Gold Bars and Tokyo Apartments: How Money Is Flowing Out of China

Nov 28, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

Today is GivingTuesday. According to the official GivingTuesday website, “GivingTuesday was created in 2012 as a simple idea: a day that encourages people to do good.”

I encourage you to make a donation to your favorite charity, but also to a favorite charity of a friend or even a stranger you admire for their work with that charity. It is a day of giving and a chance to give back some of the many blessings we in the financial markets have had bestowed upon us.

Today we have episode two of our Futures Discovery series, hosted by Corties Draper. We are a bit behind in this series, but will be ramping it up in the coming weeks. Episode two is about the importance of clearinghouses and features an interview with John McPartland of Hidden Road Partners.

We also have Episode 26 of JLN’s Options Discovery video series, hosted by Asma Awass. This episode is titled “A Deeper Dive Into 0DTE Options Trading; Jonathan Zaionz, Senior Derivatives Analyst at Cboe Global Markets, Discusses His Recent Paper, “The Rise of SPX & 0DTE Options.”

Also, there is a print interview I did with Nasdaq EVP Kevin Kennedy about the launch of the GEMX options market in Nasdaq’s AWS cloud infrastructure. The interview is titled “Nasdaq’s Kevin Kennedy Discusses GEMX Launch on AWS Cloud, Highlights Latency Improvements and Future Cloud Migration Plans.”

A report published yesterday by Acuiti, in collaboration with ION, titled “Strategic Workforce Development: Talent and Technology,” highlights significant challenges in the derivatives industry’s workforce management. The study reveals that 84% of firms in the sector find it challenging to hire younger talent, with this issue intensifying over the past five years for more than a quarter of them. Notably, clearing operations face the most severe talent shortages. The high-pressure environment and the competitive appeal of other sectors are major deterrents, although the reasons vary across different regions. In response, nearly half of the firms are turning to automation and technology investments as a solution. This strategic shift seems promising, as 83% of those who invested in post-trade technology report a marked improvement in employee satisfaction.

The New York Post reports “The Vermont man charged with shooting three Palestinian college students had been fired from his financial services job just weeks earlier – as it emerged that he previously served as a Boy Scout leader.” Jason Eaton worked for CUSO Financial Services and had been an Assistant Scoutmaster of a Boy Scout Troop, though the troop is now defunct and he was not registered with the Scouts at the time of his arrest. The BSA has banned Eaton from registering with the BSA and “proactively placed in the Volunteer Screening Database, permanently preventing his registration or participation in the future,” the NY Post reported the BSA saying in a statement.

The Allstate Maui Invitational, a premier early-season college basketball tournament, KemperSports and the college basketball community raised $1.7 million for Maui wildfire relief and recovery efforts. The Purdue Boilermakers won the tournament, which saw the number one ranked Kansas Jayhawks lose, thus the Boilers have moved up to number one in the national rankings for men’s NCAA basketball.

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

Exchanges worldwide have been ringing the bell for climate as of Nov. 26. The Ring the Bell for Climate Campaign 2023 runs alongside the days of COP28, the United Nations Climate Change Conference taking place in Dubai November 30 through December 12. View the list of member exchanges of the World Federation of Exchanges and their affiliates who are participating in the Ring the Bell for Climate Campaign here.~SAED

Our most read stories from our previous edition JLN Options were:
Stock-market ‘fear gauge’ tumbles to nearly 4-year low. That makes some traders extremely nervous from MarketWatch.
Billions Wiped Out as Stock-Safety Trade on Wall Street Misfires from Bloomberg.
Nasdaq bets on boom in ‘zero day’ options with new contracts from the Financial Times. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).


Nasdaq’s Kevin Kennedy Discusses GEMX Launch on AWS Cloud, Highlights Latency Improvements and Future Cloud Migration Plans

Nasdaq has been moving its markets to the cloud, and it recently announced GEMX had moved to its AWS cloud infrastructure. John Lothian News interviewed Nasdaq Executive Vice President Kevin Kennedy to discuss the launch of the latest Nasdaq market.

Read the story »


Eventus CEO Travis Schwab Highlights Growth and Innovation at FIA EXPO 2023

At FIA EXPO 2023 in Chicago, John Lothian News caught up with Eventus CEO Travis Schwab to discuss the company’s latest developments and industry insights. Schwab shared the significance of extending Eventus’s relationship with Philip Capital, emphasizing the growth in the Asia-Pacific region and validating the strength of their partnership.

Watch the video »


Clearing the Way: The Essential Role of Clearinghouses in Futures Exchanges

In this episode of “Futures Discovery,” we venture into the realm of clearinghouses, commonly referred to as Central Counterparties (CCPs). These pivotal financial market infrastructures are instrumental in ensuring the smooth operation and resilience of the global financial landscape. Join Corties Draper, our “Futures Discovery” host, as he unravels the essential functions of CCPs and their crucial role in futures exchanges. Included in this episode is Corties’ interview with our subject matter expert, John McPartland of Hidden Road Partners, who talks about the function and purpose of clearinghouses.

Watch the video »


Options Discovery Episode 26: A Deeper Dive Into 0DTE Options Trading; Jonathan Zaionz, Senior Derivatives Analyst at Cboe Global Markets, Discusses His Recent Paper, “The Rise of SPX & 0DTE Options” and More With JLN’s Asma Awass

In this episode of Options Discovery, Asma Awass discusses a hot topic in the options industry today: 0DTE trading. This episode includes a breakdown of what 0DTE options are, how they were introduced, the benefits of trading 0DTE options, and more! Asma then sits down with Jonathan Zaionz, a senior derivatives analyst at Cboe Global Market, where he discusses his recent paper, “The Rise of SPX & 0DTE Options.” Jonathan also digs deeper into the different topics of 0DTE trading. You can download Jonathan’s paper here:

Watch the video »


New maps show where snowfall is disappearing
Eric Zerkel – CNN
Snowfall is declining globally as temperatures warm because of human-caused climate change, a new analysis and maps from a NOAA climate scientist show. But less snow falling from the sky isn’t as innocuous as just having to shovel less; it threatens to reinforce warming, and disrupt food and water for billions of people. Climate scientists say the future of snowfall is pretty clear: A warmer world driven by human pollution means precipitation is more likely to fall as rain than snow, all else being equal.

