First Read

Corzine Settlement Raises More Questions Than Gives Answers
By Jim Kharouf, JLN

So Jon Corzine has settled a lawsuit over the MF Global collapse for $132 million. And while that means more money will be returned to creditors, it is really only part of the story.

I have wondered periodically since that firm filed for bankruptcy in October 2011 and tossed the futures markets into full response mode, if Corzine would ever be prosecuted for his role in the debacle. He hasn’t yet. The CFTC, for its part, brought a suit against Corzine in 2013 and essentially, that has been the last we’ve heard of it. The CFTC investigation is now approaching the three year mark and the clock is ticking. One key part of his settlement, is that there are still funds set aside from the insurers who are paying the legal defense fees for Corzine’s CFTC case. In other words, he’s somehow settled this part of the case with the insurance company’s money. It’s unclear how that worked.

Today’s issue also features several articles about Lehman Brothers as well as why former US Attorney General Eric Holder did not bring any meaningful cases against top Wall Street executives in the wake of the financial crisis. I wonder why the SEC had not brought a case against Corzine for his role in the mismanagement, negligence and loss of customer money at MF Global. Even in the case of Refco, where $430 million in debt was hidden from investors and customer monies were frozen or hidden, CEO Phillip Bennett and company president Tone Grant were arrested and convicted and sentenced. Grant died last year while serving his term.

Each case is different. But by all accounts, something bad happened at MF Global with a CEO at the helm who was heavily involved with the investments and moves the company was making. Those moves led to customer accounts being breached and eventually lost – only to be recovered in a painstaking bankruptcy process. Yet, no one. Not Corzine, nor anyone else has been prosecuted to date.

It wasn’t just bad luck for Corzine, customers, investors and creditors, or was it?

++++

Pointing a Finger at the Fed in the Lehman Disaster
By JAMES B. STEWART – NY Times
As the last eight years have unfolded, the enormous economic and political consequences of the Lehman Brothers failure have emerged with stark clarity, never more evident than in this week’s Republican convention.
goo.gl/dSYo7s

***** This was brought up at our MarketsWiki Education event in New York. Is there a connection between two firms that failed, Bear Stearns and Lehman, and the fact that both declined to participate in the rescue of Long Term Capital Management?

++++

Connecting the Dots: How DTCC Manages Contagion Risks
Andrew Gray, DTCC Managing Director and Group Chief Risk Officer – from Risk.net.
As the Lehman Brothers bankruptcy in 2008 demonstrated, the failure of one highly interconnected entity can spread rapidly across the global financial system and have a devastating impact on financial stability. The level of financial interconnectedness cannot be overstated.
To read the full article, click here to download the PDF.

++++

Sponsored Content

JPX-Osaka Exchange’s new derivatives trading system “New J-GATE” launched!

– Trading hours extended
From July 19, OSE market is open until 5:30am (JST), i.e. 3:30pm in Chicago, 4:30pm in NY, and 9:30pm in London. Also, its day session opens at 8:45am, 15 minutes earlier than before.

– New products debuted
In addition to OSE’s representative Nikkei 225 Futures/Options and TOPIX Futures, TSE Mothers Index Futures, TAIEX Futures, FTSE China 50 Index Futures, and JPX-Nikkei 400 Index Options were added in OSE’s product lineup.

– New functions are available
Powered by Nasdaq OMX Genium INET Trading, the New J-GATE brings you: ITCH protocol for multicast market data distribution, OMnet API for lower-latency order entry and TradeGuard for enhanced risk management.

For more information, please visit our website.

Sponsored
content from:
JPX-Osaka

++++

CurveGlobal COO Lyall departs amid September launch
By Joe Parsons – The Trade
Cathryn Lyall, one of the most renowned figures in the listed derivatives world, has left CurveGlobal, the incoming interest rate derivatives platform from the London Stock Exchange.
goo.gl/johL3h

***** CurveGlobal continues to throw curveballs. It is never a good message to the industry when highly respected industry executives leave an organization prior to its launch. Now you have two, Bill Templer and Cathy Lyall who have left before the launch. Such moves deflect the company’s story, as people want to know what is going on rather than what can the product do for me and my firm.

