Math Whiz Trades Without Humans to Build a $700 Million Fortune

Dec 5, 2019

First Read

Hits & Takes
By JLN Staff

Dan Stern is the subject of today’s MarketsWiki Education Open Outcry Traders History Project video. Stern is part of a prominent Chicago Board of Trade family of traders and lovers of soccer.~JJL

John Lothian News is getting ready to publish a 10 minute video story about the Illinois cannabis law and the implications for investing and trading in the space. We have interviewed three members of the consultancy Supercritical, including former Cboe executive Jay Caauwe. We are looking for a firm that would be interested in sponsoring this video, as it is a little out of our normal sponsors’ area of interest. We expect the video to get good viewership given the interest in this area ahead of the law change January 1, 2020. If you are interested in sponsoring the video, please contact me at johnlothian@johnlothian.com. Suzanne Cosgrove and Mike Forrester collaborated to develop this video.~JJL

FTSE Russell is holding an interactive webinar on the 2020 investment outlook featuring Alec Young, managing director, global markets research at FTSE Russell. He will discuss the key macro issues confronting investors in 2020, before addressing questions via a live Q&A with webinar participants. The webinar is on Wednesday, December 11 at 11:00 – 11:30 a.m. EST.~JJL

ICAP will host their annual Charity Day on Tuesday, December 10. They will be joined by Alex Rodriguez and Bradley Cooper, among other celebrities, to raise money for more than 45 charities.~SR

There is a CAIA Chicago Options Event at Cboe on Tues. Dec. 10 featuring money managers from Innovator, Invesco and Calamos.~JJL

The ICE’s Investor Relations page has been down every time I tried it today. Yesterday, they issued a congratulations message to former executive Kelly Loeffler, for being named to the U.S. Senate.~JJL

Congratulations to Kelly Loeffler on being designated as the next U.S. Senator from the state of Georgia, taking over for Johnny Isakson, who is stepping down for health reasons. We wish you the best of success in your new career as a public servant.~JJL

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Risk Management, Analytics and Parallel Processing: Tom Watson of Hanweck
JohnLothianNews.com

Tom Watson, head of sales at Hanweck, sat down with JLN at FIA Expo to talk about Hanweck’s “as a service type” model, which distributes data in a feed or file so customers can integrate the data into their own platforms. He discusses the company’s branching out into international markets and margin analytics and how GPU-based computing is changing the industry landscape.

Watch the video »

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Georgia governor picks political newcomer for U.S. Senate
Ben Nadler and Zeke Miller, Associated Press
Georgia’s Republican governor has chosen a wealthy businesswoman and political newcomer to fill an upcoming vacancy in the U.S. Senate, flouting President Donald Trump’s preferred candidate in a play for moderate suburban voters.
/jlne.ws/2OPC0QS

***** In her comments at the press conference announcing her selection, Kelly Loeffler made a strong statement that she is a lifelong conservative, anti-elective abortion, pro-second amendment, pro-Trump and pro-wall. She is also against Democrats and socialism. She will be on the ballot in November of 2020, so her comments were really intended for voters in the Georgia Republican Senate primary. Her rhetoric was not something you typically hear publicly said from industry participants. But now she is a politician. One wonders, though, how this rhetoric will play with participants of ICE and NYSE.~JJL

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OCC’s Transformation: Enhanced Efficiency and Agility
Bill Raczyk, OCC Vice President, Process Innovation
In an age of ever-more-rapidly evolving technology, businesses need to engage in constant reinvention to remain relevant. OCC, the world’s largest equity derivatives clearing organization, is no different.
/jlne.ws/34RCOu1

*****I want to be transformed like the OCC. I need more efficiency and especially agility.~JJL

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The staggering millennial wealth deficit, in one chart
Christopher Ingraham – The Washington Post
Few things capture the precariousness of life for today’s young adults like a visualization of their wealth.
Economist Gray Kimbrough did just that, using Federal Reserve data to compare how generations fared financially at different points of their life cycles.
/jlne.ws/33X8a1j

*****Given the growth of the “nones,” people who say they have no religious affiliation, and the wealth deficit from this generation, I have grave doubts about how churches are going to survive in the coming years.~JJL

