Hits & Takes
John Lothian & JLN Staff
The UK Financial Conduct Authority announced when LIBOR will end. There is no turning back the clock, even if you have all the Infinity Stones. There will be no makeovers, just what comes next.
The SEC has announced an enforcement task force focused on climate and ESG issues. The task force will be led by Kelly L. Gibson, the acting deputy director of enforcement, who will oversee a division-wide effort, with 22 members drawn from the SEC’s headquarters, regional offices, and enforcement specialized units.
JLN is working on developing a Special Report on ESG to be published in the late spring. The first step is to identify potential sponsors and participants in some panels we have planned for the ESG deep dive. Thom Thompson and Suzanne Cosgrove will lead the effort. They previously collaborated on our Special Report on Spoofing. If you are interested in learning about sponsorship opportunities or want to participate, please contact me at email@example.com
I would like to give a shout out to Joe Adamczyk, the president of Exchange Analytics, for his leadership and insightful problem solving by getting involved in a little known problem, employment of military spouses. According to an article from Global Investor Group/FOW on the Exchange Analytics website, “Since assuming leadership last year, President Joe Adamczyk hired three military spouses to his small business, one of whom the company-sponsored as a fellow through the U.S. Chamber of Commerce Foundation – Hiring Our Heroes Military Spouse Fellowship Program.”
Nice work, Joe. Well done.
Amanda Pullinger, Chief Executive Officer at 100 Women In Finance, posted to LinkedIn that Women In Finance will be ringing the Closing Bell at Nasdaq on Monday for both our 20th Anniversary and for International Women’s Day. They will also take over the NASDAQ Tower for an hour.
NFA’s website has the following alerts:
- Due to scheduled maintenance, NFA’s Swaps Proficiency Requirements System will be unavailable from March 12, 2021 to March 14, 2021. If you are currently taking the Swaps Proficiency Requirements, prior to March 12, 2021 please complete any modules that you have begun to ensure your progress is saved.
- Due to maintenance, the following systems will be unavailable from 8:00 a.m. until 12:00 p.m. CT on Sunday, March 7, 2021: Online Registration System (ORS), BASIC Data Entry, Security Futures Products Training, Online Payments, Online Arbitration Claims, Arbitrator Profile, Arbitrator Training, Employment Application and Profile System, and all Electronic Filings Systems including EasyFile, Exemptions, Annual Questionnaire, and Disclosure Documents. We apologize for any inconvenience.
- Due to a scheduled upgrade, NFA’s arbitration applications including the Online Dispute Resolution System (ODR) and File a Claim will be unavailable from 5:00 p.m. CT until 8:00 pm CT on Thursday, March 4, 2021. We apologize for any inconvenience.
Kevin Murphy of StoneX is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Kevin is a friend and a long time JLN reader who joined StoneX from Barclays. He was previously an executive with JP Morgan. Thank you to Kevin and all who have given and all who have yet to give. You are all incredible people! Support our efforts to preserve industry history by donating to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The Securities and Exchange Commission appears to be marshalling its forces to confront ESG-related lapses. In February the agency created the position of senior policy adviser for climate and ESG, naming Satyam Khanna to the job (previously he was a member of the SEC’s Investor Advisory Committee and served on a Biden-Harris transition team for financial regulators). And on Thursday it announced the creation of a Climate and ESG Task Force to be led by the SEC’s acting deputy director of enforcement, Kelly Gibson. The SEC stated that the initial focus of the task force would be to identify any “material gaps or misstatements in issuers’ disclosure of climate risks.”~SC
Announcements on the end of LIBOR
The FCA has announced the dates that panel bank submissions for all LIBOR settings will cease, after which representative LIBOR rates will no longer be available. This is an important step towards the end of LIBOR, and the Bank of England and FCA urge market participants to continue to take the necessary action to ensure they are ready.
*****Like any good streaming series, you have to watch the credits at the end to find out what happens next.~JJL
Launch of “JPX English Disclosure GATE”
Tokyo Stock Exchange, Inc. (TSE) has today launched “JPX English Disclosure GATE”, a web portal for English disclosure, to promote better English disclosure from listed companies and increase investment opportunities for overseas investors. With the rate of foreign stock ownership in the Japanese market growing, a large proportion of listed companies are proactively working to disclose company information in English: the English disclosure rate among JPX Nikkei Index 400 constituent companies, for example, is 97.5%.
*****Very smart move.~JJL
Episode 8: Diversity and Derivatives
The financial industry has increased its focus on improving gender diversity in the workforce in recent years, but there is still a long way to go. How can firms gain momentum in tackling this issue and what impact has the coronavirus pandemic had on diversity initiatives? PIMCO’s Tracey Jordal and Amanda Pullinger from 100 Women in Finance give their perspectives.
*****Should we list diversity derivatives?~JJL
A precious metal that costs 15 times more than gold is driving a surge in thefts of catalytic converters
Lesley Wroughton, Max Bearak – Washington Post
In just the past week, Andrew Reichenbach’s car repair shop in Minneapolis has had three Mitsubishis come in with their exhaust pipes sawed off. The thieves were after a precious metal — tucked into almost all American vehicles — in such demand that it costs 15 times the price of gold.
*****There is a key supply and demand issue here, but also a production issue. Rhodium is a small by-product of platinum mining and there is a huge surplus of platinum supplies.~JJL
Renee Montgomery Windmill Dunks on Kelly Loeffler, Becomes First Former Player to Be Owner, Executive of WNBA Franchise
Jay Connor – The Root
When former Atlanta Dream guard Renee Montgomery decided to sit out during the 2020 WNBA season in order to focus on social justice issues, it was the officer-related death of George Floyd that compelled her to act. But little did she know that this tragedy would also serve as a catalyst for a series of events that would eventually position her to make history.
*****All kinds of history being made here.~JJL
Looting the Boy Scouts; The mass tort industry gins up thousands of dubious claims.
