Hits & Takes
By JLN Staff
Leo Melamed was inducted into the Chicago Innovation Hall of Fame last night at the Chicago Innovation Awards Gala, a virtual event as is the case these days. Leo was introduced by CME Group board member Terry Savage. There was a bit of hyperbole in the introductions for Leo, but also a lot of underlying truth. Congratulations to Leo on his latest honor. If you would like to make a donation to the Chicago Innovation Foundation in honor of Leo, or for any other good reason, you can do so HERE.
Fact of the day: there are 13 different synthetic orders types available on the TT platform.
Yesterday we published the video for Bevon Joseph, the second speaker in our MarketsWiki Education World of Opportunity 2020 virtual event on July 22nd. Bevon is the cofounder of The Greenwood Project, which helps bring diversity to the financial industry through helping inner city youth. See the video below.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Bevon Joseph: Closing the Opportunity Gap – MarketsWiki Education World of Opportunity
Bevon Joseph, co-founder of the Greenwood Project, was inspired to learn about financial services when he took his first job in the business as the trading floor “computer guy” for JPMorgan Chase in New York. He went on to work on Wall Street, but didn’t see many people in the field who looked like him. So he and his wife Elois started the Greenwood Project to expose high achieving students on Chicago’s south and west sides to career opportunities in the financial industry. He spoke at the virtual MarketsWiki Education “World of Opportunity 2020” event about why education, mentorship and internships are needed to close the opportunity gap for Black and Latinx students seeking to work in the financial industry.
The China-U.S. Divorce is Going to Hurt
Rosalind Mathieson -Bloomberg
In recent years we’ve learned a new phase: Conscious Uncoupling. The aim is to keep things civil and constructive in a separation. What is increasingly happening with the U.S. and China — three months before an election in America – is more akin to a wrecking ball through a marriage.
*****It is us kids that always get hurt in a geo-political divorce.~JJL
Eurex expands in Taiwan with launch of mini-KOPSI futures; The Financial Supervisory Commission of Taiwan has approved the launch of Eurex mini-KOPSI futures, amid surge in trading volumes so far this year.
Hayley McDowell – The Trade
Exchange operator Eurex has expanded its reach in Taiwan after receiving regulatory approval to launch mini-KOPSI futures. Eurex said it gained approval from the Financial Supervisory Commission (FSC) of Taiwan to launch the global derivatives contracts, allowing buy- and sell-side market participants exposure to the Korean benchmark index KOPSI.
*****This is big little news, or big mini news. It is just big news.~JJL
Paris Braces for One of Worst Heat Waves in More Than a Century
Rudy Ruitenberg – Bloomberg
Paris is facing one of its worst heat waves in more than a century, with daily average temperatures hovering around 30 degrees Celsius (86 degrees Fahrenheit) over a seven-day period and hitting a maximum of 39 degrees on Sunday, according to forecaster Meteo-France.
*****I would not recommend jumping into the Seine to cool off.~JJL
Covid 19 coronavirus: US Government issues New Zealand travel warning due to its ’23 active cases’
The New Zealand Herald
The US Government has warned its citizens to be very cautious about travelling to New Zealand because of our “23 active cases” of Covid-19.
*****They had me at “travel warning.”~JJL
CryptoMarketsWiki Coin of the Week: Ethereum Classic (ETC)
Ethereum Classic, the cryptocurrency created from a fork on Ethereum’s blockchain, suffered multiple “51 percent” attacks yesterday – which are cyber attacks specific to blockchain protocols in which the attackers gain more than 50 percent of the blockchain’s computing power in order to alter the blockchain (so much for immutability!). The first attack occurred on August 1st and the second took place on August 6. The popular exchange Binance confirmed that 4,000 blocks on the ETC blockchain had been altered and that it was halting ETC payouts, withdrawals, and deposits.
Thursday’s Top Three
Our top story Thursday was The Unique U.S. Failure to Control the Virus, from The New York Times. Second was Why Are U.S. Stock Markets Booming When Everything Is So Bleak? from Newsweek. Third was a repeat from Wednesday’s top three, Sen. Kelly Loeffler blasts players on her WNBA team for supporting challenger, from the New York Post.
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Kicking Out Chinese Stocks and WeChat Is Another Nail in the Coffin of U.S.-China Links; The Trump administration’s latest moves against China could have profound impacts. But the winners and losers might not be who they seem.
Mike Bird – WSJ
The White House shot with both barrels at Sino-U.S. financial links Thursday, firing off a plan that could force Chinese companies to give up U.S. listings and executive orders restricting transactions related to ByteDance and Tencent Holdings, TCEHY 0.17% two major Chinese tech companies.
Investors say negative real yields are driving the ‘everything rally’; Concerns start to grow among analysts over the longer-term inflation outlook
Tommy Stubbington and Robin Wigglesworth – FT
A collapse in real yields — the return that bond investors can expect once inflation is taken into account — is rippling through global financial markets and driving record rallies in assets from gold to technology stocks, investors say.
