Hits & Takes
By JLN Staff
From the NFA: In late November, NFA will be updating the Firm Application/Annual Registration Update, Individual Application and firm and individual change process in its Online Registration System (ORS). NFA encourages your firm to complete any incomplete Firm or Individual Applications, Annual Registration Updates or change processes no later than 5:00 p.m. CT on Friday, November 22, 2019. After that time, any applicable incomplete processes will be deleted. This system update will not affect any completed applications or changes.~JJL
The European Energy Exchange announced the acquisition of the Nasdaq Futures Exchange yesterday. NFX, launched in July 2015, had volumes totaling 22 million contracts in 2018, down 55% from the previous year’s volume of 49.1 million contracts, according to the FIA Annual Volume Survey. Through the first half of 2019, volumes totaled 4.5 million contracts, down 65% from 13.1 million contracts in the first half of 2018.~JK
The ISDA Interest Rate Benchmarks Review for Q3 2019 and year-to-September 30, 2019 is out. It analyzes trading volumes of interest rate derivatives transactions in the US referencing the Secured Overnight Financing Rate and other selected alternative risk-free rates, as well as analyzing IRD traded notional referencing LIBOR denominated in US dollars, sterling, Swiss franc, yen, euro, as well as EURIBOR and TIBOR.
Billion-Dollar-a-Day Crypto Trader Finds Accolades Are Better Than Anonymity
Olga Kharif – Bloomberg
Alameda Research ranked as one of the most successful traders; Startup says it handles about about 5% of volume worldwide
In the murky world of cryptocurrencies, most traders stay under the radar, betting that anonymity provides some protection against getting hacked, exposing strategies or worse.
***** Hubris is an amazing drug.~JJL
NFA announces nominations made by the 2019 Nominating Committee
In accordance with NFA Bylaw 406, the Office of the Secretary has received from the 2019 Nominating Committee a list of its nominees for positions on NFA’s Board of Directors and 2020 Nominating Committee. The list of nominees included with this notice shall serve as notification to NFA Members of the candidates proposed by the 2019 Nominating Committee.
*****Do you want to be a petition candidate? Now is your time.~JJL
Deutsche Börse Photography Foundation shows “New Works. 20 Years of Art Collection Deutsche Börse “in The Cube, Eschborn / Frankfurt; Exhibition presents new acquisitions of the Art Collection Deutsche Börse / Two open Saturdays allow exhibition visit on November 30, 2019 and January 18, 2020 without registration / press tour on November 21, 2019 at 11 o’clock
The Deutsche Börse Photography Foundation opens the exhibition “New Works. 20 Years of Art Collection Deutsche Börse ” at The Cube, Eschborn / Frankfurt. On display are new acquisitions for the Art Collection Deutsche Börse from the years 2018 and 2019. The works of the 14 exhibited artists provide a comprehensive insight into the further development of the collection for contemporary photography. “New Works” is the culmination of an extensive program to mark the 20th anniversary of the Art Collection. The exhibition will be on view from November 22nd to February 22nd and can be visited for the first time on two open Saturdays without prior registration.
Tuesday’s Top Three
Our top read story of the day on Tuesday was the European Energy Exchange AG‘s announcement, EEX Group Acquires Commodities Business of Nasdaq Futures, Inc. (NFX). Second was Bloomberg’s The Unsolved Mystery of the Medallion Fund’s Success. It is still unsolved. Third was WatersTechnology’s Support Swells for Developer in Spoofing Software Case about John Lothian’s campaign for Jitesh Thakkar
Trading Futures in a Retirement Account
As of mid-2017, 35% of US households owned IRAs with a mean asset value of more than $88,000 according to an Investment Company Institute study. IRA owners are looking to preserve their assets and improve their diversification in an unstable – and sometimes volatile – market.
Preserving assets over the long haul becomes easier when investors pursue options they know and understand. For many, those options lie outside the traditional stock and bond markets and fall into the category of alternatives – including futures trading.
Futures trading has been allowed in IRAs since they were established in 1974 and there are real benefits to the investor and futures professionals. We’ll look at the benefits for both groups.
On the investor side, adding futures trading to a retirement plan can mean investing in something they have worked with for decades – allowing them to use their in-depth knowledge to benefit their retirement. Futures also adds a dimension of diversification and can help hedge against losses in other markets.