****** You are going to have to travel farther and farther north to go skiing if this keeps up.~JJL


The Best Savings Accounts for Kids and Teens; Looking beyond your local bank can pay dividends
Kerri Anne Renzulli – The Wall Street Journal
Every parent wants to teach their children how to handle money wisely. Stashing pennies and nickels in a piggy bank is a great way to start. But when it comes to lessons about budgeting and interest, you may want to open a savings account. Since you typically must be 18 to open a bank account, many financial institutions offer special custodial or joint accounts designed to be managed by a child with adult supervision. But, not all kid accounts are created equal.

****** Kids today will never have the pleasure of having a savings account passbook like I had as a kid to keep track of transactions.~JJL


Monday’s Top Three
Our top story Monday was How to Fix a $2.2 Trillion FX Risk After 50 Years of Trying, an opinion piece from Bloomberg. Second was John Lothian’s commentary, Electronic Trading to AI; JLN’s Path of Non-Price-Oriented Risks, in JLN. Third was our MarketsWiki page for Rama Pillai, who accepted the Kilt Challenge at IDX earlier this year to raise money for Futures For Kids




Lead Stories

Gold Bars and Tokyo Apartments: How Money Is Flowing Out of China; Chinese families are sending money overseas, a sign of worry about the country’s economic and political future. But a cheaper currency is also helping exports.
Keith Bradsher and Joy Dong – The New York Times
Affluent Chinese have moved hundreds of billions of dollars out of the country this year, seizing on the end of Covid precautions that had almost completely sealed China’s borders for nearly three years. They are using their savings to buy overseas apartments, stocks and insurance policies. Able to fly again to Tokyo, London and New York, Chinese travelers have bought apartments in Japan and poured money into accounts in the United States or Europe that pay higher interest than in China, where rates are low and falling. The outbound shift of money in part indicates unease inside China about the sputtering recovery after the pandemic as well as deeper problems, like an alarming slowdown in real estate, the main storehouse of wealth for families. For some people, it is also a reaction to fears about the direction of the economy under China’s leader, Xi Jinping, who has cracked down on business and strengthened the government’s hand in many aspects of society.

The Case That Could Destroy the Government; What was once a fringe legal theory now stands a real chance of being adopted by the Supreme Court.
Noah Rosenblum – The Atlantic
This Wednesday, the Supreme Court will hear a case that poses the most direct challenge yet to the legitimacy of the modern federal government. The right-wing legal movement’s target is the “administrative state”-the agencies and institutions that set standards for safety in the workplace, limit environmental hazards and damage, and impose rules on financial markets to ensure their stability and basic fairness, among many other important things. The case, Securities and Exchange Commission v. Jarkesy, threatens all of that. Terrifyingly, this gambit might succeed.

SEC’s in-house enforcement powers at risk in US Supreme Court case
Andrew Chung – Reuters
A challenge to the U.S. Securities and Exchange Commission’s powers to protect investors from fraud comes before the Supreme Court on Wednesday in another in a series of legal attacks against federal agencies that regulate financial markets. The justices are due to hear arguments in an appeal by President Joe Biden’s administration of a lower court’s ruling restricting the SEC’s power to enforce securities laws through the agency’s longstanding in-house tribunal system. The case involves hedge fund manager George Jarkesy, who the SEC fined and barred from the industry after determining he had committed securities fraud.

We Know War Is Awful, So Why Is It Making a Comeback?
Peter Coy – The New York Times
The two bloodiest wars of the past two years have been results of tragic miscalculations. A third war, which has dominated the news lately, might also have been set in motion by a costly mistake, as I’ll explain. To economists, this raises a question: If wars are so awful, why do we keep blundering into them? First, the data. The wars that cost the most lives in 2022 were in Ethiopia and Ukraine. Battle-related deaths exceeded 100,000 in the Tigray region of Ethiopia and 81,000 in Ukraine, according to the Peace Research Institute Oslo. Those conflicts drove battle-related deaths for the world as a whole to a 28-year high of 237,000, the institute says. Believe it or not, 2023 is peaceful by comparison.

Crypto derivatives market structure in Europe set for change with launch of new onshore markets
Market structure for crypto derivatives trading is set to evolve rapidly over the next three years as a new generation of onshore regulated trading venues launch, a study from Acuiti has found. The Future of Digital Asset Market Structure in Europe, which was released today and produced in association with D2X Group, argues that the future market structure of crypto derivatives in Europe will incorporate elements of both crypto native and traditional markets.

Germany Must Credibly Commit to Green Investment; Now that a court has ruled against the government’s extrabudgetary fudges, reforming unduly austere fiscal rules is the way to go.
The Editorial Board – Bloomberg
After a shock court ruling, Europe has suddenly found itself facing a question crucial to its prosperity and its ability to combat climate change: Can Germany, the region’s largest economy, meet the scale of public investment required to both revive growth and support the green transition? Hopefully the country’s fractious ruling coalition can muster the will to say yes.

1.5 Degrees: A Tiny Number With a Global Effect; Goal to limit warming will be a hot topic at COP28 climate summit
Eric Niiler – The Wall Street Journal
Nearly 200 nations and business leaders pledged eight years ago to keep Earth from warming above 1.5 degrees Celsius. That goal has proven difficult to meet. The 1.5 C threshold isn’t a random number. It has been embedded in policies that affect how we heat and cool our homes, what kind of cars we drive, and how nearly all businesses operate. But even as the U.S. and many other nations ramp up cleaner renewable solar and wind power, overall emissions of carbon dioxide keep going up. As a result, the Earth’s temperature continues to rise, and 2023 is virtually certain to be the warmest on record.

UBS Chairman Says Swiss Regulator Needs More Teeth
Margot Patrick – The Wall Street Journal
Here’s a rarity: A banker calling for tougher bank regulation. UBS Chairman Colm Kelleher said Switzerland needs to sharpen the teeth of its financial regulator following UBS’s March rescue of Credit Suisse. Swiss regulators didn’t have the necessary tools to hold Credit Suisse bankers and board members accountable for running an unviable business model, Kelleher said. Regulators in the U.S. and U.K. have some of those powers.

