Nasdaq, SVB, Citi, Goldman Sachs, and Morgan Stanley Launch New Platform for Trading Private Company Stock

Jul 20, 2021

First Read

$51,906/$300,000 (17.3%)
Trading Technologies


Hits & Takes
John Lothian & JLN Staff

We will cut off registration for the MarketsWiki Education World of Opportunity virtual event at 11 a.m. CT tomorrow. The event starts at 1:30 p.m. CT and runs for one hour. This morning I interviewed Cboe Global Markets Executive Chairman and CEO Ed Tilly for the program. The event is FREE, so sign up your interns and newer employees. We will also continue to share additional video programs with those who register even if they can’t attend tomorrow.

US Bank has informed us that the SBA has provided funds for forgiveness of our second draw PPP loan and the loan is paid in full. Thank you to the SBA for providing these funds to businesses like JLN so we could retain all our employees during the pandemic and the economic shock it produced.

Trading Technologies announced it is connected to the Warsaw Stock Exchange and TT’s global user base can now access derivatives products listed on WSE through the TT platform. — Trading Technologies

The editorial board of the Wall Street Journal has penned an editorial titled “We’ll Always Have Covid. The Delta variant spooks markets, but the vaccines work even if the virus won’t go away.” So we have that going for us. —WSJ

Amazon has been nothing short of amazing during the pandemic, greatly expanding their operations and hiring thousands of new workers. And now they even deliver billionaires into space. — Bloomberg

Where were you 52 years ago today? I was not watching billionaires blast into space for a short time, but rather was watching Apollo 11 astronauts land and walk on the moon. —NASA

The wildfire in southern Oregon is so big it is creating its own weather. —NY Times One official there said only Mother Nature can extinguish the fires now and rains and snow are not expected until the fall. —Washington Post

Trading Technologies made their match to the JLN MarketsWiki Education GoFundMe campaign yesterday. We greatly appreciate TT and their support. Thank you to TT and all who have given and all who have yet to give. Support our efforts to preserve industry history and educate the next generation of traders and market professionals by giving to our GoFundMe campaign.

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



FIA Principal Traders Group releases white paper on central clearing in the US Treasury market
The FIA Principal Traders Group today released a white paper regarding central clearing in the US Treasury market. FIA PTG believes increased central clearing would deliver a number of benefits to market participants in the US Treasury market, including alleviating specific balance sheet constraints observed during the volatility of March 2020, as well as reducing operational risk, facilitating the entry of new liquidity providers, and increasing overall market transparency.

*****When the FIA PTG talks I listen and the FIA board holds their breath.~JJL


A Goldman Sachs Analyst by Day, He Helped Pitch Israeli Baseball Into the Olympics; Former Yale hurler Eric Brodkowitz, using the remote work option to its fullest, honed his breaking ball with an independent club in Idaho as his adoptive team makes an improbable run to Tokyo
Andrew Beaton – WSJ
Eric Brodkowitz’s baseball career was finished. He had just pitched his final game at Yale and had no pipe dream of playing in the big leagues. He was taking his talents to Goldman Sachs. Then he received another job offer: pitching for Israel’s national baseball team. He would have to become an Israeli citizen. He would have to travel to countries like Bulgaria and Lithuania just so the team could qualify for the chance to qualify for the Olympics. He would have to move to Idaho and pitch for an independent-league team to stay in shape. And there was no guarantee that he would make the team even if Israel did somehow make the Olympics. He decided to do it anyway. And he never stopped working for Goldman.

*****Another athlete working for an investment bank? But this is a good story.~JJL


Monday’s Top Three
Our most read story on Monday was JW Marriott Chicago faces $231 million foreclosure suit, from Crain’s Chicago. It is very sad what is happening to downtown Chicago just when it was starting to thrive. Second was Microsoft Supercharged The PC Industry. Now It Could Kill It, from Forbes. Third was The collapse of Archegos Capital Management, from The Trade, which was our most read story on Friday.


MarketsWiki Stats
26,479 pages; 234,624 edits
MarketsWiki Statistics


Lead Stories

Nasdaq, SVB, Citi, Goldman Sachs, and Morgan Stanley Launch New Platform for Trading Private Company Stock; Nasdaq Private Market to be spun out from Nasdaq and contributed to the joint venture
Nasdaq, SVB Financial Group (“SVB”), Citi, Goldman Sachs, and Morgan Stanley today announced a joint venture to establish an institutional-grade, centralized secondary trading venue for issuers, brokers, shareholders and prospective investors of private company stock.

Nasdaq to spin out exchange for private businesses in deal with banks; Exchange operator in joint venture with SVB Financial, Citi, Goldman Sachs and Morgan Stanley
Oliver Ralph – FT
Nasdaq said it will spin out its exchange for private businesses and turn it into a joint venture with SVB Financial, Citi, Goldman Sachs and Morgan Stanley. The exchange operator set up Nasdaq Private Market, which helps people to trade shares in private companies, in 2014. It said on Tuesday that the venture would “develop a full suite of liquidity solutions for private companies”.

