LSEG to buy market data solutions provider MayStreet

May 18, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

The CFTC has assigned advisory committee sponsorships amid the commissions new commissioners. Commissioner Kristin N. Johnson will sponsor the Market Risk Advisory Committee; Commissioner Christy Goldsmith Romero will sponsor the Technology Advisory Committee; Commissioner Summer Mersinger will sponsor the Energy and Environmental Markets Advisory Committee; Commissioner Caroline D. Pham will sponsor the Global Markets Advisory Committee; and Chairman Rostin Behnam will sponsor the Agriculture Advisory Committee.

The CME Group has awarded the CME Group-MSRI Prize in Innovative Quantitative Applications to University of Chicago Economics Professor Nancy Stokey.

“The CME Group-MSRI Prize recognizes individuals who contribute original concepts in mathematical, statistical or computational methods for the study of markets’ behavior and global economics. Stokey’s recent work has focused on economic growth and development, as well as the role of trade and technology transfers in accelerating growth in middle-income countries.”

CME Group’s Terry Duffy must feel a little bit better today about the rebuke he received from his shareholders for a big pay package his board proposed for him after JP Morgan’s Jamie Dimon had the same thing happen to him. Only 31% of shareholders voted for Dimon’s remuneration plan.

Dorothy (Bobak) Zielinski, formerly of the OCC and the NFA, has joined FTX has director of compliance. Congratulations to Dorothy on her new job.

At the OCC, Karen Bilek in the legal services department spent a lot of time to help update and modernize the Options Disclosure Document (ODD), working with OCC leadership, regulators and clearing members to streamline the document and increase its user friendliness. She was recognized for this work with a framed version of the new ODD signed by our OCC Executive Chairman Craig S. Donohue, CEO John P. Davidson and COO Scot E. Warren

Have you donated to the Kilt Challenge yet to support Pat Kenny‘s fundraising for Futures for Kids at the IDX Gala?

The FIA is holding the FIA Forum: Commodities 2022 in Houston, Texas, on June 21-22 at The Houstonian. This event is to tackle the issues that are top of mind for physical commodity and derivatives market participants and service providers in energy, agriculture and metals. For more details and to register, click HERE.

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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FIA’s International Derivatives Expo is returning to The Brewery in London this coming 6-8 June. Standing still is not an option in today’s evolving cleared derivatives environment. Without adapting to new products, processes, technologies and regulations, your business won’t meet the needs of tomorrow’s industry. We’re bringing together industry leaders, vendors and policymakers to discuss what’s “now” in derivatives, and what lies ahead. Sign up here.

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NSA Probing Reach of Software From Russia’s Kaspersky in US Systems; US fears Kremlin could use software to penetrate key sectors; Kaspersky has denied improper ties to the Russian government
Katrina Manson – Bloomberg
The National Security Agency is investigating the extent that software made by the Russian cybersecurity company Kaspersky is embedded in US businesses and organizations amid rising security concerns arising from Russia’s invasion of Ukraine. “I am still very worried about US companies that are using Kaspersky,” said Rob Joyce, the NSA’s director of cybersecurity, in an interview in which he revealed the inquiry. “We think that is ill-advised with this global situation.”
/jlne.ws/3FWJ0Es

******There is a lack of trust between the US intelligence services and Kaspersky going back awhile. In 2018, Natalya Kaspersky, the CEO of the InfoWatch group of companies and co-founder of Kaspersky Labs, delivered a presentation with one slide reading, “Bitcoin is a project of American intelligence agencies, which was designed to provide quick funding for US, British and Canadian intelligence activities in different countries.”~JJL

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Marc Andreessen Laments American ‘Vetocracy’; The “It’s time to build” investor spoke at a tech conference in Washington about the trouble with building things.
Ellen Huet – Bloomberg
The US has lost its ability to build big projects and produce goods, venture capitalist Marc Andreessen lamented Tuesday during an appearance at a technology conference in Washington, hosted by autonomous vehicle software company Applied Intuition. The billionaire investor cited examples of major accomplishments from an earlier era—like the Hoover Dam, the Golden Gate Bridge and the Manhattan Project—and said that the US, which “has always prided itself on production,” has let its advantages atrophy in recent decades. It’s a thesis that Andreessen, who co-founded the venture firm Andreessen Horowitz, has been speaking and writing about since the first few months of the Covid-19 pandemic, when he saw that the country was struggling to provide enough protective equipment to health care workers.
/jlne.ws/3wyydfw

*****Saying no is easy. Building the Hoover Dam is not.~JJL

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Allianz Cooperator Used Bathroom Break to Run Out on the SEC
Greg Farrell – Bloomberg
A former portfolio manager for the Allianz SE unit that agreed to pay $5.8 billion over the implosion of its hedge funds in 2020 saw no escape from the questioning of the SEC’s lawyers. So Stephen Bond-Nelson excused himself to use the bathroom and never returned. At least, not until he decided to plead guilty and cooperate in the investigation of the fraud.
/jlne.ws/3Lq9lMm

****** This is the second most popular escape or called escape number two.~JJL

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Thirty Years After My Father Helped Bring McDonald’s to Russia, It’s Quitting the Country; He was one of dozens of managers who brought the golden arches to Pushkin Square
Katia Dmitrieva – Bloomberg
There is a picture of me and a monkey from sometime in 1990, sitting in front of the first McDonald’s ever opened in Russia. Over my shoulder, you can see the metal barricades that had to be erected in the restaurant’s first months to control the tens of thousands of people who lined up for a Big Mac and fries. On Monday, McDonald’s Corp. said it will exit Russia after more than 30 years of operation in the country. The fast-food chain was one of the first Western brands to set up shop in Russia, just before the fall of the Soviet Union.
/jlne.ws/3FVNWtg

***** The spirit of McDonalds is still there. There is an ember somewhere in Russia that can grow from its own Kroc.~JJL

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Stetson’s Iconic Cowboy Hat Triggers Dispute With Haberdasher; Inventor of the 10-gallon hat says manufacturer RHE Hatco doesn’t hold exclusive rights under 35-year-old deal
Jef Feeley – Bloomberg
Ten-gallon cowboy hat inventor John B. Stetson Co. says a distributor is trying to pilfer the rights to sell the head covering of choice for the likes of Buffalo Bill Cody and John Wayne. The 157-year-old company wants a Delaware judge to find RHE Hatco. Inc. — a maker and seller of western chapeaus — doesn’t have exclusive authority under a 1987 license to sell Stetsons through retail or e-commerce sites. Stetson no longer possesses a copy of the 35-year-old contract, according to a May 11 lawsuit.
/jlne.ws/3Mx5COw

****** I have heard of all hat and no cattle. This is no hat and no cattle.~JJL

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Tuesday’s Top Three
Our most clicked article yesterday was our FIA Boca 2022 interview with Trading Technologies CEO Keith Todd Trading Technologies CEO Keith Todd Had Plenty To Announce At FIA Boca 2022 And Expects Even More Later This Year. Second most read was JustGiving FIA’s Give A Penny To Kenny – IDX Gala Kilt Challenge and we hope you are giving. Third was Garry Kasparov’s Opinion piece in The Wall Street Journal This Is No Time to Go Wobbly on Russia.

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MarketsWiki Stats
26,832 pages; 238,513 edits
MarketsWiki Statistics

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Lead Stories

LSEG to buy market data solutions provider MayStreet
Bob Currie – Asset Servicing Times
London Stock Exchange Group (LSEG) has announced that it will purchase market data solutions provider MayStreet. The deal is expected to be completed by the end of Q2 2022, with MayStreet becoming part of the exchange group’s Enterprise Data Solutions business within its Data and Analytics division. This will build on an existing partnership between the two companies, through which MayStreet is supporting the development of LSEG’s Real-Time Direct data feed. MayStreet is also providing market data to the SEC’s market Information Data Analytics System (MIDAS) through a contract that began in 2019.
/jlne.ws/39ucXj2

How a Trash-Talking Crypto Bro Caused a $40 Billion Crash; Do Kwon, a South Korean entrepreneur, hyped the Luna and TerraUSD cryptocurrencies. Their failures have devastated some traders, though not the investment firms that cashed out early.
David Yaffe-Bellany and Erin Griffith – NY Times
Do Kwon, a trash-talking entrepreneur from South Korea, called the cryptocurrency he created in 2018 “my greatest invention.” In countless tweets and interviews, he trumpeted the world-changing potential of the currency, Luna, rallying a band of investors and supporters he proudly referred to as “Lunatics.”
/jlne.ws/3ljzYI8

