Hong Kong’s financial sector faces talent crunch as expats head for the exit

Jan 24, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

SEC Commissioner Elad L. Roisman has left the building. He issued a departing statement on Friday, his last day as a commissioner at the SEC. His fellow commissioners, Chair Gary Gensler, Commissioner Hester M. Peirce, Commissioner Allison Herren Lee, and Commissioner Caroline A. Crenshaw issued their own statement on his departure.

CFTC Chairman Rostin Behnam will be participating in a question and answer session as part of the CMC State of the Industry 2022 conference.

There is a new entry in the Coinbase blog by the company’s chief legal officer, Paul Grewal, titled “Proof of alignment.” The post addresses asset listing decisions and processes. It also addresses investments by Coinbase Ventures and “mechanisms to align ourselves even further with our customers.”

FINRA has issued a reminder memo of firms’ obligations to execute marketable customer orders fully and promptly and notes that 99.94% of them are executed within less than five seconds. Back in the day of open outcry trading, we had a three-minute rule. But then of course when things got busy a “fast market” would be declared and brokers were no longer held to the three-minute rule. Of course, the worst fill I ever received was a 17-minute fill on an order in a New York softs market. We have come a long way.

The Financial Times Global Commodities Summit will be held on March 21 to 23 at an in-person event at the Hôtel Beau-Rivage Palace, Lausanne, Switzerland after a two-year absence. The event bills itself as the “pre-eminent gathering of senior commodity executives, traders and financiers.” Representatives from our new sponsor Abaxx Exchange will be there, and they are a sponsor. The event is also accessible virtually.

Former CFTC Chairman J. Christopher Giancarlo was the guest in a video discussion on the YouTube channel “The Future of DeFi,” and their fireside chats. This is part of his campaign for his book, “Crypto Dad.”

HKEX is looking for summer interns. Check out their summer intern program HERE.

Here was a humorous sign in a bookstore: “We have moved a few books around. Travel is now in the Fantasy section, Sci-fi in current affairs and Epidemiology is in self help.”

My son Tim was going to go to India for a wedding in February, but it has been postponed because of a surge in Covid-19 cases there.

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


The Cboe Options Institute is holding a 60-minute webinar on Wednesday, Jan. 26 at 12pm EST exploring the topic of “Accelerating Growth in Funds’ Use of Options.” The speakers will be Keith Black, PH.D., CAIA, CFA, FDP managing director and program director, FDP Institute; Joseph Cusick, vice president, portfolio specialist, Calamos Investments; Blair Hull, founder and chairman, Hull Tactical; and Matt Moran, head of index insights, Cboe Global Markets. You can go HERE to register. And look out for coverage of the webinar incorporating an interview with all the panelists, which will be appearing in JLN after the webinar takes place. ~SR


Crackdown on Crypto Ads; Biden Nominates William Brodsky; Greenwood Project Expanding Outreach

Alex Perry’s Optionstopia

John’s take

Term of the Week

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How BlackRock is managing ‘the greatest investment opportunity of our lifetime’
Grace O’Donnell – Yahoo Finance
In his 2022 letter to CEOs, BlackRock (BLK) CEO Larry Fink urged other heads of companies to prepare for and participate in the green transition as part of a broader defense of stakeholder capitalism. “I believe the decarbonizing of the global economy is going to create the greatest investment opportunity of our lifetime,” Fink wrote. “It will also leave behind the companies that don’t adapt, regardless of what industry they are in.”

**** What is the greatest investment opportunity of our lifetime? I think it is investing in yourself so that you can help others.~JJL


China’s Vast Blueprint for Tech Supremacy Over U.S.; Trillions of dollars will flow into companies, infrastructure and research parks under the plans, which are key to Xi’s effort to broaden wealth creation and create a more equal society.
Bloomberg News
China’s technology industry is a telling example of the country’s unusual approach to economic development, mixing government influence with private enterprise on a scale that no nation has ever attempted. Under President Xi Jinping, the Communist Party has rolled out several programs to nudge the economy away from the labor-intensive, low-margin industries that underpinned growth over the past two decades and to make China self-sufficient in critical technologies. Trillions of dollars will flow into companies, infrastructure and research parks under the plans, which are key to Xi’s effort to broaden wealth creation and create a more equal society. The risk is that his government ends up wasting money by investing in companies and sectors that fail to live up to their promise.

****** Plans are great. But reality is different. ~JJL


IRS to start requiring facial recognition scans to access tax returns
Megan Henney – Fox Business
The Internal Revenue Service is going to start requiring users of its online tax payment system to provide a selfie to a third-party company in order to access their accounts. Beginning in summer 2022, users who need to log on to the IRS’ website to access the Child Tax Credit Update Portal, check online accounts, get their tax transcript, receive an Identity Protection PIN or view an online payment agreement will need to create an account with identity verification company ID.me.

****** As long as it is just a face scan and not a brain scan.~JJL


Here are the celebrities promoting crypto — even as concerns around scams mount
Alexandra Semenova – Yahoo Finance
Cryptocurrency popularity has boomed in recent years, and celebrities have gotten in on the fanfare. But as criminal activity in the space soars, so has the likelihood that influencer endorsements could lure investors into costly digital-asset scams.

