Hits & Takes
John Lothian & JLN Staff
The SEC is holding its “40th Annual Small Business Forum” that will feature conversations on capital formation from startup to small cap. There are four sessions from May 24 to May 27. On Monday, May 24, the session will focus on “Finding Your First Dollars.” The Tuesday, May 25, session looks at “Being a Savvy Investor.” The Wednesday, May 26, session explores “Small and Emerging Funds” and the Thursday, May 27, session will examine “Small Cap Insights.” — SEC
The preliminary results of the CME Group’s annual meeting had directors elected, except for the B-1 and B-3 directors, where there was no quorum. As a result, the exiting B-1 and B-3 directors will continue to serve until the 2022 annual meeting.
Directors elected during the CME Group’s annual meeting included: Terrence A. Duffy, Timothy S. Bitsberger, Charles P. Carey, Dennis H. Chookaszian, Bryan T. Durkin, Ana Dutra, Martin J. Gepsman, Larry G. Gerdes, Daniel R. Glickman, Daniel G. Kaye, Phyllis M. Lockett, Deborah J. Lucas, Terry L. Savage, Rahael Seifu, William R. Shepard, Howard J. Siegel and Dennis A. Suskind, each for a one-year term expiring in 2022.
Also, the annual meeting ratified the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm for 2021 and approved, on an advisory basis, the compensation of named executive officers.
In addition, the company’s Class B-2 shareholders elected Michael G. Dennis and Patrick W. Maloney each for a one-year term expiring in 2022.
Women in Derivatives (WIND) has elected Karen Wares, head of broker relationship and prime services management, J.P. Morgan Asset Management, as the newest addition to its board of directors. — WIND
The World Federation of Exchanges has published new guidance on “How Derivatives Exchanges Can Promote Sustainable Development” in collaboration with the UN’s Sustainable Stock Exchange initiative. — WFE
Don’t miss the virtual LME Asia metals online seminar on May 25; it is a one-day webinar which will bring together industry leaders to share their insights into the development prospects of the metals market and the challenges and opportunities emerging from the COVID-19 pandemic. The webinar will be at 09.00-17.00 GMT and is offered in both English and Mandarin (simultaneous interpretation available). — LME
Also, the Peterson Institute for International Economics will host a virtual discussion on “Hong Kong as an International Financial Center” on May 12, 2021 at 8:00-9:00 a.m. ET. You can register HERE. — Peterson Institute for International Economics (PIIE)
Correction: We had a bad link for IncubEx yesterday in JLN as we reported that it was the second most-clicked link in the newsletter on Tuesday.
CME Group Senior Director Steve Stasys is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Stasys has been a trader with Ronin Capital and worked for Eurex. He was also the director of research and development for U.S. Futures Exchange. Thank you to Steve and all who have given and all who have yet to give. Support our efforts to preserve industry history by giving to our GoFundMe campaign. Steve’s contribution is being matched dollar for dollar by the Trading Technology matching pledge.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
FIA recapped first-quarter futures and options trading and open interest data on Wednesday in a webinar hosted by Will Acworth, FIA’s senior vice president of publications, data and research. The results were much as expected: retail investors led record global volume growth. One new point: Q1 volume in interest rate futures and options rebounded from its prolonged slump of 2020. As for exchange competition in Q1, the top global exchange by volume was the National Stock Exchange of India, followed by Brazil’s B3, with CME Group coming in third. Will retail investors stay around, and will they trade futures? UBS exchange analyst Alex Kramm, also on the call, noted that the exchanges are gearing up for the challenge with new marketing efforts aimed at retail, like more mini contracts.~SC
CFTC Issues Order of Registration to Mercado Mexicano de Derivados, S.A. de C.V., to Permit Trading by Direct Access from the U.S.
The Commodity Futures Trading Commission announced today that it has issued an Order of Registration to Mercado Mexicano de Derivados, S.A. de C.V. (MexDer), a Foreign Board of Trade (FBOT) located in Mexico City, Mexico, and a subsidiary of the Mexican Stock Exchange Group.
*****Is that a smiling Gary Flagler of MexDer I see, or is that just the sun coming up? They both seem to have about the same amount of energy this morning.~JJL
Why the Best Job in Finance Isn’t About the Bonus; Norway’s sovereign wealth fund keeps its top portfolio managers happy with lots of freedom, access to companies and zero marketing responsibilities.
Mark Gilbert – Bloomberg
Norway’s sovereign wealth fund, the world’s biggest, is hamstrung in competing for talent with the rest of the investment industry. As a public institution, it faces what it calls “barriers to remuneration.” In other words, it can’t pay its stars what they would earn working at a hedge fund. But a study just published celebrating 20 years of active management suggests the fund has found other ways to attract and retain portfolio managers.
*****Wait. I thought I had the best job in finance.~JJL
Wednesday’s Top Three
The top story on Wednesday was from the Wall Street Journal, CME Group to Close Most of Its Trading Pits Permanently. The second was from John Lothian News, Jim Krause: The Path to Electronic Trading. The third was from Crain’s Chicago Business, Chicago says farewell to CME’s last commodity trading pits.
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Gensler raises concern about market influence of Citadel Securities; SEC chair highlights concentration risk among big trading firms in House testimony
Eric Platt and Gary Silverman – FT
Gary Gensler, new chair of the Securities and Exchange Commission, has expressed concern about the prominent role Citadel Securities and other big trading firms are playing in US equity markets, warning that “healthy competition” could be at risk.
GameStop Frenzy, Archegos Meltdown May Prompt New SEC Rules, Chairman Says; Gary Gensler is set to testify Thursday before House Financial Services Committee
Dave Michaels and Alexander Osipovich – WSJ
Wall Street’s top regulator will study potential new rules related to two recent episodes of stock-market turbulence—the GameStop Corp. frenzy among small investors and the implosion of Archegos Capital Management. In testimony prepared for the House Financial Services Committee, Securities and Exchange Commission Chairman Gary Gensler says applications that “gamify” trading—by using appealing visual graphics to reward a user’s decision to trade—might encourage frequent trading that results in worse outcomes for investors. Some Democratic lawmakers have blamed gamification for the boom in retail trading that helped drive the rise in GameStop shares.
