The Massive Hedge Fund Betting on AI; U.S., EU fines on banks’ misconduct to top $400 billion by 2020

Sep 27, 2017

First Read

Hits & Takes
By JLN Staff

Former JLNer Doug Ashburn‘s mom, Margaret Anne “Margie” Ashburn, 72, of Creve Coeur, died Saturday, September 23, 2017 at her home. Details on services are posted here. Our sincere condolences go out to Doug and Nancy Ashburn and family.

PricewaterhouseCoopers Global FinTech Report 2017, reported that 77 percent of survey respondents in financial services are expected “to adopt blockchain as part of an in production system or process by 2020.” ~JK

And now a note from a great musician Matt Scharpf of Eurex. “Once again I am participating in Rocktoberfest sponsored by ALTSO – A Leg To Stand On, next Thursday night, October 5th at City Winery in Chicago. My goal is to raise $10,000 in ticket sales and donations so I can play 40 minutes of music at the event with a bill of other great bands from Chicago. I hope you are keen to help me do that. If you would like to attend and support ALTSO, click this link for tickets and then when you see, ‘Who do you want to rock out with,’ pick Matt Scharpf or one of your other favorites. It all goes to a great cause.” Who else can play his own songs, Barenaked Ladies and Indigo Girls all in one set? ~JK

In something that seems right out of an episode of HBO’s “Silicon Valley” (it seriously sounds close to events in the last season), it was revealed that someone got under the hood of Showtime’s web properties and inserted some code that used viewers’ browser’s processing power to mine the cryptocurrency Monero. Clever. Sometimes the software used “as much as 60 per cent of CPU capacity on computers visiting the sites.” If web users were notified such code was being deployed to make money for the site, could this be a new way for companies to replace ad revenue from their properties? The Pirate Bay (obviously a less-than legitimate example) already tried it. There’s intriguing potential here, albeit potential fraught with pitfalls and legal concerns. ~SD

OCC’s Mary Savoie was interviewed by Nasdaq yesterday as part of their TradeTalks series. ~JJL

Sailing News: Convexity, Don Wilson and the team (USA) hold first position in the M32 North America Championship in Chicago (IL), USA. ~JJL

Former President George W. Bush is the keynote speaker of the CME Group’s Global Financial Leadership Conference from Nov. 13-15 at The Ritz-Carlton in Naples, FL. ~JJL

The Asia Pacific News from yesterday assembled by JLN, with a new graphic, is available HERE. ~JJL

Would you be interested in an email version of the Asia Pacific Financial News? Right now we post it to the JohnLothianNews.com website and push it out via Twitter, LinkedIn, Facebook and Google+. Let us know. ~JJL

Lastly, don’t forget to recommend college students you know to sign up for our MarketsWiki Education Recruiting event on October 16 at the CBOE and/or have them submit their resumes. ~JJL

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OCC Announces Promotions to Leadership Team
OCC
OCC, the world’s largest equity derivatives clearing organization, today announced several promotions to its leadership team.
“To fulfill its role as an effective and efficient Systemically Important Financial Market Utility and serve as a forceful advocate for the U.S. exchange-listed options industry, OCC must be seen as a destination for top talent,” said Craig Donohue, OCC Executive Chairman and CEO. “Through the work of our entire team, OCC has been able to attract and retain very knowledgeable individuals across a wide range of expertise who are adding value to the work we do every day for market participants.
/goo.gl/Cuo7cj

**** Some very well-deserved promotions.

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Singapore, Norway Are Beloved by Expats in HSBC Ranking; New Zealand rated highly for forming friendships
By Zoe Schneeweiss and Andy Hoffman – Bloomberg
Singapore topped HSBC Holdings Plc’s 2017 Expat Explorer rankings for a third year, edging out Norway in a survey of 27,500 expatriates. New Zealand took the crown in the experience category, with high ratings for forming friendships, how safe expats feel and the ease of setting up. Switzerland led the economic rankings, while the Netherlands pipped Sweden in the family category, which includes education and raising children.
/goo.gl/gxW5hc