The Editorial Board – WSJ
The plaintiff bar long ago turned mass torts into a business model, but never underestimate legal creativity. The attempted looting of the Boy Scouts of America is highlighting the need for tort reform in a modern era of social media and lawsuit marketing. The Boy Scouts filed for bankruptcy a year ago amid what it acknowledges are legitimate claims of sexual abuse by some scout leaders. BSA and its insurers have been working in good faith to settle those claims. Which is why insurers owned by Chubb Ltd. and Hartford Financial Services are asking U.S. bankruptcy Judge Laurie Selber Silverstein to allow discovery into the methods of plaintiff lawyers who produced a 55-fold increase in new claims in less than a year.
*****This case will be the tipping point for tort reform in the U.S. It is an egregious case of abuse of the system, fraud, lying and use of social media to game the system.~JJL
Thursday’s Top Three
Our top story on Thursday was Fortune’s No such thing as a free trade: How Robinhood and others really profit from ‘PFOF’—and why it harms the markets. Second was The New York Times’ Brazil’s Covid Crisis Is a Warning to the Whole World, Scientists Say. Third was The Wall Street Journal’s A ‘Mind-Boggling’ Individual Investor Boom Stirs Up Markets in Asia.
CryptoMarketsWiki Coin of the Week: Cardano (ADA)
Cardano, a smart contract platform that it sometimes called “The Ethereum of Japan,” underwent a hard fork Monday. The fork, dubbed “Mary,” enabled Cardano users on its platform to create their own digital tokens that will run natively on Cardano’s blockchain. Because multiple tokens can run natively on Cardano’s blockchain, instead of its original native token, ADA, it is now a “multi-asset” blockchain platform. In addition to this, the ADA token tripled in February to become the third-largest cryptoasset by market cap, though it has fallen drastically since then.
201,312,165 pages viewed; 25,493 pages; 230,842 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Libor Moves to Its ‘Final Chapter’ as U.K. Sets End Dates
William Shaw and Silla Brush – Bloomberg
Final readings for most rates will take place on Dec. 31; Firms should ‘act now’ to complete transition: BOE’s Bailey
U.K. regulators kicked off the final countdown for Libor, ordering banks to be ready for the end date of a much maligned benchmark that’s been at the heart of the international financial system for decades. The U.K. Financial Conduct Authority confirmed Friday that the final readings for most rates will take place at end of this year, with just a few key dollar tenors set to linger for a further 18 months.
Libor to cease for most currencies by end of 2021; UK regulators want to smooth shift to alternative benchmarks
Philip Stafford – FT
Libor will formally cease at the end of the year for most currencies, UK regulators said on Friday, a step that will raise the pressure on banks and asset managers to move off the tainted lending benchmark. The Financial Conduct Authority, which oversees the global benchmarks, said publication of Libor would finish on December 31 for sterling, euro, Swiss franc and Japanese yen. One-week and two-month US dollar settings will also end at that time.
Britain starts countdown on Libor’s ‘final chapter’
Huw Jones – Reuters
Britain’s financial regulators on Friday called a formal halt to nearly all Libor rates from the end of this year, as expected, piling pressure on markets to speed the switch in interest rates used in $260 trillion of contracts around the world.
Bill Gates Says Bitcoin Is Bad for the Planet. He’s Not Wrong; The cryptocurrency “uses more electricity per transaction than any other method known to mankind,” he says.
Caroline Delbert – Popular Mechanics
Bill Gates, fresh off making headlines for suggesting the world should eat 100 percent synthetic beef, is now beefing with a new target: bitcoin. Gates, the Microsoft cofounder and chair of the investment fund Breakthrough Energy Ventures, recently said in a live-streamed Clubhouse session that bitcoin guzzles up a concerning amount of energy.
Coinbase founder rides crypto boom to Nasdaq listing; Brian Armstrong’s plan to make bitcoin accessible to the masses has helped his company’s valuation soar
Miles Kruppa – FT
Of all the ways to grow rich from the cryptocurrency boom, Brian Armstrong chose perhaps the most conservative. Nine years after founding the most popular destination in the US for cryptocurrency buyers, Coinbase, his decision is about to pay off as bitcoin reaches new peaks.
Texas Watchdog Says Grid Operator Made $16 Billion Error
Naureen S Malik – Bloomberg
Watchdog says Ercot should have reset prices on Feb. 18; Adjustment would ease financial squeeze on power companies
A firm hired to monitor Texas’ power markets says the region’s grid manager overpriced electricity over two days during last month’s energy crisis, resulting in $16 billion in overcharges.
The Fed must avoid a repeat of the March Treasuries mystery; Emergency measures unblocked the bond markets in 2020, but there is a risk of another crisis
Gillian Tett – FT
This month, a “whodunnit” — or “what-did-it” — mystery hangs over markets. No, this is not about gyrations in bitcoin prices or GameStop shares. Instead, the issue is the $21tn US Treasuries sector. In March 2020, as Covid-19 hit the west, Treasury prices went haywire as market liquidity collapsed. That was shocking in a sector that is normally “the largest and most liquid government securities market in the world”, according to the Federal Reserve.
Q&A: The bond market shock; Why turmoil in global fixed income matters to your portfolio
Katie Martin – FT
This time last year, markets were in the grip of the coronavirus crisis. Stock markets were tanking and central banks were embarking on aggressive interest rate cuts and other stimulus measures to steady the financial system. It all sent bond prices rocketing, pushing yields to rock-bottom levels. Now, the issue for investors is that those bond prices have been falling back and yields are rising. Some hedge funds are raking in big returns. But other institutional investors are fretting that it could yet seriously destabilise markets.
Better Finance: GameStop Case Highlights Discrimination Of “Retail” Investors In Stock Markets
In January, the market value of American video game and electronics retailer GameStop, driven by an “army” of “retail” investors, shot up from $1.4 billion to $33.7 billion. This dramatic increase in stock price caused hedge funds that were shorting GameStop to “suffer” significant losses and accuse retail investors of market manipulation. This standoff between “retail” and professional investors revealed the challenges faced by “retail” investors in equity trading: discrimination and conflicts of interest.
