John Lothian Newsletter: Cyber criminals lead race to innovate; Block-Hunting Algorithm May Portend European Dark Pools’ Future; Fed official warns ‘flash crash’ could be repeated

Apr 14, 2015

First Read

Bits & Pieces
by John J. Lothian

The Most Interesting Man in the World is now the Mayor elect of the Village of Fontana, Wisconsin. Congratulations to CQG executive Pat Kenny on winning a “highly” contested election. He was the only candidate, but lots of people dreamed of running against him. Pat Kenny does not run for office often, but when he does…

We had the whole JLN team in the office yesterday for the first time since the FIA Boca Raton conference. It was nice to see everyone. It won’t last, though.

We will be hitting the conference circuit in full force these next few weeks. Next week, Doug will be in Montreal for the ISDA annual meeting. The following week, Jim will be in New York for the CTA Expo. Sarah and I head to Miami for the OIC conference May 6-8. And IDX is just around the corner.

There is a story below about egg baron Jack DeCoster, who was a one-time futures brokerage customer of former colleague of mine. DeCoster was a major player in corn options back then, dominating the open interest in some strike prices. The risk manager at LIT America at the time, Liz Vodor, kicked DeCoster out of the firm for representing too much risk. DeCoster also had a habit of being slow to meet margin calls at the end of the year when he was closing his books, as I recall. That created a lot of stress.

Have you signed up for the FinTech Exchange 2015 event yet? If not, you should do so. It already is a much talked about event.

Remember that May 15 is FFK Day. Did you know that London City workers spend, on average, GBP 10.59 a day on coffee, lunch and miscellany? Futures for Kids (FFK) suggests that, on May 15, bring a sack lunch, make your own coffee, and take the ten-and-a-half quid (about $16) and donate to the organization. Of course, there is no need to wait until next month to click the link and donate..


Former Egg Executives Receive Three-Month Sentence; Quality Egg owner and his son pleaded guilty to selling contaminated food after salmonella outbreak
A former Iowa egg baron and his son were sentenced to three months in prison Monday for their part in a 2010 salmonella outbreak that sickened thousands of people and led to a large recall.

***** Anyone can do three months.


Yes, Worry About the Stock Market
By Mark Gilbert
Stanley Druckenmiller, the man who broke the Bank of England and made $1 billion in 1992 by selling the British pound with his colleague George Soros, is worried about today’s economy. For Druckenmiller, it feels like 2004, just before the financial crisis, just before the global economy slid into recession. “There is nothing more deflationary than creating a phony asset bubble, having a bunch of investors plow into it and then having it pop,” the investor told the One Tree Club in Florida on Jan. 18.

****** Since we are talking about egg barons, why not include Chicken Little.


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Virtu IPO aims to present friendly side of high-frequency trading
Philip Stafford, FT
At a publicity event in London last week author Michael Lewis professed “no great antipathy to the high-frequency traders exploiting the problem” of the US equity market. Now this week Virtu, one of the world’s largest high-speed proprietary traders, is due to list, aiming to show exactly how it navigates a world where some 13 exchanges compete for business with alternative trading venues and bank-owned platforms.

***DA: When we got our first microwave oven, my mom made us store a cup of water in there while not in use. She heard that, if it were to start running with nothing in the oven, we would have a Three Mile Island situation in the kitchen. The point is, it is human nature to fear that which we do not understand. The key to overcoming it is education, not demagoguery.


NFA Website Use Notice
Due to system maintenance, the following systems will not be available on Saturday, April 18, 2015, between 9:00 p.m. and 10:00 p.m. CDT: Online Registration System, BASIC, BASIC Data Entry, Security Futures Products Training, Online Payments, Online Arbitration Claims, Arbitrator Profile, Arbitrator Training, Employment Application and Profile System, News Center, NFA Manual, and all Electronic Filings including EasyFile, Exemptions, Questionnaire, and Disclosure Documents. We apologize for any inconvenience.


Lead Stories

Cyber criminals lead race to innovate
Hannah Kuchler in San Francisco, FT
Cyber criminals are advancing faster than companies can defend themselves, with denial of service attacks worsening, ransoms on the rise and data breaches targeting more high-profile retailers, according to two widely followed reports from cyber security companies.

