OIC 2021: What’s Next for the Options Industry? ‘Not Going to Put the Genie Back in the Bottle’
Suzanne Cosgrove – John Lothian News
Retail participation, education of new investors, seen as ongoing industry themes in 2021
After two days of heralding the record volume that accompanied exceptional periods of volatility in 2020, panelists in the final sessions of the Options Industry Conference generally breathed a collective sigh of relief that the industry had escaped last year’s challenges relatively unscathed.
Even the Federal Reserve’s Randal Quarles, vice chairman for supervision and chairman of the Financial Stability Board, took a relatively sanguine tone on Thursday in his keynote discussion with OCC Executive Chairman Craig Donohue.
To read the rest of this story, go HERE.
Hits & Takes
John Lothian & JLN Staff
Congratulations to Joanna Mallers, who will receive a $250 Amazon gift card from JLN as the winner of the JLN Demographic Survey award. Also, Glen Chalkley of LME, Matt Wolfe of OCC and Peter Lugiai of the CME Group won the award to name a charity to which a $100 donation will be made in their names. Thank you to all who filled out our demographic survey.
Matt Wolfe designated his gift to iMentor Chicago and Peter Lugiai gave the money to our JLN MarketsWiki Education GoFundMe campaign.
Thank you to Thom Thompson of JLN who took a deep dive into the world of NFTs and built an outstanding page for the subject of non-fungible tokens on MarketsWiki. As are things with wikis, it is still a work under development.
The FIA has a webinar on May 19 titled “UK/EU – Rebuilding a relationship.” The Brexit divorce was a long-drawn-out process which laid bare tensions over how best to oversee derivatives markets and enable continued cross border market access. Will Euro-denominated derivatives migrate to EU CCPs on a voluntary basis or be mandated? Will UK regulations diverge? What are the prospects for market fragmentation and the financial and operational implications for market participants? Join the FIA on May 19 as speakers from ABN AMRO Clearing Bank, Allen & Overy, LSEG (London Stock Exchange Group), Eurex and Citi answer these questions and highlight core areas of concern for the cleared derivatives industry. Register HERE.
As part of FIA’s virtual Law & Compliance Conference, FIA, Inc. and their Law & Compliance Division are raising funds for Breakthrough New York. Read about their history with this non-profit, which provides high-potential, low-income students with equal opportunity and access to top colleges. Donate HERE.
JLN is going to discontinue its Brexit section since we have an accord between the UK and EU. Further stories will either be in Regions or Politics. We are considering adding new sections to JLN. We are considering Travel as that will be a continuing issue as the pandemic eases. Also perhaps an ETF section. Do you have any ideas? Email me at firstname.lastname@example.org if you have suggestions.
Also, we are going to try an experiment and start to write up boiled-down versions of some of the news in key sections of the newsletter, post them to JohnLothianNews.com and push them out via social media. Here is an example I created for the Wellness Exchange section from yesterday’s newsletter.
The Chicago Board of Trade building, built in 1930 to house the CBOT’s trading pits, was the city’s tallest building until 1955 and sits at the end of LaSalle Street. A @Hidenotslide shared this imaginative collage of pictures of the CBOT Building.
We had no new donations to our JLN MarketsWiki Education GoFundMe campaign. As a reminder, we will give donors a shout-out here in JLN, we will build you a MarketsWiki page and put a GoFundMe badge on your page to show you are a supporter, and we will list your name on a scrolling list of supporters at the end of our videos for the three history video series we currently have. Support our efforts to preserve industry history and give to our GoFundMe campaign and get your donation matched by Trading Technologies.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
OIC 2021: Yesterday’s panel on options market structure at the Options Industry Conference ushered in a beautiful new word to the derivatives lexicon: retailization. According to the panel, the options industry’s 16 exchanges and five families of exchange operators were able to benefit from retailization over the past 15 months because of the efforts and infrastructure investments expended since the Great Recession. Panelists said they were relieved this year to be able to talk about innovation and growth more than about risk management. On the industry’s agenda are projects to reduce the number of strike prices and to market mini-size products as it competes against cryptocurrencies and sports betting for the retail trader’s dollar.
FIA CEO Wall Lukken spoke with the acting chairman of the CFTC, Rostin Behnam, in conjunction with the trade group’s Law and Compliance Conference that ends today. While little more than reprising their conversation from last month’s virtual Boca, Behnam did provide a few more clues about what might be coming out from the CFTC. Talking about how retail trading is stimulating product innovation, the acting chairman hinted that the CFTC might be trying to apply the hedging and price discovery tests for new products to less “wholesale” kinds of hedgers (even individuals?) so that they can be allowed to trade. And Behnam’s several mentions of cryptocurrency trading should probably be taken as an indication that the commission is not about to abandon its recent fascination with the new commodity. ~Thom Thompson
Our friends over at Wolters Kluwer are sharing their insights today about the first 100 days of the Biden administration. Commodities and derivatives coverage by Lene Powell and Brad Rosen can be found on pages 47-50 and you can find the full “Special Report” here. ~Thom Thompson
Affluent Americans Rush to Retire in New ‘Life-Is-Short’ Mindset; The unprecedented surge in shares and home values during an economic crisis is easing the retirement path for those who have savings and investments.
Alexandre Tanzi and Michael Sasso – Bloomberg
Discover what’s driving the global economy and what it means for policy makers, businesses, investors and you with The New Economy Daily. Sign up here After a year of early-morning Zoom calls, the specter of a deadly virus and soaring stock and real estate values, working American baby boomers who can afford it plan to get out while the getting’s good.
******Your portfolio is at record highs and your home has never been worth more. Take the money and run seems like a good idea.~JJL
Flu Has Disappeared Worldwide during the COVID Pandemic
Katie Peek – Scientific American
Since the novel coronavirus began its global spread, influenza cases reported to the World Health Organization have dropped to minuscule levels. The reason, epidemiologists think, is that the public health measures taken to keep the coronavirus from spreading also stop the flu. Influenza viruses are transmitted in much the same way as SARS-CoV-2, but they are less effective at jumping from host to host.
*****Hard to cough on someone when you don’t see anyone and when you do you are wearing a mask.~JJL
A Deep Dive into Dark Trades
Phil Mackintosh – Nasdaq
Our industry has seen much discussion about the growth of retail trading since 2019. We have also seen off-exchange trading rising to more than 50% of all shares traded on some days.
*****Phil Mackintosh of Nasdaq puts on his mask and fins and wades into the dark pools.~JJL
Vaccine Passports Are a Reality, Whatever They’re Called; It will be impossible to escape some proof of immunity to re-engage in activities such as education, travel and entertainment.
Joe Nocera – Bloomberg
I downloaded my vaccine passport the other day. Of course, it wasn’t called a vaccine passport. Rather, it was an “Excelsior Pass,” issued by New York State. In addition to verifying that I have been fully vaccinated, it has a QR code that ticket-takers can scan when I want to go to Madison Square Garden to see the resurgent Knicks or Yankee Stadium to watch the faltering Yankees. It can also show the last time the holder has tested negative for Covid-19; more on that in a moment.