++++

What if There Just Aren’t Enough Jobs to Go Around?: A new study examines earnings data to link declining job mobility to lower overall demand for workers
By ANNA LOUIE SUSSMAN – WSJ
Despite steady job growth over the past six years, the U.S. labor market—by some accounts—has become a stagnant place where fewer people switch jobs and workers linger in the same roles for longer.
goo.gl/3Huo2C

***** We are not lacking in jobs, just imagination.

++++

Global Spend Mobility Mitigates Risk in Light of Brexit
Perseus
About a year ago, an Asia-based metals broker came to Perseus without any trading infrastructure in the UK and wanted to begin offering services to European customers. As such, we implemented the full suite of LiquidPath services including colocation, managed infrastructure, PrecisionSync time nodes, network between Chicago, Hong Kong and London, as well as CME and LME market data feeds in London’s LD4 data center. As the Brexit decision neared, the firm feared that regulatory changes would impact their ability to offer services to European customers from the City of London. In the month since the UK officially decided to leave the European Union, the firm exercised their GSM option to relocate their European operations to Frankfurt. With a simple phone call, Perseus was able to turn down the services in LD4 and turn up those same services in Frankfurt’s FR2 data center. There was no cost to the client and they are free to continue serving European customers regardless of how and when Britain negotiates the terms of this breakup.
goo.gl/xuba95

**JK: A promo for Perseus that tells a deeper story – how technology makes companies mobile and how fragile or tenuous a financial center’s dominance actually is.

++++

Thursday’s Top Three
Yesterday saw a larger number than usual of popular stories. Almost feels wrong to pick a top three but, this being a top three list, here they are. In first place is the story, C.E.O.s Meet in Secret Over the Sorry State of Public Companies. It is difficult to be covert when you are famous. In second placeTayloe Draughon of Neurensic wrote, I thought I was clever enough to not get caught. Finally we have the New York Times story, How Traders Use Front-Running to Profit From Client Orders

Lead Stories

Corzine, others settle most litigation over MF Global collapse
Reuters
Jon Corzine has settled a lawsuit by the trustee for the former New Jersey governor’s company MF Global Holdings Ltd, as part of a $132 million accord to end much of the remaining litigation over the brokerage’s 2011 collapse.
reut.rs/2aevqlf

Settlement Ends Much of Litigation Against MF Global’s Corzine; Pact for $132 million over former CEO’s role in brokerage firm’s collapse
By PEG BRICKLEY – WSJ
The legal fallout from the collapse of MF Global has produced another settlement, a $132 million pact that ends much of the litigation aimed at former New Jersey Gov. Jon Corzine.
goo.gl/UOLVbJ

Metals Trading Goes Old School During LME’s Electronic Shutdown
Agnieszka De Sousa – Bloomberg
Traders used phones as LMEselect was hit by connection issue; Problem unrelated to fault shutting London office until August
For a few hours this morning, old-fashioned telephone trading saved the world’s biggest metals market from total standstill.
goo.gl/wJWOSI

Judge shrinks Madoff trustee $905 million lawsuit versus Florida firm
BY JONATHAN STEMPEL – Reuters
A federal bankruptcy judge on Thursday narrowed a $905 million lawsuit filed by the trustee seeking money for Bernard Madoff’s victims against executives who ran a now-defunct Florida accounting firm that had close ties to the swindler.
goo.gl/qFbNUK

HSBC case is another blow for trust in banks
Financial Times
Banks like to tell the world how much they respect and value their clients. In its literature, the UK-based global institution HSBC says that its customers are “at the heart of everything we do”. That may be the marketing patter, but a recently launched criminal case in New York puts a rather different spin on these words. Two senior executives in the bank’s foreign exchange division have been charged with fraud for allegedly front-running an unusually large customer order, making millions of pounds of profit at a client’s expense.
on.ft.com/2aeBD0c

A Clue to the Scarcity of Financial Crisis Prosecutions
William D. Cohan – NY Times
One of the enduring mysteries of the 2008 financial crisis has been why the Justice Department made so few attempts to prosecute the individuals responsible for it, given the abundance of tangible evidence of wrongdoing by Wall Street bankers, traders and executives in the years leading up to the great unwinding.
nyti.ms/2ayJWjO

JPMorgan to Stop Settling Government Securities for Dealers
Liz McCormick, Hugh Son – Bloomberg
Shift would leave BNY Mellon dominating niche of repo market; Rising cost of transactions sparks move, seen by end of 2017
JPMorgan Chase & Co. plans to exit the business of settling government securities for most dealers by the end of 2017, including some transactions in a key corner of the $1.6 trillion repurchase-agreement market.
goo.gl/1HrSTO

