LSE in exclusive talks with Euronext over Borsa Italiana sale

Sep 18, 2020

First Read

New FTSE Russell Data Model Looks for ‘Green’ in Global Investments
By Suzanne Cosgrove – John Lothian News

Ahead of the implementation of an ambitious EU classification system for sustainable activities, known as the EU Taxonomy, FTSE Russell this week launched a Green Revenues 2.0 model to classify the “green” revenue exposure of global listed companies, a segment of the economy that FTSE Russell estimates is worth approximately $4 trillion.

A final Taxonomy report, published by the EU technical expert group on sustainable finance in March 2020, set out detailed criteria for 70 economic activities that contribute to climate change mitigation and 68 to adaptation activities.

Some 6,000 large EU companies are subject to the EU’s Non-Financial Reporting Directive and will be required to disclose if their activities are Taxonomy-aligned, and to what extent, by January 2022.

The entire initiative “is an important component of ESG (environmental, social and governance) investing,” said Arne Staal, global head of research and product management for FTSE Russell.
“We see very strong interest in Europe, and growing interest in the U.S.,” he said in an interview.

To read the rest of this story, go here.


Hits & Takes
JLN Staff

Our friends at CQG have upgraded their sponsorship level (thank you) and as part of the deal they are a sponsor for the first five videos in The Path to Electronic Trading series. We have added a CQG sponsor notice to the Gerry Corcoran video with which we launched the series.

The second video in the series, which we will publish later today and will be in the Weekend Update, is an interview with Dan Gramza, who will talk about his experience helping SGX transition from open outcry trading to electronic trading.

Also, we have also developed a logo for the series, which is shown here.

Brian Mehta, the CMO of Trading Technologies, has a podcast titled “Transforming how Futures are Traded.”

ErisX has made two promotions. Tony Acuña-Rohter has been promoted to chief technology officer. He joined ErisX in February 2018 as head of technology. John Denza has been promoted to chief commercial officer. Denza joined ErisX in January 2019 as a business development executive. It should also be noted that ErisX has two open positions in technology, an application security engineer and a software engineer – full stack. See the careers section of their website for details.

The U.S. Department of Justice announced Wednesday that they had indicted five Chinese hackers and two Malaysian businessmen accused of intrusions that hit more than 100 companies in the U.S. and abroad. If you have not hardened your cyber security, now is a good time to do so. Yesterday was a better time to do so.

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


Correction: In my article about the spoofing trial involving former Deutsche Bank metals traders yesterday, I incorrectly said that jail time was off the table for the cooperating witness David Liew. Liew has pleaded guilty to one count of conspiring to spoof metals markets with DB colleagues but has not been sentenced. The judge in Liew’s case may, in fact, sentence him to prison, up to the statutory maximum of five years, regardless of any sentencing recommendations from the prosecution in his case. The DOJ has agreed not to charge Liew for separately conspiring with a friend at UBS to spoof and he cannot be sentenced to jail time for those crimes, but the judge in Liew’s case may be made aware of these other crimes and take them into account when sentencing Liew. Liew’s potential for serving jail time engendered a lengthy discussion among the attorneys and the judge, who refused to allow the defense attorneys to let anyone to say that Liew had been “granted immunity” with respect to any criminal actions he may have engaged in. ~ Thom Thompson

Update from USA v Vorley et al: David Liew, the junior co-conspiring metals trader in the Deutsche Bank spoofing triad, spilled no new beans when his cross-examination continued Thursday in federal court. Wednesday, he was cross-examined by the attorney for James Varley and yesterday by Cedric Chanu’s attorney. Chanu’s defense covered much of the same ground as Vorley’s attorney, with maybe a little more speed, since the landmarks were familiar, but getting to the same place. Liew was naive and ambitious, a dangerous combination in a place like Deutsche Bank. The “foundation” – as the trial attorneys call it – for that little smear of Germany’s once great financial institution was laid by Liew’s testimony about the lack of training and the total lack of trading ethics oversight he experienced in his years at the bank. Thursday afternoon’s testimony by a senior fellow from compliance who was called by the prosecution buttressed the sorry impression left by Liew. For example, the prosecution’s witness said that among the many hours of compliance training traders at the bank receive was an annual mandatory hour on market manipulation. Their own documents, entered as exhibits, showed that in the several years included in the excerpt from Vorley’s personnel file he took only one training course on market manipulation. The course description said that training was supposed to take no more than half an hour, including the test. Neither Liew nor Deutsche Bank is on trial, but they both look guilty. ~Thom Thompson

The London Metal Exchange will host a webinar on Tuesday September 22 to outline its approach to the role metals and mining play in the transition to a sustainable future. The webinar is free and will take place at 12:00 London time (BST). The speakers will be Matthew Chamberlain, LME CEO and Georgina Hallett, Chief Sustainability Officer. The webinar will be held on BrightTalk. You can go here to register. ~SR

Also, the deadline for feedback on the LME’s Sustainability Discussion Paper, which you can download here, is September 24. ~SR


Supervisory Board of Deutsche Börse AG extends board memberships of Dr. Thomas Book and Dr. Stephan Leithner
Deutsche Börse AG
In its meeting yesterday, the Supervisory Board of Deutsche Börse AG approved the management board mandates of Dr. Thomas Book and Dr. Stephan Leithner extended early for five years until the end of June 2026.

*****You can book another five years for Thomas Book at Deutsche Boerse, and Stephan Leithner too. Congratulations to both.~JJL


C.D.C. Testing Guidance Was Published Against Scientists’ Objections; A controversial guideline saying people without Covid-19 symptoms didn’t need to get tested for the virus came from H.H.S. officials and skipped the C.D.C.’s scientific review process.
Apoorva Mandavilli – WSJ
A heavily criticized recommendation from the Centers for Disease Control and Prevention last month about who should be tested for the coronavirus was not written by C.D.C. scientists and was posted to the agency’s website despite their serious objections, according to several people familiar with the matter as well as internal documents obtained by The New York Times.

*****Do the scientists get to give political advice since the politicians are giving scientific advice?~JJL


The slow death of Big Oil; The industry must reinvent itself to survive in a low-carbon era
The editorial board – FT
Oil and gas companies used to measure their success by how good they were at finding new reserves. The unforgiving rule by which they were judged was the “reserve replacement ratio”, a metric of how successful a company was at replacing the oil and gas it extracted with new supplies. Today, that view is being turned upside down. Bernard Looney, chief executive of BP, believes the future lies in producing less hydrocarbons, not more. He wants BP to cut its production of oil and gas by 40 per cent over the next decade.

****** Slow is the word.~JJL


Queen set for financial blow from coronavirus crisis; UK monarch’s estate warns of falls in rental income and property value
George Hammond – FT
Having ripped through the high street and emptied offices, the pandemic is now threatening the Queen’s coffers. The Crown Estate said on Friday that it expected the value of its property and its profits to be badly hit by the coronavirus crisis. “We are under no illusions about the challenges we face,” said Dan Labbad, chief executive of the estate, which manages a sprawling property portfolio on behalf of the monarch including shops and offices in central London, retail parks in other regions and the seabed off the English, Welsh and Northern Irish coastline.

******I see a royal go fund me campaign coming.~JJL


Qantas seven-hour flight to nowhere sells out in 10 minutes
Francesca Street – CNN Travel
Pre-pandemic, many of us viewed flying simply as a method of getting from one destination to another as quickly as possible.
But amid global restrictions, travelers have been daydreaming not only about far-flung destinations, but the flying experience itself — from the thrill of the take-off to the unmatched views of the Earth from the cabin window. That’s where “flights to nowhere” come in — air travel that takes place purely for the purpose of the journey, not the destination.

****What happens if you miss your flight?~JB


CryptoMarketsWiki Coin of the Week: UNI
Decentralized (DEX) cryptocurrency exchange Uniswap launched its governance token, UNI, on September 16, minting 1 billion digital coins to be distributed publicly over the next four years. According to Uniswap’s blog, 60 percent of the coins will be distributed to users, while 21.51 percent will be reserved for team members and future employees, 17.8 percent will be reserved for investors, and 0.69 percent will be reserved for advisors. Uniswap made news recently when a user copied its code wholesale to create SushiSwap.


Thursday’s Top Three
Our top story Thursday was John Lothian News’ Fed’s Star Witness In Spoofing Trial Gets Tarnished Under Cross-examination, by Thom Thompson. Second was Deutsche Börse’s press release Deutsche Börse acquires a majority in quantitative brokers, thereby strengthening its strategic focus on the buy side. Third was What JPMorgan Has To Say About Young Employees Working From Home, from Yahoo Finance.


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Lead Stories

LSE in exclusive talks with Euronext over Borsa Italiana sale; Discussions come as London exchange group seeks regulatory approval for Refinitiv deal
Philip Stafford – FT
The London Stock Exchange Group has begun exclusive talks to sell the owner of the Milan stock exchange to rival Euronext, in a concession to secure approval for its $27bn deal to buy data and trading group Refinitiv. Euronext, which owns the main stock exchanges of Paris, Amsterdam, Dublin, Oslo, Lisbon and Brussels, pushed ahead of Germany’s Deutsche Börse and Switzerland’s SIX Group in the battle to win Borsa Italiana.

