First Read

It’s All About Jobs
Jim Kharouf and Doug Ashburn, JLN

It must be an election year since we’re talking about jobs. And we’re also talking about the future – primarily blockchain.

In today’s issue, the two threads are starting to pull together. On the one hand we’ve got a report in The Trade showing jobs in sales and trading have plunged almost 20 percent over the past five years – largely in the fixed income space.

And yet, we’re seeing a louder drumbeat of interest and initiative in the blockchain space. The FT story on Digital Asset‘s plans today included an estimate on the amount of money being spent on the technology. Richard Lamb, CEO of Accenture’s financial services operating group, said that of the $100 billion spent on financial technology, 10- to 20 percent could go toward blockchain. On top of that the Global Blockchain Council in Dubai, made up of 32 members, is jumping into the space, with an estimate that $300 billion could be invested in the blockchain space over the next four years. Toss in a few other notable efforts from IBM and DTCC, Microsoft, Australian Securities Exchange which is already allied with Digital Asset, Nasdaq and a host of others and you can see the potential growth in this space. There are jobs to be had, just not in fixed income trading at the moment.

One wonders what the settlement and clearing space will look like in the coming years.

Also, a story about another Jobs – or at least about the company he left behind – has garnered much attention this week, and reignited the age-old balance between privacy and security. Should Apple be required by the FBI to assist it in cracking through the layers of security to obtain information about the recent terrorist attack in San Bernardino, or will that open up the floodgates of personal privacy protection?

Our industry is still grappling with this issue. Nearly six years after the passage of the Dodd-Frank Act, the issue of data sharing among jurisdictional authorities is still being debated. Once all the pieces are in place, who exactly will be allowed a look into our data repositories? How granular will this data be required to be? What is to stop “non-vetted” foreign regulators to use the information to less wholesome ends? In other words, who will regulate the regulators?

We are asking these same questions with the CFTC’s recently proposed Regulation AT, a set of rules addressing the evolution of automated trading on U.S. exchanges, specifically the requirement that proprietary trading firms submit source code for regulator review. These issues – privacy and blockchain – are due to be taken up at next week’s CFTC Technology Advisory Committee meeting on February 23.

Are these good rules designed to protect market participants, or is it regulatory overreach into private matters, and fraught with unintended risks? We will be watching the battle between Apple and the FBI. Early indications on Twitter show that the public is on Apple’s side. Will they feel the same way about our market regulations?

Finally, speaking of jobs. We’ve added a new section to the John Lothian Newsletter simply called Did You Know? It will appear occasionally to illustrate a factoid about a company, person or item found in MarketsWiki, featuring a fact or story that makes you go, “hmm.” You’ll also impress at cocktail parties with one liners about exchanges and people in our industry. Check out our first one on jobs at the Intercontinental Exchange

Explaining Apple’s Fight With the F.B.I.
The New York Times
Tuesday evening, a federal court ordered Apple to help the F.B.I. unlock an iPhone used by one of the attackers who killed 14 people in San Bernardino, Calif., in December. Wednesday morning, Apple said in a strongly worded letter that it would challenge the court’s request. While technology companies recently have resisted government demands, Apple’s letter is one of the industry’s most forceful pushbacks against a court ruling.
nyti.ms/1Krbebw

Survey Says – Give the readers what they want!
We are nearing the final days of our 2016 reader survey. Help us help you by giving us three minutes of your time and sharing your thoughts. Plus, we tried to make it fun and colorful. The final kicker? You could win an Apple Watch. Click HERE to get started.

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Did You Know?
As we rework pages within MarketsWiki, some interesting facts are worth noting. Today’s “Did You Know?” is about the Intercontinental Exchange.

Shortly after ICE CEO Jeff Sprecher purchased the company, then called the Continental Power Exchange, in 1997, the company revamped its technology platform which would become the backbone for the ICE Trading Platform used today. ICE lost all of its customers during that time and the company shrunk from 30 people to just 6. It was relaunched as the Intercontinental Exchange in 2000.

Today, after 21 acquisitions, the company has 5,549 people, as of December 31, 2015, according to SEC filings. Here is a snapshot of employee growth at ICE, with the understanding that much of it is from acquisitions, including NYSE.