****** Are you ready for the Super Bowl and all the celebrities promoting crypto? ~JJL


Drop in college enrollment threatens to cause long-term economic, social consequences; Another million adults ‘have stepped off the path to the middle class’
Jon Marcus – Washington Post
Slower economic growth. Continued labor shortages. Lower life expectancy. Higher levels of divorce. More demand for social services, but less tax revenue to pay for it. A sharp and persistent decline in the number of Americans going to college — down by nearly a million since the start of the pandemic, according to newly released figures, and by nearly 3 million over the last decade — could alter American society for the worse, even as economic rival nations such as China vastly increase university enrollment, researchers warn.

****** This is a real problem, not just for the universities but for society. ~JJL


Friday’s Top Three
Our top story Friday was the somewhat tongue-in-cheek First Trailer For Movie Depicting The GameStop Stock Fiasco Has Arrived, from Gaming Bible, which contains the line, “This is of course huge news for men who have posters of Leonardo diCaprio in The Wolf of Wall Street on their ceilings.” Second was the HKEX’s announcement of LME Management Changes, which included the news that Matthew Chamberlain will be stepping down as CEO of the London Metal Exchange on April 30, 2022. Third was a tie between the MarketsWiki page for Matthew Chamberlain and the home page for Abaxx Exchange, a new exchange out of Asia which has just joined the list of John Lothian News sponsors.


MarketsWiki Stats
26,696 pages; 237,137 edits
MarketsWiki Statistics


Lead Stories

Hong Kong’s financial sector faces talent crunch as expats head for the exit
Scott Murdoch and Kane Wu – Reuters
Late last year, Tania Sibree quit her well-paid job as a financial services lawyer in Hong Kong and returned to Australia rather than live a moment longer with the city’s strict coronavirus restrictions. Sibree, who said she had enjoyed the previous five years in Hong Kong, is one of hundreds – possibly thousands – of foreign expatriate professionals who have left or are planning to leave, threatening to dent the city’s standing as one of the world’s financial hubs.

Greek stock exchange board picks Kontopoulos as new CEO
The board of Hellenic Exchanges (EXCr.AT), the operator of Greece’s stock and equity derivatives markets, picked Yiannos Kontopoulos as its new chief executive to replace outgoing CEO Socrates Lzaridis, the group said on Saturday.

Don’t write off Hong Kong as a financial centre just yet; Despite a political crackdown, people who want to move capital into China will continue to use the territory to do so
Robin Harding – FT
Humans seem able to ignore many great crimes against each other, but woe betide the individual who brings harm to a small, cuddly animal. Hong Kong is astir after the city passed a death sentence on thousands of hamsters, following three human cases of Covid-19 linked to a pet shop, where several of the rodents also tested positive.

LME chief Chamberlain to join digital assets firm Komainu
Luke Jeffs – FOW
The London Metal Exchange’s chief executive Matthew Chamberlain, who announced on Friday his decision to step down from that role, is joining a digital asset custodian backed by Nomura as chief executive.
Chamberlain will join Komainu as chief executive after he leaves the LME at the end of April.
Komainu confirmed the appointment just hours after the LME said on Friday morning Chamberlain was leaving his post as chief executive after five years running the Hong Kong Exchanges and Clearing-owned LME.

****Here is the story from Reuters.

Foreign Executives in Isolated Hong Kong Head for Exit, Sick of Zero-Covid Curbs; Flight bans, quarantine stays for arrivals and school closures jeopardize the city’s status as a business hub
Dan Strumpf – WSJ
Stringent rules to try to keep Hong Kong free of Covid-19 are driving away more foreign executives, chipping away at the city’s decades-old status as one of the world’s top business hubs. Flight bans, lengthy quarantine stays for arrivals and repeated school closures are pushing more people to a breaking point as the pandemic enters its third year and the city clings to a zero-Covid strategy abandoned by nearly all countries save for China. A growing outbreak at a public housing estate has prompted the government to lock down buildings and send more people into quarantine.

Russian financial markets sustain fresh blow on rising Ukraine tensions; Moex stock index falls more than 7% while currency and bonds also come under selling pressure
Tommy Stubbington – FT
Russian stocks and bonds took a further hit on Monday, while the rouble also sank, as investors reacted to warnings of a rising threat of military action against Ukraine. Moscow’s Moex stock index was down more than 7.5 per cent, taking its losses so far this year to more than 16 per cent, following the partial withdrawals from their embassies in Ukraine by the US and UK. Russia’s government debt also slumped, pushing yields to their highest level in six years, as the potential for swinging Western sanctions prompted investors to dump Russian assets.

Goldman Says Russia Conflict Could Curb Gas Flows Indefinitely
Anna Shiryaevskaya – Bloomberg
Russian natural gas flows to Europe could be curtailed for “an indefinite period” if the nation’s new pipeline project to Germany is hit by sanctions as a result of escalating tensions over Ukraine, according to Goldman Sachs Group Inc. The bank still assumes that the Nord Stream 2 pipeline will begin service in the second quarter, but delays in the approval process might push it to later in the year or even longer amid escalating Russia-Ukraine tensions, it said in a note. Gas prices could also briefly revisit record levels seen in the middle of December, or even shoot higher.

Why the Sustainable Investment Craze Is Flawed; The first in a series of Streetwise columns about the failed promise of funds guided by environmental, social and governance principles, known as ESG
James Mackintosh – WSJ
The financial industry has spotted an opportunity to make money by helping people feel good about themselves. Despite claims to the contrary, these investments don’t do much to make the world a better place. ESG funds, as they are known, promise to invest in companies with better environmental, social and governance attributes, to save the planet, improve worker conditions or, in the case of the U.S. Vegan Climate ETF, prevent animals from being eaten.