Istanbul Bourse Steps Up Punishments for ‘Misleading Commentary’
Taylan Bilgic – Bloomberg
Penalties for market professionals for abuse jump 100-fold; Turks have rushed to invest in shares in search for returns
Istanbul’s stock exchange increased potential fines for market professionals who mislead investors and broadened the scope of its penalties to include views expressed in the media as it steps up efforts to discourage abuses following a surge in share trading among Turks. “False, wrong and misleading commentary and advice” about capital markets published in newspapers, the internet, in social media, or broadcast on television was added to a roster of punishable acts, according to regulations issued Friday.

Even Fidelity’s $230 Billion Star Manager Has Robinhood Anxiety
Erik Schatzker – Bloomberg
Contrafund manager questions mutual funds’ appeal to Gen Z; He regrets selling Tesla, still likes Buffett’s Berkshire
Will Danoff has been wondering why billions of dollars keep flowing out of the Contrafund, the giant mutual fund he manages at Fidelity Investments. Performance isn’t the problem. He’s up 21% this year, trouncing the S&P 500’s 6.2% return. His conclusion: Today’s kids want something sexier. “There’s a demographic issue,” Danoff, who has beaten the benchmark by an average of more than 3 percentage points annually over three decades, said in a Bloomberg Front Row interview. “We need to appeal to the Gen Z-ers and the younger generation as well, and luckily I think our app is quite good. But you know, a typical Gen Z-er may not be as interested in owning a mutual fund.”

Option Dealers Pushed Prices to Extremes in Day Trader Onslaught
Justina Lee and Yakob Peterseil – Bloomberg
Apple, Tesla options hit historic levels amid wave of demand; Retail traders are still buying calls despite recent selloff
Amid last month’s frenzy in options, some investors said they saw an age-old ritual playing out. Newbie traders, blinded by dreams of riches, rushed into the market, where Wall Street professionals sat waiting to take advantage of their enthusiasm by raising prices. A few volatility analysts saw signs that dealers cashed in on novice buyers by pushing up options costs in the most popular stocks. By these accounts, individuals were so hungry for Apple Inc. and Tesla Inc. options in late August and early September that they were willing to buy at any cost.

Fed Details New Round of Big-Bank Stress Tests; The tests will provide more information on the resiliency of large banks when it comes to lending during the downturn
Andrew Ackerman – WSJ
The Federal Reserve will analyze large banks’ ability to withstand two coronavirus-related recession scenarios as part of a second round of stress tests later this year, the central bank said Thursday.

Stock Traders Brace for Quadruple Witching Amid Options Anxiety
Lu Wang and Katherine Greifeld – Bloomberg
The event typically spurs trading volume, share gyrations; Yet with fewer expirations this time, impact could be muted
In a month during which the red-hot trade in technology stocks has wavered and options activity dominated headlines, traders are facing another potential catalyst for market turmoil on Friday.

Philosophy for a Time of Crisis; From Socrates to Camus, thinkers have asked how to respond when adversity turns our lives upside down
Eric Weiner – WSJ
Thanks to the pandemic and its economic fallout, we are all philosophers now. The “slow cure,” as philosophy has been called, is exactly what we need. This is philosophy not as metaphysical musing but as originally conceived by the ancient Greeks: practical, therapeutic medicine for the soul.

US will ban WeChat and TikTok downloads on Sunday
Brian Fung, CNN Business
The Commerce Department plans to restrict access to TikTok and WeChat on Sunday as the Trump administration’s executive orders against the two apps are set to take effect. The Department said Friday that as of Sunday, any moves to distribute or maintain WeChat or TikTok on an app store will be prohibited.

Ending China’s Chokehold on Rare-Earth Minerals; The U.S. and allies can break Beijing’s monopoly on elements vital to electronics and national defense.
James Mattis, James O. Ellis Jr., Joe Felter, and Kori Schake – Bloomberg
China dominates the global market in rare-earth minerals, producing 70% of the world’s exports. But this isn’t a gift of nature — it’s the result of 15 years of industrial policy. The Chinese government identified a critical economic chokehold, invested in building companies, subsidized production to underprice and ultimately destroy competition, and then constructed a monopoly.

DOJ Indicts Chinese Hackers for Break-Ins at 100 Companies
Chris Strohm -Bloomberg
The Justice Department revealed Wednesday previously sealed indictments of five Chinese hackers and two Malaysian businessmen accused of intrusions that hit more than 100 companies in the U.S. and abroad.

London Stock Exchange Eyes Sale of Italian Unit to Help Secure Refinitiv Approval; LSE enters talks toward a sale as it tries to complete its $15 billion acquisition of Refinitiv amid antitrust concerns
Ben Dummett and Giovanni Legorano – FT
London Stock Exchange LSE +1.06% Group PLC took a key step toward gaining regulatory approval for its $15 billion acquisition of financial-data company Refinitiv Holdings Ltd. by entering into exclusive talks for the sale of its Italian exchange operator. LSE said Friday it is in discussions to sell Borsa Italiana Group to a consortium comprising pan-European rival Euronext ENX 5.61% NV, an investment arm of the Italian government and Intesa Sanpaolo ISNPY 0.04% SpA for an undisclosed amount.

LSE Chooses Euronext, Italian Banks for Milan Bourse Talks
Viren Vaghela and Daniele Lepido – Bloomberg
Borsa Italiana would become Euronext’s largest revenue source; Euronext’s consortium includes Italian state-backed lender
London Stock Exchange Group Plc is in exclusive talks to sell Borsa Italiana to Euronext NV and two Italian institutions, as the government in Rome moves closer to repatriating ownership of its main equity-trading venue. LSE, which is selling Borsa Italiana to get approval for its $27 billion Refinitiv deal, said in a statement it chose the group for talks over rival bidders that included Deutsche Boerse AG and SIX Group AG. The bids reportedly value the Italian exchange at 3.5 billion euros ($4.1 billion) to 4 billion euros.

Turkey Suspends UBS’s Direct Market Access on Turkcell’s Slump
Tugce Ozsoy – Bloomberg
Turkcell shares plunged momentarily on Tuesday afternoon; Regulator says decision was taken to protect investor rights
Turkey’s capital markets regulator suspended UBS AG London branch’s direct market access to the country’s stock exchange, citing transactions by the firm in Turkcell shares on Tuesday afternoon.

Goldman holds top rank in activism defense, Spotlight climbs: data
Svea Herbst-Bayliss – Reuters
Goldman Sachs GS.N ranked as the top adviser to companies targeted by activist investors during the first half of 2020 while Morgan Stanley MS.N dropped into fourth position as the coronavirus weighed on corporations, new Refinitiv data show.

City sheriff Chris Woolard rides off; Interim boss of the FCA has one last duty before riding into the sunset
Matthew Vincent – FT
Chris Woolard, interim boss of the Financial Conduct Authority, revealed this week that he’s handing in his sheriff’s badge. And given the praise he’s received from business owners for winning them Covid-19 insurance payouts in a High Court dust-up, plus the tribute paid to him by Bank of England governor Andrew Bailey, Woolard’s is surely a badge of honour.

Steve Cohen’s Point72 Settles With Female Employee in Gender Discrimination Arbitration; Lauren Bonner had sued the firm in 2018 alleging unfair pay practices, sexist work environment
Juliet Chung – WSJ
Steven A. Cohen’s Point72 Asset Management recently reached a settlement with a female employee who sued the firm in 2018 alleging unfair pay practices and a pervasively sexist work environment. The suit had been filed in federal court in Manhattan, which granted Point72’s motion to move the case into arbitration. Arbitration began in April 2019.

In Time of Pandemic, Auction Houses Cash In Big on Watches; Online auctions are breaking records, and their fastest-growing audience is wristwatch enthusiasts.
Chris Rovzar – Bloomberg
The world may be in a state of Covid-19 chaos, with growing unemployment, a spiraling death rate, and no vaccine on the immediate horizon, but someone just paid $3.6 million for a pre-owned wristwatch, 1 $9.2 million for a fancy blue diamond ring, 2 $84.6 million for a painting, 3 and $795,000 for a rare bottle of whiskey. 4

Worst Shipping Crisis in Decades Puts Lives and Trade at Risk; With 300,000 workers stranded on merchant ships, Bloomberg found dozens of labor violations that threaten seafarers’ safety, as well as the global supply chain.
K. Oanh Ha, Jack Wittels, Khine Lin Kyaw and Krystal Chia – Bloomberg
On July 25, the Unison Jasper pulled into the Australian port of Newcastle carrying 31,000 tons of alumina bound for one of the country’s largest smelters. The ship had traveled around the world in the seven months since the pandemic began, but in Australia, authorities found a problem serious enough to detain the vessel.

