Edward Boyle and Patrick Gardner
Hits & Takes
John Lothian and JLN Staff
The team at John Lothian News wishes you and yours a very Happy New Year and a better 2021. This last year has been one for the history books and shall not soon be forgotten. But let us be optimistic that in the new year we can overcome this pandemic and emerge stronger for having survived the experience. We mourn those we have lost in the last year, but cherish their memories and all we learned from having them in our lives. Happy New Year!
We are still collecting answers to our readership survey. We greatly appreciate the participation we have received so far and hope to get even more to improve the accuracy of the data. We will be picking three names of people who answered the survey and shared their names and giving a donation of $100 for each to a charity of their choice. The link for the survey is above.
Refinitiv Chief Privacy Officer Vivienne Artz has been recognised in this year’s UK Queen’s new year’s honors list. She has been awarded the OBE (Order of the British Empire) for her contribution to increased gender diversity in financial services as president and CEO of Women in Banking & Finance, and as a leader and role model for gender diversity across multiple organisations and companies for many years, and for her contribution to data privacy. Congratulations to Ms. Artz on this honor.
If you have not noticed from the many appeals flooding your inbox, today is the last day of the year and the last day to make a donation to a charity that you can deduct from your 2020 taxes. There are many organizations with great needs, especially food banks trying to feed the many unemployed people impacted by the pandemic. I encourage you to increase your charitable deductions on this last day of 2020.
We had two new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. BOX Options Exchange CEO Ed Boyle contributed, as did Patrick Gardner, director of sales & product manager, automated trading at Vela. Ed is a member of the JLN Advisory Committee and a leading member of the Singing Boyle Brothers band. OK, I made up that last part about the band, but not about the brothers. Ed is a former TD Securities and NYSE Euronext executive who is a longtime fan of JLN. Patrick is a former director of sales at OptionsCity, which was acquired by Vela. He is also a hockey coach for the Chicago Jets, a pee wee and bantam level team in Chicago. Thank you to Ed and Patrick and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.
I would also like to thank Dan Pritchard, who was noted yesterday as a donor. Dan gave our campaign a shout-out on LinkedIn yesterday, encouraging people to donate to our campaign. Thank you Dan.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Before former SEC Chairman Jay Clayton left his role last week, the agency tied up a few digital assets loose ends. The SEC published a statement that set forth special purpose broker dealers’ responsibilities for custodying customers’ digital securities. The commission finally took action against Ripple for not registering the coin XRP, which the SEC believes is a security. And it disapproved options exchange BOX’s plan for a blockchain settlement system for stock transactions. ~Thom Thompson
The SEC’s lawsuit against Ripple over its unregistered sale of XRP continues to have – forgive the pun – ripple effects throughout the cryptocurrency industry. Things are not going well for the company. Adding to the list of trading platforms that have announced that they are delisting XRP, Binance.US and Genesis Trading announced Wednesday that they would be delisting the digital asset. While Genesis said via email that trading was merely “suspended,” and that the company was “monitoring the evolving regulatory situation with XRP,” Binance.US announced that it would fully remove support for XRP trading on January 13, 2021, with some exceptions made for users who wish to withdraw XRP from their accounts after that time. ~MR
Intercontinental Exchange Statement on the Passing of Board Member Jean-Marc Forneri
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, issued statements from company leaders today mourning the loss of longtime board member Jean-Marc Forneri, who passed away on December 28, 2020.
***** Our condolences to the family, friends and colleagues of Jean-Marc Forneri.~JJL
Operation Warp Speed at a crawl: Adequately vaccinating Americans will take 10 years at current pace; In other coronavirus news: Vice President-elect Kamala Harris got her shot; the pandemic has left many Americans “stuck in time.”
Health Workers Administer Covid-19 Vaccines At The Palace Nursing & Rehabilitation Center
Joe Murphy and Corky Siemaszko – NBC News
The Trump administration’s Covid-19 vaccine distribution program needs a major shot in the arm because at the current rate, it would take almost 10 years to inoculate enough Americans to get the pandemic under control, a jarring new NBC News analysis showed Tuesday. The goal of Operation Warp Speed, a private-public partnership led by Vice President Mike Pence to produce and deliver safe and effective Covid-19 vaccines to the public, is to ensure that 80 percent of the country’s 330.7 million people get the shots by late June.
***** Ten years at warp speed is not warp speed. ~JJL
Wednesday’s Top Three
Our top story Wednesday was the Wall Street Journal’s How NYSE’s Top Salesman Fought for IPOs in 2020, about John Tuttle, the NYSE’s vice chairman and chief commercial officer. Second was HKEX CEO Charles Li’s “Goodbye, friends!” – his farewell as he retires from his 11 year post at the exchange. And people still want to know What happened to Maria Bartiromo?, as the Washington Post story was once again in our top stories at number 3.
196,130,046 pages viewed; 24,850 pages; 227,958 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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HKEX’s New Big Boss Will Face Hong Kong’s Uncertain Future; Charles Li’s successor will inherit one of the world’s largest stock exchanges. But Beijing’s tightening control poses new challenges.
