Luxembourg among biggest winners from Brexit

Sep 15, 2020

First Read

New Retail Interest Spurs Renewed Focus on Investor Education
By Suzanne Cosgrove, John Lothian News

Equity markets are seeing an influx of new retail interest, with up to 25 percent of market activity executed by retail investors on peak days this year, compared with about 10 percent in 2019, said John Zecca, Nasdaq’s executive vice president and chief legal and regulatory officer.

The trend is pushing market professionals and regulators to look at comprehensive ways to educate and protect novice market entrants.

“During this time period, we have seen some challenging questions,” including about complex investments like inverse exchange-traded funds (ETFs) and options leverage accounts, said Lori Schock, head of the SEC’s office of investor education and advocacy. “We’re a disclosure-based system in the U.S.,” she said. “We need people to read and understand it. You need to do your homework.”

Schock was among the half-dozen panelists who examined the retail trend Monday in a Nasdaq-sponsored webinar titled, “The Evolution of Retail Investing and Related Obligations.”

To read the rest of this story, go HERE.


Hits & Takes
John Lothian & JLN Staff

Mohamed Bourouissa, a French-Algerian artist, was awarded the Deutsche Börse Photography Foundation Prize 2020 for the exhibition “Free Trade.” Bourouissa (born 1978) was awarded the prestigious prize, worth 30,000 British pounds, on Monday 14 September 2020. The announcement was made during an online presentation by the Photographers’ Gallery in London.

Today, the FT has a special report about Luxembourg as a financial center. “Luxembourg is among the biggest winners from Brexit as businesses shift operations out of UK. The Grand Duchy has built on its strengths in private banking, investing, insurance and corporate lending developed over the past half century.”

The stories from the special report have these headlines:

    • Luxembourg among biggest winners from Brexit
    • Luxembourg financial watchdog sharpens its teeth
    • Luxembourg post-pandemic stimulus ‘should be sustainable’
    • Luxembourg tries to shed ‘tax haven’ label
    • Luxembourg strengthens status as offshore renminbi centre
    • Secure, green and international: why Luxembourg suits expatriates
    • Luxembourg’s older investors turn to robo advisers
    • Shake-up at Luxembourg’s Qatar-owned Quintet bank


The Long Term Stock Exchange is open for business. It actually opened on September 10, in what I would describe as the softest of launches.

David “DJ” Cooke will be joining West Monroe Partners after graduation as a full time software engineering consultant out of their Seattle office. DJ is one of my Eagle Scouts who went to the World Scout Jamboree in Japan in 2015 with help from the readers of this newsletter.

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


Tracking the Unprecedented Food Crisis Brought on by Covid-19
Contributors: Millie Munshi – Bloomberg
The world is hurtling toward an unprecedented hunger crisis. The pandemic is upending food supply chains, crippling economies and eroding consumer purchasing power. In a worst-case scenario, about a tenth of the world’s population won’t have enough to eat. Some projections show that by the end of the year, more people will die each day from hunger than from Covid-19.

******In the U.S., we are lucky to have local food banks to help address the hunger crisis. But those food banks need your support. The food bank for Chicago is the Greater Chicago Foodbank. One in seven people in Chicago will experience food insecurity during 2020. September is Hunger Action Month. You can donate to the Greater Chicago Food Depository HERE. Or, find your local food depository or food bank and give to it.~JJL


At JPMorgan, Productivity Falls for Staff Working at Home
Michelle F Davis – Bloomberg
‘Creative combustion’ has taken a hit, KBW analysts say; JPMorgan CEO Dimon discussed bank’s findings with KBW
A troubling pattern emerged as most of JPMorgan Chase & Co.’s employees worked from home to stem the spread of Covid-19: productivity slipped. Work output was particularly affected on Mondays and Fridays, according to findings discussed by Chief Executive Officer Jamie Dimon in a private meeting with Keefe, Bruyette & Woods analysts. That, along with worries that remote work is no substitute for organic interaction, is part of why the biggest U.S. bank is urging more workers to return to offices over the coming weeks.

*****This may be the exception rather than the rule – according to a recent study published by the Harvard Business Review, the productivity of “knowledge workers” – people whose job involves the use of specialized knowledge, which probably applies to most of JPMorgan’s WFH employees – has actually increased during the pandemic. While some aspects of work life, including direct management methods, have become more difficult, the study found that knowledge workers seem to be more intrinsically motivated.~MR


Mohamed Bourouissa was awarded the Deutsche Börse Photography Foundation Prize 2020
Deutsche Börse
Mohamed Bourouissa receives the Deutsche Börse Photography Foundation Prize 2020. The French-Algerian artist is awarded for the exhibition “Free Trade”. Mohamed Bourouissa (born 1978) was awarded the prestigious prize worth 30,000 British pounds on Monday 14 September 2020. The announcement was made during an online presentation by the Photographers’ Gallery in London. The accompanying film provided an overview of the history of the Photography Prize as a warm-up before the work of Bourouissa and this year’s three other finalists Anton Kusters, Mark Neville and Clare Strand were presented. The winner was then announced.

****Photojournalism has always been a powerful medium for showing stories that need attention. Mr. Bourouissa’s work continues that heritage.~JB


Vinyl record sales surpass CDs for the first time since the 1980s
Jazmin Goodwin – CNN
The days of vinyl records being a nostalgic relic of the past are long gone. This year, vinyl sales have outpaced CD sales in the United States for the first time since the 1980s.
Vinyl records accounted for $232.1 million of music sales in the first half of the year, compared to CDs, which brought in only $129.9 million, according to a report from the Recording Industry Association of America.

****I wholeheartedly support this. Raise your hand if you miss reading liner notes.~JB


Monday’s Top Three
Our top story Monday was These 5 Habits Will Help You Stay Focused All Day. A Psychologist Explains Why, from Second was Miax joins challengers to dominant US exchange operators, from the Financial Times. Third was The Wildly Popular Trades Behind the Market’s Swoon and Surge, from the Wall Street Journal.


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Lead Stories

Luxembourg among biggest winners from Brexit; Trade deal uncertainty is a boon for Grand Duchy as it vies to grab business from the City of London
Philip Stafford – FT
As one of the smallest countries in the EU, Luxembourg has a proud record. Two of the last five presidents of the European Commission, one of the top jobs in the bloc, have been former Luxembourg prime ministers: Jean-Claude Juncker and Jacques Santer.

UBS Chairman Studies Feasibility of Credit Suisse Deal
Jan-Henrik Foerster – Bloomberg
Assessment is part of internal planning procedures, people say; A deal would likely face regulatory hurdles, analyst says
UBS Group AG Chairman Axel Weber has been studying the feasibility of a mega-merger with rival Credit Suisse Group AG as part of a regular thought-exercise on future strategic options, according to people familiar with the matter. UBS, the world’s largest wealth manager, has been exploring the question with consultants but it hasn’t raised the topic at the level of the executive board, the people said. The assessment is part of regular internal planning procedures and there are currently no formal discussions going on between the two banks, said the people, who asked for anonymity because the information isn’t public.