Block-Hunting Algorithm May Portend European Dark Pools’ Future
John Detrixhe, Bloomberg
European policy makers want to make dark pools revert to their original purpose as places for trading blocks of stocks, rather than venues that break orders into tiny slivers. Algorithms may help turn that goal into reality.

Fed official warns ‘flash crash’ could be repeated
Robin Wigglesworth in New York, FT
A senior Federal Reserve official has warned that last autumn’s “flash crash” in US Treasuries could happen again due to the changing nature of the US government debt market, and urged banks, investors and exchanges to adopt a revised set of guidelines in response to the turmoil.

Protesters disrupt hedge fund conference in midtown Manhattan
Roughly 400 hedge fund managers, investors, lawyers and journalists got something that was not on the lunchtime menu at an industry conference on Monday when roughly two dozen protesters interrupted the meal, shouting out prominent names of attendees and demanding better wages at fast-food restaurants.

U.S. Commodity Futures Trading Commission and Australian Prudential Regulation Authority Sign Memorandum of Understanding to Enhance Supervision of Cross-Border Regulated Firms
The U.S. Commodity Futures Trading Commission (CFTC) announced today that CFTC Chairman Tim Massad and Australian Prudential Regulation Authority (APRA) Chairman Wayne Byres have signed a Memorandum of Understanding (MOU) regarding cooperation and the exchange of information in the supervision and oversight of regulated firms that operate on a cross-border basis in the United States and in Australia.

Richard Mayhew Joins R.J. O’Brien (UK) Limited to Build Grains Team in EMEA
PR Newswire
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today announced that veteran institutional grains broker Richard Mayhew has joined its affiliate R.J. O’Brien (UK) Limited as Senior Vice President, Head of Grains & Oilseeds, EMEA. With more than 35 years of experience in grains in both the physical and futures markets, Mayhew will build a team focused on all aspects of futures related to grains and serve commercial clients throughout the Europe, Middle East and Africa region.

Ackman Says Student Loans Are the Biggest Risk in the Credit Market
by Kelly Bit, Bloomberg
Bill Ackman says the biggest risk in the credit market is student loans.
“If you think about the trillion dollars of student loans we have outstanding, there’s no way students are going to pay it back,” Ackman, who runs $20 billion Pershing Square Capital Management, said today at 13D Monitor’s Active-Passive Investor Summit in New York.

Cinnober and Ancoa agree strategic collaboration to deliver market surveillance capabilities to banks
Cinnober, an independent supplier of multi-asset financial technology for market operators, clearing houses, banks and brokers, and Ancoa, providers of contextual surveillance and insightful analytics for exchanges, regulators, buy and sell-side firms, have entered into a strategic collaboration to provide market surveillance to the global banking sector.

Trading’s ‘next big thing’
The Trade
With new ways to conduct real time analysis, better execution control and new transaction cost analysis products, Jonathan Watkins asks where is the ‘next big thing’ in trading technology?

Size doesn’t matter for equity commissions
By Sarah Krouse, Financial News
Institutional investors are getting a worse deal on the equity trading commissions they pay than previously thought, according to a new study by consultancy Greenwich Associates into an area that is of growing importance to European regulators.


Regulators warn over-the-counter derivatives are out of control
EU and US industry and regulatory figures have warned that the number and nature of repositories listing over-the-counter (OTC) derivatives trades is threatening to blind regulators to market risk.

New Basel Head Sets Worthy Priorities
Mayra Rodriguez Valladares, American Banker
The quality of an organization’s leader and the tone he sets are the most important predictors of whether the organization will reach its objectives. By these measures, the Basel Committee on Banking Supervision is in good hands with recently appointed secretary general William Coen. I have gained invaluable insights into his abilities and experience over several interviews and by observing the pace at which the committee has been releasing important guidelines and finessing existing ones since he took over.

FINRA Readies Changes to Communications Rules;Membership application rules out for public comment till mid-May
Think Advisor
The Financial Industry Regulatory Authority will consider proposed changes at its April Board meeting to the rules regarding communications with the public, as well as gifts, gratuities and noncash compensation.

