Ken Griffin’s Virus Plan Now Includes Emergency Trading Site in Florida; Virus Market Mayhem Makes Insider Info More Valuable Than Ever

Apr 2, 2020

First Read

Hits & Takes
By John Lothian & JLN Staff

Not surprisingly, the OCC recorded its highest volume month ever in March, with total cleared contract volume at 670,646,998 contracts, the U.S. equity options industry’s highest month ever – up 62.8 percent from March 2019.

CME Group had a record March and first quarter with a record average daily volume (ADV) of 32.1 million contracts during the month of March, up 68% from March 2019. First-quarter 2020 ADV reached a record 27 million contracts, an increase of 45% from first-quarter 2019.

Rich Mackey has left Bakkt Clearing, where he was president. He is now a managing director at Prime Trading, LLC, a proprietary trading firm. He participated in our MarketsWiki Education program a couple of years ago.

Rory O’Kane is now managing director at Simplex Investments. He was previously
a senior vice president of Two Sigma.

Aite Group co-founder and research director Gwenn Bézard and their team of analysts are holding a webinar this Friday, April 3 at 10 a.m. ET where they will discuss: “Navigating the COVID-19 Crisis: Challenges and Opportunities in Financial Services.”

The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced a monthly volume record of $55.829 billion during March, traded across all AFX products. This surpasses a previous monthly volume record of $46.695 billion set during the month of December 2019, marking a 19.6 percent increase.

The Dream Exchange is holding a webinar on the subject of “The Future of Liquidity for Private Companies and Investors” tomorrow at 2 PM EST.

When in a Zoom meeting in gallery style, do you ever feel like you are a member of the Brady Bunch or on Hollywood Squares?


Derivatives daily average volume at the Singapore Exchange (SGX) rose 23% month-on-month in March, to 1,526,343 contracts, SGX reported in an email. SGX has also seen increased activity during its overnight (T+1) session, with almost a quarter of SGX futures volumes traded in the T+1 session across all asset classes.~SR


JLN Special Report: Chicago Trading Community Faces Off In Spoofing Fight

In our special report about spoofing, “Chicago Trading Community Faces Off In Spoofing Fight,” the team at John Lothian News digs into one of the most controversial trading infractions since futures trading moved out of the trading pits. We started by inviting some traders, lawyers and software experts to discuss their views of current trends in anti-spoofing regulation. Then we looked at a couple of the major criminal cases, whose hallmarks were either brazenness or sheer volumes. Attorney Renato Mariotti, who as a government attorney successfully led the first criminal spoofing prosecution, contributed an essay that contains well-considered advice for firms and their traders in this era of aggressive enforcement.

Read the article HERE


OCC March Total Volume Up 62.8 Percent from a Year Ago – Highest Volume Month Ever for U.S. Equity Options Industry
OCC, the world’s largest equity derivatives clearing organization, announced today that March 2020 total cleared contract volume was 670,646,998 contracts, the U.S. equity options industry’s highest month ever – up 62.8 percent from March 2019. This exceeds the previous record of 568,899,108 cleared contracts set in February 2020. OCC’s year-to-date average daily total cleared contract volume is 28,407,644 contracts.

******It would have been nice to celebrate these big numbers in Puerto Rico at the Options Industry Conference. Maybe next year.~JJL


CME Group Reports All-Time High ADV for March and First-Quarter 2020
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today reported its March and first-quarter 2020 market statistics, showing it reached a record average daily volume (ADV) of 32.1 million contracts during the month of March, up 68% from March 2019. First-quarter 2020 ADV reached a record 27 million contracts, an increase of 45% from first-quarter 2019. Open interest at the end of March was 123 million contracts. Market statistics are available online in greater detail HERE

*****Big numbers from the big exchange.~JJL


Goldman Sachs Commits $300 Million to Support Communities and Small Business
Goldman Sachs
Small Business Stimulus Package of $250 Million in Emergency Loans and $25 Million in Grants to Community Development Financial Institutions and other Mission-Driven Lenders; $25 Million COVID-19 Relief Fund to Support Hardest Hit Communities
The Goldman Sachs Group, Inc. today announced it will deliver $300 million across two separate initiatives to help small businesses and communities around the world navigate the current health and economic crisis. Goldman Sachs has committed:

*****Thank you. Any copycats?~JJL


Wednesday’s Top Three
Our top story Wednesday was the JLN Special Report: Chicago Trading Community Faces Off In Spoofing Fight by Thom Thompson and Suzanne Cosgrove et al. It’s a comprehensive look at current spoofing practices and regulation/enforcement. Second was A Coronavirus Fix That Passes the Smell Test, a Bloomberg Opinion piece. (Losing your sense of smell is one of the signs of the virus, in case you hadn’t heard.) Third was Renaissance Technologies hedge fund takes 17 percent hit due to coronavirus, from the New York Post.


