‘God Told Me to Put Money Into Hertz’: How Small Investors Are Upending Wall Street

May 27, 2021

First Read

$42,176/$300,000 (14.1%)

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Hits & Takes
John Lothian & JLN Staff

When my children were young, I would often read to them at night or tell them a story. One of the books they requested again and again was “The Very Hungry Caterpillar,” by Eric Carle. Carle died Sunday at the age of 91. The book used simple words and terrific artwork to tell the story. Thank you to Mr. Carle for a life that gave much joy and learning. — WSJ

The Wall Street Journal has a story titled “How to Talk Retirement Savings With Your Spouse; Couples can avoid friction during volatile markets with conversations in advance,” by Anne Tergesen. This is a great subject. Does it belong in the investing and trading area of the newsletter? Or in wellness exchange? Or politics? Or all of the above? Can baby boomers ever retire? Some I know don’t want to. — WSJ

Today we have two videos from JLN. The first is Part Two of our Open Outcry Traders History Project interview with financial futures pioneer Bradley Rotter. The second is our interview with Donald MacKenzie, a sociology professor at the University of Edinburgh who has written a book on high-frequency trading. The book is “Trading at the Speed of Light; How Ultrafast Algorithms are Transforming Financial Markets,” published by Princeton University Press. — MacKenzie Video Rotter Interview

I need to go into the index provider business. Index providers saw their revenues jump to a record $4.1 billion in 2020, as revenues shot up by nearly 10%, the Financial Times reported. — FT

Carl Icahn says he may get Into cryptocurrencies in a “big way.” This is another way of saying, “I am jealous of all the attention and clout Elon Musk has over crypto and I want it too, but not enough to really invest in any coins or tokens.” — Bloomberg

One of the reasons my alma mater Purdue University is so popular is that they have not had a tuition rise in 10 years. — Purdue

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. You can make a difference in helping us to preserve industry history by donating to our GoFundMe campaign and/or telling your story in a video for one of our series.

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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Chuck Mackie has written up his three takeaways from Day 3 of Consensus 2021, Coindesk’s “BIG” crypto conference, including CBDC, suits versus cypherpunks, and PayPal and the big card companies weighing in on payments. You can read it here.~SR

Yesterday, one of my favorite tweeters, @BennettTomlin, asked the twitterverse if any of the crypto trading platforms do not operate their own trading desks. Trading against customers is pretty anathema among stock and futures exchanges, probably because it is mostly illegal. But crypto derivatives exchanges that only let their customers buy options (short options margining is admittedly hard and risky) would seem likely to be in the practice of trading against their customers. @BennettTomlin did not get many responses and no one said they are sure that this or that platform does not have a trading desk. Coincidentally, a few hours after the tweet,
I was speaking with someone from ErisX who pointed out that the ErisX platform, which is both a spot market and a futures exchange, does not “trade” cryptocurrencies. It “lists” them for its customers to trade.~Thom Thompson

STA has announced that the Greenwood Project is its 2021 charity. JLN readers are well-acquainted with the Chicago-based Greenwood Project, founded by Bevon and Elois Joseph to introduce Black and Latinx college and high school students to financial services careers. STA said it plans to promote the Greenwood Project throughout the year and has invited the group to its Annual Market Structure Conference in Washington, D.C. in October. ~SC

On Wednesday we published an item about CrossTower’s initiative to raise funds for medical equipment for India’s COVID-19 patients. The link to donate funds to the charity, Running4Oxygen, was faulty. Please use the one here. ~SC

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Bradley Rotter – Open Outcry Traders History Project, Part Two
JohnLothianNews.com

Bradley Rotter was on the financial floor of the Chicago Board of Trade when the Treasury bond market was working out its inefficiencies in its early days. Sparse institutional interest in bond futures in the beginning created lots of opportunities and sometimes the markets would move limit up and and limit down in the same day.

Rotter was interviewed by John Lothian for the Open Outcry Traders History Project. This is the second part of a two-part presentation of that interview.

Watch the video »

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Donald MacKenzie Takes a Long Look at High-Frequency Trading and its History
JohnLothianNews.com

Donald MacKenzie, a professor of sociology at University of Edinburgh, became fascinated with high-frequency trading 10 years ago, specifically about the alpha involved in speed. John Lothian News interviewed Professor Donald MacKenzie over Zoom about his new book “Trading at the Speed of Light; How Ultrafast Algorithms are Transforming Financial Markets,” published by Princeton University Press.

Watch the video »

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Register for the virtual Asset Management Derivatives Forum
FIA.org

FIA and SIFMA AMG are bringing you a virtual take on the Asset Management Derivatives Forum in 2021. Join us for virtual programming on June 8 and 9, during which market participants from all sides of a trade and leading regulators will examine the latest developments impacting the use of derivatives by asset managers. This year’s keynote speakers are Dan Berkovitz, commissioner at the Commodity Futures Trade Commission, Catherine McGuinness, chair of the policy and resources committee for the City of London, and Allison Herren Lee, commissioner at the U.S. Securities and Exchange Commission. Learn more and register!

Sign Up Here »

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When to Buy a Lamborghini? There’s No Time Like the Present; Lamborghinis are popular with the crypto crowd. All the more reason for Volkswagen to consider a sale of the Italian sports car maker.
Chris Bryant – Bloomberg
For those who aspire to cryptocurrency riches, the entreaty “When Lambo?” long ago became a popular way to refer to that blessed day when you’re finally wealthy enough to buy a luxury sports car. The soaring price of Bitcoin and other financial assets means more and more people are in a position to join that club. And after having been stuck at home for a year the newly wealthy are in a mood to spend. This is undoubtedly good news for Lamborghini’s owner, Volkswagen AG, which has seen the attractiveness of its Italian subsidiary shoot up among potential buyers of the asset.
/bloom.bg/2R1OVDi

***** The reason I don’t drive a Lamborghini is I would need two of them, one for each foot.~JJL

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Wednesday’s Top Three
Our top story Wednesday was our lead story, the press release FairX Announces New Futures Exchange for Retail Investors. Second was a 1993 promotional video from the CBOT on YouTube. Third was Upstart Peer-to-Peer Crypto Exchanges Take Aim at Coinbase, from the Wall Street Journal.