NASD gains as SEC unveils new rules on trading unlisted securities
The NASD OTC may be the major winner as the Securities and Exchange Commission (SEC) last week quietly broadened the scope of the Nigerian capital market by releasing new rules on trading unlisted securities. The rules make it illegal to transfer public securities through dark pools and away from the apex regulator’s oversight. It also imposes

CFTC Case Against Kraft Puts Cos. on Hedge
Joe Mont, Compliance Week
When does driving a hard bargain with your suppliers cross the line into market manipulation?
Any company that requires raw goods, and relies on the commodities futures markets to procure those materials or hedge against price increases, should take heed of a recent enforcement action the Commodity Futures Trading Commission took against Kraft Foods Group and Mondelez Global. The surprise that makes the case notable, and perhaps alarming for companies, is that the CFTC based its action on a section of the Dodd-Frank Act believed by many to be a check against market manipulation by high-frequency traders—not something an end-user like Kraft would ever need to worry about.

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans

  • BATS: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Rule 11.23, “Auctions” (Release No. 34-74702; File No. SR-BATS-2015-31; April 10, 2015); see also Exhibit 5
  • BYX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Y-Exchange, Inc. (Release No. 34-74703; File No. SR-BYX-2015-21; April 10, 2015); see also Exhibit 5
  • C2: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Change the Close of Trading Hours on the Last Day of Trading in Expiring Quarterly Index Expirations (Release No. 34-74719; File No. SR-C2-2015-008); see also Exhibit 5
  • C2: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Exchange Opening Procedures (Release No. 34-74718; File No. SR-C2-2015-006)
  • EDGA: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Content of the BATS One Feed Under Rule 13.8(b) to Include Consolidated Volume for all Listed Equity Securities (Release No. 34-74717; File No. SR-EDGA-2015-17); see also Exhibit 5
  • EDGA: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of EDGA Exchange, Inc. (Release No. 34-74707; File No. SR-EDGA-2015-16; April 10, 2015); see also Exhibit 5
  • EDGX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Content of the BATS One Feed Under Rule 13.8(b) to Include Consolidated Volume for all Listed Equity Securities (Release No. 34-74716; File No. SR-EDGX-2015-17); see also Exhibit 5
  • ISE: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend the Schedule of Fees (Release No. 34-74706; File No. SR-ISE-2015-11; April 10, 2015); see also Exhibit 5
  • NYSE: Notice of Withdrawal of a Proposed Rule Change, as Modified by Partial Amendment No. 1, Amending Rule 13 and Related Rules Governing Order Types and Modifiers; Correction (Release No. 34-74642A; File No. SR-NYSE-2014-59; April 9, 2015)
  • NYSE Arca: Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services to Provide a Second Way to Qualify for the Cross-Asset Tier Credit of $0.0030 Per Share for Orders that Provide Liquidity to the Exchange (Release No. 34-74715; File No. SR-NYSEArca-2015-24); see also Exhibit 5
  • NYSE Arca: Notice of Designation of Longer Period for Commission Action on Proceedings to Determine Whether to Approve or Disapprove Proposed Rule Change to Remove the Exchange’s Quote Mitigation Plan as Provided by Commentary .03 to Exchange Rule 6. (Release No. 34-74705; File No. SR-NYSEArca-2014-117; April 10, 2015)
  • NYSE Arca: Notice of Filing of Proposed Rule Change Relating to Listing and Trading under NYSE Arca Equities Rule 5.2(j)(3), Commentary .02 of Shares of the Vanguard Tax-Exempt Bond Index Fund (Release No. 34-74701; File No. SR-NYSEArca-2015-18; April 10, 2015)
  • NYSE Arca: Notice of Designation of a Longer Period for Commission Action on Proceedings to Determine Whether to Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to Listing and Trading of Shares of the SPDR SSgA Global Managed Volatility ETF under NYSE Arca Equities Rule 8.600; Correction (Release No. 34-74559A; File No. SR-NYSEArca-2014-100; April 13, 2015)
  • NYSEMKT: Notice of Designation of Longer Period for Commission Action on Proceedings to Determine Whether to Approve or Disapprove Proposed Rule Change to Remove the Exchange’s Quote Mitigation Plan as Provided by Exchange Rule 970.1 (Release No. 34-74704; File No. SR-NYSEMKT-2014-86; April 10, 2015)


Exchanges & Trading Facilities

CFTC Flexes Muscle Over London Metal Exchange
The U.S. commodity regulator is taking a harder stance on metal-market activities, the latest example of how the agency is using expanded powers granted to it after the financial crisis.