Jacky Wong – WSJ
In an uncanny metaphor for Hong Kong’s uncertain future, the city’s bourse has yet to find a new boss after longtime Chief Executive Charles Li retired Thursday. His successor will inherit one of the world’s largest stock exchanges. But Beijing’s tightening control on the financial hub will add new challenges.
Britain Budges on Derivatives Rules in Last-Minute Brexit Relief
Silla Brush – Bloomberg
Britain’s market watchdog eased restrictions on cross-border derivatives trading in a move to calm fears of market turbulence just hours before the Brexit transition period ends. The Financial Conduct Authority said Thursday it acted to resolve conflicting European Union and U.K. laws that threatened a $200 billion-a-day market in London for interest-rate swap trades. London-based branches of European investment banks such as Deutsche Bank AG and Societe Generale SA will be permitted to trade on EU venues, as long as they are trading for EU clients.
UK faces ‘dangerous situation’ as new Covid cases surge; Oxford/AstraZeneca vaccine approval raises hopes of beating pandemic but questions remain on speed of rollout
Sebastian Payne and Sarah Neville – FT
The UK is in a “very dangerous situation” in its battle against coronavirus, facing a “grim and depressing picture” of rising infections and deaths as millions more were placed under the tightest tier of restrictions.
What did Silicon Valley’s crypto bubble create? Three years after investors poured $20bn into initial coin offerings, start-ups are revealing what they did with the money
Richard Waters – FT
Three years ago, when the blockchain start-up Filecoin raised $257m with nothing more than a promise to build a decentralised marketplace for data storage, it looked like another example of the mania that was sweeping through the cryptocurrency world.
SEC officials were absent in Robinhood settlement; Outgoing chairman and his successor both have ties to employees of the trading app
Patrick Temple-West – FT
Two US Securities and Exchange Commission members with personal ties to Robinhood employees sat out the agency’s enforcement settlement with the popular trading app this month. The SEC’s outgoing chairman, Jay Clayton, and its current acting chief, Elad Roisman, did not participate in Robinhood’s $65m settlement of charges that it failed to provide its customers with the best prices for trades on its platform, according to agency disclosures.
Lessons From a Crazy Year in Financial Markets; A historic downturn and dizzying comeback show markets still have the capacity to surprise us all
Akane Otani – WSJ
Here is something many investors would have found difficult to believe during March’s stomach-churning selloff: 2020 would turn out to be a stellar year for the stock market. The Dow Jones Industrial Average is at a record. The market for initial public offerings is flourishing. Just weeks ago, home-rental startup Airbnb Inc. made a stock-market debut so stunning that its chief executive was briefly left speechless on live television.
This Is How Prejudice Can Hinder the Economy
Joe Weisenthal and Tracy Alloway – Bloomberg
Economics is all about improving living standards, but rarely does the dismal science deal with social justice or talk about how a lack of it could actually hinder growth. In this episode, UBS Global Chief Economist Paul Donovan discusses how prejudice and labor markets are intertwined, and why discrimination can restrict development. Donovan describes how historical technological advances have often increased racism, sexism and other forms of prejudice as people sought out scapegoats to blame for lost jobs and wealth. He also describes how the current ‘fourth industrial revolution’ is fomenting more blame, and what economists can do about it.
China Considers Requiring Ant to Sell Finance Investments, Source Says
Ant Group could be pushed to divest some finance-linked stakes; Holding firm’s minority stakes now can’t exceed 15% of assets
Chinese regulators are studying plans to force Ant Group Co. to divest equity investments in some financial companies, curbing the company’s influence over the sector, according to a person familiar with the matter. The plans, which would involve pushing Ant to sell some of its minority shares in operations such as banking-related businesses, are part of a push by watchdog agencies to regulate so-called financial holding companies, the person said, requesting not to be named because the matter is private. An Ant spokesperson declined to comment on Thursday.
Exit from single market closes a chapter UK did so much to write; Margaret Thatcher drove integration before becoming a staunch critic of ‘European superstate’
Martin Sandbu – FT
When Big Ben strikes 11pm on New Year’s Eve, the UK will leave Europe’s single market. It will be a moment of national catharsis — and like in Greek tragedies — a moment when the protagonist’s own triumphs of the past catch up with him.
Central bankers to retail punters: who shaped markets in 2020; Our pick of the people who captured the key moments and trends of the year
In an eventful year for global markets, some individuals (and one company) stand out. Here, the FT’s markets team picks out the notable protagonists, and the key person to watch in 2021.
What is in the EU-China investment treaty? Deal improves level playing field for European investors, while Chinese companies benefit from new openings
Jim Brunsden, Michael Peel and Sam Fleming – FT
After seven years of talks the EU has secured one of its top priorities in relations with China: an investment agreement that Brussels insists will resolve longstanding problems faced by European companies.