*****There should be something added to people’s regular passports for this.~JJL
The ‘Disaster Girl’ Made Half a Million Dollars Selling Her Meme As an NFT
Cheryl Teh – Insider
“Disaster Girl” Zoe Roth has made bank — by selling the original image of her meme as an NFT for close to half a million dollars.
She was the subject of a viral image that became a meme favorite for humorous (and somewhat sinister) takes on life, after the photo snapped in 2005 by her father was turned into a meme.
*****Check out the Thom Thompson produced NFT page on MarketsWiki to learn more about what NFTs are all about.
Thursday’s Top Three
The top story on Thursday was from the Financial Times, Cboe set to launch Amsterdam derivatives exchange. No. 2 was from Mondovisione, Proprietary Trading Firms Set for Significant Expansion of Crypto Derivatives Trading. And the third most-read story was from Bloomberg, How Good Are Vaccines? Try 99.9999% Effective.
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India’s Covid wards are like scenes from Dante’s ‘Inferno’; Black market oxygen, rows of patients struggling to breathe — the pandemic has cruelly exposed systemic issues
Zarir Udwadia – FT
The happiest I have been since the pandemic began was at 8am on the 20th of January this year. Entering the Covid-19 ward of one of the three hospitals I work at in Mumbai, I went through the all too grimly familiar routine of donning PPE to start my rounds, only to be told by the nurse in charge that we had no new Covid admissions that day. After the relentless battering of the previous 245 days it was a moment of rare bliss. We shared the smile of co-conspirators, jubilant that fresh daily cases were under 15,000 across India, in keeping with the continuing decline we were ticking off ourselves at our hospital.
Parametric fund earns ‘Gamma Hammer’ moniker with bet on tranquil markets; Morgan Stanley-owned fund placing multibillion dollar bets on stocks holding steady
Eric Platt, Joe Rennison, Laurence Fletcher, Colby Smith and Robin Wigglesworth – FT
A big bet on markets remaining docile has captured Wall Street’s attention, with $350bn fund manager Parametric earning itself the nickname ‘Gamma Hammer’ for billions of dollars’ worth of options trades.
Goldman Sachs predicts quantum computing 5 years away from use in markets; US bank and QC Ware looked into use of technology to price complex derivatives
Richard Waters – FT
Quantum computing could be brought to bear on some of the most complex calculations in financial markets within five years, considerably earlier than expected, according to research jointly conducted by Goldman Sachs.
Patchwork of vaccine passports complicates return of global travel; Efforts to certify Covid-19 status are proliferating but it is not easy to make them compatible
Richard Milne, Leila Abboud, Philip Georgiadis, Mehreen Khan and Kiran Stacey – FT
Camilla Gregersen calls it “gaining our freedom back”. On Wednesday last week, the Danish trade union boss joined about 10 per cent of Denmark’s population in having a Covid-19 test that day to enable her to use a digital coronavirus passport. Within half an hour, the negative result of her rapid test was logged in the “coronapas” and she was able to use it to visit a museum and restaurant in Copenhagen.
Retail organizations sue Fed over debit law enforcement; Two North Dakota retail associations allege in a new federal lawsuit the Fed hasn’t properly fulfilled its duty to determine “reasonable” debit card processing fees under a 2010 law.
Lynne Marek – Payments Dive
Two retail associations sued the Federal Reserve Board of Governors today over what they claim is a failure by the federal agency to properly enforce a federal law that caps the fees that can be charged on debit transactions.
Survey: Workflow Transparency, Data Security, and Work-From-Anywhere Capability Are Top Post-Pandemic Needs for the Buy-Side Front Office; Majority of asset managers report front-office technology modernization remains a top priority though data indicate COVID-19 pandemic stunted system upgrade progress
Workflow transparency, data security and work-from-anywhere capability top the list of post-pandemic needs for the buy-side front office, according to results from the 2021 Investor Survey: Research Management Trends in the Year of a Pandemic, published today by MackeyRMS and InsiderScore.
Credit Suisse Chairman Says Sorry for Losses as He Exits
Marion Halftermeyer and Patrick Winters – Bloomberg
Greensill, Archegos losses are ‘inexcusable,’ Urs Rohner says; Incoming chairman says Credit Suisse crisis worst he’s seen
In his last words as Credit Suisse Group AG Chairman, Urs Rohner apologized. Eight weeks after the Swiss bank entered one of the most turbulent periods in its history, the its outgoing chairman on Friday offered a mea culpa for the financial hits from the collapse of Archegos Capital Management and Greensill Capital.
Singapore Passes Libor Milestone With $128 Billion at Stake
Ameya Karve and Chanyaporn Chanjaroen – Bloomberg
New cash products to cease being tied to SOR at end-April; Limited historical use of interbank funding a challenge: BI
Singapore banks are pressing on in their transition away from the discredited London interbank offered rate as financial centers around the world are facing deadlines to move off Libor-priced loans and securities. After Friday, lenders and borrowers must stop using the Singapore dollar swap offer rate (SOR), computed using Libor, for new loans and other so-called cash products and use a new benchmark. That’s the guidance that’s been in place since last year from a steering committee formed by the city-state’s central bank.
The strange case of the ‘$100m deli’ and the universities that own a slice; Duke and Vanderbilt have sizeable stakes in a company with one asset: a tiny, small-town eatery
Mark Vandevelde – FT
Duke and Vanderbilt universities, two of the most prestigious seats of learning in the US, are among the biggest shareholders of a company that owns a single sandwich shop in New Jersey and has a stock market valuation of $100m despite recording just $13,976 in sales last year.
Horta-Osório pledges urgent review of Credit Suisse’s management; Comments from new chair come as bank confirms departure of head of risk after Archegos and Greensill crises
Owen Walke and Sam Jones – FT
António Horta-Osório promised an urgent review of risk management, strategy and culture at Credit Suisse, as he took over as the new chair of the ailing bank.
Big Tech’s surging growth stuns Wall Street; Accelerating revenue and profits suggest an enduring effect from shift to digital during pandemic
Richard Water – FT
After the world’s largest tech companies enjoyed a boom during the coronavirus pandemic, the expectation was that life would gradually return to normal. It certainly is not turning out that way.
Margin debt and leverage are flashing red, again; Much of the froth in US markets is being driven by unusual liquidity flows that may reverse soon
Gillian Tett – FT
When the Archegos fund imploded last month, it demonstrated yet again the perils of taking on excessive margin debt. Although a then little known family office, Archegos amassed a reported $50bn of loans from banks such as Mizuho and Credit Suisse to purchase risky equities. When those bets turned sour, its losses surpassed $10bn, judging from recent results from the banks that made those loans.
JPMorgan and the art of return-to- office politics; The fast-evolving field has already developed a few best practices
Bryce Elder – FT
The fast-evolving art of the back to office memo has already developed a few best practices. One is to keep orders informal so peer pressure can do the rest.
Profits and Politics in China’s Tech Crackdown
Nathaniel Taplin and Jacky Wong – WSJ
Is Beijing punishing China’s internet-technology titans because they are too large and too powerful or because tech firms are abusing their market power? Following the dramatic fall from grace of billionaire Jack Ma and his fintech brainchild, Ant Group, that question has become an existential one for current and prospective Chinese internet entrepreneurs—and the economy as a whole.