A Crypto First? What Happens When a Blockchain Like Terra Dies; Collapse of TerraUSD stablecoin threatens entire ecosystem; Users and app developers are likely to leave for other efforts
Olga Kharif – Bloomberg
The crypto world has been riveted by the rapid collapse of the TerraUSD stablecoin. But its implosion may bring about something just as noteworthy: the death of a major blockchain. The Terra blockchain — the platform supporting scores of decentralized applications that let users swap crypto coins and earn yields — was halted and then restarted twice in recent days, as the value of its main cryptocurrency, Luna, and the related TerraUSD (UST) stablecoin collapsed following a wave of selling pressure.
/jlne.ws/3Mql5Q5

Back to the Office? Almost 9 in 10 UK Professionals Say No Thanks; A survey of UK finance workers finds an industry in flux.
Tom Metcalf – Bloomberg
More than 85% of UK finance workers no longer view the office as their main place of work, highlighting the challenge the industry faces if it tries to persuade bankers to return to pre-pandemic norms. The demand for a new paradigm is clear from a YouGov survey of more than five hundred finance executives from across the UK commissioned by Bloomberg News last month. Just 14% now consider the office their main workplace compared to 42% for the home and 44% for a hybrid arrangement.
/jlne.ws/3wqqfpZ

Allianz Fund Collapse Ends in Guilty Plea, $5.8 Billion Deal; Funds sold as safer in a market crash lost $7 billion; Allianz accepts ‘corporate responsibility’ for ‘isolated’ acts
Bob Van Voris and Stephan Kahl – Bloomberg
A unit of Allianz SE pleaded guilty to fraud and agreed to pay $5.8 billion after misrepresenting the risk posed by a group of hedge funds that collapsed amid pandemic market gyrations. The deal announced Tuesday brings to a close an embarrassing episode for the German insurance giant, which has agreed to sell the bulk of Allianz Global Investors US as part of a settlement with the Securities and Exchange Commission.
/jlne.ws/3yF7r7T

Allianz agrees $6bn settlement over scandal-hit US funds; German insurer’s investment arm pleads guilty to securities fraud
Ian Smith and Stefania Palma – FT
German insurer Allianz has agreed a $6bn settlement with US authorities under which its investment arm will plead guilty to securities fraud after a scandal at its funds business left investors nursing billions of dollars worth of losses.
/jlne.ws/39ukiiz

EU prepares to sell more carbon permits to pay for exit from Russian gas; Plan risks pushing up emissions by making it easier to use other fossil fuels
Andy Bounds and Sam Fleming – FT
Brussels wants to raise EUR20bn to fund the EU’s exit from Russian energy by selling surplus carbon emissions permits — a move that risks hitting the bloc’s climate goals by making it cheaper to burn fossil fuels. The European Commission is looking at auctioning off part of a stock of Emissions Trading Scheme certificates, EU officials and diplomats told the Financial Times. The permits allow their users to emit more carbon.
/jlne.ws/3Ptz6yw

Euronext sees strong first quarter on the back of doubling trading revenues and Borsa Italiana acquisition; Exchange operator’s trading revenue grew to EUR150.8 million resulting from strong activity across asset classes with cash trading revenue growing to EUR94.0 million.
Annabel Smith – The Trade
Euronext has reported a strong first quarter supported by doubling trading revenues year on year and contributions from its recently acquired Borsa Italiana. The exchange operator saw its first quarter revenue and income rise to EUR395.7 million largely off the back of boosted trading revenues across asset classes which rose to EUR150.8 million, up 57% from the same period last year.
/jlne.ws/3NhehUU

Lawmakers Seek to Curb Voting Power of BlackRock, Vanguard and Other Big Asset Managers; Expected GOP bill would require large money managers to give passive-fund investors a way to vote proxies
Angel Au-Yeung – WSJ
A group of Republican senators is looking to curtail the power big asset managers like BlackRock Inc. and Vanguard Group have over public companies. In legislation to be introduced Wednesday, Sen. Dan Sullivan (R., Alaska) calls for voting choice to be made available to individual investors in passive funds when money managers own more than 1% of a company’s voting securities.
/jlne.ws/3LqtlhJ

JPMorgan shareholders vote against Jamie Dimon’s pay; Only 31% of investors backed chief executive’s remuneration plan
Joshua Franklin – FT
JPMorgan Chase shareholders have voted against the bank’s executive pay plan, delivering a stinging rebuke to chief Jamie Dimon and his management team. In a “say on pay” vote at the bank’s annual meeting on Tuesday, only 31 per cent of investors voted in favour of JPMorgan’s 2021 plan, which included a total $201.8mn package for six top executives. Dimon stands to make $50mn from a one-off special award. It is the first time the bank’s board has lost such a vote since it was introduced in 2009. The vote is non-binding, but the bank said in its proxy filing ahead of the meeting that its compensation and management development committee “will take into account the outcome of the vote when considering future executive compensation arrangements”.
/jlne.ws/3a1RXQR

Jamie Dimon Dealt Rare Blow as JPMorgan Holders Reject Pay Plan; Bonuses for Dimon, Pinto were criticized by proxy advisers; Bank says board takes shareholder feedback ‘very seriously’
Hannah Levitt – Bloomberg
Jamie Dimon was handed a rare defeat from shareholders as they rejected a pay proposal, just months after the board unfurled lucrative incentives for the JPMorgan Chase & Co. chief to stay on for a number of years. The pay packages for Dimon and other company leaders were supported by just 31% of shareholders, a tally announced at the bank’s annual meeting on Tuesday. The preliminary result marks the first time since 2009 — when JPMorgan began seeking investor votes on pay — that a majority of shareholders declined to back the firm’s measures.
/jlne.ws/3wnh09I

Twitter Board Says It Plans to Enforce Musk Merger Agreement
Michelle F Davis – Bloomberg
Twitter Inc.’s board said it plans to enforce its $44 billion agreement to be bought by Elon Musk, saying the transaction is in the best interest of all shareholders. “We intend to close the transaction and enforce the merger agreement,” the board said Tuesday in a statement to Bloomberg News. Directors voted earlier to unanimously recommended that shareholders approve Musk’s $54.20-a-share offer.
/jlne.ws/37UTAPP

BNP Banker Fired for Terrorizing Traders Wins $1.8 Million; Paris tribunal says Alami was unfairly dismissed by the lender; Ex-BNP derivatives sales chief says ruling “clears his name”
Gaspard Sebag – Bloomberg
A senior BNP Paribas SA banker fired after being accused of terrorizing subordinates on the trading floor was awarded nearly 1.7 million euros ($1.8 million) in compensation and lost bonuses. Omar Alami, formerly head of BNP’s equity derivatives sales for Switzerland, Belgium and Luxembourg, was unfairly dismissed, the Paris employment tribunal ruled Tuesday without giving further details.
/jlne.ws/3yKp6uJ

Luna Foundation Guard has now dumped $2.4 billion from its Bitcoin reserves in failed attempt to defend TerraUSD peg
Christiaan Hetzner – Fortune
Luna Foundation Guard, the second largest known holder of Bitcoin, liquidated almost its entire reserves last week worth billions in a failed attempt to defend the Terra UST stablecoin peg. Ever since the collapse of UST and its sister governance token Luna, designed to maintain the peg through an algorithmic process of manipulating the latter’s money supply, the entire crypto community wanted to know just one thing: what happened to LFG’s prodigious Bitcoin holdings?
/jlne.ws/3yLIrfi

Ben Bernanke Says He Doesn’t See Value in Bitcoin; The former Fed chairman says the crypto is too complicated to use as money.
Stephen Alpher – CoinDesk
Former U.S. Federal Reserve Chairman Ben Bernanke told CNBC on Monday that he doesn’t believe bitcoin (BTC) works as money, a store of value or digital gold. “If bitcoin were a substitute for fiat money, you could use bitcoin to go buy your groceries,” he said. “Nobody buys groceries with bitcoin because it’s too expensive and too inconvenient to do that.” he added, noting how it would be impossible to price something like celery in bitcoin because there’s too little stability in its value. Occasionally known as “Helicopter Ben” for suggesting in 2002 that the Fed could simply drop money from helicopters to ward off deflationary conditions – a comment the cypherpunks who laid the groundwork for Bitcoin were no doubt well aware of – Bernanke addressed the digital gold case for bitcoin. “Gold has underlying use value,” he argued. “You can use it to fill cavities. The underlying use value of a bitcoin is to do ransomware or something like that.”
/jlne.ws/3LiG6eg

All Those Celebrities Pushing Crypto Are Not So Vocal Now; Crypto boosters such as Matt Damon, Reese Witherspoon and Gwyneth Paltrow have been criticized for hyping virtual currency without highlighting the risks.
Tiffany Hsu – NY Times
In the latest commercial from the virtual currency exchange Crypto.com, titled “Bravery Is a Process,” the star basketball player Joel Embiid walks through Philadelphia while Bill Self, his former college coach, lends the narration. “Even when our path didn’t make sense to everyone else, we kept going,” Mr. Self says in the ad, which made its debut on May 6. “We keep going, until our path is the one they wish they’d taken.”
/jlne.ws/37YXG9C