Dogecoin’s 12,000% Rally Spurs Hunt for Next Crypto Winner; Individual investors are betting that cheaper alternatives to bitcoin and dogecoin will skyrocket in price and make them money
Caitlin Ostroff – WSJ
After bitcoin and dogecoin’s blistering rally this year, individual investors are venturing further out into the cryptocurrency universe in search of the next big thing. A more than 12,000% rally this year in dogecoin, a cryptocurrency that was set up as a joke and serves no purpose, sent its price to a record 69 cents per token this week. Bitcoin climbed briefly to over $60,000 apiece last month, more than doubling its price since the end of 2020. That is prompting investors to turn their attention to newer digital assets such as DigiByte, VeChain and SafeMoon in the hunt for cheaper alternatives that could be the next to skyrocket.
Cryptocurrency Dogecoin surges ahead of Elon Musk’s ‘SNL’ gig
Jesse O’Neill – Bloomberg
SpaceX might not be the only thing Elon Musk has sent into the stratosphere. Dogecoin, a meme cryptocurrency that was launched as a joke in 2013, has risen more than 100 percent in the past week as Musk, an influential crypto backer, prepares to host “Saturday Night Live.”
Yale endowment’s David Swensen dies; The pioneering manager revolutionised how institutions manage their money
Robin Wigglesworth – FT
David Swensen, the head of Yale University’s endowment who helped reshape how institutions manage their money, has died from cancer aged 67. After stints at Salomon Brothers and Lehman Brothers, Swensen returned to his alma mater in 1985 to lead its investment office. At the time, endowments were typically conservatively managed, but Swensen overhauled the model dramatically, taking advantage of their long-term focus to invest heavily in the nascent private equity and hedge fund industries.
SocGen to allow staff to work from home three days a week after crisis; French bank’s pledge comes as first-quarter profits rebound after recovery in equities business
David Keohane – FT
Société Générale is to allow staff to work from home up to three days a week once the coronavirus crisis is over, the latest sign of divergence over the future of the office between European and US banks. Frédéric Oudéa, the French lender’s chief executive, told the Financial Times the new flexible working arrangements were “absolutely feasible without impacting our client relationships or our productivity”.
Chicken Shortage Sends Prices Soaring, and Restaurants Can’t Keep Up; Spicy sandwiches, hot wings and a labor crunch push poultry prices to records
Heather Haddon and Jacob Bunge – WSJ
Chicken wings are flying off the shelves. After a year promoting takeout wings and crispy chicken sandwiches, restaurants including KFC, Wingstop Inc. and Buffalo Wild Wings Inc. say they are paying steep prices for scarce poultry. Some are running out of or limiting sales of tenders, filets and wings, cutting into some of their most reliable sales.
China’s Emissions Now Exceed All the Developed World’s Combined
China spewed 27% of global greenhouse gases in 2019: Rhodium; OECD’s cumulative emissions since 1750 far outweigh China’s
China now accounts for more greenhouse gas emissions than all of the world’s developed nations combined, according to new research from Rhodium Group. China’s emissions of six heat-trapping gases, including carbon dioxide, methane and nitrous oxide, rose to 14.09 billion tons of CO2 equivalent in 2019, edging out the total of Organization for Economic Cooperation and Development members by about 30 million tons, according to the New York-based climate research group.
Crypto trading volumes boom as activity cools on stock markets; More and more daytraders and institutional investors shift their attention to more speculative assets
Philip Stafford and Joe Rennison – FT
Trading has boomed in cryptocurrency markets while volumes in stocks and derivatives have tumbled with an increasing number of daytraders and institutional investors setting their sights on more speculative assets. A slowdown in equities trading last month contrasted with a frenzied first quarter, during which activity jumped in “meme” stocks like GameStop and AMC, turbocharging the profits of banks, brokers and market makers at the heart of global markets.
Goldman Sachs Leads Investment in Crypto Firm Coin Metrics
Matthew Leising – Bloomberg
Investors are pouring money into $2.2 trillion crypto market; Goldman’s head of digital assets will join Coin Metrics’ board
Coin Metrics, a cryptocurrency and blockchain data provider to institutional clients, raised $15 million through investors led by Goldman Sachs Group Inc. The firm, founded in 2017, plans to use the proceeds to grow in Europe and Asia, create new products and expand current offerings, Tim Rice, a co-founder and the firm’s chief executive officer, said in an interview. He declined to give a valuation for the company based on the latest investment.
Archegos prepares for insolvency as banks seek compensation for $10bn losses; Family office plans possible wind-down as prime brokers look to recoup funds
Tabby Kinder, Stephen Morris, Ortenca Aliaj and Leo Lewis – FT
Archegos Capital is preparing for insolvency, triggered by banks’ attempts to recoup some of the $10bn they lost on its soured bets in March.
UK to scrap EU rule giving choice of clearer in derivatives
Damian Shepherd – City AM
Britain will scrap a rule inherited from the European Union that aimed to open the listed derivatives market to more competition, saying it was not appropriate to implement alone. The UK had championed the open access rule, which allows buyers and sellers of derivatives listed on exchanges across the EU to choose where they clear their contract, rather than be locked into using a clearer.
India’s Stock Market Lives on Another Planet; Investors are expecting the second Covid-19 wave to be a bigger version of the first. It’s far worse than that.
Andy Mukherjee – Bloomberg
Why isn’t India’s stock market falling more? The question is a fair one, considering the risky asset class in a country struggling with its most horrific calamity since its violent partition and independence nearly 75 years ago. New daily Covid-19 infections have remained above 300,000 for two weeks now, the worst caseload the world has seen. The death rate is 3,700-plus — probably much higher if you discount the underreported official statistics.
Google Adopts Hybrid Workweek, With 20% of Its Employees to Work Remotely; About 20% of staff will be able to work from home and 20% can shift offices
Tripp Mickle – WSJ
Alphabet Inc.’s Google announced a series of moves to offer employees more workplace flexibility, allowing a fifth of its staff to work from home permanently and another fifth of workers to shift to a different geographic location.