Coinbase Offers Another Way to Ride the Bitcoin Roller Coaster; The company may be listing its shares at a peak time for cryptocurrencies, so investors should be cautious about its recent results
Telis Demos – WSJ
Coinbase Global is going public just as enthusiasm for the digital currencies it trades is exploding. Investors should brace for a wild ride. Coinbase, which revealed its financials last week ahead of an anticipated direct listing, said it handled nearly $200 billion worth of trading in digital assets like bitcoin and ether last year, and stored or held in custody about 11% of the total market capitalization of crypto assets at the end of last year. Trading volume surged in the fourth quarter, nearly doubling from the third quarter. Coinbase earned $322 million in net income in 2020, versus a loss of $30 million in 2019.
Winter Storm Eased Natural-Gas Glut; Natural gas futures have fallen 15% from the February high
Marco Quiroz-Gutierrez and Ryan Dezember – WSJ
The Arctic blast that froze much of the country last month cut deeply into natural gas stockpiles, averting a springtime fuel glut and setting the stage for higher prices later this year.
ETF Investors Flock to International Stock Funds; Part of the interest stems from the run-up in domestic stocks, which meant that investors were underweighted overseas
Ari I. Weinberg – WSJ
International exchange-traded funds are back in favor. The turnaround has been building for months. Following the summer 2020 rally for U.S. stocks, interest in international developed- and emerging-markets stocks picked up in November and December and has surged through February. According to FactSet, international-stock ETFs (excluding “global” funds, which have U.S. exposure), have gathered $31 billion in net new assets in the first two months of this year, compared with $30 billion for all of 2020.
Robinhood now a go-to for young investors and short sellers
John McCrank – Reuters
Robinhood, the online brokerage used by many retail traders to pile in to heavily shorted stocks like GameStop Corp, has made an ambitious push into loaning out its clients’ shares to short sellers as it expands its business.
Reddit hires its first chief financial officer as it prepares for an I.P.O.
Mike Isaac – NY Times
The world’s most popular internet message board is thinking about going public. Reddit, the social network and online bulletin, said on Thursday that it had appointed its first chief financial officer, Drew Vollero, in a move toward tidying up the company’s books before an eventual public offering of its stock.
France Backs Italy’s Decision to Block AstraZeneca Exports
Viktoria Dendrinou, John Follain, and Francois De Beaupuy – Bloomberg
Italy withholds 250,700 AstraZeneca doses bound for Australia; French health minister said France could take similar action
France backed Italy’s decision to halt a shipment of AstraZeneca Plc’s coronavirus shots to Australia as tensions escalate over global supplies of the vaccines, signaling that other European Union states could take similar measures.
Largest Vaccine Maker Warns of Delays as U.S. Prioritizes Pfizer
Chris Kay – Bloomberg
Serum Institute CEO says U.S. law acting as ‘serious’ limit; WHO chief scientist says meeting over issue is next week
The head of the world’s biggest vaccine maker and the World Health Organization’s chief scientist said manufacturers of coronavirus shots face a global shortage of the raw materials needed to churn out the inoculations.
Vaccinated Workers Are Getting Benefits That Those Without Covid Shots Won’t; Israel’s new rules show how the world will be much smaller for those without vaccines.
Alisa Odenheimer, Emily Cadman, and Katharine Gemmell – Bloomberg
If you’ve got a green pass on your wrist showing you’ve been vaccinated, the office is your oyster at Israeli cybersecurity company Check Point Software Technologies Ltd. You can get treatments at the hair salon on the second floor, use the on-site gym and access game rooms with Playstations, billiards and ping pong tables, among other perks.
Inside the ‘Covid Triangle’: a catastrophe years in the making; Three east London boroughs were already at breaking point. Then the pandemic struck
Anjli Raval – FT
Manish Shah knew it was only a matter of time before he was struck by coronavirus. When the pandemic first hit the UK, the pharmacy where he works in Dagenham, east London, put in strict protocols on mask-wearing and physical distancing. But as the more aggressive variant of the virus raged through this part of the capital over the winter, more and more sick people turned to Shah for help.
The painful politics of vaccination; There is something powerful about the idea that until the lockdowns can be eased for everyone, they should be eased for nobody
Tim Harford – FT
It isn’t often I receive an email that makes me smoulder with rage. This one did, which was strange since it was perfectly polite. My correspondent wanted to know why he wasn’t allowed to meet his friends indoors for coffee. They were in their early seventies and vaccinated. Was there really a risk?
Germany approves AstraZeneca jab for over-65s; U-turn could help speed up the country’s sluggish Covid-19 vaccination campaign
Guy Chazan – FT
Germany has decided to approve the Oxford/AstraZeneca Covid-19 jab for people aged 65 and over, in a move that could help speed up the country’s sluggish vaccination campaign.
As Texas Drops Mask Mandate, Covid-19 Cases Bear Watching; Here is what happened after Texas allowed businesses to reopen to varying degrees beginning last May
Max Rust – WSJ
Texas Gov. Greg Abbott announced this week that state residents will no longer be required to wear masks beginning March 10. The governor, a Republican, also lifted capacity restrictions on businesses, saying, “It is now the time to open Texas 100%.” The nation’s second-largest state was followed by a similar announcement in Mississippi. The decisions drew a quick rebuke from President Biden, who said, “I hope everybody’s realized by now, these masks make a difference.”
B117 coronavirus variant might soon become dominant in Germany: RKI head
A more contagious variant of the coronavirus first detected in Britain might soon become the predominant strain in Germany, making it hard to stop its spread, the head of the Robert Koch Institute said on Friday.
