Thomas Sexton to succeed Daniel Roth as NFA President and CEO on March 1, 2017
NFA announced today that its Board of Directors appointed Thomas Sexton, to serve as NFA’s President and CEO, effective March 1, 2017. Daniel Roth, NFA’s President and CEO, who announced his retirement in May 2016, will work closely with NFA’s Board and Mr. Sexton during this important transition.
**** Congratulations to Tom Sexton on being appointed the third CEO in the history of the NFA. There were reports of tremendous candidates for the position and Tom Sexton won the day. We look forward to working with Tom in his new role and thank Dan Roth for his many years of service to the industry.
Giving Thanks to the People that got me Here (A.K.A. The Importance of Opportunities, Failures, Competitors and Mentors
Jessica Darmoni – The Title Connections
New York reminds me a lot of Bangkok. Besides the fact that both cities don’t have alleyways and keep their trash right on the sidewalks, they are also cities that I believe a part of me evolved in. If you follow me on Instagram, you know that I have #ThaiRoots and a #HippieHeart from my time in Thailand. However, I have also spent many days wearing a suit, running around Manhattan in high heels carrying a brief case filled with business strategies, black moleskin notebooks and the occasional poem (or two.)
***** My former colleague and mentee Jessica Titlebaum Darmoni has offered words of thanks heading into the Thanksgiving holiday. I appreciate her kind words for Jim Kharouf and myself.
Bridging the Week by Gary DeWaal: November 14 to 18 and November 21, 2016 (Sarao, Coscia and Spoofing; Friends and Family Hiring; Politicians Tell Regulators Put Pens Down)
Gary DeWaal, Katten Muchin Rosenman LLP
Last week, the federal court hearing the Commodity Futures Trading Commission’s enforcement action against alleged Flash Crash spoofer Navinder Sarao accepted his settlement offer proposed two weeks ago, while a three-judge panel of a federal court of appeals appeared to be sympathetic to Michael Coscia when it heard arguments to overturn his November 2015 conviction for spoofing on November 10. Separately, Mary Jo White announced her imminent resignation as SEC Chair while Timothy Massad, CFTC chairman, was urged to put pens down by K. Michael Conaway, Chairman of the US House of Representatives Committee on Agriculture, regarding CFTC consideration of revised position limits rules, Regulation Automated Trading and the cross-border application of its swap dealer registration requirements. As a result, the following matters are covered in this week’s edition of Bridging the Week
***** We are thankful for Gary DeWaal this Monday.
How Fake News Goes Viral: A Case Study
By Sapna Maheshwari – NY Times
Eric Tucker, a 35-year-old co-founder of a marketing company in Austin, Tex., had just about 40 Twitter followers. But his recent tweet about paid protesters being bused to demonstrations against President-elect Donald J. Trump fueled a nationwide conspiracy theory — one that Mr. Trump joined in promoting.
***** I have always been fascinated by news and how the market consumes it. False news has always been a challenge for the markets. Assessing a rumor’s validity is a true market function. It is nothing new; there are just faster, cheaper and better ways for it to spread.
Hackers know to prey on our curiosity, naivety and greed; Digital tricksters understand the psychological traits that make employees their dupes
Hannah Kuchler – FT
Wendy Tran discovered this year that hackers had filed fraudulent tax returns on her behalf, hoping to pocket a refund. Her tax data and that of her colleagues at Seagate, the California-based hard drive maker, had been sent to cyber criminals by an HR employee. The HR member of staff, seeing an email request that purported to be from someone authorised to view the data, attached the US W-2 tax forms and sent them off by email.
****** Stupid is as stupid does.
One More Thing to Give Thanks for: Turkey Prices Are Falling
Megan Durisin, Lydia Mulvany – Bloomberg
U.S. turkey production seen rising 7% in 2016 to record; Average meal cost for 10 people seen falling from peak in 2015
Here’s another excuse to pig out this Thanksgiving: turkey prices are down.
