LSE Group: when equities are no longer the stock in trade

Nov 16, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

Tomorrow, November 17, is the last day to nominate someone for the 2024 FIA Hall of Fame. The FIA is always looking for balanced representation globally and across gender, the latter of which is sometimes harder to find in an industry that 30 or 40 years ago was dominated by open outcry exchanges filled with testosterone-fueled men. So do your best to nominate those men and women from around the world who contributed to the futures industry and are deserving of a place in the FIA Hall of Fame. Make your nominations HERE.

I have made several nominations and am a member of the FIA Hall of Fame committee that will consider the nominations. It is a much more inclusive and transparent process that has brought forth some outstanding honorees. I can’t wait to see who the 2024 nominees will be.

The November issue of the World Federation of Exchanges’ Focus magazine features insights from global exchange leaders on sustainable financial market practices. Sohn Byungdoo, CEO of the Korea Exchange, outlines initiatives for a sustainable and resilient financial future. Taipei Exchange Chairman Philip Chen discusses promoting sustainable development, while Rasha Dayyat from the Amman Stock Exchange and Ahmed Salman from the Egyptian Exchange explain their climate change policies and sustainability efforts in their respective markets.

In the Americas, Juan Pablo Cordoba of the Nuam Exchange highlights alignment with sustainability practices. Randall Hopkins and Erika Spence from Nasdaq’s Capital Access Platforms Division discuss using technology to enhance sustainability reporting ROI. B3’s Flavia Mouta Fernandes and Fernando de Andrade Mota propose major listing rule changes for ESG measures.

Finally, Alina Aldambergen of KASE shares the exchange’s future growth plans.

The Wall Street Journal is kind enough to break down the costs of Thanksgiving dinner over the last several years in a story titled “Your Thanksgiving Costs, Broken Down” with the subheading “Prices for travel and holiday feasts are more manageable than last year.”

Cheryl and I returned from Florida last night and were immediately mobbed by our dogs. One of my Eagle Scouts house-sat for us and took care of Bella and Indy. We were in Florida to clean out our mobile home property there and sell it. We had an offer and accepted it, but the buyer then backed out. So I have had my first real estate outtrade. The other side just ripped up the trading card and said they never made the trade.

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

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The U.S. Global Change Research Program researched and developed the Fifth National Climate Assessment (NCA5) over three years. Much in the news since its release Tuesday, Nov. 14, NCA5 is a technical and scientific assessment and does not recommend policies or evaluate existing policies. The global research program is offering a series of webinars and workshops, as well as a podcast, to help the public understand its findings. You can download the NCA5 and sign up for these educational offerings on the GlobalChange.gov website. ~SAED

Our most read stories yesterday on JLN Options were:
A Taylor Swift song is the best investment advice for 2024, Goldman Sachs says from Markets Insider.
Hedge Funds Copy Citadel Fee Model in Fight for Asia Talent from Bloomberg.
Bitcoin’s Options Market Has Overtaken Its Futures Market in a Sign of Growing Sophistication from CoinDesk. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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Sponsored Content
To reinforce the function of margin, that is to “protect investors,” Japan Securities Clearing Corporation (JSCC), a group entity of Japan Exchange Group (JPX), that handles clearing of JPX’s derivatives market, has changed its Margin calculation methodology from “SPAN method” to “VaR method” on November 6, 2023

Under the VaR Margin calculation method, there are 2 types of calculation methods, Historical Simulation Method (HS-VaR Method) and Alternative Simulation Method (AS-VaR Method).

HS-VaR method is used for Index Futures/Options (such as our flagship contract Nikkei 225 futures, excluding dividends index futures), Japanese Government Bond (JGB) Futures/Options, Interest Rate Futures (3-Month TONA Futures) listed on Osaka Exchange (OSE), and TOCOM’s Electricity and LNG Futures contracts. On the other hand, AS-VaR method is used for OSE’s Dividends index futures, Precious Metals Futures/Options, Rubber Futures, Agricultural Futures and TOCOM’s Energy Futures (other than Electricity/LNG Futures).

* In JST: JST minus 15 hours = Chicago time.
** Instruments subject to AS-VaR Method are also recorded.
CLICK HERE FOR MORE DETAILED INFORMATION
Note: Each Broker decides its handling of the amount of Margin to investors independently based on the Margin requirement JSCC notifies the Brokers. So, the Margin requirement JSCC calls for the Brokers and the amount of Margin Brokers require for investors to deposit may be different.

——————————————-
Contact: Osaka Exchange / Tokyo Commodity Exchange Derivatives Business Development
E-mail: ose-dmg@jpx.co.jp
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Market Makers in the Options Industry: Eric Cott, Former Advisor in Education at the OIC, Discusses Market Makers and More in This Options Discovery Full Interview
JohnLothianNews.com

In this Options Discovery full interview, Asma Awass speaks with Eric Cott, former advisor in education at the OIC and current president of Cott Consulting. Eric addresses a variety of topics from his career including his experiences in the derivatives space as well as how he started his own company. Eric also gives insight into how liquidity, market volatility, and technology. affect the role of market makers in the options industry.

Watch the video »

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Exxon CEO Says Making Big Oil ‘Villains’ Slows Path to Net Zero Emissions
Kevin Crowley – Bloomberg
Exxon Mobil Corp. warned that making Big Oil into “villains” and trying to restrict supply of fossil fuels will slow the path to net zero emissions and keep millions of people in the developing world in poverty. “The solutions to climate change have been too focused on reducing supply,” Chief Executive Officer Darren Woods said in a speech at the Asia Pacific Economic Cooperation CEO Summit in San Francisco Wednesday. “That’s a recipe, for human hardship and a poorer world.” Woods called for governments to “harness the industry’s capabilities for change” by providing taxpayer support for emissions-reducing technologies like carbon capture before market forces can take over. Attacking oil and gas companies for their role in climate change will only serve to keep net zero as an “aspiration” rather than a reality, he said.
/jlne.ws/3MKXZWI

***** I think Big Oil may have been the villain long before net zero came around.~JJL

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Biden Wants New Rules Over Commercial Spaceflights
Justin Sink – Bloomberg
The Biden administration will ask lawmakers Wednesday to adopt a new framework for regulations governing private spaceflight, as the US grapples with a boom in companies like Jeff Bezos’s Blue Origin LLC, Richard Branson’s Virgin Galactic Holdings Inc. and Elon Musk’s SpaceX offering to bring humans into the cosmos.
/jlne.ws/49BLw1n