Traditional, Roth, SEP, SIMPLE and Solo 401(k) plans also allow individuals to save for retirement tax-free or tax deferred. Depending on eligibility and the type of IRA, the IRA owner may also receive a tax deduction for IRA contributions.
On the professional side, offering the IRA option to your clients can help you serve your clients because most investors don’t realize they can use IRAs to trade futures. Offering IRAs can also grow your business by doubling the number of accounts you establish per customer.
Futures trading accounts can be held in any type of IRA as long as it is self-directed and clients can choose to use managed futures, a self-directed futures account or systems trading.
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Hong Kong Exchange Drops on Worry Protests Will Hurt Trading
Jeanny Yu – Bloomberg
Hong Kong Exchanges & Clearing Ltd.’s shares slipped on concern that continuing unrest in the city will cripple trading volume. The exchange operator fell 2.1% on Wednesday, taking its retreat for the week to 4.7%. Speculation also circulated around trading floors that Alibaba Group Holding Ltd. may not be able to complete its share sale in the city, even as it was said to win approval to proceed with the listing.
Homespun Firms Challenge Wall Street’s Muni-Bond Supremacy; The SEC is considering allowing advisers to arrange sales to skilled investors without the involvement of large banks and midsize brokers
Heather Gillers – WSJ
Wall Street’s longstanding hold on the $4 trillion municipal-bond market faces a challenge from an onslaught of small, independent firms known as municipal advisers.
Bakkt now plans to offer cash-settled bitcoin futures; looking to beat rival CME Group
Yogita Khatri – The Block
Bakkt, a provider of physically-settled bitcoin futures contracts, is now planning to offer a cash-settled version of the product due to customer demand. “We have the intention of offering a cash-settled contract as well,” Bakkt chief operating officer Adam White told at the Invest: NYC conference on Tuesday.
Brexit’s $78 Trillion Derivatives Spat Needs Fix Now, Banks Say
Silla Brush – Bloomberg
Lobbying groups want continued access to London clearing; Industry is pressing for solution well ahead of year-end
The world’s biggest banks pressed policy makers to pass an urgent Brexit fix to ensure European traders’ access to London derivatives clearinghouses and avoid rupturing 61 trillion pounds ($78 trillion) in contracts.
Former Man Group president Jonathan Sorrell to join Capstone; Ex-CFO of world’s largest listed hedge fund group will make switch in January
Robin Wigglesworth and Jennifer Thompson – FT
Former Man Group president Jonathan Sorrell is joining Capstone, a $6bn-in-assets hedge fund that specialises in trading swings in volatility, to lead initiatives such as a possible expansion into China.
CME Group Announces Resignation of Alex J. Pollock from Its Board of Directors to Accept Senior Position with the U.S. Treasury
CME Group today announced that Alex J. Pollock will step down from the company’s Board of Directors effective November 15 as he accepts a new role within the U.S. Treasury Department as Principal Deputy Director of the Office of Financial Research. Pollock has served as a CME Group director since 2004.
Anonymous shell companies are a menace to the financial system; Authorities need to crack down on drug dealers, arms traffickers and corrupt politicians
Xiangmin Liu – FT
Every year hundreds of billions of dollars are being laundered through fake companies and the money used to facilitate crime. It needs to stop.
SEC Wins Jury Trial in Layering, Manipulative Trading Case
Today, jurors in New York federal court returned a verdict in the Securities and Exchange Commission’s favor against a trading firm headquartered in Kiev, Ukraine, and two individuals for their roles in an unlawful trading scheme that generated more than $25 million in illicit profit.
INTL FCStone Financial Launches New Canadian Equity Trading Platform
INTL FCStone Inc. (NASDAQ: INTL) (the “Company”) today announced that the Broker-Dealer Division of its wholly owned subsidiary, INTL FCStone Financial Inc. (“INTL”), launched a new interactive Canadian equity trading platform, Maple Live. This news follows on the announcement that the company’s Canadian subsidiary, INTL FCStone Financial (Canada) Inc. has become a member in the category of futures commission merchant of the Investment Regulatory Organization of Canada (IIROC).
Nasdaq to sell commodities futures business to German exchange; US group fails to break duopoly in energy markets
Philip Stafford – FT
Nasdaq is to sell its commodities futures business to an exchange owned by Deutsche Börse, ending a four-year effort to break into energy markets dominated by US rivals CME Group and Intercontinental Exchange.