Cboe Europe enhances Cboe LIS Block Trading Platform with Directed IOI service
Cboe Global Markets, Inc.
New service offers improved and more secure workflow for the delivery of block IOIs from brokers to clients; Empowers high-touch and sales trading teams by allowing them to better target block liquidity; Further expands Cboe Europe’s block trading capabilities and builds on success of Cboe LIS platform
Cboe Europe, a pan-European exchange operator and subsidiary of Cboe Global Markets, Inc. (Cboe: CBOE), today announced an enhancement to its block trading platform, Cboe LIS, which is powered by BIDS technology, with the addition of Directed Indication of Interest (DIOI) functionality. The service was successfully launched on 12 July 2021 on the Cboe UK LIS platform. Cboe plans to extend this new service to Cboe NL LIS later this year, subject to regulatory approval.

UBS CEO Says Remote Work ‘Here to Stay’ as Clients Move Online
Manus Cranny and Marion Halftermeyer – Bloomberg
Hamers says investment bankers will also work remotely; Bank to allow about two thirds of employees to work remotely
UBS Group AG Chief Executive Officer Ralph Hamers said investment bankers will be able to work part of their time from home under a new, permanent hybrid model that the bank is rolling out.

The Battles to Come Over the Benefits of Working From Home; Not having to commute was the equivalent of a big bonus for many employees. In the future, bosses may expect more hours in exchange for remote work, an economist says.
Austan Goolsbee – NY Times
Millions of Americans have gotten a taste of working from home during the pandemic, and, boy, have they liked it. Almost two-thirds of U.S. workers in a McKinsey survey at the start of the year said they wanted to work from home at least three days a week when the pandemic was over.

Nasdaq to Spin Out Market for Pre-IPO Shares in Deal With Banks; Goldman Sachs, Morgan Stanley and others to invest in Nasdaq Private Market
Alexander Osipovich – WSJ
Nasdaq Inc. NDAQ -0.78% is teaming up with a group of banks including Goldman Sachs Group Inc. GS -2.76% and Morgan Stanley MS -2.08% to spin out its marketplace for shares of private companies. The deal could help drive more transactions to Nasdaq Private Market, the New York-based exchange operator’s trading platform for shares of companies that haven’t yet had an initial public offering.

The World Federation of Exchanges Welcomes Clarificatory Guidance on Climate-related Metrics and Targets.
World Federation of Exchanges
The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, has commented on the Task Force for Climate-related Financial Disclosure’s (TCFD) updated guidance on Climate-related Metrics, Targets and Transition plans. The WFE supports the proposed updates to the guidance, which will provide a foundation for reporting on climate related risk and opportunity. Since issuing its final recommendations in 2017, the TCFD framework has played a pivotal role in improving climate-related disclosure practices—with formal endorsement amongst the WFE membership continuing to grow.

Africa’s green superpower: why Gabon wants markets to help tackle climate change; Ahead of a key UN summit, the idea of ‘natural capital’ is gaining ground as a tool to avert environmental catastrophe
David Pilling – FT
Sweat pouring down his face, Iftikhar Ali, a bond trader and former hedge fund manager, is nervously tramping to his next appointment. The encounter will take place not in the City of London but under the canopy of the Gabonese rainforest. And the client he is meeting, who goes by the name of Kamaya, is a lowland silverback gorilla.

UBS profits surge as wealth management arm shines; Swiss lender’s investment bank buoyed by global boom in M&A
Stephen Morris and Sam Jones – FT
UBS reported a surge in second-quarter profit as the world’s largest wealth manager reaped the benefits of buoyant markets and a boom in mergers and acquisitions. The Swiss lender’s earnings climbed 63 per cent to $2bn, comfortably surpassing the $1.35bn analysts had forecast. Revenue beat expectations in the bank’s four main divisions, while pre-tax profit increased across all four of its geographic regions.

Agencies release public sections of resolution plans for eight large banks
Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation
The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) today released the public sections of eight large domestic firms’ resolution plans, which are required by the Dodd-Frank Act and commonly known as living wills.

TNS Expands Eurex and Xetra Access to Non-Members
Business Wire
Transaction Network Services (TNS) revealed today that it is working with Deutsche Börse to provide access to Eurex and Xetra market data for non-member organizations. TNS, which has provided managed hosting, colocation and connectivity services to Eurex and Xetra member organizations since 2018, will leverage its established presence at the data centre in Frankfurt to now also provide market data services to organizations that do not hold Eurex or Xetra member status.

Trading Technologies Connects to Warsaw Stock Exchange via the TT® Platform
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, and the Warsaw Stock Exchange (WSE), the national exchange of Poland, today announced that TT’s global user base can now access derivatives products listed on WSE through the TT platform.

Vegas Mother-Son Duo Swindled Investors in Crypto Scam, SEC Says; The regulator shut down an alleged fraud by Joy and Brent Kovar, who raised more than $12 million from at least 277 investors.
Suzanne Woolley and Charlie Wells – Bloomberg
A mother-son team swindled investors after telling them their money would be invested in securities and cryptocurrencies based on recommendations by an “artificial intelligence supercomputer,” according to the U.S. Securities and Exchange Commission.

If Stablecoins Cause Instability, Regulators Have Themselves to Blame
JP Koning – Yahoo! Finance
With the stablecoin market rising to $100 billion last month, the debate over how to regulate these novel financial products is heating up. Last week, Federal Reserve Chairman Jerome Powell warned that stablecoins are “growing incredibly fast but without appropriate regulation.” This week, the President’s Working Group on Financial Markets, made up of top U.S. financial regulators, will discuss


Singapore Still Can’t Live With the Virus; Just weeks after issuing new guidelines for co-existing with low levels of Covid, the government has tightened curbs after an outbreak at a karaoke lounge.
Rachel Rosenthal – Bloomberg
It was just a matter of time before Singapore’s commitment to live with Covid-19 would be tested. The only surprise is how quickly that moment came and how avoidable it was.