J.P. Morgan Chase Nearing Settlement With Prosecutors on Asia Hiring Probes; J.P. Morgan expected to pay about $200 million to settle criminal, civil probes, sources say
By EMILY GLAZER, CHRISTOPHER M. MATTHEWS and ARUNA VISWANATHA – WSJ
J.P. Morgan Chase & Co. is expected to pay around $200 million to settle federal investigations into whether it tried to win business by hiring the sons and daughters of powerful people in Asia, people familiar with the matter said.
goo.gl/tlmNg0

The Global Economy’s Hesitation Blues
Robert J. Shiller – Project Syndicate
Economic slowdowns can often be characterized as periods of hesitation. Consumers hesitate to buy a new house or car, thinking that the old house or car will do just fine for a while longer. Managers hesitate to expand their workforce, buy a new office building, or build a new factory, waiting for news that will make them stop worrying about committing to new ideas. Viewed from this perspective, how worried should we be about the effects of hesitation today?
/goo.gl/gxYcDU

Corzine, others settle with MF Global trustee over collapse
Jonathan Stempel – Reuters
Jon Corzine has reached a settlement with the trustee for the former New Jersey governor’s collapsed brokerage MF Global Holdings Ltd, as part of a series of accords expected to provide about $132 million to creditors, according to court papers.
reut.rs/2aevqlf

London’s future: a brief guide; Five scenarios for the city post-Brexit, from a ‘renationalised’ British capital to a European enclave
by: Charles Leadbeater – FT
Cities can implode, especially when they face a catastrophic shift in the environment to which they cannot respond.
/goo.gl/JmCQdM

Britain Goes Back to Bronze Age With Plans to Revive Tin Mining
Thomas Biesheuvel, Agnieszka De Sousa – Bloomberg
Miner seeks tin in region known for metal since ancient times; South Crofty closed in 1998, ending Cornwall’s tin production
A half mile shaft of filthy water dug into the granite that forms the southernmost tip of England separates Richard Williams from his dream of bringing back mining to a region known for its tin since before Roman times.
goo.gl/n7J9ra

He Made ‘Carried Interest’ Famous. Now He’s Going to Help Write The Law; Victor Fleischer joins the Senate Finance Committee’s Democratic staff
By RICHARD RUBIN – WSJ
The tax law professor who helped turn carried interest from a technical tax term into a populist cause is coming to Washington.
goo.gl/32nPPs

Frankfurt’s Trading Importance Set to Grow Post-Brexit: Chart
Julia Hirsch – Bloomberg
Securities trading in Frankfurt will probably experience an upswing in the wake of Britain’s decision to leave the European Union, with Germany’s banking capital emerging as one of the main beneficiaries in the changing landscape, according to a survey of German financial professionals. More than three-quarters of the respondents said trading and settlement would gain while asset management, corporate banking and professional services are also likely to benefit.
goo.gl/phM2zs

Brexit

City unites for new bipartisan Brexit lobby
Jessica Davies – Financial News
Influential City executives from both sides of the Brexit debate are coming together to launch a new body that aims to represent the financial industry’s interests in the UK’s exit from the European Union.
goo.gl/WBAVwQ

Hollande urges UK to start Brexit talks as soon as possible
BBC
French President Francois Hollande has said he respects the decision of the UK to leave the EU but Brexit negotiations should begin as soon as possible. Meeting Theresa May for talks in Paris, Mr Hollande said he recognised the new UK government needed time to prepare but stressed: “The sooner the better.” He thanked the PM for her “message of solidarity” in the wake of the truck attack in Nice. Mrs May said she wanted to “maximise opportunities” for the UK and the EU.
bbc.in/2ayKbva

Europe’s non-euro 8 fear consequences of Brexit vote
Tony Barber – Financial Times
Britain’s departure from the EU will deprive the eight other countries in the bloc that are not in the euro zone of a powerful ally, forcing them into difficult policy choices, according to officials and analysts in the nations concerned. “The UK’s exit from the EU will change the relationship between eurozone countries and those without the common currency, to the detriment of the latter,” said Sebastian Plociennik, head of the EU programme at the Polish Institute of International Affairs, a think-tank.
on.ft.com/2aevD7F