U.S. Moves to Tighten Disclosure Requirements for Chinese Listings
Saleha Mohsin and Jenny Leonard – Bloomberg
Currently listed companies would have until 2022 to comply; Report comes amid rising tensions between U.S. and China
A high-powered group of U.S. regulators said stock exchanges should set new rules that could trigger the delisting of Chinese companies, following mounting concerns that investors are being exposed to frauds. The President’s Working Group on Financial Markets said Thursday that in order to trade on a U.S. exchange, companies must grant American regulators access to their audit work papers. The group hasn’t determined how to enforce the guidelines, said a senior Treasury Department official who briefed reporters on the condition of anonymity. While the final penalty would be removal from U.S. exchanges, the Treasury and Securities and Exchange Commission would establish how binding the mandate is in implementing the rules.
ICE’s Sprecher Boosts Mortgage Business With Ellie Mae Deal
Matthew Leising and Shahien Nasiripour – Bloomberg
Acquisition in cash and stock values Ellie Mae at $11 billion; ICE chief sees ‘obvious’ need for mortgage system overhaul
Jeff Sprecher, chief executive officer of Intercontinental Exchange Inc., continued his foray into the mortgage market with the purchase of cloud-based platform provider Ellie Mae. Atlanta-based ICE, as the company is known, agreed to buy Ellie Mae from private equity firm Thoma Bravo LLC in a deal that values the mortgage-lending platform at about $11 billion. The owner of the New York Stock Exchange will pay a combination of stock and cash for Pleasanton, California-based Ellie Mae, according to a statement Thursday. Further terms weren’t disclosed.
Intercontinental Exchange Enters Definitive Agreement to Acquire Ellie Mae from Thoma Bravo
(NYSE: ICE), a leading operator of global exchanges and clearing Intercontinental Exchange houses and provider of mortgage technology, data and listing services, announced today that it has entered into a definitive agreement to acquire Ellie Mae®, the leading cloud-based platform provider for the mortgage finance industry. The transaction with Ellie Mae, a portfolio company of Thoma Bravo, a leading private equity investment firm, values Ellie Mae at approximately $11 billion. The deal, following ICE’s taking a majority stake in MERS in 2016, purchasing the remainder in 2018, and acquiring Simplifile in 2019, establishes ICE, through its growing ICE Mortgage Services network, as the leading provider of end-to-end electronic workflow solutions serving the evolving U.S. residential mortgage industry.
Cboe US Periodic Auction To Combat Off-Exchange Volumes
Cboe Global Markets is aiming to launch periodic auctions in the US, after success in Europe, as off-exchange trading volume has been increasing. Adam Inzirillo, head of US equities at Cboe Global Markets, told Markets Media: “In the last couple of years, as off-exchange trading volumes have grown, periodic auctions give the public an on-exchange alternative for executing block trades and attracting natural interest.”
LIBOR Transition: Preparing for the End of LIBOR
Andrew Bettwy, Ron D. Franklin, Jinyoung Joo, Peter Martin -Proskauer Rose LLP
For the past several years, loan market participants have been well aware of the anticipated phase-out of the London Interbank Offered Rate (“LIBOR”) as a benchmark for floating rate instruments. Based on current regulatory guidance, the official end of LIBOR may not occur until after the end of 2021, when banks that have participated in the determination of LIBOR will no longer be required to make LIBOR submissions. However, loan market participants are strongly advised to take action now, to ensure their loan documentation permits the efficient replacement of LIBOR with another suitable benchmark rate at the appropriate time.
Coming Next: The Greater Recession; The suspension of federal benefits would create damage almost as terrifying as the economic effects of the coronavirus.
Paul Krugman – NY Times
One pretty good forecasting rule for the coronavirus era has been to take whatever Trump administration officials are saying and assume that the opposite will happen. When President Trump declared in February that the number of cases would soon go close to zero, you knew that a huge pandemic was coming. When Vice President Mike Pence insisted in mid-June that “there isn’t a coronavirus ‘second wave,'” a giant surge in new cases and deaths was clearly imminent.
RJ O’Brien acquires Dubai-based interdealer broker Lombard Forte Securities; Lombard Forte Securities is now part of the RJ O’Brien group as the broker looks to expand its geographic reach.
Hayley McDowell – The Trade
Futures brokerage RJ O’Brien has confirmed it has acquired an interdealer broker based in Dubai as it looks to expand its footprint and products in the region.
Capital markets lawyers sharpen impact investing skills; Pro bono work is evolving to embrace new areas of legal expertise
Thomas Hale – FT
As with any bond, the $12m raised at the start of the year by Singapore’s Impact Investment Exchange to support women’s livelihoods across Asia required extensive legal advice.
Prosecutors suspect Wirecard was looted before collapse; Payments provider ramped up unsecured loans to opaque business partners in Asia to $1bn earlier this year
Olaf Storbeck, Stefania Palma and Dan McCrum – FT
German prosecutors suspect Wirecard was looted before its spectacular collapse in June, with $1bn funnelled to opaque partner companies even as the payments group fought allegations of accounting fraud.