FCA sets out proposals to strengthen its financial promotion rules for high-risk investments
Sue Whitbread – IFAMagazine.com
Following feedback to its Call for Input (CFI) on Consumer Investments, the Financial Conduct Authority (FCA) has today published proposals to strengthen its financial promotion rules for high-risk investments to help retail investors make more effective decisions. The discussion paper (DP) seeks views on 3 areas where changes could be made to address harm to consumers from investing in inappropriate high-risk investments. The 3 areas of focus are the classification of high-risk investments, the segmentation of the high-risk investment market and the responsibilities of firms which approve financial promotions. The feedback to this DP will help shape the rules the FCA plans to consult on later in the year, ensure they are feasible for firms to implement and that they have the intended impact.
Pfizer, BioNTech Seek EU Signoff on Covid Shot for Younger Teens
Naomi Kresge – Bloomberg
Pfizer Inc. and BioNTech SE sought authorization for their Covid-19 shot to be used in children ages 12 to 15 in the European Union, potentially easing the path for schools to open broadly in the fall.
Western Europe’s Record Vaccinations Raise Hopes Worst Is Over
Chris Reiter and Geraldine Amiel – Bloomberg
Record Covid inoculations in Germany, Italy point to progress; EU vaccine supplies are due to quadruple in the second quarter
Western Europe is heading toward a critical phase in its fight against the coronavirus pandemic as accelerating vaccination rates open up the prospect of easing lockdowns and reviving economies. Germany and Italy administered a record number of Covid-19 shots this week, and France is betting that faster immunizations will lead to a gradual return to normal life. Across the European Union, there’s growing optimism that the worst is over, even as authorities continue to fight a third wave.
Global Cases Top 150 Million; France Extends Shots: Virus Update
Global cases of the coronavirus topped 150 million, with India remaining at the epicenter of the pandemic after reporting record new infections Friday. Brazil’s fatalities exceeded 400,000 as the country recorded more Covid-19 deaths in the first four months of the year than in all of 2020.
France to Extend Covid Vaccination to All Adults From June 15
Ania Nussbaum – Bloomberg
France will allow all adults to get vaccinated against the coronavirus from June 15, President Emmanuel Macron says in a tweet on Friday. Starting this weekend, all “vulnerable” adults, and from May 15, all those above 50, will be entitled to get vaccination.
Singapore Reinstates Some Distancing Measures, Tightens Borders
Philip Heijmans – Bloomberg
Bars visitors from Bangladesh, Nepal, Pakistan, Sri Lanka; Malls will have tighter limits on number of people allowed
Singapore will reinstate some social distancing controls and tighten borders with countries that are seeing a persistent rise in coronavirus cases to stem a virus spread in the city. The government will allow fewer people at malls and large stores, and close campsites for two weeks from May 1, according to a statement from the health ministry on Friday. It will reduce the operating capacity of attractions to 50% from 65% for a week from May 7, and urged people to limit social gatherings to two per day and stay home where possible, it said.
Sweden Pushes Inoculation Target Back After J&J Vaccine Pause
Rafaela Lindeberg – Bloomberg
Sweden’s government delayed its national vaccination target for a second time in a month, after the country’s health agency decided to pause the use of Johnson & Johnson’s shots. According to the new target, all adults are to be offered at least one dose of vaccine before Sept. 5, a three-week delay compared to the previous goal of Aug. 15.
WHO Should Look Beyond Animals on Covid Origin, Scientists Say
Corinne Gretler – Bloomberg
Group lays out ideas for next mission to China in open letter; Suggestions include mandating broad access to data and samples
The World Health Organization should convene another investigation into the origins of the coronavirus pandemic that looks beyond animal sources, a group of scientists said in an open letter.
AstraZeneca on track to submit data for US vaccine approval, says chief; Pharma group plans filing in next few weeks after controversy over previous trial results
Hannah Kuchler – FT
AstraZeneca chief executive Pascal Soriot said there was “nothing wrong” with the Covid-19 vaccine data that it was submitting for US approval, as he insisted the company was on track to file in the next few weeks.
Vaccitech valued at $579m in US public offering; Company that owns tech behind Oxford/AstraZeneca Covid vaccine raises $111m
Hannah Kuchler and Aziza Kasumov – FT
Vaccitech, the company that owns the technology behind the Oxford/AstraZeneca coronavirus vaccine, raised $111m through its initial public offering on Thursday, showing that investors were willing to look past recent concerns about rare side-effects from the jab.
The Math That Explains the End of the Pandemic
Zoë M. McLaren – NY Times
Dr. McLaren is an associate professor at the University of Maryland, Baltimore County, who studies policies to combat infectious disease epidemics, including Covid-19. The United States has vaccinated more than half of its adults against Covid-19, but it could be months until the country has vaccinated enough people to put herd immunity within reach (and much of the world is still desperately waiting for access to vaccines).
How India’s Vaccine Drive Crumbled and Left a Country in Chaos
Bibhudatta Pradhan, Archana Chaudhary, and Sudhi Ranjan Sen – Bloomberg
India opened inoculations to an extra 600 million people; States are now left fighting with private companies for shots
When India launched its Covid-19 vaccination drive in mid-January, the chances of success looked high: It could produce more shots than any country in the world and had decades of experience inoculating pregnant women and babies in rural areas.
Exchanges, OTC and Clearing
Euronext to pull trading servers out of UK after Borsa Italiana deal; Desire for EU location means data centre will be moved from Basildon to Bergamo
Philip Stafford – FT
Exchange group Euronext has completed its EUR4.4bn purchase of Borsa Italiana and will concentrate its operations in the EU by moving its computer servers out of the UK.
CME Group beats profit estimates on lower expenses
Futures exchange operator CME Group Inc (CME.O) on Wednesday reported first-quarter profit that beat Wall Street estimates, driven by lower expenses, while trading levels for some of its top products rebounded to pre-pandemic levels.
B3 approves new structure for vice-presidents and statutory directors
The Board of Directors of B3, in a meeting held today, approved changes and additions to the Company’s statutory executive board. The role of Vice President of Operations/ Chief Operating Officer was redesigned and will have its attributions split between two new Vice Presidents, who will report to the CEO.
PNC Bank joins the American Financial Exchange
The American Financial Exchange (AFX) announced today that PNC Bank, N.A., has joined the exchange, a transparent, rules-based and self-regulated electronic market for overnight and term unsecured lending among banks, financials and corporates.
ICE Publishes Update on UK Emissions Trading Scheme Ahead of First UK Emissions Auction on May 19; UK Government publishes guidance on eligibility criteria for participating in the auctions
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that, ahead of the first auction of UK emissions allowances for the UK Emissions Trading Scheme (UK ETS) due to commence on May 19, the UK Government’s Department for Business, Energy and Industrial Strategy (BEIS) has published updated guidance on the eligibility criteria for participating in the auctions.