FXPA Publishes Buy Side Guidance to Prepare for T+1 Settlement
The Foreign Exchange Professionals Association (FXPA) has published a guidance paper to assist buy side traders in their preparations for the advent of T+1 Settlement of US and Canadian equities, which takes effect in May 2024. The “Buy Side Guidance in Preparation for T+1 Settlement” includes a framework of voluntary, non-binding recommendations and was jointly developed by FXPA’s T+1 Settlement and Buy Side working groups.

Gary Gensler has remade the SEC into a crypto nemesis and climate warrior. Now a backlash is brewing; The combative former Goldman Sachs banker faces staff burnout, widening criticism from Congress, and a potential reckoning from hostile federal courts.
Leo Schwartz and Jeff John Roberts – Fortune
The two-minute video clip has a low-budget, jittery feel. Quick, clumsy transitions tee up self-consciously cheesy reenactments. The vibe is high school AV club-except for the clip’s narrator. He looks like a stock photo of a bureaucrat, in a dark gray suit jacket and blue dress shirt. His wide-set eyes never look away from the camera; his hands never stop gesticulating.

Elon Musk and Mark Cuban are backing the crusade by an ‘evasive’ hedge-fund manager to strip the SEC of its in-house judges
Greg Stohr and Bloomberg – Fortune
Hedge-fund manager George Jarkesy said he didn’t recall more than 800 times during questioning at the SEC about deceiving investors. A judge at the agency said he was so evasive his testimony was all but worthless. A decade later, Jarkesy may have the last laugh.

Clean-energy sell-off is ‘very wrong’, warns US power group boss; AES chief defends renewables investment despite market rout this year
Amanda Chu and Jamie Smyth – Financial Times
The head of one of the world’s largest developers of clean energy said investors are on the wrong side of history as they drive a historic sell-off in renewable stocks. Shares of companies involved in wind and solar power projects and the equipment behind them have been slammed this year as high interest rates and inflation hit their profitability. Yet Andres Gluski, chief executive of power company AES, said investors were making a “big mistake” given the scale of the climate crisis. “We’re having the hottest year on record…and yet Wall Street is giving a lot of preference to oil companies over renewable companies,” Gluski said in an interview.

Interactive Brokers gets regulatory green light for new cryptocurrency retail trading expansion; Eligible clients will now be able to transact and manage cryptocurrencies alongside other asset classes in a single account and interface.
Wesley Bray – The Trade
Interactive Brokers has become the first SFC-licensed securities broker to receive approval to allow retail clients to trade cryptocurrencies in Hong Kong. Eligible clients of Interactive Brokers Hong Kong trading cryptocurrencies will now be able to transact and manage their portfolio through a single platform with a unified view.

Ukraine Invasion

‘At what cost?’ Ukraine strains to bolster its army as war fatigue weighs
Olena Harmash and Tom Balmforth – Reuters
When Antonina Danylevych’s husband enlisted in the Ukrainian army in March 2022, he had to line up at the draft office alongside crowds of patriotic countrymen. There are no crowds now, she says. Danylevych, a 43-year-old HR manager, gave her blessing when Oleksandr joined up with tens of thousands of other Ukrainian citizens to defy the Russian invasion.

Ukrainian spy chief’s wife poisoned, media reports say
The wife of Ukraine’s military intelligence chief has been poisoned with heavy metals, several Ukrainian media outlets reported on Tuesday, citing unnamed intelligence sources. Marianna Budanova is the wife of Kyrylo Budanov, who heads Ukrainian military intelligence agency GUR, which has been prominently involved in clandestine operations against Russian forces throughout the 21-month war. Budanov’s public profile has surged in Ukraine, where he is portrayed as a behind-the-scenes mastermind of efforts to strike back at Russia. In Russian media he is a hate figure.

‘You have to accept that you can be killed. But it is always scary.’ The story of one bloody battle in a trench in eastern Ukraine
Daria Tarasova-Markina, Anna Coren and Helen Regan – CNN
“Guys, leave me here. I can’t walk,” pleads a Ukrainian soldier sitting in a narrow trench under constant Russian bombardment. His legs have been injured by shrapnel and he is bleeding through the bandages. He smokes a cigarette as he lies on the ground, the unit’s medic crouches low in the trench trying to patch him up. Moments before, four enemy tanks passed just meters away, forcing him and his fellow soldiers to bury themselves into the black fertile earth, which shakes as the tanks roll overhead.

Ukraine war live updates: Winter storms batter Russia and Ukraine, wreaking havoc, death and destruction … but war continues
Holly Ellyatt – CNBC
Southern Ukraine and Russia continue to be battered by bad weather, with huge winter storms causing widespread power cuts, losses of water supplies, mass flooding, traffic chaos and destruction. Heavy fighting carries on along the front line in Ukraine, nonetheless.

Israel/Palestine Conflict

Israel-Hamas truce in Gaza extended two days; more hostages released
Nidal Al-Mughrabi and Dan Williams – Reuters
Mediator Qatar said on Monday a truce between Israeli and Hamas forces in Gaza had been extended by two days, continuing a pause in seven weeks of warfare that has killed thousands and laid waste to the Palestinian enclave. “An agreement has been reached to extend the humanitarian pause for an additional two days in the Gaza Strip,” a Qatari foreign ministry spokesperson said in a post on social media platform X. Hamas also said it had agreed a two-day extension.

Disease could be bigger killer than bombs in Gaza – WHO
Emma Farge – Reuters
More people could die from disease than from bombings in the Gaza Strip if its health system is not repaired, a World Health Organization spokesperson said on Tuesday, warning of a surge in infectious diseases and diarrhoea in children. In figures deemed reliable by the United Nations, Gaza health authorities say more than 15,000 people have been confirmed killed in Israel’s bombardment of the narrow enclave, around 40% of them children, with many more feared to be lost under rubble.