Citi Faces Possible OCC, Fed Reprimand Over Risk Controls
Jennifer Surane and Jesse Hamilton – Bloomberg
Regulators are considering a public reprimand of lender; Bank says it has several projects underway to improve controls
Federal regulators are weighing taking actions against Citigroup Inc. over deficiencies in the bank’s risk and control functions that have persisted even after the lender spent an additional $1 billion on those areas this year. The Office of the Comptroller of the Currency along with the Federal Reserve have weighed publicly reprimanding the bank, a move that could involve a consent order, according to people familiar with the matter, who asked not to be identified discussing regulatory matters. The bank remains in discussions with both overseers and any action isn’t imminent, the people said.

Regulators Prepare to Reprimand Citigroup for Failing to Improve Risk Systems; Moves accelerated plans for CEO Michael Corbat’s retirement
David Benoit and Ben Eisen – WSJ
Federal regulators are preparing to reprimand Citigroup Inc. C -5.59% for failing to improve its risk-management systems—an expansive set of technology and procedures designed to detect problematic transactions, risky trades and anything else that could harm the bank.

Bank of England delays government bond purchase after settlement glitches; Central bank pushes back reverse auction following problems at Crest hub
Philip Stafford – FT
The Bank of England delayed a gilt purchase auction for the first time in more than three years on Monday, following outages in a vital part of the UK securities market’s infrastructure.

BNP Paribas Securities Services joins forces with Digital Asset to develop DLT trade and settlement apps
BNP Paribas Securities
BNP Paribas Securities Services today announces a new partnership with Digital Asset to design a number of real-time trade and settlement apps using DAML smart contracts. The new apps will provide market participants in Asia Pacific with real-time access to the Australian Securities Exchange (ASX) and Hong Kong Exchange (HKEX)’s anticipated DLT -based trading and settlement platforms. The apps will also be available to clients in markets that have not integrated DLT, bringing them the benefit of real-time workflows.

EU set to extend access to London clearing houses to mid-2022; Central banks have warned of disruption without smooth post-Brexit transition
Philip Stafford and Jim Brunsden – FT
The EU is preparing to offer its banks an 18-month extension on access to London’s crucial markets infrastructure as it seeks to prevent a jolt to financial stability when the UK’s Brexit transition period expires at the end of the year.

USDA Boss’s Home State, Georgia, Got Most Trade Aid Per Farmer
Mike Dorning – Bloomberg
Democrats attack aid payments as tilted to South, large farms; Senate Democrats requested GAO probe of $28 billion program
Farmers in U.S. Agriculture Secretary Sonny Perdue’s home state of Georgia received the highest average payments last year under President Donald Trump’s trade aid program, the Government Accountability Office found in a report released Monday. mSenate Democrats said the findings confirm their long-standing complaints that Trump’s $28 billion trade aid program was unfair to family farmers in the Midwest because farms in the South got higher average payments and a large portion of aid went to bigger farms.

Boris Johnson suffers rebellion over contentious Brexit bill; PM secures vote but senior Tories come out against internal market legislation that threatens international law
George Parker, Jasmine Cameron-Chileshe and Jim Pickard – FT
Boris Johnson was on Monday night hit by a Conservative revolt over his plan to break international law on Brexit, as a number of high-profile Tory MPs refused to back a bill that overrides his own exit deal.

UBS chairman maps out Credit Suisse merger; Axel Weber brought in management consultants to examine potential for a deal
Owen Walker and Stephen Morris – FT
UBS chairman Axel Weber has mapped out a merger with Credit Suisse that would create a unified Swiss champion in wealth management and investment banking. Mr Weber has used external management consultants to examine the potential for a deal but no formal discussions have taken place with Credit Suisse or with managers or directors at UBS, according to people briefed on the matter.

Banks Balk at Fed’s $600 Billion Lifeline for Main Street Firms
Lisa Lee, Catarina Saraiva, and Michelle F Davis – Bloomberg
Just $1.4 billion of loans have been issued amid onerous terms; Small take-up could stall economic recovery, support for jobs
It was billed as a lifeline for America’s middle-market companies seeking cash to get through the pandemic. Yet more than two months since its launch, the Federal Reserve’s Main Street Lending Program isn’t living up to expectations as few banks are willing to provide the loans. Some of the nation’s biggest lenders have demanded such crushing terms that discussions have stalled from the get-go, while other banks have decided not to participate at all. That’s meant the take-up for the $600 billion program is just 0.2%, threatening to undercut the economic recovery and efforts to protect jobs.

How India’s mutual fund industry got knocked for six; Franklin Templeton debacle highlighted liquidity risks at a time of falling inflows
Benjamin Parkin – FT
Two young cricketers pause for a water break after a practice session in the nets, only to be approached by legendary batsman Sachin Tendulkar. But the icon is not there to talk about sports. “Before spending [your money], why don’t you think of investing it?” he asks them.

House Moderates Plan $1.52 Trillion Bipartisan Relief Compromise
Erik Wasson – Bloomberg
Problem Solvers Agree on $1.5 trillion in virus relief; Proposal offers glimmer of hope in stalled negotiations
A 50-member group of House Democrats and Republicans will release a $1.52 trillion coronavirus stimulus plan Tuesday in a long-shot attempt to break a months-long deadlock on providing relief to the pandemic-battered U.S. economy.


French cities act against resurgence of virus; Bordeaux and Marseille clamp down on socialising and give police new powers to enforce measures
David Keohane and Leila Abboud – FT
French cities grappling with a resurgence of Covid-19 have announced several restrictions, including limits on partying and large events, as the country resorts to local measures to try to avoid another national lockdown.

George Washington Enrollment Drops 17% in Pandemic Setback
Janet Lorin – Bloomberg
George Washington University’s enrollment is down about 17% from last year, an early indication of the impact of Covid-19 on U.S. higher education. President Thomas LeBlanc told a faculty senate meeting that preliminary undergraduate enrollment is about 1,000 students below its target of 10,126, a spokeswoman said Monday. Last year, the school in Washington, D.C., drew 12,031 undergrads in the fall, including 1,416 from abroad, and 11,008 were full-time students.

Coronavirus Legal Fight Between Insurers and Businesses Goes Global; A U.K. court will decide whether business interruption policies are clearly worded, while Australian insurers believe a now repealed century-old law allows them to exclude the pandemic
Alice Uribe – WSJ
A debate over whether business-interruption insurance policies held by millions of companies cover a pandemic is increasingly being tested in global courts, drawing in regulators, insurers, industry groups and company owners.

Bill Gates on the Pandemic: ‘You Hope It Doesn’t Stretch Past 2022.’
David Wallace-Wells – NY Magazine
Every year, the Bill and Melinda Gates Foundation releases a Goalkeepers report, tracking the world’s progress toward the U.N.’s Sustainable Development Goals. The news is almost always pretty good. This year’s edition is … not like that. “Almost every time we have opened our mouths or put pen to paper,” the Gateses write in the report’s introduction, “we have celebrated decades of historic progress in fighting poverty and disease. But we have to confront the current reality with candor: This progress has now stopped.” Their annual report tracks global progress on 18 different metrics. “In recent years, the world has improved on every single one. This year, on the vast majority, we’ve regressed.”

The Carnival Cruise Ship That Spread Coronavirus to the World; How were hundreds of infected Ruby Princess passengers allowed to disembark in Sydney and return to homes from Tasmania to Florida?
Matthew Campbell – Bloomberg
At about 6 a.m. on March 19, William Wright, a retired Australian mortgage broker, woke up feeling a little off. He had a cough and his nose was running, though it didn’t seem too bad. In any case, there was no time to linger in bed. Wright and his wife, Lucia, had just docked in Sydney after a 10-day journey around New Zealand on the Ruby Princess, a 950-foot, 1,542-cabin vessel operated by Carnival Corp.’s Princess Cruises subsidiary. The couple’s disembarkation time was 8:05 a.m., so they quickly packed up and had breakfast. They arrived on schedule in the Explorers Lounge, the nightclub where they’d been told to assemble with other passengers leaving at the same time.