Liquidity Suffered In Listed Energy And Commodity Markets During Recent Market Volatility: Acuity Avelacom Proprietary Trading Report 2Q22; Listed energy and commodity derivatives markets experienced major liquidity issues during the February volatility while crypto derivatives remained liquid, a new report has found.
MondoVisione
Following Russia’s invasion of Ukraine, global bourses were sent into a tailspin with volatility not seen since the early days of Covid gripping markets. According to the Q2 2022, Proprietary Trading Management Insight Report, produced by Acuiti in partnership with Avelacom, energy and commodity markets experienced the most liquidity issues. The report, which is based upon a quarterly survey of Acuiti Expert Network of over 100 senior proprietary trading executives, found that a third of respondents experienced major liquidity issues in energy and 29% in commodities.
/jlne.ws/3yPKwH7

London Stock Exchange buys US data solutions provider MayStreet
Alliance News
London Stock Exchange Group PLC on Wednesday said it has agreed to buy New York-based data solutions provider MayStreet Inc. LSEG noted it already has a commercial partnership with MayStreet, with MayStreet supporting LSEG’s real-time data feeds. MayStreet was founded in 2012 by Chief Executive Patrick Flannery and Chief Technology Officer Michael Lehr.
/jlne.ws/3Mvflok

Trading Venue Perimeter: Whose Interest Being Protected Under ATS Reform? By Kelvin To, Founder And President, Data Boiler Technologies
Mondonvisione
Do market participants need better ability to evaluate potential conflicts of interest of multilateral trading venues? No. Market participants are not “Cops” to regulate trading venues, the Securities and Exchange Commission (SEC) is. The public relies on market regulators and Self-Regulatory Organizations (SROs) to assure that they are not scammed in the open market. Such a market is called the Exchange. Otherwise, civilians are left with reading all the “small print” (Form ATS, ATS-N, ATS-R, ATS-G and other enhanced disclosures) on their own and taking risk engaging with a trading partner or counterparties. These are called bilateral deals or multilateral trade agreements. The trade terms and corresponding recordkeeping are subject to privacy protection. Regulators should refrain from intervening legitimate private practices.
/jlne.ws/38FA6yO

Crypto adoption spreads in Argentina even as central bank tightens rules; Country says it is trying to mitigate risks from growing use of sometimes volatile assets
Lucinda Elliott – FT
On a crowded pedestrian street in central Buenos Aires, black market money changers have new competition. Brightly coloured posters advertising online cryptocurrency exchanges stand alongside the traditional cuevas, or “caves”, dingy unmarked bureaux de change that convert pesos and dollars at up to twice the official rate.
/jlne.ws/37Uws3O

The mauling of Tiger Global; Tech stock sell-off has lost Chase Coleman’s hedge fund $17bn this year
Laurence Fletcher and Akila Quinio, Miles Kruppa and Antoine Gara – FT
Early last year Chase Coleman wrote to investors to celebrate the 20-year record of Tiger Global, one of the biggest winners from a technology bull market that had run since the financial crisis. Now the best-known of the so-called Tiger cub firms has become the highest-profile hedge fund casualty of the tech stock hammering as interest rates have started to rise.
/jlne.ws/3FUK1Nj

Shanghai Opens for More Bankers at Offices as Lockdown Eases; HSBC, JPMorgan and local banks among firms to resume operation; Hundreds of bankers have been stationed in offices for weeks
Bloomberg News
Shanghai is allowing more than 800 financial institutions to send employees back to the office under a closed-loop arrangement as China’s financial hub slowly emerges from an unprecedented shutdown of more than six weeks.
/jlne.ws/3sEjQoE

Volatility sees spread products fall by half, report finds; Return of volatility this year has led to predictions that it’ll mirror 2020, with spread products that spiked in 2021 down and FX trading volumes up.
Annabel Smith – The Trade
Volatility has seen spread products such as agency residential mortgage-backed securities and high yield credit dive 30-50% in the first quarter, a report by Coalition Greenwich has found. This year is expected to mirror the volatility in 2020 – the report noted – sending spread products that had seen a surge last year into a downward spiral.
/jlne.ws/37UJs9C

Ukraine Invasion

US Set to Block Russian Debt Payments, Raising Odds of Default; Treasury Department won’t extend carve-out that ends May 25; Expiring waiver gave Moscow leeway to pay coupons in dollars
Saleha Mohsin and Sydney Maki – Bloomberg
The Biden administration is poised to fully block Russia’s ability to pay US bondholders after a deadline expires next week, a move that could bring Moscow closer to the brink of default. The Treasury Department’s Office of Foreign Assets Control is expected to let a temporary exemption lapse once it expires on May 25, according to people familiar with the matter. The waiver, issued shortly after the US levied sanctions on Russia over its invasion of Ukraine in February, has given Moscow room to pay coupons, helping it avert default on its government debt.
/jlne.ws/3yKoMMx

Russia will likely be shut out permanently from global energy markets, top oil execs say
Phil Rosen – Business Insider
Russia will likely be shut out permanently from global energy markets once Europe can operate without the country’s oil and gas, top energy executives said. The European Union’s resolve is “firm” to wean itself off of Russian supplies, Meg O’Neill, CEO of Australia’s Woodside Petroleum, said at an energy conference in Brisbane Tuesday, according to the Financial Times.
/jlne.ws/3wlN2De

Omens of Decline for Russia’s Once World-Leading Energy Industry
Stanley Reed – NY Times
It was to be a hugely ambitious project on the frigid Gulf of Ob, in Russia’s Far North, a steppingstone in Moscow’s rising ambitions to be a power in liquefied natural gas much as it is in oil and gas delivered by pipeline. When President Vladimir V. Putin of Russia launched his war on Ukraine, the $21 billion project known as Arctic LNG 2 was well underway with dozens of wells drilled, an airport built and most of the equipment ordered.
/jlne.ws/38Fyfdk

Eni defies Brussels by opening rouble account for Russian gas payments; EU reiterates move would breach bloc’s sanctions against Moscow
Amy Kazmin and Valentina Pop – FT
Eni is to open a rouble account with Gazprombank to comply with Russian demands for gas sales, a move that puts the Italian energy group on a collision course with Brussels over EU sanctions against Moscow. Eni’s announcement comes days before it is due to make its next payments for Russian gas from state-owned supplier Gazprom. Russian gas accounts for nearly 40 per cent of Italy’s total gas imports.
/jlne.ws/3li1Hci

Janet Yellen targets Russian oil in EU talks with price cap and tariff proposals; US Treasury secretary raises mechanisms to stymie energy flows with bloc leaders ahead of G7
James Politi, Sam Fleming and Guy Chazan – FT
US Treasury secretary Janet Yellen is stepping up talks with EU and G7 allies on a potential price cap or tariff on Russian oil, as Brussels struggles to reach a consensus among its member states on a full import ban. Yellen raised the Biden administration’s ideas during a visit to the European bloc’s leaders this week and was expected to present them at a gathering of G7 finance ministers and central bank governors in Germany that starts on Wednesday.
/jlne.ws/3FXtHvp

Exchanges, OTC and Clearing

LSEG to acquire market data solutions provider MayStreet; Following the completion of the deal, which is expected in H1 this year, MayStreet will join Refinitiv in LSEG’s expanding data and analytics division.
Annabel Smith – The Trade
The London Stock Exchange Group (LSEG) has moved to further expand its data and analytics capabilities with the acquisition of MayStreet, a market data solutions provider. LSEG has signed an agreement to acquire the firm in H1 of this year. Further details of the transaction were not disclosed.
/jlne.ws/3sH0I9q

University of Chicago Economics Professor Nancy Stokey Receives CME Group-MSRI Prize in Innovative Quantitative Applications
CME Group
CME Group, the world’s leading derivatives marketplace, and the Mathematical Sciences Research Institute (MSRI), today announced that Nancy Stokey, Frederick Henry Prince Distinguished Service Professor of Economics, University of Chicago, is the recipient of the 2021 CME Group-MSRI Innovative Quantitative Applications Prize for her work in economics and mathematics.
/bit.ly/3sJ93cL

Product Modification Summary for Clearing Firms, Bookkeeping Software Providers,
ISVs
CME Group
Effective Sunday, June 12, 2022 for trade date Monday, June 13, 2022, and pending all relevant
CFTC regulatory review periods, please be advised that the New York Mercantile Exchange, Inc. (NYMEX or EXCHANGE) will expand trade at settlement (TAS) or TAS spread eligibility for the products listed below on CME Globex and available for submission for clearing on CME ClearPort.
/bit.ly/3NleJ4O

