Generation moonshot: why young investors are not ready to give up on risk

Jul 20, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

I am headed to Old St. Patrick’s Church in downtown Chicago this morning for the services for Jacqueline Cashman, the wife of Thomas J. Cashman, the man who helped me get into the futures industry and my first employer in the industry.

Today we publish part two of our interview with Eurex CTO Wolfgang Eholzer for The History of Financial Futures series. This video and part one could have just as easily been part of The Path to Electronic Trading video series, but it started with Wolfgang’s stories about the Battle of the Bund and his small role in it. In this video, he starts out talking about the naming of the Eurex match engine and other technology, among other stories.

The New York Times has an opinion piece by journalist Moya Lothian-McLean titled “Britain Is Melting, and We’ve Got Nothing More Than Water-Soaked Towels to Get Us Through It” Well Moya, I have been saying for years that the beer was too warm and the whole continent needed more ice machines. But try the special cooling towels, they work nice.

Business Insider has a profile of Citadel’s Troy Kane and how he went from a 14-year old trading floor clerk to the global head of derivatives and FICC for Citadel Securities.

Former ICE executive Raj Chopra is starting a new position as head of America’s ecosystem & business development at Velocity Career Labs.

Here is your silly video of the day of a baby panda noisily eating squash.

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

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Wolfgang Eholzer: The History of Financial Futures, Part 2
JohnLothianNews.com

In part two of the interview with Wolfgang Eholzer for The History of Financial Futures video series from John Lothian News and MarketsWiki Education, Eholzer explains where the names of Eurex’s trade matching engine and other technology came from. Eurex wanted a short name that could be easily copyrighted and easily reproduced for other products.

Watch the video »

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Apex Fintech Solutions’ Data Underscores Mounting Recession Fears and the Rise of the Crypto Millennial in Second Quarter 2022; An accelerating shift into dividend stocks indicates investors may have predicted recession in the first quarter; Sentiment around crypto is divided among generations, as Gen Z investors pull back and millennial investors lean in.
Business Wire via Benzinga
Apex Fintech Solutions (“Apex”), the “fintech for fintechs” powering innovation and the future of digital wealth management, today released its Second Quarter 2022 Apex Next Investor Outlook (“Q2 ANIO Report” or the “report”). The report, which analyzes proprietary data of U.S.-based investors who trade through introducing brokers on the Apex Clearing platform, sheds light on the top 100 stocks held by investors across four generations, as of June 30, 2022, with a special focus on the rising Gen Z2 demographic. The report also includes an analysis of cryptocurrency trading data across the platform. Please note the report is not intended as securities analysis nor as a recommendation to buy or sell any investment and is meant for informational purposes only.
/bit.ly/3v3ZLJL

***** Look deep into the data, but don’t fall in.~JJL

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EEX natural gas futures illustrates commodity volatility
Jeff Reeves – FIA
Commodity market disruptions have impacted trading activity in a host of derivative contracts, and caused challenges for many different market participants across 2022. To help illustrate some of the most dramatic changes in trading behaviors, FIA has compiled a list of active commodity derivative contracts that have seen significant spikes in open interest over the prior year. One of the most noteworthy trends on this list is tremendous volatility in European Energy Exchange (EEX) natural gas contracts when comparing 2021 activity to 2022, driven in part by the Russian invasion of Ukraine and related disruptions to global supply chains.
/jlne.ws/3PnR8BE

****** The worst debit I ever had from a customer when I was a futures broker was from natural gas, actually natural gas spreads. Yes, it can be volatile.~JJL

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How FTX plans to reshape the US futures market with crypto tech; Exchange is seeking regulatory approval for products that render margin calls obsolete
Alexandra Heal and Philip Stafford – FT
FTX is seeking to shake up the sprawling US derivatives market, marking the biggest intervention to date by a crypto group in to the heart of traditional finance. The three-year-old exchange, founded by Sam Bankman-Fried, is seeking approval from the US Commodity Futures Trading Commission to offer customers bitcoin futures — contracts that allow users to bet on the price of the world’s most actively traded digital token. The proposed process would strip out the brokers that for the past 40 years have acted as intermediaries between customers and the exchanges where deals are done.
/jlne.ws/3yQ3fAF

******Sounds more like Sam is trying to render brokers obsolete.~JJL

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These maps show how excessively hot it is in Europe and the U.S.; The heat, which has killed hundreds in Portugal and Spain, is unprecedented in many areas
Matthew Cappucci and Jason Samenow – The Washington Post
A historic and deadly heat wave has been scorching western Europe, killing hundreds in Spain and Portugal. Temperatures spiked to 115 degrees on the Iberian Peninsula amid bone-dry conditions, fueling wildfires and displacing thousands of people in France. The mercury topped 100 degrees (38 Celsius) in Britain on Monday and is expected to surge higher Tuesday. For the first time, the U.K. Met Office has issued a red warning for heat, its most extreme alert. The warning, in effect through Tuesday, includes Birmingham, Oxford, Nottingham and London. Wales already established its highest temperature on record Monday, and England could be next Tuesday, with temperatures as high as 104 degrees (40 Celsius). At the same time, another heat wave is brewing across the pond in the United States — one that produced a tie for Salt Lake City’s highest temperature Sunday and could bring readings as high as 113 degrees in Texas and Oklahoma on Tuesday.
/jlne.ws/3PDeXoW

****** You should wear dark glasses when you look at this map, as it is very hot!~JJL

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Tuesday’s Top Three
Our most clicked “story” Tuesday was the picture of the late Ralph Goldenberg with Chris Hehmeyer and Jessica Hehmeyer. Second was the picture of Goldenberg and Hehmeyer in the early days of their firm. Third was Billionaire Ken Griffin’s Colossal Palm Beach Estate Riles Up Neighbors, from The Daily Beast.

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MarketsWiki Stats
26,931 pages; 239,582 edits
MarketsWiki Statistics

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Lead Stories

Generation moonshot: why young investors are not ready to give up on risk; Even amid a meltdown in crypto markets, DIY traders who came of age after the financial crisis no longer want to play by the old rules
Madison Darbyshire – FT
With $1,000 in savings and two US government stimulus checks, Chris Zettler began investing in 2020. First he bought companies he knew, he says, “but then I got bored with it”. He moved on to call options in companies with volatile share-prices, riding the price swings. He used a win to buy 100 shares in the meme stock AMC at $30 in May and sold at about $65 in June.
/jlne.ws/3RIGGqh

Europe Rolls Out Plan to Conserve Gas Amid Fears Russia Will Tighten Taps; EU guidelines call on countries to cut gas consumption by 15%, reductions that could become mandatory in emergencies
Kim Mackrael – WSJ
The European Union is pressing governments to step up their energy-conservation campaigns and prepare for possible rationing of natural gas amid rising concerns that Russia is about to tighten its squeeze on the continent’s supply. The European Commission, the EU’s executive body, released a plan Wednesday that pushes governments to prepare for a winter without ample supplies of Russian gas. That scenario was thrown into relief this week as capitals across Europe waited for Moscow to restart Nord Stream, a key artery carrying gas from Russia to Europe, after a period of scheduled maintenance that is set to end Thursday. Europeans are on edge because Moscow had already reduced the flow of gas through Nord Stream to about 40% of its capacity before the maintenance period began.
/jlne.ws/3csYrJH

Crypto Layoffs Hit Risk and Compliance Staff at Big Exchanges; Businesses including Coinbase and Gemini have cut employees and rescinded job offers, though recruiters say demand for legal and compliance talent in the industry continues, particularly among startups
Mengqi Sun – WSJ
The cryptocurrency industry was until recently a finance star: institutional and individual investors poured in money, and talent flocked to the sector to share in its growth. Now, with the rapid drop in cryptocurrency prices, the fortunes of these companies have changed almost overnight, prompting layoffs. Some of the largest cryptocurrency exchanges, including Coinbase Global Inc. and Gemini Trust Co., have cut staff, including in risk and compliance.
/jlne.ws/3RPOXsv

Putin Signals Gas Pipeline Will Restart, But With Conditions; Nord Stream link set to end planned maintenance on Thursday; A spat over a pipeline part is complicating the outlook
Bloomberg News
Russian President Vladimir Putin signaled that Europe will start getting gas again through a key pipeline, but warned that unless a spat over sanctioned parts is resolved, flows will be tightly curbed. Europe is on tenterhooks, waiting to see whether gas flows resume on Thursday when maintenance on the Nord Stream pipeline is set to end. Putin gave the clearest signal yet that Moscow plans to restart at least some flows.
/jlne.ws/3ISwebA

Sam Bankman-Fried Turns $2 Trillion Crypto Rout Into Buying Opportunity; Putting up $1 billion for rescues and acquisitions, the FTX co-founder demonstrates his dominance of digital currency.
Hannah Miller and Olga Kharif – Bloomberg
Over the span of 14 days in June, Sam Bankman-Fried, wunderkind quant-turned-cryptocurrency billionaire, carried out a dealmaking spree unlike any other in the brief history of the industry. Transactions came in dizzying, rapid-fire succession: The co-founder and chief executive officer of digital-asset exchange FTX bought two companies, propped up the crypto platform BlockFi, and tried to save another, Voyager Digital, with a large loan.
/jlne.ws/3vpwV6T