Insurance policyholders win Covid-19 High Court test case; Ruling is a ‘significant victory’ for claimants over business interruption payouts
Matthew Vincent and Oliver Ralph – FT
Holders of business interruption insurance have won a “significant” victory in a High Court test case to determine whether the coronavirus pandemic should trigger payouts under their policies.

UK universities see record admissions, despite the pandemic; Jump in A-level grades following government’s Ofqual U-turn aids rise in accepted places
Bethan Staton – FT
UK universities are heading for a “bumper year” of new admissions, according to preliminary figures, defying warnings of a downturn because of coronavirus.

Covid-19 Test Maker Examines False-Positive Results in Nursing Homes; Becton Dickinson is looking into multiple reports from facilities using its Veritor rapid-test machines
Anna Wilde Mathews – WSJ
Becton Dickinson BDX 0.05% & Co. is investigating reports from nursing homes that federally provided rapid coronavirus testing equipment from the company is producing false-positive results in some cases.

How Companies Are Getting Speedy Coronavirus Tests for Employees; Intermediaries are finding labs with capacity for companies seeking to make sure workers are virus-free. But many employers choose to avoid the cost.
Noam Scheiber – NY Times
As businesses try to recover from the pandemic’s economic blow while ensuring the safety of workers and customers, many have complained of two obstacles: access to coronavirus testing for their employees and long delays in receiving results.

Bill Gates Wonders Whether FDA Can Be Trusted on a Covid Vaccine
Erik Schatzker – Bloomberg
Philanthropist says political pressure cost agency credibility; Polls show confidence slipping as Trump pushes for approval
Bill Gates used to think of the U.S. Food and Drug Administration as the world’s premier public-health authority. Not anymore. And he doesn’t trust the Centers for Disease Control and Protection either. Both, in his view, are casualties of a presidency that has downplayed or dismissed science and medicine in the pursuit of political gain. One recent example came when FDA Commissioner Stephen Hahn, speaking at one of President Donald Trump’s news conferences, exaggerated the benefit of blood plasma as a treatment for Covid-19, then backtracked the following day.

Exchanges, OTC and Clearing

Miami International Holdings Announces Fully Subscribed Strategic Equity Rights Transaction with Leading Equities Firms to Trade on MIAX PEARL
Miami International Holdings, Inc.
Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX®, MIAX PEARL® and MIAX Emerald™ options exchanges (the MIAX Exchange Group™), today announced that it has finalized a strategic transaction with industry-leading firms to trade on MIAX PEARL Equities, MIH’s first cash equities exchange. MIAX PEARL Equities will officially join the MIAX Exchange Group on September 25, 2020 when trading begins under MIAX PEARL’s exchange license.

ETF Pioneer SIX Celebrates 20 Years Of Growth
As one of the first European exchanges to launch a segment for Exchange Traded Funds in 2000, today the Swiss Stock Exchange – together with its issuers and market makers – offers investors more choice than ever to trade ETFs in a liquid and secure marketplace.

BARX sales director at Barclays to join Euronext FX as head of US sales; Clinton Norton will depart Barclays after more than 12 years to head up US sales at Euronext FX in November.
Hayley McDowell – The Trade
Pan-European exchange operator Euronext has hired a 12-year sales director at Barclays to lead US sales for its FX trading business, The TRADE can reveal. Clinton Norton has been appointed head of US sales at Euronext FX, and will join the exchange group in November this year.

UPDATE: Revised Regulatory Relief Concerning COVID-19 Pandemic
CME Group
On September 11, 2020, the CFTC issued a notice extending the temporary no-action relief granted to registered U.S. intermediaries in response to the COVID-19 pandemic. The Exchange is issuing this updated notice to confirm that the temporary relief from compliance with certain Exchange rules granted by the Exchange to intermediaries operating from off the trading floor or not on the premises of an entity registered to conduct customer business is also being extended through January 15, 2021 to coincide with the new end date for the CFTC no-action relief. No other substantive changes have been made to this revised SER.

Effective Dates for Spot Month Position Limits in the October 2020 Core Products
CME Group
Spot month limits are effective at the close of trading on the dates listed (in chronological order):

September 2020 Final Foreign Currency Settlement Prices – Effective September 14, 2020
CME Group

Amendments to the Random Length Lumber Futures Contract
CME Group
Effective Sunday, October 4, 2020 for trade date Monday, October 5, 2020, and pending all CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or Exchange”) will implement amendments to the Random Length Lumber Futures contract (the “Contract”) (Rulebook Chapter 201; CME Globex Code: LBS; Clearing Code: LB).

Product Modification Summary: Reduction of the Minimum Price Increment for the Australian Dollar/U.S. Dollar (“AUD/USD”) Futures Contract – Effective: November 23, 2020
CME Group
Effective Sunday, November 22, 2020, for trade date Monday, November 23, 2020, and pending all relevant Commodity Futures Trading Commission (“CFTC”) regulatory review periods, please be advised that Chicago Mercantile Exchange, Inc. (“CME” or “Exchange”) will amend the minimum price increment for the Australian Dollar/U.S. Dollar (“AUD/USD”) futures contract from 0.0001 to 0.00005.

Temporary Amendments of the Listing Schedule of Five (5) FX Weekly Option Contracts to Early List the Monday and Wednesday Week 1 and Friday Week 2 Contracts
CME Group
Effective Sunday, September 27, 2020 for trade date Monday, September 28, 2020, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will implement temporarily amendments of the listing schedule of five (5) FX weekly Options contracts (the “Contracts”) to early list certain weekly contracts on a one-time basis as more specifically described in the table below. Pursuant to the temporary rule amendments, the Exchange will list five weekly instead of four weekly contracts as shown in Appendix A. The listing of the additional weekly contracts pursuant to the temporary rule amendments is designed to provide additional risk management tools in advance of the United States 2020 General Election on November 3, 2020.

Moscow Exchange will partner with the Corporate Secretaries Forum
On October 8-9, 2020, Moscow will host the XIV International Forum of Corporate Secretaries “Culture of Corporate Governance”, which is organized by the National Association of Corporate Secretaries. The Moscow Exchange will act as a partner of the forum. The program includes professional discussions on trends in the development of corporate governance practices, opinions and advice from leading experts, and motivational speakers. The forum will be held in person.

FXCM Expands Trading Offering With Volatility Index CFDs
FXCM Group, LLC (“FXCM Group’ or ‘FXCM’), a leading international provider of online foreign exchange trading, CFD trading, cryptocurrencies and related services is today announcing the addition of Volatility Index CFDs to its range of available trading instruments.


Fintech Startup Klarna Is Valued at $10.65 Billion in New Funding
Natalia Drozdiak – Bloomberg
Snoop Dogg-backed firm raises $650 million from investors; Fintech startup has previously said it’s eyeing an IPO in U.S.
Klarna AB, a Swedish payment provider for online shoppers, is still setting its sights on an initial public offering even after its latest funding round left it roughly twice as valuable as it was a year ago. “Over time, with the amount of shareholders we have, it’s probably going to be the natural evolution,” Chief Executive Officer Sebastian Siemiatkowski, said in an interview on Tuesday.