Covid-19 forces rethink on partnerships, office life and digitalisation; Lawyers should expect career changes and more working from home
Kate Beioley – FT
A lack of pen and paper may seem like the least of a lawyer’s concerns in the 21st century. But for the Asian firms plunged into the coronavirus pandemic this year, an inability to sign documents in person was one example of the unique kind of headache slowing them down.
The next virus pandemic is not far away; Scientists say new diseases will jump from animals unless humans change the way they live
David Crow – FT
In a broken world struggling to recover from coronavirus, a new pandemic threatens to destroy the remnants of mankind. That is the storyline of Covid-21: Lethal Virus, a TV movie in post-production that imagines another coronavirus will emerge next year.
Hong Kong to Offer Free Virus Tests to Entire City, Lam Says
Jinshan Hong – Bloomberg
City initiates a one-time free, voluntary test for millions; Move shows powerful boost of testing capacity with China aid
Hong Kong will offer free virus tests to all residents, the city’s leader said on Friday, a move that reflects the powerful boost that mainland China has provided to its containment efforts.
Key coronavirus model projects nearly 300,000 people could die in the US by December
Amanda Watts – CNN
Researchers behind an influential model at the University of Washington are now projecting that the US death toll could reach nearly 300,000 by December 1 — but that can be changed if consistent mask-wearing occurs.
This Year’s Must-Have Back-to-School Item: Masks for Children; Crayola, Old Navy and Disney are among the brands making colorful masks for children. Child psychologists see this as a positive step toward “normalcy.”
By Derrick Bryson Taylor – NY Times
Fall is drawing near, and right on schedule, ads offering discounts on backpacks, notebooks and pencils are beginning to pop up on television and online.
A majority of travelers are not willing to get on planes, a new survey shows.
Niraj Chokshi – NY Times
More than half of Americans who flew in the past year are not ready to do so again, according to a new survey, underscoring the difficulty airlines face in convincing people it is safe for them to get back on planes.
Exchanges, OTC and Clearing
ICE mortgage deal is largest in its 20-year history
Acquisition of Ellie Mae for $11bn moves NYSE-owner deeper into home loan technology
Philip Stafford and Ortenca Aliaj and James Fontanella-Khan – FT
New York Stock Exchange owner Intercontinental Exchange has struck the largest deal in its 20-year history, agreeing to pay $11bn for Ellie Mae to charge its efforts to modernise the US mortgage data market.
Approval of Initial listing (ETF):Global X MSCI SuperDividend® Japan ETF and 1 ETF(Global X Japan)
Today, Tokyo Stock Exchange, Inc. (TSE) approved the listing of new ETFs managed by Global X Japan. The ETFs will be listed on Wednesday, August 26, 2020.
CME Group Declares Quarterly Dividend
CME Group Inc., the world’s leading and most diverse derivatives marketplace, today declared a third-quarter dividend of $0.85 per share, payable September 25, 2020, to shareholders of record as of September 10, 2020.
Forfeiture of Unclaimed Interim Dividend for 2014
As provided in the Articles of Association of Hong Kong Exchanges and Clearing Limited (“HKEX”), any dividend unclaimed after a period of six years from the date for payment of such dividend shall be forfeited and shall revert to HKEX. Accordingly, HKEX’s interim dividend for 2014 of HK$1.83 per share, payable on 22 September 2014 and remaining unclaimed on 22 September 2020, will be forfeited and will revert to HKEX.
July monthly figures at Eurex and EEX; July saw a decrease in the number of traded derivatives contracts at Eurex while OTC Clearing, and the Eurex Repo Market showed strong growth.
Deutsche Börse Group
All classes of financial derivatives at Eurex recorded declines in the number of contracts traded in July 2020 compared to July 2019, with the largest fall coming in European equity derivatives. Here, the ongoing uncertainty made dividend pricing still a challenge.
A. Single Stock Futures: Introduction of five Single Stock Futures; B. Single Stock Futures/Single Stock Dividend Futures/Equity Options: Name change
Due to previous corporate actions, the Management Board of Eurex Deutschland took the following decisions with effect from 17 August 2020:
Risk.net: Eurex passes volatility test with flying colours; Eurex explores how Covid-19 volatility across the industry has tested market participants’ resilience, and how the central counterparty (CCP) itself has proved its credentials as a reliable and sustainable euro liquidity pool.
The volatility that swept the market at the height of the Covid-19 pandemic proved a challenge for many participants across many different segments of the industry. But one firm that appears to have held course and passed the test was Eurex Clearing, the CCP based in the European Union that has grown steadily into a competitor of London-based rival LCH in the euro interest rate swaps clearing business.
From niche to mainstream – the growing market demand for listed derivatives (Part II)
In response to market demand, listed derivatives are getting more and more versatile in terms of products and functionality. In this second part of a two-piece interview, Megan Morgan, Global Head of Equity and Index Sales at Eurex, talks about benchmarks, product strategies and the future of derivatives exchanges.