Leave London After ‘Brexit’? Steve Cohen Doubles Down
Chad Bray – NY Times
As some financial companies consider moving jobs out of London after Britain’s vote to leave the European Union, the billionaire investor Steven A. Cohen’s firm, Point72 Asset Management, is taking a contrarian view. The firm — a family office that manages Mr. Cohen’s $11 billion fortune and the personal money of some of its employees — has doubled the size of its work force in London in the last six weeks after reopening its office here last year.
nyti.ms/2aevAcg

Meet the Brexit Negotiators: Veterans of Europe’s Backroom Wars
Jonathan Stearns, Ian Wishart- Bloomberg
David Davis up against seasoned, savvy Brussels bureaucrats; Britain’s handicap is a four-decade hiatus from trade policy
David Davis, the U.K. minister responsible for Britain’s exit from the European Union, is starting out with a distinct disadvantage: his country hasn’t run its own trade policy since joining the EU in 1973, while Europe has been honing its negotiating machinery for the past 60 years.
goo.gl/8WUqJr

Exchanges, OTC and Clearing

NYSE LEADS IN U.S. IPO PROCEEDS RAISED TO DATE IN 2016; Leadership continues in technology IPOs and in ETPs at NYSE
ICE
The New York Stock Exchange (NYSE) remains the premier venue for global capital raising with over $5.1 billion in proceeds from U.S. initial public offerings (IPOs) year-to-date as of July 19, 2016. Activity for IPOs at the NYSE strengthened as the first half of 2016 progressed, particularly in the technology sector.
goo.gl/OJEM9t

The Nasdaq Stock Market Leads All US Listing Exchanges With 38 Percent Of ETP Listings And Switches In The Second Quarter Of 2016
Press Release
Nasdaq (Nasdaq:NDAQ), the single largest U.S. equity exchange by market share, announced 13 new ETP listings in June, further establishing itself as the foremost listing and trading venue for exchange-traded products (ETPs). For the second quarter in a row, Nasdaq led all other US exchanges and captured 38 percent of ETP listings and switches with 36 products in total.
goo.gl/HJtgjn

Statement Of CFTC Chairman Timothy Massad On CFTC Staff Guidance Regarding Clearinghouse Recovery Plans And Wind-Down Plans
Press Release
Clearinghouses have taken on an increased importance in the global financial system, and the CFTC is focused on making sure they remain strong and resilient. Today’s staff guidance, which will help clearinghouses improve their Recovery Plans and Wind-down Plans, is a critical part of that effort.
goo.gl/bl7ymF

CFTC Staff Issues Guidance to Clearinghouses on Recovery Plans and Wind-Down Plans
CFTC
The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) today issued guidance to clearinghouses to further the development of Recovery Plans and Wind-down Plans. For clearinghouses, or Derivatives Clearing Organizations (DCOs), the development of these plans is a critical element of risk management and contingency planning to address the extreme circumstances that could threaten DCOs’ viability and financial strength, and is required by CFTC regulations.
goo.gl/5h5ZDr

Former SocGen CFO appointed head of OTC clearing at HKEx; Jacky Mak appointed to head up HKEx OTC clearing subsidiary.
By Hayley McDowell – The Trade
Jacky Mak – a former chief financial officer of Soc Gen in Hong Kong and Taiwan – has been appointed head of OTC clearing at the Hong Kong Stock Exchange (HKEx).
goo.gl/Q4rf9m

FTSE Russell continues support of ISOCO values; FTSE Russell’s annual compliance statement endorses IOSCO benchmark principles, and announces integration of FTSE MTS indices.
By Hayley McDowell – The Trade
The FTSE Russell, a global index provider, has confirmed its continuing support for regulatory principles outlined by the International Organization of Securities Commissions (IOSCO).
goo.gl/NVUItE

Derivatives on the iShares EURO STOXX 50® UCITS ETF (Dist): Change of product group
Eurex
Effective 25 July 2016, futures and options on iShares EURO STOXX 50 UCITS ETF (Dist) with ISIN IE0008471009 (Product codes: EUNF and EUN2 respectively) will have a new product assignment group to reflect the new international settlement structure of the underlying ETF shares.
/goo.gl/dbCRIo