After record COVID-19 deaths, Bolsonaro tells Brazilians to stop ‘whining’
Lisandra Paraguassu, Ricardo Brito – Reuters
After two straight days of record COVID-19 deaths in Brazil, President Jair Bolsonaro on Thursday told Brazilians to stop “whining” and move on, in his latest remarks attacking distancing measures and downplaying the gravity of the pandemic.
One and Done: Why People Are Eager for Johnson & Johnson’s Vaccine; Johnson & Johnson’s one-shot vaccine is allowing states to rethink distribution, even as health officials and experts worry some will view it as inferior.
Noah Weiland – NY Times
In North Dakota this week, health officials are sending their first Johnson & Johnson Covid-19 vaccines to pharmacies and urgent care clinics, where people who don’t necessarily have a regular doctor can get the single jab. In Missouri, doses are going to community health centers and rural hospitals. And in North Carolina, health providers are using it to inoculate meatpacking, farm and grocery workers.
Exchanges, OTC and Clearing
Asian bourses look to join Spacs craze despite governance concerns; Indonesia the latest to consider blank cheque vehicles as Wall Street mania hits
Mercedes Ruehl and Tabby Kinder – FT
The Indonesia Stock Exchange has become the third Asian bourse, after Hong Kong and Singapore, to explore allowing special purpose acquisition vehicles, prompting concerns about investor protection as Wall Street’s mania for the vehicles extends to the region.
Euronext announces volumes for February 2021
Euronext, the leading pan-European market infrastructure, today announced trading volumes for February 2021.
February 2021 monthly figures at Eurex;OTC Clearing continues strong performance in February
The positive trend in OTC clearing at Eurex continued in February. Notional outstanding volume grew by 10 percent year-on-year to EUR 19,903 billion in February 2021 while average daily cleared volume increased by 15 percent across the same period. Longer dated interest rate swaps saw the largest increase, up 44 percent – from EUR 12 billion in February 2020 to EUR 18 billion in February 2021.
ICE Announces Update on Global Environmental Complex as the ICE Global Carbon Futures Index Hits Record High and EUA Options Reaches Record Volume; Global Carbon Futures Index serves as a benchmark for the global price of carbon
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced an update on its global environmental complex, as the ICE Global Carbon Futures Index value (ICECRBN) reached a record on February 12, 2021, with a weighted average price of $39.08/tonne, and ICE EU Carbon Allowance (EUA) Options reached records in February for total volume traded of more than 412,000 contracts, and for Average Daily Volume (ADV) of more than 20,500 contracts.
ICE Benchmark Administration Publishes Feedback Statement for the Consultation on Its Intention to Cease the Publication of LIBOR Settings
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announced that ICE Benchmark Administration Limited (IBA), the authorized and regulated administrator of LIBOR®, has today published a feedback statement for the consultation on its intention to cease the publication of LIBOR® settings.
London Stock Exchange Group PLC Preliminary Results for the Year Ended 31 December 2020
London Stock Exchange Group
Unless stated otherwise, all figures in the highlights below refer to 12 months to 31 December 2020 and comparisons with the prior 12 month period on the same basis.
B3 Announces Results For The Fourth Quarter Of 2020
B3 S.A. – Brasil, Bolsa, Balcão B3 S.A. – Brasil, Bolsa, Balcão (ticker: B3SA3) reports today its fourth quarter (4Q20) earnings. Total revenues reached R$2,537.7 million, a 44.3% increase over the same period of the previous year (4Q19), while recurring EBITDA totaled R$1,728.9 million, up by 46.5% year-over-year (yoy). The Company’s recurring net income totaled R$1,159.6 million.
Decision By The Disciplinary Committee Of Nasdaq Stockholm Regarding Modern Times Group MTG AB
The Disciplinary Committee of Nasdaq Stockholm has found that Modern Times Group MTG AB (“MTG” or the “Company”) has breached the rules of Nasdaq Stockholm (the “Rulebook”) and therefore ordered the Company to pay a fine of two annual fees.
HKEX To Implement VCM 2nd Phase Enhancement On 29 March
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce that it will implement the second phase enhancement of the Volatility Control Mechanism (VCM) in its securities market on 29 March 2021.
UK watchdog looks to ‘open banking’ apps to help boost competition
Huw Jones – Reuters
Britain’s competition watchdog wants a new independent banking industry body to accelerate take-up of “open banking” apps to spawn new fintech companies and offer more choice to consumers.
What to expect from the fintech industry in 2021
Xingjun Ni – Fortune
COVID-19 is completely transforming the way people live, work, and interact with one another. As more and more day-to-day activities take place online, demand for digital finance and other forms of financial technology services has increased simultaneously. The new normal created by the pandemic brings huge opportunities for the industry. Fintech will have to focus on a few important priorities in 2021 as we work toward serving more users and gaining widespread acceptance.
Fintech startup ClearGlass Analytics closes $3.6M for pension funds transparency platform
Mike Butcher – Tech Crunch
Fintech startup ClearGlass Analytics has closed a £2.6 million ($3.6 million) funding round for its platform, which aims to create greater transparency on fees in the long-term savings market, such as pensions and the wider asset management market. The £2.6 million seed round includes European VC Lakestar and Outward VC, as well as several angels from both the asset management and pension fund worlds. These include Ruston Smith, a pension trustee; Richard Butcher, chair of the PLSA (U.K. pension trade body); Chris Wilcox, former Global Head of JP Morgan Asset Management; and Rob O’Rahilly, Sikander Ilyas and Alex Large, also former JP Morgan employees. ClearGlass is targeting the £1.5 trillion mature “Defined Benefit” pension schemes market and claims to now work with more than 500 DB pension funds. It will use the funding to expand into the U.K. Defined Contribution pension market, and consolidate its early footprint in Europe and Africa.
Square to Buy Majority Stake in Jay-Z’s Tidal Music Streaming Platform; Jay-Z to join payments company’s board as part of $297 million deal
Peter Rudegeair and Anne Steele – WSJ
Square Inc. has created a one-stop financial shop for coffee shops, flea markets and all manner of small merchants. Now it is trying to do the same thing for musicians, teaming up with Jay-Z’s Tidal streaming service.