‘Just not functioning’: quotes from a tumultuous year in markets; From the March panic to the stimulus-soaked rally, the coronavirus crisis left investors awestruck
The year 2020 will stand as the time when the coronavirus crisis almost broke the financial markets. Investors watched with growing horror in March as a stock sell-off turned into a liquidity crisis where even the ultra-safe US government bond market was straining to match buyers and sellers — challenging the most basic assumptions of risk and threatening the underpinnings of the financial system.
Year in a word: Spac; This year financiers dodged pesky reporting requirements with a newly popular vehicle
Brooke Masters – FT
Who would turn down a blank cheque? Certainly no one on Wall Street. Normally, when companies raise money through an initial public offering, they have to provide financial information and a business plan. But 2020 was the year when financiers dodged those pesky requirements with a newly popular vehicle known as a Spac.
Stimulus Money Should Have Gone to the Jobless, Economists Say; While lawmakers debate increasing the payments to $2,000, most Americans are expected to save, not spend, their $600 checks.
Nelson D. Schwartz and Gillian Friedman – NY Times
Galen Gilbert knows just what he will do with the check he gets from Washington as part of the pandemic relief package, whatever the amount: put it in the bank.
How scammers siphoned $36B in fraudulent unemployment payments from US
Nick Penzenstadler – USA TODAY
In a Zoom session with the camera turned off, Mayowa describes how he scoops up U.S. unemployment benefits fattened by COVID-19 relief, an international imposter attack that has contributed to at least $36 billion being siphoned away from out-of-work Americans.
Review of 2020: chaos on a roll; Vanishing liquidity, the Ronin collapse, broken backtests, XVAs – the pandemic wreaked havoc in risk transfer markets
The Covid-19 pandemic brought the financial system to the brink in 2020. Lockdowns turned cities into ghost towns overnight and economic activity ground to a halt. From hastily assembled home offices, market participants faced one crisis after another: equity volatility surged; the US Treasury market seized-up; and oil futures turned negative. At times, it felt like a year-long crisis was being squeezed into six weeks. CME Group pulled the plug on one of the world’s largest proprietary trading firms. Dealers incurred heavy losses in their structured products books. Some hedge funds were unable to see out the turmoil.
Putin Battles to Sell Russia’s Vaccine in New Rift With West
Henry Meyer and Stepan Kravchenko – Bloomberg
Regulators dash hopes of quick approval for Sputnik V abroad; Putin regularly promotes Russian vaccine to other leaders
Russia is accusing the West of maligning its achievements in the global race to defeat Covid-19 as attempts to win key markets for its Sputnik V vaccine run up against the demands of regulators.
China Is Making It Harder to Solve the Mystery of How Covid Began; Investigators may never know how Covid-19 emerged in the country — and how to stop it from happening again.
In the year since seafood hawkers started appearing at Wuhan’s hospitals sickened with a strange and debilitating pneumonia, the world has learned a lot about Covid-19, from the way it spreads to how to inoculate against the infection. Despite these advances, a chasm remains in our understanding of the virus that’s killed nearly 2 million people and whipsawed the global economy: we still don’t know how it began.
How the pandemic is worsening inequality; Poor workers and nations suffer but rising markets boost the rich
Valentina Romei – FT
The coronavirus pandemic is worsening global economic inequality in an array of ways, both geographically and socially. As the first vaccines roll out, the spread of the virus is expected to decline in the coming months — but its economic impact is likely to linger, economists warn.
Trump administration admits missing Covid vaccination goals; Officials say US states have used only a fifth of the doses they were given
Kiran Stacey – FT
The US will end the year having vaccinated far fewer people against coronavirus than hoped, senior Trump administration officials admitted, with states having used only about a fifth of the doses they were given in the past three weeks.
Australia battles Covid-19 outbreak as suppression success foiled; New Year’s Eve celebrations scaled back even as Sydney cricket match to proceed with fans
Jamie Smyth – FT
Australian authorities are scrambling to contain a coronavirus outbreak that has broken Melbourne’s 61-day run without local transmission and threatens one of the world’s most successful efforts to suppress the pandemic.
Coronavirus Live Updates: U.S. Covid-19 Hospitalizations Top 125,000 for the First Time
A fast-spreading variant of the disease was detected in California and Colorado officials identified a second possible case in the state.
120,000 Have Died. The Nursing Home Disaster Continues; The first coronavirus outbreak in the United States happened in a nursing home in February. Since then, it’s only gotten worse.
E. Tammy Kim – NY Times
Eight months into the pandemic, Brendan House, a nursing home in Kalispell, Mont., had not had a single resident test positive for the coronavirus. It was an extraordinary feat, given that 40 percent of the deaths from Covid-19 nationwide had occurred in long-term care facilities.
If Covid-19 vaccination picks up, US could return to normal life by early fall 2021, Fauci says
Lauren Mascarenhas – CNN
If the US is able to “diligently vaccinate” people in 2021, the nation could return to normal life by early fall, Dr. Anthony Fauci said in an interview with California Gov. Gavin Newsom on Wednesday. Although Covid-19 vaccine rollout is off to a slower start than expected, if the US is able to “catch up” in 2021, widespread vaccination could be possible beginning in April, Fauci said.