Gaza Is Falling Into ‘Absolute Chaos,’ Aid Groups Say; The cease-fire is providing a glimpse of the problems that could follow once the war ends
Jared Malsin and Abeer Ayyoub – The Wall Street Journal
A shaky cease-fire between Israel and Hamas has allowed a surge of aid to reach Palestinians in Gaza, but humanitarian groups and civilians in the enclave say the convoys aren’t nearly enough to address the needs of the strip’s two million people. Despite the pause in fighting, Palestinians in Gaza are burning door frames and piles of garbage to cook, sleeping crammed into school classrooms and strangers’ homes, and scrambling onto trucks bringing aid from Egypt in a desperate grab for supplies, residents say.

Negotiators Press for Long-Term Israel-Hamas Truce; A long-term cease-fire would likely require both sides to make hard-to-swallow concessions
Summer Said, Stephen Kalin and Saeed Shah – The Wall Street Journal
The chief brokers of the Israel-Hamas hostage-prisoner exchange are pushing the two sides for a long-term cease-fire that would prolong the truce in Gaza beyond the current two-day extension and start talks that would end the war altogether, said Egyptian and Qatari officials. A long-term cease-fire would likely require Israel and Hamas to make hard-to-swallow concessions, such as trading Israeli soldiers for potentially thousands of Palestinian prisoners in Israeli jails, the officials said. And it would require Israel to hold back on an offensive in southern Gaza intended to capture the strip and kill Hamas’s top leadership, the officials said.

Exchanges, OTC and Clearing

CCPG response to FSB resolution report
CCP Global
The Global Association of Central Counterparties (“CCP Global”) is the international association for central counterparties (“CCPs”), representing 42 members who operate over 60 individual CCPs across the Americas, EMEA, and the Asia-Pacific region.

Cboe director departs to re-join Matrix as head of options execution strategy; Incoming individual had been with Cboe for almost two years after previously serving at Matrix, Dash Financial Technologies, ConvergEx Group and JP Morgan.
Annabel Smith – The Trade
Former director at Cboe Global Markets has left the exchange operator after less than two years to re-join agency only broker-dealer Matrix Executions. Michael Sparacino has been appointed head of options routing strategy at Matrix. He re-joins the agency only broker-dealer after also previously serving as a director for almost three years from 2019 to 2022.

CME Group U.S. Treasury Futures Open Interest Surpasses Record 21 Million Contracts
CME Group
CME Group, the world’s leading derivatives marketplace, today announced that open interest in its deeply liquid U.S. Treasury futures set a new record of 21,428,757 contracts on November 24. This year, the notional value of open interest in CME Group U.S. Treasury futures grew to $2.57 trillion, an increase of 50% year-over-year, as the average daily volume (ADV) reached 5.5 million contracts, the highest annual level ever.

HKEX Signs Agreement With China Beijing Green Exchange To Promote Green Finance And Sustainable Development
Hong Kong Exchanges and Clearing
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Tuesday) pleased to announce that it has signed a Memorandum of Understanding (MOU) with the China Beijing Green Exchange (CBGEX) to explore cooperation in a number of areas, including building an ESG ecosystem, promoting green and sustainable finance and contributing to the green development of the Belt and Road Initiative (BRI). Under the agreement, HKEX and CBGEX will work together to explore cross-border sustainable development, in particular addressing the demand generated from China’s increased focus on green infrastructure investments and its shift to a low-carbon economy. The two exchanges will also conduct research related to green and transition finance, collaborate on capabilities building for ESG standards and information disclosure, as well as explore opportunities in the carbon market.

Japan’s TSE starts market maker trial in carbon credit market
Japan’s Tokyo Stock Exchange (TSE) said on Monday it has launched a market maker mechanism on a trial basis in the newly-launched carbon credit market to boost liquidity. The trial will run from Monday to Feb. 29, 2024, and the target classifications are J-Credit on energy-saving and on renewable energy (electricity). Designated market makers are trading house Sumitomo Corp (8053.T), Marubeni Corp (8002.T) and Mitsui & Co(8031.T) as well as Daiwa Securities (8601.T) and Mizuho Bank (8411.T).

Eurex has refined its Market Disruption Rules
With effect from 27 November 2023, Eurex has refined its Market Disruption Rules based on the experience gained in past crisis situations (Russia’s war against Ukraine, Covid-19 crisis), in which the orderly price discovery of a derivative instrument may be distorted, and orderly trading may no longer be maintained. When such events have occurred in the past, Eurex Deutschland has been able to take swift action in accordance with the existing legal and regulatory framework (§§12/13 of the Exchange Rules). These measures have generally worked as intended, but it is important for market participants to be able to transparently assess how Eurex will handle such events, especially as the causes and effects of these market disruptions are diverse.

Default Simulation Exercises by CCPs
CCP Global
Clearing member default simulations, often called “default simulations” or “fire drills”, may be performed at least annually by CCPs to confirm the readiness of a CCP’s default management structure. The purpose of a default simulation is to check that operationally, the plans that a CCP and its participants have in place for managing an actual member default are fit for purpose. Such tests are distinct from stress testing which validates the financial resources of a CCP. During these simulations, CCPs test the operational readiness of their staff, procedures, IT systems, clearing members and clients, or part thereof. CCPs may also conduct a more limited scope of fire drills, such as testing new members, staff or systems, particularly new systems.

Ceremonies on the First and Last Trading Days of the Year
Japan Exchange Group, Inc. will hold its annual ceremonies on the last trading day of 2023 and on the first trading day of 2024 as follows. For this year’s last trading day ceremonies, we plan to welcome Mr. Kuriyama Hideki, Manager of Team Japan at the 2023 World Baseball Classic, as our special guest at the Tokyo site. At the Osaka site, we will invite market users and other related parties from the Kansai business community to close out the year with us as well as listed companies based in Kansai that have conducted IPOs this year.

Nasdaq Announces Mid-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date November 15, 2023
At the end of the settlement date of November 15, 2023, short interest in 3,169 Nasdaq Global MarketSM securities totaled 10,924,879,396 shares compared with 10,847,253,689 shares in 3,200 Global Market issues reported for the prior settlement date of October 31, 2023. The mid-November short interest represents 3.06 days compared with 3.15 days for the prior reporting period.