1999: 6
2005: 205
2010: 933
2015: 5,549

“Did You Know?”
is brought to you by:
MarketsWiki

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Yahoo Closes Online Magazines, a Costly Experiment by Marissa Mayer
The New York Times
Marissa Mayer, the embattled chief executive of Yahoo, is gutting one of her signature projects: A cluster of digital magazines devoted to topics like food, autos, real estate, travel and technology. Yahoo notified dozens of writers and editors at the 15 publications on Wednesday that they were losing their jobs as part of the Internet company’s broader plan, announced last month, to cut 15 percent of its work force.
nyti.ms/1KraS4C

***DA: I hope that is not a missive on the future of electronic publications. I happen to be quite fond of one of them.

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Germination And Emergence: Allison Yacker on Emerging Manager Seeding Arrangements
JohnLothianNews.com

In the trading space, much like the rest of the world, some of the best ideas and strategies come from emerging managers, or the “new kids on the block.” The trick is finding the right right win-win partnership to help get them on their way.

Today, it is the large managed funds that control most of the assets. A recent study from hedge fund research firm Preqin shows that big funds – those with over a billion under management, manage more than 90 percent of the assets. That concentration of assets creates a problem for small or new funds, looking to get seed money that will propel the firm forward. According to Allison Yacker, partner at Katten Muchin Rosenman, part of the solution lies in “seeding arrangements,” whereby a larger, established firm provides the working capital and other elements that allow an emerging manager to focus on trading. The challenging trading environment since the 2008 financial crisis, coupled with more regulations and compliance costs, has created a more competitive environment for firms looking to attract capital.
Watch the video »
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Yesterday’s Top Three
JP Morgan moves global clearing role to London
CME Group Inc. Names Slate of Director Nominees
Soon Hemp May Be A Tradable Commodity With Startup Seed CX

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Lead Stories

Headcount in trading slashed 20% over last five years
The Trade News
Jobs within sales and trading have decreased by almost 20% between 2010 and 2015 at top banks in the world, according to data from Coalition. Coalition made the findings as part of its index of top global banks, which included data from BAML, Citi, JP Morgan, Goldman Sachs, Morgan Stanley, UBS and Deutsche Bank.
goo.gl/AO2oh3

IEX to critics of its U.S. exchange bid: ‘We stand by our words’
Reuters
IEX Group struck back on Wednesday at critics of its bid to become a U.S. stock exchange, including the New York Stock Exchange and BATS Global Markets, which have accused their potential rival of skewing facts to help win approval.
reut.rs/1KraZ05

Blythe Masters forges blockchain partnerships
FT.com
Blythe Masters, the investment banker turned blockchain entrepreneur, will on Wednesday announce a string of partnerships with consultancies to help their financial clients harness the technology that underpins bitcoin. Digital Asset Holdings, the New York start-up run by Ms Masters, has agreed alliances with Accenture, PwC and Broadridge to offer its blockchain technology to their consulting clients with a promise to save them money and time.
on.ft.com/1KreeER

Dubai Government Backs Expansive Blockchain Research Effort
Coindesk.com
An innovation center established by Sheikh Mohammed bin Rashid, vice president and prime minister of the United Arab Emirates (UAE) and emir of Dubai, has announced the formation of a research council focused on blockchain technology. According to the release, the Global Blockchain Council will consist of 32 members including government entities (Smart Dubai Office, Dubai Smart Government, the Dubai Multi Commodities Centre (DMCC), international companies (Cisco, IBM, SAP, Microsoft) and blockchain startups (BitOasis, Kraken and YellowPay).
goo.gl/FeQETj

ISE Mercury Completes Successful Launch
Press Release
The International Securities Exchange Holdings, Inc. (ISE Holdings) today announced that ISE Mercury, ISE Holdings’ third options exchange, launched successfully yesterday. ISE Mercury launched with twelve symbols that were selected as the first of four phases of product rollouts. The rollout schedule, which initially includes more than 600 of the most actively-traded options products, is available here
goo.gl/13nmc2

Deutsche Boerse revenues buoyed by Eurex and Clearstream earnings
Joe Parsons, The Trade News
Frankfurt-based exchange group Deutsche Boerse reported full year net revenues of around EUR2.4 billion, a 16% increase from 2014, largely due to the derivatives and post-trade businesses.
goo.gl/vr6VSf

