London’s Future Is in the Hands of the EU

Jan 16, 2020

First Read

Hits & Takes
By JLN Staff

Yesterday there was a bigger crowd for the CFA Society Chicago’s SOFR panel discussion in Chicago than for the Security Traders Association Mid-winter Annual Meeting further south down Michigan Avenue. The SOFR discussion was a balanced presentation about Libor, SOFR and Ameribor. The panel, “Life after Libor,” featured Agha Mirza, managing director of the CME Group and global head of interest rate products, representing the futures perspective~JJL

I genuinely learned things about how the transition from Libor is developing and the manner in which some products, whether cash, structured products or derivatives, will transition to some alternative to Libor. There is not a single instrument that will replace Libor, just like there are variants now of different short-term rates. I have lots to follow up on after the CFA event.~JJL

At STAC, the first panel was on Cannabis, an interesting subject to start a conference of security traders. SuperCritical’s Jay Caauwe was on the panel and we interviewed him and Illinois State Representative Kelly Cassidy, 14th District, afterwards. Also on the panel were Mark DeSalvo of Revolution Cannabis, Michael Piermont of Leaftrade, and Terry Patton of Cannatrac. There continues to be a lot going on in this space with lots of risk and reward opportunities.~JJL

Patty Schuler of Box Options Exchange moderated a panel on Women in Finance 2020, and it was nice to see a panel with all women.~JJL

I left STAC’s conference after lunch, though I did sit in on the ESG panel for a while. It featured all men. STAC continues today at the Chicago Hilton with a pretty good lineup of panels and speakers.~JJL

The Senegalese-American singer and songwriter Akon has finalized plans for the construction of a 2000-acre city in Senegal. The city’s economy will run entirely on blockchain technology and a cryptocurrency called “Akoin.” Makes me wonder what other musicians would call their own cryptocurrencies, if they created ones named after themselves…Eminem Coin (MNM)? Koindrick Lamar (KLM)? Coinye (COINYE)?…wait, no – that one’s been done already.~MR

Bloomberg’s Liam Vaughan has a story titled “Flash Crash Culprit Seen as Childlike Gamer Not Fit for Prison.”~JJL

The Futures Industry Association‘s (FIA) December 2019 volume report showed that worldwide volume of exchange-traded derivatives was 2.82 billion contracts in December, down 0.4% from the previous month but up 5.8% from December 2018.~SR


UK regulators launch fresh push to switch away from Libor; Banks have until September to stop issuing cash products linked to sterling benchmark
Caroline Binham – FT
Banks have until September this year to stop issuing cash products linked to sterling-denominated Libor as part of a fresh assault on the notorious benchmark by UK watchdogs to meet a 2021 deadline.

****They are not kidding this time. The industry really needs to get ready to move away from Libor and all $325 trillion dollars of Libor-linked instruments and deals.~JJL


Nobody Makes Money Like Apollo’s Ruthless Founder Leon Black; The private equity CEO with a fearsome reputation skates on the edges of other people’s catastrophes and manages to walk away richer.
Caleb Melby and Heather Perlberg – Bloomberg
Leon Black, the most feared man in the most aggressive realm of finance, wants you to know he’s misunderstood. Not about the feared part—that much is indisputable. Black built his company, Apollo Global Management Inc., by buying struggling businesses with huge piles of debt at bargain-basement prices, imposing austerity measures on the staff, and extracting huge dividend payments and management fees. Many of Apollo’s most lucrative deals have been from companies other firms wouldn’t go near, and Black is concerned this has left him with a reputation for taking on inordinate risk. “We’ve actually made our most money during recessions,” he says, growing agitated. As his face reddens over his blue Hermès tie, his incongruously soft voice rises by an octave, and he stabs a pile of printed-out emails with an eraserless No.?2 pencil. “Everybody else is running for the doors, and we’re backing up the trucks.”

***** I love the smell of hyperbole in the morning!~JJL


Far Point to Buy Global Blue From Silver Lake; Global Blue gets U.S. listing, nearly $1 billion as part of the transaction
Cara Lombardo – WSJ
Far Point Acquisition Corp., the blank-check company launched by former New York Stock Exchange President Thomas Farley, said Thursday it plans to buy Swiss payments company Global Blue for $2.6 billion, including debt.

