How Wall Street stormed the music business

Sep 13, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

The FIA’s golf outing yesterday in the Chicago suburbs raised over $30,000 for The Greater Chicago Food Depository and The Greenwood Project. Nice work, people.

The FIA has created a page on their website that contains information related to market closures caused by Her Majesty Queen Elizabeth II’s State Funeral on Monday 19 September.

If you are interested in the latest SALT/FTX conference, you can watch a number of videos they have posted to their YouTube channel from the program itself as one-off interviews.

The latest edition of the Financial Times podcast “Tech Tonic,” featuring Jemima Kelly, is titled “A sceptic’s guide to crypto: the crypto Wild West.” Kelly looks at crypto regulation and why there is so little of it.

Jay Caauwe, a former Cboe executive, is leaving the consulting firm he formed with a couple of partners. With a grateful note on LinkedIn, Caauwe announced he was leaving the cannabis consulting firm Supercritical, LLC. JLN has collaborated with Caauwe and Supercritical in the past for our cannabis industry coverage. We wish Jay well for what comes next.

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

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Andrew Freedman writes in Axios Generate about a new software called Climate Alpha that uses AI to tell customers where to invest and move to in light of climate change and other factors. The firm, which just raised a $4 million seed round, says its competitive advantage is that it tells you where to go rather than where to avoid in the United States. Climate impacts like sea level rise and extreme weather events will interact with socioeconomic trends and other developments to make places more or less desirable areas to live. ~SAED

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MWE SHORT: David Kelbaugh – How to Build a Successful Brand
JohnLothianNews.com

In this video from MarketsWiki Education’s World of Opportunity event in Chicago, David Kelbaugh, CEO of Tacklebox, breaks down the benefits of successful branding. Kelbaugh says his job is to make sure you get remembered for the right reasons, by the right people. The goal isn’t to impact people and tell them to buy what you’re selling, but to influence them to advocate for you. People don’t buy what you do, they buy why you do it.

Watch the video »

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Lex Luthringshausen Full Interview; Lex Talks IV Rank, IV Percentile, and Straddles With JLN’s Alex Teng
JohnLothianNews.com

In this Options Discovery interview, Lex Luthringshausen from Tradier sits down with Alex Teng to discuss implied volatility rank and implied volatility percentile and how to use them when trading options. He later breaks down the options straddle trading strategy and talks about his personal experiences as a tradier. Lex is also very prominent in the world of options education. You can find him at OptionsBrewTV by Tradier on YouTube, where he creates content, holds workshops, and gives free seminars for options traders at all levels.

Watch the video »

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Binance.US Launches Market Maker Program to Reward Select Participants with Lucrative Rebates
Binance.US
Binance.US, America’s home to buy, sell, trade, convert and stake digital assets, has announced its Market Maker Program* that will reward traders who provide liquidity to its order book through 0 maker trading fees and lucrative rebates for top performers. By providing liquidity for a select group of trading pairs, the top 25% of participants will be rewarded with a rebate of 0.005%, and the next 25% will receive a rebate of 0.002%. Rewards will be distributed daily following a short on-boarding grace period. All participants will be eligible for 0 maker fees on the pairs included in the Binance.US Market Maker Program, and the top 75% of participants will receive 0 maker fees on all trading pairs in the Binance.US order book. All participants of the program will also receive special API limits to help them be as effective as possible with their resources.
/jlne.ws/3xjKgyp

***** Attention market makers!

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Climate Change Is Making People Angrier Online; Hate speech increases on social media when temperatures rise above 30°C (86F), new research says
Laura Millan Lombrana – Bloomberg
Climate change is making us angrier online. A lot angrier. Hateful comments spike on social media when temperatures rise above 30 degrees Celsius (86 Fahrenheit), researchers at the Potsdam Institute for Climate Impact Research have found. More from Bloomberg Green BYD Is a Giant in China and Still Finding Its Footing Overseas EU Weighs Price Cap on Power From Renewables, Nuclear Fatal E-Scooter Fire Exposes India’s Rush Toward Greener Future New Wildfires Hit Southwestern France Amid Record Heat “It’s an indicator of how well people can adapt to high temperatures,” said Annika Stechemesser, lead author of the study published in The Lancet Planetary Health earlier this month. “If temperatures go too hot or too cold, we found that there’s an increase in online hate speech, no matter the socioeconomic differences, religion or political beliefs.”
/jlne.ws/3QJABYK

****** They don’t call it turning up the heat for nothing.~JJL

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From Beer to Tomatoes, Europe’s Energy Crisis Is Spilling Over; Ripple effects threaten Belgian brewer, German greenhouses; Widening fallout adds pressure on authorities to stem crunch
Lyubov Pronina and Petra Sorge – Bloomberg
The Belgian brewer of Delirium Tremens beer is facing a real risk of halting production for the first time in more than a century as Europe’s energy crisis creates unexpected ripple effects across the region. From German tomatoes to Swedish bread, Russia’s squeeze on gas supplies is starting to hit sectors well beyond utilities and energy-intensive industries. The spillover on food and drink supplies will likely intensify as temperatures drop and households require heating, forcing businesses and consumers into tough decisions.
/jlne.ws/3xfpLTx

****** No matter what, there is always gas involved before, during or after beer.~JJL

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Monday’s Top Three
Our top story Monday was Forbes’ How One Man Lost $1 Million To A Crypto ‘Super Scam’ Called Pig Butchering. Second was IMC Trading & Gaming for Charity 2022 Recap, a YouTube video from IMC Trading. Third was John Lothian News’ MWE Short: Julie Armstrong – The Power of the People.

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MarketsWiki Stats
26,213,692 pages; 240,636 edits
MarketsWiki Statistics

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Lead Stories

How Wall Street stormed the music business; Investors poured billions into buying rights, turning pop songs into a new asset class — but then the economy stalled
Anna Nicolaou and Kaye Wiggins – Financial Times
For Barry Massarsky, a specialist number cruncher for pop stars and record labels, the financialisation of music has been very good business. “We are so busy. We are so unbelievably contracted with so many different players . . . new funds are coming in once or twice a week”, Massarsky told the Financial Times in July. “[My business partner] is like: ‘Hold the door shut!’ It’s wild . . . the market is scintillating”
/jlne.ws/3QFORSv

How to save the Treasury market; Pimco comes out in favour of all-to-all trading
Robin Wigglesworth – Financial Times
One of our obsessions around here is the health of the Treasury market, which has creaked ominously since at least October 2014, and came spookily close to exploding in March 2020. Since then there has been an outpouring of angst over the health of one of the financial system’s most important pillars, and duelling reports into the core causes and triggers of the occasional outbreak of freakish fragility in the US government bond market.
/jlne.ws/3dgtbOV

The Ethereum Merge Ups the Stakes—and Reshapes the Crypto Universe; Ether will pay interest and more closely resemble normal financial instruments.
Olga Kharif and David Pan – Bloomberg
Ethereum is about to get a makeover. The popular crypto network that runs Ether, the world’s second-most-valuable digital currency, could morph as early as Sept. 14 into a configuration that shakes up the entire crypto universe. The long-anticipated software change, “the Merge” to crypto fans worldwide, will lower Ethereum’s energy use by 99%, silencing critics who dislike the blockchain for its electricity consumption—enough to power Finland for a year by one estimate.
/jlne.ws/3S12pJ4

Fidelity Weighs Bitcoin Trading on Brokerage Platform; The firm has more than 34 million brokerage accounts
Justin Baer – The Wall Street Journal
Fidelity Investments is weighing a plan to allow individual investors to trade bitcoin on its brokerage platform, people familiar with the matter said, marking the financial giant’s latest foray into cryptocurrencies. Fidelity launched a bitcoin-trading business for hedge funds and other institutional investors in 2018, and earlier this year allowed corporate clients to add the digital asset to the 401(k) retirement plans it manages for them. Now, the Boston firm is working toward bringing crypto to its more than 34.4 million brokerage accounts, the people said.
/jlne.ws/3xk9uwp

Former Sky executive picked to lead City reforms; Boris Johnson ally Andrew Griffith chosen to lead overhaul of financial services regulation under Truss government
Stephen Morris, Daniel Thomas and George Parker – Financial Times
Former Sky finance chief Andrew Griffith will lead the government’s financial services reforms, including sweeping plans to overhaul former Brussels insurance rules, after being appointed City minister by prime minister Liz Truss. Griffith, a close ally of former PM Boris Johnson, had already been chosen as financial secretary to the Treasury, which will be wrapped together with the ministerial position into one role. He succeeds John Glen, who was a popular City minister during a turbulent four years punctuated by Brexit until his exit in July after Johnson announced he would step down.
/jlne.ws/3LhCNFW

