Nasdaq pulls out of Oslo Bors battle, handing Euronext victory

May 27, 2019

First Read

Hits & Takes
By JLN Staff

Today is Memorial Day in the U.S. where we remember and honor those who have given their lives in military service to their country. I will be marching in a parade today in Elmhurst with my troop of girls in Scouts BSA, the first parade in which we will have participated.~JJL

Condolences to the family, friends and fans of Bart Starr, the hall of fame quarterback of the Green Bay Packers, who died at the age of 85. I am pretty sure there is a Bart Starr jersey somewhere in the back of Jim Kharouf’s closet.~JJL

Bloomberg has a series of maps that show how the land area is used in every region of the United States. One bit of info: Agricultural land takes up about a fifth of the country, yet the actual land area used to grow the food Americans eat is only about the size of Indiana, Illinois and half of Iowa combined. More than a third of the entire corn crop is devoted to ethanol production. Most cropland is used for livestock feed, exports or is left idle to let the land recover.~SR

The World Federation of Exchange’s Technology Conference 2019 will be held from June 30 to July 2 in Umeå, Sweden.~JJL

Futures Radio’s Anthony Crudele interviewed Dr. Jessica Hehmeyer, a functional medicine physician, in a piece titled “Beyond The Charts.”~JJL

Cboe’s Brett Lustgarten placed first in the J.P. Morgan Corporate Challenge last week with a winning time of 17:26.~JJL

Interns from ADM recently packed 55,000 meals for Feed My Starving Children, a Christian nonprofit organization based in Minnesota dedicated to providing nutritious meals to children worldwide.~JJL

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The Spread – Death, Records and Regulation

JohnLothianNews.com

In this episode of The Spread, discussion centers around three letter acronyms (TLAs), a new record, and regulatory challenges to exchanges’ revenues.

Watch the video »

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First American Financial Exposed Customers’ Data; Real estate title insurance company points to design defect in one of its production applications
Geoffrey Rogow – WSJ
Real estate title insurance company First American Financial Corp. FAF 0.69% may have given unauthorized access to customers’ financial information.
/on.wsj.com/2woXrhy

*****Nice to know a company with all my financial history has a data breach.~JJL

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‘Generation Jobless’ Looks Back on How Financial Crisis Shaped Careers; Employees who entered the labor force around the financial crisis reflect on how a rocky start helped, hurt
Chip Cutter and Lauren Weber – WSJ
John Dodge never planned a career in insurance. The financial meltdown 10 years ago pushed him into it.
/on.wsj.com/2wls9YW

***** What a great name, “Generation Jobless.”~JJL

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Bump Goes the Futures Orders; JAC Warns FCMs
Gary DeWaal – Bridging the Week
The Commodity Futures Trading Commission determined not to stand in the way of a rule amendment by ICE Futures U.S. to impose speed bumps on certain orders entered in two futures contracts traded on the exchange. Two commissioners raised concerns that the rule amendment might be anticompetitive. Separately, the futures industry’s Joint Audit Committee reiterated prior guidance that a futures commission merchant may not guarantee customers against losses, or pay out funds from any individual account of a customer, where the payout would leave the aggregate of accounts of the customer at the FCM undermargined. Moreover, JAC strongly suggested FCMs take certain immediate actions to comply with its guidance with the implicit suggestion “or else.”
bit.ly/2K5JMUQ

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Friday’s Top Three
Our top story of the day was the Daily Mail’s Trump’s financial records from Wells Fargo and TD Bank have been turned over to House Democrats
Second was the JLN piece Leo Melamed Looks Back and Forward in Fireside Chat. Third was Bloomberg’s Billions in Losses on Margin Loans Spook BOE’s Bank Regulators

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Lead Stories

Nasdaq pulls out of Oslo Bors battle, handing Euronext victory
Terje Solsvik – Reuters
Nasdaq withdrew its offer for Oslo Bors on Monday, giving pan-European exchange Euronext free rein to pursue its bid for the Norwegian stock market operator after a five-month battle.
/reut.rs/2wlCtQJ

China’s Baoshang Bank takeover raises contagion fears
Andrew Galbraith, Cheng Leng – Reuters
A takeover by Chinese regulators of a troubled lender with links to a missing tycoon jolted markets on Monday, lifting interbank financing costs for some smaller banks and raising worries about broader risks to the country’s financial system.
/reut.rs/2wpfCDX