****** To boldly go where no…scratch that. To carefully go where no….~JJL

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Wall Street megadonors warm to Nikki Haley as their anti-Donald Trump Republican; Former US ambassador to the UN praised for ‘muscular foreign policy’ and electability
Alex Rogers and Brooke Masters – Financial Times
Nikki Haley’s strong performances in the Republican presidential debates have won over several of the party’s big donors and intrigued other Wall Street figures this week, as she swung through New York seeking moneyed backers who want an alternative to Donald Trump. The former US ambassador to the UN drew big names to New York events on Tuesday, among them a small meet-and-greet breakfast with financiers including BlackRock chief executive Larry Fink, and an evening fundraiser co-hosted by former Goldman Sachs president Gary Cohn.
/jlne.ws/3SHEh1I

****** Vivek was never going to be the choice of Wall Street with his over-the-top Trumpian populist act.~JJL

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Wednesday’s Top Three
Our top clicked item Wednesday was our MarketsWiki page for Ken Griffin. Second was Ken Griffin Sees Miami Possibly Replacing NYC as Finance Capital, from Bloomberg via Yahoo!Finance. Third was RIP Goldman Sachs, by Bethany McLean for Business Insider.

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Lead Stories

LSE Group: when equities are no longer the stock in trade; The 300-year-old exchange makes under 4% of its revenues from listing and dealing stocks, as it has become one of the world’s biggest financial data groups
Nikou Asgari – Financial Times
“In finance, names can be a bit misleading,” intones an American-accented voiceover on a promotional video for the London Stock Exchange Group. “Take ours, for instance,” it continues. Black cabs driving around London carry adverts showing the company’s logo alongside pictures of the Eiffel Tower and the Statue of Liberty. The video cites the 190 countries in which it operates. The rebranding is clearly intended to show that the London Stock Exchange Group is no longer particularly about London – or about trading stocks.
/jlne.ws/3QYy7ci

Nasdaq Leans Into Tech in Quest to Become More Than an Exchange; CEO Adena Friedman’s recent $10.5 billion Adenza deal underscores a strategic shift from simple stock market to fintech company.
Katherine Doherty – Bloomberg
When most people think of Nasdaq, they think of big tech stocks: It is, after all, the world’s No.âEUR‰2 stock exchange and home to the likes of Amazon.com, Apple, Facebook, Google and Microsoft. But when Adena Friedman looks at the company, she thinks fintech. To make that vision a reality, Friedman, who became Nasdaq’s chief executive officer in 2017, has completed at least a dozen acquisitions, culminating in the $10.5 billion takeover of financial software house Adenza on Nov. 1.
/jlne.ws/3QFThKY

Global banks criticise South Korean short selling ban as ‘phantom farce’; Regulators seen to be appeasing retail investors ahead of parliamentary elections next year
Christian Davies and Song Jung-a and Hudson Lockett – Financial Times
Global investment banks have criticised a blanket ban on short selling imposed by South Korean regulators last week, accusing authorities of bowing to the demands of local retail investors ahead of parliamentary elections in April. The ban, which came into force on November 6 and is due to last until June next year, was introduced as a response to so-called naked short selling, which financial authorities said had “undermined fair price formation” in South Korea’s capital markets.
/jlne.ws/3QFqmqj

Accounting firms hit with record US fines over audit failures; PCAOB imposes total penalties nearing $12mn against PwC, Deloitte, KPMG and others
Stephen Foley – Financial Times
The US audit regulator set up in the wake of Enron’s collapse two decades ago has set a record for fines in a single year, after a flurry of enforcement actions against accounting firms including PwC, Deloitte and KPMG. The Public Company Accounting Oversight Board fined PwC’s Greek business $3mn on Tuesday and levied a $500,000 penalty on KPMG in Japan on Wednesday for failing to meet US standards in their audits of New York-listed clients.
/jlne.ws/40Dne2Z

US and China agree to boost green energy in climate action ‘gesture’; Co-operation viewed as positive sign ahead of COP28 despite lack of commitment on phaseout of fossil fuels
Aime Williams – Financial Times
The world’s two biggest polluters have made a positive “gesture” to co-operate on climate change, with the US and China agreeing to accelerate the rollout of renewable energy to displace their heavy reliance on fossil fuels. The joint statement on climate diplomacy between Washington and Beijing came shortly before Joe Biden and Xi Jinping were due to meet in San Francisco as part of an effort to stabilise US-China relations.
/jlne.ws/49D5qca

FDIC Chair, Known for Temper, Ignored Bad Behavior in Workplace; Martin Gruenberg set a tone that left alleged harassment and discrimination unpunished at the bank regulator. After a WSJ investigation, he came under scrutiny at congressional hearings.
Rebecca Ballhaus – The Wall Street Journal
In 2019, the FDIC’s No. 2 legal official left a ranting, cursing voicemail for an employee criticizing her work. The federal bank regulator paid that employee a $100,000 settlement because of it, former officials said. The legal official kept his job. Last year, Chairman Martin Gruenberg promoted him to become the federal agency’s general counsel.
/jlne.ws/47hnlDF

Regulators Say Wells Fargo Isn’t Doing Enough to Police Customer Crimes; Bank also faces lawsuit claiming that it failed to detect alleged Ponzi scheme
Ben Eisen and Ben Foldy – The Wall Street Journal
Wells Fargo is struggling with its regulatory obligation to monitor financial crime, the latest challenge in the bank’s yearslong effort to recover from a series of scandals. Regulators are pushing the bank in formal orders to improve how it catches criminals who are using its bank, according to people with knowledge of the matter. At the same time, the bank is facing a lawsuit claiming it allowed an alleged $490 million Ponzi scheme to operate. The regulators are focused on the bank’s broad consumer-watching systems, not any specific client or event, but the lawsuit’s allegations suggest what can go wrong when a bank’s monitoring systems fail.
/jlne.ws/3ueSp8B

