JPM’s $65m ISDAFIX fine; EU HFT rules; Blockchain for margin and collateral?

Jun 19, 2018

JPM’s $65m ISDAFIX fine; EU HFT rules; Blockchain for margin and collateral?

Jun 19, 2018

Spencer Doar

Spencer Doar

Associate Editor

First Read

Hits & Takes
JLN Staff

The MontrÈal Exchange announced new futures on exchange-traded funds (ETF) and trust units are now available.~JJL

The European Banking Authority released its 2017 annual report. A few of the key areas earmarked for extra focus in 2018 are: preparation for Basel III implementation, improving credit risk modelling, developing a common framework for non-performing loans, and third-country equivalence.~SD

According to a recent study from FTSE Russell, “the green economy represents 6 percent of the market capitalization of global listed companies, approximately US$4 trillion.” That’s roughly the same as fossil fuels. ~SD

Bank of Canada Deputy Governor Lynn Patterson had a very Canadian quote: “I realize I am giving you more work to do, but it is important that you keep up with these developments and ensure you are operationally prepared” (via the Bloomberg story Bank of Canada Calls on Markets to Prepare for Benchmark Changes). ~SD

ComputerWorld’s best places to work list is out. CME Group, Vanguard and RSM make appearances.~SD

Add another step of achievement for AI. An IBM computer argued, convincingly, with a human (a national debating champion no less). People watching said the human had a better delivery but the AI’s argument was more substantive.~JB

The latest NFA Board Update from their May meeting is posted to their website.~JJL

Are you registered for WealthTech 2018 on Thursday, June 28th in Chicago yet?~JJL

PanXchange launched their extended data services in #fracsand today.~JJL

Here is a Youtube video of Bill Brodsky on OCC’s critical central counterparty role.~JJL

Here is a copy of the OCC’s 2017 Annual Report, complete with interviews with former Cboe Chairman Bill Brodsky, FIA CEO Walt Lukken, Brian Lamb, CEO of EquiLend, and Steve Sears, former senior columnist at Barron’s.~JJL

The Speaker list for MarketsWiki Education World of Opportunity events in New York and Chicago has been updated and the complete lineup of speakers on which days and sessions is listed on the MarketsWikiEducation.com website. Sadia Halim of BNP Paribas has joined the list of speakers.~JJL

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FIA IDX 2018 – Montreal Exchange’s Luc Fortin Says It’s All About The Time
JohnLothianNews.com

Luc Fortin, the president and CEO of Montreal Exchange, is looking to expand the exchange’s reach this year with new extended hours starting in October, which will grab more of the European time zone as well as its interest rate suite in the second half of the year. It is one of the last G7 exchanges to offer longer trading hours, so the move will put the Canadian derivatives market on a more equal footing with other markets.

“The concept of trading the market on your time is something we’re very pleased to announce,” Fortin said. “It’s something that is long overdue.”
Watch the video and read the rest here »

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Paul Tudor Jones warns the next recession will be ‘really frightening’
Julia La Roche – Yahoo
Legendary global macro trader Paul Tudor Jones is warning that asset prices are too high. And furthermore, he’s concerned about what the next recession might look like. He shared his thoughts on Monday during a conversation with Goldman Sachs CEO Lloyd Blankfein as part of the firm’s “Talks at GS” series.
/jlne.ws/2I46pEj

***** Is it October already?~JJL

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Futurization is dead. Long live futurization; Thomas Book, CEO Eurex, on new ways to financial stability and efficiency
Eurex
At the recently held IDX conference some of the world’s exchange leaders declared the era of futurization over, some even talked about the death of futurization. It was Mark Twain who found the report of his death greatly exaggerated. What if the same goes for futurization? What if we could breathe new life into it and shift from stability to efficiency? Would that not be an interesting turning point? It indicates that we all focus on growth opportunities again and contribute to the economic growth the world needs.
/jlne.ws/2I3lJB6