Dr. Evil Would Love Facebook’s “GlobalCoin”; More than 2 billion users spending one currency, controlled by one billionaire. What’s to worry about?
Lionel Laurent – Bloomberg
Sometimes even bitter billionaire rivals need each other. Mark Zuckerberg and the Winklevoss twins fell out over the founding of Facebook Inc. but they appear to have buried the hatchet over the blockchain.
/bloom.bg/2wmdhJN

New Zealand Crypto Firm Hacked to Death, Seeks U.S. Bankruptcy
Josh Saul – Bloomberg
Cryptopia still has millions in digital assets to distribute; Showdown with Arizona server company jeopardizes company data
Cryptopia Limited, a New Zealand company that operated a cryptocurrency exchange with over 300,000 accounts from around the world, filed for U.S. bankruptcy protection after hackers broke in earlier this year and stole over $16 million.
/bloom.bg/2wlrfM2

Hacked Crypto Exchange Cryptopia Files for US Bankruptcy Protection
Yogita Khatri – Bloomberg
Hacked cryptocurrency exchange Cryptopia, which went into liquidation earlier this month, has now filed for bankruptcy protection in the U.S. Cryptopia’s assigned liquidator, professional services firm Grant Thornton New Zealand, announced Monday that it has taken the step to preserve Cryptopia data stored and hosted on servers with an Arizona-based firm.
bit.ly/2wk3RP2

China’s Banking Cleanup Needs a Bigger Mop; The Baoshang takeover suggests problems may be emerging at other small lenders.
Anjani Trivedi – Bloomberg
China’s banking cleanup has moved into a fresh phase with the seizure of a small city-commercial lender. It’s far from clear that regulators have the right supplies to finish the job.
/bloom.bg/2wk9wom

China Warns Traders of ‘Huge Loss’ If They Short the Yuan
Bloomberg
China advised traders against shorting the yuan, after a recent slide took the currency to the brink of the critical 7 per dollar level.
/yhoo.it/2wmQcqr

Banks that used secret chatrooms called the ‘Cartel’, ‘Bandits Club’ and the ‘Mafia’ to fix foreign exchange rates are targeted in major Australian class action lawsuit
Alison Bevege – Daily Mail Australia
Five of the world’s biggest investment banks have been accused of colluding to fix foreign exchange rates and trigger client stop loss orders in a class action lawsuit filed on Monday. UBS, Barclays, Citibank, JPMorgan and Royal Bank of Scotland subsidiary NatWest Markets, have been accused of acting together in a cartel for the benefit of themselves and to the detriment of other market participants between 2008 and 2013.
/dailym.ai/2wx1Y1L

Meet The Godfather Of Crypto, Who’s Been Working On Digital Currency Since The Early 80s
Tracy Alloway and Joe Weisenthal – Bloomberg
Bitcoin has been around for about ten years. But the dream of a decentralized, anonymous digital currency has been around for decades. On this week’s podcast, we speak with one of the original godfathers of the space, David Chaum, an American cryptographer, who first wrote about digital cash in the early 80s. Chaum’s original vision wasn’t exactly the same as what we know as cryptocurrencies today, but many of the ideas were the same, and Chaum’s work was cited by many of the early crypto believers. On this week’s podcast, we talk to him about the history of his work, cryptocurrency, and where he sees it going now.
/bloom.bg/2woCW4y

At the Spelling Bee, a New Word Is M-O-N-E-Y; Elite spellers now can pay to get a spot in the national event. For this generation of zealous competitors, it just means another chance to shine.
Shalini Shankar – WSJ
Until last year, winning a regional spelling bee was the only way that children from across the U.S. could be invited to—and win—the annual Scripps National Spelling Bee, an iconic scholastic competition held since 1925.
/on.wsj.com/2wpHsjf

Hedge Funds Score Win Against Regulatory Threats; U.S. activist short seller Muddy Waters looks vindicated, morally if not financially, after former French target admitted financial distress
Carol Ryan – WSJ
Muddy Waters, the pugnacious Californian hedge fund run by Carson Block, is enjoying a day in the sun. A French company it warned about more than three years ago admitted Thursday night that it is in financial distress. The saga shows a lack of foresight among some European regulators that would rather short sellers just go away.
/on.wsj.com/2wo3eE5

Robinhood reportedly seeks over $7 billion valuation in latest funding round
The Block Crypto
Robinhood Markets is entering the final stages of a funding round at a valuation between $7 and $8 billion, as reported by The Information.
bit.ly/2wlD30Z

The Willy Wonka of Wall Street Has a Sweet Side Hustle in New Jersey
Sonali Basak – Bloomberg
Gary Parr’s pastime is building a luxury chocolate brand; Apollo CEO Leon Black is a fan after tasting product line
Gary Parr watches with boyish wonder as hundreds of chocolate drops roll off a massive piece of Italian machinery.
/bloom.bg/2wpggRT