Nasdaq to Exit Energy Futures; Deutsche Börse’s energy arm to buy NFX’s core assets, as Nasdaq gives up on its effort to break into commodities
Alexander Osipovich – WSJ
Nasdaq Inc. said it has agreed to sell its struggling energy-futures business, NFX, to a unit of German exchange group Deutsche Börse, giving up on its four-year effort to break into commodities.
Hong Kong stocks hit as protest violence deepens; Hang Seng down nearly 4% this week as clashes spill into financial district for a third day
Hudson Lockett – FT
Hong Kong stocks extended their decline for the week to almost 4 per cent on Wednesday as violent clashes between protesters and police previously limited to weekends spilled onto the streets of the city’s central financial district, darkening investor sentiment.
Hong Kong Banks Tell Staff: Cancel Meetings, Watch Family, Be Safe
Lulu Yilun Chen, Alfred Liu, and Manuel Baigorri – Bloomberg
Banks urge employees to take precautions as violence escalates;’ ‘Managers should not hesitate to cancel’ meetings, BNP says
Citigroup Inc. warned Hong Kong staff to avoid illegal gatherings after police grabbed one of its investment bankers off a sidewalk. As protests raged, firms across the city urged workers to consider staying home to ensure their families’ safety.
UBS boss Ermotti says too-small European banks must consolidate
UBS Group (UBSG.S) Chief Executive Sergio Ermotti on Wednesday said banking consolidation, especially in Europe, is unavoidable in coming years as institutions must achieve critical mass to remain competitive.
Sweden to Abandon Negative Rates But Currency Can’t Catch a Break; The Swedish krona is the worst performer among major nations’ currencies since 2018, and remains susceptible to global trade tensions
Caitlin Ostroff – WSJ
Sweden, unlike most of the rest of the slow-growth world, has had enough of negative interest rates. Next month, its central bank is expected to unwind them—among the first of those that dabbled in the unorthodox stimulus measure in recent years to do so. But investors see other factors that will keep the country’s downtrodden currency, the krona, one of the worst performing in the world, from staging a comeback.
ADM says to focus on organic growth after acquisitions
Grain trader Archer Daniels Midland Co ADM does not expect to continue its aggressive strategy of acquisitions in the next few years and will instead focus on organic growth, a senior official said on Wednesday.
Hedge-Fund Style Fees for Mutual Funds Face Crackdown in Europe
Lucca De Paoli and Silla Brush – Bloomberg
Managers running about $1.4 trillion use performance charges; ESMA has been consulting industry on standardization of fees
As the war over fees rages in the asset management industry, European mutual funds have managed to retain a lucrative perk with their ability to mimic hedge funds’ fees. Now, regulators are clamping down.
How Libor’s Demise Affects a Hugely Popular Derivatives Contract
CME proposes plan for converting eurodollars to SOFR products; Libor could go away in 2021, and the ramifications are huge. CME Group Inc. shed light on what could happen to the exchange giant’s most-traded contracts — eurodollars, which permit bets on interest rates — if the scandal-plagued Libor benchmark they’re tied to goes away in two years.
Citi accused of trumpeting forex trader dismissal amid probe; Ramchandani alleges bank fired him without due process to curry favour with watchdogs
Caroline Binham – FT
One of Citigroup’s former top currency traders, acquitted of US foreign exchange-rigging charges, will allege that the bank trumpeted his dismissal to journalists and prosecutors amid a transatlantic investigation.
Exchanges, OTC and Clearing
CME Group Announces Jan. 13, 2020 Launch for Bitcoin Options
CME Group, the world’s leading and most diverse derivatives marketplace, today announced options on its Bitcoin futures contracts will be available for trading starting Jan. 13, 2020, pending regulatory review.
Joseph Nehorai, Goldman Sachs: Accessing dividends in new markets
Based on three new MSCI Dividend Point Indexes – the MSCI EM Dividend Point Index, the MSCI EAFE Dividend Point Index and the MSCI World Dividend Point Index – , Eurex has launched derivatives futures that enable market participants to hedge their dividend exposure around the globe. Joseph Nehorai, Managing Director and Global Head of Futures Execution at Goldman Sachs, gave us his points of view on the new products.
HSBC partners with SGX and Temasek on DLT for fixed income; The partnership between HSBC, SGX and sovereign wealth fund Temasek marks the first end-to-end digitisation effort focusing on the Asian bond markets.
Joe Parsons – The Trade
HSBC has begun a trial with Singapore Exchange (SGX) and sovereign wealth fund, Temasek, to explore the use of distributed ledger technology (DLT) for the issuance and servicing of fixed income securities.