***** Since Jon Matte moved to Norway, things have looked up for it. ~JJL

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Tuesday’s Top Three
Our top read piece on Tuesday was a profile story on Jessica Titlebaum Darmoni, by
Pallavi Goodman Jessica Titlebaum Darmoni – A Unique Voice in Derivatives. Second was At the Lake Magazine’s Legends Of Snake Road, about Charles Hutchinson, former president of the Chicago Board of Trade. Third went to Finance Feeds’ Trading Technologies seeks to reverse another Patent Trial and Appeal Board decision

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MarketsWiki Stats
108,286,879 pages viewed; 22,815 pages; 209,609 edits
MarketsWiki Statistics

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Lead Stories

The Massive Hedge Fund Betting on AI; Initially wary of the technology, Man Group was soon persuaded by the returns from algorithm-centric funds.
Adam Satariano and Nishant Kumar – Bloomberg
As chief executive officer of one of the world’s largest hedge funds, Luke Ellis prides himself on a healthy appetite for risk. “My job,” he says, “is to not blink.” About five years ago, he did, though—in a big way. What spooked him was an experiment at his firm, Man Group Plc. Engineers at the company’s technology-centric AHL unit had been dabbling with artificial intelligence—a buzzy, albeit not widely used, technology at the time.
/goo.gl/QM7M4h

U.S., EU fines on banks’ misconduct to top $400 billion by 2020: report
Reuters
Regulators in the United States and Europe have imposed $342 billion of fines on banks since 2009 for misconduct, including violation of anti-money laundering rules, and that is likely to top $400 billion by 2020, a research report said on Wednesday.
/goo.gl/i9xSDu

Nasdaq, SEB to test blockchain for mutual funds
Anna Irrera – Reuters
Exchange group Nasdaq Inc and Nordic financial services group SEB have teamed up to test a blockchain-based mutual fund trading platform for the Swedish market in an effort to simplify and make the process faster.
/goo.gl/3oZ95p

California, Quebec, Ontario Ink Deal to Join Carbon Markets
Carolyn Whetzel – Bloomberg BNA
California, Quebec, and Ontario cemented plans Sept. 22 to launch North America’s largest carbon allowance market next year.
bit.ly/2wUOHh3

Mifid II is Europe’s chance to recoup ground lost to the US
Anthony Perrotta – FT
An opportunity for Europe to regain ground lost to the US as the gold standard for trading and market oversight is fast approaching.
/goo.gl/7NdUXv

Cryptocurrency Derivatives? You Bet. This Trader Has 295% Return
Edward Robinson – Bloomberg
U.K. brokerage uses contracts for difference to trade bitcoin; Regulators race to catch up with exploding market in tokens
The price of bitcoin has increased sixfold in the past year, despite a 25 percent plunge this month triggered by China’s crackdown on digital tokens. Not a week goes by without startups launching new ones to fund everything from dentistry to Las Vegas strip clubs. Even Paris Hilton is tweeting to her 16 million followers about her cryptocurrency investments. If that isn’t a jump-the-shark-moment, what is?
/goo.gl/R9q8wP

SEB and Nasdaq to Build Blockchain for Swedish Mutual Fund Market
GlobeNewswire
SEB, the Nordic financial services group, and Nasdaq, Inc. (Nasdaq:NDAQ) have announced a joint project to test a developed prototype for a mutual fund trading platform based on blockchain technology. The aim is to increase efficiency in the processing of purchases and sales of fund units and to create a unit ledger – an area which today is largely characterized by manual routines, long settlement cycles and paper driven processes.
/goo.gl/mBhduu

OCC revamps senior leadership
SecuritiesLendingTimes.com
Equity derivatives clearinghouse OCC has completed a comprehensive restructuring of its senior staff members including David Prosperi, Jean Cawley, Kirstin Wells.
/goo.gl/RyPfv2