UK Regulators to Introduce Rules for Stablecoins in New Markets Bill
Sandali Handagama – Coindesk
Regulators in the U.K. are introducing rules for using stablecoins – cryptocurrencies whose prices are pegged to another asset – as payment tools to the country’s parliament on Wednesday. The rules are part of a long-awaited financial services and markets bill, aimed at strengthening the U.K. financial system post-Brexit, set to be presented to parliament in the coming hours.
/jlne.ws/3ITpMB9

My Worldview Has Been Destroyed’: Chinese Banking Scandal Tests Faith in the System; The disappearance of ordinary savers’ money, and the government’s seemingly indifferent response, could pose a major test for the Communist Party’s legitimacy.
Vivian Wang and Zixu Wang – NY Times
The saving opportunity with the rural bank in central China looked, to Sun Song, a 26-year-old-businessman, like a great find. It would be linked to his existing account at a large, reputable state-owned bank. The rural bank was also offering high interest rates, making it seem like an ideal place to park his roughly $600,000 in savings.
/jlne.ws/3zlvVmg

Robinhood Was Behind Phantom Surge in Berkshire Hathaway Trade Volume, Study Finds; New research suggests fractional trades caused an apparent trading frenzy in the stock last year
Alexander Osipovich – Bloomberg
A sudden surge in trading volumes in class A shares of Warren Buffett’s Berkshire Hathaway Inc. confounded investors last year. Now, a trio of academics say they have solved the stock-market mystery. The jump in volumes was an illusion caused by a change in how Robinhood Markets Inc. reports fractional trades, according to a new study expected to be released Wednesday. The study suggests that volume data for many other stocks were inflated during the pandemic. Its authors blamed a “misguided” Financial Industry Regulatory Authority rule for how brokers should report fractional trades.
/jlne.ws/3Olq58Q

Europe sizzles in record heat wave as thousands flee wildfires; London Heathrow hits 104 degrees, Britain’s highest temperature on record
Ellen Francis, Annabelle Timsit and Jason Samenow – The Washington Post
“BRITAIN IS MELTING,” one front page here read Tuesday, as record heat and raging wildfires in France and Spain brought the toll of extreme temperatures up close for many Europeans. As the heat wave moved across the continent, Germany and Belgium also issued heat alerts, while firefighters battled to contain flames that have scorched land in Portugal for days. The United Kingdom’s weather service declared Tuesday the hottest day on record in Britain, where many schools closed and subway authorities urged commuters to avoid unnecessary travel.
/jlne.ws/3OkIouW

Japan Buys Most Expensive Gas Shipment as Energy Crunch Bites; Nippon Steel paid highest ever price for LNG delivery: people; Tight energy markets are sending prices of gas and coal higher
Nicholas Swee Yang Lua and Stephen Stapczynski – Bloomberg
Japan bought its most expensive ever natural gas shipment as an escalating global energy crunch brings new risks of blackouts and intensifies competition for fuel imports. Nippon Steel Corp. purchased a liquefied natural gas cargo for delivery in September in the low-$40 per million British thermal units range, according to traders with knowledge of the matter. The cargo is Japan’s most expensive ever, they said.
/jlne.ws/3PCOZlu

India’s central bank wants to ban cryptocurrencies, government says
Jagmeet Singh and Manish Singh – TechCrunch
India’s central bank wants to ban cryptocurrencies, the government told the parliament on Monday, raising more uncertainty about the future of the nascent virtual digital asset in the world’s second largest internet market. Nirmala Sitharaman, the minister of finance in India, said Monday that the Reserve Bank of India has expressed concerns about the “destabilising effect of cryptocurrencies on the monetary and fiscal stability of a country” and has recommended “for framing of legislation on this sector,” she said.
/jlne.ws/3J6hAOd

Elon Musk’s summer sojourn interrupted by Delaware court; Billionaire Tesla chief executive must now consider risk and harm to other business ventures
Sujeet Indap – FT
Summer vacation is now officially over for Elon Musk. On Monday, images emerged of the shirtless and pale Tesla chief executive partying on a yacht in Greece with the Hollywood super agent Ari Emanuel. But just 24 hours later, a Delaware judge put a crimp in his holiday, ordering Musk on Tuesday to stand trial in October as Twitter seeks to force him to complete the $44bn buyout of the company he has tried to walk away from. Musk had argued there was no need to begin the proceedings until next February.
/jlne.ws/3RPA1dC

UK Chancellor Has ‘Open Mind’ on Powers to Overrule Regulators; Treasury plan for ‘call-in’ powers is under consideration; But Zahawi says it won’t appear in Wednesday’s finance bill
Joe Mayes – Bloomberg
UK Chancellor of the Exchequer Nadhim Zahawi says the government is considering giving ministers the power to overturn financial regulators’ decisions, a move that would upend the rules that govern the City of London and spark tension with the Bank of England. But Zahawi said he was undecided and the ‘call-in’ powers wouldn’t be included in the government’s Financial Services and Markets Bill due to be published on Wednesday.
/jlne.ws/3zfu6Y9

EU Set to Target 15% Reduction in Natural-Gas Use on Russian Supply Woes; European Commission drafts voluntary demand-reduction targets; Europe is preparing for potential gas-supply cutoff by Moscow
Ewa Krukowska and John Ainger – Bloomberg
The European Union is set to propose a voluntary 15% cut in natural gas use by member states starting next month on concern Russia may halt supplies of the fuel. The goal would be embedded in a regulation accompanying a demand-reduction plan the European Commission is scheduled to unveil Wednesday to cope with a potential full cutoff by Moscow.
/jlne.ws/3PnOcF9

Yellen Says Oil-Cap Plan Blunts Concerns Over Russian Reprisals
Christopher Condon – Bloomberg
US Treasury Secretary Janet Yellen said her plan to limit Russia’s oil earnings can overcome fears among potential partners that President Vladimir Putin may retaliate. “What I heard was concern about retaliation,” Yellen said Monday in an interview en route to Seoul, South Korea, after attending a gathering of Group of 20 finance ministers in Bali, Indonesia. Yellen said she addressed those concerns by pointing to the alternative if the price-cap scheme isn’t put into place.
/jlne.ws/3IQAhoC

SEC’s Gensler Says It’s Unclear If China Will Avoid Delistings
Lydia Beyoud and David Westin – Bloomberg
Securities and Exchange Commission Chair Gary Gensler says it’s unclear if American and Chinese authorities will reach a deal to avoid the delisting of some 200 companies from US stock exchanges. Gensler said on Tuesday during an interview on Bloomberg Television’s “Balance of Power With David Westin” that it’s ultimately Beijing’s decision whether to grant access to American audit inspectors as required by US law. He added that talks between the two sides had been “constructive.” “I just really don’t know right now,” he said over the prospects of reaching a deal. “It’s going to be choices made by the authorities there.”
/jlne.ws/3OeywCY

French Banking Giant BNP Paribas Enters Crypto Custody Space: Sources
Ian Allison – CoinDesk
French Bank BNP Paribas (BNP) is entering the crypto custody space via a partnership with Swiss digital asset safekeeping firm Metaco, according to three people with knowledge of the deal. Many large banks are edging towards crypto custody, but what makes this deal particularly significant is BNP Paribas Securities Services’ position as a major global custodian with almost $13 trillion in assets under custody.
/jlne.ws/3cgRY4A

Spoofing Gold Price ‘Common’ at Bear Stearns, Ex-Trader Says
Eddie Spence – Bloomberg
At Bear Stearns Cos., before the bank was acquired by JPMorgan Chase & Co. in 2008, manipulating the gold futures market with bogus spoof orders was “common practice,” especially for its top trader, Gregg Smith, a former colleague told jurors in Chicago. “It was pretty widespread” on the precious-metals trading desk, said Corey Flaum, a gold and silver trader who was later fired for spoofing and reached a criminal plea agreement to cooperate with prosecutors. “It was done out in the open,” Flaum said Monday. “Nobody ever said boo about doing it. No one ever said it was legal or illegal. It was common practice.”
/jlne.ws/3IRcxkk

Founders who ‘cannot be trusted’ and a $50 million yacht: New Three Arrows Capital bankruptcy filing sheds light on the crypto hedge fund’s epic demise
Grady McGregor – FORTUNE
Kyle Davies and Zhu Su, the founders of Three Arrows Capital (3AC), are nowhere to be found, but the size of their firm’s gargantuan debt obligations have come into clearer view. The crypto hedge fund owes $3.5 billion to 27 different companies, including $2.3 billion to digital currency lender Genesis Global Trading, according to a court filing in the firm’s bankruptcy made public on Monday. “3AC is insolvent and should be wound up,” creditors argued in a 1,157-page affidavit filed in a British Virgin Islands court. “Its management cannot be trusted to retain any remaining assets for the benefit of creditors.”
/jlne.ws/3v0vT0N