Big data and machine learning in central banking
Sebastian Doerr, Leonardo Gambacorta and José María Serena Garralda – BIS
The world is changing and so is the way it is measured. For decades, policymakers and the private sector have relied on data released by official statistical institutions to assess the state of the economy. Collecting these data requires substantial effort and publication often happens following a lag of several months, even years. However, the last years have seen explosive growth in the amount of readily available data, as well as in the technology and software used to analyse it. These developments have spurred central banks’ interest in big data and machine learning.
40% of Goldman Sachs Clients Reported Exposure to Crypto: Survey
Tanzeel Akhtar – Coindesk
Investment bank Goldman Sachs has conducted a client survey on digital assets and findings show positive sentiment toward the future of cryptocurrency investing.
Ripple’s Garlinghouse, Larsen to file motions to dismiss in SEC lawsuit
Michael McSweeney – The Block
Twin letters filed in federal court indicate that Ripple CEO Brad Garlinghouse and co-founder Chris Larsen will seek a dismissal of the charges against them in the Securities and Exchange Commission’s ongoing lawsuit. The letters, linked here and here, set forth the arguments for dismissal of their respective charges. Both letters highlight pending motions to dismiss, which as of press time are not publicly available via court records. The SEC filed suit against Ripple last December, Garlinghouse and Larsen, alleging violations of U.S. securities laws in connection with what the agency alleged was an unregistered sale of securities in the form of XRP.
Bitcoin Could Reach $1 Million or More, Kraken CEO Says
Lynn Thomasson – Bloomberg
CEO says crypto exchange may consider going public next year; Jesse Powell acknowledges volatility, saying it can fall 50%
As the leader of crypto exchange Kraken, Jesse Powell is bound to be bullish on Bitcoin. Yet he’s projecting a disruptive future that would stretch the imagination of even the most ardent crypto fans. In a Bloomberg Television interview, Powell said Bitcoin could reach $1 million in the next decade, adding that supporters say it could eventually replace all of the major fiat currencies.
The Future of Money Is Digital, But Is It Bitcoin? Central banks will hold the power as interoperability between national tokens — and private ones — takes priority.
Andy Mukherjee – Bloomberg
The idea that much of today’s cash use will shift to digital tokens is neither faddish nor outlandish, as long as you don’t start equating the future of money with Bitcoin. Sure, governments will borrow some elements of the distributed ledger technology behind private cryptocurrencies, but they will very much want to retain control of what circulates as money in their economies. Some will succeed.
Ripple Says SEC ‘Picking’ Crypto Winners and Losers in XRP Fight
Malathi Nayak – Bloomberg
The U.S. Securities and Exchange Commission is trying to treat the cryptocurrency XRP as a security even as it exempts Bitcoin and Ether from being regulated like stocks or bonds, XRP developer Ripple Labs Inc. said.
Cryptocurrency trading volumes spike 17% in February: CryptoCompare
Cryptocurrency trading volumes soared by 17% last month in the wake of Tesla’s $1.5 billion bitcoin bet, with larger exchanges taking a growing share of the overall volumes, data showed on Friday.
Blockchain firm Ripple sees no fallout in Asia Pacific from SEC lawsuit
Blockchain payments firm Ripple has not experienced any fallout in its Asia Pacific business after being sued by the U.S. Securities and Exchange Commission (SEC), the company’s chief executive officer said on Friday.
Bitcoin miner Cipher to go public via $2 billion SPAC merger
Cipher Mining Inc said on Friday it will go public through a merger with blank-check firm Good Works Acquisition Corp in a deal that values the combined company at $2 billion.
GBTC is trading at a nearly 12% discount — its highest fall in history
Yogita Khatri – The Block
The Grayscale Bitcoin Trust (GBTC) product is trading at a nearly 12% discount — its highest fall in history, according to data compiled by The Block. The current premium of GBTC stands at minus 11.59%. The sharp fall in the premium suggests that some large investors might be cashing out their gains or just arbitraging premiums away. Competing products, i.e., new bitcoin exchange-traded funds (ETFs) in Canada, could also be a contributing factor.
BitMEX Plans to Add Spot Trading, Brokerage, Custody Services: Report
Tanzeel Akhtar – Coindesk
Embattled cryptocurrency exchange BitMEX’s new CEO said the firm is planning to add spot trading, brokerage, and custody services to its offerings. Alexander Hoptner, who joined the exchange in December, said Thursday he is planning on transforming the exchange and expanding business operations by adding three news services, according to a Bloomberg report. Prior to joining the firm, Hoptner worked for the German exchange Börse Stuttgart. In his new role, he plans to transform the crypto firm by amending relationships with regulators and expanding business operations from spot trading to brokerage and custody services.
BitGo becomes latest crypto firm to earn trust license from New York regulator
Aislinn Keely – The Block
BitGo can now provide custody services for New York state clients. The New York Department of Financial Services (NYDFS) issued the crypto services provider a New York Trust license, according to an announcement from the company released Thursday. While BitGo was already a qualified custodian through the South Dakota Division of Banking, it now has the green light to offer its services to New York-based clients. This means meeting the state’s high compliance standards, including know-your-customer controls, a SOC 2 Type 2 audit from an independent reviewer and insurance of up to $100 million in digital assets.
China Abandons 24-Year Experiment With Open Hong Kong Elections
Iain Marlow and Kari Soo Lindberg – Bloomberg
Beijing unveils sweeping plans to limit opposition’s role; Xi presses ahead despite U.S. call to preserve democracies
For almost a quarter of a century, Hong Kong stood as the one place under Beijing’s rule with open elections. A landslide loss just over a year ago may have finally convinced China to end the experiment in democracy.