****** Dropping turkeys has always been a thing.
Friday’s Top Three
Let’s just say we had a mixed bag of top stories on Friday’s most read list. The top story, about global warming, came from the Washington Post – The North Pole is an insane 36 degrees warmer than normal as winter descends. The second most read piece was about Dodd-Frank repeal talk, in the FT’s article Swaps industry balks at joining Trump in gutting Dodd-Frank. The third most read story was from the New York Times, Automated Pro-Trump Bots Overwhelmed Pro-Clinton Messages, Researchers Say
89,557,675 pages viewed; 22,244 pages; 202,579 edits
Inside a Moneymaking Machine Like No Other; The Medallion Fund, an employees-only offering for the quants at Renaissance Technologies, is the blackest box in all of finance.
Katherine Burton – Bloomberg
Sixty miles east of Wall Street, a spit of land shaped like a whale’s tail separates Long Island Sound and Conscience Bay. The mansions here, with their long, gated driveways and million-dollar views, are part of a hamlet called Old Field. Locals have another name for these moneyed lanes: the Renaissance Riviera.
Schumer Says He Can Block Trump’s Efforts to Repeal Dodd-Frank
Anders Melin – Bloomberg
Incoming Senate minority leader vows ‘tooth and nail’ fight; Schumer predicts Trump would also lose on Obamacare rollback
Incoming Senate Minority Leader Chuck Schumer, drawing a line in the sand for the next administration, said he has the votes to stop President-elect Donald Trump from repealing the Dodd-Frank Act and “the rules we put in place to limit Wall Street.”
Gold bugs blindsided by Trumpflation; Investors wrongfooted by second major surprise that prompted a flight from havens
Mamta Badkar and Henry Sanderson – FT
What’s bugging gold? The election as US president of a political neophyte with questionable temperament was supposed to be a sweet moment for gold, perhaps the best-known haven when markets or politics get a little hairy.
SURVEY: Hedge fund managers have the best work-life balance in finance
Ben Moshinsky – Business Insider
Around four-fifths of hedge fund managers reported their work-life balance being either great or satisfactory, according to a report from salary-benchmarking site Emolument.com.
Hedge funds struggle to justify their vast fees in the wake of Trump’s election
Marion Dakers, Telegraph
THE American election earlier this month created ripples in the financial markets that were felt across the globe. The shock of Donald Trump’s victory represented a classic opportunity for the hedge fund managers who bet on global economic movements.
Trump Brings in Wall Street Veterans to Talk Top Treasury Post
Jennifer Jacobs, Arit John – Bloomberg
Family to join next president in Washington after school year; Career Marine Mattis may get defense post, Romney State Dept.
President-elect Donald Trump interviewed top investment executives for the role of Treasury secretary as he stitches together the administration that will take over the White House in January.
Eris and R.J. O’Brien Fixed Income Group Release Second Hedge Accounting Paper; Newest case study illustrates how to successfully obtain fair value hedge accounting treatment when using Eris Swap Futures
Eris Exchange (Eris) and an institutional fixed income brokerage group at R.J. O’Brien & Associates (RJO), the nation’s oldest and largest independent futures brokerage and clearing firm, today released another third-party accounting case study outlining how Eris Interest Rate Swap Futures can receive the same favorable hedge accounting treatment as that applied to over-the-counter (OTC) swaps. Following up on the case study released last month addressing cash flow hedge treatment, the RJO Fixed Income Group commissioned the latest study, concluding that Eris Swap Futures may successfully receive fair value hedge accounting treatment and providing a concrete example of how to achieve hedge effectiveness.
Study finds active global equity funds outperform; Research shows international stockpickers beat the market by 1.2 per cent annually
by: Attracta Mooney – FT
Portfolio managers who promise expertise in actively selecting shares have long been accused of failing to beat the performance of cheaper funds that track an index, but a new study argues that some stockpickers do add value.
Citigroup heads Financial Stability Board’s systemic risk list; Three of the biggest US banks will have to hold extra capital
by: Martin Arnold, Banking Editor – FT
Three of the biggest US banks have been judged to pose greater systemic risks and had their capital requirements increased by global regulators in their annual rankings of the most systemically important financial institutions.
Why the Federal Reserve Must Become the World’s ‘Dealer of Last Resort’; The U.S. central bank could be left holding an elephant-sized bag as a global dollar-shortage bites.