Intercontinental Exchange Announces ICE Futures U.S. Contract Based on NYSE FANG+™ Index of Tech Stocks; Efficiently Hedge or Gain Exposure to Key Tech Sector Stocks with Futures
ICE
Intercontinental Exchange announced the launch of the NYSE FANG+TM Index, an index that provides exposure to a select group of highly-traded growth stocks of next generation technology and tech-enabled companies. On November 8, 2017, ICE Futures U.S. plans to launch a quarterly futures contract based on the NYSE FANG+ Index, subject to regulatory review.
/goo.gl/84hDKr

HKEX Announces Plans for Iron Ore Futures
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) plans to introduce cash-settled TSI Iron Ore Fines 62 per cent Fe CFR China Futures (Iron Ore Futures), with rollout tentatively set for November of this year, subject to market readiness.
/goo.gl/6MScGP

S.E.C. Hacking Response Provides Road Map for Compromised Companies
Peter J. Henning – NY Times
Guess whose database was hacked, exposing sensitive information that could be used for illegal profit, but who failed to disclose that information to the public in a timely manner?
If you picked Equifax, which disclosed a breach on Sept. 7 that resulted in the theft of personal financial information of as many as 143 million Americans, you would only be half right.
nyti.ms/2wVsm2Y

Why Your Orange Juice Might Be From Brazil: Florida’s Trees Are Dying
Julie Wernau – WSJ
Florida is synonymous with oranges. They’re on the state license plate. At the product’s heyday in 1977, the state boasted 53 orange juice processing plants. Today, beset by bacteria, hurricanes and international competition, there are seven.
/goo.gl/SFPUaM

When Tech Disrupts Wealth and Stability, ‘Angels’ May Be Solution
Farhad Manjoo – NY Times
Jason Calacanis cuts an unusual figure for a financial savior in Silicon Valley, where it’s fashionable for the world’s richest men to feign embarrassed modesty about their wealth and power.
/goo.gl/a53NKr

CFTC will use South Bronx tactics in white-collar probes
Carleton English – NY Times
To crack down on white-collar crime, the director of enforcement at the Commodity Futures Trading Commission is bringing tactics he learned as a criminal prosecutor in the South Bronx.
/goo.gl/Uo8iWk

Exchanges, OTC and Clearing

CBOE Holdings Launches S&P 500 Dividend Aristocrats Target Income Index
Mondovisione
CBOE Holdings, Inc. (BATS: CBOE | NASDAQ: CBOE) today announced it has launched the CBOE S&P 500 Dividend Aristocrats Target Income Index (SPAI), a benchmark index designed to track the hypothetical performance of a partial buy-write strategy applied to stocks contained in the widely utilized S&P 500 Dividend Aristocrats Index, to target a specific level of total income.
bit.ly/2wV3vfx

FANG on Steroids: New Futures Contract Will Magnify Bets on Tech Stocks
Alexander Osipovich – WSJ
There will soon be a new, riskier way to trade one of the buzziest acronyms in the world of technology stocks.
Intercontinental Exchange, the parent company of the New York Stock Exchange, said Tuesday it will launch a new futures contract based its new NYSE FANG+ Index. The term “FANG” refers to the quartet of Facebook, Amazon.com, Netflix, and Google (whose parent company is now called Alphabet).
on.wsj.com/2wUAroo

SGX named Derivatives Exchange of the Year
SGX
Singapore Exchange (SGX) has once again been named “Derivatives Exchange of the Year” at this year’s Asia Risk Awards held last night in Singapore. The awards recognise excellence in derivatives trading and risk management in Asia and this is the fourth year that SGX has been awarded this title.
/goo.gl/U6t3SX

Derivatives exchange of the year: SGX; Asia Risk Awards 2017
Asia Risk staff
Idiosyncratic risks are on the rise – not only across regions but also between asset classes. This means that it is becoming increasingly important for companies to be able to precisely hedge their value and supply chain. The Singapore Exchange retains its position as Asia Risk Derivatives Exchange of the Year for strengthening its vertical business lines, at the same time as continuing to diversify and broaden its horizontals.
/goo.gl/qhVYB9