SPACs Are Running Out of Names to List; The SPAC boom has led two marketing companies to battle over who gets to be called ‘System1,’ a name taken from Daniel Kahneman’s best seller ‘Thinking, Fast and Slow’
Jon Sindreu – WSJ
The SPAC boom, which is now turning to bust, pitted too much money against too few company names—in one case, literally. Following the approval last Thursday of a merger with a special-purpose acquisition company, or SPAC, led by American billionaire Bill Foley, advertising-technology firm System1 LLC is set to begin trading on the New York Stock Exchange Tuesday as System1 Inc. Its ticker will be “SST.”

How Robinhood Investors Robbed Themselves; Herding into the same stocks made novice investors feel like geniuses, but the party is over and it was predictable
Spencer Jakab – WSJ
Following the crowd works—until it doesn’t. A new generation of traders getting their tips from social media and using apps like Robinhood to choose stocks are learning that the hard way. Back in 2020 when millions of mostly young people opened brokerage accounts for the first time while sheltering from the Covid-19 pandemic, it seemed like they could do no wrong, even as some legendary investors could do no right. Dave “Day Trader” Portnoy poked the most revered one of them all to his millions of Twitter followers:

Reddit’s WallStreetBets Was the GameStop Kingmaker, but Longtime Users Say the Thrill Is Gone; The group was once the engine that powered rookie traders, but now veteran members say only tired-out ideas remain
Gunjan Banerji – WSJ
Reddit’s WallStreetBets was the place to be last year for meme-stock mania. These days, some one-time fans say it is hardly worth clicking on. Those who once scoured the online message forum for brazen and unexpected trading ideas say they are mostly finding members still chatting about stocks such as GameStop Corp. GME 3.59% and AMC Entertainment Holdings Inc. AMC -0.55% Constructive feedback on trades, some users complain, has largely been replaced by cheerleading. Devotees who were once glued to the forum—watching power users like Keith Gill, or “DeepF—ingValue,” post bold bets on GameStop—say they have largely abandoned the page in favor of other trading communities.

WallStreetBets: The Power of A Single Subreddit
Michelai Graham – Boardroom.tv
While Reddit prepares for an IPO, we wanted to check in on the investment forum that sparked the meme stock craze of 2021.
Last year’s meme stock craze kept plenty of amateur investors busy at home, and you can thank WallStreetBets for most of that. For the uninitiated, WallStreetBets is a popular subreddit where retail traders freely discuss stock and option investments. The group was founded in 2012 by Jaime Rogozinski, who has since been removed from the platform by Reddit administrators. WallStreetBets will turn a decade old on Jan. 31 with roughly 11.5 million followers to date.

Empty Private Jet Flights Hastened Credit Suisse Chairman António Horta-Osório’s Downfall; A bank review of the chairman’s travel found it was paying for planes to return empty after dropping him off in London and Lisbon
Margot Patrick, Emily Glazer – WSJ
After relocating to Zurich last spring to run Credit Suisse Group AG CS -5.53% as chairman, António Horta-Osório flew to London and Lisbon for work meetings and business events, then spent time with his family at homes there.

Wall Street’s Big Payday Makes the Fed’s Job Harder; Compensation for higher-skilled positions is starting to show rapid increases, threatening to turbocharge a new phase of inflation.
Lisa Abramowicz – Bloomberg
For more than a year, an egalitarian narrative dominated the discussion about U.S. wages. Lower income workers were seeing the biggest pay increases while gains for better-paid employees lagged behind. But the quarterly results posted by banks last week may upend the dialogue, and when Federal Reserve policy makers meet this week, they may feel additional pressure to keep broadening wage gains from adding to inflation.

Judge Rules Banks Must Stand Trial Over $7 Billion R. Allen Stanford Fraud Claims; Judge finds services of major banks may have helped fraudster R. Allen Stanford
Alexander Gladstone – WSJ
Toronto-Dominion Bank, HSBC Bank PLC and other banks linked to convicted fraudster R. Allen Stanford must stand trial over claims they supported his $7 billion Ponzi scheme and should repay defrauded investors, a federal judge ruled.


Covid Isn’t Going Away. So How Do We Live With It? Two years into the pandemic, countries have begun testing new — and in many cases different — strategies for protecting their populations.
Lara Williams – Bloomberg
As we near the end of our second year living through a pandemic, countries are taking somewhat different approaches to handling the virus. In the U.K., disgraced Prime Minister Boris Johnson announced an end to all Plan B restrictions and a target date for ditching the legal requirement to isolate after contracting Covid-19. Meanwhile, Hong Kong has sentenced more than 2,000 hamsters — including beloved pets — to death after 11 hamsters in a single pet shop were found to have traces of the coronavirus. The scientific basis for that decision is questionable, says Matthew Brooker, who says that the episode fuses together “the absurdity, arbitrariness and rigidity of policies that have characterized the government’s public health and political programs since the onset of the pandemic.”

U.K. to End Covid Testing for Vaccinated Travelers
Emily Ashton – Bloomberg
The U.K. will stop requiring vaccinated travelers to take a Covid-19 test after arriving in England, Prime Minister Boris Johnson said. The new rules come on the heels of a recent lifting of pre-flight test requirements, and are part of a general easing of Covid-19 restrictions as the U.K. starts to treat the virus as endemic.