Speech by Pol de Win, Head of Global Sales and Origination, SGX Group at EY Entrepreneur of the Year Awards Dinner 2023
Good evening, Dr. Tan, Minister for Manpower and Second Minister for Trade and Industry. Nam Soon, it is such a pleasure for us to partner EY on this fantastic event; winners, nominees, ladies and gentlemen. Tonight, we gather not only to honour success but to applaud the visionaries, trailblazers and innovators who have transformed dreams into reality. The accomplishments of our winners tonight are nothing short of remarkable, showcasing the ingenuity, resilience and entrepreneurial spirit that has defined the business landscape in Singapore.

Moscow Exchange expands the list of foreign exchange market instruments
On December 4, 2023, the Moscow Exchange is launching new instruments on the foreign exchange market for the Chinese yuan – Russian ruble pair, which will allow participants to enter into transactions at the weighted average yuan rate and at currency fixing.


French IT Firm Atos Reviews Terms of Sale to Czech Billionaire; Company is mulling further disposals to address maturities; Kretinsky keen to drop Eviden investment, improve terms
Irene Garcia Perez and Benoit Berthelot – Bloomberg
French IT services firm Atos is in “advanced discussions” to amend certain terms of the deal to sell Tech Foundations to Czech billionaire Daniel Kretinsky’s EPEI, the company said in a statement on Tuesday. The firm said it’s assessing debt and equity markets to raise funds, and is also considering further asset disposals to address upcoming maturities. It faces repayment on a EUR1.5 billion ($1.6 billion) term loan A coming due in January 2025 and EUR750 million bonds that mature in May 2025.

Liberum to connect to OptimX Markets block trading capability; Liberum’s new A-PEX algorithm, which connects to Clearpool’s algorithmic management system (AMS), is set to allow the business to more easily smart order route, with extra configuration abilities, to OptimX.
Claudia Preece – The Trade
Liberum T-REX, is set to connect to US-based equities block trading start-up OptimX Markets’ new block trading capability early next year. “Our collaboration with Liberum highlights our firm’s commitment to provide distribution from the most innovative sources of institutional liquidity across the European marketplace,” said Peter McStay, head of OptimX EMEA.

T+1 six-month countdown begins today: DTCC encouraged by testing but concerned about smaller firms who are ‘yet to start’; Today marks six months until the US moves settlement times for equities to T+1 and the picture of lingering issues is becoming increasingly clearer.
Jonathan Watkins – The Trade
The DTCC is seeing positive signs in terms of the numbers of firms testing for T+1, but remains concerned about smaller players who are yet to start. Engaging those who haven’t even come to the table in terms of preparation around the multiple facets of preparation required – whether that’s testing, FX, lending, automation or understanding new timeframes and cut-offs – has been a concern from day one, and it appears that the challenge continues even with just six months left.

Optiver becomes first market maker to join Plato partnership as full member
Wesley Bray – The Trade
Non-profit member organisation for the equity marketplace, Plato Partnership, has added global market maker and liquidity provider Optiver as a sell-side member. The addition of Optiver marks a significant milestone for the partnership as it becomes the first market-making company to join as a full member.

The US is racing ahead in its bid to control artificial intelligence – why is the EU so far behind?
Seth Lazar – The Guardian
Between fancy global summits, OpenAI’s boardroom drama and rumoured technical breakthroughs, the world has recently been paying close attention to the frontiers of AI research. But last month the White House Office of Management and Budget (OMB) in the US released a memo on the use of more mundane AI systems in government that is likely, in the near term at least, to be equally consequential.

Microsoft Needs a Better Seat at OpenAI’s Table; Leadership crisis exposed Microsoft’s reliance on AI startup, showing need for greater role
Dan Gallagher – The Wall Street Journal
Microsoft MSFT played a weak hand rather well in the drama that engulfed OpenAI last week. But the tech giant now has a complicated task ahead: It needs to solidify its relationship with the high-profile startup while also showing it can chart its own course in the vital field of artificial intelligence. Wall Street has cheered Microsoft CEO Satya Nadella’s handling of the situation, which began with the surprise firing of OpenAI Chief Executive Sam Altman by the company’s board of directors late on Friday, Nov. 17, and concluded with Altman agreeing four days later to return to his role. In the interim, Microsoft announced plans to hire Altman directly, along with any other OpenAI employees who cared to join.

AI threat demands new approach to security designs: US official
The Business Times
Artificial Intelligence. The potential threat posed by the rapid development of artificial intelligence (AI) means safeguards need to be built in to systems from the start rather than tacked on later, a top US official said on Monday. “We’ve normalised a world where technology products come off the line full of vulnerabilities and then consumers are expected to patch those vulnerabilities. We can’t live in that world with AI,” said Jen Easterly, director of the US Cybersecurity and Infrastructure Security Agency.

AI Is Going to Change Your Playlist Forever; There are some very smart and creative people trying to navigate the music industry’s fast-shifting landscape.
Timothy L. O’Brien – Bloomberg
The artificial intelligence hype may be starting to die down overall, but AI isn’t going away. You can literally hear it in music. Back in April, a super-convincing AI duet between rapper Drake and singer the Weeknd went viral, caused panic in the music industry, and opened the floodgates for deepfakes like Frank Sinatra singing hip-hop and a fictional Oasis mixtape called AIsis. It’s not just novelty memes, either: AI-generated background music is sneaking into your Spotify playlist, cranking out chill soundscapes and helping the Beatles put out one last song called “Now and Then.”

OpenAI Is Still an $86 Billion Nonprofit; Also Binance’s guilty plea and Finnish electricity prices.
Matt Levine – Bloomberg


Cybersecurity in 2023: 6 Developments That Defined the Year
Dice Staff
The potential benefits and pitfalls of generative artificial intelligence technology. The ongoing conflict between Russia and Ukraine and new tension in the Middle East. Increasing scrutiny of cybersecurity leaders and their decisions. Ransomware attacks targeting casino resorts. These are some headlines that made news in the cybersecurity community throughout 2023. While a significant portion of news coverage over the last 12 months has focused on generative A.I., including the recent upheaval at OpenAI involving its co-founder Sam Altman, sophisticated cyber attacks continue to damage networks and expose user data.