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Lead Stories

Ken Griffin’s Virus Plan Now Includes Emergency Trading Site in Florida
Liz McCormick – Bloomberg
Market-maker Citadel Securities opens Palm Beach trading floor; Facility opened two days before Wednesday’s stay-at-home order
Citadel Securities this week opened an office in Florida to help ensure billionaire Ken Griffin’s giant trading firm can continue at full capacity during the coronavirus pandemic — and cope with the explosion in volume the illness has spurred.

Virus Market Mayhem Makes Insider Info More Valuable Than Ever
Gaspard Sebag and Hugo Miller – Bloomberg
Working from home creates challenges for insider-trading cops
Market abuse probes often follow financial crises, lawyers say
The coronavirus pandemic may present an opportunity for insider trading — and a challenge for those trying to prevent it. The disruption means executives and back office staff may fall through the cracks of compliance operations and employees given new areas of responsibilities to cover for ill colleagues.

Statement from HM Treasury and the Prudential Regulation Authority on the implementation of the Basel 3.1 standards
UK Government
HM Treasury and the Prudential Regulation Authority (PRA) welcome the announcement made on 27 March by the Group of Central Bank Governors and Heads of Supervision (GHOS), delaying the implementation of the Basel 3.1 standards by one year.

When Volatility Surges, SEC’s Trade-Monitoring System Has Struggled; Internal agency emails point to data delays and outages in system designed to analyze unexpected market swings
Cezary Podkul – WSJ
The stock market is gyrating wildly but the Securities and Exchange Commission may not have a complete picture of what’s going on. A decade ago, a “flash crash” in the stock market shocked investors and drove the SEC to try to improve its ability to monitor unexpected swings in trading.

How the Muni Market Became the Epicenter of the Liquidity Crisis; A concentration of power and risk has resulted from a fundamental shift in how municipal bonds are bought and sold
Heather Gillers and Gunjan Banerji – WSJ
The coronavirus triggered a liquidity crisis in municipal bonds, but the volatility that resulted has been brewing for a decade. Desperate sellers across most markets sold assets at deep discounts last month as the spreading new coronavirus left investors fearful and hungry for cash. Perhaps no investment flipped from coveted haven to spurned hot potato as quickly as municipal bonds.

Fed eases rule constricting capital for trading firms; The Federal Reserve provided banks with capital requirement leeway that Cboe Global Markets and Chicago trading firms said was critical to relieving pressure amid coronavirus-induced market volatility.
Lynne Marek – Crain’s Chicago Business
Options exchanges and Chicago trading firms got the relief they were seeking when the Federal Reserve gave its blessing of early implementation of rules that ease some capital requirements for banks.

‘We are not going to go back’: Tradeweb’s CEO explains why working from home is a game changer for the $1 trillion-a-day marketplace
Dan DeFrancesco – Business Insider
The CEO of a company that oversees more than $1 trillion in trades on its platforms every day said successfully having nearly its entire staff work remotely could lead to significant changes in the way it operates for the long term.

Is This The End of the NYSE Floor?
Jeff Bacidore – Traders Magazine
I began my non-academic career in the Research Department at the NYSE, during the Dick Grasso Era. Back then, the Dow was below 10,000 – and the floor was packed with people. It was not unusual to see a lion on the floor of the Exchange, beach volleyball games on Broad Street, and celebrity visits almost daily. (My own brush with greatness was tripping over Jenna Elfman in the Blue Room of the NYSE trading floor. Had I fallen harder, I might have been able to sue and get some of that “Greg and Dharma” money. But unfortunately, only my ego was bruised).

The Financial Market’s Stress Is All About the Dollar; The critical faultline in the selloff has been the sudden strength of the greenback, as banks and investors liquidate assets and scramble for cash.
Marcus Ashworth – Bloomberg
Good riddance to the worst first quarter in history. But that doesn’t guarantee Spring sunshine and flowers as winter ends. Eminent investors such as Oaktree Capital Group LLC co-founder Howard Marks and DoubleLine Capital’s Jeffrey Gundlach are warning that the worst may not be over. April really could be the cruelest month for equities as a brief bear market rally peters out and the lows are tested again. Until there’s evidence that the worst of the virus contamination is under control, the economy and financial markets are at its mercy.

TMX Forges Ahead to Offer Round-the-Clock Derivatives; Trading Despite the coronavirus, the exchange is on track with plans to offer near 24-hour derivatives trading, new interest rate contracts, and increased transparency into ESG risks.
Rebecca Natale – Waters Technology
TMX Group will continue with plans to extend market hours and release products in 2020 and 2021, says Luc Fortin, president and CEO of the Montreal Exchange (MX) and TMX Group’s global head of trading.

Big Banks Get Fed Blessing to Extend Leverage
Jesse Hamilton – Bloomberg
Fed relaxes key limit on level of debt Wall Street can take on; Fundamental leverage ratio was part of response to 2008 crisis
The Federal Reserve will let Wall Street banks take on more leverage so they can absorb a severe lack of liquidity for Treasuries and a surge in customer deposits amid the coronavirus pandemic.