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Lead Stories

‘God Told Me to Put Money Into Hertz’: How Small Investors Are Upending Wall Street; Spring resurgence in so-called meme stocks is latest triumph for retail traders long derided as ‘dumb money’
Gunjan Banerji and Alexander Osipovich – WSJ
Many small investors are beating Wall Street pros at their own game. A basket of stocks favored by individuals has outperformed the broader market since March of last year, according to Vanda Research. This group, which includes behemoths like Apple Inc. and Tesla Inc. alongside electric-vehicle maker NIO Inc. and digital-payments company Square Inc., has gained 68% since the beginning of March 2020, far outpacing the S&P 500’s roughly 36% climb.
/on.wsj.com/3wzQ5oA

Justice Department Opens Probe Into Archegos Blowup
Sridhar Natarajan, Greg Farrell, and Donal Griffin – Bloomberg
Prosecutors seek information from banks that dealt with firm; The inquiry adds to regulatory scrutiny that started in March
The Department of Justice is investigating the market-rattling meltdown of Bill Hwang’s Archegos Capital Management in March, a debacle that left big banks in Europe, Asia and the U.S. nursing more than $10 billion in losses. Federal prosecutors in Manhattan sent requests for information to at least some of the banks that dealt with the firm, according to people with knowledge of the matter, who asked not to be identified discussing the confidential probe. It’s unclear what potential violations or entities authorities are examining.
/bloom.bg/3uzX2EV

American bank chiefs express caution over cryptocurrencies; Citigroup, Wells Fargo and BofA CEOs among attendees at fiery Senate hearing
Gary Silverman and Joshua Franklin – FT
Chief executives of several leading US banks expressed caution about dealing in cryptocurrencies in testimony released ahead of a sometimes contentious hearing before a Senate committee on Wednesday.
/on.ft.com/3flSmhm

Bitcoin’s Reliance on Stablecoins Harks Back to the Wild West of Finance; To understand the weakness of stablecoins such as Tether, it is worth a quick history lesson from pre-Civil War American finance
James Mackintosh – WSJ
Stablecoins are one of the weirdest things in the whole bizarro world of cryptocurrencies, because they operate on principles directly opposed to the rest of the crypto system. Crypto true believers argue that bitcoin and its ilk will supplant “fiat” currencies issued by governments, while the whole point of the innovative blockchain that underlies them is to overcome what pseudonymous inventor Satoshi Nakamoto called “the inherent weaknesses of the trust based model.”
/on.wsj.com/3hYKmoe

Federal Prosecutors Have Asked Banks for Information About Archegos Meltdown; Manhattan U.S. attorney’s office is reaching out to Wall Street banks that lent to the firm
Margot Patrick, Emily Glazer and Juliet Chung – WSJ
Federal prosecutors in New York have requested information about Archegos Capital Management from banks across Wall Street, according to people familiar with the matter. Banks that lent to Archegos, including Credit Suisse CS 0.93% Group AG, UBS UBS -0.38% Group AG, Goldman Sachs Group Inc. and Morgan Stanley, MS 0.55% have been contacted for information, the people said.
/on.wsj.com/2RQB1nF

How a small hedge fund with a tiny stake in Exxon rallied others to its cause.
NY Times
Exxon Mobil was dealt a stunning loss at its annual shareholder meeting on Wednesday from an unlikely opponent: a small new activist investor focused on climate change, Engine No. 1. The hedge fund won at least two seats on the oil giant’s 12-member board. It may yet claim a third nominee when the counting is over.
/nyti.ms/3ySrA8a

Index providers’ revenues jump to a record $4.1bn in 2020; MSCI and S&P maintain lead over FTSE Russell as overall revenues shoot up by nearly 10%
Jackie Noblett – FT
The huge adoption of passive investing has driven collective revenues for index providers, including MSCI, S&P Dow Jones Indices and FTSE Russell, to a record high.
/on.ft.com/3bWZUVU

Defeats for Big Oil mark ‘sea change’ in climate battle; Investors trigger boardroom changes at ExxonMobil as activists force Shell to cut emissions
Justin Jacobs and Anjli Raval – FT
Big Oil has been rocked by a climate reckoning. International oil companies have laid out detailed plans to drive down carbon emissions. But stunning boardroom and courtroom defeats this week showed how powerful forces in society want faster change.
/on.ft.com/3uvxkkx

DBS Bank CEO: We Have Twice as Many Engineers as Bankers; Banks and financial regulators should facilitate the tokenization of the financial system, DBS CEO Piyush Gupta said during Consensus 2021.
Anna Baydakova – Coindesk
We’re now in a reality where financial institutions have to be technology firms first, said Piyush Gupta, the CEO of Singapore’s DBS Bank. In the modern world, both central and commercial banks will be in charge of facilitating the transition to the financial infrastructure of the future, which will be digitized and tokenized, Gupta said in a pre-recorded speech at CoinDesk’s Consensus 2021 virtual conference.
/bit.ly/3uqZNYW

Head of UK’s financial regulator says it was not up to the job; Head of Financial Reporting Council says successor body not due to be in place until 2023
Daniel Thomas and Michael O’Dwyer – FT
The head of the UK regulator overseeing financial reporting has admitted that it was not up to the job during a series of business scandals that have unleashed a far-reaching overhaul of audit and corporate governance.
/on.ft.com/3cgadob

People Hired in the Pandemic Are More Likely to Quit Their Jobs; A lack of bonding with colleagues has reduced engagement, says a study.
Peter Coy – Bloomberg
For those starting new jobs during the pandemic, welcome drinks and informal chats by the coffee machine have been replaced by formal meetings over Zoom. That lack of bonding time with other colleagues poses a problem for employers, who are less likely to retain those new hires than if they’d joined back when people worked primarily out of offices, according to a new study.
/bloom.bg/3uoHWC0

Why commuters won’t easily be lured back to the office; ‘Why not think bigger: train cars that offer all-you-can-eat sushi on rotating conveyor belts, or are fitted with Peloton bikes?’
Joshua Chaffin – FT
The lasting memory of my daily commute is the numb expression of a woman who sat across from me one evening a few years ago, knee-to-knee, because the cramped train cars were apparently built in an era when Americans were half their current size. She withdrew one small bottle of champagne from her bag and downed it. Then another. I don’t think she was celebrating.
/on.ft.com/3oTrNDr

Apple ad for ‘alternative payments’ job signals cryptocurrency interest; Posting comes as iPhone maker quietly prepares for bitcoin payments through Wallet app
Tim Bradshaw – FT
Apple has hinted at a growing interest in cryptocurrency, as it seeks new talent for its payments division. The iPhone maker is recruiting a business development manager for “alternative payments”, including cryptocurrencies, according to a job ad posted this week.
/on.ft.com/3fNCqnd

Facebook Ends Ban on Posts Asserting Covid-19 Was Man-Made; Social media titan’s policy shift reflects a deepening debate over the origins of the virus first identified in Wuhan, China
Newley Purnell – WSJ
Facebook Inc. FB -0.04% has ended its ban on posts asserting Covid-19 was man-made or manufactured, a policy shift that reflects a deepening debate over the origins of the pandemic that was first identified in Wuhan, China, almost 18 months ago.
/on.wsj.com/2ROX0eS

Coronavirus

Africa Needs 20 Million Astra Shots by July for Second Doses
Katarina Hoije and Leah Wilson – Bloomberg
African nations will need 20 million AstraZeneca Plc coronavirus vaccines by mid-July to complete the immunization of people who’ve had the first dose of the shots, the World Health Organization said.
/bloom.bg/3oX0qIM

Seychelles’s Covid Mysteries Pit Anti-Vaxxers Against Scientists; Cases in the world’s most vaccinated nation are ticking up, forcing researchers to wage war against misinformation on whether jabs are effective.
Antony Sguazzin, Jason Gale – Bloomberg
For epidemiologists, the past year and a half has been a voyage of discovery. Recently their journey aboard SARS-CoV-2 took an unexpected turn toward Seychelles, a palm-fringed archipelago in the Indian Ocean with fewer than 100,000 inhabitants. A country that few could pinpoint on a map suddenly became internet-famous as the most vaccinated nation on Earth, with 64% of the population having received the requisite two shots. Yet to the surprise of virologists—and the dismay of the government, which had been counting on the immunization drive to reopen the tourism-dependent economy—the infection count has been ticking up. As of May 13 a third of active cases—about 900 in all—were among residents who’d been fully vaccinated.
/bloom.bg/3vE2PKA