Covid-19 Is the Salt in South Africa’s Wounds; The pandemic has worsened divisions in one of the world’s most unequal countries, contributing to a week of violence and destruction. The scars will linger, but smart intervention can help.
Clara Ferreira Marques – Bloomberg
Pandemics don’t cause riots. They do, though, create the perfect conditions for turmoil in fragile societies that are already powder kegs of inequality and sky-high unemployment, and where coronavirus has inevitably hit the poor hardest. South Africa’s days of unrest this month, the worst violence since apartheid, were triggered by the jailing of former president Jacob Zuma on contempt-of-court charges. The financial pain caused by Covid-19 was dry kindling and fuel.

China lacks Covid exit strategy as it strives for zero infections; Success in containing virus is impeding Beijing’s plans for a full return to normal
Christian Shepherd and Primrose Riordan – FT
China’s commitment to achieving zero Covid-19 cases means most of its citizens will probably be cut off from the outside world until the year-end, delaying a full return to normal for world’s second-largest economy.

Fauci Says Biden Team ‘Pleading’ With Americans to Get Vaccines
Robert Langreth – Bloomberg
President’s Covid adviser sounds alarm on delta variant; ‘Everything is on the table’ regarding future measures: Fauci
Top U.S. infectious-disease expert Anthony Fauci said the delta variant of the coronavirus is causing a significant increase in infections and the Biden administration is “practically pleading” with people to get vaccinated.

Exchanges, OTC and Clearing

LME launches lithium contract as CME rivalry intensifies; Exchanges move to capitalise on surge in demand for commodities tied to electric car sector
Henry Sanderson – FT
The London Metal Exchange has launched a new contract for battery metal lithium, setting up a transatlantic battle with US rival CME Group, as exchanges look to capture rapid growth in demand for commodities tied to the electric car industry.

Hong Kong Exchange CEO Explores Ending Bad Weather Trading Halt
Kiuyan Wong – Bloomberg
Whenever inclement weather hits Hong Kong early in the morning, the city’s stock traders turn to the local observatory website to see if they need to go to work or not.
Hong Kong has a detailed series of weather alerts that determine whether businesses, schools and public transport operate. This includes the stock market — the world’s third largest and where more than $24 billion worth of shares change hands on average every day.

MarketAxess names new chief financial officer; The head of accounting and finance at MarketAxess has been promoted to succeed Tony DeLise as CFO.
Wesley Bray – The Trade
Fixed income platform provider MarketAxess has confirmed that Tony DeLise will transition from his position as chief financial officer from 1 August 2021. Christopher Gerosa, who is currently head of accounting and finance at MarketAxess, will succeed DeLise as CFO.

Cboe adds directed IOIs to block trading platform; Directed IOIs have been rolled out on Cboe UK LIS with Morgan Stanley the first broker to use the service to send block IOIs to buy-side clients.
Hayley McDowell – The Trade
Cboe Europe has launched directed indications of interest (DIOI) functionality to its block trading platform, allowing high-touch and sales trading teams to deliver block IOIs to buy-side clients. Morgan Stanley was the first broker to use the Directed IOI service, which went live on 12 July on Cboe UK LIS. The service will be extended to Cboe NL LIS in Europe later this year and more brokers will be added to the initiative over the next few months.

I2PO SPAC lists on Euronext Paris
EUR275 million raised;16th SPAC listing on Euronext in 2021;1st European SPAC dedicated to the entertainment and leisure sector
Euronext today congratulates I2PO, a Special Purpose Acquisition Company (SPAC) dedicated to the entertainment and leisure sector, on its listing on the professional compartment of Euronext’s regulated market in Paris (ticker code: I2PO).

Kompuestos lists on Euronext Growth
Market capitalisation of EUR28.93 million; 125th listing on Euronext in 2021
Euronext today congratulates Kompuestos, a manufacturing company specialising in designing and producing biodegradable resins and compounds for the plastic industry, on its dual listing on Euronext Growth Paris (ticker code: ALKOM).

Snapshot Eurex EnLight: something to look back on, and more to look forward to
EnLight, our selective RFQ platform, has developed into a versatile and nearly indispensable tool for many of our customers. All the more reason for us to support our customers with a continuously evolving platform. Let’s have a quick review of the first half of this year.

Initial Listing of the 2-Year, 5-Year, 10-Year, and 30-Year Micro Treasury Yield Futures Contracts
CME Group

Disruptive Practices Prohibited
CME Group
Effective on trade date Monday, August 2, 2021, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA2006-5 from July 27, 2020. It is being issued based on the following amendments:

Submission of a Comment Letter on IFRS Foundation Exposure Draft on Proposed Targeted Amendments to the IFRS Foundation Constitution by The IFRS Council of Japan
The IFRS Council of Japan, in which Japan Exchange Group, Inc. and Tokyo Stock Exchange, Inc. participate as members, has submitted a comment letter on the IFRS Foundation Exposure Draft on Proposed Targeted Amendments to the IFRS Foundation Constitution to Accommodate an International Sustainability Standards Board to Set IFRS Sustainability Standards, published on April 30, 2021.

