New York City Marks 9/11 at a Time of Harrowing Loss; Citigroup’s Jane Fraser to Succeed Michael Corbat as CEO

Sep 11, 2020

First Read

John Lothian News Announces The Path to Electronic Trading Video Series
John Lothian

New Series Will Capture the Stories of the Move from Trading on the Floors to Trading on the Screen

John J. Lothian & Company, Inc. and John Lothian News are pleased to announce the launch of a new MarketsWiki Education video series, The Path to Electronic Trading.

The Path to Electronic Trading was inspired by the success of the Open Outcry Traders HIstory Project. Gerry Corcoran, the CEO of RJO O’Brien, came to JLN to tell the story of how his one day of working on the trading floor helped create the path to electronic trading as RJO and other firms applied technology to improve the efficiency of a futures pit busting at the seams with paper orders.

His story inspired us to develop this new video series that will capture the individual stories of the people and firms that embraced technology and created the evolutionary path from the shouting of orders on the trading floor to trading all forms of derivatives, securities and other products via purely electronic means.

To read the rest of this announcement, go here.


Hits & Takes
John Lothian & JLN Staff

Today is 9/11. It is 19 years since the attacks on the U.S. on 9/11/2001. Never Forget. Never Ever Forget.

Forty-two 9/11 survivors have passed away from COVID-19. Maybe more.

Dr. Anthony Fauci says U.S. needs to ‘hunker down’ for fall and winter. I am hunkering. I hope when I am done hunkering, I will be a hunk.

The Reformed Broker, Joshua M Brown, has a new podcast, “Why Markets Crash in the Fall.”

Bloomberg reports that suicides among U.S. kids and young adults jumped 57% in the past decade. Thom Lant posted a moving comment on Facebook about depression and suicide. I love Thom Lant. Show your love for everyone as you don’t know for whom that expression of love and compassion could mean the difference between life and death.

Phil Mackintosh of Nasdaq has a commentary titled “What Everyone Should Know About the Stock Market.”

Have a great day and stay safe and treat people the same way you want to be treated.


On 9/11/2001, I was ten years old. I remember waiting for the school bus the morning that the tragedy in New York happened, completely unaware of what was going on. I went through the whole school day not knowing – I didn’t find out until I went home that day. Years later, I feel weird about it; I kind of wish someone had told us what was happening, even though we were kids.~MR

The CFTC did some light lifting yesterday when it published its Division of Enforcement’s guidelines for “evaluating compliance programs in connection with enforcement matters.” The three-page memo provides a framework for Division staff in considering whether the target of an enforcement action has a compliance program reasonably designed to prevent, detect and remediate misconduct. Such factors are to be weighed when penalties are assessed by the Division in an enforcement action. As footnote 2 in the memo says, the 390 words of the guidelines are not binding on anyone but the Division staff. Just for the record: the text of the CFTC’s press release is 470 words. ~Thom Thompson

Members Exchange (MEMEX) on Thursday announced its inaugural fee structure with no pricing tiers or charges for market data or connectivity. In a release, the exchange said members will pay 25 cents per 100 shares to remove liquidity. Those who add liquidity will be rebated 29 cents per 100 shares for displayed volume and 20 cents per 100 shares for non-displayed volume, with pricing subject to filing with the SEC. MEMX plans to launch trading in seven stock symbols (ACST, BB, ED, F-B, GOOG, ICSH, and XOM) on September 21 and begin trading all NMS symbols September 29. The complete fee schedule for MEMX’s launch can be found here. ~SC


Gerry Corcoran’s One Day of Working on the CBOT Trading Floor Started A Path to Electronic Trading

R.J. O’Brien CEO Gerry Corcoran spent just one day working on the trading floor, during the drought of the summer of 1988. He was a new CFO for the brokerage firm and it was an all hands on deck day due to a severe drought that was causing huge volatility on the grain floor of the Chicago Board of Trade, where RJO had a lot of farmer hedging business.

Watch the video »


Revisiting Milton Friedman’s Critique of Stakeholderism; The Nobel laureate economist argued that CEOs and boards should focus on maximizing shareholder value, not stakeholder value.
Peter Coy – Bloomberg
Exactly 50 years ago, economist Milton Friedman argued that corporate boards should focus on maximizing shareholder value and not get wrapped up in trying to achieve other objectives. The conventional wisdom in boardrooms today seems to be that Friedman was wrong. In fact, though, a lot of what he wrote was spot on. Sadly, the current emphasis on “stakeholder value” is one part enlightenment, one part public relations, and one part an attempt by corporate directors to get a freer hand to run companies as they personally see fit.

*****Every 50 years, look at Milton.~JJL


A Free Market Manifesto That Changed the World, Reconsidered; Milton Friedman’s libertarian economics influenced presidents and inspired “greed is good.” So what did Friedman get right — and wrong? Today’s business leaders and economists weigh in.
Andrew Ross Sorkin – NY Times
Sept. 13 is the 50th anniversary of a seminal moment in the world of business: the publication of Milton Friedman’s essay in The New York Times Magazine entitled “The Social Responsibility of Business Is to Increase Its Profits.”

*****Milton Friedman should be re-examined.~JJL


A new front in coronavirus disinformation: Wall Street research
Cristina Alesci and Casey Tolan – CNN
Coronavirus misinformation is infecting the unlikeliest of places: Wall Street research that investors rely on to trade in the financial markets. In an early August note to clients, an analyst at a research firm called Fundstrat Global Advisors, which distributes widely-read reports and analysis to investors, cited a series of tweets by an ophthalmologist named James Todaro who painted a rosy picture of the US population’s potential for developing herd immunity to coronavirus

*****Misinformation is one of the biggest problems of this age.~MR


CryptoMarketsWiki Coin of the Week: XRP
XRP, a digital asset created by Ripple, has been (and continues to be) used in multiple giveaway scams based on YouTube. The scams involve users creating videos that use Ripple’s logos and the likeness of its CEO, Brad Garlinghouse. Ripple sued the video platform in April, alleging the platform’s “willful blindness” of such scams led to their proliferation on YouTube. YouTube filed a motion in July to dismiss these allegations, which Ripple recently contested.


Thursday’s Top Three
Our top story Thursday was the Financial Times’ ED&F Man agrees debt restructuring in eleventh-hour rescue. Second was John Lothian’s commentary on David Downey’s colorful 2018 letter to the CFTC, David Downey Knows Security Futures Like No One Else. Third was the Wall Street Journal’s How Travel Will Change Post-Pandemic: 10 Expert Predictions. (“Even luggage” might change!)


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Lead Stories

New York City Marks 9/11 at a Time of Harrowing Loss; As they memorialize a past tragedy, New Yorkers face another profound and deadly crisis that is not yet over.
Michael Gold – NY Times
The families will come together again to honor their loved ones at the site where their lives were stolen. The flags will be at half-staff, and the bells will toll in New York City as they have in years past, sounding a peal of collective mourning for those killed on one of the darkest days in American history.

Citigroup’s Jane Fraser to Succeed Michael Corbat as CEO; Fraser would be the first woman to lead a major Wall Street bank
David Benoit and Christina Rexrode – WSJ
Jane Fraser made a career at Citigroup Inc. C -0.88% doing the hard jobs. She helped set the bank’s course after the financial crisis and nursed its battered mortgage business. She mopped up messes in Latin America. The biggest challenge of her career awaits: leading America’s third-largest bank through the worst economic crisis in decades.

