Libor’s Final Days Begin With Push to Shake Up Swaps Market

Jul 27, 2021

First Read

$51,906/$300,000 (17.3%)


Hits & Takes
John Lothian & JLN Staff

The SEC issued an “Opinion of the Commission” on Monday in a case between ABN AMRO Chicago LLC and Chicago Board Options Exchange, Inc. and C2 Options Exchange, Inc. Here is a summary of the opinion:

“ABN AMRO Clearing Chicago LLC petitions for review of disciplinary action taken by the Chicago Board Options Exchange, Inc. (“CBOE”), and C2 Options Exchange, Inc. (“C2” and, collectively, “the Exchanges”).1 The Exchanges found that ABN AMRO violated Rule 15c3-5 under the Securities Exchange Act of 1934 (the “Market Access Rule” or the “Rule”) and CBOE Rule 8.2 (which requires adherence to applicable laws) by failing to maintain controls reasonably designed to assure compliance with pre-order entry restrictions on complex order auction responses. We conclude that ABN AMRO violated those rules by not having controls reasonably designed to prevent its client from placing unauthorized trades, but also find that the sanctions imposed are excessive and should be cancelled because outreach by the Exchanges’ marketing department led to ABN AMRO’s client placing the unauthorized trades.”

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Support our efforts to preserve industry history and educate the next generation of industry professionals and participants by giving to our GoFundMe campaign.

Today we have part one of our interview with Yra Harris, a longtime CME member, for the Open Outcry Traders History Project. Yra has some great stories and is very enthusiastic, and is realistic about the mistakes he made during his trading career.

Today there is a mask requirement at the SBR for all inside activities because of a 140% spike in the number of Covid-19 cases in the last week in West Virginia. Luckily, today we are leaving the Boy Scout high adventure base here and heading home. Goodbye to a beautiful Scout facility and to carbohydrate-laden food.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL



Yra Harris – Open Outcry Traders History Project – Part 1

Yra Harris was on a career track to become a college professor in the 1970s, earning a master’s degree in economics. But when he came home from school his parents gave him $250 for a suit and told him to go look for a job.

He did, interviewing at Continental Bank, First Chicago and other banks, but he said he had “broader expectations,” as well as aspirations to go to Washington to work for a congressional committee.

Watch the video »


Virus Cases in Tokyo Leap to New Record of 2,848 Amid Olympics
Isabel Reynolds – Bloomberg
Surge comes with tens of thousands visiting city for games; Games organizers reported seven new cases connected with event
Daily coronavirus infections in Tokyo surged to a record 2,848 cases, about double the number found a week earlier, just as the Japanese capital hosts tens of thousands for the Olympics.

******And the gold medal for virus spreading goes to the Olympic Committee.~JJL


Humanity Is Caught in a Doom Loop; The planet is not exactly having its best decade. Then again, it’s been here before.
Mark Gongloff – Bloomberg
Last week on the East Coast the moon turned blood-red. Birds are dropping from the sky. Billionaires are frantically building rockets to flee the planet. It all feels a little apocalyptic, and maybe it should: The world is wracked with drought, floods, wildfires, hunger, plague, more plague, political upheaval and jorts, to name a few examples.

****When I was in college writing computer code on punch cards, the worst thing that could happen was a loop. Your program would run until infinity, or until the mainframe kicked it out because of lousy programming. There is hope from loops, but they sure make you dizzy first.~JJL


Return to Office Hits a Snag: Young Resisters; A generation gap has emerged between them and colleagues who value the workplace over the advantages of remote work. Bridging it may require flexibility.
Nelson D. Schwartz and Coral Murphy Marcos – NY Times
David Gross, an executive at a New York-based advertising agency, convened the troops over Zoom this month to deliver a message he and his fellow partners were eager to share: It was time to think about coming back to the office.

******Why go back to the office when I am just going to be put in a cubicle anyway?~JJL


Monday’s Top Three
Our top story Monday was Crypto-based ‘shadow financial market’ spooks regulators, from Yahoo News. I would think so. Second was Bloomberg’s Wild Superyacht Secrets I Learned When I Became a Deckhand – its second time in the top three. Third was The New York Times’ The Most Influential Spreader of Coronavirus Misinformation Online, about Joseph Mercola, an osteopathic physician in Cape Coral, Fla.


MarketsWiki Stats
26,494 pages; 234,763 edits
MarketsWiki Statistics


Lead Stories

Libor’s Final Days Begin With Push to Shake Up Swaps Market
Alex Harris – Bloomberg
Banks shift to SOFR for interdealer trades starting Monday; Move designed to pave way for forward-looking term rate
U.S. regulators are wagering a major shakeup of the multitrillion-dollar interest-rate swaps market is just what’s needed to wean Wall Street off the London interbank offered rate for good. In a key development in the shift from the discredited benchmark, beginning Monday, swaps desks will switch from Libor to the Secured Overnight Financing Rate when entering into most interdealer trades, effectively changing how they hedge their interest-rate risk.