Hong Kong becomes world’s largest exchanges operator
Josh Noble in Hong Kong and Philip Stafford in London, FT
China Construction Bank has overtaken JPMorgan, Facebook and Chevron in terms of size, in a sign of how a dramatic stock market rally in Hong Kong is reshaping the league table of the world’s largest companies.

Rubber Trading Shifts From Tokyo
As rubber futures struggle to break out of a four-year long price slump, trading is shifting from its traditional base on the Tokyo Commodity Exchange to other locations in Asia that are either big producers or consumers of the commodity.

Euronext bets on post-quota market with new dairy futures
Euronext launched revamped dairy derivatives on Monday, betting an end of EU milk quotas will stir price hedging interest, but a lack of opening day trade illustrated the uphill task it faces in a sector that has so far shunned futures.

Equity derivatives traders warm to OTC
Equity derivatives traders have begun to warm once again to trading over-the-counter – rather than through the regulated exchanges that many flocked to following the chaos of the financial crisis. Volumes across listed US futures, options and securities lending transactions declined by 6% in March over the previous year, following a 13% decrease in February and a 5% drop in January over 2014 levels, according to data from the Options Clearing Corporation.

Hedge Funds & Managed Futures

Ex-Governor Will Lead New Fund at Bain Capital
By MICHAEL J. de la MERCED, NY Times
The former governor of Massachusetts, Deval Patrick, has joined the private equity firm Bain Capital as a partner to focus on socially oriented investments, a person briefed on the matter said on Monday.

Money Market Abandons Logic in Denmark After Currency Sinks
by Frances Schwartzkopff
The Danish krone is close to its weakest in 14 years and money-market traders are predicting the central bank will need to raise rates in 2015 to defend its euro peg.

BlackRock’s Chief, Laurence Fink, Urges Other C.E.O.s to Stop Being So Nice to Investors
NY Times
On Tuesday morning, the chief executives of 500 of the nation’s largest companies will receive a letter in the mail that will most likely surprise them.
The sender of the letter is Laurence D. Fink, chief executive of BlackRock, the largest asset manager in the world. Mr. Fink oversees more than $4 trillion — that’s trillion with a “t” — of investments, making him perhaps the world’s most important shareholder.

The $74 Million Stock Award That Jarden’s Board Values at Zero
by Anders Melin, Zhenzi Zhao, Alicia Ritcey, Bloomberg
Jarden Corp.’s Executive Chairman Martin Franklin is poised to become one of the highest-paid U.S. executives for 2014 thanks to a $74 million performance award that the consumer-brands company granted him last year and recorded as having no value.

Investors pile into eurozone inflation bonds
Joel Lewin, FT
Investors are pouring money into exchange traded funds tracking inflation-linked eurozone bonds at the quickest pace in five years, highlighting a dramatic shift in inflation expectations driven by the launch of quantitative easing.

Banks & Brokers

J.P. Morgan Makes Senior Promotions in Europe
J.P. Morgan has handed Viswas Raghavan, its head of banking in Europe, the Middle East and Africa, the additional role of deputy chief executive of corporate and investment banking in the region. It follows strong performance in 2014 when growth in revenues in the unit EMEA beat all other regions.

Citigroup Shuffles Top Ranks; Forese is named sole president, Bird to oversee global consumer bank
Citigroup Inc.’s chief executive shuffled top management across three continents Monday, appointing a clear No. 2 and naming a rising star to head the bank’s consumer unit.

Broker Lost at Sea? No, Just Dodging FINRA Complaint
BY MARGARIDA CORREIA, Bank Investment Consultant
A broker’s desperate plan to escape legal issues by faking his disappearance at sea collapsed on Sunday when authorities finally tracked him down.