New York to Mark 19th Anniversary of 9/11 With Intimate Event; To prevent spread of coronavirus, memorial service will be a small gathering of victims’ loved ones
Katie Honan – WSJ
The memorial service in lower Manhattan marking the 19th anniversary of the 9/11 terrorist attacks is expected to be a small, more intimate gathering of the victims’ closest family members and friends because of the Covid-19 pandemic.

JPMorgan Top Brass Tell Trading-Floor Staff to Come Back to the Office; The bank, which just notched a record trading quarter, told staffers they need to return by Sept. 21 unless they have child-care or medical issues
Julia-Ambra Verlaine – WSJ
One of Wall Street’s biggest employers is calling its trading staff back to the office. JPMorgan Chase JPM -1.03% & Co. executives told senior employees of the bank’s giant sales and trading operation that they and their teams must return to the office by Sept. 21, according to people familiar with the matter. Trading chief Troy Rohrbaugh and Marc Badrichani, the bank’s global head of sales and research, delivered the message in conference calls Wednesday morning, the people said. The two executives said employees with child-care issues and medical conditions that make them more vulnerable to coronavirus complications can continue working from home, the people added.

The New ‘Blank Check’ Barons Are Coming for Wall Street
Crystal Tse – Bloomberg
Special purpose acquisition companies get $35 billion in 2020; ‘This is going to end badly,’ veteran dealmaker Franklin says
It’s the hot ticket on Wall Street, a symbol that you’ve arrived or can at least persuade investors that you’re on your way: the blank-check company. Few corners of American finance capture the giddiness of today’s stock market quite like the mad rush into these vehicles, formally known as special purpose acquisition companies, or SPACs.

Hong Kong’s Reign as World’s Freest Economy at Risk, Group Warns
Kari Soo Lindberg – Bloomberg
Hong Kong’s long reign as the world’s freest economy is at risk due to China’s efforts to quell dissent, the Fraser Institute said, undercutting government arguments that the crackdown was improving the business climate.

A Climate Reckoning in Fire-Stricken California; If climate change was a somewhat abstract notion a decade ago, today it is all too real for Californians fleeing wildfires and smothered in a blanket of smoke, the worst year of fires on record.
Thomas Fuller and Christopher Flavelle – NY Times
Multiple mega fires burning more than three million acres. Millions of residents smothered in toxic air. Rolling blackouts and triple-digit heat waves. Climate change, in the words of one scientist, is smacking California in the face.

Shrinking Money-Market Funds Threaten Global Dollar Supply; A major source of greenbacks for international banks has begun to shrink again, which could threaten major non-U.S. banks that have come to depend on it
Mike Bird – WSJ
After the money-market panic in March, assets in the prime funds which invest in short-term corporate debt rocketed back up in April and May. They are now sliding once again, posing a threat to non-U.S. banks which rely on them.

Market Volatility Teaches New Investors That Stocks Go Down, Too; Technology shares plunged over three days by their widest margin in nearly six months, draining some individual portfolios
Michael Wursthorn and Mischa Frankl-Duval – WSJ
A new wave of investors suffered big losses in recent days, getting a harsh lesson on how the stock market works. Technology stocks plunged over a three-day trading span that ended Tuesday by their widest margin in nearly six months, erasing thousands of dollars from some individual investors’ portfolios.

JPMorgan Says Big Options Bets Swing Stocks in Thin Markets
Joanna Ossinger – Bloomberg
Dealer hedging can stoke equity volatility: strategist Quigg; Tech derivatives have been in spotlight as big trades revealed
Market liquidity remains thin and this can leave stocks vulnerable to exaggerated moves around big options trades, according to JPMorgan Chase & Co. “While we are not concerned about a dominant ‘whale’-type investor, exceptionally large trades in thin markets,” especially in sectors or investment styles considered overbought or oversold, increase the “potential for exacerbated stock moves as dealers hedge exposure,” Shawn Quigg, a derivatives strategist at JPMorgan, said in emailed comments.

Dutch Nomination Kicks Off Race for Key ECB Job
Birgit Jennen and Alexander Weber – Bloomberg
The Netherlands is making a bid to secure its second seat; Euro-area finance ministers start search for nominee in Berlin
The Netherlands opened the race to fill a vacancy in the European Central Bank’s top team by nominating Frank Elderson, who currently runs banking supervision at the Dutch central bank.

Hedge the U.S. Election in Currency Markets
Joanna Ossinger – Bloomberg
Currencies might be the best place to hedge U.S. election uncertainty because volatility looks cheaper in foreign-exchange markets relative to other asset classes. That’s the view of strategists at Morgan Stanley and Tallbacken who have been gauging the increase in volatility in stocks, rates, currencies and commodities ahead of one of the most divisive elections in recent U.S. history.

The latest big bailout comes with big whistleblower payouts; Companies are suspected of siphoning off billions in government support. There is one way of catching them
Tom Braithwaite – FT
The bigger the bazooka the better. But what if it misses the target? To fight the effects of the coronavirus pandemic, the US tried to get forgivable government loans to businesses before they went under. Banks were the conduit and in May, JPMorgan’s head of business banking Jennifer Roberts trumpeted the initial success.

The Widening Education Gap May Tear the Economy Apart; The Covid-19 pandemic will exacerbate the disparities in educational outcomes, much as the Great Recession did.
Claudia Sahm – Bloomberg
It’s no secret that in this economy the well off, or “haves,” have done very well at the expense of everyone else. We see it in the record-high stock market, the expiration of extra jobless benefits and the higher death rates among Black people from Covid-19, to name just a few examples. The return to schools will drive these inequities further part, with long lasting economic effects.

New Yorkers Face Fines for Not Wearing Masks on Public Transit
Keshia Clukey – Bloomberg
Levy of $50 starts Monday for subway, commuter-rail riders; Push to boost ridership struggling to recover from pandemic
New Yorkers will be fined $50 starting Monday if they refuse to comply with the state’s mandate to wear masks while using public transportation, Governor Andrew Cuomo said Thursday.

The Tax Moves Day Traders Need to Make Now; New, inexperienced investors are rushing into the market thanks to no-commission trades and the popular Robinhood trading app. What many don’t know is that they could owe Uncle Sam taxes on those trades.
Laura Saunders and Mischa Frankl-Duval – WSJ
If you’re one of the millions of day traders who have jumped in and out of markets this year, check your taxes now. Being a taxpayer may not be top of mind, but not paying attention could dent your bottom line next April.

The Hollowing Out of Hong Kong; China’s tightened grip on the finance hub will make it harder for Hong Kong to diversify its economic base and keep pace with regional rivals in Singapore and Shenzhen
Nathaniel Taplin – WSJ
Does Beijing’s imposition of a draconian yet murky national security law mean the end of Hong Kong as we have known it? For financiers, the answer is probably no: The city retains many of its core advantages, especially preferential access to Chinese markets, a stable currency, and open capital markets.

Business Leaders Urge Mayor de Blasio to Stop New York City’s Decline; Letter cites public safety and quality-of-life issues; mayor reiterates need for borrowing authority, stimulus
Katie Honan and Ben Chapman – WSJ
More than 160 business leaders, including executives at Citigroup Inc., Mastercard Inc. and Nasdaq Inc., have signed a letter to Mayor Bill de Blasio warning of New York City’s deteriorating condition in the wake of the coronavirus pandemic and growing anxiety over public safety, cleanliness and other quality-of-life issues.