ICE Futures US to launch contracts on new index for tech stocks; The NYSE FANG+ index will track major technology company stocks including Facebook, Apple, Amazon, Netflix and Alphabet.
Hayley McDowell – The Trade
Intercontinental Exchange (ICE) has developed a new index which ICE Futures US will provide quarterly contracts for as of this November.
/goo.gl/FYM3FV

Introduction of Flexible Options
OSE – JPX
Osaka Exchange, Inc. (OSE) will introduce Flexible Contract Months for security options trading and index options trading as a new listed options trading method, which allows flexible setting of exercise dates and strike prices.
/goo.gl/18zKVu

The World Federation of Exchanges Responds to CPMI-IOSCO Framework for Supervisory Stress Testing of Central Counterparties
WFE
The World Federation of Exchanges (“The WFE”), which represents more than 200 market infrastructure providers including exchanges and CCPs, has responded to the CPMI-IOSCO Framework for Supervisory Stress Testing (“SST”) of Central Counterparties (“CCPs”).
The purpose of the Framework is to guide global securities regulators as they collaborate on SSTs to observe the systemic effect of market stress on multiple CCPs across jurisdictions. The WFE has welcomed this initiative as an important tool for macro-prudential economic analysis.
Read the full WFE response here. (PDF)

IOSCO World Investor Week
JPX
The International Organization of Securities Commissions (IOSCO) is the international body that brings together the world’s securities regulators. IOSCO will be holding its inaugural World Investor Week(WIW) from October 2 to 8, 2017 to raise awareness of the importance of initiatives in investor education, investor protection, and financial literacy across the world. As the first market to open, JPX will hold a special opening ceremony for World Investor Week. Scenes from the ceremony will be made available on our website.
/goo.gl/BUFDHR

London Stock Exchange welcomes Franklin Templeton’s first ETFs in Europe
London Stock Exchange
London Stock Exchange welcomes Franklin Templeton’s first ETFs in Europe; CurveGlobal celebrates first anniversary; Franklin Templeton launches first range of smart beta ETFs in Europe; 27 dedicated ETP issuers now active on London Stock Exchange; More than £163 billion of on-exchange trading in ETPs on London Stock Exchange in first half of 2017
/goo.gl/i9NDtr

Introduction of Regulatory Market-Making and introduction of Eurex Liquidity Provider Framework
Eurex
With Eurex circular 082/17, Eurex Deutschland and Eurex Zürich (collectively: the Eurex Exchanges) have announced the redesign of Eurex Market-Making in the context of MiFID II, effective January 2018. This circular contains information on the changes with respect to the following topics:
/goo.gl/164rwe

Eurex Annual Derivatives Forum: meeting market requirements with innovation
Eurex
Over 120 representatives from the buy and sell side attended this year’s Eurex Derivatives Forum at the Intercontinental Hotel in Frankfurt. Both the agenda and the invited guest speakers made for an informative afternoon.
/goo.gl/62mcjb

Of the shares of Voltabox AG on the Frankfurt Stock Exchange; Trading start in the Prime Standard planned for October 13 / DirectPlace supports the placement of the shares
Deutsche Börse
The share subscription for the stock market listing of Voltabox AG is today launched at the Frankfurt Stock Exchange and is expected to last until October 10th. The company is aiming for a stock exchange listing in the Prime Standard, the first trading day is scheduled for October 13th.
/goo.gl/ejWPGg

Letter to Shareholders – ASX 2017 Final Dividend
ASX
/goo.gl/by7MVW

TradeTalksEurope – Nasdaq Buy-side Symposium Review
NASDAQ
/goo.gl/doq4k6

New Daily Volume Record of 2.61 Million for VIX Options, as Investors Engage in Hedging and in Short VIX Futures
Matt Moran – SPVIXViews.com
On September 25th a new daily volume record of 2.61 million contracts was set for options on the CBOE Volatility Index® (VIX®), as the VIX Index rose 6.5% to close at 10.21 that day.
/goo.gl/jwsjCJ