Luke Kawa – Bloomberg
As President-elect Donald Trump threatens to turn away from the rest of the world, the Federal Reserve will find itself under increasing pressure to extend a helping hand outwards.
ICAP appoints Stuart Connolly as Head of Client Product Development for Post Trade Risk and Information
ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces today that it has appointed Stuart Connolly as Head of Client Product Development for its Post Trade Risk and Information (PTRI) division, effective Monday 21 November. In this newly created role, Stuart will report to Jenny Knott, Chief Executive Officer for PTRI, and will be based in London.
SEC’s White hopes regulator will continue to be ‘aggressive’; Chair at the SEC, Mary Jo White, announced departure from position earlier this month.
By Hayley McDowell – The Trade
The Securities and Exchange Commission’s (SEC) Mary Jo White has expressed hope that the regulator will continue to be “aggressive and strong” following her departure.
Brexit Banks Told to Relax: ECB Won’t Give First-Mover Advantage
Gavin Finch – Bloomberg
ECB considering fast-tracking regulatory approvals process; Euro policy makers already talking with U.K. on risk models
Finance executives planning to shift operations out of the U.K. because of Brexit have been told by European Central Bank officials not to rush as there will be no first-mover advantage when it comes to gaining regulatory approvals, according to people briefed on the discussions.
Exchanges, OTC and Clearing
CBOE Holdings Announces Early Termination of Hart-Scott-Rodino Waiting Period for Bats Acquisition
CBOE Holdings, Inc. (NASDAQ: CBOE) today announced that the U.S. Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR), in connection with its proposed acquisition of Bats Global Markets, Inc. (Bats: BATS).
Chinese commodity futures turmoil casts doubt on possible trading links
Cathy Zhang – South China Morning Post
With the launch of the Shenzhen-Hong Kong Stock Connect approaching, some observers now expect the next step in Hong Kong’s financial links to the mainland could come through commodities trading. Earlier this month, Charles Li Xiaojia, the chief executive of Hong Kong Exchanges and Clearing, said the bourse was likely to explore similar schemes for metals, bonds and initial share sales. However, despite the idea being highlighted in the Hong Kong stock exchange’s 2016-18 strategic plan, the recent turmoil in the mainland’s commodities futures market could now set back those plans.
Chinese firms a ‘growing force’ for London Metal Exchange
Enoch Yiu – South China Morning Post
The London Metal Exchange has invested over £100 million (HK$958.3 million) in technology to upgrade its famous open outcry trading floor, as a growing number of Chinese members boosts the bourse’s future prospects. Peter Childs, head of trading operations and price discovery at LME, said six Chinese companies had joined since the LME was purchased by Hong Kong Exchanges and Clearing in 2012.
Hong Kong’s proposed listing changes fuel fierce debate
Jennifer Hughes – Financial Times
Fierce debate over a proposed shake-up of Hong Kong’s listing regime has resulted in claims that detractors are turkeys scared of Christmas and even split publicly the city’s Listing Committee — the nexus of the territory’s role as the world’s largest venue for public floats. Plans to reform the opaque process would shift the city’s decades-old balance of power between investors and issuers, giving the former potentially a greater say and putting the regulator at the centre of the process.
SGX rules out VM haircutting in recovery planning
Blake Evans-Pritchard – Risk.net
Singapore’s Exchange (SGX) has no plans to introduce variation margin gains haircutting (VMGH) into its recovery and resolution plans, according to Agnes Koh, the exchange’s chief risk officer. “In a Singapore context, we don’t intend – at least at this stage in our recovery and resolution plan – to put variation margin haircutting as a recovery tool. We think this would conflict with what the motivation is for a CCP’s existence. If it has to be used, perhaps it is something the resolution…
Global Trumpism Seen Harming Efforts to Reduce Climate Pollution
Jessica Shankleman – Bloomberg
Climate not a priority for populist movements in U.S., Europe; Concern for UN talks as Obama’s leadership gives way to Trump
Populism is drawing momentum from environmentalism in the U.S. and Europe, threatening the world’s effort to rein in climate change.