Dubai Mercantile Exchange Registers 21% Increase In Exchange Trading Volume And 172% In Forward Curve Trading
Dubai Mercantile Exchange (DME), the premier international energy futures exchange in the Middle East, today announced a 21% increase year-on-year in exchange trading activities, along with 172% increase in forward curve trading, following Saudi Aramco’s adoption of DME Oman in its official selling price in October 2018.
Trade Organizations Call For Extension Of Temporary Equivalence And Recognition Of UK CCPs
ISDA and 13 other financial services trade associations have today written to European Commission Vice President Valdis Dombrovskis to highlight the need for an urgent extension to the temporary equivalence determination for UK central counterparties (CCPs). Without such an extension, EU clearing members would not be able to continue as direct members of UK CCPs in the event of a no-deal Brexit, and EU counterparties would not be able to clear derivatives subject to the clearing obligation on those CCPs. The current temporary equivalence expires on March 30, 2020.
HKEX outage zapped key hedge; now banks push for rule change; Dealers seek shutdown of CBBC market if futures go dark
Chris Davis – Risk.net
It took markets by complete surprise. Not long into the trading day on September 5 what appeared to be a small glitch in the futures trading platform of the Hong Kong Exchange turned out to be a lot more serious, making it tough for issuers to price listed products fairly.
CEO of a hopeful exchange backed by Wall Street’s biggest players told us how it can compete in a space dominated by NYSE and Nasdaq
Dan DeFrancesco – Business Insider
The CEO of an upstart stock exchange vying for regulatory approval believes the low costs offered by the venue will help to break the tight grip of big players on the market — and he wants the firm to be an advocate for its members and their investors in Washington.
GMEX Group launches Regulated Digital Investment Fund; Providing access to tokenised Digital FinTech and Digital Green Finance opportunities
GMEX Group (GMEX), a leader in digital business technology solutions for capital markets, in collaboration with Digital Partners Network (DPN), a group of professional services firms meeting the demands for digital business enablement, is pleased to announce the launch of the Digital Investment Fund PCC (DIF).
Canadian Securities Exchange Announces Partnership with Jamaica Stock Exchange
? Signed MOU to foster co-operation between exchanges ?
The Canadian Securities Exchange (“CSE” or “the Exchange”) today announced that it has signed a Memorandum of Understanding (“MOU”) with the Jamaica Stock Exchange (“JSE”). The MOU facilitates co-operation and sharing of information between the two exchanges in order to enhance the respective markets for the benefit of all participants.
Citi invests in credit trading platform Trumid; Trumid has won investment from Citi via its Spread Products Investment Technologies (SPRINT) program.
Hayley McDowell – The Trade
Electronic credit trading platform Trumid has received investment from Citigroup, as the US investment bank seeks to leverage the growth of algorithmic and portfolio trading in the credit space.
Next in Google’s Quest for Consumer Dominance—Banking; Search giant plans to partner with banks to offer checking accounts
Peter Rudegeair and Liz Hoffman – WSJ
Google will soon offer checking accounts to consumers, becoming the latest Silicon Valley heavyweight to push into finance.
Open Source Code Will Survive the Apocalypse in an Arctic Cave; GitHub is preparing for a different kind of the end of the world.
Ashlee Vance – Bloomberg
The last stop for civilization before the North Pole is Svalbard, an archipelago north of mainland Norway along the 80th parallel. Most of Svalbard’s old Norwegian and Russian coal mines have shut down, so locals have rebranded their vast acres of permafrost as an attraction to scientists, doomsday preppers, and scientist doomsday preppers. Around Svalbard, things can be hidden from the stresses of the outside world. There’s a treaty in place to keep it neutral in times of war. In other words, it’s an ideal spot for a big global reset button or two.
Blockchain is Dead? Crypto Geeks Debate Merits of Once Dear Tech
Vildana Hajric – Bloomberg
For a technology that was supposed to transform and solve seemingly every problem in the world, the enthusiasm is fading pretty quickly. Blockchain, the underlying technology that powers cryptocurrencies including Bitcoin, is getting its last rites read at the Consensus Invest conference in New York, where hundreds of crypto true-believers have gathered Tuesday to discuss the latest trends in the still-nascent digital assets market.