Beijing Gives Tech Investors a Brutal New Tutorial; The pain for Chinese internet technology firms will be long-lasting—and the crackdown isn’t over yet
Jacky Wong – WSJ
Anyone who bought into Chinese internet stocks hoping for a bounce following the dramatic fall from grace of ride-hailing giant Didi DIDI -0.25% has been taught another painful lesson this week. Fighting the Fed, or Washington, is usually a losing game—but betting against Beijing’s fast-moving, often opaque regulatory apparatus in Xi Jinping’s new era of centralized control is suicidal.

U.K. Revises SPAC Rules to Attract Listings to London Market
Silla Brush – Bloomberg
Financial Conduct Authority pushes ahead with reforms; Minor tweaks to proposals to help larger SPACs raise money
Britain’s financial watchdog revised rules for blank-check firms in a bid to attract listings, even as the boom in the market begins to falter. The Financial Conduct Authority confirmed Tuesday it will no longer require special purpose acquisition companies, or SPACs, to suspend their listing when they reveal their deal plans — removing one of the roadblocks that kept London out of the fundraising rush last year.

SEC Charges 27 Financial Firms for Form CRS Filing and Delivery Failures
The Securities and Exchange Commission today announced that 21 investment advisers and 6 broker-dealers have agreed to settle charges that they failed to timely file and deliver their client or customer relationship summaries – known as Form CRS – to their retail investors.

Tether Executives Said to Face Criminal Probe Into Bank Fraud
Tom Schoenberg, Matt Robinson, and Zeke Faux – WSJ
DOJ examining whether banks were misled about crypto business; Tether says it’s committed to cooperating with law enforcement
A U.S. probe into Tether is homing in on whether executives behind the digital token committed bank fraud, a potential criminal case that would have broad implications for the cryptocurrency market.

China Stocks in U.S. Suffer Biggest Two-Day Wipeout Since 2008
Matt Turner – Bloomberg
Nasdaq Golden Dragon China Index has fallen 15% since Thursday; Index loses $769 billion in value amid rout in Chinese shares
Beijing’s sweeping crackdowns of its technology and education sectors has unleashed shockwaves across global markets, erasing $769 billion in value from U.S.-listed Chinese stocks over the course of just five months.

A Covid-Weary World Is Facing a Distressing Reality Check; Variants and new hotspots show what the virus’s long tail will be like
James Paton and Robert Langreth – Bloomberg
Just a few weeks ago, much of the world seemed poised to leave Covid behind. U.S. President Joe Biden declared the U.S. close to independence from the virus. Britons hit the dance floor to celebrate “Freedom Day.” Singapore’s legendarily strict government signaled it would begin to loosen its zero-cases approach and make life and travel more manageable.

Wall Street Interns Return to Office, and Nightlife, After a Year of Zoom Meetings
Eric Krebs, Maria Heeter, and Mary Biekert – Bloomberg
JPMorgan, Goldman interns making the most of in-person work; Remote aspiring financiers feel left out from networking
Fourteen-hour workdays followed by late-night dancing at Phebe’s Tavern and Grill, the notorious intern bar. Coffee with the boss on JPMorgan Chase & Co.’s ground floor. Impromptu rooftop gatherings with colleagues. Analysts shouting stock prices across a busy trading floor.

The contentious revamp of US insider trading laws; New act seeks more clarity on what is illegal but critics say it will create more uncertainty
Sujeet Indap – FT
Insider trading treachery dominates popular depictions of Wall Street in film and television. Yet an irony exists: for all its attention, there is no precise US law describing the criminality of improperly buying or selling stock upon the possession of material, non-public information. But this may be about to change.

Amazon Job Posting Hints at Plan to Accept Cryptocurrency
Matt Day and Katherine Chiglinsky – Bloomberg
Payments team seeks digital currency, blockchain lead; Retailer doesn’t accept any cryptocurrencies as payment today
An Amazon job posting published online last week seeks a “Digital Currency and Blockchain Product Lead.” After Insider reported the existence of the posting earlier, Bitcoin surged to about $40,000. Amazon shares gained about 1% in New York.

The Remote-Work Czar Is the New Shortcut to the C-Suite
One of the most sought-after management jobs right now is leading large, far-flung teams through uncharted waters. Human resources veterans need not apply.
Matthew Boyle – Bloomberg
Ask a college senior, and “vice president of productivity and remote experience” probably isn’t on her list of dream jobs. Yet this fast-growing pandemic-era position has emerged as a previously unimaginable path to the C-suite—or at least to a virtual desk nearby.

New Benchmarks Put an End to ‘Anything Goes’ for ESG Indexes
Frances Schwartzkopff – Bloomberg
ESG asset managers are accelerating their use of new climate-investing benchmarks created by European authorities, in a development that’s set to make it harder to get away with greenwashing. While only about $1.2 billion is now tied to gauges that meet European Commission requirements — a tiny fraction of the $35 trillion of ESG assets worldwide — inflows have more than doubled since January, according to the European Securities and Markets Authority.

