Hits & Takes
John Lothian & JLN Staff
The FT runs an annual young financial journalist of the year competition and offers cash prizes and more. The FT issued a call for all teenagers to write an article for the FT on the digitization of finance. There are various questions the FT wants addressed, depending on the writer’s age. You can learn more HERE.
Bloomberg is reporting that many Christmas parties in London are being cancelled. Ten percent of bookings have been cancelled, UKHospitality says, according to Bloomberg.
United Airlines is moving operations staff from Willis Tower to the Chicago suburb of Arlington Heights. The move impacts about 900 managers and technical support staff. About 400 flight dispatchers could eventually follow them, Bloomberg reported. United’s headquarters will remain in the city of Chicago, the airline said.
As I mentioned yesterday about the SEC’s updated of the list of unregistered entities using misleading information to solicit primarily non-U.S. investors firms, the site Cryptoinvesttrading.com uses some pictures of executives in the “Our Teams” section of their front page. The picture purported to be Dave Mart, strategy officer, is actually a picture of Alexander Kraft, a Sotheby’s auction house executive. He also has his own sartorial line and an active Instagram account that shows off his luxurious lifestyle and clothing.
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 FOW International Award winners have been announced. You can find out who took home the honors at the FOW’s ceremony last night for “the best and brightest innovations in the derivatives industry” by clicking here. (As a teaser, the winner of Global Exchange of the Year was Eurex.)~SR
As new variants of the coronavirus emerge, the winter issue of the International Monetary Fund’s Finance and Development magazine explores the connections between human and economic health. Obviously, overcoming the pandemic “is a prerequisite to restoring jobs, livelihoods, and economic growth,” says Gita Bhatt, the F&D’s editor-in-chief. That’s key for global economic and financial stability, and therefore important to the IMF. World Trade Organization Chief Ngozi Okonjo-Iweala, Singapore’s Senior Minister Tharman Shanmugaratnam, and Harvard’s Larry Summers are among the authors featured in the new issue. It’s available online here. ~SC
STA has made available a pre-recorded Open Call with legal experts on the subject of the SEC’s Rule 10c-1 (the Rule), which would for the first time require all lenders of securities to provide data and material negotiated terms of securities lending transactions for dissemination to the public. The SEC published and requested comment on the rule on November 18. The Zoom link to the STA recording is here. ~SC
Enron’s Cast of Characters: Where They Are 20 Years After the Fall
Mark Chediak, Greg Farrell and Naureen Malik – Bloomberg
It’s been 20 years, to the day, since Enron Corp. filed for bankruptcy, marking one of the most spectacular financial collapses in history and forever cementing its legacy as the posterchild of corporate fraud. The energy-trading giant’s downfall, triggered by revelations of shady accounting practices, still reverberate throughout the business and political world today. The deceptive practices of its executives, some of whom served jailtime, helped spur the passage of federal laws and regulations designed to improve the accuracy of financial reporting. Enron’s misdeeds in energy—its traders were found to have manipulated California’s recently deregulated electricity market, helping spark a crisis that led to sky-high power prices and rotating blackouts—ultimately led to the downfall of the state’s governor. The name Enron is still invoked in shorthand—like Theranos, Madoff or Lehman—a full two decades after its public ruin. It even inspired a limited-run Broadway show.
***** Cast of characters? It sure was a show.~JJL
SEC Charges Latvian Citizen With Digital Asset Fraud
The Securities and Exchange Commission today charged a Latvian citizen with defrauding hundreds of retail investors out of at least $7 million through two separate fraudulent digital asset securities offerings. According to the civil complaint, filed in U.S. District Court for the Eastern District of New York, Ivars Auzins defrauded U.S. and foreign investors through the unregistered offer and sale of digital asset securities in an initial coin offering and a purported digital asset cloud mining program. Auzins allegedly used fake names, fictitious entities, and fraudulent profiles to perpetrate his schemes, and misappropriated nearly all of the investor funds that were raised.
***** Good example of the SEC’s recently released list of unregistered entities with misleading information to solicit clients.~JJL
Up all night with a Twitch millionaire: The loneliness and rage of the Internet’s new rock stars; Ten hours a day, streamers are broadcasting lives of obsession and wealth for an unforgiving crowd. How long can any of them last?
Drew Harwell – Washington Post
Just before midnight, six hours into his 10-hour Twitch live stream, Tyler Steinkamp’s rage begins to erupt. He’s just scarfed down a dinner of cold chicken fingers over the sink during a three-minute ad break and raced back to his computer, where he is playing the “battle arena” game “League of Legends” as 28,762 people watch.
***** This the world our children live in.~JJL
‘Fearless Girl’ Statue Faces Another Move, NFT Future
Francesca Maglione – Bloomberg
The popular yet embattled statue known as “Fearless Girl” might have to find a new home again, while its creator also contemplates making nonfungible tokens of the Wall Street icon. The bronze image of a girl standing defiantly with her hands on her hips has come to the end of its three-year permit for the space across from the New York Stock Exchange. The sculpture’s creator, Kristen Visbal, led a press conference on Thursday with Democratic district leader Vittoria Fariello and Todd Fine, president of advocacy group Save Washington Street, advocating for it to stay.
***** I am afraid the Fearless Girl might be moved. I know I am moved by the Fearless Girl.~JJL
Thursday’s Top Three
Our top story Thursday was Crypto.com Agrees to Acquire Nadex and the Small Exchange from IG Group, from the Crypto.com blog. Second was The Financial Times’ story on the Crypto.com news, Crypto.com forges deal to buy two of IG Group’s US trading assets. Those stories likely prompt a question that may (or may not) have been answered in the CME Group’s webinar What’s Next For Crypto Derivatives? which took place Thursday at 11:00 a.m. ET and was our third most clicked item.