Scientists claim to have solved Covid vaccine blood-clot puzzle; German researchers say side effect is caused by adenovirus vector and can be fixed
Anna Gross – FT
Scientists in Germany claim to have cracked the cause of the rare blood clots linked to the Oxford/AstraZeneca and Johnson & Johnson coronavirus vaccines and believe the jabs could be tweaked to stop the reaction happening altogether.
/on.ft.com/3oW7wx9

France finally gets its Covid vaccination act together; The country’s inoculation drive has picked up speed after a slow start
David Keohane – FT
All it took to get my first dose of the Covid-19 vaccine in France was a five-hour round trip and two days and eight hours of incessant refreshing at my computer. “Got it!,” I yelled at my colleague Leila, after I snagged one of the recently opened slots for those under 50. “Well done! Where is it?” came her reasonable reply. “I . . . I don’t know.”
/on.ft.com/3yAWRMy

WHO reboots IP sharing scheme for Covid shots, drugs and tests; Member states urged to engage with vaccine makers to increase poorer nations’ access to treatment
Donato Paolo Mancini – FT
The World Health Organization is moving to reboot its intellectual property sharing scheme as vaccine shortages threaten poorer nations’ attempts to emerge from the pandemic and as the debate over patents intensifies.
/on.ft.com/3wCLPVn

UK virus cases hit 6-week high but vaccines diminish threat; Rise in infections remains concentrated among younger, less vulnerable people
Sarah Neville and John Burn-Murdoch and Andy Bounds – FT
New coronavirus cases in the UK have exceeded 3,000 for the first time since mid-April, but Financial Times analysis suggests the high proportion of people vaccinated is likely to blunt the force of any “summer wave”. The jump in cases reported on Wednesday represents an 18 per cent rise in the past week and in Bolton — the north-west town that has become a hotspot for the variant first detected in India — infection rates hit a six month-high.
/on.ft.com/3ySolO2

Covid-19 Is Killing Hundreds of Pregnant Women and Babies in Brazil; Expectant mothers are at greater risk; doctors face agonizing decisions on when to deliver babies prematurely
Luciana Magalhaes and Samantha Pearson – WSJ
Taíssa Souza, an advertising manager, wasn’t due to give birth until April. But in February she fell so ill with Covid-19 that she struggled to breathe, forcing doctors to deliver her baby son who was pressing up against her disease-ridden lungs.
/on.wsj.com/3fHP2vO

Influencers Say They Were Urged to Criticize Pfizer Vaccine; A disinformation effort to reduce public confidence in Covid-19 vaccines tried to enroll social media commentators in France and Germany.
May 26, 2021 – NY Times
The mysterious London public relations agency sent its pitch simultaneously to social media influencers in France and Germany: Claim that Pfizer’s Covid-19 vaccine is deadly and that regulators and the mainstream media are covering it up, the message read, and earn thousands of euros in easy money in exchange.
/nyti.ms/3bWW8vz

C.D.C. Will Not Investigate Mild Infections in Vaccinated Americans; At least 10,000 vaccinated people were infected with the coronavirus through the end of April. Now the agency has stopped pursuing the mildest cases.
Roni Caryn Rabin – NY Times
Julie Cohn was fully vaccinated when she went to cheer at her 12-year-old son’s basketball game in March. Midway through the match, he asked to remove his mask because he was getting so hot. She thought little of it.
/nyti.ms/3ulLl4x

Exchanges, OTC and Clearing

Listen in to STA Trading Views now to catch the latest episode!
STA
Episode 11 of STA Trading Views features an interview with Bryan Harkins, President at BIDS Trading, and Mehmet Kinak, Global Head of Systematic Trading and Market Structure at T. Rowe Price. Our conversation includes discussion of the state of the exchange and ETF landscape, the buy vs. build quandary and Cboe’s recent acquisition of BIDS Trading.
/bit.ly/3mV9IUv

Micro Bitcoin Futures Surpass 500,000 Contracts Traded
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, announced that Micro Bitcoin futures volume surpassed 500,000 contracts on Monday, May 24.
“We are pleased with the strong uptake and support we have seen for this new contract so early on in its first month,” said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products.
/bit.ly/3bXJg8e

ICE sees record futures and options open interest as traders continue to mitigate risk; The exchange reported a new record open interest of 84.5 million contracts across its futures and options trading earlier this month.
Annabel Smith – The Trade
Intercontinental Exchange (ICE) has surpassed its previously set record for open interest on futures and options trading as the markets continue to look for means to mitigating risk. The exchange saw a new record of open interest with 84.5 million contracts across its futures and options trading earlier this month, surpassing the previously set record from March last year.
/bit.ly/2R28w6k

Aquis tackles unbundling conundrum with research expansion for top stocks; Research on Aquis Stock Exchange’s Apex stocks will be produced and published by Fregnan and Research Tree and available on AQSE’s website under latest scheme.
Annabel Smith – The Trade
The Aquis Stock Exchange (AQSE) has set out plans to offer free access to research on its Apex stocks in a bid to resolve issues relating to research unbundling for SMEs. As part of the new scheme, quantitative research on AQSE’s Apex stocks will be provided by machine learning and artificial intelligence analytics FinTech, Fregnan, and published on the AQSE website.
/bit.ly/3oTyzsE

Eurex Exchange Readiness Newsflash | Change of EMDI and EOBI multicast addresses for the Micro-EURO STOXX 50® Index Future (FSXE) with effect from 14 June 2021
Eurex
Eurex Exchange is planning to make configuration changes to the Micro-EURO STOXX 50® Index Future (FSXE). The multicast addresses for the EOBI and EMDI market interfaces will change and the product will receive its own dedicated multicast addresses. The current partition ID (Partition 3) and the port numbers will not be changed.
/bit.ly/3uo2DxL

TMX Group CEO John McKenzie to present at the Virtual Deutsche Bank Global Financial Services & FinTech/Info Services Conference
TMX
TMX Group CEO John McKenzie will present at the virtual Deutsche Bank Global Financial Services & Fintech/Info Services Conference on Wednesday, June 2, 2021 at 12:35 p.m. – 1:10 p.m. ET.
/bit.ly/3oUXc8i

Nasdaq Executives to Present at June 2021 Investor Conferences
Nasdaq
Nasdaq (Nasdaq: NDAQ) will be presenting at the following conferences in June with webcasts available at Nasdaq’s Investor Relations Website: ir.nasdaq.com/events.cfm
/bit.ly/3oUQJKI

Cboe Global Markets to Present at Deutsche Bank Global Financial Services Conference Tuesday, June 1
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, announced today that Chris Isaacson, Executive Vice President and Chief Operating Officer, and Brian Schell, Executive Vice President, Chief Financial Officer and Treasurer, will present at Deutsche Bank’s 11th Annual Global Financial Services Conference, taking place virtually on Tuesday, June 1 at 1:25 p.m. (Eastern Time).
/bit.ly/3uoQetl