Wash Trades Prohibited – Rule 534; To Members, Member Firms and Market Users From Market Regulation Department
Pending all relevant regulatory review periods, this Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA1411-5RR from January 6, 2015. It is being issued to add additional questions and answers into the FAQ (#s 18-21) to provide additional regulatory guidance concerning circumstances that may be deemed a violation of Rule 534 (“Wash Trades Prohibited”), including activity during the pre-open on CME Globex and information on indirect wash trades. Additionally, the answer to FAQ 17 has been modified to clarify that CME Group’s self-match prevention (“SMP”) functionality does not prevent self-matches upon the opening of the market in circumstances where the orders are entered during the pre-open state on Globex.
Block Trades; Members, Member Firms and Market Users From Market Regulation Department
Effective Date 01 December 2016
This Advisory Notice supersedes CME Group RA1613-5 from October 25, 2016. It is being issued in response to a request from the CFTC to amend the term “fiduciary responsibility” to “pre-existing duty” in the third paragraph of Section 12 concerning the use of nonpublic information with respect to block trades. The CFTC determined that the term pre-existing duty comported more closely with language contained in the Commission’s final rules under Part 180 published in the Federal Register on July 14, 2011 (17 CFR Part 180 RIN Number 3138-AD27). In those final rules, the Commission determined that trading on the basis of material nonpublic information in breach of a pre-existing duty (established by another law or rule, or agreement, understanding, or some other source) may be in violation of Rule 180.1.
SGX Bull Charge: 13 years of rallying the industry for charity
Closing another successful year of fundraising with the Charity Run held today, SGX’s flagship charity programme Bull Charge raised more than S$2.6 million in proceeds this year.
SGX in blockchain group advancing Singapore’s vision of Smart Financial Centre
Singapore Exchange (SGX) is pleased to be part of an industry-wide collaboration that will harness blockchain technology to advance Singapore’s vision of a Smart Financial Centre.
For Analysts, Trump Can Literally Make Everything Great Again;’ Peak greatness.
Tracy Alloway – Bloomberg
Donald Trump’s campaign slogan captured the imaginations of almost half of America’s voters. Now it’s enthralling Wall Street.
Wall Street is worried Trump may bring back an economic disaster from the 1970s
Bob Bryan – Business Insider
One of the dirtiest words to come out of the 1970s, at least in economic circles, is stagflation. The decade saw a combination of increasing inflation and lackluster economic growth that hurt everything from consumers to stocks prices.
Paulson’s Big Long: A Bet on Trump Yields Power and Profit
Joe Light = Bloomberg
Hedge-fund billionaire gains influence in Washington; He’s lobbied to revive Fannie Mae, Freddie Mac; shares surge
John Paulson went long Donald Trump when much of Wall Street went short.
Trump’s Debt to the Financial Crisis
By Mark Whitehouse – Bloomberg
Do we have the 2008 financial crisis to thank for Donald Trump’s election as U.S. president? More than a century of human experience suggests it’s a real possibility.
Obama Races to Regulate Before Trump Takes Reins
Jennifer A Dlouhy – Bloomberg
At federal agencies across Washington, regulators are rushing to finalize rules before President Barack Obama leaves the White House. Where the administration has issued an average of 2.2 rules per day this year, 10 were pushed out the door on Tuesday and Wednesday, according to a count by the American Action Forum. “We’re running — not walking — through the finish line of President Obama’s presidency,” U.S. Environmental Protection Agency Administrator Gina McCarthy said to agency staff in a post-election e-mail.
Diplomats Confront New Threat to Paris Climate Pact: Donald Trump
Coral Davenport – NY Times
Marrakesh, Morocco — Diplomats from around the world converged here this week with the plan to put details on last year’s Paris climate accord and move the globe closer to controlling the industrial emissions that are heating the planet.
Yellen can’t sate Trump appetite for smaller Fed role in economy, Goldman Sachs says
Jeffry Bartash – MarketWatch
President-elect Donald Trump has been critical of the Federal Reserve’s easy-money approach and one of his key advisers this week urged the bank to reduce its influence on the U.S. economy. But that’s easier said than done.