26,667 pages; 236,420 edits
London Looks For a Way to Drag Its Stock Market Out of the Past; The home of the “Big Bang” is trying to reinvent itself again in a bid to become a more attractive place for companies to list.
Swetha Gopinath – Bloomberg
The City of London is trying to reinvent itself, even as a prominent hedge fund manager derided the U.K.’s financial center as a “Jurassic Park” devoid of growth and innovation. New rules come into force today aimed at luring more technology firms and growth-oriented companies to list in London. Firms issuing dual-class shares will be allowed to list on the top tier of the London market, a move designed to encourage founders to take their companies public while retaining significant stakes.
India at crypto crossroads as New Delhi considers ban; Embryonic start-up scene fuelled by foreign capital is braced for regulation
Chloe Cornish – FT
For India’s millions of cricket fans, matches this year have been punctuated by adverts for cryptocurrency. The ads, featuring Bollywood stars and offering free bitcoins, largely glossed over the risks and legal ambiguities of trading the digital coins.
Cboe slams European Commission’s ‘highly discriminatory’ consolidated tape plans; The exchange operator has said Brussels’ consolidated tape revenue regime neglects pan-European venues including Cboe NL, which it claimed was the largest EU lit book.
Annabel Smith – The Trade
Exchange operator Cboe has called the European Commission’s consolidated tape plans “highly discriminatory” to pan-European venues. Brussels set out plans last week in its Capital Markets Union (CMU) action plan to implement a single post-trade near real time consolidated tape for each individual asset class.
CME Group Achieves Four SOFR Records in November
SOFR futures open interest grew to over 1.6 million contracts; Single day volume record of 520,781 on November 30, 2021 surpassing prior record of 441,499 contracts on October 28, 2021; Average daily volume (monthly) of 304,314 contracts per day; Cleared SOFR Swaps notional volume of $124 billion
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that its SOFR futures contracts reached a new open interest record, surpassing 1.6 million contracts on November 30, a 137% increase in open interest year to date and more than 60% growth since mid-September. November’s SOFR average daily volume increased to 304,314 contracts per day, up over 250% year on year.
CFTC’s Interest Rate Benchmark Reform Subcommittee Selects December 13 for SOFR First for Additional Cross-Currency Derivatives
The Interest Rate Benchmark Reform Subcommittee, a subcommittee of the Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC), today announced that it has selected December 13 to switch interdealer trading conventions from LIBOR to the Secured Overnight Financing Rate (SOFR) for the U.S. dollar (USD) leg of newly-executed cross-currency derivatives under the MRAC’s SOFR First initiative. Acting Chairman Rostin Behnam is the sponsor of MRAC.
The Hot New Trend For Hedge Funds Is—Finally—Female Founders; Nine recently opened or soon-to-launch funds demonstrate that change is coming—slowly—to the world of money management.
Katherine Burton, Nishant Kumar, Hema Parmar – Bloomberg
When Mala Gaonkar and Divya Nettimi open their hedge funds in 2022, some bankers and investors expect they could each start with $1 billion or more under management. There has never been such a large launch by a woman-led firm, never mind two in the same year.
Morgan Stanley Sees Crypto-Banking Regulation Arriving Faster Than Expected
Will Canny – CoinDesk
Regulators are looking to develop a set of rules for crypto banks sooner than expected, according to a research note from Morgan Stanley published last week. This follows a joint statement from the Federal Reserve, Federal Deposit Insurance Corp. (FDIC) and Office of the Comptroller of the Currency (OCC) on Nov. 23 that outlined a “policy-sprint” to develop rules for firms offering services in the crypto space.
Calling all teenagers: could you write an article for the FT? Our annual young financial journalist of the year competition offers cash prizes and more
Claer Barrett – FT
Trading cryptocurrencies, the allure of “buy now pay later” and the growing sway of “finfluencers” on TikTok and Instagram. These are all big financial talking points for young people — but do you have what it takes to turn one into an article that could be published in the Financial Times?
ETFs shine as high taxes loom on US mutual fund capital gains; Several large asset managers have warned capital gains distributions will be 20% or more of the funds’ NAV
Jackie Noblett – FT
This year is shaping up to be a rough tax year for many active mutual funds and could prompt some investors in taxable accounts to shift their assets to the more tax-efficient ETF structure, analysts say. American Century, Columbia Threadneedle, Harbor Funds, Invesco, MFS, T Rowe Price and Vanguard have warned active mutual fund investors to expect year-end capital gains distributions equivalent to 20 per cent or more of the net asset value of the fund, according to a Morningstar review published this month.
Vanishing cash means ‘digital literacy’ is vital; Financial education is one of the best investments in our children’s future
Claer Barrett – FT
Forget pounds, dollars or even bitcoin. There’s only one currency that my two-year-old niece currently understands — and it’s pain aux raisins. Bribery is a key feature of “Auntie Claer care”. If she’s been good, she gets a treat at the coffee shop on our way home (her favourite part is unravelling the pastry and picking out all the raisins). And another important part of this occasional ritual? She likes to pay for it herself.
Companies Cling to Libor as Key Deadline Nears; Banks can’t issue new loans using the troubled rate after Dec. 31, so some companies are looking to pull off one last deal before then
Mark Maurer and Sebastian Pellejero – WSJ
U.S. companies need to give up the London interbank offered rate for new debt at the end of December. Many want to close just one more deal before that. Come Jan. 1, banks won’t be able to issue new loans or other financial contracts using Libor, which underpins trillions of dollars in corporate loans, derivatives and home mortgages. They will, however, be able to keep referencing Libor for debt issued before the year-end deadline through June 2023.
U.S. labor market tightening; layoffs near three-decade lows
Lucia Mutikani – Reuters
The number of Americans filing new claims for unemployment benefits increased less than expected last week, pointing to tightening labor market conditions, while layoffs tumbled to the lowest level in 28-1/2 years in November. The weekly unemployment claims report from the Labor Department on Thursday, the most timely data on the economy’s health, also showed jobless benefits rolls falling below 2 million for the first time since the COVID-19 pandemic started in the United States more than 20 months ago.
