First Read

New York Was A Great Educational Experience
By John J. Lothian

The MarketsWiki Education World of Opportunity series swept into New York yesterday at the Nasdaq MarketSite and it was another banner day for the series. We had about 110 interns and newer employees attend the two sessions and not a single one of them left during the sessions.

Let us just say that the speakers kept the attention of the audience, especially Kenny Polcari from O’Neill Securities. Polcari was so animated in telling his story, and that of the market, that the windows across Times Square from the MarketSite shook and Elmo was knocked over.

We are greatly appreciative of Nasdaq for hosting the event at their Times Square facility. We are also appreciative of the rest of our sponsors, including Global Premier sponsor CME Group. The swag giveaways were a hit with the New York crowd, just as they had been in Chicago. For the second year in a row, each of the participants took home a MarketsWiki Education high quality drawstring backpack with some sponsor swag in it and we raffled off some higher value items, including several Series 3 study kits from The IFM.

But we could not have pulled off this series without the time and dedication of our speakers, who each took time out of their busy schedules to talk to the young audience and pass on some insight, wisdom and even humor. Thank you to all our speakers in New York, and to the Chicago speakers from last week.

We will move on to London, Paris and Frankfurt in the fall and are still looking for venues for each city. So if any of you want to host us, or have some ideas, we welcome them. We are also looking for speakers or suggestions for speakers for each of those cities. If you are interested, or have an idea of someone who would be a good contributor, please let us know.

And lastly, we will need some help getting the word out for the fall series. We have been in London for two years already with the series, but Paris and Frankfurt are virgin territory for it. So we will need some help connecting to employers, schools and the young people in them.

You have all greatly helped us make this program a success and we are grateful. You have told the story, you have helped young people find their way to the series and hopefully to careers in the industry. We could not do this without you, so thank you from the top to bottom of my heart.


HTG Capital Partners, LLC, to Acquire Operations of Kottke Associates, LLC
HTG Capital Partners, LLC, and Kottke Associates, LLC, announced today that they have reached a definitive agreement providing for the acquisition by HTG of the introducing broker, money management and proprietary trading businesses of Kottke Associates. The transaction is expected to close in the third quarter, subject to the completion of certain closing conditions.

***** This is a good deal for both parties, as HTG continues to acquire proprietary trading assets and money management businesses, while Kottke partners get to move on to the next stages of their lives and careers. As it turns out, John J. Lothian & Company, Inc. is a sub-lessor of Kottke Associates. Our 16th floor CBOT offices used to be the accounting department for Kottke. Kottke’s lease off 11,000 square feet of office space at the CBOT Building is up at the end of the year, which played an important role in this decision. HTG also has a real estate lease ending in March of 2017, so it is good time for them to be looking to add to their business. The whole real estate angle on this deal makes our recent presentation at the MarketsWiki Education World of Opportunity series by GlenStar Properties’ Christian Domin about real estate risk that much more relevant. I like both sides of this deal and think the cultures will mesh well. Chris Hehmeyer of HTG is stepping it up after stepping down as NFA chairman. Word is that Integritas Financial Consulting’s Carl Gilmore was used in putting this deal together. Nice work Carl.


FIA’s Walt Lukken on Reg AT and the 2016 Agenda

Walt Lukken, president and CEO of the FIA, spoke with JLN about what issues the FIA is working on for the remainder of the year. The trade organization is focusing on Reg AT, the BASEL leverage ratio rules and the ramifications of Brexit.

A big concern for the FIA is the CFTC’s desire to get and store, without a subpoena, firms’ proprietary algorithms, which have enormous intellectual property value for the firms. As for BASEL, the FIA is worried about the negative impact current rules have on clearing. The surprise Brexit vote added another issue to the FIA’s plate and, despite a one-year reprieve, MiFID looms in the background.
Watch the video »

***DA: Walt was in town last week to address the FIA Operations Americas division at a luncheon, and also to deliver one of the talks at our education series. He was gracious enough to give JLN a regulatory update as well.