July monthly figures at Eurex and EEX
July saw a decrease in the number of traded derivatives contracts at Eurex while OTC Clearing, and the Eurex Repo Market showed strong growth.
All classes of financial derivatives at Eurex recorded declines in the number of contracts traded in July 2020 compared to July 2019, with the largest fall coming in European equity derivatives. Here, the ongoing uncertainty made dividend pricing still a challenge.
Eurex Mini-KOSPI Futures now tradable in Taiwan
Eurex Mini-KOSPI Futures currently the only contract to allow for after-hours trading and hedging of KOSPI; Strong volume increase in Eurex Mini-KOSPI Futures in Q2
IRS Notional OutstandingZoom
Eurex Mini-KOSPI Futures have received approval from the Financial Supervisory Commission (FSC) of Taiwan. With this regulatory approval, Eurex expands its reach into Taiwan allowing both – buy side and sell side institutions – exposure to the Korean benchmark index KOSPI.
Nasdaq and Trumid collaborate on real-time US treasury hedging and execution; Partnership will see Nasdaq develop an integrated workflow tool to connect Trumid to US treasury liquidity for real-time hedging.
Hayley McDowell – The Trade
US exchange group Nasdaq and bond trading platform Trumid has teamed up to develop a solution for real-time US treasury hedging for corporate bonds. The new partnership will see Trumid’s trading platform integrated with Nasdaq’s fixed income technology and real-time execution as they look to simplify hedging processes with a single point of access for credit and rates via Trumid.
NBA Stars Lining Up to Become Backers of New Blockchain Project
Vildana Hajric – Bloomberg
Dapper Labs raises more than $12 million for Flow blockchain; Brooklyn Nets, Miami Heat players among those participating
Some of the NBA’s biggest stars are getting the ball rolling on a new blockchain venture. The Brooklyn Nets’ Spencer Dinwiddie and Garrett Temple, the Miami Heat’s Andre Iguodala, the Los Angeles Lakers’ JaVale McGee and the Orlando Magic’s Aaron Gordon are among the backers of a Dapper Labs blockchain project that looks to make the building of consumer products based on the technology easier.
FTSE Russell: Global Rise In Asset Owners Using Smart Beta Indexes As The Basis For Sustainable Investment Strategies
FTSE Russell, the global index, data and analytics provider, has published results of a survey examining the convergence of smart beta strategy and Sustainable Investment (SI); Smart Sustainability: 2020 global survey findings from asset owners.
BlueCrest Capital Management installs Eze EMS with SS&C Technologies; Hedge fund BlueCrest Capital Management switches to SS&C Eze for multi-asset execution and trade automation.
Kiays Khalil – The Trade
BlueCrest Capital Management has installed the execution management system (EMS) Eze from SS&C Technologies to boost its multi-asset trading processes.
Fintech funding in Asia failed to rebound in the second quarter, report says
Saheli Roy Choudhury – CNBC
Financial technology start-ups in most of the world raised more money in the second quarter than they did in the first three months of the year, but deal activity remained on a decline, according to a new report from CB Insights.
Fintech funding rose 17% on-quarter from $7.9 billion to $9.3 billion, according to the report. CB Insights said its data excluded start-ups that were solely funded by angel investors, private equity firms or through other means like raising debt or line of credit transactions.
Starling Bank: Challenger fintech startup sees COVID-19 revenue boom
Callum Burroughs – Business Insider
London-based challenger bank Starling Bank has defied COVID-19 woes by gaining half a million customers in the past eight months, and expects to break even by the end of 2020.
Starling tripled customer deposits between November 2019 and the end of July, from £1.01 billion ($1.33 billion) to more than £3 billion ($3.9 billion), it said in its 2019 annual report and an accompanying trading update published Thursday.
Canada’s Smith School opens applications for fintech Masters course
Designed for professionals already employed, the first Master of Financial Innovation and Technology (MFIT) programme will begin in November and will be delivered in evening and weekend sessions. Graduates will receive training in finance, data science and machine learning technologies, equipping them with knowledge of cutting edge technologies transforming the world of finance.
‘The Enron of Europe’ — What We Know So Far About the Wirecard Scandal; Australian YouTuber Dagogo Altraide posted a new video to his 2.5M subscribers detailing the fall of FinTech company
A new video takes viewers through German financial technology company Wirecard’s journey from being one of the top businesses in the world to one who’s shares plummeted by more than 98% before filing for insolvency.
Seismic Shifts In The Cryptocurrency Market May Be Ahead, With Stablecoins Soaring
Benny Emerling – Benzinga
Recent developments indicate major shifts may be ahead in the cryptocurrency market, with the importance of stablecoin growing, PayPal rumored to announce a partnership with Paxos to offer crypto trading, and Mastercard expanding its own cryptocurrency program.