Companies Warn of U.S. Labor Shortages Economists Call Temporary
Payne Lubbers, Olivia Rockeman, and Reade Pickert – Bloomberg
Restaurants to manufacturers complain they can’t find workers; Economists, policy makers argue employment mismatch won’t last
As the U.S. job market comes roaring back, there’s a growing debate about whether there are enough workers to power faster economic growth. Companies from fast food chains like Chipotle Mexican Grill Inc. to chicken producer Pilgrim’s Pride Corp. and MGM Resorts International say they can’t find — or entice — enough workers. In earnings calls and business surveys, executives often blame stimulus checks and generous unemployment benefits for hampering hiring efforts.
Pandemic Payment Habits Are Looking Sticky; PayPal is so far seeing little to suggest that consumers’ digital-spending ways will change once economies and stores reopen further
Telis Demos – WSJ
After a blockbuster 2020, the biggest question mark surrounding PayPal PYPL -1.10% Holdings and other digital payment companies was whether things would return to normal in 2021. So far, there is little sign of that.
A harrowing brush with Covid as India is ravaged; Contracting the virus was just the start of one FT journalist’s ordeal
Amy Kazmin – FT
As a foreign correspondent, my job is to tell India’s stories, not be part of them. But when I started feeling feverish while writing an article about Covid-19 vaccine policy last month, I had a gut feeling that the Sars-Cov-2 virus had found me.
US backs plan to suspend Covid vaccine patents during pandemic; EU says it is ‘ready to discuss’ move to rip up intellectual property rights but drugmakers object
Aime Williams and Kiran Stacey, Hannah Kuchler and Donato Paolo Mancini – FT
The US has backed a temporary suspension of intellectual property rights for Covid-19 vaccines, in a change of tack welcomed by countries such as South Africa and India but which has rattled the pharmaceutical industry.
Merck Takes $170 Million Charge for Discontinued Covid-19 Drug
Riley Griffin – Bloomberg
Merck & Co. is taking a $170 million charge after discontinuing development of an experimental drug tested in patients hospitalized with severe and critical Covid cases, the company said in a quarterly filing.
India’s Struggle to Track New Covid Variants Could Worsen Crisis
John Lauerman and Bhuma Shrivastava – Bloomberg
Emergence of strains in India highlights monitoring blind spot; Analyses show vaccines effective against B.1.617 strain
The good news is that the vaccines work against a new virus strain circulating in India that’s spread to several other countries. The bad news is it won’t be only the new version of the pathogen to emerge from an outbreak of this scale, underscoring the urgency of mapping other possible variants that may be currently racing through India’s tightly-packed population of 1.4 billion people.
U.S. backs giving poorer countries access to COVID-19 vaccine patents, reversing stance
Andrea Shalal, Jeff Mason, David Lawder – Reuters
President Joe Biden on Wednesday threw his support behind waiving intellectual property rights for COVID-19 vaccines, bowing to mounting pressure from Democratic lawmakers and more than 100 other countries, but angering pharmaceutical companies.
COVID spreading in rural India; record daily rises in infections, deaths
Shilpa Jamkhandikar, Tanvi Mehta – Reuters
Hopes that India’s deadly second wave of COVID-19 was about to peak were swept away on Thursday as it posted record daily infections and deaths and as the virus spread from cities to villages across the world’s second-most populous nation.
Moderna Booster Shot Bolsters Antibodies Against Variant Strains
Robert Langreth – Bloomberg
Two types of booster show early promise in mid-stage trial; Boosters may help fight strains from South Africa and Brazil
Moderna Inc.’s Covid-19 booster shots gave positive results against immune system-evading strains that emerged in South Africa and Brazil, according to early results from a mid-stage trial. Two types of booster shots studied spurred higher levels of virus-halting antibodies against the variant strain P.1 that ravaged Brazil as well as B.1.351, common in South Africa, Moderna said in a statement. One of the boosters is an additional low-dose shot of its existing vaccine, while the other type is customized against the South Africa strain.
A New Wave of Vaccines Is Coming, and They’re Not All Also-Rans; Dozens of companies are developing shots—and some will likely succeed as Covid lingers.
Naomi Kresge, Tim Loh – Bloomberg
The Covid-19 vaccine rollout has given drugmakers the kind of brand-name shorthand usually reserved for more mundane consumer products: People talk about getting Pfizer, Moderna, J&J, or Astra much as they might reach for a Kleenex or a Popsicle. And those companies have contracts to provide billions of doses, appearing to leave little room for other entrants. So why are dozens of hopefuls still working on shots?
Von Der Leyen Defends EU Vaccination Drive as Exports Rise
Viktoria Dendrinou, John Follain, and Nikos Chrysoloras – Bloomberg
Commission chief says bloc is world’s top vaccine exporter; EU eyes joint purchase, development of Covid treatments
The head of the European Union’s executive arm mounted a spirited defense of the bloc’s Covid-19 vaccination campaign, taking a swipe at countries like the U.S. and the U.K. as she hailed her region as the world’s top vaccines exporter. “Our European vaccination campaign is a success,” European Commission President Ursula von der Leyen told an online conference. “What counts is the steadily increasing daily delivery of vaccines to our people — and to the world.”
World’s Vaccine Trailblazer Shows What Return to Office Will Look Like; Post-pandemic working life is taking shape in highly inoculated Israel.
Yaacov Benmeleh – Bloomberg
Traffic is returning to the city streets. Elevators are getting crowded. Favorite lunch spots are filling up. Two months after Israel reopened its economy, Tel Aviv is moving on from the work-from-home era.
Exchanges, OTC and Clearing
Most Chicago trading pits closed for good, CME Group says;The futures market owner shuttered the so-called “open outcry” floors at the beginning of the pandemic.