Politics

Donald Trump and the shifting symbolism of austerity
Gillian Tett – Financial Times
At the Republican party’s 2012 convention in Tampa, Florida, a gigantic “debt clock” hung over the stage showing how America’s national debt was swelling in real time. It was intended to remind delegates of the need for tough fiscal measures. At the 2016 convention in Cleveland, Ohio, this week some speakers — such as Mike Pence, the vice-presidential nominee — have deplored the size of US debt. But the comments have been brief, almost ritualistic, and there has been almost no call for an austerity plan.
on.ft.com/2aexuJN

Trump leaves some on Wall Street wary and confused
Rodrigo Campos – Reuters
Donald Trump has said a lot of things that, were he a sitting U.S. president instead of a candidate for the job, could be expected to roil financial markets. If investors were taking the Republican presidential nominee at his word, they would be selling shares of Apple Inc (AAPL.O), Mondelez International Inc (MDLZ.O) and Ford Motor Co (F.N), and cashing out of Mexican equities – all targets of Trump threats of boycotts, barrier walls or import taxes. Investors betting on a Trump presidency would be buying shares of U.S. companies that dealt exclusively with domestic customers and suppliers.
reut.rs/2ayjE0R

Trump’s America Grows More Ominous Over 13-Month Run; There were several notable differences between Trump’s acceptance speech Thursday and the one that launched his campaign.
Michael C. Bender – Bloomberg
Donald Trump completed his hostile takeover of the Republican Party on Thursday with one of the most ominous speeches of his campaign, showing his already dystopian view of America has darkened considerably since he first announced his presidential campaign.
goo.gl/E7KhpH

Investing and Trading

Corporate earnings: Of populism and profits
The Economist
If you look at the headlines, geopolitical risk is at record highs, with populism and strife in Europe, a coup attempt in Turkey, a tense election in America, the threat of terrorism, and tensions in the South China Sea. Peer at a stock-price screen, however, and everything seems fine. This month the S&P 500 index of big American firms roared to a new high. Benjamin Graham, a famous investor, described America’s stockmarket as a manic depressive. But now it appears to be one of the planet’s last, incorrigible optimists. Investors are convinced that the outlook for corporate profits has improved. For the past four quarters, earnings-per-share for the S&P 500 have been falling by about 12% compared with the prior year (see chart)
econ.st/2ayCLbm

Why the end of austerity would be an earthquake for markets; Any unified fiscal stimulus in developed economies has the potential to change investors’ mindsets
by: Michael Mackenzie – FT
Shock proof. The resilience of markets is standing out as a defining feature, with setbacks shortlived and ultimately providing investors with a buying opportunity.
/goo.gl/6qXAiD

Draghi’s Sopping Up Whatever Liquidity Was in European Credit
Katie Linsell – Bloomberg
Bond trading costs rise to highest in more than three years; More stimulus possible if Brexit undermines European growth
Mario Draghi’s buying spree in Europe’s corporate bond market may be making it cheaper for borrowers. But for the people who trade the debt it’s becoming a lot more expensive.
goo.gl/VHd5oB

The Search for the Elusive Natural Interest Rate; The concept guides central bankers like Janet Yellen, but the rate can’t be directly observed.
Peter Coy – Bloomberg
Financial markets are remarkably strong in a world roiled by terror attacks, a coup attempt in Turkey, murders of police officers in the U.S., and Britain’s historic vote to leave the European Union. The S&P 500 set a record on July 20 for the sixth time in eight sessions. Are investors ignoring how the real world will affect their investments? Or do they know something the rest of us don’t?
goo.gl/ckMzIa

Institutions

Hedge Funds Face More Scrutiny as They Expand FX Market Making
Lananh Nguyen – Bloomberg
Be careful what you wish for — that’s the advice from State Street Corp. to the newest market makers in the $5.3-trillion-a-day foreign-exchange market. As hedge funds and automated-trading firms ramp up their currencies businesses, they’ll probably attract more interest from regulators, said Chip Lowry, senior managing director at State Street Global Markets in Boston, in a conference call Tuesday hosted by Greenwich Associates.
bloom.bg/2ayKlmb

US banks added $700 billion of capital since Dodd-Frank; Secretary Lew praises Wall Street reform for strengthening bank balance sheets, and pulling derivatives “out of the shadows”.
By Hayley McDowell – The Trade
Banks in the US have added an additional $700 billion worth of capital to their balance sheets since the implementation of Dodd-Frank, according to an official at the Treasury.
goo.gl/O1BbIa