UBS sees HSBC, peers under pressure to exit some emerging markets
HSBC Holdings Plc is among global lenders facing pressure to exit underperforming businesses in emerging markets nations from Brazil and Mexico to South Korea, creating opportunities for local banks to assert control of their home turf, analysts at UBS Securities said on Monday.

Deutsche Bank and a rocky path to GoldmanSachsism
Izabella Kaminska, FT
Deutsche Bank has long been an unloved stock.
Not only does it trade stubbornly below book-value, a bleak revenue outlook in January led to the promise of a major strategy rethink for the group, including the prospect of job cuts, asset sales and the streamlining of investment banking divisions.

Clearing & Settlement

Thompson: Keep an eye on risky derivatives trades
Since the financial crisis, 25 repositories have begun listing so-called over-the-counter derivatives trades, securities transactions which are not carried out on stock exchanges. But the number of such warehouses is beginning to work against transparency and effective risk avoidance, according to Larry Thompson.

New clearing regulations may be needed to avoid catastrophic losses
New regulations may have to be introduced to make sure central counterparties (CCPs) are robust enough to withstand events that could otherwise cause catastrophic losses within the financial market system, the European Central Bank (ECB) has said.

Societe Generale Corporate & Investment Banking goes live with ICE CDS Clearing
Automated Trader
Societe Generale Prime Services – formerly Newedge – has announced that it has been approved as a clearing member of ICE Clear Credit and ICE Clear Europe, which are subsidiaries of Intercontinental Exchange, Inc. (ICE) and provide clearing services to the credit default swap (CDS) markets.

Financial Firms Move Closer to Central Clearing in Repo Market
Bloomberg Business
Financial institutions in the almost $2 trillion a day market for borrowing and lending debt are close to unveiling centralized trade clearing systems to minimize risk in the essential wholesale funding mechanism.

Indexes & Products

Nasdaq Record-Watch Is Back On
The Nasdaq Composite has been rising on Monday morning, lately up about 16 points, or 0.3%, at 5012. The move has taken the index back over the 5000 mark for the first time since two brief forays in March and has put the all-time record back on the radar.

Family of Global Sovereign Inflation-Linked Bond Indices Launched by S&P Dow Jones Indices
As investors grow increasingly concerned about inflationary issues across developed and emerging markets, S&P Dow Jones Indices (S&P DJI) today announced the launch of a new family of Global Inflation-Linked Sovereign Indices to effectively measure inflation-linked country debt within these classifications. The launch of the S&P Global Sovereign Inflation-Linked Bond Indices is part of S&P DJI’s global initiative to expand its fixed income index offerings globally across more bond types.

Is it possible for fund managers to beat the stock market?
The Irish Times
Nearly anyone with money in the stock market since 2009 has benefited from the great bull market run. But compared with the overall market, most actively managed stock mutual funds haven’t performed very well or very consistently.

Often Overlooked: Systematic Rebalancing Key To Smart Beta
John Fererer, Invesco, in Seeking Alpha
The systematic rebalancing of smart beta indexes eliminates emotion from the allocation process

iShares MSCI China A UCITS ETF launched on Xetra; ETF offers access to Chinese A-shares
Deutsche Boerse
A new iShares ETF from BlackRock’s product offering has been tradable in Deutsche Börse’s XTF segment on Xetra since Tuesday.

A Tale of Two Benchmarks: Benchmark Selection
S&P Dow Jones Indices
This is the fourth post in a series of blog posts relating to the in-depth analysis of performance differential between the S&P SmallCap 600 and the Russell 2000.
The difference in returns between the two indices highlights the fact that investors should be aware that index construction differences can have a meaningful impact on returns.


TradeTech: Unbundling to increase scrutiny of execution
The Trade
Full unbundling of research from commission payments will lead to an increased focus on execution quality in the coming years, according to speakers at TradeTech 2015.

Bondcube Enters Race to Forge a Fixed-Income Market That Works
by John Detrixhe, Bloomberg
Electronic bond trading is becoming increasingly popular with entrepreneurs and technology firms, who have set up more than a dozen new markets to trade company debt. The question is whether any of them will succeed.