Australian watchdog investigates Entain over anti-money laundering controls; Owner of betting sites Ladbrokes and Coral under scrutiny
Emma Dunkley – Financial Times
Australia’s financial crime watchdog is investigating Entain to check whether the London-listed betting company has complied with anti-money laundering and counter-terrorism financing rules. The Australian Transaction Reports and Analysis Centre (Austrac) said on Monday that the investigation into Entain, which owns sports betting brands including Ladbrokes and Coral, followed “an extensive” examination of bookmakers.
/jlne.ws/3BacYD6

Sam Bankman-Fried’s FTX Ventures and Anthony Scaramucci’s SkyBridge deal marries the companies’ love for crypto with the safety of more stable investments.
Aaron Weinman – Business Insider
One of the more interesting developments last Friday happened in the crypto space. Sam Bankman-Fried — founder of crypto exchange FTX and known by his initials SBF — acquired a 30% stake in SkyBridge Capital, an alternative investment firm. The deal was inked through SBF’s venture-capital firm FTX Ventures and will support growth initiatives for SkyBridge.
/jlne.ws/3La7mNC

Anthony Scaramucci says Sam Bankman-Fried’s SkyBridge bet shows faith in its future
Madison Darbyshire and Ortenca Aliaj – Financial News
The fund manager Anthony Scaramucci agreed to sell a large stake in his SkyBridge Capital business to the cryptocurrency billionaire Sam Bankman-Fried to prove it had a long-term future, he said, after suffering investment losses linked to the plunging price of digital assets. SkyBridge announced on Friday that Bankman-Fried’s FTX Ventures will acquire a 30 per cent stake in the group. As part of the agreement, SkyBridge will spend $40mn to buy cryptocurrencies.
/jlne.ws/3LbP6U7

There’s a New Cop on the Banking Beat: Chief Climate Risk Officer; The Office of the Comptroller of the Currency, which oversees big banks, hired a chemical engineer to review the risks climate change poses to banks.
Emily Flitter – The New York Times
The Office of the Comptroller of the Currency announced on Monday that Yue Chen would be the agency’s chief climate risk officer. Dr. Chen will focus on developing a new system to assess climate-driven risks to banks, and figure out how to monitor and manage them, the agency said in a statement. Climate change, including global warming and increasingly severe and unpredictable weather events, makes it harder for banks to figure out how much money to lend to real estate and business deals, and how to price those loans. Advocates of climate-driven financial oversight say that a catastrophic weather event that caused larger-than-expected losses to banks could threaten the stability of the financial system.
/jlne.ws/3xk92hX

An Under-the-Radar California Bill Could Transform Crypto Nationwide
Joe Light – Barron’s
As Washington just starts to wrap its arms around the digital-asset industry, an under-the-radar bill in California is threatening to upend the way crypto firms have done business for a decade. The bill passed in late August implements many provisions – including giving crypto customers more favorable prices when they trade – that consumer-protection advocates have sought for years. It will also temporarily ban some of the shakiest crypto products and impose what the industry argues is an onerous licensing regime on firms. Analysts say some of the provisions would be difficult for companies to implement just in California, meaning the bill could have national implications.
/jlne.ws/3BCej6Y

Goldman Sachs plans round of job cuts as dealmaking dries up; Review of underperforming bankers threatens hundreds of employees
Joshua Franklin – Financial Times
Goldman Sachs is planning to implement a round of job cuts in the coming weeks that threatens to result in hundreds of dismissals among the bank’s employees, according to a person briefed on the matter. In a sign of the dealmaking slowdown on Wall Street, Goldman will restart its annual cull of underperforming bankers, which it paused during the coronavirus pandemic as banks struggled to keep up with the workload. The process typically results in between 1 and 5 per cent of company-wide employees losing their jobs, with the impending review set to result in dismissals towards the lower end of that range, the person said.
/jlne.ws/3QICULE

CFTC backs banks in tussle over clearing house governance CME and Ice will need to pay more attention to clearing members on risk committees
Sharon Thiruchelvam – Risk.net
A new rule proposed by the US Commodity Futures Trading Commission (CFTC) could force clearing giants CME and Ice to reconstitute their risk governance processes and give clearing members a bigger say in risk management decisions. The governance rules – proposed for comment on July 27 – are seen as a big win for futures commission merchants (FCMs), which have long complained about central counterparties (CCPs) failing to listen to their members before taking decisions that have implications for
/jlne.ws/3U33EJI

U.S. Banks Lost a Record $370 Billion in Deposits Last Quarter; The outflows will fuel a debate about how the Fed’s inflation-calming moves are going to play out in the banking system
David Benoit – The Wall Street Journal
Deposits at U.S. banks fell by a record $370 billion in the second quarter, the first decline since 2018. Deposits fell to $19.563 trillion as of June 30, down from $19.932 trillion in March, according to the Federal Deposit Insurance Corp. The outflow in the quarter isn’t a problem for banks, which are sitting on more deposits than they want. Deposits in the banking system usually stay relatively stable, but swelled by some $5 trillion in the past two years due to pandemic stimulus. Now, a series of Federal Reserve rate increases is taking some of that money out of the system, in part by decreasing demand for loans and increasing demand for government bonds.
/jlne.ws/3U52Jsc

U.S. Banking Regulator Appoints New Climate Risk Chief; Nina Chen, trained as a chemical engineer, joins the Office of the Comptroller of the Currency after leading the newly-created climate division at New York’s financial regulator
Richard Vanderford – The Wall Street Journal
The Office of the Comptroller of the Currency has appointed Yue (Nina) Chen, a risk expert with experience at New York’s financial regulator and at major banks, as its chief climate risk officer. The U.S. banking regulator on Monday announced the appointment of Dr. Chen, who trained as a chemical engineer, to lead the OCC’s climate risk effort. She will report directly to Acting Comptroller of the Currency Michael Hsu, the OCC said.
/jlne.ws/3xkmvGh

American Tech Can’t Catch a Break in India; India is flexing its muscles in the tech world, preparing a raft of new legislation to tighten control on the internet
Megha Mandavia – The Wall Street Journal
U.S. tech companies are rolling up their sleeves and bracing themselves for an onslaught of regulation in India that will change the way they do business in the South Asian nation. On Saturday, India opted out of trade talks with a U.S.-led group of Asian countries, saying the benefits aren’t clear from trade commitments related to issues around the environment, labor and digital trade. It added that it is in the process of firming up its own digital framework and laws, particularly regarding privacy and data. By doing so, India became the only participant in the 14-nation Indo-Pacific Economic Framework that didn’t sign on to the group’s negotiation track on trade.
/jlne.ws/3eMSFnH

94 per cent of California’s cannabis farms are at risk from wildfire; Cannabis farms faced more wildfire risk than any other crop in the state
Ethan Freedman – The Independent
Wildfires are a growing threat to nearly all Californians, with tens of thousands of acres regularly burning every summer across the state and sending smoke hundreds of miles away. But a new study from researchers at the University of California, Berkeley finds that the cannabis industry may have some of the most at risk when it comes to wildfires, with 94 per cent of the state’s farms located in fire hotspots. The study points to a growing problem as the newly legal cannabis industry meets the reality of a hotter, more fire-prone world under climate crisis. “Our findings affirm that cannabis agriculture is geographically more threatened by wildfire than any other agricultural crop in California,” Christopher Dillis, an environmental researcher at UC Berkeley and lead author on the study, told the university.
/jlne.ws/3eMuxS3

Drought, record heat and blackouts test China’s faith in renewable energy
Stephanie Yangstaff – Los Angeles Times
With 80% of its electricity coming from hydropower, the province of Sichuan in southern China has been lauded as a model for a clean energy future in the nation most crucial to the worldwide fight against climate change. The province usually has such an abundance of power that it sends a surplus east to Shanghai and other cities. But a historic drought is testing its faith in carbon-free energy. For much of August, lower river flows dramatically reduced the supply of electricity while a record heat wave increased demand.
/jlne.ws/3La9PHS

Paralyzed by Covid Restrictions, China’s Consumers Are Closing Their Wallets
Tanner Brown – Barron’s
As Covid lockdowns persist, an ossification has begun to set in for Chinese consumption, with weak demand driving stock declines for the sector—all amid lower-than-expected inflation. The problems plaguing the Chinese consumer economy are numerous, but nationwide Covid lockdowns are both preventing spending as well as creating a chilling effect on consumers when they aren’t under movement restrictions, experts said.
/jlne.ws/3LabLA4

Leaders in Trading 2022: Rising Stars of Trading and Execution nominations now open; The TRADE is delighted to open the voting for its eighth annual Rising Stars awards, celebrating the most promising talents in trading.
Laurie McAughtry – The Trade
The TRADE’s Rising Stars Awards return for their eighth year, recognising the brightest up-and-coming talent across trading and execution for 2022. In partnership with Instinet, nominations are now open and names can be submitted here for the stars you think deserve recognition.
/jlne.ws/3eLxBxV