U.S. Officials Say Covid-19 Vaccination Effort Has Lagged; “We know that it should be better, and we’re working hard to make it better,” said Moncef Slaoui, a leader of the federal effort to accelerate vaccine development and distribution.
Rebecca Robbins – NY Times
The distribution of vaccines in the United States has gotten off to a slower-than-expected start, federal health officials acknowledged in a news conference on Wednesday, though they also voiced confidence that the pace would accelerate in the coming weeks.
Column: The pandemic has been a national test. We flunked.
Steve Chapman – Chicago Tribune
Over the past century, there have been times when Americans showed they could unite to overcome formidable challenges: winning World War II, sending men to the moon, bringing down Soviet communism. The coronavirus pandemic will not be remembered as one of them.
Exchanges, OTC and Clearing
Cboe IBHY Futures Set Single-Day Volume and Notional Value Records
Cboe Global Markets, Inc., a market operator and global trading solutions provider, today announced that trading in Cboe iBoxx iShares$ High Yield Corporate Bond Index futures set a new daily volume record on Monday, December 28, with a reported 4,451 contracts traded, representing more than $648 million in notional value. This new record surpasses the previous high of 3,891 contracts traded on October 28, 2020. In addition, Cboe iBoxx iShares$ Investment Grade Corporate Bond Index futures reached their second highest daily volume of all-time on Monday, December 28 with a reported 610 contracts traded, representing more than $92 million in notional value. Both IBHY and IBIG futures are traded on Cboe Futures Exchange, LLC (CFE).
Nasdaq Advances Corporate Sustainability Leadership in 2020; Launched ‘Purpose Initiative’ to Champion Inclusive Growth and Prosperity; Published Inaugural Corporate Diversity Statistics1 in Annual Sustainability Report; Reduced Carbon Emissions to Zero for Second Consecutive Year
Nasdaq (Nasdaq: NDAQ) announced today the milestones achieved in 2020 to advance its environmental, social and governance (ESG) practices, as part of its company-wide commitment to sustainability. Nasdaq’s ESG efforts are successfully reflected both in its work with corporate clients, and within its own operations.
Performance Bond Requirements: Agriculture and Energy Margins – Effective January 04, 2021
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
Performance Bond Requirements: Agriculture and Energy Margins – Effective January 04, 2021
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
CME Globex Notices: December 28, 2020
Critical System Updates
New Resource for Critical Configuration Files
iLink 3 Configuration File Enhancement – January 10, 2021
iLink 2 on MSGW Decommission – February 26, 2021
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
iLink 3 SBE Schema Update – January 24, 2021
Phase 1 CME FX Link Enhancements – February 21, 2021
Phase 1 CME FX Link Enhancements: Drop Copy Impact – February 21, 2021
CME STP Notices: December 30, 2020
CME STP Support of BrokerTec Markets – January 18, 2021
New Aggressor Indicator Flag on CME STP – January 24, 2021
Enhancements for Exercise and Assignment Trades on CME STP – January 25, 2021
BrokerTec Stream on CME STP – February 1, 2021
CME STP FIXML API Connectivity Documentation
EBS Market Integration Notice
In Q4 2021, subject to applicable regulatory approvals, EBS Market’s Central Limit Order Book and eFix Matching Service will launch on CME Globex. You will receive subsequent notices with additional details and actions required to support the EBS Market integration onto CME Globex.
CME Reference Data API Version 2 Enhancement – Calendar Spread on Options
Effective Sunday, January 24, (trade date Monday, January 25) Reference Data API version 2 will support a new secondary underlying link at the instrument level for Calendar Spread on Options (CSO). This enhancement will provide clients with a simplified process to derive the tradable underlying outright futures legs of the CSO. Technical details can be found in the Client Impact Assessment.
CME Reference Data API Version 1 Decommission
Effective December 31, CME Reference Data API version 1 will be decommissioned. CME Group recommends customers should migrate to CME Reference Data API version 2 as soon as possible. CME Reference Data API version 2 will require customer authorization using a CME Group Login and a registered OAuth 2.0 API ID to access the service. Customers that require access to BrokerTec content must also complete API ID entitlement registration.
EEX: Consultation On The Italian Hydrogen Strategy
In response to the Italian Hydrogen Strategy, EEX welcomes very much that the Strategy is integrated into the broader European context. In its response, EEX elaborates on conditions for hydrogen markets to develop.
THE TECHNANCIAL COMPANY is pleased to announce that 2 significant deals were closed in the last weeks of 2020
THE TECHNANCIAL COMPANY
Tuesday, 29th December 2020: The Technancial Company (TTC) announced today that TTC has entered agreements to deliver Initial Margin calculation and Credit Risk controls on the Cloud (Public Cloud) to two significant Global Market participants.
TTC signed two clients, one a Global Tier 1 Bank, the other a well-established voice and electronic broking and information business, both headquartered in the UK.
