Future of London Finance at Stake in Brexit Fight

Dec 4, 2020

First Read

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


FIA Asia-V: Are Data and Technology the New Drivers for the Business?
Jeff Bergstrom – John Lothian News

There is perhaps nothing more central to trading than data. The numbers flashing across your computer screen may represent tangible products but in the end it is all reduced to a data stream. Getting the maximum benefit out of that data and the technology needed to do so were at the heart of the FIA Asia-V seminar: “Are Data and Technology the New Drivers for the Business?” (See panelist list below.)

On the face of it, one might think there’s not all that much to it. “Garbage in, garbage out” as the saying goes. But listening to the panelists speak it became apparent there is much more to it and both the possibilities and complexities can quickly get out of control.

To read the rest of this story, go here.


FIA Asia-V: Wrapping Up the Future of Futures: Politics, China and a Margining Debate
Suzanne Cosgrove – John Lothian News

Several industry themes emerged in the very last panel discussion of FIA Asia-V, or as moderator and JPMorgan Managing Director David Martin wryly noted, the “graveyard of all graveyard shifts at the end of a three-day conference.”

These topics included market volatility, the new U.S. political landscape, China’s role as a competitive player in the capital markets, and a re-examination of exchange infrastructure, technology and margins.

Martin, who is head of JPMorgan’s Asia-Pacific global clearing, said global markets were prepared for volatility around the U.S. elections, but were surprised that more volatility was spurred by the prospective launch of COVID vaccines than by the election itself.

To read the rest of this story, go here.


FIA Asia-V: ESG – Meeting Customer Demand While Building a Market
Matt Raebel – John Lothian News

ESG (Environmental, Social and Governance) investing is a hot topic these days. The growing practice of investing in exclusively eco-friendly, socially-conscious companies is a developing industry, and from the sounds of the panelists at the FIA Asia-V panel, “Responding to Societal Issues” Wednesday, it’s still got a lot of growing to do.

The panelists said that each of their companies had seen increased demand for ESG products, especially from clients in the U.S. and Europe. Mathieu Fuhrmann, vice president of equity index sales at Eurex, said that Eurex’s clients asked the exchange to build out an ESG marketplace in the European Union beginning with benchmark ESG indices, launching ESG derivatives products later to meet customer demand. Pascal Lambert, group country head of Singapore and head of South East Asia & India at Societe Generale, said that investor appetite for ESG products has particularly increased among prime bankers and family offices over the past 18 months.

To read the rest of this story, go here.


Hits & Takes
John Lothian & JLN Staff

The LaSalle Street Trading Tech Awards event was a success last night. There was a nice crowd on Zoom for the presentation, which included a pre-recorded video. The event raised over $81K for the Pathway to Adventure Council of the Boy Scouts of America, and counting. Thank you to all who attended, all who contributed and to Myriam Herrera and Pat Kenny. Myriam is the Scout professional who organizes the event. This year she was also the director and producer of the video presentation. And thank you to Pat Kenny for being the most interesting chairman during a very difficult year. The event exceeded budgetary expectations from the Pathway to Adventure Council.

I want to share with you, though, how easy we have it here in Chicago versus a fundraiser in Florida that Pathway to Adventure Council Scout Executive Jeff Issac oversaw when he was the Scout Executive down there. They had a fundraiser called the Gator Grind. It was run at their Scout camp 30 minutes west of Boca Raton, FL. Runners would do a 5K run through the Scout camp, including swamps full of alligators. The camp would have some buoys and other barriers to help keep the gators away, but there was plenty of reason to run as fast as you could through the swamp. It makes our Trading Tech program look like a walk in the park.

Tim Gits has moved over to Quantitative Brokers as their chief sales officer. Deutsche Boerse recently bought a majority interest in QB. Gits was previously deputy global head of fixed income funding & financing at Eurex in Chicago. I wonder if he even has to move his desk.

The total cleared volume yesterday at OCC was 34,344,892 contracts, 17.0% higher than the YTD daily average of 29,352,442.

Reverend Raphael Warnock and Senator Kelly Loeffler will debate each other this Sunday at 7 p.m. ET on CNN.

Thank you to Straits Financial LLC for sending me a gift basket of sausages, cheeses, mustards and crackers. They are always appreciated. To show how much I love cheese and sausage, here is a story from my college days. While at Purdue, after a trip to Jimmy Dean’s at a big mall in Lafayette to buy some cheese and sausage, I acquired the nickname, “wine and cheese John.”

Ray McKenzie was our first two time giver to the JLN MarketsWiki Education GoFundMe campaign. Then yesterday he became the first three-time giver to the campaign. Ray rocks, both figuratively and literally. His work for ALTSO is an inspiration. He is an enterprise account executive with Apple, but has had a long career in the markets, including career stops at the CME Group, ICE and Morgan Stanley. Thank you to Ray and all others who have given and all those yet to give. Help support our efforts to record industry history by donating to our GoFundMe campaign.

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


FIA President and CEO Walt Lukken on Thursday released a statement congratulating House Agriculture Committee Chairman-designate Representative David Scott and Ranking Member-designate Representative Glenn ‘GT’ Thompson. FIA also recognized and thanked outgoing Chairman Collin Peterson and Ranking Member Conaway for their leadership and decades of public service.~SR

Pages for cryptocurrency exchanges in both MarketsWiki and CryptoMarketsWiki have been refreshed to include ErisX’s new clearing authority (swaps, other commodities) and innovative price-bounded futures.~Thom Thompson

Representative Rashida Tlaib (D – Michigan) introduced a bill co-sponsored by representatives Stephen Lynch (D – Massachusetts) and Chuy Garcia (D – Illinois) requiring stablecoins to be issued by banks. Tlaib said her support for this bill came out of concern for her community falling prey to potentially predatory business practices by stablecoin issuers like Facebook’s Diem (formerly called Libra). “I feel like a mama bear, and I have to watch out for what is coming for my district and my neighborhood,” she said.~MR


FIA welcomes new House Agriculture Committee leadership
FIA President and CEO Walt Lukken today released the following statement congratulating House Agriculture Committee Chairman-designate Representative David Scott and Ranking Member-designate Representative Glenn ‘GT’ Thompson. FIA recognized and thanked outgoing Chairman Collin Peterson and Ranking Member Conaway for their leadership and decades of public service:

*****What would be an appropriate welcome gift? At this time of year, a nice fruitcake works for any occasion.~JJL


All the Happiness Money Can Buy in the Winter of Covid-19; Beat the pandemic blues by investing in exercise, experiences and other people’s well-being.
Sarah Green Carmichael – Bloomberg
As the saying goes, money can’t buy happiness. That certainly seems to be true in 2020 — rates of depression and anxiety are up, even though many households have more cash on hand than usual. Savings rates in the U.S. spiked to a previously unfathomable 34% in April and sat at a still-high 14% in September. Savings in the U.K. have also hit record highs, with households saving 29% of their disposable income.

*****My mother informed me and my family that she would not be giving us Christmas gifts this year. Instead, she will be contributing to some food banks that help the growing number of hungry people because of the pandemic. This is the best Christmas gift ever!~JJL


Baiju Bhatt and Vladimir Tenev, Gen Z’s Preferred Brokers; Robinhood added 3 million accounts in the first four months of 2020 as millennials and Zoomers stuck at home flocked to the stock market.
Annie Massa – Bloomberg
Since the Stanford pals founded it in 2013, Robinhood has been about lowering barriers to investing. It offered free trades before that was industry standard, along with no minimum balances and an app-focused approach that made buying shares as easy as ordering a burger on Seamless. So it was perhaps no surprise that as equity markets collapsed and then recovered, millions of newly minted traders—many with $1,200 stimulus checks— logged on. Their Jim Cramer was Dave Portnoy, founder of the irreverent Barstool Sports Inc., who livestreamed his profanity-laced trading sessions and rooted that “stocks only go up!” (Portnoy has no formal relationship with Robinhood.)