*****Tom Farley with a big deal.~JJL


Wednesday’s Top Three
Our most read story Wednesday was Bloomberg’s U.S. Recommends No Jail Time for Flash Crash Trader, about Navinder Singh Sarao, the British trader some blamed for contributing to the 2010 Flash Crash. An important story, as the industry still struggles to define what constitutes “spoofing.” Second was another Bloomberg story, U.S. Data-Release Plan Has Wall Street Preparing for Algo Wars, about the Trump administration’s plan to stop the practice of giving reporters advance copies of market-moving reports from the government with an embargo until an agreed-upon time. And in third was Cboe Plans Comeback in Crypto Markets, from Waters Technology.


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Lead Stories

London’s Future Is in the Hands of the EU
Alexander Weber and Silla Brush – Bloomberg
EU to take crucial decisions on City’s access over next months; Financial firms will push for more concessions from Brussels
London’s battle to remain a global financial hub now rests on a once-obscure process controlled by politicians in Europe. The European Union will consider about 40 equivalence decisions this year, determining how much equity, fixed-income and other investment banking business can remain in London and still serve EU clients. The bloc’s politicians are under no obligation to maintain close ties with the U.K.’s finance industry.

Climate change will reshape markets, McKinsey warns; Investors have not priced in how warmer weather might affect output, report says
Camilla Hodgson and Billy Nauman – FT
Financial markets could face upheaval if the risks of climate change are not taken more seriously, McKinsey warned in a report on Thursday.

The Federal Reserve is the cause of the bubble in everything; We know from experience that liquidity-fuelled asset markets usually end badly
Michael Howell – FT
It’s liquidity, stupid. Rephrasing the words of Bill Clinton’s adviser James Carville helps explain why many stocks are hitting record highs, why gold is breaking higher and why economies look set to rebound sharply this year.

Why Goldman Sachs is playing catch-up with JPMorgan; David Solomon eyes the consumer banking profits enjoyed by his rival
Laura Noonan – FT
When JPMorgan Chase posted dramatically better quarterly results this week than Goldman Sachs, it illustrated just why Goldman boss David Solomon is planning to make his company more JPMorgan-like.

BOE Urges Financial Firms to Accelerate Exit From Libor
William Shaw – Bloomberg
Benchmark underpins $300 trillion in contracts including bonds; ‘There is an amount of inertia,’ according to ING’s Bouvet
Want the lowdown on European markets? In your inbox before the open, every day. Sign up here. The Bank of England has called on financial businesses to speed up their move away from Libor, a discredited benchmark that underpins $300 trillion of contracts including bonds and loans, which is due to be phased out by the end of 2021.

Middleman Involved in Alleged Lekoil Scam Investigating Matter
Laura Hurst – Bloomberg
Lekoil paid Seawave to arrange $184 million loan from QIA; Ghana-based firm received a $600,000 commission for the work
Seawave Invest Ltd., which was paid $600,000 by Lekoil Ltd. for arranging financing from Qatar’s sovereign wealth fund, is investigating allegations of fraud after it emerged the loan wasn’t real.

Palladium Soaring Again Sparks Concern of Bubble
Elena Mazneva and Justina Vasquez – Bloomberg
Spot prices have soared more than 20% so far this year; ‘This is already becoming a bubble,’ Commerzbank says
The palladium rally continues to defy all expectations. The silvery-white precious metal, which is used in catalytic converters, has been on a tear this year that shows no signs of slowing down. It’s already notched a 20% gain for 2020. On Thursday, prices rallied as much as 5.5% and touched $2,390 an ounce.

U.S., China Sign Deal Easing Trade Tensions
Bob Davis, Lingling Wei and William Mauldin – The Wall Street Journal
The U.S. and China signed a trade deal that officials say will lead to a sharp increase in sales of U.S. goods and services to China, further open Chinese markets to foreign firms—especially in financial services—and provide strong new protections for trade secrets and intellectual property. The eight-part agreement acts as a cease-fire in a two-year trade war that has roiled markets world-wide and cut into global growth. But it leaves in place U.S. tariffs on about $370 billion in Chinese goods, or about three-quarters of Chinese imports to the U.S.

Exchanges, OTC and Clearing

LSEG’s futures exchange CurveGlobal appoints new sales head for US expansion; Robert Grillo joins CurveGlobal after a two-year hiatus as head of business development for the Americas.
Joe Parsons – The Trade
CurveGlobal, the London Stock Exchange Group’s interest rate futures platform, has recruited a new sales executive to lead its expansion for the US market. Robert Grillo joins CurveGlobal as head of business development for the Americas, based in New York, and will lead the platform’s efforts to expand with US traders.

Euronext completes the acquisition of Nord Pool
Euronext today announced the completion of the acquisition of 66% of the share capital and voting rights of the Nord Pool group1, after receiving regulatory approvals2.