Facebook integrates payments over its three networks; Move expands ecommerce options and shows progress of ‘Whatsabook’ integration
Hannah Murphy – FT
Facebook has unveiled a new payments system that will eventually allow users to send money across its trio of networks, as the social media group presses ahead with integrating WhatsApp and Instagram more closely with its core platform.
Deltix and Hehmeyer Announce Successful First Month Crypto Trading of Bakkt Bitcoin Futures Using Deltix Technology
Deltix, Inc. announced with Hehmeyer Trading + Investments that Hehmeyer’s Crypto division has completed its first month trading the Bakkt Bitcoin Futures on ICE Future U.S.
With Code of Conduct, Trade Group ADAM Seeks Legitimacy for Crypto
Marc Hochstein – Coindesk
One year after its formation, the Association of Digital Asset Markets (ADAM) has drafted a code of conduct for the cryptocurrency market.
The trade group has also recruited five more companies, bringing its total membership to 15. The new members are: custodians BitGo and Anchorage, trading firm and VC investor CMT Digital, lender BlockFi, and prime brokerage Tagomi.
CME Group Announces Launch Date of Options on Bitcoin Futures Product
Ana Alexandre – Cointelegraph
The Chicago Mercantile Exchange (CME) Group has announced the date it expects to launch options on Bitcoin (BTC) futures in a statement on Nov. 12. “In response to growing interest in cryptocurrencies and customer demand for tools to manage bitcoin exposure, CME Group will launch options on Bitcoin futures (BTC) on January 13, 2020,” the company revealed in the announcement. The CME Group said that the upcoming product is still pending regulatory approval.
Bakkt Set to Smash Bitcoin Trading Volume Record in November
Marie Huillet – Cointelegraph
Bitcoin (BTC) futures trading on the Intercontinental Exchange Bakkt platform is seeing a considerable rise in average daily volume so far this month compared to September and most of October.
Binance plans to support all 180 currencies for its direct fiat-to-crypto trading facility
Yogita Khatri – The Block
Cryptocurrency exchange Binance has plans to support all 180 fiat currencies of the world for its direct fiat-to-crypto trading facility.
China’s central bank says it is still researching and testing digital currency; launch reports are ‘fraudulent’
Yogita Khatri – The Block
The People’s Bank of China (PBoC), the country’s central bank, has officially said that it is “still in the process of research and testing” its digital yuan.
Bitfinex to launch options and gold-backed stablecoin
Aislinn Keely – The Block
Bitfinex has plans to offer options as soon as Q1 2020, according to Paolo Ardoino, CTO of Bitfinex and Tether. Ardoino told The Scoop that compliant perpetual swaps and basket futures are on the way.
Chainalysis Launches Kryptos to Help Financial Institutions Uncover Cryptocurrency Opportunities and Risks
Yahoo Finance (press release)
Chainalysis, the blockchain analysis company, today announced the launch of Chainalysis Kryptos, new software designed to help financial institutions better understand the risks associated with existing cryptocurrency activity and opportunities for investment. Built on the reference data standard already trusted by government agencies across the world and more than 115 leading cryptocurrency businesses, Kryptos enables financial professionals to connect the dots between traditional financial transactions and cryptocurrency markets.
ASX-Listed DigitalX Seeds New Fund With Half Its Bitcoin Holdings
Daniel Palmer – Coindesk via Nasdaq
The first ever cryptocurrency firm to be listed on a major stock exchange has launched a new bitcoin fund. DigitalX, which debuted on the Australian Securities Exchange (ASX) under its previous name DigitalBTC as far back as 2015, announced the new fund on Wednesday. The firm said it’s offering qualifying wholesale and professional investors such as family offices and high-net-worth individuals exposure to the cryptocurrency via a “standard unlisted fund structure” without the effort and risk of holding it directly.
New Product Specialist Joins Fidelity to Focus on Crypto Strategy
Joeri Cant – Cointelegraph
Fidelity Investments has hired Michael Zinaman as its product specialist to further develop a range of products in the company. On Nov. 12, the Block reported that Michael Zinaman had joined financial services company Fidelity Investments. Zinaman will reportedly oversee the company’s strategy on cryptocurrencies, custody and execution services. Zinaman started his new position as product specialist at Fidelity just over a month ago, where he was hired to focus on the company’s cryptocurrency strategy, according to a source with knowledge of the matter.