Cboe Global Markets Reports Results for First Quarter 2021
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the first quarter of 2021. “We are off to a strong start this year with continued momentum across the company, achieving quarter-over-quarter increases in net revenue and trading activity for each business segment, as well as meaningful progress executing on multiple growth opportunities. We were excited to announce plans to acquire Chi-X Asia Pacific, enabling us to broaden our geographic and asset class presence, while helping us to further extend the distribution of our product offerings to our global network of customers,” said Edward T. Tilly, Cboe Global Markets Chairman, President and Chief Executive Officer. “We remain confident in our ability to achieve our targeted mid-term organic net revenue growth of 4 to 6 percentage points and to drive additional organic net revenue growth longer-term through our ongoing investment in attractive market opportunities, as demonstrated by the increase in our organic growth target for recurring non-transaction revenue. Cboe has a strong foundation and I am confident that we have the team and capabilities to drive value-enhancing growth as we remain focused on our commitment to create long-term value for our customers and our shareholders.”
NYSE-owner ICE’s profit beats as Ellie Mae powers mortgage business
Niket Nishant, John McCrank – Reuters
New York Stock Exchange-owner Intercontinental Exchange Inc reported first-quarter profit that beat Wall Street estimates on Thursday, boosted by strength in its mortgage technology business and continued market volatility. Excluding one-time items like M&A costs, ICE earned $1.34 per share in the quarter, 4 cents above analysts’ average estimate, according to IBES data from Refinitiv. ICE’s mortgage servicing business benefited from its $11-billion acquisition last year of mortgage tech firm Ellie Mae. ICE has been investing in the business since 2016.
Cboe set to launch Amsterdam derivatives exchange; Move reinforces exchange operator’s strategy of shifting to EU after UK’s exit from bloc
Philip Stafford – FT
Cboe Global Markets is set to launch a new derivatives exchange in Amsterdam in September, adding options trading to its push into the EU market now that the UK has left the bloc.
Deutsche Börse and Commerzbank invest in 360X to develop future digital asset marketplace; The new partnership will drive the serial construction and operation of new marketplaces and ecosystems for digital asset classes.
Wesley Bray – The Trade
Deutsche Börse and Commezbank have announced a new partnership with fintech, 360X, to develop a next-generation digital asset trading platform. The partnership will involve the creation of a new blockchain-based digital marketplace and ecosystem for existing real asset classes such as art and real estate, planned for this year.
Cboe Europe derivatives exchange secures first trading banks ahead of September launch; Cboe Europe Amsterdam derivatives exchange is due to launch on 6 September and has received backing from the likes of Morgan Stanley, Goldman Sachs and ABN AMRO Clearing.
Annabel Smith – The Trade
ABN Amro Clearing, Goldman Sachs and Morgan Stanley have become the first participant banks to back the new Cboe Amsterdam derivatives exchange. The Cboe Europe Derivatives exchange is due to launch on 6 September, subject to regulatory approval, with its EuroCCP subsidiary to provide clearing services for the venue.
Mid-cycle SPAN file discontinued effective May 24, 2021
This is to advise that, effective Monday, May 24, 2021, the “Mid” cycle (“m”) SPAN file will no longer be published. As usual, to be sure of receiving final end of day settlement prices and margin rates for all CME-cleared futures and options, use the final (“s”) file
Appointment Of The Chairman Of The Executive Board Of NSD
The Supervisory Board of National Settlement Depository (NSD), a Moscow Exchange Group company, has approved the candidacy of Viktor Zhidkov as NSD CEO / Chairman of the Executive Board. Mr. Zhidkov’s candidacy will be submitted to the Bank of Russia, before being put to the NSD Supervisory Board for final approval.
Oleg Viyugin Re-elected As Chairman Of The Moscow Exchange Supervisory Board
The Supervisory Board newly elected at the Annual General Meeting of Shareholders held its first meeting on 29 April 2021. The Board includes 12 directors, eight of whom are independent directors.
Upgrading FX payments systems to reduce risk without causing disruption; It goes without saying, payments are fundamental to the financial ecosystem. Whenever banks or financial institutions interact with one and another, such as through transactions or trades, it results in one or more subsequent payments.
Arjun Jayaram – E-Forex
The larger the financial institution, the more complex the products traded; the risks they take; the value of settlements; the regulatory constraints; their balance sheets; and the liquidity knock on effects. This makes payments systems and workflows in capital markets very difficult to manage, as they need to function with multiple asset classes, across multiple jurisdictions and connect effectively with an array of other systems.
Blockchain Firm Paxos Valued at $2.4 Billion on New Fundraising
Matthew Leising – Bloomberg
Paxos Trust Co., a blockchain startup that caters to financial institutions including PayPal Holdings Inc. and Credit Suisse Group AG, is valued at $2.4 billion after raising $300 million from investors.
McKay Brothers offers ultra low latency private bandwidth between Illinois and Asia
McKay Brothers International
McKay Brothers International (MBI), an industry leader in lowest latency wireless telecommunications networks, offers private bandwidth between Aurora, Illinois and major exchanges in Asia. Wherever possible, the company leverages its wireless expertise in combination with fiber for ultra-low latency circuits. McKay end points in Asia include major trading centers in Tokyo, Hong Kong, Singapore, and Shanghai.
Beijing warns fintech firms against anti-monopoly behavior
Zen Soo – ABC News
Chinese financial regulators have summoned 13 companies engaged in online finance services, including Tencent and Bytedance, and told them to strengthen anti-monopoly measures.
The regulators, which include the People’s Bank of China (PBOC) and China’s securities and banking regulators, said in a statement Thursday that they had summoned companies including Xiaomi’s fintech arm; Tencent; Bytedance; e-commerce platform JD.com’s JD Finance, and the finance arm of food delivery platform Meituan.
China regulators order Tencent, other fintech companies to boost anti-monopoly measures
Chinese financial regulators have summoned 13 companies engaged in online finance services, including Tencent and Bytedance, and told them to strengthen anti-monopoly measures.
How Fintech Can Help Break The Health Poverty Trap
William A. Haseltine – Forbes
There has never been a better argument for Universal Health Coverage (UHC) than the devastating global impact of the Covid-19 pandemic. As widespread infectious disease outbreaks are increasing in frequency and the number of people with chronic conditions continues to rise, we must find new ways to ensure that everyone is able to access and pay for the health services they need. As Covid-19 has demonstrated, no one is safe from health threats until the entire population is protected.
Chinese regulators tell fintech groups to fix ‘problems’; Tencent, ByteDance and 11 others summoned as Beijing extends pressure beyond Jack Ma’s Ant Group
Yuan Yang – FT
Chinese officials have told 13 of the country’s biggest tech companies to “rectify prominent problems” on their platforms, a sign that the regulatory pressure on the fintech sector is spreading beyond Jack Ma’s Ant Group.
China Orders Tech Giants to Unbundle Financial Services; Companies have turned their mobile payment apps into financial supermarkets, offering loans and insurance policies. No more, says Beijing.
Keith Zhai – WSJ
In recent years, China’s technology giants have turned consumers’ embrace of mobile payment apps into lucrative ecosystems offering a range of financial services, from personal loans to insurance policies. Now, Beijing wants to put a stop to that.
Substantive Research launches research dashboard for asset managers; New research dashboard by Substantive Research will offer asset managers insights on pricing from research providers, sector coverage and investment in analyst teams.
Annabel Smith – The Trade
Substantive Research has launched a new dashboard aimed at helping asset managers navigate the changing research landscape.