2020 – Half-Year Financial Results Webcast Details and Key Dates
ASX is scheduled to announce its financial results for the half-year ended 31 December 2019 on Thursday, 13 February 2020. After the results have been announced, ASX will hold a briefing at:

Closing remarks by Tan Boon Gin, CEO of SGX RegCo, at the ACRA-SGX-SID Audit Committee Seminar 2020
Good morning/afternoon ladies and gentlemen 1. By now, I am sure most, if not all, of you would have heard that today, we launched our public consultation on a series of proposals aimed at enhancing our oversight of the quality of work of auditors and property valuers in respect of their dealings with listed companies.

SGX RegCo wants Singapore-registered auditor for all listed companies, proposes new rules on property valuers and valuations
Singapore Exchange Regulation (SGX RegCo) is consulting the market on proposals to strengthen oversight of audits by requiring all listed companies to appoint an auditor registered with the Accounting and Corporate Regulatory Authority (ACRA). In exceptional circumstances, SGX RegCo may direct the appointment of an additional auditor.


Virtu Financial speeds up POSIT Alert and shifts to bilateral matching
The Trade News
High-speed trading firm Virtu Financial has finalised major changes to global block indications network system, POSIT Alert Europe, and deployed its technology in a bid to speed up the block trading process for clients.

Major Companies Shared Vulnerability Used in Travelex Cyberattack; Purdue, Revlon and Texas Instruments were among firms using Pulse Secure VPN to create remote logins for staff, says cybersecurity firm
Caitlin Ostroff and Anna Isaac – WSJ
A vulnerability at Travelex that was exploited by hackers to disrupt the money-exchange company existed at dozens of major U.S. companies and institutions, potentially leaving them open to similar breaches, according to cybersecurity firm Bad Packets.

Barclays to distribute bond liquidity metrics with FactSet; Barclays will distribute its Liquidity Cost Score bond metrics on the Open: FactSet Marketplace.
Hayley McDowell – The Trade
UK investment bank Barclays has expanded a partnership with FactSet to broaden distribution of its bond liquidity metrics.

Horizon Software introduces upgraded equity derivatives EOMS for sell-side; Global head of client services at Horizon, Vincent Dumontoy, says the new EOMS system is unique to the options market.
Hayley McDowell – The Trade
Electronic and algorithmic trading technology provider Horizon Software has released an updated version of its global execution and order management system (EOMS) for sell-side clients globally.

Trad-X launches dealer-to-client electronic CLOB platform; The swaps MTF central limit order book from Trad-X provides real-time executable pricing and live updates on a range of swaps.
Hayley McDowell – The Trade
Interdealer broker Trad-X has confirmed the launch of a dealer-to-client electronic central limit order book, as it looks to provide an alternative to the traditional request for quote (RFQ) trading protocols.

BlackRock looks to make Aladdin the ‘language of portfolios’; Larry Fink tells investors that BlackRock will use the eFront platform to add ‘sustainability sleeves’ to the Aladdin system.
Hayley McDowell – The Trad
BlackRock has said it wants investment operations platform Aladdin to become the ‘language of portfolios’, as its chief executive reiterates that technology remains a key differentiator for the behemoth institution.


Former Regulator Known as ‘Crypto Dad’ to Launch Digital-Dollar Think Tank
Alexander Osipovich – The Wall Street Journal
A former top American financial regulator dubbed “Crypto Dad” for his embrace of cryptocurrencies is setting up a think tank to promote the idea of digitizing the U.S. dollar. J. Christopher Giancarlo, who stepped down as chairman of the Commodity Futures Trading Commission last year, said he was creating the nonprofit Digital Dollar Foundation to study converting the dollar into a fully electronic currency based on blockchain, the technology that underpins bitcoin.

Crypto derivatives market saw its busiest trading day of 2020 on Tuesday
Celia Wan – The Block
Cryptocurrency derivatives trading struck its highest trading volumes of 2020 on Tuesday, while bitcoin jumped by 9% and ether by 16%, per data compiled by Skew. For Bitcoin futures contracts, roughly $25 billion traded hands during the single day, making Jan. 14 the busiest session since Oct. 26. Meanwhile, open interest on bitcoin futures was up by 16% to $3.5 billion, with cryptocurrency exchanges OKEx and BitMEX seeing the largest volumes.