Why testing offers a way to end the lockdowns; Widespread screening will be complex and costly but crucial
The editorial board – FT
More than a third of the world’s population has been urged to stay at home. Stock markets have collapsed and authorities have thrown vast sums of money at the global economy to stop it from plunging into depression. Yet the most chilling aspect of the coronavirus crisis gripping governments worldwide is uncertainty.

Treasury Department Selects Wall Street Banks to Advise on Airline Aid; PJT Partners, Moelis, Perella Weinberg Partners expected to be tapped
Cara Lombardo and Liz Hoffman – WSJ
The Treasury Department plans to hire three Wall Street banks for advice on doling out tens of billions of dollars in aid to the airline industry, which is hemorrhaging cash as a result of the coronavirus pandemic.

Yutaka Imanishi appointed Head of Japan, LCH
Responsible for LCH’s business in Japan; Appointment demonstrates LCH’s long-term commitment to Japan and the wider Asia-Pacific region; LCH is licensed by Japanese Financial Services Agency for offering clearing services of non-Yen IRS and FX non-deriverable forwards (NDFs) to Japanese financial insititutions
LCH, a leading global clearing house, today announced that Yutaka Imanishi has been appointed Head of Japan, LCH, effective immediately. Based in Tokyo, Mr Imanishi reports to Kate Birchall, Head of Asia Pacific, LCH.

CHI-CAP Supports the Community
Chicago Capital
Chicago Capital has committed $100,000 to help those impacted by the Coronavirus COVID-19. The rapid spread of the virus and related containment efforts have been a shock to business and family. The virus has impacted our lives in a variety of ways and, by now, many of us know someone who has become ill.

Exchanges, OTC and Clearing

LBMA and CME Group comment on healthy gold stocks in New York and London
CME Group and LBMA are reaching out to global market participants to ensure they have the latest information and resources, and will continue to coordinate efforts as market circumstances evolve. Together, both CME Group and LBMA are actively taking measures to ensure the continued efficient operation of global gold markets during this unprecedented time.

OCC March Total Volume Up 62.8 Percent from a Year Ago – Highest Volume Month Ever for U.S. Equity Options Industry
OCC, the world’s largest equity derivatives clearing organization, announced today that March 2020 total cleared contract volume was 670,646,998 contracts, the U.S. equity options industry’s highest month ever – up 62.8 percent from March 2019. This exceeds the previous record of 568,899,108 cleared contracts set in February 2020. OCC’s year-to-date average daily total cleared contract volume is 28,407,644 contracts.

Brokers bolster algo access to dark pools and liquidity for buy-side; The long-only results of The TRADE’s 2020 Algorithmic Trading Survey show that dark pool access remains a key focus for asset managers, as providers see largest jump in score in connecting the buy-side to dark liquidity.
Editors – The Trade
On the whole, 2019 was a very good year for global equity markets. Passive investing and indexing continued to tick along while the major US indices recorded new highs—the year ended with three rate cuts in the US helping to fuel the largest gains since 2013. Likewise, European markets had their best year in a decade. Many of the fears worrying investors never realised—the global recession never arrived, trade wars didn’t deter investment, Brexit didn’t implode the market, and World War III wasn’t on the horizon after all. Taken together, a robust market, stringent best execution requirements, and improved decision support created a favorable environment for algorithms.

Former CME executive director named head of Japan at LCH; LCH has appointed former executive director for optimisation at CME Group in Japan to head up its business in the country.
Kiays Khalil – The Trade
London-based clearing house LCH has hired an executive director from CME Group, Yutaka Imanishi, to head up its business in Japan. Imanishi has been appointed head of Japan at LCH effective immediately, and will be responsible for LCH’s business in Japan and its central counterparties (CCP) office in Tokyo. He reports to Kate Birchall, head of Asia Pacific at LCH.

MarketAxess expands global municipal bond liquidity amid increased demand; Following record activity last year, MarketAxess has expanded access to US taxable municipal bond liquidity to the UK, Europe and Singapore.
Kiays Khalil – The Trade
MarketAxess has expanded access to US taxable municipal bond liquidity through its regulated venues in the UK, Europe and Singapore, after seeing record municipal bond trading activity last year.

MGEX Announces Record-Breaking March
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announces its best March and the fifth best overall month in MGEX history with a total of 277,629 contracts. This new record shatters the previous record by 37%, previously set in 2017. March’s volume is also 6% higher than February


CloudMargin Names David White Chief Commercial Officer
New Role to Fuel Growth, Oversee Sales and Marketing
Press Release
CloudMargin, creator of the world’s first and only collateral and margin management solution native to the cloud, today announced that David G. White has just joined the firm in the newly created role of Chief Commercial Officer. White has 14 years of capital markets experience in over-the-counter (OTC) derivatives markets and supporting technology.