DP World says hackers stole Australian ports employee data
DP World Australia, one of the country’s largest ports operators, said on Tuesday hackers had accessed files containing personal details of employees after a cyber incident early this month forced it to suspend operations for three days. The breach, spotted on Nov. 10, crippled operations at the company, which manages about 40% of the goods that flow in and out of Australia, affecting its container terminals in Melbourne, Sydney, Brisbane and Western Australia’s Fremantle.

‘The enemy is false information’: World leaders and businesses take on cybersecurity in Riyadh
The third Global Cybersecurity Forum in Riyadh brought together world leaders and businesses to discuss and take action in the fight against cybercrime. Under the theme ‘Charting Shared Priorities in Cyberspace’ the event encourages dialogue, integrating the key drivers that shape it and supports those working towards cyber stability.


Interactive Brokers gets regulatory green light for new cryptocurrency retail trading expansion; Eligible clients will now be able to transact and manage cryptocurrencies alongside other asset classes in a single account and interface.
Wesley Bray – The Trade
Interactive Brokers has become the first SFC-licensed securities broker to receive approval to allow retail clients to trade cryptocurrencies in Hong Kong. Eligible clients of Interactive Brokers Hong Kong trading cryptocurrencies will now be able to transact and manage their portfolio through a single platform with a unified view.

In spot bitcoin ETF race, some pioneers stick to the sidelines
Suzanne McGee – Reuters
Despite growing excitement that spot bitcoin exchange-traded funds (ETFs) will soon win regulatory approval, some cryptocurrency ETF pioneers plan to sit out what is expected to be a fierce industry battle for market share. Demand for a bitcoin ETF, which would allow retail and institutional investors to easily bet on the price of the world’s biggest cryptocurrency, is expected to draw in as much as $3 billion from investors in the first few days of trading and pull in billions more thereafter.
/ makes DeFi accessible to the average consumer
Catherine Shu – TechCrunch
Hussain Elius is best known as the co-founder of Pathao, one of Bangladesh’s top ride-sharing apps. For his latest startup, however, Elius is exploring the world of DeFi with, a self-custodial, smart contract wallet with three main features. The first is enabling businesses to send payments to remote employees around the world. The second is allowing people to use as a virtual bank account. And the third is is the on-ramp/off-ramp infrastructure that the company is building to enable users to change their crypto holdings for fiat or vice versa.

U.S. ‘lagging behind’ on crypto regulation: Certified cryptocurrency forensic investigator
Kyla Curley, a partner at StoneTurn and a certified cryptocurrency forensic investigator, sits down with CNBC Crypto World to discuss advancements in the U.S. as it pertains to crypto regulation and weighs in on what lawmakers should prioritize in an effort to catch up to the rest of the world.


Elon Musk wants to be a world leader. His own behavior is holding him back
Brian Fung – CNN
Elon Musk is an increasingly important player in global affairs and has been touring the world to meet with political leaders in recent months. But his statements, social media posts and actions prove he is fundamentally unprepared for world leadership, even as he has amassed control over ever more levers of power through his ownership of X, Starlink and other technology platforms.

Finland Seals Eastern Border to Stem Russian Hybrid Operation
Leo Laikola – Bloomberg
Finland decided to close the last road border crossing that had remained open on its frontier with Russia after it continued to push migrants into the Nordic country. New information and estimates indicated that “instrumentalized immigration” would have intensified without the decision, Prime Minister Petteri Orpo and Interior Minister Mari Rantanen told reporters on Tuesday.


UK Unveils New Fund Management Rules to Address Greenwashing
Gautam Naik – Bloomberg
The UK’s financial watchdog has unveiled a new framework designed to protect retail investors from misleading ESG claims. The measures include an anti-greenwashing rule, product labels to help investors understand a fund’s specific goals, and marketing requirements aimed at ensuring that products don’t promote a sustainability objective that doesn’t exist.

SEC Adopts Rule to Prohibit Conflicts of Interest in Certain Securitizations
The Securities and Exchange Commission today adopted Securities Act Rule 192 to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act. The rule is intended to prevent the sale of asset-backed securities (ABS) that are tainted by material conflicts of interest. It prohibits a securitization participant, for a specified period of time, from engaging, directly or indirectly, in any transaction that would involve or result in any material conflict of interest between the securitization participant and an investor in the relevant ABS. Under new Rule 192, such transactions would be “conflicted transactions.”

Statement on Final Rule Prohibiting Conflicts of Interest in Securitizations
Chair Gary Gensler – SEC
Today, the Commission adopted a rule to prohibit certain market participants in the asset-backed securities (ABS) market from taking positions against the products they help bring to market. I am pleased to support this rule as it fulfills Congress’s mandate to address conflicts of interests in the securitization market, a market which was at the center of the 2008 financial crisis.

Prohibiting Conflicts of Interest in ABS Securitizations
Commissioner Jaime Lizarraga – SEC
Today the Commission adopted a new rule to address harmful conflicts of interest in the asset-backed securities (“ABS”) market. As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), Congress directed the Commission to issue rules prohibiting those conflicts of interest, which played a significant role in causing the 2008 financial crisis.

Statement on the Final Rule: Prohibition Against Conflicts of Interest in Certain Securitizations
Commissioner Mark T. Uyeda – SEC
Today, the Commission adopted Rule 192 under the Securities Act of 1933 to implement Section 621 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.[1] Section 621 is intended to prohibit those involved in the securitization process from profiting from the securities’ failures. While the Commission’s initial 2011 proposal to implement Section 621 largely tracked the text of Section 621,[2] commenters expressed concerns that this approach lacked clarity regarding the scope of prohibited and permitted conduct.[3] When re-proposing Rule 192 earlier this year, the Commission provided greater detail in the rule text, including the types of transactions that constitute “conflicted transactions” prohibited by the rule and defining certain key terms used in the rule. The Commission stated that its re-proposed rule “would provide strong protection against material conflicts of interest while not unnecessarily hindering routine securitization activities that do not give rise to the risks that Section [621] was intended to address.”[4]

Unsettling End of an Era: Statement on Adoption of Rule Prohibiting Conflicts of Interest in Certain Securitizations
Commissioner Hester M. Peirce – SEC
Although not covering as many eras as this year’s most watched concert tour,[1] this rulemaking comes close. Like its musical counterpart, a rule that is more than a decade and multiple iterations in the making should be really good.[2] This rule, with its lingering ambiguities and over-breadth, may not be. It certainly is better than what we proposed, but it is also different enough from the proposal that public comment on the new approach is necessary to ensure that we got it right this time. Even a short comment period on the new rule text would have helped to ensure that the rule prohibits securitization participants from betting against securitizations without stopping risk mitigating hedging, market-making, and other ordinary course transactions. As burdensome as it would have been for the Commission and commenters to formally re-engage, the consequences of getting this rule wrong loom large enough to warrant one more round of comment.[3] Accordingly, I dissent.