Applications for Spot Call Butter Regularity
CME Group
Pursuant to Regulation 1203.C. notice hereby is given that Central Storage & Warehouse LLC has applied to the Exchange for a declaration of regularity in Spot Call Butter at the following locations:
/bit.ly/3wCxv0C

Applications for Spot Call Nonfat Dry Milk and Spot Call Dry Whey Regularity
CME Group
Pursuant to Regulation 1203.C. notice hereby is given that Central Storage & Warehouse LLC has applied to the Exchange for a declaration of regularity in Spot Call Nonfat Dry Milk and Spot Call Dry Whey at the following locations:
/bit.ly/3NpxBPR

Expansion of Trading at Settlement (“TAS”) Eligibility for the Light Sweet Crude Oil
Futures and Brent Crude Oil Last Day Financial Futures Contracts
CME Group
Effective Sunday, June 12, 2022, for trade date Monday, June 13, 2022, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will implement amendments to the Trading at Settlement (“TAS”) Table located in Chapter 5 (“Trading Qualifications and Practices”) (the “Table”) to expand TAS eligibility for the Light Sweet Crude Oil Futures contract and Brent Crude Oil Last Day Financial Futures contract (the “Contracts”) as detailed below.
/bit.ly/38ttGTH

EEX Japanese Power market reports sustainable organic growth 2 years after launch
EEX
Today marks the second anniversary of EEX’s product launch for the Japanese Power Derivatives market. Since launch in May 2020, EEX’s Japan Power product suite, which includes power futures for the regions Tokyo and Kansai, is now firmly established as the benchmark contract in Japanese power trading, backed by the continuous support from the local trading community and international market participants.
/bit.ly/3FXcSAr

ESG investing on the path to net zero
Eurex
Institutional investors play a key role in directing capital towards initiatives that support the energy transition. Eurex caught up with Claire Coustar, Global Head of ESG and Sustainable Finance, IB-FIC at Deutsche Bank, about the growth of sustainability-linked bonds, carbon markets and the challenges on the path to net zero.
Where are you seeing the most growth today in the green bond market?
The part of the ESG market that has had the most attention over the past year and the highest growth in volume is in sustainability-linked-bonds and loans. This trend began early last year in the high grade European corporate sector and continued to grow in the high yield corporates in the bond and loan market and finally, in March of 2022, we saw Chile became the first sovereign to issue a sustainability-linked bond.
/bit.ly/3wwLfKt

Dividend Derivatives: Introduction of EURO STOXX® Banks Index Dividend Options
Eurex Circular 054/22 Dividend Derivatives: Introduction of EURO STOXX® Banks Index Dividend Options
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 13 June 2022: Introduction of EURO STOXX® Banks Index Dividend Options, Introduction of a new Product Specific Supplement for EURO STOXX® Banks Index Dividend Options. This circular contains all information on the introduction of the new products and the updated sections of the relevant Rules and Regulations of Eurex Deutschland.
/bit.ly/3wmDVCg

Euronext publishes Q1 2022 results
Euronext
Strong performance driven by growth in non-volume related business and in trading activities, cost control and integration of the Borsa Italiana Group. 2022 cost guidance upgraded. Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris – 17 May 2022 – Euronext, the leading pan-European market infrastructure, today publishes its results for the first quarter 2022.
/bit.ly/3yJKVut

Notice of the 21st Annual General Shareholders Meeting
JPX
/bit.ly/3wpyzWR

Daily Price Limits to be Broadened : 1 issue
JPX
The following issue has fallen under the following (1) or (2) for two consecutive business days. As such, TSE wishes to bring to your attention that it will broaden only the upper (or lower) daily price limit on the next business day (May 19) as follows.
/bit.ly/3NE9Nbt

Moscow Exchange Group starts calculating the index for wheat
MOEX
From May 18, 2022, the National Commodity Exchange (NTB, part of the Moscow Exchange Group) begins the calculation and daily publication of a new exchange indicator – the wheat price index.
/bit.ly/3wDxN7q

Call for applications
Disciplinary committee of the Montréal Exchange
TMX
Montréal Exchange Inc. (the “Exchange”) is seeking applications from interested and qualified persons
to be included on the list of persons eligible to sit on its Disciplinary Committee.
/bit.ly/3sEH5Ph

Fintech

Elon Musk Does Not Care About Spam Bots; Also the merger proxy and Allianz Structured Alpha.
Matt Levine – Bloomberg
Elon Musk is the richest person in the world, and an active Twitter user. When he tweets, he gets a lot of spammy replies, many of which seem to be written by automated bots. He has complained about this a lot. Eventually he decided to do something about it. The thing that he decided to do about it was buy Twitter. On April 13, he sent a letter to Twitter Inc.’s board of directors offering to buy the company for $54.20 per share in cash. “If our twitter bid succeeds,” he tweeted, “we will defeat the spam bots or die trying!”
/jlne.ws/3wqdsE0

What Are Twitter Bots and Why is Elon Musk Fighting Over Them?
Hannah Miller – Bloomberg
Elon Musk and Twitter Inc. chief Parag Agrawal are butting heads over the way the social media giant handles so-called automated bots, stoking speculation Musk may try to lower the price or even walk away from his $44 billion offer for the company. Musk told a tech conference in Miami that fake users make up at least 20% of all Twitter accounts, possibly as high as 90%. Twitter disagrees. It reports that spam accounts make up fewer than 5% of total users, and Agrawal posted a long thread laying out his company’s methodology. Musk replied by tweeting “this deal cannot move forward” unless Twitter provides proof of its claims.
/jlne.ws/38yfo41

Apple Delays Plan to Have Staff in Office Three Days a Week; Company cited rising Covid cases for pushing back deadline; Apple to also again require masks for staff at 100 US stores
Mark Gurman – Bloomberg
Apple Inc. delayed a plan to require workers to come back to the office three days a week, citing a resurgence in Covid-19 cases, marking the latest setback in its efforts to return to normal. The company informed employees Tuesday that it’s delaying the requirement, which had been slated to go into effect on May 23, according to a memo seen by Bloomberg. However, the company is still expecting workers to come to the office two days per week. The company said the requirement is being delayed for “the time being” and didn’t provide a new date.
/jlne.ws/3MrxzXS

Tradeweb expands electronic portfolio trading capabilities; Among the new functionalities are the additions of trade on spread at market close and the increase in the line item capacity.
Wesley Bray – The Trade
Tradeweb Markets has launched new functionalities for its electronic portfolio trading tool as it looks to increase flexibility and efficiency for institutional clients. Among the new functionalities is the addition of trade on spread at market close, which Tradeweb claimed was a significant advancement in credit trading and would be especially beneficial to clients using passive investment strategies that profit from executing trades at the market close. It will also give clients more flexibility in arranging trades before the closing.
/jlne.ws/3G4q3Qo

Coinbase Stock Jumps on Plan to Scale Back Hiring
Angela Palumbo – Barron’s
Coinbase Global, the trading platform for cryptocurrencies, was climbing on Tuesday after Chief Executive Officer Emilie Choi said the company will be slowing down its hiring. Coinbase stock has been having a difficult year. Shares of the crypto trading platform had fallen 74.2% so far this year. At the close on Monday, less than a week after Coinbase posted disappointing earnings, the stock was down 9.1%.
/jlne.ws/3wndBrs

Elon Musk Is Acting Like Henry Ford. Uh-Oh; Both auto magnates built dominant companies. Both became global celebrities. Both dove headlong into other pursuits. One lost his edge. So far.
Stephen Mihm – Bloomberg
As Elon Musk tries to add the social media giant Twitter to his expanding empire, he’s seeming a bit busy. When he’s not starting and buying complex companies, he’s sounding off about free speech, cryptocurrency, artificial intelligence and, well, just about everything. nThe electric-car magnate is developing an eerie resemblance to another automotive visionary: Henry Ford. That’s not meant as a compliment. If Musk keeps courting celebrity and pursuing side ventures, the risk is that Tesla, the company that made him a household name, will fall from its premier position just as Ford Motor Company did in the 1920s.
/jlne.ws/3MtGyYt

Twitter Suspended His Account. Then He Launched a Competing Network; A crypto entrepreneur says a decentralized system can solve many of the ills that Elon Musk has been tweeting about.
Hannah Miller – Bloomberg
Last month, after Elon Musk said he would acquire Twitter Inc., a Finnish cryptocurrency developer named Stani Kulechov tweeted a joke saying he was selected as Twitter’s interim chief executive officer. Then Twitter briefly suspended his account.
/jlne.ws/3MqP6iZ