Mail Ballots Not a Clear Boost for Turnout or Biden; Many state legislatures are debating whether to restrict mail-in voting in future elections
Gabriel T. Rubin – WSJ
DID MAIL-IN VOTING BOOST BIDEN? The presidential-election results left the impression that mail-in voting increased turnout and propelled President Biden to victory. But the reality is that voting by mail didn’t do either, Stanford researchers say in a new paper based on the latest data. That finding is notable because mail-in voting has become a controversial topic as many state legislatures debate restricting its use in future elections.
The United States suspends tariffs on Scotch whisky and other British products.
Eshe Nelson – NY Times
The United States will suspend retaliatory tariffs against Britain for four months, including on Scotch whisky, arising from the longstanding trade dispute about subsidies for Boeing and Airbus. The two governments said they would use the time to try to come up with a long-term solution to the trade disagreement.
The Global Markets Advisory Committee Will Meet on March 11
The Global Markets Advisory Committee (GMAC) will hold a public meeting on Thursday, March 11, 2021. The meeting will begin at 9:00 a.m. (EST) via teleconference in accordance with the Commodity Futures Trading Commission’s implementation of social distancing due to the coronavirus (COVID-19) pandemic. Commissioner Dawn Stump is the sponsor of the GMAC.
Libor end date confirmed as 31 December; FCA has confirmed all Libor settings will cease immediately on 31 December for major currencies as firms are urged to complete transition plans.
Annabel Smith – The Trade
Libor rates for major currencies will officially end on 31 December this year, concluding the several year process to withdraw the controversial benchmark and transition the industry to alternative risk-free rates.
UK further loosens dark trading restrictions in post-Brexit strategy; FCA has changed the UK’s approach to the double volume caps following a shift of share trading from London to the EU after Brexit.
Annabel Smith – The Trade
The UK’s financial watchdog has further relaxed rules that limit dark trading in equities as it looks to reclaim EUR6 billion of trading volumes that shifted from London to the EU post-Brexit. The Financial Conduct Authority (FCA) confirmed it has loosened its approach to dark trading and the double volume caps (DVC) that were introduced under MiFID II in Europe in 2018.
Dover Financial Advisers to pay $1.2 million penalty and its sole director to pay $240,000 penalty for false or misleading conduct
The Federal Court has ordered that Dover Financial Advisers Pty Ltd (Dover) pay a $1.2 million penalty for engaging in false or misleading conduct, and that Terrence (Terry) McMaster, Dover’s sole director, pay a $240,000 penalty for being knowingly concerned in Dover’s conduct.
Former NSW financial adviser charged with dishonest conduct and fabricating evidence
Former financial adviser, Mr Ezzat-Daniel Nesseim, of Gordon NSW, has been charged with sixteen offences, including dishonest conduct, fabricating evidence and providing false information to ASIC.
FINRA Provides Guidance on Common Sales Charge Discounts and Waivers for Investment Products
Many investment companies provide sales charge discounts and waivers on their products for customers in certain circumstances described in their product offering documents (e.g., prospectuses or statements of additional information). These include volume-based discounts, such as breakpoints and waivers, on mutual fund exchanges. Failure to apply these discounts or waivers correctly may adversely affect customers’ rates of return on their investment and contravenes firms’ obligations under FINRA rules.
FINRA Alerts Firms to Phishing Email Using “finra-online.com” Domain Name
FINRA warns member firms of an ongoing phishing campaign that involves fraudulent emails (see sample in Appendix) purporting to be from “FINRA Membership” and using the email address “firstname.lastname@example.org”. The email asks the recipient to respond to an issue of “regulatory non-compliance for which your immediate response is required” and then asks the recipient to click on a link or document.
First-of-its-Kind Study Identifies Drivers of Chronic Fraud Victimization;AARP, FINRA Investor Education Foundation and Heart+Mind Strategies identify key intervention opportunities
AARP, the FINRA Investor Education Foundation (FINRA Foundation) and Heart+Mind Strategies today released Addressing the Challenge of Chronic Fraud Victimization, a study that identifies evidence-based ways to help repeat victims of financial fraud and their families. The study, published in recognition of National Consumer Protection Week (NCPW), used a behavior model to help illuminate factors that may contribute to repeat or chronic victimization by financial fraud schemes.
SEC Announces Enforcement Task Force Focused on Climate and ESG Issues
The Securities and Exchange Commission today announced the creation of a Climate and ESG Task Force in the Division of Enforcement. The task force will be led by Kelly L. Gibson, the Acting Deputy Director of Enforcement, who will oversee a Division-wide effort, with 22 members drawn from the SEC’s headquarters, regional offices, and Enforcement specialized units.
SEC Issues Over $5 Million to Joint Whistleblowers Located Abroad
The Securities and Exchange Commission today announced an award of over $5 million to joint whistleblowers whose tip caused the opening of an investigation that resulted in a successful enforcement action. The whistleblowers provided significant information about misconduct abroad that directly supported certain allegations in the enforcement action.
Enhancing Focus on the SEC’s Enhanced Climate Change Efforts by Commissioner Hester M. Peirce, Commissioner Elad L. Roisman
FCA provides update on support for consumers impacted by coronavirus
Our mortgages tailored support guidance sets out our expectation that firms should not enforce mortgage repossessions, except in exceptional circumstances, before 1 April 2021. We are publishing updated draft guidance for firms from 1 April, to ensure that mortgage customers whose homes may be repossessed are treated fairly and appropriately, particularly where there are risks of harm to customers who are vulnerable as a result of coronavirus (Covid-19).
Cryptocurrency Fraudster Pleads Guilty to Securities Fraud and Money Laundering Charges in Multi-Million Dollar Investment Scheme;A citizen of Sweden pleaded guilty to securities fraud, wire fraud, and money laundering charges that defrauded more than 3,500 victims of more than $16 million.