Wall Street Bankers Warn of Brexit ‘Havoc’
MoneyBeat – WSJ
Wall Street bankers have lined up alongside U.S. politicians to warn of the effect that Britain’s possible exit from the European Union would have on their business, as U.K. Prime Minister David Cameron prepares for a crunch summit in Brussels, reports Financial News.
on.wsj.com/1Lv1YxZ

Judge blocks Madoff victims’ $11 billion lawsuit vs Picower estate
Reuters
Victims of Bernard Madoff’s fraud cannot pursue a Florida lawsuit to recover $11 billion from the estate of Jeffry Picower, who they say helped perpetuate the swindler’s Ponzi scheme, a Manhattan bankruptcy judge ruled on Wednesday.
reut.rs/1Krb5ET

Fed minutes reveal members wary of ‘downside risks’ to US economy
Investment Week
Minutes from the Federal Open Market Committee’s January meeting reveal a more dovish tone as members agreed “uncertainty had increased”, putting doubts over the likelihood of a further rate hike in March.
goo.gl/wXTJDE

St. Louis Fed’s Bullard says ‘unwise’ to continue rate hikes for now
Reuters
It would be “unwise” for the U.S. Federal Reserve to continue hiking interest rates given declining inflation expectations and recent equity market volatility, St. Louis Fed President James Bullard said on Wednesday in comments that mark a stark change of direction for one of the Fed’s more hawkish inflation foes. Bullard for much of last year argued for an earlier rate hike, but said he now feels key assumptions supporting higher rates have been undermined.
reut.rs/1KraJOF

Eight Key Features of Blockchain and Distributed Ledgers Explained
DTCC
The heated discussion – some might say “hype” – surrounding the potential for distributed ledger technology to alter the post-trade infrastructure has been unprecedented. Is it a disruptive force on the verge of replacing legacy infrastructures or will the technology produce only marginal impacts in the short-term? It is early in the blockchain debate right now and there are few definitive answers.
bit.ly/1U9YZCb

Regulatory

IEX `Speed Bump’ Seems to Comply With U.S. Rules, Finra CEO Says
Bloomberg Business
IEX Group Inc. should have a clear path to winning Securities and Exchange Commission approval to be a stock exchange despite claims that its trademark speed bump would violate market rules, according to a top U.S. financial regulator. IEX’s proposal to briefly pause incoming orders is probably consistent with rules that seek to ensure a fair and competitive trading environment, Rick Ketchum, the chief executive officer of the Financial Industry Regulatory Authority, said Wednesday.
bloom.bg/1Lv3PCY

Bank of England and Vickers clash on capital rules
Risk.net
The Bank of England (BoE) has dismissed concerns its capital requirements are too low, responding to criticisms raised by John Vickers, who chaired an influential banking reform committee. In articles published in the Financial Times and Vox on February 15, Vickers warned that the BoE’s framework for capital requirements, particularly its systemic risk buffer, could fall short of what his committee, the Independent Commission on Banking (ICB), proposes.
bit.ly/1KrdKyp

CFTC Swaps Report Update
The CFTC Swaps Report provides a detailed weekly snapshot of the gross notional outstanding as of the penultimate Friday prior to the CFTC Swaps Report’s Wednesday publication date, as well as a detailed weekly total of the transaction volume (on both a ticket volume and dollar volume basis) ending that same penultimate Friday, in two asset classes (interest rate swaps, credit default swaps).
goo.gl/84dIwa

Richard G. Ketchum, Chairman And Chief Executive Officer FINRA; Remarks From The Exchequer Club – Essential Elements Of Sound Capital Market Structure
Press Release
In recent years, there has been increased debate about the structure of capital markets. Market structure, once the domain of regulators, market operators and large, sophisticated investors, is now a topic for much broader public discourse, in part because of the flamboyance of recent market moves, and in part because popular authors have claimed that the markets are “rigged.”
goo.gl/GNnyDp

FCA publishes Call for Input on the review of retained provisions of the Consumer Credit Act
Financial Conduct Authority
The review will consider whether particular CCA provisions remain appropriate or should be modified, updated, or replaced by FCA rules or guidance in order to maintain the right degree of consumer protection for today’s market.
goo.gl/5fBqIy