A great step forward in market access: FX derivatives migrate to the standard T7 trading system
With effect from 15 May 2021 Eurex has decided to transfer its FX derivatives from the T7/FX trading system to its standard T7 trading system. This will simplify access and lower the entry barrier to Eurex’s FX products. In addition, trading FX on Eurex also offers several other benefits for participants as Maximilian Dannheimer, Head of FX ETD Sales at Eurex, explains in this video.
MSCI index derivatives: Change to the Liquidity Provider schemes
The Executive Board of Eurex Frankfurt AG took the following decisions with effect from 1 June 2021:
468 SPAC I SE has been listed on the regulated market in Frankfurt since today
Deutsche Börse Group
468 SPAC I SE (ISIN: LU2333563281) has been listed on the regulated market ( General Standard ) of the Frankfurt Stock Exchange since today . The company is a SPAC – a Special Purpose Acquisition Company. According to the issuer, the aim of the issuer is to invest in a European company from the sub-areas of marketplaces, direct-to-consumer (D2C) and software & artificial intelligence within a specified period of time.
SYNLAB AG new in the Prime Standard of the Frankfurt Stock Exchange
Deutsche Börse Group
SYNLAB AG (ISIN: DE000A2TSL71) has been listed in the Prime Standard of the Frankfurt Stock Exchange since today . At the start of trading, the shares were quoted at EUR 18.00. The issue price was EUR 18.00.
Coinbase Backer Parlays ‘Fantasy’ Bet Into $4.6 Billion
Jacqueline Davalos – Bloomberg
Crypto exchange’s $86 billion valuation eclipsed Twitter’s IPO; Coinbase is one of buzziest investments for Union Square
Before his bet on cryptocurrency exchange Coinbase Global Inc. became a multi-billion-dollar exit, Union Square Ventures co-founder Fred Wilson compared Bitcoin to science fiction.
CreamPYE Launches New Token To The Crypto Community
The cryptocurrency ecosystem no doubt comes with lots of excitement and opportunities. With so many projects on the blockchain, crypto enthusiasts have the opportunity to diversify their investment portfolios.
Proposed Legislation in Germany Could Allow $425B to Flow Into Crypto: Report
Over-the-counter crypto trader Alessandro Andreotti says bitcoin’s stagnant market is due to investors continuing to explore other cryptocurrencies. “Bitcoin has, in fact, gone up, but I see it as a consolidation move to a new price range,” Andreotti said. “It’s staying relatively stable right now while alts moon.”
Mass adoption looms as South America’s second-largest company accepts crypto payments
Marcel Pechman – CoinTelegraph
On April 28, MercadoLibre (MELI), the largest Latin American online marketplace, launched a real estate section dedicated to cryptocurrencies. Although the company does not settle property transactions directly, it legitimizes the category as a payment system.
The $81 billion retailer is the second largest company in South America and is present in 18 countries, including its three largest markets, Brazil, Argentina, and Mexico.
Turkey’s Most Advanced Crypto Trading Platform ICRYPEX Announces Joint Venture
Focusing their investments on technology and financial technology, Hedef Girisim Sermayesi Yatirim Ortakligi A.S. and Idealist Danismanlik A.S is now partnering with ICRYPEX Cryptocurrency Exchange, one of the Turkey’s leading crypto trading platforms. Hedef Girisim Sermayesi Yatirim Ortakligi and Idealist Danismanlik acquire 30% of ICRYPEX Cryptocurrency Exchange.
ICRYPEX Cryptocurrency Exchange provides services to its customers with its 129 full time employees. ICRYPEX offers its investors a cutting-edge, super-fast and low commission multi-asset crypto trading platform while supporting crypto currency wallet services. ICRYPEX also makes a difference in the sector with its 24/7 phone support.
Turkey jails 6 in crypto probe including Thodex CEO’s siblings -courthouse
A Turkish court jailed pending trial six suspects late on Thursday as part of a probe into cryptocurrency trading platform Thodex, including the CEO’s siblings, a spokeswoman for the prosecutor’s office said.
As Ether Pushes Ever Higher, Crypto Traders Plot Price in Bitcoin Terms
Omkar Godbole – Yahoo Finance
Cryptocurrency-focused financial firm Apifiny has been granted a broker-dealer license from the U.S. Financial Industry Regulatory Authority (FINRA), according to an announcement Thursday.
Apifiny Prime, the trading arm of Apifiny (pronounced the same as “epiphany”), joins a select group of crypto companies such as Coinbase, Gemini, eToro and Circle in holding a FINRA broker-dealer license.
Bitcoin is making all Revolut’s dreams come true; The company is about to allow bitcoin withdrawals to anywhere in the world for UK Metal account users.
Jemima Kelly – FT
As we all know, Revolut has set out to become one of the Big Boys of Banking. Earlier this year the London-based fintech, which is gearing up for a fundraising that will reportedly value it at between $10bn and $15bn, applied for a full UK banking licence. It has also hired grandees from the world of banking and traditional finance such as the founder of the firm now known as Abrdn, Martin Gilbert, and former Goldman Sachs vice-chair Michael Sherwood.
Bitcoin: too good to miss or a bubble ready to burst? The cryptocurrency has risen 600 per cent in the past year, turning even former cynics bullish
Eva Szalay – FT
The problem with investing in bitcoin is that it instinctively feels too good to be true. The largest cryptocurrency by volume is worth 600 per cent more today than a year ago, soaring from about $7,000 per bitcoin to $54,000 this week, along the way becoming one of the best performing financial assets of 2020. Despite including some extreme price swings, the year-long rally has so far defied fears of a repeat of bitcoin’s spectacular price crash of 2018.
A Legacy Guy Considers DeFi; Unicorns, sushi, pancakes, and the future of market structure
Until now, this newsletter has concerned itself with market structure issues of the present. From a history of its main characters to the misunderstood features of its setting, I’ve set out to help readers become smarter & more informed about exchanges, their customers & biggest partners, because I believe they’re severely under-followed. This industry is defined by a handful of companies that control powerful centralized platforms, and have leveraged these platforms to make their owners wealthy for decades.
Chaotic Johnson Always Struggled With Rules, and U.K. Voters Love It
Tim Ross and Joe Mayes – Bloomberg
Authorities warned of ‘pattern’ of ‘casual’ behavior in 2019; May 6 elections key test for premier amid rows over ‘sleaze’
As a schoolboy, Britain’s prime minister Boris Johnson appeared to be convinced that the normal rules did not apply to him. “I think he honestly believes that it is churlish of us not to regard him as an exception, one who should be free of the network of obligation which binds everyone else,” wrote Johnson’s Eton College house master, Martin Hammond, in 1982, as quoted in Andrew Gimson’s biography of the premier.
China Accuses Australia of Economic Coercion as Ties Deteriorate
Jason Scott – Bloomberg
Beijing blames Morrison’s government for souring relations; Remarks comes after Canberra official warns of ‘drums of war’
China’s top diplomat in Canberra blamed Australia for deteriorating ties between the nations, accusing it of economic coercion and “provocations” in a wide-ranging speech that painted Beijing as a victim. Citing Australia’s decision last week to cancel agreements between Beijing’s flagship Belt and Road Initiative and Victoria state among a litany of “negative moves,” Ambassador Cheng Jingye said the country’s perception of China as a “threat and challenge” had hurt relations. He called claims of Chinese economic coercion “ridiculous and irrelevant.”