*****They are an amazing story.~JJL


SEC Announces Office Focused on Innovation and Financial Technology
FinHub Specialized Unit to Become Stand-Alone Office
The Securities and Exchange Commission today announced that the SEC’s Strategic Hub for Innovation and Financial Technology, commonly referred to as FinHub, will become a stand-alone office. Valerie A. Szczepanik will continue to lead FinHub as its first director and will report directly to the SEC Chairman.

*****It would have really been innovative to have announced some joint office with Lab CFTC. Maybe someday. Right now we just have SEC and CFTC equivalence.~JJL


Bank of England criticised for losing track of £50bn of banknotes
Richard Partington – The Guardian
It is known throughout the world as a byword for security. But the Bank of England is evidently a tad unclear on the whereabouts of £50bn of banknotes, and it doesn’t seem to be overly concerned about it, a powerful group of MPs has said. In a stiff rebuke for Threadneedle Street, the Commons public accounts committee said the money – equivalent to a stack of £5 notes more than 800 miles high – had essentially gone “missing” because the Bank did not keep close enough tabs on cash usage in modern Britain.

*****My first reaction to this story is that the British are the absolute best when it comes to street names. ~JB


U.S. Infections, Deaths, Hospitalizations All Hit Record Highs; Newly reported Covid-19 cases in the U.S. hit a record high, as did deaths reported in a day, while the global death toll from the coronavirus pandemic passed 1.5 million.
Adam Martin – The Wall Street Journal
Newly reported Covid-19 cases in the U.S. hit a record high, as did deaths reported in a day, as the global death toll from the coronavirus pandemic passed 1.5 million. Hospitalizations also hit a record, with 100,667 people in the U.S. admitted as of Thursday, according to the Covid Tracking Project. Of those, a record 19,442 people were in intensive care. The country reported 217,664 new cases on Thursday, according to data compiled by Johns Hopkins University, up from 200,055 on Wednesday, and surpassing the previous record of 205,557 set Friday last week. Newly reported deaths also surged Thursday, to 2,879, according to Johns Hopkins data, the second daily record in a row. The U.S. reported 2,804 deaths on Wednesday.

****All these numbers are going to get worse in the coming months, according to many experts. Let’s try wearing a mask, social distancing, washing our hands often and checking our temperatures. Let’s stop the spread.~JJL


CryptoMarketsWiki Coin of the Week: Bitcoin (BTC)
Bitcoin’s price hit a high of $19,834.93, beating its 2017 record in late November, leading to a surge of trading volume. Bitcoin mining revenue was $521 million in November, a 47.9 percent increase from October.


Thursday’s Top Three
Our top story Thursday was The New York Times’ 2,596 Trades in One Term: Inside Senator Perdue’s Stock Portfolio. Second was Yahoo News’ Trump backers, including Flynn, edge toward a call to ‘suspend’ Constitution to head off Biden taking office. Third was New York Magazine’s Doug Collins’s Sacrilegious Attack on Raphael Warnock.


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Lead Stories

Future of London Finance at Stake in Brexit Fight; Even if Brexit negotiators reach a trade agreement, the deal won’t cover finance, the crown jewel of the U.K.’s economy
Simon Clark – WSJ
Brexit trade negotiations are down to the wire this week. Even if the U.K. and European Union strike an accord, it won’t cover Britain’s most valuable industry, and one coveted by the EU: finance. That has set off a land grab between the 27-nation bloc and the U.K. for lucrative financial transactions and the jobs and clout that come with them. The financial services sector has the biggest trade surplus of any industry in the U.K., with exports in 2019 of £79 billion, equivalent to $106 billion.

Weather-Upending La Niña Is a Headache for Farmers Around the World; Characterized by cooler-than-normal waters in the Pacific, it causes dry conditions in some parts of the globe, heavy rains in others
Lucy Craymer – WSJ
La Niña is shaking up agriculture in an already-tumultuous year for commodity markets. The natural weather phenomenon, known as the cool sister of the better-known El Niño, occurs every few years. It is characterized by cooler-than-normal waters in the Pacific Ocean, causing dry weather in some parts of the globe and heavy rainfall in others.

Boom-Year for Financial Services M&A Still Has More to Come
Matthew Monks and Nabila Ahmed – Bloomberg
Financial services dealmaking is booming. Thanks to a frenzy of transactions in the past week, 2020 is already the second-busiest year since the financial crisis for deals involving banks, financial technology companies, insurers and asset managers.

Special Report: Burner phones and banking apps: Meet the Chinese ‘brokers’ laundering Mexican drug money
Drazen Jorgic – Reuters
Early next year, a Chinese businessman named Gan Xianbing will be sentenced in a Chicago courtroom for laundering just over $530,000 in Mexican cartel drug money.

Energy Trader Vitol Paying $163 Million to Settle Corruption, Manipulation Charges; Company accused of using bribes to gain advantage when bidding for oil in Brazil, Mexico, Ecuador
Dave Michaels and Dylan Tokar – WSJ
Swiss-based energy firm Vitol agreed to pay $163 million to settle criminal and civil charges that its employees paid bribes to gain an advantage when bidding for oil in Brazil, Mexico and Ecuador. Vitol’s deal with the Justice Department, announced Thursday in Brooklyn federal court, is the first in what is expected to be a series of similar settlements involving global commodity trading companies. Some of the claims grew out of a sweeping corruption scandal in Brazil that focused on bribery of officials at state-controlled Petróleo Brasileiro SA, also known as Petrobras.

CFTC Orders Vitol Inc. to Pay $95.7 Million for Corruption-Based Fraud and Attempted Manipulation; First CFTC Enforcement Action Involving Foreign Corruption
The Commodity Futures Trading Commission today issued an order filing and settling charges against Vitol Inc., an energy and commodities trading firm in Houston, Texas, for manipulative and deceptive conduct. The conduct, which spanned from 2005 to early 2020, involved foreign corruption and physical and derivatives trading in the U.S. and global oil markets, including attempted manipulation of two S&P Global Platts physical oil benchmarks. The order requires Vitol to pay more than $95 million in civil monetary penalties and disgorgement.

Wall Street Keeps Pushing Into China as Washington Balks
Bloomberg News
Banks, asset managers pile in amid rising tensions, sanctions; Most global funds plan to add China exposure next year: survey
A year into China’s big bang opening of its financial markets, Wall Street has ever more to lose from a growing consensus in Washington over reining in Beijing.It’s a risk they’re willing to take.

Cboe Global Markets Reports November 2020 Trading Volume
Cboe Global Markets
U.S. Equities total ADV up 51 percent from November 2019; European Equities total ADNV up 33 percent from November 2019; Options total ADV up 50 percent from November 2019; ADV in VIX options up 37 percent from November 2019; Global FX total ADNV up 32 percent from November 2019
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today reported November monthly trading volume.

China’s closer ties with Hong Kong’s bond market to create ‘enormous opportunities’ for city; The Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBOC) are looking at expanding the current Bond Connect scheme; No timeline has been set to establish the so-called southbound leg of the scheme to match the existing Stock Connect system that already allows two-way trading
Karen Yeung – South China Morning Post
Discussions have begun to allow Chinese investors to trade bonds in Hong Kong, a move that will “generate enormous opportunities” for the city’s financial services industry and has the potential to strengthen its status as an international financial centre.

London Has Lost Its Clout, Brexit Deal or No Brexit Deal; The City is still a vital financial center for Europe. But its ability to attract companies raising capital is diminished.
Lionel Laurent – Bloomberg
Back in the mid-2000s, when finance was booming and the City of London was at the peak of its powers, brokerage boss Michael Spencer joked that statues of two U.S. politicians — Paul Sarbanes and Michael Oxley — should be put up near the London Stock Exchange. Their tough regulation of Wall Street had sent the cost of being publicly listed in the U.S. rocketing, making the British capital, already a magnet for global money and gateway to the nascent euro area, an ideal alternative IPO destination.