European Commission: Speech By Commissioner Jonathan Hill At The European Forum For Manufacturing And Association For Financial Markets In Europe Dinner Debate
Mondovisione
We’re committed to legislating less and legislating better. This year, we’ll propose 80% fewer laws than was usual under the last Commission. And we’ll review two and a half times as much legislation to check it’s working as was initially envisaged. I’m also clear that businesses and entrepreneurs need a period of stability so that they can plan ahead and invest.
goo.gl/sb205r

Exchanges & Trading Facilities

CBOE Holdings Declares First-Quarter 2016 Dividend; Announces Increase In Share Repurchase Authorization
PR Newswire
CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that its Board of Directors has declared a quarterly cash dividend of $0.23 per share and increased its share repurchase authorization by $100 million. The quarterly cash dividend of $0.23 per share of common stock will be payable on March 18, 2016, to common stockholders of record on March 4, 2016. Additionally, CBOE Holdings’ Board of Directors has also authorized the company to repurchase up to an additional $100 million of its outstanding common stock, effective immediately.
prn.to/1Kr84V4

Deutsche Börse AG Closes Financial Year 2015 With Significant Increases In Net Revenue And Profit
Mondovisione
Deutsche Börse AG published its preliminary results for the fourth quarter and the full year 2015 on Wednesday. The company generated net revenue of EUR2,367.4 million for the full year, a year-on-year increase of 16 per cent (2014: EUR2,047.8 million). Deutsche Börse thus posted the highest net revenue figure since the financial crisis, and has overcome the impact of the crisis. At EUR1,248.8 million, adjusted operating costs were higher than in the previous year (2014: EUR1,068.8 million), primarily due to consolidation and exchange rate effects, as well as higher remuneration expenses reflecting the positive share price performance.
goo.gl/i1z1cD

Euronext to unveil new strategic plan in Q2
Financial News
European exchange operator Euronext will outline a new strategic plan in the first half of 2016, after announcing it had achieved the objectives set out before its 2014 listing a year ahead of schedule.
goo.gl/27LH7n

Blockchain – The next level
The Trade News
The Australian Stock Exchange (ASX) is exploring implementing a new clearing and settlement system based on Blockchain technology and has purchased a minority stake in Digital Asset, a Blockchain start-up based in the US. The ASX is seeking to overhaul its clearing and settlement system – CHESS – for the first time in nearly 20 years and Blockchain is one potential solution to this overhaul.
goo.gl/K5sNP6

SGX consults on changes to derivatives rules and contract specifications
SGX
Singapore Exchange (SGX) is seeking public feedback on proposed amendments to the Futures Trading Rule, SGX-Derivatives Clearing (SGX-DC) Rules and various contract specifications. The amendments are related to the new derivatives trading and clearing systems which SGX is investing in.
goo.gl/hi3VMZ

Tokyo Commodity Exchange: Suspension Of Listing New Contracts Of Gold Options
Mondovisione
The Tokyo Commodity Exchange, Inc. will update Gold options contract specifications in conjunction with the launch of the new trading system scheduled on September 20. To maintain consistent contract specifications, the Exchange will suspend listing new contracts of which trading period will continue beyond the new system launch date.
goo.gl/oKvBip

Politics

Democratic Economists Say Bernie Sanders’s Math Doesn’t Add Up
WSJ
Four leading Democratic economists sharply criticized Sen. Bernie Sanders for citing “extreme claims” about the economic effects of his campaign proposals, the latest in a stream of critiques from Democrats over details of his platform. Criticism has also been directed at Mr. Sanders’s plan for a single-payer, government-run health-care plan, with critics saying he underestimates the costs of providing health care to all Americans and overestimates the revenue his plan would generate.
on.wsj.com/1KraHGw

How Sanders, Trump Threaten Market Confidence
WSJ
Markets don’t usually pay a lot of attention to presidential elections. For all the campaign theatrics, presidents from both parties, once in office, tend to hew to economic orthodoxy, whether on free trade or the independence of the Federal Reserve. This would be a good year to jettison those assumptions.
on.wsj.com/1Krd0cJ