David Roeder – Chicago Sun Times
CME Group, the owner of Chicago’s futures markets, said Tuesday it will permanently close most trading pits that were shuttered in March 2020 because of the pandemic. The company’s brief announcement didn’t get into reasons for the decision, but many traders had suspected that the coronavirus would cause the traditional pits to be closed for good.
Tradeweb Reports Volume of $19.3 Trillion in April; April Average Daily Volume was $896.8bn, an increase of 17.5% YoY
Tradeweb Markets Inc.
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today reported total trading volume for April 2021 of $19.3 trillion (tn). Average daily volume (ADV) for the month was $896.8 billion (bn)1, an increase of 17.5 percent (%) year over year (YoY).
Phillip Futures offers derivatives trading on Hanoi Stock Exchange via CQG platform
Phillip Futures, one of the region’s top brokerages, announced a new milestone in its partnership with CQG, a leading global provider of high-performance technology solutions for traders, brokers, commercial hedgers, and exchanges. Phillip Futures will now offer VN30 futures from the Hanoi Stock Exchange (HNX) to its customers using the CQG platform.
Deutsche Börse fully acquires Clearstream Fund Centre for $429 million; By acquiring the remaining stake from UBS, Deutsche Börse becomes the sole shareholder in the company, after acquiring a 51% share in September.
Wesley Bray – The Trade
Deutsche Börse has acquired the remaining 49% stake in Zurich-based fund distribution platform, Clearstream Fund Centre, from UBS for $429 million. Under the terms of the transaction, the European exchange operator will become the sole shareholder of Clearstream Fund Centre, having previously acquired a 51% stake in the company in September last year.
Deutsche Börse acquires remaining shares in Clearstream Fund Center
Deutsche Börse AG
Deutsche Börse AG is acquiring the remaining 49 percent stake in Clearstream Fund Center from UBS for CHF 390 million. This means that Deutsche Börse will become the sole owner of the Zurich-based fund distribution platform, having already acquired a 51 percent stake on September 30, 2020. The transaction should lead to a book profit in the low to mid double-digit million euro range for Deutsche Börse.
Bank of America EMEA execution services head Tiefenbrun departs for Cboe Europe; Natan Tiefenbrun has departed Bank of America after eight years and will join Cboe Europe as head of equities in June.
Hayley McDowell – The Trade
Exchange operator Cboe Europe has hired industry veteran and the head of execution services for EMEA at Bank of America to lead its European equities trading business. Natan Tiefenbrun will join Cboe as senior vice president and head of European equities in London next month reporting to president of Europe and Asia Pacific, Dave Howson, after eight years with Bank of America.
Cboe Expands European Leadership Team with Senior Hire
Industry veteran Natan Tiefenbrun will join Cboe as Senior Vice President, Head of European Equities; Prior to joining Cboe, Tiefenbrun has led a distinguished career in European equities trading, most recently as a Managing Director at Bank of America; In this new role, Tiefenbrun will oversee Cboe’s European equities business
Cboe Europe, a pan-European exchange operator and a subsidiary of Cboe Global Markets (Cboe: CBOE), today announced that Natan Tiefenbrun will join the company as Senior Vice President, Head of European Equities. In this new role, Natan will oversee Cboe’s European equities trading business, reporting to David Howson, EVP, President Europe and Asia-Pacific, Cboe Global Markets. He will join in June and be based in Cboe’s London office.
ASX Group Monthly Activity Report – April 2021
2021 Macquarie Australia Conference Presentation
CME Group Inc. Announces Preliminary Results from its 2021 Annual Meeting of Shareholders
CME Group Inc. (NASDAQ: CME) today announced the preliminary shareholder voting results from its 2021 annual meeting.
CME Group Declares Quarterly Dividend
CME Group Inc., the world’s leading and most diverse derivatives marketplace, today declared a second-quarter dividend of $0.90 per share. The dividend is payable June 25, 2021, to shareholders of record as of June 10, 2021.
EBS Market Integration onto CME Globex
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: May 3, 2021
Critical System Updates
Update – GLink Network Infrastructure Rebalance at Aurora Co-Location Facility UPDATE
Update – iLink 3 SBE Schema Update – May 12 UPDATE
CME Globex Performance Enhancements – Starting June 6
SGX RegCo leverages RegTech for oversight of listed issuers
Singapore Exchange Regulation (SGX RegCo) is introducing the use of artificial intelligence and other RegTech solutions to enhance its oversight of listed issuers. The solutions will help automate the extraction of data that can then be used to compute certain indicators of financial risks. The indicators are based on SGX RegCo’s observations of indicative signs of possible financial distress or irregularities in listed companies. These include, among others, the existence of long outstanding trade receivables; significant asset write-offs; low cash coverage ratio and negative working capital.
ICE Mortgage Technology Millennial Tracker Finds Millennial Purchase Activity Increases, Even as Rates Rise
ICE Mortgage Technology, part of Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today shared that according to the ICE Mortgage Technology™ Millennial Tracker purchase activity among millennials increased in March, even as interest rates rose for the first time since October 2020.
Japan Exchange Group: Status Of Acquisition Of Own Shares
Japan Exchange Group, Inc. hereby announces the status of matters regarding acquisition of own shares pursuant to the provisions of its Articles of Incorporation and Article 459, Paragraph 1 of the Companies Act, which was resolved at its Board of Directors meeting held on April 28, 2021.
Nodal Exchange Achieves Records In Power And Environmental Futures In April
Nodal Exchange announced today that it achieved several records in monthly power and environmental futures in the United States in April 2021. Nodal Exchange achieved record power futures open interest with 1,076 million MWh per side (equivalent to the electricity consumption of 101 million homes for a year in the USA) at the end of April representing 51.5% market share which is also a new record. Nodal also achieved record open interest in environmental futures open interest with 135,946 lots representing 12.4% market share as of end of April.
Barchart and Evolution Markets Announce Partnership for Global Environmental Data
Barchart, a leading provider of market data and technology services to the financial, media, and commodity industries, has announced a new distribution partnership with Evolution Markets, a leader in institutional services for global environmental and energy markets.