European Supervisory Authorities recommend actions to combat challenging market conditions; In a joint risk report, the European Supervisory Authorities provide five policy actions for competent authorities, financial institutions and market participants to deal with ‘deteriorating’ economic outlook.
Wesley Bray – The Trade
The three European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – have issued a joint risk report highlighting the deteriorating economic outlook alongside providing recommendations to prepare for challenges ahead. The joint committee’s risk report notes that the post-pandemic economic recovery in Europe was impacted severely by the Russian invasion of Ukraine.
/jlne.ws/3RHe28f

Ukraine Invasion

Putin’s strategy to weaponize winter (Opinion)
Jonathan Sweet and Mark Toth, Opinion Contributors – The Hill
As the summer war in Ukraine transitions into autumn and the harvesting of sunflowers begins, repeated Russian military setbacks in the Donbas region and Kherson Oblast are forcing Vladimir Putin to show his hand. Impatient to reverse course on the battlefield, the Russian president is signaling that Moscow fully intends to weaponize Europe’s winter energy needs — for not just Ukraine but the entire European Union. Under the current circumstances, though, Russian ground forces may not make it to winter. Ukrainian President Volodymyr Zelensky possesses the Valyrian steel sword; he just requires the Biden administration’s full confidence and support to wield it decisively and bury Putin’s “special military operation” in the fields of Ukraine.
/jlne.ws/3RYAxW0

Russia’s cash reserves run dry as West shuns Putin’s energy
James Warrington – The Telegraph
Russia’s budget surplus has shrunk significantly in the latest sign that its public finances are feeling the strain from sanctions and the Kremlin shutting off gas supplies to Europe. The budget surplus narrowed to 137bn roubles (£1.9bn) in the first eight months of 2022, a sharp fall from 482bn roubles in year-to-date data the previous month.
/jlne.ws/3L7T6VG

Harsh Winter Reality Is Finally Sinking In for EU Leaders; Hostage to Putin’s gas shutoff, Europe has no pain-free options on energy.
Lionel Laurent – Bloomberg
“Good leaders elicit in their people a wish to walk alongside them,” writes Henry Kissinger in his latest book on leadership. Ursula Von der Leyen, head of the European Union’s executive arm, faces such a leadership test this week when she presents an outline of how the bloc’s 27 members can survive a winter without Russian gas while avoiding a deep economic crisis.
/jlne.ws/3debCze

Exchanges, OTC and Clearing

Monday, September 19, 2022 – State Funeral of Her Majesty, Queen Elizabeth II – UK Bank Holiday
CME Group
The UK Government has announced that the day of the State Funeral of Her Majesty, Queen Elizabeth II on Monday, September 19, 2022, will be a UK bank holiday. Impact On Products; Interest Rates: As a result of the ICE Benchmark Administration (IBA) announcement, the last trading day for the expiring September 2022 One-Month Eurodollar Futures (CME Chapter 453) and the expiring September 2022 Three-Month Eurodollar Futures (CME Chapter 452) and Options (CME Chapter 452A) will be Friday, September 16, 2022. Please refer to the Final Settlement rules (45303.A.) and (45203.A.) for additional details. Additionally, due to the UK bank holiday, the last trading day for expiring September 2022 MAC USD and SOFR Swap Futures will be Friday, September 16, 2022. Quarterly IMM SONIA Futures and MPC SONIA Futures will not be available for trading and clearing.
/jlne.ws/3eM7OoZ

Intercontinental Exchange Publishes Seventh Annual Sustainability Report
ICE
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today released the company’s annual sustainability report, which includes environmental, social and governance (ESG) highlights from the last year and outlines the ways in which ICE continues to advance its ESG initiatives. ICE issued its first sustainability report in 2016 and has continued to release a new report each year for the past seven years. “The needs of our stakeholders remain key drivers of everything we do at ICE,” said Jeffrey Sprecher, Founder, Chair, and CEO of ICE. “In the same way we’re focused on bringing efficiencies to the markets we serve, we also look at ways to expand transparency into our own business, and the new disclosures and reporting formats help deliver on that goal.”
/jlne.ws/3L7vJLS

Borsa Istanbul: Calculation Of Order-To-Trade Ratio And Daily Reporting To Members In Derivatives Market
Korkmaz Ergun – Borsa Istanbul
An expected increase has been observed in the number of orders entered/modified/canceled in the trading system of Borsa Istanbul due to increase in trading volume, interaction between markets, algortihmic and high frequency transactions. Similar trend has been observed for a long time in the global exchange industry in line with the technological development. In this context, monitoring, reporting and analysis of orders has gained great importance.
/jlne.ws/3U4FSNu

BME and Bolsa Mexicana de Valores sign a collaboration agreement on financial education; Through the alliance, training will be offered to students from Spain and Mexico; It will feature an Investor Relations training programme and virtual conferences.
BME
BME, through its training subsidiary, Instituto BME, and Bolsa Mexicana de Valores (BMV), through Escuela de Bolsa Mexicana, have signed a collaboration agreement on financial education to share their training offerings in Spain and Mexico. The aim is to facilitate access to financial and stock market training, promote sustainability and sustainable finance and further explore the ESG strategy of both organisations.
/jlne.ws/3d4UAna

CME Group Announces Launch of Ether Options
CME Group
CME Group, the world’s leading derivatives marketplace, today announced the launch of options on Ether futures. “As market participants anticipate the upcoming Ethereum Merge, a potentially game-changing update of one of the largest cryptocurrency networks, interest in Ether derivatives is surging,” said Tim McCourt, Global Head of Equity and FX Products, CME Group. “The launch of our new Ether options contracts is particularly well-timed to provide the crypto community with another important tool to gain access to and manage exposure to ether. Our new options contracts will also complement CME Group’s Ether futures which have seen a 43% increase in average daily volume year over year.”
/jlne.ws/3BcT89Z

EEX Group unveils new trade registration platform – Touchpoint; Free to use web-based solution enables users to control all parts of OTC trade workflow
EEX
EEX Group has successfully launched its new trade registration platform – Touchpoint – which will further facilitate the registration of OTC trades for all EEX markets. For the first time ever, Touchpoint brings together all EEX asset classes, (Power, Natural Gas, Emissions, Dry Freight and Agriculturals), in a single, intuitive and easy to use platform. The new, free to use service, which is available via both direct front end and API incorporates a comprehensive range of trade registration, risk management and analytics functions, allowing EEX customers to better control all parts of their OTC trade workflow.
/jlne.ws/3Ua5mJw

USD and CNH London Mini Futures Contracts Daily Maximum Fluctuation Price Band Reference Price
HKEX
Due to the difference between the HKFE T-session Close of the following USD London Mini Futures Contract and the Closing Price published by the London Metal Exchange (LME) for the corresponding LME contract is greater than 5%, LME Closing Price is used as the reference price to determine the Maximum Fluctuation price band today for below markets.
/jlne.ws/3QDMn78

JSE to list actively managed ETFs
JSE
The Johannesburg Stock Exchange (JSE) is pleased to announce that the Financial Sector Conduct Authority (FSCA) has approved amendments to the JSE Listings Requirements that will pave the way for issuers to list and trade Actively Managed ETFs (AMETFs) for the first time. These amendments, which will come into effect on 14 October 2022, are the most significant recent regulatory changes to the local Exchange Traded Funds (ETF) industry since the South African Reserve Bank (SARB) issued an Exchange Control Circular in February 2017. The changes allowed locally registered Collective Investment Scheme (CIS) management companies to list ETFs which related to offshore assets on South African securities exchanges. It allowed these funds unlimited investment in offshore assets, subject to the restrictions on their offshore portfolio allowances.
/jlne.ws/3DkZ1op

Nasdaq Announces End of Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date August 31, 2022
Nasdaq
At the end of the settlement date of August 31, 2022, short interest in 3,449 Nasdaq Global MarketSM securities totaled 10,037,516,423 shares compared with 10,108,978,643 shares in 3,454 Global Market issues reported for the prior settlement date of August 15, 2022. The end of August short interest represent 3.13 days average daily Nasdaq Global Market share volume for the reporting period, compared with 2.71 days for the prior reporting period.
/jlne.ws/3eMdejP

NYSE Group Consolidated Short Interest Report
ICE
NYSE today reported short interest as of the close of business on the settlement date of August 31, 2022.
/jlne.ws/3daTS7O

Notice on Investigation and Penalties for Violations of Relevant Rules and Regulations in August 2022
SFE
Shanghai Futures Exchange (hereinafter referred to as “The Exchange”) has been on continuous efforts in investigating and penalizing violations of relevant rules and regulations, so as to strengthen the risk management of the futures market, regulate the futures trading activities and protect the legitimate rights and interests of futures market participants. The enforcement against such violations in August 2022 are listed as follows: In the aspect of administration of abnormal trading behaviors, the Exchange has dealt with a total of 42 cases, among which 22 cases were self-trades,20 cases were frequent order cancellations.The Exchange has separately notified the relevant clients by phone through members,placed 6 clients on the Exchange’s watchlist,notified 7 abnormal trading behaviors to all the members.The Exchange has suspended 1 client from opening new positions on the relevant futures contracts and notified to the market.
/jlne.ws/3BCnSTq