European Commission Doesn’t Expect Russia to Restart Nord Stream; Key gas pipeline to Europe has been down for maintenance work; EU is bracing for worst-case scenario; urging energy savings
Stephen Stapczynski and Ewa Krukowska – Bloomberg
The European Commission doesn’t expect Russia to restart a key natural gas pipeline this week, a senior official said, the clearest indication yet that the bloc is bracing for the worst. “We don’t expect that it comes back,” Budget Commissioner Johannes Hahn said Tuesday. “We are working on the assumption that it doesn’t return to operation. And in that case certain additional measures need to be taken.” Russia is scheduled to resume flows through the Nord Stream pipeline on July 21 after planned maintenance. Still, concerns are growing from Brussels to Berlin that the link may not return, especially after Russia slashed flows last month, citing delays because of sanctions.
/jlne.ws/3v3lnpr

Russia’s Gazprom tells European buyers gas supply halt beyond its control
Julia Payne – Reuters
Russia’s Gazprom has told customers in Europe it cannot guarantee gas supplies because of “extraordinary” circumstances, according to a letter seen by Reuters, upping the ante in an economic tit-for-tat with the West over Moscow’s invasion of Ukraine. The Russian state gas monopoly said in a letter dated July 14 that it was retroactively declaring force majeure on supplies from June 14. The news comes as Nord Stream 1, the key pipeline delivering Russian gas to Germany and beyond, is undergoing 10 days of annual maintenance scheduled to conclude on Thursday.
/jlne.ws/3zgZDck

Row erupts at European fund body over influence of non-EU giants; Trade bodies representing German and Italian fund managers are unhappy about some of the rights given to corporate members, which include BlackRock and Fidelity
David Ricketts – Financial News
A rift has emerged within the EU’s fund management trade body over the influence that corporate members such as BlackRock, Fidelity and others have when lobbying on behalf of the sector. The European Fund and Asset Management Association champions the industry with European policymakers as well as global bodies, representing the bloc’s national trade bodies and members with more than EUR31tn of assets.
/jlne.ws/3yQB8Bn

Neil Shen’s Sequoia China seeks ‘politically correct’ investment strategy; Billionaire founder of powerful VC firm raises $9bn tech fund with a plan aligned to Beijing’s policy goals
Tabby Kinder and Ryan McMorrow – FT
After a dismal year for Chinese tech companies, the $9bn that Sequoia China raised earlier this month to fund hundreds more start-ups was a display of star power from the venture capital group’s billionaire founder Neil Shen.
/jlne.ws/3ct8b70

Britain Is Melting
Moya Lothian-McLean – NY Times
Britain’s chickens have come home to roast. A dependably temperate climate has this week given way to extreme heat. “HOTTER THAN THE SAHARA,” bellowed the front page of the aptly titled tabloid The Sun on Monday. Worryingly, it proved to be a rare instance of accuracy from the paper. By midafternoon that day, British meteorologists confirmed that England, Scotland and Northern Ireland had all experienced the highest temperatures of the year so far. Wales went one scarier, breaking its record for the hottest day not once but twice.
/jlne.ws/3ITw2J9

Ukraine Invasion

Ukraine and Russia near deal to end blockade of grain exports; Kyiv seeks assurances on safety of ports and vessels before agreement to help ease global food crisis is finalised
Laura Pitel, Max Seddon and Henry Foy – FT
Ukraine and Russia are close to agreeing a deal to secure the safe passage of millions of tonnes of grain through the Black Sea but remain at odds over how to ensure the security of the ports and ships along the crucial export route, according to people familiar with the UN-led negotiations
/jlne.ws/3zi9hva

Ukraine graft concerns resurface as Russia war goes on
Matthew Lee, Nomaan Merchant – AP
Ukrainian President Volodymyr Zelenskyy’s dismissal of senior officials is casting an inconvenient light on an issue that the Biden administration has largely ignored since the outbreak of war with Russia: Ukraine’s history of rampant corruption and shaky governance.
/jlne.ws/3v4cJqN

Russian Oil Going About 10% Cheaper in China as Flows Upended
Serene Cheong – Bloomberg
China’s appetite for cheap Russian oil continues to reverberate through the global market, with buyers being offered their favorite crude from the OPEC+ producer at a deep discount to similar-quality barrels.
/jlne.ws/3IQx9ZY

Ukraine Seeks Foreign-Debt Payment Halt as War Hits Economy; Government seeks agreement with bondholders by Aug. 15; Ukraine plans to service, redeem debt if no accord reached
Volodymyr Verbyany and Daryna Krasnolutska – Bloomberg
Ukraine is seeking to delay payments on its foreign debt and change the coupon structure on some existing bonds as Russia’s invasion hobbles its economy and depletes foreign reserves. The government wants to agree with bondholders on a two-year payment freeze and changes to its so-called GDP warrants by Aug. 15, according to decrees published on the government’s website Wednesday.
/jlne.ws/3yLWUpO

Why Russia Believes It Cannot Lose the War in Ukraine
Serge Schmemann – NY Times
Sergey Karaganov is a prominent Russian political scientist whom I have known for almost 20 years in covering Russia and have interviewed many times as a window into Kremlin thinking. The academic director of the faculty of World Economy and International Affairs at Moscow’s Higher School of Economics and honorary chairman of Russia’s premier nongovernmental think tank, Mr. Karaganov warned for years about a potential conflict in Ukraine over NATO expansion. Since the brutal Russian invasion of Ukraine began in February, he has written articles and given interviews in broad support of President Vladimir Putin, so I interviewed him to better understand Mr. Putin’s aims in the conflict. Ukraine continues to suffer, and those who hope to support Ukraine must understand those aims as it tries to confront Russia’s aggression.
/jlne.ws/3aO55tT

Exchanges, OTC and Clearing

HKEX appoints new chief strategy officer; As part of the expansion of its expansion of its emerging business development team, HKEX has also named a new head of digital assets, markets and head of carbon and ESG products, markets.
Wesley Bray – The Trade
Hong Kong Exchanges and Clearing (HKEX) has appointed Daniel Sonder as its new chief strategy officer and head of data business, markets. Sonder was promoted to the role after joining HKEX from Brazilian stock exchange B3 earlier this year, where he served as chief financial officer.
/jlne.ws/3v19dxr

Nasdaq Announces 3-For-1 Stock Split and Quarterly Dividend of $0.20 Per Share
NASDAQ
The Board of Directors of Nasdaq, Inc. (Nasdaq: NDAQ) has approved and declared both a 3-for-1 stock split of the company’s common stock in the form of a stock dividend, along with a regular quarterly dividend of $0.20 per share on the company’s outstanding common stock, which on a split-adjusted basis is economically equivalent to the pre-split dividend amount of $0.60 per share paid in the preceding quarter.
/bit.ly/3yX0zB6

Fund Recs joins REGIS-TR’s Partnership Programme
BME-X
REGIS-TR has added Fund Recs to their Partnership Programme. Through this partnership, Fund Recs will have direct access to the REGIS-TR trade repository to automatically retrieve trade data on behalf of their clients. This partnership will greatly simplify and streamline the reconciliation process for Fund Recs’ clients. Under EMIR and SFTR, financial counterparties are required to submit their transaction data to a trade repository in a timely manner and, having effective oversight of their trade reporting is critical to ensure ongoing compliance with regulations. Fund Recs’ EMIR and SFTR modules enable its clients to ensure that trade flows are submitted and complete as defined by regulatory requirements.
/bit.ly/3RLQjo2

OTC Clearing Firm Advisory – USI to UTI Changes for the CFTC Part 45 Regulations – Effective July 20, 2022
CME
Please be advised that CFTC regulation § 45.5 is changing to support the adoption of Unique Transaction Identifiers, with a production compliance date of December 5, 2022. To allow significant time for firms to test the change, CME Clearing (CME) will make the following changes to all OTC trades in New Release on Wednesday, July 20, 2022.
/bit.ly/3OnmqaL

Notice of Disciplinary Action
CME Group
# NYMEX 19-1215-BC
Effective Date 19 July 2022
NON-MEMBER: Powerline Petroleum, LLC
NYMEX RULE VIOLATIONS: RULE 526. BLOCK TRADES (In Part)
The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades: F. Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.
/bit.ly/3OgVNUF

Silver Bond – Reminder on the Submission of the Letter of Undertaking
HKEX
CCASS Participants are reminded that, if they are interested in participating in the Silver Bond issuance in the 2022-23 financial year, they (including securities brokers who participated in Silver Bond issuances of previous years) should submit the signed Letter of Undertaking by hand to the Hong Kong Monetary Authority at or before 12:00 noon, 27 July 2022. Those who did not sign the Letter of Undertaking could not participate in the Silver Bond issuance in the 2022-23 financial year. For details, please refer to the circular to CCASS participants published by the HKEx dated 13 July 2022 (reference number: CD/DNS/CCASS/192/2022; https://www.hkex.com.hk/-/media/HKEX-Market/Services/Circulars-and-Notices/Participant-andMembers-Circulars/HKSCC/2022/ce_HKSCC_SKA_192_2022.pdf)
/bit.ly/3aPvHuz