Enhancement to Security Sub Type for Exercise and Assignments on Options
CME Group
Effective Sunday, June 6 (trade date Monday, June 7), to clearly represent fee and grouping criteria for Exercise and Assignments on options, the TrdCaptRpt/Instrmt/@SubTyp values will be populated as applicable when customer initiates an allocation.
/bit.ly/3vretIT

Enhancement to Security Sub Type for Exercise and Assignments on Options
CME Group
Effective Sunday, June 6 (trade date Monday, June 7), to clearly represent fee and grouping criteria for Exercise and Assignments on options, the tag 762-SecuritySubType of TradeCaptureReport (tag 35-MsgType=AE) values will be populated as applicable when customer initiates an allocation.
/bit.ly/3vretIT

CME Globex Notices: May 24, 2021
CME Group
Critical System Updates
CME Globex Performance Enhancements – Starting June 6
Launch of AIR TRF Funding Values on CME Data Insights: Settlements and Valuations – June 6
Future Spreads Launching on CME Smart Stream on GCP JSON – June 6
CME FX Link Enhancements: New Zealand Dollar/US Dollar Spot FX Impact – June 27
/bit.ly/2SuJwF2

Administrative Amendments to the E-mini Nasdaq Biotechnology Index Futures Contract
CME Group
Earlier today, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) implemented an administrative correction to Rule 36006.C. (“BTIC Minimum Price Increment”) of the E-mini Nasdaq Biotechnology Index Futures contract (the “Contract”) (Rulebook Chapter 360; CME Globex Code: BIO; CME ClearPort/Clearing Code: BQ; BTIC Code: BIT)
/bit.ly/34mNy55

Market Data AutoCert+ Test Suites Are Available Now
CME Group
The Market Data AutoCert+ test suites are now available for application certification in preparation for the EBS Market launch on CME Globex. AutoCert+ is an automated testing tool for validating application functionality prior to connecting to and transacting on CME Group platforms. Certification ensures messaging and processing reliability and the capability to gracefully recover during abnormal events.
/bit.ly/3vElCp6

Fintech

Paytm Targets $3 Billion IPO in What Would Be India’s Largest Debut
Saritha Rai – Bloomberg
Digital payments pioneer is planning a debut late this year; Morgan Stanley, JPMorgan shortlisted for banking support
Paytm, India’s leading digital payments provider, is aiming to raise about 218 billion rupees ($3 billion) in an initial public offering late this year, according to a person familiar with the deal, in what could be the country’s largest debut ever.
/bloom.bg/3ux97e0

Silex Insight launches high performance (2Tbps) SM4-GCM Multi-booster
Silex Insight
Silex Insight, a leading provider for flexible security IP cores, announces the launch of the SM4-GCM Multi-booster, a high performance, small size symmetric cryptographic core, compliant to Chinese National Standard GBT.32907-2016. The SM4-GCM is an extension of their AES-GCM high performance which support SM4 and AES in 1 signal IP Core while keeping the high throughput. This OSCCA compliant security IP is available as of today.
/bit.ly/34mPpqt

The battle to win at legal tech; The Big Four accountancy firms and technology groups are competing with law firms in this growing market
Kate Beioley – FT
When UnitedLex recruited five senior staff with extensive experience at the Big Four accounting firms, the hires were a statement of intent. By appointing senior figures from professional services firms earlier this year, the legal tech company was reinforcing its strategy to offer services as well as products.
/on.ft.com/3yKrHlQ

Visa takes a swipe in fintech, builds new online marketplace
Mary Ann Azevedo – TechCrunch
The relationships between banks and fintechs are multi-faceted.
In some cases, they partner. In many cases, they compete. In other cases, one acquires or invests in the other.
Well, today, an announcement by global payments giant Visa is aimed at helping facilitate banks and fintechs’ ability to work together.
/tcrn.ch/3urqEnM

Fintech Startup Acorns Plans to Go Public in $2 Billion SPAC Deal
Peter Rudegeair – WSJ
Acorns Grow Inc. plans to go public through a merger with a blank-check company in a deal that values the digital savings and investing app at about $2.2 billion, according to people familiar with the matter.
The Irvine, Calif.-based financial-tech company is expected to announce a combination with Pioneer Merger Corp., a special-purpose acquisition company affiliated with the hedge funds Falcon Edge Capital and Patriot Global Management, as soon as Thursday, the people said. As part of the transaction and a related private placement involving funds managed by BlackRock Inc., Wellington Management Co. and other investors, more than $450 million in proceeds will flow to Acorns’s balance sheet, the people said.
/on.wsj.com/3p6R9Op

Cybersecurity

Colonial Pipeline ‘ransomware’ attack shows cyber vulnerabilities of U.S. energy grid
Will Englund, Ellen Nakashima and Taylor Telford – WP
A major fuel pipeline that was shut down after a brazen cyberattack will probably come back online by week’s end, officials said Monday, as security experts warned that the nation must take more seriously persistent vulnerabilities in America’s aging energy infrastructure.
Several cybersecurity experts said the incident represents the biggest known cyberattack on U.S. energy infrastructure. On Monday, Biden administration officials sought to assuage fears that the attack could lead to price spikes, fuel shortages or panicked buying up and down the East Coast, and Colonial announced that it had restarted some service.
/wapo.st/3vrCYp7

In Wake Of Colonial Attack, Pipelines Now Must Report Cybersecurity Breaches
Brian Naylor – Wyoming Public Media
The Transportation Security Administration, in the wake of the ransomware attack on the Colonial Pipeline that caused widespread gasoline disruptions earlier this month, has announced new reporting requirements for pipeline operators.
In a security directive, the TSA, which oversees pipeline cybersecurity, said it will now require that pipeline operators report any cyberattacks on their systems to the federal government within 12 hours. Pipeline companies must also put in place a 24/7, on-call cybersecurity coordinator to work with the government in case of an attack, and conduct an assessment of their cyber practices in the next 30 days.
/bit.ly/2RPngWr

100 Days To Stronger Cybersecurity For The US Electric Grid: A Good Start, But More Is Needed
Saryu Nayyar – Forbes
As the Biden administration gears up to rebuild America’s infrastructure, the Department of Energy (DOE) recently announced a “100-day plan to address cybersecurity risks to the U.S. electric system.” The sprint is intended to “enhance the cybersecurity of electric utilities’ industrial control systems (ICS) and secure the energy sector supply chain.” According to the announcement, the plan is “a coordinated effort between DOE, the electricity industry, and the Cybersecurity and Infrastructure Security Agency (CISA).”
Coming on the heels of a massive December cyberattack that affected the DOE’s systems, as well as the ransomware attack against the Colonial Pipeline that disrupted the critical flow of refined oil products, the cybersecurity sprint is great news. Anything that is done to enhance the cyberdefenses of our critical infrastructure is welcome.
/bit.ly/3yJCGw8