Fintech Bright Spot Africa Plays Catch-Up in Bumper Funding Year
Roxanne Henderson – Bloomberg
Report finds African fintech investment reached $1.35 billion; Most global funding in the sector flowed to the U.S. last year
Fintech companies in Africa raised more capital despite the Covid-19 pandemic, standing in contrast to their emerging-market peers such as Latin America that saw a decline. The continent saw fintech funding, including mergers and acquisitions, grow to $1.35 billion last year from $1 billion in 2019, according to a report by BFA Global’s Catalyst Fund and Briter Bridges published on Thursday. While Indian and Latin American fintech companies still raised more money than those in Africa, their volumes fell from the previous year as they battled to close later-stage deals.
Ant Looks to Revamp a Controversial Business Without Sparking an Outcry; Company needs to turn its ‘mutual-aid’ service, a type of crowdfunded medical coverage with nearly 91 million members, into a regulated business
Keith Zhai, Jing Yang and Xie Yu – WSJ
Ant Group Co., which has pledged to get all its financial services fully regulated, is exploring ways to revamp a popular and controversial product that nearly 91 million Chinese citizens count on. Ant’s Xianghubao “mutual aid” service is a type of crowdfunded medical coverage. Signing up is free, and members are entitled to receive lump-sum cash payouts of up to $45,000 in cases of certain critical illnesses or life-threatening injuries. It was built on the premise that there is safety in numbers: Members have been contributing the equivalent of less than a penny toward each claim.
JP Morgan expands data platform for trading clients with Confluence; The partnership with Confluence is the latest by JP Morgan as the investment bank looks to provide full investment lifecycle data products to its buy-side clients.
Joe Parsons – The Trade
JP Morgan has expanded its partnership with Confluence to integrate the vendor’s risk and performance measurement data with its data and analytics platform for trading clients.
The UK’s chance to define Europe’s best execution blueprint
Anish Puaar, European market structure analyst, Rosenblatt Securities via The Trade
With the Financial Conduct Authority (FCA) poised to scrap MiFID II’s so-called RTS 27 and 28 reports, the UK has an opportunity to set Europe’s gold standard for best execution monitoring. Replacing the MiFID II reports with a standardised set of broker routing metrics, similar to those recently introduced by the US Securities and Exchange Commission (SEC), could be a good place to start.
US Federal Reserve Proposes Guidelines for ‘Novel’ Banks That Want Access to Fed Payments; The guidelines would have direct bearing on Wyoming special purpose depository institutions (SPDI) that want access to Fed payments, said U.S. Senator Cynthia Lummis.
Nate DiCamillo – Coindesk
The U.S. Federal Reserve has proposed guidelines that would give “novel types of banking charters” access to the Fed’s payments rails. The central bank invited public comment on the guidelines for the next 60 days.
Monetary Authority Of Singapore Launches Global FinTech Hackcelerator For A Greener Financial Sector
The Monetary Authority of Singapore (MAS) announced the launch of the 6th edition of the Global FinTech Hackcelerator, with the theme “Harnessing Technology to Power Green Finance”. The competition, supported by Oliver Wyman, seeks to unlock the potential of FinTech in accelerating the development of green finance in Singapore and the region.
Bitcoin will eventually hit ‘$1 million a coin,’ CoinDesk editor predicts
Seana Smith – Yahoo Finance
As investor interest in cryptocurrency spikes, bitcoin could rise to $1 million over the next five years, one expert told Yahoo Finance Live. “Bitcoin is going to $1 million a coin,” CoinDesk Learn Editor Ollie Leech said. “I actually believe that it will, at some stage, with just the scarcity aspect alone, it makes it an incredibly exciting asset to hold… Bitcoin is uncontested.”
Ethereum is leaving bitcoin in the crypto dust
Paul R. La Monica – CNN Business
Hunter S. Thompson once wrote, “There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge.” He was referring to the intoxicating drug, not the cryptocurrency. But ethereum investors may have reasons for fear and loathing, too.
Coinbase Plans to Close Its San Francisco Headquarters in 2022
Olga Kharif – Bloomberg
The company has previously said it has ‘remote first’ attitude; The crypto exchange will have a network of smaller offices
Coinbase Global Inc., the biggest U.S. cryptocurrency exchange, plans to close its San Francisco headquarters next year and let employees continue to work remotely.
How to Decide Whether to Invest in Bitcoin or Ether
Joanna Ossinger – Bloomberg
The days when Bitcoin was the only real option for investors looking to get into cryptocurrencies are long gone. Ether, the second-largest currency, rose to a record as interest in so-called alt coins continues to surge. Dogecoin, the memecoin that started as a joke, is now worth nearly $90 billion. In all, there are more than 7,000 coins currently tracked by CoinGecko, with a bewildering array of names (PancakeSwap, anyone?). For most people it makes sense just to start with the top two: Bitcoin and Ether. Either would have been a relatively good investment so far in 2021 — Bitcoin has about doubled, and Ether has more than quadrupled, compared with an 11% gain for the S&P 500.
Coinbase to Close Its Former HQ Office in San Francisco to ‘Decentralize’ Workforce
Sebastian Sinclair – Coindesk
About a year after Coinbase announced plans to become “remote-first,” the U.S. cryptocurrency exchange said it’s going to shut its former headquarters office in San Francisco. In February, the company had announced it would no longer have a headquarters as part of a move to “decentralize” Coinbase’s workforce in order to ensure no one location is more important than any other. Now, according to an announcement made via Twitter on Wednesday, Coinbase is closing the office where that HQ used to be.
Tether’s on-chain volume has surpassed the $1 trillion mark for the first time
Yogita Khatri – The Block
The Tether (USDT) stablecoin’s adjusted on-chain volume has surpassed the $1 trillion mark on a yearly basis for the first time, according to data compiled by The Block Research. As of April 30, USDT had an adjusted on-chain volume of $1.01 trillion, i.e., a 64% market share of the total stablecoin transaction volume of 2021 to date (about $1.6 trillion). On-chain transaction volume is any value transfer within a blockchain network, such as buys, sells (trading), and sends (remittances). Moreover, it is “adjusted” by Coin Metrics, the source firm of the data, in order to filter out duplicates and wash trading as much as possible.