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Iceland puts well-being ahead of GDP in budget
BBC
Iceland’s prime minister has urged governments to adopt green and family-friendly priorities, instead of just focusing on economic growth figures.
Katrin Jakobsdottir has teamed up with Scottish First Minister Nicola Sturgeon and New Zealand’s PM Jacinda Ardern to promote a “well-being” agenda.
Ms Jakobsdottir called for “an alternative future based on well-being and inclusive growth”.
She said new social indicators were needed besides traditional GDP data.
/jlne.ws/2YjpSL3

***** Alternative data can be good.~JJL

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Don’t fall for these 10 financial scams; How fraudsters will try to trick you out of your money
Claer Barrett – FT
Plenty of unscrupulous people have tried to trick me into parting with cash over the years. So far, none have succeeded. A survey this week could possibly reveal why: it turns out “nice people” are far more likely to fall for financial scams than misanthropes like me.
/jlne.ws/2sOFdHR

*****Every day my email box is full of potential scams. The number of robo calls I receive is also astounding.~JJL

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Wednesday’s Top Three
Our top story Wednesday was Chicago Magazine’s Ceres Cafe, Destroyer of Careers, about debauchery at Ceres Cafe in the CBOT building, expanding on the Eddie Johnson scandal. Next up was Acuiti’s Half of derivatives brokerages considering new front-office software provider. And in third was Bloomberg’s Homebody in a Hoodie: Hedge Fund Founder Builds Quant Paradise.

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CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

Math Whiz Trades Without Humans to Build a $700 Million Fortune
Tom Maloney, Alexander Sazonov, and Lananh Nguyen – Bloomberg
Alex Gerko’s XTX Markets more than doubled profits last year; Market-maker can handle $150 billion in daily trading volume
When alumni of the New Economic School gathered in London in September for their first informal meeting outside Russia, the two-day program included lectures from former graduates, guests such as billionaire Alfa-Bank Chairman Petr Aven and evening drinks at local pubs.
/jlne.ws/2PkJvhA

By Jove! Crypto has discovered netting
Izabella Kaminska – FT
Yes. The technical geeks will quibble with what we’re about to say. But conceptually and practically it amounts to this. End of. To get around its epic scaling limitations the numero uno cryptocurrency system (bitcoin, duh) is finally deploying the Lightning Network (LN) to major players such as the exchange Bitfinex. And what that basically means is that bitcoin is moving firmly away from real time gross settlements and push payments and into the world of deferred net settlement and pull payments.
/jlne.ws/382alng

EU regulator calls for closer scrutiny of fees for market data; Esma says that almost 2 years on from Mifid II, charges remain unreasonable
Philip Stafford – FT
European exchanges will face closer monitoring of the prices they charge customers for basic data, after regulators ruled that the Mifid II markets revamp had not delivered on its aim of cutting the costs of trading.
/jlne.ws/368fXui

ESMA recommends real-time consolidated tape for equity
ESMA
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, has today published a first review report on the development of prices for market data and on the consolidated tape for equity, following the application of the Markets in Financial Instruments Directive (MiFID II) for nearly two years.
/jlne.ws/2sNVJYG

Euronext to acquire control of Nord Pool, a leading physical power market in europe, reinforcing Oslo as Euronext’s hub in the nordics
Euronext
Euronext will enter into a partnership, governed by a shareholder agreement, with the Nordic and Baltic Transmission System Operators (TSOs) that currently own Nord Pool[3], and who will retain a 34% stake through a joint holding company. Euronext is pleased to enter into the power market with such strong and experienced partners.
/jlne.ws/34UoQYn

Regional exchanges ramp up efforts to attract global clients; FIA Asia panel discussion looks at efforts by regional exchanges to attract greater international participation
Kirsten Hyde – MarketVoice
Leaders from several regional exchanges in Asia discussed their initiatives to attract more international clients at the FIA Asia conference on Dec. 4.
/jlne.ws/2qmNwcX

US cannabis companies struggle to secure insurance; Insurers remain cautious in taking on risk, resulting in higher premiums
Robert Armstrong – FT
Major insurance providers, including Berkshire Hathaway and Aon, have begun to offer coverage to American companies in the legal marijuana industry, which had long been off-limits due to regulatory or reputational reasons.
/jlne.ws/2YlR7V7