JPX And JPXI Launch ESG Bond Information Platform
JPX
Japan Exchange Group, Inc. (JPX) and JPX Market Innovation & Research, Inc. (JPXI) have today launched the ESG Bond Information Platform. The Sustainable Finance Platform Development Working Group, set up by JPX in October 2021, discussed practical issues around the creation of an “information platform” for ESG bonds. With “green” investment growing fast during the net zero transition, the Working Group pointed out the importance of enabling access to information which is useful for the operations of both issuing organizations and investors. We hope that by bringing information (security information, issuer information (including strategy), use of proceeds/impact, external reviews, etc.) which was previously scattered across the websites of individual issuers, review providers, securities companies, and others together onto one platform, we can improve convenience for market players and visibility of the products, thereby contributing to the development of the sustainable finance market.
/jlne.ws/3ztup1T

Request For Comments
TMX
Amendments To The Rules Of Bourse De Montréal Inc. To Modify The Delivery Period Of The 30-Year Government Of Canada Bond Futures (Lgb)
The Rules and Policies Committee of Bourse de Montréal Inc. (the “Bourse”) and the Special Committee of the Regulatory Division of the Bourse approved amendments to the Rules of the Bourse in order to modify the delivery
period of the 30-year government of Canada Bond Futures (LGB). Comments on the proposed amendments must be submitted at the latest on August 19, 2022.
/bit.ly/3RM96iY

Market for Underlying Security Used for Openings on MIAX Options, MIAX Pearl Options and MIAX Emerald Options for Newly Listed Symbols Effective Wednesday, July 20, 2022
MIAX
Please refer to the Regulatory Circulars listed below for newly added symbols and the corresponding market for the underlying security used for openings on the MIAX Exchanges. The newly listed symbols will be available for trading beginning Wednesday, July 20, 2022.
/bit.ly/3B3GFqJ

Nasdaq Reports Second Quarter 2022 Results; Continues Strong Growth in Solutions Segments Revenue; Nasdaq, Inc. (Nasdaq: NDAQ) today reported financial results for the second quarter of 2022.
NASDAQ
Second quarter 2022 net revenues increased 6% compared to the second quarter of 2021. Solutions segments2 revenues increased 10%, including 12% organic growth, partially offset by a negative 2% FX impact. Annualized Recurring Revenue (ARR)3 increased 9% compared to the second quarter of 2021. Annualized SaaS revenues increased 12% and represented 35% of ARR. Second quarter 2022 GAAP diluted earnings per share decreased 10% compared to the second quarter of 2021 primarily due to a gain on a divestiture in the prior year period. https://bit.ly/3zhIcIE

Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange Closed for Civic Holiday
TMX
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Monday, August 1, 2022 for the Civic Holiday. The Exchanges will re-open and resume regular trading on Tuesday, August 2, 2022.
/bit.ly/3v1yyr1

Fintech

Scrutiny of Alibaba in Record Breach May Ensnare All China Tech; E-commerce giant led a wide selloff of China tech on Friday; Researchers suggest most likely cause may have been user error
Sarah Zheng and Coco Liu – Bloomberg
Questions surrounding Alibaba Group Holding Ltd.’s role in China’s largest known cybersecurity breach may fuel Beijing’s resolve to clamp down on domestic tech giants and accelerate a move away from their private cloud services. Researchers studying the leaked data of close to a billion Chinese residents earlier this month have noticed hallmarks of Alibaba’s cloud service, including the domain name of the hosting service.
/jlne.ws/3Oht0j1

Schroders acquires minority stake in blockchain and digital assets firm Forteus; Investment will allow Schroders to develop its tokenisation strategy.
Wesley Bray – The Trade
Schroders has entered the digital asset space by acquiring a minority stake in Forteus, an asset manager focused on blockchain technology and digital assets. Forteus serves as the asset management arm of diversified digital asset investment firm, Numeus Group.
/jlne.ws/3zgJOlU

Cowen Digital serves up crypto with a side of tradition; Speaking to The TRADE Cowen Digital’s co-leads, Eric Rose and Drew Forman say their newly launched division aims to mimic Cowen’s operations in equities.
Annabel Smith – The Trade
Cowen Digital has launched into the market with the intention of bringing traditional workflows to the non-traditional digital assets market. The initiative has been live trading with clients since the beginning of the year but was only announced publicly in March.
/jlne.ws/3aSFnUY

Cybersecurity

Biden administration pushes to close the growing cybersecurity workforce gap
Brian Fung – CNN
The Biden administration is pushing to fill hundreds of thousands of cybersecurity jobs in the United States as part of a bid to close a talent shortage US officials describe as both a national security challenge and an economic opportunity.
On Tuesday, the administration announced a multi-agency plan to create hundreds of registered apprenticeship programs with the private sector to flesh out the nation’s cybersecurity workforce — and defend against a rising tide of data breaches, ransomware attacks and other hacking incidents.
/jlne.ws/3yRl8yZ

Cybersecurity Priorities For The Board’s Agenda
John Maynard – Forbes
For years now, organizations have had to make a critical decision—either embrace the digital transformation project or see business growth stagnate, if not wither away. There is simply not enough room in today’s competitive market to accommodate those who don’t. With that said, we have witnessed a mass migration to cloud-based technologies and, simultaneously, an increasingly intricate and inescapable threat environment. This leads businesses, once again, to a crossroads—recognize cybersecurity as a business problem as opposed to an IT issue or find oneself in a vulnerable position when combatting cyber threats.
/jlne.ws/3PkSU6x

Cryptocurrencies

Bankman-Fried Says Customers Should Get Deposits Back in Crypto Bailout
Olga Kharif – Bloomberg
Here are the key takeaways from FTX founder and CEO Sam Bankman-Fried’s remarks at the Bloomberg Crypto Summit in New York Tuesday. Terminal users can click here for the TOPLive blog.
/jlne.ws/3IMWMuR

Morgan Stanley Says Buy Salvadoran Bonds Battered by Bitcoin Bet; El Salvador’s debt has been ‘overly punished’ by markets; Bonds could rebound to 44 cents on the dollar by year end
Maria Elena Vizcaino – Bloomberg
Morgan Stanley is ready to scoop up battered bonds from El Salvador, which are some of the worst-performing notes this year as the president’s bet on Bitcoin backfires. The government’s $7.7 billion in eurobonds have been “overly punished” by the market despite El Salvador having better metrics than other distressed peers, Simon Waever, the global head of emerging-market sovereign credit strategy at the bank, wrote in a note Tuesday.
/jlne.ws/3OkWhJu

Investment Firm Valkyrie Branches Into Venture Capital With Focus on Israeli Crypto Startups
Danny Nelson – CoinDesk
Crypto investment firm Valkyrie is moving into venture capital with a planned $30 million fund that will bet heavily on early-stage startups in Israel. Valkyrie has hired Lluis Pedragosa, a veteran of Israel’s VC scene who is the founder and former partner of cybersecurity-oriented Israeli VC Team8, to lead Valkyrie Ventures. The Spaniard told CoinDesk that the crypto startup market in Israel has been languishing in a “vacuum” and that despite the country’s surging tech entrepreneur landscape, funders, founders and builders were all avoiding crypto. He attributed that to the bad taste left by the initial coin offerings scams of 2017 and 2018. “But that has changed in the past 12 to 18 months, with more and more entrepreneurs jumping on the blockchain wagon,” Pedragosa said.
/jlne.ws/3PnLTlI

Crypto Mining and Staking Firm Foundry Starts Training Program for Miners
Eliza Gkritsi – CoinDesk
Digital asset mining and staking firm Foundry has started the Foundry Academy, a program to train and prepare technicians for the bitcoin mining industry. Foundry is a subsidiary of Digital Currency Group (DCG), which is the parent company of CoinDesk.
/jlne.ws/3B53MRU

Three Arrows Creditors Include Crypto Giants, Co-Founder’s Wife; Genesis parent DCG filed $1.2 billion claim as top creditor; List shows web of connections around bankrupt hedge fund
Yueqi Yang and Muyao Shen – Bloomberg
A creditor list of bankrupt crypto hedge fund Three Arrows Capital puts the interconnected nature of the industry on display, with lenders ranging from some of the biggest digital-asset firms to the wife of co-founder Kyle Davies. At the top is Digital Currency Group Inc., the parent company of crypto brokerage Genesis, which filed a $1.2 billion claim against Three Arrows, according to people familiar with the matter who reviewed a court filing.
/jlne.ws/3IULLI2

Singapore Plans to Broaden Crypto Regulations After Shakeout; MAS set to consult on potential steps in September or October; Central bank will detail position on digital assets next month
Suvashree Ghosh and Faris Mokhtar – Bloomberg
Singapore will broaden cryptocurrency regulations to cover more activities, joining a worldwide push to clamp down on risks after a series of business failures rocked the industry. The Monetary Authority of Singapore plans to consult on proposed steps in September or October, Managing Director Ravi Menon said in response to questions after releasing the central bank’s annual report Tuesday.
/jlne.ws/3ofRNJD