How to Better Keep Track of Small Expenses and Fees in New Year; Neglecting day-to-day financial health is often why people struggle to achieve their savings goals—financial self-checkup can help
Amber Burton – WSJ
In making financial goals for the new year, the approach many people tend to take is to go big. In doing so, they might be missing the small picture. “These smaller goals become your true financial foundation, a solid base that is crucial for your financial success, especially when you start reaching and planning for the larger goals in life,” said Michaela McDonald, a financial-advice expert at Albert, a finance app.
2020 Asia Pacific Fintech Industry Recap
Zennon Kapron – Forbes
Despite the challenges that 2020 posed to countries, and individuals across Asia Pacific, the fintech industry was among the few bright spots. Across the region, billions of individuals and companies moved digital, a trend accelerated by the pandemic. Indeed, fintech is one of the few sectors of the economy which has grown.
EarlyBird’s new app lets families and friends ‘gift’ investments to children
Sarah Perez – TechCrunch
A new fintech startup called EarlyBird wants to help families invest in their children’s financial futures. Through the EarlyBird mobile app, parents in just a few minutes can create a custodial account, also known as a UGMA (Uniform Gifts to Minors Act) account. These accounts typically allow a parent, aka the “custodian,” to invest in stocks, bonds, mutual funds and other securities on behalf of the minor child. When the child comes of legal adult age, the investments become theirs. Through the app, parents can set up an account for their child, then invite other family members and close friends to contribute. The idea is not so different, in spirit at least, from something like HoneyFund, where newlyweds ask loved ones for cash donations instead of physical gifts.
Tech, cross-border activities set to drive Asia M&A next year
Kane Wu – Reuters
Coronavirus-spurred growth in the technology sector will help drive M&A activity in the Asia Pacific next year, bankers and lawyers predict, with the potential easing of Sino-U.S. tensions likely to revive Chinese outbound investment. Deals involving Asia Pacific firms totalled $1.2 trillion in 2020, up 12% from 2019. Seven of the year’s 10 largest transactions were announced in the third quarter, which in total accounted for 40% of the year’s deals by value. High technology and telecommunications companies surged to a 23% share of deal value, up from 14% last year, while retail and consumer products and services firms also reported growth.
China asks all internet platforms to investigate fintech operations
China’s banking and insurance regulator on Thursday said all internet platforms should investigate their fintech businesses to ensure they comply with regulatory requirements, and rectify any failings as soon as possible. China’s financial regulators have summoned Alibaba’s financial technology affiliate Ant Group for talks recently over outstanding problems. “(Ant’s) problems are not individual, but universal to some extent,” China’s Banking and Insurance Regulatory Commission (CBIRC) said in an online statement.
Coinbase Sued for Allowing the Sale of XRP
Colin Harper – Coindesk
In an interesting consequence of Ripple Labs’ battle with the U.S. Securities and Exchange Commission, a Missouri man claiming to be a Coinbase client is suing the crypto exchange for selling the XRP token. In a complaint filed in the Northern District Court of California, Thomas C. Sandoval, the St. Louis County-based plaintiff, alleges Coinbase knowingly sold XRP as an unregistered security and gained commission on these sales.
Coinbase Sued Over Crypto XRP Commissions After SEC Pursues Ripple
Joel Rosenblatt and Olga Kharif – Bloomberg
Lawsuit says exchange knew Ripple’s token was a security; Complaint comes after SEC asserted XRP requires registration
Coinbase Inc. knew cryptocurrency XRP was a security rather than a commodity and “illegally” sold Ripple Labs Inc.’s tokens anyway, a customer argues in a proposed class-action lawsuit over the commissions the crypto exchange collected.
Anthony Scaramucci’s Skybridge has invested $182 million into bitcoin, according to deck
Frank Chaparro – The Block
Anthony Scaramucci’s Skybridge appears to be making a big bet on bitcoin, according to an investor deck obtained by The Block. The firm has already invested as much as $182 million into bitcoin on behalf of its funds. The deck says the firm has invested more than $25 million for a new bitcoin investment fund that went live in December.
What Is Proof-of-Stake?
Alyssa Hertig – Coindesk
Proof-of-stake is a method of maintaining the integrity of a cryptocurrency, preventing users from printing extra coins they didn’t earn. While a different method, called proof-of-work, is currently used by Bitcoin and Ethereum – the two largest cryptocurrencies by market capitalization – Ethereum has plans to migrate to proof-of-stake to make the platform more scalable and reduce energy consumption of the network.
Associate Professor of Finance on Bitcoin rally: Blockchain technology is ‘real and effective’
Bitcoin is currently on its longest winning run since 2019. Bryan Routledge, Associate Professor of Finance at the Tepper School of Business, Carnegie Mellon University, joins Yahoo Finance Live to break down how Bitcoin rallied to record levels this year and the outlook for crypto in 2021.
Bitcoin Touches $29,000 for Another Record High in a Banner Year
Eric Lam – Bloomberg
Token has surged 50% in December, is up 300% in 2020; Wall Street showing greater interest in cryptocurrency
Bitcoin vaulted above $29,000 to reach yet another record level on the last day of 2020, in a fitting end to a groundbreaking year for the world’s largest digital currency.