Colonial Pipeline Missed Requested Security Review Before Hack Company was scheduling a federal cyber assessment when attackers struck
David Uberti – WSJ
Colonial Pipeline Co. last year didn’t undergo a requested federal security review of its facilities and was in the process of scheduling a separate audit of its computer networks when hackers hit on May 7. The ransomware attack led to a six-day shutdown of the East Coast’s largest conduit for fuel, sparking scrutiny of pipeline security and pushing the Department of Homeland Security to prepare to issue first-of-their-kind cybersecurity regulations for the sector.
/on.wsj.com/2TnDN4r

Cybersecurity is too big a job for governments or business to handle alone
Paul Mee and Chaitra Chandrasekhar – World Economic Forum
The recent hack of network management company SolarWinds, which enabled bad actors to compromise a range of US government agencies and major corporations, has revealed a troubling truth: Business and government expose each other to significant cyber-risks because they are interconnected and rely on the same network of software vendors. That’s why the strategic response must involve more intense collaboration. Simply put, the threat of cyberattacks is too big a job for either government or business to tackle alone
/bit.ly/3hXBMpS

Cryptocurrencies

Ripple CEO Says IPO Highly Likely After SEC Case Concludes
Matthew De Saro – Be[in]Crypto
Ripple CEO, Brad Garlinghouse, says its “highly likely” that the company will go public after its SEC lawsuit is concluded.
CEO of Ripple, Brad Garlinghouse, stated the company could go public if, and when, it resolves its lawsuit with the Securities and Exchange Commission (SEC). The CEO was asked directly about the prospect of going public and, according to Business Insider, responded by saying the chances are “very high at some point.”
/yhoo.it/3uqzTob

Carl Icahn Says He May Get Into Cryptocurrencies in a ‘Big Way’
Scott Deveau – Bloomberg
Activist investor Carl Icahn is interested in getting into cryptocurrency in a “big way,” and may eventually put more than $1 billion into an alternative currency.
/bloom.bg/3urKu1W

How China Rivals Elon Musk in Rattling Crypto Markets
Zheping Huang – Bloomberg
Not much moves cryptocurrency markets like Elon Musk tweets — except, perhaps, the idea of another crackdown in China, the world’s second-largest economy. From a trading ban on domestic exchanges to squeezes on power-consuming digital currency miners, Chinese regulators have tried to tamp down risks related to the stratospheric rise of Bitcoin and its peers for years. However, a recent spate of official warnings has unnerved traders anew, even though some appear to reiterate previous positions. While the statements can be tough to decipher, they seem to indicate that China is watching crypto closely and could take further steps to rein it in as President Xi Jinping seeks to reduce financial risk in the economy and meet the country’s ambitious goals for combating climate change.
/bloom.bg/34AFBtj

Crypto Can Be Ignored as a Fad, Danish Central Banker Says
Anna Edwards, Ott Ummelas, and Mark Cudmore – Bloomberg
Governor Lars Rohde discusses cryptocurrencies on Bloomberg TV; Crypto assets are “very speculative at best,” Rohde says
Bitcoin and other cryptocurrencies are little more than a speculative fad that central bankers can probably ignore, according to Lars Rohde, the governor of Denmark’s central bank. The much more serious threat stems from big tech, he said in an interview with Bloomberg Television on Thursday. If technology giants start “invading the currency area” and the means of transaction, then “that could be very interesting and maybe also a real threat to the autonomy and independence of central banks.”
/bloom.bg/3vwOm3e

Binance Says ‘Rollback’ Not Possible After DeFi Exploits on Binance Smart Chain; Binance is not responsible for “rug pulls” on Binance Smart Chain, an exchange representative says.
Muyao Shen – Coindesk
Decentralized finance protocols built atop Binance’s smart-contract blockchain, Binance Smart Chain, have suffered an increasing number of hacks or exploits. Those include an exploit earlier this month on bEarn Fi that resulted in an $11 million loss.
/bit.ly/2SxmXzw

DeFi ‘Raises Challenges’ for Investors, Regulators, SEC’s Gensler Says; The regulator has suggested that a dedicated market regulator would offer some protection against fraud and manipulation.
Nikhilesh De – Coindesk
Decentralized finance (DeFi) could pose fresh challenges for U.S. investors, Securities and Exchange Commission (SEC) Chair Gary Gensler said Wednesday. The cryptocurrency sector poses various risks to investors in the markets and challenges to the securities regulator, Gensler said in prepared testimony before the House Appropriations Committee. He pointed to volatility in the market and novel products as some examples of these issues.
/bit.ly/3fqDHSc

Bank of Korea Sees Threat to Financial System in Leveraged Crypto Trading; The central bank governor has pledged to monitor transactions of Korea’s financial institutions associated with leveraged crypto trading.
Jamie Crawley – Coindesk
The governor of South Korea’s central bank said leveraged crypto trading threatens the country’s financial system, the Korea Herald reported.
/bit.ly/3fqDZIM

Why China’s Crackdown May Make Bitcoin Mining More Centralized; Big Chinese miners are likely to survive the crackdown.
David Pan – Coindesk
China’s nationwide crackdown on crypto mining could create a competitive environment in which only the biggest miners can survive, said a co-founder and managing partner of Waterdrip Capital, a major investor in the Chinese crypto mining industry.
/bit.ly/3vvpzwr

SEC Starts Official Review of SkyBridge, Fidelity Bitcoin ETF Applications; The two bitcoin ETF bids join four others under official review with more still pending.
Zack Seward – Coindesk
Filings with the Securities and Exchange Commission (SEC) show the U.S. regulatory agency is kickstarting its review of two more bitcoin (BTC, -0.38%) exchange-traded fund (ETF) applications.
/bit.ly/3fscjD2

Iran bans bitcoin mining as power cuts grip country; President Rouhani orders clampdown as cryptocurrency boom hits electricity output
Najmeh Bozorgmehr – FT
Iran has banned cryptocurrency mining for four months as the energy intensive industry has triggered electricity blackouts across the country. In recent weeks, businesses and households across Iran have experienced blackouts for as much as six hours a day. Rolling blackouts cost Iranian chess players their match in an online Asian championship.
/on.ft.com/3hTePUJ

Securitize Launches Securitize Capital With Two Crypto Yield Funds
Press Release via Bankless Times
Securitize today launched Securitize Capital, a wholly-owned subsidiary that will serve as an alternative investment manager of digital asset funds to provide investors exposure to cryptocurrencies and decentralized finance (DeFi) in the form of digital asset securities.
/bit.ly/3hY4oz2

Politics

Dominic Cummings Tells a Chilling Story of British Failure; The U.K. cannot fully move past the pandemic until it understands the policy fiascoes that led to so many lost lives.
Therese Raphael – Bloomberg
What impact will Dominic Cummings’s extraordinary seven-plus hours of testimony Wednesday have on Boris Johnson’s government and Britain’s examination of its pandemic performance? Not much, is the cynical view. After all, Johnson’s mistakes in the first waves of Covid-19 have been well covered. And Cummings, the prime minister’s former top adviser who was dismissed in November, is hardly a neutral observer.
/bloom.bg/2QUyIQ2

Cummings launches stinging attack on Johnson and handling of Covid crisis; Prime minister’s former adviser says government fell ‘disastrously short’ of standards expected by public
George Parker, Sebastian Payne and Jasmine Cameron-Chileshe – FT
Dominic Cummings, Boris Johnson’s former chief adviser, has accused the UK prime minister of being “unfit for the job”, as he painted a picture of chaos, indecision and deceit at the heart of government as ministers battled Covid-19.
/on.ft.com/3hUePnh