DTCC’s NSCC Enhances ETF Solution With Automated Collateral Management Process As
Firms Navigate Volatility; Enhancements include new fixed-income ETF capabilities along with a new no-touch process that provides the industry with increased operational efficiency and balance sheet relief
The Depository Trust & Clearing Corporation (DTCC), the premier market infrastructure for the global financial services industry, today announced that its subsidiary, National Securities Clearing Corporation (NSCC), has launched an automated solution that streamlines and simplifies the Exchange-Traded Fund (ETF) collateral management process and adds new fixed income ETF capabilities, a critical step to freeing up capital and increasing operational efficiency during market uncertainty and volatility.

EEX European Emissions Market Records Strong Gains In First Half Year
Emissions market reaches 743 million tonnes, up +32 % vs. H1 2020; Increased trading activity in EEX Emissions Futures order book
The European Energy Exchange (EEX) reported significant growth on its European Emissions markets in the first half of 2021. The total volume amounted to 742 million tonnes of CO2 which marks an increase of 32% compared to the first half of the previous year (H1 2020: 561 million tonnes of CO2).

EEX Press Release – EEX expands its position as No.1 Trading Venue for Japanese Power Futures
The European Energy Exchange (EEX) continues to register strong market interest and growth in its Japanese Power Derivatives products. From January until June 2021, a volume of 3,519 GWh was traded in Japanese Power Future contracts. This is more than 5 times the volume traded in the last year since launch (May – December 2020: 587 GWh).

EEX Press Release – EEX Dairy Derivatives markets set new trading record for H1 2021
The European Energy Exchange (EEX) set a new record volume in its Dairy Derivatives markets in the first half of 2021. With 77,760 tonnes equivalent traded (equals 15,552 contracts), EEX volumes increased by 58% compared to H1 2020 (49,300 tonnes, equals 9,860 contracts).


Zoom’s $100 BIllion Deal Muscle Sets Up Cloud Showdown with Salesforce; The videoconferencing company’s willingness to use its elevated stock as currency for purchases like software maker Five9 signals big ambitions that pose a serious threat to Salesforce.
Tae Kim – Bloomberg Inc. helped Zoom Video Communications Inc. get off to a good start when it invested in the startup’s IPO roughly two years ago. But with the videoconferencing company now looming as a serious threat in cloud software, Salesforce may regret its initial support.

Fidelity signs FinTech pledge on partnering with start-ups; As the first asset manager to sign the FinTech pledge, Fidelity has committed to principles on engaging with start-ups and onboarding processes.
Hayley McDowell – The Trade
Fidelity International has become the first asset manager to sign the FinTech pledge in the UK that outlines principles on engaging with start-ups. Backed by HM Treasury and the FinTech Delivery Panel, the pledge aims to accelerate growth of the FinTech sector in the UK with standards on partnerships between large financial institutions and technology firms.

Head of US FICC at RBC Capital Markets appointed CEO of US operations at LedgerEdge; Corporate bond trading start-up that uses distributed ledger technology LedgerEdge has named its CEO of US operations ahead of launch this year in the UK.
Hayley McDowell – The Trade
Start-up bond trading platform LedgerEdge has hired the head of fixed income, currencies and commodities (FICC) at RBC Capital Markets to lead its operations in the US as CEO. Michelle Neal takes on the senior role as LedgerEdge prepares to launch its first corporate bond multilateral trading facility venue in the UK later this year, followed by a US alternative trading system venue early next year.

Nvidia Stock’s Surge Makes Chip Maker 10th-Biggest U.S. Listed Company; Company’s shares are up nearly 80% over the past year
Hardika Singh – WSJ
The post-pandemic boom in the semiconductor business has powered Nvidia Corp. NVDA -2.80% into the top 10 U.S. public companies, joining the likes of Apple Inc. and JPMorgan Chase & Co. Shares of the Santa Clara, Calif., firm have risen nearly 80% over the past year, giving it a market value of around $453 billion. That is more than rivals Intel Corp. and Broadcom Inc. combined.


China Denies Microsoft Hack, Says U.S. and Allies Ganging Up
Bloomberg News
Foreign Ministry spokesman calls the accusation unwarranted; China and the U.S. are already at odds over range of issues
China rejected accusations by the U.S., U.K. and their allies that actors linked to the Asian nation’s government were behind the Microsoft Exchange hack and other “malicious cyber activities.” “The U.S. ganged up with its allies and launched an unwarranted accusation against China on cybersecurity,” Chinese Foreign Ministry spokesman Zhao Lijian said Tuesday at a regular press briefing in Beijing. “It is purely a smear and suppression out of political motives. China will never accept this.”

China hits back at US-led accusations over cyber attacks; Beijing calls allegations that it spearheaded global offensive a ‘malicious smear’
Edward White and Christian Shepherd – FT
China has challenged US-led accusations that Beijing was at the heart of a wave of global cyber attacks including an offensive against a Microsoft email application that affected tens of thousands of organisations.

Rising Threats Target Cloud Providers, Virtual Infrastructure
Nathan Eddy – Security Boulevard
A growing number of cybercriminals are developing malware to conduct attacks on virtualized environments, and some are aggressively trying to exploit vulnerabilities already found in software for deploying virtual infrastructure, according to a report from Positive Technologies. Overall, the number of cyberattacks increased by 17% in 2021 compared to the first quarter of 2020, with 77% being targeted attacks, according to the report. The most popular vulnerabilities for attackers to exploit this quarter were breaches in the Microsoft Exchange Server software (ProxyLogon) and the outdated file sharing program Accellion FTA.