***** We will always have the future(s).~JJL

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Monday’s Top Three
Our top read pieces were led by coverage of the Bank for International Settlements’ report on cryptocurrencies. Let’s just say they don’t like them very much. Bloomberg’s Bitcoin Could Break the Internet, Central Bank Overseer Says was the top read article. Our second most read pieces were tied, so we’ll go with the Telegraph’s story on the same BIS report Bitcoin is useless, unsafe, and dirty. The other two articles, which make today’s top three a top four, were: the FT’s Why even bigger volatility ‘accidents’ are yet to come and KLGates’ http://bit.ly/2t7sRHZBreaking Down The 2nd Criminal Spoofing Trial: Part 1

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MarketsWiki Stats
128,177,286 pages viewed; 23,164 pages; 213,534 edits
MarketsWiki Statistics

Lead Stories

JPMorgan fined $65m for attempted swap-market manipulation claims
Kadhim Shubber – Financial Times
JPMorgan Chase will pay a $65m fine for attempted swap-market manipulation, the Commodity Futures Trading Commission said on Monday.
The bank is the latest to be hit by a long-running investigation into rate-rigging in the $300tn interest-rate swaps market.
/on.ft.com/2JLSmsF

****Also see Reuters, The Trade and WSJ – the press release can be found in the Regulation section.

Tighter HFT capital rules will only harm eurozone market trading; New standards may trigger exodus of firms from supporting prices in futures contracts
Philip Stafford – FT
Tighter capital rules for high-frequency traders is the last thing Europe’s already liquidity-constrained financial markets need. A regulatory push for banks to set aside more capital against their trading operations has constrained their ability to support two-way prices across markets. This has opened up opportunities for high-frequency traders to act as a key source of liquidity on exchanges and in private trading venues. Their activity accounts for roughly a third of trading in EU equity markets, and is higher in some futures markets.
/jlne.ws/2I2dZiO

Industry stakeholders partner on blockchain based margin and collateral solution
GlobeNewswire
ABN AMRO Clearing, EuroCCP, Euroclear and Nasdaq have completed a joint proof of concept to make the use of securities more efficient when used to cover margin calls, including after business hours, using blockchain, or distributed ledger technology (DLT).
/jlne.ws/2I2bT2F

HFT Traders Dust Off Century-Old Tool in Search of Market Edge
Brian Louis, Nick Baker and John McCormick – Bloomberg
Jump Trading, Virtu appear to be testing shortwave for trading; Sites are located just miles away from CME’s futures exchanges
The latest twist in the race to be fastest in high-frequency trading sits just down the road from the Promise Equestrian Center, a sprawling stable and horse-riding complex about 45 miles west of downtown Chicago. It uses a super-charged version of techniques dear to amateur radio operators worldwide.
/goo.gl/3gkK2m

****SD: Credit where credit is due – the shortwave endeavors were discovered and posted on the Sniper in Mahwah blog more than a month ago. The phenomenon is not new by a longshot. Props to Bob Van Valzah for some awesome detective work. (Following his journey of discovery in the blog is more fun than reading the story, if you have the extra time. And there is a second part to the story which was posted just a few weeks ago, too.)

Xavier Rolet ‘approached’ for top Thomson Reuters job
Samuel Agini – Financial News
Xavier Rolet, the former chief executive of the London Stock Exchange Group, turned down an approach to lead Thomson Reuters’ giant trading division, according to people familiar with the situation.
bit.ly/2JMXlcK

Financial World’s A-List Could Take Hollywood’s Cue on Inclusion
Andrew Ross Sorkin – NY Times
Frances McDormand, the actress who won an Academy Award this year for her performance in “Three Billboards Outside Ebbing, Missouri,” introduced much of the world to a new idea when she accepted her Oscar. “I have two words to leave you with tonight: inclusion rider,” she said.
/jlne.ws/2I3ufjs

Morgan Stanley’s Gorman warns Wall Street to remain vigilant
Ben McLannahan – Financial Times
Bankers on Wall Street need to be “a little paranoid and a little scarred” from the last crisis, according to James Gorman, Morgan Stanley chief executive, who has warned that rising profits and a strong economy should represent “the most scary time” for the industry. Shares in the big banks have more than quintupled since March 2009, boosted latterly by higher interest rates and lower taxes, while multibillion-dollar settlements with regulators are also mostly in the rear-view mirror.
/goo.gl/1f5iCg