Liquid Exchange Cancels Sale of Telegram’s Gram Tokens
Daniel Palmer – Coindesk
Japan-based Liquid exchange has cancelled its sale of Telegram’s not-yet-launched gram tokens. Originally announced last June, the limited sale of tokens sourced from Gram Asia – said to be one of the biggest investors in Telegram’s $1.7 billion ICO – took place in July. However, the tokens were not to be released until Telegram’s TON network – the blockchain supporting the tokens – had gone live. That had been expected by the end of October last year. Sale proceeds were held in escrow pending the issuance.

Crypto Analytics Firm Elliptic to Tell US Congress Privacy Coins Need Stricter AML Rules
Nikhilesh De – Coindesk
A crypto analytics startup will recommend the U.S. Congress call for more stringent anti-money laundering (AML) enforcement around exchanges facilitating the trade of privacy coins during a hearing on how cryptocurrency is being used in human trafficking.

Gemini ventures into insurance business – launches ‘Nakamoto’ to provide $200M crypto coverage
Yogita Khatri – The Block
Cryptocurrency exchange and custodian Gemini has launched a “captive” insurance company, dubbed “Nakamoto.” Captive insurance is an alternative to self-insurance in which a company creates a licensed insurance company to provide coverage for itself. Gemini’s Nakamoto is licensed by the Bermuda Monetary Authority, according to an announcement published Thursday. Nakamoto will provide $200 million worth of coverage to Gemini customers for assets held in offline or “cold” wallets. Gemini said it is the “largest” limit of insurance cover currently available by any crypto custodian in the world.

Suits v hoodies: the cryptocurrency battle; Facebook’s Libra was a wake-up call for central bankers, who are now adapting to a new digital reality
Gillian Tett – FT
Can a pinstripe suit be combined with a hoodie? That might sound like an unlikely fashion dilemma. But it also reflects a policy question hanging over central banks.

Blockchain, all over your face
Jemima Kelly – FT
We try pretty hard to take the world of blockchain seriously, and to stay open-minded to the idea that among the myriad downright idiotic ideas out there, there might be something, somewhere, that could one day prove useful in some way.

Bitcoin is on its best start-of-year streak since 2012
Ben Winck – Business Insider
Bitcoin is up about 22% in the first 15 days of the new year, notching its best start-of-year surge since 2012, The Wall Street Journal first reported. The digital currency is nearing the $9,000 threshold just two weeks into 2020, and crypto-enthusiasts expect institutional interest to drive prices higher through the year. Other cryptocurrencies have soared through the year-to-date, with Ethereum and Ripple up 29% and 23%, respectively.

Kraken Acquires One of Australia’s Longest-Running Crypto Exchanges
Sebastian Sinclair – Coindesk
U.S.-based Kraken announced its plans for expansion into the Asia-Pacific (APAC) region on Tuesday after acquiring one of Australia’s longest-running cryptocurrency exchanges, Bit Trade. Kraken is aiming to position itself as the premier cryptocurrency service within the region, identifying Australia as a key growth area for retail and institutional clients. The financial terms of the deal were not disclosed.

New Hampshire legislators kill crypto tax payments bill
Mike McSweeney – The Block
An effort by a pair of New Hampshire lawmakers that would have allowed the payment of taxes and fees in the form of cryptocurrency was officially scuttled last week, public records show. As reported at the time by CoinDesk, Representatives Dennis Acton and Michael Yakubovich initiated the effort on January 3 of last year. If approved, the bill would have instructed the New Hampshire state treasurer to “develop an implementation plan for the state to accept cryptocurrencies as payment for taxes and fees and allows state agencies to accept payment in cryptocurrencies after July 1, 2020.”

Bithumb Exchange Fighting Back Against ‘Groundless’ $69M Tax Bill
Daniel Palmer – Coindesk
South Korea-based exchange Bithumb is fighting a move by the country’s tax authority to withhold over $69 million in tax on foreign cryptocurrency transactions. Confirmed by the company in December, National Tax Service (NTS) based its demand on the rate for miscellaneous income. The tax is calculated at an annualized rate of 22 percent, and in this case was based on the amount of foreign withdrawals from Bithumb. A withholding tax is paid by the income provider rather than the recipient, so in effect Bithumb’s foreign customers are paying the tax. Now the exchange has filed a complaint with Korea’s tax tribunal against the NTS, calling the tax “groundless,” The Korea Times reports Friday.

Binance DEX could soon list FTX leveraged tokens for bitcoin and others
Yogita Khatri – The Block
Binance DEX, the cryptocurrency exchange’s non-custodial trading platform, could soon allow leveraged trading. Binance Chain Explorer – a graphic user interface of the exchange’s native public blockchain that supports the DEX – has listed eight “BULL” and “BEAR” leveraged tokens of derivatives platform FTX. These tokens are tied to four cryptocurrencies – bitcoin (BTC), ether (ETH), XRP and EOS. FTX’s BULL and BEAR leveraged tokens allow traders to either take a short or a long position with three times leverage cap.