SGX RegCo to require 9-year cap on ID tenure, disclosure of directors’ and CEO remuneration
SGX
Board renewal and remuneration matters remain areas where improvement is needed, according to findings from an independent review of companies’ disclosures, Singapore Exchange Regulation (SGX RegCo) said today. In the disclosure review, KPMG in Singapore (KPMG) evaluated information in annual reports and company websites based on the 2018 Code of Corporate Governance (CG Code). Annual reports of 585 listed companies whose financial years ended between 1 July 2020 and 30 June 2021 (both dates inclusive) were reviewed.[1] One-third of each score was awarded when the relevant disclosure is present while the quality of the disclosure determined the rest of the score.
/jlne.ws/3RWk9Wb

TMX Group Equity Financing Statistics – August 2022
TMX
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for August 2022. TSX welcomed four new issuers in August 2022, compared with four in the previous month and 10 in August 2021. The new listings were three exchange traded funds and one industrial products & services company. Total financings raised in August 2022 increased 379% compared to the previous month, and were up 64% compared to August 2021. The total number of financings in August 2022 was 32, compared with 11 the previous month and 33 in August 2021.
/jlne.ws/3xjFEbx

Fintech

New Chip Restrictions on China are Hitting US Companies Too
Ian King – Bloomberg
The White House is considering tighter tech restrictions against China than it’s enacted before. New rules could place broad limitations on the shipment of chips used for developing artificial intelligence, in particular. That comes on top of earlier action by the government, which told Nvidia Corp. and Advanced Micro Devices Inc. they’ll need permission to sell certain products to Chinese companies. The recent moves represent an escalation in US policies aimed at handicapping China’s efforts at tech independence. Previously Washington had concentrated its efforts on cutting off individual companies that it deemed bad actors—most notably Huawei Technologies Co., which has been accused of being a threat to national security. But more recently there’s been a creeping spread into restricting exports of certain chip technologies to any company in China.
/jlne.ws/3xmyD9T

Digital Wallet Provider MetaMask Allows Crypto Purchases With Brazilian Reals
Paulo Alves – CoinDesk
MetaMask, one of the largest crypto wallet providers, has integrated the Brazilian government’s payment system Pix and started allowing crypto purchases with Brazilian reals.
/jlne.ws/3eQ9bU0

Binance-linked WazirX says India unfreezes bank accounts
Reuters
WazirX, linked to the world’s largest digital currency exchange Binance, said on Monday its bank accounts were unfrozen by India’s financial crime-fighting agency after more than a month.
/jlne.ws/3dby6AS

UK Fintech ePayments to Close After Probe of Anti-Crime Controls; Closely held company can ‘no longer sustain the business’; FCA forced firm to freeze operations on AML concerns in 2020
Donal Griffin – Bloomberg
EPayments Systems Ltd., a UK electronic payments company that’s been under regulatory scrutiny for years over its anti-crime controls, is closing down. The London-based firm, which deals in prepaid cards and electronic wallets and had almost £180 million ($211 million) in client funds at its peak, has begun the process of entering into an “orderly, solvent wind-down,” according to a statement on its website. The Financial Conduct Authority forced ePayments to freeze operations in early 2020 and the closely held firm had been working to improve its anti-crime controls since then, filings show.
/jlne.ws/3d8xKuC

Cybersecurity

How has COVID-19 affected cybersecurity?
Madeline Lauver – Security Magazine
When the COVID-19 pandemic shut down offices in early 2020, the enterprise cybersecurity threat landscape expanded — as did the roles of chief information security officers (CISOs), many of whom needed to react quickly to protect their growing networks and support remote work environments.
/jlne.ws/3U8npzo

U.S. government offensive cybersecurity actions tied to defensive demands
Cynthia Brumfield – CSO Online
Offensive cyber operations are best known as acts of digital harm, mainly in the context of cyber “warfare,” with nation-states, particularly intelligence organizations, serving as the primary actors. But, as experts and officials speaking at the Billington Cybersecurity Summit this year attest, “offensive cyber” is also a term increasingly applied to the growing use of digital tools and methods deployed by various arms of the federal government, often in partnership with private sector parties, to snuff out threats or help victims of ransomware actors proactively.
/jlne.ws/3qzRzhy

China says NSA used multiple cybersecurity tools in attacks against Chinese university
Eileen Yu – ZDNET
China has released a report that reveals the US National Security Agency (NSA) used multiple cybersecurity tools in its recent attacks against a Chinese university. Amongst these are sniffing and Trojan programs, which Chinese researchers say led to the theft of a “large amount of sensitive data”.
/jlne.ws/3B4lXpe

Survey Connects Cybersecurity Skills Gap to Increase in Breaches
Jennifer Gregory – SecurityIntelligence
The skills gap in cybersecurity isn’t a new concern. But, new research revealed in Fortinet’s 2022 Cybersecurity Skills Gap report confirmed what many experts have assumed. The skills gap increased risk and was likely the direct cause of at least some breaches.
Data for the survey was collected from 1,223 IT decision-makers in countries across the globe. The majority of the respondents were C-level executives (34%) or directors (34%), with the remaining responses coming from a variety of positions, including owners, vice presidents and department heads.
/jlne.ws/3eLP9Ke

Overcoming Vast Exploitable Gaps Caused By Single-Function Cybersecurity Sprawl
David Schiffer – Forbes
While the future of technology continues to evolve, the path of cybersecurity is clear. For years, organizations have acquired discrete security products, like threat detection, virtual private networks, secure email gateways and endpoint protection, among others. This sprawl of single-function products is a source of great stress for IT and security teams that are now confronted with complex and fragmented security postures.
/jlne.ws/3qA7QD7

Cryptocurrencies

Cryptoverse: Ether snaps at bitcoin’s heels in race for crypto crown
Medha Singh and Lisa Pauline Mattackal – Reuters
For years, ether could barely dream of challenging its big brother bitcoin. Now, its ambitions may be becoming more realistic. The second-biggest cryptocurrency is taking market share from bitcoin ahead of an all-important “Merge” software upgrade that could sharply reduce the energy usage of its Ethereum blockchain, should the developers pull it off in coming days.
/jlne.ws/3U6OPpG

A Bitcoin ETF Is Long Past Due, Crypto Lobbyists Say in New Report
Jesse Hamilton – CoinDesk
The question of whether the U.S. Securities and Exchange Commission (SEC) should be forced to permit spot-based bitcoin exchange-traded-funds (ETF) is now inching through the courts, but industry lobbyists are making another public push to declare the regulator is wrong in opposing the product.
/jlne.ws/3eQ4z08

Do Not Pass Go, Do Not Collect 200 Bitcoin; An apparent Monopoly-themed board game touting bankrupt cryptocurrency lender Celsius briefly went on sale
Spencer Jakab – The Wall Street Journal
Temperatures are rising in cryptocurrency circles after an ill-considered marketing promotion seems to have launched around a bankrupt crypto lender. Cryptocurrency lender Celsius Network LLC shocked customers when it halted withdrawals this spring and then, despite reassurances, filed for bankruptcy in July. Now a Celsius-themed board game that supposedly had been worked on for months briefly went on sale and was quickly withdrawn, according to Cointelegraph. Celsiusopoly, pictured in a now-deleted tweet from marketing firm USA Strong, showed the ability to gain monopolies in various cryptocurrencies of ascending value. In place of the “Chance” card was “Reward and Interest” and adorning the box was a quote from happier times by Celsius chief executive Alex Mashinsky: “Do good. Then do well.”
/jlne.ws/3RRpEWg

Novogratz Says Fidelity to Shift Retail to Crypto Soon
David Pan – Bloomberg
Mike Novogratz, the founder and chief executive of Galaxy Digital Holdings Ltd., said he’s heard that Fidelity Investments will “shift retail customers into crypto soon.” Fidelity has been one of the most visible institutional proponents of digital assets, saying earlier this year that it would have a product ready in coming months to allow 401(k) plan participants to direct a portion of their savings into Bitcoin. In June, people familiar with the situation said market makers Citadel Securities and Virtu Financial Inc. were building a crypto trading platform along with Fidelity and fellow retail brokerage Charles Schwab Corp.
/jlne.ws/3BC4W7p

Crypto Fraud and Asset Recovery Network in U.K. launches Hong Kong chapter
Dylan Butts – Forkast
The Crypto Fraud and Asset Recovery Network (CFAAR), which calls itself the first global network of its kind, has launched a Hong Kong-based chapter in collaboration with seven local finance, law, and crypto regulation experts.
/jlne.ws/3U3V6Ch

Fidelity May Be About to Up Its Crypto Game With Bitcoin Trading. What to Know.
Jack Denton – Barron’s
Fidelity Investments is considering allowing individual investors to trade Bitcoin, according to a report—a move that would mark a significant advancement in the financial giant’s march into digital assets.
/jlne.ws/3BeuGoX