Failing to hire women, ECB extends supervision job deadline: sources
Frank Siebelt – Reuters
The European Central Bank has extended a deadline for filling three top jobs at its bank supervision arm after it failed to hire any women for the roles, two sources said, illustrating the bank’s long struggle to attract female talent for senior positions.
/reut.rs/2wo2LSl

Exchanges, OTC and Clearing

China’s Chip Companies Just Can’t Excite the NYSE; SMIC’s delisting in the U.S. isn’t a product of the trade war. The company has always lagged behind TSMC, UMC and Globalfoundries.
Tim Culpan – Bloomberg
A decision by Semiconductor Manufacturing International Corp. to delist its New York-traded depositary receipts was quickly linked to the U.S.-China trade war, as if it were a victim of the growing tensions.
/bloom.bg/2wpGHXr

ICE Data Services rolls out historical tick data platform; ICE DataVault to provide aggregated real-time tick data via programmatic, cloud, or ‘click-thru’ access.
John Brazier – The Trade
ICE Data Services has announced the launch of a new data management platform for historical tick data.
bit.ly/2wmgJUL

Nasdaq Withdraws Offer to Acquire Shares of Oslo Børs VPS
GlobeNewswire
Nasdaq AB, an indirect subsidiary of Nasdaq, Inc. (Nasdaq:NDAQ), has decided to withdraw its offer (the “Offer”) to acquire all of the issued shares of Oslo Børs VPS Holding ASA made pursuant to the offer document published on 4 February 2019 (as amended). This decision has been made because under the current circumstances the minimum acceptance condition for completion of the Offer is incapable of being satisfied. Shareholders who previously accepted the Offer are being released from their obligations under the Offer.
bit.ly/2QrbMDo

Nasdaq withdraws offer for Oslo Bors; Decision clears way for Euronext to buy Norway’s main stock exchange
Myles McCormick – FT
Nasdaq has withdrawn its offer for Oslo Bors, ending a lengthy battle with Euronext for control of Norway’s main stock exchange.
/on.ft.com/2Qofz4i

Welcome Address by Chew Sutat, Head of Equities and Fixed Income, SGX at Singapore-Israel: Growing Capital Markets Together
SGX
Good morning, Ms Simona Halperin, Ambassador of Israel to Singapore and East Timor, ladies and gentlemen. Together with Tel-Aviv Stock Exchange (TASE) and the Israeli Economic and Trade Mission to Singapore, SGX is pleased to welcome you to this conference, which marks the first anniversary of SGX’s partnership with TASE. Thank you for joining us today, as we bring together market leaders to share insights into Israel’s successful transformation into an innovation hub, and to help Asian investors understand how Israel can be the next investment destination.
bit.ly/2QwXFg0

SGX launches options on global pricing benchmark for natural rubber
SGX
SGX SICOM TSR 20 is world’s pricing benchmark for natural rubber; Options contract broadens risk-management toolkit that includes futures and forwards
Singapore Exchange (SGX) today launched the industry’s first options contract on TSR 20 rubber, the global benchmark grade, offering market participants a new risk-management tool.
bit.ly/2QtmtW7

ADX Chief Executive Meets Senior LSE Officials
MondoVisione
As part of the Abu Dhabi Securities Exchange’s (ADX) strategy aimed at bolstering its leading position in the region and extending its cooperation with global financial markets, H.E. Khalifa Salem Al Mansouri, Acting Chief Executive of ADX, met senior officials at the London Stock Exchange (LSE) recently. The meeting was part of the ADX delegation’s visit to the British capital recently. As part of the trip, the ADX delegation also participated in the MSCI Annual Global Investing Conference and workshops and visited iov42 Limited. The latter specializes in financial technology solutions and applications related to Blockchain.
bit.ly/2QoITYD

Fintech

Fintech Is Putting The Bank Of Mom And Dad Out Of Business
Madhvi Mavadiya – Forbes
According to recent research from peer-to-peer lender Zopa, those aged between 18 and 22 – also known as Gen Z – are no longer compelled to rely on their parents to support them financially as 35 percent of the age group and 52 percent of millennials have more than £1,000 in savings. These findings suggest that Generation Z are in control of their financial future and contradict the abundance of headlines that suggest that this generation, in addition to 23 to 28 year olds known as millennials, spend frivolously on Pret A Manger and cannot save.
bit.ly/2K48Hbn