Trump Is Wrong About TikTok. China’s Plans Are Much More Sinister; The West still doesn’t understand the scale of Beijing’s soft-power ambitions.
Yi-Zheng Lian – NY Times
The Trump administration says it wants to ban the popular short-video app TikTok in the United States, because TikTok’s parent company, ByteDance, is Chinese. Washington is worried that the personal data of the many millions of Americans using the app could be siphoned off to China and misused. To some, that concern may seem excessive or its timing politically opportunistic, but the danger posed by TikTok is real: In fact, it is only a stand-in for far greater risks.

Are Stocks Losing Some of Their Liquidity Momentum? The effect of Fed support may be fading with no second wind in sight from fundamentals and policies.
Mohamed A. El-Erian – Bloomberg
The volatile market action over the past 24 hours shines a spotlight on an important question for investors: Have markets lost part of the liquidity anchor that not only allowed them to brush off a number of negative influences but also pulled stocks higher to one record after the other? The issue becomes all that more important given the continued uncertainty facing the fiscal relief package and Thursday’s jobless claims numbers.

Hedge Funds Can’t Possibly Survive the Nasdaq Whale; With Masayoshi Son’s big bets driving up the S&P, who needs professionals anymore?
Shuli Ren – Bloombrg
These days, you don’t really need a professional to tell you how to make money. The rise of Big Tech alone has allowed investors in exchange-traded funds to recoup their March losses. As for the more adventurous players, like SoftBank Group Corp.’s Masayoshi Son, they can simply buy billions of dollars worth of call options, which has driven up demand and the price of FAANG stocks.

CME’s First Water Futures Are Coming as U.S. West Burns
Elizabeth Elkin – Bloomberg
CME Group plans to launch new contract by late this year; ‘Water scarcity is certainly one of the biggest challenges’
If the record heat and wildfires ravaging California weren’t a clear enough sign that the climate is changing, then consider this: Wall Street is about to start trading futures contracts on the state’s water supply. The contracts are the first of their kind in the U.S. and are being created by CME Group Inc., the world’s largest futures exchange. They are intended, CME says, to both allow California’s big water consumers — like almond farms and municipalities — to hedge against surging prices and can act as a benchmark that signals how acute water scarcity is becoming in the state and, more broadly, across the globe.

Big U.S. Storm Landfalls This Year Are One Shy of 1916 Record
Will Wade – Bloomberg
Hurricane Sally eighth storm to reach U.S. so far this year; Odds of tying or breaking the mark are high, forecaster says
Hurricane Sally’s historic flooding of Florida and Alabama this week marked the eighth named storm to strike the continental U.S. this year, leaving the tally just one short of a record that dates back more than a century.

Goldman Sends Some Traders Home After New York Covid-19 Case
Sridhar Natarajan – Bloomberg
Firm is pressing ahead with broader plan to repopulate offices; Follows similar back-to-office setbacks at JPMorgan, Barclays
Goldman Sachs Group Inc. sent some traders home from its Manhattan headquarters after at least one employee tested positive for Covid-19, according to people with knowledge of the matter.


What’s Next for the Coronavirus? The virus isn’t going away, but a vaccine is coming and so is an election.
Jeneen Interlandi – NY Times
The deadliest month in American history was an October during a global pandemic. In 1918, after waning through the long summer, Spanish flu came roaring back to claim nearly 200,000 lives, just in that one month, just in the United States. Until recently, this second-wave surprise — it was the worst of three to hit the country between 1918 and 1919, most likely because a rare mutation made the virus more deadly — was a bit of obscure medical trivia. But as our current pandemic enters its ninth month, armchair epidemiologists have been wringing their hands over it.

Doctors and Hospitals Are Better Prepared to Treat Covid-19 This Fall; Many are confident they can handle a second wave of cases this fall, pointing to advances in treatment and lessons learned
Sarah Toy and Caitlin McCabe – WSJ
U.S. hospitals expect to be better prepared if a second wave of Covid-19 cases hits in coming months, doctors and administrators say, after gaining a better understanding how to triage patients, which drugs to use and what supplies are needed.

Bank of England warns coronavirus resurgence threatens UK economic recovery; Monetary Policy Committee also says renewed Brexit tensions pose risk as it holds interest rates at 0.1%
Chris Giles – FT
The resurgence of coronavirus across Europe is likely to slow the UK’s economic recovery which had been exceeding expectations, the Bank of England’s rate setting committee said after its September meeting.

Global Cases Top 30 Million; London Flags Measures: Virus Update
Bloomberg News – Bloomberg
Global Covid-19 infections passed 30 million, according to data from Johns Hopkins University, with the U.S., India and Brazil recording the largest number of cases. London Mayor Sadiq Khan said further measures may be announced amid reports of a surge in virus numbers.

Startups Race to Develop Tech That Can Clear Workplaces of Covid; Companies are desperate for ways to sanitize offices, factories and stores. But surfaces are one thing—air is another.
Larissa Zimberoff – Bloomberg
Smithfield Foods Inc. thought it was doing great. In the first quarter of this year, the pork giant’s earnings were up 190% over the same period in 2019. Then the pandemic hit, and the close quarters of meatpacking plants made them ideal places for the coronavirus to spread.

Students at the Costliest MBA Programs Have Buyer’s Remorse; Paying $80,000 or more for a year of virtual education now seems like a bad deal to many.
Janet Lorin – Bloomberg
MBA students at some of the most expensive and prestigious programs are having buyer’s remorse, spurred by Covid-19. Students felt the price tag of their programs—some more than $80,000 annually for tuition, fees, and other charges—wasn’t worth it, even after the changes required by the coronavirus pandemic, according to a survey of 3,532 MBA students at 95 graduate programs around the world. Bloomberg Businessweek conducted the study from May to early August.

India’s Hindu Temples Use ‘God’s Gold’ to Pay Pandemic Bills; With donations down because of Covid, they’re tapping their Fort Knox-size trove.
Swansy Afonso, PR Sanjai – Bloomberg
Collectively, Indians own the biggest private stash of gold in the world, and religious adherents have long donated gold to temples, often to honor deities associated with individual temples. Over the centuries, that’s made the country’s 3 million religious houses some of the world’s largest holders of the precious metal. But now India’s temples—shut for months because of the coronavirus pandemic and deprived of donations—are being forced to consider depositing some of their famed stashes of gold with banks to pay mounting bills.

Counting U.S. Covid-19 Deaths in Your Community
Cedric Sam and David Ingold – Bloomberg
Eight months after the first case of the new coronavirus was reported in the U.S., the death toll is on the verge of surpassing 200,000, the highest of any country in the world. A surge in cases during the summer pushed the death count higher, even after early, deadly outbreaks in Seattle and New York City were largely controlled. Thirty-two states have reported more than 1,000 deaths from Covid-19.

U.S. Stands on Verge of Dark New Milestone: 200,000 Virus Deaths
Emma Court – Bloomberg
America has more Covid-19 fatalities than any other country; New cases stabilize, but fears of ‘calm before the storm’
The U.S. will top 200,000 deaths from the novel coronavirus in coming days, a devastating milestone that comes eight months after the pathogen was first confirmed on American soil.

U.K. Refuses to Rule Out New Lockdown as Covid Surges Again
Alex Morales – Bloomberg
Hancock: country faces a ‘big moment’ amid pandemic resurgence; Reports say government is considering new lockdown in October
Health Secretary Matt Hancock declined to rule out a second national lockdown amid a surge of coronavirus cases across the U.K., as London Mayor Sadiq Khan warned fresh restrictions could be imposed on the capital.

Covid-19 Vaccine Study Results Could Come Late October, Moderna CEO Says; Company also released the guidelines for the shot’s final-stage trial
Peter Loftus – WSJ
A large, pivotal study of Moderna Inc.’s MRNA -1.38% Covid-19 vaccine could yield a preliminary answer about whether the shot works safely as early as October, though it’s more likely to be November, the company’s leader said.

Covid-19 Lockdowns May Have Saved Kids’ Lives; Deaths appear to be down among children in 2020 in the U.S. and other affluent countries. Everybody staying home has its benefits as well as costs.
Justin Fox – Bloomberg
Covid-19 the disease has mostly spared children’s lives, but it is widely expected that the measures taken to slow its spread and the economic dislocation that has followed in its wake will have all sorts of negative consequences for them. A team of researchers from the Johns Hopkins Bloomberg School of Public Health projected in May that pandemic-induced disruptions to health care and food provision in developing countries will result in the deaths of hundreds of thousands of children — possibly causing the first annual increase in the global child mortality rate in at least 60 years. Another group of researchers from Johns Hopkins, the International Food Policy Research Institute and elsewhere forecast in July that Covid-related malnutrition would claim the lives of 128,605 children under 5 around the world — mostly in Africa — this year. Even in rich countries where malnutrition is unlikely to be a major issue, the pandemic’s mental health consequences for young people could be dire.

Positive results for 90-minute Covid-19 test; DnaNudge procedure compares well with others but has not been validated for use in communityoss – FT
A 90-minute Covid-19 test that the UK government has spent £161m on has been deemed highly effective in an academic review, as companies scrabble to bring their tests to market.