Ether Traders Load Up on $8K Call Options in Bet Price Will Double by July
Omkar Godbole – Coindesk
Prices for ether, the native cryptocurrency of the Ethereum blockchain, have already quadrupled this year. Now, some options traders are betting prices could double again – by the end of next month. Market data reveals growing demand for ether’s deep out-of-the-money (OTM) call options – bullish bets with strike prices well above the spot market price of the underlying asset. Ether has rallied from $2,000 to record highs over $3,500 in the past 10 days. On Tuesday, a single high-net-worth trader or a group of traders bought 9,000 contracts of the $8,000 call expiring June 25.
Decentralized exchange protocol Uniswap v3 goes live on Ethereum
Michael McSweeney – The Block
UPDATE (5/5 2:40 p.m. ET): The Uniswap team has officially announced the launch of v3. “We’re thrilled to announce that Uniswap v3 has been deployed to the Ethereum mainnet! All relevant contract addresses can be found here,” the team said in a blog post. A migration guide for v3 had previously been added to GitHub.
Crypto.com Becomes Official Sponsor of Italy’s Soccer Cup Final
Jamie Crawley – Coindesk
Hong Kong-based cryptocurrency exchange Crypto.com will sponsor the final of Italy’s soccer cup competition, Coppa Italia, taking place May 19 between Atalanta and Juventus. Announced Thursday, the partnership with Lega Serie A is the first such agreement between a professional soccer league and a crypto platform, Crypto.com said. To commemorate the event, a collection of non-fungible tokens (NFT) will be made available, featuring the trophy, match highlights and more. The two organizations intend to “create a new experience for football fans in Italy and beyond,” according to their joint announcement.
Boris Johnson’s ‘madman’ strategy dumbfounded Brussels’ Brexit chief; Michel Barnier diaries describe how EU lost trust in UK’s unpredictable and unprepared prime minister
Jim Brunsden and Sam Fleming – FT
Michel Barnier openly wondered whether Boris Johnson was pursuing a “madman strategy” in Brexit negotiations and came close to losing faith in the UK’s ability to keep its word during the gruelling talks, according to his diaries.
Open access regime for exchange traded derivatives
On 30 December 2020, HM Treasury announced that it would conduct a review of the open access regime for exchange traded derivatives (ETDs) to assess its suitability for UK markets after the end of the transition period.
McConnell Says ‘100%’ of His Focus Is on Blocking Biden Agenda; Senate GOP leader’s remarks come as Democrats and Republicans have focused on possible infrastructure deal but see few prospects elsewhere
Lindsay Wise – WSJ
Senate Minority Leader Mitch McConnell said Republicans are united behind stopping President Biden’s agenda, putting a damper on already slim hopes for bipartisan cooperation in Congress ahead of more talks with the White House on a possible infrastructure deal.
*****Nothing like an open mind about what is good for the people of the USA.~JJL
China Fires Back After G-7 Shows United Front Toward Beijing
Beijing tells Western countries to solve their own problems; U.S. is trying to get allies to take firm stance against China
China urged Western nations to stay out of its affairs and fix their own problems after the Group of Seven’s foreign ministers unified behind a litany of grievances with the world’s second-largest economy.
Biden Is Coming for the Tax Loopholes That the Rich Cherish; The president wants to foil strategies used to transfer wealth from generation to generation.
Peter Coy – Bloomberg
You’d expect taking money from the 1 Percent to be child’s play in a democracy. The 99 Percent have less money than the rich, but they have way more votes. In practice, Robin Hoodism isn’t so simple. Rich people can rightly make the case that they’re already picking up a big share of the nation’s tab for defense, social spending, and everything else. They can argue, more controversially, that raising their taxes will discourage them from working, inventing, and investing, to everyone’s detriment. And if all else fails, they can hire lawyers and accountants to minimize what they owe the Internal Revenue Service.
Biden’s Audit-the-Rich Target of $700 Billion Seen as Tall Order
Allyson Versprille – Bloomberg
White House aims at wealthy and companies to fund economy plan; IRS would need to staff up, audits can take years to resolve
President Joe Biden’s plan to raise $700 billion over a decade from increased tax audits of the wealthy and corporations — a major funding source for his economic-investment proposals — will probably take years to bear fruit and faces skepticism that the figure is realistic.
Hillary Clinton: ‘There has to be a global reckoning with disinformation’
David Smith – The Guardian
Her bid for the White House was engulfed by a tidal wave of fabricated news and false conspiracy theories. Now Hillary Clinton is calling for a “global reckoning” with disinformation that includes reining in the power of big tech.
SIFMA Statement in Support of the Securing a Strong Retirement Act
SIFMA today issued the following statement from President and CEO Kenneth E. Bentsen, Jr. on the Securing a Strong Retirement Act of 2021:
ASIC quarterly update January to March 2021; ASIC has today released its first quarterly update report, which covers the period from 1 January to 31 March 2021.
The January to March 2021 period saw ASIC continue to support Australia’s economic recovery from the COVID-19 pandemic. We supported banks, superannuation trustees and insolvency practitioners to understand and comply with changes in the regulatory environment. ASIC also provided information to consumers impacted by the COVID-19 pandemic and natural disasters.
Acting Chairman Behnam to Participate in a Fireside Chat at ISDA’s 35th AGM
UK scraps open access regime for derivatives in latest regulatory divergence; The open access regime for exchange traded derivatives will be scrapped in the UK but it will continue to support the regime for the equity and OTC derivatives markets.
Annabel Smith – The Trade
The UK has confirmed plans to axe the open access regime aimed at increasing competition in cross-border derivatives trading and clearing in the latest sign of regulatory divergence from the EU post-Brexit.