Crypto Tax Software Sees Surge in Demand Amid IRS Crackdown
Lydia O’Neal – Bloomberg Tax
Startups providing cryptocurrency tax software have proliferated in recent years, and the tools will become even more popular going into the 2020 filing season, industry professionals said. Demand for the software, which calculates cryptocurrency traders’ taxable gains, grew in the wake of the assets’ exponential increases in value in 2017 and, more recently, spiked after the IRS signaled in July it would crack down on tax-evading traders.
PBOC Wants ‘Controllable Anonymity’ in China’s Digital Currency
Joanna Ossinger – Bloomberg
China wants to balance functionality with concerns about anonymity as it works toward launching a digital version of the yuan, according to an official from the People’s Bank of China.
Trump Warns Wall Street His Defeat Would Endanger Market Gains
Justin Sink – Bloomberg
President delivers stump speech to Economic Club of New York; He characterizes Democratic challengers as radical socialists
President Donald Trump delivered a stump speech aimed at Wall Street, touting his economic record to an audience of executives and economists while warning that a Democratic victory in 2020 would endanger stock market gains.
Trump Campaign Official Heard of WikiLeaks Emails Earlier Than Known; Rick Gates testifies that campaign viewed hacking of Democratic emails as ‘a gift’
Byron Tau and Shelby Holliday – WSJ
A top official on President Trump’s 2016 campaign testified that longtime Trump adviser Roger Stone told him as early as spring 2016 that WikiLeaks would release materials that could damage rival Hillary Clinton —and that the campaign viewed the materials as “a gift.”
Charles Schwab Joins Chorus of Billionaires Opposing Wealth Tax
Josh Friedman – Bloomberg
The idea is ‘sort of wrong-directed in many ways,’ he says; Wealth levy is key campaign tenet of Elizabeth Warren
Charles Schwab, founder of the giant discount brokerage firm, is joining other finance billionaires in opposing the wealth tax backed by presidential candidate Elizabeth Warren.
Judge Limits Phone Searches at U.S. Borders; Federal agents must have reasonable suspicion of a crime before examining electronic devices at airports, other crossings
Jacob Gershman – WSJ
A federal judge ruled Tuesday that border agents can’t search international travelers’ electronic devices without suspecting them of a crime, potentially putting a limit on a growing practice in U.S. ports of entry.
Bloomberg Is Biden’s Best Friend; Mayor Mike won’t be president, and neither will he do any favors for Trump or Warren.
Holman W. Jenkins, Jr. – WSJ
Michael Bloomberg is not going to be president, but he is a sane liberal with an interesting election strategy—albeit also a strategy likely to turn the White House into ashes in his mouth in the unlikely event he were to win (not that many ambitious people don’t prefer the taste of White House ashes to almost any other favor).
New poll shows Buttigieg in the lead in Iowa. Can he win it all?
Andrew Romano – Yahoo News
When Pete Buttigieg, the 37-year-old openly gay mayor of the fourth-largest city in Indiana, announced his presidential campaign in April, he was the longest of long shots to win the Democratic nomination.
Warren Pledges Corporate Perjury Law to Fight Misinformation
Misyrlena Egkolfopoulou – Bloomberg
Companies could be subject to as much as $250,000 in fines; Warren names Exxon, tobacco companies in anti-corruption plan
Elizabeth Warren unveiled a new policy proposal Tuesday to prosecute large corporations for perjury if they mislead the public and government regulators.
Pre-insolvency adviser sentenced to four and a half years imprisonment for money laundering
Former pre-insolvency adviser John Narramore has been sentenced to four and a half years in prison, with a non-parole period of 20 months, at Brisbane District Court. Mr Narramore previously pleaded guilty to one charge of dealing in the proceeds of crime.
ASIC gives guidance on companies’ whistleblower policies and relief to small not-for-profits
ASIC has provided guidance to assist companies meet their obligation to have a whistleblower policy.
Overstock Shares Hit Seven-Year Low as SEC Expands Investigation; SEC looking into Overstock’s dividend and stock-trading plans of certain executives
Paul Vigna – WSJ
Overstock.com Inc. OSTK -17.41% shares hit a seven-year low Tuesday after the online retailer disclosed that a government investigation has widened to focus on the stock plans of some of its executives.
The SEC’s Proposal on Proxy Advisor Regulation Shields CEOs From Accountability to Investors
by Robert Jackson – ProMarket- University of Chicago Booth School of Business
SEC Commissioner Robert Jackson dissented from his SEC colleagues’ proposal on how to reform proxy advisors regulation. New rules, he argues, would introduce a tax on firms who recommend that shareholders vote in a way that executives don’t like. Jackson’s analysis also shows that the proposed changes will remove key CEO accountability measures from the ballot.