The Robinhood IPO Is Coming Soon. Steer Clear.
Avi Salzman – Barron’s
There will be no velvet rope at Robinhood Markets’ big debut on Thursday. The company is offering up to a third of its shares in its initial public offering to the Average Joes who use its app, instead of the Wall Street suits who usually get first dibs. The wisdom of those crowds may validate the $35 billion valuation that the company projected in a prospectus

Credit Suisse hires Goldman Sachs partner to lead risk turnaround
Brenna Hughes Neghaiwi – Reuters
Credit Suisse on Tuesday appointed Goldman Sachs partner David Wildermuth its new chief risk officer, as it seeks to turn the corner on the Archegos and Greensill scandals that have rocked Switzerland’s second-biggest bank.

China Crackdown Wrecks Demand for Loans to Fund Overseas M&A
Bloomberg News
Chinese companies’ use of debt to pay for overseas expansion is on track to shrink to a seven-year low thanks in part to Beijing’s sweeping regulatory crackdown.

China Stock Rout Spreads Amid Fears of Foreign Investor Exodus
Jeanny Yu and Livia Yap – Bloomberg
A rout in Chinese shares in the crosshairs of Beijing’s regulatory crackdown extended into the bond and currency markets Tuesday as unverified rumors swirled that U.S. funds are offloading China and Hong Kong assets.

Global markets regulators team up to keep watch on SPACs
Global securities markets regulators said on Tuesday they have begun monitoring special purpose acquisition companies, or SPACs, due to potential regulatory concerns. SPACs are shell companies that list themselves on the stock market and use the proceeds to buy other companies. It is a form of investment that soared last year on Wall Street, gathered steam in Europe this year and is now spreading into emerging markets.

Tight Access and Data Doubts Cloud China’s Carbon Market
Bloomberg News
Emissions system has seen trading volumes tumble since debut; Small polluters have been unable to participate so far: people
China’s national carbon market, seen as a key tool to help the world’s top polluter curb emissions, is being hampered by limited early access for small companies and doubts over data quality, according to people familiar with the details.


Billionaire Soon-Shiong Sees His Covid Shot as Universal Booster
Janice Kew and Antony Sguazzin – Bloomberg
Combos with ImmunityBio’s shot could yield stronger immunity; South African health workers to get T-cell booster in study
U.S. biotech billionaire Patrick Soon-Shiong is backing a Covid-19 vaccine candidate that he sees as having potential as a universal booster of other pandemic shots.

US vaccine diplomat urges producers to back low-cost jab hubs abroad; State department unveils plan to boost global supplies by spurring creation of overseas factories
Kiran Stacey – FT
Joe Biden’s top vaccine diplomat has urged Covid-19 vaccine makers in the US to support the development of low-cost manufacturing hubs overseas to boost the production of cheaper jabs for developing countries.

US to keep Covid travel bans in place as Delta variant spreads; No plan to lift limits ‘at this point’ in blow to hope of salvaging international summer travel season
Kiran Stacey and Mamta Badkar – FT
The Biden administration has said it will maintain its Covid-related travel bans for the foreseeable future on a range of countries, including the UK, the EU and China, due to the spread of the more transmissible Delta variant.

California and New York City to mandate vaccines for public workers; Latest requirements come as officials struggle to stop spread of Delta variant
Peter Wells – FT
Public employees in the state of California and New York City will be required to get a Covid-19 vaccine or submit to weekly testing, as officials across the country try to curb a rising number of infections tied to the spread of the contagious Delta variant.

As Virus Cases Rise, Another Contagion Spreads Among the Vaccinated: Anger; Frustrated by the prospect of a new surge, many Americans are blaming the unvaccinated. A tougher stance may backfire, some experts warn.
Roni Caryn Rabin – NY Times
As coronavirus cases resurge across the country, many inoculated Americans are losing patience with vaccine holdouts who, they say, are neglecting a civic duty or clinging to conspiracy theories and misinformation even as new patients arrive in emergency rooms and the nation renews mask advisories.

Covid Treatment Options Remain Elusive, Despite Months of Effort and Rising Delta Cases; Researchers have been held back by a lack of relevant research, a scattered array of clinical trials and a fragmented U.S. healthcare system
Joseph Walker – WSJ
Nearly a year and a half into the pandemic, researchers are still struggling to find effective, easy-to-use drugs to treat Covid-19. Ten drugs have been cleared or recommended in the U.S. for use. Two of those later had their authorizations rescinded after they failed to work. The government recently paused shipments of a third because it wasn’t effective against new variants. The best medicines for early treatment are cumbersome to administer, and drugs for those in the hospital can only do so much for patients who are already severely ill.

FDA Asks Covid-19 Vaccine Makers to Expand Number of Children in Tests; Bigger pool of those 5 to 11 years is seen aiding discovery of any side effects, like the heart condition myocarditis
Felicia Schwartz, Thomas M. Burton and Jared S. Hopkins – WSJ
The Food and Drug Administration has raised the minimum number of young children that should be in Covid-19 vaccine trials to better detect any side effects, people familiar with the matter said.