What Financial Advisers Are Telling Rich Clients About Biden’s Tax Hike; Top earners are seeking guidance before their rates on capital gains rise—and they’re being told to buckle up.
Laura Davison and Ben Steverman – Bloomberg
President Joe Biden’s proposal to roughly double the capital-gains tax for the rich has put financial advisers in the unusual position of acting as part therapist and part fortune teller. Frantic calls are coming in from clients surprised to see that what they’d dismissed as rhetoric from the 2020 election campaign has come out this week as concrete White House proposals.
Vote-by-Mail Favored by Older, Affluent Voters, Census Finds
Ryan Teague Beckwith and Gregory Korte – Bloomberg
Data contradict GOP-led efforts to restrict ballot access; Ballot access is polarized since Trump’s claims of voter fraud
Those most likely to vote by mail in 2020 included some demographic groups that voted heavily for Donald Trump, new Census data show, undermining his claim that voting by mail only helps Democrats.
Constitutional court strikes down German climate law; Ruling is setback for Angela Merkel and will force government to rewrite legislation by end of year
Guy Chazan – FT
Germany’s top court has demanded changes to Germany’s climate law, saying it places too much of a burden on future generations to reduce carbon emissions, in a key victory for young climate campaigners.
ASIC review finds retail managed funds responded well to COVID-19 challenges in 2020
An ASIC review of a targeted selection of retail managed funds found that they did not face serious investor liquidity challenges during the height of COVID-19 market disruption, and that their liquidity frameworks were generally adequate.
MAS commits $42 mil towards tech grants for financial sector
Atiqah Mokhtar – The Edge
The Monetary Authority of Singapore (MAS) is pledging $42 million towards two schemes aimed at promoting the adoption of tech and digital solutions within the financial sector – a new Regulatory Technology (RegTech) grant scheme and the existing Digital Acceleration Grant (DAG) scheme.
SEC Charges Eight Companies for Failure to Disclose Complete Information on Form NT
The Securities and Exchange Commission today charged eight companies for failing to disclose in SEC Form 12b-25 filings that their request for seeking a delayed quarterly or annual reporting filing was caused by an anticipated restatement or correction of prior financial reporting. The violations were uncovered by an initiative focused on Form 12b-25 filings by companies that quickly thereafter announced financial restatements or corrections. Each of the companies was a public reporting company at the time of the violations and agreed to settle the Commission’s charges and pay civil penalties.
Enhancements to Weekly Aggregated Reports and Statistics for U.S. Treasury Securities
The Treasury Aggregate Statistics provide trading volume in U.S. Treasury Securities reported by FINRA Members to TRACE for the prior week. The reports have been published since March 2020. In the next few weeks, FINRA will publish the following:
FINRA Seeks Comment on Supporting Diversity and Inclusion in the Broker-Dealer Industry; Comment Period Expires: June 28, 2021
FINRA is committed to supporting efforts by broker-dealer industry participants to foster diversity, inclusion and equal opportunity.1 FINRA seeks comment on any aspects of our rules, operations and administrative processes that may create unintended barriers to greater diversity and inclusion in the broker-dealer industry or that might have unintended disparate impacts on those within the industry.
NFA orders former associated person Jeremy Ruth never to reapply for NFA membership
NFA has ordered Jeremy Ruth, a former associated person of Postrock Brokerage LLC (Postrock), never to reapply for NFA membership status in any capacity or act as a principal of an NFA Member. Postrock is a former NFA Member introducing broker located in Chicago, Illinois.
The FCA and Practitioner Panel joint survey for 2021 launches
The FCA and Practitioner Panel joint survey for 2021 has launched. We sent the survey to a sample of regulated firms, so they can share their feedback on how the FCA regulates the industry.
FCA consults on strengthening investor protections in SPACs
The FCA has launched a consultation on proposed changes to its Listing Rules for certain special purpose acquisition companies (SPACs).
Volkswagen’s gag falls flat as the S.E.C. begins an inquiry.
Jack Ewing – NY Times
Volkswagen’s American unit was only kidding when it put out the word late in March that it was changing its name to “Voltswagen” to show its commitment to electric vehicles. To say the April Fool’s joke didn’t land is an understatement. Now the misfired marketing gag has prompted an inquiry by the Securities and Exchange Commission.
ISDA, AFME Publish Recommendations for CRD VI, CRR III
ISDA and the Association for Financial Markets in Europe (AFME) have published their views and recommendations on key priorities in the sixth Capital Requirements Directive and the third Capital Requirements Regulation (CRD VI, CRR III).
The S.E.C. delays a long-awaited decision on whether to allow a Bitcoin fund.
Ephrat Livni – NY Times
For many cryptocurrency supporters and investors, regulatory approval of a Bitcoin exchange-traded fund in the United States represents the holy grail. It would allow the crypto-curious to get exposure to Bitcoin without having to buy the tokens themselves, signifying that digital assets are really, truly mainstream.
Canadian Securities Regulators Establish Regulatory Regime For Financial Benchmarks
The securities regulatory authorities of British Columbia, Alberta, Saskatchewan, Ontario, Québec, New Brunswick, and Nova Scotia today adopted final rules to establish a Canadian regulatory regime for financial benchmarks.
Canadian Securities Regulators Seek Comment On Proposed Framework For Commodity Benchmarks
The securities regulatory authorities of British Columbia, Alberta, Saskatchewan, Ontario, Quebec, New Brunswick and Nova Scotia today published for comment a proposed framework for the designation and regulation of commodity benchmarks and the persons or companies that administer them.
Investing and Trading
Beyond GameStop: survey reveals Reddit’s larger-than-expected influence on investing
When users on the social media platform Reddit engineered a stunning and meteoric rise in GameStop (NYSE:GME) share prices earlier this year, the episode could have easily been considered a fluke. Yet a new survey from Investing.com has found that Reddit’s broader influence on the investing space is more substantial than expected.
Exxon Rebounds to First Profit Since 2019 on Crude Surge
Kevin Crowley – Bloomberg
CEO Woods seeks to shield S&P 500’s third-largest dividend; Supermajors now profitable again after radical spending cuts
Exxon Mobil Corp. snapped a record streak of losses as rising oil and natural gas prices bolstered one of the biggest dividends in the S&P 500 Index. Exxon earned 64 cents a share in the first quarter, beating the 61-cent average estimate from analysts in a Bloomberg survey. The oil giant’s exploration and drilling division drove most of the gains but it also received a substantial tailwind from higher chemicals prices that helped offset losses incurred during the deadly February storm in Texas.
La Nina Gives a Turbocharge Boost to Already High Food Prices; The prospect of a U.S. drought — and difficult weather almost everywhere else — has prices soaring.
Brian K Sullivan, Fabiana Batista, Jasmine Ng – Bloomberg
Global prices for food and crops are at multi-year highs and there’s a culprit far larger than human commerce: La Nina.