Intrade Founder Takes Another Shot at a Sports-Betting Exchange
Eben Novy-Williams – Bloomberg
Do Americans want to bet on sports like they trade stocks? Tradesports, hoping that they do, plans to relaunch in 2020
One of the founders of Intrade, a popular marketplace for political predictions that shuttered in 2013, is betting that Americans are ready to gamble on sports like they trade stocks. Ron Bernstein, who helped launch Intrade two decades ago, is bringing back Intrade spinoff Tradesports as a sports-betting exchange. The brand is starting a free-to-play beta test this week, with hopes of being licensed and active in some U.S. states next year.
/jlne.ws/2Lrn9tE

The repo market is ‘broken’ and Fed injections are not a lasting solution, market pros warn
Joy Wiltermuth – MarketWatch
The Federal Reserve’s ongoing efforts to shore up the short-term “repo” lending markets have begun to rattle some market experts. he New York Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short term money markets since mid-September when a shortage of liquidity caused a spike in overnight borrowing rates.
/jlne.ws/2OTbENZ

CME Group to Launch LNG Freight Futures as Demand to Hedge Trade Risks Rises
Reuters
Exchange operator CME Group said on Tuesday it would be the first futures exchange to launch trading of three liquefied natural gas (LNG) freight futures contracts on Dec. 23.
/jlne.ws/2DQoJRU

Exchanges, OTC and Clearing

HKEX Monthly Market Highlights
MondoVisione
Securities Market – Market capitalisation was $35.7 trillion at the end of November 2019, an increase of 16 per cent from $30.8 trillion at the end of November 2018.
Derivatives Market – The average daily turnover of Stock Futures for the first eleven months of 2019 was 3,736 contracts, an increase of 15 per cent when compared with the 3,262 contracts for the same period last year.
/jlne.ws/2rfATkk

Nasdaq CEO Adena Friedman to Present at Goldman Sachs U.S. Financial Services Conference 2019
Nasdaq
/jlne.ws/364SgmL

ASX Monthly Activity Report – November 2019
ASX
/jlne.ws/2Loo0eT

European equity derivatives lead the way at Eurex in November; Eurex’s European equity derivative volumes showed strong growth // New record set for Open Interest in MSCI derivatives
Eurex
Eurex, a globally leading derivatives exchange, recorded a second consecutive month of strong growth in European equity derivative volumes. Traded contracts were up 19 percent year-on-year in November to 32.7 million following on from a 45 percent year-on-year rise in October. Double digit growth was also recorded in the OTC clearing space.
/jlne.ws/366kDAW

Mare Nostrum lists on Euronext Growth; EUR7.99 million raised – market capitalisation EUR39.7 million
Euronext
Euronext today celebrated the listing of Mare Nostrum, an innovative human resource specialist for SMEs, on Euronext Growth in Paris (ticker code: ALMAR). Mare Nostrum is a recognised recruitment and staffing provider serving customers in construction, manufacturing, transport, logistics and services.
/jlne.ws/2PmfVbQ

Members Exchange Messaging Protocols Now Available
Tom Fay – MEMX
I am excited to announce the availability of pre-production versions of the MEMX Session Level, Order Entry (MEMO) and Market Data (MEMOIR) protocols. The documentation set provides detailed technical information for all supported messaging constructs and compiler ready data schema definitions to allow for simple code generation. This release provides all future participants an early opportunity to begin to develop and test the systems and applications needed to access MEMX.
/jlne.ws/35VzfDk

Cboe Global Markets Reports November 2019 Trading Volume
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today reported November monthly trading volume.
/jlne.ws/2OQfO9a

Fintech

Edinburgh fintech creates jobs with £500k funding ahead of New Year launch
A trio of high-profile business leaders will join the fintech’s board under funding deal.
Hannah Burley – The Scotsman
A fledgling Edinburgh fintech led by a trio of Scottish tech veterans has secured six-figure seed funding to create jobs and develop its offering as it prepares for product launch.
/jlne.ws/2Rm7a3Z

Straits Times Index (STI) Quarterly Review – December 2019; Mapletree Logistics Trust to be added to the STI
SGX
FTSE Russell announces that there will be one change to the constituents of the Straits Times Index (STI), following the December quarterly review. Mapletree Logistics Trust will be added to the index and, as a result, Golden Agri-Resources will be excluded.
/jlne.ws/2PjuRHH