WHO Is Set Up to Fail Without More Funds, Director Warns
Andy Hoffman and Corinne Gretler – Bloomberg
Organization is asking for additional $480 million for budget; Tedros makes comment as WHO member delegates meet in Geneva
The World Health Organization can’t do its job if member states and donors don’t agree to a proposed funding increase giving the international health body more autonomy to fight pandemics, its chief said.

What Japan Got Right About Covid-19
Hitoshi Oshitani – NY Times
It all began with the coronavirus outbreak on a Diamond Princess cruise ship back in February 2020. Nine health care workers and quarantine officers who were responding to the outbreak on the ship in Japan became infected. An official report suggested that they had most likely been infected through contact with infectious droplets and contaminated surfaces. But as an expert investigating respiratory infections, I had my doubts. These were people experienced in infection control and prevention procedures, and it was difficult to believe that not one, not two, but nine of them failed to wash their hands properly. While this was still in the very earliest days of the pandemic, it seemed possible that the coronavirus was spreading in some other way than through large droplets.

Omicron Cases Put New Zealand on Red Alert, Leader Ardern Cancels Wedding; Sizes of gatherings to be limited as authorities warn variant is circulating in country’s biggest city
Alice Uribe – WSJ
New Zealand moved to the highest level of its Covid-19 restrictions as it seeks to contain an Omicron-variant outbreak that also led Prime Minister Jacinda Ardern to cancel her wedding plans. Ms. Ardern said on Sunday that nine Covid-19 cases in the Nelson Marlborough region, on the country’s South Island, had been confirmed as Omicron. The nine cases are from a single family who flew earlier this month to Auckland—New Zealand’s largest city, located on the North Island—to attend a wedding and other events. A further case from the same household has also been confirmed.

Hong Kong warns of worsening COVID outbreak as leader defends hamster cull
Greg Torode and Anne Marie Roantree – Reuters
Hong Kong leader Carrie Lam on Saturday warned that COVID-19 infections could be growing exponentially in a congested residential area of the city and that overall cases had also spread due to an outbreak in pet hamsters.

India’s COVID-19 cases rise by 333,533 in last 24 hours – govt
India reported over 300,000 new COVID-19 infections for the fourth straight day even though the caseload over the last 24 hours was slightly lower than a day before, data released by the government on Sunday showed.

Omicron Wave Drives Surge of Workers Calling In Sick, Working Through Illness; Almost 8.8 million Americans were out sick or caring for someone with Covid-19 in early January
Harriet Torry – WSJ
The Omicron wave of coronavirus cases is weighing on the U.S. labor force, keeping millions of people home sick while others say they are working through illnesses. This double impact from the biggest surge of Covid-19 illnesses so far in the pandemic comes as employers have struggled with an unusually tight labor market and an unemployment rate that is approaching pre-pandemic levels. Job openings have hovered at their highest-ever levels for months. Workers have quit at a record rate. Fewer people are in the workforce than before the pandemic began. Meanwhile, those who are working are getting bigger than usual pay increases amid the highest inflation in four decades.

SEC Pays Whistle-Blowers $40 Million for Tips on Multiple Frauds
Matt Robinson – Bloomberg
Four tipsters provided documents, identified key individuals; Regulator has paid out $1.2 billion since first award in 2012
The U.S. Securities and Exchange Commission will pay more than $40 million to four tipsters for helping the agency bring successful enforcement cases by providing documents and identifying people involved in misconduct. The agency awarded $37 million to two whistle-blowers who provided evidence that helped the SEC advance its investigation of securities violations. Another tipster received $1.8 million for information that prompted a probe, while a third whistle-blower got $1.5 million for helping shape the agency’s strategy.

Exchanges, OTC and Clearing

Kaiko and ICE partner on crypto data; As part of the partnership, ICE’s network will give market participants access to high-quality crypto data.
Wesley Bray – The Trade
Cryptocurrency market data provider Kaiko has developed a new offering in collaboration with data, technology and market infrastructure provider Intercontinental Exchange (ICE). Through the new offering, Kaiko’s cryptocurrency data feeds can now be accessed by investors and enterprises connected to any of ICE’s data centres, including locations in the Americas, Europe and Asia-Pacific, or via the cloud using ICE Cloud Connect.

Central Depository of Armenia and National Depository of Ukraine signed MoU
At the end of December 2021, a Memorandum of Cooperation was signed between the National Depository of Ukraine (NDU) and the Central Depository of Armenia (CDA), in particular, the Memorandum provides for cooperation on the issues of the new application of Armenian Depository – CDA Online, as well as electronic voting.

Nigerian Exchange Limited Partner Centre For International Private Enterprise On Capacity Building
Nigerian Exchange Limited (“The Exchange” or “NGX”), through its specialized learning hub, X-Academy, is pleased to announce its partnership with the Centre for International Private Enterprise (CIPE). Through this partnership, NGX and CIPE aim to fill the capacity gap in corporate compliance expertise and knowledge in the African business environment and to provide effective resources to help local companies translate their corporate ethics commitments to a robust system of compliance that ensures that they can conduct business with integrity.