‘Nothing has changed’ to prevent another FTX collapse, CFTC chair says
Courtney Degen – Pensions & Investments
“Nothing has changed” to prevent the possibility of another event like the collapse of former cryptocurrency exchange FTX, Rostin Behnam, chair of the Commodity Futures Trading Commission, said Nov. 15. “Has anything happened in the last year that would sort of slow down the ability for that kind of fraud to occur again?” asked Emily Wilkins, Washington correspondent at CNBC, at Georgetown University’s Financial Markets Quality Conference.
/jlne.ws/40FByYC

CFTC Chairman: U.S. Regulators Lack Authority to Prevent Another Major Crypto Collapse
Hassan Shittu – Cryptonews.com
Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam has stated that U.S. regulators lack the authority to preemptively prevent another major crypto collapse similar to the FTX incident. Speaking at the Financial Markets Quality Conference 2023 at Georgetown University, Behnam underscored that, despite urging the Senate Banking Committee almost a year ago to swiftly address regulatory concerns, “nothing has changed, and we could be in a position where another FTX type event happens.”
/jlne.ws/3ufrsSe

Decentralized Finance Is Becoming Less Competitive a Year After FTX’s Collapse Roiled Crypto
Muyao Shen – Bloomberg
A small number of participants are dominating the world of decentralized finance as the crypto sector, which seeks to replicate financial markets without middlemen, still hasn’t recovered from FTX’s collapse a year ago. Most categories in DeFi – from peer-to-peer lending to decentralized exchanges – are seeing capital largely held in a few major projects, according to data compiled by crypto-risk modeling company Gauntlet. The firm used a popular measure of market concentration and competition called the Herfindahl-Hirschman Index.
/jlne.ws/3SLline

US and China agree to boost green energy in climate action ‘gesture’; Co-operation viewed as positive sign ahead of COP28 despite lack of commitment on phaseout of fossil fuels
Aime Williams – Financial Times
The world’s two biggest polluters have made a positive “gesture” to co-operate on climate change, with the US and China agreeing to accelerate the rollout of renewable energy to displace their heavy reliance on fossil fuels. The joint statement on climate diplomacy between Washington and Beijing came shortly before Joe Biden and Xi Jinping were due to meet in San Francisco as part of an effort to stabilise US-China relations.
/jlne.ws/49D5qca

US Opens Talks With Global Gas Heavyweights on Emission Tracking; Australia, Japan, EU will collaborate on voluntary framework; Group aims to standardize info on gas supply chain emissions
Jennifer A Dlouhy and Ari Natter – Bloomberg
Some of the world’s biggest natural gas exporters and importers will craft a framework for measuring, monitoring and verifying the emissions of methane across the fuel’s supply chain under an international working group the Biden administration announced Wednesday. The formal effort was unveiled hours after European Union negotiators agreed on a plan to limit methane emissions from imported oil and gas. It also comes weeks before the COP28 climate summit, where methane will be a key issue. Sultan Al Jaber, the summit’s president, is seeking to push oil and gas companies to make an array of climate commitments, including reducing methane emissions and ending gas flaring.
/jlne.ws/40EieuY

Barclays flags Treasuries central clearing cybersecurity risks after ICBC hack
Davide Barbuscia – Reuters
A key reform proposed by the U.S. Securities and Exchange Commission to boost the use of central clearing for U.S. Treasuries could leave the market more exposed to cybersecurity risks, Barclays said, referring to the cyber hack of Industrial and Commercial Bank of China’s U.S. broker-dealer last week.
/jlne.ws/3QzdKRG

Korea Mulls Years-Long Trading Ban on Illegal Short Sellers
Youkyung Lee – Bloomberg
South Korea is considering several options to penalize illegal short sellers, including banning them from stock trading for up to 10 years, the country’s financial regulators said. Those who engage in illegal short selling – such as placing “naked short” orders – may also be restricted from serving as executives at listed companies and financial firms in Korea, the Financial Supervisory Service said Thursday. The government may also extend a ban on all short selling beyond June next year if reform measures aren’t sufficient, the Financial Services Commission said.
/jlne.ws/3ssBQFT

Hedge fund Millennium prepares for life after founder Izzy Englander; The 75-year-old owner has no intention of retiring but has emphasised the firm’s transition to shared leadership
Harriet Agnew in London and Ortenca Aliaj – Financial Times
A year ago Bobby Jain, a top executive at Millennium Management who was regarded by many at the hedge fund as a potential successor to Izzy Englander, abruptly departed. It had become clear to him that the firm’s 75-year-old founder was not going anywhere. Englander had also grown uncomfortable with the idea of one person replacing him, according to people familiar with the situation.
/jlne.ws/3SJWb4e

Women Are Leading the Fight to Stop Climate Change; A new cast of leaders is taking over the world’s efforts to halt global warming as familiar climate diplomats step aside.
John Ainger, Antony Sguazzin, Simone Iglesias, Michael J Kavanagh, and Liza Tetley – Bloomberg
Over the past few years, international climate policy has been shaped largely by a close-knit group of politicians in the twilight of their careers. Now leaders from beyond the traditional US-Europe-China power center-some new to the international stage, others already veterans-are emerging. And women are at the forefront.
/jlne.ws/47fyCVf

World Needs $172 Billion More to Face Climate Impacts Than Estimates Show; The amount countries say they require to reinforce infrastructure for more extreme weather far exceeds the figures generated by analysis models.
Nathaniel Bullard – Bloomberg
The UN Environment Programme recently published its annual Adaptation Gap Report, examining how much funding the world’s developing countries will need to withstand the impacts of climate change. The report provides a complex but constructive understanding of the investment required, beginning with the striking shortfall today. According to UNEP, ” Adaptation finance needs are 10 to 18 times as great as current international public adaptation finance flows – at least 50% higher than previously estimated.”
/jlne.ws/3SEcDTq

Former Citadel CIO, Tom Miglis, Joins RQD* Clearing’s Board of Directors After Series A Funding
RQD Clearing, LLC
RQD Clearing, LLC (RQD), a leading correspondent clearing services provider, welcomes Tom Miglis, former Chief Information Officer of Citadel and current Investment Partner at Nyca Partners, to its Board of Directors following a successful Series A financing round led by Nyca Partners and ABN Amro Clearing Investments.
/jlne.ws/3suceIH