Delta Sends Hospital Admissions Up in 39 States as Omicron Lands
Jonathan Levin – Bloomberg
Omicron is stealing most of the attention, but it’s the delta variant of Covid-19 that’s pressuring the U.S. health-care system. The seven-day average of hospital admissions with confirmed Covid-19 has climbed 18% in the past two weeks to 6,691, the highest since Oct. 13, according to U.S. Department of Health and Human Services data. The numbers are ticking higher in 39 states and the nation’s capital.
A Goldilocks Model for Yearly Covid Vaccinations; The best way to administer doses may be to immunize some of the people all of the time.
Lionel Laurent – Bloomberg
Two doses? Three? More? The euphoria that greeted safe and effective Covid-19 vaccines a year ago has turned to confusion and debate in the face of resurgent cases and an ugly new variant. The rich world is doubling down on booster doses, ignoring warnings from the World Health Organization that this will worsen supply shortages in the developing world.
Beijing, Shanghai Hit as China’s Covid Outbreak Picks Up Steam
China’s two largest cities are seeing cases of Covid-19 pick up once again, as an outbreak in the north spread to six provinces and led to 91 new locally-transmitted infections reported on Friday. The country’s political and financial hubs of Beijing and Shanghai detected one and two new cases respectively. Inner Mongolia, where the latest flare up is concentrated, reported almost five dozen infections, according to the National Health Commission.
Omicron Fears Fail to Stop New Yorkers at Favorite Time of Year
Amanda L Gordon – Bloomberg
Sandy Weill, Mark Mason attend Ailey’s opening night gala; ‘Being realistic about the paranoia,’ Nicolas Rohatyn says
New Yorkers had a message for omicron on Wednesday night: We got this. We’re not letting a new variant stop us. It came from the throngs who gathered to see the tree lighting at Rockefeller Center, and from the ticket-holders for opening night of Alvin Ailey American Dance Theater’s season at City Center, its first since 2019.
Roche Creates PCR Tests That Can Single Out Omicron Variant
Thomas Mulier – Bloomberg
Swiss drugmaker Roche Holding AG has developed PCR tests that can single out infections with the omicron variant of Covid-19, which would help countries monitor the spread of the new strain. Roche said Friday its recently acquired TIB Molbiol unit is introducing three such tests for research use only.
Swiss Expand Use of Certificates, Urge WFH to Curb Covid Surge
Catherine Bosley and Corinne Gretler – Bloomberg
The Swiss government expanded the use of certificates and masks to stem the tide of coronavirus infections less than a week after citizens backed previous measures in a referendum.
UK’s ‘mix and match’ booster jab strategy backed by new study; Research shows mRNA vaccines from Pfizer and Moderna are by far most effective third doses
Hannah Kuchler and Sarah Neville – FT
The UK’s decision to adopt a “mix and match” Covid vaccine booster strategy has been supported by a study showing that the mRNA shots from Pfizer and Moderna were by far the most effective at increasing antibody levels.
FDA Aims for Quick Review of Omicron Vaccines and Drugs; Agency and drugmakers develop testing and manufacturing guidelines in case they are needed for fight against new Covid-19 variant
Felicia Schwartz – WSJ
The Food and Drug Administration is laying the groundwork for the rapid review of Omicron-targeted vaccines and drugs if they turn out to be needed, according to people familiar with the matter. The agency, building on rules established earlier this year to assess shots and treatments, has been meeting with drugmakers and setting guidelines for the studies and data needed to swiftly evaluate products targeting the new Omicron Covid-19 variant, the people said.
Covid-19 Vaccine Demand Strains CVS, Walgreens; Pharmacies recommend booking appointments as concerns over Omicron variant push people to seek shots
Sharon Terlep, Tarini Parti and Sarah Nassauer – WSJ
The U.S. has plenty of Covid-19 vaccines but retail pharmacies are struggling to quickly administer them in some places. Vaccine seekers in some states face waits of days or weeks for doses as local health officials hustle to improve access to meet surging demand. CVS Health Corp. CVS 1.36% , Walgreens Boots Alliance Inc. WBA 2.06% and Walmart Inc., WMT -1.22% which are facing staffing shortages, now say they may not be able to accommodate people without appointments.
Vaccine Campaigns Are Built on Trust. In Some Places, It Is in Short Supply.
Anita Sreedhar and Anand Gopal – NY Times
Robert Steed knew the toll Covid-19 had taken on the South Bronx, where he’d lived most of his life. There were longtime tenants who’d succumbed to the disease. There were the ambulances that would pull up to the drab brick apartment buildings of St. Mary’s Park Houses, the public housing complex where he’d grown up. The posters pasted near the elevators, urging residents to get vaccinated. But he wouldn’t go near the vaccine.
How to Carry Your Covid Health Data on a Smartphone; To plan for safe travels and gatherings this holiday season, here are some simple ways to take your Covid-related health data with you.
Brian X. Chen – NY Times
The state of the digital Covid vaccine card — the bar code that we store on our phones and present to businesses and venues as proof of inoculation — is chaotic.
Exchanges, OTC and Clearing
China’s Didi to delist from New York and switch to Hong Kong; Ride-hailing group’s retreat following Beijing regulatory crackdown hits Chinese tech stocks
Ryan McMorrow, Sun Yu and Tom Mitchell – FT
Chinese ride-hailing group Didi Chuxing said it would delist from the New York Stock Exchange, accelerating China’s decoupling from US capital markets as Beijing cracks down on the country’s leading technology groups. The company, which has been hit by increased regulatory scrutiny in China, wrote on its official Weibo account on Friday that it would begin the process of delisting and prepare to go public in Hong Kong.