Eventus Systems selects Itiviti’s Managed FIX Service for drop copy consolidation
Eventus Systems
Itiviti, a leading technology and service provider to financial institutions worldwide, today announced that Eventus Systems, a multi-award winning global trade surveillance and market risk platform provider, has selected Itiviti’s Managed FIX Service to consolidate drop copies from market centers.
/jlne.ws/2sOJ1sD

Nomura taps Pico for new FX and rates trading platform; Pico to develop, host and manage new platform for Nomura’s global FX and rates trading businesses.
John Brazier – The Trade
Asian investment bank Nomura has extended its partnership with technology services provider Pico to enhance its FX and rates trading operations.
/jlne.ws/2PfRsVn

Derivatives brokers eye switch to new trading systems by 2021; Acuiti study finds nearly one-third of derivatives firms planning to adopt new front-office technology provider in the next two years.
John Brazier – The Trade
The derivatives front-office technology landscape will be in rude health for providers over the next two years, with brokers the most likely to source a new provider, according to a study from Acuiti.
/jlne.ws/2sLDKC1

DriveWealth Teams with First Thai Partner, SBI Thai Online Securities Co., to Bring Easy Access to U.S. Stock Market, First Fractional Share Capability for Thai Residents
DriveWealth, LLC
DriveWealth, LLC, a U.S. based leader in global digital trading technology, announced today its first partnership in Thailand. The firm has teamed with Thailand’s leading online securities trading provider, SBI Thai Online Securities Co., Ltd. (SBITO), to bring local investors direct access to the U.S. stock market and their first opportunity to participate in fractional share trading. The move follows the relaxation of rules by the Thai Ministry of Finance and Bank of Thailand, effective last month, enabling retail investors to invest directly in foreign securities.
/jlne.ws/2LqxWod

Cryptocurrencies

Cryptocurrencies proving to be a threat to US government
John Crudele – NY Post
As I’ve mentioned in this column, the US government has been looking into whether rogue governments like Iran and North Korea have been using cryptocurrencies to evade international trade sanctions. I had a good source for those stories. Last week, a 36-year-old researcher for the Ethereum Foundation — connected to Ethereum, one of the cryptocurrencies — was charged with helping North Korea do just that.
/jlne.ws/2RkR5vh

Central bank talk of launching cryptocurrencies is all bluff; The real hope is that private banks will improve costly world of cross-border payments
Martin Arnold – FT
To the untrained eye, several of the world’s top central banks appear to be rushing towards launching their own cryptocurrencies any day now.
/jlne.ws/2LqQwwd

Almost 70 crypto hedge funds have closed this year as institutional investors shy away
Yogita Khatri – The Block
Nearly 70 crypto-focused hedge funds that largely cater to institutional investors, such as pension funds and family offices, have closed this year.
/jlne.ws/2ORwQE1

Bitcoin Crashes After Sudden Leap Higher [Updated]
Billy Bambrough – Forbes
Bitcoin and other major cryptocurrencies, including ethereum, Ripple’s XRP, litecoin, and bitcoin cash, have suddenly leaped, with bitcoin rising almost $1,000 in just minutes. [Update: 7:55pm EST] After suddenly surging, the bitcoin price has given up almost all of its gains, dropping to around $7,200 per bitcoin. Bitcoin climbed from $7,070 per bitcoin to $7,801 on the U.S.-based Kraken exchange, a rise of around 10%.
/jlne.ws/2RkZDST

Litecoin’s Mining Power Tanks to Lowest in Year Following Price Plunge
Omkar Godbole and Bradley Keoun – Coindesk
Litecoin’s price plunge in recent months has whittled away the profitability of mining the cryptocurrency, leading to a shakeout among computer operators on the network seen as a faster and cheaper but less secure version of bitcoin.
/jlne.ws/33Q603h

Ex-Morgan Stanley Developers Launch High-Speed Cryptocurrency Derivatives Exchange
Gertrude Chavez-Dreyfuss – Reuters
A group of former software developers from Morgan Stanley announced on Wednesday the launch of a cryptocurrency derivatives exchange called Phemex that aims to execute trades in less than a millisecond for both retail and institutional investors. Jack Tao, an 11-year executive with Morgan Stanley where he was the global development leader of the investment bank’s Electronic Trading (MSET) Benchmark Execution Strategies (BXS), co-founded the company. He resigned from Morgan Staley in July.
/jlne.ws/34V9enE