Who’s the Next Woman to Take Over on Wall Street?
NY Times
Citigroup made history by appointing Jane Fraser as its next chief executive, making her the first woman to lead a major Wall Street bank when she takes over early next year. That makes us wonder: Who’s next? Here are some of the top contenders to break the glass ceiling in banking:

43% of retail investors are trading with leverage: survey
Ethan Wolff-Mann – Yahoo Finance
It’s no secret retail investors have been a force in the current bull market, shoveling money into stocks and reaping the benefits of a strong market. Six months into the pandemic, the bullishness has continued. Investors are trading more and even getting into options and margin — two forms of leverage that can magnify wins, but also losses.

Options Mania and Real-World Risk Mean Volatility Here to Stay
Sarah Ponczek – Bloomberg
Overheated derivatives market is fueling big swings in stocks; Macroeconomic calendar is adding to outlook for volatility
Job losses persist. The global economic recovery from Covid-19 remains tenuous. The U.S. presidential election is less than two months away, Congress seems unable to agree on additional stimulus and Brexit is once again facing roadblocks.


From Asia to Africa, China Promotes Its Vaccines to Win Friends; With pledges of a coronavirus vaccine, China is on a charm offensive to repair strained diplomatic ties and bolster engagement with other countries.
Sui-Lee Wee – NY Times
The Philippines will have quick access to a Chinese coronavirus vaccine. Latin American and Caribbean nations will receive $1 billion in loans to buy the medicine. Bangladesh will get over 100,000 free doses from a Chinese company.

The Coronavirus Is Mutating, and That’s Fine (So Far); SARS-CoV-2 has been slowly changing in small ways, without getting more dangerous.
Edward Holmes – NY Times
No doubt you have read the recent headlines about patients who recovered from Covid-19 only to be infected with SARS-CoV-2 again later — purportedly by a different “strain” of the virus.

Post-COVID heart damage alarms researchers: ‘There was a black hole’ in infected cells
Suzanne Smalley – Yahoo News
Shelby Hedgecock contracted the coronavirus in April and thought she had fought through the worst of it — the intense headaches, severe gastrointestinal distress and debilitating fatigue — but early last month she started experiencing chest pain and a pounding heartbeat. Her doctor put her on a cardiac monitor and ordered blood tests, which indicated that the previously healthy 29-year-old had sustained heart damage, likely from her bout with COVID-19.

To Keep Schools Open as Covid Surges, Europe Isolates Infected Students; Governments want to help parents get to work and avoid lost classroom time for students; ‘we have a moral duty’
Joanna Sugden – WSJ
European governments are working to keep schools open amid a rise in coronavirus infections, removing pupils suspected of being infected and so far avoiding a repeat of the wide-scale spring closures. Governments in the U.K., France, Germany and elsewhere say they are determined to keep classrooms open in the fall both because it enables parents to return to work and because of the social and economic scarring caused by months without face-to-face teaching for millions of pupils earlier this year.

U.S. Coronavirus Cases Rise for a Third Day in a Row; States including Louisiana, Illinois and New York move toward reopening further
Adam Martin – WSJ
The daily increase in U.S. coronavirus infections rose for the third day in a row, as hope for passing an economic relief bill before Election Day faded. States including Louisiana, Illinois and New York moved toward reopening, and the Food and Drug Administration sought to assure the public it wouldn’t be swayed by politics when approving a vaccine.

How coronavirus changed gardening forever; The pandemic has created a new generation of enthusiasts who have found growing is good for the soul
Jane Perrone – FT
“What food can grow on my windowsill?” “Where can I get hold of some compost?” “What leaves can you use as toilet paper?” In early March, when Covid-19 began to grip the globe, something shifted in the world of gardening. I began to field horticultural questions from friends, family and fellow journalists, most of whom had never before shown a scrap of interest in plants.

How quick and dirty Covid tests can help end the weariness; A mass programme is needed because we cannot wait for an effective vaccine
Tim Harford – FT
Screwtape, CS Lewis’s unforgettable devil, has this advice for crushing people who are facing a test of endurance. “Feed him with false hopes?.?.?.?Exaggerate the weariness by making him think it will soon be over.”

Statistics, lies and the virus: Tim Harford’s five lessons from a pandemic; In an age of disinformation, the value of rigorous data has never been more evident
Tim Harford – FT
Will this year be 1954 all over again? Forgive me, I have become obsessed with 1954, not because it offers another example of a pandemic (that was 1957) or an economic disaster (there was a mild US downturn in 1953), but for more parochial reasons.

Covid Vaccines Face a Volatile World When It Comes to Trust
James Paton – Bloomberg
Vaccine confidence has waned in some nations, study shows; U.K., France, Finland, Italy show signs of increasing support
Radically different opinions around the world on the safety, effectiveness and importance of vaccines highlight the challenge facing health officials once a Covid-19 shot arrives. In countries such as South Korea, Indonesia, Pakistan and Poland, confidence in vaccines has declined in recent years, according to a study published Thursday in The Lancet medical journal. Although support for inoculations in Europe remains low compared with other regions, there are signs that trust is rising in Finland, France, Italy, Ireland and the U.K., the report found.

India Survey Suggests Covid-19 Cases Hit 6.4 Million by May
Ragini Saxena – Bloomberg
The ICMR conducted first national survey from May 11 – June 4; 28,000 people across 70 districts were enrolled in survey
The results of India’s first nationwide serological survey suggests that more than six million people were infected with the coronavirus as early as May, which would place the country well ahead of the current official tally in the U.S.

It’s Hard to Keep a College Safe From Covid, Even With Mass Testing; The University of Illinois had a state-of-the-art reopening, and then the virus cases piled up.
Emma Court, Shruti Singh – Bloomberg
When the University of Illinois at Urbana-Champaign welcomed more than 35,000 students back to its Central Illinois campus in late August, it looked like it could be more than just another school reopening in the Covid-19 era. It was a real-world example of the sort of public health measures many experts long have been urging: frequent testing—even of people with no symptoms—combined with contact tracing and technology-enabled exposure notifications.

Munich Re Stops Selling Pandemic Business Coverage After Losses
Stephan Kahl – Bloomberg
Want the lowdown on European markets? In your inbox before the open, every day. Sign up here. Munich Re has stopped selling coverage to protect against business losses in future pandemics after the German reinsurer took a 1.5 billion-euro ($1.8 billion) virus-related hit in the first half. “We are currently examining whether we will offer new contracts that include pandemic protection in property and casualty insurance in the future,” Torsten Jeworrek, Munich Re’s head of reinsurance, said in an interview. “For the moment it has been suspended, for example with respect to event cancellations.” The company will continue to cover pandemics in its life and health contracts.

China Starts Testing Covid-19 Nasal Spray Vaccine
Bloomberg News
Spray becomes 10th candidate from China in human testing phase; Scientists hope for better infection control with nasal spray
The newest Covid-19 vaccine candidate to start human testing is the first where volunteers won’t get a painful injection. Instead, they’ll receive a spray through the nose.