Millennials and Gen Z are spreading coronavirus—but not because of parties and bars;Younger generations are blamed for the pandemic’s spread, but also face the brunt of the transmission risk that comes with keeping the economy going.
Rebecca Renner – National Geographic
WHEN PARAMEDICS RUSHED the pregnant Honduran woman into the emergency room, 28-year-old Chuan-Jay Jeffrey Chen stood ready to receive her. It was April, and the pandemic had already taken over his final year as an emergency medicine resident. Of all the coronavirus patients surging into Massachusetts General Hospital in Boston, this 32-year-old patient remains Chen’s most memorable.

When Will You Be Able to Get a Coronavirus Vaccine? Despite the president’s repeated claims that a vaccine will be available in October, scientists, companies and federal officials all say that most people won’t get one until well into next year.
Katie Thomas and Jesse Drucker – NY Times
Americans are desperate to know when a coronavirus vaccine will be available to finally curb the pandemic that has already taken nearly 200,000 lives in the United States, and allow schools and the broader economy to reopen.

Exchanges, OTC and Clearing

NYSE – Direct Listing Review – Reminder
On September 17, 2020, the New York Stock Exchange will host an industry conference call to discuss the NYSE Direct Floor Listing price discovery and opening trade process on the first day of trading, including the role of the Exchange, Financial Advisor and Designated Market Maker. On September 19, 2020, the NYSE will provide a weekend testing opportunity of the Direct Listing Process.

CORRECTING and REPLACING: CME Group to Launch First-Ever Water Futures Based on Nasdaq Veles California Water Index; New futures will help California water market users hedge price risk and provide a regulated, market-based solution for managing risk to the most active and dynamic water market in the U.S.
In a release issued under the same headline on Thursday, September 17th by Nasdaq, Inc., please note that a link in the contact information was leading to an inactive web page. The link has been updated and the corrected release follows:

ESG Derivatives: Liquidity will bring Liquidity; Recent ESG trade breaks notional volume record for ESG options
Swedbank Robur did it again! Swedbank Robur, one of Scandinavia’s largest asset managers, has investment funds covering all major regions, sectors and asset classes. EUR40bn of EUR125bn are already placed in ESG-related (Environmental, Social, and Governance) funds, and this proportion is increasing rapidly. During the current roll activities, Robur performed an inter-product switch together with Barclays – out of the STOXX Europe 600 into the ESG filtered STOXX Europe 600 ESG-X index.

Euronext and CDP Equity confirm exclusive talks with LSEG to acquire Borsa Italiana
Euronext and CDP Equity (“CDPE”, 100% owned by Cassa Depositi e Prestiti) confirm they have entered into exclusive talks with London Stock Exchange Group plc (“LSEG”) to acquire Borsa Italiana group, together with Intesa Sanpaolo. There can be no certainty that this will lead to a transaction. The proposed combination of Borsa Italiana and Euronext would create a leading player in continental European capital markets. This transformational project would position the newly formed group to deliver the ambition of further building the backbone of the Capital Markets Union in Europe, while at the same time supporting local economies.

Euronext enters into exclusive talks for LSEG’s Borsa Italiana; Euronext moves forward with Borsa Italiana talks after bids from fellow exchange operators Deutsche Börse and SIX.
Annabel Smith – The Trade
European exchange group Euronext has entered into exclusive talks with the London Stock Exchange Group (LSEG) to acquire Borsa Italiana, together with Italian banking group Intesa Sanpaolo.

The future of the university in the age of Covid; As students start a term like no other, higher education is being reinvented for the post-pandemic world
Henry Mance – FT
Shortly after the start of lockdown, British households became hooked on the BBC’s adaptation of Sally Rooney’s novel Normal People. The show’s protagonists, Marianne and Connell, fall in love at school and find each other again at university — first at a party, then in a bar, then in her rooms. In their own melancholic way, they live the undergraduate dream — love, growing up, intellectual pretension.

Oslo Børs Optiq® Migration: Production Listing Schedule
Euronext informs clients that the technical creation in Production of the Oslo marketplace and financial market will start on Monday 28 September 2020 for Oslo Cash Equities and as of Friday 2 October 2020 for Oslo Derivatives. Fixed Income Cash instruments will be created as from Friday 16 October. A few Oslo Indices instruments will also be visible in the Production Indices Optiq Standing Data Files, but only on the dates mentioned below. A new version of the Migration Guidelines is also available.

HKEX Changes Of Designated Securities For Short Selling
Exchange Participants are requested to note that Smoore International Holdings Limited (Stock code: 6969) will be admitted to the list of Designated Securities for short selling with effect from 25 September 2020.

Technical User Group Webinar For Oslo Market Participants: Oslo Bors Optiq Migration – Conformance Testing http://
Following the different communication from Euronext and the approach of the migration dates, we invite you to join to a Technical User Group on Conformance Testing in the scope of the Oslo Bors Optiq Migration.

Bursa Malaysia Derivatives Re-Launches The 5-Year Malaysian Government Securities Futures Contract With A Revised Settlement Methodology To Facilitate Physical Delivery
Bursa Malaysia Derivatives (“BMD”) has successfully re-launched the 5-Year Malaysian Government Securities (“MGS”) Futures contract (FMG5) with a revised settlement methodology. The FMG5 Contract’s settlement, which was previously cash-settled, is now physically delivered.

FTSE Russell China Government Bond Index Selected By CSOP Asset Management For Landmark ETF
FTSE Russell, the global index, data and analytics provider, has been selected by CSOP Asset Management (CSOP) as the index provider for its ICBC CSOP FTSE Chinese Government Bond Index ETF. The ETF is being launched by CSOP in partnership with ICBC Asset Management.

BOX Exchange Price Protections For Complex Orders – Date Change
BOX Exchange LLC (“BOX” or the “Exchange”) recently distributed IC-2020-22 which detailed new price protections for Complex Limit Orders executed on BOX.


Snowflake’s skyrocketing IPO has echoes of the dotcom boom; Spectacular debut of cloud software company could have knock-on effects for entire sector
Richard Waters – FT
The Oxford English Dictionary added a new meaning for the word “snowflake” two years ago: a person who is overly sensitive to criticism, or unduly entitled.

Nvidia chief pledges ‘legally binding’ commitments to UK for Arm; US chip company seeks to calm political furore over takeover of Cambridge-based tech company
Richard Waters, Jim Pickard and Matthew Vincent – FT
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The head of Nvidia has promised to make “legally binding” promises to the staff of Arm Holdings after a political row over the takeover of the Cambridge-based tech company.

The fintech barbarians are no longer at the gate
The paradigm of challengers and incumbents should be revisited in the light of widespread collaboration between the two, according to Tony McLaughlin of Citi and Mike Massaro, CEO of Flywire.
Massaro and McLaughlin have spoken of the new era of partnerships between fintechs and incumbents that is taking shape, defying the commonly-held assumption that the latter are resistant to innovation.

BidFX launches remote working FX desktop application on OpenFin; The application will support the layout of window-based components that interoperate across a trader’s multiscreen workstation.
Annabel Smith – The Trade
Institutional foreign exchange trading platform provider BidFX has launched a trading desktop application that will support the layout of multiple screens for traders via the operating system (OS) OpenFin. BidFX will now offer a desktop-installed web application supporting the layout of window-based components that interoperate across a trader’s multi-screen workstation via OpenFin.

Tech Veterans Hoffman and Pincus Join Hunt for SPAC Targets
Katie Roof – Bloomberg
Hoffman- and Pincus-backed blank-check rises in trading debut; Tech duo raised $600 million in initial public offering
LinkedIn Corp. co-founder Reid Hoffman and Zynga Inc. founder Mark Pincus are looking to set themselves apart from the ultra-wealthy who have started special purpose acquisition companies. For their SPAC, which began trading Thursday after raising $600 million, the high-profile pair want to draw upon their experience building companies and taking them public without losing a “growth mindset,” they said in an joint interview.

SMEs in Fintech Scored Highest in terms of “Readiness” for Blockchain or DLT Adoption and Integration: Report
Omar Faridi – Crowdfund Insider
Fintech solutions, retail focused platforms, and information communication technology or ICT software programs are expected to lead the blockchain or distributed ledger tech (DLT) revolution, according to a new report.
The findings of CIVITTA’s report reveal that finance, retail, and ICT solutions are the “most promising economic sectors” for applying and developing blockchain or DLT based platforms. The report has been prepared after relevant research was conducted by the BlockStart initiative, a pan-European DLT focused partnership program.

Can Digital Mortgage Platforms Reduce Discrimination in Lending? Early indications are promising. But automated systems provide rich opportunities to perpetuate bias.
Jennifer Miller – NY Times
In 2015, Melany Anderson’s 6-year-old daughter came home from a play date and asked her mother a heartbreaking question: Why did all her friends have their own bedrooms?