Hong Kong IPOs shrink as investors favour rival markets; New listings have raised 10% less this year as Beijing cracks down on tech groups
Hudson Lockett and Tabby Kinder – FT
New stock listings in Hong Kong have slid this year, making it an exception across global markets as concerns persist over the outlook for China’s tech sector after Beijing slammed the brakes on offshore share sales.
Sweeping overhaul of UK listing rules comes into force; Changes by FCA aim to make London more attractive to fast-growing tech companies
Philip Stafford and Laura Noonan – FT
Britain’s chief financial regulator has finalised a sweeping overhaul of the listing rules, aimed at making the City more attractive to fast-growing companies from the technology and biotech sectors.
Grolleau lists on Euronext Growth Paris
EUR8 million raised; Market capitalisation of EUR27 million; 58th listing on Euronext Paris in 2021; 187th listing on Euronext in 2021
Euronext today congratulates Grolleau, a major player in Smart Territory infrastructures, on its listing on Euronext Growth Paris (ticker code: ALGRO).
Datrix S.p.A. lists on Euronext Growth Milan
33rd listing of 2021 on Euronext Growth Milan; Datrix S.p.A. brings the total number of companies listed on Euronext Growth Milan to 164; Total placement volume of the offering equal to EUR15 million
Borsa Italiana, part of the Euronext Group, today congratulates Datrix S.p.A. on its listing on Euronext Growth Milan.
An excellent finish to 2021: FOW honors Eurex three times over
It is always a good sign when one’s work is acknowledged by clients and the press. Eurex has had this honor already several times this year and now here come the next three awards: a panel of internationally recognized judges at FOW not only named us “Global Exchange of the Year” but also “Exchange of the year – Europe” and “Most Innovative Contract of the Year”.
Unscheduled adjustment in the DAX
Change after the spin-off of Daimler Truck Holding AG from Daimler AG; DAX calculation on December 10 with 41 values
STOXX Ltd., Qontigo’s global index provider, has announced an unscheduled change in the DAX. With the spin-off of Daimler Truck Holding AG from Daimler AG, an adjustment in the DAX is necessary. Daimler Truck Holding AG will be included in the DAX for one day on December 10, 2021. This adjustment ensures that the index can be represented by investors. The DAX is thus calculated for one day with 41 values.
HKEX Enhances Product Offering with Weibo Debut
Weibo Futures and Options to be introduced on 8 December; Weibo shares to be included in Designated Securities Eligible for Short Selling on 8 December; Issuers can list derivative warrants on Weibo shares on 8 December
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Friday) that it will offer investors more options on Weibo Corporation (Weibo, stock code: 9898) shares after its debut.
HKEX Publishes Net-Zero Guide & Announces New ESG Data Display
Practical Net-Zero Guide for Business (Net-Zero Guide) published to help guide companies in developing a pathway to net zero; Partnership with leading ESG data providers to display HKEX-listed companies ESG metrics
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Thursday) pleased to announce two new initiatives to support businesses and investors in their sustainability journey, helping to facilitate the net-zero transition across the reg
Intercontinental Exchange Reports November 2021 Statistics
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported November 2021 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
Nasdaq November 2021 Volumes
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for November 2021 on its investor relations website. A data sheet showing the monthly volumes and quarterly capture rates can be found at: http://ir.nasdaq.com/financials/volume-statistics.
Change to the JPX-Nikkei Index 400
Japan Exchange Group, Inc., Tokyo Stock Exchange, Inc. and Nikkei Inc. will make the following change to the JPX-Nikkei Index 400 constituent in accordance with the constituent selection rule.
— Bloomberg Commodity Index futures converted from embedded fee to standard fee — CME
— Performance Bond Requirements: Energy, Agriculture, Equities, Metals – Effective December 03, 2021 — CME
— Performance Bond Requirements: Energy & Interest Rate Margins – Effective December 03, 2021 — CME
— New Product Summary: Initial Listing of Japanese Power (Day-Ahead) Tokyo Base-Load Average Price Option Contract Contracts – Effective January 24, 2022 — CME
KRM22 partners with Currency.com to deliver traditional capital market control to the crypto industry
KRM22 is pleased to announce a partnership with Currency.com, the high-growth European crypto platform, with the implementation of KRM22 Market Surveillance product. An exciting opportunity to add to our growing cryptocurrency client base and continue to drive industry and regulatory standards through Market Surveillance.
Three Ex-Goldman Bankers Get Eisler Backing for Their Substack Rival
Donal Griffin – Bloomberg
Three former Goldman Sachs Group Inc. bankers have secured the backing of Edward Eisler for a media startup that looks to challenge blogging platforms like WordPress and Substack Inc. Traders Alfred Mallol and Majid Sebti, as well as software engineer Joan Cots have raised $5 million in early funding for Excerp, according to a statement Wednesday. Among the backers of the friends-and-family round is hedge fund manager Eisler, another ex-Goldman executive.
Asia’s Richest Man Says He ‘Believes’ in Blockchain Technology
P R Sanjai – Bloomberg
Digital technologies are a great leveler, he said in a forum; It will reinvent many sectors and make them more accessible
Mukesh Ambani, Asia’s richest person, said he sees the benefits of the blockchain technology and expects India to soon have one of the world’s most-advanced digital infrastructures — a tool that can generate equitable prosperity across the society.
SoftBank and celebrity investors back Christian app in $40m funding round; Glorify attracts investment from VC firms as well as Kris Jenner and Michael Bublé
Cristina Criddle – FT
An app that helps Christians connect to God has attracted investment from several celebrities and heavyweight investors including Andreessen Horowitz and SoftBank’s Latin America Fund, in a deal that values it at about $250m. London-based Glorify’s $40m series A funding round on Thursday included investors such as venture capital firm K5 Global, reality TV star Kris Jenner and singers Michael Bublé and Jason Derulo.
