John Lothian Newsletter: Deutsche Börse CEO braced for regulatory scrutiny over LSE deal; Ex-Citi Trader’s Bitcoin Exchange Skirts Currency Curbs; Lessons From a Bank Heist

May 31, 2016

First Read

Education is Everything: MarketsWiki Education, Chicago 2016
John Lothian – John Lothian News
There are lots of ways to get an education. One of the questions we ask in our John Lothian Profiles videos is “What did the markets teach you the hard way?” Getting taught the hard way is certainly one way to learn. But so is learning from the experiences of others.

Learning from others is at the heart of the MarketsWiki Education World of Opportunity series. We wanted the young people looking at our industry to hear from some of the people who helped build it into what it is today, and from some of the people who are building it into what it will be tomorrow.

My father used to say that one’s education was the one thing in life that can’t be taken away from you. You can lose possessions, jobs, loved ones as you go through life, but no one can take away your education.

My education, two bachelor’s degrees from Purdue University after four years at an outstanding high school, Glenbrook South in Glenview, IL, was really about learning to learn. It was about preparing for a life of learning to be able to handle the changes in careers that was inevitable as I grew older and more experienced and the world changed.

My education was not about learning how to do specific things, though I certainly did. Publishing a newspaper is completely different from when I was in college. Computer programs were written on punch cards and run through mainframe computers. About the only thing that is the same as when I was in college is the technology to tap a keg of beer. But even that has changed.

MarketsWiki Education’s World of Opportunity series is a chance to learn from some of the leaders of our industry. That is not a chance a young person gets every day. It is an opportunity that one should grasp and take advantage of.

If you know of some young person who you think would find the series valuable, please pass along the information and a recommendation for them to attend. They can sign up here
MWE Chicago 2016

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Deutsche Börse and Taiwan Futures Exchange enter into market data partnership
Press Release
Taiwan Futures Exchange (TAIFEX) and Deutsche Börse Market Data + Services signed a market data partnership agreement, under which Deutsche Börse will act as the licensor of TAIFEX market data and information products to all international clients. Therefore, clients will be able to benefit from the state-of-the-art licensing services offered by Deutsche Börse, which already functions as a licensing partner for a whole range of trading venues around the globe such as BSE India, Irish Stock Exchange and Bulgarian Stock Exchange.
goo.gl/qCfqPp

***** Big data gets bigger.

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Hedge fund TCI backs Deutsche Boerse-LSE merger – Der Spiegel
Reuters
Activist hedge fund TCI backs plans for a merger of Deutsche Boerse and the London Stock Exchange, fund founder Chris Hohn told German magazine Der Spiegel, 11 years after winning a high-profile campaign to prevent a deal.
goo.gl/AY1QJ1

***** In this game of thrones, the children also make kings.

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What Silicon Valley’s billionaires don’t understand about the first amendment
Nellie Bowles in San Francisco – The Guardian
No major American cultural force is more opposed to examination and more active in suppressing it today than Silicon Valley. So when it was revealed this week that Facebook board member Peter Thiel had been secretly bankrolling a lawsuit to inflict financial ruin on the news and gossip site Gawker, Silicon Valley cheered.
/goo.gl/aQ9uMn

***** I think the mistake was made when they named the publication “The Gawker.” There have always been challenges for “Yellow Journalism” and this is the latest.

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European Parliament votes for hands-off approach to blockchain tech regulation
Jennifer Baker – Ars Technica UK
MEPs yesterday voted to take a hands-off approach to regulating blockchain technology. In a move that received the thumbs up from finance commissioner Jonathan Hill, the European Parliament suggested that a “wait and see” approach would be more beneficial than suffocating the new tech with rules and legislation.
goo.gl/XlSQD3

***** We call this the Jamie Lannister approach to regulation.

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10 tips for new Wall Street interns from hedge fund giant Citadel
Rachel Butt – Business Insider
Summer is here, and that means a flock of eager students are about to start an internship on Wall Street.
goo.gl/EA7AXc

***** Tip number 11, and it should be higher, is to attend the MarketsWiki Education series in Chicago, New York, London, Paris or Frankfurt.