Binance may block Japanese users from trading on its platform
Yogita Khatri – The Block
Cryptocurrency exchange Binance may soon stop serving users in Japan. According to a notice issued Wednesday, the exchange said its main platform,, will implement a “gradual restriction of trading functions” for Japanese residents “at a later date.”

Venezuela’s Maduro Vows to Revive Petro Coin in His Annual Address
By Patricia Laya and Nicolle Yapur – Bloomberg
President Nicolas Maduro pledged to revive Venezuela’s failed cryptocurrency for everything from oil sales to passport fees in his state of the union address to the Constituent Assembly on Tuesday.


House votes to trigger Trump impeachment trial; Adam Schiff and Jerrold Nadler among seven Democrats picked to act as prosecutors in the Senate
Lauren Fedor – FT
The House of Representatives has set the stage for Donald Trump’s impeachment trial, voting on Wednesday to send articles of impeachment to the US Senate and approving seven House Democrats to lead the prosecution of the US president.

Trump Asks JPMorgan Leader to Say ‘Thank You, Mr. President’
Max Abelson – Bloomberg
A smiling President Donald Trump thanked some of the biggest U.S. companies for about 10 minutes on Wednesday at the White House, where he was celebrating his trade deal with China. When it came to JPMorgan Chase & Co., he asked for reciprocation.

‘Will you say, “Thank you, Mr. President” at least? Huh?’ — Trump said some crazy stuff to corporate bosses after signing the China trade deal
Theron Mohamed – Business Insider
Donald Trump teased some of America’s most powerful executives on Wednesday at the signing of his preliminary trade deal with China. “Most of you, I can say, you’re doing fantastically well,” the US president said while greeting and backslapping the assembled bosses. “‘Thank you, Mr. President.’ Don’t worry about it. Don’t feel guilty.”

Russia Moves Quickly to Make Putin’s New Vision a Reality
Andrey Biryukov and Stepan Kravchenko – Bloomberg
Parliament confirms Mishustin’s candidacy in vote Thursday; Appointment part of surprise Putin government shakeup
Vladimir Putin’s new prime minister pledged to work with business and overhaul the cabinet after a surprise shakeup that may enable the president to extend his 20-year rule.

Beware economists bearing simple equations; Proponents of wealth taxes and the Green New Deal are relying on conflicting theories
Chris Giles – FT
As we start a new decade, those on the left of politics tend to hold two beliefs close to their hearts. The first is that something must be done about wealth inequality, which has widened to unacceptable levels. The second is a conviction that public investment financed by government borrowing will in some sense pay for itself.

Lev Parnas: Trump ‘knew exactly what was going on’ in Ukraine; The associate of Rudy Giuliani also leveled accusations against Vice President Mike Pence and Attorney General William Barr.
Matthew Choi, Kyle Cheney and Darren Samuelsohn – Politico
Lev Parnas, the Rudy Giuliani associate caught in the middle of President Donald Trump’s impeachment, said on Wednesday that the president was fully aware of his actions in Ukraine, and leveled a string of potentially damaging accusations against the president’s closest allies, including Vice President Mike Pence, Attorney General William Barr and the House Intelligence Committee’s top Republican, Rep. Devin Nunes.

The $95 Billion Centerpiece of the Trade Deal Is Already In Doubt
Pratish Narayanan – Bloomberg
U.S. agriculture markets trade lower after phase-one deal; Markets waiting for actual evidence of increased shipments
China has pledged to buy almost $95 billion worth of additional U.S. commodities as part of a phase one trade deal. The market is not so sure. Prices fell for most raw materials that are part of the agreement. The Bloomberg Commodity Index added 0.1% after dropping 0.4% on Wednesday as the agreement was announced. Oil and gas rallied Thursday, but soybeans, cotton and corn kept falling.

Putin’s New Plan to Hold Power Forever; The Russian leader has come up with a constitutional reform that gives him three paths to indefinite rule.
Leonid Bershidsky – Bloomberg
In his state of the nation address on Wednesday, Russian President Vladimir Putin proposed a sweeping constitutional reform that would give him several options to retain power after 2024, when his term ends. The announcement led to the resignation of Prime Minister Dmitry Medvedev’s government, showing that a full reset of Russia’s governance system is underway — and that Medvedev won’t succeed Putin as president, as he did for one term in 2008.