Segun Adeniyi: The Future of Fintech
Melissa Mordi – The Guardian
Fintech is a word that few outside the banking word have heard of, but AFF is a name that’s recognised everywhere. African Fintech Foundry, a branch of Access Bank revolutionised the face of banking technology, not just in Nigeria but across the African continent have won several awards for their impressive work.
The Guardian Life spoke to their current head, Segun Adeniyi about excessive emails, human error and the true meaning of wealth.
bit.ly/2K7kOEz

Refinitiv to acquire cloud-based OMS provider AlphaDesk; Acquisition to further Refinitiv end-to-end trading solution with order and portfolio management capabilities, expanding on existing execution and analytics services.
John Brazier – The Trade
Refinitiv has announced it is to acquire order management system specialist AlphaDesk to boost its end-to-end trading portfolio.
bit.ly/2wlv4Ro

Three reasons to consider MSCI Saudi Arabia Index Futures from Eurex
Eurex
On 20 May Eurex launched MSCI Saudi Arabia Index Futures. We spoke to Ralf Huesmann, Senior Expert, Equity & Index Strategy and Product Design, about the product launch and the reasons for it.
bit.ly/2Qupup1

HKEX Signed MOU with Beijing Antaike Information
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) and Beijing Antaike Information Co Ltd (Antaike) signed a Memorandum of Understanding (MOU) in Beijing on 24 May to establish a deeper strategic partnership. Based on the existing alumina quotation cooperation, the MOU seeks to further expand the cooperation in the spot market of non-ferrous metal, and two parties jointly promote the internationalisation of spot prices of Mainland China’s non-ferrous metals.
bit.ly/2Qt5wee

Cryptocurrencies

Beacon Chain Contracts: A New Way to Deploy Dapps on Ethereum 2.0
Christine Kim – Coindesk
The core infrastructure behind ethereum 2.0 might be in for a major redesign. Dubbed the beacon chain, a new proposal by ethereum founder Vitalik Buterin suggests radically modifying the blockchain’s role in a new iteration of the ethereum network based on proof-of-stake consensus. “The idea here is that basically on the beacon chain, you’re going to be able to deploy these little worlds that summarize how a blockchain works, how a state transition works, [and] how a smart contract works,” Raul Jordan, co-lead at non-profit Prysmatic Labs, told CoinDesk.
bit.ly/2K8oaHs

The Real Discussion About Ethereum’s Next Hard Fork Is About to Begin
Christine Kim – Coindesk
More than two dozen ethereum improvement proposals (EIPs) have been submitted for review and inclusion in ethereum’s next system-wide upgrade or hard fork, dubbed Istanbul. The list – with 28 official EIPs and at least one other set to be added – include changes to the $27 billion network that impact its mining algorithm, code execution and pricing, data storage, and much more. About a dozen of these proposals were discussed at length by ethereum core developers during a bi-weekly call on Friday. However, the majority ended up being tabled for further debate, with only one EIP receiving a tentative approval.
bit.ly/2VNG2JO

Bitcoin Cash Privacy Has Improved in Leaps and Bounds
Jamie Redman – Bitcoin.com News
Over the last few years, privacy has become of great importance to digital asset enthusiasts as law enforcement has cracked down on money transmitters, seized coin shuffling services, and blockchain analysis has increased significantly. To thwart this, some bitcoiners have turned to mixing applications that utilize the Coinjoin protocol and other methods of obfuscation. However, the crypto community was dealt a blow on May 22 when Europol shut down one of the largest cryptocurrency transaction mixing sites, Bestmixer.io.
bit.ly/30KxaYW

Bitcoin Climbs to Highest in a Year Amid Cryptocurrency Comeback
Adam Haigh and Vildana Hajric – Bloomberg
Bitcoin soared to the highest level in a year, extending a run that’s seen prices more than double since March. The largest cryptocurrency climbed as much as 10% Monday from levels late Friday, and was trading at $8,847 as of 10:25 a.m. in Tokyo. Rival coins were also stronger at the start of the week. Litecoin added almost 9% and Ether, the second largest digital token, rose 6%.
/bloom.bg/2HYd9pq

You can now pay your AT&T bills using cryptocurrency
Jon Porter – The Verge
You can now pay your AT&T bill using cryptocurrency thanks to a partnership between the mobile operator and the BitPay payment service. You’ll be able to pay using cryptocurrency either on AT&T’s website or through its myAT&T app. AT&T’s announcement doesn’t specify which cryptocurrencies it will accept, but the list of supported currencies on BitPay’s website suggests that Bitcoin, Bitcoin Cash, Gemini USD, Paxos, and Circle’s US Dollar Coin should all be supported.
bit.ly/2YQHNIa