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Friday’s Top Three
The top clicked story Friday was CME Group’s Terry Duffy’s testimony about a threatened financial transaction tax. In second place was Meet Wall Street’s New A.I. Sheriffs, INC’s bio on Neurensic’s David Widerhorn, one of the the magazine’s “30 under 30.” Duffy figured prominently in third place as well: the FOW story accompanying the transaction tax press release.

Lead Stories

Deutsche Börse CEO braced for regulatory scrutiny over LSE deal
By Eyk Henning, WSJ
The chief executive of Deutsche Börse said his planned merger with the London Stock Exchange Group wouldn’t close before the first quarter of next year because of intense regulatory scrutiny and that US rivals could potentially still torpedo the deal to create Europe’s biggest stock-market operator.
goo.gl/7XbSE4

Ex-Citi Trader’s Bitcoin Exchange Skirts Currency Curbs
Shai Oster – Bloomberg
Bitcoin Mercantile Exchange has already turned profitable; Exchange lets investors take synthetic positions in stocks
It was after Arthur Hayes got laid off from Citigroup Inc. in 2013 that he stumbled across one of the simplest ways to make money he’d ever seen. He was living in Hong Kong and saw the price of bitcoin across the China border was much higher. He hopped on a bus, opened a China account and started buying low in one market and selling high in the other. “It was too easy,” he says.
goo.gl/3Oej14

Lessons From a Bank Heist
By Editorial Board – Bloomberg
Swift can’t do it alone.
The Society for Worldwide Interbank Financial Telecommunication, an organization that enables money transfers worldwide, has come under fire after a rash of bank hackings — some of which bear fingerprints of nation-states including North Korea. In response, it announced this week a series of new measures aimed at protecting the global financial system from cybercrime.
goo.gl/pV4xKo

North Korea Has Been Linked to the SWIFT Bank Hacks
Lucinda Shen – Fortune
And they go back to 2015.
Cybersecurity firm Symantec his found evidence that the recent string of digital attacks on Asian banks is linked to North Korea, corroborating a previous study that the isolationist country played a role in the hacks. But Symantec found one other detail—the attacks could be traced as far back as October 2015, two months prior to the earliest known incident.
goo.gl/fWp8r0

Nuns With Guns: The Strange Day-to-Day Struggles Between Bankers and Regulators
KIRSTEN GRIND and EMILY GLAZER – WSJ
Lenders are awash in new regulations, and growing armies of rule enforcers are forcing striking changes on banks’ internal cultures
Among the new federal banking regulations there is one that financial wonks call “TRID,” the TILA-Respa Integrated Disclosure rule.
goo.gl/xxO2sF

The Untold Story Behind Saudi Arabia’s 41-Year U.S. Debt Secret
Andrea Wong – Bloomberg
Failure was not an option.
It was July 1974. A steady predawn drizzle had given way to overcast skies when William Simon, newly appointed U.S. Treasury secretary, and his deputy, Gerry Parsky, stepped onto an 8 a.m. flight from Andrews Air Force Base. On board, the mood was tense. That year, the oil crisis had hit home. An embargo by OPEC’s Arab nations—payback for U.S. military aid to the Israelis during the Yom Kippur War—quadrupled oil prices. Inflation soared, the stock market crashed, and the U.S. economy was in a tailspin.
goo.gl/1MT9xK

Deutsche Boerse could be target if LSE merger fails – D.Boerse CEO
Reuters
Deutsche Boerse could become a takeover target if its planned $30 billion tie-up with London Stock Exchange flopped, the German exchange operator’s chief executive warned.
goo.gl/965lNx

The Don’t Ask, Don’t Tell Guide to Trading on Inside Information; Why Phil Mickelson didn’t get busted.
Sheelah Kolhatkar – Bloomberg
On Friday, July 27, 2012, Phil Mickelson received a phone call. It wasn’t just any call; it was, according to the U.S. Securities and Exchange Commission, a transmission of business intelligence potentially worth millions of dollars. Mickelson’s friend, a gambler named William Walters, was calling to urge him to buy shares of Dean Foods.
goo.gl/T0WBkY