Want to Invest in Lithium and Cobalt? Good Luck Finding Prices; As the metals are used in more electric-car batteries, interest in the materials has soaredóbut reliable prices are hard to come by
Amrith Ramkumar – WSJ
Investors in two of the hottest commodities in recent years face a vexing problem: Reliable prices for lithium and cobalt are every bit as rare as large deposits of the valuable ores.
/jlne.ws/2JZKwbd

Big Four Under Attack as Timid Accounting Regulator Gets Tough
Aine Quinn – Bloomberg
KPMG audit quality deemed unacceptable by under-fire regulator; PwC fined $9 million for auditing of collapsed company BHS
The U.K. accounting watchdog is ramping up misconduct fines after being called useless and toothless by lawmakers irate at the failure of the accounting industry to prevent several high-profile corporate collapses.
/jlne.ws/2JYLHYj

An Investor Wants Wall Street to Get Serious About Gender Equality; Verger Capital asks hedge funds about policies on pay and harassment.
Janet Lorin – Bloomberg
Your average hedge fund or venture capital shop might not care if it’s run like a boys’ club. But what if the funds’ biggest clients were to start paying attention?
/jlne.ws/2K25ZAp

Corruption thrives in a globalised world; Has corruption become more common? Or simply easier to expose
Gideon Rachman – FT
Remember the Brics? When the concept was first launched by Goldman Sachs in 2001, it was a handy acronym to describe the world’s most dynamic emerging economies. There were always sceptics who questioned just how much Brazil, Russia, India and China have in common. Those doubts only grew when South Africa joined the club.
/jlne.ws/2JZZUUX

Exchanges, OTC and Clearing

OCC 2017 Interactive Annual Report
OCC
On behalf of the Board of Directors and my fellow colleagues at OCC, I am pleased to share with you our 2017 annual report. Over the past year, the team achieved a number of key milestones that position OCC for continued resiliency, innovation and growth while strengthening our role as an industry leader and market influencer.
/goo.gl/9USqKf

Robert Priestley resigns from ASX board and Future Fund citing ANZ cartel case as a ‘distraction’
Jessica Gardner – Australian Financial Review
JPMorgan Australian chairman Robert Priestley has resigned from the board of sharemarket operator ASX and from the Future Fund board of guardians saying a cartel case being pursued by the competition regulator could prove to be a “distraction”.
/goo.gl/i5SY8d

Mr Robert Priestley resigns from the board of ASX
ASX
ASX advises that Mr Robert Priestley has resigned from the ASX Board, with effect from today. Mr Priestley said, “I am very conscious of the unique role that the ASX plays at the heart of Australia’s financial marketplace, and with all of its participants. There has been considerable interest in the ACCC banking matter which may become a potential distraction for the ASX and my Board colleagues.
/jlne.ws/2I1yCM4

Hong Kong poised to create Chinese treasury bond futures market
Karen Yeung – SCMP
Hong Kong Exchanges and Clearing (HKEX) is expected to relaunch an improved version of Chinese treasury bond futures in Hong Kong, possibly as soon as this year, in an effort to broaden the yuan-denominated financial market and deepen the trading liquidity of the Bond Connect scheme.
/goo.gl/Wcxdcr

CME Group Named to IDG’s Computerworld List of Best Places to Work in Information Technology
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that is has been selected by IDG’s Computerworld as a 2018 Best Places to Work in Information Technology (IT), one of 100 top organizations that challenge their IT employees while providing great benefits and compensation. The recognition is part of the publication’s annual Best Places to Work in IT survey, which is available online at computerworld.com.
/jlne.ws/2K0UCM1

Kenya Changes its Plans for a Commodities Exchange
African Markets
The Kenyan government has decided to create an agricultural and non-agricultural exchange according to the Principal Secretary at the State Department of Trade Chris Kiptoo. The change from its earlier plan could further delay the setting up of a regional commodities exchange since the legal and institutional process to set it up could take time.
/goo.gl/oVQNNH