Goldman Sachs Eyes Own Token as Bank Appoints New Head of Digital Assets
Paddy Baker – CoinDesk
Goldman Sachs is seriously considering its own cryptocurrency, possibly a stablecoin, as it significantly expands its digital assets team and appoints a new head to spearhead efforts.
U.S. Senate confirms crypto-friendly SEC commissioner Hester Peirce for second term in office
Michael McSweeney – The Block
The U.S. Senate confirmed Securities and Exchange Commission commissioner Hester Peirce for a second term in a voice vote on Thursday. The Senate Banking Committee cleared Peirce’s nomination alongside the nomination of Caroline Crenshaw on Wednesday. Peirce took office in 2018 and was formally nominated for a second term in early June. Peirce’s second term will expire in 2025. Peirce is likely to continue advancing policy goals that have drawn cheers from the crypto industry, including her advocacy for the approval of a bitcoin ETF — efforts to date have been stymied amid concerns about price manipulation and the lack of surveillance-sharing agreements across major marketplaces.
Binance Says New York Banks Can Now Use Its Stablecoin After Watchdog Approval
Paddy Baker – Coindesk
Binance’s USD stablecoin has been green listed by New York’s financial watchdog meaning banks and financial institutions can use the asset without any further regulatory approval. The New York Department of Financial Services (NYDFS) updated its “Greenlist” this week to include Binance USD (BUSD). This means banks in the New York area can now custody and list BUSD without prior approval from the NYDFS – they must still inform the regulator before adding it, however.
NBA stars join $12 million funding round for CryptoKitties creator Dapper Labs
Saniya More – The Block
A group of players from the National Basketball Association (NBA) is among the investor group backing Dapper Labs’ new $12 million funding round. The Brooklyn Nets’ Spencer Dinwiddie and Garrett Temple, the Miami Heat’s Andre Iguodala, Los Angeles Lakers’ JaVale McGee, and Aaron Gordon from the Orlando Magic are among those providing a new round of funding to the startup, best known for its Ethereum-based game CryptoKitties. Dapper Labs raised the funding for its new blockchain, “Flow.” The Vancouver-based company built the blockchain to address challenges it was facing in launching and building products on Ethereum.
Federal Reserve Is Rushing to Get Its Instant Payments Offering Ready
Danny Nelson – Coindesk
The Federal Reserve is bullish on technologies that aim to speed payments, and is now rushing to get its own platform, FedNow, up and running. In a Thursday webinar, Federal Reserve Board Governor Lael Brainard said the U.S. central bank will debut its instant payment service “as soon as practically possible.” COVID-19 showcased Americans’ dire need of a “resilient instant payment system,” Brainard said. FedNow aims to be the answer, even if it won’t arrive until 2023 or 2024.
Popular DeFi platforms are seeing a surge in Web traffic
Michael McSweeney – The Block
July was a big month for the DeFi ecosystem, and new Web traffic data shows increases in online foot-traffic for major platforms. Uniswap and Compound had especially busy Julys, according to the data. Over the past few months, The Block has reported on the growing volume on decentralized exchanges, which hit an all-time high above $4 billion for July.
Indian crypto exchange CoinDCX launches staking rewards for three coins
Yogita Khatri – The Block
CoinDCX has become the first major Indian crypto exchange to launch staking product, meaning its users can now earn returns for holding certain coins. At launch, CoinDCX supports three coins: Harmony (ONE), QTum (QTUM), and Tron (TRX). The annual returns for ONE, QTUM, and TRX are 8-10%, 6-10%, and 5-10% respectively, Sumit Gupta, co-founder and CEO of CoinDCX, told The Block. The exchange doesn’t charge any commission or fee for the staking service, said Gupta.
Russia’s Sberbank Launches Blockchain on Hyperledger, Mulls Stablecoin in 2021
Anna Baydakova – Coindesk
Sberbank, Russia’s biggest consumer bank, is launching a blockchain platform built on Hyperledger Fabric, potentially with its own stablecoin. The blockchain system is designed for trade finance transactions, including exchanging letters of credit, the bank’s press representative told CoinDesk Thursday. Anatoly Popov, Sberbank’s deputy chair, told the Russian newspaper Vedomosti on Wednesday the bank is also planning to launch its own stablecoin, pegged to the price of the ruble, that could be used to buy digital assets.
Japan’s New FSA Chief Stands Firm on Crypto Regulation, Calls for Push on Digital Yen
Sebastian Sinclair – Coindesk
The incoming chief of Japan’s Financial Services Agency (FSA) has expressed reluctance to soften rules governing cryptocurrencies. As Reuter’s reported on Wednesday, commissioner Ryozo Himino, said the regulator was not considering taking “special steps” to promote cryptocurrency trading. Himino became the head of the FSA in July when he replaced the previous commissioner Toshihide Endo. Deregulating crypto, he said, would not necessarily advance technical innovation, but could increase “speculative” trading.