Register for the SEC’s 40th Annual Small Business Forum, Featuring Inclusive Conversations on Capital Formation from Startup to Small Cap
The Office of the Advocate for Small Business Capital Formation will host the Securities and Exchange Commission’s 40th Annual Government-Business Forum on Small Business Capital Formation virtually from May 24-27, 2021. Each of the four sessions will feature panelists with in-depth knowledge of the issues facing small businesses across the country, spotlighting the following topics:
Regulation for a different world
Speech by our CEO, Nikhil Rathi, delivered at Association of Foreign Banks – CEO Programme 2021 – The UK Regulatory Landscape Post-Brexit and Beyond.
FCA fines Sapien Capital Ltd for serious financial crime control failings in relation to cum/ex trading
The FCA has fined Sapien Capital Ltd £178,000 for failings which led to the risk of facilitating fraudulent trading and money laundering. The fine was reduced due to serious financial hardship.
Investing and Trading
Citadel sees most U.S. staff back to office by June 1; The expectation for workers’ return is earlier than some of its hedge fund peers, with many employees expressing an eagerness to get back to their desks.
Ken Griffin’s Citadel expects to have most of its U.S. employees back in its offices in New York, Chicago and Greenwich, Connecticut, by June 1, according to a person familiar with the matter.
With Most Meme-Stock Losses Recouped, Retail Army Is on the Hunt
Kamaron Leach – Bloomberg
Portfolios have recovered $123 billion since March: Vanda; Signs of moves toward blue chips, crypto, new Reddit picks
After taking a beating during the meme-stock mania earlier this year, do-it-yourself investors have recovered about three-quarters of their losses. Now having licked their wounds, it’s unclear whether they’ll return to making buzzy bets or stick with safer offerings.
GameStop Can Thank WallStreetBets for Its S&P Credit Upgrade
Alex Wittenberg – Bloomberg
Retailer was able to wipe out long-term debt with equity sale; S&P cited that in upgrade and noted new vision for company
The Reddit army’s meme-packed campaign to boost GameStop Corp.’s stock price has now resulted in one of the most conventional victories on Wall Street: a credit-rating upgrade.
Janet Yellen weighs into old territory on interest rates; Treasury secretary should not have commented on monetary policy — though she was right
The editorial board – FT
There is little, on the surface, to object to in Janet Yellen’s statement that if it looks as though government spending is leading the US economy to overheat the Federal Reserve may have to raise interest rates. As a description of the job of an independent central bank it was admirably concise. It was also conditional: she did not say the economy would overheat, only what the Fed should do in response. Nonetheless, it was still unwise to say it.
Lessons in investing from John Maynard Keynes; ‘Keynes had a knack for making his risks pay off. When he died in 1946, he owned £400,000 in stocks and securities’
Tim Harford – FT
In March 1918, with the German army camped outside Paris, the young British economist John Maynard Keynes heard that a remarkable auction was about to take place in the City of Light. The estate of the late artist Edgar Degas was selling off his vast collection of pieces by France’s most celebrated 19th-century painters.
How to invest like Cathie Wood, but without buying Ark ETFs; Investors outside the US will have found it hard to buy into the hype, but there are alternatives
Dave Baxter – FT
Cathie Wood’s Ark funds are creating about as much frustration in the UK as they are hype. From disruptive innovation to autonomous technology, the narratives behind these exchange traded funds can be as exciting as some of their stellar returns.
BOE Slows Bond Buying as Haldane Bids for Fewer Purchases
David Goodman – Bloomberg
U.K. should recover pre-pandemic level during 2021, BOE says; Bailey will speak at press conference at 1pm in London
The Bank of England slowed its emergency bond-buying and signaled it’s on course to end that crisis support later this year as a strong rebound takes hold across the economy with the removal of pandemic restrictions.
Actress-Turned-Mogul Alba Makes $122 Million in Honest IPO
Devon Pendleton – Bloomberg
Beauty firm’s debut values Alba’s 5% stake at $98 million; IPO also results in 260% return for Arnault-backed L Catterton
Actress Jessica Alba cemented her claim to one of the most lucrative side gigs in Hollywood after shares of her beauty business, the Honest Co., soared 44% in its market debut. The “clean” beauty- and baby-products maker’s stock closed at $23 Wednesday after it priced the shares at $16 in its initial public offering. Alba’s roughly 5% stake is valued at $98 million, according to the Bloomberg Billionaires Index. She also has exercisable options valued at about $24 million.
Rio Tinto suffers huge revolt over pay; More than 60% of votes cast at AGM oppose remuneration report
Neil Hume – FT
Rio Tinto has suffered a major revolt by shareholders over the exit package handed to former chief executive Jean-Sébastien Jacques, who quit last year following the destruction of an ancient Aboriginal site in Western Australia.
Environmental, Social and Corporate Governance
Tesla to lose hundreds of millions of dollars in emission credit sales; Fiat owner Stellantis no longer needs to buy credits from Elon Musk’s group to meet CO2 goals
Peter Campbell and David Keohane – FT
Tesla is set to lose hundreds of millions of dollars this year in payments after carmaker Stellantis ditched plans to buy emission credits from the US group. In 2019 Fiat Chrysler (FCA) entered a deal to pool with Tesla to pass tough European carbon dioixide rules, agreeing to pay to offset the emissions from its own line-up.
Linklaters to Pick First Female Leader in Its 183-Year History
Ellen Milligan – Bloomberg
Law firm has shortlist of three women candidates for key role; Move comes after Freshfields appointed female senior partner
Linklaters LLP, one of London’s “Magic Circle” of elite law firms, is poised to elect the first female senior partner in its 183-year history. A shortlist of three women candidates include London-based global corporate head Aedamar Comiskey, London corporate and M&A partner Sarah Wiggins and Milan-based capital markets partner and western Europe managing partner Claudia Parzani.
ISDA Publishes US Renewable Energy Certificate Annex
The International Swaps and Derivatives Association, Inc. (ISDA) has published a new US Renewable Energy Certificate (REC) Annex, reflecting increased interest in trading products that help companies meet renewable energy and emissions-reduction targets as part of their environmental, social and governance (ESG) strategy.
Germany sets ambitious new carbon emissions target; Move follows ruling by constitutional court criticising previous climate goals
Guy Chazan – FT
Germany is to raise its target for reducing carbon emissions by 2030 from 55 per cent to 65 per cent, after the country’s supreme court said its previous climate goals were not ambitious enough.