Ukraine Invasion

US Alarms Oil Tanker Owners With Russian Price Cap Letters
Alex Longley – Bloomberg
The US Treasury’s sudden flurry of letters to tanker companies for potentially breaching a Group of Seven price cap on Russian oil trades included a warning that those who don’t comply with the probe properly could face prison.
/jlne.ws/47CAVBE

Finland Closes Key Russian Border Crossings
Leo Laikola – Bloomberg
Finland will close four of its busiest border crossings with Russia after concluding that an influx of migrants from third countries was an organized operation threatening its national security. The government is acting “decisively and quickly” to “stop this phenomenon,” Prime Minister Petteri Orpo told reporters in Helsinki on Thursday. It will close the Vaalimaa, Nuijamaa, Imatra and Niirala crossing points from Nov. 18 to Feb. 18 and concentrate all asylum applications at two northerly border points.
/jlne.ws/3QJvvxC

Western investors spooked as Moscow mulls compulsory share purchase plan
Sinead Cruise, Elena Fabrichnaya and Alexander Marrow – Reuters
Western investors in Russian companies are bracing for a new presidential decree under consideration in Moscow which they fear could force them to sell their shareholdings to the Russian government at big discounts. The potential decree, which could give Russia a “super pre-emptive right” to buy shares in strategic companies from foreign shareholders, marks the latest blow to investors holding Russian assets that were worth several billions of dollars prior to February 2022.
/jlne.ws/49D8DZg

Russia detains two senior employees from Carlsberg’s Russian breweries
Reuters
Russian authorities on Wednesday detained two senior employees from Carlsberg’s Russian subsidiary, Baltika Breweries, over allegations of fraud, and made similar claims against several others, Danish brewer Carlsberg said on Thursday.
/jlne.ws/3ug2pyl

Israel/Palestine Conflict

Israel Searches for More Evidence of Hamas Presence at Gaza’s Largest Hospital; Israeli military is facing growing pressure to justify its raid on the Al-Shifa complex
Sune Engel Rasmussen and Dov Lieber – The Wall Street Journal
The Israeli military on Thursday said it continued to search through Gaza’s largest hospital for further evidence that it is used by Hamas for military purposes, as Israel faced growing pressure to justify sending troops into a medical facility. After a day of searching through Al-Shifa Hospital in Gaza City, questioning patients, staff and displaced people sheltering inside, Israel on Wednesday released footage of AK-47 assault rifles, grenades, battle vests with Hamas insignia and other assorted military equipment it said it found hidden in the MRI wing of the hospital.
/jlne.ws/46cnze8

Israel Targets Hamas Tunnels With Attack Dogs, ‘Sponge’ Bombs; Military deploying range of aerial, ground technology for task; Hamas conceals weapons, fighters in underground labyrinth
Henry Meyer and Marissa Newman – Bloomberg
With Israel’s war on Hamas advancing to the heart of Gaza’s main city in a little under six weeks, the army is looking to minimize the risk of confronting another challenge: infiltrating the group’s vast, secret network of tunnels. Anxious to limit losses among its soldiers, Israel’s military has deployed a complex array of technologies to probe and attempt to destroy the underground complexes – and eventually the Hamas leadership – including around Al Shifa hospital.
/jlne.ws/46mNmAi

Exchanges, OTC and Clearing

The New York Stock Exchange and the Abu Dhabi Securities Exchange Agree to Memorandum of Understanding for Business Collaboration; Agreement focuses on dual listings and the exploration of new products; Represents most recent collaboration between ICE and ADX
Intercontinental Exchange
The New York Stock Exchange, part of Intercontinental Exchange, Inc. (NYSE: ICE), and the Abu Dhabi Securities Exchange (ADX), one of the fastest growing markets worldwide, today announced that the two parties have signed a memorandum of understanding to collaborate on a number of key business activities, including the dual listing of companies on both exchanges. The NYSE and ADX will also explore opportunities to develop ETFs and data and index products, as well as collaborate on sustainability-related initiatives. The agreement follows the announcement last week that ADX has selected the ICE Global Network to offer global institutional investors direct access to ADX market data and order entry.
/jlne.ws/3uak6iL

Cooperation in the Issuance of Hitachi’s Digital Green Bond
JPX
Hitachi, Ltd. (“Hitachi”), JPX Market Innovation & Research, Inc. (“JPXI”), Nomura Securities Co., Ltd. (“Nomura”), and BOOSTRY Co., Ltd. (“BOOSTRY”), are cooperating with Hitachi toward its issuance of a “Digitally Tracked Green Bond” (“digital green bond”) utilizing digital technologies such as IoT and a blockchain platform. Hitachi plans to allocate the funds raised through the issuance of the digital green bond to an energy-efficient green building.
/jlne.ws/40JhK6A

NCC received the highest credit rating from Expert RA agency
MOEX
The Expert RA rating agency assigned the National Clearing Center (NCC) a credit rating of ruAAA with a stable outlook. The credit rating of the Expert RA agency was assigned to NCC for the first time and is long-term. The agency explained the assignment of the rating by NCC’s strong market positions, position on capital and profitability, high quality of assets, adequate liquidity position, as well as a high assessment of the level of corporate governance and business processes.
/jlne.ws/47BjKQQ

Fintech

Tradeweb to acquire algo provider r8fin as fixed income algo arms race heats up; Tradeweb is the second major fixed income venue to move to acquire an algo provider in H2 of this year after MarketAxess confirmed it was set to purchase Pragma in August.
Annabel Smith – The Trade
Tradeweb is set to become the latest fixed income trading venue to add an algorithmic technology provider to its universe with the acquisition of r8fin. r8fin specialises in US treasuries and interest rate futures. Its clients include hedge funds, systematic hedge funds, professional trading firms and primary dealers.
/jlne.ws/3SJTbo9

How to keep the lid on the Pandora’s box of open AI; The debate currently playing out will have an impact on global productivity and stability
John Thornhill – Financial Times
It is rapidly emerging as one of the most important technological, and increasingly ideological, divides of our times: should powerful generative artificial intelligence systems be open or closed? How that debate plays out will affect the productivity of our economies, the stability of our societies and the fortunes of some of the world’s richest companies.
/jlne.ws/47egoTP