Klarna valued at $11bn after fresh investment for fintech; Silver Lake, BlackRock and GIC invest $650m in Swedish group ahead of possible IPO
Richard Milne – FT
Silver Lake, Singapore’s sovereign wealth fund GIC and BlackRock are investing $650m in Klarna, valuing the Swedish “buy-now, pay-later” group at more than $11bn ahead of a likely stock market listing by the most valuable private fintech in Europe.

Nvidia sends shockwaves through chip industry with Arm deal; None of Arm’s major customers has publicly backed $40bn deal
Richard Waters – FT
Rene Haas, head of the intellectual property group at Arm Holdings, spent much of Monday trying to reassure customers that the SoftBank-owned chip design company was not about to turn them into second-class citizens.

Nvidia Deal Threatens Arm’s Status as the Switzerland of Chips
Ian King – Bloomberg
Record purchase faces months of regulatory, customer scrutiny; Arm success built on neutrality, supplying technology to all
Nvidia Corp.’s record deal to buy Arm Ltd. will encounter major hurdles from regulators in countries sparring over trade and customers concerned the transaction will limit competition and unfairly favor Arm’s future owner. After announcing the $40 billion agreement on Sunday, Nvidia Chief Executive Officer Jensen Huang and his counterpart at Arm, Simon Segars, defended the combination in briefings spanning several times zones. They both acknowledged their work is just beginning.

TikTok’s Fast-Growing China Twin Has 600 Million Daily Users
Zheping Huang – Bloomberg
Douyin had 400 million daily active users in January; ByteDance China chief promises additional investment
Douyin, the Chinese-market version of ByteDance Ltd.’s TikTok video-sharing app, surpassed 600 million daily active users in August, rising from 400 million at the start of the year. The service has produced 41.7 billion yuan ($6.1 billion) in revenue for more than 22 million creators over the past year and the company intends to spend $1.5 billion in a push to double that figure over the next 12 months, said ByteDance China Chief Executive Officer Kelly Zhang. Speaking at the Douyin Creator Conference Tuesday, Zhang detailed the growth of Douyin’s audience and the efforts to bolster and diversify income streams for creators.

EY chairman admits ‘regret’ over Wirecard failures in letter to clients; Carmine Di Sibio pledges to raise bar on audits as group tries to mitigate backlash
Tabby Kinder – FT
The global chairman of EY has expressed “regret” that a fraud at collapsed German fintech Wirecard was “not uncovered sooner” and said the Big Four accounting firm would “raise the bar significantly” on its audits, including when verifying bank balances.

Virtu launches post-trade TCA for Frontier algos; Upon launching the new Prism Frontier post-trade TCA tool, Virtu said it expects to launch real-time TCA for its algo suite later this year.
Hayley McDowell – The Trade
US-based market maker Virtu Financial has launched a post-trade transaction cost analysis (TCA) tool to review execution performance across its suite of Frontier algorithms.

Tradeweb MD named non-exec director at outsourced dealing desk BTON; Former head of Asia at Tradeweb, Andrew Bernard, will join the BTON Financial advisory board as part of the firm’s strategic hiring plan.
Kiays Khalil – The Trade
Outsourced dealing desk BTON Financial has appointed a Tradeweb veteran and electronic trading expert to its advisory board as a non-executive director. Andrew Bernard joins the advisory board at BTON after more than 17 years with Tradeweb where he worked in various senior positions including managing director, head of Asia and managing director for sales.

Salisbury BKT Securities replaces Bloomberg SSEOMS with Itiviti’s OMS solution
Itiviti, a leading technology, and service provider of electronic trading and connectivity solutions to financial institutions worldwide, today announced that Salisbury BKT Securities Corporation (Salisbury Securities), an institutional Philippine stockbroker has deployed Itiviti’s OMS solution to replace Bloomberg’s SSEOMS platform.

GreenKey Releases NLP Tool for Hedge Funds; Custom Models Enable Traders to Process Sell-Side Research in Minutes.
GreenKey’s platform includes pre-trained “Trusted Curator” base models that understand Wall Street jargon. Traders can automate topic classification and sentiment analysis so they don’t have to read thousands of pages of research, news, or earnings transcripts.


Nigeria to Regulate Crypto-Currency Trading to Protect Investors
Emele Onu – Bloomberg
Nigeria’s Securities and Exchange Commission said it will regulate trade in digital currencies to provide protection for investors and to ensure that transactions are transparent. “The general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices,” the Abuja-based regulator said Monday in an emailed statement. The agency said it’s obliged to regulate “when the character of the investments qualifies as securities transactions.”

India Plans to Introduce Law to Ban Cryptocurrency Trading
Archana Chaudhary and Siddhartha Singh – Bloomberg
India plans to introduce a new law banning trade in cryptocurrencies, placing it out of step with other Asian economies which have chosen to regulate the fledgling market. The bill is expected to be discussed shortly by the federal cabinet before it is sent to parliament, according to people familiar with the development who who asked not to be identified, citing rules on speaking with the media.

Paxful Ceases Operations in Venezuela Apparently Due to US Sanctions
Aziz Abdel-Qader – Finance Magnates
Peer-to-peer Bitcoin exchange, Paxful has sent notice to its customers that it will no longer offer its services in Venezuela. The company’s decision to cease operation in the country, which leads the Latin American region in terms of crypto volumes, was apparently related to sanctions imposed by the United States on Venezuela.
Paxful users in Venezuela have 30 days to withdraw their funds free of charges. However, Venezuelan traders who have completed address verification that confirms they are living abroad will be able to continue trading on Paxful.

MicroStrategy says it may boost its bitcoin holdings past $250M, per new filing
Michael McSweeney – The Block
A publicly-traded company called MicroStrategy made waves last month for allotting some of its strategic capital into bitcoin — some $250 million, as reported at the time. MicroStrategy had previously indicated that it saw bitcoin and other alternative investments as a means to avoid inflation, noting that “it makes sense to shift our treasury assets into some investments that can’t be inflated away or are less likely to be inflated away.”

Jihan Wu Regains Upper Hand in Bitmain Co-Founder Fight
Wolfie Zhao – Coindesk
In a new twist in Bitmain’s ongoing power struggle, co-founder Jihan Wu has regained the legal representative status of the bitcoin miner maker giant. China’s business registration record update on Sept. 14 shows Wu has again become the legal representative and executive director of Beijing Bitmain Technology, the operating entity of Bitmain. Subsequently, Micree Zhan, the rival co-founder who was ousted last October by Wu but regained control earlier this year, is no longer the legal representative and executive director but remains a general manager of the firm.

Ethereum 2.0 devs to deploy ‘Spadina’ testnet with focus on genesis and deposits
Aislinn Keely – The Block
After the Medalla testnet went live last month, Ethereum will be getting one more dress rehearsal before the eventual launch of its next iteration, Ethereum 2.0. In a Monday blog post, ETH 2.0 developer Danny Ryan announced the pending deployment of Spadina, a mainnet-configuration test network with a three day-lifespan, later this month.

Another $1 Billion in Tether Set to Leave Tron for Ethereum
Alexander Behrens – Decrypt
A second $1 billion in Tether stablecoins will be moved from Tron to the Ethereum blockchain on behalf of an unnamed customer. The move will reduce the Tether supply on the Tron blockchain to less than $4 billion. Tron has launched some DeFi applications of its own to compete with Ethereum, but not enough to stall the Tether chain swap.