KCG CEO Wants Wholesale Market Making to Go Beyond Stocks
Declan Harty – Bloomberg
KCG Holdings Inc., one of the top market makers who handle stock trades on behalf of retail brokerages, said the practice would work well in currencies, Treasuries and other assets. “I think it’s a good model,” Coleman said during a conference call with analysts to discuss the company’s second-quarter earnings. “What I’d like to see over the next three to five years is this model expand beyond U.S. equity retail,” he said. “There could be specialists for executing other products, whether it’s FX or Treasuries or things beyond retail.”
bloom.bg/2aexmtH

Blackstone’s assets under management hit record high of $356bn
Joseph Cotterill and Mary Childs – Financial Times
Blackstone, the world’s biggest alternative investment manager, expanded its empire to record size in the second quarter as assets under its management surpassed $350bn for the first time. Blackstone’s economic net income — a measure of earnings which includes unrealised gains on investments such as buyouts and real estate — was $520m in the three months ended in June, increasing only 2 per cent on the same period last year, the group said in results on Thursday.
on.ft.com/2aeBwC0

HSBC reviewing 2013 forex probe after trader’s arrest: source
Reuters
HSBC (HSBA.L) is reviewing a past investigation of forex trades after the arrest on Tuesday night of a senior manager in New York for alleged fraud, according to a source familiar with the matter.
reut.rs/2aeuld4

JPMorgan to pay about $200 million to settle Asia hiring probes: WSJ
Reuters
JPMorgan Chase and Co (JPM.N) is expected to pay about $200 million to settle criminal and civil probes over its Asia hiring practices, the Wall Street Journal reported, citing people familiar with the matter.
reut.rs/2ayjsia

Goldman Sachs Raising Private-Equity Fund of $5 Billion to $8 Billion; Goldman soon will begin marketing a new corporate-buyout fund of between $5 billion and $8 billion, its first such fund since the financial crisis
By LIZ HOFFMAN – WSJ
In 2007, Goldman Sachs Group Inc. raised one of the biggest private-equity funds ever. Nine years later, it is readying a sequel more tailored for the times.
goo.gl/gZTqvb

Arab-American bias lawsuit against JPMorgan can proceed: U.S. judge
BY DENA AUBIN – Reuters
An Arab-American family whose business and personal bank accounts were closed in 2014 without explanation can sue JPMorgan Chase for racial discrimination, a federal judge in Detroit has ruled.
goo.gl/F6hfPK

Fintech

Facebook Moves One Step Closer to Light-Based Wireless Communication
Steph Yin – NY Times
The internet is often called the “World Wide Web,” but it’s not actually accessible to residents of a large portion of the world. Today, four billion people are offline, and 1.6 billion of them live in sparsely populated areas around the world.
nyti.ms/2ayK9mQ

Post-Brexit Rumblings Spook U.K. Tech Boom
By Therese Raphael – Bloomberg
If you are under 35, possess an entrepreneurial spirit, speak Python and don’t think of a vegetable when you see the word Celery, then it’s likely you are in high demand. That’s especially true in Europe, a labor market starved of tech talent. And it’s why the U.K. will now have to work extra hard to retain your services.
goo.gl/H1HtsV

Digital Contact Eyes Broker Clients for Custom News Feeds; The vendor’s product will make it possible for retail brokers to create customized news feed for clients, based on their own data.
Joanne Faulkner – Waters Technology
UK-based Big Data analysis engine provider Digital Contact is in the “closing stages” of signing several contracts with brokers to feed its tradable equity data and news alerts into their platforms for wider distribution to their client bases.
goo.gl/Fc3Zds

Regulation

Sebi to finalise options in commodities today
Business Standard News
The Securities and Exchange Board of India is meeting the Commodity Derivatives Advisory Committee tomorrow to give a final shape to option trading in commodity futures and revise warehousing norms to ensure good delivery on settlement.
goo.gl/kTb7dY

U.S. sides with HSBC to block release of money laundering report
Mica Rosenberg – Reuters
The U.S. government asked a federal appeals court on Thursday to block the release of a report detailing how HSBC Holdings Plc (HSBA.L) is working to improve its money laundering controls after the British bank was fined $1.92 billion.
reut.rs/2ayJnX9