The Cybersecurity 202: TSA is about to announce new ransomware protection requirements for pipelines
Joseph Marks with Aaron Schaffer – The Washington Post
The Transportation Security Administration is today mandating that pipelines implement protections against ransomware and other cyberattacks, according to a statement shared with The Cybersecurity 202. The action marks the first time the federal government has required specific cyber protections for pipelines. It comes in the wake of a May ransomware attack on Colonial Pipeline that disrupted gas supplies to the southeastern United States and prompted panic buying. In that case, the Russia-based hackers locked up Colonial’s computers for days until the company paid a $4.3 million ransom.

Northern Trains ticket systems hit by suspected ransomware attack
Hannah Murphy and Philip Georgiadis – FT
Northern Trains, the UK government-run train operator, has shut down its ticket machines following a suspected ransomware attack, marking the latest in a string of highly disruptive hacks by cyber criminals. Northern, one of only a handful of train services in the UK fully run by the government, said on Monday that its self-service ticket machines had been hit by technical difficulties last week, forcing them all to be taken offline.

Spyware needs more and better oversight
Financial Times Editorial Board
Activists, academics, business people and journalists operating in autocratic states have long suspected that security agents eavesdrop on their phone calls. In face-to-face meetings, mobiles are turned off during sensitive conversations and stuffed under cushions for fear they are being used as listening devices. But allegations that military-grade spyware developed by the Israeli company NSO Group has been used to hack 37 reporters, activists, executives and two women close to murdered Saudi journalist Jamal Khashoggi, are shocking and deeply concerning.


Ripple Cites SEC Commissioners’ Remarks to Support Dismissal of Case
James Rubin – Coindesk
Ripple lawyers submitted a supplemental letter Monday to support their request for dismissal of an ongoing Securities and Exchange Commission case against them. The document notes a July 14 statement by SEC commissioners Hester Peirce and Elad Roisman opposing the agency’s enforcement action against Blotics, the operator of the once-popular cryptocurrency website Coinschedule.

How DeFi Enables Small Investors To Access Private Investments And Exotic Assets
Luis Aureliano – Benzinga
The total value locked in DeFi protocols has skyrocketed to $53.7 billion from just $2.5 billion a year ago. Most of this growth has been driven by retail investors and traders. Most institutions have started dipping their toes in DeFi. The institutional money into the DeFi ecosystem would boost liquidity and provide better rates.

China to explore cross-border payments in digital yuan
China’s central bank said on Friday it will explore cross-border payments in digital yuan, and is willing to discuss setting global standards for digital fiat currency to jointly develop the international monetary system.

How Derivatives Amp Up Already Heady Crypto Markets
Justina Lee – Bloomberg
Bitcoin has long been known for its violent swings in price. But the volatility isn’t just driven by tweets from Elon Musk or warnings from Chinese regulators: It’s also fed by a massive derivatives industry that has boomed on the back of voracious demand for leverage and speculative tools in cryptocurrency markets. In some ways it’s a tale as old as Wall Street, but now in a new digital wrapper. For instance, when Bitcoin plunged as much as 30% in a day in May, leveraged-up positions in futures and options were wiped out, with the expected consequence of amplifying the sell-off as they had boosted the rally earlier.

Why Yellen, Powell Cast a Wary Eye on Stablecoins
Olga Kharif – Bloomberg
Bitcoin is exciting: its price swoops and dives. Such volatility has made regulators around the world look closely at Bitcoin and other cryptocurrencies with a value that bounces around. But two of the world’s most powerful financial regulators, U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell, are focused as well on a more boring but more useful form of crypto, stablecoins. They fear that their very usefulness could create risks for consumers and potentially even for the financial system; Yellen is pushing financial regulators to “act quickly” in drafting stablecoin rules. Others see stablecoins as the thing that will force central banks to dive into the digital coin business themselves.

Cryptocurrency markets slide as Yellen leads mounting regulatory scrutiny; US Treasury secretary urges ‘quick’ action to address stablecoin market
Siddharth Venkataramakrishnan – FT
Cryptocurrency markets have come under renewed pressure after top US officials including Treasury secretary Janet Yellen said they expect to issue recommendations on stablecoins, important assets in the digital economy, in the coming months.


EXCLUSIVE: UK to warn EU it may deviate from Brexit deal on N.Ireland -sources
UK prepares showdown with EU over N.Ireland; UK to warn it may deviate from Brexit deal; Frost says: Things have to change; Frost says: All options on the table
Britain will threaten this week to deviate from the Brexit deal unless the European Union shows more flexibility over Northern Ireland, one UK and three EU sources told Reuters, a move that could thrust the five-year Brexit divorce into tumult.

Will Flood Politics Change Germany and the World? As cataclysms become ever more frequent, people are demanding new answers to climate change — and discovering that there are no easy ones.
Andreas Kluth – Bloomberg
There she was again, the proverbial mother of the nation, walking somberly through the rubble and mud of a nearly destroyed town called Schuld, which happens to be German for “guilt.” German Chancellor Angela Merkel, two months before an election that will usher her out of politics and into retirement, has done her best to stay aloof from the campaign to succeed her. But the natural disaster that struck her country last week left her no choice but to wade in.