Hedge Funds May Lose 25% of Assets, Blackstone Says
Scott Deveau, Devin Banerjee – Bloomberg
Industry faces ‘day of reckoning’ that will be painful: James
Hedge-fund fee structure is hard to justify, billionaire says
The $2.9 trillion hedge-fund industry may lose about a quarter of its assets in the next year as performance slumps, said Tony James, Blackstone Group LP’s billionaire president.
goo.gl/fFhKnG

Divorcing Your Hedge Fund Manager
By Michael P Regan – Bloomberg
As anyone who’s still stuck at work reading this knows, this is Memorial Day weekend — when we’re all supposed to remember veterans or something, I forget exactly.
goo.gl/hmDhb2

‘Stockbroker’s Bible’ Just Told Oil Industry To Accept Its Demise; Coming from the Financial Times, that’s a sobering wake-up call.
Alexander C. Kaufman – Senior Business Editor, The Huffington Post
The editorial board of the Financial Times isn’t exactly stacked with bleeding-hearted environmentalists. Just a month ago, the British paper defended ExxonMobil’s right to question climate change amid legal probes into whether the oil giant covered up evidence of global warming.
goo.gl/VlZLr5

Every Stock Was a Buy to This Analyst Team, Then Shares Tanked
Phil Kuntz, Fox Hu – Bloomberg
Emperor Securities touted 173 companies’ shares in past year; Hong Kong broker forecast big gains as its trading fees soared
Companies probably love getting attention from analysts at Emperor Securities Ltd. in Hong Kong. Investors who followed their advice for the past year, not so much.
goo.gl/bKr5qo

China rebuts currency criticism as renminbi takes big fall; Normally tight-lipped central bank speaks out against claims it has abandoned market liberalisation
Gabriel Wildau in Shanghai – FT
China’s currency suffered its second-biggest monthly depreciation ever in May as the central bank pushed back against claims it has abandoned market-oriented exchange-rate reform.
/goo.gl/DUrspi

Regulatory

Despite new SEC rules, investors should see crowdfunding as gambling, not investing
Gail MarksJarvis – Chicago Tribune
Just as news stories exposed concerns about the inner workings of LendingClub, the U.S. government has been opening the door for Americans from virtually any income level to dabble in the speculative world of crowdfunding.
goo.gl/JR3gNH

ASC to enact its new fee rule
ASC
The Alberta Securities Commission (ASC) announced today that it will adopt ASC Rule 13-501 Fees, pending Ministerial approval, which will replace the ASC’s current fee schedule.
goo.gl/ieIzef

Banks Set for Capital Reprieve as EU-SEC Derivatives Talks Drag
Silla Brush – Bloomberg
Banks using some U.S.-based clearinghouses to handle their derivatives trades are set to win a reprieve from tougher capital rules as the European Union continues talks with the Securities and Exchange Commission on regulatory equivalence.
goo.gl/QjzOtk

SURVEY REPORT ON REGULATION AND OVERSIGHT OF AUDITORS
IOSCO
/goo.gl/Jq210H

FCA hires Godfrey to advise on asset management policy; Daniel Godfrey was forced out of the Investment Association in October.
By John Bakie – The Trade
The UK’s financial regulator has hired the former chief executive of the country’s trade body for asset managers, who was forced out of his former role last year.
goo.gl/EgF7me

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC
/goo.gl/h0yuDn

SEC Rule 606: Repair Is Needed Before Any More Pilot Programs Are Started
David Weisberger, Markit via Tabb Forum
Since the SEC’s Rule 606 fails to require disclosure of the vast majority of routed orders, and there are no publicly available statistics on the efficiency or behavior of most routers, it would be imprudent to conduct a pilot on ‘maker-taker’ without first ensuring that all relevant data will be available. Substantive reform of Rule 606 is essential in order for market participants and regulators to study the potential impact on routing behavior and reduce conflicts of interest.
goo.gl/M0APjS

Exchanges & Trading Facilities

SGX welcomes Xandar Capital as Catalist Full Sponsor
SGX
Singapore Exchange (SGX) is pleased to welcome Xandar Capital as a Full Sponsor on Catalist, its sponsor-supervised board for growth companies.
goo.gl/TpKuuE