Wall Street keen for a fellow traveler at Treasury
By Dan Burns and Jennifer Ablan – Reuters
With President-elect Donald Trump promising to spend as much as half a trillion dollars on infrastructure and slash taxes – initiatives that could add dramatically to the U.S. debt and balloon the budget deficit – Wall Street is far more focused on who will next head the U.S. Treasury than it was in the previous selection process under President Barack Obama.
Investing and Trading
Global Bonds Post Biggest Two-Week Loss in Quarter Century
Wes Goodman and Yun Li – Bloomberg
Bonds around the world had their steepest two-week loss in at least 26 years as President-elect Donald Trump sends inflation expectations surging. The Bloomberg Barclays Global Aggregate Index has fallen 4 percent since Nov. 4. It’s the biggest two-week rout in data going back to 1990. Federal Reserve Chair Janet Yellen contributed to the decline by saying Thursday an interest-rate hike could come “relatively soon.”
Negative Rates Are Failing to Halt Savings Obsession in Europe
Niklas Magnusson, Hanna Hoikkala – Bloomberg
Survey shows 69% of Europeans put savings into bank accounts; Intrum Justitia survey also shows 29% wanting to move abroad
After years of turbo-driven central bank stimulus, most Europeans still want to leave their spare cash in savings accounts, even if those accounts pay zero interest.
Financial Conditions Are Rigged Against Donald Trump
Luke Kawa – Bloomberg
The reaction in financial markets to President-elect Donald Trump’s election victory — much like the win itself — has defied conventional wisdom, with U.S. equities surging following a sharp drop as the results came in. But if you’re an occasional real estate developer — a self-professed “low interest rate guy” who wants to fix America’s trade deficit while bringing factories back from overseas — it might seem as though markets have been rigged against you.
The Big Short: is the next financial crisis on its way?
Patrick Collinson – The Guardian
In the Oscar-winning The Big Short, Steve Carell plays the angry Wall Street outsider who predicts (and hugely profits from) the great financial crash of 2007-08. He sees sub-prime mortgages rated triple-A but which, in reality, are junk – and bets billions against the banks holding them. In real life he is Steve Eisman, he is still on Wall Street, and he is still shorting stocks he thinks are going to plummet. And while he’s tight-lipped about which ones (unless you have $1m to spare for him to manage) it is evident he has one major target in mind: continental Europe’s banks – and Italy’s are probably the worst.
Trump stalked by bond market vigilantes who are predicting a spending boom
Ben Martin – The Telegraph
Few people can appreciate the power of the bond market better than Bill Clinton. In the early Nineties, as the US president contemplated widening the budget deficit by boosting spending, unease about his plans among bond investors sent Treasury yields higher. Faced with steeper borrowing costs, he was forced into a volte-face and cut the budget deficit instead.
Now or Never: Time for Stock Pickers to Shine
Steven Russolillo – WSJ
Active managers have no excuse now. One reason why professional stock pickers have struggled so much in recent years is that stocks have tended to move in lockstep. That is, much of the market has risen or fallen in unison no matter the catalyst, making it difficult for fund managers to spot opportunities and outperform benchmarks. That explanation looks less plausible lately.
Opinion: It’s time for U.S. investors to bring their money home
Michael Kahn – MarketWatch
How often does your financial adviser recommend diversifying your portfolio globally to hedge against a domestic downturn? That’s usually a good plan, but investors today might be better served by bringing the money home and putting more of it to work here in the U.S.
Rising rates test resolve of investors who piled into bonds
Trevor Hunnicutt and Sam Forgione – Reuters
Investors who piled into bond funds for safety will see red when they unfurl their current account statements this holiday season. Retreating from stocks in 2016, fund investors plunged $194 billion in U.S.-based bond funds in the first three quarters this year, according to the Investment Company Institute, a trade group.
In Bond Traders’ Trump Nightmare, Some Big Winners Emerge
Brian Chappatta, Liz McCormick – Bloomberg
Higher bond yields will boost funded ratios for pension funds; Low rates ‘just not right in today’s economy,’ BlackRock says
In the wake of Donald Trump’s victory, much has been made about the stunning selloff in the U.S. bond market.