These are Wall Street’s new favorite candidates
Yahoo Finance
Jeb Bush was the master of Wall Street funding during the first half of 2015, but those big-money bets are now shifting to other candidates. Yahoo Finance analyzed all donations of $10,000 or more to the super PACs supporting each major presidential candidate, and found that Marco Rubio and John Kasich have picked up new funding from Wall Street, while donations to Bush’s super PAC have dropped sharply. Here’s a breakdown of super PAC funding for all of 2015:
yhoo.it/1Lv3G2m

Hedge Funds & Managed Futures

Draghi Faces New Dilemma With Pummeling of Eurozone Bank Stocks
WSJ
The battering of European financial stocks is putting heat on the European Central Bank not to slash subzero interest rates even lower next month, but its policy makers say they are considering a further cut. Shares of European banks and insurers have tumbled recently, falling more than broadly slumping markets. Financial firms have been hit in part because negative rates erode their profit. Fears of more rate cuts have worsened the rout, investors say.
on.wsj.com/1KremUT

Wall Street Gloom Seen as `Big Disconnect’ With Profit Outlook
Bloomberg Business
Welcome to the first earnings-report cycle in 2016, where the steep oil-price drop that’s pummeling energy companies has triggered broader Wall Street pessimism and obscured decent results from companies like Vulcan. As a whole, earnings in the Standard & Poor’s 500 are on pace for the biggest quarterly decline since 2009. But strip out the energy-sensitive industries and most companies are reporting profit gains.
bloom.bg/1Lv3RuD

Central Banks Are Facing `Loss of Faith,’ Gold Veteran Says
Bloomberg Business
Gold’s rally is being driven as investors start to lose faith in central bankers’ ability to deal with economic challenges, according to Evolution Mining Ltd.’s Jake Klein, who said the metal’s advance has been strong enough to draw attention from long-time bears.
bloom.bg/1Lv3U9y

Tiger Global Recently Bought $1.1 Billion of Apple Stock
Fortune
Tiger Global Management apparently stocked up on new holdings in the final quarter of 2015, including major new stakes in Apple and Priceline. The tech-heavy hedge fund run by Chase Coleman reported that it took a $1.1 billion stake in Apple along with a $967 million Priceline stake in the fourth quarter, according to a quarterly filing with the Securities and Exchange Commission this week.
for.tn/1U9YoR2

Hedge Fund Manager Hendry Says China Doomsayers Have It Wrong
Bloomberg Business
Hugh Hendry, the hedge fund manager known for his bearish bank bets during the financial crisis, said he disagrees with peers including Kyle Bass who say China will suffer a crisis and major devaluation.
bloom.bg/1U9YxE4

Bund Flattening Defying Textbook Highlights ECB Angst: Analysis
Bloomberg Business
Euro-area disinflationary pressure is getting deeply entrenched. With shorter-end bunds already pricing in further European Central Bank easing, the recent curve flattening shows ineffectiveness of policies in boosting inflation and nominal growth, Bloomberg strategist Tanvir Sandhu writes.
bloom.bg/1U9YyIa

Banks & Brokers

A New Worry for Bank Investors: Bail-In Risk
WSJ
Some of the recent anxiety around banks may be coming from postcrisis rules aimed at preventing another bailout. Holders of the bonds of the biggest banks used to benefit from the assumption that such firms were “too big to fail,” meaning taxpayers would ride to the rescue if they ran into trouble. The financial crisis proved them largely correct.
on.wsj.com/1KrdYp6

Bank-Stock Rout Ripples to Bonuses
WSJ
For bankers, getting a bonus in stock has become an albatross. Employees at Goldman Sachs Group Inc. have been hit with more than $400 million in paper losses thanks to a plunge in the value of stock bonuses paid out early last year, according to a Wall Street Journal analysis. Similar declines have been felt by advisers, traders and other staff across Wall Street.
on.wsj.com/1Lv3sYT

Deutsche Bank Analyst Kept Some Doubts to Himself
Bloomberg View
Sell-side equity research is like the priesthood. If you are a sell-side research analyst in the U.S., you are required by the Securities and Exchange Commission to conform your work to your inmost beliefs. “When research analysts tell clients to buy or sell a particular security, the rules require them to actually mean what they say,” says the SEC’s head of enforcement
bv.ms/1Lv3RdQ