Decentralized exchange IDEX raises $2.5 million in seed funding ahead of IDEX 2.0 launch
Yogita Khatri – The Block
Decentralized crypto exchange IDEX has raised $2.5 million in seed funding. IDEX is in the process of launching an improved version of its existing exchange called IDEX 2.0. Alex Wearn, co-founder and CEO of IDEX, told The Block that IDEX 2.0 is scheduled to launch sometime next month. Decentralized crypto exchange IDEX has raised $2.5 million in seed funding ahead of IDEX 2.0 launch.
Trump Targets WeChat and TikTok, in Sharp Escalation With China; The government cited national security concerns in announcing sweeping restrictions on two popular Chinese social media networks, a move that is likely to be met with retaliation.
Ana Swanson, Mike Isaac and Paul Mozur – =NY Times
The Trump administration has announced sweeping restrictions on two popular Chinese social media networks, TikTok and WeChat, a sharp escalation of its confrontation with China that is likely to be met with retaliation.
Trump gives US groups 45 days to stop dealing with TikTok and WeChat; Tencent shares fall as much as 10% after president steps up campaign against Chinese apps
Demetri Sevastopulo, Hannah Murphy and Yuan Yang – FT
Print this page
Donald Trump has given US companies 45 days to stop dealing with ByteDance, the Chinese owner of TikTok, and WeChat, the messaging platform owned by Tencent, as he stepped up a campaign to clamp down on apps that he described as a threat to economic and national security.
Trump Reinstates Tariff on Canadian Aluminum; The tariff, which prompted dollar-for-dollar retaliation from Canada, was imposed just one month after a new trade deal between the two countries went into effect.
Ana Swanson and Ian Austen – NY Times
President Trump announced Thursday that he was reimposing a 10 percent tariff on Canadian aluminum to help struggling American producers, a step that is likely to incite retaliation and worsen ties with Canada just one month after the countries’ new trade deal went into effect.
US reinstates 10% tariff on certain Canadian aluminium imports; Donald Trump cites national security in move criticised by important business lobby
Aime Williams – FT
The Trump administration will reimpose tariffs on certain aluminium imports from Canada, escalating trade tensions just weeks after a new trade agreement between the US, Canada and Mexico went into effect.
Trump team outlines plan to crack down on US-listed Chinese groups; Proposal recommends delisting companies that do not meet American accounting standards
Demetri Sevastopulo and Kadhim Shubber – FT
The Trump administration has issued its recommendations to ban Chinese companies that do not comply with US accounting standards from listing on American stock exchanges.
‘Most Deranged I’ve Ever Seen’: Critics Rip Trump’s ‘Desperate’ Attack On Biden
Ed Mazza -HuffPost
President Donald Trump is facing heat for an ugly attack he made about the faith of former Vice President Joe Biden. Although Biden is a practicing Catholic, Trump claimed he was “against God,” then launched into a rambling attack on Thursday: “Take away your guns, destroy your Second Amendment. No religion, no anything. Hurt the Bible. Hurt God. He’s against God. He’s against guns. He’s against energy. Our kind of energy.”
The Polls Remain Dismal for Donald Trump; His approval rating has ticked up slightly, but that’s where the good news for his campaign ends.
Jonathan Bernstein – Bloomberg
Time to check in on Donald Trump’s approval ratings. Since I last looked a month ago, there’s a bit of good news for him. Maybe. Possibly. But not enough. The good news? A month ago, Trump’s net approval (that is, approval minus disapproval) was a dismal negative 15.2. That put him just a bit better than Jimmy Carter and George H. W. Bush were in early July of their election years before they were each solidly defeated. All the elected presidents who were re-elected were doing either somewhat or a lot better.
Schwarzman’s Wallet Props Up Wall Street Elite’s Giving to Trump
Shahien Nasiripour and Hema Parmar – Bloomberg
Within industry’s top 31 firms, some worry about a backlash; Blackstone CEO has provided three-quarters of cash from group
A few years ago, Stephen Schwarzman was just the latest deep pocket on Wall Street to open up to Donald Trump. Right now, he’s the biggest one left. Donations to Trump’s 2020 campaign from the most elite corners of American finance would be down drastically compared with 2016 — were it not for the notable exception of Schwarzman, who has become one of the president’s most ardent Wall Street backers.
Capital market regulation and coronavirus
Speech by Mark Steward, Executive Director of Enforcement and Market Oversight, delivered at the ShareSoc Webinar: building market and investor confidence.
NFA orders former Chicago, Ill. introducing broker Postrock Brokerage LLC to not reapply for membership
NFA has ordered Postrock Brokerage LLC (Postrock), a former NFA Member introducing broker located in Chicago, Ill., to not reapply for membership. The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint issued by the BCC and a settlement offer submitted by Postrock and Kevin Meyer, Postrock’s owner and sole managing member. Among other things, the Complaint alleged that Postrock made misleading statements and misrepresentations to customers and placed unauthorized trades in customers’ accounts or exercised discretion over customers’ accounts without having written authority. In addition, the Complaint alleged that Postrock placed trades for customers which offered no economic benefit.