Wesley R. Bricker Named SEC Interim Chief Accountant
Press Release
The Securities and Exchange Commission today announced that Wesley R. Bricker has been named the Commission’s Interim Chief Accountant responsible for the activities of the Office of the Chief Accountant as James V. Schnurr, current Chief Accountant, recovers from a serious bicycle accident.
goo.gl/sU0rmC

ESMA fines Fitch Ratings Limited EUR1.38 million
ESMA
The European Securities and Markets Authority (ESMA) has fined Fitch Ratings Limited (Fitch) EUR1.38 million for a series of negligent breaches of the Credit Rating Agencies (CRA) Regulation.
/goo.gl/klSgSw

Dark pool controls ‘weak’, warns UK regulator
Philip Stafford – Financial Times
anks will need to tighten up controls and monitoring of their internal trading platforms after a review by UK markets regulators described current practices as “weak”. A survey published on Thursday by the Financial Conduct Authority into equity trading that takes place off-exchange found many banks had inadequate controls to prevent potential conflicts of interest.
on.ft.com/2aewUeV

Spanish bank sees red in color quarrel with German rival
AP via Fox News
Spanish bank Santander has suffered a legal blow in its long-running row with a German rival over the use of the color red. Germany’s Federal Court of Justice ruled Thursday that the country’s publicly-owned Sparkassen are entitled to keep their trademark for a shade of red called HKS 13.
fxn.ws/2aexxpa

?Derivative alternatives to Libor should be adopted faster by US, global authority says
Neil Roland, MLex
The US and some other countries should speed development of derivatives reference rates as alternatives to Libor, the Financial Stability Board said. The US, UK, Japan and Switzerland were to have adopted a single alternative rate for over-the-counter derivative contracts by the end of June.
goo.gl/MSmwC0

U.K. Insurers Are Failing to Supervise Salespeople, FCA Says
Patrick Gower – Bloomberg
FCA will write to chief executives demamding better oversight; More than half of companies were not clearly managing risks
The Financial Conduct Authority will write to chief executives of U.K. insurers after it found “widespread” evidence that companies are failing to supervise external salespeople.
goo.gl/T2SQKj

FCA finds failings in the oversight of appointed representatives in the general insurance sector
UK FCA
The Financial Conduct Authority (FCA) has found significant shortcomings in the control and oversight of appointed representatives by their principal firms in the general insurance sector in a thematic review published today.
goo.gl/WZl04B

Regions

How to access China before the MSCI green light
Deborah Fuhr – Financial News
The decision by index provider MSCI to keep Chinese domestic stocks out of its emerging markets indices means many investors benchmarked against global indices will have to stay out of one of the world’s biggest markets. But if they decide to plunge in, there are plenty of options.
goo.gl/eew3E6

African banks: Subprime savannah
The Economist
Africa’s financial firms can claim many innovations, from M-Pesa, a pioneering Kenyan mobile-money service, to the life insurance for people with HIV offered by All Life, a South African firm. To these can be added the first social-media bank run. Chase Bank Kenya, the country’s 11th-largest (unrelated to America’s JPMorgan Chase), was taken over by regulators in April after word of its impending collapse spread on Twitter and WhatsApp, spurring panicked withdrawals. The run highlighted the risks facing banks in a region that is seen by many investors as one of the industry’s final frontiers. Whereas banks in many rich countries have produced disappointing profits since the financial crisis of 2008, African ones had until recently been reporting stellar growth and juicy returns.
econ.st/2ayD6ec

‘India’s external debt of $474 billion forms 16% of APAC borrowing’
By PTI
Debt pile up is the highest in the Asia Pacific region, with the largest increase in external borrowings seen in China, India, Indonesia, Taiwan and Malaysia.
Debt pile up is the highest in the Asia Pacific region, with the largest increase in external borrowings seen in China, India, Indonesia, Taiwan and Malaysia.
MUMBAI: Emerging markets are increasingly becoming vulnerable to global shocks after a decade-long build-up of debt, with the Asia Pacific region, including India, seeing the largest growth in external borrowings, says a report by Moody’s.
goo.gl/V61SNL

Emerging Global Advisors Survey Finds Growing Optimism Among Investors in Emerging Markets
NEW YORK, July 21, 2016 /PRNewswire/ — Emerging Global Advisors (EGA) today announced the results of its latest Emerging Markets (EM) Investor Sentiment Survey, a quarterly poll of asset managers and financial advisors focusing on their sentiment and equity allocations to emerging markets. The EGA EM Investor Sentiment score increased 28% from 538 in the first quarter of 2016 to 687 in the second quarter of 2016. Scores range from 0 (most negative) to 1,000 (most positive).
goo.gl/VbLliz