What Would You Do If You Stopped Watching the Market?
Michael F. Kay – Forbes
Think of the hours spent watching the ticker symbols swim across the screen. Consider the time devoted to listening and reacting to the pundits and “experts” who predict what will happen next. Calculate the attention given to reading the columns of advice aimed at convincing you what stock or fund to buy or sell. Imagine all that time freely given in an effort to be “in the know,” have an economic advantage, be better informed and have an edge on everyone else (except for those who are watching the same noise, of course). Needless to say, it’s a lot of time, attention and human resource—all of which are actually devoted to nothing.

***** It is just noise. Don’t listen to the noise.


Lessons in Bond Math: Less Than 1% Chance U.S. Yields Reach 1.1%
Liz McCormick – Bloomberg
SocGen’s new model puts ‘fair value’ for Treasuries at 1.95%; Insatiable demand confounds bond market’s brightest luminaries
In the U.S. bond market, trying to call a bottom in yields has proven to be a veritable minefield for just about anyone who’s tried.

***** I know people predicting the low in yields for the last five years. When will they give in? When they run out of money, with the hat tip to John Maynard Keynes.


Sponsored Content

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June sets another global temperature record, extending a blazingly hot year
By Chris Mooney
This June has joined every other month of this year so far in setting an all-time monthly record for global temperatures, according to two separate federal science agencies — though the globe was not as extremely warm last month as it was earlier in the year.

***** I can’t wait to go to Boy Scout summer camp next week and sleep in a tent with natural air conditioning.


Five Questions With Geoff Sharp At Eris Exchange
Innovation, capital efficiency and broad market access are the hallmarks of Eris Exchange, which lists standardized LIBOR interest rate swap futures offered through TT. In this edition of “Five Questions with…,” we talk with Geoff Sharp, who recently joined Eris as head of sales. We will explore how Eris continues to innovate and attract a broad range of clients to its market.


Tuesday’s Top Three
The top story yesterday was not a story at all but rather the video of a hoard of people running into Central Park in New York to catch a Pokemon with their cell phones. Has to be seen to be believed. The number two story, Wall Street on edge as Republicans warm to Glass-Steagall is a bit of a surprise. Third has family tragedy and courtroom drama in an insider trading case in the Bloomberg story, Dad’s Tape Could Jail Banker Son Accused of Offering Tips


Lead Stories

ICE to Let Investors Bypass Banks in Credit-Swaps Trading
Sridhar Natarajan, Matthew Leising – Bloomberg
Intercontinental Exchange Inc. is making it easier for investors looking to hedge default risks to bypass the Wall Street banks that have long been the gatekeepers in the $12 trillion credit derivatives market.

Pimco poaches Man Group’s Manny Roman to be CEO
by: Chris Newlands, Madison Marriage, Nathalie Thomas and Richard Blackden – FT
Pimco has raided Man Group, the world’s largest listed hedge fund group, to find a new chief executive following a protracted period of upheaval at the Californian bond house.

China’s Biggest Exchange Amps Up Trading Technology Systems
By Bloomberg News
China’s biggest stock market by volume has introduced technology upgrades that bring it closer in line with its international counterparts. The Shenzhen Stock Exchange now has an order-matching engine with a response time of 1.1 milliseconds, one-hundredth of the previous system, while order processing capacity was tripled to 300,000 trades a second. Accompanying the upgrade is a new data center equipped with 5,000 server cabinets for co-location, allowing brokers to place their servers in the same spot as the exchange’s machines.

Blockchain unlikely to solve settlement issues, says expert; Industry expert says settlement should not be the first problem solved with blockchain.
By Paul Walsh – The Trade
Implementing blockchain technology for settlement transactions will not be as easy as many believe, according to an industry expert.