How Many 9/11 Survivors Have Died of COVID-19? At Least 42 — and Likely Many More
Ashley Rodriguez, Beatriz Muylaert – The City
Michael Field arrived at the World Trade Center on Sept. 11, 2001, shortly after the terrorist attacks on the Twin Towers. The FDNY emergency medical technician wound up working at Ground Zero for nine months. He later suffered from rheumatoid arthritis and pulmonary issues — conditions that his wife, Stacey Field, attributed to his work digging through the rubble as the rescue operation quickly turned to a long-term recovery effort.

The Other Way Covid Will Kill: Hunger; Worldwide, the population facing life-threatening levels of food insecurity is expected to double, to more than a quarter of a billion people.
Peter S. Goodman, Abdi Latif Dahir and Karan Deep Singh – NY Times
Long before the pandemic swept into her village in the rugged southeast of Afghanistan, Halima Bibi knew the gnawing fear of hunger. It was an omnipresent force, an unrelenting source of anxiety as she struggled to nourish her four children.

Exchanges, OTC and Clearing

Euronext confirms interest to buy LSEG’s Borsa Italiana; LSEG had previously stated it is considering offloading Borsa Italiana to alleviate competition concerns about its Refinitiv acquisition.
Joe Parsons – The Trade
Euronext has confirmed it has entered into discussions to bid for the London Stock Exchange Group’s (LSEG) Milan-based securities exchange Borsa Italiana. The pan-European would have to offer at least EUR4 billion for the bid to be successful, according to reports.

Euronext’s statement regarding Borsa Italiana
Euronext confirms it is currently in discussions with Cassa Depositi e Prestiti Equity (“CDP Equity”) to submit an offer to London Stock Exchange Group plc for the acquisition of the business and key operational assets of Borsa Italiana.

Euronext announces annual review results of the Cac® Family Indices
Euronext today announced the results of the annual reweighting of the CAC® Family indices. The changes due to the review will be effective from Monday 21 September 2020.

MSCI-Index Futures: Order book incentives for selected Asian products
As of 1 October 2020, market participants can benefit from a fee holiday for trading selected Asian MSCI Futures in the order book.

ICE Changes Name of NYSE FANG+™ Index Futures to Reflect New Contract Size; Contract will be called the MICRO NYSE FANG+™ Index Futures Contract
Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listing services, today announced it will change the name of the NYSE FANG+™ Index Futures Contract to reflect plans to change the contract size, which will lower the notional value of the contract. The new name will be the MICRO NYSE FANG+™ Index Futures Contract.

CME STP Notices: September 10, 2020
CME Group
New – New Originating Event Enumeration in CME STP Interest Rate Swap (IRS) Messages – September 18 NEW
BrokerTec Stream on CME STP – December 7
CME STP Support of BrokerTec Markets – Q4 2020

Performance Bond Requirements: Agriculture, Energy, Equity and Interest Rate Margins – Effective September 11, 2020
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.

Performance Bond Requirements: Energy, Interest Rate & Metal Margins – Effective September 11, 2020
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below. Please email any questions to

POSTPONED: Amendments to the Exercise Price Rule of the Options on Three-Month Eurodollar and Three-Month SOFR Futures Contracts – Addition of 6.25 Basis Point Strike Price Intervals
CME Group
Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will amend the Exercise Price rules of the Options on Three-Month Eurodollar Futures (Rulebook Chapter 452A) and Options on Three-Month SOFR Futures contracts (Rulebook Chapter 460A) (the “Contracts”) for trading on the CME trading floor, the CME Globex trading platform (“CME Globex”) and for submission of clearing via CME ClearPort (collectively, the “Rule Amendments”). The effective date of this initiative is forthcoming

Reduction of the Minimum Price Increment and Related Amendments to the CME Globex Non-Reviewable Trading Ranges Table of the Australian Dollar/U.S. Dollar (“AUD/USD”) Futures Contract
CME Group
Effective Sunday, November 22, 2020, for trade date Monday, November 23, 2020, and pending all relevant Commodity Futures Trading Commission (“CFTC”) regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will reduce the minimum price increment of the Australian Dollar/U.S. Dollar (“AUD/USD”) futures contract (Rulebook chapter: 255; Commodity code: AD) commencing with the December 2020 contract month and beyond for trading on the CME Globex electronic trading platform and for submission for clearing through CME ClearPort. Specifically, CME is amending Rule 25501.C. (“Price Increments”) of the AUD/USD futures contract by reducing the minimum price increment for outright transactions from $.0001 ($10.00) to $.00005 ($5.00) per Australian dollar

CME Globex Notices: September 7, 2020
CME Group
iLink 3 MSGW Session Migration
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
Harmonization of Enable/Disable Implied Behavior for ICS – September 20
CME Group Risk Management Tools Enhancement – September 20
Update – iLink Enhancements for Location ID and Displayed Quantity – November 15 UPDATE

SGX reports market statistics for August 2020
CME Group
Cash equity activity accelerates on portfolio rebalancing, buoyant US market;Equity index futures volumes moderate as Asian cash market volatility normalises; China economic reopening dominates; iron ore derivatives trading keeps up-trend
Singapore Exchange (SGX) today reported its August 2020 market statistics. COVID-19 related developments and the reopening of global economies remained in focus. The cash equity market was more active due to portfolio repositioning after the release of half-year financial results, buoyant US technology stocks and hopes for a viable COVID-19 vaccine. Equity index futures trading eased as volatility of underlying Asian markets returned to more normal levels. Iron ore derivatives volume stayed in an uptrend on China’s economic recovery.

Change of Central Contract Months in 10-year JGB Futures Trading
Concerning 10-year JGB Futures, since the trading volume of the December 2020 contract (second contract) surpassed that of the September 2020 contract (nearest contract) in today’s auction market, the central contract month pertaining to temporary trading halt (Circuit Breaker rule) is as follows from September 14, 2020 (trading day).

Tokyo Financial Exchange: Extension Of Promotional Period For Discount Program In Three-Month Euroyen Futures
This informs Trading Members of the extension of the current Discount Program in Three-month Euroyen Futures (Euroyen). TFX has decided to extend the program until the end of March 2021.


cmdty by Barchart Launches Innovative Basis Forecast Indexes for Corn and Soybeans
Barchart, a leading provider of data and technology services to the financial, media, and commodity industries, announces the launch of cmdty Basis Forecast Indexes for Corn and Soybeans that are updated daily and cover 850+ counties, Crop Reporting Districts, and States across the U.S.

Santander spins out fintech VC; doubles allocated funds to $400m
Santander is spinning out its Innoventures fintech venture capital unit and doubling its commitment to the newly autonomous fund to $400 million.
Now called Mouro Capital, the fund will manage the existing portfolio of Santander Innoventures, which has invested in 36 startups in Europe and the Americas since its launch in 2014.

Microsoft and Refinitiv target connectivity and market data in major partnership; The strategic partnership between Microsoft and Refinitiv will give financial services firms improved connectivity and market insight.
Annabel Smith – The Trade
Microsoft and Refinitiv have entered into a major partnership in a bid to improve connectivity and market data insights across the financial services sector.

Big bank CEOs see fintech threat ‘diminishing’ despite pandemic
Geoff Zochodne – Financial Post
When Shopify Inc. dethroned the Royal Bank of Canada to become the country’s most valuable company earlier this year, it didn’t bother Dave McKay.
Speaking at a virtual conference earlier this week, the chief executive of RBC said a rise like Shopify’s doesn’t harm the bank’s shareholders, and that Canada could actually use more such companies, as well as the economic benefits that come with their success.