AmEx to overhaul management, cut jobs
Reuters
American Express Co said it would overhaul its management, streamline its marketing operations and cut jobs as it looks to reduce $1 billion in costs over the next two years. The credit card issuer, which said it would cut jobs as part of the restructuring program, did not give any details about the number of employees it plans to lay off.
reut.rs/1Krczio

How Slightly Negative Rates Can Tear Into Bank Profits
WSJ
The consensus on negative interest rates is becoming increasingly negative. For banks, there is growing concern from analysts that even slightly negative rates can seriously suppress profits.
on.wsj.com/1KrdgbI

Clearing & Settlement

In 2016, Capital Markets Pulling for Blockchain
Finextra
The technology is already enticing exchanges; CME Group and Nasdaq are investigating the possibilities. CME Group has met with Euroclear, LCH.Clearnet, London Stock Exchange, Société Générale and UBS to form a working group looking at using blockchain for settlements, according Capital markets firms will stop thinking blockchain is something to be suspicious of and start to realize its enormous possibilities this year.
/goo.gl/w4rKvB

OCC Welcomes ISE Mercury Options Exchange
Press Release
OCC, the world’s largest equity derivatives clearing organization, announced today that ISE Mercury has become an OCC participant exchange. ISE Mercury, ISE’s newly launched options exchange, began operations on February 16, bringing to 14 the total number of U.S. options markets.
goo.gl/imGlrU

Indexes & Products

This Stat Shows How the S&P 500 Is Changing
WSJ
For those trying to figure out what’s supporting the stock market this year, here’s a hint: It’s not the stocks that powered the market last year. Of the 20 best-performing stocks in the S&P 500 index last year with a market value of more than $10 billion at year end, 70% of them are down this year through yesterday, FactSet data show.
on.wsj.com/1KrcI5n

Threats to hedge fund managers’ ‘secret sauce’
FT.com
Hedge fund managers are arguably the celebrity chefs of the money management industry. They are best able to whip up returns that make investors drool. But financial engineers are unpicking their secret sauce and finding new ways to sell it by the bottle. The biggest trend in the money management industry is the shift towards passive investment. About $3tn is now in index-tracking and exchange traded funds that only seek to replicate the returns of a broad market, such as the S&P 500, the Barclays Aggregate bond index or the FTSE 100. The basic return of a market is known as “beta” in financial jargon.
on.ft.com/1Lv1vvL

Banks build ETF businesses as growth stalls in bond trading
Reuters
Wall Street banks are ramping up businesses that trade exchange-traded funds full of bonds, a bright spot of growth at an otherwise bleak time for trading but one that may carry unappreciated risk.

Barclays PLC, Credit Suisse Group AG and Goldman Sachs Group Inc have all created special teams to make markets in bond ETFs. The teams include staff across stock and bond markets, since the ETFs trade like stocks on stock exchanges, but their underlying securities are bonds.
reut.rs/1Lv3D6B

Technology

IBM and Microsoft Will Let You Roll Your Own Blockchain
Cade Metz – WIRED
They call it the Hyperledger. And it can be yours.
In late December, several big-name companies from across both the tech and financial industries—including IBM, JP Morgan, Wells Fargo, and the London Stock Exchange—unveiled a new open source software project based on the blockchain, the global online ledger that underpins the bitcoin digital currency. The project aims to build blockchain-like software that can more efficiently, reliably, and openly track the exchange of financial assets, including stocks, bonds, futures, houses, and car titles. And considering the names involved—particularly the Depository Trust & Clearing Corporation, or DTCC, which oversees Wall Street’s stock settlement system—it’s an enormously significant undertaking.
goo.gl/3GKrEJ

Australia is in the vanguard of blockchain’s march to market
FT.com
Australia is set to become the test case for an attempt by custodians of the world’s financial data to apply emerging blockchain technology to markets. Blockchain — which combines the peer-to-peer computing ethos of Silicon Valley with the money management of Wall Street — is slowly being introduced to financial markets.
on.ft.com/1KrdOOC