Fintech

CQG Releases New Functionality and Features, Including Care Orders for Hedge Management
CQG
CQG, a leading global provider of high-performance trade routing, market data, and technical analysis tools, announced today a new release of its latest functionality enhancements. This also marks the beginning of a new quarterly release schedule, in addition to CQG’s annual upgrade.
/goo.gl/N6T45N

FactSet beats fourth-quarter revenue estimates as more clients sign up
Reuters
Financial information provider FactSet Research Systems Inc (FDS.N) reported a better-than-expected quarterly revenue on Tuesday, as its signed up more clients for its analytics and data services.
reut.rs/2xEiUES

Hyperledger Gains 10 New Members
PR Newswire via Markets Insider
Hyperledger, an open source collaborative effort created to advance cross-industry blockchain technologies, announced today that 10 new organizations have joined the project. As a multi-project, multi-stakeholder effort, Hyperledger incubates eight business blockchain and distributed ledger technologies including Hyperledger Fabric, Hyperledger Iroha, Hyperledger Indy, Hyperledger Burrow, Hyperledger Sawtooth, among others.
read.bi/2wV00Ww

Technology development of the year: Fenics
Risk.net
New opportunities are opening up in the foreign exchange options market. Major global banks are pulling back their liquidity provision, leaving space that many local players are eager to occupy. Furthermore, the market is going the way of spot trades and becoming more electronic, enabling those with the technology to offer new and more flexible services. This is where Fenics comes in.
bit.ly/2wUMFO5

Colt extends Nordic PrizmNet footprint
Finextra
Verne Global, a provider of highly optimised, secure, and 100% renewably-powered data center solutions, today announced that Colt has expanded its presence within its Icelandic data center by adding Colt PrizmNet as part of its on-net offering.
/goo.gl/jYuyij

Politics

Jeremy Corbyn: It’s right to plan for run on pound
BBC
Jeremy Corbyn says it is “right to look at all these scenarios” after his shadow chancellor suggested that there could be a run on the pound if Labour went into government.
bbc.in/2wUux6H

Lawmakers Criticize SEC Chairman Over Handling of Hack; Jay Clayton testifies Tuesday about the breach of the SEC’s Edgar system
By Dave Michaels and Andrew Ackerman – WSJ
U.S. senators, already facing distress calls from constituents over the Equifax Inc. hack, criticized the Securities and Exchange Commission’s new leader for how the agency handled a 2016 breach of its cornerstone system for storing market-moving information.
/goo.gl/F1JiVN

Trump Tax Cut Odds Start to Make Waves Again in the Stock Market
Lu Wang – Bloomberg
Most-taxed companies, small-caps outperforming as hopes revive; Republicans plan to preview tax-overhall bill Wednesday
Amid FANG flu and another trash rally, a trade tied to Donald Trump has come quietly back into vogue with U.S. equity investors.
/goo.gl/mLbbZR

How to Tell If Trump’s Tax Plan Is Dead on Arrival
Sahil Kapur – Bloomberg
Tax cuts for high earners and deficit debate among key issues; ‘Until I see it, I have nothing but worries,’ economist says
President Donald Trump pronounced a Republican framework for overhauling the U.S. tax code “very comprehensive, very detailed” Tuesday, but lingering uncertainties over whether Congress can pass an ambitious and controversial rewrite of the tax code has Washington advocates fretting.
/goo.gl/m5XM7C

Trump’s Too-Big-to-Fail Punt; Treasury abdicates on MetLife’s Sifi designation.
The Editorial Board – WSJ
The Trump Administration has been promising to restore more legal certainty to arbitrary financial rules, but we’re beginning to wonder. Financial regulators on Friday failed to decide whether to remove AIG ‘s “systemically important” label. The political punt underscores the imperative for Treasury to clarify the government’s opaque review process and drop its appeal of MetLife ‘s challenge to its too-big-to-fail status.
/goo.gl/ntS7x6