Treasury Volatility Boosts Tradeweb; Volatility and remote trading fueled near-record November; market share of corporate trading crossed 10% threshold
Matt Wirz – WSJ
Sharp moves in Treasury bonds have whipsawed investors recently, but the volatility has made a winner out of Tradeweb Markets Inc., TW 2.21% a large electronic marketplace for U.S. government debt. Average daily trading volume on the company’s electronic platform hit $959 billion in November, the second-busiest months ever for Tradeweb behind March when panicked investors piled into the Treasury market. Increased volatility before and after the election fueled much of the surge, along with the growing adoption of electronic trading, the company said.

Swiss Say They Were Successful With Digital Currency Experiment
Catherine Bosley – Bloomberg
Some major central banks looking into issuing digital currency; SNB’s Maechler says experiment isn’t a commitment to issuing
The Swiss National Bank and partner organizations said they successfully conducted experiments to push forward understanding of how digital currencies could work within the country’s financial system. In ‘Project Helvetia’ the SNB, the Bank for International Settlements and the financial infrastructure operator SIX linked the existing interbank payment system to a distributed ledger, according to a joint press release Thursday. They also tested issuing digital currency onto a blockchain-like platform.

Darrin Williams, a Banker for the Forgotten; He was part of a successful effort to add $10 billion for community development finance institutions in the second round of Paycheck Protection Program loans.
Jeff Green – Bloomberg
Darrin Williams, a former lawyer, rose from relative obscurity when he was tapped to be a member of President Trump’s Great American Economic Revival initiative, which also included Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., and David Solomon, chairman and CEO of Goldman Sachs Group Inc. Their conversations with Trump and Secretary of the Treasury Steven Mnuchin ultimately led the Small Business Administration, which administered the $350 billion program, to earmark the money for so-called CDFIs.

Nasdaq vs. Warren Buffett; The famous investor on what he looks for in a corporate director.
The Editorial Board – WSJ
The more we think about the new racial, gender and LGBTQ mandates for corporate directors that Nasdaq announced on Tuesday, the more absurd they seem.

Setting the Table for a Challenging 2021; 2021 is shaping up to be a year where we start to deal with the consequences of conflicting rules raised over the past 12 months.
Phil Mackintosh – Nasdaq
Almost a year ago, we looked at 20 things that might be important to watch for in 2020. What we didn’t expect was a pandemic! In reality, though, despite the pandemic dominating markets and the economy, regulators still proposed big changes. However, as we walk backward through proposals in 2020, we see a lot of fuzzy logic. It was, in hindsight, a year of conflicting messages, and not just about whether we should trust in masks and science!

California Warns of Lockdowns in Most of State Within Days
David R Baker – Bloomberg
Stay-at-home orders imposed when ICUs’ capacity runs short; Four of five regions may meet triggers this week as cases soar
California, the first state to tell residents to stay home to fight the coronavirus pandemic, is about to do it again. With cases soaring, Governor Gavin Newsom said he will impose shelter-at-home orders on a regional basis once hospitals start running short of intensive-care capacity. Four of the state’s five areas may hit the threshold within a day or two, he said at a briefing Thursday. “The bottom line is if we don’t act now, our hospital system will be overwhelmed,” he said.

Reports of globalisation’s death are greatly exaggerated; Covid-19 has changed rather than ended cross-border flows
Gillian Tett – FT
This week, some cheering vaccine news emerged with the UK regulatory approval of a jab to protect against the virus. Not only are investors celebrating light at the end of the pandemic’s economic tunnel, the development also gives a shot in the arm to that much maligned concept of “globalisation”.


Coronavirus Pandemic Cited as Top Risk to Financial Stability in 2021 According to New DTCC Survey
DTCC press release
The Coronavirus (COVID-19) pandemic ranks as the greatest threat to global financial stability in 2021, according to a new survey published by The Depository Trust and Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, with nearly one third (31%) of survey respondents citing the pandemic as the top risk, with two thirds (67%) citing it as a top 5 risk.

Covid-19 Disbelief Saddles Health-Care Workers With Another Challenge; Doctors and nurses worry that community skepticism about coronavirus will hurt efforts to limit it
Sarah Krouse – WSJ
Dr. Michaela Schulte works overnight shifts at St. Luke’s Health System hospitals near Boise, Idaho, treating some of the hundreds of critically ill Covid-19 patients filling hospital beds in her state during the most severe period of the pandemic so far.

Covid-19 Hospitalizations, Single-Day Deaths Hit New U.S. Highs; Some doctors ration intensive care as coronavirus patients stretch hospitals
Melanie Evans – WSJ
Covid-19-related deaths reported in a single day hit a record in the U.S. as hospitalizations surpassed 100,000 for the first time this week, leaving hospitals in some regions of the country without enough beds in intensive-care units to meet their patients’ needs.

Covid Shrinks the Labor Market, Pushing Out Women and Baby Boomers; Nearly four million Americans have stopped working or looking for jobs
Gwynn Guilford and Sarah Chaney Cambon – WSJ
Since spring lockdowns were lifted, the demand for workers has snapped back faster than many economists expected. Between April and October the unemployment rate fell by more than half, to 6.9%, undoing more than two-thirds of its initial rise.

Biden says he has asked Fauci to stay on and join COVID-19 team
Trevor Hunnicutt – Reuters
President-elect Joe Biden has asked top U.S. infectious disease expert Anthony Fauci to continue in his job and serve as Biden’s chief medical adviser and on the COVID-19 team after Biden takes office on Jan. 20, Biden said on Thursday.

Tracking the Coronavirus Vaccines That Will End the Pandemic
The biggest vaccination effort in history has begun. This week, the U.K. was first to clear the use of a new shot from Pfizer Inc. and BioNTech SE. The U.S. will likely do the same, and a separate vaccine from Moderna Inc. is close behind. By the end of 2020, tens of millions of people could be inoculated. Next year: billions more.

Vaccines offer hope for end to pandemic, but brutal months lie ahead
Joel Achenbach and Jose A. Del Real – Washington Post
Coronavirus vaccines are poised to be approved and distributed in the coming weeks in the United States, but that promising news comes amid record levels of infections and hospitalizations, with experts warning that the most brutal period of the pandemic lies ahead.

Could a Blood Test Show if a Covid-19 Vaccine Works? A new monkey study offers a ray of hope for speeding up clinical trials of Covid-19 vaccines.
Carl Zimmer – NY Times
A new study in monkeys suggests that a blood test could predict the effectiveness of a Covid-19 vaccine — and perhaps speed up the clinical trials needed to get a working vaccine to billions of people around the world.

In Blue States and Red, Pandemic Upends Public Services and Jobs; As a standoff over federal aid persists, state and local governments are making deep budget cuts. “Everything’s going to slow down,” one official said.
Patricia Cohen – NY Times
The coronavirus pandemic has inflicted an economic battering on state and local governments, shrinking tax receipts by hundreds of billions of dollars. Now devastating budget cuts loom, threatening to cripple public services and pare work forces far beyond the 1.3 million jobs lost in eight months.

Biden says he’ll publicly get a COVID-19 vaccine, keep Fauci
Trevor Hunnicutt – Reuters
U.S. President-elect Joe Biden said on Thursday he would publicly take a coronavirus vaccine to demonstrate its safety to the public and pledged to retain the nation’s top adviser on the pandemic, Anthony Fauci, when he takes office next month.

California governor issues regional lockdown plans as ICUs near capacity
Sharon Bernstein, Steve Gorman – Reuters
California’s governor on Thursday announced plans to impose COVID-19 stay-at-home orders on a regional basis, with tougher social and economic restrictions to be triggered when intensive care units near maximum capacity at a region’s hospitals.