ItBit Joins London Blockchain Scene
Waters Technology
ItBit is focused on developing a blockchain-based delivery-versus-payment (DVP) mechanism for the spot gold trading market. Jason Nabi, formerly global head of broker-dealer services at Societe Generale, has joined ItBit as the company’s new head of EMEA operations. Nabi has held prior positions at London Stock Exchange, Bloomberg, IBM Global Services, BNP Paribas Securities Services and Markit.
goo.gl/LSh68c

Enforcement

SEC Charges Biopesticide Company And Former Executive With Accounting Fraud
Press Release
The Securities and Exchange Commission today charged biopesticide company Marrone Bio Innovations and a former executive with inflating financial results to meet projections it would double revenues in its first year as a public company. Marrone Bio agreed to pay a $1.75 million penalty to settle the SEC’s charges.
goo.gl/uVDWjo

SEC: Deutsche Bank Analyst Issued Stock Rating Inconsistent With Personal View
Press release
An SEC investigation found that Charles P. Grom certified that his March 29, 2012 research report about discount retailer Big Lots accurately reflected his own beliefs about the company and its securities. But in private communications with Deutsche Bank research and sales personnel, Grom indicated that he didn’t downgrade Big Lots from a “BUY” recommendation in his report because he wanted to maintain his relationship with Big Lots management.
goo.gl/bHdg2L

Nasdaq Stockholm Orders Nederman Holding To Pay A Fine Corresponding To One Annual Fee
Mondovisione
Nederman was due to publish its interim report at 12.00 p.m. on October 20, 2015. However, a news agency published information from the report shortly before 11:00 a.m. on the same day. This news agency had managed to access the interim report from Nederman’s website. After Nederman became aware of the leak, the report was published in a press release at 11.30 a.m. on the same day, after which the Exchange was contacted.
goo.gl/5g9zsK

CP All Pressured By Investors to Take Action on Insider Trading; SEC’s fine undermines attempts to crack down on graft
Bloomberg Business
Thai fund managers overseeing more than $172 billion in assets agreed on Thursday to freeze investments in billionaire Dhanin Chearavanont’s CP All Pcl until the operator of 7-Eleven convenience stores takes action against executives charged with insider trading.
bloom.bg/1Lv3Neb

Environmental & Energy

Iran, Iraq Balk at Committing to Oil-Output Cap
MoneyBeat – WSJ
Iran’s refusal to curb its oil production has thrown into question the future of a plan brokered by Saudi Arabia and Russia for major oil-producing countries to limit their output to last month’s levels, Benoit Faucon, Summer Said and Asa Fitch report. Iraq on Thursday stopped short of saying it would curb production, Summer Said reports.
on.wsj.com/1Lv1tE8

The key to halting climate change: admit we can’t save everything
By Ayana Elizabeth Johnson – The Guardian
Climate change, and human resistance to making the changes needed to halt it, both continue apace: 2015 was the hottest year in recorded history, we may be on the brink of a major species extinction event in the ocean, and yet political will is woefully lacking to tackle this solvable problem.
bit.ly/1KX5VAp

Tackling Climate Change Through Profits
By Reuben Munger – Huffington Post
Last month in Davos, the World Economic Forum released the results of a survey of 750 experts on the “most significant long-term risks worldwide.” This year the survey was unequivocal: failing to act on climate change is the number one global risk.
huff.to/1KqMMa4

U.S. States That Embrace Carbon Price Are Unfazed By Scalia And Supreme Court Drama
By Steve Zwick – Ecosystem Marketplace
Two days before US Supreme Court Justice Antonin Scalia passed away in Texas, a group of leading environmentalists held a press conference to dissect the implications of the Court’s decision to freeze President Barack Obama’s Clean Power Plan (CPP) pending the outcome of a lawsuit by 29 state attorneys general and some energy companies.
huff.to/1oKM79J

Hottest January Ever Recorded Was Last Month: Grave Fears Sparked For Scientists
Inquisitr
New research published by NASA has confirmed that January, 2016, was the hottest January ever recorded, with temperatures having soared well above any of those since recording began in 1880. The hottest January ever was directly after the hottest year ever recorded, with 2015 having smashed 2014’s global average temperature by.23 degrees Fahrenheit — an unprecedented and alarming climb in temperature in just one year.
goo.gl/ZcQnVG