SGX launches SGX Sustainability Indices
SGX
Singapore Exchange (SGX) today announced the launch of SGX Sustainability Indices, another suite of equity indices composed of SGX-listed stocks introduced by SGX Index Edge. SGX’s partner, Sustainalytics, provided the environmental, social and governance (ESG) research and ratings for SGX-listed companies, and the ratings underpin the Indices.
goo.gl/9OoBkh

SGX welcomes Hyflux Ltd’s perpetual capital securities
SGX
Singapore Exchange (SGX) today welcomed the listing of Hyflux Ltd’s perpetual capital securities with a distribution rate of 6% per annum, to be paid semi-annually, on the Mainboard under the stock code “BTWZ”.
goo.gl/Dpzq2d

BSE to sell up to 30% stake by FY17-end; BSE will hold an AGM on 24 June to seek shareholder approval for the share sale, could raise around Rs1,300 crore
Jayshree P. Upadhyay, Ankit Doshi – Livemint
Asia’s oldest stock exchange BSE Ltd will sell up to a 30% stake before 31 March 2017 through a so-called offer for sale (OFS) with a possible fresh sale of equity tagged on, the exchange informed its shareholders on 28 May.
goo.gl/BNLXzJ

Thomson Reuters FXall Named Best Multibank And Independent Platform In Euromoney FX Poll For 14th Year
Mondovisione
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today announced that its dealer-to-customer trading venue, FXall, has again been named “Best multibank and independent platform” in this year’s Euromoney Foreign Exchange Survey for the 14th consecutive year.
goo.gl/ozM2br

China to allow qualified financial firms to list on New Third Board
Reuters
China’s securities regulator said on Friday it would resume listings by qualified financial institutions and private equity firms on the country’s over-the-counter (OTC) New Third Board, part of efforts to fund innovation and stimulate growth.
goo.gl/PNVL6m

Nasdaq President & COO Adena Friedman to Present at 2016 Deutsche Bank Global Financial Services Conference
Nasdaq
goo.gl/2ulP3O

***DA: Friedman will also be headlining our MarketsWiki Education series in NY July 19.

Report on Initial Public Offering Applications, Delisting and Suspensions; (As at 31 May 2016)
HKEX
goo.gl/k2KW5j

Article series on how to trade volatility | Part 1: The evolution of the volatility landscape
by Colin Bennett – Eurex
The first in a 3 part series of articles on volatility, this introductory report describes the evolution of the volatility product landscape over time, and the different methods of calculating volatility indexes. Example trades for both volatility futures and options on volatility futures are shown.
goo.gl/kNzwZd

Client’s view: Assenagon on the benefits of the Registered Customer status at Eurex Clearing
Eurex
Assenagon Asset Management S.A. is the first investment manager to benefit from the Registered Customer status for listed derivatives at Eurex. Lothar Kloster, of Eurex Fixed Income & FX Derivatives Trading & Clearing Sales, met with René Reißhauer, Senior Portfolio Manager at Assenagon, to discuss this access model for institutional investors.
goo.gl/g4I52j

Egyptian Exchange: Trading Hours During Ramadan Holy Month
MondoVisione
The Egyptian Exchange (EGX) decided that the trading session dates during the month of Ramadan to be as follows:
goo.gl/ZXxHR2

DME HOLDS ROUNDTABLE FOR CHINESE INDEPENDENT OIL REFINERIES
DME
DME, the premier international energy futures and commodities exchange in the Middle East, recently held a roundtable in Shandong, China that was attended by the key Chinese independent oil refineries.
goo.gl/wLjfVc

Politics

A Challenge to Donald Trump’s Energy Claims: Economic Reality
By CORAL DAVENPORT – NY Times
In his pledge to aggressively expand American oil and gas production, and his framing of that push as a salvation for the nation’s economic and fiscal health, Donald J. Trump is following in the footsteps of decades of Republican politicians.
goo.gl/IEmeuR

8 Reasons Donald Trump Could Be A Modern-Day Joe McCarthy
Javier Hasse , Benzinga Staff Writer
Joseph McCarthy, U.S. Senator for the state of Wisconsin between 1947 and 1957, was, to many, the face of the fight against Communism in the United States during the fifties. In fact, his practices became so popular a term describing such anti-Communist activities was coined after his name: McCarthyism — which later became a way to characterize the practice of making unfair, unsubstantial accusations.
goo.gl/Oc53CN