Quantitative Easing Is a ‘Dangerous Addiction’; A new report spells out the risks. Central banks should take note.
Mervyn King – Bloomberg
Introduced as an emergency response to a severe fall in aggregate demand at the end of 2008 and the beginning of 2009, quantitative easing has since become the main policy tool of advanced-economy central banks. In principle, there is nothing wrong with this. Central banks have long bought and sold government bonds to influence the money supply. But the enormous scale of purchases during 2020 and 2021, in circumstances where the case for a substantial monetary injection was far from clear, led to concerns about its impact on inflation.

Republicans Want Digital Yuan Restricted at Beijing Olympics
Brody Ford – Bloomberg
U.S. lawmakers raise concerns of China spying on athletes; China says token to be used primarily for retail transactions
Republican Senators Marsha Blackburn, Roger Wicker, and Cynthia Lummis urged the U.S. Olympic Committee to forbid American athletes from using China’s new digital currency at the 2022 Beijing Winter Olympics, citing espionage and data-security concerns.

Greensill scandal is about more than sleaze; The Treasury and regulators need to consider their responsibilities
The editorial board – FT
The most damning comments in the report of the UK’s Treasury select committee on the lessons from the failure of the supply chain finance outfit Greensill are focused, with admirable clarity, on David Cameron. The former prime minister’s actions on behalf of the company and its founder Lex Greensill displayed a significant lack of judgment, according to the committee, which is responsible for holding the finance ministry to account. That his behaviour was within the rules merely demonstrates that the rules need tightening, the report concludes.

The US’s strict Covid border policy is alienating Europe; The Biden administration’s stringent controls on foreign visitors are harming America’s reputation abroad
Leslie Vinjamuri – FT
Rebuilding America’s tarnished image abroad has been a key priority for Joe Biden’s administration. But the longer that America’s borders remain closed, the more the administration is squandering an opportunity to harness America’s soft power abroad.

Floods drive climate to heart of German election campaign
Greens set to be biggest beneficiary of voters’ growing concern about freak weather events
Guy Chazan – FT
With just over two months to go until polling day, the devastating floods that swept through western Germany this week have catapulted climate change to the heart of the country’s election campaign.

US resolves currency dispute with Vietnam; Biden administration deal removes an irritant in relations between the two countries
James Polit, John Reed – FT
The US has reached a deal with Vietnam to resolve a dispute over the south-east Asian nation’s currency that had soured economic relations between the two countries during Donald Trump’s presidency.

Cameron Slammed for ‘Lack of Judgment’ Over Greensill Lobbying
Tim Ross – Bloobmerg
U.K. Parliamentary committee calls for stronger lobbying rules; Treasury committee says ex-PM tried to use ‘personal links’
Former U.K. Prime Minister David Cameron showed a “significant lack of judgment” in repeatedly lobbying the government on behalf of the now-collapsed finance firm Greensill Capital, a parliamentary inquiry has found.


Extension of relief from the on-site annual inspection of branch offices and guaranteed IBs
Due to COVID-19, NFA allowed Members to conduct all calendar year 2020 annual inspections of branch offices and guaranteed introducing brokers (IB) remotely (see Notice to Members I-20-35). NFA understands that Members may find it difficult to complete on-site annual inspections for calendar year 2021 since their staff may be in various stages of transitioning back to the office or still working remotely. Therefore, NFA is extending the relief provided in Notice I-20-35 through the end of 2021. Although Members must conduct the required annual inspection of each branch office and guaranteed IB by December 31, 2021, firms may conduct these inspections remotely. A Member that conducts a remote examination in 2021 based on this relief may still conduct a remote examination in 2022 if its risk assessment indicates it is appropriate to do so. This risk assessment should take into account that the firm conducted the exam remotely the prior two years.

UBS brokerage pays $8 million to settle U.S. SEC charges, SEC says
Chris Prentice and Lisa Lambert – Reuters
The brokerage arm of UBS Group AG agreed to pay $8 million to settle charges made by the U.S. securities regulator over compliance failures related to the sales of a volatility-linked, exchange-traded product, the regulator said on Monday.

Some funds can’t substantiate green credentials, says UK watchdog
Huw Jones – Reuters
Many asset managers seeking authorisation for sustainable funds are failing to give accurate information to substantiate their green credentials, Britain’s financial watchdog said on Monday.

Yellen Tells Regulators to ‘Act Quickly’ on Stablecoin Rules
Christopher Condon – Bloomberg
Treasury convenes President’s Working Group to examine topic; Regulators discuss impact on users, markets, national security
Treasury Secretary Janet Yellen pushed top U.S. financial regulators to accelerate their consideration of new rules to police so-called stablecoins, a type of cryptocurrency that’s seen rapid recent growth and remains largely unsupervised.

ASIC releases reference checking and information sharing protocol for financial advisers and mortgage brokers
ASIC has made the ASIC reference checking and information sharing protocol (ASIC Protocol) that will give effect to the Financial Services Royal Commission’s recommendations to improve reference checking in the financial advice and mortgage broking industries. ASIC has also released guidance documents that will help Australian financial services (AFS) and credit licensees comply with their new reference checking obligations.

ASIC appeals Cigno and BHF Solutions Federal Court decision
ASIC has appealed the Federal Court decision which dismissed its allegations that Cigno Pty Ltd (Cigno) and BHF Solutions Pty Ltd (BHF Solutions) contravened the National Consumer Credit Protection Act 2009 (National Credit Act). Cigno and BHF Solutions operate a lending model that provide small loans to large numbers of consumers and charge substantial fees on those loans.