FCA and Bank of England encourage switch from LIBOR to SONIA for sterling interest rate swaps from Spring 2020
The FCA and the Bank of England encourage market makers to change the market convention for sterling interest rate swaps from LIBOR to SONIA (the Sterling Overnight Index Average) in Q1 2020. This change is intended to move the greater part of new sterling swaps trading to SONIA and reduce the risks from creating new LIBOR exposures.

Next steps for LIBOR transition in 2020: the time to act is now
The Bank of England (the Bank), Financial Conduct Authority (FCA) and the Working Group on Sterling Risk-Free Reference Rates (RFRWG) have published a set of documents today, outlining priorities and milestones for 2020 on LIBOR transition.

Lawmakers Press Rule Maker on Economic Impact of Credit-Loss Standard
Mark Maurer – The Wall Street Journal
The chairman of the Financial Accounting Standards Board on Wednesday faced a barrage of questions from lawmakers seeking to better understand the economic effects of a controversial new rule on credit-loss accounting. During an oversight hearing, members of the House Committee on Financial Services’ Subcommittee on Investor Protection, Entrepreneurship and Capital Markets questioned FASB Chairman Russell Golden, expressing concern the new accounting rule would negatively affect banks, consumers and the economy at large.

Industry urged to accelerate Libor transition this year; Despite Libor being due to cease at the end of 2021, UK authorities have set out a timeline for the shift to the Sonia benchmark throughout this year.
Hayley McDowell – The Trade
Financial authorities in the UK have teamed up to urge market participants to accelerate efforts to transition away from the Libor benchmark this year, before it is axed at the end of 2021.

ASIC consults on s444GA share transfers under a Deed of Company Arrangement
ASIC has released a consultation paper on a proposal to formalise its policy on share transfers made under s444GA of the Corporations Act. ASIC will seek public input on the proposal until Tuesday 28 February 2020.

Retrospective Rule Review Report
In November 2017, FINRA launched a retrospective review of Rule 5250 (Payments for Market Making), which generally prohibits members from receiving payments for market making, to assess its effectiveness and efficiency.1 The review is part of an ongoing initiative to periodically look back at a rule or set of rules to ensure they remain relevant and are appropriately designed to achieve their regulatory objectives, particularly in light of industry, market and technology changes.

Member obligations under NFA Bylaw 1101 and Compliance Rule 2-36(d) with respect to CPOs/CTAs exempt from registration
The CFTC requires any person that claims an exemption from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), an exclusion from CPO registration under CFTC Regulation 4.5 or an exemption from CTA registration under 4.14(a)(8) (collectively, exemption) to annually affirm the applicable notice of exemption within 60 days of the calendar year end. Persons that fail to file the affirmation notice by March 2, 2020, will be deemed to have requested a withdrawal of the exemption and, therefore, may be required to be registered and NFA Members.

FCA quantifies impact of CFD offering restrictions on brokerage profits;The profit reduction for firms offering CFDs to retail clients is c. £38.5 million and £55.3 million.
Maria Nikolova – Finance Feeds
The UK Financial Conduct Authority (FCA) today published an impact assessment regarding the regulations that restrict the offering of contracts for difference (CFDs) to retail clients.

Swiss Federal Council’s advisory board calls for measures to combat cyber risks in fin sector; The establishment of preventive measures specifically tailored to the financial market is seen as urgent.
Maria Nikolova – Finance Feeds
The Swiss Federal Council strategic advisory board has drawn up a financial market policy overview for the past year, outlining a number of recommendations to the government.

UK regulators push for March 2020 switch from LIBOR to SONIA for sterling interest rate swaps
Maria Nikolova – Finance Feeds
The change aims to move the greater part of new sterling swaps trading to SONIA and minimize the risks from creating new LIBOR exposures.

SEC seeks summary judgment against Telegram in unregistered digital token offering case
Maria Nikolova – Finance Feeds
The US regulator says it is entitled to summary judgment as a matter of law on its claim that Telegram made unregistered offers and sales of securities.

Despite CFTC’s efforts, whereabouts of Yossi Herzog remain unknown
Maria Nikolova – Finance Feeds
According to the regulator, Herzog is not currently in Israel and attempts to determine his current geographic location have been unsuccessful.