Binance to Launch Margin Trading “Soon”
David Kimberley – Finance Magnates
Binance has confirmed that it plans to launch margin trading for its clients in the near future. The world’s second largest cryptocurrency exchange appears to have revealed the news by accident. Just after midnight on Friday morning, the exchange operator posted screenshots of a ‘light mode’ and ‘dark mode’ on its Twitter page, asking its followers to say which they preferred.
bit.ly/2W60aMm

Franck Muller Releases Luxury Watch With Bitcoin Cold Wallet Functionality
Max Boddy – Cointelegraph
High-end Swiss watchmaker Franck Muller has partnered with alternative assets investing firm Regal Assets to release the bitcoin (BTC) storage watch “Encrypto,” according to a report by Cointelegraph Brasil on May 23.
bit.ly/2JHVKEw

DeFi and Credit on the Blockchain: Why Loans Are Better When They’re Decentralized
Simon Chandler – Cointelegraph
In the feverish quest to decentralize anything even remotely open to decentralization, one of the most promising areas is finance and the financial industry. This shouldn’t be too surprising, given bitcoin and the origins of blockchain technology, but at a time when even babies are being put “on the blockchain,” the emergence of decentralized finance (DeFi) provides welcome proof of crypto’s real utility and applicability.
bit.ly/2VMZmXy

UK Financial Watchdog Warns Public of Crypto Clone Firm
Max Boddy – Cointelegraph
The primary financial regulator of the United Kingdom, the Financial Conduct Authority (FCA), warned that ICAP Crypto is a clone firm in a public announcement on May 24. According to the report, ICAP Crypto is a clone firm of ICAP Europe Limited. Clone firms are a type of scam in which the scammers use information from legitimate firms in an attempt to convince targets that they are genuine.
bit.ly/2YNyOY3

Bitcoin Cash Miners Undo Attacker’s Transactions With ‘51% Attack’
Alyssa Hertig – Coindesk
Two bitcoin cash (BCH) mining pools recently carried out what is known as a 51 percent attack on the blockchain in an apparent effort to reverse another miner’s transactions.
bit.ly/2wo6gbG

Crypto Funds, Lending and Market Manipulation
Noelle Acheson – Coindesk
The following article originally appeared in Institutional Crypto by CoinDesk, a free newsletter for institutional investors interested in cryptoassets, with news and views on crypto infrastructure delivered every Tuesday. Sign up here.
bit.ly/2wtDfel

What Will It Take to Regulate Crypto Exchanges?
Konstantinos Stylianou – Bloomberg
Shortly after Bitcoin SV was delisted from Binance, CoinDesk advisor Michael Casey published an insightful op-ed discussing whether the delisting amounted to censorship (it doesn’t), whether exchanges should be held to high standards of neutrality (they should) and whether regulation is necessary to achieve this result (it is).
bit.ly/2wmdRXZ

Politics

European Election Results Show Growing Split Over Union’s Future
NY Times
Populists and nationalists who want to chip away at the European Union’s powers increased their share in Europe’s Parliament after four days of continent-wide elections, but it was not the deluge that many traditionalists had feared.
/nyti.ms/2YKfSJI

Assange, Espionage and the Press; Is WikiLeaks a publisher or a ‘hostile intelligence service’?
The Editorial Board – WSJ
After Julian Assange was indicted Thursday under the 1917 Espionage Act, the news was played as an escalation in President Trump’s war on the press—a “direct assault” on the First Amendment. There’s reason to worry this precedent could be used against journalists. Yet the WikiLeaks case also presents hard questions that can’t be waved away.
/on.wsj.com/2wqNMa8

Florida Is the Big Winner as the Wealthy Move Out of Northern States
Lee J Miller and Wei Lu – Bloomberg
Florida nets $17.2 billion from inbound moves vs outbound; Connecticut, New York, New Jersey face biggest income drains
Roughly 5 million Americans move from one state to another annually and some states are clearly making out better than others.
/bloom.bg/2wlyy6j

China says disputes with U.S. should be resolved via talks
Reuters
China’s Foreign Ministry said on Monday that any disputes between China and the United States should be resolved through talks.
/reut.rs/2wmdywj

Trump Says He Agrees With Kim Jong Un That Biden Has ‘Low IQ’
Jennifer Epstein – Bloomberg
President Donald Trump said on Monday he agreed with North Korea’s insult of former Vice President Joe Biden’s intelligence, calling the Democratic presidential candidate “a disaster” during a trip to Japan.
/bloom.bg/2wly7sH