Singapore Govt-Backed FinTech Accelerator Boosts 3 Bitcoin Startups
Startup accelerator Startupbootcamp FinTech, announced on Monday the top 10 finalists to join its Singapore program, among which are blockchain-based startups Otonomos, CryptoSigma and DeBuNe, demonstrating that Singapore’s government is serious about its ambitions to become Asia’s blockchain technology hub.

10 fintech start-ups shaking up Asian banking
Computer Business Review
Fintech is becoming ever more important for the banking sector, disrupting everything from payments (think Bitcoin) to capital markets (think Flash Boys). As such investors are constantly on the lookout for interesting start-ups capable of creating the next wave of innovation that will shake up the financial industry.


Ex-Rabobank trader charged by U.S. for Libor scheme pleads not guilty
A British former trader at Rabobank pleaded not guilty on Monday to U.S. charges that he engaged in a scheme to manipulate Libor, the benchmark interest rate at the center of wide-ranging global probes into misconduct at major banks.

FCA hits Clydesdale Bank with record £20.7m fine for PPI failings
Lindsay Fortado and Emma Dunkley, FT
The UK’s financial regulator has imposed its largest-ever penalty for failings around selling payment protection insurance (PPI), fining Clydesdale Bank £20.7m for failings that included staff falsifying information on its policies.

Heir to Nina Ricci perfume fortune convicted as result of Swiss HSBC leak
Michael Stothard in Paris, FT
The heir to the Nina Ricci perfume and fashion fortune has been handed a three-year sentence for tax fraud in the first high-profile conviction to come out of the leaking of client details from HSBC’s Swiss private banking arm.

SEC Charges Texas Oil Company and Its Founder with Securities Fraud
FTSE Global Markets
The Securities and Exchange Commission says it has charged Mieka Energy Corporation of Flower Mound, Texas, and its founder and president Daro Ray Blankenship, with fraudulently offering oil and gas-related investments.

Environmental & Energy

Ontario and Quebec sign cap-and-trade deal, urge Ottawa to take leadership role
By Geoffrey Vendeville – Montreal Gazette
As Quebec and Ontario announced that they would link their carbon markets, they urged Ottawa to work more closely with the provinces to curb climate change.

New Regulation Aims to Prevent Explosions at Offshore Rigs
The Obama administration on Monday proposed a new regulation for offshore oil and gas rigs intended to improve equipment standards and well designs and avoid a catastrophic spill like the one in the Gulf of Mexico in 2010.

Shale Oil Boom Could End in May After Price Collapse
by Lynn Doan, Dan Murtaugh, Bloomberg
The shale oil boom that pushed U.S. crude production to the highest level in four decades is grinding to a halt.

Scrap fossil fuel subsidies now and bring in carbon tax, says World Bank chief
By Larry Elliott – The Guardian
Poor countries are feeling “the boot of climate change on their neck”, the president of the World Bank has said, as he called for a carbon tax and the immediate scrapping of subsidies for fossil fuels to hold back global warming.


Hong Kong Link Is No Match for 44% One-Day Score in Chinese IPOs
Even the world-beating rally in Hong Kong’s stock market can’t compete with Chinese investors’ favorite way to make a quick profit: initial public offerings.

Disappointment inevitable for those buying into China’s froth
James Mackintosh, FT
Timing the exit from stock market bubble is almost impossible, writes James Mackintosh

China ETF Investors in U.S. Miss Out on World’s Best Stock Rally
by Belinda Cao, Bloomberg
U.S. investors are missing out on the biggest stock rally in the world.

Hank Paulson says China financial system to face reckoning
By Steve Goldstein, MarketWatch
Former U.S. Treasury Secretary Hank Paulson says China’s financial system will have to face a reckoning, though he thinks the country won’t see a U.S.-style recession from it.

Hong Kong needs financial reform to weather future financial crises and regain its lost lustre
South China Morning Post
Since 2008, Hong Kong has remained one of the few jurisdictions to avoid large-scale changes in its financial regulation. In the US, UK, Australia and across the EU, governments have radically changed the way their financial regulators work. Judging by International Monetary Fund and Financial Stability Board studies, their financial overhauls have made these countries more resilient and attractive places to park money.

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