Investing and Trading
Active management and ESG are a perfect match; Environmental, social and governance integration needs to be constantly revisited to capture mispricing
Pascal Blanqué – FT
Environmental, social and governance factors are a pillar of investing, holding more than $30tn of assets after impressive growth of 34 per cent over the past two years. So powerful is momentum, the fund industry will most likely embrace a near 100 per cent ESG-based model by 2030.
Drastic changes needed to alleviate climate crisis, says IEA; Emissions will continue to rise even if governments meet existing environmental targets
Anjli Raval – FT
Carbon emissions are set to rise up until 2040 even if governments meet their existing environmental targets, the International Energy Agency has warned, providing a stark reminder of the drastic changes needed to alleviate the world’s climate crisis.
ECB Picks Bank of France Director to Run Market Operations
Piotr Skolimowski – Bloomberg
Imene Rahmouni-Rousseau will take over on Feb. 1, 2020; Ulrich Bindseil has moved to market infrastructure & payments
The European Central Bank appointed Imene Rahmouni-Rousseau, a director at the Bank of France, as its next chief of market operations — a key role in implementing monetary policy following the resumption of quantitative easing.
IRS Decision Is Bad Omen for RenTech Tax Dispute Worth Billions
Zachary Mider – Bloomberg
Tax agency denied appeal from GWA involving basket options; Same maneuver is at center of case involving Jim Simons’s fund
A little-noticed decision by the Internal Revenue Service’s appeals unit may spell trouble for legendary investor Jim Simons, who’s embroiled in a multibillion-dollar tax dispute with the agency.
Millennials on the Cusp of Middle Age Missed Their Boom; Too many economic forces were against them when they came of age.
Noah Smith – Bloomberg
The great irony of the ironic “Ok boomer” trope being enthusiastically used by millennials is that they themselves are the older generation to which the term increasingly applies.
Biggest U.S. Milk Company Dean Foods Files for Chapter 11 Bankruptcy; Dairy producer in talks about sale to Dairy Farmers of America
Jacob Bunge – WSJ
Dean Foods Co., the biggest U.S. milk company, filed for bankruptcy protection, a fresh setback to a U.S. dairy industry struggling against declining U.S. milk consumption and rising competition.
IEA Sees U.S. Shale Squeezing OPEC Influence; U.S. shale-oil production will reshape global energy markets in the years to come, the International Energy Agency said
David Hodari – WSJ
LONDON—Unceasing U.S. shale-oil production will reshape global energy markets in the years to come, bolstering the country’s influence over nations in the Organization of the Petroleum Exporting Countries, the International Energy Agency said Wednesday.
Why Falling Rates Haven’t Sunk the Banks; Investors are bidding up bank shares hoping that a small decline in deposit costs is a taste of things to come
Telis Demos – WSJ
When it comes to bank stocks, there is a lot riding on deposits. The KBW Nasdaq Bank index is up 11% over the past month, nearly three times the gain of the S&P 500. Behind that rally isn’t so much confidence that rates or the economy will suddenly zoom higher, but a belief that banks can manage through the Federal Reserve’s easing, thanks to some help on funding costs. Analyst estimates for 2020 net interest margins at Bank of America BAC -0.27% and Wells Fargo, WFC 0.31% for example, have ticked higher since the end of October
Even the Fed’s Own Research Shows Rates Are Too High; A new model based on global rather than U.S.-centric inputs has the potential to upend large parts of the financial markets.
Tim Duy – Bloomberg
New research from the Federal Reserve’s own economists reveal that estimates of the neutral real rate of interest are well below those of policy makers. The low estimates have important implications for policy makers and market participants, suggesting the Fed may still have some hawkish expectations of what can be accomplished in the future despite its dovish turn this year.
UBS’ billionaire boondoggle
Thomas Hale – FT
Last week, UBS made a pretty bold claim. Companies run by billionaires outperform other public companies, it argued in a report from its wealth management department that broadly defended the ultra-rich. More controversially, it attributed this so-called Billionaire Effect to “smart” risk-taking.
Administrator considers managers to take over Woodford Income Focus fund; Link Fund Solutions has held meetings with a shortlist of candidates since suspending fund
Owen Walker – FT
The administrator tasked with deciding the fate of Neil Woodford’s last open-ended fund has drawn up a shortlist of potential managers to take it over.