SEC urges Court not to dismiss action against binary options marketer
Maria Nikolova – Finance Feeds
The US regulator argues that it has made efforts to effect service on Peter Szatmari and that it awaits information from the Central Authority of Hungary as to whether

Investing and Trading

It’s a strange new world where tech stocks are safe havens; Investors are drawn to Fangs’ rich balance sheets and deep liquidity in the market
John Plender – FT
In global capital markets, a “flight to quality” was traditionally regarded as a change of sentiment, where investors tried to minimise the risk of a loss of principal rather than chasing high returns. That normally meant retreating into government bonds yielding a safe income. US Treasuries were seen as the ultimate bolt hole.

Carefree investors should heed lessons from 2018 shake-out; Markets prove robust in face of stresses but recent history shows how slip-ups can emerge
Robin Wigglesworth – FT
Financial markets have suffered a few frights already this year, but despite the shocks delivered by US president Donald Trump and Iran, they have largely picked up where they left off in 2019. What could stop the ageing bull run?

Massive Art Trove From Macklowe Divorce Edges Closer to Auction
Katya Kazakina – Bloomberg
Collection with Rothko, Warhol may be worth about $700 million; Sotheby’s, Christie’s, Phillips prepare to compete for mandate
The battle for one of the biggest art collections on the market is about to begin. Sotheby’s, Christie’s and Phillips were invited to submit proposals to sell the collection of Harry and Linda Macklowe, two octogenarians in the middle of a bitter divorce. A judge ordered the couple’s 65 most valuable works to be sold and the proceeds split.

European Stock ETF Gets Biggest Stamp of Approval Since 2017
Ksenia Galouchko – Bloomberg
European equities are gaining fans in the new year. Investors poured the most money since June 2017 into the Vanguard FTSE Europe ETF, the biggest exchange-traded fund for the region’s stocks. The ETF saw inflows of $234 million in the latest session that Bloomberg has data for. The fund is on track for a third consecutive month of inflows.


Why Extinction Rebellion is wrong about BlackRock
Izabella Kaminska – FT
Last week, the world’s largest fund manager BlackRock finally yielded to high-level pressure to step up its activism on matters ESG and climate. On Wednesday the asset manager further announced it had offloaded $500m in shares from companies that generate a quarter or more of revenue from thermal coal.

Hedge fund veteran looks to cash in on biotech boom; Fund-of-hedge funds launch comes after S&P biotech sector doubled in four years
Laurence Fletcher – FT
Dixon Boardman, a veteran of the hedge fund industry, is launching a biotech-themed fund, trying to cash in a wave of investor interest in one of the best performing segments of the US stock market.

Goldman Reveals It’s Still a Small Player in Pursuit of Rich
Erik Schatzker and Sridhar Natarajan – Bloomberg
Firm’s $4.4 billion in wealth-management revenue trails peers; Goldman has recently made a push for mass-affluent clients
When the world’s wealthy look for a bank to entrust with their personal fortunes, Goldman Sachs isn’t necessarily on their speed dial.

UBS Restructures Asia Wealth Unit as Khan Seeks to Make His Mark
Alfred Liu and Marion Halftermeyer – Bloomberg
Swiss bank adds Koh as co-head of Asia Pacific family office; Executives appointed for Greater China, Southeast Asia
UBS Group AG is restructuring its wealth management business in Asia as the Swiss bank implements a sweeping global revamp driven by new wealth co-head Iqbal Khan.

Rothschild China Rainmaker Eyes $800 Million Private Equity Fund
Cathy Chan, Manuel Baigorri and Geraldine Amiel – Bloomberg
Rothschild China Rainmaker Eyes $800 Million Private Equity FundView photos
Jennifer Yu, a veteran China dealmaker at Rothschild & Co., is starting a private equity fund targeting investments in regions including Europe, people with knowledge of the matter said.

Morgan Stanley Profit Soars, Closing Out a Banner Year; Fourth-quarter profit rose 46%; firm is the last of big U.S. banks to report earnings for quarter
Liz Hoffman – WSJ
Morgan Stanley MS 0.15% ?’s MS 0.15% fourth-quarter profit rose 46% from a year ago, capping off the bank’s best year on record. The firm’s profit of $2.2 billion, or $1.30 a share, on $10.9 billion in revenue, topped expectations of analysts polled by FactSet, who had forecast earnings of $1.02 a share on $9.71 billion of revenue.

BNY Mellon profit falls short on lower interest rates
Bank of New York Mellon Corp missed analysts’ estimates for quarterly profit on Thursday, as the world’s largest custodian bank earned less from its interest-earning assets due to rate cuts by the Federal Reserve.

Morgan Stanley bond trading revenue surges, profit handily beats estimates
Morgan Stanley wrapped up the earnings season for big U.S. banks on a resounding note, comfortably beating quarterly profit estimates and raising the possibility that the Wall Street bank could raise its strategic targets.