European Companies Seen Splurging $180 Billion on Buybacks
Lukas Strobl – Bloomberg
LVMH, L’Oreal and BP are among those repurchasing their shares; Large cash pile built in pandemic spurs pressure for payouts
Fear and caution in European boardrooms may be fading, as a pick-up in buybacks shows rising confidence that more cash can be returned to shareholders instead of shoring up balance sheets.
UK financial advisers still shun ETFs, data show; Platform charges and difficulties of buying fractional shares mean index-tracking mutual funds continue to dominate
Ed Moisson – FT
The UK financial advisory market continues to elude exchange traded funds, new data show, as platforms lack the functionality to cheaply add them to popular model portfolios. While intermediaries have increased their allocations to passive funds, ETFs are struggling to gain traction with financial advisers in the UK.
Fertiliser industry emerges from nine-year funk; Astonishing turnround as rising demand for food and easy credit spurs use by farmers
John Dizard – FT
The fertiliser industry has seen an astonishing turnround in its fortunes over the past year. The beginning of the Covid-19 crisis last year marked the bottom of what had been a nine-year funk in prices and profits.
Irrational World of Distressed Debt Leaves $15 Billion Idle
Antonio Vanuzzo and Laura Benitez – Bloomberg
Most funds are cut out of high-profile Gupta blow-up; Mudrick sizes up mid-market deals, others scrap for junk bonds
It was a flashpoint in the world of distressed investing: Sanjeev Gupta’s infamous metals empire was falling apart as Greensill Capital imploded. As turnaround specialists sought to grab debt of one of his key assets on the cheap, a single U.S private-equity firm swooped in to buy up the lion’s share — at full price.
Pork Plants Face Slower Hog Slaughter After Court Ruling; USDA tells meatpackers that processing lines must slow after court rules on speeds; industry fears hog backlog
Jacob Bunge – WSJ
The U.S. pork industry faces a new speed limit on hog slaughtering, the result of a court ruling that worker groups welcomed and industry officials warned could disrupt farmers and processing plants.
Rally in Transportation Stocks Nears 122-Year-Old Record Streak; Gains underscore investors’ expectations that rebounding economy will boost companies carrying goods, raw materials
Sebastian Pellejero – WSJ
Shares of airlines, railroads and trucking companies are rolling to their longest streak of weekly gains in more than a century, fueled by investors’ optimism that a resurgence in economic growth will boost profits at transportation companies.
Environmental, Social and Corporate Governance
Carbon Capture – The Missing Piece in the Net Zero Puzzle?
Alistair Wishart, Nadine Amr, Steven Wilson, Freddie Wright and Grace Oyegbile – Vinson & Elkins
In December 2020, the Norwegian government approved funding the $1.6 billion Northern Lights project led by Norway’s Equinor, Anglo-Dutch Shell and France’s Total. Northern Lights is the transportation and storage element of Longship – Norway’s pioneering $2.3 billion full-scale carbon capture and storage project, which is planned to include the development and operation of a carbon dioxide transportation and storage network through which Norwegian and European industrial companies emitting carbon dioxide may store their emissions underground. The first phase of the project is expected to be completed as early as 2024.
Carbon Taxes Cut Emissions, Not Jobs or Economic Growth; It’s easy to see why infrastructure spending would cut emissions, while creating jobs. Carbon taxes appear to do the same.
Gernot Wagner – Bloomberg
It’s easy to poke fun at some economists’ apparent obsession with carbon taxes as the sole climate policy tool. Some appear to revel in making the case that we should tax carbon and only tax carbon. Meanwhile, it’s clear that carbon taxes alone aren’t enough, because more must be done than “just” price the negative emissions externality, and because of politics. Taxing something bad might be objectively good, but “tax” still appears to be a four-letter word in Washington, D.C.
As Indian Point Goes Dark, New York Races to Swap Nuclear With Wind; Shutting down the long-troubled nuclear plant will mean replacing zero-emission electricity with natural gas—for now
Eric Roston and Will Wade – Bloomberg
One of the pair of active nuclear reactors within blast radius of Manhattan made a federal safety watch-list back in 1993. That’s when regulators cited Unit 3 at the Indian Point Energy Center for leaky coolant pipes and faltering engineering support. Shortly thereafter a control-room operator tested positive for marijuana and cocaine. But none of that helped activists’ long quest to turn off the nuclear plant.
Methodist Church dumps Shell over ‘inadequate’ climate plans; Investor discord over oil major’s decarbonisation strategy ahead of crucial shareholder vote
Attracta Mooney and Anjli Raval – FT
The Methodist Church has sold out of Royal Dutch Shell over the oil major’s “inadequate” response to climate change, weeks before a shareholder vote on the company’s energy transition plans.
Eni to float or sell stake in retail and renewables division; Italian oil major seeks to capture value from clean energy boom
Anjli Raval – FT
Italy’s Eni has approved a plan to list or sell a minority stake in its new retail and renewable power business as part of the company’s energy transition strategy.
BlackRock Takes Aggressive Posture on ESG Proxy Votes; Asset manager signals it is boosting its support of shareholder-led environmental, social and governance proposals
Dawn Lim – WSJ
The world’s largest asset manager is showing it is more willing to use its heft to influence the policies of the companies it invests in. BlackRock BLK 1.35% has so far increased its support for shareholder-led environmental, social and governance proposals, and published a slew of criticisms of public companies that haven’t bent to its overall requests.
CLSA Is Giving Junior Bankers a 30% Pay Hike to Stem Exodus
Cathy Chan and Ina Zhou – Bloomberg
First-year analysts said to get pay bump of at least 40%; CLSA is struggling to keep talent after Beijing-led overhaul
CLSA Ltd., controlled by China’s biggest securities firm, is boosting the monthly paychecks of junior bankers by 30% on average as the Hong Kong brokerage seeks to stop defections after a two-year exodus of key staff, people familiar with the matter said.
A Brawl Between Billionaire Founders at Apollo Sidelines One of Its Own; After urging Leon Black out, Harris is no longer running day-to-day operations
Sabrina Willmer, Heather Perlberg, and Sridhar Natarajan – Bloomberg
Three months after Josh Harris made his failed pitch to take Leon Black’s crown atop a $455 billion investing juggernaut, Black’s chosen heir is in charge — and Harris is on the outs. The behind-the-scenes drama between Apollo Global Management Inc.’s billionaire co-founders keeps brewing, with ramifications for investors as the company reconfigures its governance this year. Publicly, Harris has endorsed the decision to elevate co-founder Marc Rowan to chief executive officer. Privately, he’s being sidelined, even as he remains a “key man” in Apollo’s flagship fund — meaning investments could stall without him.
Barclays Shares Slump as Debt Trading and Expenses Disappoint
Stefania Spezzati – Bloomberg
FICC slumps 35%, trailing bumper quarter on Wall Street; Costs expected to rise on bonuses, real estate review
Barclays Plc fell the most among European banks on Friday after the bank’s debt trading revenue and expense forecast disappointed investors. Revenue from fixed income, currency and commodities trading slumped 35% in a quarter that saw U.S. rivals post double-digit growth. Shares fell as much as 7.5% as the bank missed its target on a key expense ratio and warned costs will rise this year above 2020 levels.