Canadian-government backed bitcoin miner goes bankrupt, owing millions to creditors; Great North Data, a Canadian-government backed bitcoin miner, has filed for bankruptcy
Yogita Khatri – The Block
Great North Data, a Canadian-government backed bitcoin mining firm, has gone bankrupt. The firm, backed by federal and provincial government agencies, has liabilities of CA$13.2 million (~$10 million) against assets of CA$4.6 million (~3.49 million), CBC News reported Wednesday, citing bankruptcy documents filed late last month.
/jlne.ws/2qrVXE2

What Twitter Meme Wars Say About Crypto’s Reliance on Figureheads
Leigh Cuen – Coindesk
Would you get a tattoo of your employer’s logo? Gareth Li, head of business development and partnerships at Binance, had the crypto exchange’s angular diamond etched on his arm to match founder Changpeng “CZ” Zhao’s ink. And a similar level of commitment extends to the charismatic CZ’s fans, who get their own Binance tattoos, sometimes permanently.
/jlne.ws/2YkubFP

U.S. Citizen Charged With Helping North Korea Evade Sanctions
Mengqi Sun – WSJ
A U.S. cryptocurrency expert is facing a federal charge after allegedly providing information that could help North Koreans evade U.S. sanctions, the U.S. Justice Department said. Virgil Griffith, 36, was arrested at Los Angeles International Airport last week and appeared in federal court in Los Angeles on Monday, prosecutors said. He is charged with conspiring to violate the International Emergency Economic Powers Act.
/jlne.ws/383iyaZ

Report: Bank of France to test digital currency in 2020
Celia Wan – The Block Crypto
France is looking to test central bank-issued digital currency in 2020, according to news site AFP. In a Wednesday conference hosted by the French Prudential Supervision and Resolution Authority (ACPR), the central bank’s governor François Villeroy de Galhau said that the bank will start testing digital currency soon and “will launch a call for projects before the end of the first quarter of 2020,” per the AFP report.
/jlne.ws/2Pfoxkb

Ex-Morgan Stanley execs launch crypto derivatives exchange Phemex, claiming it to be ‘on par with Nasdaq’; Eight former core developers from Morgan Stanley have launched crypto derivatives exchange Phemex
Yogita Khatri – The Block
Eight former core developers from one of Wall Street’s top investment banks, Morgan Stanley, have launched a cryptocurrency derivatives exchange with big claims.
/jlne.ws/2Yrk3ve

WisdomTree launches its first bitcoin exchange-traded product
Tom Wilson – Reuters
U.S. asset manager WisdomTree launched on Tuesday its first investment product that tracks bitcoin, a rare example of a mainstream money manager offering exposure to the volatile world of digital currencies.
/jlne.ws/2DMCYqJ

Japan Now Has 21 Approved Crypto Exchanges
Bitcoin.com
Japan’s top financial regulator has approved the remaining crypto exchange that was in business prior to the regulation of the crypto industry. Exchanges in this category were allowed to continue operations while their registration applications were being reviewed. The regulator has so far approved a total of 21 crypto exchanges to operate in the country.
/jlne.ws/33VvxrH

Politics

Trump Making a Terrible Mistake on Tariffs, Brazil’s Guedes Says
Rachel Gamarski and Martha Viotti Beck – Bloomberg
President Donald Trump is making “a terrible mistake” in his decision to apply tariffs to Brazilian steel exports, according to the economy minister of the Latin American country.
Paulo Guedes, speaking in a video interview to O Antagonista news website, also denied the U.S. leader’s accusation that Brazil is deliberately weakening its currency.
/jlne.ws/2rZ58fi

Kamala Harris Wall Street donors mull whom to fund now
Josh Kosman – NY Post
Kamala Harris’s surprise exit from the presidential race is expected to spur a fresh round of jockeying for her wealthy Wall Street donors, sources told The Post.
/jlne.ws/2LF8CLl

London Mayor says Trump appears to care only about white America
Bianca Nobilo and Zamira Rahim, CNN
London (CNN)The Mayor of London, Sadiq Khan, has said Donald Trump’s divisive rhetoric gives the impression the US President cares only about white Americans.
/jlne.ws/2DOw7x1