How Blockchain Technology Eliminates Stock Market Manipulation; Are Tokenized Stocks the Way to Go?
John Kiguru – Crypto News Flash
The stock market is a significant part of today’s global economy, most companies in developed countries raise capital through equity and debt securities. According to the latest analysis by the Federal Reserve, 41.9% of the U.S household wealth is directly or indirectly held through various stocks. This figure has more than doubled compared to three decades ago. That said, it has not been a bed of roses for all investors; the current structure of the stock market is designed to favour institutions, leaving retailers with peanuts or nothing to show from their investments. For instance, the 2009 financial crisis affected individual households at a larger magnitude while ‘too big to fail’ institutions were bailed out by the government.
/jlne.ws/3Px9Wzc

Microsoft Begins Cloud Concessions After Rivals Complain; Responsibility to do more said Microsoft president Brad Smith; Measures would will not apply to biggest rivals Amazon, Google
Jillian Deutsch – Bloomberg
Microsoft Corp. is bowing to pressure to make it easier for European cloud providers to host the company’s software. The US company is launching a new initiative that will make it easier for European cloud companies to host Microsoft products like Windows and Office 365 apps. The company will also provide greater licensing flexibility for customers in Europe.
/jlne.ws/3NlrfB5

OSL and BSO unveil strategic partnership to bolster connectivity for institutional exchange clients
BSO
BSO, the global pioneering infrastructure and connectivity provider, and OSL, Asia’s leading digital asset platform, today announced that BSO will become the low latency connectivity provider of choice for OSL’s institutional grade exchange. BSO’s global low-latency network will allow institutions to connect directly to OSL’s exchange matching engines at high-speed, providing users with rapid access to the necessary infrastructure to support profitable high-frequency and algorithmic trading.
/jlne.ws/3MDjYMY

Cybersecurity

NSA, Allies Issue Cybersecurity Advisory on Weaknesses that Allow Initial Access
NSA.gov
The Cybersecurity and Infrastructure Security Agency (CISA), the National Security Agency (NSA) and the FBI, along with allied nations, published a Cybersecurity Advisory today to raise awareness about the poor security configurations, weak controls and other poor network hygiene practices malicious cyber actors use to gain initial access to a victim’s system.
/jlne.ws/3wynpPP

NSA Says ‘No Backdoor’ for Spies in New US Encryption Scheme; NIST agency running competition for new encryption standards
ByKatrina Manson – Bloomberg
The US is readying new encryption standards that will be so ironclad that even the nation’s top code-cracking agency says it won’t be able to bypass them. The National Security Agency has been involved in parts of the process but insists it has no way of bypassing the new standards.
/jlne.ws/39tKsSC

India to press ahead with strict cybersecurity rules despite industry concerns
Munsif Vengattil and Aditya Kalra – Reuters
India will not change upcoming cybersecurity rules that force social media, technology companies and cloud service providers to report data breaches swiftly, despite growing industry concerns, the government said on Wednesday.
The Indian Computer Emergency Response Team issued a directive in April asking tech companies to report data breaches within six hours of “noticing such incidents” and to maintain IT and communications logs for six months.
/jlne.ws/3wpbG5Z

Zero-trust architecture may hold the answer to cybersecurity insider threats
Nathan Parde – MIT News
For years, organizations have taken a defensive “castle-and-moat” approach to cybersecurity, seeking to secure the perimeters of their networks to block out any malicious actors. Individuals with the right credentials were assumed to be trustworthy and allowed access to a network’s systems and data without having to reauthorize themselves at each access attempt. However, organizations today increasingly store data in the cloud and allow employees to connect to the network remotely, both of which create vulnerabilities to this traditional approach. A more secure future may require a “zero-trust architecture,” in which users must prove their authenticity each time they access a network application or data.
/jlne.ws/3wqffJd

Government’s finally getting its own cybersecurity in order
Joseph Marks and Aaron Schaeffer – The Washington Post
The federal government’s top cyber agency is finally getting the tools it needs to spot and thwart hacking threats in real time.
During the past year, the Cybersecurity and Infrastructure Security Agency (CISA) has deployed or updated a suite of monitoring tools that — essentially for the first time ever — give the agency broad visibility into hacking threats across most of the civilian government.
CISA says it has also expanded its authority to force agencies to fix digital vulnerabilities before hackers from Russia and elsewhere can exploit them.
/jlne.ws/3G03Brp

China’s Internet Censors Try a New Trick: Revealing Users’ Locations; The rapidly expanding practice, which authorities say helps combat disinformation from abroad, has fueled a whole new type of online battle.
Joy Dong – NY Times
For years China’s censors have relied on a trusted tool kit to control the country’s internet. They have deleted posts, suspended accounts, blocked keywords, and arrested the most outspoken. Now they are trying a new trick: displaying social media users’ locations beneath posts.
/jlne.ws/39wyvvg

Cryptocurrencies

Bitcoin won’t become ‘an alternative form of money,’ or a store of value, says Ben Bernanke; ‘Gold has underlying use value. You can use it to fill cavities. The underlying use value of a Bitcoin is to do ransomware or something like that,’ Bernanke said in an interview with CNBC.
Frances Yue – MarketWatch
Ben Bernanke, former chairman of the Federal Reserve, said that he doesn’t think bitcoin would take over “as an alternative form of money.” Bitcoin and other cryptocurrencies have been “successful as a speculative asset,” Bernanke said in an interview with CNBC’s Squawk Box that aired Monday morning. “You are seeing the downside of that right now,” Bernanke said. Bernanke made the comment after bitcoin fell more than 55% from its all-time high in November while ether is down more than 58% from its record high, according to CoinDesk data. The Nasdaq Composite has lost about 27% from its peak.
/jlne.ws/38BdeRd

Crypto Hedge-Fund Head Predicted Terra’s $60 Billion Implosion
Bloomberg Tax
Hacks, scams, ponzis, rug pulls and crashes are common in crypto; they happen almost every day. The recent collapse of the Terra ecosystem and its UST stablecoin is different. Terra was pitched as an important experiment — an attempt to create a stablecoin pegged to the US dollar without relying on traditional financial securities or overcollateralized crypto assets as reserves. Last week’s sudden collapse of the Terra project now puts that idea in doubt, and its loudest critic is claiming victory.
/jlne.ws/3MsKrNj

China Makes a Comeback in Bitcoin Mining Despite Government Ban; ‘Covert mining operations’ behind rise, Cambridge Center says; Hashrate on the network climbed to new highs after 2021 fall
Tanzeel Akhtar and Sidhartha Shukla – Bloomberg
While the US extended its leading position as the dominant location for Bitcoin mining, China has reemerged as the second-largest locale despite a government ban on the activity last year. The US accounted for 37.84% of global hashrate, a measure of computing power used to extract the digital currency, between September 2021 to January, according to the Cambridge Centre for Alternative Finance, in a report released on Tuesday. The hashrate, also responsible for securing the Bitcoin network, has made a strong comeback to new highs after falling last year.
/jlne.ws/3yK7Gyr

Crypto Assets Poorly Understood by Retail Investors, BOE Says; Digital currency risk not spreading to financial markets; Official spearheading a global move to regulate crypto assets
Reed Landberg – Bloomberg
Most retail investors who have put money into digital currencies probably don’t understand exactly what they bought or the risks involved, a Bank of England official said. Jon Cunliffe, deputy governor for the UK central bank, stepped up his call for authorities to regulate cryptoassets to ensure the market is stable and transparent.
/jlne.ws/3yGjLVr

DAI Is King Of Decentralized Stablecoins After Terra Collapse; MakerDAO, which supports stablecoin, rallied 40% in a week; DAI requires Ethereum-based coins to be used as collateral
Olga Kharif – Bloomberg
Just when you thought the world of cryptocurrency stablecoins couldn’t get more complicated, it does. A so-called governance token named MKR, which is used to help run the decentralized DAI stablecoin, has surged about 40% in value over the past week in the wake of the collapse of the algorithmic stablecoin TerraUSD that shook cryptocurrency markets. DAI is part of the ecosystem of the MakerDAO, one of the first decentralized autonomous organizations in crypto, which in theory acts like a community of pooled interests with no central control.
/jlne.ws/3FUUvfs

Crypto Can Complement Mobile Money in Africa, Kenyan Banker Says
Bella Genga – Bloomberg
Cryptocurrency can supplement mobile money in Africa if regulators can be convinced of its benefits, according to the chief executive of Kenya’s biggest lender by market value. Many central banks on the continent have warned against trading cryptocurrency, while some have made it outright illegal. The Central African Republic is the only African nation to have adopted the digital assets and the South African Reserve Bank is formulating rules to protect investors.
/jlne.ws/3woyWkr