Twitter Decries India Intimidation, Will Press for Changes
Vlad Savov – Bloomberg
Twitter Inc. called the visit by police to its Indian offices on Monday a form of intimidation in its first public comments on the matter. The social network reiterated its commitment to India as a vital market, but signaled its growing concern about the government’s recent actions and potential threats to freedom of expression that may result. The company also joined other international businesses and organizations in criticizing new IT rules and regulations that it said “inhibit free, open public conversation.”
/bloom.bg/3oWpUpx

US Lawmakers Introduce Bill to Require Digital Dollar Updates; A bipartisan bill would require the U.S. Treasury secretary to publish a report on the dollar’s role in the global economy, as well as how central bank digital currency efforts are proceeding.
Nikhilesh De – Coindesk
A pair of U.S. congressmen have introduced a bill that would require the Treasury Department to evaluate the digital yuan, digital dollar and the actual dollar’s role in the global economy. The bipartisan bill, introduced by Reps. French Hill (R-Ark.) and Jim Himes (D-Conn.), seeks to ensure the U.S. dollar remains the world’s reserve currency and directs the Treasury Department to publish a report that evaluates current policy and governance around the currency. This report would include details around central bank digital currencies (CBDC), among other issues.
/bit.ly/3oWrEiz

How to Fix America; Take a road trip from New York to California to see infrastructure projects with the potential to make cities more liveable and equitable.
Bloomberg
In 2011, then-President Barack Obama stood in front of the deteriorating Brent Spence Bridge linking Ohio and Kentucky with a plea to Republican leadership: Pass the jobs bill to rebuild America. (It did not pass.) Six years later, when asked about the same bridge, then-President Donald Trump answered “we’re going to get it fixed.” (It did not get fixed.)
/bloom.bg/3uv8Aci

US democracy is still in the danger zone; Threat has outgrown Trump as Republican states seek to control what happens in future elections
Edward Luce – FT
Early into Donald Trump’s presidency, the Economist Intelligence Unit downgraded the US to a “flawed democracy”. Unfortunately it still belongs there. Far from putting Trumpian distempers into the rear-view mirror, Joe Biden’s victory has deepened them. Trump’s style of politics has taken on a life independent of him. Even if he retired to a monastery, the Republican party has chosen its course.
/on.ft.com/3c0lgRY

Angela Merkel has dealt Europe’s authoritarian leaders a trump card; German chancellor’s refusal to halt Nord Stream 2 encourages Putin to act with impunity
Philip Stephens – FT
Vladimir Putin and Alexander Lukashenko are not natural soulmates. The Russian president finds his fellow autocrat in Belarus a wilful ally. What unites the two leaders is a determination to hold on to power whatever the cost by way of ruthless repression of political opposition.
/on.ft.com/3wH0grB

Regulation

CFTC Staff Publishes Updated Responses to FAQs Regarding Commission Regulation 4.27 and Form CPO-PQR
CFTC
Commodity Futures Trading Commission’s Market Participants Division (MPD) today published updated responses to frequently asked questions regarding CFTC Regulation 4.27 and Form CPO-PQR (FAQs). These FAQs update the 2015 FAQs that addressed issues on Form CPO-PQR from filing mechanics and deadlines to more technical questions. [See CFTC Press Release No. 7273-15]
/bit.ly/3g2QlGb

NFTs getting a closer look from FINRA
Lydia Moynihan – NY Post
How hot is the NFT craze? It’s so hot that even Finra is trying to wrap its head around it. The Financial Industry Regulatory Authority — the non-government group that licenses broker dealers and accordingly polices it for infractions — is “taking a deep dive to understand NFTs and the implication for the regulation of broker dealers,” according to a source close to the group.
/bit.ly/2TqQI5L

Charges filed in the Federal Court against ME Bank
ASIC
Following an ASIC investigation, criminal charges were filed against Members Equity Bank Limited (ME Bank) in the Federal Court of Australia on 25 May 2021. These charges relate to alleged contraventions of sections 12DB(1)(g) and 12GB(1) of the Australian Securities and Investments Commission Act 2001 (Cth) and sections 64(1) and 65(1) of the National Credit Code (Cth), between 2 September 2016 and 3 September 2018.
/bit.ly/3oTFPEW

LIBOR transition in the Asia Pacific region: Time is running out
ASIC
Nathan Bourne, ASIC’s Senior Executive Leader, Markets Infrastructure, recently spoke about the London Inter-Bank Offered Rate (LIBOR) transition at a webinar hosted by Bloomberg Professional Services and the International Capital Market Association (ICMA) to launch their Guide to Tough Legacy Bonds in Asia Pacific.
/bit.ly/2SyVjlT

ASIC sues AMP for charging deceased customers
ASIC
ASIC has commenced civil penalty proceedings in the Federal Court against five companies that are, or were, part of the AMP Limited group, alleging that these entities were involved in charging life insurance premiums and advice fees to more than 2,000 customers despite being notified of their death.
/bit.ly/3oSHdI6

ESMA publishes guidance on funds’ marketing communications
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities regulator, has today published the final report on its Guidelines under the Regulation on cross-border distribution of funds. The Guidelines specify the requirements that funds’ marketing communications must meet.
/bit.ly/3oYANHw

ESMA Consults on Synthetic Securitisations RTS and Amendments to STS Templates
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities and markets regulator, published today a Consultation Paper (CP) on draft regulatory technical standards (RTS) implementing the amended Securitisation Regulation (SECR).
/bit.ly/3oW7m8N

Financial Reports and Policies
FINRA
As a not-for-profit, self-regulatory organization whose operations are funded by member firm fees—without the support of any taxpayer dollars—FINRA must prudently manage its finances to ensure it can appropriately fund its mission to protect investors and promote market integrity in a manner that facilitates vibrant capital markets.
/bit.ly/3oJ9pgn

Report on Use of 2020 Fine Monies
FiNRA
FINRA is a not-for-profit, self-regulatory organization (SRO) dedicated to promoting investor protection and market integrity in a manner that facilitates vibrant capital markets. One of FINRA’s tools for achieving this objective is fair and effective enforcement of our member firms’ compliance with securities laws and regulations.
/bit.ly/3vqHh48

Report on Use of 2020 Fine Monies
FiNRA
FINRA is a not-for-profit, self-regulatory organization (SRO) dedicated to promoting investor protection and market integrity in a manner that facilitates vibrant capital markets. One of FINRA’s tools for achieving this objective is fair and effective enforcement of our member firms’ compliance with securities laws and regulations.
/bit.ly/3vqHh48

FCA stops EverFX offering CFDs to UK customers
UK FCA
The FCA has acted to stop a Cypriot-based firm, ICC Intercertus Capital Ltd, and other members of its group which trade as EverFX, from offering high risk contracts for differences (CFDs) to UK investors.
/bit.ly/3fJC013