Keep Your Politics Out of My Vaccine Shot; To end the pandemic, a divided nation will have to get on the same page for once.
Mark Gongloff – Bloomberg
The New York Times has a cool tool that lets you plug in your age, location, occupation and underlying health conditions to find out where you stand in line for Covid vaccines. Turns out I’ve only got 268 million people ahead of me. Now I know how Beetlejuice felt. I’m looking forward to resuming normal life in, let’s say, March 2022.

Fauci Slams U.K. on Pfizer Shot Review, Then Mutes Critique
John Lauerman and Alex Morales – Bloomberg
U.K. accepted company’s data without extra scrutiny, he says; Education secretary had said Britain is ‘much better country’
Anthony Fauci, the U.S. government’s top infectious-disease specialist, slammed the U.K.’s drug regulator, saying that it rushed to clear the Covid-19 vaccine from Pfizer Inc. and BioNTech SE.

Sweden Aims to Get 2 Million Covid Vaccines in First Quarter
Niclas Rolander – Bloomberg
Sweden expects to get enough Covid-19 vaccines to immunize a fifth of the population in the first quarter of 2021, Prime Minister Stefan Lofven said Friday.

Exchanges, OTC and Clearing

Cboe Advances ETP Market Leadership, Becomes 2nd Largest Primary Listings Exchange in the U.S.
Cboe Global Markets
35 percent of all new ETP launches this year have occurred on Cboe BZX Equities Exchange; Cboe now home to more than 400 ETPs in the U.S., representing over $370 billion in assets under management; Since investing in its listings business in 2015, Cboe has grown ETPs on its exchange by 1,400 percent
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced it has become the 2nd largest primary listings venue for exchange-traded products (ETPs) in the U.S. following record gains in new listings this year.

Tradeweb reports November average daily volume up 37.2% YOY and at $958.7 billion was second-highest month ever
Average daily volume (ADV) across rates, credit, equities and money markets for Tradeweb Markets was $958.7 billion (bn) in November 2020, up 37.2 percent (%) year over year (YoY) and Tradeweb’s second-highest month ever. Average daily trades for the month totaled 55,837. Tradeweb set monthly ADV records across cash rates and credit markets, specifically Treasuries, Mortgages, U.S. High Grade Credit, U.S. High Yield Credit, European Credit, Chinese Bonds and Repurchase Agreements, as well as automated trading (AiEX) across products. Tradeweb captured a record 20.1% of U.S. High Grade TRACE (including 10.3% fully electronic) and a record 6.8% of U.S. High Yield TRACE (including 3.9% fully electronic). Additionally, Rates Derivatives captured record SEF market share.

Taiwan Futures Exchange Newsletter – December 2020
TAIFEX’s trading volume reached 309,697,676 contracts on November 30, surpassing the previous record of 308,083,576 contracts in 2018. Of all core products, Mini-TAIEX Futures (MTX) posted the strongest growth, with a significant increase of 102.1% YoY to 55,231,745 contracts. The market volatility triggered by the pandemic is considered as a major factor of soaring demand for risk hedging, which drives up the volume of the derivatives market. Meanwhile, ADV in the after-hours session also rose 57.4% YoY as of November 30, with MTX displaying a robust growth of 141.7%. Contracts traded overnight represented 27.7% of the market’s total volume, up from 22.9% of the same period in 2019.

FTSE Mondo Visione Exchanges Index Up 8.9 % In November, Hellenic Exchanges Top Performer, HKEX Largest Exchange By Market Capitalisation
Shares in the world’s largest exchange operating groups rose by 8.9% in November, with all but 5 of the 32 constituents of the FTSE Mondo Visione Exchanges Index being in positive territory. The Index closed at 67,638.94 points, up from the October close of 62,119,09.

CME Group Chief Financial Officer and Global Head of Financial and OTC Products to Present at Goldman Sachs 2020 U.S. Financial Services Conference
CME Group
CME Group announced today that John Pietrowicz, Chief Financial Officer and Sean Tully, Global Head of Financial and OTC Products, will present virtually at the Goldman Sachs 2020 U.S. Financial Services Conference on Tuesday, December 8, 2020, at 9:20 a.m. (Eastern Time).

CDPQ becomes a lead investor in IEX Group
IEX Group
Caisse de dépôt et placement du Québec (CDPQ), a leading institutional investor, announced a strategic investment in IEX Group (IEX), a New York City-based financial technology company and the eighth largest stock exchange operator globally in terms of the value of shares traded every day. CDPQ joins other leading investors in IEX that are committed to the company’s vision and strategy.

A-Team Group Recognizes ICE Data Services as Best Pricing and Valuations Data Provider
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 announced that ICE Data Services was recognized as best pricing and valuations data provider in the A-Team Group’s 2020 Data Management Insight Awards. These awards are given based on reader nominations and voting, and recognize outstanding performance by market data service providers and consultants.

Chatham structures and executes the first AMERIBOR interest rate swap transaction
Chatham Financial
Chatham Financial announced today that it has structured and executed the first AMERIBOR-indexed interest rate swap in a designated hedging relationship on behalf of First Merchants Bank.

American Financial Exchange: E D & F Man Derivative Products Inc. And First Merchants Bank Transact First AMERIBOR® Interest Rate Swap
The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced the completion of the exchange’s first AMERIBOR® interest-rate swap transaction on December 1, 2020.

ASX Group Monthly Activity Report – November 2020

Decrease of Spot Month Position Limit, Single Month Accountability Level, and All Month 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.

Amendments to Rule 589. (“Special Price Fluctuation Limits”) for Certain Energy Futures Contracts and Related Termination of Emergency Action
CME Group
New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will terminate the emergency action taken by the CME Group Global Command Center (“GCC”) regarding amendments to NYMEX Rule 589. (“Special Price Fluctuation Limits”) for the NY Harbor ULSD Futures, RBOB Gasoline Futures, Light Sweet Crude Oil Futures, and Brent Crude Oil Last Day Financial Futures contracts (the “Contracts”) (see SER 8561 and SER 8566) and implement a permanent amendment to Rule 589. with respect to the Contracts (the “Rule Amendments”) effective on Monday, December 21, 2020 (pending all relevant CFTC regulatory review periods).

Performance Bond Requirements: Energy, Metals, and Interest Rate Margins – Effective December 04, 2020
CME Group
As 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.

Performance Bond Requirements: Agriculture, Energy & Metal Margins – Effective December 04, 2020
CME Group
As 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. Please email any questions to Clearing.RiskManagement@cmegroup.com

EBS Market Integration onto CME Globex
CME Group
In Q4 2021, subject to applicable regulatory approvals, EBS Market’s Central Limit Order Book and eFix Matching Service will launch on CME Globex. You will receive subsequent notices with additional details and actions required to support the EBS Market integration onto CME Globex.

CME Globex Notices: November 30, 2020
CME Group
Critical System Updates
New – New Resource for Critical Configuration Files NEW
iLink 2 on MSGW Decommission – February 26, 2021
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
Removal of Korea Exchange (KRX) Markets on CME Globex – December 18
iLink 3 SBE Schema Update – January 24, 2021
Phase 1 CME FX Link Enhancements – February 21, 2021
Phase 1 CME FX Link Enhancements: Drop Copy Impact – February 21, 2021

CME STP Notices: December 3, 2020
CME Group
Changes to Time Unit of the Original Trade for Weekly Options – This Week
CME STP Support of BrokerTec Markets – January 18, 2021
BrokerTec Stream on CME STP – February 1, 2021
CME STP FIXML API Connectivity Documentation

BME Admits A 650 Million-Euro Bond To Trading From SIX Group
Today BME has admitted SIX’s 650 million-euro senior bond to trading, with maturity in December 2025. This new bond has been launched via the subsidiary SIX Finance, is guaranteed by SIX Group, and marks SIX’s debut in the Fixed Income markets.