MicroStrategy’s Bitcoin Timing Shows a Spotty Scorecard
Bailey Lipschultz and Tom Contiliano – Bloomberg
Bitcoin’s slide below $30,000 has dragged MicroStrategy Inc.’s stash of the cryptocurrency underwater, muddying founder Michael Saylor’s strategy of betting on the token. The software maker has disclosed new Bitcoin additions nearly two dozen times, with the first back in August 2020. However, all but four of those times they paid more on average than the current price of around $30,000. The first four purchases in late 2020 — amassing just over 70,000 coins for just $1.13 billion — have nearly doubled in value.
/jlne.ws/3wpg6ts

Binance Seeks German License to Expand European Operations; Crypto exchange in talks with BaFin over permissions, CEO says; Regulator warned against Binance’s stock tokens in 2021
Emily Nicolle – Bloomberg
Binance is courting Germany’s financial regulator over a license to operate in the country, a little over a year after it was admonished for offering stock-like tokens without publishing an investor prospectus.
/jlne.ws/3wDX8xY

Crypto Analytic Firm Nansen Buys NFT Portfolio Tracker Ape Board
Joanna Ossinger – Bloomberg
Blockchain data-analytics firm Nansen has bought a top portfolio tracker in the decentralized-finance and nonfungible-token space and says it has aggressive growth plans in what could be a consolidation period for cryptocurrencies in the next year or so.
/jlne.ws/3yGP02A

Politics

Europe accused of ‘double standard’ on Ukrainian refugees
Edith M. Lederer – AP
The quick acceptance of Ukrainians fleeing Russia’s aggression puts a spotlight on Europe’s “double standard” for migrants, standing against its nonwelcome for people fleeing violence in Africa, the Mideast and elsewhere, the head of the world’s largest humanitarian network said Monday. Francesco Rocca, president of the International Federation of Red Cross and Red Crescent Societies, said he doesn’t think “there is any difference” between someone fleeing eastern Ukraine’s Donbas region and someone escaping the Boko Haram extremist group in Nigeria.
/jlne.ws/3wl2Yph

If Elon Musk does buy Twitter, free speech absolutism will not be enough; The possible new owner of the platform will soon learn how hard it is to retain the trust of users
Marietje Schaake – FT
After weeks of speculation about the putative new owner’s style and impact, it is now unclear whether Elon Musk will actually end up buying Twitter. After announcing a $44bn bid, he subsequently complained about the number of fake accounts on the social media platform and said the deal would not “move forward” until Twitter provided satisfactory data on the scale of the problem.
/jlne.ws/39ufaek

US Seeks to Wean India From Russia Weapons With Arms-Aid Package; Potential $500 million deal would put India near Israel, Egypt; India is the largest buyer of Russian made military hardware
Sudhi Ranjan Sen and Peter Martin – Bloomberg
The US is preparing a military aid package for India to deepen security ties and reduce the country’s dependence on Russian weapons, people familiar with the matter said. The package under consideration would include foreign military financing of as much as $500 million, according to one person, which would make India one of the largest recipients of such aid behind Israel and Egypt. It’s unclear when the deal would be announced, or what weapons would be included.
/jlne.ws/3lonoYi

Colombia’s No. 1 Banker Has No Fear of Leftist Front-Runner; Luis Carlos Sarmiento, CEO of Grupo Aval speaks in interview; Strong economic growth to dissuade sharp shifts: Sarmiento
Daniel Cancel and Andrea Jaramillo – Bloomberg
Luis Carlos Sarmiento Gutierrez would figure to be one of the people fretting the most about the looming election of the first left-wing leader in Colombia’s modern history. Sarmiento oversees the biggest banking operation in the country, Grupo Aval, and a $7 billion family fortune that ranks as one of the largest in all of Latin America. But Sarmiento, at least publicly, betrays little angst about the outcome of the vote this month.
/jlne.ws/39BF0xe

Boris Johnson must embrace the Brexit he made; The row over Northern Ireland risks a deeper decline in UK trade in response to threats of violence from a tiny minority
Martin Wolf – FT
In his general election campaign of 2019, Boris Johnson promised the country that he would “get Brexit done”. He has failed. Once again he is planning a law to allow him to repudiate parts of the UK’s Brexit deal on Northern Ireland, on which he campaigned. This would destroy the UK’s reputation for keeping its word, invite a parallel EU repudiation of its free trade deal with the UK, enrage the Biden administration and divide the west.
/jlne.ws/3LpFi7v

Regulation

UK regulators struggle to recruit staff for post-Brexit roles; CMA, HSE and FSA are facing shortfall of lawyers, vets and toxicologists, warns spending watchdog
Peter Foster – FT
Three key UK regulators are struggling to recruit and train enough staff to implement the government’s promise to deliver Brexit benefits, a report by the spending watchdog has found. The National Audit Office found that the shortages had left the Competition and Markets Authority, the Health and Safety Executive and the Food Standards Agency facing significant challenges in standing up bespoke, post-Brexit regulatory regimes.
/jlne.ws/3NlpKDc

Wall Street Bond Traders Get New Warning From SEC Chief
Lydia Beyoud – BNN Bloomberg
Wall Street bond traders are getting another warning that they might soon have less time to report their transactions to regulators. Securities and Exchange Commission Chair Gary Gensler repeated his call to slash the amount of time that traders have to report many bond transactions as part of a bid to increase visibility into fixed-income markets. Speaking at an event on Monday, Gensler said that he thought the current 15-minute limit was too long. “We can shorten this time frame,” Gensler said during a Financial Industry Regulatory Authority event. “That’s a lifetime in markets.”
/jlne.ws/39xR8ir

SIFMA Recommends a Full Market Close on May 30 in the U.K. in Observance of the Memorial Day Holiday
SIFMA
SIFMA has confirmed its previous recommendation for a full market close on Monday, May 30, 2022, for the trading of U.S. dollar-denominated fixed income securities in the U.K. in observance of the U.S. Memorial Day holiday.
/jlne.ws/3wqJaB0

Chairman Behnam to Give a Luncheon Keynote at the Managed Funds Association’s Annual Legal and Compliance Conference
CFTC
Chairman Rostin Behnam will give a luncheon keynote at the Managed Funds Association’s Annual Legal and Compliance Conference
/jlne.ws/3MpQUIK

CFTC Announces Advisory Committee Sponsorships
CFTC
The Commodity Futures Trading Commission today announced the sponsorships of the agency’s advisory committees. Commissioner Kristin N. Johnson will sponsor the Market Risk Advisory Committee; Commissioner Christy Goldsmith Romero will sponsor the Technology Advisory Committee; Commissioner Summer Mersinger will sponsor the Energy and Environmental Markets Advisory Committee; Commissioner Caroline D. Pham will sponsor the Global Markets Advisory Committee; and Chairman Rostin Behnam will sponsor the Agriculture Advisory Committee.
/jlne.ws/3FU5yFY

CFTC Charges Florida Man and His Two Entities for Operating a $3.4 Million Commodity Futures Fraud
CFTC
The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Southern District of Florida against Damian Castilla and his companies, DCAST Capital Investments LLC and Five Traders LLC, all of Miami, Florida, alleging that from January 2014 through the present, Castilla and his companies defrauded at least 50 pool participants of approximately $3.4 million through commodity pools that purported to trade commodity futures.
/jlne.ws/3FXqlbN

FINRA Annual Conference: Fireside Chat with Eileen Murray
FINRA.org (Audio)
The FINRA Annual Conference is happening now, in-person in Washington, DC, and virtually. The event is packed full of panels with information on all the latest compliance trends and emerging regulatory issues.
On today’s episode, we’re taking you behind the scenes of the opening plenary session, a conversation between FINRA President and CEO Robert Cook and the outgoing chair of the FINRA Board of Governors, Eileen Murray.
/jlne.ws/3wo8yqK

SEC Charges Allianz Global Investors and Three Former Senior Portfolio Managers with Multibillion Dollar Securities Fraud; Allianz Global Investors Agrees to Pay More Than $1 Billion to Resolve SEC Charges
SEC
The Securities and Exchange Commission (SEC) today charged Allianz Global Investors U.S. LLC (AGI US) and three former senior portfolio managers with a massive fraudulent scheme that concealed the immense downside risks of a complex options trading strategy they called “Structured Alpha.” AGI US marketed and sold the strategy to approximately 114 institutional investors, including pension funds for teachers, clergy, bus drivers, engineers, and other individuals. After the COVID-19 market crash of March 2020 exposed the fraudulent scheme, the strategy lost billions of dollars as a result of AGI US and the portfolio managers’ misconduct. AGI US has agreed to pay billions of dollars as part of an integrated, global resolution, including more than $1 billion to settle SEC charges and together with its parent, Allianz SE, over $5 billion in restitution to victims.
/jlne.ws/3wpWrtA