Investing and Trading

SPACs Need More Oversight and Regulation; Well regulated, new approaches to public markets can get average investors back into the game.
Chamath Palihapitiya – Bloomberg
Big Tech is known not only for being valuable and very profitable, but also for how much of that value was created in the public markets. Facebook, Apple, Amazon, Microsoft and Google raised less than $2 billion combined before going public — relying instead on public markets to finance their ambitions. As a result, average investors have been able to participate in those companies’ combined $4 trillion in gains. Things have changed.
/bloom.bg/3vxFCdm

Great Fortunes Are Built on Great Tech. Or Handbags and Bubbly; Bernard Arnault of LVMH is odd man out among the techie multibillionaires
Peter Coy – Bloomberg
You can tell a lot about a society by whom it makes rich. Jeff Bezos, Elon Musk, Bill Gates, and Mark Zuckerberg—four of the five wealthiest people in the world, by Bloomberg’s tally—all made their money as technologists and engineers. They have transformed lives through digital commerce, electric cars, software, and social media. Judging by their success, technology is the one world-changing, fortune-making engine of the day.
/bloom.bg/3ul25J2

Investors Bet Billions That Health Care’s Long Overdue Digital Shift Is Finally Here; The pandemic has drawn an infusion of capital to young companies looking to solve old problems
John Tozzi – Bloomberg
Investors are pouring a record amount of money into young companies trying to transform U.S. health care at an accelerating pace. Spurred by the pandemic, private funding for health-care companies has reached new highs every quarter since Covid-19 emerged. Investors steered a record $6.7 billion to U.S. digital health startups in the first three months of 2021, according to venture firm and researcher Rock Health. In 2011, Rock Health tracked $1.1 billion invested in digital health for the entire year.
/bloom.bg/2SsCxwm

A $250 Million Fund Steers HBCU Endowments Into Venture Capital; The Advancement Initiative aims to help less prosperous schools bridge the wealth gap through investments in late-stage startups.
Lizette Chapman, Janet Loh – Bloomberg
College endowments illustrate just how deep-rooted inequality is in higher education. U.S. college endowments held about $630 billion in fiscal 2019. But just a few schools account for much of that: More than one-third comes from the top 10, led by Harvard, the University of Texas, and Yale. By comparison, the assets of the approximately 100 historically Black colleges and universities (HBCUs) total just under $4 billion, with Howard University holding the most—$712 million as of June 2020.
/bloom.bg/3fq9XVp

Convertible debt sold by high-flying US groups falls back to Earth; Worries about inflation and a pullback in tech shares have weighed down on convertible bonds
Joe Rennison and Aziza Kasumov – FT
Investors have been jolted by a slide in the price of convertible bonds issued at the top of the market this year, as fears of higher inflation have pushed interest rates upwards and dented the debt’s value.
/on.ft.com/3fqFV40

How to Talk Retirement Savings With Your Spouse; Couples can avoid friction during volatile markets with conversations in advance
Anne Tergesen – WSJ
When markets turn volatile, it is hard enough for one person to make decisions. Add another person to the mix, and tempers can flare if a couple disagrees about how much of their portfolio to invest in stocks. Just ask my parents. While my mother was comfortable holding a high percentage of her long-term savings in stocks, my father wasn’t. So when stocks plummeted in 2008 when they were in their early 70s, he wanted to get out of the market and she wanted to buy more shares.
/on.wsj.com/3fNGS59

Environmental, Social and Corporate Governance

What Climate Science Loses Without Enough Black Researchers; With calls to address racism echoing around the profession, scientists are remaking institutions that have excluded people of color.
Saijel Kishan, Eric Roston – Bloomberg
Vernon Morris had often felt invisible in a profession defined by observation. As a climate scientist, he’s encountered racist behavior at every level of his field. Feelings of isolation marked his early days analyzing atmospheric ozone chemistry, with virtually no Black peers. Morris has weathered groundless police harassment, and repeatedly been mistaken for a janitor when working at NASA decades ago as a grad student. He was once stopped at a science conference, despite wearing a speaker name badge, as he made his way to the podium to give a speech. And Morris has felt the sting of everyday slights, such as when White scientists and students go out of their way to avoid eye contact.
/bloom.bg/3uoHjbC

Farmers See Sustainable Eggs as the Industry’s Next Big Thing; Raising chickens with “regenerative agriculture” could create a new premium category.
Leslie Patton, Kim Chapman – Bloomberg
On a recent sunny day, 13,000 chickens roam over Larry Brown’s 40 windswept acres in Shiner, Texas. Some rest in the shade of a parked car. Others drink water with the cows. This all seems random, but it’s by design, part of what the $6.1 billion U.S. egg industry bets will be its next big thing: climate-friendly eggs.
/bloom.bg/3fsdgLX

Dutch court orders Shell to accelerate emissions cuts; Ruling sets a precedent for other companies that could face similar lawsuits
Anjli Raval – FT
Royal Dutch Shell has lost a landmark legal case, with a Dutch court ordering the oil company to increase its emissions cuts in a ruling that could set a global precedent for corporate polluters.
/on.ft.com/3yKkaU8

ExxonMobil shareholders hand board seats to activist nominees; Historic vote reflecting climate concerns comes on bruising day for international oil companies
Derek Brower – FT
ExxonMobil’s shareholders on Wednesday voted to change the supermajor’s board, delivering a historic rebuke to management, as changes sweeping though the global oil sector reached the top of its most famous company.
/on.ft.com/3fmELq9

Australia must ensure new coal projects do not harm children; Court’s landmark climate ruling follows case initiated by 86-year-old nun and eight schoolchildren
Jamie Smyth – FT
Australia’s government will need to ensure that children are not harmed by its decisions to approve coal projects in a landmark ruling that could have big implications for the country’s fossil fuels industry.
/on.ft.com/3yIou6r

Can businesses deliver on their climate promises? The FT-Statista listing highlights companies that are turning ambition into action
Matthew Vincent – FT
“I’m very much a believer that it’s action that matters much more so than, you know, the flurry of political promises and statements and slogans.”
/on.ft.com/3wQ3OYH

Institutions

Deutsche Bank Considers More Cuts to Back Office Amid Cost Headwinds
Steven Arons – Bloomberg
Deutsche Bank AG is considering deeper cuts to its support functions after running up a few unexpected bills. “There’s wriggle room for further efficiency improvements, for example by interlocking more closely the back office of the corporate bank and the investment bank,” Chief Financial Officer James von Moltke said at the virtual annual general meeting on Thursday. He pointed to cost “headwinds” as a reason for potentially activating the plans.
/bloom.bg/3urh6ZN

Once Fired by JPMorgan Over a Trading Blowup, He’s Now the CFO
Hannah Levitt and Sridhar Natarajan – Bloomberg
Barnum shifted from big-money wagers to nuts-and-bolts roles; He’s ‘different than all the other Groton and Harvard people’
The CV isn’t quite what you’d expect for someone who’s about to handle the finances of the mighty JPMorgan Chase & Co. Long before Jeremy Barnum was promoted to chief financial officer, he was fired over a trading mishap — by JPMorgan. He later parted ways with hedge fund BlueMountain Capital Management over another market blunder.
/bloom.bg/3utWJLw