SEC Charges Consumer Loan Company With FCPA Violations
The Securities and Exchange Commission today announced that World Acceptance Corporation, a South Carolina-based consumer loan company, has agreed to pay $21.7 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA).
ESMA Agrees Position Limits Under MIFID II
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published twelve opinions on position limits regarding commodity derivatives under the Markets in Financial Instruments Directive and Regulation (MiFID II/MIFIR).
Superannuation trustees compensate members wrongly classified as ‘smokers’
Superannuation trustees that were classifying new members as ‘smokers’ by default and charging them higher life insurance premiums have ceased this practice, and some trustees have remediated members for the extra premiums paid.
ASIC cancels AFS licence of Global Merces Funds Management Limited
ASIC has cancelled the Australian financial services (AFS) licence of Global Merces Funds Management Limited (Global Merces) effective 20 July 2020.
Banking Regulator Fines Capital One $80 Million Over 2019 Hack; OCC, Federal Reserve order the bank to beef up cybersecurity defenses
AnnaMaria Andriotis – WSJ
A top banking regulator has fined Capital One Financial Corp. COF -1.73% $80 million over a 2019 hack that compromised the personal information of about 106 million card customers and applicants.
BIS: Basel Committee Releases Consultative Documents On Principles For Operational Risk And Operational Resilience
In recent years, the growth of technology-related threats has increased the importance of banks’ operational resilience. The Covid-19 pandemic has made the need to address these threats even more pressing. Given the critical role played by banks in the global financial system, increasing banks’ resilience to absorb shocks from operational risks, such as those arising from pandemics, cyber incidents, technology failures or natural disasters, will provide additional safeguards to the financial system as a whole.
Investing and Trading
Why stock splits disappeared from our lives
Joshua M Brown – The Reformed Broker
Apple is splitting its stock 4-for-1 in two weeks. What does it mean for you? What might it mean for the broader market? And why have stock split announcements become so scarce in recent years? Did something change? The peak of the stock split era was from 1995 through 2000. Investors were buying stocks specifically because they were about to split. It was one of the dopiest aspects of an already preposterously amateurish era of speculation and spectacle.
Mark Zuckerberg’s Fortune Surpasses $100 Billion
Jack Pitcher – Bloomberg
Optimism over Facebook’s TikTok rival has pushed stock to peak; Zuckerberg’s fortune has surged by $22 billion this year
Mark Zuckerberg’s net worth passed $100 billion for the first time Thursday after Facebook Inc. hit a record high on optimism about the release of its TikTok competitor Reels.
Mother and Son Had $35 Billion Fortune, Then Things Unraveled; Germany’s Schaefflers have seen net worth drop 75% since 2018
Benjamin Stupples – Bloomberg
A lot can happen in two-and-a-half years. In early 2018, Georg Schaeffler became Germany’s richest person as shares of Continental AG, the car-part maker in which he and his mother — Maria-Elisabeth Schaeffler-Thumann — own a major stake, surged in price. At the time, their combined fortune totaled $35 billion.
Amazon and Tesla Take Off as Small Investors Embrace Fractional-Share Trading; Proponents say it has helped democratize access to the stock market, while others warn many investors could lose money
Alexander Osipovich – WSJ
Trading slivers of individual shares has become a fervent pursuit for thousands of individual investors, amplifying the 2020 rise of pricey yet popular stocks like Amazon.com Inc. and Tesla Inc.
Environmental, Social and Corporate Governance
Department Of Labor Tells Plan Fiduciaries To Stay In Their Lane Regarding ESG Investing
Vinson & Elkins LLP – JDSupra
On Tuesday, June 23, 2020, the U.S. Department of Labor (the “Department”) proposed a rule intended to “provide clear regulatory guideposts for plan fiduciaries in light of recent trends involving environmental, social and governance (ESG) investing.” The new rule codifies the Department’s existing position that plan fiduciaries must select investments based on financial considerations, not on non-pecuniary objectives.
Boohoo issues highlight ESG ‘minefield’ for advisers
Imogen Tew – FT Adviser
The asset management industry’s ‘full speed ahead’ approach to providing environmental, social and governance investing has left advisers with a “minefield” of ratings, due diligence and fact-finding potholes to navigate.
ESG investing has boomed in popularity over recent years as fears over climate change have led investors to consider the impact of their money and as a growing number of millennials have begun investing.
ESG On the List of CFOs’ Priorities for 2021
Ben Hernandez – ETF Trends
Thanks to the Covid-19 pandemic, 2020 is one year that everyone wants to forget, including chief financial officers (CFOs). Speaking of which, a Forbes report noted that CFOs are placing a high priority in 2021 on environmental, social, and governance (ESG).
More and more companies are beginning to see the value that ESG can bring—not only in terms of investing in the initiatives they care about but also its relative performance. ESG was one of the stellar performers even amid Covid-19.
ESG Blog: Calls for Rio Tinto CEO to resign after destruction of sacred site
CEO of Rio Tinto Jean-Sébastien Jacques is facing calls to resign after the firm failed to recognise the cultural significance of a 46,000-year-old Aboriginal site, prior to destroying it.