Legions of greying Brexit voters find risks easier to confront; Voters in Christchurch do not fear UK’s exit because they can remember life before the EU
by: Joshua Chaffin in Christchurch, Dorset – FT
As a young lawyer, Christopher Chope campaigned for Britain to stay in Europe in the 1975 referendum battle, rallying voters with the slogan: “For your children and your grandchildren!”
/goo.gl/I42MsN

Hedge Funds & Managed Futures

Hedge funds and banks commission Brexit exit polls; Entrepreneurial traders are preparing to lay big bets on the result
by: Chris Giles and Jim Pickard
Hedge funds and investment banks have commissioned private exit polls in an attempt to make profits from the result of the UK’s referendum on EU membership next month.
/goo.gl/8j5YLk

Activists say Cramer, other directors worse than Kim Jong Un
By Jennifer Booton- MarketWatch
New site’s board calls investors’ letter ‘entirely inconsistent’ with recent meetings
TheStreet Inc. has been struggling to turn its stock price around, and activist investors are now openly challenging Jim Cramer’s financial news site.
goo.gl/zPTUWt

Biggest Hedge Fund Set to Get $22 Million From Connecticut
By ALEXANDRA STEVENSON – NY Times
The world’s biggest hedge fund, Bridgewater Associates, is poised to receive $22 million in financial aid from Connecticut in an effort to keep it from moving its headquarters out of the state.
goo.gl/1ug0HB

Currency Tranquility Is Calm Before Storm as Risks Taunt Traders
Rachel Evans – Bloomberg
JPMorgan’s measure of FX volatility tumbles to January low; SocGen and Saxo Bank warn price swings poised to pick up
It’s all quiet in currency markets, a little too quiet for some traders who warn that an uptick in volatility is just around the corner.
goo.gl/TeTL1L

Bond Traders Say Don’t Count Out June Hike After Yellen Remarks
Susanne Walker Barton – Bloomberg
Futures markets signal greater probability of move in June; Two-year note in longest losing streak in two months
Treasuries traders who delayed holiday getaway plans on Friday took away a clear message from Federal Reserve Chair Janet Yellen — a mid-year interest-rate hike may be on the way.
goo.gl/JNL6Lo

Yellen points to summer rate rise; Fed chair says further move likely in ‘coming months’ if US data hold up
by: Shawn Donnan in Cambridge, Massachusetts and Adam Samson in New York – FT
The head of the US Federal Reserve said on Friday that a rate rise would probably be appropriate in “coming months” if the US economy continued to improve, in the strongest signal yet that the central bank could tighten monetary policy this summer.
/goo.gl/n3efqc

Fidelity Marked Up Private Tech Shares in April; Pinterest was among the winners, with its shares increasing 14% during the month
By ROLFE WINKLER – WSJ
The Nasdaq was down slightly in April, but private tech shares outperformed, at least according to Fidelity Investments.
goo.gl/XZvjQG

Buyers sell fund giants as boutiques gain popularity=
ANNA FEDOROVA – Investmentweek
FE report reveals key trends Boutiques have jumped up the popularity rankings among fund buyers as they have been removing some of the larger, well-known vehicles run by big providers from portfolios, according to the latest annual research paper by FE.
goo.gl/83K01M

Banks & Brokers

Banks pressed to step up defences against cyber attack; Swift unveils new measures to improve customer security
by: Martin Arnold, Banking Editor – FT
Banks received a double dose of pressure to tighten up their defences against cyber attack on Friday as they were admonished on the subject by one of Europe’s top regulators and the Swift global payment messaging system.
/goo.gl/GomYj8

J.P. Morgan’s CIO on the Bank’s Security Game Plan; Dana Deasy discusses the bank’s strategy since the 2014 breach, as well as working with fintech partners
Emily Glazer – WSJ
The amount of money most large banks spend on technology unrelated to cybersecurity is shrinking. Not so at J.P. Morgan Chase & Co., the nation’s largest bank by assets.
goo.gl/snbCH7