Microsoft launches AI chips as developers seek Nvidia alternatives; New processors designed for OpenAI’s GPT models will be deployed in its Azure data centres next year
Tim Bradshaw – Financial Times
Microsoft has unveiled its first bespoke chips for artificial intelligence in the cloud, as developers clamour for alternative suppliers to Nvidia, which dominates the market for AI processors. Two new processors – a general-purpose chip based on Arm designs called Cobalt and a specialised AI “accelerator” named Maia – will be deployed in Microsoft’s Azure data centres next year, supporting its services including OpenAI and Copilot.
/jlne.ws/40KQLrp

No One Told AI Startups That San Francisco Is Over; Companies working on artificial intelligence are clustering in several neighborhoods and say face-to-face connections help innovation.
Priya Anand – Bloomberg
San Francisco has become perhaps the primary example for what happens when a city’s economic and creative opportunities no longer outweigh the costs and inconveniences of living there. It’s struggled more than any major US city to recover from the pandemic, leaving critics to gleefully predict that its decline could be irreversible.
/jlne.ws/46gYBKC

AI Companies Must Rethink How They Pay For Data, Lanier says; Technology pioneer Jaron Lanier says AI companies should work to determine which individuals contributed the most useful data to their artificial intelligence systems
Nate Lanxon and Jackie Davalos – Bloomberg
Some prominent figures in Silicon Valley have suggested artificial intelligence will eventually create so much wealth that companies could redistribute it to the public, including people whose livelihoods were impacted by AI. But Jaron Lanier sees problems with that plan.
/jlne.ws/3sCyD6w

Nvidia Challenger Sapeon Unveils Latest AI Chip for Data Centers; Korean conglomerate SK Group hopes to build Nvidia alternative; SK Telecom split off Sapeon to accelerate AI chip development
Yoolim Lee – Bloomberg
Sapeon Inc., a semiconductor startup backed by South Korean conglomerate SK Group, unveiled its latest artificial intelligence chip to ramp up its offerings in the increasingly competitive market.
/jlne.ws/3sBKNwt

Companies Tried to Spend Less on Cloud. Then AI Showed Up; Businesses have been working to better manage their cloud budgets. Generative AI, which runs on the cloud, is making that much harder.
Belle Lin and Isabelle Bousquette – The Wall Street Journal
/jlne.ws/3MNbWn7

How Amazon Is Going After Microsoft’s Cloud Computing Ambitions
Emily Birnbaum – The Wall Street Journal
/jlne.ws/40IGVXh

Apple Pay launches UK open banking integration for Wallet
FinExtra
Apple Pay users across the UK can now take advantage of a new feature that taps into the open banking framework to let them connect cards and view their account balance from within the Wallet app. Soft launched in September, the feature is now live for all Brits, letting them see their up-to-date debit card balance in Wallet and when they’re checking out with Apple Pay online or in-apps.
/jlne.ws/3MNIPjn

Cybersecurity

Clorox’s cyber chief leaves as recovery from cyberattack continues – Bloomberg News
Reuters
Clorox’s chief information security officer, Amy Bogac, has left the company as it works to recover from a cyberattack, Bloomberg News reported on Wednesday, citing an internal memo. The incident in August threw the cleaning supplies maker’s order fulfillment facilities out of gear for more than a month, and forced it to trim its annual revenue forecast.
/jlne.ws/3SIZSqM

Customers seek wiggle room to pay for cybersecurity, despite ‘unprecedented’ level of attacks, Palo Alto Networks says
Bill Peters – MarketWatch
Shares of Palo Alto Networks Inc. slid after hours Wednesday after the cybersecurity company trimmed its full-year outlook for billings, as its customers seek more flexibility on cybersecurity spending. Executives tempered that forecast despite what they characterized as an an “unprecedented level” of cyberattacks driving demand for greater security. But a more cautious tack on the economy and higher interest rates have reshaped the way businesses craft their tech budgets.
/jlne.ws/3R0uH8V

Barclays flags Treasuries central clearing cybersecurity risks after ICBC hack
Davide Barbuscia – Reuters
A key reform proposed by the U.S. Securities and Exchange Commission to boost the use of central clearing for U.S. Treasuries could leave the market more exposed to cybersecurity risks, Barclays said, referring to the cyber hack of Industrial and Commercial Bank of China’s U.S. broker-dealer last week. The SEC central clearing rule, first proposed in September last year, would apply to the cash Treasury and repurchase agreements (repo) markets, where banks and other players such as hedge funds borrow short-term loans backed by Treasuries.
/jlne.ws/3SP7KXT

Cybersecurity Investment: Spotlight on Vulnerability Management
European Union Agency for Cybersecurity
The new report of the European Union Agency for Cybersecurity (ENISA) confirms investment continues to grow but stresses the importance of vulnerability management. Despite a 25% increase of the cost of major cyber incidents in 2022 compared to 2021, the new report on cybersecurity investment reveals a slight increase of 0,4% of IT budget dedicated to cybersecurity by EU operators in scope of the NIS Directive.
/jlne.ws/47sA86g

Cryptocurrencies

The Philippines To Launch First Tokenized Treasury Bonds in Effort To Strengthen Domestic Debt Market
Davier M – CoinMarketCap
The Philippines is set to sell tokenized treasury bonds for the first time, in a significant milestone for its financial markets. The Bureau of the Treasury has announced that it will offer at least 10 billion pesos ($179 million) worth of one-year tokenized bonds on Monday, marking a shift towards exploring blockchain technology and tokenized securities to enhance the country’s domestic debt market.
/jlne.ws/49HtSJJ

JPMorgan and Apollo Global Unveil Blockchain Asset Management Proof-of-Concept with Avalanche
Hope C – CoinMarketCap
J.P. Morgan and Apollo Global’s blockchain platform, Onyx, have announced a proof-of-concept in partnership with Avalanche as part of the Monetary Authority of Singapore’s Project Guardian. The aim of this initiative is to transform asset and wealth management by utilizing blockchain, smart contracts, and tokenization to simplify portfolio management, particularly for traditionally challenging alternative assets.
/jlne.ws/40In61X

Binance Partners With Gulf Energy To Launch Crypto Exchange in Thailand
Davier M – CoinMarketCap
Binance, one of the leading cryptocurrency exchanges, is gearing up to establish its presence in Thailand with a new crypto exchange set to launch early next year. The exchange will be operated through a joint venture between Binance and a unit of Gulf Energy Development, a major energy company founded by Thai billionaire Sarath Ratanavadi.
/jlne.ws/3MKJLFp