JPMorgan Sees $50 Billion Wave From Insurers Flooding Into ETFs
Sonali Basak and Dani Burger – Bloomberg
In blow to hedge funds, insurers seek cheaper growth options; ETFs could replace some cash and stock holdings, JPMorgan says
The booming demand for hot exchange-traded funds has finally caught up with the staid, sleepy insurance industry.
Deutsche nominates chairman for second term, clears him of Libor blame: source
Deutsche Bank has nominated its chairman for a second term after an internal probe cleared him of accusations that he was partly to blame for the bank’s poor cooperation with authorities in a probe into rate-rigging, a source close to the bank said.
Credit Suisse moves toward Swiss bank spin-off
Joshua Franklin – Reuters
Credit Suisse has moved more than 1 million customers into a new Swiss bank which goes live on Sunday, a step toward what could be Switzerland’s biggest stock market listing in more than a decade.
Banks Are Entering A ‘New World Order,’ Analyst Says
Julie Verhage and Felice Maranz – Bloomberg
After regulation and low yields made the world of banking quite dull following the financial crisis, things are about to get more interesting. According to a new note from analysts at Macquarie Group Ltd., it’s time to “shift exposure” in the financial sector as the outlook looks much different in the post-election world.
U.S. Banks Close Rupee Exchanges After Large Bills Ruled Illegal
Jennifer Surane and Sonali Basak – Bloomberg
Aruna Desai has a problem with the thousands of Indian rupees she has with her in the U.S. — she can’t find a bank to exchange her funds and couldn’t give the money away if she tried.
Hedge Funds Embrace Copper’s Wild Ride
Joe Deaux – Bloomberg
The biggest copper rally in almost six years is leaving hedge funds squaring off with Goldman Sachs Group Inc. Futures in New York jumped 18 percent in just a month. The gains were propelled by a drop in London Metal Exchange-monitored inventories and speculation that Donald Trump’s pledges on infrastructure building will increase metals demand. The president-elect seems to have convinced money managers, who boosted their wagers on further price gains to the largest ever.
Live Blockchain Platforms in 2017?; Much-ballyhooed technology will soon move from proof of concept to production.
By Rob Daly, Editor at Large – MarketsMedia
Global capital markets should see the first live blockchain-based platforms in the second half of 2017, according to industry experts.
Hackers Program Bank ATMs to Spew Cash
Robert McMillan – WSJ
Cybercriminals who once earned millions by breaking into individual online bank accounts are now targeting the banks’ own computers, with often-dramatic results. In Taiwan and Thailand earlier this year, the criminals programmed bank ATMs to spew cash. Gang members stood in front of the machines at the appointed hour and collected millions of dollars.
Post-trade environment ‘not designed’ for blockchain
Paul Walsh – Global Custodian
The current legal and regulatory environment of the post-trade space is not designed to facilitate wide spread implementation of distributed ledger technology (DLT), according to Euroclear. A new report from Euroclear suggested that questions remain over the technology which has been billed by custodians as being able to streamline parts of the industry.
Fintech: Blockchain landmarks point to transformation of trade finance
Chris Wright – Euromoney
There will be many steps in the process of making blockchain technologies widespread in trade finance, but a crucial one was taken in October by Commonwealth Bank of Australia, Wells Fargo and a shipment of fine Texan cotton. The transaction – delivering the cotton from Texas to Qingdao using Skuchain’s Brackets distributed ledger system – was important for three reasons.
Is Engine of Innovation in Danger of Stalling?; For many companies spending on research is a speculative bet with an uncertain, and far distant, payoff
By CHRISTOPHER MIMS – WSJ
This is a special time for technology. Five of the world’s seven most valuable companies are U.S. tech firms. But the core innovations underlying Apple Inc., Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Facebook Inc. are decades old.
Should Trump Undo Investor Protections? Meet the Brokers of Madison County
Ron Lieber – NY Times
How did this rural county become the place with the highest percentage of stockbrokers in the entire United States with at least one black mark on their disciplinary records? Yes, you read that right. Not Long Island with its penny-stock boiler rooms. Not Florida, either, with its high concentration of retirees and the people who prey on them for a living.