BAML edges out JP Morgan in battle for FTSE 100 broking roles
By Bernard Goyder and Lucy Burton – Financial News
Bank of America Merrill Lynch has become the corporate broker with the most FTSE 100 clients, Financial News research reveals, a whisker ahead of JP Morgan, long regarded as the leader in the business.
goo.gl/MEvFTD

R.J. O’Brien Named “Best FX Broker-Dealer” in Profit & Loss Magazine Readers’ Choice Awards 2016
R.J. O’Brien & Associates
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 Profit & Loss Magazine has named the firm “Best FX Broker-Dealer” in its annual FoXy Readers’ Choice Awards.
goo.gl/nnWxFO

European Bank Returns Aren’t as Bad as You Think
by Mike Bird – WSJ
Good news stories are few and far between for Europe’s bruised banking system, but there’s a little-noticed bright spot in recent bank earnings.
goo.gl/YTNj0I

FlexTrade becomes latest to join RSRCHXchange’s platform; FlexTrade’s EMS users to access research via RSRCHXchange’s platform.
By Hayley McDowell – The Trade
FlexTrade Systems has announced its partnership with RSRCHXchange to provide institutional research for its execution management system (EMS) users.
goo.gl/5OzszC

Clearing & Settlement

Capital reprieve coming for banks
Silla Brush, Bloomberg, via The Journal Gazette
Banks using some U.S.-based clearinghouses to handle their derivatives trades are set to win a reprieve from tougher capital rules as the European Union continues talks with the Securities and Exchange Commission on regulatory equivalence. The European Commission, the EU’s executive arm, plans a six-month delay in increasing capital charges on trades at clearinghouses in countries whose rules haven’t been deemed equivalent to those in the EU, a commission official said. That includes SEC-regulated clearinghouses, including ones run by the Options Clearing Corp. and the Depository Trust and Clearing Corp. Without the delay, billions of dollars in capital requirements would kick in on June 15.
goo.gl/tKi4xm

Blockchain Technology Will Profoundly Change the Derivatives Industry
NASDAQ.com
Wall Street firms are beginning to tinker with blockchain and smart contract technology that will allow buyers, sellers and central clearing houses of derivative trades to share information, such as KYC (Know Your Customer), in real time across various distributed ledger platforms unleashing incredible efficiencies.
goo.gl/P8U3PR

Tullett Prebon becomes first platform to send SEF trade for clearing in Japan
LeapRate
Tullett Prebon has announced that it become the first firm to successfully send a Swap Execution Facility (SEF) trade for clearing at the Japan Securities Clearing Corporation (JSCC). The trade was executed via tpSEF’s hybrid trading platform.
/goo.gl/Nxdml7

Indexes & Products

‘Low vol’ funds attract more than $10bn of inflows this year; Fears rise sector’s newfound size could change behaviour of underlying stocks
by: Stephen Foley in New York – FT
Equity funds that promise to shield investors from market volatility attracted inflows for the 11th straight month in May, making them a marketing success story for the asset management industry but triggering warnings that they may not behave as expected in a future market downturn.
/goo.gl/Mff5B6

Goldman Sachs raises odds of China share inclusion in MSCI indexes to 70 percent
Reuters
Goldman Sachs has increased the probability that MSCI will include mainland Chinese shares in its indexes to 70 percent, citing recent steps taken by Beijing to remove obstacles for global money managers to invest in the country’s equity markets.
reut.rs/1Vsc7E6

A-shares: coming to an index product near you
GlobalCapital
Index providers are once again discussing the potential inclusion of A-shares with global investors. But despite the best efforts by China’s regulators to ready the country’s financial system, market participants remain divided about whether recent steps go far enough.
goo.gl/Lv3aF3

Smart Beta Wins The War; Holdouts Persist
ETF.com
When BlackRock finally stopped using the competing phrase “strategic beta” in 2015, I hoped that the “smart beta” terminology wars had come to an end. But just like Hiroo Onoda, the lone Japanese soldier from World War II who was found isolated on a Pacific island three decades later, still fighting a conflict he hadn’t realized was over, a few holdouts are stubbornly persisting.
goo.gl/Z1hTHW