Mawer Investment Management deploys SimCorp Dimension to streamline workflows; SimCorp said the agreement with Mawer Investment Management is the latest in a series of North American front-to-back deals for the technology provider.
Annabel Smith – The Trade
Mawer Investment Management has implemented the multi-asset front-to-back investment management platform from SimCorp. The SimCorp Dimension system will help streamline the Canadian investment firm’s investment workflows including order execution, portfolio management, compliance, and corporate actions, through to settlement via a single platform, SimCorp said.

Vela expands fixed income offering with Fenics US Treasuries; Vela has added Fenics US Treasury to its direct market access platform offering clients access to cash and derivatives trading venues.
Annabel Smith – The Trade
Data and trading technology provider Vela has integrated Fenics US Treasuries (UST) with its direct market access (DMA) platform, allowing clients to access cash and derivatives trading venues. The integration aims to deliver a low latency path to the venue and improve transactional and communication performance by cross-connecting Vela’s DMA platform to Fenics’ co-location in New Jersey.


Euro Zone Is About to Make Up Its Mind on Digital Currency
Carolynn Look and Alexander Weber – Bloomberg
Lagarde says task force findings to be presented within weeks; Weidmann says central banks aren’t planning to abolish cash
European Central Bank officials will discuss in coming weeks whether or not the region needs to create a digital version of its currency, arguing they can’t afford to be complacent on technical innovation. Bank of France Governor Francois Villeroy de Galhau said during a virtual panel discussion hosted by the Bundesbank that Europe faces “urgent and strategic choices” on payments, including on the question of a potential central bank digital currency.

Lex Sokolin: The Revolution You’ve Been Waiting For: Fintech + DeFi
Lex Sokolin – Coindesk
Everything seems to be getting connected: finance, culture, art, technology, media, geopolitics. It is either a fantastic time to be working in our industry or we are slowly going nuts from information overexposure. Let’s tug on a few strings as they relate to my thesis for what is happening next.
At the core of the answer is the question about the computing paradigm. How does software operate? Where does it operate? Who secures it? And, of course, in the spirit of our common interest, how does this impact financial infrastructure?

French Central Bank Chief Eyes Public-Private Partnership for Possible Digital Euro
Paddy Baker – Coindesk
The head of France’s central bank has spoken of the potential benefits of private sector involvement in the development and issuance of a future European digital currency. Francois Villeroy de Galhau, governor of the Banque de France, said in a speech Friday that a public/private partnership would be the best way to issue a central bank digital currency (CBDC) to retail users.

Former Central Bank Official: Japan Should Take a Digital Yen Seriously
Sandali Handagama – Coindesk
Japan is in no rush to digitize the yen but there are reasons the country should think seriously about a central bank digital currency (CBDC), said Tetsuya Inoue, formerly of the Bank of Japan (BoJ) and now a chief researcher at the Nomura Research Institute. Inoue is the author of a book on a digital yen. Inoue told CoinDesk Japan in a recent interview that as Japanese banknotes are highly trusted, and there isn’t a considerable unbanked population, there is no rush to issue a digital currency.

Switzerland enshrines its crypto-friendly policies into law
Adriana Hamacher – Decrypt
Switzerland just became the first major financial center with a full set of laws to govern blockchain commerce. The Swiss Senate has overwhelmingly approved legislation making it easier to use cryptocurrencies and decentralized finance. The new legislation enables companies to create digital shares and other tradable assets. The laws are expected to come into effect early next year.

Square Forms Group to Stop Patent Hoarding From Stifling Crypto Innovation
Paddy Baker – Coindesk
Jack Dorsey’s payment company is inviting other cryptocurrency firms to join its “alliance” to pool patents and preserve the industry’s open-source spirit. Square said Thursday it has launched what it calls the Cryptocurrency Open Patent Alliance (COPA), a non-profit that wants to stop companies from locking up useful technologies in patents, a practice Square says hamstrings innovation.

Uniswap September Volume Tops August’s $6.7B Record in 10 Days on Dizzying DeFi Demand
Zack Voell – Coindesk
Uniswap topped August’s record high trading volume in the first 10 days of September, reaching $6,729,691,041 mid-morning on Thursday, leaving almost three weeks to push further into record territory. Last month’s $6.7 billion in traded volume was the leading decentralized exchange’s fourth consecutive all-time monthly high, as CoinDesk previously reported.

Binance puts up $100 million to attract DeFi projects to its new blockchain
Michael McSweeney – The Block
Crypto exchange Binance has unveiled a new initiative — backed by a $100 million pot — to attract would-be-developers and projects to its recently unveiled Binance Smart Chain. Participants can garner up to $100,000 via the program. The unveiling comes more than a week after Binance launched Smart Chain, billed as a smart contract-focused companion to its existing Binance Chain.

Casa co-founder Jeremy Welch joins Kraken as VP of product
Frank Chaparro – The Block
Jeremy Welch, the co-founder of crypto wallet services provider Casa, is joining cryptocurrency exchange Kraken as its vice president of product, the firm announced on Thursday. A former product specialist at Google, Welch co-founded Casa in 2016 as a hardware provider in the space. He left the firm at the beginning of the year and will continue to serve as an advisor to the company. As for his new role at Kraken, Welch will be “launching strategic improvements across Kraken’s product suite and leading the change” on new features, a press memo said.

Bitstamp Integrates Nasdaq’s Matching Engine for Faster Order Executions
Sebastian Sinclair – Coindesk
Cryptocurrency exchange Bitstamp has implemented a new matching engine from Nasdaq’s technology vendor that it says greatly speeds up trading. Announced Thursday, the updated matching engine improves upon Bistamp’s previous implementation developed by global provider of exchange and clearing technology Cinnober – since acquired by Nasdaq With the upgrade, “Bitstamp can continue to bolster their capacity, performance and resiliency,” said Andy Green, vice president and head of the EMEA division at Nasdaq Market Technology.

tZERO Approved To Launch Retail Broker-Dealer Subsidiary
tZERO, a leader in financial innovation and liquidity for private companies, announced today that the Financial Industry Regulatory Authority (FINRA) has approved the membership application of tZERO Markets, a retail broker-dealer and wholly owned subsidiary of tZERO that is registered with the Securities and Exchange Commission (SEC). This approval allows tZERO Markets to offer its customers retail brokerage services for digital securities and provide issuers with investment banking and placement agent services in connection with capital raising activities.


Trump’s Coronavirus Response Was Beyond Incompetent; He wasn’t oblivious to the danger. He just didn’t care.
Paul Krugman – NY Times
Most cases in which cars kill pedestrians surely reflect negligence: drivers who were too busy talking on their cellphones or thinking about their golf games to notice the senior citizen crossing the street in front of them. A handful are acts of murder, like when a man killed a woman by plowing his car into counterprotesters at a neo-Nazi rally in Charlottesville, Va.

U.S. Imposes Sanctions Over Russian Election Meddling
Ian Talley and Dustin Volz – WSJ
The Trump administration on Thursday sanctioned a Ukrainian lawmaker and three Russians alleged to have interfered in U.S. elections as Moscow’s agents. The action targeted Andriy Derkach, a Ukrainian lawmaker who the U.S. Treasury Department said is acting as a Russian agent interfering in the 2020 presidential elections, and three Russians alleged to have worked for the previously sanctioned Internet Research Agency, a company U.S. officials say was at the center of Moscow’s efforts to influence prior U.S. elections.