Ethereum Blockchain’s Upgrade May Lead to Greater Institutional Adoption of Ether: Bank of America
Will Canny – CoinDesk
While Ethereum’s switch to a proof-of-stake (PoS) consensus mechanism from proof-of-work (PoW), a transition known as the Merge, doesn’t address concerns about the blockchain’s scalability or high transaction fees, it has implications that reach beyond simply acting as a precursor for the next stage in the process, the Surge, Bank of America (BAC) said in a research report Friday.
/jlne.ws/3xmyUcV

Crypto Custody Firm BitGo Files $100M Lawsuit Against Galaxy Digital For Breaching Merger Agreement
Oliver Knight – CoinDesk
Cryptocurrency custody firm BitGo has filed a lawsuit against crypto financial services firm Galaxy Digital, seeking more than $100 million in damages. In a statement on Twitter, California-based BitGo alleges that Galaxy Digital intentionally breached its $1.2 billion merger, which was announced in May last year.
/jlne.ws/3BAQWdR

Crypto Fund Ledger Prime Planning to Refund Outside Investors
Brandy Betz – CoinDesk
Crypto hedge fund LedgerPrime is planning to return all capital to outside investors amid a transition to becoming a family office, pending approval, Chief Investment Officer Shiliang Tang confirmed to CoinDesk in an email. The news was first reported by Seeking Alpha.
/jlne.ws/3eM8Npb

Starbucks Odyssey Program to Offer Digital Collectible Stamps in NFT Form
CoinDesk
Starbucks (SBUX) is set to begin a non-fungible token-based (NFT) loyalty program called Odyssey that allows customers to purchase and earn digital collectible stamps in the form of NFTs that offer benefits and immersive experiences. “The Hash” panel discusses what this means for the growing market of NFT adoption.
/jlne.ws/3xmqjXQ

Politics

White House Releases Report on Crypto Mining, Drawing Praise From Advocates and Critics
CoinDesk
The Biden administration’s new findings on bitcoin (BTC) mining’s environmental impact united industry advocates and critics; Both sides declared their views had support from the highest levels of the U.S. government. “The Hash” panel discusses what this means for the future of the mining industry and whether the optimism stays.
/jlne.ws/3RHr9q5

ESG ETFs face perfect storm in the US; Fund providers face political battles and a tightening regulatory environment that could prove onerous
Emma Boyde – Financial Times
US providers of exchange traded funds that invest according to the dominant environmental, social and governance (ESG) principles are facing a perfect storm. Not only are they braced for a slew of complex new rules from the Securities and Exchange Commission, but they have also become entangled in political and ideological battles that have seen ESG funds condemned for being a symptom of “woke capitalism”.
/jlne.ws/3QBhz6N

How ESG investing got tangled up in America’s culture wars
Michael Copley – NPR
A growing number of Republican politicians are moving to penalize Wall Street investors who consider environmental, social and governance (ESG) issues when they decide where to put clients’ money. In Florida, a state board chaired by Gov. Ron DeSantis recently barred investment fund managers and advisors from considering “social, political, or ideological interests” when making decisions for Florida’s retirement system. In Texas and West Virginia, GOP leaders say they will block investors from state business who they claim “boycott” the fossil fuel industry. Fifteen other states are considering similar measures. And Republicans have said that if they retake Congress in the midterms, they plan to push federal legislation to curtail investment decisions they attack as “woke.”
/jlne.ws/3QzsLB3

ESG is the free market, not political fodder
Kevin Bain – The Bond Buyer
The fear of extreme weather and civic unrest has inspired investors of all sizes to buy environmental, social and governance (ESG) securities. The global ESG market has grown from $19 trillion in 2014 to a projected $55 trillion in 2022 due to such incredible demand. Banks have appropriately responded by making it easier to invest in a greener and more equitable world with ESG dedicated funds. Companies and governments have more frequently added a green or social label to their bond issuance to attract investor interest — lowering interest costs. The rise of ESG investing exemplifies supply meeting demand in the free market, but some conservative leaders seem to have forgotten their Econ 101.
/jlne.ws/3QNAT0Y

Yellen to Visit I.R.S. Facility as Biden Administration Prepares to Bolster Tax Agency; The Treasury secretary will deliver a speech to staff laying out the modernization plans.
Alan Rappeport – The New York Times
Treasury Secretary Janet L. Yellen will make her first visit to an Internal Revenue Service facility on Thursday as the Biden administration embarks on an $80 billion overhaul of the tax collection agency. Ms. Yellen plans to tour the I.R.S. offices in New Carrollton, Md., and give a speech to employees there about plans to modernize the agency, according to a Treasury official. The building there houses about 7,500 I.R.S. staff who are focused mostly on information technology services.
/jlne.ws/3U3T8BW

Regulation

The Long and Winding Road to Market Data Reform
John Ramsay – IEX Exchange
Two recent court decisions cleared the way for the U.S. Securities and Exchange Commission to implement important market reforms, notwithstanding the continuing opposition of the large exchange companies that sued to block the changes. Chair Gensler suggested in a recent speech that the SEC may take the opportunity to accelerate key parts of those reforms. It’s a good idea, and the Commission should seize the chance to do so.
/jlne.ws/3xjStme

FINRA Fines BofA Securities, Inc. $5 Million for Large Options Position Reporting Failures
Ray Pellecchia – FINRA
FINRA announced today that it has fined BofA Securities Inc. (BofAS) $5 million for failing to report over-the-counter (OTC) options positions to the Large Options Positions Reporting system (LOPR) in more than 7.4 million instances, including 26 positions that were over the applicable OTC position limit, and related supervisory failures. The matter originated from FINRA’s Trading and Financial Compliance Examinations Group’s identification of the issue through the group’s review of OTC exercise limits.
/jlne.ws/3RG9kHR

SEC Charges Hudson Advisors and Lone Star Global for Failing to Disclose that Fund Fees Included More Than $50 Million of Owner’s Income Tax Liability
SEC
The Securities and Exchange Commission announced charges today against registered investment advisers Hudson Advisors L.P. and Lone Star Global Acquisitions Ltd. for including Hudson’s owner’s anticipated income tax liability as a component of certain fees charged to 14 private equity funds they managed. Hudson and Lone Star Global have agreed to pay $11.2 million in civil penalties and have reimbursed the affected funds $68.5 million, which includes interest on the undisclosed tax liability charges.
/jlne.ws/3DoJggb

SEC charges VMware with misleading investors by obscuring financial performance
Kanishka Singh – Reuters
The U.S. Securities and Exchange Commission said on Monday it has charged cloud computing company VMware Inc (VMW.N) with misleading investors by obscuring its financial performance. The company was charged with misleading investors about its order backlog management practices, which the agency said enabled it to push revenue into future quarters by delaying product deliveries to customers, thereby concealing the company’s slowing performance relative to its projections.
/jlne.ws/3Laqyea

SEC Charges VMware with Misleading Investors by Obscuring Financial Performance
SEC
The Securities and Exchange Commission today charged VMware Inc. for misleading investors about its order backlog management practices, which enabled the Palo Alto, California-based technology company to push revenue into future quarters by delaying product deliveries to customers, concealing the company’s slowing performance relative to its projections.
/jlne.ws/3LaT0wv

ASIC places interim stop orders on Australian Residential Property Fund and Private Property Trust No. 20
ASIC
ASIC has placed interim stop orders on the offer and distribution of two managed funds directly to retail investors in response to deficiencies in the funds’ target market determinations (TMD). The funds are:the Australian Residential Property Fund; the Private Property Trust No. 20.
/jlne.ws/3BBELNX

Former BBY Head of Operations charged with obtaining financial advantage by deception
ASIC
Fiona Mae Bilton of Victoria has been charged with obtaining a financial advantage by deception.
Ms Bilton, as Head of Operations at stockbroking firm BBY Limited (BBY), is charged with three counts of dishonestly obtaining a financial advantage for BBY by deceiving St George Bank on 115 separate occasions between June 2013 and May 2015. The charges arise out of Ms Bilton’s involvement in obtaining overdraft funding from St George Bank for BBY that BBY was not entitled to.
/jlne.ws/3QFdzlI

FCA decides to impose conditions on takeover of Link Group
FCA
Following announcements made on Monday 12 September by Link Group to the Australian Securities Exchange and Dye and Durham (D&D) to the Toronto Stock Exchange, the Financial Conduct Authority is providing a short update on its involvement in the proposed takeover of the Link Group by D&D. The proposed takeover involves the acquisition of seven firms authorised by the FCA. D&D is required to seek FCA approval to take control of these firms. One of these is Link Fund Solutions Ltd (LFS), which managed the LF Woodford Equity Income Fund (WEIF).
/jlne.ws/3xlAQCt