Senators press SEC chairman on Dodd-Frank clawbacks, but Equifax execs ineligible
Francine McKenna – MarketWatch
Senate Banking Committee members had a lot of questions for Jay Clayton, the Securities and Exchange Commission chairman, on Tuesday, but several senators switched gears to ask about compensation clawbacks after news broke that Equifax CEO Richard Smith was retiring.
/goo.gl/LzFerH

Regulation

Syngenta agrees to settle GMO corn litigation
Nate Raymond – Reuters
Syngenta AG has agreed to pay close to $1.5 billion to resolve lawsuits stemming from its decision to commercialize a genetically modified strain of corn before China approved importing it, a person familiar with the matter said on Tuesday.
reut.rs/2xDNsGx

EBA and ESMA publish guidelines on suitability assessment for management body members and key function holders
ESMA
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have published their joint Guidelines to assess the suitability of members of management bodies and key function holders.
/goo.gl/KY5kLz

New FINRA ADF Participant
FINRA
Beginning Monday, October 2, 2017, Jane Street (MPIDs: JSCA and JSEB) will become a Trade Reporting Only (TRO) participant on the FINRA Alternative Display Facility (ADF).
/goo.gl/SVFXhz

Proposed Rule Change to Amend Section 13 of Schedule A to the FINRA By-Laws Relating to the Review Charges for Communications Filed with or Submitted to FINRA
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend Section 13 of Schedule A to the FINRA By-Laws (“Section 13”) governing the review charges for communications filed with or submitted to FINRA’s Advertising Regulation Department (the “Department”) to account for upcoming technological changes that will allow websites to be filed in native format.
/goo.gl/4CofhL

Stock Market Analyst Barred for Illegally Cashing In On His Research Reports
Two Investment Bankers Also Charged in Insider Trading Case
SEC
The Securities and Exchange Commission today charged a stock market analyst with insider trading prior to the publication of research reports and articles he authored with the false disclaimer that he wasn’t trading in the companies being covered. He agreed to settle the charges and be barred from trading in penny stocks for the rest of his life.
/goo.gl/yz3n27

ASIC remakes relief for financial counselling agencies providing advice or credit assistance
ASIC
ASIC has made two new instruments relating to financial counselling agencies to continue the relief provided by class orders that were due to expire (‘sunset’).
/goo.gl/gYUZYb

The TRADE confirms speakers for MiFID II Checklist event; The MiFID II Checklist event will be held in London on 3 October at The Rosewood Hotel.
Editors – The Trade
Heads of trading and CEOs at global brokers and exchange groups will be joining The TRADE at the MiFID II Checklist event on 3 October in London to prepare our readers for the final stretch of MiFID II implementation.
/goo.gl/tiz36o

SEC Accuses Analyst of Trading on His Reports; Napodano has reached a settlement, agreeing to a permanent ban on trading penny stocks and to pay back the improper gains and a penalty
Austen Hufford – WSJ
Federal authorities have accused an equity analyst of trading on penny stocks before releasing his related equity-research reports.
/goo.gl/ym9fGf

FBI, SEC Look Into Business Practices of Country’s Largest ‘Green’ Lender; Agencies seek information about Renovate America’s business practices
Kirsten Grind – WSJ
Investigators from the Federal Bureau of Investigation and the Securities and Exchange Commission are looking into business practices at Renovate America Inc., the largest provider of energy-saving home-improvement loans, according to people familiar with the matter and documents reviewed by The Wall Street Journal.
/goo.gl/p3FfMF

Departure of PepsiCo Lawyer Is Focus of SEC Probe; The agency is investigating an allegation that the company retaliated against its general counsel in 2012 for her handling of a Russia probe
Andrew Ackerman, Joe Palazzolo and Jennifer Maloney – WSJ
Federal securities regulators are investigating an allegation by PepsiCo Inc.’s PEP -0.12% former top lawyer that the company fired her in retaliation for the way she handled an internal probe into potential wrongdoing in Russia, according to people familiar with the matter and internal documents.
/goo.gl/9skJT3