Vaccine-Resistant Variants Could Result in a Stop-Go World Economy
Tom Orlik and Maeva Cousin – WSJ
Despite the rise of the delta variant, Bloomberg Economics’ base case remains that the world economy will see a continued recovery in the second half of 2021, underpinned by strength in the U.S., acceleration in Europe and India moving out of its slump. Further out, the increase in cases is a reminder that Covid-19 is likely here to stay, raising the prospect of permanently lower output relative to the pre-Covid path as contact intensive services suffer. In the worst case scenario, the appearance of vaccine resistant variants could result in a stop-go world economy, with sporadic lockdowns and reopening dragging major economies in and out of recession.

Exchanges, OTC and Clearing

Colt adds connectivity to upcoming Cboe Europe Derivatives market; Users of the Colt PrizmNet network will gain access to the new Cboe derivatives market to trade equity index futures and options when it goes live in September.
Hayley McDowell – The Trade
Connectivity solutions provider Colt Technology Services has said it will provide access to the new European derivatives market at Cboe when it goes live in September. Colt will provide its clients connectivity to Cboe Europe Derivatives (CEDX) via its PrizmNet low-latency network, which aims to speed up time to market, reduce slippage and lost trades for users accessing the new exchange.

Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange Closed for Civic Holiday
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Monday, August 2, 2021 for the Civic Holiday.

Nasdaq, Inc. Announces Proposed Senior Notes Offering
Nasdaq, Inc. (the “Company”) (Nasdaq: NDAQ) today announced that it plans to offer, subject to market and other conditions, Euro-denominated senior notes (the “Offering”). The Company expects to use the net proceeds from the Offering, together with available cash balances, to refinance its existing 1.75% Senior Notes due 2023.

Notice of Disciplinary Action
CME Group
The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:
PENALTY: In accordance with the settlement offer, the Panel ordered Tradition to pay a fine to the Exchange in the amount of $50,000.

Notice of Disciplinary Action
CME Group
NYMEX RULE VIOLATION: 562. Position Limit Violations (in part)
Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.
PENALTY: In accordance with the settlement offer, the Panel ordered LITASCO to pay a fine in the amount of $35,000.

Notice of Disciplinary Action
CME Group
MEMBER: RBC Capital Markets, LLC
NYMEX RULE: Rule 432 General Offenses
It shall be an offense: W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
PENALTY: in accordance with the settlement offer, the BCC Panel ordered RBC to pay a $45,000 fine.

Notice of Disciplinary Action
CME Group
NYMEX RULE: Rule 432 General Offenses
It shall be an offense: G. To prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.
PENALTY: in accordance with the settlement offer, the BCC Panel ordered Chaia to pay a $25,000 fine and serve a 10 business day suspension from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group. The suspension shall run from August 2, 2021 through August 13, 2021, inclusive.

NGX CEO Engages Institutional Clients On Market Development
The Chief Executive Officer, Nigerian Exchange (NGX) Limited, Mr. Temi Popoola, CFA, hosted an engagement session with Institutional clients on Monday, 26 July 2021. The virtual event saw Mr. Popoola speak passionately about the plans of NGX post-demutualisation, emphasising where the Exchange is now and what market players should expect.


Singapore Fintech Startup Nium Tops $1 Billion Valuation
Yoolim Lee – Bloomberg
Nium raises more than $200 million, led by Riverwood Capital; Temasek-backed payments firm targets U.S. IPO within 24 months
Singapore’s Nium Pte, a payments startup serving businesses, became a rare fintech unicorn in the city-state after raising more than $200 million in fresh funding.

Tiger Global: the technology investor ruffling Silicon Valley feathers; The firm’s swift decisions, high valuations and backing of rival start-ups sets it apart from typical venture capitalists
Miles Kruppa and Benjamin Parkin – FT
For the first 15 years of running Tiger Global Management, Chase Coleman wore a suit every day in the hopes that investors would look past his inexperience. Today, his firm faces a different kind of reputational issue.

Big fines can change Big Tech, says French competition chief; Isabelle De Silva’s comments come as slow pace of antitrust probes frustrates European regulators
Javier Espinoza and Leila Abboud – FT
Multimillion-euro fines can force Big Tech companies to change their behaviour, despite their deep pockets, the president of the French Competition Authority has argued.

Eventus Systems wins Trade Surveillance Product of the Year in 2021 Risk Technology Awards
Second win in category for Validus platform
Eventus Systems
Eventus Systems, Inc., a leading global provider of multi-asset class trade surveillance and market risk solutions, today won the award for Trade Surveillance Product of the Year in the 2021 Risk Technology Awards. The firm won the comparable honor in 2019, also for its Validus platform that now provides not only trade surveillance and risk monitoring but also anti-money laundering and transaction monitoring.

Digital bank Starling makes first acquisition in quest for faster growth; Goldman Sachs-backed start-up to buy landlords’ mortgage provider Fleet for £50m
Stephen Morris – FT
UK digital bank Starling has struck a £50m deal for a buy-to-let mortgage group, the first acquisition by the Goldman Sachs-backed start-up that is targeting an initial public offering within two years.