SFC and CSRC hold high-level enforcement cooperation meeting and joint training
Securities and Futures Commission
The Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) recently held their 15th regular high-level meeting on enforcement cooperation and a three-day joint training event at Chengdu. This was the first in-person meeting between the current enforcement heads of the SFC and the CSRC and the first in-person joint training between the two enforcement units since the COVID pandemic.

FCA sets out greenwashing rules
The Financial Conduct Authority has moved to clamp down on greenwashing by putting in place sustainability disclosure requirements and an investment labels regime. The UK watchdog first outlined plans for a package of measures to improve the trust and transparency of sustainable investment products and minimise greenwashing a year ago. Now, after receiving industry feedback, it has confirmed that the rules will come into effect next year. From the end of May, an anti-greenwashing rule for all authorised firms will make sure sustainability-related claims are fair, clear and not misleading.

Investing and Trading

The Stocks That AI Mania Left Behind; Value stocks looked like they were making a comeback-until AI madness happened
Charley Grant – The Wall Street Journal
This was supposed to be the year value stocks shined. Then AI mania took over and ran away with the spotlight. Shares of big tech companies are surging this year and racing past value stocks once again, powered by investor optimism about the promise of artificial intelligence. That is a reversal from last year, when value stocks pulled ahead of growth stocks for the first time since 2016.

UBS Chair Kelleher Warns Bubble Is Forming in Private Credit; Kelleher latest executive to warn about the rising risks; Private credit market has roughly tripled in size since 2015
Myriam Balezou and Laura Benitez – Bloomberg
UBS Chairman Colm Kelleher warned against growing risks in private credit as the market continues to boom. “There is clearly an asset bubble going on” in the asset class, Kelleher said at the FT Global Banking Summit in London on Tuesday. “What it needs is just one thing to trigger a fiduciary crisis.”

Environmental, Social and Corporate Governance

The cheque book COP: UAE’s $200bn bid for climate influence; The summit host is investing big in clean energy to ensure talks are a success – and possibly to sway the outcome, critics say
Attracta Mooney and Aime Williams – Financial Times
Just days before negotiators from more than 60 countries descended on Abu Dhabi last month for the final round of climate talks ahead of the UN’s COP28 summit, Sultan al-Jaber, president-designate of the conference, travelled more than 1,000 miles north to Azerbaijan. Jaber, who juggles at least eight different jobs including chief executive of the United Arab Emirates’ Abu Dhabi National Oil Company and chair of the state-owned renewable energy company Masdar, met Azerbaijani President Ilham Aliyev to mark the inauguration of a solar farm large enough to power 110,000 houses.

UAE planned to use COP28 summit for oil deals, documents show; Leak appears to outline talking points for discussions with foreign governments
Kenza Bryan, Simeon Kerr, James Politi and Raya Jalabi – Financial Times
The United Arab Emirates planned to use meetings about the COP28 climate summit it is hosting later this week to pitch oil and gas deals to foreign governments, according to leaked briefing documents obtained by the non-profit Centre for Climate Reporting alongside the BBC. Sultan al-Jaber, president-designate of this year’s UN climate summit, has called for a “phaseout” of fossil fuels globally. But his position as head of COP28 while also leading the UAE state oil company Adnoc has attracted criticism from politicians in the US and Europe because of the perceived conflict of interest.

High cost of capital a bane for energy transition ahead of COP28
Divya Chowdhury – Reuters
Advocates for the energy transition are concerned ahead of the COP28 summit in Dubai about the high cost of capital available to make change happen, as policymakers ratchet up their rhetoric on the need for tight monetary policy. COP28 is widely expected to focus on climate finance, specifically to build on the G20 nations’ commitment to triple renewables deployment to about 11,000 gigawatts by 2030, which will need funds of around $4.5 trillion.

Biggest Climate Talks Ever Confront Global Chaos and Record Heat; More than 70,000 people are expected in Dubai for COP28, but what can they actually get done?
Jess Shankleman, Laura Millan, and Jennifer A Dlouhy – Bloomberg
More than 70,000 politicians, diplomats, campaigners, financiers and business leaders will fly to Dubai to talk about arresting the world’s slide toward environmental catastrophe. The need for progress has never been more urgent: 2023 will almost certainly be the hottest year on record, greenhouse gas emissions are still rising and promises to cut pollution remain insufficient to take the risk of unmanageable warming off the table. At the same time, rapid inflation and global instability – including wars in Ukraine and Gaza – have scrambled the politics and economics of the energy transition.

Eat Less Meat Is Message for Rich World in Food’s First Net Zero Plan; UN’s FAO is set to publish plan for food’s climate transition; Food expected to take more focus at COP28 summit in Dubai
Agnieszka de Sousa – Financial Times
The world’s most-developed nations will be told to curb their excessive appetite for meat as part of the first comprehensive plan to bring the global agrifood industry into line with the Paris climate agreement. The global food systems’ road map to 1.5C is expected to be published by the United Nations’ Food & Agriculture Organization during the COP28 summit next month. Nations that over-consume meat will be advised to limit their intake, while developing countries – where under-consumption of meat adds to a prevalent nutrition challenge – will need to improve their livestock farming, according to the FAO.