U.S. Department of Justice
Roger Nils-Jonas Karlsson, 47, and his company, Eastern Metal Securities (EMS), was charged in a criminal complaint filed March 4, 2019, with crimes involving a scheme to defraud victims of more than $16 million. Karlsson, also known by several aliases including Steve Heyden, Euclid Deodoris, Joshua Millard, Lars Georgsson, Paramon Larasoft, and Kenth Westerberg, was arrested on June 17, 2019, in Thailand and was extradited to the United States to face the charges. A federal grand jury indicted Karlsson and EMS on July 25, 2019. Karlsson pleaded guilty to all the charges pending against him. EMS has ceased to exist.
Investing and Trading
Stock Market Momentum Comeuppance Gets No Sympathy From the Fed
Vildana Hajric and Lu Wang – Bloomberg
Rout in tech sends Nasdaq 100 to third straight steep loss; Rising yields dent valuation case for high-growth tech stocks
Last summer as the Faang block was tightening its strangle-hold on equities, a theory was hatched that the only thing that could ever halt the rally in megacap tech would be evidence the economy is healing.
ETFs Show Balance Is Shifting in Favor of Emerging-Market Stocks
Srinivasan Sivabalan – Bloomberg
Fund buying EM stocks heads for biggest inflows in two years; U.S. stocks, gold, bonds, real estate all witness outflows
If capital flows into U.S. exchange-traded funds are any indication, investors have begun to favor emerging-market stocks over almost every other asset class — including U.S. equities.
Suze Orman: GameStop frenzy is ‘a game,’ not investing
Max Zahn with Andy Serwer – Yahoo Finance
A second wave of the GameStop (GME) rally has struck the stock market in recent days, sending the price up 172% since late last month. While still well below its January high, GameStop stands more than 1,500% above where it did six months ago. Amid the rally, the stock’s traders and their online movement came under fire from personal finance guru Suze Orman in a new interview with Yahoo Finance. That interview came before shares of another heavily shorted stock, Tanger Factory Outlet Center (SKT), shot up amid a similar frenzy, going as high as 16% in early trading Thursday.
Environmental, Social and Corporate Governance
Goldman Sachs Joins Peers With Net-Zero Climate Goal
Goldman Sachs today announced that it is joining the ranks of other major U.S. banks in committing to align its financing activities with a net-zero pathway by 2050, set interim targets by the end of 2021, and measure and disclose its progress in meeting those goals.
FTSE 100 companies lag peers on anti-sexual harassment policies; Only 49% published a policy compared to 69% of companies in the S&P 500
Emma Boyde – FT
Three years after the #MeToo movement highlighted the widespread incidence of unwanted sexual advances in the workplace, fewer than half of FTSE 100 companies published an anti-sexual harassment policy, research shows.
ESG Is All the Rage. Big Investors Can’t Agree on Why.
James Mackintosh – WSJ
The great thing about sustainable investing is it can be whatever you want it to be. For fund giant BlackRock, BLK -2.03% stocks in companies that respect the climate ought to be more expensive but aren’t, so there is money to be made as valuations rise. For DWS, DWS +0.99% Germany’s biggest fund manager, companies with positive environmental, social and governance characteristics are already expensive, but will be a good investment because they will have more cash flow for buybacks. Amundi, Europe’s biggest manager, thinks both that positive-ESG stocks are more expensive but also that they deserve to be more expensive still. However you look at it: Buy!
SEC creates task force for climate, ESG violations
Sylvan Lane – The Hill
The Securities and Exchange Commission (SEC) announced Thursday it will form a task force to weed out misconduct involving environment, social and governance (ESG) regulations and investment products. The SEC’s new Climate and ESG Task Force — part of the agency’s enforcement division — will focus on making sure publicly traded companies, investment advisers and funds comply with ESG-related disclosure rules. “Climate risks and sustainability are critical issues for the investing public and our capital markets,” said acting Chairwoman Allison Herren Lee, a Democratic commissioner appointed by President Biden to temporarily lead the agency until his nominee for chairman, Gary Gensler, is confirmed.
FTSE 100 companies lag peers on anti-sexual harassment policies
Emma Boyde – FT
Three years after the #MeToo movement highlighted the widespread incidence of unwanted sexual advances in the workplace, fewer than half of FTSE 100 companies published an anti-sexual harassment policy, research shows. Equileap — which provides data on gender equality used by fund and index providers to construct so-called gender lens investment strategies — found just 49 per cent of FTSE 100 companies published an anti-sexual harassment policy in 2020 compared to 69 per cent of S&P 500 companies and 60 per cent of companies in the MSCI developed markets world index.
Wind Power Was Thriving in Texas. Then Came the Freeze.; Wind farms have boomed in the Lone Star State, but one week of extreme wholesale power prices left many operators in financial distress
Russell Gold – WSJ
The Texas wind industry suffered a devastating financial blow during last month’s electricity crisis, which hit roughly half of the state’s wind farms and may force some to seek bankruptcy protection or relinquish control to Wall Street.
Macquarie Weighs New London HQ in Vote of Confidence for Offices
Jack Sidders and Stefania Spezzati -Bloomberg
Sydney-based bank could move to a new base in U.K. capital; It currently leases 217,000 square feet of office space
Macquarie Group Ltd. has kicked off a hunt for a potential new London headquarters, a show of confidence in the long-term prospects of the capital’s office market. The Sydney-based bank is seeking brokers to help search for new offices of a similar size to its current premises on the City of London fringes, according to people familiar with the process. Any move wouldn’t happen for several years and Macquarie could still renew its current lease that expires in 2025, the people said, asking not to be identified as the process is private.
Melvin Capital Had a Better Month; Also confetti, wash trades, college reunions and Rocket.
Matt Levine – Bloomberg
My basic thesis about hedge fund managers is that the essential skill of a hedge fund manager is not picking stocks that go up, but rather continuing to manage a hedge fund. There is overlap between those skills, but they are distinct; in particular, plenty of people continue managing hedge funds even after losing lots of money, and if you want to be a “successful” (in my sense) hedge fund manager you should study their methods. (Alternatively, you can just always pick stocks that go up, which will probably make you pretty successful in my sense too, but that seems hard.) Classic methods include:
Credit Suisse pulls plug on $10bn of frozen Greensill-linked funds; Valuation uncertainty and reduced availability of insurance coverage for new investments behind bank’s decision
Stephen Morris – FT
Credit Suisse said it would wind down $10bn of supply-chain finance funds linked to troubled financier Lex Greensill and start returning cash to about 1,000 affected investors.