Britons gambled £14.4bn in a year; Gambling Commission moves to ban betting using a credit card
Lucy Warwick-Ching – FT
What does this chart show?
How Britons gambled away £14.4bn between March 2018 and April 2019. The breakdown shows that more gambling is taking place remotely by people using online gaming apps and websites, with £5.3bn (just over 37 per cent of the total) spent this way during the period, according to data from the Gambling Commission.

Scotland’s first commercial gold mine faces green opposition; Company optimistic but environmental concerns may hinder wider exploration
Mure Dickie – FT
Deep inside a mountain in Cononish Glen, Scotgold Resources chief executive Richard Gray pointed at a greyish band of quartz running across a rough mine tunnel wall. “That’s where the gold is,” he said.

Consultancy Seawave investigating Lekoil loan scandal; Bahamas-based group accused of helping to arrange a $184m loan that proved fake
Harry Dempsey and Neil Hume – FT
The consultancy accused of helping to arrange a fraudulent $184m loan for oil explorer Lekoil says it has launched its own investigation into the deal, which is fast becoming an embarrassment for London’s lightly regulated AIM market.

Germany strikes EUR44bn deal to phase out coal use in energy supply; Compensation agreed for communities and companies including RWE
Tobias Buck- FT
The German government has struck a deal with the country’s coal-producing regions to phase out the use of coal power by 2038 in return for compensation and benefits worth EUR40bn.

Swedish Government Sees Negative Rates in 2021-2022
Rafaela Lindeberg – Bloomberg
Government also sees more unemployment amid gloomier outlook; Finance Minister forecasts GDP growth of 1.1% in 2020
Sweden’s government forecasts the key policy rate to return to negative territory in 2021, something Riksbank Deputy Governor Henry Ohlsson cautioned against in the minutes of the December meeting.

Russia’s $40 Billion Gold Buying Binge Is Slowing Down
Yuliya Fedorinova and Andrey Biryukov – Bloomberg
The central bank cut bullion purchases by 44% in 2019; Gold makes up about 20% of total reserves, the most since 2000
Russia, the world’s biggest buyer of gold, is losing interest in the precious metal. After spending an estimated $40 billion on gold in the past five years, the central bank is starting to rein in spending. It bought 149 tons of gold in the first 11 months of 2019, 44% less than the year before. Annual purchases are expected to be the lowest in six years.


Dominic Cummings has ‘done’ Brexit. Now he plans to reinvent politics; Can Boris Johnson’s controversial adviser stay in Downing Street long enough to deliver his radical agenda?
George Parker – FT
When Boris Johnson walked through the front door of Number 10 on July 26 2019, the British political system was in a state of Brexit-induced paralysis. But in a small room upstairs, arguably the second most powerful man in Britain was already issuing new instructions to demoralised staffers: “Don’t be sh#t.”

Memo to Brexit Britain — free trade is not a vote-winner; The aggregate gains are distributed unevenly — witness how well the top 1 per cent have done
Philip Stephens – FT
One of the things that has always puzzled me about Britain’s Brexiters is the casual assumption that free trade is a vote-winner. Boris Johnson promises a quick deal with US president Donald Trump. Japan, Australia and Canada are among others on the prime minister’s list. The voters, ministers say, will cheer these agreements from the rooftops.

EU ramps up its Brexit demands
Jim Brunsden – The Financial Times
Since the end of last week, a group of diplomats from across Europe have spent a lot of their time staring at powerpoint presentations. Holed up in the EU Council’s hulking premises in Brussels, they have been studying the challenge of negotiating a new partnership with Britain after Brexit. The daily seminars, covering everything from criminal justice to fish, were conceived by Brussels to make sure everyone will be on the same page in the testing talks to come. So what have they, and we, learnt so far?


How to understand clients by analysing social media; What you say on twitter could end up used by brands to influence what people buy
Jonathan Margolis – FT
A couple of years ago, I got lost in rural New South Wales because there was no phone coverage, which meant Google Maps wouldn’t work. I made a mental note to buy a TomTom, as old-fashioned satnavs don’t depend on a data signal. So when a tempting deal on a TomTom came up last Black Friday, I bought one.

Turkey Removes Ban on Wikipedia After Almost Three Years
Asli Kandemir – Bloomberg
Wikipedia is available in Turkey again after a nearly three-year ban. The Turkish government agency in charge of internet technologies lifted the ban after the nation’s top court ruled last month that the restriction violated free speech.

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