BMLL collaborates with EOSE to bring derived data product to wider market; BMLL has teamed up with EOSE which will act as an outsourced sales resource to support the analytics firm’s data distribution.
Kiays Khalil – The Trade
BMLL Technologies has entered into an agreement with outsourced market data services provider EOSE to distribute its Derived Data Service to new clients and industry players.

SS&C reaches milestone for front-to-back investment operations platform; SS&C has expanded Eze Eclipse to the EMEA and Asia-Pacific regions, taking the total number of clients of the front-to-back platform to over 110.
Joe Parsons – The Trade
SS&C Technologies has onboarded more than 110 clients to its front-to-back Eze Eclispse platform since its launch last year.

Refinitiv calls for standardised alternative data ecosystem; Alternative data adoption has expanded outside of hedge funds to the broader investment community, increasing the need for standards and best practices.
Hayley McDowell – The Trade
Refinitiv has highlighted the need for more standardised processes in the licensing and distribution of alternative data, as it calls on the industry to produce an open ecosystem.

Fintechs eye $15b fighting fund as Judo bags cheque
James Eyers, James Thomson and Jonathan Shapiro – Financial Review
Non-bank lenders Prospa, Zip and Flexigroup are among a group of fintechs considering applying for government support under a $15 billion structured finance fund, which has been set up to ensure appropriately priced credit flows into competitors of the major banks.

Colt provides full hosting capability to three Taiwan exchanges
Colt Technology Services, a leading provider of agile, high-bandwidth connectivity solutions, today announced that it now provides full hosting capability to three Taiwan exchanges in response to the growing demand from Taiwan exchanges after the Taiwan Stock Exchange Corporation (TWSE) announced the implementation of continuous trading from 23 March 2020.


Biggest Winner in Crypto Crash Is Most Controversial Coin
Olga Kharif – Bloomberg
Tether’s market cap surged by nearly $2 billion amid woes; Other stablecoins like USD Coin and Paxos have also benefited
With most asset classes hurting during the coronavirus pandemic, one cryptocurrency has emerged as the biggest winner in that sector: The token known as Tether.

Coronavirus adds fuel to the Digital Dollar debate
Robert Hackett and David Z. Morris – Fortune
Should banking have a public infrastructure option? Congress is beginning to think so. Last week early drafts of several coronavirus-related stimulus bills included provisions for “digital dollars” and “digital dollar wallets.” Put forward by House Financial Services Committee Chair Maxine Waters and House Speaker Nancy Pelosi, the initial proposals would have offered Americans access to the electronic equivalent of cash through free bank accounts connected directly—and unprecedentedly—to the Federal Reserve.

FATF Says US ‘Largely Compliant’ With Virtual Currency Recommendations
Danny Nelson – Coindesk
The Financial Action Task Force (FATF) has rated the U.S. “largely compliant” with its revised criteria for preventing money laundering and terrorist financing (AML/CTF) through digital assets. The intergovernmental standards group published its assessment of the U.S.’s compliance with its banking rules, evaluating laws and regulations around digital assets and other areas on Tuesday. That’s not to say the U.S. is completely in line with the current “New Technologies” standards, known by FATF as “Recommendation 15,” though. The most powerful member of FATF’s global financial crimes network retains “minor deficiencies.”

SEC delays decision on tZERO’s proposed security token exchange
Yogita Khatri – The Block
The U.S. Securities and Exchange Commission (SEC) has delayed the decision of approving or disapproving tZERO’s proposed security token exchange. In a letter published Wednesday, the SEC said it is looking for more comments on the proposed Boston Security Token Exchange (BSTX) – a joint venture between BOX Digital and tZERO – which plans to provide a regulated trading platform for security tokens.

Crypto Firm Diginex Hires Ex-UBS Executive Yoon as Asia Chairman
Eric Lam and Viren Vaghela – Bloomberg
Diginex Ltd., a Hong Kong-based cryptocurrency and blockchain services company, has hired former UBS Group AG executive Chi-Won Yoon ?as its chairman of Asia. Yoon was most recently vice chairman of UBS Wealth Management and announced his retirement from the firm last year, Diginex said in a statement viewed by Bloomberg. He had previously held roles including president and chief executive of UBS AG, Asia Pacific, and was a member of the UBS Group executive board from 2009 to 2015, the statement said.

Judge Denies Telegram’s Request to Issue Gram Tokens to Non-US Investors
Anna Baydakova – Coindesk
A federal judge has denied Telegram’s request to issue its forthcoming gram tokens to non-U.S. investors. U.S. District Judge P. Kevin Castel, of the Southern District of New York, wrote on Wednesday that Telegram’s claim it could issue its tokens to investors but ensure these tokens did not end up in U.S. investors’ hands was unconvincing. He rejected a request by the messaging platform to clarify his earlier preliminary injunction preventing any gram issuance.