Russia Dominates Wheat Market as Soggy Fields Push Out France
Manisha Jha, Anatoly Medetsky – Bloomberg
‘Black Sea just has so much to sell,’ INTL FCStone says; Russia to take 16% of global wheat market: UkrAgroConsult
In the race to supply wheat to the world’s biggest buyer, Russia is running away with the prize.

Riding shock after shock is a danger for financial markets; Financial markets’ recent ability to ride shocks points to unhealthy reliance on central bank easing
by: Roger Blitz – FT
Pill-popping financial markets are a patient who has swallowed enough central bank medicine to become numb to any shocks, perceived or real.

FCA invites bids for £120m scrutiny contract; The UK regulator has invited companies to bid to join its panel of external consultants which investigate regulated firms.
By Joe McGrath – The Trade
The Financial Conduct Authority is reviewing its panel of external companies used to scrutinise regulated firms in a tender process valued at up to £120 million.

Inside the High-Profile Downfall of a $8 Billion Hedge Fund
Simone Foxman, Katia Porzecanski, Katherine Burton – Bloomberg
Main fund said to have funneled money to troubled credit fund; Visium firing 33 employees in New York as funds are shut
Long before Jacob Gottlieb was forced to unwind his Visium Asset Management last month amid insider trading allegations, red flags were emerging at the once $8 billion hedge fund.

EU unlikely to move soon to strip London of clearinghouse business, finance chief says
By Harvard Zhang – MarketWatch
The European Union probably won’t try to wrest a lucrative financial clearinghouse away from London anytime soon, but the euro-denominated business could eventually be moved to the continent, a top EU official says.

LME extends ring trading at emergency venue until Friday
The London Metal Exchange (LME) has extended open outcry trading to its disaster recovery site in Chelmsford, east of London, until Friday after structural problems forced the shutdown of its offices, the exchange said on Tuesday.

Insider Trading Is Sometimes a Family Affair
Matt Levine – Bloomberg
Let’s say you are the chief executive officer of a company that is about to announce a big merger that will push up its stock price. And let’s say you tell your best friend about it. And let’s say he buys stock in the company and makes a lot of money. Is that insider trading? The answer — to everything — is “it depends,” but I think there are three possible answers.

The big interview: ITG’s Frank Troise
John Bakie – The Trade
Six months is a long time in finance, and for Frank Troise that period has seen him hit the road and visit over 150 clients since he took over the helm of agency broker ITG in January. “We’re getting out there to recover and gain back the trust of our clients, we’re talking about governance issues and looking at how we can best assist them,” Troise said. A big part of his early months in the job have been helping bury the skeletons in ITG’s closet. Last year the firm reached a $20 million settlement with the US Securities and Exchange Commission (SEC) due to a secret desk within the company that was misusing information from its dark pool.

DV Trading breaks away from Rosenthal Collins
Lynne Marek – Crain’s Chicago Business
Chicago futures firm DV Trading is venturing out on its own, with its two top executives buying the enterprise from veterans at Rosenthal Collins Group who helped them get started. DV Trading CEO Jared Vegosen and President Dino Verbrugge will take ownership and split from RCG on Sept. 1, according to both firms. The traders are parting amicably from the long-time Chicago futures broker, which backed Vegosen in launching DV’s Chicago office in March, 2007.

Goldman blames Brexit for returns squeeze; Wall Street leader grapples with less lucrative banking times
by: Ben McLannahan and Adam Samson – FT
Blame it on Brexit. Right at the start of Goldman Sachs’ second-quarter earnings call on Tuesday, Harvey Schwartz called out the main culprit. The recovery was going pretty well from a wretched first quarter, said the bank’s chief financial officer. Then came the UK poll on its EU membership. In the run-up to the vote, client activity dropped while Goldman pulled in its horns.