The oil industry has invented an ironic new use for solar power
Quartz
There’s a huge project taking shape in the deserts of Oman. It will extract crude oil from the ground by pumping vast quantities of steam into it. To produce the steam, water will be brought to a boil using as much as a gigawatt of energy. The source of that energy: the sun.
goo.gl/1sNVel

Asia-Pacific

Japan’s Sliding Profits Pressured as Yen Rocks Abenomics
WSJ
Japanese corporate profits fell nearly 10% last quarter and many companies are bracing for more pain ahead, as a stronger currency undermines Prime Minister Shinzo Abe’s economic growth program. A sharp decline in the yen drove profits to record levels in recent years, helping push the stock market to multiyear highs. Under “Abenomics,” those profits have been touted as a key link in a “virtuous cycle” that should lead to higher wages and inflation, and ultimately sustainable growth.
on.wsj.com/1KrdVd5

Japan in yen policy crisis
Euromoney magazine
All the hard work of Abenomics has been undermined by weeks of frantic trading that has seen the yen appreciate dramatically on safe-haven flows, with QE and even an announcement on negative rates having little impact. The market is now waiting to see if the Bank of Japan has any more tricks up its sleeve.
goo.gl/WIAbVS

Asia markets set for a year of exceptions
FT.com
If regular investors shiver at the prospect of a China struggling to combat slowing growth to the extent it has to follow Europe and Japan in making people pay to save — and it should send a chill — then China’s indebted companies should be nearing outright panic.
on.ft.com/1Lv2U5t

The People’s Bank of China Moves to Daily Open-Market Operations
Bloomberg Business
China’s central bank will conduct open-market operations every working day, it said in a statement posted on its website Thursday. The People’s Bank of China said it is taking the step to improve the effectiveness of the operations. It added that it will issue notices on the days that it refrains from using the tool due to insufficient demand.
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Don’t Panic About China’s Slowdown, Goldman Says
Bloomberg Business
China’s growth is poised to decelerate this quarter and the road ahead will be bumpy. But don’t panic, says the most accurate forecaster on the nation’s economy. Growth will slow to 6.7 percent in the first three months of this year as financial services contributes less to the expansion than a year ago and because policy measures to support growth have tapered off from the last quarter of 2015, says Song Yu, Beijing-based chief China economist at Goldman Sachs Gao Hua Securities Co. and the best overall forecaster of China’s economy according to Bloomberg Rankings for the past two years.
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China is selling US government debt
Business Insider
Chinese holdings of US government debt fell to a ten-month low in December. According to the US treasury department, US government debt held by China – the largest offshore holder globally – fell by $18.4 billion to $1.25 trillion in December, leaving the holdings of bills, notes and bonds largely unchanged from the levels of a year earlier.
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Frontier Markets

Philippine bond sale success bucks emerging markets trend
FT.com
So far this year emerging markets borrowers have sold just $6bn of dollar-denominated debt, not including the Philippines deal, down from $16.4bn at this point last year, according to Dealogic. Bankers said the success of deals such as this one could encourage other borrowers to tap the market.
on.ft.com/1Lv1I22

Emerging market benchmarks under threat from EU law
Risk.net
Heightened regulatory scrutiny discourages banks from participating in third-country benchmarks Attempts to establish derivatives trading in Asia’s emerging markets could be made more difficult by the EU’s new benchmarking law, which is likely to further deter global banks from participating in the indexes required to price derivatives contracts reliably. The development of an interest rate swap benchmark in Vietnam has struggled because of the reluctance of global banks to contribute their data.
goo.gl/EStL9z

Qatar is Weathering the Global Oil Market Storm
MoneyBeat – WSJ
Standard & Poor’s released its latest update on a number of oil- and gas-producing nations yesterday, slashing credit ratings left right and center. But one energy giant stood out with a glowing report and no action taken: Qatar.
on.wsj.com/1Lv3z6R

Nigeria to expand stock exchange range to lure investors
Africanews
Nigeria’s stock exchange is looking to attract investors spooked by a weak currency and oil price by offering more products ahead of a possible listing.
The exchange, saw the total market capitalisation of companies listed there halve to around 42 billion U.S dollars from 86.3 billion U.S. dollars in 2007 when the market was booming.
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