Binance.US Starts Affiliate Marketing Program Taking Aim at Coinbase
Ian Allison – Coindesk
Binance.US, the American subsidiary of cryptocurrency exchange giant Binance, is trumpeting the launch of its affiliate marketing program even as rival Coinbase (COIN) closed its affiliate program, citing bear market conditions.
/jlne.ws/3B5zfU2

Japan’s Self Regulatory Project in Peril as Financial Regulator Reprimands Crypto Advocacy Group: Report
Sandali Handagama – Coindesk
Japan’s “self-regulation experiment” for its digital asset space is unraveling as disagreements between financial regulators the industry advocacy body deepen, according to a Financial Times (FT) report.
/jlne.ws/3zdYIbx

Financial Inclusion in Crypto: Jay-Z and Jack Dorsey’s Bitcoin Academy; Can digital assets be accessible to all or is the price of entry having disposable income?
Victoria Vergolina – Bloomberg
What do Rapper Jay-Z and Jack Dorsey, founder and former CEO of Twitter, have in common? No, it’s not music. It’s Bitcoin. If you spend enough time around people who believe that crypto can transform society, you’ll eventually hear them make an argument about financial inclusion. Jay-Z has teamed up with Dorsey on what they’re calling Bitcoin Academy, an educational program designed to empower people through financial literacy — with a focus on Bitcoin. Bloomberg reporters Paulina Cachero and Akayla Gardner join this episode to discuss Bitcoin Academy and whether Bitcoin is truly the key to a more financially inclusive society.
/jlne.ws/3PD5Ep5

South Korea Investigates Abnormal Crypto-Linked FX Transactions
ByHooyeon Kim – Bloomberg
South Korean financial regulators are probing abnormal foreign-exchange transactions at some of the country’s largest commercial banks for any links to money laundering or currency speculation using crypto assets, an official said.
/jlne.ws/3Om1Qr2

Gemini Becomes First Company to Be Registered as Virtual Asset Service Provider (VASP) in Ireland
Gillian Lynch – Gemini
Today, we are thrilled to announce that Gemini is the first company to be registered as a Virtual Asset Service Provider (VASP) by the Central Bank of Ireland. Our VASP registration comes on the heels of our Electronic Money Institution (EMI) authorisation in February of 2022, also from the Central Bank of Ireland.
/jlne.ws/3PloQIb

Indian Exchanges Hold Meeting to Discuss Way Forward After Crypto Advocacy Body Is Dissolved: Sources
Amitoj Singh – CoinDesk
India’s biggest crypto exchanges are meeting in Bengaluru, the tech capital of India, to recalibrate their plans for the industry, according to multiple sources. This comes after the Blockchain and Crypto Assets Council (BACC), the advocacy body that represented the industry, was disbanded last week by its parent, the Internet and Mobile Association of India (IAMAI). On Monday, in what was the first official confirmation of the position of India’s central bank, the country’s finance minister confirmed that the central bank wants to prohibit cryptocurrencies. At least 10 of India’s largest crypto exchanges and their representatives are in the meeting, still underway at press time, a source said.
/jlne.ws/3omMrw1

‘Singapore-based’ Crypto Firms Leading Market Meltdown Were Not Regulated, Central Bank Chief Says
Sandali Handagama – Coindesk
Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), says troubled crypto firms reported by the media as being based in Singapore are not fully regulated in the country.
/jlne.ws/3B18sZ5

Bored Apes Creator Warns of Threat Group Targeting NFT Communities
Shaurya Malwa – CoinDesk
Yuga Labs, the development studio behind popular non-fungible tokens (NFT) collections such as the Bored Apes Yacht Club, warned in a tweet Monday of a group of attackers targeting the NFT community. “Our security team has been tracking a persistent threat group that targets the NFT community,” Yuga developers tweeted. “We believe that they may soon be launching a coordinated attack targeting multiple communities via compromised social media accounts.” Yuga Labs did not respond to requests asking for more specific information at writing time. However, the warning came as millions of dollars worth of NFT exploits have occurred in the past few months.
/jlne.ws/3yVGiMe

Dubai’s Metaverse Plan Targets 40,000 Virtual Jobs in Five Years
Leen Al-Rashdan – Bloomberg
Dubai is seeking to break into the world’s top 10 metaverse economies under a new strategy that envisions the sector supporting as many as 40,000 additional virtual jobs and adding $4 billion to the city’s GDP in five years. The government aims to develop global standards in building safe and secure platforms for users and develop infrastructure and regulations to accelerate the adoption of these technologies, state-run WAM news agency said. The plan, launched by Dubai Crown Prince Sheikh Hamdan bin Mohammed, aims to support the government’s goal of increasing the number of blockchain companies by five times in five years. Dubai is already home to over 1,000 companies in the metaverse and blockchain sector, which contributes $500 million to the national economy, Sheikh Hamdan said.
/jlne.ws/3PHi1QO

Politics

Democrats’ Jeffries Bets on Lift From Trump: ‘Run, Donald, Run’; NYC representative says Democrats can beat odds in midterms; Jeffries dismisses drag on candidates from low Biden approval
Billy House – Bloomberg
Former President Donald Trump announcing another run for the White House before the midterm elections would be a boon for Democrats and a “disaster” for Republicans, New York Representative Hakeem Jeffries said. “Run, Donald, run,” Jeffries, the chairman of the House Democratic Caucus, said Tuesday when asked about the prospect of Trump announcing a 2024 presidential bid before the November election. “It’s clear to me that Republicans are furiously trying to prevent Donald Trump from declaring his candidacy for the presidency prior to the midterms,” Jeffries, 51, told a panel of Bloomberg editors and reporters in Washington.
/jlne.ws/3oi6EDu

Economy and Society: July 19, 2022- Missouri Treasurer challenges ESG impact on public pensions
Ballotpedia staff
The SEC undoes Trump administration rules on proxy advisory services. On July 13, the Securities and Exchange Commission (SEC) voted to undo rules placed on proxy advisory services during the Trump administration. The advisory services – and especially the two dominant services, Institutional Shareholder Services (ISS) and Glass-Lewis – have long been considered among the key players in the ESG universe. The SEC agreed with the advisory services that the rules were, in their view, unduly burdensome and inhibited their ability to act independently. Reuters reported as follows: “The U.S. securities regulator voted on Wednesday to rescind rules introduced under former President Donald Trump that critics said impeded the independence of firms that advise investors on how to vote in corporate elections. The move is the latest installment in a long-running battle over how to regulate proxy advisers like Institutional Shareholder Services and Glass Lewis, which advise investors how to cast their ballot on issues including the election of directors, merger transactions and shareholder proposals.
/bit.ly/3oh0Bil

UK Treasury Aims to Avoid Brexit Regulation Fight With Bank of England; Finance bill may call for consultation on controversial powers; Chancellor Zahawi will pledge to make City more competitive
Katherine Griffiths and Joe Mayes – Bloomberg
The UK government is seeking to avoid a clash with the Bank of England by playing down the threat of prospective new powers for it to intervene in regulators’ decisions, according to two people familiar with their conversations.
/jlne.ws/3cvGUkp

Germany Should Make English an Official Language; What Akkadian, Aramaic or Latin used to be, English is today: the lingua franca. Resistance is futile.
Andreas Kluth – Bloomberg
Here’s a great idea that unfortunately won’t become reality any time soon: Germany should recognize English as a second official language. So should most countries, in fact. The idea popped up this month in a 10-point program put forth by the Free Democrats, the business-friendly and liberal junior partners in the German governing coalition. Their motivation is to attract half a million skilled immigrants per year, net of emigrants. This makes sense. Germany is an aging society that suffers from labor shortages and needs more international talent. But as a society, it’s much less open to newcomers — both bureaucratically and culturally — than traditional immigrant nations such as Canada, say. Another hurdle is German. As Mark Twain authoritatively and charmingly put it, the language is “awful.” Only a deviant mind, given a clean slate, would construct a grammar with four cases and three genders, yielding a baffling array of permutations just for definite articles. By contrast, English has “the.” Nuff said.
/jlne.ws/3J6fw8V

Mario Draghi offers to remain as Italy’s PM if coalition partners back reform; Prime minister willing to stay on if country’s fractious political parties stop subverting government
Amy Kazmin and Silvia Sciorilli Borrelli – FT
Mario Draghi said he was willing to remain in power but warned he would only reverse a previous decision to quit — and prevent Italy from tumbling into early elections — if his fractious coalition partners backed his reform agenda. The Italian prime minister’s announcement reassured markets ahead of a crucial European Central Bank meeting on Thursday set to raise interest rates for the first time since 2011.
/jlne.ws/3B0sCSY

Regulation

U.K. Regulator Criticizes Audit Firms Over Exam Cheating; FRC asks big audit firms to detail what they are doing to prevent cheating on professional exams after SEC fined Ernst & Young $100 million in June
Jennifer Williams-Alvarez – WSJ
The U.K.’s audit and accounting regulator is intensifying its scrutiny of big audit firms and what they are doing to prevent cheating on professional exams, a move that comes after the U.S. Securities and Exchange Commission in late June handed Ernst & Young a $100 million fine. The Financial Reporting Council in a July 5 letter said it is “deeply concerned” about audit professionals cheating on external professional exams and internal assessments.
/jlne.ws/3PsHnm4