FlexTrade integrates EMS with FINBOURNE data platform; Mutual buy-side clients of FlexNOW and LUSID will be able to execute and manage complex multi-asset strategies on a global scale.
Annabel Smith – The Trade
FlexTrade has integrated its execution management system (EMS) with the investment data processing platform from FINBOURNE to broaden execution strategies available to buy-side clients.

AccessFintech taps Capco to accelerate post-trade transformation adoption; Capco will combine its technology consultancy capabilities with the AccessFintech post-trade solution under agreement.
Wesley Bray – The Trade
Capco and AccessFintech have partnered to accelerate the adoption of AccessFintech’s data management and workflow solution by asset managers and other post-trade firms.

Fiserv Introduces Expanded Digital Capabilities For Consumer And Business Customers Of Financial Institutions – Capabilities Will Enable Industry-Leading Digital Banking Experiences For Financial Institutions Of All Sizes
Fiserv, Inc. (NASDAQ: FISV), a leading global provider of payments and financial services technology solutions, today introduced enhanced Fiserv Digital capabilities for integrated digital banking and card management. This enriched, mobile-first suite will enable financial institutions to offer their consumer and business customers an industry-leading digital banking experience that is designed for the way people expect to engage with their financial institution, and meets the growing demand for a unified, seamless customer experience across mobile and online channels.

Settlement failure attributed to significant problems in the middle-office for majority of institutions
Torstone Technology
Survey by Torstone Technology in collaboration with GreySpark Partners reveals data and technology challenges in the middle-offices of banks and brokers; T+1 and CSDR pose operational challenges and costs for legacy middle-office systems
60% of institutions believe that settlement failures attributed to inadequacies of the middle-office are still a significant problem in their organisation, according to a new global survey conducted by Torstone Technology, a leading SaaS provider of post-trade securities and derivatives processing in collaboration with GreySpark Partners, a leading global capital markets consultancy.


Biden to convene private sector leaders for cybersecurity talks in August
Andrea Shalal and Robert Birsel – Reuters
President Joe Biden and senior U.S. officials will meet private sector leaders on Aug. 25 to discuss ways to beef up cybersecurity, a White House spokesperson said on Wednesday, underscoring the need for collective action. Members of Biden’s national security team and officials from across the administration will meet business executives to “discuss how we can work together to collectively improve the nation’s cybersecurity,” the spokesperson for the White House National Security Council said.

The Cybersecurity 202: Arizona could face a more than $9 million clean up bill after a partisan election audit
Joseph Marks and Aaron Schaffer – The Washington Post
Arizona’s heading into the red on election security, driven by a partisan audit in Maricopa County and baseless claims by former president Donald Trump and his allies that his election loss wasn’t legitimate. The state’s already on the hook for roughly $3 million to replace the county’s voting machines because of concerns the partisan firm conducting the audit, Cyber Ninjas, can’t ensure the machines weren’t infected with malicious software during the process.

The Technology 202: Chinese tech giants set their sights on Washington as they work to do damage control
Aaron Schaffer – The Washington Post
Less than two weeks after Joe Biden was elected president in November, a top executive at Chinese telecom giant Huawei expressed optimism about a potential “reset.” But the Biden administration has largely adhered to the Trump administration’s skepticism toward the company, and Huawei has responded in kind. It surged its lobbying expenditures to more than $1 million in the second quarter of the year — a level of spending reported at the height of the company’s tensions with the Trump administration in 2019.

When Ransomware Group REvil Vanished, Its Victims Were Stranded
Kartikay Mehrotra – Bloomberg
Ransomware attacks always hurt—but perhaps never more so than when the victim is compromised through the very company they pay for IT and security services.

Discord is now an essential tool for hackers
Joel Khalili – Tech Radar
A new report from security company Sophos shows that Discord, which has grown rapidly in popularity in recent years, is now regularly used to host, distribute and control different kinds of malware. What’s more, the issue is becoming more grave by the week. Over the past two months, Sophos has detected almost 140 times the number of Discord malware threats than in the same period last year.

The recent history of ICS attacks. Four reports on novel or evolving cyber threats. Updates from Project Pegasus.
The US Cybersecurity and Infrastructure Security Agency (CISA) yesterday released an account of six cyberattacks on industrial control systems that occurred between 2011 and 2016, suggesting that more such attacks may be in the offing. The history is interesting in its specific attribution of the attacks to nation-states: one each to China and Iran, the remaining four to Russia.


Bitcoin Miner Crusoe Energy Seeks Loan to Expand Operations
Rachel Butt and Katherine Doherty – Bloomberg
Data center company Crusoe Energy Systems Inc. is sounding out investor interest in a potential debt deal that would help grow the firm’s Bitcoin mining business, according to people with knowledge of the matter.

Some of DeFi’s Leading Investors Are Backing a New Options Protocol
Cheyenne Ligon – Coindesk
Lyra, an options trading protocol built on Ethereum scaling network Optimism, received $3.3 million in a seed round led by Framework Ventures and ParaFi Capital. The DeFi Alliance, Orthogonal, Robert Leshner’s Robot Ventures and Apollo Capital also participated in the round.