DAX index derivatives: 1. Harmonisation of daily settlement prices for DAX and Mini-DAX Futures; 2. Extension of volatility strategies for DAX options
Eurex
/goo.gl/7Erw9i

Technology

Piraeus Securities S.A. Goes Live With Horizon For Derivatives Market Making
Mondovisione
Athens-based investment firm, Piraeus Securities (Piraeus), has gone live with the latest version of Horizon’s trading platform as part of the firm’s continued commitment to quality and innovation in its market making activities. This implementation is a significant upgrade for the firm.
goo.gl/XenkBs

Mizuho readies fintech war chest to escape Japan gloom; Japanese banks seek growth from digital disrupters to offset hit from negative interest rates
by: Leo Lewis in Tokyo – FT
Mizuho Financial Group is building a pot of money for global acquisitions of financial technology companies as Japan’s second-biggest bank attempts to leapfrog its local rivals after years of industry torpor.
/goo.gl/pSDW7D

Australia to auction $11.5 million confiscated bitcoins
Reuters
Around A$16 million ($11.49 million) worth of confiscated bitcoins will be auctioned in Sydney next month, the first such auction outside the United States, as demand for the digital currency surged to its highest in nearly two years.
goo.gl/HIyY5k

Enforcement

Hong Kong watchdog reveals HK$46m in unauthorised stock trading amid cyberattack warnings; Nine cases resulted in losses of HK$1.56 million for which banks paid full compensation
Allen Au-yeung – SCMP
The banking watchdog revealed on Thursday that it had received ­reports from banks about unauthorised stock trading activities in at least 22 online bank accounts in at least four banks. The sum ­involved was HK$45.97 million.
goo.gl/6Arngm

SEC fines Federated Investors for oversight shortfalls
BY JONATHAN STEMPEL – Reuters
Federated Investors Inc (FII.N) will pay a $1.5 million fine to settle U.S. Securities and Exchange Commission charges that it failed to properly monitor whether outside consultants it employed might have misused potential market-moving information.
goo.gl/pD8U82

Environmental & Energy

We’ve Only Got Five Years Before Our 1.5°C Carbon Budget Is Blown
Carbon Brief
In its most recent synthesis report, published in early 2014, the Intergovernmental Panel on Climate Change (IPCC) laid out estimates of how much CO2 we can emit and still keep global average temperature rise to no more than 1.5C, 2C or 3C above pre-industrial levels.
bit.ly/1PdcAZu

How earthquakes help capture carbon dioxide
The Economist
Long before people started dumping large amounts of carbon into the atmosphere, the planet was producing—and managing—such emissions rather well all on its own.
econ.st/1VqP3oZ

ExxonMobil is in its climate change bunker and won’t let reality in
Damian Carrington – The Guardian
When one of the world’s largest pension funds tells the biggest oil company on the planet that it faces an existential threat, there are stormy times ahead. The Guardian wanted to give you the latest weather report from inside ExxonMobil’s annual general meeting in Dallas on Wednesday, but the newspaper’s reporter was banned.
goo.gl/O17TMn

As El Nino Exits, La Nina Looms, Promises Her Type of Mayhem
Brian K Sullivan – Bloomberg
Signs across Pacific Ocean indicate a La Nina is developing; This may mean cooler temperatures but more hurricanes
Think of it as Mother Nature’s roller-coaster ride: the shift between the weather patterns known as El Nino and La Nina that, at their worst, can cause havoc worldwide.
goo.gl/ig2RFR

Solar Panel Leasing Decreases as More Customers Look to Buy; Falling equipment prices and more availability of loans are making purchasing increasingly cost effective
By Cassandra Sweet – WSJ
Companies such as SolarCity Corp. and Sunrun Inc. that rapidly expanded by leasing solar panels to U.S. homeowners now face stiff competition from smaller upstarts that sell the units to customers instead.
goo.gl/H0sIo8

Asia-Pacific

Hong Kong Stock Brokers Cry Foul at Fees Crimping Their Profits
Eduard Gismatullin
Traders urge review of exchange’s unique fee structure; Australia, Tokyo have lower costs compared to Hong Kong
Brokers in Hong Kong are being slapped with fees vastly higher than peers elsewhere in the region, prompting claims that the national stock exchange’s rules aren’t just out-of-date and confusing, they’re eating into profits.
goo.gl/796UqR