Trump Media Probe Seeks Information on Obscure Private Equity Firm
Tiffany Kary – Bloomberg
A federal probe of Donald Trump’s social media deal is putting a spotlight on Rocket One Capital, an obscure private equity firm with no obvious connection to the transaction beyond a board member.
/jlne.ws/3Ol0GfB

CFTC Orders Powerline Petroleum, LLC to Pay $875,000 For Fraud, False Statements to CME, and Failure to Register as a Commodity Trading Advisor; Co-Founder and Owners Also Charged
CFTC
The Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against Powerline Petroleum, LLC (Powerline), its co-founder and owner, Darren Dohme, and other owner, Adam Wright, for misleading clients regarding the nature of Powerline’s role, and financial interest in the clients’ transactions, and for making false statements to the Chicago Mercantile Exchange (CME), a board of trade and designated contract market. Powerline and Dohme are also charged with failing to register Powerline as a Commodity Trading Advisor (CTA) and for failure to make required disclosures.
/jlne.ws/3zh35ni

Dissenting Statement of Commissioner Summer K. Mersinger Regarding Enforcement Action Against Powerline Petroleum, LLC
CFTC
I respectfully dissent from the Commission’s enforcement action charging, and settling with, Powerline Petroleum, LLC (“Powerline”) and its current principals, Darren Dohme and Adam Wright. As a matter of law, I do not believe that all the charges are backed by the facts. I also believe that some aspects of the settlement are inconsistent with the Commission’s prior treatment of similar cases and fundamentally unfair. I agree that we need to be strong on enforcement and, at the CFTC, we are. But what can be much harder for regulators – yet just as vital to the long-term success of our mission – is to exercise our enforcement powers in a fair and even-handed manner, consistent in the charges we bring and the sanctions we impose. It is here that I believe the Commission has fallen short in this case.
/jlne.ws/3ct0Rbx

CFTC Orders Powerline Petroleum, LLC to Pay $875,000 For Fraud, False Statements to CME, and Failure to Register as a Commodity Trading Advisor
Co-Founder and Owners Also Charged
CFTC
The Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against Powerline Petroleum, LLC (Powerline), its co-founder and owner, Darren Dohme, and other owner, Adam Wright, for misleading clients regarding the nature of Powerline’s role, and financial interest in the clients’ transactions, and for making false statements to the Chicago Mercantile Exchange (CME), a board of trade and designated contract market. Powerline and Dohme are also charged with failing to register Powerline as a Commodity Trading Advisor (CTA) and for failure to make required disclosures.
/jlne.ws/3zh35ni

Dissenting Statement of Commissioner Summer K. Mersinger Regarding Enforcement Action Against Powerline Petroleum, LLC
CFTC
I respectfully dissent from the Commission’s enforcement action charging, and settling with, Powerline Petroleum, LLC (“Powerline”) and its current principals, Darren Dohme and Adam Wright. As a matter of law, I do not believe that all the charges are backed by the facts. I also believe that some aspects of the settlement are inconsistent with the Commission’s prior treatment of similar cases and fundamentally unfair.
/jlne.ws/3ct0Rbx

FINRA’s Augmented Reality Web and Mobile App Featured
Joan Hutcheson – FINRA
September 2021 marked the sixth anniversary of FINRA’s annual Createathon event, under the theme, “Powered by People.” For three days, teams of staff collaborated across business and technology to innovate. Among the many game-changing solutions created was Xpand Reality, an augmented reality simulation web and mobile app for investor education. The story of the app’s key features, logical workflow and technical architecture is highlighted in the following guest blog as published by Amazon.
/bit.ly/3PEpqAv

SEC Issues More than $17 Million Award to a Whistleblower
SEC
The Securities and Exchange Commission today announced an award of more than $17 million to a whistleblower who provided information and assistance in a covered action and related action. The whistleblower’s information prompted SEC staff to open a new investigation that led to the successful covered action. The whistleblower also provided SEC Enforcement staff with detailed information and documents throughout the investigation. Further, because the same information led to the success of the related action, the whistleblower is also entitled to an award based on amounts collected in the related action.
/bit.ly/3zhRRio

22-186MR Unregistered investment scheme operator Chris Marco charged with 50 counts of fraud
ASIC
Chris Marco, of Mount Hawthorn, Western Australia is due to appear on 22 July 2022 at the Perth Magistrates Court charged with 50 counts of fraud under section 409 of the Criminal Code (WA). Following an ASIC investigation, it is alleged that between July 2013 and October 2018, Mr Marco defrauded $36.5 million from nine investors. It is also alleged, of the $36.5 million, one investor was defrauded $10 million by investing with Mr Marco.
/bit.ly/3ySmeug

FMA opens consultation on standard conditions for financial institution licences
FMA
The Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko has released a consultation paper on proposed standard conditions for licences granted under the Financial Markets (Conduct of Institutions) Amendment Act 2022 (CoFI).The CoFI Act will introduce a new regulatory regime for the conduct of registered banks, licensed insurers and licensed non-bank deposit takers, with an overarching principle for these institutions to treat consumers fairly.
/bit.ly/3yRm32w

The FCA welcomes the Secondary Capital Raising Review Report
FCA
The FCA welcomes the publication of Mark Austin’s Secondary Capital Raising Review (SCRR) final report on 19 July 2022, which was commissioned by the Government in October 2021. The final SCRR report recommendations aim to promote the ability of companies to finance their businesses through public capital markets. They provide a valuable and timely contribution to the ongoing market reform agenda and complement the FCA’s ongoing Primary Markets Effectiveness Review. The SCRR report aligns with the FCA’s strategic priority to ensure UK wholesale markets continue to be regarded as one of the leading global markets of choice for issuers, intermediaries and investors by identifying ways to streamline further capital raising by publicly traded companies and promote access for investors.
/bit.ly/3coQBB0

Remarks By Mr Ravi Menon, Managing Director, Monetary Authority Of Singapore At The MAS Annual Report 2021/2022 Media Conference On 19 July 2022
Ravi Menon – Mondovisione
“Good morning and thank you for joining us in person for the release of the MAS Annual Report. This year, I will focus my remarks on inflation. It is the key macroeconomic challenge facing the global economy, affecting countries ranging from the United States to Sri Lanka, as well as Singapore. The IMF’s latest projection for global inflation in 2022 is 7.4%. This would be the fastest rate of inflation in the last 25 years. Inflation is a pervasive economic ill – it affects everyone. The lower-income groups are particularly vulnerable. Inflation is uppermost in the minds of many Singaporeans.”
/jlne.ws/3PnYXHD

The Securities and Futures Commission (SFC) has reprimanded RBC Investment Services (Asia) Limited (RBC) and fined it $7.7 million for regulatory breaches relating to mishandling of client assets (Note 1).
Hong Kong Securities and Futures Commission
The SFC’s investigation found that between January 2018 and August 2020, RBC had failed to segregate client money as required under the Securities and Futures (Client Money) Rules (Client Money Rules) on 86 occasions, involving individual transaction amounts ranging from $146 to $52 million.
/jlne.ws/3oiTPsA

Shri Pramod Rao takes charge as Executive Director, SEBI
SEBI
Shri Pramod Rao took charge as Executive Director in SEBI on July 15, 2022. He will handle the Department of Debt and Hybrid Securities (DDHS) and Enquiry and Adjudication Department (EAD). Prior to this assignment, Shri Pramod Rao held the position of Group General Counsel at ICICI Bankand provided strategic oversight to the legal function for the ICICI group. Earlier, he served as a member of Board of Directors of ICICI Securities Ltd., ICICI Prudential Trust Ltd. and ICICI Trusteeship Services Ltd.
/jlne.ws/3v1GDvR

FSC consents the Barclays Bank Plc’s Application to Establish its Taiwan Securities Firm Subsidiary
Taiwan FSC
The FSC consents the Barclays Bank Plc’s application to establish a securities firm subsidiary, Barclays Securities Taiwan Limited (BSTW), doing business as a securities broker and underwriter with the paid-in capital of NT$1 billion.
BSTW shall complete the incorporation registration in 6 months from now and further apply for the FSC’s approval to grant the securities firm license.
/jlne.ws/3aSRW2A

Investing and Trading

Investors cut equity allocations to lowest level since Lehman collapse; Fund managers reach ‘dire level’ of pessimism over economic outlook, Bank of America survey shows
Chris Flood – FT
Big investors have cut their allocations to equities to the lowest level since the collapse of Lehman Brothers at the height of the global financial crisis as rising recession fears spark worries about corporate profits. Fund managers this month reduced their net overweight position in stocks to the lowest level since October 2008, while also boosting cash holdings to a 21-year high of 6.1 per cent of assets under management, a survey by Bank of America of 259 investment managers with combined assets of $722bn published on Tuesday showed.
/jlne.ws/3PkTdOX