SEC head grilled over handling of cyber attack; Lawmakers criticise Jay Clayton over commission’s disclosures after system breach
Barney Jopson in Washington – FT
The chairman of the US Securities and Exchange Commission, Jay Clayton, has been grilled by lawmakers over his response to a cyber attack on the agency’s corporate filing system.
/goo.gl/A6cFGM

Securities Commission Malaysia Sues Seven Individuals For Market Manipulation, Seeks Disgorgement And Civil Penalty Of RM7 Million
Mondovisione
Securities Commission Malaysia (SC) recently sued seven individuals at the Kuala Lumpur High Court for the manipulation of shares in APL Industries Bhd (APLI) and is seeking court orders for disgorgement and civil penalty of up to RM7 million and barring the defendants from the capital market.
/goo.gl/NxvvmK

SEC is getting serious about bitcoin fraud and fake news
Jon Fingas – Engadget
The US’ Securities and Exchange Commission has to deal with a lot more than classic financial crimes these days: it has to worry about everything from insider trading hacks to the integrity of the latest digital currencies. To that end, it’s creating a Cyber Unit that will focus its enforcement team on digital offenses. These include hacks, such as attempts to obtain insider info or to compromise trading platforms and accounts, but that’s really just the tip of the iceberg.
/goo.gl/CQog9Y

Investing and Trading

Louis Dreyfus’s $1.4 Billion Commodity Hedge Fund to Shut
Isis Almeida and Nishant Kumar – Bloomberg
The hedge fund run by Louis Dreyfus Holding BV will close by the end of 2017, joining a wave of commodity-investment vehicles that have shut in recent years.
All funds and investments run by Edesia Asset Management BV will be wound down by Dec. 31 as the agricultural-commodities giant focuses on its main business, the company said in a statement Tuesday. The investment firm founded in 2008 manages more than $1.4 billion, it said. That’s down from $2.7 billion in August 2013, according to the parent company’s website.
/bloom.bg/2xEccPe

Active fund managers ride tech stocks to best performance since 2009
David Randall – Reuters
An overweight position in technology stocks like Facebook Inc (FB.O) and Google-parent Alphabet Inc (GOOGL.O) is helping more active fund managers beat their benchmarks than at any point since 2009.
reut.rs/2wUtbsK

‘Lower for longer’ oil price era almost over, Trafigura says; Trader warns of oil crunch as rising demand strains supply and Brent nears $60 a barrel
Anjli Raval and Neil Hume in Singapore – FT
One of the world’s biggest commodities traders says the “lower for longer” era of low oil prices is nearing an end, as Brent crude approaches a more than two-year high of near $60 a barrel.
/goo.gl/rGWqst

Bond markets need to wake up to global upswing; Investors are mistaken if they think yields will be able to stay low for much longer
Michael Heise – FT
Since the financial crisis in 2008, the global economy has been characterised by slow growth, low inflation and extremely expansionary monetary policies. Markets seem to expect a continuation of this so-called “new normal”. They predict no interest rate rises in the foreseeable future from either the ECB or the Bank of Japan, and they expect the Fed funds rate to stay lower than indicated by the Fed`s governors.
/goo.gl/erxvvr

Hedge fund management still a man’s world even though women outperform
Stephen Vines – South China Morning Post
Are women better fund managers than men? If a recent report on their performance as hedge fund managers is anything to go by, the answer is yes, but, as ever, it is complicated.
/goo.gl/fcs25c

Active fund managers ride tech stocks to best performance since 2009
David Randall – Reuters
An overweight position in technology stocks like Facebook Inc (FB.O) and Google-parent Alphabet Inc (GOOGL.O) is helping more active fund managers beat their benchmarks than at any point since 2009.
/goo.gl/q5iCnj

Institutions

Bank of America Venture Trims 10% of Staff as Part of Digital Push; About 250 employees lose jobs as part of restructuring
Rachel Louise Ensign – WSJ
Bank of America Corp.’s BAC 0.20% merchant-services joint-venture has laid off about 10% of its staffers as a part of a restructuring, according to a person familiar with the matter.
/goo.gl/R9xweR