Wall Street Revives Dream of Bitcoin ETF With New SEC Filing
Claire Ballentine and Vildana Hajric – Bloomberg
For years, regulators have quashed hopes of a Bitcoin exchange-traded fund, citing worries about everything from market volatility and industry manipulation to thin liquidity. Just like Bitcoin itself, issuers keep fighting back. VanEck Associates Corp. has started a new push to launch an ETF tracking the world’s largest digital currency, according to a filing Wednesday to the U.S. Securities and Exchange Commission. The VanEck Bitcoin Trust would reflect the performance of the MVIS CryptoCompare Bitcoin Benchmark Rate. It’s a bold move for the New York-based firm. There have been multiple applications for crypto-tracking ETFs over the years, and the SEC has denied them all.
Yearn.Finance founder Andre Cronje releases new DeFi protocol yCredit
Yogita Khatri – The Block
Yearn.Finance founder Andre Cronje has released a new decentralized finance (DeFi) protocol called yCredit. It allows users to deposit ERC-20 tokens and receive 99.5% worth of deposits as a credit line in the form of yCREDIT tokens. For instance, if a user deposits $100 worth of ETH, they will receive $99.5 worth of yCREDIT. If they burn $100 worth of yCREDIT, then they will receive their ETH back. Cronje said the protocol is still “experimental” and can be “economically exploited,” meaning users should use it at their own risk.
BitGo settles with US Treasury over sanctions violations
Yogita Khatri – The Block
Crypto firm BitGo has settled with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) for apparent violations of sanctions programs. According to OFAC, BitGo failed to prevent persons located in sanctioned jurisdictions, such as Crimea, Cuba, Iran, Sudan, and Syria, to open accounts and use its “hot wallet” services. The apparent violations occurred between 2015 and 2019, where BitGo processed 183 digital currency transactions, totaling nearly $9,130. OFAC said BitGo had reason to know that some of its users were located in sanctioned countries based on those users’ IP addresses, but failed to implement controls at the time of the transactions. As BitGo did not voluntarily self-disclose the apparent violations, it will pay a fine.
Proposed FinCen Rule on Crypto Wallets Would Likely Be Ineffective, Elliptic Says
Jaspreet Kalra – Coindesk
The U.S. Treasury Department’s proposed rules which would require users to comply with KYC requirements if they seek to send their crypto to a private wallet could end up being ineffective, according to blockchain analytics firm Elliptic. In its published response to the rule, Elliptic said that the rules could “adversely impact” the effectiveness of existing Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regulations. Earlier this month, the Treasury Department released an advanced notice of proposed rulemaking which laid out that users of centralized cryptocurrency exchanges who wish to move their holdings onto their own private wallet, or to someone else’s, would have to provide detailed personal information for transactions greater than $3,000. The exchanges would be required to report either individual or groups of transactions that add up to more than $10,000 as well.
Ebang International Holdings Inc. to Launch Cryptocurrency Exchange in the First Quarter of 2021
Ebang International Holdings Inc.
Ebang International Holdings Inc. (Nasdaq: EBON, the “Company,” “we” or “our”), a blockchain technology company in the global market, today announced that the Company expects to commence public testing of its cryptocurrency exchange and officially launch the exchange in the first quarter of 2021. Currently, the Company has completed the internal testing of its cryptocurrency exchange.
‘Crooks’ Versus ‘Socialists’: Ads Frame Georgia’s Bitter Runoffs
Gregory Korte – Bloomberg
Small-dollar donors fuel TV ads in war for control of Senate; Some Georgia stations air five hours of political ads a day
Republicans and Democrats are inundating Georgia with an inescapable flood of advertising before next week’s high-stakes Senate runoff elections, with the typical state resident being exposed to some 500 ads in the past two months. And a solid majority of the ads — about 70% — are partly or entirely negative. Republican spots portray Democrats Jon Ossoff and Raphael Warnock as “dangerously radical” and warn they’ll will hand over power to socialists like Bernie Sanders and Alexandria Ocasio-Cortez.
A better form of capitalism is possible; Everyone loses from the growth of a precariat in rich economies
The editorial board – FT
The quiet of the Christmas holiday period is a moment to remember how the Nativity story describes the family of Jesus: sent on the road by absurd administrative rules, left without accommodation, and going into labour in undignified conditions. We might note how well their precariousness could also describe an underclass in the wealthiest societies humanity has ever known.
Early Voting Numbers in Georgia Senate Races Put G.O.P. on Edge; While polls suggest that the state’s crucial runoff elections are up for grabs, Republicans have grown worried about strong turnout in Democratic areas and mixed messages from President Trump.
Astead W. Herndon and Richard Fausset – NY Times
Senator Kelly Loeffler issued a now-familiar warning during a campaign event on Wednesday in Bibb County: If Democrats win the Georgia Senate runoff elections, there will be little left to stem a rising tide of extremist socialism in America.