Ant, Grab Win Singapore Digital Bank Licenses Along With Sea
Chanyaporn Chanjaroen and Yoolim Lee -Bloomberg
Consortium involving China’s Greenland also won permit; MAS expects winners ‘to thrive alongside the incumbent banks’
Ant Group Co. and a venture led by Grab Holdings Ltd. won licenses to run digital banks in Singapore, paving the way for the technology giants to expand their financial services in the Southeast Asian hub.

Capitalab launches “Capitalab FX, with CLS” for FX Forwards compression
BGC Partners
Capitalab, a division of BGC Brokers LP, an entity within the BGC Partners, Inc. (NASDAQ: BGCP) group of companies, today announced a services agreement with CLS Group (CLS), a market infrastructure delivering settlement, processing and data solutions for the global foreign exchange (FX) market.

Breakingviews – Stripe lobs chum into Wall Street’s turbid waters
John Foley – Reuters
Wall Street has a complicated relationship with companies like Stripe. The upstart digital payments firm is a threat to the once-cozy world of consumer banking. But it’s also a potential source of new business, which explains the crowded line-up of banks who announced new partnerships with Stripe on Thursday. There’s an extra appeal: One day one of those institutions might just get to bring Stripe to market – or maybe even buy it.

Brazilian soy farmers try 5G technology with Huawei equipment
Reuters Staff
The Brazilian farm state of Goias rolled out a pilot project on Thursday to increase productivity and take fast action against disease using fifth-generation technology and equipment provided by China’s Huawei Technologies Co.

Trump signs order on principles for U.S. government AI use
David Shepardson – Reuteres
U.S. President Donald Trump signed an executive order on Thursday setting guidance for federal agency use of artificial intelligence in government decision-making.

Exchange Data International Awarded Best Corporate Actions Solution
Exchange Data International (EDI), a leading provider of global security corporate actions, pricing and reference data, is pleased to announce that they were awarded ‘Best Corporate Actions Solution” by the Data Management Insight Awards 2020 today.

Snowflake’s Cloud is Particularly Dense; Fast-growing company’s business model makes forecasting a challenge and nosebleed valuation risky
Dan Gallagher – WSJ
The beauty of a snowflake is that each one is unique. For Snowflake SNOW 16.13% the company, that also will prove to be a challenge. The provider of cloud-based data warehousing services went public in September in what has been the hottest stock debut so far this year. Snowflake’s share price more than doubled on its first trading day and the stock gained another 15% ahead of its first quarterly report as a public company on Wednesday afternoon.

Apple Pay Targeted in Dutch Antitrust Probe Into Payment Apps
Aoife White – Bloomberg
Probe concerns payment apps’ access to ‘NFC’ functions; Apple has faced complaints from banks and other competitors
Apple Inc. phones face scrutiny from Dutch antitrust regulators who are probing whether users get a free choice of financial apps with contactless payments.


Ripple CTO Says Majority Vote Would Force the Burning of Billions in XRP
Tanzeel Akhtar – Coindesk
Ripple Chief Technology Officer David Schwartz tweeted the community could force the burning of billions of the protocol’s XRP native tokens held in escrow to prevent the drop in price that would likely occur should those billions in frozen tokens ever flood the market.

What’s a Better Bet, Bitcoin or a Cockapoo? We’ve spent a lot on pets during the pandemic. Let’s look at what we’ve gotten in return.
Andrea Felsted – Bloomberg
Cryptocurrencies aren’t the only assets to have seen their value driven up recently by hordes of eager buyers. It’s the same for Cockapoos. Bitcoin has risen about 170% so far this year. In the U.K., a Yorkshire Terrier is up by about the same amount. I’d argue that it’s a price worth paying (for a dog, not a punt on crypto), given the returns for your mental wellbeing.

How American investors are gobbling up booming bitcoin
Tom Wilson, Alun John – Reuters
Bitcoin has grabbed headlines this week with its dizzying ascent to an all-time high. Yet, under the radar, a trend has been playing out that could change the face of the cryptocurrency market: a massive flow of coin to North America from East Asia.

Changpeng Zhao, Crypto’s Influence Miner; Zhao says he expects Binance to have profits of $800 million to $1 billion this year, up from about $570 million last year, as market uncertainty pushes traders into digital coins.
Olga Kharif – Bloomberg
Changpeng Zhao, who goes by CZ, started his business in 2017. By that point, the world was littered with failed exchanges— see Mt. Gox, 2014. But Zhao had experience engineering high-frequency trading systems and working for other crypto startups. (From 2002 to 2005, he worked at Bloomberg LP.) Binance offered lower trading fees and rolled out a coin, BNB, that doubles as a loyalty program: If you hold it in your digital wallet, you pay lower fees, no matter what coins you trade.

S&P Dow Jones Indices Builds Crypto Indexing Capabilities With Lukka
S&P Dow Jones Indices (S&P DJI), the world’s leading index provider, is launching global cryptocurrency asset index capabilities with Lukka, a leading New York City-based crypto asset software and data company. S&P DJI will provide S&P DJI-branded and customized indexing and benchmarking solutions supported by Lukka’s proprietary crypto asset pricing data.

S&P Dow Jones Is Adding Crypto Indices in 2021
Scott Chipolina – Decrypt
S&P Dow Jones Indices has today announced that it will launch cryptocurrency indices in 2021. The products branded under the S&P Dow Jones Indices name will reportedly use data from Lukka, a New York-based virtual currency company, on more than 550 of the top traded coins.

OKEx’s Trading Volumes and Tether Reserve Plunge on Possible User Exodus
Muyao Shen – Coindesk
A sharp drop in OKEx’s trading volume and stablecoin reserves – tether (USDT) in particular – may reveal an ongoing exodus of its users after the popular crypto derivatives exchange unexpectedly halted all crypto withdrawal activities for about five weeks.

Coinbase joins Square’s crypto patent effort COPA
Saniya More – The Block
Coinbase is the latest company to join Crypto Open Patent Alliance (COPA), a consortium developed by Square to increase access to crypto technology through the creation of a collaborative patent library, according to an announcement published Thursday.

Russia’s Crypto Community Fears Digital Ruble Plan Means ‘Back to USSR’
Anna Baydakova – Coindesk
Russian cryptocurrency and blockchain association (RAKIB) warned the country’s central bank against making its future CBDC too centralized. RAKIB sent a letter to the Bank of Russia Chairwoman Elvira Nabiullina saying that the potential design for digital ruble that the regulator seems to favor, will return the Russian economy to the Soviet model, when all the financial activities were managed in a centralized way, the Russian newspaper Kommersant wrote on Friday.

Layer-2 Ethereum scaling solution OMG Network gets acquired by a venture firm
Yogita Khatri – The Block
Layer-2 Ethereum scaling solution OMG Network has been acquired by Genesis Block Ventures (GBV). GBV is a subsidiary of Genesis Block, a Hong Kong-based crypto over-the-counter (OTC) trading firm. Financial terms of the acquisition were not disclosed. As part of the deal, GBV plans to grow the adoption of OMG Network (formerly OmiseGo) in Asia and beyond. “A number of integrations and partnerships are in the works,” said GBV, adding that it will work with OMG “to leverage resources and explore new directions, such as building lending and trading platforms, to achieve DeFi’s massive adoption and growth potential.”

Over 1 million ETH, worth more than $605 million, has been staked in the Eth2 contract
Yogita Khatri – The Block
The Ethereum 2.0 or Eth2 staking contract continues to attract deposits, even after the beacon chain was successfully launched last week. The contract has now accrued more than 1 million ETH (worth over $605 million). There is no closing date for the contract, meaning people can continue to make deposits to earn staking rewards.