“Investor Protection in a Digital Age,” Remarks Before the 2022 NASAA Spring Meeting & Public Policy Symposium
Chairman Gary Gensler – SEC
Thank you, Melanie. My thanks to the state securities regulators in the audience and to the North American Securities Administrators Association (NASAA) for your vital work to protect investors.
As is customary, I’d like to note that my views are my own, and I’m not speaking on behalf of the Commission or SEC staff.
Today, you’ve asked me to talk about investor protection in a digital age.
/jlne.ws/3FWFr14

Testimony at Hearing before the Subcommittee on Financial Services and General Government U.S. House Appropriations Committee
SEC.gov
Good morning, Chairman Quigley, Ranking Member Womack, and members of the Subcommittee. I’m honored to appear before you for the second time as Chair of the Securities and Exchange Commission. It is good to be here alongside Federal Trade Commission Chair Khan. As is customary, I’d like to note that my views are my own, and I am not speaking on behalf of my fellow Commissioners or the SEC staff.
/jlne.ws/3LjIDVH

Consultation on Adjustment Spreads for the Transition of Legacy SOR Contracts in Wholesale Markets
MAS
The Monetary Authority of Singapore (MAS) and the Steering Committee for SOR & SIBOR Transition to SORA [1] (SC-STS) today jointly announced an SC-STS consultation on adjustment spreads that will apply to legacy SOR business loans and derivatives. The consultation covers the setting of the MAS Recommended Rate [2] to provide contractual certainty for SOR contracts that remain outstanding after 31 December 2024, and supplementary guidance to support the on-going transition of legacy SOR contracts in wholesale markets.
/jlne.ws/3FUgCmv

Fund managers’ inconsistent performance measurement and cost of fees reduces benefits to investors
Financial Markets Association – New Zealand
The managers of New Zealand managed investment schemes (MIS or KiwiSaver/fund managers) are showing repeatable performance, relative to appropriate market indices. However, the benefits of their skill to investors in some funds is reduced by fees, and the costs of commission paid by managers to third parties.
/jlne.ws/3MsTX2T

Investing and Trading

Conditions for Higher Airfares Could Persist for Years, Frontier Airlines Chief Says
Alison Sider – WSJ
Airfares could remain high for the foreseeable future, as the forces pushing prices upward aren’t going away, Barry Biffle, chief executive of Frontier Group Holdings Inc., said Tuesday. “Their input costs are going up. Unless that subsides, I can’t see why fares would go down,” Mr. Biffle said, speaking at The Wall Street Journal’s Future of Everything Festival. Airline fares surged 18.6% in April from a month earlier, the fastest rise on record, according to the latest data from the Bureau of Labor Statistics’ Consumer Price Index.
/jlne.ws/3wo4x5G

Stock Selloff Crunches SPAC Creators as They Race to Find Deals; SPAC mergers have become harder to find, and creators stand to lose money without a deal; ‘It’s a ticking time bomb’
Amrith Ramkumar – WSJ
An investor stampede out of risky trades is squeezing SPACs that are running out of time to find companies to take public, potentially leaving their architects without deals and saddled with sizable losses. Firms that have gone public through mergers with special-purpose acquisition companies have tumbled lately alongside the technology sector and cryptocurrencies. Supply-chain disruptions and technological setbacks have hurt many startups, combining with worries about high inflation and rising interest rates.
/jlne.ws/3FXqhsz

Central banks seek interest rate sweet spot in inflation fight; Getting the balance between growth and inflation just right is fraught with difficulty
Martin Arnold, Colby Smith and Chris Giles – FT
Almost all central bankers in the US and Europe agree rates must rise to tackle soaring inflation. What is open for debate is where they should stop. Monetary policymakers and markets are trying to assess where lies the “Goldilocks”, or neutral, level of rates — the optimal level where an economy is neither overheating nor being held back. But, after almost 15 years of tepid inflation and ultra-low borrowing costs, no one is quite sure what “just right” looks like.
/jlne.ws/3Lo40VS

UK trading firm XTX consolidates market position with record profits; Earnings generate multimillion pound payout for Russia-born owner Alexander Gerko
Eva Szalay – FT
XTX Markets made a record profit last year, solidifying the UK trading firm’s position at the heart of financial markets and generating a multimillion pound payout for owner Alexander Gerko. London-based XTX made £667mn in net profits in 2021, a record for the six year old company, compared with £470mn in 2020 as it benefited from turbulent, pandemic-hit markets, according to figures seen by the Financial Times that have been filed at Companies House.
/jlne.ws/3wqsg5x

Environmental, Social and Corporate Governance

Canada Can Boost Oil Output by 900,000 Barrels a Day, Kenney Says; ‘Let’s be visionary about this,’ premier tells US senators; Estimate roughly triples a pledge by Canadian energy minister
Robert Tuttle – Bloomberg
Canada’s oil production could increase by 900,000 barrels a day to make up for supply losses from Russia’s war in Ukraine, according to the premier of the province of Alberta. Premier Jason Kenney gave the estimate in testimony before a U.S. Senate committee on Tuesday. It’s about triple the estimate delivered weeks ago by Canadian Natural Resources Minister Jonathan Wilkinson.
/jlne.ws/3wqujqd

Pimco Sued Over ‘Fraternity’ Culture by Minority Ex-Workers; Two men claim unequal treatment over pay and promotions; Company calls allegations baseless, an affront ‘to the facts’
Malathi Nayak – Bloomberg
Pacific Investment Management Co. now has both men and women suing over a “fraternity” culture that allegedly favors White males. Two men, a Black ex-employee and a former contractor who is Asian, claim minority professionals at the money manager are promoted in fewer numbers, earn less for equal work and are often denied mentorship opportunties to help them rise up the ranks. Pimco has discriminatory performance evaluations and unfair promotion and job assignment policies that sideline minorities, Andre Dowtin and Patrick Kim said in a complaint filed in California’s Orange County Superior Court.
/jlne.ws/3lnCDjW

Hong Kong has the ability to be a green finance hub, but none of the vision; The success of the government’s green bond scheme provides plenty of scope for investing in groundbreaking energy projects and pursuing ambitious climate policy; Yet, our leaders can’t seem to think bigger than a few low-carbon buildings and waste management fees
Jill Baker – South China Morning Post
Covid-19 has given many in Hong Kong a renewed appreciation for green living. During the pandemic, our sprawling country parks and stretches of coastline provided respite from the tense, dense city. Communing with nature was one of the things that friends told me had kept them sane over the past two years. That’s why it’s disappointing that our government does not appear more committed to a cleaner, greener environment and a more sustainable way of life. Its inaugural Retail Green Bond, marketed this month, was a wasted opportunity for promoting green policy.
/jlne.ws/3MsFzrv

U.S. Allows Chevron to Maintain Venezuela Operations but Won’t Permit Drilling; License extension seeks to encourage talks between Maduro government and opposition
José de Córdoba,. Ken Thomas – WSJ
The U.S. extended a limited license held by Chevron Corp. on Tuesday that allows the oil company to maintain its operations in Venezuela and negotiate future business in an attempt to encourage talks between the government of Venezuelan President Nicolás Maduro and the U.S.-backed opposition to open a path to free and fair elections. The U.S. didn’t expand the license to allow Chevron to drill for and market Venezuelan crude, as the company had hoped. Chevron didn’t immediately respond to a request for comment.
/jlne.ws/38BLwnp

UK Hedge Funds Expect ESG Cash Swell as New Rulebook Is Written; Local regulators are signaling they may break away from the EU in their treatment of short-selling.
Lisa Pham – Bloomberg
Hedge funds based in the UK may soon be handed a competitive edge over their peers in the EU, when it comes to ESG investing. Britain, unlike the EU, has signaled it’s willing to enshrine the role that short-selling plays in environmental, social and governance investing in the foundations of its ESG rulebook. The Financial Conduct Authority has “explicitly sought feedback on the role of derivatives, short-selling and securities lending in sustainable investing” because “we need to ensure that our regulatory framework is appropriately designed to accommodate the breadth of ESG strategies observed in the market,” the UK regulator told Bloomberg in an email.
/jlne.ws/3NloY9g

Divest fossil fuels — the time for engagement is over; Investors must use their collective might to accelerate the transition to renewable energy
Daniel Godfrey – FT
The environmental dilemmas facing asset managers were exposed last week, when the world’s largest player BlackRock announced it would be supporting relatively few shareholder resolutions on climate this year.
/jlne.ws/3wGVcVQ