The $16bn bailout of US farmers is misguided; Patching up victims of a trade war to keep it going is ill-advised
The editorial board – FT
Aggression against trading partners has a way of blowing back on the domestic economy. That is one trade policy lesson that the current US White House ought perhaps to have learnt by now.
/on.ft.com/2wmgetR

Trump’s $16-billion farm bailout means you’re paying for his tariff war twice
Michael Hiltzik – LA Times
We’ll say this for President Trump: When he misunderstands something, he misunderstands it more than anyone else in creation.
Take the business of tariffs. Trump is unshakably convinced that his tariffs are a tax on China. He repeated this grossly erroneous claim just Thursday, during his announcement of a new $16-billion bailout for farmers harmed by, yes, his tariff war.
/lat.ms/2K1WsvU

JPMorgan Chase accused of purging accounts of conservative activists
John Aidan Byrne – NY Post
Conservative activists are calling out America’s largest financial institution charging they are being targeted.
/nyp.st/2wnXk60

ECB chief economist hits out at Trump’s ‘worrisome’ rhetoric; Globalisation backlash derails investment, says Praet as he prepares to leave office
Claire Jones – FT
The European Central Bank’s outgoing chief economist, who played a key role in the institution’s response to the eurozone crisis, has hit out at the ‘America First’ rhetoric of US president Donald Trump.
/on.ft.com/2Qtp42s

Regulation

SEC Awards $4.5 Million to Whistleblower Whose Internal Reporting Led to Successful SEC Case and Related Action
U.S. Securities and Exchange Commission (Press Release)
Washington D.C., May 24, 2019 — The Securities and Exchange Commission awarded more than $4.5 million to a whistleblower whose tip triggered the company to review the allegations as part of an internal investigation and subsequently report the whistleblower’s allegations to the SEC and another agency.
bit.ly/2K4xMTu

The Cat-and-Mouse Game of Crypto Regulation Enters a New Phase
Michael J Casey – Coindesk
In the relentless cat-and-mouse game between regulators and cryptocurrency developers, the cats are about to add some serious firepower – this time in the form of a global alliance.
bit.ly/2woX1Yw

ECB Extends Application Deadline to Fill Banking Watchdog Seats
Zoe Schneeweiss – Bloomberg
The European Central Bank extended the deadline for applications for the three empty board seats at its supervisory arm.
/bloom.bg/2wp4tmG

ASIC employee default superannuation fund
ASIC
From 1 July 2019, ASIC will employ people under the ASIC Act instead of the Public Service Act, following legislation passed by Parliament on 17 September 2018.
bit.ly/2QtobqE

ESMA consults on future reporting guidelines under SFTR
ESMA
The European Securities and Markets Authority (ESMA) has today opened a public consultation on draft guidelines on how to report securities financing transactions (SFTs).
bit.ly/2QtmA3Z

ESMA updates its Questions and Answers on the Securitisation Regulation
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) on the Securitisation Regulation (Regulation 2017/2402).
bit.ly/2Qvc24u

ESMA updates its opinion on ancillary activity calculations
ESMA
The European Securities and Markets Authority (ESMA) has today published an updated opinion on ancillary activity calculations. This updated opinion provides the estimation of the market size of commodity derivatives and emission allowances for the year 2018. ESMA has prepared those estimations based on data collected from trading venues as well as data reported to trade repositories under EMIR.
bit.ly/2Qrc7WG

You Asked. We Answered. “What’s a Reverse Stock Split?”
FINRA
An investor recently asked: Why do some companies do a reverse stock split—and what is FINRA’s role? Stock splits—reverse or otherwise—can help a company manage the price of its shares. When a company’s stock price gets higher than desired (perhaps intimidating investors who fear there is little room for growth), the company might decide to split the stock to bring its price down.
bit.ly/2QtM0hL

Upcoming FINRA Board of Governors Election; Petitions for Candidacy Due: July 8, 2019
FINRA
The annual meeting of FINRA firms will take place on or about Monday, August 19, 2019, to elect one Large Firm Governor and one Small Firm Governor to the FINRA Board of Governors (FINRA Board). A formal notice of the meeting, including the precise date, time and location, will be mailed to executive representatives on or about July 19, 2019.
bit.ly/2Quq1Hx

Update – TRACE for Treasuries User Guide
FINRA
As stated in the May 7, 2019 TRACE Technical Notice, FINRA updated the TRACE for Treasuries User Guide to coincide with the addition of an “All-In Price” field. This field will be located in the Matched and Unmatched Screens on the TRAQS website beginning Monday, June 10, 2019. FINRA previously advertised June 3, 2019 for the new field to be in effect. The field will display the All-In Price of the matched or unmatched transaction; this price is inclusive of commission, and the field is view-only. No direct input is required by any user.
bit.ly/2Qr6tnz