Politics

Biden Adviser Says Sanctions Will Bring Down Iran Oil Exports
Ari Natter and Annmarie Hordern – Bloomberg
The US will enforce oil sanctions against Iran amid the renewed conflict in the Middle East, a White House Energy adviser said Wednesday. “We are going to enforce those sanctions,” President Joe Biden’s energy security adviser Amos Hochstein said on Bloomberg Television, in reference to what he said amounted to more than 1 million barrels a day of oil exports from Iran. “Those numbers will come down.”
/jlne.ws/46khcVY

Joe Manchin Says He Is ‘Absolutely’ Considering a Run for President
Laura Davison – Bloomberg
West Virginia Senator Joe Manchin said he is considering launching a presidential campaign, moving closer toward a bid that could shake up the 2024 election. “I will do anything I can to help my country, and you’re saying, ‘Does that mean you would consider it?’ Absolutely,” Manchin, a Democrat, said Wednesday in an interview with NBC News.
/jlne.ws/49y0fdP

Peter Thiel Is Still Hoping That Donald Trump Just Fades Away; The tech elite’s adventure in right-wing populism hasn’t gone quite like anyone intended.
Max Chafkin – Bloomberg
At the end of 2016, Donald Trump and the venture capitalist Peter Thiel sat down to a meeting with a group of the most powerful figures in the tech industry. With Apple’s Tim Cook, Tesla’s Elon Musk, Google’s Larry Page and Amazon.com’s Jeff Bezos looking on, the president-elect thanked Thiel for his early support. Trump then attempted a sort of handshake. Grabbing Thiel’s hand and lightly patting it, he raised it above the table in a gesture that seemed somewhere between tenderness and triumph.
/jlne.ws/3SLtSlW

Regulators to face tough questions about bank capital rules as pushback intensifies
Jennifer Schonberger – Yahoo Finance
A debate in Washington about tougher capital requirements for big banks is intensifying as the architects of those new rules prepare to testify before Congress this week. Federal Reserve Vice Chair for Supervision Michael Barr, FDIC Chair Martin Gruenberg, and acting OCC Comptroller Michael Hsu are expected to face tough questions today and tomorrow from mostly Republican members who argue that bigger bank capital buffers proposed by these regulators would curb lending and hurt the economy.
/jlne.ws/3R35ASQ

China’s plan to seize on global chaos and supplant the US may be working
Tom Porter – Business Insider
President Joe Biden seems keen to ease tensions with his main global rival, China’s leader Xi Jinping, against a backdrop of global chaos and conflict. The pair are meeting today in San Francisco on the sidelines of the annual Asia-Pacific Economic Cooperation (APEC) forum, in the first face-to-face meeting between the US and Chinese leaders in a year.
/jlne.ws/47hQzlU

Regulation

BlackRock tells SEC it ‘must’ approve spot crypto ETFs given precedent; The SEC has stalled on approving the spot crypto products, though many analysts believe an approval is imminent.
Sabrina Tobba – The Street
The world’s largest asset manager, BlackRock, has pointed out that the U.S. Securities and Exchange Commission (SEC) “must” approve spot crypto exchange-traded funds (ETFs), due to previous approvals of ETFs featuring crypto futures. The Wall Street asset manager said that the markets regulator, which is notoriously skeptical of the crypto industry, should not treat spot crypto ETFs and crypto futures ETFs differently.
/jlne.ws/3QIv32B

Federal Court Orders Illinois Man and His Entities to Pay Over $20 Million in Restitution and Penalties for Commodity Pool Ponzi Scheme
CFTC
The Commodity Futures Trading Commission today announced the U.S. District Court for the Northern District of Illinois entered an order of final judgment against Chicago-based Phillip Galles and the various Tyche entities he controlled: Tyche Asset Management LLC, Tyche Master Fund Ltd, Tyche Asset Trade LLC, Tyche Offshore Fund Ltd., Tyche Onshore Fund LP, Tyche PML Master Fund Ltd., Tyche PML Onshore Fund LP, Tyche Onshore Fund GP LLC, and Tyche Asset Trade LLC.
/jlne.ws/46bzHfq

SEC Charges Algorithmic Trader Matthew Melton with Defrauding Investors Out of More Than $1.5 Million
SEC
The Securities and Exchange Commission today charged Matthew Melton for fraud in connection with material misrepresentations to investors about the performance of his Price Physics trading algorithm and his misappropriation of more than $1.5 million of investor proceeds.
/jlne.ws/47viKy9

SEC Charges Former Co-CEOs of Tech Start-Up Bitwise Industries for Falsifying Documents While Raising $70 Million From Investors
SEC
On November 9, 2023, the Securities and Exchange Commission announced charges against Jake Soberal and Irma Olguin, Jr., the former co-CEOs of Fresno, California-based private technology services startup Bitwise Industries Inc., for misleading investors about the company’s finances. Soberal and Olguin have agreed to resolve the charges against them.
/jlne.ws/49y3CkZ

NFA orders London, United Kingdom introducing broker Braemar Securities LTD to pay a $140,000 fine
NFA
NFA has ordered Braemar Securities LTD (Braemar Securities) to pay a $140,000 fine. Braemar Securities is an introducing broker (IB) Member of NFA located in London, United Kingdom.
/jlne.ws/3SLOydk

FCA finds further work required to fully embed ‘Guiding Principles’ for ESG and sustainable investment funds
FCA
A review by the FCA has found that while most Authorised Fund Managers (AFMs) have made efforts to comply with the FCA’s expectations on the design, delivery, and disclosure of their ESG and sustainable funds, further improvement is needed.
/jlne.ws/3G8KcW1

Investing and Trading

Mars to buy Hotel Chocolat in £534mn deal; UK chocolatier’s founders to get payday of about £280mn after difficult year marked by waning demand
Madeleine Speed, Laura Onita and Maxine Kelly – Financial Times
Pet food and confectionery giant Mars has announced it will buy ailing UK chocolate business Hotel Chocolat in a deal worth about £534mn, with a payday of about £280mn for the latter’s founders. The cash offer, which values the company at about £534mn on a fully diluted basis, represents a sizeable premium on the Aim-listed chocolatier’s share price on Wednesday and comes after Hotel Chocolat made a loss this year, amid sinking demand and the fallout from botched expansion plans.
/jlne.ws/49ANXRH