Barclays Investment Bank Boss Vows to Restore ‘Commercial Zeal’
Stephen Morris and Donal Griffin – Bloomberg
Throsby wants staff to ‘step up’ for clients, take more risk; Lender is redeploying resources from lending to trading desks
Barclays Plc’s investment-banking boss, Tim Throsby, says he plans to reignite “commercial zeal” within the firm’s worst-performing unit, ending five years of risk-averse retrenchment that’s left traders trailing U.S. rivals.
/goo.gl/w2edJr

Deutsche Offers a Less-Than-Plum Role
Andrew Peaple – WSJ
Deutsche Bank’s global head of the fundamental credit strategy group, Jim Reid, needs a new manager in London.
/goo.gl/dMo9fP

No European banks have asked for UK licences as Brexit looms
Hellenicshippingnews.com
Britain’s financial watchdog has not had any applications as yet for licences from European Union financial firms operating in Britain which may lose the right to “passport” their services into the country once it leaves the EU in March 2019.
/goo.gl/MRuaWz

Austrian bank BAWAG PSK planning Vienna IPO
Reuters Staff
Lender BAWAG PSK, majority owned by U.S. private equity group Cerberus Capital Management, plans an initial public offering in Vienna that could be Austria’s biggest in a decade.
/goo.gl/bsotRQ

Regions

‘Chicken Little’ investors in China given debt boost; Search for opportunities gets under way during grand economic transition
James Kynge – FT
China might be described as a Chicken Little play for stock investors. Whenever fears of sovereign debt defaults are rising — the market equivalent of the sky falling in — investors flock to sell stocks.
/goo.gl/Z1zoTK

The Mystery of the $1.8 Billion Korean Bond Selloff
Jiyeun Lee and Hooyeon Kim – Bloomberg
South Korean sovereign bonds saw the biggest exodus of foreign cash since at least 2014 on Tuesday, sparking speculation in Seoul — and beyond — over who is getting out.
/goo.gl/zCd69J

Petrobras has drawn up a strategy for Brazil oil auctions
Reuters Staff
Petróelo Brasileiro SA has drawn up a strategy to participate in Brazil’s three upcoming oil auctions this year, as a declining debt burden has increased the state-controlled oil producer’s firepower, Chief Executive Officer Pedro Parente said on Wednesday.
/goo.gl/oPJvdN

China’s ‘teapot’ oil refiners feel the heat as competition grows; Rivalries in sector add to woes of excess capacity and slower demand for fuel
Anjli Raval and Neil Hume in Singapore
China’s independent oil refiners face an uphill struggle as excess capacity in the sector and slower demand for fuel creates a tougher trading environment, a top executive has warned.
/goo.gl/Lr6PGv

Beijing cuts red tape for foreign firms as it vies for investors; Regulation from 1995 requiring companies to set up representative offices in China scrapped, as vice-premier warns of new challenges ahead
Frank Tang – South China Morning Post
As Washington prepares to unveil a corporate tax-cut plan, Beijing has scrapped cumbersome requirements on foreign businesses that have been in place for 22 years in its latest bid to woo investors.
/goo.gl/2Aj63P

Does Hong Kong really need so many obscure and antiquated ‘specialist’ bodies?
Jake Van Der Kamp – South China Morning Post
A top adviser to the Hong Kong government has warned that opposition lawmakers threatened the prospects of the city’s financial services industry if they refused to approve funding for the Financial Services Development Council
/goo.gl/366pmb

Brexit

Boris Johnson Hosts Launch of Hard Brexit Pressure Group
By Robert Hutton – Bloomberg
Institute for Free Trade will lobby ministers to drop tariffs; Event comes after May adopted softer language toward the EU
U.K. Foreign Secretary Boris Johnson is to host the launch of a pressure group that is pushing for maximum distance from the European Union, less than a week after Prime Minister Theresa May tried to woo EU leaders with softer language on Brexit.
/goo.gl/kCfT7k

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