Bitcoin payments on dark markets most impacted by coronavirus pandemic: Chainalysis report
Yilun Cheng – The Block
A report from blockchain analysis Chainalysis this week indicates that the correlation between bitcoin spending and the digital asset’s price went through dramatic changes amid the recent market volatility. The report published on March 30 broke down the impact of the coronavirus on the consumer end of bitcoin. Although purchases related to merchant services, gambling services, the darknet market all underwent a decline as expected, their correlation with bitcoin’s price differs for each service category and has shifted in surprising ways, according to the report.

Bitfury Latest to Donate Crypto Mining Power to Coronavirus Research
Paddy Baker – Coindesk
Blockchain tech firm Bitfury has donated some of its GPU-based computing power towards coronavirus research. The Amsterdam-based firm said Tuesday it had dedicated its GPU computer nodes to the “Folding@home” coronavirus research project. Run by Washington University, the project has been asking for computer processing power to run simulations for coronavirus protein structure that could ultimately help develop a vaccine.

Binance is launching its own crypto mining pool
Yilun Cheng – The Block
Cryptocurrency exchange company Binance is launching a crypto mining pool. On Tuesday, Russian news outlet Coinlife first reported the exchange’s plan to build a new bitcoin mining pool. The move was later confirmed by Binance CEO Changpeng Zhao in a Wednesday tweet. Additionally, Zhao announced that there will be a series of new additions to Binance’s finance product line-up including staking, savings, and loans.

Could Coronavirus Kill the Bitcoin Mining Industry?
Rachel McIntosh – Finance Magnates
Depending on where you are in the world, you may be on week four, eight, or even thirteen of coronavirus quarantine; while video conferencing in pajama pants may be starting to feel a bit more normal, the world is keenly aware that the full effects and implications of the quarantine have not yet been felt, and will not be fully realized for months – or even years – to come.

Blockstack Wins Patent for Its Dapp Single Sign-On Product
Danny Nelson – Coindesk
Blockstack, the control-your-data decentralized web developer, has patented the process behind its single sign-on for every dapp system, Blockstack Auth. The patent covers Blockstack’s method for cryptographically signing into dapps with a single digital identity, without requiring a third party to authenticate. The system received USPTO’s approval on March 24 following an uncharacteristically short eight month wait – most applications sit for about 32 months, according to Erickson Law Group – and exactly three years after Blockstack’s 2017 release of the Auth developer version.


White House economists tried warning the Trump administration a pandemic would kill up to 500,000 Americans and cost the economy $4 trillion
Joseph Zeballos-Roig – Business Insider
White House economists published a study last September warning the Trump administration that a pandemic could cost up to 500,000 lives in the US and inflict $4 trillion of damage to the American economy.

U.K. and U.S. Acted Too Late on Coronavirus, Says Stanchart Boss
Harry Wilson and Francine Lacqua – Bloomberg
Bill Winters hits out at lockdown delays to control pandemic; Winters says Asian economies will recover sooner than West
Standard Chartered Plc Chief Executive Officer Bill Winters said the authorities in London and Washington have been too slow in ordering the type of lockdown that China used to control the Covid-19 outbreak.

EU Says It Should Have Acted Faster to Help Italy After Outbreak
John Ainger and John Follain – Bloomberg
Von der Leyen says bloc was late to see threat, slow to act; Italian official rips Commerzbank note on country’s bonds
Europe showed signs of rallying around virus-stricken Italy, even as its leaders fought to ward off a retreat from their country’s sovereign bonds.

Biden Calls for Democratic Convention to Be Delayed Because of Virus; The former vice president said the convention should be moved from mid-July to August, becoming the most prominent Democrat to urge such a postponement.
Reid J. Epstein – WSJ
Former Vice President Joseph R. Biden Jr. on Wednesday night called for moving the Democratic National Convention from mid-July to August, making him the most prominent member of his party to say the convention must be rescheduled because of the coronavirus outbreak.

Dream co-owner Sen. Kelly Loeffler, under fire for stock moves, discloses millions more in retail, medical gear
Cassandra Negley – Yahoo Sports
U.S. Senator Kelly Loeffler (R-Ga.), co-owner of the Atlanta Dream, disclosed more than $1.4 million additional stock purchases and sales while under fire for allegations of insider trading, the Atlanta Journal-Constitution reported.

Sen. Kelly Loeffler Faces Renewed Scrutiny For COVID-19 Stock Transactions; The Georgia Senator came under fire last month after she and her husband dumped substantial portions of their portfolio after a series of private congressional briefings on the then-burgeoning pandemic.
Associated Press
The husband of Georgia Sen. Kelly Loeffler recently acquired as much as $415,000 in stock in DuPont de Nemours, a chemical company that manufactures protective equipment in exceedingly high demand because of the coronavirus pandemic.