The Fall of a Russian Cyberexecutive Who Went Against the Kremlin; Ilya Sachkov, who’s been charged with treason in Russia, is alleged to have given the U.S. information about the “Fancy Bear” operation that sought to influence the U.S. election.
Irina Reznik, Henry Meyer and Jordan Robertson – Bloomberg
At a business awards ceremony in February 2019 at the Kremlin, a young cybersecurity entrepreneur named Ilya Sachkov chatted with Russian President Vladimir Putin. As cameras rolled, Sachkov invited Putin to visit the Moscow offices of his company, Group-IB, to see its powerful antihacking technologies firsthand. “You’ll definitely be astonished,” he said.
Navigating Cybersecurity Risks in International Trade
Keman Huang, Stuart Madnick, and Fang Zhang – Harvard Business Review
Digital trade is crucial for almost every company, but it also introduces new complications. When products or services that contain a computer or can be connected to the internet — which nearly every product or service does — cross borders, cybersecurity risks emerge. Growing concerns that foreign states or corporations can abuse digital products to collect privacy data, plant vulnerabilities, or otherwise cause harm mean that digital products sold across borders are subject to increased scrutiny and controls, and can be targeted for bans — fairly or not — by host governments. Navigating and mitigating these risks needs to be a part of every transnational company’s digitalization strategy.
Why Data Center Proximity Doesn’t Equal Ironclad Cybersecurity
Jason Soroko – Forbes
Recent breaches of well-established on-premises infrastructure speak to the very core of most chief information security officers’ nightmares. Consider high-profile headlines involving SolarWinds, Microsoft Exchange, the Microsoft Active Directory domain controller printer spooler (PrintNightmare) and Microsoft CA (PetitPotam). Massive incidents like these raise the question: “Should I trust the security of internal corporate ecosystems more than external systems?” It’s likely that many IT leaders are giving too much trust to systems in close proximity to their physical infrastructures.
Officials Testify on Protecting Cybersecurity Infrastructure
The House Transportation and Infrastructure Committee looked at how the federal government can address cybersecurity threats.
U.S. imposes first cybersecurity rules for rail transit, despite industry pushback
Nicole Sganga – CBS News
The federal government imposed two cybersecurity mandates on “higher-risk” railroad and rail transit systems, despite industry efforts to beat back regulations.
The new security measures will order critical passenger and freight railways to take these actions:
Women Poised to Fill Gap of Cybersecurity Talent
Linn F. Freedman – National Law Review
I have been advocating for gender equality in Cybersecurity for years [related podcast and post].
The statistics on the participation of women in the field of cybersecurity continue to be bleak, despite significant outreach efforts, including “Girls Who Code” and programs to encourage girls to explore STEM (Science, Technology, Engineering and Mathematics) subjects.
Looking Back to See What the Future Holds for Cybersecurity Enforcement
Sara Lord – JDSupra
The year 2021 will likely be seen as a defining moment in the history of cybersecurity enforcement. For the healthcare industry and government contractors, in particular, the government’s expanding focus on cybersecurity brings increased risks and penalties for noncompliance with stricter cyber standards and requirements.
Metaverse a Massive Opportunity for Crypto, Says BoA
Joel Frank – FX Empire
The metaverse presents a massive opportunity for blockchain technology and will result in the widespread adoption of cryptocurrencies for transactions, global head of thematic investment strategy at Bank of America Haim Israel said in an interview this week.
Meta allows more cryptocurrency ads
Jon Fingas – Engadget
Meta is backing away from its ban by expanding the number of regulatory licenses it accepts from three to 27. The crypto landscape has “matured and stabilized” enough to justify the change of heart, the company said, including an increased amount of government regulation that sets “clearer responsibilities and expectations.”
NFT craze breathes life into first ETF, investors seek to ‘connect and create’
David Hollerith – Yahoo Finance
A new exchange traded fund (ETF) is trying to capture the white-hot market for non-fungible tokens (NFTs) in one financial product. But the catch is that it won’t actually own any NFTs, crypto assets or related derivatives. Listed under the symbol “NFTZ” by issuer Defiance ETFs, the Defiance Digital Revolution ETF launches Thursday on the New York Stock Exchange’s Arca platform. The fund owns shares in publicly traded blockchain-related companies like Coinbase (COIN), in addition to those making a commitment to NFTs, like Funko (FNKO), PlayBoy (PLBY) and DraftKings (DKNG).
Digital Entertainment Asset and Bascule Inc. Launches the World’s First NFT From Space; THE FIRST SPACE SUNRISE 2022 WILL BE LAUNCHED IN REAL-TIME FROM THE INTERNATIONAL SPACE STATION
Digital Entertainment Asset Pte. Ltd
Digital Entertainment Asset Pte. Ltd (DEA), a global GameFi company and Bascule Inc., led by Representative Director Masayoshi Boku, have teamed up to launch ‘The First Space Sunrise’, an exclusive limited edition NFT (Non-fungible token) which features real-time photos from the International Space Station (ISS).
Luna Surges as Token Becomes the ‘Latest Shiny Thing’ in Crypto
Joanna Ossinger – Bloomberg
Coin price has jumped about 60% in the past seven days; Network is destroying Luna tokens amid shift to stablecoin
Terraform Labs’ Luna token is climbing into the ranks of the largest cryptocurrencies amid changes in how the coin is used for its blockchain payments network and optimism about the potential for decentralized applications.
Poland Sees Gas Market Risk Amid Russia Pipeline Dispute
Ewa Krukowska – Bloomberg
Climate minister Anna Moskwa speaks in interview in Brussels; EU carbon market fails to encourage green shift, Moskwa says
Natural gas prices in Europe could remain volatile for months, with Russia limiting supplies as it seeks approval for a controversial new pipeline to the region, according to Poland’s new climate minister, Anna Moskwa.