Retail investors can soon pose questions to corporate execs from companies like Tesla and Coinbase with a new Robinhood feature
Natasha Dailey – Business Insider
Robinhood is launching a new feature that will allow retail investors to pose questions to executives from Tesla, Coinbase, and other big companies. In a Thursday blog post, Robinhood said it’s rolling out a shareholder Q&A feature powered by Say Technologies to let users ask questions to leaders of companies they invest in Say Technologies, which Robinhood acquired for $140 million in August, has partnered with about 20 companies, including Tesla, crypto-exchange Coinbase, and software company Palantir, to allow retail traders to participate in shareholder events, like question-and-answer sessions on earnings calls that have been historically reserved for institutional investors and analysts.


Log4j lesson: Cybersecurity defense isn’t just about tech
Chris Hallenbeck – VentureBeat
Aside from stolen data and money, perhaps the greatest impact of massive attacks like SolarWinds, Colonial Pipeline, and the current Log4j vulnerability, is that people are beginning to realize that cyber attacks and cyber damages are inevitable. But while breaches have always been as sure as death and taxes, we can reduce the frequency and success of disruptive events, and control the degree to which they cause a negative impact. ­­­­

Olympians challenged by cybersecurity concerns in Beijing
John Powers – Boston Globe
As if Olympians didn’t already have to worry about just making their teams and avoiding testing positive for COVID-19, multiple countries have warned them that they’re likely to be spied upon while they’re at the Games.
The United States Olympic & Paralympic Committee recently told athletes and staff that they should assume that all of their data and communications will be “monitored, compromised, or blocked” by the Chinese government. The British, Canadian, German, and Dutch competitors received the same warning from their committees. So, athletes are being encouraged to bring disposable laptops and cellphones to China and leave them there.

Cybersecurity in 2022 – A Fresh Look at Some Very Alarming Stats
Chuck Brooks – Forbes
Last year I wrote two FORBES articles* that highlighted some of the more significant cyber statistics associated with our expanding digital ecosystem. In retrospect, 2021 was a very trying year for cybersecurity in so many areas. There were high profile breaches such as Solar Winds, Colonial Pipeline and dozens of others that had major economic and security related impact. Ransomware came on with a vengeance targeting many small and medium businesses. Perhaps most worrisome was how critical infrastructure and supply chains security weaknesses were targeted and exploited by adversaries at higher rates than in the past. Since it is only January, we are just starting to learn of some of the statistics that certainly will trend in 2022. By reviewing the topics below, we can learn what we need to fortify and bolster in terms of cybersecurity throughout the coming year.

Cybersecurity jobs in high supply in St. Louis
Sydney Stallworth – NBC KSDK
From meatpacking to oil pipelines, ransomware attacks targeted all sectors in 2021. Just last month, Kronos, one of the largest HR companies in the world fell victim to a ransomware attack, halting services that many companies use to manage employees and payrolls.
Now, the need for cybersecurity jobs could be at an all-time high.


Here’s why experts say the crypto market will be just fine despite a possible Russian ban on everything from mining to trading
Isabelle Lee – Business Insider
When the central bank of Russia proposed a sweeping ban on cryptocurrency activity on Thursday, digital assets barely skipped a beat. Bitcoin even rose around 5% at one point during New York trading hours. There are bigger concerns right now in crypto,” Chris Vecchio, senior strategist at foreign exchange firm DailyFX, told Insider. “What’s happening is much more closely tied to global stimulus conditions and central banks pulling back their pandemic era efforts. That, to me, is the prevailing story here.”

Crypto Startup Blockchain.com Adds Top Walmart Director to Board
Olga Kharif – Bloomberg
Ex-American Airlines chairman Tom Horton joins panel; Firm is loading up on directors, backers from well-known firms
Blockchain.com is adding the lead independent director from Walmart Inc., the world’s biggest retailer, to its own board in the run-up to a potential public offering by the cryptocurrency service.

Jane Street Says Crypto Trading Business Is ‘Clear Growth Area’
Yueqi Yang – Bloomberg
Inquiries from private wealth, sovereign funds are increasing; Volatile market is attracting attention of Wall Street firms
Wall Street firm Jane Street, known for its dominance in established financial markets such as exchange-traded funds and corporate bonds, is becoming a major player in a fast-growing field: cryptocurrency trading.

Turks flock to cryptocurrencies in search of stability; Erdogan plans crackdown as lira turmoil encourages speculation in digital assets
Laura Pitel and Eva Szalay – FT
Despite having a masters degree and a stable job, a middle-class lifestyle has felt increasingly unobtainable in recent years for Orhan, a 39-year-old Turkish web security expert. Frustrated by his rapidly eroding purchasing power, Orhan last year joined the millions of Turks who have flocked to cryptocurrencies amid soaring inflation and a plunge in the Turkish lira.

Proof of alignment
What we’ve already done to align ourselves with our customers, and what we’re doing next.
Paul Grewal, Chief Legal Officer – Coinbase
Coinbase is committed to providing a fair, transparent and equal experience across our suite of trading products. We take a number of steps to ensure this, including: We do not coordinate asset listing decisions with anyone not directly involved with our review and listing process. This includes members of our management team that do not sit on our asset listing committee (the majority of Coinbase’s leadership team does not sit on our listing committee), our Board of Directors, venture capitalists, or outside investors.