Financial watchdog calls for access to EU single market
Caroline Binham and Martin Arnold – Financial Times
Andrew Bailey, the new head of the Financial Conduct Authority, has said access to the EU’s single market is essential for the financial sector. Mr Bailey, who was making his first public appearance since moving from the Bank of England, also said the government should make other trade deals around the world. The UK should have access to the single market and should be “seeking to have in place trade agreements with other countries,” Mr Bailey said at the FCA’s annual meeting.

Brexit Contagion Likely in Italy First, Aberdeen’s Diggle Says
Jill Ward – Bloomberg
Italy’s autumn referendum could bolster Five Star Movement; BOE says Brexit could exacerbate issues facing Italy’s banks
Italy may be the first country where Brexit contagion shows up, said Aberdeen Asset Management economist Paul Diggle.

Business Didn’t Really Have a Plan for Brexit Either
Stephanie Baker, Donal Griffin – Bloomberg
Boom time for corporate advisers as U.K. set to leave EU; Spreadsheets, hotlines, PowerPoints, webinars proliferate
New U.K. Prime Minister Theresa May says “Brexit means Brexit,” but many companies are struggling to figure out what the country’s departure from the European Union will bring for them. Outside advisers are eager to lend a hand.

Bank of England sees no clear evidence of sharp Brexit hit yet
The Bank of England said it saw “no clear evidence” that a sharp economic slowdown was yet under way after last month’s vote to leave the European Union, though there were signs investment and hiring were being put on hold.

Brexit Briefing: Remain’s day in court; High Court to hear legal challenges on the result of the June 23 referendum
by: James Blitz – FT
Britain’s decision to leave the EU has been the subject of furious disputes between politicians. Now it is time for the lawyers to have their say.

Exchanges, OTC and Clearing

HKEX Announces Securities for First Phase of its Closing Auction
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the securities for the first phase of the closing auction it will introduce in its securities market on Monday, 25 July 2016. They were posted in the Volatility Control Mechanism and Closing Auction Session (CAS) section of the HKEX website today along with updated frequently asked questions about the CAS.

WisdomTree Lists Six Exchange-Traded Funds on Toronto Stock Exchange; Market open ceremony welcomes TSX’s fifth new ETF provider in 2016
Toronto Stock Exchange (TSX) welcomes WisdomTree Investments, Inc. (WisdomTree), the industry’s ninth largest exchange-traded fund (ETF) provider globally, to the Exchange. WisdomTree will open the market this morning to celebrate the launch of six new Canadian ETFs, which began trading on TSX last Thursday.

Deutsche Rohstoff AG launches bond on Frankfurt Stock Exchange
Deutsche Börse Cash Market
A new bond issued by Deutsche Rohstoff AG is tradable in the Entry Standard of the Frankfurt Stock Exchange as of today.

ICAP routes EUR212 billion notional equity baskets into Bats Europe’s ETR service since the launch of their cleared basket solution
ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, and Bats Europe (Bats), Europe’s largest stock exchange, announce today that following a successful launch of ICAP’s cleared equity basket solution in April 2015, over EUR212 billion of notional trades have been routed through the Bats Exchange Trade Reporting (ETR) service for clearing during the financial year ended 30 June 2016.

IEX Makes Money, But Lack of Rebates Could Slow Growth
Annie Massa – Bloomberg
IEX has been profitable for 13 months as a dark pool; Investors Exchange preparing to begin trading in August
IEX Group Inc. has been profitable for more than a year, using a business model that veers away from the revenue models of established stock exchanges.

Trading volume of new USD/RUB FX futures hits RUB 415 million on the first day
Moscow Exchange launched a new deliverable USD/RUB FX futures contract on Monday 18 July 2016. Participants executed 65 trades totaling RUB 415.7 million on the first trading day of the new product.


Glass-Steagall: Wall Street is not happy with Donald Trump
Jon Marino – CNBC
Wall Street is not pleased. A top advisor to presumptive GOP presidential nominee Donald Trump said on Monday that the party wants to reimplement Glass-Steagall, Depression-era legislation that was designed to prevent big bank “supermarkets,” but which was repealed in 1999.