The FinTech50 2020
This year’s 50 European fintechs to watch in 2020 were selected from over 2000 Fintechs across Europe by investors in, buyers and champions of innovators in the sector: our international panel. In this not-business-as-as-usual year, we wanted The FinTech50 to be relevant to the lives and livelihoods of people and business (including, of course, the businesses that many of these innovators serve: financial services). Together, they represent a wide range of services, from helping consumers to save money, to making life (and finance) easier for SMEs and their employees, accelerating digital transformation, bridging centralised and decentralised finance, to addressing climate change. And so much more.

Amazon API Gateway now supports mutual TLS authentication
Amazon API Gateway now supports mutual TLS (mTLS) authentication. Customers can now enable mTLS on custom domain names for regional REST and HTTP APIs at no additional cost. Mutual TLS enhances the security of your API and helps protect your data from attacks such as client spoofing or man-in-the middle attacks.


Crypto Exchange Bitfinex Wins More Time to Present Documents
Olga Kharif – Bloomberg
New York judge appoints special referee to select documents; Last year, New York Attorney General said exchange hid losses
The crypto exchange Bitfinex won additional time to provide documents in a case filed last year by New York Attorney General Letitia James that claims that it hid the loss of comingled client and corporate funds. In a virtual ruling Thursday, New York state Judge Joel M. Cohen extended an injunction by 90 days and directed a special referee to set a schedule to provide documents requested. Cohen said he’d defer to the referee in determining which documents related to the cryptocurrency Tether, which is affiliated with Bitfinex and related companies, are pertinent to the case. He also hinted that he may not extend the injunction again.

Uniswap Recaptures DeFi Buzz With UNI Token’s Airdropped Debut
Muyao Shen – Coindesk
Uniswap’s governance token, UNI, which was launched Wednesday night, has been on a roller-coaster ride in the past 24 hours, but despite the price volatility the total market cap of UNI could make the automated market maker (AMM) one of the most valuable decentralized finance (DeFi) projects in the coming years.

Wyoming Regulator Taps Chainalysis as State Push into Crypto Continues
Aziz Abdel-Qader – Finance Magnates
Just a few hours after Kraken secured the first Wyoming banking license granted to a cryptocurrency firm, Blockchain intelligence platform Chainalysis has onboarded the state regulator. Chainalysis and the Western state’s Division of Banking, the banking regulator responsible for the chartering and supervision of state banks, have teamed up to combat money laundering, sanctions violations, and other criminal activities that use digital assets.

South Korean police summon Bithumb chairman for alleged fraud
Yogita Khatri – The Block
The Seoul Metropolitan Police Agency has reportedly summoned Lee Jung Hoon, the chairman of Bithumb, for alleged fraud. South Korea’s state-run news agency Yonhap reported Friday, saying that Lee, 44, is under investigation by the police. Lee is accused of pre-selling Bithumb’s native BXA tokens worth about 30 billion won (~$25 million) to investors and then not listing the token, which has allegedly led to investors’ losses.

How US States Are, and Aren’t, Easing Crypto Firms’ Compliance Burden
Nikhilesh De – Coindesk
The Conference of State Bank Supervisors (CSBS), an organization of state financial regulators, will make it easier for financial technology payment firms and cryptocurrency exchanges to prove they’re in compliance with U.S. state laws. The CSBS announced a “One Company, One Exam” plan Tuesday whereby states will coordinate their supervisory exams for the nation’s largest payment firms in an effort to reduce the costs on both state regulators and the companies they oversee. Essentially, the exam is how these regulators will make sure regulated entities are still in compliance.

As network costs rise, Coinbase will require Pro customers to pay withdrawal fees
Saniya More – The Block
Coinbase Pro customers will now have to pay crypto withdrawal fees based on an estimate of the network transaction fee, the cryptocurrency exchange announced in an email sent to its users on Thursday. Up until now, Coinbase Pro had taken care of all transaction fees when users withdraw from its exchange, paying the blockchain network fee on behalf of its users. “To ensure a smooth experience for our customers and reasonable transaction processing times, Coinbase Pro will charge a fee based on our estimate of the network transaction fees that we anticipate paying for each transaction.

Investment Firm Blockchain Capital Joins Libra Association
Paddy Baker – Coindesk
One of the oldest investment firms in crypto has joined the governance organization behind the Facebook-backed Libra project. The Libra Association announced Friday that Blockchain Capital would advise on the creation of its global payment system. It would also make its network of experts and industry figures available for the Association’s use, said Dante Disparte, Libra’s head of policy and communications. Founded in 2013, Blockchain Capital has invested in over 80 industry companies, including Coinbase and Ripple.

VeChain to Supply Blockchain Tech for Chinese Food Safety Group That Includes McDonald’s
Sebastian Sinclair – Coindesk
The VeChain Foundation has become the first blockchain-based entity to join the China Animal Health and Food Safety Alliance (CAFA). According to a Thursday medium blog post, VeChain joins the 130 strong member group as its only public blockchain technology provider, and will further provide technical and infrastructural support for member firms. CAFA is a government-backed organization that falls within the purview of the Ministry of Agriculture of the People’s Republic of China and includes of some of the world’s most recognizable brands such as MacDonald’s and IBM.

DEX volumes continue to soar in September, crossing almost $15 billion month-to-date
Momina Khan – The Block
The rapid increase in decentralized exchange (DEX) volumes continued its upswing in the month of September, after increasing significantly last month, as previously reported by The Block. Month-to-date volume in September has already surpassed the total volume seen throughout August — so far the $14.9 billion volume in September reflects an almost 30% increase over the August volume, which was $11.6 billion according to data published by Dune Analytics, which tracks volumes in the DEX sector.

On bitFlyer Japan, Bitcoin Rewards Program Hits New Record
Sandali Handagama – Coindesk
The number of monthly users who earned T-Points, or loyalty points, for bitcoin (BTC) payments on the bitFlyer exchange in Japan reached a record high in August. The two companies partnered to offer rewards to customers last year. According to a bitFlyer report featured in a CoinDesk Japan article Thursday, the exchange did not specify the number of users of the service. But BTC was trading at 1.3 million Japanese yen ($12,400) in August for the first time in a year.


F.B.I. Director Warns of Russian Interference and White Supremacist Violence; Testimony by Christopher A. Wray contradicted efforts by President Trump and other officials to downplay the threats.
Zolan Kanno-Youngs – NY Times
Christopher A. Wray, the director of the F.B.I., warned a House committee on Thursday that Russia was actively pursuing a disinformation campaign against former Vice President Joseph R. Biden Jr. and expressed alarm about violent extremist groups.

Suga Win Boosts Data-Firm Stocks While Mobile Carriers Drop
Gearoid Reidy – Bloomberg
Docomo, KDDI shed $24 billion in market cap since Abe resigned; NTT Data, Fujitsu, NEC climb on plan for new ‘Digital Agency’
The formal takeover by Yoshihide Suga as Japan’s prime minister this week is already creating winning and losing stock ideas. The contrast in the new era of “Suganomics” was stark in Tokyo on Friday, with the nation’s largest telecommunications providers dropping further on his latest push to cut mobile phone bills while stocks related to his plan for a new “Digital Agency” gained.

As network costs rise, Coinbase will require Pro customers to pay withdrawal fees
Saniya More – The Block
Coinbase Pro customers will now have to pay crypto withdrawal fees based on an estimate of the network transaction fee, the cryptocurrency exchange announced in an email sent to its users on Thursday. Up until now, Coinbase Pro had taken care of all transaction fees when users withdraw from its exchange, paying the blockchain network fee on behalf of its users.

Poll: Most Scots would reject independence after considering issues; Scots are less likely to support independence if there is a risk of losing the pound and a hard border with England, a new poll has revealed.
Scott Macnab – Scotsman
And the prospect of Scotland finding itself outside the UK and the EU for a lengthy period also sees support plummet, according to the poll commissioned by Scotland in Union.

Student debt is fueling the Black-white wealth gap — and pursuing a college degree has become ‘racialized,’ this professor says
Jillian Berman – MarketWatch
Over the past several years, policymakers and pundits have gained a greater understanding of the disproportionate impact the nation’s debt-based college finance system has on Black families and borrowers.

Trump Announces a New Round of Farm Aid in Battleground Wisconsin; President promises $13 billion more in aid to farmers hit by coronavirus
Andrew Restuccia and Jesse Newman – WSJ
President Trump unveiled $13 billion in new aid to farmers facing economic harm from the coronavirus pandemic as he aimed to boost support among rural voters at a campaign rally.

Judge blocks ‘politically motivated’ changes to U.S. Postal Service ahead of election
Karen Freifeld – Reuters
A federal judge on Thursday blocked controversial changes to the United States postal service, saying they were “a politically motivated attack” that had slowed the nation’s mail and likely would slow the delivery of ballots in the upcoming presidential election.

Twitter Tightens Security Ahead of US Presidential Election
Paddy Baker – Coindesk
High profile users on Twitter will be told to up their account security as the platform looks to prevent hacks and protect “unique sensitivities” in the run-up to the 2020 U.S. election. The social media site said in a post on Friday that certain Twitter accounts will be required to use strong passwords and will only be able to reset them if they supply identifying information, such as an email or a phone number. It will also roll-out a series of internal security safeguards to better detect malicious activity and attempts to take over accounts.