Covid vaccine becomes divisive issue in US election campaign; Donald Trump, a long-term sceptic, is pushing for a speedy approval while Democrats urge caution
Kiran Stacey and Hannah Kuchler – FT
For years, Donald Trump has been among the most prominent anti-vaccination voices in the US, repeatedly blaming childhood immunisations for causing what he described as an autism “epidemic”.

China Retaliates Against U.S. Diplomats, Including in Hong Kong
Bloomberg News
Beijing says U.S. has violated international laws, norms; Move comes amid a broader conflict between U.S. and China
Beijing said it will take unspecified retaliatory measures against U.S. diplomats in China, including those working in Hong Kong, following earlier moves by the Trump administration to limit the ways Chinese diplomats can operate on U.S. soil.

Trump, Biden Use 9/11 Visits to Check Off a Vital Political Box
Jordan Fabian, Jennifer Epstein, and Daniel Flatley – Bloomberg
The two will appear at different times at plane crash site; State is closely contested as Biden narrowly leads in polls
Donald Trump and Joe Biden will signal on Friday that their paths to the White House run through Pennsylvania, as both commemorate the anniversary of the Sept. 11 attacks near the town of Shanksville, where one of the hijacked planes crashed in 2001.

Russian Hackers Have Targeted 200 Groups Tied to U.S. Election, Microsoft Says; China has also sought to compromise ‘high-profile individuals’ linked to Joe Biden’s campaign, according to the software giant
Dustin Volz – WSJ
Russian government hackers have targeted at least 200 organizations tied to the 2020 U.S. election in recent weeks, including national and state political parties and political consultants working for both Republicans and Democrats, according to Microsoft Corp.


CFTC Issues Guidance on Factors Used in Evaluating Corporate Compliance Programs in Connection with Enforcement Matters
The Commodity Futures Trading Commission today announced the issuance of new, public, staff-level guidance by the Division of Enforcement, which outlines factors that will be considered when evaluating compliance programs in connection with enforcement matters. The guidance, which will be published in the agency’s Enforcement Manual, is the first of its kind issued by the Division. It follows the recent update of the agency’s civil monetary penalty guidance, which was released in May. [See CFTC Press Release No. 8165-20]

UK financial watchdog’s probes taking longer and costing more; Despite a high caseload, only 15 investigations resulted in fines in 2019-20
Matthew Vincent – FT
Britain’s financial regulator is still working on a high volume of investigations into potential wrongdoing by firms and individuals, but delivering a relatively low proportion of clear outcomes at an increasing cost, according to new data.

Court rulings support ASIC’s position on notice compliance and legal privilege
Two recent Federal Court decisions support ASIC’s position on obligations to comply with ASIC Act notices and to clearly substantiate any claims for legal professional privilege.

Insider trader sentenced to three years imprisonment for trading in Big Un Ltd shares
Former investment analyst, Mr Michael Ming Jinn Ho, 33, has been sentenced in the Sydney Downing Centre District Court to three years imprisonment. Mr Ho pleaded guilty to five counts of insider trading and one count of communicating inside information in respect of Big Un Limited (Big Un) shares and options between 18 July 2016 and 10 February 2018 (20-045MR).

FINRA to disable Transport Layer Security (TLS) version 1.0 and version 1.1
Effective 09/30/2020 FINRA will disable support for Transport Layer Security (TLS) protocol versions 1.0 and 1.1 for all web applications/API connections. Firms using older clients/browsers that do not support TLS version 1.2 and above will not be able to establish connectivity with FINRA web applications/APIs.

New Research: FINRA Foundation Explores Risky Financial Behaviors by Senior Investors; Study Suggests Overconfidence in Financial Knowledge May Lead to Excessive Financial Risk Taking Among Older Investors
America’s older investors, many facing diminished financial knowledge and overconfidence in their ability to make sound investment decisions, may engage in more risky financial behaviors as they continue to age, according to new research from the FINRA Investor Education Foundation (FINRA Foundation), in collaboration with researchers from Duke University and Rush University Medical Center.

2020 FINRA Virtual Diversity Summit Week; FINRA Virtual Diversity Summit Week | September 21 – 24, 2020
FINRA’s 2020 Diversity Summit has been reimagined as a virtual, week-long learning series, FINRA’s 2020 Diversity Summit Week: Focus on Inclusion. This program, hosted by FINRA’s President and CEO Robert Cook, begins on September 21 and is open to FINRA employees and members of the financial services industry.

CFTC to Hold an Open Commission Meeting on September 17
Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the CFTC will hold an open meeting on Thursday, September 17, 2020 at 10:00 a.m. (EDT). The meeting will be held via conference call in accordance with the agency’s implementation of social distancing due to the COVID-19 (coronavirus) pandemic.

Agricultural Advisory Committee to Meet via Teleconference September 24
Chairman Heath P. Tarbert, the sponsor of the Agricultural Advisory Committee (AAC), announced today the AAC will hold a public meeting on Thursday, September 24, 2020 at 2:00 p.m. (EDT). The meeting will be held via conference call in accordance with the agency’s implementation of social distancing due to the COVID-19 (coronavirus) pandemic.

CFTC Issues Guidance on Factors Used in Evaluating Corporate Compliance Programs in Connection with Enforcement Matters
The Commodity Futures Trading Commission today announced the issuance of new, public, staff-level guidance by the Division of Enforcement, which outlines factors that will be considered when evaluating compliance programs in connection with enforcement matters. The guidance, which will be published in the agency’s Enforcement Manual, is the first of its kind issued by the Division. It follows the recent update of the agency’s civil monetary penalty guidance, which was released in May. [See CFTC Press Release No. 8165-20]

National Futures Association: Proposed Amendments to Part 3 of NFA’s Compliance Rules regarding Virtual Hearings
Dear Mr. Kirkpatrick:
Pursuant to Section 17(j) of the Commodity Exchange Act (“CEA” or “Act”), as amended, National Futures Association (“NFA”) hereby submits to the Commodity Futures Trading Commission (“CFTC” or “Commission”) proposed amendments to NFA’s Part 3 Compliance Rules to specify that a Hearing Panel in an NFA Business Conduct Committee (“BCC”) matter has the authority to order a virtual hearing in extraordinary circumstances. NFA’s Board of Directors (“Board”) unanimously approved the proposed amendments at its meeting on August 20, 2020.

FCA publishes Annual Report and Accounts 2019/20
The Financial Conduct Authority (FCA) has today published its Annual Report and Accounts, which looks back on the organisation’s key pieces of work throughout 2019/20.

Bailey turned down £40k FCA bonus
Rachel Mortimer – FT Adviser
Former Financial Conduct Authority chief Andrew Bailey turned down a £40,000 bonus award in his final year at the financial regulator. Mr Bailey left the FCA to head up the Bank of England in March this year, but was due to receive a £40,800 deferred share of his performance bonus from the previous year this April.

Amended Interpretive Notice 9053 – Forex Transactions

ISDA Creates InforHub
ISDA Create is an online platform that allows buy- and sell-side firms to electronically negotiate their documentation, making the negotiation process far more efficient and less time consuming, as well as allowing for the capture of legal and commercial data within the documents without any additional effort.