France: the battle over wind power stirs up the election; Heavy investment in wind farms is vital to meeting net zero goals but the sector is becoming a contentious political issue
Sarah White and Victor Mallet – FT
As France’s election season gathers steam, the fishermen from Saint-Brieuc on the north Brittany coast have had a stream of illustrious visitors, including the EU’s former Brexit negotiator Michel Barnier.
Biden Struggles to Win Support Among Democrats for Vacant Wall Street Regulation Posts; Unfilled positions threaten to slow implementation of president’s agenda
Andrew Ackerman – WSJ
The White House’s desire to appease both liberal and moderate Democrats has left several top Wall Street regulatory posts unfilled, slowing the implementation of President Biden’s agenda nearly a year into the administration.
Omicron Could Widen Blue-Red Economic Divide; Democratic-leaning states avoid the worst of Covid-19 illness while their economies lag
Greg Ip – WSJ
Covid-19 has carved a partisan divide through the U.S. Democratic-leaning states have gone further with social distancing, school closures, mask mandates and vaccinations than Republican-leaning states. As a result, the former had generally lower rates of infection and death than the latter—and paid for it with much weaker job growth. If the Omicron variant unleashes a new wave of the pandemic, those partisan gaps could be perpetuated.
More Sept. 11 Victims Who Sued the Taliban Want Frozen Afghan Funds; The Biden administration was set to tell a court on Friday what it thinks should happen, but obtained a delay until Jan. 28.
Charlie Savage – NY Times
A fight is breaking out among lawyers for different groups of victims of the Sept. 11, 2001, terrorist attacks over who can try to seize $7 billion in Afghan central bank funds deposited at the New York Federal Reserve — money the Taliban now claims is theirs.
SEC Charges Pharma CFO and Former Partner with Insider Trading
The Securities and Exchange Commission today charged the former Chief Financial Officer of pharmaceutical company Immunomedics, Inc. and his former romantic partner with insider trading in the company’s stock.
SEC Adopts Amendments to Finalize Rules Relating to the Holding Foreign Companies Accountable Act; Rules Set Forth the Submission and Disclosure Requirements Mandated by the Act
The Securities and Exchange Commission today adopted amendments to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act (HFCAA). The rules apply to registrants the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board (PCAOB) is unable to inspect or investigate (Commission-Identified Issuers).
EU fines banks EUR344m in forex trading probe; Final investigation found traders had used Sterling Lads chatroom to share information
Javier Espinoza and Philip Stafford – FT
European antitrust regulators have fined HSBC, Credit Suisse, Barclays and RBS a total of EUR344m for colluding to rig the global currency market, bringing to an end a long-running investigation.
A Tougher CFPB Wants to Be Big Tech’s Financial Watchdog; New director Rohit Chopra wants to know more about Silicon Valley’s plans in the payments business.
Akayla Gardner – Bloomberg
The Consumer Financial Protection Bureau has been a flashpoint in partisan politics and a focus of Wall Street’s ire since its inception a decade ago. Now the watchdog, which was created in the wake of the 2008 financial crisis to protect Americans from fraud and other abuses, has a new target: Big Tech.
Vietnam Police Bust $3.8 Billion Crypto-Tied Gambling Ring: VTV
Nguyen Xuan Quynh – Bloomberg
Ho Chi Minh City police have detained 59 people tied to the biggest illegal online gambling ring ever uncovered by Vietnamese authorities, according to state-owned broadcaster VTV. The cryptocurrency gambling ring had transactions totaling more than $3.8 billion, which includes the amount of money gamblers put in the ring and excludes reciprocal money from the dealer, VTV reported, citing information from the police.
HMRC eyes hefty fines for Isa rule breaches; Review follows the collapse of minibond company LCF
Kate Beioley – FT
Brokers face the threat of penalties for breaking individual savings account (Isa) rules as part of a proposed overhaul to protect customers after the collapse of minibond provider London Capital & Finance. HM Revenue & Customs has issued a call for evidence on plans to fine brokers and fund supermarkets that fail to comply with Isa rules due to concerns that the current system “primarily penalises investors” for brokers’ bad behaviour.
ESMA publishes latest edition of its newsletter
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its latest edition of its Spotlight on Markets Newsletter.
Developments in the Digital Assets Market
This panel focuses on education and awareness about key developments in the digital assets market, including exploring issues related to broker-dealer’s involvement in the digital assets market and developments concerning DeFi and stablecoins. Join FINRA panelists and industry experts as they discuss these complex investments products and consider both the potential benefits and risks they present.
SD holiday filing requirements
Visit NFA’s website to view schedules of 2022 swap dealer (SD) holiday filings, risk data and margin monitoring filings and financial reporting due dates. We recommend viewing the schedules and keeping this Notice as a reference for the upcoming 2022 holiday filing requirements.
FSA publishes English translation of monthly magazine, Access FSA No.218 NEW
Overview of major banks’ financial results as of September 30, 2021
Following the announcements by major banks, etc. of their financial results as of September 30, 2021, the FSA has compiled the figures, etc. announced by these banks.
FCA proposes stronger requirements on oversight of appointed representatives
The FCA has today launched a consultation on improving the appointed representatives regime and tackling harm from this model.
FCA and Practitioner Panel publish findings from 2021 joint survey
The FCA and the Practitioner Panel have published a report from our 2021 joint survey of FCA regulated firms.
Investing and Trading
Why Affluent Clients Find Advisors Very Differently
Philip Palaver – Financial Advisor Magazine
In our article last month we examined how prospects, when searching for an advisor, trust the recommendations of their friends and family the most, but they also notice brands and assign a lot of importance to the reputation of the firm. The survey conducted by The Ensemble Practice LLC among consumers with over $100,000 in income reveals that while “Who can I trust?” is the fundamental question all investors ask, there are significant differences in who they ask this question to based on their wealth, age, gender and sources of wealth.