BNP Paribas Misses Fixed Income Rally as Provisions Decline
Alexandre Rajbhandari – Bloomberg
Fixed-income revenue slumps 17% in strong quarter for rivals; Profit beats estimates as bank sets aside less for bad loans
BNP Paribas SA relied on lower provisions for bad loans and a resurgence of its equities business to boost earnings as its fixed-income traders missed out on a global rally.
UBS to Move Tokyo Rates Trading to Sydney in Asia Revamp
Takashi Nakamichi – Bloomberg
Bank of Japan’s bond buying has reduced JGB trading activity; UBS says it will continue to participate in yen bond trading
UBS Group AG will relocate its Tokyo-based rates trading business to Sydney by the end of this year as the Swiss bank reorganizes its Asia-Pacific operations. The firm has initiated the process to relinquish its Japan Government Bond primary dealership, though the change won’t impact UBS’s other fixed-income trading businesses conducted with Japanese clients, it said in a statement Friday.
New Credit Suisse Chairman António Horta-Osório Resets Agenda After Archegos, Greensill Turmoil; New chairman says the bank’s current and potential risks ‘need to be a matter of immediate and close scrutiny’
Margot Patrick – WSJ
Credit Suisse Group AG’s new chairman signaled a broad re-evaluation of the bank’s risk taking and said strategic changes could be in store after it was flung into turmoil by the back-to-back collapses of Archegos Capital Management and Greensill Capital.
Credit Suisse Risk Committee Head Exits After Archegos Hit
Marion Halftermeyer and Patrick Winters – Bloomberg
Top shareholders had called for removal of key board members; Glass Lewis advised investors to vote against Gottschling
Credit Suisse Group AG risk committee head Andreas Gottschling is stepping down from his role after prominent investors indicated they’ll vote to oust him following the $5.5 billion hit from the meltdown of Archegos Capital Management.
Credit Suisse CEO Gottstein Vows to Restore Calm After Archegos
Patrick Winters and Marion Halftermeyer – Bloomberg
CEO says the hedge fund scandal has ‘left its mark’ on him; Bank has seen departures of several executives after Archegos
Credit Suisse Group AG Chief Executive Officer Thomas Gottstein pledged to restore calm at the Swiss bank after the Archegos Capital Management scandal caused a $5.5 billion hit and further damaged its reputation.
South Korea Supreme Court Clarifies Securities Transaction Tax Liability for Forced Sale of Shares, in English
The South Korean Supreme Court April 28 posted online the English version of Decision No. 2017Du52979, clarifying the tax treatment of a forced share sale. A share transaction between two parties was cancelled due to a judgment of fraud. The shares were restored to the original owner and sold in a forced sale, and the proceeds were paid as dividends to the party that was to receive the shares. The court clarified that the sale and dividend payment transaction was taxable under the securities transaction tax because the transaction had the same legal effect as a share transfer under the…
Covid hit prompts Japan to rethink rules on sports gambling; Officials hope betting on baseball and football can shore up finances battered by pandemic
Leo Lewis and Kana Inagaki – FT
Japan’s government has begun internal discussions to legalise gambling on football and baseball in a move that would create a combined sports betting market estimated at more than $65bn a year.
Young Workers Are Drifting Away From London as Jobs Dry Up
David Goodman – Bloomberg
SpareRoom site shows a plunge in people seeking rooms; Lockdowns and Brexit prompted thousands to leave U.K. capital
An unheralded corner of London’s property market is suggesting the capital has lost a big portion of its young professionals and lower-paid workers since the start of the pandemic.
China Politburo Reiterates No Sharp Turn in Macro Policies
China’s top leaders see economic recovery as unstable; It will keep macro policies consistent to boost investment
China’s top leaders pledged to deepen supply side reform and drive a rebound in domestic demand, staying the course for now to bolster the economy’s recovery.
Ping An in Talks for Partial Stake in Credit Suisse’s Chinese Partner
New Founder Group’s assets include brokerage, technology firms; Ping An said to weigh merging Founder Securities with its unit
Ping An Insurance Group Co. has agreed to acquire a majority stake in the newly-established Founder Group for as much as 50.75 billion yuan ($7.9 billion). The Chinese insurer plans to buy a 51.1% to 70% stake in the new Founder Group, whose assets include Founder Securities Co., Founder Technology Group Corp. and China Hi-Tech Group Co., according to a statement to Shanghai stock exchange on Friday. The size of the deal could range from 37.05 billion yuan to 50.75 billion yuan, the statement said.
Pressure mounts to reopen Brexit deal
Douglas Fraser – BBC
Four months into Britain’s break from the European customs union with its single market, and on 1 May, it becomes fully legal.
The European Parliament has endorsed the deal. And today, the Council as well.
Portugal’s minister for Europe, in the chair, says this opens a new chapter: “We value the UK as a good neighbour, an old ally and an important partner”.
Who says they don’t have a sense of humour in Brussels?
Forget curtains and cash – Johnson’s legacy will be the bitter taste of Brexit
Polly Toynbee – The Guardian
Amid slippages, losses, vanishing investments and export drops, the drip, drip of Brexit damage never stops. I collect examples every week, as if picking up spent mortar rounds from a battlefield. On Wednesday, it was 450 jobs lost as car parts manufacturer Toyoda Gosei prepares to shut factories in Rotherham and Swansea, and relocate to the Czech Republic.
Brexit: Anger over government’s failure to get Norway fishing deal
Chris Morris – BBC
Fishing crews have been “disastrously let down” by the government’s failure to reach a deal with Norway, UK Fisheries chief executive has said.
UK fleets will not have access to Norway’s sub-Arctic seas, following the breakdown of UK-Norway negotiations.
One trawler, which catches 10% of fish sold in chip shops, will be tied up for a year following the collapse in talks.
Brexit has caused very few finance jobs to leave London
SPEAKING TO THE Treasury select committee in January 2017, Xavier Rolet, then chief executive of the London Stock Exchange, warned that a sufficiently deep divorce could cost Britain 232,000 financial services jobs. Such gloom was common, as was the expectation that Britain’s loss would be others’ gain. Frankfurt and Paris got ready to welcome hordes of bankers ejected from London.
Who Would Spend Billions to Buy Manchester United and Arsenal? Without a European Super League, owners are left with teams whose value can only be realized by selling up.
Alex Webb – Bloomberg
Soccer is not a very good business. That’s why the billionaire owners of Manchester United Plc. and Arsenal F.C. wanted to join the ill-fated European Super League. Now that those plans have combusted, the owners are left with teams whose value can only be realized by selling up. The problem is, there are no rational buyers for clubs with a sticker price in the billions of dollars.
Suicide of Wall Street investor Charles de Vaulx leaves friends shocked
Lydia Moynihan – NY Post
The suicide of New York investor Charles de Vaulx surprised his closest colleagues and loved ones even though he was noticeably downtrodden over the abrupt liquidation of his 14-year-old investment firm, sources told The Post. The 59-year-old financier — who took his life on Monday by jumping from a Midtown Manhattan office tower — was “very depressed” after International Value Associates wound down its operations in March, said Jean-Marie Eveillard, a legendary value investor who had been De Vaulx’s mentor.