Amazon denies report of accepting bitcoin as payment
Reuters Inc on Monday denied a media report saying the e-commerce giant was looking to accept bitcoin payments by the end of the year.

Indian central bank’s digital rupee could pave the way ahead for country’s crypto ecosystem
Mimansa Verma – Quartz
After giving a cold shoulder to cryptocurrencies for years, India’s central bank is finally set to launch its own digital currency, and investors in the country have a reason to cheer. On July 22, Reserve Bank of India (RBI) deputy governor T Rabi Sankar said the regulatory body is considering introducing a central bank digital currency (CBDC) in a phased manner. A CBDC is a legal tender issued by a central bank in a digital form. In effect, it is just a digital version of the fiat currency, which in India’s case is the rupee.

Goldman Asset-Management Arm Files to Offer a Crypto-Related ETF
Olga Kharif – Bloomberg
Goldman Sachs Group Inc.’s asset-management arm filed an application Monday with the U.S. Securities and Exchange Commission to offer an exchange-traded fund focused on securities of cryptocurrency-related companies.

Peter Thiel-Backed Exchange Bullish Begins Pilot Program
Jamie Crawley – Coindesk
Bullish, the crypto exchange subsidiary of backed by Peter Thiel, Galaxy Digital and others, is to begin a seven-week pilot program. The pilot will use simulated crypto assets and paper money to give invited investors a sample of Bullish’s trading interface, an announcement Tuesday said

‘I was panicking’: the high-risk bets sparking a backlash at Binance; Crypto exchange slashes leverage after customers and regulators balk at high-voltage derivatives
Adam Samson and Joshua Oliver – FT
Binance is to cut drastically the risk clients can assume in one of its flagship cryptocurrency products after a backlash from regulators and consumers over high-risk derivatives that can quickly leave users with painful losses.

When bitcoin bros* talk unregistered securities; Pomp and some sad circumstances.
Jemima Kelly and Jamie Powell – FT
Good morning to everyone including those who tweet things that come round to bite them on the proverbial. (We can once again embed tweets! Thank you FT devs.)

Binance stops crypto margin trading against pound, Aussie dollar, euro
Binance, the world’s largest cryptocurrency exchange, said on Monday that it would stop offering cryptocurrency margin trading involving the Australian dollar, euro and sterling.

Bitcoin Miner Crusoe Energy Seeks Loan to Expand Operations
Rachel Butt and Katherine Doherty – Bloomberg
Data center company Crusoe Energy Systems Inc. is sounding out investor interest in a potential debt deal that would help grow the firm’s Bitcoin mining business, according to people with knowledge of the mater.


Schumer’s pot legislation could spark up cannabis IPOs on Wall Street
US stock exchanges have long shunned the nation’s homegrown cannabis industry, a dynamic that has sent companies north in search of pot-friendly capital markets. But if new legislation in Congress is successful, that could soon change.

The First and Now the Last Best Hope of the Arab Spring Is At Risk; Tunisia’s president has taken on near dictatorial powers. Democracy’s survival is in the hands of the largest labor union and the military.
Bobby Ghosh – Bloomberg
Amid Tunisia’s political upheaval, it is easy to hear echoes of the events in Egypt eight years ago. In the summer of 2013, widespread protests against an unpopular Islamist government allowed General Abdel-Fattah El-Sisi to take power in what amounted to a coup.

UK to consider relaxing travel restrictions from EU and US; Ministers are also looking at removing France from the ‘amber plus’ list
George Parker, Philip Georgiadis and Alice Hancock – FT
The UK government will this week consider loosening travel restrictions for travellers from the EU and the US, with one senior airport executive confident that ministers would broaden quarantine exemptions “imminently”.


Former Glencore trader pleads guilty to role in Nigeria bribery scheme; Anthony Stimler admits to money laundering and violating US Foreign Corrupt Practices Act
Neil Hume and David Sheppard – FT
A former oil trader at Glencore has pleaded guilty in the US over his part in a scheme to bribe government officials in Nigeria in return for lucrative oil contracts.

SEC Issues Substituted Compliance Determination for France
The Securities and Exchange Commission today announced the approval of a substituted compliance determination order with respect to security-based swap dealers and major security-based swap participants (SBS Entities) subject to regulation in the French Republic (the French Order). This is the first determination that addresses substituted compliance in connection with the Commission’s capital and margin requirements.

FCM and IB Members—FinCEN updates its list of FATF-identified jurisdictions with AML/CFT deficiencies
On July 1, 2021, the Financial Crimes Enforcement Network (FinCEN) issued a news release announcing that the Financial Action Task Force (FATF) reissued its list of jurisdictions with strategic AML/CFT deficiencies. NFA Member futures commission merchants (FCM) and introducing brokers (IB) should review this release to ensure that their AML programs have the most current information on FATF-identified jurisdictions with AML/CFT deficiencies and revise their AML programs accordingly. A copy of the news release is available on FinCEN’s website.