U.S. Says It Is Cracking Down on PPP Fraud; Authorities point to criminal cases amid concerns that the small-business relief program lacked safeguards against abuse
Ryan Tracy – WSJ
Federal authorities sought Thursday to underscore their efforts to combat fraud in the government’s coronavirus relief program for small business, pointing to charges filed against 57 people for alleged crimes related to the Paycheck Protection Program.

Investing and Trading

New York Fed Seeks to Diversify Firms Providing Emergency Support; Daleep Singh, who leads the New York Fed’s markets group, says the central bank’s support efforts have been effective
Michael S. Derby – WSJ
A top New York Fed official said the Federal Reserve is trying to broaden who can take part in its pandemic emergency support efforts. “Now that the facilities are operational, our focus is on extending access to the facilities,” New York Fed Executive Vice President Daleep Singh said Thursday. Mr. Singh leads the bank’s markets group, which implements monetary policy and monitors financial markets for the regional bank that is the Federal Reserve’s main point of contact with the financial sector.

Fed Seen Balking Again at Providing Fresh Interest-Rate Guidance
Christopher Condon and Kyungjin Yoo – Bloomberg
Economists expect dot plot to show rates near zero through ’23; Survey finds Fed’s strategy shift not moving expectations much
Federal Reserve officials will link interest-rate increases to inflation outcomes when they provide more guidance on the future path of monetary policy, economists said in a Bloomberg survey. They’re just not sure when that guidance is coming.

Money-Market Fund Woe Becomes a Headache for Borrowers
Emily Barrett – Bloomberg
For decades, money-market mutual funds offered better returns than bank deposits, were just as accessible and seemed just as safe — until they needed a federal bailout at the height of the 2008 financial crisis. That led to reforms meant to make the industry safer, while still allowing users to pursue higher yields, and investors started to drift back. But now the Federal Reserve has driven rates so low that the extra risk hardly seems worth it. That’s creating problems not just for fund managers but for corporations that have long relied on money markets to fund their day-to-day operations.

America’s $20 Trillion Debt Pile Is Getting Cheaper as It Grows
Liz McCormick and Alexandre Tanzi – Bloomberg
Debt-service costs set to hit half-century low, CBO projects; Low yields suggest room for more stimulus as Congress balks
The U.S. government is paying less as it borrows more, one reason investors appear more comfortable than Congress about funding another leg of stimulus. Interest payments in the federal budget declined about 10% in the first 11 months of this fiscal year, when America was running up its biggest deficit since World War II. Over the next few years, servicing the national debt will be cheaper than any time in the past half-century when measured against the size of the economy, according to the Congressional Budget Office.

The Coming Age of Disorder Will Favor Commodities; A return to the stagflation of the 1970s would be bad for stocks and bonds.
John Authers – Bloomberg
Another New World Order
Is it time for a New World Order? Ever since the double shock of collapsing oil prices and the advent of the pandemic six months ago, it has looked as though the existing order cannot hold. That order, associated primarily with the names of Paul Volcker, Margaret Thatcher and Ronald Reagan, was built around independent central banks and aggressive globalization, and oversaw some two decades of impressive growth, then another two decades marked by repeated crises and deepening inequality and discontent. Covid-19 appeared to administer the coup de grace.

Palantir Hires Citadel Securities for Direct Listing on NYSE
Sonali Basak and Lizette Chapman – Bloomberg
Palantir Technologies Inc. hired Citadel Securities, the market-making firm majority-owned by Wall Street titan Ken Griffin, to help oversee its direct listing on the New York Stock Exchange.

Environmental, Social and Corporate Governance

Breakingviews – Citi’s new CEO can lead on ESG if not returns
Antony Currie – Reuters
Citigroup’s decision to choose Jane Fraser as its next chief executive shows that it is becoming the U.S. banking industry’s ESG leader. Granted, that’s a relatively low bar on environmental, social and governance criteria alike. But the $109 billion lender stands out from the crowd. Cementing that advantage will be one of Fraser’s tasks – but so will boosting the lender’s long-term earnings drag.

One of Sweden’s Biggest Investors Starts ESG Pressure Campaign
Hanna Hoikkala and Rafaela Lindeberg – Bloomberg
Alecta, a Swedish pension fund with about $110 billion under management, wants to take active investing to a new level to force the companies it owns to be more ethical.
Carina Silberg, who runs a newly merged corporate governance and sustainability unit at Alecta, says her team is bringing in reams of data to figure out exactly what portfolio companies are doing when it comes to environmental, social and governance standards.

Correcting the Myths On the Labor Department’s ESG Rule
Ellen Wald – RealClearMarkets
The Labor Department is now considering new rules that address whether criteria other than financial opportunity can be used to determine the investment of ERISA funds used for private employee pensions. Specifically, this proposed rule concerns whether private pension funds can invest in social justice-oriented funds, called ESG or “Environment, Social and Governance.” These funds purport to take into account a company’s commitment to the environment, social issues and diversity and equity in governance. Proponents of ESG investing are touting their funds as more resilient during times of economic upheaval and uncertainty but a new study contradicts these claims and suggests that much of the pro-ESG advocacy must be viewed with a skeptical eye.

ESG Disclosures: Lessons Learned and Best Practices [Part 3 of 4]
Seyfarth Shaw LLP – JDSupra
In our previous alert, we described the sustainability reporting ecosystem shaping the disclosure parameters and approaches to voluntary disclosure given the lack of regulatory mandates on disclosure. As a result, companies are navigating their way towards a more transparent and accountable way to engage with their stakeholders using a variety of ESG (environmental, social and governance) disclosures. However, the uptick in disclosures has caused companies to face new theories of liability and litigation.

ANALYSIS: ERISA Proxy Voting Proposal Would Limit ESG Factor Use
Bloomberg Law
The Department of Labor has proposed changes to its proxy voting requirements in its investment duties rules under provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The proposals would limit an ERISA-covered retirement plan fiduciary’s ability to vote on some proxy proposals, including environmental, social and governance (ESG) issues, and provide that a fiduciary’s duties do not require it to vote on all proxy measures presented to it.


Citigroup’s Jane Fraser to Succeed Michael Corbat as CEO; Fraser would be the first woman to lead a major Wall Street bank
David Benoit and Christina Rexrode – WSJ
Jane Fraser made a career at Citigroup Inc. C -0.88% doing the hard jobs. She helped set the bank’s course after the financial crisis and nursed its battered mortgage business. She mopped up messes in Latin America. The biggest challenge of her career awaits: leading America’s third-largest bank through the worst economic crisis in decades.

Stanley Druckenmiller is a trading genius, and that’s why we should stop listening to him
Jamie Powell – FT
Soros’s number two at the Hungarian’s famous Quantum Fund believed the US stock market was in full-on bubble territory. Naturally, he was short tech to the tune of $200m. Druckenmiller was right; valuations were silly. The problem was, however, that the market kept going up. By May, the fund was down 18 per cent for the year. So instead of blaming the Fed, his luck or retail traders, Druckenmiller did what any good trader does and decided to stop fighting the tape. The Quantum Fund reversed course and went neck-deep long tech, finishing the year up 35 per cent.

Non-transparent ETFs pass their first test — spreads are tight; Although precise holdings are concealed, trading has been less cautious than anticipated
Carmen Germaine – FT
A new breed of ETFs approved by the Securities and Exchange Commission last year have passed their first test — spreads are surprisingly tight, which is keeping costs down.