Elizabeth Warren Accuses Michael Bloomberg of ‘Buying the Election’
Misyrlena Egkolfopoulou and Joe Weisenthal – Bloomberg
On Bloomberg TV, Warren says party shouldn’t be for sale; New York mayor spending $59 million on television ads so far
Elizabeth Warren accused former New York Mayor Michael Bloomberg of trying to buy the 2020 election with millions of dollars in advertising to fuel his late entry into the Democratic race.
/jlne.ws/33ORMzO

Illinois native likely to be new Georgia U.S. senator; Republican Gov. Brian Kemp is backing financial industry executive Kelly Loeffler to fill the seat held by retiring U.S. Sen. Johnny Isakson, in a rebuff of President Donald Trump’s lobbying to appoint one of his biggest supporters in the House.
Lynne Marek – Crain’s Chicago Business
The next U.S. senator from Georgia may be a woman who grew up in an Illinois farming family and is well known to the Chicago trading industry.
/jlne.ws/34SGXxX

Regulation

Building operational resilience: impact tolerances for important business services
UK FCA
The Bank of England (the Bank), Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have today published a shared policy summary and co-ordinated consultation papers (CPs) on new requirements to strengthen operational resilience in the financial services sector.
/jlne.ws/2RooBRm

FCA meets firms to discuss feedback on Gabriel and improvements to new data collection platform
UK FCA
Following the Gabriel user survey we launched in July 2019, we met with survey respondents who expressed interest in engaging with us on the new system. Firms across the UK participated in our roundtable events in London, Manchester, and Edinburgh to discuss their feedback on Gabriel – our current data collection system – which will be replaced by a new reporting platform.
/jlne.ws/2LooXUv

DSIO Issues Advisory Providing Guidance and Staff Recommendations for Chief Compliance Officer Annual Report Preparation
CFTC
The U.S. Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today issued an advisory that addresses the preparation of the Chief Compliance Officer (CCO) Annual Report for futures commission merchants, swap dealers, and major swap participants.
/jlne.ws/36fZnsT

SEC Issues Agenda for Dec. 11 Meeting of Small Business Capital Formation Advisory Committee
SEC
The Securities and Exchange Commission today released the agenda for a Dec. 11 telephonic meeting of its Small Business Capital Formation Advisory Committee. The committee provides the Commission with advice and recommendations on Commission rules, regulations and policy matters relating to small businesses, from privately-held emerging companies to smaller public companies. Additional information on the committee, including its members, is available on the committee webpage.
/jlne.ws/2sIK3WY

ESMA publishes proposals on CRAs internal control functions
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has launched a consultation on proposed Guidelines on Internal Controls for CRAs, which sets out the systems and controls that credit rating agencies (CRAs) should have in place to meet the requirements of the CRA Regulation (CRAR) on internal controls.
/jlne.ws/38cRvKu

ASIC releases report on mining and exploration initial public offers
ASIC
An ASIC review of mining and exploration initial public offers (IPO) has found that companies, directors and lead managers need to implement better practices that take account of the unique characteristics and vulnerabilities of the micro-cap sector.
/jlne.ws/2LnOBIO

New data reveals the number of UK investment firms struggling with MiFID II reporting; New data discloses around 15% of UK investment firms have notified FCA of errors or omissions in transaction reporting under MiFID II.
John Brazier – The Trade
Newly released data has found that 546 firms have reported errors in transaction reporting under the MiFID II regime, following a Freedom of Information (FOI) request from consultancy Duff & Phelps.
/jlne.ws/366K5Xi

Banking Regulator Rebukes Wells Fargo’s HR Operations; OCC cited backlog of employee complaints and compensation structures that don’t do enough to prevent wrongdoing
Rachel Louise Ensign – WSJ
Wells Fargo WFC 1.26% & Co.’s principal regulator has said the bank has a massive backlog of employee human-resources complaints and poor controls around pay, a rebuke that adds to the long list of problems facing the lender’s new chief executive.
/jlne.ws/2PgHByI

Amazon Faces Widening U.S. Antitrust Scrutiny in Cloud Business
Dina Bass, David McLaughlin, and Naomi Nix – Bloomberg
FTC said to broaden Amazon inquiry beyond online retail; Amazon’s cloud business leads market over No. 2 Microsoft
U.S. antitrust enforcers have broadened their scrutiny of Amazon.com Inc. beyond its retail operations to include its massive cloud-computing business, according to people familiar with the matter.
/jlne.ws/2Lnf35y