Newly released Georgia Senate runoff poll finds Democratic candidates with widening leads
Madison Hall and John L. Dorman – Business Insider
Jon Ossoff and the Rev. Raphael Warnock, the two Democratic US Senate candidates in Georgia, widened their leads against Republican Sens. David Perdue and Kelly Loeffler in a new poll from JMC Analytics and Polling.
Statement on use of the Temporary Transitional Power to modify the UK’s derivatives trading obligation
The UK has implemented the G20 commitment to improve over-the-counter derivatives markets by onshoring the Markets in Financial Instruments Regulation (MiFIR) derivatives trading obligation (DTO) under the EU Withdrawal Act. The UK DTO applies to the same classes of derivatives as the EU DTO.
FINRA Announces Interim Progress of Voluntary 529 Plan Share Class Initiative; $2.7 Million in Restitution to Customers; Two Matters Resolved Through Settlements and 17 Matters Resolved Through Cautionary Actions, Resulting in Remediation to Customers and Correction of Supervisory Deficiencies
FINRA today announced initial results of its voluntary self-reporting 529 Plan Share Class Initiative (529 initiative), which include more than $2.7 million in restitution and interest to customers owning approximately 3,900 accounts, arising from settlements with two firms and 17 matters resolved through cautionary action letters. All 19 firms in this initial group agreed to remediate harmed customers and to enhance their supervisory systems and procedures, where appropriate. In January 2019, FINRA launched the initiative through Regulatory Notice 19-04 to promote member firms’ compliance with the rules governing share-class recommendations of 529 savings plans and promptly compensate harmed customers.
SEC Charges Jewelry Wholesaler with Fraudulent Securities Offering Targeting Current and Retired Police Officers and Firefighters
The Securities and Exchange Commission today charged Gregory Altieri, of Melville, New York, for operating a fraudulent Ponzi-like scheme that defrauded current and retired police officers and firefighters, among others, and misappropriating investor funds.
Investing and Trading
Bond-Guzzling ECB Will Shield the Market From Next Debt Tsunami
James Hirai – Bloomberg
ECB buying will exceed sales by 240 billion euros, ING says; January set to be busiest month for issuance, SocGen says
European bond investors are looking to the region’s central bank to absorb a glut of sovereign debt heading to the markets in 2021. Bond issuance by euro-area nations may total 1.25 trillion euros ($1.5 trillion) next year as they fight the fallout from the pandemic, on par with the record levels reached in 2020, according to ING Groep NV. In addition, the European Union itself is set to be a leading issuer, with a landmark stimulus plan that will be financed by jointly-issued debt.
Trafigura takes stake in Rosneft’s vast Arctic oil project; Commodity trader strengthens ties with Russian state-backed group by investing in Vostok Oil
Neil Hume and David Sheppard – FT
Commodity trader Trafigura has acquired 10 per cent of Rosneft’s giant Arctic oil project, further strengthening the ties between the trading house and Russia’s state-backed oil company.
Environmental, Social and Corporate Governance
Climate efforts have entered a tricky new phase; Governments need to turn emission reduction pledges into action
The editorial board – FT
Never has so much been promised by so many governments, businesses and financial institutions. China says it will cut its carbon emissions to virtually zero by 2060. BP is aiming for net zero emissions by 2050, as is HSBC, the EU, US president-elect Joe Biden and investors managing assets worth $9tn. This splurge of commitments to tackle climate change is welcome, but it risks being confused with something it is not: action to cut emissions at the scale and pace needed to meet the goals of the 2015 Paris climate accord.
ESG Disclosures: Guiding Principles and Best Practices for Investment Managers
Akin Gump Strauss Hauer & Feld LLP – JDSupra
Whether preparing or reviewing Environmental, Social, and Governance (ESG) disclosures for compliance with regulatory requirements in the EU, the United Kingdom (UK) or the United States (US), or for alignment with ESG best practices more broadly in response to investor demand, investment managers and their funds should consider certain guiding principles and best practices.
Active, ESG, and Thematic ETFs Were 2020’s Big Winners. Expect More.
Evie Liu – Barron’s
Amid everything else, a new market cliché emerged in 2020: That the pandemic accelerated trends—such as telehealth, remote working, and online shopping—that were already in motion. Not surprisingly, exchange-traded fund companies, and investors, have been quick to hop on the trends driven by the pandemic, regulatory changes, and social movements.
Here’s why global funds are backing ESG
Sonal Bhutra – CNBCTV
The year 2020 witnessed Environmental, Social and Governance (ESG) investing gaining a lot of traction with companies and asset management funds focusing on the parameters set under it. In fact, at present around 4 percent of the global assets under management (AUM) is now ESG focused which compares with 0.3 percent in 2010 and if we look at the total number of funds, ESG funds now contribute 8.5 percent versus 2 percent 10 years back.