Retail Investors Pile into Currency Trading as Euro Slides to Parity With Dollar; Amateurs are diving into the risky world of foreign-exchange markets.
Paulina Cachero and Claire Ballentine – Bloomberg
Americans looking to capitalize on the unusually weak euro aren’t just booking shopping trips to Europe: They’re making risky bets on the currency market. While foreign-exchange trading has historically been reserved for specialty desks on Wall Street, big swings in global currencies have enticed DIY traders into the complicated world of FX.
/jlne.ws/3csuN7n

Trader Behind Huge Fed Funds Wager Bags $14 Million in First Day
Edward Bolingbroke – Bloomberg
A trader is pocketing big profits for breaking with the pack and placing a sizable bet that the Federal Reserve won’t increase the size of its interest-rate hikes. On Friday, someone purchased October futures with a notional value of $150 billion that are tied to the Fed’s benchmark overnight rate. The futures price in expected moves at the July and September meetings. The trade marked a bet that financial markets had shifted too far by pricing in increasing odds that the central bank would raise its key rate by as much as a full percentage point at one of the two meetings. The wager quickly turned profitable as expectations were dialed back heading into Friday’s close of trading. By day’s end, it was 11.5 ticks higher, amounting to a profit of about $14.4 million from the level at which the wager was placed.
/jlne.ws/3IP0O5W

People Have Money, but They’re Forgetting to Pay Bills; Credit-card and other delinquencies are rising. Here’s how to remember to pay, even when you’re stressed about inflation.
Veronica Dagher – WSJ
More Americans are falling short on their financial responsibilities, like paying their bills or meeting with their financial adviser. In many cases, it’s happening because, they say, they simply forgot. Financial advisers and researchers say plenty of people are missing payments because they can’t afford them.
/jlne.ws/3IUqgXS

The investment drought of the past two decades is catching up with us; Despite 20 years of cheap credit, countries have failed to capitalise on shoring up their futures
Martin Sandbu – FT
In all the talk of “building back better” and making economies “match fit”, “strategically autonomous” and “resilient”, there is an unstated but tragic premise. For decades, most advanced economies did not build their future but languished in an investment drought, the scandal of which is greater for being unacknowledged. Between 1970 and 1989, the share of gross domestic product devoted to investment by six of the world’s seven biggest economies averaged from 22.6 per cent for the US to 24.8 per cent for Germany. The seventh, Japan, was an outlier with 35 per cent.
/jlne.ws/3zkjCXz

The world isn’t prepared for a wave of sovereign debt defaults; Many emerging markets will need painful bond writedowns from China and private creditors
Alan Beattie – FT
The World Bank isn’t often given to making specific prophesies of doom as opposed to wringing its hands and talking vaguely about risk. So it’s quite something when it bluntly talks of a “coming spate of debt crises” in emerging markets.
/jlne.ws/3yTmk4W

Environmental, Social and Corporate Governance

Mexico has opened the door to cleaner energy, but only to some; The president’s acceptance that a transition is under way is unlikely to resolve the country’s electricity bottleneck
Pamela Starr – FT
When Mexican president Andrés Manuel López Obrador met his US counterpart Joe Biden in Washington for bilateral talks earlier this month, there was one major energy-related breakthrough: López Obrador at last publicly recognised the inevitability of the coming energy transition. For a politician long devoted to the centrality of fossil fuels in Mexico’s national energy matrix, this is a very important shift.
/jlne.ws/3OkJsPs

Halliburton boss says oilfield service shortages likely to worsen; Sector reaps rewards of tight market for materials, drilling equipment and labour
Myles McCormick – FT
Shortages of labour and equipment at US oilfields are likely to get worse next year, according to the country’s biggest services group, as American production shows signs of a sharp acceleration. A lack of everything from crews and drivers to drilling rigs and the sand used in the fracking process has added to the challenge of increasing production but has also led to bumper profits for oil services groups.
/jlne.ws/3ITusqt

U.K. Heat Wave: Britain Sets New Record on a Second Day of Scorching Temperatures; Britain recorded a temperature of 40.3 degrees Celsius (104.5 Fahrenheit), the highest ever in the United Kingdom if confirmed. Fires broke out in parts of London, but evening thunderstorms brought a respite.
NY Times
/jlne.ws/3aUktou

GMRF Increases Coverage to Include ESG Documents
SMA
Social Market Analytics released U.S. Machine Readable Filings (MRF) in partnership with S&P Global Market Intelligence in April 2020. Machine Readable Filings is the first product to provide parsed textual data of SEC Edgar Regulatory Filings at the Document, Part, Item, Section, and Notes level with historical baselines back to 2006. Global Machine Readable Filings (GMRF) was released in April 2021 in partnership with S&P Global Market Intelligence. Global Machine Readable Filings provides parsed textual data of international companies’ Annual, Semi-Annual, Quarterly Reports and Financial Supplements across ~1.6M documents spanning over 200 countries. Based on client demand, we expanded our technologies to an emerging set of document types: Environmental, Social, and Governance (ESG) Reports.
/jlne.ws/3B4mg58

Europe Wind Generation Increases, Providing Some Relief to Power Costs; German wind output forecast to more than double from Monday; Wind generation can ease pressure on fossil-fuel power
Priscila Azevedo Rocha – Bloomberg
European wind generation is forecast to increase Tuesday, providing some relief to soaring power prices amid a scorching heat wave sweeping across Europe. German wind generation is expected to more than double from Monday’s peak to about 18,000 megawatts, according to a Bloomberg model. That’s still well below the 48,663-megawatt high recorded in February. Higher winds are also forecast in France and Britain.
/jlne.ws/3PKEaOp

BlackRock Is Buying Renewable Natural Gas Producer for $700 Million; Massachusetts-based Vanguard Renewables works with dairy farmers and food companies to convert food waste and cow manure into an energy source
Amrith Ramkumar – WSJ
BlackRock Inc. is buying a company that turns food waste and cow manure into renewable natural gas, a deal that adds to momentum in the industry during the war in Ukraine, company officials said. The world’s biggest asset manager is acquiring Vanguard Renewables, a Boston-area company that works with dairy farmers and food companies to produce renewable natural gas for utilities and energy firms such as Dominion Energy Inc. and Enbridge Inc. The transaction is valued at $700 million, and BlackRock could spend over $1 billion more in financing Vanguard Renewables’ expansion, a person familiar with the matter said.
/jlne.ws/3PGAhKh

ESG is more of a muddle than a fiddle: podcast
George Hay – Reuters
Environmental, social and governance investing is under the spotlight. In this episode of The Exchange podcast, Bridgewater’s sustainable finance gurus Karen Karniol-Tambour and Carsten Stendevad explain how ESG’s main problem is a lack of clarity over its goals.
/reut.rs/3PtiK8Q

Institutions

Cathie Wood’s Ark Shutters Transparency ETF in First Closure
Claire Ballentine – Bloomberg
Cathie Wood is closing down one of her exchange-traded funds, the first time her Ark Investment Management has pulled the plug on an ETF. The St. Petersburg, Florida-based firm is shutting down its ARK Transparency ETF (CTRU), which launched at the end of last year, according to a regulatory filing. With holdings like Teladoc Health Inc. and Spotify Technology SA, the fund aimed to invest in companies that received high scores on transparency.
/jlne.ws/3zhbpn4

Jefferies to restructure as it doubles down on investment banking
Reuters
Jefferies Financial Group said on Tuesday it plans to reduce the size of its merchant banking portfolio as part of a restructuring aimed at focusing on its global investment banking business. The plan includes spinning off its holdings in Vitesse Energy before the end of this year to create a new publicly traded oil and gas company which will list on the New York Stock Exchange.
/jlne.ws/3OqJtBf

BlackRock Is Breaking the Wrong Kind of Records; Clients of the world’s largest asset manager lost an unprecedented $1.7 trillion in the first half’s market carnage.
Marc Rubinstein – Bloomberg
BlackRock Inc. is used to breaking records. The world’s largest asset manager was the first firm to break through $10 trillion of assets under management. But the bigger they are the harder they fall. And this year BlackRock chalked up another record: the largest amount of money lost by a single firm over a six-month period. In the first half of this year, it lost $1.7 trillion of clients’ money.
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JPMorgan takes on direct lenders with leveraged loans unit; Bank hopes to cash in on boom in private credit and will keep debt on its own balance sheet
Joshua Franklin – FT
JPMorgan Chase’s investment bank has set up a unit to compete with growing competition from direct lenders, committing a “significant chunk of capital” to hold leveraged loans on its balance sheet.
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Schroders takes minority stake in digital assets-focused manager Forteus; FTSE 100 asset manager to explore issuing digital tokens to investors instead of traditional shares or fund units
Harriet Agnew and Joshua Oliver – FT
Schroders has bought a minority stake in Forteus, an investment manager focused on digital assets, to explore issuing digital tokens to investors. The FTSE 100-listed asset manager, which oversees £731.6bn on behalf of customers, said on Tuesday that it had invested in the Zurich-based company, which specialises in blockchain technology and digital investments.
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Capital Group adds 3 new strategies to actively managed ETFs; Asset manager unveils new fixed income funds, just months after debut in the market
Rob Langston – FT
Capital Group has unveiled plans to bolster its actively managed exchange traded funds with the addition of three new strategies, just months after entering the ETF space for the first time, a regulatory filing shows. The company launched its first suite of six active ETFs on the New York Stock Exchange in February and plans to add to the range with three new strategies: Capital Group Municipal Income ETF, Capital Group US Multi-Sector Income ETF and Capital Group Short Duration Income ETF.
/jlne.ws/3IVlNUO