FCA publishes final rules to strengthen investor protections in SPACs; The FCA has published final rules and changes to its Listing Rules for certain special purpose acquisition companies (SPACs).
On 30 April 2021, the FCA consulted on proposals to remove the presumption of suspension for SPACs that meet certain criteria which are intended to strengthen the protections for investors, while maintaining the smooth operation of the market. The proposed changes were designed to provide an alternative approach for SPACs that must otherwise provide detailed information about a proposed target to the market to avoid being suspended.

New Zealand Financial Markets Authority Warns Investors About Scammers Impersonating NZ Derivatives Issuer
The Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko – is warning investors to be wary of scammers impersonating New Zealand-based derivatives issuer Rockfort Markets Limited.

New IOSCO SPAC Network discusses regulatory issues raised by SPACs;’ IOSCO’s SPAC network held its first meeting yesterday to discuss the issues raised by special purpose acquisition companies.
While SPACs have long existed, transactions have surged recently, drawing regulatory attention to the issues SPACs raise. While SPACs may offer alternative sources of funding and provide opportunities for investors, they may also raise regulatory concerns.

Investing and Trading

China Doesn’t Care How Much Money You Lose; DiDi, TAL, and now Meituan—Beijing’s crackdown continues, and it has less to do with foreign money than domestic control.
Shuli Ren – Bloomberg
Whether you’re a bond or stock investor, chances are you’ve been burned by the Chinese government this year. For example, just days after DiDi Global Inc. raised $4.4 billion in a New York initial public offering, Beijing started an investigation over the ride-hailing giant’s data security practices. DiDi has lost about $29 billion in market value in less than a month.

‘Platform’ is the latest buzzword to beguile investors; Pedestrian businesses seek to goose valuations by deploying the term for their business models
Jonathan Knee – FT
Microsoft joined Apple last month as the second tech titan to exceed the once unthinkable equity value threshold of $2tn. The steady takeover of overall stock market capitalisation by a small group of massive digital platforms during the past decade has changed the way public and private investors think and talk about value, and not for the better.

Environmental, Social and Corporate Governance

Fidelity to Vote Against Climate, Diversity Laggards Next Year
Alastair Marsh – Bloomberg
Fidelity International warned companies it invests in that if they don’t take sufficient action to combat climate change the asset manager will vote against management at shareholder meetings beginning next year.

Artificial Intelligence Could Dramatically Speed Up Climate Action; The list of applications for AI keeps on growing, but the industry needs guardrails to ensure solutions are climate aligned
Akshat Rathi – Bloomberg
Technological solutions to climate change can be put into two categories. Vertical solutions that tackle pollution in one sector, say low-carbon fertilizers that help reduce emissions in agriculture. Or horizontal solutions that address issues across many different industries, say lithium-ion batteries that electrify cars but also better integrate renewables in the electricity mix.

Top Coffee, Sugar, Soy Ports Hunt Climate Clues to Stem Risks
Augusta Victoria Saraiva – Bloomberg
Brazil ports, regulator seek to better gauge adverse effects; Sea hubs are growing shipments, Santos reporting records
As Brazil contends with its worst drought in almost 100 years, its ports and their regulator are intensifying efforts to quantify the risks of climate change for the nation’s sea hubs. The National Agency for Waterway Transportation and the German Corporation for International Cooperation are compiling rankings of risks ranging from gales to rising sea levels at 21 key Brazilian ports and will release the first phase of findings next month. The maritime operations of Latin America’s largest economy are the world’s biggest handlers of coffee, soybeans and sugar.

Global LNG Market Faces Shakeup From Japan’s Green Shift
Stephen Stapczynski – Bloomberg
LNG imports into Japan seen falling by a third by 2030; Utilities to abandon longer-term deals, boost spot exposure
Japan’s aggressive new plan to champion clean energy is shaking up the liquefied natural gas market that it helped pioneer 60 years ago.

100% owned by the Chinese state
Steve Johnson – FT
The UK’s largest asset manager has denied accusations of “greenwashing” in relation to a fund investing purely in securities issued by wholly Chinese government-owned entities that is presented as being in line with environmental, social and governance (ESG) principles.

Boom in ESG Finance Creates One of Asia’s Hottest Job Markets
Ayai Tomisawa – Bloomberg
ICBC, HSBC, ANZ are among banks making push for ESG businesses; Clients understand talent pool is thin, will pay: Egon Zehnder
Demand for sustainable finance jobs is heating up globally and perhaps nowhere more crucially than in Asia, home to some of the world’s biggest economies and carbon emitters.


Everybody take the week off, Wall Street firm tells staff
David French and Jessica DiNapoli – Reuters
No calls, no emails and no meetings. That’s the order this week from Aquiline Capital Partners to its staff. The private equity firm is putting all employees on vacation, people familiar with the matter said.

Credit Suisse investment bank set for Archegos aftershocks
Brenna Hughes Neghaiwi, Oliver Hirt and Pamela Barbaglia – Reuters
When Credit Suisse reports earnings on Thursday, investors will get an insight into how aftershocks from the Archegos and Greensill scandals are being felt across its investment bank just as its rivals are flourishing.