Banks Aren’t Ready for the Office-Loan Reckoning; As hard as lenders try to pull back from commercial property, the loans keep piling up.
Marc Rubinstein – Bloomberg
Few banks want to lend to the commercial real estate market right now. And who can blame them? Rising interest rates and surging vacancies, particularly for offices, have dramatically increased risks. In the first nine months of this year, banks’ commercial real estate originations dropped by 67% over the same period last year, according to the Mortgage Bankers Association. And in a recent Federal Reserve survey of loan officers, a net two-thirds said that they’re further tightening lending standards. The metrics reflect a reluctance to lend not seen outside the global financial crisis or the start of the pandemic.
/jlne.ws/3QziA1i

M&A Hunters Target London for Some of World’s Cheapest Companies; Hotel Chocolat, City Pub Group are latest takeover targets; ‘We’ll definitely see more bids,’ says Rathbones fund manager
Joe Easton and Alexandra Muller – Bloomberg
M&A activity burst into life in the City of London on Thursday with three new deals. US candy manufacturer Mars Inc. has made an offer for Hotel Chocolat Group Plc at a hefty 170% premium, while Young & Co.’s Brewery Plc has agreed to buy smaller rival The City Pub Group PLC at nearly 50% above its closing share price. “We’ll definitely see more bids,” said Alexandra Jackson, manager of the Rathbone UK Opportunities equities fund, pointing to greater investor clarity on interest rates and “lots of cash” at private equity firms.
/jlne.ws/3sAEB80

Environmental, Social and Corporate Governance

The New Generation of Freeway Fighters Is Assembling; Foes of US highway expansions, fueled by environmental and equity concerns, gathered at a summit to share strategy, compare notes and try to forge a national movement.
Megan Kimble – Bloomberg
Like most American cities, Cincinnati’s downtown is defined by a tangle of highways. In the 1960s, Interstate 75 was built through the West End neighborhood northwest of downtown; the highway – and the massive urban renewal project that accompanied it – wiped out 3,700 buildings and displaced more than 25,000 people, most of whom were Black. In early 2022, when Matt Butler learned about a $3.6 billion plan to widen I-75 through the West End, he thought: No way. Butler is the co-founder of the Devou Good Foundation, a nonprofit that supports active transportation projects across southern Ohio and northern Kentucky, where 20% of households don’t have access to a car.
/jlne.ws/3QJtD82

US Regions Will Suffer a Stunning Variety of Climate-Caused Disasters, Report Finds
Nicholas Kusnetz, Lee Hedgepeth, Amy Green, Phil McKenna, Dylan Baddour, Aydali Campa, Wyatt Myskow, Marianne Lavelle and Kristoffer Tigue – Inside Climate News
If there is one overarching message from the nation’s latest climate assessment, it is that nowhere will be spared. Hotter temperatures are coming to every corner of the country, as are weather extremes. Many regions are experiencing more frequent, heavier rains, while others are seeing worsening drought. Some are getting both. Everywhere, these changes are translating into greater stresses on Americans’ health through worsening heatwaves, wildfires, hurricanes, floods and the psychological toll of mounting disasters.
/jlne.ws/3MQh75B

EVs Are the Only Bright Spot in Climate Fight, Study Shows; World is failing in almost every area in push for net zero; Report comes ahead of first global stocktake at COP28
Jess Shankleman and John Ainger – Bloomberg
Global efforts to reach net-zero carbon emissions are failing in almost every way, with one exception: the boom in electric vehicles. That’s the conclusion of a study that was jointly conducted by the Bezos Earth Fund and other non-profits which assessed 42 different measures key for the world hitting net zero by 2050. They cover electricity, industry, transport and land as well as the need to scale up nascent carbon-removal technologies and climate finance.
/jlne.ws/3SHAFNc

EU rules on methane leaks to hit oil and gas importers; New regulations fail to include specific target on reduction of potent greenhouse gas emissions from energy sector
Ian Johnston – Financial Times
The EU has agreed on new restrictions on methane emissions aimed at Europe’s energy sector as well as oil and gas importers, in an effort to crack down on the potent source of global greenhouse gases. Oil, gas and coal companies will have to monitor, detect and repair methane leaks across the bloc in rules that will also apply to the importers of fossil fuels from 2027, in regulations agreed on Wednesday. By 2030, importers will have to meet maximum methane intensity thresholds, yet to be defined.
/jlne.ws/3sH3XAY

Institutions

Cyberattack on ICBC’s US unit to not have material impact on parent bank – Fitch
Reuters
Ratings agency Fitch on Thursday said the recent cyberattack at ICBC Financial Services will not have a material impact on its Chinese parent, although it highlights growing threats to global payment networks from such incidents. The U.S. arm of Industrial and Commercial Bank of China Ltd (ICBC) was hit by a ransomware attack last week that disrupted trades and sent ripples through the U.S. Treasuries market, where the bank acts as a broker for hedge funds and other market participants.
/jlne.ws/3QItu4J

BlackRock woos investors for ethereum trust to further crypto push
Reuters
Asset management giant BlackRock on Thursday began courting public investors for an ethereum trust, doubling down on its cryptocurrency bets amid potentially easing regulations over such investment vehicles. The iShares Ethereum Trust, which was registered last week, will give investors access to ether – the second most popular cryptocurrency – without directly owning it.
/jlne.ws/3G2GY6E

Blackstone borrows to boost lending power of $52bn credit fund; Private equity firm raises funds through collateralised loan obligation secured by its portfolio
Eric Platt – Financial Times
Blackstone is planning to borrow hundreds of millions of dollars to give its flagship private credit fund added investment firepower, as the asset manager taps a new source of leverage that it and rivals aim to increasingly exploit in the years to come. The private equity behemoth is in the final stages of raising just under $400mn through a so-called collateralised loan obligation secured by the very loans held by its $52bn Blackstone Private Credit Fund, known as BCRED, according to documents obtained by the Financial Times.
/jlne.ws/47xPXs8

Manulife to buy CQS in end of an era for Michael Hintze; The Tory donor will step back from his firm as the Canadian money manager bulks up in private credit
Brooke Masters and Costas Mourselas and Harriet Agnew – Financial Times
Manulife is buying CQS, the UK credit investor founded by Lord Michael Hintze, as the Canadian insurer and money manager seeks to bulk up in the fast-growing area of private credit.
/jlne.ws/3SLqB68