Presidential Election Is the Only Cloud for Credit Investors; Options markets show investors are hedging against a sharp selloff in November
Paul J. Davies – WSJ
Investors piled back into corporate debt as hopes of an economic recovery grew. The only cloud on the horizon now, based on options markets, is the presidential election. The rally in credit markets has been helped by companies repairing their balance sheets and ensuring they have plenty of cash. By some measures, the extra income demanded by investors to hold corporate bonds instead of government debt—known as the spread—has fallen to near record lows.

China’s Communists to Private Business: You Heed Us, We’ll Help You; Party leaders have pledged to increase their influence over entrepreneurs even as they promise greater aid, reflecting Xi Jinping’s greatest — and sometimes conflicting — challenges.
Chris Buckley and Keith Bradsher – NY Times
Mao Zedong vowed to abolish China’s capitalists. Deng Xiaoping said they could get rich. Now Xi Jinping, China’s current leader, has his own message for the country’s private businesses that reflects a drive for both economic growth and greater Communist Party control: We’re here to help you, but you must also help and heed us.


NFA announces webinar to debut redesigned Annual Questionnaire
As part of the NFA membership application process, as well as on an annual basis thereafter, NFA requires Members to complete an Annual Questionnaire. NFA recently redesigned the Annual Questionnaire, which will launch on Friday, October 2, 2020.

SEC Charges Former CEO of Technology Company With Raising $123 Million in Fraudulent Offerings
The Securities and Exchange Commission today filed an emergency action against Adam Rogas, the former CEO of Las-Vegas-based NS8 Inc., which purports to provide fraud detection and prevention software to e-commerce merchants, seeking an asset freeze and charging Rogas with defrauding investors by falsely claiming millions of dollars in revenue.

SEC Awards Almost $250,000 to Joint Whistleblowers
The Securities and Exchange Commission today announced an award of nearly $250,000 to joint whistleblowers whose tip caused the opening of an investigation that resulted in a successful enforcement action. The whistleblowers raised concerns internally before reporting the concerns to the Commission.

ASIC moves against SMSF auditor misconduct
ASIC has added conditions to the registration of two auditors of self-managed superannuation funds (SMSFs). ASIC additional conditions were imposed on the following SMSF auditors for the reasons outlined:

ASIC cancels AFS licence of Union Standard International Group
ASIC has cancelled the Australian Financial Services (AFS) licence of Sydney-based retail over-the-counter (OTC) derivatives issuer Union Standard International Group Pty Ltd (Union Standard).

Former JPMorgan trader sentenced to prison for currency rigging
A former JPMorgan Chase foreign exchange trader was sentenced Thursday to eight months in prison, following his November 2019 conviction for conspiring with traders at other banks to rig currency trades. Akshay Aiyer, 37, was also sentenced to two years supervised release and fined $150,000 by Manhattan Federal Judge John Koeltl.

FCA’s best option? Leave well alone; The ‘greatest good’ choice might be for the regulator to do nothing about the consumer investment market
Merryn Somerset Webb – FT
I think it might be time for us all to take a few steps backwards — to the work of the classical utilitarians Jeremy Bentham and John Stuart Mill. For them, the best approach to decision-making in an impartial world — one where every individual’s happiness or wellbeing has the same value — is to look for the choice that will produce the greatest good for the greatest number of people.

CFTC Finalizes Rules to Improve Swap Data Reporting, Approves Other Measures at September 17 Open Meeting
The Commodity Futures Trading Commission at its open meeting today unanimously approved three final rules to revise CFTC regulations for swap data reporting, dissemination, and public reporting requirements for market participants. All three measures are part of the CFTC’s efforts to improve the quality, accuracy, and completeness of the data reported to the agency and streamline CFTC regulations. The Commission also unanimously approved a final rule that will permit derivatives clearing organizations (DCOs) organized outside of the U.S. to be registered with the CFTC. Finally, the Commission unanimously approved a supplemental notice of proposed rulemaking regarding amendments to the CFTC’s regulations that govern bankruptcy proceedings for commodity brokers.

Statement of Chairman Heath P. Tarbert in Support of Final Rules on Swap Data Reporting
I am pleased to support today’s final swap data reporting rules under Parts 43, 45, and 49 of the CFTC’s regulations, which are foundational to effective oversight of the derivatives markets. As I noted when these rules were proposed in February, “[d]ata is the lifeblood of our markets.”[1] Little did I know just how timely that statement would prove to be.

Supporting Statement of Commissioner Brian Quintenz Regarding Final Rules Amending the Swap Data Recordkeeping and Reporting Requirements (Part 45)
I am pleased to support these amendments to part 45 regulatory reporting, which hopefully represent the beginning of the end of this agency’s longstanding efforts to collect and utilize accurate, reliable swap data to further its regulatory mandates.

Supporting Statement of Commissioner Brian Quintenz Regarding Amendments to the Commission’s Regulations Relating to SDR and Data Reporting Requirements
I am pleased to support today’s final rule that will improve the accuracy of data reported to, and maintained by, CFTC-registered swap data repositories (SDRs). Data collected by SDRs provides a crucial source of information to the CFTC as it discharges its statutory responsibilities to supervise regulated entities, monitor the derivatives markets, and enforce the Commodity Exchange Act. Today’s rule makes sensible adjustments to how reporting counterparties submit swap data to SDRs and how SDRs fulfill their responsibilities as Commission registrants. These adjustments are based on the almost decade-long experience of the CFTC staff in supervising SDRs and reviewing swap data, as well as the public’s informed comments to the proposal.

Statements of Concurrence by Commissioner Rostin Behnam Regarding Final Rules on Real-Time Public Reporting, Swap Data Recordkeeping, and Swap Data Repositories
I respectfully concur in the Commission’s amendments to its regulations regarding real-time public reporting, recordkeeping, and swap data repositories. The three rules being finalized together today are the culmination of a multi-year effort to streamline, simplify, and internationally harmonize the requirements associated with reporting swaps. Today’s actions represent the end of a long procedural road at the Commission, one that started with the Commission’s 2017 Roadmap to Achieve High Quality Swap Data.[1]

Statement of Commissioner Dawn D. Stump Regarding Final Rules: Swap Data Reporting
I am very pleased to be here today finalizing improvements to the Commission’s swap data reporting rules[1], which I will refer to collectively as the “Final Rules.” I have always felt that the entire suite of swap data reporting rules must be considered holistically to ensure that the CFTC delivers the best regulations possible. I am happy to see that the Commission will today act on all three of these Final Rules concurrently.

Statement of Commissioner Dan M. Berkovitz Regarding Amendments to the Swap Data Reporting Rules
I support today’s final rules amending the swap data reporting requirements in parts 43, 45, 46, and 49 of the Commission’s rules (the “Reporting Rules”). The amended rules provide major improvements to the Commission’s swap data reporting requirements. They will increase the transparency of the swap markets, enhance the usability of the data, streamline the data collection process, and better align the Commission’s reporting requirements with international standards.

Supporting Statement of Commissioner Brian D. Quintenz Regarding Final Rules Amending the Real-Time Reporting Requirements (Part 43)
The Commodity Exchange Act (CEA) specifically directs the Commission to ensure that real-time public reporting requirements for swap transactions (i) do not identify the participants; (ii) specify the criteria for what constitutes a block trade and the appropriate time delay for reporting such block trades, and (iii) take into account whether public disclosure will materially reduce market liquidity.[1] The Commission has long recognized the intrinsic tension between the policy goals of enhanced transparency versus market liquidity. In fact, in 2013, the Commission noted that the optimal point in this interplay between enhanced swap transaction transparency and the potential that, in certain circumstances, this enhanced transparency could reduce market liquidity “defies precision.”[2] I agree with the Commission that the ideal balance between transparency and liquidity is difficult to ascertain and necessarily requires not only robust data but also the exercise of reasoned judgement, particularly in the swaps marketplace with a finite number of institutional investors trading hundreds of thousands of products, often by appointment.

Statement of Commissioner Dawn D. Stump Regarding Block Size Threshold in Final Rule: Amendments to Real-Time Public Reporting Requirements
I have often referenced the need for a review of policies as per the wishes of the G-20 Leaders’ Statement from the Pittsburgh Summit in 2009, which included an expectation that members would “assess regularly implementation and whether it is sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse.”[1] Today, the Commission finds itself debating a challenging issue with a robust history. In order to properly assess whether we are making the right choices, I prefer to consider where we have come from. Luckily, the history of prior Commissions’ deliberations and transparency of regulatory rule-writing efforts affords us such an opportunity for a look back.

Statement of Chairman Heath P. Tarbert in Support of Final Rule on Alternative Compliance for Non-U.S. Clearinghouses
Nations have borders, but markets rarely do. That is certainly the case with the global derivatives markets. For more than a century, U.S. derivatives markets have provided hedging and price discovery opportunities not only for Americans but also to individuals and businesses from abroad. In the 21st century, these markets involve participants domiciled in the Americas, Europe, Asia and elsewhere each and every day. And the clearinghouses that provide the credit risk management services for our exchanges have members and ultimate customers from around the world. The same is true for clearinghouses based in, for example, Europe. So the question that has naturally arisen is how the home regulator of the clearinghouse-which in the United States we refer to as a derivatives clearing organization (DCO)-should work with regulators in home jurisdictions of the DCO’s members and customers.