Family-owned Cogelec lists on Euronext; First IPO for a company from Euronext’s FamilyShare programme raises EUR38.7 million; market capitalisation totals around EUR105 million
Euronext
Euronext today welcomed Cogelec, the French leader in access control systems for building complexes, to Euronext Paris.
/jlne.ws/2I3vHSW

Fintech

UK competition watchdog to examine Ion’s takeover of Fidessa
Reuters
Britain’s Competition and Markets Authority said on Monday it would examine whether Ion Capital’s proposed acquisition of financial systems firm Fidessa (FDSA.L) will stifle competition.
/goo.gl/DbqaxJ

****City AM here.

Vela Wins Intelligent Trading Technology Award For Best High Performance Data Feed Handler
Mondovisione
Vela, a leading independent provider of trading and market access technology for global multi-asset electronic trading, announced that it has won the Intelligent Trading Technology award for Best High Performance Data Feed Handler – Software for the second consecutive year.
bit.ly/2JP9CgU

IBM Unveils System That ‘Debates’ With Humans
Cade Metz and Steve Lohr – NY Times
A match between an Israeli college debate champion and a loquacious IBM computer program demonstrated on Monday new gains in the quest for computers that can hold conversations with humans. It also led to an unlikely question for the tech industry’s deep thinkers: Can a machine talk too much?
/jlne.ws/2JW1WWc

****The FT here.

Cryptocurrencies

Cryptocurrency hedge funds see returns plunge in volatile times
Emma Dunkley – Financial Times
Hedge funds investing in cryptocurrencies have seen plunging returns this year, with performance dropping by 35 per cent as digital coins suffered a volatile first half.
Figures from US analytics firm HFR showed that global hedge funds investing in cryptocurrencies and the technology that underpins digital money have posted negative performance in four out of five months this year, after rising more than 2,700 per cent in 2017.
/on.ft.com/2K5DlS6

Square obtains NY State cryptocurrency license
Anna Irrera – Reuters
Square Inc (SQ.N), the payments company founded by Twitter Inc (TWTR.N) CEO Jack Dorsey, has obtained a license to offer New York state residents the ability to buy and sell bitcoin through its Cash App, the company said on Monday.
/reut.rs/2MDjmZh

Blockchain is ‘Almost a Must’ for Business, says UBS CEO
Tokens24
Swiss financial services giant UBS Group is not betting the ranch on bitcoin as of now, but Sergio Ermotti CEO of UBS Group AG praised blockchain in an interview, suggesting that it is “almost a must” for business.
bit.ly/2K0ZfWp

Hayley’s Comment: Crypto Craze
The Trade
It’s strange to think that not too long ago terms like cryptocurrency, digital asset and Bitcoin were of little interest to the financial industry. But these days, everybody is talking about crypto, from the latest price swings and scandals to any sniff of potential regulatory oversight and intervention.
/jlne.ws/2K2eviv

The Stock Pop From a Crypto Rebrand Doesn’t Last; Companies have been racing to tie themselves with blockchain and are seeing short-term gains.
Lily Katz, Mark Glassman – Bloomberg
From late 2017 to early 2018, dozens of small- and mid-cap companies tried to use the hype surrounding Bitcoin to goose their stock market value. Fruit-juice enterprises touted ties to blockchain while tobacco businesses pivoted to cryptocurrency mining. “You may get an initial pop in the stock, but generally you’re going to see these things lag behind,” says Steven DeSanctis, a strategist at Jefferies LLC. “The market is going to figure out whether or not it has the appropriate growth profile.”
/jlne.ws/2JYwVkh

Crypto Celebrity McAfee Stops Touting ICOs, Citing ‘SEC Threats’
Benjamin Robertson – Bloomberg
One of the world’s most prominent promoters of initial coin offerings is calling it quits. John McAfee, the anti-virus software pioneer turned cryptocurrency evangelist, said in a tweet on Tuesday that he will stop recommending ICOs because of unspecified “threats” from the U.S. Securities and Exchange Commission.
/jlne.ws/2K01UfV