The World’s Largest Pension Fund Has Cooled on ESG. Should You? Thematic indices make investors feel good. But is simple virtue enough to fatten retirement accounts and support an aging population?
Shuli Ren – Bloomberg
If a pioneer investor in ESG is getting cold feet, should you? In July 2017, Japan’s $1.6 trillion Government Pension Investment Fund — the world’s largest — blazed a trail by putting 1 trillion yen ($9.1 billion) into three indices that track Japanese stocks that put emphasis on environmental, social and corporate governance issues. GPIF then plowed 1.2 trillion yen into two carbon-efficient indices in 2018, and another 1.3 trillion yen into two ESG foreign equity indices last December.
Barclays Shareholders Reject Second Climate Change Resolution
Alastair Marsh – Bloomberg
Proposal by campaign group got 14% support in an investor vote; Lender set own its climate goals after similar call last year
For the second year in a row, Barclays Plc shareholders rejected a proposal that would require the bank to wind down its lending to the fossil-fuel sector.
Climate Change Raising Sovereign Credit Risk in Most Countries
Jonathan Tirone – Bloomberg
Moody’s sees climate-related events weighing on fiscal revenue; Three-quarters of countries could see credit profiles reduced
Climate change is on course to lift borrowing costs across large swathes of the globe as rising sea levels, superstorms and droughts erode the economic stability of nations, according to Moody’s Investors Service.
BMO Harris calls biz bankers back to the office; In the latest plan among large financial services firms, Chicago’s second-largest bank will return about 1,000 workers to its downtown headquarters beginning next month.
Steve Daniels – Crain’s Chicago Business
Chicago’s second-largest bank is returning its business bankers and associated staff to the office, beginning next month. BMO Harris Bank’s commercial bankers will come back to downtown Chicago one month before the city’s largest bank, JPMorgan Chase, is requiring its workers to return to the office. Chase CEO Jamie Dimon announced late last month that all U.S. workers would be expected back in offices in July.
Confluence and J.P. Morgan Expand Partnership, Integrating Additional Asset Coverage into Delta Risk and Performance Platform
Confluence Technologies, Inc.
Confluence Technologies, Inc. (“Confluence”), a global technology solutions provider delivering innovative products to the worldwide money management industry, and J.P. Morgan (NYSE: JPM) today announced a new development in their partnership to deliver a multi-asset portfolio analytics solution. At the start of Q3 2021, Delta, Confluence’s risk and performance solution will have expanded coverage powered by J.P. Morgan’s proprietary analytics to include U.S. securitized products. This will also be available through J.P. Morgan’s platform.
Goldman Sachs just told its US staffers they need to be back in the office by June 14 in one of Wall Street’s earliest pushes to get employees back in person
Samantha Stokes and Reed Alexander – Insider
The time is ticking on remote work at another Wall Street firm. Goldman Sachs is asking its US employees to come back into the office by June 14, according to an internal memo sent Tuesday and reviewed by Insider. UK employees will be required to come in by June 21.
Cathie Wood’s Ark Battered by Selloff, Worst Run of Outflows
Lu Wang and Claire Ballentine – Bloomberg
Speculative fringe of market keeps bleeding amid tech carnage; The rout stands in contrast with buoyancy in the broad market
The selloff that’s tearing through high-valuation tech shares has battered Cathie Wood’s flagship ETF. The ARK Innovation exchange-traded fund (ARKK) dropped for a seventh straight day Wednesday in its longest slide in nearly two and a half years. After surging roughly 150% in 2020 thanks to a string of prescient bets on Tesla Inc. and stay-at-home tech darlings, the negative stats are starting to add up.
SocGen Sees Three-Day Homeworking; ING Plans 50% Office Week
Alexandre Rajbhandari and Caroline Connan – Bloomberg
Bank has signed agreement with trade union representatives; Dutch lender ING says it expects about half home-working
Societe Generale SA plans to allow its French staff to work from home for up to three days a week, joining peers including Deutsche Bank AG in providing one of the most flexible return-to-office policies among large international banks. The Paris-based lender has signed an agreement with its domestic union representatives on the remote work plans, Chief Executive Officer Frederic Oudea said in an interview with Bloomberg TV on Thursday. He said that the move would “help us to further improve the attractiveness of Societe Generale as an employer.”
$953 Million Singaporean Fund Ensnared by Alleged Nickel Fraud
David Ramli, Yoolim Lee, Chanyaporn Chanjaroen and Alfred Cang – Bloomberg
Singapore regulator conducting supervisory review of Vickers; Vickers founder Tan confirmed firm’s related exposure to Envy
Technology startup investor Vickers Venture Partners has been caught up in the allegedly fraudulent nickel trading scheme of a Singaporean businessman and his Envy Global Trading, prompting a review by the city-state’s monetary authority.
China suspends economic dialogue with Australia as relations curdle
Gabriel Crossley, Kirsty Needham – Reuters
China “indefinitely” suspended on Thursday all activity under a China-Australia Strategic Economic Dialogue, its state economic planner said, the latest setback for strained relations between the two countries.
Carnivorous Argentines Told to Forgo Beef as Climate Fears Grow
Jonathan Gilbert – Bloomberg
Ranchers are biggest contributor to Argentina’s emissions; Beef consumption has already been plunging on economic woes
Some of the planet’s most voracious beef eaters are being told to cut back to help the environment. The government in Argentina, a ranching heartland that’s traditionally vied with neighboring Uruguay as the world’s red-meat capital, wants people to stop feasting on beef for one day a week as it tries to achieve climate goals.
Why This Climate-Laggard Nation Still Attracts Investments
Matthew Burgess – Bloomberg
Half of Australian government debt held by foreign buyers; Australia risks losing support as ESG pressure mounts
Australia isn’t paying the price for being a climate laggard. At least not yet. Some of the world’s biggest investors continue to hold Australian debt even as they pledge to shift money away from countries and assets that don’t align with a low-carbon world.