Statement of Commissioner Rostin Behnam Regarding Registration with Alternative Compliance for Non-U.S. DCOs
I support today’s final rule permitting derivatives clearing organizations (DCOs) organized outside of the United States (non-U.S. DCOs) that the CFTC determines do not pose substantial risk to the U.S. financial system to register with the Commission and comply with the core principles applicable to DCOs (Core Principles) set forth in the Commodity Exchange Act (CEA) through compliance with their home country regulatory regime. This registration category establishes a new model for regulatory deference aimed at reducing regulatory burdens and ongoing compliance costs for non-U.S. clearing organizations.

Statement of Commissioner Dawn D. Stump Regarding Registration with Alternative Compliance for Non-U.S. Derivatives Clearing Organizations
Throughout my tenure at the Commodity Futures Trading Commission (CFTC or Commission), I have discussed the benefits of shared goals, cooperation, and mutual recognition (often referred to as “deference”) among regulators. In early 2019, I wrote an opinion piece in the Financial Times in which I appealed to our international regulatory partners to recommit to a coordinated approach in order to ensure that our alliance remains strong rather than fractured. [1] When the CFTC proposed this rulemaking last summer, I committed to advancing a coordinated approach to the regulation of global central counterparties (CCPs). I expressed both my belief that the proposal we put forward was an important first step in that process, and my sincere hope that our international regulatory partners would also take the opportunity to reset and recognize that our shared interest in advancing derivatives clearing would be best achieved by respecting each jurisdiction’s successful implementation of the principles agreed to by the Group of 20 Nations (G-20) in 2009.[2]

Statement of Commissioner Dan M. Berkovitz Regarding Registration with Alternative Compliance for Non-U.S. Derivatives Clearing Organizations
I support today’s final rule permitting derivatives clearing organizations (DCOs) organized outside of the United States (non-U.S. DCOs) to register with the Commission and provide clearing to U.S. customers, yet comply with certain DCO Core Principles through their home country regulatory regime. This final rule maintains the Commission’s authority to protect U.S. customers and markets, while also recognizing the interests of foreign regulators in supervising DCOs located in their home jurisdictions. It will foster U.S. market participants’ access to foreign clearing organizations while maintaining key customer protections.

Statement of Commissioner Dan M. Berkovitz Regarding Part 190 Bankruptcy Regulations, Supplemental Proposal
The part 190 rulemaking supplemental notice of proposed rulemaking (Supplemental NPRM) addresses a potential unintended outcome of the original NPRM identified in a number of comments on the proposal. These comments stated that certain provisions in the original proposed rule related to the bankruptcy of a derivatives clearing organization (DCO) could have significant, unintended and detrimental impacts on various market participants with contracts cleared at the DCO. The Supplemental NPRM presents new, alternative provisions governing DCO bankruptcy that are intended to avoid these impacts. In issuing the Supplemental NPRM, the Commission seeks public comment on these alternative provisions.

Former Foreign Exchange Trader Sentenced To Prison For Price Fixing And Bid Rigging
US Department of Justice
Akshay Aiyer, a former currency trader at a major multinational bank, was sentenced to serve eight months in jail and ordered to pay a $150,000 criminal fine for his participation in an antitrust conspiracy to manipulate prices for emerging market currencies in the global foreign currency exchange (FX) market, the Justice Department announced today. On Nov. 20, 2019, Aiyer was convicted after a three-week jury trial in the U.S. District Court for the Southern District of New York for conspiring to fix prices and rig bids in Central and Eastern European, Middle Eastern, and African (CEEMEA) currencies, which were generally traded against the U.S. dollar and the euro, from at least October 2010 through at least January 2013.

Listings of cannabis-related businesses
In response to queries from cannabis-related companies interested in listing in the UK, the FCA is today setting out its approach to assessing these applications. This is pending a guidance consultation which will follow in due course.

Financial regulators publish updated Regulatory Initiatives Grid; The Financial Services Regulatory Initiatives Forum has today issued the second edition of the Regulatory Initiatives Grid.
Upcoming work in the latest iteration includes the LIBOR transition and ongoing work to prepare the financial services sector for the end of the EU exit transition period.

Investing and Trading

Platinum, Palladium Prices Diverge as Car Makers See Uneven Recovery; As key ingredients in catalytic converters, both metals are at the forefront of efforts to reduce auto emissions
Will Horner – WSJ
A strong rebound in Chinese car sales is helping to widen the price gap between palladium—already the most expensive of the major precious metals—and its sister metal platinum. This year, palladium prices have jumped 27% to $2,404 a troy ounce, while platinum has only recently returned to pre-pandemic levels of $979 an ounce.

Millions Are House-Rich but Cash-Poor. Wall Street Landlords Are Ready; Hardships caused by the coronavirus pandemic are likely to force a lot of sales and create new renters
Ryan Dezember – WSJ
Americans with mortgages have accumulated nearly $10 trillion in home equity thanks to a decade of rising home prices. Yet millions of them have fallen behind on mortgage payments and risk losing their houses. It is a potential bonanza for rental-home investors. Since the coronavirus pandemic began, big single-family landlords have raised billions of dollars for homebuying sprees.

Where there’s a silver tip, there’s a silver tap; Investors shouldn’t over estimate the demand for physical metals while market makers are at play
John Dizard -FT
There’s a City of London saying that where there’s a tip, there’s a tap. Or, inside information is usually someone trying to sell you something. Around May and April, I started hearing more about silver. Nothing indiscreet, just that I should be thinking about it. In my usual contrary way, I wrote a silver-sceptical column in July, pointing out what had happened to silver bulls in the past, notably the Hunt brothers in 1980.

Investors vent their frustration over Fed’s balance sheet inertia; Chairman Jay Powell demurred this week when urged to revamp central bank’s debt purchase plans
Colby Smith – FT
The Federal Reserve is the $7tn gorilla in the financial markets, and investors wish it was willing to throw its weight around a bit more. The US central bank showed little hesitation in wading into the market during the pandemic panic in March, and investors took comfort from knowing that the Fed and its chairman Jay Powell had their back. But this week they were frustrated by his reluctance to promise more specific actions.

Treasury Savings Bonds Can Yield More Than Junk; The U.S. guarantees “EE bonds” will double in 20 years, for a 3.5% annual return.
Brian Chappatta – Bloomberg
It seems like a life hack for fixed-income investing. It’s no secret that investors are living in a lower-for-longer interest rate world. In the U.S., this is clear by any number of metrics. The Federal Reserve’s key short-term lending rate is pinned in a range of 0% to 0.25% and isn’t expected to budge for years, at least; the yield on benchmark 10-year Treasury notes is 0.69%, after never falling below 1.32% before 2020; and the Freddie Mac 30-year mortgage rate set a new five-decade low of 2.86% last week. Meanwhile, companies can borrow as cheaply as ever. One often-cited example is Ball Corp., a junk-rated aluminum-packager, which sold $1.3 billion of 10-year debt last month at 2.875%, the lowest ever for U.S. speculative-grade debt with a maturity of longer than five years.

Bond Market Shows U.S. Is Leading in Race to Reflate the Economy
John Ainger – Bloomberg
Brighter U.S. inflation outlook is at odds with Europe, Japan; Fed’s new target of 2% average price gains in traders’ focus
The U.S. is emerging as an early favorite in the all-out showdown to rekindle inflation in the world’s major economies. With the Federal Reserve planning to hold interest rates near zero until at least 2023 and Congress working on another fiscal boost, a pocket of the debt market is starting to see consumer prices modestly over 2% in years to come. That’s in stark contrast to Europe where deflation fears have reawakened, and Japan, which has battled moribund price pressures for decades to no avail.

Environmental, Social and Corporate Governance

Efforts to Add Black Directors Leave Latinos Out of the Conversation; Concerned by the recent focus on one minority, a coalition launches its own campaign: #DiversityIncludesLatinos.
Jeff Green – Bloomberg
Roel Campos has a message for the dozens of companies pledging to add a Black director: Don’t forget that corporate boards are even further behind in hiring Latino members.

JPMorgan Fund Manager’s ESG Bets Win Spot in U.K. Midcap Gauge
Joe Easton – Bloomberg
JESC to join FTSE 250 with environment, wellness investments; Francesco Conte is among JPAM’s longest serving trust managers
A JPMorgan Chase & Co. fund run by one of the firm’s longest-serving investment-trust managers has won promotion to the U.K.’s midcap equity index by riding the wave of environmental, social and governance stocks.

Giant Glencore Mine Faces Threat as Fund Refuses Backing
Matthew Burgess – Bloomberg
Glencore Plc’s plans for a giant new coal mine in Australia’s Bowen Basin may suffer a setback after key stakeholder UniSuper Management Pty said it won’t support the project. The A$80 billion ($59 billion) pension fund told its investment partners that it won’t support the A$1.5 billion Valeria project as the economics “don’t stack up,” Chief Investment Officer John Pearce said in a University of Melbourne webinar Thursday night.