Hands Across the Sea: Best Execution, US vs. EU
George Bollenbacher, Capital Markets Advisors – TABB Forum
As market participants worldwide get serious about preparations for MiFID II, how the EU rules compare with the same approaches in other jurisdictions continues to be an important question. The disparities between the EU rules for best execution and those in the US are very large. George Bollenbacher examines the different requirements, warning that the disparities are likely to cause another cross-border nightmare for market participants.
Head of SEC Calls for New Laws to Help Police Wall Street
Aruna Viswanatha – WSJ
Securities and Exchange Commission Chairman Mary Jo White said on Thursday new legislation could help law enforcement go after senior executives for misconduct that happens at their firms, adding to a growing chorus of law enforcers calling for more tools to police Wall Street.
Exchange Amendments to Block Trade Pre-Hedging Rules
FIA is pleased to host representatives from CME, ICE and Nasdaq Futures regarding the exchanges’ recent amendments to their block trade pre-hedging rules. Those amendments expressly permit pre-hedging of certain block trades. The exchange representatives will review the key aspects of the amendments and address attendee questions.
How a Chinese Company Pressed J.P. Morgan to Make Hires
Ned Levin – WSJ
For seven years, Taikang Life Insurance Co., one of China’s biggest insurers, tantalized J.P. Morgan Chase & Co. with talk of going public. Capitalizing on the bank’s eagerness to win the business, Taikang asked the bank to hire, one by one, various family and friends of its executives, internal J.P. Morgan emails show. J.P. Morgan eventually took on a total of eight interns and full-time employees it believed Taikang had referred. That was twice the number of any other company linked to a bank program called “Sons and Daughters,” which was aimed at winning business in China.
Fed Makes It Tougher for Former Officials to Work On Wall Street
Jesse Hamilton – Bloomberg
The Federal Reserve is slamming a wedge into the revolving door between government and Wall Street, by placing several restrictions on former officials who go to work for financial services firms.
Fund managers braced for tougher fee rules
Madison Marriage and Attracta Mooney – Financial Times
Friday lunchtimes are normally when many in the fund management industry gather in nearby watering holes in the City alongside clients for a few pre-weekend drinks. This week, however, they would have had much more to digest than just the sausage rolls after the City watchdog issued a sharply critical review of the fee structures in the industry that could end up costing their firms dearly.
Nomura, RBS appeal U.S. judge’s $839 million mortgage bond award
Nate Raymond – Reuters
A U.S. appeals court appeared unlikely on Friday to overturn an order requiring Nomura Holdings Inc (8604.T) and Royal Bank of Scotland Group Plc (RBS.L) to pay $839 million for making false statements while selling mortgage-backed securities to Fannie Mae (FNMA.PK) and Freddie Mac(FMCC.PK).
Wells Fargo faces tighter controls as U.S. regulator reverses course
Patrick Rucker – Reuters
A leading U.S. bank regulator on Friday reversed course and positioned the agency to claw back pay of former executives at Wells Fargo & Co after a phony-accounts scandal.
RBS accused of ignoring warnings over risky investments
Emma Dunkley and Jane Croft – Financial Times
Former managers at Royal Bank of Scotland disregarded warnings from staff over risky investments and its investment bank’s dependency on the “heroin of unsecured funding” before the financial crisis, it has been alleged in court documents.
Ex-JPMorgan executive who fled to Argentina pleads guilty in U.S.
Nate Raymond – Reuters
A former JPMorgan Chase & Co executive who spent eight years on the run in Argentina pleaded guilty on Friday to U.S. charges that he embezzled $5.4 million from clients at the bank and at a prior employer, UBS AG.
Stock trading competitions can bring new investors: Experts
With capital markets seeking to attract new investors, regulator Sebi’s proposal to ban competition or leagues related to stock trading could defeat this very purpose, experts say, adding that such initiatives are training ground for investments. In a recent set of proposed regulations, the Securities and Exchange Board of India (Sebi) is planning a blanket ban on practice of offering schemes, competitions, games or leagues to protect investors from being misled.
Canadian Securities Regulators Release MFDA Oversight Review Report
The Canadian Securities Administrators (CSA) today released the Oversight Review Report of the Mutual Fund Dealers Association of Canada (MFDA).