Investing and Trading

Twitter plans first foray into junk bond market; Social media platform hopes to raise $600m after underwhelming third-quarter earnings
Joe Rennison and Hannah Murphy – FT
Twitter is planning its first foray into the junk bond market, hoping to raise $600m as the social media platform tries to shrug off lacklustre third-quarter earnings.
/jlne.ws/34U3nP8

How the euro has become ‘the world’s new carry trade’; ‘Regime break’ emerges since currency rivals yen as one that everyone wants to borrow
Eva Szalay – FT
The euro has entered a new phase, according to Deutsche Bank, rivalling Japan’s yen as the currency everyone wants to borrow — but no one wants to own.
/jlne.ws/2LroxfQ

Japan’s Most Cautious Investors Are Taking More Dollar Risks
Masaki Kondo and Daisuke Sakai – Bloomberg
As the decade that welcomed unprecedented quantitative easing comes to a close one thing is clear: Japan life insurers are taking more and more risk with their investments. A combination of ever lower bond yields and elevated costs have seen Japanese life insurers cut their hedges on dollar investments to the lowest in at least 10 years, according to calculations by Bloomberg.
/jlne.ws/2rWbY5y

Cargill invests over $113 million in Ivory Coast, Ghana cocoa sector
Reuters
Global commodities trader Cargill said on Wednesday it is investing more than $113 million to expand its cocoa processing facilities in the Ivory Coast and Ghana, creating 85 direct and hundreds of indirect jobs.
/jlne.ws/2ORtVen

Institutions

TD’s Profit Slumped in Fourth Quarter; Adjusted earnings of C$1.59 a share down from year earlier, missed analysts’ expectations
Allison Prang – WSJ
Toronto-Dominion Bank Group’s profit fell in its fiscal fourth quarter as TD raised its credit-loss provision and noninterest expenses increased.
/jlne.ws/2RmfbG4

Stockbroker Numis suffers from London stock market slowdown; Aim-listed group also blames Brexit uncertainty as profits plunge 61%
Archie Hall – FT
Lacklustre stock market activity and a weakening of corporate confidence ahead of Brexit drove a troubled 2019 for Aim-listed stockbroker Numis, which reported a 61 per cent fall in profits on Wednesday.
/jlne.ws/2Lqcb81

Wealth Adviser Deals Soar as Goldman, Private Equity Covet Fees
John Gittelsohn – Bloomberg
Personalized advice holds pricing power as trading fees plunge; Firms representing $2.4 trillion may hit market, Cerulli says
Investment adviser deals, once a fragmented backwater of financial services, are surging as Wall Street eyes fees in a business with pricing power.
/jlne.ws/34VUHYA

Credit Suisse Blocks Prosecutor Using Critical Finma Report
Hugo Miller – Bloomberg
Bank tapped Swiss law to seal report into banker’s fraud; Prosecutor now asking to lift order on bank regulator’s report
Credit Suisse Group AG has acted to block Geneva prosecutors from using details of a critical report by the country’s financial regulator into the bank’s failure to prevent fraud at its wealth management unit.
/jlne.ws/2P9dHMw

Soros CIO Puts Conservative Stamp on Fund Built With Bold Bets; The new head of the legendary asset management shop has pulled back from risk.
Katherine Burton, Katia Porzecanski – Bloomberg
In November, Dawn Fitzpatrick, chief investment officer of Soros Fund Management, was being interviewed on a finance podcast called Capital Allocators. At the top of the program, the host sent out an appeal: “Dawn contends that Soros has a uniquely attractive platform for the right type of leading investors to apply their trade,” he said before reciting an email address, twice, for interested managers to send their résumés.
/jlne.ws/2LplepA

Why did Tribune Publishing roll over for this hedge fund? As a matter of corporate governance, the deal to give Alden Global two board seats is indefensible
Joe Cahill – Crain’s Chicago Business
Tribune Publishing directors wasted no time capitulating to an aggressive new shareholder with a record of eviscerating local newspapers.
/jlne.ws/38dTT3F

BMO Harris cutting more than 300 local jobs; The job cuts, part of a companywide cost-savings initiative at Toronto-based BMO Financial Group, were a surprise with revenue and profit rising.
Steve Daniels – Crain’s Chicago Business
BMO Financial Group is preparing to cut well over 300 jobs in the Chicago area as part of a companywide cost-savings initiative.
/jlne.ws/2Pjjcs2