Million-Dollar Box Conjures Up a Fortune for Bitcoin Visionary
Ilya Khrennikov – Bloomberg
A former New York hedge-fund titan deployed his giant, million-dollar BlockBoxes to Canadian tar-sands country. A Chinese fintech pioneer runs his off of hydropower in the Caucasus. A rich Russian with ties to the Kremlin keeps his in a communist-era factory on the outskirts of Moscow.
/jlne.ws/2K1l6x7

Politics

How Anti-Immigration Passion Was Inflamed From the Fringe
By Michael D. Shear and Katie Benner – NY Times
Jeff Sessions and Stephen Miller spent years on the political fringe in the nation’s capital as high-decibel immigration hard-liners, always warning about the dangers of open borders but rarely in a position to affect law or policy.
/jlne.ws/2K2BCd6

Wilbur Ross sale of Putin-linked shipping group shares revealed; US commerce secretary shorted Navigator Holdings before a critical article appeared
Shawn Donnan in Washington – FT
US secretary of commerce Wilbur Ross sold shares he owned in a New York-listed shipping company just days before the publication of an article that revealed the company’s ties to Vladimir Putin’s inner circle.
/jlne.ws/2I1Jv0v

How to Play a U.S.-China Trade War? Investors Map Out Tactics
By Eric Lam and Abhishek Vishnoi – Bloomberg
Buying yen proves a favorite, with Japan’s net credit position; Chinese stocks tied to economy’s rise could be beneficiary
A billion here, a billion there, and pretty soon you’re talking about real money, as one American politician once said. Now that the U.S.-China trade spat is encompassing potentially hundreds of billions of dollars, investors are under pressure to figure out how to respond.
/jlne.ws/2I0WzmQ

Fall of the American Empire
By Paul Krugman – The New York Times
The U.S. government is, as a matter of policy, literally ripping children from the arms of their parents and putting them in fenced enclosures (which officials insist aren’t cages, oh no). The U.S. president is demanding that law enforcement stop investigating his associates and go after his political enemies instead. He has been insulting democratic allies while praising murderous dictators. And a global trade war seems increasingly likely.
/jlne.ws/2I3hiWY

China slams U.S. ‘blackmailing’ as Trump issues new trade threat
Michael Martina, Eric Beech – Reuters
U.S. President Donald Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods and Beijing warned it would retaliate, in a rapid escalation of the trade conflict between the world’s two biggest economies.
/jlne.ws/2I19QvH

No Good Will Come of Separating Immigrant Families; Trump’s policy is morally indefensible, and history shows it will only get worse.
By Mark Gongloff – Bloomberg
No Dilemma; Just Immoral
The Donald Trump administration’s policy of stripping immigrant children from their parents at the southern border is already a moral nightmare. History suggests the situation will only get worse if it doesn’t end soon.
/jlne.ws/2JZVosT

Regulation

CFTC Orders JPMorgan Chase Bank, N.A. to Pay $65 Million Penalty for Attempted Manipulation of U.S. Dollar ISDAFIX Benchmark Swap Rates
CFTC
The Commodity Futures Trading Commission (CFTC or Commission) today issued an Order filing and settling charges against JPMorgan Chase Bank, N.A. (JPMC) for attempted manipulation of the ISDAFIX benchmark and requiring JPMC to pay a $65 million civil monetary penalty.
/jlne.ws/2lfiIEV

KPMG singled out for declining audit quality
Lucy McNulty – Financial News
KPMG has been singled out for an “unacceptable deterioration” in the quality of its audits by its regulator, and will face tougher oversight than its peers.
The Financial Reporting Council, which oversees audit firms, said half of KPMG’s company audits in 2017-18 had required “more than just limited improvements” after the regulator had inspected them. That was up from 35% the previous year.
bit.ly/2JLsxZX

FINRA Hearing Panel Bars Broker for Violating Terms of His Suspension; Firm Expelled from FINRA Membership for Allowing Broker to Work While Suspended
FINRA
FINRA announced today that a FINRA hearing panel permanently barred broker Bruce Martin Zipper of Miami, FL, for continuing to conduct firm business while serving a three-month suspension. The hearing panel also expelled his firm, Dakota Securities, from FINRA membership for not adequately supervising Zipper, allowing him to associate while suspended (and later while statutorily disqualified) and for falsifying books and records. The decision resolves charges brought by FINRA’s Department of Enforcement in November 2017.
/goo.gl/EffCZc