ABN Amro Shares Slip as Probe Raises Doubts Over Cost Targets
Ruben Munsterman – Bloomberg
Lending income holds up despite negative interest rates; Timing of criminal probe uncertain, CEO Van Dijkhuizen says
ABN Amro Bank NV fell in Amsterdam trading as profit slipped and a criminal probe prompted the bank to warn of uncertainty.
Alibaba gets Hong Kong exchange green light for share sale; Chinese group aims to raise up to $15bn in one of world’s biggest fundraisings this year
Daniel Shane and Mercedes Ruehl – FT
Alibaba has won approval from the Hong Kong stock exchange for a secondary listing in the city to raise as much as $15bn, according to two people familiar with the matter, in what is set to be one of the world’s biggest fundraisings this year.
Spain Overtakes U.K. as Europe’s Worst Stock Market After Vote
Namitha Jagadeesh and Jan-Patrick Barnert – Bloomberg
IBEX benchmark is down 2.5% this week following the election; Banks lead losses as broader index drops for a fourth day
Just as Spanish stocks were starting to rally toward this year’s highs, a coalition with an anti-austerity political party is dampening the mood once more.
Former Conservative minister warns risk of no-deal Brexit remains; David Gauke to run as independent to highlight threat of a Johnson majority
Sebastian Payne – FT
David Gauke, the former justice secretary, has warned that a Conservative majority government after the upcoming general election would put the UK on course for a no-deal Brexit at the end of 2020.
Brexit drove Tesla to pick Berlin over Britain for new factory: report
Britain missed its chance to host the first European factory of U.S. electric vehicle pioneer Tesla (TSLA.O) because of Brexit, Chief Executive Elon Musk said in remarks reported on Wednesday.
Chances of no-deal Brexit fall as PM Johnson’s hopes rise – Reuters poll
Jonathan Cable – Reuters
The chances of a no-deal Brexit fell in the last month because UK Prime Minister Boris Johnson looks set to win a Dec. 12 election and secure the backing in parliament he needs to get his new Withdrawal Agreement passed, a Reuters poll found. The median probability of a disorderly Brexit, where no deal is agreed, dropped to 20% in the Nov. 8-12 Reuters poll of economists from 30% in October, the lowest since a poll taken in May soon after the EU granted another delay to Britain’s departure.
Brexit: Claims about EU tax rules fact-checked
There have been posts on Twitter for over a year claiming that Brexiteers’ enthusiasm for a swift departure from the European Union (EU) is because of new tax rules that are about to come into force. Here’s a recent example from actor and writer David Schneider.
General election 2019: Brexit Party MEP quits as candidate
The Brexit Party’s MEP for Scotland has quit as a general election candidate in protest at its decision not to field candidates in seats held by the Tories. Louis Stedman-Bryce said he backed an agreement with the Conservatives in Scotland to help fight the SNP. But he said he could not support the UK-wide arrangement because he does not approve of Boris Johnson’s proposed Brexit deal. Mr Stedman-Bryce had planned to stand in the Glasgow North East constituency.
Arrest warrant issued for UBS banker Scott Hapgood over death of Anguilla hotel worker
Kenneth Garger – NY Post
An arrest warrant has been issued for the Connecticut banker accused of killing a hotel worker in Anguilla — a day after he skipped a court hearing out of fear for his safety, a report said.
Sandy and Joan Weill Give $106 Million to Fund Neuroscience Hub
Tom Metcalf – Bloomberg
The effort will involve three universities in Western U.S.; Couple recently contributed $14.6 million to Carnegie Hall
Sandy and Joan Weill are keeping up the pace of their charitable giving. On Tuesday, the couple announced a $106 million gift to start the Weill Neurohub at the University of California at Berkeley, University of California at San Francisco and the University of Washington. The research network aims to encourage collaboration between neuroscientists and researchers in disciplines such as engineering and computer science to quicken the development of therapies for brain and nervous system diseases.
Hippo Bathtub Fetches $4.3 Million, Reaps Whopping 2,500% Return
The work by François-Xavier Lalanne is a life-size incarnation of the African beast, with a sink and vanity folded into its maw and a full bathtub inside its body. The unique piece was made in 1969 from welded brass and copper. It was estimated at $1 million to $1.5 million. The anonymous owner bought it for $168,000 at a 2006 Sotheby’s auction.