G.O.P. Joins Democrats Urging Glass-Steagall’s Revival. (Don’t Hold Your Breath.)
Attacking big banks is as American as apple pie. But it’s a new entry on this year’s Republican menu.

Millennials Will Vote to Shake Up Wall Street. Right?
Polly Mosendz – Bloomberg
Most of us realize we’re becoming our parents in middle age. It looks as if millennials are getting a head start in the voting booth. Asked to rank a list of issues in order of importance to them when considering a presidential candidate, millennials gave priority to the economy and terrorism, just like voters in general. The survey, of 1,000 Americans aged 18-29 was done by the Harvard Institute of Politics.

Here Is Who Donald Trump Wants for Treasury Secretary
Dan Primack – Fortune
Believe it or not, the job may go to a former Clinton donor if Trump is elected. Donald Trump has told prospective donors that, if elected president, he plans to nominate former Goldman Sachs banker Steve Mnuchin for U.S. Treasury Secretary. That’s according to Anthony Scaramucci, a high-profile hedge fund manager and Trump fundraiser.

Trudeau Shifts From Wall Street to Times Square With New Envoy
Josh Wingrove and Theophilos Argitis – Bloomberg
Prime Minister Justin Trudeau has appointed a long-time media executive as Canada’s new representative in New York, replacing a former investment banker. Trudeau named Cineplex Inc. chairwoman Phyllis Yaffe as his consul general on Tuesday, part of his biggest diplomatic overhaul since taking power.

Boris Johnson refuses to apologize for ‘thesaurus’ of insults
William James and David Brunnstrom – Reuters
British Foreign Secretary Boris Johnson said on Tuesday it would take far too long for him to apologize for the “rich thesaurus” of rude comments and insults he has directed at world leaders and others over the years. Johnson, a former journalist with a talent for trenchant comments that his critics say sometimes tip over into untruth, said his utterances over a three-decade career had often been “misconstrued”.

The Republicans’ Plan To Break Up Big Banks Is Just Bizarre
by Cyrus Sanati – Fortune
National Convention were being entertained by the ramblings of conservative luminaries as Scott Baio, Antonio Sabato Jr., and Melania Trump Monday night at Cleveland’s Quicken Loans center, the lobbyists, party bigwigs, and D.C. power brokers were at exclusive parties closed to the average convention-goer.

Investing and Trading

The Future of Big Oil? At Shell, It’s Not Oil; The energy giant is shifting to gas as the industry adapts to climate change.
Matthew Campbell, Rakteem Katakey, James Paton – Bloomberg
At Australia’s Curtis Island, you can see Big Oil morphing into Big Gas. Just off the continent’s rugged northeastern coast lies a 667-acre liquefied natural gas (LNG) terminal owned by Royal Dutch Shell, an engineering feat of staggering complexity. Gas from more than 2,500 wells travels hundreds of miles by pipeline to the island, where it’s chilled and pumped into 10-story-high tanks before being loaded onto massive ships. “We’re more a gas company than an oil company,” says Ben van Beurden, Shell’s chief executive officer. “If you have to place bets, which we have to, I’d rather place them there.”

The ‘Electronics for Bonds’ Trade Explains Why Corporate America’s Borrowing Costs Keep Falling
Luke Kawa and Tracy Alloway – Bloomberg
The past year has seen a Chinese currency devaluation, a rate hike by the Federal Reserve, ‘Brexit,’ and a failed coup. But after risk premiums on the debt sold by U.S. companies jumped amid the oil price downturn and the market turmoil that characterized the start of 2016, spreads on investment-grade corporate bond have now tightened to right where they were 12 months ago, a Bank of America Merrill Lynch team led by Hans Mikkelsen observes. Investors in bonds sold by U.S. companies with relatively stronger balance sheets might have one big group to thank for the ability of their market to buck a growing laundry list of potential headwinds.