Filecoin: Understanding the Complex Crypto System Meant to Rival AWS
Brady Dale – Coindesk
Filecoin might be the most complex thing the blockchain industry has ever brought to market. The Web 3.0 data-storage project, funded by a $257 million initial coin offering that closed in September 2017, has been building out its technology ever since. While Filecoin has been quieter than most over that time, Filecoin is currently wrapping up a very active incentivized testnet called Space Race. There are 1.5 million FIL tokens allocated to testnet participants, though it’s hard to assess the value of that offer when the company has refused to discuss details that might inform FIL’s underlying price. Nonetheless, this testnet has been quite popular.

Binance is sued by Japanese crypto exchange Fisco for allegedly facilitating the laundering of $9 million
Yogita Khatri – The Block
Binance has been sued in a U.S. court by Japanese crypto exchange Fisco. Fisco alleges that Binance facilitated the laundering of more than $9 million of stolen bitcoin via the Zaif hack in 2018. A Binance spokesperson declined to comment on the complaint to The Block when reached.

New York Attorney General to Bitfinex and Tether: ‘Delays Must Stop’
Nikhilesh De – Coindesk
The New York Attorney General’s office is losing patience with Bitfinex and Tether. NYAG senior enforcement counsel John Castiglione filed a letter Monday ahead of a conference between the regulator and the two cryptocurrency firms arguing it is way time they complied with a 17-month-old document production order detailing financial information within the next two months. For their part, counsel representing the two firms argue the order is too broad, and the scope should be limited first.


Trump, California Leaders Clash Over Climate’s Role in Wildfires
Justin Sink and Jordan Fabian – Bloomberg
President says the state should better manage forests; Trump claims Europe has more explosive trees than California
Donald Trump and California state officials sparred over whether climate change is contributing to out-of-control wildfires across the West, after the president insisted that poor forest management drives the conflagrations. Wade Crowfoot, the secretary of California’s Natural Resources Agency, told Trump in a meeting in Sacramento on Monday that a warming climate is making the state’s fires worse.

What happens if Trump loses but refuses to concede? A contested result and the risk of civil unrest would pose a dilemma for Congress, courts and the military
Katrina Manson and Kadhim Shubber – FT
As Americans prepare to cast their vote in the US election, a nightmare scenario looms large: what if Donald Trump were to lose the presidency but refuse to accept defeat? Mr Trump has repeatedly refused to commit to accepting the election outcome, predicted widespread fraud, and claimed that the results from postal voting — which is expected to surge because of the coronavirus pandemic — might not be known “for months or for years”.

Millionaires Would Pay Up Under Biden Tax Plans, Study Shows
Laura Davison – Bloomberg
Penn Wharton analysis sees middle earners paying slightly more; Democrat’s plans would raise $3.4 trillion over next 10 years
Millionaires could see much bigger tax bills if Democrat Joe Biden is elected president in November, but levies on most households below the top income brackets would stay about the same as under President Donald Trump, an outside analysis shows. Biden’s tax proposals would have the top 0.1% of earners — those currently making about $3.3 million or more annually — paying a 43% rate on their income, according to the Penn Wharton Budget Model. That top group pays a rate of about 30.6% under Trump’s 2017 tax law, according to the report, which accounts for income, payroll and corporate duties.

Facebook Is Failing in Global Disinformation Fight, Says Former Worker; The employee, who worked in a group dedicated to rooting out fake accounts, said executives ignored or were slow to react to her warnings.
Sheera Frenkel – WSJ
While Facebook has heralded improvements to its fight against disinformation in the United States, it has been slow to deal with fake accounts that have affected elections around the world, according to a post published by a former employee.

TikTok’s Proposed Deal Seeks to Mollify U.S. and China; The Chinese-owned app designed a compromise to satisfy U.S. security concerns. The terms are now under review by the Trump administration.
David McCabe, Ana Swanson and Erin Griffith – NY Times
After more than six weeks, two White House executive orders, new Chinese regulations and multiple bidders, a deal for the social media app TikTok has boiled down to one main strategy: mitigation.

US issues restrictions on import of Xinjiang cotton and apparel products, citing forced labour; US customs agency issues Withhold Release Orders, banning cotton, apparel, hair products and computer parts from four Xinjiang companies
Finbarr Bermingham, Robert Delaney and Jacob Fromer – South China Morning Post
The US government has announced new restrictions on the import of products, especially cotton and apparel, from China’s Xinjiang Uygur autonomous region, citing concerns over the alleged widespread use of forced labour.

China Says TikTok Sale Shows U.S. ‘Economic Bullying’
Maria Tadeo, Nikos Chrysoloras, and Natalia Drozdiak – Bloomberg
Chinese envoy to the EU, Zhang Ming, speaks in TV interview; Zhang scolds EU’s 5G security toolbox, restrictions on Huawei
A senior Chinese official accused the U.S., which forced the sale of TikTok on national security grounds, of “economic bullying,” while lambasting European Union restrictions on Huawei Technologies Co., Ltd., in comments highlighting Beijing’s increasing assertiveness against what it sees as unfair treatment from Western governments.

US wildfires reveal partisan divide on climate; It is in the Republican party’s interests to embrace a green agenda
The editorial board – FT
A “blowtorch over our states” is the Washington state governor Jay Inslee’s vivid phrase for climate change. His opposite numbers in California and Oregon are equally clear that forest management cannot on its own explain the wildfires afflicting the western US. Scientists say warmer, drier conditions, wrought by a human-made rise in temperatures, are among the mix of causes.

Chinese Companies in Pentagon Spotlight Hire Global Banks to Sell Dollar Bonds; ChemChina and Three Gorges pursue bond deals after designation by Defense Department as ‘Communist Chinese military companies’
Frances Yoon – WSJ
Two major Chinese state-owned firms recently labeled by the U.S. Department of Defense as “Communist Chinese military companies” are selling billions of dollars in bonds with the help of Western banks. The label doesn’t impose any legal restrictions and in itself has no bearing on whether a company can do business in the U.S. Still, legal experts and financial analysts said the sale was notable, because the labeling could be a signal of sanctions to come and could pose reputational risks for the banks that are running the sale and investors who buy the bonds, even though they aren’t breaking any U.S. laws.

What Do Businesses Get When Their Employees Die From Covid-19? Under Trump, OSHA’s Covid-19 Response Is Failing Workers; Businesses have little to fear from the government’s workplace safety office.
The Editorial Board – NY Times
Just $15,615. That’s how much a $52 billion meatpacking company was fined by the federal government for unsafe conditions that led to the deaths of eight workers. Even as the dangers and virulence of the coronavirus have become more glaring, infecting 6.5 million Americans and killing nearly 200,000, the nation’s top worker protection arm has been asleep at the wheel. The Occupational Safety and Health Administration has issued only guidelines, rather than establish enforceable rules, for businesses that rushed to reopen when they were deemed essential early in the pandemic, putting hundreds of thousands of employees in workplaces where the virus could easily spread.