Link ‘likely’ to face £300mn penalty over Woodford fund collapse; UK regulator discloses potential hit to administrator of former star stockpicker’s flagship fund
Joshua Oliver – Financial Times
The Financial Conduct Authority has tipped its hand on the outcome of its investigation into the collapse of the fund run by Neil Woodford, saying it is “likely” to demand that Link pay up to £300mn over its role in the scandal.
/jlne.ws/3qxB9pV

Investing and Trading

Fidelity Weighs Bitcoin Trading on Brokerage Platform; The firm has more than 34 million brokerage accounts
Justin Baer – The Wall Street Journal
Fidelity Investments is weighing a plan to allow individual investors to trade bitcoin on its brokerage platform, people familiar with the matter said, marking the financial giant’s latest foray into cryptocurrencies. Fidelity launched a bitcoin-trading business for hedge funds and other institutional investors in 2018, and earlier this year allowed corporate clients to add the digital asset to the 401(k) retirement plans it manages for them. Now, the Boston firm is working toward bringing crypto to its more than 34.4 million brokerage accounts, the people said.
/jlne.ws/3QMrGpG

FBI Warns Investors to Take Precautions with Decentralized Financial Platforms
Ravie Lakshmanan – The Hacker News
The U.S. Federal Bureau of Investigation (FBI) on Monday warned of cyber criminals increasingly exploiting flaws in decentralized finance (DeFi) platforms to plunder cryptocurrency. “The FBI has observed cyber criminals exploiting vulnerabilities in the smart contracts governing DeFi platforms to steal investors’ cryptocurrency,” the agency said in a notification. Attackers are said to have used different methods to hack and steal cryptocurrency from DeFi platforms, including initiating flash loans that trigger exploits in the platforms’ smart contracts and exploiting signature verification flaws in their token bridge to withdraw all investments.
/jlne.ws/3UhOqRp

Reports August 2022 Operating Data
Robinhood
Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today reported selected monthly operating data for August 2022
/jlne.ws/3d66jSr

U.S. DOJ short-selling probe looks at trading in Amazon, Microsoft, JPM – Bloomberg News
Reuters
The U.S Department of Justice has subpoenaed some short sellers for trading information on firms including Amazon.com Inc, Microsoft Corp and JPMorgan Chase & Co, as part of a short-selling probe, Bloomberg News reported on Monday.
/jlne.ws/3Dlvo6h

Opec says oil sell-off driven by ‘erroneous signals’ in markets; Investor bets against crude prices are not in line with fundamentals, cartel argues
Tom Wilson – Financial Times
Opec said the recent oil sell-off was the result of “erroneous signals” as the cartel pushed back against predictions that slowing economic growth and monetary policy tightening would weigh on global crude demand into 2023. Oil market fundamentals were “unchanged”, the producer group argued, yet hedge funds and other money managers had continued to close out bets on rising prices in the two major oil futures contracts “amid a market narrative of worsening economic and demand outlook.”
/jlne.ws/3BBAjPe

Petra Diamonds to resume dividends as Russia sanctions help lift prices; Embattled London-listed miner launches debt-cutting drive
Harry Dempsey – Financial Times
Petra Diamonds has reinstated a dividend and launched a debt-cutting drive after strong prices helped by uncertainty over Russian supplies lifted the mining group’s full-year profits.
/jlne.ws/3eHFwfw

Redburn appoints new global head of execution services; New execution services head has been with Redburn for 13.5 years, joining as an equities sales trader in 2009.
Annabel Smith – The Trade
European equity research and execution firm, Redburn, has promoted from within for its new global head of execution services. Andrew Quick has been appointed to head up execution services globally, after serving with the firm for the last 13.5 years.
/jlne.ws/3BeCgjq

Environmental, Social and Corporate Governance

Liquidnet joins Sustainable Trading network; TP ICAP, Liquidnet’s parent company, said the move “solidified” its wider ambition for the broker’s energy transition.
Annabel Smith – The Trade
Liquidnet has joined the non-profit environmental, social and governance (ESG) membership network, Sustainable Trading. Originally launched in February, the network is aimed at driving trading focused change around how the market approaches sustainability. Members of the network – which includes the buy- and sell-side as well as trading venues and FinTechs – will use the network as a forum to collaborate on how to develop solutions to ESG issues in trading including considering how the industry builds, maintains and operates trading infrastructure and the environmental impact this has.
/jlne.ws/3U9cplF

Egypt climate champion calls for new metric on climate finance
Aidan Lewis – Reuters
Developing country climate financing needs should start being reframed at the U.N. climate summit in November, in order to move beyond the outdated – and unfulfilled – $100 billion that rich nations had pledged to deliver each year, the U.N. high-level climate champion for Egypt said. With food and energy inflation already being driven by climate concerns and the war in Ukraine, the world needs to deliver more financing to help developing nations for their energy transition and ability to adapt to climate challenges like drought or sea level rise, Mahmoud Mohieldin said. “The finance architecture of climate is inefficient, insufficient and unfair,” Mohieldin said in an interview, noting that the $100 billion pledge made in 2009 will expire in 2025. To date, it has only ever been partially met.
/jlne.ws/3L8wsfE

First climate lawsuit against Russian government launched over emissions; Group of activists file supreme court case demanding stronger action on meeting Paris accord goals
Waseem Mohamed – The Guardian
The first-ever climate lawsuit in Russia has been filed by a group of activists demanding that the the government take stronger action over the climate crisis. The group wants the Russian authorities to take measures that will reduce the country’s greenhouse emissions, in line with targets of limiting the global temperature rise to 1.5C agreed under the 2015 Paris climate accords. Russia is the fourth biggest producer of carbon emissions worldwide, and its average temperatures have risen twice as fast as the global average. The country’s emissions are predicted to reach 2,212m tons of carbon dioxide by 2030.
/jlne.ws/3DtCwgW

Creditors Lose Some Rights as ESG Bond Market Allows Legal Tweak; Some bonds now allow KPI adjustments without investor consent; NatWest says development gives issuers considerable discretion
Greg Ritchie – Bloomberg
In one of the hottest corners of ESG debt, issuers have started altering documents so they can change their targets without getting bondholders’ permission. It’s a variation on the sustainability-linked bond, which generally requires an issuer to meet pre-determined environmental, social or governance goals within a given timeframe, or face higher borrowing costs. The more flexible version of the SLB allows issuers to adjust those targets under certain conditions, without incurring a penalty.
/jlne.ws/3Leirgz

I survived the worst ESG backlash since the term was invented; Today’s ESG critics are running out of ammunition
Halla Tómasdóttir – Fortune
In 2007, I co-founded the investment firm Auður Capital in my native Iceland. We set out to incorporate more “feminine” values into finance, with the overriding philosophy that we would pursue profit with principles and place environmental, social, and governance issues at the heart of our investments. The following year, a global financial crisis brought down Iceland’s financial sector – a black swan event that swept reality out from under our feet. Our firm was the only asset manager that survived intact. We went from being laughed at by some in the sector to being broadly trusted by a fast-growing community of clients.
/jlne.ws/3d5yh0B

ESG funds to double by 2025; Dow Jones’ research forecasts ESG to account for 15% of all investments by that point
Banking Exchange
Sustainable investing is the number one growth opportunity for the asset management industry according to statistics from Dow Research, which forecasts the amount of ESG investments to double in the next three years. By 2025, Dow Jones predicts these portfolios will account for 15% of all investments. Based on a survey of 200 ‘financial leaders’ the research found the opportunity to drive positive change was the most widely-cited reason for this.
/jlne.ws/3BbTZrI

CEO Daily
Alan Murray – Fortune
Good morning. Will political attacks on ESG cause companies to pull back from social and environmental commitments? I was in Florida yesterday—ground zero for the attack on “woke” CEOs—and asked that question of Workday co-CEO Aneel Bhusri, who is hosting his company’s massive annual customer event there. It was a table-turner for me—Bhusri was interviewing me about my book Tomorrow’s Capitalist in front of a group of senior executives. But I managed to slip my question into the conversation. His response: “I believe in the narrative of environment, social and governance. I think these are three important things for companies to focus in on. It’s part of stakeholder theory. “I’m not a fan of the ESG construct because it seems like a catch-all. I’m not sure how those three things came together. The SEC is now looking to measure and regulate it.
/jlne.ws/3xlJwbU

Liquidnet joins Sustainable Trading network; TP ICAP, Liquidnet’s parent company, said the move “solidified” its wider ambition for the broker’s energy transition.
Annabel Smith – The Trade
Liquidnet has joined the non-profit environmental, social and governance (ESG) membership network, Sustainable Trading. Originally launched in February, the network is aimed at driving trading focused change around how the market approaches sustainability. Members of the network – which includes the buy- and sell-side as well as trading venues and FinTechs – will use the network as a forum to collaborate on how to develop solutions to ESG issues in trading including considering how the industry builds, maintains and operates trading infrastructure and the environmental impact this has.
/jlne.ws/3U9cplF