Notice of Disciplinary Action; Green Plains Grain Company LLC
The Panel concluded that GPGC thereby violated CBOT Legacy Rule 538.A and Rule 534. In accordance with the settlement offer, the Panel ordered GPGC to pay a fine in the amount of $15,000.
Notice of Disciplinary Action; Jump Trading LLC
the rule violation upon which the penalty is based, on November 16, 2016, a Panel of the CME Business Conduct Committee (“BCC” or “Panel”) found that it had jurisdiction over Jump pursuant to CME Rules 400 and 402 as the conduct occurred while Jump was a CME member. In accordance with the settlement offer the Panel ordered Jump to pay a fine of $42,500.
/goo.gl/3tjhSmthe Mutual Fund Dealers Association of Canada (MFDA).
Hong Kong firms in China charm-push ahead of Hong Kong-Shenzhen investment link
Samuel Shen and John Ruwitch – Reuters
Scores of Hong Kong-listed companies – many small – are on a roadshow blitz in China to whet the appetite of mainland investors ahead of the launch of a cross-border investment link between Shenzhen and Hong Kong. Mainland investors are enthusiastic, viewing the cross-border channel as a way to buy relatively cheap growth companies and hedge against a rapidly falling yuan, which hit an eight-year low on Friday against the dollar.
Shenzhen-Hong Kong Connect attracts Koreans
Park Eun-Jee – Korea JoongAng Daily
When Korean investors gained access to some Shanghai Stock Exchange indexes through a trading link called Shanghai-Hong Kong Stock Connect two years ago, they were betting big. In the five months after its launch in April 2015, the cross-border trading channel had attracted 4.4 trillion won ($3.7 billion) from Korea, according to the Financial Supervisory Service.
Aluminum’s Chinese Illusion
David Fickling – Bloomberg
Something very strange is happening in China’s metal markets. Buyers appear to be behaving the way U.S. shoppers do at this time of year: queuing up and pushing to get their hands on some product before anyone else can get a chance. Aluminum has been in a state of backwardation on the Shanghai Futures Exchange for several months.
China prepares to open national carbon market
Zhang Chun – chinadialogue
In the wake of Donald Trump’s surprise victory in the US presidential election, and his refusal to recognise climate change, China’s new carbon market is attracting particular attention. China’s move is not just one of the most important outcomes of the US-China bilateral climate talks – it may be the most watched national climate change move since the Paris Agreement came into force.
Venezuela’s Nemesis Is a Hardware Salesman at a Home Depot in Alabama
Anatoly Kurmanaev – WSJ
Public Enemy No. 1 of Venezuela’s revolutionary government is Gustavo Díaz, a Home Depot Inc. employee in central Alabama. On his lunch breaks from the hardware section, Mr. Díaz, 60 years old, does more than anyone else to set the price of everything from rice to aspirin to cars in his native Venezuela, influencing the inflation rate and swaying millions of dollars of daily currency transactions.
Merger of two exchanges
Raul J. Palabrica – Inquirer.net
There is light at the end of the tunnel for the aborted merger of the Philippine Stock Exchange (PSE) and Philippine Dealing and Exchange Corp. (PDEx). E is the trading platform for the stocks of the country’s top corporations. PDEx, on the other hand, is the venue for trading the fixed-income securities or debt papers of companies with good credit ratings. Except for Vietnam and the Philippines, the equities and securities markets of our neighbor countries are integrated, meaning, they operate on a single trading platform.
Financial Times in Talks on Acquisitions Year After Nikkei Deal
Gerry Smith – Bloomberg
Newspaper looks to buy companies that boost subscriber growth; Brexit, U.S. election have helped bolster paid readership
The Financial Times is in talks to buy companies that strengthen its digital subscription business as the newspaper capitalizes on greater financial support from its new owner, Japan’s Nikkei Inc., FT Chief Executive Officer John Ridding said.
Mark Zuckerberg and Facebook Must Defend the Truth
Jim Rutenberg – NY Times
Friday night, the Facebook co-founder Mark Zuckerberg went on his vast social network to convince an expanding chorus of critics — including the departing president of the United States — that he honest-to-goodness wants to combat the “fake news” that is running wild across his site and others, and turning our politics into a paranoiac fantasy come to life.