JPMorgan calls senior traders back to the office; Bank sets September 21 deadline for managers to return as Covid-19 cases subside
Robert Armstrong and Laura Noonan – FT
JPMorgan Chase has summoned the leaders of its trading teams back to the office by September 21 as the world’s biggest investment bank tries to restore normality after the unprecedented work-from-home experiment triggered by the Covid-19 crisis.

Jane Fraser seeks to tame the Citigroup ‘beast’; First female leader of a big Wall Street bank will need to bring order to its operations
Robert Armstrong – FT
Jane Fraser’s appointment as the first female chief executive of a big Wall Street bank was a cause for celebration in an industry that has struggled with gender equity. Even competitors expressed their approval.

Citi confirms appointment of new chief executive as Corbat set to retire in 2021; Jane Fraser will replace retiring Citi chief executive Michael Corbat when he steps down in February next year.
Annabel Smith – The Trade
US investment bank Citi has confirmed that its chief executive, Michael Corbat, will retire next year and be replaced by the institution’s current CEO of global consumer banking.

Billionaire Michael Hintze’s CQS Hedge Fund Is Down 42.5%
Nishant Kumar – Bloomberg
Recent monthly gains haven’t dented earlier losses by much; Billionaire is among the worst-hit money managers this year
Billionaire Michael Hintze’s hedge fund is down 42.5% this year, with recent gains failing to make up for a slump during the market turmoil in March. The CQS Directional Opportunities Fund, which manages about $1.8 billion, was up 1.3% in August for a third straight month of gains, according to letters to investors seen by Bloomberg. But that wasn’t enough to make much of a dent in the fund’s 48% loss it suffered in the four months through May.


Hong Kong police arrest 15 people over Next Digital stock surge; Shares in media company had rocketed following detention of its pro-democracy founder Jimmy Lai
Hudson Lockett and Nicolle Liu – FT
Hong Kong police have arrested more than a dozen people in connection with a dramatic rise in the shares of a media company owned by Jimmy Lai, the pro-democracy tycoon detained last month under the city’s controversial national security law.

Rio Tinto CEO quits after backlash over Aboriginal site destruction; Jean-Sébastien Jacques and two senior executives to leave miner after investor pressure
Neil Hume and Jamie Smyth – FT
Jean-Sébastien Jacques, chief executive of Rio Tinto, will step down by the end of March after failing to contain the fallout from the destruction of an ancient Aboriginal site in Western Australia.

Bank Indonesia Intensifies Intervention to Stem Rupiah’s Fall
Grace Sihombing – Bloomberg
Rupiah is down more than 7% so far this year, most in Asia; New Jakarta restrictions could weigh on economic recovery
Bank Indonesia is intensifying its intervention in currency markets to keep the rupiah from depreciating further, as renewed social restrictions to stop coronavirus from spreading in Jakarta threaten to weigh on the economy.

Underwriters Rescue India 10-Year Bond Sale Amid Supply Worries
Subhadip Sircar – Bloomberg
Underwriters rescued a sale of Indian sovereign bonds, the third such instance in five auctions, highlighting the growing anxiety about rising debt supply amid precarious government finances.

Tiny Hong Kong IPO Soars in Best Debut of 2020
Julia Fioretti – Bloomberg
An engineering services company that raised just $16 million in its Hong Kong initial public offering soared 186% on the first day of trading, making it the best debut in the city this year.

Spanish Bank Deal Brews to Create a Regional Powerhouse
Charlie Devereux and Nicholas Comfort – Bloomberg
CaixaBank SA’s potential acquisition of Bankia SA would create a new powerhouse in Spanish finance, putting pressure on the country’s other three top banks. A takeover, which may be announced within days, would allow the combined company to lead rivals Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA in the domestic market by almost every measure, with more than 600 billion euros ($715 billion) of assets in Spain. In some key areas, CaixaBank is already No. 1 on its own.

Fears Grow China Will Halt German Pork Imports Due to African Swine Fever
Bloomberg News
Nervousness is mounting over whether top pork consumer China will halt imports of the meat from Europe’s biggest producer on concerns about a pig-killing disease. Germany, which counts on China for nearly two-thirds of its pork exports, confirmed a case of African swine fever on Thursday. That’s already caused South Korea and Japan to suspend purchases, and Taiwan to begin inspecting the luggage of passengers from the European nation.

Bonds From Mexican Airport That Doesn’t Exist Are in a Tailspin
Justin Villamil – Bloomberg
As travel slumps, revenue stream backing notes has faltered; Securities due in 2047 have dropped to 86 cents on the dollar
Bonds sold to finance a $13 billion airport in Mexico City that was ultimately scrapped are among the region’s worst performers as investors question the revenue stream that backs them. Notes due in 2047 from the Mexico City Airport Trust had a volatile first half and are now poised for their fourth straight weekly decline. Their drop to 86 cents on the dollar from above par at the beginning of the year is the seventh-worst performance in the Bloomberg Barclays Latin America Bond Index.

London’s offices are largely empty, like the tills in nearby shops.
Eshe Nelson – NY Times
Britain’s sparsely populated offices have put the economy in a quandary. The dry cleaners, coffee shops, lunch places and clothing retailers specializing in suits that serve areas packed with offices are starved of their customers.


Johnson’s lawbreaking Brexit plan leaves trade talks in balance; Prime minister faces intense pressure from Brussels and own Tory party to scrap bill overwriting Irish border deal
George Parker and Peter Foster and Jim Brunsden – FT
Boris Johnson started the week claiming his plan to break international law over Brexit was a technical issue of little consequence. Downing Street said it was “limited and reasonable” while ministers talked about “tying up loose ends”.

Brussels threatens legal action over UK Brexit treaty breach; EU hands Britain end-of-September deadline to withdraw internal market bill
Jim Brunsden and George Parker – FT
Brussels has issued Boris Johnson with an ultimatum to scrap his plans to override the UK’s Brexit treaty by the end of the month, warning the move had “seriously damaged trust between the EU and the UK”.

Cummings doesn’t need a no deal Brexit to create his British Google
Chris Stokel-Walker – WIRED UK
January 1, 2021 will be momentous for many reasons. For one, 2020 will finally be over. And, according to business secretary Alok Sharma, it will also mean a significant change for British businesses as the country slips out of the European Union, and with it the EU’s state aid rules.

Brexit Talks Hit Crisis as Boris Johnson Rejects Ultimatum; Europe has demanded the quick withdrawal of draft Brexit legislation that breaks international law. Britain has refused.
Stephen Castle and Mark Landler – NY Times
Britain and the European Union were on a collision course Thursday, after Brussels demanded the speedy withdrawal of proposed Brexit legislation that the government of Prime Minister Boris Johnson has admitted would breach international law.


9/11 Ground Zero responders suffer early risk of dementia, researchers say
Carl Campanile – NY Post
The Sept. 11 terror attack didn’t just sicken first responders who desperately searched for victims at Ground Zero — it also appears to be robbing them of their mental faculties, disturbing new research shows.

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First Read $51,906/$300,000 (17.3%) ++++ Hits & Takes John Lothian & JLN Staff The STA is holding the 88th Annual Market Structure Conference in person on October 6-8 at the JW Marriott in Washington, DC with the title "The Great Return." That is a very good...

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