Big Banks to Be Saddled With Tab for SVB, Signature Depositors; FDIC set to approve plan for refilling deposit insurance fund; Industry officials pushed back on parts of agency’s May plan
Katanga Johnson – Bloomberg
The government is set to approve a plan on Thursday – over some industry objections – that will saddle the biggest banks with much of the tab for refilling the bedrock US deposit insurance fund. The Federal Deposit Insurance Corp. is expected to green light key parts of the regulator’s May proposal for replenishing the fund, according to people familiar with the matter. It typically only covers as much as $250,000 in an account, but was used to make whole uninsured depositors hit by March’s banking turmoil.
/jlne.ws/40O2zt1

Work & Management

Wells Fargo to cut less than 50 investment banker jobs – source
Reuters
Wells Fargo has let go of less than 50 bankers from its corporate and investment banking unit as part of year-end pruning, a source familiar with the matter said on Tuesday. Top U.S. banks have flagged even more potential layoffs to save costs, especially if the economy remains under pressure from high interest rates and geopolitical tensions, threatening to derail a budding rebound in investment banking.
/jlne.ws/49Psfd0

Hedge fund Schonfeld to cut 15% of jobs after ending Millennium talks; Multi-manager tells 150 employees, mostly in non-investment roles, they are losing their jobs
Harriet Agnew – Financial Times
US hedge fund Schonfeld Strategic Advisors is cutting 15 per cent of its workforce in a cost-cutting drive after walking away from talks with larger rival Millennium Management earlier this week. About 150 of the firm’s 1,000 employees were informed on Wednesday that they were losing their jobs, according to a person with direct knowledge of the situation. The cuts largely relate to non-investment roles in areas such as technology and back-office services, the person added.
/jlne.ws/3QFwJKn

Wellness Exchange

Medical Studies Are Too White. How Science Is Working to Get Better Data; Efforts to diversify clinical trials aim to ensure devices, drugs and prevention work for all
Dominique Mosbergen – The Wall Street Journal
Researchers are coming up with new ways to make medical studies less white. They are building trust in groups long ignored by science and working with doctors and patients of color to design better studies. They are opening research sites in more diverse communities and providing stipends to help people participating in their studies pay for gas and child care.
/jlne.ws/46hT4mX

How PFAS “forever chemicals” are harming our health, with Linda Birnbaum (Ep. 123)
University of Chicago
By now, you’ve probably heard about the dangers of PFAS “forever chemicals.” These chemicals are all around us-they’re in waterproof hiking boots, electronics, nonstick pans and even our drinking water-but there’s no way for them to break down in our environment. Epidemiological studies have linked to these chemicals to numerous diseases-from kidney cancer, liver cancer, obesity, decreased fertility and more.
/jlne.ws/3sL5PZv

Health Insurers Have Been Breaking State Laws for Years
Maya Miller and Robin Fields – ProPublica
In North Carolina, lawmakers outraged that breast cancer patients were being denied reconstructive surgeries passed a measure forcing health insurers to pay for them. In Arizona, legislators intervened to protect patients with diabetes, requiring health plans to cover their supplies. Elected officials in more than a dozen states, from Oklahoma to California, wrote laws demanding that insurance companies pay for emergency services.
/jlne.ws/49ARob3

Driving Economic Growth And Prosperity Through Better Women’s Health Policies.
Kevin Ali – Forbes
Women’s health and empowerment as a driver of economic stability and growth were critical agenda items at this week’s Asia-Pacific Economic Cooperation (APEC) CEO Summit in San Francisco, where I was the co-chair of the private sector host committee. And the reasons were compelling.
/jlne.ws/3QKdBuV

Regions

Japan Monthly Tourism Numbers Return to Pre-Covid Level
Yoshiaki Nohara – Bloomberg
More tourists came to Japan in October than in the same month in 2019 before the pandemic, a development that will offer support for the economy after it shrank over the summer. The number of visitors was about 2.52 million, compared with roughly 2.50 million in October 2019, Japan’s National Tourism Organization reported Wednesday.
/jlne.ws/3G42uYO

China objects to US bid for APEC to shift trade and investment principles
David Lawder – Reuters
China is objecting to a U.S. proposal for Asia Pacific Economic Cooperation (APEC) members to incorporate sustainability and inclusivity into their trade and investment policies, a source briefed on the negotiations said on Wednesday. Talks on the issue were continuing at the APEC summit in San Francisco to try to find language that the group’s 21 member states could agree on, the source said.
/jlne.ws/3QDg1LL

North Korea Tests New Engines for Ballistic Missiles to Strike US Bases in Guam
Jon Herskovitz – Bloomberg
North Korea tested new engines for intermediate-range ballistic missiles, its state media said, a move that could help Pyongyang deliver quick strikes on US bases in places such as Guam. Tests were conducted on Nov. 11 and 14 on “new-type high-thrust solid-fuel engines” for “further enhancing the strategic offensive capabilities” of North Korea’s armed forces, the official Korean Central News Agency reported Wednesday.
/jlne.ws/47dyk0V

Turkey’s Lira Lures Carry Traders Once Again; Lira losing about 0.1% of its value every day for three months; Losses have been below Turkey’s inflation rate, bond yields
Kerim Karakaya – Bloomberg
The unnatural steadiness of Turkey’s currency depreciation is drawing the attention of investors who borrow where interest rates are low and seek to put money to work where returns are higher. So far this year, the lira’s chronic weakness and one of the fastest inflation rates globally have yielded the worst carry returns in the world. But the trade’s fortunes may be about to change.
/jlne.ws/3SJahCT

Miscellaneous

What is the point of an expo in today’s world? The chaotic build-up to Japan’s event suggests it is a relic of a past global order
Leo Lewis – Financial Times
Mexico and Estonia have pulled out but Denmark, Cameroon and Jamaica still want in. Construction costs are spiralling so fast that Brazil, Argentina and Poland are said to be considering moving their showcases into a glorified warehouse. A European nation was told by one of Japan’s biggest contractors that, yes, they will certainly complete the desired pavilion – a month after the event is finished.
/jlne.ws/3uj4F84

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