Institutions

Goldman, JPMorgan Could Get $133 Million for Advising Twitter on Musk Deal
Michelle F Davis – Bloomberg
Goldman Sachs Group Inc. and JPMorgan Chase & Co. are set to earn a combined $133 million in fees for advising Twitter Inc. on its $44 billion acquisition by Elon Musk — if the deal closes. Twitter agreed to pay Goldman Sachs $80 million, the bulk of which will get paid once the deal closes, according to a US securities filing on Tuesday. The bank got $15 million of that when the deal was announced. JPMorgan is poised for a $53 million payout, $5 million of which was payable after the lender delivered its opinion to Twitter’s board on April 25. The rest hinges on the deal closing.
/jlne.ws/3FUV7Si

Tiger Cubs and the Danger of Hedge Funds Buying Too Many Unicorns; Chase Coleman’s Tiger Global became one of the world’s busiest venture capital investors. Any regrets yet?
Shuli Ren – Bloomberg
Last year, when the tech sector was all the rage, hedge funds raced to private markets, writing million-dollar checks in minutes, to get exposure to the next-generation of unicorns before anyone else. As the Nasdaq selloff pummels their portfolios, it’s worth asking what their investments are worth now and if they have any second thoughts. The most prominent crossover investor — industry jargon for hedge funds that also do venture capital — is Chase Coleman’s Tiger Global Management LLC. The firm’s public stock positions fell from $46 billion at the end of 2021 to just over $26 billion as of March.
/jlne.ws/3Ms18sa

Goldman’s Unlimited Vacation Is a Mirage for Workaholic Bankers; Long holidays are frowned upon on Wall Street and the impact of the new employee perk will depend on bosses embracing the policy.
Matthew Boyle – Bloomberg
Goldman Sachs Group Inc.’s move to offer senior bankers unlimited time off seemingly marks a step toward a softer side of Wall Street. But there’s policy, and then there’s practice. Companies are experimenting with all sorts of employee-friendly policies — the four-day workweek, no-meeting Wednesdays, more casual dress codes — but unless they’re embraced by the firm’s leadership, they won’t make much of a difference. In a banking world where long vacations are generally frowned upon, providing partners and managing directors all the time off they want doesn’t matter if they simply don’t take it.
/jlne.ws/3lnvwIi

Investors Who Shorted Russia ETFs Are Now Stuck Paying Never-Ending Fees; Shorts have paid $2.6 million in borrow fees since ETFs halted; Borrow rates rose as Russia-Ukraine tensions intensified
Elaine Chen – Bloomberg
Investors who bet against ETFs tracking Russian assets in the build up to the Ukraine invasion made the right call — and they’ve been paying the price ever since. Stocks linked to Russia plunged following the outbreak of war and subsequent economic punishment meted out to the country, vindicating bearish wagers. But sanctions also made trading Russian securities almost impossible, leaving short sellers unable to exit their positions.
/jlne.ws/3wvwyY8

Solid welcomes Darren Barker to expand the Institutional Sales team; Solid is one of the leading non-bank market makers and multi-bank ECN’s in the Institutional FX marketplace
ZAWYA
Solid, one of the leading non-bank market makers and multi-bank ECN’s in the Institutional FX marketplace has today announced it is expanding its institutional sales drive by welcoming Darren Barker to the team as the new Head of Business Development. Barker has over 30 years FX financial markets experience that has covered a wide range of roles including risk management, market making and client relationship management. His client focus within the institutional sector has included Hedge Funds, CTA’s, Asset Managers and Family Offices. More recently he has been working on growing and developing Prime Brokerage based businesses for leading Brokerage companies within the FX Agency space.
/jlne.ws/3yHZf6E

Barclays doubles stake in Australian investment bank Barrenjoey; UK bank commits to lender that has emerged as an M&A leader
Nic Fildes – FT
Barclays has doubled its stake in Barrenjoey to almost 20 per cent after it paid A$75mn ($53mn) for new shares in the Australian investment bank that is rapidly expanding its financial services range. Barrenjoey, which means “young kangaroo”, was launched in 2020 and backed by Australian fund manager Magellan and Barclays.
/jlne.ws/3wA6DP1

Wellness Exchange

China diverts anti-poverty funds to Covid testing as crisis deepens; Local governments say resources are being used to cover costs of zero-Covid policy
Sun Yu in Beijing – FT
China’s cash-strapped local governments have been forced to divert funds from poverty alleviation and infrastructure to finance mass coronavirus testing as President Xi Jinping’s zero-Covid policy causes growing financial strains. An official in the north-eastern city of Jilin said authorities had earmarked a “significant” portion of state-backed funds intended to reduce poverty to buy PCR tests, after an outbreak that has infected more than 26,000 people since March. In the southern industrial hub of Quanzhou, local officials said an ambitious infrastructure investment plan had slowed in part because the authority reallocated funds to testing following an outbreak that has infected more than 3,000 people over the past two months.
/jlne.ws/3MsOuJo

Covid-Testing Unicorn Is Plotting Bets for Post-Virus World; Prenetics merged with SPAC of Hong Kong tycoon Adrian Cheng; The biotech company aims to hit $640 million in sales by 2025
Venus Feng – Bloomberg
In less than a decade, Prenetics Group Ltd. transformed itself from a DNA-kit maker to a major Hong Kong Covid-19 test provider. Now as the coronavirus ebbs in the city — and the rest of the world adjusts to living with it — Chief Executive Officer Danny Yeung is already planning its next pivot.
/jlne.ws/37Z7jFi

How can Covid-19 affect the human brain? Scientists are trying to understand the cause of neurological effects and whether symptoms will be long-lasting
Sarah Neville, Oliver Barnes and Ian Bott – FT
The cognitive impairment caused by severe Covid-19 is comparable with the decline that takes place between the ages of 50 and 70, according to a recent study by Cambridge university and Imperial College London. Researchers said the degeneration was equivalent to losing 10 IQ points. The findings, published earlier this month, were the latest in a series of studies that suggest Covid-19 has an impact on the brain.
/jlne.ws/38yDjQI

Regions

HSBC’s Legion of Hong Kong Retail Investors Warm to Breakup Call; Ping An’s push to split HSBC gains traction in Hong Kong; Hong Kong shareholders are frustrated by slump in dividend
Denise Wee and Olivia Tam – Bloomberg
Smarting from HSBC Holdings Plc’s move to scrap its dividend during the height of the pandemic, the bank’s largely silent mass of retail shareholders in Hong Kong is warming up to the idea of a breakup. Splitting up Europe’s biggest bank to separate out its Asian operations is being pushed by its largest investor, Ping An Insurance Group Co., based just across the border in Shenzhen. The call is winning support in Hong Kong’s retail base, which owns about a third of the bank, with some seeing it as a surefire way of preventing the steady stream of payouts from being cut off again.
/jlne.ws/3LmSt91

Saudi Aramco Weighs IPO of Trading Unit Amid Oil Boom; Saudi oil giant working with Goldman, JPMorgan, Morgan Stanley; Aramco Trading business could be worth more than $30 billion
Julia Fioretti, Nicolas Parasie, Matthew Martin, and Dinesh Nair – Bloomberg
Saudi Aramco is considering an initial public offering of its trading arm amid a boom in oil prices in what could be one of the world’s biggest listings this year, according to people with knowledge of the matter. The state-controlled oil major is working with banks including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley as it studies a potential listing of Aramco Trading Co., the people said, asking not to be identified as the information isn’t public.
/jlne.ws/3wzJCvr

Russia says fertiliser producers want to ship potash
Reuters
The Kremlin said on Tuesday that Russian fertiliser producers were trying to fulfil contracts despite Western sanctions against them, which posed a risk to global food security. Spokesperson Dmitry Peskov was responding to a question about a reported proposal by U.N. Secretary-General Antonio Guterres that Russia allow the shipment of some Ukrainian grain to alleviate a global food crisis in return for facilitation of Russian and Belarusian exports of potash fertiliser, currently restricted under sanctions over the conflict in Ukraine.
/jlne.ws/3NDzYPx

Miscellaneous

Wingstop’s Plan to Control Chicken Costs Is to Start Raising Its Own Animals; Company is considering buying or building farm as costs surge; CEO said his supply-chain team has visited established farms
Leslie Patton – Bloomberg
Chicken-wing chain Wingstop Inc. is actively looking at the potential purchase of a poultry company in order to better control the volatile cost of chicken. Wingstop still has as much as $150 million in proceeds from its bond sale earlier this year. This could be used to fund any transaction, according to Chief Executive Officer Michael Skipworth, who took the helm in March. He said the company hired outside experts to evaluate integrating a chicken farm into the company’s supply chain — or building its own, an option that would take longer to bring online.
/jlne.ws/3NpmxCD

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