Commercial Hedgers May Mark The Bottom In U.S. Treasury Yields
Yields on 10-Year U.S. Treasury bonds are sitting near all-time lows, yet Leuthold Weeden Capital Management’s Doug Ramsey doesn’t see many sellers stepping up to the plate publicly. According to Ramsey, bond traders likely have the memory of the “widow-maker” trade of shorting Japanese government bonds fresh on their minds.

Gold is not all that glisters – diamonds act as hedge for the rich
In a packed Christie’s auction room in Geneva, one could hear a pin drop as two anonymous bidders slugged it out in their quest to own the world’s most exquisite blue diamond.

Pimco goes back to its fixed income roots with new CEO; Pimco, the world’s largest bond player, announced Manny Roman, CEO of Man Group, will take over as head from 1 November.
By Joe Parsons – The Trade
Pimco has appointed Manny Roman, head of the world’s largest hedge fund Man Group, as its new chief executive, in a move to rebuild its fixed income roots following a period of disorder among its top management.

Are we entering a Cold War-style stock market?
Dale Jackson – The Globe and Mail
Don’t let the recent stock market rally fool you, says Chicago options trader Todd Horwitz. The chief strategist at says it’s all part of a carefully crafted feat of financial engineering by the world’s central banks. “All the central banks are trying to pump in liquidity. China owns about 60 per cent of their market and every major economy is buying up their own stock markets,” he says, pointing out that it was the promise of more stimulus from the Bank of Japan that actually helped spark the July rally.

What illiquidity? Bond ETFs surge ahead
Financial News
There’s plenty of concern about bond markets. Prices are sky-high and trading is freezing up. But bond ETFs are roaring ahead. In the first six months of 2016, some $67.6 billion in net new global assets flowed into fixed income exchange-traded funds, according to research firm ETFGI. This was almost double the $35.3 billion in net new assets these funds had gathered by the same point in 2015. Fixed income ETFs collected 55% of all net new money that moved into these passive investment products in the first part of 2016.


Britain’s big banks call for upstart rivals to share burden of free accounts
Britain’s so-called challenger banks should be compelled to share the burden of providing loss-making fee-free basic accounts to the financially vulnerable, executives from Barclays and Co-Operative Bank said on Tuesday.

Goldman Bond-Trading Boosts Profit; Cost Cuts Fall Short
Dakin Campbell – Bloomberg
Fixed-income revenue rises 33%, equities revenue drops 11%
Firm’s compensation costs decline 13% to $3.3 billion
Goldman Sachs Group Inc., the Wall Street bank most reliant on trading, posted a 74 percent increase in second-quarter profit as revenue from fixed-income trading and debt underwriting surpassed analysts’ estimates. Expenses declined less than some projections.

Goldman Not Quite an All-Weather Performer
Aaron Back – WSJ
Can Goldman Sachs make hay when the sun isn’t shining? The investment bank’s remarkable streak of outstanding performance has hit a rough patch. For several years, Goldman Sachs consistently posted returns on equity above 10%, a key threshold in the mind of investors because it is the theoretical cost of capital for banks.

Goldman Is Finding Consumers Online, But It’s No J.P. Morgan
Peter Rudegeair – WSJ
Goldman Sachs Group three-month old push into online banking is off to a fast start, but newly-released figures show just how much of a lead the largest U.S. banks have over the new entrant. Over 20,000 new customers signed up for savings accounts and certificates of deposit that the company started offering through the website of its banking arm, GS Bank, during the quarter, said Chief Financial Officer Harvey Schwartz on a conference call with analysts. Goldman debuted the new products in April following the completion of its acquisition of the online deposit platform of General Electric bank.