China Buying Sparks Bitcoin Surge; Crypto-currency adds $1 billion in market capitalization amid supply concerns
By GREGOR STUART HUNTER and CHAO DENG – WSJ
Chinese investors are pumping up bitcoin again, sending prices up nearly 16% in the past four days, just two years after the country was at the center of a boom and bust in the crypto-currency.
goo.gl/msxo9N

The Big Short Is Back in Chinese Stocks
Kana Nishizawa, Kyoungwha Kim – Bloomberg
Short interest in CSOP FTSE China A50 ETF is highest in a year; Yuan is heading for its biggest monthly drop since August
Chinese equities are once again in the cross hairs of short sellers.
goo.gl/nK0oFp

One-Minute Plunge Sends Chinese Stock Futures Down by 10% Limit
Bloomberg News
Unexplained drop follows similar move in Hong Kong this month; Futures exchange said to start investigation into the tumble
Chinese stock-index futures plunged by the daily limit before snapping back in less than a minute, the second sudden swing to rattle traders this month.
goo.gl/pu7AZ8

Frontier Markets

Brokers urge traders to adopt algo trading; Objective of the move is to use automation to maximise trading profits
Ashley Coutinho – Business Standard
‘Completely automate your strategy with only a few clicks’; ‘Maximise trading profits by using approved execution strategy’, ‘Customise your strategy with custom target and stop-loss, bullish or bearish signals without any programming knowledge’.
goo.gl/dpKrzJ

Miscellaneous

Bordeaux Estates Pricing 2015 Wines 19% Above Previous Vintage
Guy Collins – Bloomberg
Sterling prices 30% higher for U.K. buyers after pound drop; Merchants still waiting for most major estates to set levels
Bordeaux wine estates are marketing their 2015 vintage on average 19 percent higher than the previous year, according to a table of 20 producers from the London-based Liv-ex wine exchange.
goo.gl/71KarP

Moët Hennessy turns to China to make new fine wine; French producer to present $300 vintage red from Tibetan plateau
by: Adam Thomson in Paris
When Moët Hennessy unveils its latest top-end wine to its leading international clients next month, it will not be inviting guests to Bordeaux or even to Burgundy. Instead, they will arrive at the French embassy in China.
/goo.gl/7qmyBD

Behind the Scenes, Billionaires’ Growing Control of News
Jim Rutenberg – NY Times
At first blush, the secret support that the Silicon Valley billionaire Peter Thiel provided for Hulk Hogan’s lawsuit against Gawker is a salacious yarn about money, power, gossip and revenge.
goo.gl/B2R5u4

Former Zurich Insurance CEO Martin Senn Commits Suicide; Senn stepped down last December after a difficult period for the company
By JOHN LETZING – WSJ
Martin Senn, former chief executive of Zurich Insurance Group AG who stepped aside in December, has killed himself, the company said—the second suicide by a onetime top manager at the company in the past few years.
goo.gl/aRFV9s

Facebook, Twitter, YouTube, Microsoft back EU hate speech rules
Reuters
Facebook, Twitter, Google’s YouTube and Microsoft pledged on Tuesday to review requests for the removal of hateful content posted on their platforms within 24 hours as part of a code of conduct agreed with EU regulators.
goo.gl/N1NDAX

Charles M. Harper, Who Made ConAgra a Food Giant, Dies at 88
By PETER EAVIS – NY Times
Charles M. Harper, who in the 1970s and 1980s transformed a faltering food company called ConAgra into a global giant to rival Kraft and Kellogg, and whose own health issues inspired the creation of the brand Healthy Choice, died on Saturday at his home in Omaha. He was 88.
goo.gl/oTBXOj

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Past JLN Newsletters

CME to permanently close most trading pits

CME to permanently close most trading pits

First Read $40,626/$300,000 (13.5%) Anonymous ++++ Hits & Takes John Lothian & JLN Staff Without fanfare or amplification from its executives, the CME Group shut the books on most -- but not all -- of its floor trading history Tuesday afternoon with the...

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