Bank of America reaps trading windfall during Texas blackouts; Mayhem that left people in the state without heat or power produces hundreds of millions of dollars in revenue
Gregory Meyer and Laura Noonan – FT
Bank of America gained hundreds of millions of dollars in trading revenue when the Texas electric grid failed in a winter storm last month, highlighting the upside for Wall Street from mayhem that knocked out power and heat across the state, industry executives and traders said.
Portnoy-Backed ETF Sees Third-Highest Volume Ever in a Debut
Claire Ballentine and Vildana Hajric – Bloomberg
A new exchange-traded fund seeking to ride the companies most loved by investors online has found plenty of its own positive sentiment in its first day of trading. About $438 million worth of shares in the VanEck Vectors Social Sentiment ETF (ticker BUZZ) changed hands on Thursday, making it the third best ETF debut on record, according to data compiled by Bloomberg.
State Street expands buy-side peer-to-peer trading suite with new repo solution; The new capability is the next step in State Street’s goal to encourage buy-side clients to participate in peer-to-peer trading activities in the securities finance market.
Joe Parsons – The Trade
State Street has introduced a new peer-to-peer repo trading solution to provide its buy-side clients with a broader range of direct trading capabilities within its agency lending business. The new capability is the next step in the Boston-based investment bank’s goal to encourage clients such as hedge funds, pension funds and insurance companies to participate in peer-to-peer trading activities in the securities finance market.
China Sees Negative-Yielding Bonds in Burst of Friday Trading
Shenzhen exchange slaps trading restrictions on some investors; Prices on 2027 policy bank bond more than triples on bourse
Negative bond yields showed up in China on Friday. Three bonds of China Development Bank suddenly saw prices surge — one by more than 200% — within an hour to send the yields on the policy bank notes deep into negative territory of almost -15%.
China’s Pursuit of Natural Gas Jolts Markets and Drains Neighbors; Beijing’s quest to run world’s second-largest economy on cleaner energy is reshaping global trade in the fossil fuel
Chuin-Wei Yap and Chieko Tsuneoka – WSJ
China’s quest to anchor its industrial growth to cleaner energy is whiplashing global prices of liquefied natural gas, reshaping trade in the world’s fastest-growing fossil fuel and raising fears of power blackouts in neighboring economies competing for the resource.
Long Before Greensill Imploded, Credit Suisse Saw Danger; Swiss bank had a plan to cap exposure of its $10 billion Greensill funds to a dangerous concentration of insurance coverage, but never implemented it, according to people familiar with the funds
Duncan Mavin, Julie Steinberg and Margot Patrick – WSJ
Credit Suisse Group AG knew since 2019 that supply-chain finance funds it ran with Greensill Capital were too reliant on a small group of insurers to protect investors against default and failed to remedy the situation, according to people familiar with the funds.
Why Brexit Is Still Fueling Irish Border Tension
Peter Flanagan – Bloomberg
Keeping the land border between the Republic of Ireland and Northern Ireland free of any visible checkpoints is a key plank of the Brexit accord between the European Union and U.K. An agreement, known as the Northern Ireland Protocol, aims to do just that. Yet, it’s drawing bitter criticism from unionists who claim it undermines their British identity because it treats Northern Ireland differently from the rest of the U.K. The arrangement is also under attack from companies who say it disrupts trade.
Campaigners call on UK not to weaken plans for chemical regulation
Peter Foster – FT
Environmental and health groups have urged the UK government not to surrender to chemical industry demands to weaken its planned post-Brexit regulatory regime, warning any such move would “significantly reduce” the ability to protect the environment and public health. More than 20 leading UK organisations, including the CHEM Trust and Breast Cancer UK, said the government would be breaking its promise to enhance environmental regulations after Brexit if it accepted recent proposals by the chemical industry to ease UK regulation.
EU, U.K. Tensions Show That Brexit Isn’t Over: Brussels Edition
Nikos Chrysoloras and Ian Wishart – Bloomberg
And you thought Brexit was over? Not so fast. As with many divorces, antagonism has refused to fade even after the separation has been sealed. Tensions between the EU and Britain ramped up considerably when the U.K. announced it will ignore some crucial obligations of their agreement and the EU responded with a dramatic threat of legal action. We take a look at why. In a nutshell, Boris Johnson is already under pressure from members of his own party to rip up the Northern Ireland part of deal, meaning the risk is further escalation. That could have spillover effects far beyond politics. With the bloc yet to ratify December’s trade deal and a fear in Brussels that this may not be the government’s last attempt to scrap what it previously agreed, the next few months will be rocky.
Rishi Sunak’s Budget Means a New Path for the U.K.: Beyond Brexit
Lizzy Burden – Bloomberg
Rishi Sunak’s budget was the first chance for Britain to flex its fiscal muscles and diverge from Brussels since leaving the EU. But the chancellor of the exchequer didn’t once utter the B-word and in fact offered up a policy that trade experts say could have been delivered while part of the bloc. Eight English freeports, effectively low-tariff business zones, will aim to stimulate trade and investment. It was a policy backed by Ben Houchen, the mayor of the Tees Valley and a Conservative party darling, whose region was one of those chosen.
Business Travel Isn’t Dead, Says AmEx. But It’s Changing Forever; Boring boardrooms are out and beaches are in, according to business travel executive Evan Konwiser.
Nikki Ekstein – Bloomberg
It’s pretty tough, one year deep into the global pandemic, to put a sunny face on the future of business travel. But for the people at American Express, the future of corporate travel looks … sort of fun?