Dr Roger Munro pleads guilty to fraud charges following ASIC investigation
Dr Roger Munro has pleaded guilty in the District Court of Queensland to three counts of fraud under s408C of the Queensland Criminal Code. Dr Munro was charged following an investigation by ASIC and was due to face a three-week criminal trial. Dr Munro received funds from investors for a trading fund which he referred to as the TradeStation Futures Trading Fund (TradeStation). Dr Munro did not invest these funds into TradeStation as promised. Instead, Dr Munro dishonestly applied those funds to his own use or the use of another. Investors were not aware that their money was being used by Dr Munro is this way and Dr Munro continued to make representations to investors that their money was being invested in TradeStation by falsely reporting on the profits and losses being made by TradeStation.

SEC Shuts Down Fraudulent Mother-Son Offering Involving Purported Supercomputer
The Securities and Exchange Commission today announced that it has filed an emergency action and obtained a temporary restraining order and asset freeze to halt an alleged ongoing offering fraud by Las Vegas-based Profit Connect Wealth Services Inc., Las Vegas resident Joy I. Kovar and her son, recidivist Brent Kovar, which has raised more than $12 million from at least 277 retail investors.

SEC Files Charges in Multi-Million Dollar Fraud Involving Two Companies
The Securities and Exchange Commission today announced charges against Aron Govil of Jacksonville, Florida, for defrauding investors in two companies he controlled, Cemtrex Inc. and Telidyne Inc.

ESMA see small decrease in EEA prospectus approvals in 2020
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a joint Annual Report on Prospectus Activity and Sanctions for 2020.

ESMA publishes second report on sanctions under AIFMD
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, today publishes its second annual report on the use by National Competent Authorities (NCAs) of sanctions under the Alternative Investment Fund Managers Directive (AIFMD).

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes its 2020 report on the use of supervisory sanctions by National Competent Authorities (NCAs) under the Undertakings for Collective Investments in Transferrable Securities (UCITS) Directive.

REMINDER: Modifications to TRACE Dissemination Protocols for Specified Pool Transactions (MBS) – Effective Monday, July 26, 2021
As announced in Regulatory Notice 21-02, FINRA is modifying the convention for rounding the original loan-to-value ratio used in the dissemination of transactions in agency pass-through mortgage-backed securities and Small Business Administration (SBA)-backed asset-backed securities traded in specified pool transactions. This change will become effective on Monday, July 26, 2021. On this day, the TRACE RDID Master File will be updated with the security changes.

FCA secures conditional resolution of proceedings against Park First and its senior management
The FCA has secured a conditional agreement with the defendants in proceedings seeking compensation for approximately 4,500 investors in the failed Park First Scheme. The conditional agreement should see a further £25 million made available for compensation to investors.

FCA takes action against debt packager firms
Following an FCA review of the practices of debt packager firms, 5 firms have stopped providing regulated debt advice until further notice and the FCA has used formal powers to stop another firm from providing regulated advice.

FCA consults on post-Brexit divergence for PRIIPS regulation
The FCA has set out proposals to change disclosure documents provided to retail investors under the Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation.

Investing and Trading

Inflation Is Here — These 35 Metrics Tell You How Much to Worry
John Authers – Bloomberg
A year ago, the Covid-19 pandemic crushed prices in many parts of the U.S. economy. As expected, that has created inflation 12 months on as the economy reopens and rebounds. Now the market seems to believe that a resurgence of the pandemic will rein in inflation before it grows out of control. No one disputes that inflation has arrived. The question is where it’s heading.

The ‘Early’ Retirement Wave Isn’t Exactly That; Yes, a lot of older workers dropped out of the labor force during the pandemic. But people in their late 60s and 70s led the way.
Justin Fox – Bloomberg
Labor-force participation has fallen further among Americans 55 and older since the beginning of the Covid-19 pandemic than among so-called “prime-age” workers ages 25 through 54. Older workers’ participation rate has also shown little sign of recovery as the pandemic has eased, in contrast to the pattern among younger workers.

The 7 Habits of Highly Effective Investors; These are the basics of running your financial life.
Suzanne Woolley – Bloomberg
That saying about change being the only constant in life never felt truer than during pandemic times. Just as we changed our behavior to help guard against the spread of Covid-19, we can take steps to protect our financial lives from future turmoil.

Torrid Weather Sets Spring Wheat for Best Rally in Three Years
Megan Durisin and Sybilla Gross – Bloomberg
Futures for the variety climb for eighth day in Minneapolis; Corn prices also pick up as U.S. crop conditions hold steady
Spring wheat extended a dazzling rally as a relentless bout of hot, dry weather scorches North American fields. U.S. Department of Agriculture data on Monday showed a further collapse in spring-wheat ratings, which are treading at their worst since 1988. While the variety only accounts for a fraction of world grain output, it adds to weather worries across global growers that are driving a rebound in crop prices.

Emerging-Market Investors Pile Into Bonds as Delta Spreads
Lilian Karunungan – Bloomberg
BNP Paribas Asset likes long end among EM high yielders; Pictet Asset says conditions favor EM debt over equities
Emerging-market investors have been pouring money into bonds and cutting back on stocks in a trend that’s set to intensify as the delta variant of the coronavirus ravages developing economies with low vaccination rates.