Berkshire’s Munger Says Now ‘Even Crazier’ Than Dotcom Bust
Adam Haigh – Bloomberg
Munger also said that he wished cryptocurrencies didn’t exist; Investor urged Australia to help mend rift between China, U.S.
Berkshire Hathaway Inc.’s Charlie Munger told a conference Friday that markets are wildly overvalued in places and that the current environment is “even crazier” than the dotcom boom of the late 1990s that subsequently led to a bust. “I consider this era an even crazier era than the dotcom era,” Munger, 97, said at the Sohn conference in Sydney, The Australian Financial Review reported.
In the Tarantino Market, the Hottest Stocks Are Getting Quietly Killed; Turmoil under the surface of the S&P 500 is reminiscent of the quant crisis.
Tracy Alloway – Bloomberg
Whisper it softly, but there’s something going on beneath the surface of the stock market. While concerns around the spread of the omicron variant ostensibly helped whipsaw equities in recent days, there were strange moves happening even before worries over the new variant burst onto the scene late last week. Growth stocks, meme favorites and other companies beloved of retail investors or hedge funds had seen their share prices melt despite the overall S&P 500 remaining relatively stable.
When Everything Is a Growth Stock And All Money Is Venture Funds
Tracy Alloway – Bloomberg
What do you get a credit market that has everything? How about billions of dollars of loans at ultra-low interest rates to companies with no income? Having spent years chasing shrinking returns in the booming institutional loan market, yield-hungry lenders are taking a leaf out of the venture capitalist playbook and extending cash to companies that aren’t yet profitable but which might be expected to become so in the future.
Apple’s unusual trading points to options explosion and Reddit boards; iPhone maker’s market value reached $2.7tn this week as hedge funds latched on to retail momentum
Eric Platt and Madison Darbyshire – FT
Puzzling activity in Apple shares this week has strategists pointing to a possible cause: an explosion of trading in options linked to one of the world’s most valuable companies. As the US stock market sank on news of the spreading Omicron coronavirus variant, shares of Apple levitated mysteriously.
AmEx Global Business Travel Going Public Through $5.3 Billion Merger With Apollo SPAC; Booking services provider is combining with a blank-check company after it made several acquisitions during pandemic
Amrith Ramkumar – WSJ
American Express Global Business Travel is merging with a blank-check company backed by Apollo Global Management Inc. APO 1.63% to go public with a roughly $5.3 billion valuation, the companies said. A travel-booking services provider for corporate customers, AmEx Global Business Travel is 50% owned by American Express Co. AXP 4.47% It is combining with the special-purpose acquisition company Apollo Strategic Growth Capital. APSG 0.20% The Wall Street Journal previously reported the two sides were nearing a deal.
Covid-19 Made Americans Into Super Savers. Now They’re Hoarding Cash; Concern about the lingering pandemic has made many reluctant to dip into their funds
Julia Carpenter – WSJ
Americans are hoarding cash because of fatigue and uncertainty, with little chance the trend will reverse soon. Over the past two years, households have socked away close to $1.6 trillion in “excess savings,” or resources they otherwise wouldn’t have been able to save before the Covid-19 crisis, according to the Federal Reserve Bank of New York. The funds are well beyond the three to six months of emergency savings generally recommended by financial advisers.
Sharing Hard-Won Money Lessons to Build Generational Wealth; Wanting to help others in their communities, influencers of color who taught themselves how to pay off big debts and invest have developed audiences for their experience and advice.
Coral Murphy Marcos – NY Times
Jacent Wamala’s family pushed her to follow what they saw as the American dream. After all, that was part of why they moved to the United States from Uganda — so she could go to college, get married, have children, succeed. She did all of those things. But after 26 years here, she had acquired something else: huge debt.
Institutional investors are adopting alternative data to gain an edge on supply chains; A study by Coalition Greenwich found that 44% of institutional investors currently use alt data, while an additional 24% plan to adopt alt data in the near future.
Wesley Bray – The Trade
As companies around the world continue to be disrupted by logistics bottlenecks, institutional investors are searching for new sources of alternative data on supply chains to help inform their future investment decisions. “Alt data” are current, unique sources of data gleaned from third-party sources, which can provide valuable explanatory power to both quantitative and fundamental investment models.
Environmental, Social and Corporate Governance
Europe’s Carbon Price Has Almost Tripled in 2021
Will Mathis and Rachel Morison – Bloomberg
The cost of permits has increased more than 140% this year; Stricter EU climate goals and burning coal are boosting prices
European carbon futures rose above 80 euros ($90.272) a ton on Friday for the first time, testing the resolve of politicians who are promising to act aggressively on climate change while grappling with inflation that’s tearing into economies across the globe.
Glencore defends coal rundown strategy as right for the world; Activist fund says plans to keep producing the fossil fuel for decades was ‘morally unacceptable and financially flawed’
Neil Hume, – FT
Glencore’s new chief executive has defended the company’s plan to run down its coal mines but said he would be prepared to spin off the business if it became a problem for its biggest shareholders. Gary Nagle, who took the helm this summer, on Thursday said Glencore’s plan to close all of its coal mines within the next 30 years was the “responsible strategy for both our business and for the world”.
Credit Suisse Chairman Is Planning to Restructure Banker Pay
Marion Halftermeyer and Marion Dakers – Bloomberg
Revamp of compensation is being prepared for 2022 AGM; Horta-Osorio looks to boost ability to claw back remuneration
Credit Suisse Group AG is reviewing banker pay to better align compensation with shareholder interests, after a tumultuous year in which the firm was buffeted by the Archegos Capital Management and Greensill Capital crises.
UBS’s London Headquarters Attracts Buyer With £1.25 Billion Deal
Olivia Konotey-Ahulu and Jack Sidders – Bloomberg
Korea’s NPS, working with LaSalle, agreed to buy the property; UBS is committed to leasing 5 Broadgate until at least 2035
UBS Group AG’s London headquarters will be bought by Korea’s National Pension Service and LaSalle Investment Management for about 1.25 billion pounds ($1.7 billion).