Sam Bankman-Fried’s FTX and Anthony Scaramucci’s SALT conference are teaming up for a crypto event in the Bahamas
Matthew Fox – Markets Insider
Sam Bankman-Fried’s FTX and Anthony Scaramucci’s SALT are joining forces in a multi-year deal to launch a cryptocurrency conference in the Bahamas, along with a digital series about the fast-growing sector

Former banker launches DeFi and NFT business
Ali Raza – Inside Bitcoins
The cryptocurrency sector has attracted many individuals from the traditional financial sector. Brenda Gentry, a former mortgage underwriter from the state of Texas, has fully embraced the crypto sector, and she is now earning big from her decision.


Biden Administration to Release Executive Order on Crypto as Early as February: Report
James Rubin – Coindesk
The White House is readying an executive order for release as early as next month that will outline a comprehensive government strategy on cryptocurrencies and ask Federal agencies to determine their risks and opportunities, Bloomberg reported on Friday, citing unnamed sources.

White House Is Set to Put Itself at Center of U.S. Crypto Policy
Jennifer Epstein, Jenny Leonard and Allyson Versprille – Bloomberg News
The Biden administration is preparing to release an initial government-wide strategy for digital assets as soon as next month and task federal agencies with assessing the risks and opportunities that they pose, according to people familiar with the matter. Senior administration officials have held multiple meetings on the plan, which is being drafted as an executive order, said the people. The directive, which would be presented to President Joe Biden in the coming weeks, puts the White House at the center of Washington’s efforts to deal with cryptocurrencies.

China’s Covid Victory Over America Turns Out to Be Pyrrhic; The pandemic has revealed Americans to be tacit Social Darwinists, while trapping the Chinese in a vast Panopticon.
Niall Ferguson – Bloomberg
Authoritarian regimes tend to boast about themselves and denigrate their rivals. President Xi Jinping’s China is no exception. “As the Covid-19 epidemic takes away hundreds of lives every day in the U.S.,” wrote Hu Xijin, the former editor-in-chief of the Global Times, on Jan. 14, “that country’s propaganda machinery is engaging in vicious smears against China’s dynamic zero-case policy of epidemic prevention … Think about it. More than 800,000 Americans died from Covid-19 in the U.S. Behind these numbers, how many sad and desperate stories are there?”


CCP12 Responds To The Request For Information And Comment On The Swap Clearing Requirement
Re: Commodity Futures Trading Commission’s Request for information and comment (17 CFR Part 50, RIN 3038 – AF18) on the Swap Clearing Requirement To Account for the Transition From LIBOR and Other IBORs to Alternative Reference Rates
The Global Association of Central Counterparties (“CCP12”) appreciates the opportunity to contribute to the request for information and comments by the Commodity Futures Trading Commission (“Commission” or “CFTC”) – Swap Clearing Requirement To Account for the Transition From LIBOR and Other IBORs to Alternative Reference Rates (RIN 3038 – AF18

U.S. Can’t Extradite Young Briton in Crypto Hacking Case
Ellen Milligan – Bloomberg
Man accused of helping to steal crypto while a teenager; London judge says extradition to U.S. would be “oppressive”
The U.S. lost its bid to extradite a British man over allegations he helped hijack an American citizen’s identity to steal $8.5 million in crypto assets while he was a teenager. Corey De Rose’s extradition would be “unjust and, or, oppressive” and “disproportionate in relation to the human rights act,” a London judge ruled on Monday. De Rose’s lawyers had argued against his extradition on mental health grounds.

FCA Staff to Vote on Strike Action Monday, Unite Union Says
Leonard Kehnscherper – Bloomberg
Employees of the U.K.’s markets watchdog are voting Monday on whether to pursue “industrial action,” the latest escalation in a dispute between the regulator and staff over planned pay cuts and scrapped bonuses.

SEC Issues Awards Totaling More Than $40 Million to Four Whistleblowers
The Securities and Exchange Commission today announced three awards totaling more than $40 million to four whistleblowers who provided information and assistance in three separate covered actions. In the first order, the SEC issued an award of approximately $37 million to two joint whistleblowers who provided key evidence that contributed to the success of the covered action. The whistleblowers also provided ongoing assistance and helped the staff identify additional information that advanced the investigation.

Departing Statement
Commissioner Elad L. Roisman – SEC
On my final day at the Commission, I cannot help but reflect on what an incredible privilege it has been to work here, both as a staffer and a Commissioner. For the past several years, I have served as a temporary steward of this important agency, with a job to uphold and further the SEC mission: to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. To me, this mission has meant much more than its handful of words—it encapsulates critical elements for a successful economy and country. I will always be grateful for the time I have been able to work alongside my fellow Commissioners and the thousands of dedicated SEC staff, who not only believe in this mission, but unceasingly demonstrate their commitment to it through action.

Statement on Departure of Commissioner of Elad L. Roisman
Chair Gary Gensler, Commissioner Hester M. Peirce, Commissioner Allison Herren Lee, Commissioner Caroline A. Crenshaw – SEC
We want to thank Elad Roisman for his service on the Commission. It has been a pleasure to work with such a humble, thoughtful, and dedicated public servant.

SEC Obtains Final Judgment Against Binary Options Affiliate Marketer and Family Members Sharing in His Ill-Gotten Gains
SEC v. Ronald C. Montano, et al., Case No. 6:18-cv-01606-GAP-GJK (Middle District of Florida) (filed September 27, 2018 and amended March 11, 2019).
The Securities and Exchange Commission today announced the entry of a final consent judgment against Ronald C. Montano and Relief Defendants Romeo Montano, Elma Montano, Denise Montano, and REM Florida Properties, LLC to resolve charges related to fraudulently inducing investments in binary options.