Here Comes the Digital Dollar!
The Reformed Broker
On today’s episode of The Compound Show, Josh talks with Representative Patrick McHenry (R- NC), the Republican leader on the House Financial Services Committee about the current stimulus talks, the future of capital formation and the inevitability of a digital version of the US dollar.


Trump loyalist Loeffler’s attacks on pastor Warnock risk suburban votes in Georgia’s U.S. Senate race
Rich McKay, David Morgan – Reuters
Beau Davis, a 33-year-old security specialist from the Atlanta suburbs, is the kind of voter Republican Senators Kelly Loeffler and David Perdue may need to win runoff elections next month that will determine the balance of power in Washington.

Fiscal Policy During and Beyond the Covid Crisis; This time really is different.
Mervyn King – Bloomberg
The current downturns are unlike any previous recession or depression. The coronavirus itself is novel but, more to the point, so is the reason output collapsed in much of the world — not because of Covid-19 as such, but because people withdrew from normal economic activity, either by government decree or at their own initiative.

Shell CEO Hopeful Biden Will Speed Up Climate Change Fight
Laura Hurst – Bloomberg
Practicalities of Biden’s Green Deal policies yet to be seen; Governments have not done enough to support energy transition
The change in the U.S. presidency will bring the collaboration and set of progressive policies needed to tackle the energy transition, Royal Dutch Shell Plc’s chief executive officer said.

The Wonk Shop Behind the G-20’s Most Ambitious Climate Goal; The U.K.’s Climate Change Committee shows how the right structure allows scientists to influence policy.
Eric Roston and Akshat Rathi – Bloomberg
Behind every world-changing national commitment to fight climate change stands a team of professional nerds who make sure the numbers add up. n the U.K., that team is called the Climate Change Committee. Prime Minister Boris Johnson has just accepted the CCC’s advice to cut climate pollution by 68% by 2030 compared to 1990 levels, the most ambitious emissions-slashing goal among G-20 countries.

Schwarzman and Griffin Give Big to Super-PAC Spending in Georgia
Bill Allison – Bloomberg
Senate Leadership Fund plays major role in runoff elections; Control of the Senate hinges on the two races in Georgia
Blackstone Group Inc. co-founder Stephen Schwarzman and Citadel co-founder Ken Griffin led the big donors pouring post-Election Day money into a super-PAC that supports Republican senators. The Senate Leadership Fund, which has ties to Majority Leader Mitch McConnell, raised $104.2 million between Oct. 15 and Nov. 23, according to its latest filing with Federal Election Commission, including $71.1 million donated after the Nov. 3 general election. Two runoff elections in Georgia that will determine control of the Senate are driving the donations.

Wall Street’s Biden Fans Greet His Economy Team With Relief
Max Abelson – Bloomberg
Recruitment by the centrist Democrat puts industry at ease; ‘Nobody has said to me that this is really disappointing’
Wall Street has spent years wondering how closely the next Democrat to occupy the White House would listen to the industry. As President-elect Joe Biden builds his administration, the reaction across the financial landscape is relief. Biden’s supporters in the business, Democrats as well as some Republicans, are satisfied and in some cases jubilant as he starts filling his White House and other posts, even though he hasn’t given key perches to billionaires or financial titans such as JPMorgan Chase & Co.’s Jamie Dimon or BlackRock Inc. co-founder Larry Fink.

Trump Associates Said to Have Been Scrutinized in Suspected Pardon Scheme; A billionaire from the San Francisco area sought clemency for a psychologist convicted of monetary crimes. The Republican donor Elliott Broidy and a lawyer who later represented Jared Kushner were enlisted.
Michael S. Schmidt, Kenneth P. Vogel, Katie Benner and Adam Goldman – NY Times
The Justice Department investigated as recently as this summer the roles of a top fund-raiser for President Trump and a lawyer for his son-in-law, Jared Kushner, in a suspected scheme to offer a bribe in exchange for clemency for a tax crimes convict, according to two people familiar with the inquiry.

Romney calls Trump’s leadership on Covid-19 ‘a great human tragedy’
Mary Kay Mallonee and Devan Cole, CNN
Republican Sen. Mitt Romney on Thursday blasted President Donald Trump’s leadership — or lack thereof — during the deadly coronavirus pandemic as “a great human tragedy.”

CNN Exclusive: Biden says he will ask Americans to wear masks for the first 100 days he’s in office
Dan Merica, CNN
President-elect Joe Biden told CNN’s Jake Tapper on Thursday that he will ask Americans to wear masks for the first 100 days after he takes office, in a sign of how Biden’s approach to the virus will be dramatically different from President Donald Trump’s response.

David Perdue bought Pfizer stock — a week before company said it would develop a vaccine;Perdue bought the day Pfizer warned investors the pandemic might hurt the company. The next day, he bought more
Roger Sollenberger – Salon
Sen. David Perdue, one of two multimillionaire Georgia Republicans facing tight runoff elections in January, drew scrutiny this spring for stock transactions made in the weeks ahead of the coronavirus outbreak in the U.S., while he was receiving privileged briefings on the impending pandemic.


Ex-Austrian Finance Minister Found Guilty in Corruption Case
Boris Groendahl – Bloomberg
Protegee of late nationalist Joerg Haider took bribes; Grasser’s lawyer says he’ll appeal 8-year jail sentence
Former Austrian Finance Minister Karl-Heinz Grasser was sentenced to 8 years in jail after he was found guilty of taking bribes in one of the country’s biggest postwar corruption trials.

The Council Of Experts Concerning The Follow-Up Of Japan’s Stewardship Code And Japan’s Corporate Governance Code: The Twenty-Second Council http://

SEC Modernizes Framework for Fund Valuation Practices
The Securities and Exchange Commission today announced that it voted to adopt a new rule that establishes an updated regulatory framework for fund valuation practices. The rule is designed to clarify how fund boards of directors can satisfy their valuation obligations in light of market developments, including an increase in the variety of asset classes held by funds and an increase in both the volume and type of data used in valuation determinations.

Nekia Hackworth Jones Named Director of Atlanta Regional Office
The Securities and Exchange Commission today announced that Nekia Hackworth Jones has been named Director of the Atlanta Regional Office. She will join the SEC next month.

SEC Announces New Investor Advisory Committee Members
The Securities and Exchange Commission today announced the appointment of eight new members to its Investor Advisory Committee. The Committee was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to, among other things, advise the Commission on regulatory priorities, regulation of securities products, trading strategies, fee structures, disclosure effectiveness, and initiatives to help protect investors and promote investor confidence and the integrity of the U.S. securities markets.

Statement of CFTC Chairman Heath P. Tarbert on the FSOC Annual Report
I am pleased to vote in favor of this year’s annual report. As the report notes, the COVID-19 outbreak was an extraordinary shock to the global financial system and led to substantial financial stress. But—importantly—it did not lead to a financial crisis. During this real-world, real-time test of the resilience of our markets, of our market participants, and of our agencies, all three have performed exceptionally well.

CFTC Orders Vitol Inc. to Pay $95.7 Million for Corruption-Based Fraud and Attempted Manipulation; First CFTC Enforcement Action Involving Foreign Corruption
The Commodity Futures Trading Commission today issued an order filing and settling charges against Vitol Inc., an energy and commodities trading firm in Houston, Texas, for manipulative and deceptive conduct. The conduct, which spanned from 2005 to early 2020, involved foreign corruption and physical and derivatives trading in the U.S. and global oil markets, including attempted manipulation of two S&P Global Platts physical oil benchmarks. The order requires Vitol to pay more than $95 million in civil monetary penalties and disgorgement.

Cutover plan for firms migrating to FCA FIRDS and FITRS after the Brexit transition period
We provide details on how we’re moving MiFID reference data and transparency systems away from ESMA as part of the MiFID onshoring process.