Commissioner Rostin Behnam to Discuss Managing Climate Risk in the U.S. Financial Markets at CERES Event

CFTC Charges 3 Texas Men and 1 Florida Man in Fraudulent Digital Asset Scheme
The Commodity Futures Trading Commission today filed a complaint in the U.S. District Court for the Southern District of Texas against four individuals for fraudulently soliciting funds from customers to speculate in Bitcoin price movements. The defendants are Texas residents Mayco Alexis Maldonado Garcia, Cesar Castaneda, and Rodrigo Jose Castro Molina, and Florida resident Joel Castaneda Garcia.

SEC Examining Nikola Over Short Seller’s Fraud Allegations
Matt Robinson and Edward Ludlow – Bloomberg
Agency is reviewing claims that company misled investors; Nikola has denied accusations made by Hindenburg Research
The U.S. Securities and Exchange Commission is examining Nikola Corp. to assess the merits of a short-seller’s allegations that the electric-truck maker deceived investors about its business prospects, according to people familiar with the matter. In a Sept. 10 report that has captured Wall Street’s attention, Hindenburg Research called Nikola an “intricate fraud” that, among other allegations, overstated the capabilities of its earliest test trucks. Nikola has pushed back, accusing the short seller of making misleading statements that were designed to manipulate its shares.

SEC Awards More Than $10 Million to Whistleblower
The Securities and Exchange Commission today announced an award of more than $10 million to a whistleblower whose information and assistance were of crucial importance to a successful SEC enforcement action.

SEC Releases Report and Recommendations on the 39th Annual Small Business Forum
The Securities and Exchange Commission today delivered a report to Congress on the 39th Annual Small Business Forum. The Forum is a unique event where members of the public and private sectors gather to craft suggestions for policy impacting emerging businesses and their investors, from startups to smaller public companies. The Office of the Advocate for Small Business Capital Formation hosted the 2020 Forum on June 18, 2020 in a completely virtual format, which resulted in an inclusive event that engaged entrepreneurs, investors, market participants and other thought leaders from across the country. The 2020 Forum report is now available for download online.

SEC Charges Charter School Operator and its Former President With Fraudulent Municipal Bond Offering
The Securities and Exchange Commission today charged Park View School, Inc., a state-funded, nonprofit charter school operator based in Prescott Valley, Arizona, and its former President, Debra Kay Slagle, with misleading investors in an April 2016 municipal bond offering.

Financial Ombudsman defends approach after lender criticism; Some in industry have accused it of being able to regulate companies out of existence
Nicholas Megaw – FT
The head of the UK’s Financial Ombudsman Service has dismissed critics and defended its approach to handling customer disputes after the body was accused of in effect forcing lenders out of business by encouraging huge volumes of complaints.

Working on the Front Lines of Investor Protection – Test Cheaters Beware
In light of the ongoing challenges presented by the COVID-19 pandemic, FINRA recently launched an online testing service for candidates seeking to take qualification exams remotely. In this remote environment, candidates will use a camera-equipped computer to take qualification exams—including FINRA’s Securities Industry Essentials (SIE), Series 6, and Series 7 exams and NASAA’s Series 63, Series 65 and Series 66 exams—proctored remotely by test center staff. The concept of remote examinations may lead some to wonder, “What happens if a person is caught cheating on a FINRA-administered exam?” The answer: Regardless of the testing environment, Enforcement will pursue disciplinary action against the individual and, in most instances, seek to bar them from the broker-dealer industry.

FCA seeks views on how to improve the consumer investment market
The FCA has today launched a Call for Input (CFI) to help shape its work on improving the consumer investment market.

Result of FCA’s Business Interruption test case
The High Court has today handed down its judgment in the Financial Conduct Authority’s (FCA)’s business interruption insurance test case.

Investing and Trading

Bill Gross Says Investors Should Play Defense as Stimulus Ebbs
Michael McDonald – Bloomberg
Investors should be shifting into shunned sectors such as tobacco, banks and European stocks as fiscal stimulus and the stomach for growing deficits in the U.S. wane, according to longtime money manager Bill Gross. With an emphasis on defense, investors should consider assets that haven’t “skyrocketed on dreams of back-to-normal economic prosperity followed by even lower artificial real interest rates,” Gross, who retired last year, said in an outlook released Monday.

Pandemic debt binge creates new generation of ‘zombie’ companies; Cheap borrowing helped companies through Covid-19 crisis, but repayments are set to be a burden
Joe Rennison – FT
The onset of coronavirus — and the drastic policy response from central banks — has produced an army of companies limping along in the twilight between the living and the dead.

Financial Anxiety Is Up Around the Globe; And many households are woefully unprepared for the next economic crisis.
Ben Schott – Bloomberg
As the world reels from the fiscal shockwaves of Covid-19, a new 26-country survey suggests that many people are perilously unprepared for a major economic jolt.

IEA Says Oil Market More Fragile as Resurgent Virus Hurts Demand
Grant Smith – Bloomberg
Fourth-quarter demand forecast cut by 600,000 barrels a day; Oil inventories in developed nations rose to record in July
The outlook for global oil markets has grown “even more fragile” as a resurgent pandemic derails the recovery in demand, the International Energy Agency said. The IEA, which advises major economies, trimmed forecasts for fuel consumption for the rest of the year and predicted that oil inventories — which rebounded to record levels in July — won’t subside as sharply as anticipated.

Big Oil Goes Looking for a Career Change; The supermajor business model that owned a century comes undone.
Javier Blas – Bloomberg
For most of the past century, Big Oil executives found it pretty easy to explain to investors how their businesses worked. Just locate more of the commodities that everyone needed, extract and process them as cheaply as possible, and watch the profits flow.

Crowded Tech Stocks Have Investors ‘Paranoid’ About Bubble Risks
Ksenia Galouchko – Bloomberg
September BofA survey shows switch into cyclicals, out of tech; Fund managers are more confident of economic recovery: BofA
U.S. technology stocks are the world’s most crowded trade, say fund managers overseeing $601 billion, fueling fears about a bubble that could burst the market rally. Investors surveyed by Bank of America Corp. have never been so unanimous in their conviction on the most popular asset class, with 80% of participants citing long U.S. tech, up from 59% in August. Among the market’s biggest tail risks, concerns about a tech bubble jumped to be ranked behind only a resurgence in Covid-19.

Investors should beware Games Workshop’s fantastical share price; Hobby retailer has had a breathtaking stock-market run over the past four years
Bryce Elder – FT
What value do you put on escapism? Answers to that question have changed quite a bit over the course of 2020, which has been to the benefit of Games Workshop. Hobbyist retailers are among the biggest winners from pandemic lockdowns. Games Workshop’s shares have more than doubled over the past 12 months, having already increased eightfold in the previous three years. A record high this week gave the Nottingham-based company a £3.3bn market capitalisation, bigger than broadcaster ITV.

Software listings head biggest week for IPOs since Uber; Companies look to cash in on market hunger for technology stocks
Richard Henderson and Miles Kruppa – FT
Two of the largest US software listings in history will lead the biggest week for initial public offerings since Uber’s flotation last year, as companies cash in on the market’s hunger for technology stocks.

Retail investors are being squeezed out of the high-yield bond market; The SEC should reform 144A regulation to prevent Wall Street streaking further ahead
Ellen Carr – FT
Every pandemic has a silver lining. For high-yield bond investors, one upside of stressed credit markets is attractive new issuance. Many companies have tapped the market for investor-friendly rescue financing. Bankers have priced deals at concessional rates, which have resulted in equity-like returns for those brave enough to buy. A three-year, first lien bond from Carnival Cruise Lines in April, for example, was priced at $99 with an 11.5 per cent coupon. It’s now trading at $112. Even paying $112, an investor would lock in 6 per cent through April 2023 for a security with almost zero loss potential thanks to its collateral protection.