Alleged Stock-Dumping GOP Senator’s Coronavirus PSA Does Not Go Down Well
Lee Moran
Sen. Kelly Loeffler (R-Ga.) — who allegedly sold stocks ahead of the coronavirus crisis after attending closed-door congressional briefings about its looming threat — encouraged people to stay strong in a video released online Wednesday.


Court winds up Merlin Diamonds Limited
Upon an application made by ASIC, the Federal Court of Australia has made orders to wind up Merlin Diamonds Limited (Merlin) on insolvency grounds and appointed Mr Salvatore Algeri and Mr Timothy Norman, of Deloitte Financial Advisory Pty Ltd, as joint and several liquidators.

ESMA publishes 2019 report on enforcement of corporate disclosure
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, today publishes its Annual Report on enforcement and regulatory activities related to corporate reporting within the European Economic Area (EEA).The Report presents the 2019 activities of ESMA and of European accounting enforcers when examining compliance of financial and non-financial statements provided by European issuers.

Multi-Factor Authentication (MFA)
Multi-factor authentication (MFA) is an additional layer of security beyond the user ID and password that enhances security of your account, using another device to verify identity. It will be required for all Super Account Administrators (SAAs) and Account Administrators (AAs) who have access to FINRA applications. This additional security control is provided by the vendor Duo (Cisco), and users must enroll with a landline phone, smartphone or tablet to initiate the MFA process and to use this service going forward. Eventually, all users will have an opportunity to enroll in the Duo MFA service to access various FINRA applications.

Proposed Rule Change to Provide Members with Additional Time to Comply with the Amendments Adopted by SR-FINRA-2019-014
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to provide members with additional time to comply with the amendments adopted by SR-FINRA-2019-014 related to transactions in U.S. Treasury Securities executed to hedge certain primary market transactions

SEC Obtains Judgment Against Promoter Who Fraudulently Raised $3 Million for Christian Concerts; Highlights Issue of Fraud in Faith-Based Communities
The Securities and Exchange Commission has obtained a final judgment against Christian concert promoter Jeffrey E. Wall, of Freeport, Maine, and his business, The Lighthouse Events LLC.

FCA proposes temporary financial relief for customers impacted by coronavirus
The Financial Conduct Authority (FCA) has today proposed a range of targeted temporary measures designed as a stop-gap to quickly support users of certain consumer credit products who are facing a financial impact because of the exceptional circumstances arising from coronavirus.

Proposed amendments to the Volcker Rule could be a lifeline for venture firms hit by market downturn
Jonathan Shieber -,TechCrunch
In the wake of the financial crisis, Congress passed regulations limiting the types of investments that banks could make into private equity and venture capital funds. As cash strapped investors pull back on commitments to venture funds given the precipitous drop of public market stocks, loosening restrictions on the how banks invest cash could be a lifeline for venture funds.

Investing and Trading

Just Like That, All the Confidence in the Stock Market Is Zapped
Elena Popina – Bloomberg
Stocks sink more than 4%, putting a dent in rally hopes; Technical analysts point to Fibonacci levels for support
A few days ago, it seemed like all people wanted to talk about in the stock market was the sturdiness of last week’s low. It took one session and a 4.4% plunge in the S&P 500 to give the confidence a serious shake.

Virus Sell-Off Turns Bonds Into ‘Fallen Angels.’ Here’s Why Downgrades Matter
Molly Smith – Bloomberg
Downgrades have been pouring down on the bond market like cold March rain since pandemic-driven lockdowns triggered a global sell-off. The last time the major credit-rating agencies marked so many issues down to junk status was during the 2008-2009 financial crisis. This time around, the downgrades pushed more than $92 billion of bonds into so-called fallen angel status in March alone, with more threatening to follow — a move that can have serious financial consequences for borrowers. The downgrades also revived questions about the utility of raters whose actions come after the fact, like a forecast that arrives once you’re already soaked.

Fed’s New Repo Measures Followed a $100 Billion Treasury Exodus
Stephen Spratt and Liz McCormick – Bloomberg
Record selling by official accounts seen in Fed data for March; Fed’s latest repo measures seen as an effort to halt fire sale
The Federal Reserve is trying to call time on a fire sale of Treasuries by foreign governments and central banks. Foreign official holders of Treasuries dumped more than $100 billion in the three weeks to March 25, on course for the biggest monthly drop on record, according to weekly Fed custody data that captures much of the pandemic-fueled turmoil. They joined others seeking to unload government debt globally to raise cash amid the volatility, according to traders and market makers familiar with the transactions. Countries reliant on oil exports and smaller Asian economies have been selling U.S. debt, and central banks have been primarily offloading older, less-liquid Treasuries, these people said.

How the Coronavirus Has Broken the Global Economy
Stephanie Flanders and Scott Lanman – Bloomberg
In a matter of weeks the Covid-19 virus has turned the world upside down. In the start of a new season of Stephanomics, James Mayger and Zhu Lin report from China – the original epicenter of the virus – on how truck drivers there are trying to get back to normal. Then host Stephanie Flanders asks US economist Adam Posen how the economics profession has risen to the challenge of the crisis – and whether the right advice has been getting through to governments.