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.

Investing and Trading

Investors Seek Growth Now in Paying Later; Payments stocks are getting a boost from retailers’ embrace of buy now, pay later options at checkout
Telis Demos – WSJ
Some shoppers might feel thriftier than usual during this unusual holiday season, but merchants are increasingly offering a payment method that could help them to spend a bit more. Buttons or logos bearing names such as Affirm, Afterpay, Bread, Klarna, Splitit and Quadpay have been popping up in more online shopping carts in the U.S. this year alongside the usual options for cards or digital wallets. Collectively called “buy now, pay later,” these providers enable merchants to be paid up front but give shoppers the ability to spread the cost over weeks or months, often for zero interest, rather than just putting it all on a credit or debit card at once.

The Puzzle of Low Interest Rates; Economists don’t entirely know why rates have been so low for so long, or whether they will turn out to be mainly a boon or a danger.
N. Gregory Mankiw – NY Times
In the evolution of the U.S. economy over the past four decades, one fact stands out as especially puzzling: the large and fairly steady decline in interest rates.

Reeling U.S. Coal Industry Sends Two More Producers to Bankruptcy; White Stallion Energy and Lighthouse Resources filed for chapter 11 as Covid-19 has exacerbated the downturn in coal markets
Jonathan Randles – WSJ
Falling demand for U.S. coal during the coronavirus pandemic continues to take a heavy financial toll on the industry, tipping two more coal production companies into bankruptcy.

Opening Remarks at the December 1, 2020 Meeting of the Asset Management Advisory Committee by Chairman Jay Clayton
Welcome to today’s Meeting of the Commission’s Asset Management Advisory Committee, or AMAC, the final meeting of the year.[1] Thank you to all of the members for a remarkably productive first year, and to all of the panelists—including those presenting today and those who presented at prior meetings. Thank you also to the Commission staff, including Director Dalia Blass and her team in the Division of Investment Management, for working closely with the AMAC so it can provide the Commission with its perspectives and advice, which you have already done so well. And thank you as always to Chairman Ed Bernard for all of your time and attention in helping to guide the AMAC to a successful inaugural year. You’ve set us on a very good path and set a high standard. This is my last scheduled AMAC meeting as Chairman, and I have greatly enjoyed working with you all and participating in your meetings.

Statement on Good Faith Determinations of Fair Value under the Investment Company Act of 1940 Final Rule by Commissioner Hester M. Peirce
Let me begin by thanking the hardworking men and women of the Divisions of Investment Management and Economic and Risk Analysis, the Offices of the Chief Accountant, and General Counsel, and others at the Commission for their commitment to completing this difficult, long-overdue rulemaking. Fair valuation is one of many duties of modern mutual fund boards, It is one of the few duties specifically mentioned in the Investment Company Act and it is, without question, one of the board’s more important responsibilities. Realistically, however, fair valuation is a big job, and the board needs the assistance of others in carrying it out. The rule we are adopting today gives boards a clear path for getting the help they need to perform their statutory duty. Although today’s rule is a much-needed step forward, a non-exclusive safe harbor or a rule that gave boards more discretion would have been even better.

Remarks at Meeting of SEC Investor Advisory Committee by Commissioner Hester M. Peirce
Thank you, Paul [Mahoney]. Let me start by welcoming the new committee members[1] and congratulating the Committee’s new officers. Thank you in advance to both groups for the significant time commitment that you are taking on. I look forward to seeing the work this Committee will do in the coming months under the leadership of Jennifer [Marietta-Westberg], Heidi [Stam], Ted [Daniels], and JW [Verret]. And thank you, Jerry [Solomon] for your valuable service on the Committee.

Good Faith Determinations of Fair Value
Securities and Exchange Commission.
ACTION: Final rule.
SUMMARY: The Securities and Exchange Commission (“Commission”) is adopting a new
rule under the Investment Company Act of 1940 (“Investment Company Act” or the “Act”) that will address valuation practices and the role of the board of directors with respect to the fair value of the investments of a registered investment company or business development company (“fund”). The rule will provide requirements for determining fair value in good faith for purposes of the Act. This determination will involve assessing and managing material risks associated with fair value determinations; selecting, applying, and testing fair value methodologies; and overseeing and evaluating any pricing services used.

Model Portfolios Surging as Advisers Seek Quick Ways to Invest Client Money; Assets in these pre-baked investment kits recently surpassed $4 trillion to reach a new high
Dawn Lim – WSJ
Assets in model portfolios hit a record high this fall, reflecting growing interest in preset investment options developed by Wall Street firms. Data provider Broadridge Financial Solutions estimates that model portfolios held $4.1 trillion of assets in September, up from $3.5 trillion at the end of 2019.

Environmental, Social and Corporate Governance

Obscure Bonds to Enter Major League of ESG Corporate Debt Market
Tasos Vossos – Bloomberg
Sustainability-linkers may rise to 30% of corporate ESG supply; ECB to start buying bonds with sustainability-tied coupons
Sales of sustainability-linked bonds are set to surge amid rising market awareness and the start of European Central Bank purchases. The notes, known as SLBs, will swell to as much as 30% of global corporate ethical-debt sales next year, according to Cristina Lacaci, Morgan Stanley’s EMEA head of green and sustainability bonds. They accounted for less than 10% of the $86 billion market this year, based on data compiled by Bloomberg.

Meeting the demand for ESG
Lorna Blyth – Financial Advisor
Interest in responsible investment is reaching new heights, with the impact of Covid-19 providing a real catalyst for change. As this demand grows, the financial industry, and society as a whole, wants to know how to practice responsible investing – and what results investors can expect from it.

Glencore becomes first big miner to set Paris-aligned climate goal; World’s top exporter of thermal coal pledges to cut greenhouse gas emissions to net zero by 2050
Neil Hume – FT
Glencore, the world’s biggest exporter of thermal coal, has stolen a march on its rivals with new emissions targets that will make it the first big miner to be fully aligned with the goals of the Paris agreement on climate change.

Moscow Discovers Climate Change Can Be Good Business
Kenneth Rapoza – Forbes
“Green is good” has replaced that old 1980s Wall Street mantra: “Greed is good.” Even the oil rich Russians have discovered it. They’re not alone. City planners, start-up entrepreneurs and big business are all discovering that concern over climate change is leading to entire new industries. Or fresh demand for old ones – like solar panels that became a thing in the 1970s; new battery powered car companies like Lordstown Motors, and really old school stuff like bicycles and electric powered scooters that are part of the so-called Mobility-as-a-Service (MaaS) movement.

Hydrogen finance maturing from day trading to M&A
Alex Blackburne – S&P Global
The stock price of Latham, New York-headquartered Plug Power Inc., a hydrogen fuel-cell maker that trades on the Nasdaq, has increased almost sevenfold since the beginning of the year. The company is one of a small cohort of hydrogen stocks to have soared in value in 2020, as droves of investment managers flock to bet on businesses that either produce or utilize the fuel. In London, ITM Power PLC, which develops hydrogen electrolyzers, is up 360% since January. U.S.-based Bloom Energy Corp.’s stock has tripled in that time, while Norway’s Nel ASA and Canada’s Ballard Power Systems Inc. have more than doubled.

Sustainable investing is in vogue among wealthy Asians in the Covid-19 world even if questions linger over potential payback
Martin Choi – South China Morning Post
Asia’s richest expect sustainable investing to accelerate after the Covid-19 pandemic, even if questions remain whether these will generate higher returns than putting money elsewhere, according to a study by Lombard Odier, one of Switzerland’s oldest private banks. Ultra high net worth individuals (UHNWI) in Asia, those with a net worth of at least US$30 million, showed strong interest in sustainability as an investment consideration going forward, a trend which has been accelerated by the Covid-19 situation, said Vincent Magnenat, chief executive for Asia at Lombard Odier, in an interview.