In defence of the IPO
Jeremy Abelson – FT
Like all things in capitalism, the age-old practice of initial public offering is malleable. It’s no surprise then that, in the past few years, we’ve been seeing companies experimenting with the process of offering shares to the great and good of the investing public.

Environmental, Social and Corporate Governance

Rio Tinto’s failures show how hard it is to balance competing interests; The ESG movement has multiplied the issues that companies must consider
Brooke Masters – FT
Advocates for a kinder, gentler form of capitalism are hailing Rio Tinto’s decision last week to force out its chief executive over the destruction of a 46,000-year-old Aboriginal heritage site as a watershed moment.

A Path to ESG Disclosure
Regardless of your view of the efficacy of ESG disclosure for publicly-traded companies, investors increasingly are insisting on it, and the advisors that can profit from it the most – proxy advisory firms, large accounting firms and consultants – are heavily promoting it. For the 100 or so largest public companies, adding ESG disclosure to their current disclosure process generally is not a big deal. Many already publish reports consistent with GRI guidelines, and some publish reports that are even broader. For the 6,000 or so other public companies, it can be a tougher task and one that must be managed carefully to avoid becoming ineffective and costly. Below we provide some thoughts on what those other public companies may consider.

Partnership with MIT Looks to Improve ESG Data
Bank & Tradesman
A new collaboration between MIT’s Sloan School of Management and a Massachusetts pension fund looks to improve the measurement of environmental, social and governance data in the investment and financial sector.
State Treasurer Deborah Goldberg and the Massachusetts Pension Reserves Investment Management Board (Mass PRIM) have partnered with MIT Sloan on the Aggregate Confusion Project, a research project through the MIT Sloan Sustainability Initiative to improve how ESG is evaluated.

Anita McBain to Join Citi Research as Head of EMEA ESG Research
Press Release
Anita McBain will join Citi Research on 21st September as a Managing Director, Head of EMEA ESG Research. Anita joins Citi from M&G Investments where she was Head of Responsible Investment and Environmental & Social Governance (ESG).


Deutsche Bank Bucks Trend, Looks to Commodity Traders for Growth
Matthew Martin – Bloomberg
Bank sees contrarian Middle East strategy as key to profits; Voide and Hoving appointed as co-CEOs for Middle East, Africa
Deutsche Bank AG plans to boost lending to commodity traders in the Middle East, even as other banks back away after a spate of defaults in the industry, to help double the size of its regional business. The German lender, which on Monday appointed Loic Voide and Kees Hoving as co-chief executive officers for the Middle East and Africa, is also targeting bond markets for growth in the region.

Citi Drops After CFO Warns More Reserves Coming in Third Quarter
Jennifer Surane – Bloomberg
Citigroup Inc. shares dropped after Chief Financial Officer Mark Mason warned revenue would drop and the bank would set aside more in reserves to cover potential losses in the third quarter. While the reserve build will be “meaningfully lower” than it was in the first two quarters of this year, the bank now expects a slower recovery than it did at the end of June, Mason told investors at a conference on Monday.

Citigroup to Resume Job Cuts After Pausing for Pandemic
Jennifer Surane – Bloomberg
Cuts will affect less than 1% of lender’s global workforce; Firm sees revenue decline, faces possible regulatory actions
Citigroup Inc. will resume job cuts starting this week, joining rivals such as Wells Fargo & Co. in ending an earlier pledge to pause staff reductions during the coronavirus pandemic. The cuts will affect less than 1% of the global workforce, the bank said Monday in a statement. With recent hiring, overall headcount probably won’t show any drops, Citigroup said.

For Ray Dalio, a Year of Losses, Withdrawals and Uneasy Staff
Katherine Burton – Bloomberg
Hedge fund has seen clients pull $3.5 billion, most in years; Some insiders blame lack of innovation for poor returns
Ray Dalio is having a very bad year. So very bad, in fact, that the billionaire risks losing his coveted title as king of hedge funds. Dalio’s $148 billion Bridgewater Associates has run up hefty losses this year, even as rivals have minted money in the topsy-turvy markets. The damage as of August: an 18.6% drop in the flagship Pure Alpha II fund.

Hedge Fund Inside Biggest Norway Bank Reveals Junk Bond Bet
Jonas Cho Walsgard – Bloomberg
Inside the biggest bank in Norway, a hedge fund is going over the bond issuers that lost their investment-grade status during the Covid crisis. One of the strategies at DNB ASA’s Multi Asset fund is to identify so-called fallen angels and place bets on those that appear to have been unfairly demoted to high yield earlier this year.

Amundi closes 11 France-domiciled ETFs; Each of the closed funds had assets below EUR20m at the end of June
Ed Moisson – FT
Amundi has closed 11 France-domiciled exchange traded funds, further concentrating its business in Luxembourg and away from its home market. The ETFs, which had EUR110m in assets under management at the end of June, were closed by Europe’s largest listed fund manager in August.

Calpers Board Weighs Curbs on Investment Chief’s Personal Holdings; Move comes after former chief resigned last month amid an internal investigation into his shares in private-equity manager
Heather Gillers – WSJ
Directors of the nation’s largest pension fund this week will discuss limiting personal investments by the fund’s investment chief and potentially other officials following revelations that the fund’s former investment chief held shares in one of its private-equity managers. California Public Employees’ Retirement System Chief Executive Marcie Frost is already planning to ask the next investment chief to sell or place in a blind trust any holdings that could prompt a conflict of interest. A Calpers spokesman said the restriction would likely apply to most or all of the person’s investments, given the scope of the fund’s $410 billion portfolio.

Goldman Sachs veteran to oversee capital markets businesses at BNY Mellon; BNY Mellon has centralised the leadership for the bank’s capital markets businesses which include Pershing, Clearance and Collateral Management, and Markets.
Joe Parsons – The Trade
BNY Mellon has hired a former Goldman Sachs senior director in a new role that centralises the leadership for the custodian’s capital markets businesses. Robin Vince has been appointed as vice chair and CEO of Global Market Infrastructure, where he will have oversight of Clearance and Collateral Management, Treasury Services, Markets and Pershing businesses.


This Upstart Chinese Brokerage Is Now Bigger Than Credit Suisse
Bloomberg News
East Money becomes world’s fifth largest amid stock surge; Broker offers social networking chat, stock and fund apps
East Money Information Co., founded by a 49-year-old former stock commentator, is one of the big winners in China’s wildest stock frenzy in half a decade. Shares in the online broker and market data provider have rocketed 78% this year, giving it a market value of more than 200 billion yuan ($29 billion). That puts it among the world’s biggest traded institutional brokers, making it more valuable than even Credit Suisse Group AG, according to data compiled by Bloomberg.

It’s Been a Good Year to Throw $71 Billion at China Stock Funds
Bloomberg News
Retail investors bought more fund products than stocks in 1H; Issuance of stock-focused mutual funds hit a record high
China’s 170 million individual stock traders are doing something unusual in 2020: they’re entrusting their money to the professionals. Retail investors bought 487.7 billion yuan ($71.4 billion) worth of stocks through managed funds the first half of this year, more than the 340 billion yuan they invested directly in the market, according to data from Kaiyuan Securities Co. That’s in stark contrast to 2015, when individuals helped stoke a massive bubble by funneling 2.2 trillion yuan through their trading accounts — or just under double the amount invested in fund products.