Indian banks stragglers in mobility
Business Standard News
The financial services industry was one of the early adopters of emerging technologies in India but banks are still not on a par with their global peers in leveraging mobility and cloud. None of the six Indian banks, Axis Bank, Citibank India, DBS Digibank, HDFC Bank, ICICI Bank, and State Bank of India (SBI), reviewed by research firm Forrester in its 2016 Global Mobile Banking Benchmark late last week, scored above the global average of 65 out of 100.


Thomson Reuters Adds Futures and Options Execution Application for Commodities Traders in Eikon
Energy and commodities traders can now execute futures and options orders directly from Thomson Reuters Eikon, helping reduce the need to pay for expensive market data fees across multiple platforms without sacrificing functionality. The service is provided through City Execution, a third party app developed by OptionsCity Software and now available via App Studio on Thomson Reuters Eikon.

Thomson Reuters and Imperial College London Partner to Advance FinTech and RegTech Innovation through Joint Research; Projects will harness latest data science techniques to solve global big data challenges impacting financial and legal professionals
Thomson Reuters
Thomson Reuters and Imperial College London are working together to bring data science expertise from both corporate and academic worlds to bear on the global big data challenges impacting financial and legal professionals. The joint venture aims to drive faster innovation in FinTech and RegTech industries through collaborative research projects.

Google Cuts Its Giant Electricity Bill With DeepMind-Powered AI\
Jack Clark – Bloomberg
Game-playing AI coordinates data center tasks like cooling; DeepMind efficiencies cover part of cost of 2014 acquisition
Google just paid for part of its acquisition of DeepMind in a surprising way.

Bitcoin is peppered with flaws as a currency, warns Bank of England; Blockchain tech, on the other hand, could prove useful for parts of UK banking system.
The UK isn’t going to adopt a central digital currency any time soon, a senior Bank of England official has told the government—but blockchain technology could be used to make aspects of central banking more efficient.


Ex-UBS Trader Adoboli, Like Hayes, Seeks Crowdfunding for Appeal
Ambereen Choudhury, Gavin Finch – Bloomberg
Adoboli is seeking to raise 75,000 pounds on FundRazr page; Hayes has received about 26,700 pounds since May on internet
Kweku Adoboli and Tom Hayes have more in common than working at UBS and jail. The men, who are both 36, have each turned to crowdfunding to raise money for their court appeals.

Ex-UBS trader Kweku Adoboli loses UK deportation appeal
Kweku Adoboli, former UBS trader convicted of fraud, has lost his appeal against being deported from the UK.

The Secret History of Glass-Steagall
The Republican party platform calls for a revival of the Glass-Steagall Act, a depression-era banking law repealed in 1999. So what was Glass-Steagall? Glass-Steagall was the brainchild of Sen. Carter Glass (D-VA), best known as the principal architect of the Federal Reserve system. It erected a firewall between deposit-taking/loan-making banks and securities activities such as underwriting and trading. Its original goal was to prevent three things: purchasing of risky securities with government-insured deposits, extending bad loans to shaky companies owned by a bank, and pushing underwritten securities onto naïve bank customers.

G.O.P. Joins Democrats Urging Glass-Steagall’s Revival. (Don’t Hold Your Breath.)
NY Times
In a convention surprise, the Republicans inserted a plank in the party platform calling for the restoration of a Depression-era law, the Glass-Steagall Act, that separated commercial and investment banking. The law was repealed in 1999 during the Clinton administration, with bipartisan support, at the behest of the big banks, which said they needed to combine their investment and commercial functions in order to compete on the global stage.

The Republicans’ Plan To Break Up Big Banks Is Just Bizarre
Welcome to the post-Trump era. While delegates at the Republican National Convention were being entertained by the ramblings of conservative luminaries as Scott Baio, Antonio Sabato Jr., and Melania Trump Monday night at Cleveland’s Quicken Loans center, the lobbyists, party bigwigs, and D.C. powerbrokers were at exclusive parties closed to the average convention-goer.