Gold Dealers Report Big Shortages of Small Bars and Coins
Elena Mazneva – Bloomberg
Small gold bars and coins are in high demand from consumers; The size of different products is a key reason for the crunch
When people are worried about the future they turn to gold to protect their savings. That’s rarely been more true than today. Surging demand and disruptions from the coronavirus pandemic have created a shortage of the small gold bars most popular with consumers. Those who do manage to get their hands on metal have to pay up – – well above the per-ounce prices being quoted on financial markets in London and New York.

The Virus Is Bending Most Markets. Will Renewable Energy Break? It’s worth watching the disruption playing out in a few corporate sustainability markets to see how bad things will get.
Nathaniel Bullard – Bloomberg
Markets of every sort, in every part of the world, are responding to the shock of Covid-19. Almost nothing is left untouched, whether it’s consumer-facing, business-to-business, a luxury, or a commodity. Looking across a number of markets this week, there are two states: bending and breaking.

British Airways set to suspend 32,000 staff amid coronavirus crisis; Carrier is scrambling to cut costs as virus destroys demand for air travel
Tanya Powley – FT
British Airways is expected to announce plans to suspend about 32,000 employees as the airline looks to slash costs in the wake of the coronavirus pandemic.

In the coronavirus crisis investors cannot rely on the old playbooks; The tumult over the viral outbreak is like nothing markets have ever witnessed
Robin Wigglesworth – FT
Wall Street loves a good playbook. Perhaps it is the prevalence of former jocks on trading floors, but whenever markets become turbulent they look at what worked in similar crises and dust off the same strategies. But the coronavirus crisis is confounding because it looks at once like a mosaic of many previous crises — and also completely new.


Banker Bonuses Are a Pre-Coronavirus Thing; Cash bonuses aren’t going to fly while regulators are going easy on bank capital. Stock rewards aren’t as welcome, but they may not be a disaster.
Elisa Martinuzzi – Bloomberg
Financial regulators are applying all of the lessons of the 2008 credit crisis at record speed. In the past few weeks, they’ve worked with central banks to pump liquidity into markets and to make it easier for banks to lend. It’s essential now that lenders keep providing money to companies and households whose incomes have evaporated in the Covid-19 lockdowns. If the banks stop functioning, what hope for the rest of the economy?

Deutsche Bank Mulls Scrapping Management Bonuses This Year
Steven Arons – Bloomberg
Other measures also being discussed in response to crisis; Debate comes as regulators pressure banks to be prudent
Deutsche Bank AG is considering scrapping bonuses for top management this year as regulators urge banks to preserve capital and keep lending through the coronavirus pandemic.

Norway Wealth Fund Lost Record $113 Billion in Stock Slump
Mikael Holter – Bloomberg
Norway’s sovereign wealth fund lost a record 1.17 trillion kroner ($113 billion) in the first quarter as the coronavirus pandemic roiled stock markets.

Oil Firms Ramp Up Bond Issuance as Goldman Offers Hope
Hannah Benjamin and Ameya Karve – Bloomberg
BP, Shell, OMV offer triple-tranche euro bonds in sales rush; High-grade credit spreads may have peaked in March: Goldman
Oil firms are leading another hectic day for new bond sales in Europe, with Goldman Sachs Group Inc. predicting the worst may be over at least for the high-grade portion of credit markets.

Nuveen’s Miller Dominated Junk Muni Funds, Then They Crashed; The star fund manager says he’s made it through tough times before and expects a rebound this time, too.
Danielle Moran and Amanda Albright – Bloomberg
For more than two decades, John Miller helped to build the high-yield municipal bond market. In two weeks in early March, he watched it collapse.

Main Street Banks Are About to Show Just How Much Risk They Face
Hannah Levitt and Anders Melin – Bloomberg
First-quarter earnings loom as pandemic tests capital buffers; Loans of all kinds imperiled with millions of jobs destroyed
Executives at regional U.S. banks often say they’re only going to do as well as their clients. That’s now more true than ever. Investors are focused on which firms are exposed to the wrong industries as the coronavirus pandemic roils the economy, and they plan to scour for clues as the lenders report results in coming weeks. Bank stocks have plunged as the duration and severity of the crisis remain uncertain. The KBW Regional Banking Index tumbled 41% during the first three months of the year, the worst quarter in its history of more than two decades.

This Hedge Fund Saw Risks of Coronavirus Early. Now It’s Up 36%; Chris Hansen’s Valiant boosted hedges and bet against companies it viewed as more likely to be hurt by an economic slowdown
Juliet Chung – WSJ
Chris Hansen saw it coming. Mr. Hansen, who runs San Francisco hedge fund Valiant Capital Management, had an early conviction the novel coronavirus would wreak havoc on the global economy. Mr. Hansen and his team homed in early on the risks the virus posed and placed wagers accordingly, said people familiar with the firm. In late January, Valiant boosted its bet against stock indexes as it became more concerned about the virus.