FINRA Reminds Member Firms of Obligation to Execute Marketable Customer Orders Fully and Promptly
In light of the increasingly automated markets for NMS stocks, FINRA is issuing this Notice to remind member firms of their obligation to execute marketable customer orders fully and promptly. We also are reminding firms of their obligation to ensure that their supervisory systems are reasonably designed to achieve compliance with this obligation.

Joint session of the 49th general meeting of Financial System Council and the 37th meeting of Sectional Committee on Financial System
Japan FSA
Joint session of the 49th general meeting of Financial System Council and the 37th meeting of Sectional Committee on Financial System will be held on January 31, 2022 as follows. Date: Monday, January 31, 2022, 13:00-14:30

Investing and Trading

Single stock options worth $1.2 trillion set to expire – Options Solutions
Medha Singh – Reuters
Single stock options totaling about $1.28 trillion were set to expire on Friday, potentially driving sharp market movements as Wall Street rounds out a turbulent week, analysts at Options Solutions said. The options expiration represents nearly 40% of the total open interest on a notional basis, according to the Chicago-based investment adviser.

Financial Illiteracy Is Not Why People Struggle; Calls for improving our financial knowledge abound. But they rarely take into account the tools that would actually help the most vulnerable.
Stuart Trow and Marcus Ashworth – Bloomberg
Hardly a week goes by without a call to improve our financial literacy. Last week, the European Union commissioner for financial services, Mairead McGuinness, advocated for making such education a priority for Europe. She noted that one in three EU households couldn’t handle unexpected financial shocks in regular times — and the pandemic has only made things worse.

Our Bubble Biases Deserve the Closest Scrutiny; Given the potential consequences, it behooves both bulls and bears to consider how they may be wrong.
John Authers – Bloomberg
Time to Question Assumptions and Experience
We all face one risk when investing that’s greater than perhaps any other: the risk that we are wrong. It’s all too easy to be convinced by your own logic and let confirmation bias do the rest. When investing, it’s worth having conviction, but it’s also necessary to take out some insurance against the possibility of being wrong, even if this dilutes returns.

American Pessimism Doesn’t Extend to Shorting the Market; Even investors who are skeptical about U.S. prospects are sticking with their portfolios.
Tyler Cowen – Bloomberg
“But are you short the market?” That is my favorite rejoinder to expressions of radical pessimism. It came to mind recently when I read an opinion piece suggesting that “the United States as we know it could come apart at the seams.”

Why Can’t People Talk About Their Money? A Q&A with personal-finance adviser and author Paco de Leon on facing your financial fears, learning the art of salary negotiation and why investing in crypto is a form of “schmuck” insurance.
Alexis Leondis – Bloomberg
Alexis Leondis: You’re an illustrator, musician and founder of a financial firm, The Hell Yeah Group, that helps creative people with their personal and business finances. Earlier in your career, you worked at a major bank as a collections agent, and also at a more traditional financial planning firm. In your new book “Finance for the People: Getting a Grip on Your Finances,” you take those experiences being “inside” to help those who have felt ignored or underserved when it comes to money management. What’s the most important message for those readers?

Investors sell out of IPOs early at record rates as stocks boom; Frothy markets are prompting founders and their backers to break the traditional 180-day lock-up period
Patrick Temple-West and Nicholas Megaw and Miles Kruppa – FT
A record number of US initial public offerings last year allowed founders and early investors to sell shares before the end of a traditional 180-day waiting period. In 2021, 25 per cent of IPOs — 91 in all — included early lock-up period releases, according to Renaissance Capital. The data excluded stock up-listings and cross listings from other exchanges. These totals were the highest for the period that Renaissance analysed, which dates to 2011. In 2020, 9 per cent — or 17 companies — had early lock-up periods, according to the company.

US investors shun currency-hedged ETFs despite outsized returns; Collective assets under management are down by almost three-quarters since their high in 2015
Steve Johnson – FT
Currency-hedged exchange traded funds remain resolutely out of favour in the US — despite posting outsized returns in the past year. The largest currency-hedged ETFs in the US all comfortably outperformed their unhedged equivalents last year, helped by the strength of the dollar, which rose 6.7 per cent against a basket of six other developed world currencies, as measured by the DXY index.

Barclays Sees Treasury Liquidity Ripples as the Fed Beats Retreat
Edward Bolingbroke – Bloomberg
Dislocations on the rise in front-end Treasuries, Barclays say; Yet Fed repo facilities seen a cushion against liquidity shock
Barclays Plc’s strategists see some ripples in an otherwise smooth-functioning Treasury market as the Federal Reserve slows its bond-buying spree. With the central bank reducing its purchases as it moves closer toward raising interest rates, analysts Anshul Pradhan and Andres Mok said in a research note that there are signs of some rising dislocations in the Treasury market.

90% of Everything Is . . . Take a Guess; Venture capitalist Marc Andreessen explains the world with Sturgeon’s law.
Andy Kessler – WSJ
It used to be that 90% of the time, you accessed stuff only on your computer’s local network. Then in 1993 at the University of Illinois, Marc Andreessen developed Mosaic, the first internet browser, which allowed users to wander around the World Wide Web 90% of the time. He moved to Silicon Valley and founded Netscape. Mr. Andreessen is now a general partner at a top-decile venture-capital firm, better than 90% of its peers. Andreessen Horowitz recently raised $9 billion in new funds.