Wellness Exchange

Can a ‘Magic’ Protein Slow the Aging Process?; Elevian is one of several companies searching for ways to increase life span — in this case, using a protein called GDF11. But challenges lie ahead.
Eilene Zimmerman – NY Times
Several years ago, scientists studying aging at the Harvard Stem Cell Institute used a somewhat Frankensteinian technique known as parabiosis — surgically joining a young mouse and an old mouse so that they share blood — to see what would happen to the heart and skeletal muscle tissue. They knew from previous research that putting young blood in old mice caused them to grow biologically younger, and that young mice exposed to old blood aged faster. The Harvard researchers, Amy Wagers and Dr. Richard Lee, found that the old mouse’s heart tissue had been repaired and rejuvenated, becoming young again. In fact, the size of the old mouse’s heart had reduced to that of a young heart.
/jlne.ws/3IOLMgy

Regular coffee drinkers had lower chance of dying in 7-year period
Linda Searing – The Washington Post
People who drink a moderate amount of coffee — up to 3½ cups a day — might have a better chance at a longer life span, even if their coffee is lightly sweetened with sugar, according to research published in Annals of Internal Medicine. For about seven years, the researchers tracked the coffee consumption and health of 171,616 participants, who were an average of nearly 56 years old and were free of cancer and cardiovascular disease when the study started. They found that those who regularly drank 1½ to 3½ cups of coffee a day, whether plain or sweetened with about a teaspoon of sugar, were up to 30 percent less likely to die in that time frame from any cause, including cancer and cardiovascular disease, than were those who did not drink coffee.
/jlne.ws/3yVf9sN

Monkeypox concern grows as virus spreads in Chicago: ‘They need to get loud about this’
Jake Sheridan – Chicago Tribune
Chicago public health officials reported 173 monkeypox cases on Monday — up from 105 last week — and with vaccines scarce and hard to find, alarm is growing among doctors and those in the gay community that the city is not doing enough to address the spread. Health officials are imploring the city to do more by increasing not only resources such as contact tracing, but also public awareness and education.
/jlne.ws/3zgabbF

Hong Kong Ends Mandatory City-Run Isolation for Covid Variants
Jinshan Hong – Bloomberg
Hong Kong will no longer require people infected with the most highly infectious Covid-19 subvariants to isolate at government-run facilities, scrapping a rule that led many to fear reporting infections as cases surged in the city.
/jlne.ws/3yXNw2B

Regions

Rich Chinese Worth $48 Billion Want to Leave — But Will Xi Let Them?; Some 10,000 wealthy Chinese are looking to leave in the wake of punishing lockdowns and an economic slowdown. The question is whether they’ll be able to.
Bloomberg
Like thousands of wealthy people across China, Shanghai restaurateur Harry Hu is planning to do something he once considered unthinkable: move himself and his money out of the country. Scarred by Shanghai’s chaotic lockdown under the Covid-Zero policy that has made China a global outlier, Hu is joining what investment migration consultancy Henley & Partners estimates is a cohort of 10,000 high-net-worth residents seeking to pull $48 billion from China this year — the second-largest predicted wealth and people outflow for a country after Russia.
/jlne.ws/3AXMmGS

China bond defaults hit US$20 billion in 2022, more than double last year’s total, as property developers teeter
South China Morning Post
The value of bond defaults in China in 2022 has already more than doubled the full-year total from last year, as the accelerating debt crisis in the country’s US$2.7 trillion property market spills over into other areas of the economy. Defaults by Chinese issuers have exceeded US$20 billion so far this year, compared with about US$9 billion for all of last year, with property developers accounting for most of the defaults, said Augus To, deputy head of research at ICBC International.
/jlne.ws/3B5uQRa

Palm Oil Set to Plunge 20% by September, Top Analyst Predicts; Veteran analyst Mistry in May correctly predicted earlier drop; Market to keep sinking because of rising Indonesian reserves
Anuradha Raghu and Sing Yee Ong – Bloomberg
Palm oil, the world’s most consumed cooking oil, may extend its slide, tumbling more than 20% to 3,000 ringgit ($673) a ton by September, driven by surging supplies in Indonesia, said veteran analyst Dorab Mistry. Inventories in top exporter Indonesia have swollen to 10 million tons and will continue to increase in August because of high production, before stabilizing at around 9-10 million tons in September, Mistry, director at Godrej International Ltd., said in an interview on Tuesday.
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Malaysia Not at Risk of Collapsing Like Sri Lanka, FM Says
Ravil Shirodkar – Bloomberg
Malaysia is stable and is not at risk of going bankrupt like Sri Lanka, Finance Minister Zafrul Aziz said, citing the International Monetary Fund’s prediction for the economy to expand 5.75% this year as reason for confidence. “The IMF has never said that Malaysia is facing economic troubles that could bankrupt the country,” he said in parliament on Tuesday when asked to clarify social media reports that the Southeast Asian nation is set to meet Sri Lanka’s fate. “If we compare our economic indicators with Sri Lanka, it is clear our economy is far more stable than theirs.” Still, the government must continue to manage the country’s finances prudently and control the level of debt, he said.
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Chinese city Zhengzhou sets up bailout fund as mortgage boycott spreads; The homebuyer revolt over stalled projects is aggravating a property sector crisis
Cheng Leng – FT
China’s Zhengzhou city is creating a property developer bailout fund as increasing numbers of homeowners join a nationwide boycott of mortgage payments on unfinished houses.
/jlne.ws/3B29tQq

German energy rationing debate pits consumers against industry; Talks intensify over who should have priority in the event of shortages this winter
Guy Chazan – FT
Germany is embroiled in a fierce debate over who should have priority in a possible energy crunch — companies or consumers — as Europe’s biggest economy braces itself for Russia to turn off the gas tap. Under existing EU rules, private households and critical infrastructure such as hospitals and old people’s homes are protected from gas shut-offs, while industry is not. But business leaders are pushing back: “If it comes to a gas shortage, everyone will have to reduce their consumption, and that includes residential customers,” Karl Haeusgen, head of the VDMA, the German mechanical engineering lobby, told the Financial Times.
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Germany Is on Edge Waiting for Russia to Restart the Gas on Nord Stream 1; A maintenance shutdown of the pipeline, the main artery between Russia and Germany, is expected to end later this week amid heightened tensions.
Melissa Eddy – NY Times
Months of brinkmanship by Russia over the flow of natural gas to Germany and the rest of Europe could reach a high point later this week, when a temporary shutdown of the Nord Stream 1 pipeline is scheduled to end. Nord Stream 1, the main pipeline connecting Germany and Russia, is operated by Gazprom, the Russian state-owned energy giant. Gazprom, which recently warned European buyers of its gas that it might cut off flows, shut down the pipeline on July 11 for annual maintenance.
/jlne.ws/3AZSIpa

Saudi Arabia Reveals Oil Output Is Near Its Ceiling; The world’s biggest crude producer has less capacity than previously anticipated.
Javier Blas – Bloomberg
During US President Joseph Biden’s trip to Saudi Arabia, the world was so focused on how Crown Prince Mohammed bin Salman would respond to his plea to pump more oil immediately that it missed a bombshell: the level at which Saudi oil production will peak.
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Miscellaneous

UK Workers Rejoin Jobs Market at Fastest Pace Since Before Covid; Official figures signal chronic labor shortages may be easing; Real pay falls at its fastest pace since records began
Andrew Atkinson and David Goodman – Bloomberg
British workers rejoined the labor market at the fastest pace since before the pandemic as the cost of living crisis drew more people into jobs. The count of working-aged people outside the jobs market fell by 144,000 in the quarter through May, the Office for National Statistics said Tuesday. Employment surged 296,000, more than the pace of 170,000 that economists had expected. The figures suggest that chronic jobs shortages could be starting to unwind as workers fill a glut of vacancies that popped up when lockdowns to control the virus ended. Continuing that trend could alleviate some of the concerns the Bank of England has about tightness in the jobs market pushing up inflation.
/jlne.ws/3OpWsDo

Manhattan’s Private Clubs Offer a New Social Lifeline to Remote Workers; Amenities range from bars and workspaces to restaurants and spas, and many places have long waiting lists
Kate King, Rebecca Picciotto – WSJ
Members-only clubs are popping up across Manhattan, providing an alternative social hub and workspace as New Yorkers are spending less time in the office. More than a dozen membership clubs have opened in the borough since 2003, including at least nine within the past three years, according to Zack Bates, chief executive of consulting company Private Club Marketing. Most charge $5,000 or less in annual dues, plus a smaller sign-up fee, though those at the top end can charge considerably more. Aman New York, a private club affiliated with the luxury hotel on Fifth Avenue that is opening in August, requires a $100,000 initiation fee and yearly dues of $15,000.
/jlne.ws/3cvKDhT

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