At what price does safety come for investors? Cost of risk mitigation is often worse than the feared outcome
Mark Spitznagel – FT
From public policy to private investing, it is the central question of our time: how high a price should we pay to keep ourselves safe from harm? And this begs even more fundamental questions: should risk mitigation come at a cost at all, or should it rather come with rewards? That is, shouldn’t risk mitigation be “cost-effective”? And if not, what is it good for?

Money Clinic podcast: I lost my life savings to a scammer; Scam victim Jenny didn’t know fraudsters could do this — did you?
Claer Barrett – FT
You might think you are too smart to be duped by fraudsters, but under lockdown, criminals have come up with frighteningly convincing ways of using technology to part us from our hard-earned cash.

Investors increase pressure on companies over racial issues; Shareholder resolutions related to diversity at US-listed groups gain stronger backing in 2021
Attracta Mooney and Patrick Temple-West – FT
Shareholder pressure on companies including Amazon, Union Pacific and JPMorgan Chase to address race and other diversity issues has risen to record levels this year, after the Black Lives Matter movement and the pandemic focused investor attention on social challenges.

Environmental, Social and Corporate Governance

Emissions Could Hit New Record by 2023 Without More Green Spending; The world isn’t building back better at the scale needed to avoid the worst impacts of climate change
Akshat Rathi – Bloomberg
Less than 15% of the $2.4 trillion in government spending to support the post-pandemic economic recovery has gone to investments in clean energy, according to the International Energy Agency.

Europe’s Biggest Banks Warn of Major Flaw in Key ESG Metric
Nicholas Comfort and Frances Schwartzkopff – Bloomberg
It’s meant to be the ultimate metric for gauging how clean European banks are. But some in the industry say it will be flawed from the get-go. The European Union’s planned Green Asset Ratio, intended to reveal how much a bank lends to climate-friendly companies and projects, will offer a distorted picture of reality, according to a Bloomberg survey of some 20 major European banks. The firms, which rely on clients for the data they need to calculate the ratio, point out that many small or international companies simply won’t provide it.

Carbon emissions headed for new record in 2023, says IEA; Paltry pandemic recovery spending on clean-energy measures leaves net zero goals way out of reach, agency warns
Camilla Hodgson – FT
A mere 2 per cent of pandemic recovery spending is going towards clean energy measures, and energy-related carbon emissions were likely to climb to record levels in 2023 with “no clear peak in sight,” the International Energy Agency has said.

Wind energy CEOs warn G20 leaders over climate targets; Groups including Siemens Gamesa and Vestas say goals will be missed without increased turbine use
Nathalie Thomas – FT
The heads of many of the world’s biggest wind energy companies have told global leaders that efforts to meet global climate goals are “condemned to fail” if they do not urgently step up turbine installation.


A scandal cost Brazil billionaire bank CEO his job, but not control
Tatiana Bautzer, Carolina Mandl, Jessica Dinapoli – Reuters
Andre Esteves making key decisions for BTG Pactual;Esteves oversees BTG push into retail banking; Esteves has no plans for formal BTG management role
Twenty-three days in a Rio de Janeiro jail and getting stripped of his chief executive role were enough to make billionaire banker Andre Esteves consider leaving both Brazil and BTG Pactual, the investment bank he founded.

BNP Paribas Appoints Executives to Global Markets Platform
BNP Paribas Global Markets today announced the appointments of Ashley Wilson, Global Head of Prime Services; and John Gallo, Global Head of Institutional Sales and Co-Head of Global Markets Americas.

UBS Shares Gain After Soaring Fee Income Drives Surge in Profit
Marion Halftermeyer – Bloomberg
Net income of $2 billion above $1.32 billion analyst estimates; Swiss bank sees lower client activity levels in third quarter
UBS Group AG posted better-than-expected profit in the second quarter after Switzerland’s largest bank benefited from surging new assets and fee income, driving the shares to their biggest gain in more than eight months.

BlackRock increases opposition to high executive pay in Europe; Asset manager’s voting record shows it has become more willing to take a stand against management
Chris Flood – FT
The world’s biggest asset manager BlackRock has increased its opposition to executive pay in Europe over the past year, voting against salary packages for bosses at a swath of companies that laid off workers during the pandemic.

Another senior Goldman Sachs executive is leaving — and colleagues are vexed
Lydia Moynihan – NY Post
Yet another senior executive is leaving Goldman Sachs — and, of course, his co-workers are once again putting the exit under a microscope. Michael Swell, head of global fixed-income portfolio management at the Wall Street giant’s asset management division, is set to retire at the end of the year, according to a memo from late last month that was obtained by The Post.


Vaccine and Ventilator Shortages Show Need for African Free Trade; Covid-19 is spurring calls to implement the world’s biggest tariff-free zone to boost investment.
Prinesha Naidoo – Bloomberg
At the onset of the pandemic, global supply chain disruptions limited Africa’s ability to respond; it struggled to access additional personal protective equipment and lifesaving ventilators. Even now, as the developed world starts to reopen after hoarding vaccines, Africa is the least inoculated region, leaving it vulnerable to new waves of infection and extended lockdowns.


Leon Black rejects claims he raped and harassed Russian model; Former Apollo chief executive alleges he is ‘victim of criminal extortion scheme’
Mark Vandevelde – FT
Leon Black has forcefully rejected claims that he raped and harassed a young Russian model, branding the woman’s lawsuit “a work of fiction”, and contending that text messages and audio recordings showed that he had “become the victim of a criminal extortion scheme”.

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Why trade couldn’t buy peace

Why trade couldn’t buy peace

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