HSBC, Citi Warned of Jail Over Lai Accounts, Reuters Reports
Iain Marlow – Bloomberg
Hong Kong authorities sent letters threatening media tycoon Jimmy Lai’s bankers with as many as seven years in jail if they deal with any of his accounts in the city, Reuters reported, citing documents. Security Secretary John Lee, who signed the letters according to Reuters, previously announced that he was freezing bank accounts linked to the publisher of the city’s pro-democracy Apple Daily newspaper under Hong Kong’s sweeping national security law. The letters were sent to HSBC Holdings Plc and Citigroup Inc. earlier this month, Reuters reported.
/bloom.bg/3ut6TMx

TD Earnings Rise as Reserves Released for Loans That Didn’t Sour
Kevin Orland – Bloomberg
Toronto-Dominion Bank is benefiting from its sizable presence in the U.S., where the waning Covid-19 crisis allowed the company to release $173 million in set-asides for loans that never ended up souring.
/bloom.bg/3ux9LrW

RBC Beats Estimates as Investment Banking Lifts Capital Markets
Kevin Orland – Bloomberg
Royal Bank of Canada is getting a lift from its capital-markets business, fueled by surging equity markets and record merger activity in its home market.
/bloom.bg/3fq862K

HSBC withdraws from US retail banking; Sales effectively bring to close 40-year attempt to run full-service lender in the country
Tabby Kinder – FT
HSBC has sold its US retail banking network, effectively bringing to a close its struggling North America business after a 40-year attempt to run a full-service bank in the country.
/on.ft.com/34npeAc

JP Morgan and SimCorp set up front-to-back-office integration to streamline investment operations data; The integration aims to tackle costly fragmented investment and post-trade processes that contribute to operational risks such as high settlement trade fails.
Joe Parsons – The Trade
JP Morgan will begin integrating its custody data onto front- and middle-office platform SimCorp Dimension with the aim of eliminating costly data inefficiencies for buy-side clients. Through a new agreement, JP Morgan will directly share its post-trade data with mutual clients through SimCorp’s investment operations platform.
/bit.ly/2QUQ1R0

Archegos scandal squashes highest equities revenues for large banks in a decade; According to the Coalition Greenwich index, equities revenues reached one of the highest quarterly revenues in a decade excluding losses related to the Archegos scandal.
Annabel Smith – The Trade
The collapse of family office Archegos Capital Management in March prevented sell-side equities revenues in the first quarter from reaching one of the highest levels in a decade, the latest Coalition Greenwich index has found.
/bit.ly/2SsSVNo

Regions

Wall Street Makes Big Moves to Cater to Wealthy Chinese Investors
Tanner Brown – Barron’s
Wall Street is rushing to secure leading positions in the fast-growing Chinese investment market. China has granted initial approval for Goldman Sachs Group (ticker: GS) to take a controlling stake in a wealth management partnership with the Industrial & Commercial Bank of China (1398.Hong Kong).
/bit.ly/3oVMsXn

Zambia Lifts Foreign Exchange Limits to Counter Parallel Market
Taonga Clifford Mitimingi and Matthew Hill – Bloomberg
Customers can withdraw more foreign currency from dealers; Kwacha has depreciated every day for past four months
Zambia’s central bank increased the amount of foreign exchange that people can buy or sell daily in an effort to draw business away from the parallel market, Governor Christopher Mvunga said.
/bloom.bg/3vvkgx1

The Super Rich Are Choosing Singapore as the World’s Safest Haven; Money is sloshing around Singapore like never before. Family offices, Bentley sales and real estate prices are booming.
David Ramli and Lulu Chen – Bloomberg
When Singaporean car dealer Keith Oh first read the Facebook message, he wasn’t sure it was real. A Chinese client ordered a S$1.1 million ($830,000) Bentley—sight unseen—over the social network. “They just asked for the price and when we could do the delivery, that’s all,” he said. “It’s a million dollars to us but it’s probably nothing to them.”
/bloom.bg/3vs02nX

Germany’s Looming Power Supply Gap Will Likely Be Filled by Gas
Jesper Starn – Bloomberg
Germany needs 18 gigawatts of gas-fired capacity by 2030; Utilities calling for a capacity market to help profitability
Germany’s plans to phase out coal and nuclear power will leave a large gap in supplies of electricity that’s likely to be filled by natural gas. Germany will need to add about 18 gigawatts or 60% more gas-fired capacity to plug the hole left from shutting its six remaining nuclear reactors by the end of next year and plans to phase-out about half its coal and lignite fleet by 2030, according to a report by consultant Enappsys Ltd.
/bloom.bg/3vrJAEa

Africa’s Biggest Fund Manager Loses Head of Impact Investing
Antony Sguazzin and Loni Prinsloo – Bloomberg
Rajhdar quits PIC after his 14-month suspension is lifted; Judicial inquiry identified management shortcomings at PIC
Roy Rajhdar, the executive head of impact investing at Africa’s biggest fund manager, has quit. Rajhdar’s departure comes after South Africa’s Public Investment Corp. told staff on May 6 that his 14-month suspension had been lifted. Rajhdar on Thursday confirmed his departure, but declined to comment further.
/bloom.bg/3uozIJR

Dirty Money Flows Continuing Over New Channels, Latvia Says
Aaron Eglitis – Bloomberg
Tough restrictions pushed dirty money flows to other states; Attention to different channels needed: Latvia’s FIU director
Flows of illicit money are continuing through new channels after Latvia shut banks and instituted a crackdown, the head of the nation’s anti-money laundering watchdog said. Authorities imposed strict measures on the financial industry, which at one point handled as much as 1% of U.S. dollar flows. Scrutiny increased when the U.S. Treasury accused a local lender of money laundering and handling money for North Korean shell companies in 2018.
/bloom.bg/3vqpPNa

Chinese business under pressure from rising commodity prices; Authorities warn of ‘uneven’ recovery as industrial growth continues but consumer confidence lags behind
Thomas Hale – FT
Soaring commodity prices are putting pressure on businesses in China, even as the country’s wider industrial sector rebounds from the early effects of the coronavirus pandemic, according to the official data agency. The National Bureau of Statistics released figures on Thursday that showed a 57 per cent rise in profits at large industrial companies in April compared with a year earlier, with the sector benefiting from the comparison with a low base in 2020 owing to the pandemic. Profits grew 92 per cent in March.
/on.ft.com/2RHaV6R

Shares in Jimmy Lai’s Hong Kong media group surge 330% as trading resumes; Jailed pro-democracy tycoon had assets frozen under national security law
Primrose Riordan and Nicolle Liu – FT
Shares in the Hong Kong media company controlled by Jimmy Lai surged by 330 per cent as they resumed trading after authorities froze the jailed pro-democracy tycoon’s assets under a controversial national security law.
/on.ft.com/3yGEQN0

Miscellaneous

Elon Musk’s Mars Ambition Could Be the Riskiest Human Quest Ever
Bruce Einhorn – Bloomberg
Billionaire aims to put humans on the planet as early as 2026; Lots of unanswered questions confronting deep-space travel
More than half a century after Neil Armstrong took mankind’s giant leap on the moon, another space race is heating up. This time, the promising new frontier for Earthlings is Mars, the planet next door.
/bloom.bg/3vnmuhU

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