Environmental, Social and Corporate Governance

Cathay Financial Says It’s Struggling to Find Women Directors
Cindy Wang, Samson Ellis, and Argin Chang – Bloomberg
One woman, 12 men on board of Taiwan’s biggest financial group; Company president says he’s looked for ideal female candidates
In a wide-ranging conversation about Cathay Financial Holding Co.’s environmental and social commitments, the president of Taiwan’s largest financial company offered an explanation for the gender imbalance on its own board of directors: He can’t find any women who qualify.

Banks Handed New ESG Reporting Requirements by EU Watchdog
Frances Schwartzkopff – Bloomberg
EBA criticizes banks for poor track record in ESG reports; Stricter rules form part of EU goal to improve ESG framework
Europe is imposing new requirements on how banks report environmental risks and carbon targets, to give investors a better picture of the threats that climate change poses to the industry.

Storebrand urges agricultural traders to act on Brazil deforestation risk; Nordic asset manager criticises Bunge and Archer Daniels Midland as investors apply pressure on supply chains
Emiko Terazono and Michael Pooler – FT
A $120bn Nordic asset manager has criticised two large US agricultural traders for moving too slowly to eliminate deforestation risk from their supply chains, as investors increasingly clamp down on environmental destruction in Brazil.


Bank of America’s CEO gets real about the labor shortage: ‘We don’t have enough people now’ and those who quit aren’t coming back
Amiah Taylor – Fortune
Like many business leaders these days, Bank of America CEO Brian Moynihan is feeling the impact of the Great Resignation at his company. That would be the record numbers of U.S. workers quitting their jobs—3% left their roles in September alone—creating headaches for businesses trying to keep positions filled.

A Decent Year for Hedge Funds Is Still Not Good Enough; Double-digit returns in 2021 still lagged the benchmark U.S. stock index.
Mark Gilbert – Bloomberg
There’s good news and bad news in last year’s hedge fund numbers. While the industry has recovered some of its swagger, its performance continues to suggest that active portfolio managers aren’t living up to their promise to outpace passive returns, even during bouts of market volatility.

Pay problems: what Goldman Sachs and Ireland’s AIB have in common; Both face a pressure point over remuneration for their bankers
Patrick Jenkins – FT
Which is the better bet? Should an investor buy shares in Goldman Sachs — market capitalisation $116bn and a global super-brand among investment banks — or Allied Irish Banks, one-fifteenth the size and still majority-owned by the Irish government after a humbling bailout 13 years ago?

Dispute Between Apollo Co-Founders Black, Harris Boils Over; Leon Black has accused Josh Harris of plotting his removal in an act of revenge for being passed over as CEO, a claim Mr. Harris vehemently denies
Miriam Gottfried – WSJ
Tension between Leon Black and his Apollo Global Management Inc. co-founder Josh Harris is boiling over, threatening to buffet the investment giant with fresh controversy. In a filing last week in a rape and defamation case brought by a woman with whom he has admitted to having a yearslong affair, Mr. Black accused Mr. Harris of plotting his removal from Apollo in an act of revenge for being passed over to succeed Mr. Black as chief executive officer.


City of London’s $10 Trillion Chinese Hub Plans for Growth
Miaojung Lin and Evelyn Yu – Bloomberg
The U.K.’s relations with China may be at a low ebb but China Construction Bank Corp.’s City of London outpost is banking on ever closer financial flows between the two countries. The branch is the sole renminbi clearing bank in the U.K., making it an essential conduit to potentially staggering flows of Chinese money and investment. It has cleared some 64 trillion yuan ($10 trillion) of transactions since 2014 — the largest volume outside of Asia — and its top U.K. executive is planning for growth.

Hong Kong stockbrokers’ bonuses shrink after 2021 market rout, while staff at banks including HSBC and Bank of East Asia reap the rewards
South China Morning Post
Thousands of Hong Kong stockbrokers are bracing themselves for slimmed down or nonexistent bonuses to kick-start the Year of the Tiger, after a months-long market rout that savaged their firms’ profits. Many of the city’s 600 brokerages will be offering much smaller bonuses this year, and in some cases none at all, according to an industry body.

Hong Kong Billionaire Loses Half Her Fortune on China Probe
Venus Feng – Bloomberg
A record stock plunge for a flavoring and fragrances company has erased half of its chairwoman’s wealth, in the latest example of fortunes getting lost and a reminder for investors of the risks in Asia’s wild markets.

Turkey Is Said to Advise Banks Against Distributing Dividends
Kerim Karakaya and Asli Kandemir – Bloomberg
Turkey’s banking regulator has advised commercial lenders not to distribute dividends from profits in 2021, when a currency crash eroded banks’ cash buffers, people with direct knowledge of the matter said.

Hong Kong Expat Exodus Spurs Plunge in $770,000 School Debenture
Shawna Kwan and Natalie Lung – Bloomberg
Harrow debenture price down more than 40% from peak: broker; City is seeing population outflow amid anti-Covid measures
It’s yet another sign of the growing exodus from Hong Kong: the cost of priority admission to the city’s Harrow International School has now dropped more than 40% from its peak. Debenture prices at the institution, named after the 450-year-old boarding school that taught Winston Churchill and six other British prime ministers, have plunged to about HK$3.4 million ($437,000) from about HK$6 million in 2014, according to a broker that trades second-hand debentures.

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