Citi applies to re-enter China investment banking market; Wall Street group wants to launch a wholly owned business after exiting securities joint venture in 2019
Tabby Kinder – FT
Citigroup has applied for a licence to launch a wholly owned investment bank in China, three years after it exited the securities market in the world’s second-largest economy, according to a person with direct knowledge of the matter.
Citigroup Applies for China Securities License; Wall Street bank joins JPMorgan, Goldman Sachs and others in seeking a deeper foothold in the country
Jing Yang – WSJ
Citigroup Inc. C 2.06% has applied for a securities license in China, according to a person familiar with the matter, as the New York-based banking giant eyes a bigger presence in the world’s second-largest economy.
Allianz Strikes Deal Over Management of $35 Billion in U.S. Annuities; German financial giant is one of the top sellers of fixed annuities, a popular retirement product, to individuals in the U.S.
Julie Steinberg – WSJ
German insurer Allianz ALIZY 1.41% SE said its U.S. life insurer had reached an agreement to reinsure liabilities of $35 billion, in one of the largest transactions of its kind. U.S. subsidiary Allianz Life struck the deal with life insurance group Resolution Life and affiliates of investment firm Sixth Street, including Talcott Resolution Life Insurance Co., for a portfolio of fixed annuities.
JP Morgan appoints new head of EMEA high touch cash equity trading in London; Borja Rodriguez-Cano recently moved from Hong Kong to London to assume the new role.
Will Canny – The Trade
JP Morgan has named a new head of EMEA high touch cash trading for its equities business in London as part of a management reshuffle, according to two people familiar with the matter. Borja Rodriguez-Cano, a managing director, and formerly head of Asia Pacific cash trading at the US bank – according to his LinkedIn profile – has moved from Hong Kong to London in recent months to assume the new position in the stock trading division.
BNY Mellon’s Pershing to acquire Optimal Asset Management; The acquisition will form part of Pershing’s recently launched business unit Pershing X that is said to design and build innovative solutions for the advisory industry.
Wesley Bray – The Trade
BNY Mellon’s Pershing has entered into a definitive agreement to acquire direct indexing solutions provider Optimal Asset Management. Closing of the acquisition is subject to customary conditions and is expected to occur before the end of 2021.
China Tech Rout Deepens to $1.5 Trillion as Didi Emboldens Bears
Didi plans U.S. delisting and will seek share sale in H.K; Hang Seng Tech Index has plunged 46% from February’s peak
Chinese tech shares briefly touched their record lows in Hong Kong, as Didi Global Inc.’s announcement to start U.S. delisting and rising scrutiny on mainland firms traded there dealt a further blow to already soured sentiment. The Hang Seng Tech Index, which tracks mostly Chinese technology giants traded in Hong Kong, slid as much as 2.7% before closing 1.5% lower to hover over its lowest level since the gauge was launched in July last year. Members of the index have seen about $1.5 trillion of combined market value evaporate since a February peak.
China Media Warns Canada Goose May Have Broken Consumer Law
Firm called in by Shanghai consumer watchdog on return policy; Shares slid for three sessions in New York to lowest in month
China’s state-run People’s Daily newspaper warned that Canada Goose Holdings Inc. may have violated Chinese consumer law, a sign the clothing company may be facing a difficult period in the world’s No. 2 economy.
Evergrande Tycoon’s New Banker Is the ‘Queen of Shell Companies’
Venus Feng – Bloomberg
Kingston Securities has appeared on three Evergrande deals; Investors who bought January placement have lost 89%
She’s best known as the “Queen of shell companies,” a financier who briefly became Hong Kong’s richest woman by striking deals in some of the wildest corners of the city’s stock market. Now Pollyanna Chu has a new role: investment banker for embattled China Evergrande Group billionaire Hui Ka Yan.
China May Raise Coal Contract Prices in 2022 After Squeeze
Benchmark of 700 yuan a ton is above previous informal ceiling; Thermal futures have fallen more than half from October record
China plans to raise the benchmark price for long-term coal contracts in 2022 after a supply scare earlier this year, adding to inflationary pressures faced by manufacturers.
Quebec’s maple syrup cartel should be sweeter; The province’s reserve of liquid gold could be a model for other agricultural products if it loosened up
John Gapper – FT
There is nothing that tastes quite as good on a pancake or a waffle as maple syrup, so this week’s action by Canadian farmers to ensure their national product keeps flowing provides seasonal good cheer. Millions of pounds of “liquid gold” — half of Quebec’s strategic maple syrup reserve — are on their way.
Can’t Find a Rolex or Patek Philippe? Blame the Reddit Crowd; Luxury watches have always had more willing buyers than available supply. But interest has exploded in recent years.
Andrea Felsted – Bloomberg
It’s not just toys, tech and turkey that are in short supply this Christmas. Rolex watches will be harder to find too. Luckily for bling seekers, there are other ways to get in on the luxury watch boom.
Christmas Parties Are Getting Canceled Across the City of London
Ryan Hesketh, Lisa Pham, and Irina Anghel – Bloomberg
City of London firms start to scale back holiday events; 10% of bookings have been canceled so far, UKHospitality says
Bankers in London hoping to mark the end of a hectic year in the financial markets with a blowout holiday party are set to be disappointed. The omicron variant is prompting firms to cancel or scale back their end-of-year celebrations.
Churchill Downs to Explore Sale of Betting Unit TwinSpires
Gillian Tan and Christopher Palmeri – Bloomberg
Wagering arm may fetch $1.5 billion in any transaction; TwinSpires is the official betting partner of Kentucky Derby
Churchill Downs Inc. is exploring options including a sale of TwinSpires Racing, the official betting partner of the Kentucky Derby among other races, according to people with knowledge of the matter. The shares rose on the news.