Hong Kong’s financial watchdog fines China Merchants Securities for ‘failing’ in its IPO sponsor duty; The Hong Kong subsidiary of one of China’s largest brokerages has been fined
Yujing Liu – South China Morning Post
Hong Kong’s securities regulator on Monday fined China Merchants Securities (HK) Co HK$27 million (US$3.4 million) for failing in its duty as an initial public offering (IPO) sponsor for the 2009 listing of China Metal Recycling, one of the largest listing frauds in the city.
bit.ly/2Qro2DT

FCA regulators warn firm fraudulently cloning ICAP
Coingeek
Fraud is becoming a big issue in the digital currency world. This reality was on full display on May 24 when the U.K’s Financial Conduct Authority (FCA) issued a warning that a firm was impersonating the regulated company ICAP Europe Limited.
bit.ly/2QtMy7j

Investing and Trading

Markets Show They’re Finally Waking Up to Global Wall of Worry
Samuel Potter and Ksenia Galouchko – Bloomberg
The implications of Trump’s Huawei move took time to sink in; Tech stocks have lost momentum; economic warnings got louder
To the big-time buysiders, those investors more likely to check their portfolio by the season than the session, it was just another week. The S&P 500 still shows a big green number for 2019, after all.
/bloom.bg/2wx2TPL

JPMorgan’s Kolanovic Sees a ‘Trump Collar’ on U.S. Stock Market
Joanna Ossinger – Bloomberg
Strategist is generally positive on most aspects of markets; Recommends relative-value trades with beaten-down assets
The stock market may be bound in a range by U.S. President Donald Trump, according to JPMorgan Chase & Co.’s Marko Kolanovic.
/bloom.bg/2wltbUO

Wall Street Isn’t Buying What Silicon Valley Is Selling; Some of the best-funded startups disappoint when they go public; ‘a tough pill to swallow’
Eliot Brown – WSJ
Silicon Valley is pumping out giant startups with expansive visions, but Wall Street isn’t sold.
/on.wsj.com/2wlsn2e

Tech Hedge Fund Beats Nasdaq by Looking for Key Inflection Points
Hailey Waller – Bloomberg
Light Street Capital likes Slack, Just Eat and Farfetch; Firm’s annualized return since its 2010 start has beat Nasdaq
Lucrative opportunities in technology stocks center around identifying shifts from an old way of doing things to a better way, like from email to instant messaging or from phoning in food orders to doing it online.
/bloom.bg/2wlrtTo

Risky Municipal Bonds Are on a Hot Streak; Funds dealing in high-yield munis have drawn $8 billion as investors search further afield for returns
By Gunjan Banerji – WSJ
Investors seeking yield are piling into the riskiest corner of the municipal bond market at a pace not seen in decades.
/on.wsj.com/2QrcWie

Institutions

Asia’s billionaires develop taste for boutique wealth managers
Sumeet Chatterjee, Anshuman Daga – Reuters
Growing demand by Asia’s rich for independent advisory services and access to a wide variety of investment products is spurring the surge of boutique wealth managers more associated with the established wealth hubs of Switzerland and London.
/reut.rs/2wmdEnF

Hedge fund manager owes college friend of Trump Jr. millions of dollars, jury finds
Aaron Katersky – ABC News
Hedge fund star Paul Touradji bilked a pair of employees, including a fundraiser for the Trump campaign, out of nearly $50 million, a Manhattan jury decided late Thursday.
/abcn.ws/2wx199b

Wealth managers adapt to appeal to female clients; Women still feel unwelcome in an industry full of jargon
Lucy Warwick-Ching – FT
Women are becoming richer and controlling more of the world’s wealth, yet they remain poorly served by wealth managers and private banks.
/on.ft.com/2wx0zs1

Childhood Trauma and the Active Fund Manager; Experiencing divorce or death of a close family member tends to lead to risk aversion in adulthood.
Barry Ritholtz – Bloomberg
If you are in the market for an active fund manager, you might want to skip the usual questions about Sharpe ratios, investment philosophy and past track record.
/bloom.bg/2wlBQ9X

Citi, JPMorgan, UBS Face Australia Forex Cartel Class Action
Peter Vercoe – Bloomberg
RBS, Barclays also named in suit for manipulating currencies; Traders used chat rooms to collude on trading strategies
Citigroup Inc., Royal Bank of Scotland Group Plc and JPMorgan Chase & Co. are among five banks named in a class action lawsuit in Australia seeking damages for colluding on foreign-exchange trading strategies.
/bloom.bg/2wx3yRf