‘Sacrifice zone’: booming US LNG sector leaves its mark on the Gulf; Rising gas exports have eased Europe’s energy crisis – but worsened life in communities near the plants
Jamie Smyth and Myles McCormick – Financial Times

A New Law Regulating the Cosmetics Industry Expands the FDA’s Power But Fails to Ban Toxic Chemicals in Beauty Products; The Modernization of Cosmetics Regulation Act empowers the FDA to recall harmful cosmetics. Advocates want to know why manufacturers still don’t have to prove their products are safe before they’re sold to millions of consumers.
Victoria St. Martin – Inside Climate News

Two US projects highlight divide over carbon removal’s role in climate fight
Valerie Volcovici – Reuters

28 voices on COP28: What we want from the climate summit (part 2)

Wollemi launches to solve multi-trillion dollar emissions problem; is a world-first solution to measuring and reporting on emissions from land and agricultural investments, as countries and regions act to legislate disclosures.

Seychelles Government selects SECDEX digital carbon market solution to be showcased at COP28

Exxon’s $1 Billion UK Expansion to Make Its First Diesel in 2024; Fawley project will help the UK to reduce diesel imports; Exxon will also look at producing cleaner jet fuel at Fawley
Rachel Graham – Bloomberg


Barclays eyes up to 900 job cuts in Britain -union
Barclays is putting 900 jobs in its British business at risk of redundancy, employee union Unite said on Tuesday, as it pursues major cost cutting in a bid to improve its returns. A Unite spokesperson said that Barclays (BARC.L) staff were informed of the potential cuts at 1300 GMT.

Work & Management

Not yet equal pay for equal work: Women are still behind men on salaries and wages
Sharon Sewell-Fairman and L.K. Moe – Daily News (opinion)
It has been exactly 60 years since Congress passed the Equal Pay Act, a move intended to ensure that women earn as much as men in equivalent jobs. But despite significant progress, we still haven’t reached that goal. And since 1997, New York City women have actually lost ground. Women deserve better. These pay disparities hinder their ability to provide for their families, save for retirement and unforeseen expenses, and engage in their communities.

Fewer Black Professionals Are Getting Promoted Into Management, Reversing Trend; A push to elevate Black men and women into management roles is losing ground in big companies
Ray A. Smith and Vanessa Fuhrmans – The Wall Street Journal
U.S. companies have lost momentum in promoting Black professionals into management, according to new data from McKinsey & Co. After the May 2020 murder of George Floyd set off a national conversation about race, equity and opportunity, American companies set ambitious goals for advancing Black talent in their ranks. They have made some strides in hiring and promoting more Black professionals, especially at the highest levels of the company; there are now eight Black chief executives in the Fortune 500, compared with four in 2020.

Londoners Have More Work-From-Home Flexibility Than Parisians; One-fifth of Paris employers forbid it: Bloomberg Intelligence; High transportation costs are big issue keeping Londoners home
Eamon Farhat – Bloomberg
Londoners have more freedom to work from home than employees in Paris, according to a survey by Bloomberg Intelligence, suggesting that UK workers have more bargaining power in its tight job market. The survey, conducted Nov. 15, found that 20% of workers in Paris are not allowed to work from home, while in London the number is 4%. The results from 500 office workers in the UK and 250 in France showed that Londoners have more flexibility overall to work from home, with most having hybrid setups.

Wellness Exchange

5 questions about the latest disease outbreak in China; It’s more likely the bill is coming due for China’s prolonged Covid lockdown than a novel virus emerging.
Carmen Paun and Kelley Hopper – Politico
The wave of respiratory diseases hitting China is more likely the return of seasonal illness the country suppressed with prolonged Covid lockdowns than another pandemic threat. Children are flooding hospitals now in the same way they did in the U.S. a year ago, infectious disease experts told POLITICO.


China’s Shein files for US IPO in major test for investor appetite – sources
Kane Wu and Anirban Sen – Reuters
Fashion company Shein has confidentially filed to go public in the United States, according to two sources familiar with the matter, in what is likely to be one of the most valuable China-founded companies to list in New York. Goldman Sachs, JPMorgan Chase and Morgan Stanley have been hired as lead underwriters on the initial public offering (IPO), and Singapore-based Shein could launch its new share sale some time in 2024, the sources said.

North Korea defends satellite launch at UN as Kim takes images of White House
The Business Times
NORTH Korea’s ambassador made a rare appearance at the UN Security Council on Monday to defend his country’s launch of a spy satellite, as leader Kim Jong Un studied images including of the White House and Pentagon. Western powers, Japan and South Korea have said North Korea violated Security Council resolutions by launching the satellite last week.

Money laundering now a greater risk, say Singapore financial institutions
Yong Hui Ting – The Business Times
PERCEIVED risks from money laundering and terrorism financing (ML/TF) to Singapore’s financial system have risen, according to the Monetary Authority of Singapore’s (MAS) report on Monday (Nov 27). A survey conducted by the MAS found that financial institutions (FIs) in Singapore perceived money laundering risks as the fourth biggest risk as at October this year. This is up from seventh place half a year ago.

Kenya Abandons Eurobond Plan in Change of Funding Strategy; Country will access concessional financing: Treasury chief; May return to international markets ‘when conditions improve’
David Herbling – Bloomberg
Kenya has dropped plans to tap international capital markets this fiscal year due to the high cost of dollar debt, according to Treasury Secretary Njuguna Ndung’u. The East African nation will seek cheaper concessional funding instead, Ndung’u told the state-run MyGov newspaper. It will return to international debt markets “when conditions improve,” he said.

Vietnam Relied on Environmentalists to Secure Billions. Then It Jailed Them; The government is preparing to present its energy transition plan at the U.N. climate talks as it intensifies a crackdown on environmental advocates.
Sui-Lee Wee – The New York Times
When Vietnam was awarded a multibillion-dollar deal by a group of nine wealthy nations last year to work on reducing its use of coal, it agreed to regularly consult with nongovernmental organizations. Instead, the government has arrested several prominent environmentalists from those organizations who shaped policies that helped secure the funding, prompting concerns over sending money to countries that have violated human rights.


Hedge Fund Chief Marshall Demands Share of Treasure Found at Sea; Paul Marshall’s salvage firm in clash with South African state; SS Tilawa sunk with loss of 281 lives and $40 million silver
Jonathan Browning – Bloomberg
A company backed by one of the UK’s most successful hedge fund managers argued at the Supreme Court that it was entitled to a salvage award following the recovery of $40 million of silver from the wreck of a ship lost to a Japanese submarine in the middle of the Second World War.

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