Institutions

Goldman Sachs prepares for layoffs as deal-making slows.
Lauren Hirsch – The New York Times
Goldman Sachs is preparing for a round of layoffs that could come as soon as next week, according to two people familiar with the plans, who spoke on condition of anonymity because they were not authorized to speak publicly. The job cuts will affect employees across the company, according to the people. Goldman typically revisits its head count every year, letting go of employees based on performance and to match the bank’s needs. It had paused that program during the pandemic, which also coincided with a record period for deal-making, when bankers complained of overwork. The program typically lays off 1 to 5 percent of workers; this round of layoffs is likely to be at the lower end of that range, a person familiar with the matter said.
/jlne.ws/3BzJZKk

Goldman Sachs preparing layoffs across all departments as soon as next week: report
Lydia Moynihan – New York Post
Goldman Sachs is preparing to make its first round of layoffs since the outbreak of the pandemic, according to a report. The Wall Street banking behemoth is expected to slash jobs across all departments as soon as next week, the New York Times reported Monday. A Goldman spokesperson declined to comment when contacted by The Post. The cuts would come amid the downturn in deal-making as the economy teeters on the verge of a recession caused by runaway inflation. Before the pandemic, Goldman annually culled 1% to 5% of under-performers from its workforce every year. It halted the firings as business boomed during the pandemic.
/jlne.ws/3dfn0dX

Goldman Sachs Plans to Cut Hundreds of Jobs; Planned layoffs follow reinstatement of annual performance reviews and a slump in Wall Street deal making
Charley Grant – The Wall Street Journal
Goldman Sachs Group Inc. is preparing to lay off hundreds of staffers as soon as next week. The job cuts are part of the bank’s annual performance reviews that had been suspended during the pandemic, according to a person familiar with the matter. Goldman reinstated those reviews earlier this year following a slump in Wall Street deal-making activity. Goldman had 47,000 employees on staff at the end of June, up from 41,000 a year earlier. The New York Times earlier reported on the impending layoffs.
/jlne.ws/3QHEXQ2

“Super bearish” fund managers’ allocation to global stocks at all-time low, Bank of America survey shows
Reuters
Fund managers are “super bearish” with average allocations to cash at the highest since 2001 and allocation to global stocks at an all-time low, according to Bank of America’s (BofA) monthly survey of global fund managers for September. The results come even as MSCI’s gauge of stocks around the world (.MIWO00000PUS) has rallied 3% so far in September, though after a bruising first half the index is still down 16% this year.
/jlne.ws/3U5EpXd

Wells Fargo to Pay $145 Million to Settle 401(k) Plan Probe; Labor Department alleged bank’s retirement plan overpaid for its own stock from 2013 through 2018
Colin Kellaher and Ben Eisen – The Wall Street Journal
Wells Fargo & Co. agreed to pay about $145 million to resolve U.S. Labor Department allegations that the bank’s retirement plan overpaid for its own stock. The Labor Department found that the bank’s 401(k) plan and its trustee paid between $1,033 and $1,090 per share for preferred stock, which later converted to $1,000 in common stock when it was allocated to plan participants, the government agency said Monday. Wells Fargo and GreatBanc Trust Co., the trustee, also used the dividends paid on the preferred shares to repay stock-purchase loans, thereby offsetting their own obligations to contribute to the 401(k) plan, the Labor Department said. The transactions took place between 2013 and 2018, before the company’s current chief executive, Charles Scharf, stepped into his role.
/jlne.ws/3dbEeci

JPMorgan slashes EM corporate debt issuance forecast by a third
Marc Jones – Reuters
Investment bank JPMorgan slashed its forecast for developing world corporate debt issuance by a third on Monday, the latest sign of the economic pressures poorer countries are now facing. The amount of bonds emerging market companies and governments have been able to sell this year has plunged as surging global borrowing costs have left many either unwilling or unable to tap the international markets. “The primary market remains subdued with little signs of pick-up, compelling us to revise down our 2022 (EM corporate) issuance forecast once more to $260 billion from $400 billion,” JPMorgan analysts said in a research note.
/jlne.ws/3RTKjbY

Goldman Sachs set to cut jobs this month
Saeed Azhar – Reuters
Goldman Sachs Group Inc will cut jobs as early as this month after pausing the annual practice for two years during the pandemic, according to a source familiar with the plans. The Wall Street giant typically trims about 1% to 5% of its staff each year, and the 2022 cuts will likely be in the lower end of that range, the source told Reuters. The staff reductions may begin as early as next week, the person said. Goldman’s headcount swelled to 47,000 at the end of June, up 15% from a year earlier. A 1% cut to staffing would imply a reduction of about 500 bankers. The New York Times earlier reported on the upcoming layoffs, citing two people familiar with the plans. Goldman Sachs declined to comment.
/jlne.ws/3qAAdRC

Bank of America is fined $5 million for failing to report 7.42 million options positions
Reuters
A U.S. regulator on Monday fined Bank of America Corp $5 million for failing to report over-the-counter options positions approximately 7.42 million times, making it harder to monitor markets for possible manipulative behavior. The Financial Industry Regulatory Authority said BofA Securities’ failures occurred from 2009 to October 2020, and included 26 options positions that exceeded applicable size limits by 20% to 2,900%. FINRA also said the bank’s supervisory system was not reasonably designed to comply with reporting obligations to the regulator’s Large Options Positions Reporting platform from 2014 to October 2020. Bank of America did not admit or deny wrongdoing in agreeing to settle, and has corrected the causes underlying the reporting failures, FINRA said. The regulator also imposed a censure.
/jlne.ws/3xiaWzs

BofA names new corporate, investment banking head for North America – memo
Reuters
Bank of America Corp (BAC.N)on Monday named company veteran Mike Joo as its new head of global corporate and investment banking (GCIB) for North America, according to a memo seen by Reuters. The newly created role will add to Joo’s existing responsibilities as GCIB’s chief operating officer (COO). Joo will report to GCIB president Matthew Koder. “Mike’s extensive experience across the firm will enable him to fully utilize the entire Bank of America platform, including the Market Presidents, to leverage our expansive network and capabilities to deepen and broaden client relationships,” Koder said in the memo. The contents of the memo were confirmed by a Bank of America spokesperson.
/jlne.ws/3Batwea

Barclays is ‘far along’ in discussions with SEC on securities selling error -CEO
Lananh Nguyen – Reuters
Barclays PLC is very “far along” in discussions with the U.S. Securities and Exchange Commission after it sold securities in breach of U.S. rules, the bank’s chief executive said on Monday. “We are very, very far along in discussions with the SEC on resolving outstanding issues with that matter,” C.S. Venkatakrishnan told a Barclays investor conference. Barclays’ second-quarter profit was dented by a 1.9 billion pound ($2.3 billion) hit for regulatory missteps, including having to buy back billions of dollars of securities the bank sold in error.
/jlne.ws/3BAvndq

Wells Fargo to pay over $13 million penalty to resolve 401(k) review
Reuters
Wells Fargo & Co said on Monday it would pay a penalty of $13.2 million as part of a settlement with the U.S Department of Labor to resolve the federal agency’s review of certain transactions related to the bank’s 401(k) retirement plans. About $131.8 million would also be paid out to eligible current and former participants of the plan, the bank said, adding that it “strongly disagrees with the DOL’s allegations”. WFC gives its employees some of its preferred stock under a retirement package offered to them. The DoL alleged that from 2013 through 2018, the funds under the plan paid more for the preferred stock than what it was worth. Wells first disclosed the federal review in February.
/jlne.ws/3DsIE9c

Qontigo Insight Quarterly Multi-Asset Risk Review
Christoph Schon – Qontigo
Long-term inflation expectations have finally started to revert to their long-term averages, but stock and bond prices markets have still taken another turn for the worse, as traders evaluate the long-term economic costs of tighter monetary conditions. One of the biggest beneficiaries has so far been the US dollar, supported by the widening interest rate differential against its major rivals and by growing economic-growth concerns in Europe.
/jlne.ws/3Dkz5Jr

Credit Suisse exec: Swiss bank not main focus for cost savings
Reuters
Credit Suisse’s Swiss unit has become more efficient and growth focused in recent years and will thus be hit less by restructuring and cost savings than other parts of the bank, its head said in a media interview published on Tuesday.
/jlne.ws/3qFHRKt

Citi Got Its $500 Million Back; Also Musk v. Twitter and US v. Trevor Milton.
Matt Levine – Bloomberg
Citi Revlon
In 2016, Revlon Inc. borrowed money from some banks and hedge funds. Citigroup Inc. was the administrative agent on the loan, in charge of doing stuff like forwarding payments from Revlon to the lenders. Revlon ran into some financial trouble and set out to modify its debt in an aggressive way that disadvantaged some of the lenders on that term loan. This made those lenders mad, and they geared up to sue Revlon. Just as they were about to sue, in August 2020, Citi accidentally paid off the whole loan — $900 million — with its own money. We talked about this in detail last year, and it still makes me laugh and cringe. Citi was helping Revlon with the loan modification, and its loan-modification software had an unbelievably janky user interface, and a Citi back-office person pressed the wrong button and paid off the whole loan. Oops.
/jlne.ws/3BD7LVR