Australian MPs have criticised Jacques and other senior executives for their failure to recognise the cultural significance of the Juukan Gorge site, along with their inability to answer multiple questions at the enquiry.
Why banks’ declining reserves matter for the dollar; Last year’s repo mayhem underlined the importance of banks keeping a big cash pile at the Fed
Wenxin Du – FT
The worst of the dollar funding crunch is over, for now. But as conditions improve in the financial system, the related decline in the total cash pile held by all banks at the US Federal Reserve should be carefully watched.
Goldman takes additional $2bn hit for 1MDB settlement; Provision almost wipes out US investment bank’s second-quarter profit
Laura Noonan – FT
Goldman Sachs has taken an extra $2bn of legal charges in the second quarter to reflect the cost of settling a key case in the 1MDB scandal, wiping out almost all the profits the bank made in the three months to June 30.
Banks Could Get Another Dose of Regulatory Relief From BOE
Silla Brush – Bloomberg
BOE considering making it easier to use buffers to lend; Report flags ‘market stigma’ for lenders that run down capital
The Bank of England is considering moves to alleviate the “market stigma” lenders face when they run down their capital levels to support loans to business and consumers. That would mean U.K. banks could get even more relief from regulators intent on keeping loans flowing to the rest of the economy through the coronavirus pandemic.
Goldman Slashes Quarterly Profit 85% With 1MDB Legal Charge
Sridhar Natarajan – Bloomberg
Bank adds $2.01 billion to second-quarter litigation provision; Goldman reached deal with Malaysia to resolve probes in July
Goldman Sachs Group Inc. boosted litigation reserves by $2.01 billion after agreeing with Malaysia to resolve probes into the U.S. bank’s role in a scheme to plunder the nation’s 1MDB investment fund. The additional provision cut the firm’s previously announced second-quarter profit by 85%, the bank said Friday in a filing. Goldman Sachs said last month that the Malaysia settlement would “materially increase” the $945 million it had already set aside in the quarter.
Hong Kong’s wealthy move gold out of city on security law fears; Legislation heightens concerns of political and legal risk in Asian financial centre
Primrose Riordan – FT
Hong Kong’s wealthy are moving increasing amounts of their gold out of the financial hub after Beijing imposed a new national security law on the city last month, dealers in the precious metal say.
Trump’s TikTok and WeChat order wipes $75bn off China tech stocks; Tencent shares plummet as fears grow White House could ban all dealings with tech group
Hudson Lockett – FT
Chinese technology stocks lost more than $75bn in value on Friday after US President Donald Trump unveiled executive orders targeting popular social media apps TikTok and WeChat.
Rio Tinto chief faces calls to resign after Aboriginal site demolition; Jean-Sébastien Jacques under pressure over mining group’s destruction of 46,000-year-old rock shelters
Jamie Smyth – FT
Rio Tinto’s chief executive is facing calls to resign after admitting he did not know the cultural significance of a 46,000-year-old Aboriginal site before the mining group blew it up.
China Wants People’s Rice Bowls Filled With Locally Grown Grain
Country buys farm commodities such as corn and soy from U.S.; Agriculture minister’s comments coincide with rising tensions
China stressed the importance of keeping the people’s “rice bowl” filled with domestically grown grain at a time when available farmland is shrinking, the weather’s turning more extreme and imports are cheaper.
Turkey’s Perilous Game With Markets Reaches a Crossroads
Selcuk Gokoluk – Bloomberg
Investors in Turkey are no strangers to volatility that for years has plagued one of the Middle East’s largest economies. But not everyone may stick around this time. The lira tumbled to a record low on Friday even though the central bank has spent billions over the past year propping it up. Earlier this week, the cost of borrowing money offshore jumped beyond 1,000%, the latest sign of dysfunction in Turkey’s money markets.
Boris Johnson Commits $466 Million to Northern Ireland Brexit Red Tape
Thomas Penny – Bloomberg
Boris Johnson’s government pledged 355 million pounds ($466 million) to ensure companies can complete the paperwork needed for trade to Northern Ireland from the rest of the U.K. after Brexit, just nine months after the prime minister promised there would be no border controls. A Trader Support Service, backed with 200 million pounds from the Treasury, will complete the declarations needed on goods crossing to Northern Ireland from England, Scotland and Wales, the Cabinet Office said in an emailed statement. A further 155 million pounds will be spent on developing technology to streamline the process.
City of London faces messy future with the EU
Huw Jones – Reuters
Britain’s future access to European Union financial markets is looking increasingly patchy, as Brussels tries to limit the activities which can be carried out from London, prompting more business and jobs to cross the channel.
Evening Standard to cut a third of jobs as Covid-19 bites; London free sheet is keeping its print edition but speeding up restructuring after years of losses
Alex Barker – FT
About a third of jobs at the Evening Standard are to be eliminated in the most far-reaching cost cuts at any large UK publisher since the pandemic upended the newspaper business, according to people briefed on the plan.