UBS Names COO as President of Personal and Corporate Banking, UBS Switzerland Units
Pietro Lombardi – WSJ
UBS Group AG said Friday that Chief Operating Officer Sabine Keller-Busse will succeed Axel Lehmann as President of the Personal and Corporate Banking and UBS Switzerland units.

Dividends Aren’t Always a Reliable Guide to Bank Health; Investors need to look beyond the cash when restrictions are lifted on shareholder payouts from European banks
Rochelle Toplensky – WSJ
Dividend policies for European banks are likely to diverge in the coming months. Investors shouldn’t take a resumption of generous payouts as a sure sign of relative strength.

Hedge Fund Startup Turns to Crowdsourcing to Pick Top Trades
Nishant Kumar – Bloomberg
Will Potts will use Moneyball-style tactics at his hedge fund; Hard to keep staff as big rivals are on hiring spree
As industry giants sweep up hedge-fund talent, a startup led by former Ivaldi Capital chief Will Potts is turning to crowdsourcing for investment ideas. Potts plans to start a hedge fund at his London-based firm Higher Park in March with more than $100 million. Unlike his previous company, where he ran a team of money managers to invest as much as $3.5 billion, he is banking on a tech platform using reams of data to identify winning bets from seasoned and aspiring traders.

New UBS Chief Makes First Shakeup Atop the Bank
Patrick Winters and Marion Halftermeyer – Bloomberg
Keller-Busse moves from COO role to head of UBS Switzerland; New COO, key for digital transformation, yet to be named
UBS Group AG Chief Executive Officer Ralph Hamers made his first mark on the bank’s executive board, giving Sabine Keller-Busse a new role and extending Iqbal Khan’s responsibilities.

Active fund investors earn higher returns for tolerating underperformance; Research suggests it pays to be patient as even the top active funds have long periods of undershooting the market
Madison Darbyshire – FT
Investors looking to outperform the market by putting money into actively managed funds must tolerate longer periods of decline than most are prepared to weather in the hunt for return.


Zero interest rates: what UK investors can learn from Japan; Lessons from Japan: Savers have useful — and painful — lessons for their British counterparts
Robin Harding – FT
The glossy Tokyo branches of Japan’s big trust banks offer a startling menagerie of investment options. You can open deposits in sterling, dollars and euros. There are investment trusts themed on sustainability, fintech and driverless cars.

African Borrowers Turn On Cellphones for Covid-19 Financial Lifelines; The coronavirus pandemic has supercharged growth of mobile money—and credit—on the continent
Alexandra Wexler – WSJ
Consumers struggling with Covid-19 shutdowns across sub-Saharan Africa have found a new place to get cash to make ends meet: their cellphones. Tidahy Jacquot, 65 years old, a retired ministry of transport worker who lives in Madagascar’s capital city Antananarivo, hasn’t received any government grants or assistance and has been unable to make his normal income doing odd jobs. But he did get a loan of 60,000 ariary, equivalent to about $16, via Orange SA.

Russia Fails to Halt Enforcement of Yukos $57 Billion Award
Ruben Munsterman and Henry Meyer – Bloomberg
Dutch Supreme Court to rule on appeal against damages in 2021; Award equals about a tenth of Russia’s international reserves
Russia lost a bid to suspend enforcement of $57 billion in damages and interest won by former shareholders of Yukos Oil Co. as the government awaits a ruling on its final appeal against the arbitration award late next year.

China to expand weather modification program to cover area larger than India
James Griffiths, CNN
China this week revealed plans to drastically expand an experimental weather modification program to cover an area of over 5.5 million square kilometers (2.1 million square miles) — more than 1.5 times the total size of India.

Chinese Scientists Claim Breakthrough in Quantum Computing Race
Shiyin Chen – Bloomberg
Race toward radical leaps in computing power heating up; Another front in the wide-ranging U.S.-China tech contest
Chinese scientists claim to have built a quantum computer that is able to perform certain computations nearly 100 trillion times faster than the world’s most advanced supercomputer, representing the first milestone in the country’s efforts to develop the technology.

Norway’s central bank deputy governor Jon Nicolaisen resigns over China ties; Official with responsibility for sovereign wealth fund denied security clearance renewal
Richard Milne – FT
Norway’s deputy central bank governor with responsibility for the world’s largest sovereign wealth fund has been forced to resign due to security concerns over his Chinese wife.


U.K. Says Brexit Trade Talks Are at a ‘Very Difficult Point’
Joe Mayes – Bloomberg
Boris Johnson’s spokesman says time is in short supply; U.K. officials say EU has introduced new eleventh-hour demands
The U.K. warned Brexit trade negotiations are at a “very difficult” juncture, as intensive talks continued in London in an effort to secure a breakthrough. The atmosphere surrounding the negotiations worsened on Thursday night after British officials accused the European Union of introducing new demands at the eleventh hour.

Brexit Negotiators Race to Save Trade Deal Amid Spat With France
Ian Wishart and Joe Mayes -Bloomberg
U.K. says discussions have reached ‘a very difficult point’; British officials blame France for hardening the EU’s demands
Negotiators are racing to save a trade deal between the U.K. and European Union in light of a major dispute just hours before they were expecting to announce an accord.

Derivatives Market Faces Challenges on Brexit, EU Regulator Says
Silla Brush – Bloomberg
The European Union’s top markets regulator delivered a fresh warning that big European banks will face difficulties trading derivatives when they are locked out of London’s dominant trading platforms at the end of the Brexit transition this month. Steven Maijoor, chair of the Paris-based European Securities and Markets Authority, said in an interview Thursday that the London offices of EU firms are headed into a “conflict of law” between the U.K. and Europe, affecting swaps on benchmark interest rates and credit defaults.

Brexit: Time running out as Brexit trade talks restart
BBC News
The UK and the EU have resumed talks on post-Brexit trade in London, with time running out to achieve a deal. A senior UK government source said the prospects of a breakthrough were “receding” and accused the EU of making “11th-hour” demands. But a Brussels source denied this, with EU chief negotiator Michel Barnier calling Friday an “important day”. Both sides have to agree and ratify any deal by 31 December, when the current rules on EU-UK trade end. If they do not, they will do business on World Trade Organization rules, meaning the introduction of tariffs, or taxes on imports.

‘Dirty methods’ in Brexit vote cited in push for new laws on Europe’s elections
Daniel Boffey – The Guardian
The “dirty methods” of the Brexit referendum have been cited as a reason for new EU laws aimed at tackling disinformation and forcing online platforms including Facebook to publicly disclose the identity of people and entities funding political adverts. Vera Jourová, a vice president of the European commission, said the EU rule-book needed to be updated to deal with on-line political campaigning, as she unveiled draft legislation at a press conference in Brussels.

France Will Veto Any Brexit Deal It Sees as Unsatisfactory
Geraldine Amiel – Bloomberg
France will veto any trade deal between the U.K. and the European Union that doesn’t respect its interests, French European Affairs Minister Clement Beaune said on Friday. “If there is a deal which is not good,” he told Europe 1 radio, “then we would oppose it. We always said so.” France is concerned about last-minute concessions over access to British fishing waters and U.K. businesses getting an unfair competitive advantage. Bloomberg reported earlier this week that France’s envoy warned chief Brexit negotiator Michel Barnier not to give too much away to clinch an agreement.


Amid pandemic, orders soar for Brazil robot that feeds pigs playing classical music
Ana Mano – Reuters
Orders for a Brazilian pig-feeding robot, which plays classical music while dispensing meals, soared this year as farmers strove to cut costs amid the COVID-19 pandemic.
Roboagro, the privately-owned company that sells the robot, said in a statement sent to Reuters on Thursday that orders rose by an average of 400% to 60 units per month.

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