Regions

Has China’s IPO bonanza fizzled out amid oversupply, subdued trading?
Zhang Shidong – South China Morning Post
Initial public offerings no longer promise spectacular profits for mainland Chinese investors, with days of 44 per cent gains in some instances in first trading sessions fast becoming a thing of the past.Returns from a slew of companies debuting on mainland exchanges have been disappointing. Shares in Jiangsu Bioperfectus Technologies, a biotechnology company, for instance, rose only 17 per cent on their debut on the Science and Technology Innovation Board, or Star Market, on Thursday, missing…
/jlne.ws/386JsP6

Shinzo Abe launches $121bn stimulus package for Japan; Bigger-than-expected spending plan marks a return to the free-spending days of ‘Abenomics’
Robin Harding- FT
Prime minister Shinzo Abe has launched Japan’s first fiscal stimulus since 2016 with a larger-than-expected ¥13.2tn ($121bn) package to repair typhoon damage, upgrade infrastructure and invest in new technologies.
/jlne.ws/2sFYU4r

Turkey Eases Rules on $8.1 Billion of Bad Loans After Banks Balk
Kerim Karakaya – Bloomberg
Banks won’t need to book loans of healthy firms as soured debt; Regulator backs down on directive issued in September on NPLs
Turkey’s banking regulator eased measures on how banks classify credit to once-troubled companies, helping lenders to potentially avoid adding more non-performing loans to their books, according to people familiar with the matter.
/jlne.ws/3856sy9

Bond Rout That Didn’t Happen in Japan Casts Stimulus Doubt
Masaki Kondo – Bloomberg
Fiscal stimulus to have little impact over bond market: Mizuho; Sale of 30-year debt draws higher-than-estimated cut-off price
A stimulus package worth more than $200 billion would have led to a bond rout in any market. Not in Japan, where the yield curve held at its flattest level in three months.
/jlne.ws/2Lregk1

Brexit

Why Leave will win the Brexit battle; Many Remainers now prefer a hit to the economy by leaving the EU than a hit to democracy by staying
Simon Kuper – FT
You’d think Remain would be set to win the British election. The UK is now majority Remain (by about 53-47, taking an average of recent polls), and many Remainers have never felt so passionate about a political cause before. They also tend to be much more politically interested than Leavers, according to polling for the Hansard Society.
/jlne.ws/2YppQkP

General election: Brexit ‘offers chance to reboot UK economy’
BBC News
Leaving the EU will be an opportunity to “reboot the British economy”, a Brexit Party candidate has said. Stuart Waiton argued democracy had been “undermined” by the failure to deliver Brexit more than three years after the referendum. He said many people across the UK were disillusioned with the country’s institutions and traditional political parties. And he said change was needed so democracy can “re-emerge” in Britain.
/jlne.ws/386V1Ww

Brussels to push for rapid talks with UK after Brexit
Jim Brunsden – FT
Brussels is preparing to launch negotiations about its future relationship with Britain after Brexit, with EU leaders pushing for the union to present proposals as soon as the UK leaves. The sense of urgency from EU leaders underlines the limited amount of time available for the two sides to secure a new trade deal before Britain’s post-Brexit transition period expires next December.
/jlne.ws/34T9VxG

Boris Johnson Promises Brexit, a Budget, and New Laws in 100 Days
Alex Morales – Bloomberg
U.K. Prime Minister Boris Johnson pledged to deliver Brexit and a tax-cutting budget within 100 days of his Conservative Party winning the Dec. 12 election — a widely predicted outcome that’s driving a rally in the pound. Other early goals include a defense review, more funding for schools, and the introduction to Parliament of legislation on immigration. The Tories sought to contrast their agenda for government with the “gridlock and uncertainty” that would result from a hung Parliament — which the party described in a statement as “a very real possibility.”
/jlne.ws/2PihwiC

Miscellaneous

Steve Cohen Says Mets Deal Won’t Distract From ‘First Passion’ of Investing
Scott Soshnick and Katia Porzecanski – Bloomberg
Billionaire is preparing to take control from the Wilpons; Proposed deal values Mets franchise at MLB-record $2.6 billion
Steve Cohen told his hedge fund’s clients that owning a Major League Baseball team won’t supplant his true passion: investing.
/jlne.ws/386Cmdq

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