Publication of the Interim Note by the “Study Group on the Financial System” under the Financial System Council
FSA Japan
The “Study Group on the Financial System” under the Financial System Council (chairman: Shinsaku IWAHARA, Professor of Law, Waseda Law School) has been discussing since November 2017 a shift from an entity-based regulatory framework to a function-based, cross-sectoral regulatory framework under which the same regulations apply to activities with the same functions and risks, paying attention to a right balance between innovation and user protection.
/jlne.ws/2K1poRI

FCA details review of unbundling under MiFID II; The FCA will contact asset managers, investment banks and brokers to evaluate the effects of unbundling under MiFID II.
Hayley McDowell – The Trade
The UK’s financial watchdog is to begin a review of MiFID II’s recently enforced rules around research payments and corporate access in asset management over the next few weeks.
/jlne.ws/2JXYQUF

Supreme Court will hear disgraced ex-banker’s securities fraud case
Kevin Dugan – NY Post
Disgraced former investment banker Francis Lorenzo ó who in high school was caught stealing a salami sandwich from a convenience store ó won the right on Monday to have the Supreme Court hear his 2015 securities fraud case.
/jlne.ws/2I2uxXS

Investing and Trading

UBS overtakes BlackRock for European ETF inflows
David Ricketts – Financial News
The exchange traded funds business of UBS Asset Management has surpassed BlackRock’s dominant iShares division for new money gathered in Europe so far this year, marking a first for the Switzerland-headquartered institution.
bit.ly/2JM83A9

ESG investing: Morgan Stanley says traders flocking, expects growth
Joe Ciolli – Business Insider
Environmental, social, and governance investing ó also known as ESG ó has exploded in popularity, with roughly $23 trillion being invested with at least a partial ESG mandate.
Morgan Stanley sees several factors combining to make ESG an even bigger investment force than it already is.
/read.bi/2MB7jvF

As Trade Fight Escalates, Beer Makers Fret Over the Cost of Aluminum
Matt Phillips – WSJ
Arguments over money and politics are always worse when beer is involved. As tariffs and combative rhetoric entangle the United States in trade fights, a scuffle has broken out at home over the rising cost of the aluminum used to make cans for beer and other beverages.
/jlne.ws/2JZLfZZ

Countries Face the Tricky Task of Undoing Negative Interest Rates; The longer countries wait to raise rates, the more damage it may do
Brian Blackstone – WSJ
Europe has finally emerged from its debt crisis with healthy economic growth, but it can’t shake one relic of its troubled times: negative interest rates.
/jlne.ws/2K2Asyg

Oil producers face their ‘life or death’ question; Fear of an imminent peak in demand means companies are less likely to invest. So does that make shortages and a price rise inevitable?
David Sheppard and Anjli Raval – FT
Asked last month by a frustrated investor if, “hand on heart”, Royal Dutch Shell was more concerned about “the sustainability of the company or with the sustainability of the planet”, chief executive Ben van Beurden acknowledged that climate change will be “the defining challenge” facing the oil industry for years to come.
/jlne.ws/2JXI6K8

As the richest get richer, everyone else gets less happy; People’s negative emotions rise along with the wealth of the top 1%
Jan-Emmanuel De Neve and Nick Powdthavee – London School of Economics and Political Science
Research suggests that as the wealth of the richest explodes, the rest of us are left stressed, worried, angry and with lower levels of life satisfaction. The wealth of the richest is exploding. According to research by Oxfam, the richest 62 billionaires have the same amount of wealth as 3.6 billion people ó the poorest half of the world’s population. Last year this figure was 80; two years ago it was 85.
/jlne.ws/2K8SIcB

Draghi Says ECB Could Restart Bond Buying-Program If Required; Comments from central bank chief underline caution in winding down stimulus program
Tom Fairless – WSJ
European Central Bank President Mario Draghi signaled Tuesday that the bank could delay plans announced just last week to end its giant bond-buying program, underlining policy makers’ caution in phasing out easy money as the region’s economy slows and faces new risks.
/jlne.ws/2JZdqbm