DOL Lacks a Convincing Legal Basis for Attempts to Discourage ESG/Sustainable Investing
Albert Feuer – Bloomberg
On June 30, 2020, the U.S. Department of Labor (DOL) published in the Federal Register, 85 Fed. Reg. 39,113, proposed amendments to the regulations that set forth the duties of ERISA plan fiduciaries when selecting and monitoring plan investments and investment alternatives for plan participants and beneficiaries that would discourage what the DOL called “ESG” investments (DOL ESG/sustainable investment proposal). On Sept. 4, 2020, the DOL published, in the Federal Register, 85 Fed. Reg. 55,222, proposed amendments to the regulations that set forth the duties of ERISA plan fiduciaries when exercising proxy voting and other shareholder rights that would discourage the pursuit of what the DOL called “environmental, social or public policy agendas.” (DOL ESG/sustainable proxy proposal). The first proposal applies to all plan investments. The second proposal is limited to plan investments in corporate stock. Corporate stock includes investments in the many mutual funds organized as corporations that pursue stewardship policies that include ‘environmental, social or public policy’ agendas.”

What is the science behind the moo-ve from cattle methane emissions?
Rod Nickel – Reuters
Scientists have worked for years to reduce methane emissions from cattle burps by changing what cattle eat, or through research on vaccines, genetic modification of cattle and even forehead-mounted masks and backpacks to trap vapors.

Burps to burgers: food companies wrangle climate-warming cattle emissions
Rod Nickel – Reuters
Looking to improve milk production, California farmer John Verwey turned to a Swiss-made feed additive designed to make a cow more efficient while reducing methane emissions from cattle burps.


Why BlackRock’s Larry Fink isn’t happy about the work-from-home trend
Thornton McEnery – NY Post
The coronavirus will likely leave a permanent mark on the world’s largest asset management company, and CEO Larry Fink isn’t thrilled about it. “I don’t believe BlackRock will be ever 100 percent back in office,” the New York company’s billionaire chairman and chief executive revealed on Thursday. “I actually believe maybe 60 percent or 70 percent, and maybe that is a rotation.”

New Cabana ETF range will launch with more than $1bn in assets; Products’ huge boost comes from existing clients who chose to switch to ETF format
Steve Johnson – FT
A US investment adviser is launching its debut exchange traded fund range with more than $1bn in the bag after its existing investors jumped at the chance to switch to ETFs.

UK hedge fund Makuria hit by oil slide and lockdown effects; Credit-focused fund run by ex-Goldman Sachs analyst lost about 29% to end of August
Laurence Fletcher – FT
A UK hedge fund set up by the former head of Canyon Capital’s London office is suffering its toughest year yet, say people familiar with its performance, joining a number of managers that were hit by market turmoil and have failed to recover.

Schroders Buys $2.9 Billion Family Office in Wealthy Client Push
Lucca De Paoli – Bloomberg
Investment firm Sandaire will join Cazenove Capital division; Schroders’ Peter Harrison has led wealth management drive
Schroders Plc, the U.K.’s largest stand-alone asset manager, has agreed to buy family office Sandaire as it expands its businesses serving ultra-wealthy clients. London-based family office Sandaire, which runs 2.2 billion pounds ($2.9 billion), will join Schroders’ Cazenove Capital wealth management division, according to a company statement on Friday. Cazenove Capital is responsible for 35.6 billion pounds of client assets. Schroders declined to disclose the purchase price.


China’s Stock Bulls Spark a Decoupling in Market Prices; The growing gulf between a company’s shares listed on China’s mainland and their counterparts in Hong Kong means companies can simultaneously have two radically different valuations
Chong Koh Ping – WSJ
Shares listed on China’s mainland typically trade at a premium to their counterparts in Hong Kong. But the gap is getting pretty extreme. Shares in Luoyang Glass Co., which trade at the equivalent of $0.33 each in Hong Kong, go for more than $2.10 in Shanghai. The price of mainland-listed stock in Central China Securities Co., a brokerage, is four times its Hong Kong equivalent.

CaixaBank and Bankia strike deal to create Spain’s biggest lender; Agreement signals long-awaited consolidation in a fragmented banking sector
Nicholas Megaw and Daniel Dombey – FT
CaixaBank is set to become Spain’s largest lender after agreeing to pay a 20 per cent premium to take over smaller rival Bankia, in a move that heralds long-awaited consolidation in the country’s banking sector.

CaixaBank Takeover Deal Values Rival Bankia at $4.5 Billion
Charlie Devereux – Bloomberg
Goirigolzarri to be executive chairman, Gortazar as CEO; Combination adds to new momentum in European finance M&A
CaixaBank SA agreed to take over Bankia SA in a deal valuing its Spanish rival at about 3.8 billion euros ($4.5 billion), adding to signs that long-awaited consolidation in European banking is kicking off. The purchase will create the biggest lender operating in Spain and CaixaBank said it will deliver combined annual cost cuts and increased revenue of about 1.1 billion euros. Bankia investors will get a premium of about 20% to the bank’s closing price on Sept. 3, the last before a potential deal was reported.

ECB Moves Closer to Lifting Bank Dividend Ban by Next Year
Nicholas Comfort and Steven Arons – Bloomberg
Some ECB supervisory board members worried about impact of ban; These officials are moving toward allowing payments next year
European regulators are moving closer to lifting a de-facto ban on bank dividend payments at the start of next year, according to people familiar with the matter. Several members of the European Central Bank’s supervisory board, who supported initial requests that banks forgo dividends, see further extensions of the ban doing more harm than good, the people said, asking not to be named because the deliberations are private.


Of moonshots and bus subsidies – How state aid became a Brexit deal-breaker
The Economist
FOR YEARS only left-wingers like Jeremy Corbyn, the former Labour leader, and Bob Crow, a trade-union honcho, were bothered by Europe’s state-aid regime. For Conservative Eurosceptics, it was the best thing about Brussels. Rules prohibiting distortive subsidies to businesses were cast in the European Union’s founding treaty, but it was Margaret Thatcher who gave them teeth. For her they were a means of rolling back the state at home and abroad. She made common cause with Jacques Delors, the architect of the single market. Europe’s ailing economies could only integrate and become competitive, the logic ran, if their governments stopped doping companies on public money.

Brexit trade game: Shipping across the border in the new era of costs, delays, codes and permits
Joe Mayes and Jeremy Scott Diamond – Bloomberg
You are the owner of a small manufacturing business in northern England, making auto-parts which you export to factories in the EU. Your sales form part of the £300 billion of exports that go to the bloc from Britain each year.
Yet the U.K. has now left the EU and your customers are worried. Will you still be able to deliver? Your biggest buyer—a German car-maker—operates a just-in-time production line, meaning that any delay to a part arriving will shut down their factory.

Biden says US trade deal hinges on UK ‘respect’ for Good Friday Agreement
Joe Biden has said he will not allow peace in Northern Ireland to become a “casualty of Brexit” if he is elected US President in November.
The Democratic candidate said any UK-US trade deal had to be “contingent” on respect for the Good Friday Agreement.
Foreign Secretary Dominic Raab has been trying to reassure US politicians about the latest Brexit developments during a trip to Washington.
US Secretary of State Mike Pompeo said he trusted the UK to “get this right”.


Rockefeller Family’s Manhattan Apartment Listed at $11.5 Million
Oshrat Carmiel – Bloomberg
A Fifth Avenue co-op that belonged to former U.S. vice president Nelson Rockefeller, and has remained in his family for nearly 60 years, is seeking a new owner. The four-bedroom unit spanning the 15th floor of 812 Fifth Ave. was listed for sale Wednesday for $11.5 million. The 3,990-square-foot (371 square meters) apartment, acquired by Rockefeller in 1963, is now owned by his son, Nelson Rockefeller Jr., according to public records.

The Key to a Better Chicken Salad Is a Generous Amount of Schmaltz; A few tablespoons of fat can amp up the holiday staple, just in time for the Jewish New Year.
Kate Krader – Bloomberg
Editor’s Note: As more people are working from home, Bloomberg Pursuits is running a weekly Lunch Break column that highlights a notable recipe from a favorite cookbook and the hack that makes it genius. Chicken salad is one of the harder-working dishes out there, but it doesn’t receive much fanfare. Adjacent meals such as roast chicken and chicken noodle soup have passionate advocates who claim the best versions of their dishes. You rarely hear people shout out the “ultimate” chicken salad.

Ann Getty, Publisher and Bicoastal Arts Patron, Is Dead at 79; She married into one of the world’s richest families but refused to let herself be marginalized as a socialite.
Sam Roberts – NY Times
Ann Getty, a savvy former California farm girl who married into one of the world’s wealthiest families and transformed herself into a globe-trotting publisher, author, interior designer and philanthropist, died on Monday in San Francisco. She was 79.

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