Deutsche Bank braced for loss of investment bank chief; Garth Ritchie said to be concerned by Christian Sewing’s cuts and lack of shareholder support
Olaf Storbeck and Stephen Morris and David Crow – FT
Deutsche Bank’s top investment banker could quit the lender because of disagreements over cuts and a lack of support from shareholders, say senior figures at the bank.
/on.ft.com/2wlDQ1P

Investors should be wary as private equity firms switch structures; It is only a matter of time before one of the big investment groups runs into trouble
Sebastien Canderle – FT
Since Blackstone’s 2007 initial public offering, US alternative fund managers have scrambled to join the stock market, with the idea of giving their founders a way out — a notoriously challenging process in private partnerships.
/on.ft.com/2wo77ZW

Taking on the US: the giant hurdle for European fund managers; Success proves elusive for the titans of London, Paris and Frankfurt. Is that about to change?
Siobhan Riding – FT
Cracking the US has long been a target for companies seeking to boost their international profile — but many of Europe’s largest asset management companies find Stateside success elusive.
/on.ft.com/2wlEPPH

Regions

China to offer liquidity to Baoshang Bank
Reuters
China’s central bank said on Sunday that it would offer liquidity to Inner Mongolia-based Baoshang Bank, which the country’s financial regulators have said they would take over due to the serious credit risks it poses.
/reut.rs/2woS5TA

Turkish central bank raises reserve requirements on forex deposits
Reuters
Turkey’s central bank has raised reserve requirement rates for foreign exchange deposits at commercial banks, extending efforts to discourage locals from converting lira into other currencies.
/reut.rs/2wk9HA2

Egypt Mulling Blackstone Unit’s Offer to Take Over Power Plants
Mirette Magdy – Bloomberg
Three facilities co-built by Siemens were inaugurated in July; Edra also interested in deal that could ease Egypt debt burden
Egypt is considering offers from a Blackstone Group unit and Edra Power Holdings Sdn Bhd of Malaysia to take over three power plants co-built by Siemens AG — a move that could cut the North African nation’s debts while bringing in much-needed foreign investment.
/bloom.bg/2woREZs

Bitcoin hits all-time high in Argentine pesos
Driver for price surge is fear the Latin currency is yet again on track for hefty losses
Eva Szalay – FT
The notoriously volatile cryptocurrency bitcoin is proving to be a better store of value than at least one of the traditional currencies: the Argentine peso.
/on.ft.com/2wmLHfB

Brexit

Feel no pity for Theresa May. She has been the worst prime minister in modern times
Owen Jones – The Guardian
Spare me the inevitable pity for Theresa May after her tearful farewell address this morning. “Oh, wasn’t she given such a terrible hand!”, people might cry, or “is it her fault that her backbenchers are such a bunch of Neanderthal extremists?”, and “it’s not her fault Brexit is such an undeliverable mess, is it?”. We must see through this. May is the worst prime minister – on their own terms – since Lord North’s reign in the late 18th century, when the US colonies declared their independence.
bit.ly/2wmeqkz

May Quitting Throws Bank of England Governor Race Into Unknown
Bloomberg
Theresa May’s resignation threatens to turn the race to lead the Bank of England on its head.
/yhoo.it/2wjTdIb

HSBC Takes Hits as Brexit Britain’s Consumer Casualty List Grows
Harry Wilson and Deirdre Hipwell – Bloomberg
Europe’s largest bank was major lender to chef Jamie Oliver; Bank warned of problem U.K. clients in first-quarter results
The past months have been brutal for the U.K.’s retail and consumer industries, and one bank that’s felt its fair share of the pain is HSBC Holdings Plc, which has found itself on the wrong side of several of the highest-profile failures.
/bloom.bg/2wmGjJp

Miscellaneous

Ready for Summer Camp? Measles Shots Now Required for Many; There have been 840 confirmed cases of measles across New York since last fall
Melanie Grayce West – WSJ
Sunscreen? Check. Swimming goggles? Check. This summer, the most important part of the camp checklist for many New Yorkers is proof of measles immunization. Parents have been warned that their children could be turned away if they don’t have it.
/on.wsj.com/2wpHvvr

The stock market would be much lower if it weren’t for companies buying back their own shares
Fred Imbert – CNBC
Buybacks have gotten a bad rap from both Republican and Democratic lawmakers this year. But the stock market would be trading at a much lower level without them.
/cnb.cx/2K7IEQo

John Lothian Newsletter

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