Billionaire Howard Marks Thinks the Future of Investing Contains Fewer People
Heather Perlberg and John Gittelsohn – Bloomberg
Billionaire Howard Marks said the rise of index funds and computer-driven trading are reducing the role of people in the markets but creating room for a select few money managers to excel.
/jlne.ws/2K7yeAY

Institutions

Wells Fargo mulls combining wealth management divisions
Reuters
Wells Fargo & Co (WFC.N) said Monday it is considering restructuring and possibly combining two of its retail brokerage businesses, a move to increase efficiency among the two legacy units.
/goo.gl/TuqBwK

Q&A: Barclays head of prime sales in the Americas Betty Gee
Alex Morrell – Business Insider
Barclays is in the early innings of an overhaul of its equities division.
It recently promoted rising star Betty Gee to run prime brokerage sales in the Americas, a key business that she says has increasingly “become a driver of the industry’s equities wallet.”
/read.bi/2JOdqiw

AXA IM restructuring to cut 210 jobs; AXA Investment Managers will cut 160 jobs in France and 40 in the UK as part of organisational restructure.
Hayley McDowell – The Trade
AXA Investment Managers (AXA IM) is set to slash 210 jobs globally this year as part of company-wide restructure to streamline the firm.
/jlne.ws/2I1ebPv

BlackRock Is Offering a Free Perk That Lets It See Inside Your Portfolio; Free risk-assessment tool for financial advisers is part of an effort to sell more funds to individual investors
Sarah Krouse – WSJ
The world’s largest asset manager hopes to sell more investment products to Main Street with one of the oldest strategies in business: the freebie.
/jlne.ws/2I2aA3I

U.S. Banks Could Boost Payouts by $30 Billion After Stress Tests
Yalman Onaran – Bloomberg
Biggest lenders expected to return 96% of profits to investors; Foreign banks being tested for the first time may fail
Harsher Federal Reserve stress tests this year won’t stop U.S. banks from increasing their payouts to shareholders.
/jlne.ws/2I3bQTV

Billionaire’s Folly Becomes Bankers’ Nightmare; What happens when a privately built and managed city goes bust? We may soon find out.
Anto Antony, Dhwani Panda – Bloomberg
This onetime hilltop paradise is becoming for some a hell on earth.
The days of zero crime are over. Garbage collection is sporadic, so litter soils the man-made lake. Storefronts are vacant. Signs of neglect are everywhere: maintenance is late or nonexistent. And that’s for the construction already done. For the unfinished building worksói.e. most of itóthere is little happening.
/jlne.ws/2K2xytm

JPMorgan poaches a star equities trader from Goldman Sachs who was part of team that made $200 million in profit in one day
Dakin Campbell and Alex Morrell – Business Insider
JPMorgan didn’t wait long to replace a recently-departed senior equities trader. The bank has hired Borzu Masoudi from Goldman Sachs as a trader on its US index flow trading desk, according to a person briefed on the appointment. He’ll replace David Kim, who left for Bank of America last month, the person said.
/jlne.ws/2K3HdD2

Credit Suisse is hiring old school traders in a surprise move as rest of Wall Street bets on robots
Dakin Campbell – Business Insider
Credit Suisse is making a contrarian bet on human traders. The Swiss banking giant has hired or promoted a collection of managing directors over the last 18 months as sales traders or other members of its so-called “high touch” offering, Paul Galietto, head of equities for the Americas, told Business Insider.
/jlne.ws/2JZV5hJ

Regions

Capitalism for Dictators 101: North Koreans Study Business Basics; Singapore visits and classes in Pyongyang offer model for Kim Jong Un to loosen reins on economy
Jonathan Cheng – WSJ
What might a more economically open North Korea look like? For some Pyongyang elites, Singaporeóthe city that hosted the U.S.-North Korea summitóis helping to provide an answer.
/jlne.ws/2JXZTka