The Solar-Powered Future Is Being Assembled in China; The solar supply chain is punishingly cheap, and Longi dominates it like no one else.
Bloomberg News
On a recent morning in central China, workers in blue jumpsuits and white masks placed clamps around a bar of shiny metal and fed it into a powerful cutting machine. The bar was an ingot made of polysilicon, a heavily refined cousin of the same material that makes up sand. Inside the cutter, it was sliced into thousands of small squares slightly larger than a CD case and thinner than a thumbnail. These wafers would then be shipped on to other factories to be infused with conductive elements such as phosphorous and boron, then wired into cells and assembled into panels—the base unit of solar energy generation.

GNC Scraps Auction, Going Ahead With Sale to China’s Harbin; Vitamin seller plans to proceed with sale amid call from Sen. Marco Rubio for national-security probe
Soma Biswas – WSJ
GNC Holdings Inc. is moving ahead with a sale to China’s Harbin Pharmaceutical Group Co. after no other offers emerged, even as the deal drew scrutiny from Sen. Marco Rubio. The vitamin retailer said Monday it was canceling a bankruptcy auction and proceeding with a sale of its assets to Harbin for $760 million.

South Africa’s Harmony Gold To Boost Output Gains After Pandemic Hit
Felix Njini – Bloomberg
Harmony Gold’s loss narrows despite foreign-exchange losses; Acquisition of assets from AngloGold to boost production
Harmony Gold Mining Co. expects to increase production this year after coronavirus disruptions meant the miner was unable to take full advantage of near-record bullion prices in the 12 months through June.

Italy’s Age-Old Problems No Longer Scare Bond Investors
Olivia Konotey-Ahulu and John Ainger – Bloomberg
Axa, AllianceBernstein stay optimistic despite political risk; EU’s recovery fund can restart ailing economy, says former PM
Even as Italy heads for a period of volatile politics, budget disputes and possible credit downgrades, investors are sticking with the nation’s debt. That’s because the fiscal and monetary firepower of the European Union and European Central Bank is shielding Italy’s bond market from the uncertainty ahead, according to BlueBay Asset Management LLP, AllianceBernstein and Axa Investment Managers.

Bandits Target Nigeria’s Farmers and Threaten Food Security; Organized crime, floods and drought are hitting agriculture just when the African nation needs it most.
Ruth Olurounbi Agnieszka de Sousa, William Clowes, Mustapha Adamu – Bloomberg
Just before the start of crop planting in May, Abdullahi Hassan Wagini visited a neighbor’s farm in northern Nigeria to discuss how to prepare the fields. What happened next led him to abandon his livelihood of 25 years. As the two men were chatting, bandits on motorcycles opened fire on them. Wagini, 62, managed to flee, while his friend stayed behind to protect his cattle. He was found dead in a pool of blood, his cows gone.

Germany has more pressing concerns than Brexit; There is a world of rogue powers with an animus against the EU to deal with first
Gideon Rachman – FT
Chatting to a diplomat in Berlin last week, I suggested that Brexit probably ranked about number four on the list of German foreign-policy concerns. He looked thoughtful and then replied: “I think lower than that.” So we went through the list.


Johnson Says Bill ‘Essential’ for U.K. Integrity: Brexit Update
Joe Mayes, Alex Morales, and Kitty Donaldson – Bloomberg
Boris Johnson opened the first parliamentary debate on his bill to rewrite part of the Brexit divorce deal, saying the legislation is “essential” for guaranteeing the economic and political integrity of the U.K.

Customs agents not ready for Brexit trade with EU, survey shows; UK logistics trade association points to falling capacity due to Covid and lack of clear guidance from government
Peter Foster – FT
Almost two-thirds of customs brokers do not have enough staff to handle the extra paperwork needed to trade across the EU-UK border after January 1, a survey by Britain’s leading customs and logistics trade association has found.

Boris Johnson suffers rebellion over contentious Brexit bill; PM secures vote but senior Tories come out against internal market legislation that threatens international law
George Parker, Jasmine Cameron-Chileshe and Jim Pickard – FT
Boris Johnson was on Monday night hit by a Conservative revolt over his plan to break international law on Brexit, as a number of high-profile Tory MPs refused to back a bill that overrides his own exit deal.

Brexit vote: What just happened and what comes next?
BBC News
It’s fair to say the coronavirus pandemic has dominated the news cycle this year, so you could be forgiven for wondering what’s happening with Brexit. Well, the UK’s departure from the European Union is now fully back on the agenda after a big day of developments in London. Let’s break it down…


Steve Cohen Clinches Deal to Buy Mets After Nine-Month Saga
Nick Turner – Bloomberg
Earlier takeover talks with the New York team broke down; Deal puts Mets valuation at $2.42 billion, Sportico reports
After a nine-month odyssey, Steve Cohen finally got what he wanted: a deal to acquire the New York Mets. The billionaire reached an agreement with Sterling Partners, a firm backed by the families that own the Mets, to purchase the 58-year-old team, according to a statement Monday. Terms of the transaction, which still needs approval from Major League Baseball’s other club owners, weren’t disclosed.

Around the World, the 2020 Wine Harvest May Be Most Troubled Ever; But that doesn’t mean great wines won’t emerge.
Elin McCoy – Bloomberg
In Burgundy, starting in mid-August, masked workers fanned out into vineyards, carefully socially distanced, to begin picking grapes. It was the beginning of one of the earliest harvests of the past 650 years, and it is now ending. The 2020 harvest looks pretty different in many places around the world, much of it due to climate change: scorching heat and deadly wildfires in California’s Napa and Sonoma; drought and heat waves in France; thunderstorms and tornadoes in Italy.

Journalists Critical of Pakistan’s Government Face Treason Cases
Ismail Dilawar and Faseeh Mangi – Bloomberg
At least three journalists booked for sedition in past week; Reporters Without Borders has lowered Pakistan’s ranking
At least three journalists in Pakistan have been charged for alleged sedition in the past week, raising concerns that Prime Minister Imran Khan’s government is increasingly intolerant of media criticism. Bilal Farooqi, the news editor at the Express Tribune, said he was arrested by the Karachi police last week on charges of sedition for defaming the country’s army and criticizing the government but later he was released on bail. Absar Alam, a former anchor at AAJ news channel, said he also faced similar accusations in charges made available to him by police. Asad Ali Toor, a journalist at Samaa television, is facing a sedition case, the local media reported.

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Past JLN Newsletters

The Spread – July 30, 2021

The Spread – July 30, 2021

Earnings season in full bloom; Options lead year-to-date derivatives volume; Robinhood’s IPO; John gets real with Get Real VR: Conflicting factors underpin volatility; Cboe cleared for fall European competition; and the Cboe Options Institute’s Kevin Davitt talks about vega in this week’s “Term of the Week.”

The Four Biggest Ways That Robinhood Changed Investing

The Four Biggest Ways That Robinhood Changed Investing

First Read $51,906/$300,000 (17.3%) ++++ Options Continue to Lead Derivatives Volume Uptrend, but Q2 Lags, FIA Data Show Suzanne Cosgrove - John Lothian News Global futures and options volumes continued to trend higher in the first half of 2021 compared to both 2020...

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