BlackRock Move Sends Record $1.4 Billion to Inflation-Hedged ETF
Sam Potter and Katie Greifeld – Reuters
A tweak to BlackRock Inc.’s model portfolios has triggered a record inflow for the biggest exchange-traded fund protecting investors from inflation. The $30.7 billion iShares TIPS Bond ETF (ticker TIP) absorbed nearly $1.4 billion on Friday, according to data compiled by Bloomberg. The same day, $1.3 billion was pulled from the $16.3 billion iShares U.S. Treasury Bond ETF (GOVT) — also the most-ever.

Credit Suisse hires Goldman executive as risk management chief; David Wildermuth joins Swiss bank as it wrestles with poor response to twin crises
Owen Walker – FT
Credit Suisse has hired an executive from Goldman Sachs as its chief risk officer, as the Swiss bank sets about reinforcing its controls following a spate of crises.

Wells Fargo AM rebrands to Allspring in push to revive fortunes; Former Legg Mason head Joe Sullivan to become chief executive and chair at the asset manager
Chris Flood – FT
Wells Fargo Asset Management will rebrand to Allspring Global Investments and has appointed its third chief executive in less than three years in a push to revive the business.

Goldman Sachs exec appointed risk chief at Credit Suisse following Archegos collapse; New chief risk officer from Goldman Sachs replaces former risk chief Lara Warner who was ousted following the Archegos Capital scandal in April.
Annabel Smith – The Trade
Credit Suisse has named a former executive at US-based rival Goldman Sachs to head up its risk operations following the departure of its risk chief amid the collapse of Archegos Capital.

Barclays Overtakes Credit Suisse in Investment Banking; Executives at U.K. bank say collapses of Credit Suisse clients Archegos and Greensill have created rare opportunity to grab market share
Simon Clark – WSJ
Barclays BCS 2.48% PLC recently overtook Credit Suisse CS 2.19% Group AG in investment banking revenue, a sign that the U.K. bank’s long, frustrated push to be a major player is making progress thanks in part to the troubles of its Swiss rival.


Didi’s IPO Underwriters Go Silent as Volatility Dominates
Drew Singer – Bloomberg
Wall Street’s silence on Didi Global Inc. is speaking volumes as its stock fluctuates well below last month’s initial public offering price. A 25-day quiet period expired on Monday for U.S. analysts at the banks that took Didi public on June 30. The milestone that typically prompts a wave of new, bullish research instead left traders wondering where to turn for more insight around the impact of China’s broadening regulatory crackdown that began with the ride-hailing giant.

Credit Suisse Pushes Deeper Into China With IPO Underwriting
Bloomberg News
Credit Suisse Group AG is pushing deeper into China with plans to extend underwriting of initial public offerings even as markets are roiled by Beijing’s crackdown on the booming financial technology and private education industries.

Capitalists Are No Longer Welcome in China’s Classrooms; As Beijing makes clear what’s truly important for the nation, profit is being squeezed out of private tutoring, an investor darling.
Tim Culpan – Bloomberg
There were plenty of signs that an assault on China’s for-profit tutoring was coming. But few predicted that Beijing would lob a hand grenade into the industry, and in so doing let the entire world know that it sees childhood education as a policy priority and not just a hot capitalist income stream.

Jay Hambro to leave Gupta’s GFG after clash over aluminium sale; Tycoon’s loyal lieutenant on ‘gardening leave’ and no longer taking active role in metals group
Sylvia Pfeifer and Henry Sanderson – FT
Jay Hambro, the chief investment officer of Sanjeev Gupta’s GFG Alliance and one of the industrialist’s most loyal lieutenants, is set to leave the group after a disagreement over the sale of its European aluminium assets.

Egyptian billionaire Sawiris sets up $1.4bn gold mining vehicle; La Mancha Fund will drive consolidation in fragmented industry
Henry Sanderson – FT
Egyptian billionaire Naguib Sawiris has set up a $1.4bn fund to hold his gold mining investments and pursue new opportunities in the sector, which he says is need of consolidation.

Exchange Fund posts US$6.6 billion second-quarter gain, giving Hong Kong more firepower to defend city’s currency; Exchange Fund, the war chest used to protect the city’s currency, stood at HK$4.57 trillion (US$587 billion) at the end of June; Investment results include HK$27.6 billion gain on overseas equities
Chad Bray – South China Morning Post
Hong Kong’s Exchange Fund, the war chest used to defend the local currency from attacks by short sellers, earned HK$51.4 billion (US$6.6 billion) from its investments in the second quarter as it benefited from gains in overseas equity markets and on its bond portfolio, according to the Hong Kong Monetary Authority (HKMA).


The Western Drought Is a Crisis for Migrating Birds, Too; For years, California rice farmers have aided bird migration by flooding their fields in the off season. But this year, they barely have enough water to grow their crops.
Laura Bliss – Bloomberg
Empty wells. Salmon die-offs. Water thieves. The uncontrollable flames of monster wildfire. In California, one of the worst droughts on record has touched off a kaleidoscopic range of emergencies, amplifying age-old resource conflicts as leaders call for conservation by cities, curtailments to farmers and coordination across the board.

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