Xiaomi abandons plans for $5bn China depositary receipt; Decision to drop key plank of IPO suggests wariness of instrument’s onerous terms
Louise Lucas, Christian Parang and Henny Sender – FT
Xiaomi has mothballed what was to have been China’s trailblazing depositary receipt, dealing a blow to Beijing’s bid to bring tech giants home to domestic markets ó and to the smartphone maker’s own fundraising ambitions.
/jlne.ws/2I3nVsq

Emerging Asia Hit by Biggest Foreign Investor Exodus Since 2008
Yumi Teso, Garfield Clinton Reynolds and Adam Haigh – Bloomberg
Stock fund outflows so far this year only exceeded by 2008; Philippine, Thai central banks will meet this week on policy
A falling tide lowers all boats, it seems. Amid an exodus from emerging markets, investors are pulling out of even Asian economies with solid prospects for growth and debt financing.
/jlne.ws/2I2dFk5

Wealthy Asians Are Getting Richer Faster Than Anyone Else
Chanyaporn Chanjaroen – Bloomberg
Rich Asians got richer faster than anyone else in the world last year. Wealth assets held by high-net-worth individuals in the Asia-Pacific region jumped almost 15 percent to $21.6 trillion in 2017, according to a Capgemini SE report released Tuesday. Accelerating economic growth and equity market rallies helped push the global total to a record $70.2 trillion, the World Wealth Report showed.
/jlne.ws/2I5Yw1q

Brexit

New Brexit defeat for government in Lords
BBC
MPs will vote again on how much of a say Parliament should have on Brexit after another House of Lords defeat for the government.
/bbc.in/2MAc3S0

Brexit deal unlikely until year-end as officials revise expectations; Concern as timetable slips over Irish border and political disarray at Westminster
James Blitz and George Parker – FT
The Brexit negotiations are unlikely to reach any kind of conclusion until the end of the year because of continuing deadlock between the UK and EU over the Irish border and mounting political disarray at Westminster, said officials involved in the talks.
/jlne.ws/2I1HCAX

Miscellaneous

Counselling is better than outright firing an underperforming employee
The person may improve and you get to invest in profitability, not legal fees, write Heather Barry Kappes and William Barry
London School of Economics and Political Science
Utilizing new technology, combined with aggressive and innovative marketing, your business has significantly expanded over the last few years. You’ve attracted talented staff who are poised to take the company to even greater heights. You want to give them rein and let them run.
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John Lothian Newsletter

So you want to know what’s happening in the financial markets?

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past Newsletters

Cboe Plans to Launch Enhanced Block Trading Service in Canada

Cboe Plans to Launch Enhanced Block Trading Service in Canada

First Read $46,041/$300,000 (15.3%) ++++ Hits & Takes John Lothian & JLN Staff Today JLN has a video interview with FIA President & CEO Walt Lukken and FIA Tech President & CEO Nick Solinger about the deal announced yesterday for 10 global banks to...

Ten global clearing firms make strategic investment in FIA Tech

Ten global clearing firms make strategic investment in FIA Tech

First Read $46,041/$300,000 (15.3%) ++++ Hits & Takes John Lothian & JLN Staff I am having a virtual fireside chat with former CFTC Chairman Chris Giancarlo today as part of the Chicago Bar Association Annual Seminar. Today Euronext launched its Euronext...

Apollo, Ares and Oaktree Team Up on Initiative to Lure Black Talent

Apollo, Ares and Oaktree Team Up on Initiative to Lure Black Talent

First Read $42,416/$300,000 (14.1%) ++++ Hits & Takes John Lothian & JLN Staff Longtime industry executive K. James Kleinops has passed away, his son Jeffrey shared on Facebook. Condolences to his friends and family. -- Facebook JLN is working on its...

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past JLN Newsletters

Market Narratives Have Pushed Aside Fundamentals

Market Narratives Have Pushed Aside Fundamentals

First Read $46,041/$300,000 (15.3%) ++++ Hits & Takes John Lothian & JLN Staff We have a new and improved version of The Spread today. We have overhauled our approach to this video series and have the whole JLN team contributing to it. Suzanne Cosgrove has...

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