UBS plans to raise dividend and extend share buyback; Proposals come days after Swiss bank pulls out of deal to buy fintech Wealthfront
Owen Walker – Financial News
UBS has proposed raising its dividend and buying back more shares just days after scrapping a $1.4bn acquisition of US financial technology company Wealthfront. The Swiss lender said on Tuesday it would seek approval from shareholders to increase its ordinary dividend for 2022 to $0.55 a share, a 10 per cent increase from last year.
/jlne.ws/3QJIpd0

Wellness Exchange

EU regulator backs Pfizer/BioNTech BA.4/5-adapted COVID booster
Natalie Grover – Reuters
The European Medicines Agency (EMA) on Monday recommended a COVID-19 booster designed to combat the currently circulating Omicron BA.4/5 subvariants, days after endorsing a pair of boosters tailored to target the older BA.1 Omicron variant. The latest recommendation is for a so-called bivalent vaccine developed by Pfizer and BioNTech, which targets BA.4/5 as well as the strain of the virus that originally emerged in China in December 2019 targeted by earlier COVID vaccines. The EMA recommendation is to authorize the retooled booster shots for people aged 12 and above who have received at least primary vaccination against COVID. The final go-ahead will be subject to European Commission approval, which is expected to come in shortly.
/jlne.ws/3U7JpdK

Goldman Says China Will Stick to Covid Zero Even After Communist Party Meeting
Emma O’Brien and Linda Lew – Bloomberg
Goldman Sachs Group Inc. sees China persisting with its zero-tolerance approach to Covid-19 following a key Communist Party meeting next month, with the bank’s economists playing down expectations of any major policy shifts immediately after the congress.
/jlne.ws/3Lczsrm

Hong Kong Turns Covid Isolation Center Into Monkeypox Quarantine; City has found single monkeypox case, in arriving passenger; New virus could threaten discussions on further travel easing
Shirley Zhao – Bloomberg
Hong Kong is converting a former Covid-19 isolation center into monkeypox quarantine facility, even though it has found just one case of the new virus. The Sai Kung Outdoor Recreation Center, which was a holiday camp before being repurposed during the Covid pandemic, can provide about 100 beds, media including the South China Morning Post reported Tuesday, citing a statement from health officials. The recreation center will be closed from Tuesday until further notice for anti-epidemic purposes, the Leisure and Cultural Services Department said in a separate statement Monday, without detailing the reasons for the closure.

Some 17 Million in Europe Got Long Covid in First Two Pandemic Years; Women twice as likely to suffer lingering effects, study shows; Long Covid cases quadrupled in 2021, modeling suggests
Marthe Fourcade – Bloomberg
At least 17 million people in Europe experienced long Covid in the pandemic’s first two years, with many still struggling with debilitating symptoms, according to a new tally. Women were twice as likely as men to experience lingering effects, according to new modeling conducted by the Institute of Health Metrics and Evaluation at the University of Washington’s School of Medicine. The data, compiled for the World Health Organization’s European region, shows one in three women who were hospitalized risk developing long Covid.
/jlne.ws/3QDLyey

WHO’s Africa Hub Aims to Have its Covid-19 Vaccine Made Globally; Human trials of shot copied from Moderna to start by May; Patents may complicate development of shots for other diseases
Antony Sguazzin – Bloomberg
African Biologics & Vaccines plans to start human trials of its Covid-19 vaccine candidate by May, part of a World Health Organization-backed plan to develop locally-made inoculations in the developing world.
/jlne.ws/3S2LllV

Polio may make a comeback – and it started with linking autism to vaccination; I was struck by the illness as a child. We will put everyone in danger if we allow discredited reports to proliferate.
Paul Steiger – The Guardian
One of my earliest memories, perhaps the earliest of all, goes back to when I was about four years old, in 1946, living in the Bronx borough of New York City. I awoke to a searing headache and fiery fever, aching all over. I remember a tube being inserted into my privates, to help withdraw urine. I awoke again, I don’t know how much later, hours or days, in a hospital ward. In the bed next to me was a man engaged with a terrifying contraption I now know was an iron lung, to help him breathe.
/jlne.ws/3S12zQG

What to know about the new Omicron booster and flu shot season?
Erin Prater – Fortune
Scheduling your Omicron booster and flu shot at the same time is not only safe, it’s smart, public health officials say. Those 12 and older who received a COVID vaccination two months ago or longer—and who have finished their initial two-part vaccine series—are currently eligible for the new booster. While it’s unsafe to receive two COVID shots at the same time or too close together, receiving the Omicron booster with the flu shot is safe. And it’s a good idea, experts contend, lest you get one shot and forget to make another appointment for the other.
/jlne.ws/3LbxkQH

Regions

Bureau of Meteorology declares third La Niña is officially under way for Australia; East coast communities prepare for more rain and floods as they enter relatively rare third year of climate event
Peter Hannam – The Guardian
Australia’s Bureau of Meteorology has declared a La Niña event is under way in the Pacific, joining other international agencies to mark a weather pattern that typically elevates flood risks for much of the country. In its fortnightly update of Australia’s climate drivers, the bureau said key atmospheric and oceanic indicators of the El Niño – Southern Oscillation (Enso) showed “an established La Niña”.
/jlne.ws/3xjxv6X

China Tells Banks to Report Exposure to Conglomerate Fosun; CBIRC, Beijing SASAC make requests amid liquidity worries; Fosun entities have moved to pare stakes in listed operations
Bloomberg News
Chinese authorities have told the nation’s biggest banks and state-owned firms to start a round of checks on their financial exposure to Fosun, one of the country’s largest non-state conglomerates, according to people familiar with the matter. Multiple regulators including China’s banking watchdog and the local commission that oversees state investments in Beijing recently told institutions under their oversight to closely examine their Fosun exposure, said the people, asking not to be identified as the matter is private.
/jlne.ws/3qxyA7h

Dutch Government Plans to Launch Slavery Apology Fund
Diederik Baazil – Bloomberg
The Dutch government is said to be planning to apologize for its historic role in slave trade and set up a fund for projects that aim to raise awareness about the legacy of slavery. The fund will be announced after the nation officially apologizes for its role in slavery by the end of this year or the beginning of next year, according to people familiar with the matter. It may be as big as 200 million euros ($204 million), the people said, speaking on condition of anonymity. The prime minister’s office declined to comment.
/jlne.ws/3RD9z6M

Smallest French Corn Crop Since 1990 Shows Drought’s Huge Toll; Ministry expects corn harvest to slump 25% from last year; ‘No region is spared from the drop in yield,’ report says
Megan Durisin – Bloomberg
French farmers are collecting their smallest corn crop in more than three decades, highlighting the massive toll that summer drought has wrought on Europe’s food supplies. Heat and dryness gripped much of the continent throughout summer, in what may be its worst drought in at least 500 years. That’s been particularly brutal for farmers, who are already dipping into winter forage reserves to feed cattle as pastures wither and who face shrinking output of everything from potatoes to sugar.
/jlne.ws/3DkYjrf

Over half a million young children in Somalia face acute malnutrition
Reuters
The number of young children in Somalia facing severe acute malnutrition (SAM) has increased to over half a million – a level higher than a 2011 famine in which tens of thousands of children died, U.N. agencies said on Tuesday. “We’ve got more than half a million children facing preventable death. It’s a pending nightmare,” James Elder, spokesperson for the U.N. children’s agency UNICEF said at a Geneva news briefing, saying this level had not been seen in any country this century.
/jlne.ws/3B9ObPj

Miscellaneous

Why Is the Dollar So Strong? American Innovation; Periods of strengthening or weakening of the dollar haven’t obviously coincided with the economic cycles. Something else has been going on.
James Mackintosh – The Wall Street Journal
The dollar is having a once-in-a-generation surge of supremacy over the world. After 11 years and a 40% gain on a real trade-weighted basis, some are starting to wonder if it is time for a fall. In the short run a weaker dollar is plausible, as Europe’s governments absorb the financial threat to their economies from energy prices and foreign central banks rush to catch up with the Federal Reserve on rate rises. The burst of optimism in the markets on Friday led the dollar to fall back, as money that had sought it out as a haven left again. But the long periods of strengthening or weakening in the past haven’t obviously coincided with the economic or monetary policy cycles. Something else has been going on, and to try to spot the end of this megacycle in the dollar we need to consider what.
/jlne.ws/3qzUcA8

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China commodity trader woe a setback for Glencore

China commodity trader woe a setback for Glencore

First Read Hits & Takes John Lothian & JLN Staff Congratulations to Larry Tabb. STA announced Larry as the 2022 Dictum Meum Pactum (DMP) Award recipient. Here is a success story for you. The Greenwood Project placed four interns at Goldman Sachs this summer...

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