As Europe Lowers ESG Fees, Pick Up the Low Cost EFIV ETF
Ben Hernandez – ETF Trends
As environmental, social, and governance (ESG) investing continues to gain steam in the capital markets, market participants offering ESG products will have to differentiate themselves from the masses. One way is via lower fees, which is already happening in Europe, while in the United States, ETF investors can opt for low-cost funds like the SPDR S&P 500 ESG ETF (EFIV). Per a recent Pensions & Investments article, “money managers racing to gather environmental, social and governance assets as European asset owners shift to all-ESG portfolios will have to absorb the cost of integrating specialist data if they want to remain competitive on fees, which in Europe are already lower than for non-ESG investments.”
Investment Bank Perella Weinberg going public via SPAC
Thornton McEnery – NY Post
The investment bank behind AT&T’s $109 billion acquisition of Time Warner is going public in a merger that puts an exclamation point on an already frenzied year for so-called blank-check companies. Perella Weinberg on Wednesday said it’s agreed to merge with publicly traded blank-check company FinTech Acquisition Corp. IV in a $975 million deal that’s expected to close in the first half of 2021. The combined entity will trade on the Nasdaq.
Wealthfront’s unlikely tapping of Sheila Bair and Tom Curry signals likely push to gain a bank charter, analysts say
Oisin Breen – RIAbiz.com
The Redwood City robo-advisor additions of the two renowned former chief banking regulators brings legitimacy and guidance for seeking a margin-fattening charter that could also help solve the robo-advisor’s problem of high client acquisition costs.
Russian Gas Gets New Rival in Europe as Caspian Field Starts
Zulfugar Agayev – Bloomberg
Azeri deliveries to Italy, Greece, Bulgaria began Thursday; The shipments will help EU diversify supplies away from Russia
Azerbaijan started commercial natural gas exports to Europe via the U.S.-backed Southern Gas Corridor, helping the region to diversify supplies away from Russia. Gas pumped from the BP Plc-led Shah Deniz deposit in the Caspian Sea began flowing into Italy, Greece and Bulgaria on Thursday, BP and Azerbaijan’s state energy company Socar said in a joint statement. The European Union has worked for years to ease its dependence on Russia, which accounts for about a third of the region’s gas supplies.
Chinese Markets Shined This Year, Signal a Repeat in 2021; Nation to benefit from post-pandemic rebound as well as from funds sloshing around the world’s financial system and low interest rates
Joanne Chiu – WSJ
China’s stock market ended 2020 on a high note, with a key benchmark up 27% and at a multiyear high, reflecting the country’s economic revival during the coronavirus pandemic. The move capped a year that broke records for stock issuance and brought a big run-up in share prices which together helped boost the value of Chinese stocks globally by about $5 trillion.
Johnson’s Brexit Deal Clears Parliament With Just Hours to Spare
Joe Mayes and Tim Ross – Bloomberg
Members of Parliament pass trade accord to avoid EU tariffs; Britain will leave the EU’s single market on Dec. 31
Prime Minister Boris Johnson’s post-Brexit trade deal was approved by the U.K. Parliament less than 24 hours before the country’s final split from the European Union. The House of Lords gave the green light to the agreement late Wednesday, just a day before the U.K. leaves the EU single market when the transition period expires at 11 p.m. Thursday.
EU to Curb U.K. Travelers on Covid at End of Brexit Transition
Jonathan Stearns – Bloomberg
Britain to join most countries excluded from EU ‘white list’; Virus surge leads to recommended curb on entries from U.K.
The U.K. is set to join the U.S., Canada and most other countries whose residents are unwelcome visitors to the European Union because they haven’t sufficiently contained the coronavirus outbreak.
Boris Johnson says ‘our destiny in our hands’ as Brexit transition ends; Businesses trading with EU warned to be ready for more red tape and disruption from January 1
George Parker – FT
UK prime minister Boris Johnson on Thursday morning celebrated the passage of the Brexit trade deal bill through parliament, claiming: “The destiny of this great country now lies firmly in our hands.”
Brexit’s second act may break the UK union; Scottish independence is not inevitable, but the only alternative is a new, federal settlement
Philip Stephens – FT
And now for the second act. The first has seen the curtain come down on a deal to shape the UK’s relationship with Europe. Another union — that between the nations of England, Scotland and Wales and the province of Northern Ireland, will take centre stage in Brexit’s next act. Forget the guff about embarking on a new Elizabethan age. “Global Britain” is at present heading towards the rocks of constitutional break-up.
Brexit red tape could yet tie up your investments; Is there too much optimism around the stock market?
Stefan Wagstyl – FT
Michael Gove this week advanced one of the stranger arguments for Brexit: he said that the extra bureaucracy now involved in dealing with the EU would help make UK companies “match fit” to trade with the rest of the world.
US investment firm ALK Capital buys Premier League team Burnley; Deal is latest in a series of American acquisitions in English football
Samuel Agini – FT
An American investment group has agreed to take control of Burnley football club, the latest English Premier League side to attract US owners.
Pandemic threatens lucrative US college football tradition; Universities struggle to field teams for televised holiday season ‘bowl’ games
Sara Germano – FT
US universities are struggling to field teams for lucrative end-of-season American football matches as Covid-19 spreads across the country, putting at risk hundreds of millions of dollars of revenue for the schools that play in the holiday “bowl” games and the cities that host them.