Sifma: CAT NMS Plan Has Issues with Duplicative Systems, Cost, Data Security
Dan DeFrancesco – WatersTechnology
The Securities Industry and Financial Markets Association (Sifma) has submitted a comment letter to the US Securities and Exchange Commission (SEC) regarding the National Market System (NMS) Plan for building the Consolidated Audit Trail (CAT). The 46-page letter, which can be found here, highlights a number of concerns the industry group has with the plan in charge of building the massive audit trail that will track orders, executions and quote lifecycles for all equities and options on a daily basis and be stored in a central repository.

Feedback Statement on Call for Input: Supporting the development and adopters of RegTech
In this Feedback Statement we summarise the responses we have received to our RegTech Call for Input: Supporting the development and adopters of RegTech, and outline our approach to RegTech for 2016/17.

ASIC remakes and repeals ‘sunsetting’ class orders on trustee company common funds
Following public consultation, ASIC has finalised an Instrument to maintain relief concerning the entities to which client money can be deposited under s981B of the Corporations Act.


Turkish Financial Markets Stutter After Failed Coup
Two Turkish banks shelved plans to raise funds and the lira fell sharply as investors continued to react to last week’s failed coup and the government’s response in its aftermath.
The Turkish lira fell 1.4% against the U.S. dollar Tuesday after reports that the government dismissed more than 15,000 staff at its education ministry.

Hong Kong – one country, two economies
Ben Bland – Financial Times
On the edge of Hong Kong’s Victoria Harbour, workers are building a cavernous station that will be the terminus for one of the most expensive high-speed rail links ever constructed. The $11bn fast train linking Hong Kong to mainland China is meant to be a showpiece for integration between the semi-autonomous territory and its mother country. Instead, the over-budget and behind-schedule project has turned into a symbol of the deteriorating political and economic relationship between Beijing and Hong Kong. It could be a foretaste of the profound difficulties that lie ahead for the global financial centre.

Chinese VC Fundraising Hits Three-Year Low as Startups Hurt
The party isn’t quite over for China’s technology startups, but the dance floor’s thinning out.
Judging by the cash that investors are preparing to deploy, the euphoria that catapulted the country’s startup financing to a record 2015 may be starting to wane. Chinese-based venture capital firms raised just $400 million in the second quarter, the lowest figure in almost three years, according to London consultancy Preqin Ltd. The number of deals done involving Chinese companies fell 12 percent.

In China meeting, G20 has chance to soothe post-Brexit jitters
Finance heads from the world’s leading economies will confront fresh fears about protectionism when they meet in China this weekend, with Brexit fallout and dwindling policy options to boost global growth expected to dominate talks.
The Group of 20 finance ministers and central bankers meeting will put the spotlight on Britain’s new Chancellor of the Exchequer, Philip Hammond, who makes his international debut at the gathering and will need to answer questions about how London will manage its exit from Europe.

Q&A With Ali Tayebnia, Iran’s Minister for Economic Affairs and Finance
One year after the nuclear accord, Iran’s economy minister sat down with Bloomberg to discuss banking, bonds, oil and terrorism.

Iran Exploring Return to Global Bond Markets After 14 Year Break
Iran is exploring a return to international debt markets for the first time since 2002, a senior government official said, as the Islamic Republic seeks to finance an economic recovery a year after a historic nuclear deal that offered it a route out of isolation.


Blankfein, Goldman Partners Hit Hamptons for Stem Cell Event
Amanda L Gordon – Bloomberg
As Lloyd Blankfein huddled with David Solomon and Stephen Scherr at Scherr’s home in Sagaponack, it seemed there was a Goldman Sachs dress code in effect. Both Blankfein and Solomon wore white polos (Blankfein’s even had Goldman Sachs lettering on the sleeve) and navy pants. This made Scherr, in a long sleeve shirt and khakis, the odd man out, but he was forgiven.

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