Pakistan Stock Exchange declared Asia’s best market
The News International
LAHORE: Although decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan — which has a nominal GDP of $270 billion and a per capita income of $5,000 — the embattled country has succeeded in attracting very positive reviews between January and July 2016 from numerous Western media houses, the World Bank and the globally-acclaimed credit rating agencies like Moody’s, etc.
/goo.gl/VPGXJi

Financial frauds are sore point for foreign investors: Study; Needs to checked by a global standard regulatory framework coupled with the companies’ in-house mechanisms
Business Standard
A rise in financial frauds has become one of the sore points for foreign investors and needs to checked by a global standard regulatory framework coupled with the companies’ in-house mechanisms, a study has said.
goo.gl/mkGFRz

NSE could get a market cap of Rs 40,000 crore; India’s only listed exchange, Multi Commodity Exchange, had debuted in stock market at a P/E of 37 and is currently valued at 67
Krishna Kant & Sheetal Agarwal – Business Standard
On listing, National Stock Exchange (NSE) could get a market capitalisation of Rs 40,000 crore, going by the price-earnings (P/Es) ratios of global stock exchanges.
goo.gl/vBBj8C

Blood is thicker than BSE 200
Family businesses outperform the broader index over 10 years
N Sundaresha Subramanian – Business Standard
Family-owned businesses (FOBs) might have their own follies but they often tend to be good investments. A collection of 86 family businesses outperformed the BSE 200 index over the past decade, according to a seminal report by Ambit Capital titled ‘Succession Planning by Family-Owned Businesses in India.’ While these firms seemed to walk hand-in-hand with the broader index in the initial years of this period, they pulled ahead after the collapse of Lehman Brothers, with significant outperformance coming in the past two years. The Mumbai-based brokerage has constructed India …
goo.gl/uBWrO6

Miscellaneous

Reuters: What’s in a name?
Reuters Blog
Two hundred years ago this month – on 21 July 1816 – Israel Josaphat, founder of the ‘Reuters’ part of Thomson Reuters was born in Kassel, Germany. In 1878 – as Paul Julius Reuter – he retired as managing director of Reuters Telegram Company, one of the most famous institutions of the Victorian era. Reuters News Agency was part of the glue which bound the British Empire together. By then a household name, no one could imagine life without it. Queen Victoria herself referred to Reuter as “one who usually knows”.
tmsnrt.rs/2aezaTI

Methane leaks: A dirty little secret
The Economist
Methane is invisible to the naked eye and does not make for good television. So when about 100,000 tonnes billowed out of a natural-gas system in Aliso Canyon, Los Angeles, over 112 days last winter (pictured in infra-red above), it drew relatively little media attention—even though it forced the evacuation of thousands of homes and the plume was big enough to be detectable from space. Compare that with coverage of the Deepwater Horizon oil spill in 2010, which was the top item of news for weeks in America, much of it focused on the environmental impact on the Gulf coast.
econ.st/2ayD5GY

Some Media Companies Cool on YouTube Distribution; YouTube seen as crowded and difficult for content discovery, while Facebook and Snapchat and other platforms surge
By MIKE SHIELDS – WSJ
In May, the do-it-yourself, home-and-garden site Hometalk made its first big push into video on Facebook.
goo.gl/q10sbG

Roger Ailes Resigns From Fox News; Rupert Murdoch to Take Over; Departure follows allegations of sexual harassment by former Fox News anchor
By JOE FLINT – WSJ
Roger Ailes stepped down as Fox News Channel’s chairman and chief executive in the wake of a sexual-harassment scandal, bringing an abrupt end to his 20-year tenure and raising questions about how the cable news powerhouse will adapt to a new era.
goo.gl/SxK6fr

Edward Snowden to Help Develop a Safer Phone for Journalists
By JOHN MARKOFF – NY Times
CAMBRIDGE, Mass. — The former National Security Agency contractor Edward J. Snowden said Thursday that he planned to help develop a modified version of Apple’s iPhone for journalists who are concerned that they may be the target of government surveillance.
goo.gl/AZgAeM

Pin It on Pinterest

Share This Story