China Concealed Extent of Virus Outbreak, U.S. Intelligence Says; By Nick Wadhams and Jennifer Jacobs – Bloomberg
Report submitted to White House on China’s under-count; U.S. has publicly reported more than twice as many cases
China has concealed the extent of the coronavirus outbreak in its country, under-reporting both total cases and deaths it’s suffered from the disease, the U.S. intelligence community concluded in a classified report to the White House, according to three U.S. officials.

China’s Divorce Spike Is a Warning to Rest of Locked-Down World; Filings started rising in March as couples emerged from quarantine.
Sheridan Prasso – Bloomberg
As the coronavirus raged through China, Ms. Wu, a housewife in her 30s in southern Guangdong province, spent almost two months in isolation with her out-of-work spouse. They fought constantly. Wu, who declined to give her full name because she wants to protect her privacy, ticked off a familiar list of marital irritants, including money (too little), screen time (too much), and housework and child care (not evenly split). One particular annoyance was her husband’s habit of engaging their two children in play in the evening when they were supposed to be going to bed. “He’s the troublemaker in the house,” she says. “I don’t want to endure anymore. We’ve agreed to get a divorce, and the next thing is to find lawyers.”

China-Focused Hedge Funds Risk a Wave of Redemptions
Bei Hu – Bloomberg
About 86% of China funds allow redemptions monthly or more; Fund of funds tend to redeem from less-transparent managers
Credit Suisse Group AG is telling China-focused hedge funds they need to communicate more with investors as concerns grow that redemptions from the region will accelerate amid the market turmoil.

China’s Traders Are Cashing Out as Love for Risky Assets Fades
Bloomberg News
Nation’s companies face threat of slumping external demand; Stock traders prefer to hold cash and assets deemed less risky
Investor credit at China’s brokerages is disappearing at the fastest pace in 10 months as a bleak earnings outlook prompts the country’s investors to conserve cash.

U.K. Rescue Plan Under Strain as 1 Million Turn to Welfare
Joe Mayes and Alex Morales – Bloomberg
950,000 extra universal credit recipients since lockdown began; Ministers warn banks as loans fail to reach companies
Almost one million people have claimed “universal credit” welfare payments in the U.K. in the past two weeks, exposing the massive economic hit from Boris Johnson’s coronavirus lockdown.

Half of All Jobs in Africa Imperiled by Virus Fallout
Prinesha Naidoo – Bloomberg
Africa may be two to three weeks away from the height of a coronavirus outbreak, but its impact is already wreaking havoc on the production and movement of goods and raw materials in, out and around the continent.

Russia’s Bad Bank Should Outlive $27 Billion Clean-Up, CEO Says
Anna Baraulina – Bloomberg
Trust CEO Khabarov says Russia needs a tool for bad assets; Bad debts to grow as spread of coronavirus hurts economy: CEO
The bad-asset bank created when a group of Russia’s biggest private lenders collapsed sees the twin shocks of plunging oil prices and global economic pain wrought by the coronavirus pandemic as a chance to expand.

How the coronavirus threatens Asia-Pacific’s $7tn pensions market; Sector across region hit by fears of panicked mass withdrawals due to pandemic
Jamie Smyth in Sydney, Edward White in Wellington and Leo Lewis – FT
The coronavirus outbreak has piled pressure on Asia-Pacific’s multitrillion-dollar pensions industry, with the pandemic raising fears that retirees could make a panicked dash to withdraw their investments.

Pigs fly in as China replenishes world’s biggest hog herd
Dominique Patton – Reuters
Six planes carrying more than 4,000 high-quality French breeding pigs have arrived in China so far this year, the first of an expected dozens of plane-loads as the world’s top pork producer rebuilds its decimated hog herd.


Where’s Brexit? Canceled Whitehall Meetings Say Delay Inevitable
Joe Mayes – Bloomberg
Meetings with industry postponed as officials are redeployed; Government attention has shifted to fighting coronavirus
Prime Minister Boris Johnson says he won’t delay Britain’s final parting with the European Union at the end of the year. Empty meeting rooms across Whitehall suggest delay is all but inevitable.


City of Chicago Employee Dies From COVID-19, Mayor Announces
NBC Chicago
Chicago Mayor Lori Lightfoot announced Wednesday that a city employee has died from COVID-19. “This sobering moment should remind us that the numbers that we report every day are not mere statistics” Lightfoot said. “They are people whose lives have been forever changed.” Lightfoot declined to offer any information about the employee, but the death marks the latest fatality in what has been the epicenter of Illinois’ coronavirus outbreak. Lightfoot said she did not know the employee personally and did not have contact with him but the city was working to notify all of the man’s colleagues. In Chicago alone, 22 deaths had been reported as of Tuesday among nearly 3,000 confirmed cases.

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