ISDA 35th AGM: Are Derivatives a Green Solution?
Suzanne Cosgrove – John Lothian News
“None of this is easy; we are making this up as we go along.”
Unraveling how to effectively mitigate the economic and market risks associated with climate change was the focus of an ISDA meeting session on Tuesday, but while the panel of international regulators and banking officials outlined their considerable and ongoing efforts, a clear path to a uniform solution remained elusive.
“We in derivatives understand complexity,” said panel moderator Steven Kennedy, ISDA’s global head of public policy. Even so, he said, understanding the breadth and scope of ESG and climate change is truly a challenge.
Sarah Breeden, executive director, Bank of England, said her mission was “green finance and finance green” to support the orderly transition of the economy to net zero.
To read the rest of this story, go here.
Hits & Takes
John Lothian & JLN Staff
There is greater volatility at the CME today, or better put, there are more volatility indexes published by the CME Group across nearly every investible asset class. CME Group announced today that it has added several new benchmark indexes to its suite of CME Group Volatility Indexes (CVOL). There is now implied volatility information across five new multi-product indexes on Treasuries, agriculture, energy, metals and commodities. There are also several new single-product benchmark indexes based on CME Group’s highly liquid options markets. — CME Group
By the way, my spellcheck did not like the word “investible.” It wanted to change it to “investable.” However, the difference in the words is that investable means “ready for investment” and investible means “can be invested.” Making the indexes available to trade would make them investable. In the meantime, we can get ready.
ICE is offering a new way to compare apples to oranges in the ESG sector. ICE announced it has expanded its environmental, social and governance (ESG) reference data platform to include high-quality, granular data that enables actionable comparisons across companies and sectors. The company also shared a selection of findings from across each of the three categories. — Intercontinental Exchange
Euronext’s leadership is doing a good job of telling the story of what the acquisition of Borsa Italiana does for the exchange’s competitive strategy and position. The latest to tell the story, via LinkedIn, is Stephane Boujnah, CEO and chairman of the managing board of Euronext. He wrote:
Yesterday I was invited by Euronews to explain the rationale of the acquisition of Borsa Italiana and the migration of our core data centre activities to a completely green and new generation data centre in #Bergamo, Italy.
The acquisition of the Borsa Italiana Group is a game-changer in terms of scale, diversity of assets and revenue mix. It is the most significant event since the group was established two decades ago. Our combined group is now the leading pan-European market infrastructure, firmly positioned as the #1 venue in Europe for listing, secondary markets and equity financing. Euronext is also becoming a critical player in the post-trade landscape and debt financing in Europe.
By building the backbone of the Capital Markets Union in Europe, we have never before been so strongly positioned to serve the post-Covid real economy in Europe. Never before could we so proudly display our European roots and global ambitions. — LinkedIn
Back in 2019, JLN included a Bloomberg story by Jeffrey Bair titled “CEO’s $17,000 Birthday Party Spurs Commodity Brokerage Lawsuit.” The story can be found here. Yesterday, we were contacted by a press agent for the firm with this statement by OTC Global about the item reported in JLN:
OTC Global Holdings, LP (“OTC Global”), and its affiliated and related entities, officers, directors and employees, and John F. Klosek announce that they have resolved all claims between them. All matters are now closed, without a finding of liability against, or a finding of any misconduct by, any party, and the parties deny any wrongdoing as to each other. The resolution of the claims is confidential, and all parties’ claims and counterclaims have been dismissed with prejudice.
The law firm of Vinson & Elkins is holding a CLE event webcast titled “Unpacking the Freeze in Texas: Lessons Learned and a Path Forward” today. You can register HERE.
How much money do you have to make investing in Dogecoin before you would quit your job at Goldman Sachs? We have one data point for this question, as Aziz McMahon, head of emerging market sales at Goldman, has left the firm after making millions of dollars from the recent rise in Dogecoin. — MarketWatch
Tess Belton, an intern for the CME back in 2013 who participated in the inaugural MarketsWiki Education World of Opportunity Summer Intern Series, is “featured in Poets&Quants’s annual list of the 100 Best and Brightest MBAs!” She is working on an MBA at the University of Chicago’s Booth School of Business. — LinkedIn
ISDA published a short brief about day two of their AGM. Here is a link. — ISDA
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice. ~JJL
The Illinois Department of Financial and Professional Regulation reported that adult-use cannabis sales rose again in April, totaling more than $114.9 million. Combined with April’s medical cannabis sales, total retail revenue topped $150.2 million in Illinois, up 3.7% from March. Where does that money go? Earlier this year, the Tax Foundation took a look at tax revenues in the states where recreational cannabis is currently legal, including Illinois. Check out your state here. ~SC
GameStop and Dogecoin Are This Generation’s Rock & Roll and They’re Changing How Markets Work; Get-rich-quick trading is partly about entertainment, but it’s having a very real impact on markets.
Michael P. Regan, Kriti Gupta – Bloomberg
It’s been a weird year for the old guard of the financial markets industry. Consider the events of last week: U.S. employment data trailed economists’ forecasts by the most on record, and more than 130 companies in the S&P 500 reported earnings. Now consider what created the most buzz in markets: a massive rally in Dogecoin amid speculation that Tesla Inc. founder Elon Musk would give the cryptocurrency a boost while hosting Saturday Night Live.
***** Fear and greed do not change. ~JJL
Goldman Sachs executive quits after making millions from Dogecoin
Richard Partington – The Guardian
A senior manager at Goldman Sachs in London has quit the US investment bank after making millions from investing in Dogecoin, the joke crypto asset which has risen by more than 1,000% in value this year. City sources said Aziz McMahon, a managing director and head of emerging market sales, had resigned from the bank after making money from investing in the digital currency based on the Doge internet meme.
***** I look forward to the movie where the plucky Goldman Sachs exec is laughed at but makes millions in the end.~JB
CME Group Grows Suite of CVOL Indexes to Include Key Measures of Implied Volatility in Treasuries, Agriculture, Energy, Metals and Cross-Commodities
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it has added several new benchmark indexes to its suite of CME Group Volatility Indexes (CVOL). Together with the previously introduced indexes, CME Group now offers 40+ CVOL Indexes across nearly every major investible asset class. Beginning today, market participants can now access implied volatility information across five new multi-product indexes on Treasuries, agriculture, energy, metals and commodities, as well as several single-product benchmark indexes based on CME Group’s highly liquid options markets.
***** It used to be easy to measure volatility at the CME by looking at whether Terry Duffy’s jugular was bulging or not. ~JJL
5 Questions with Michael Andreadis of Athens Stock Exchange
Elise Fleischaker – Trading Technologies’ Trade Talk Blog
One of TT’s key differentiators is the ease with which we can connect new markets to the platform. In fact, we have added more than 10 exchanges to TT over the last 18 months. The most recent addition to our expanding portfolio of market connectivity offerings is the Athens Stock Exchange, or ATHEX, which is the national exchange of Greece. On the heels of announcing the availability of ATHEX Derivatives Market on TT, we invited Michael Andreadis, Chief Markets Operation and Business Development Officer of ATHEX, to tell us more about the exchange and share his perspectives on some of the issues facing that region. We hope you enjoy this conversation with Michael. For more information, please visit the ATHEX website.
***** I am sure Elise Fleischaker would have preferred to travel to Greece for this interview. So would I. ~JJL
Tuesday’s Top Three
Our top story Tuesday was the Wall Street Journal’s CFTC Whistleblower Program in Peril Over Potential $100 Million-Plus Payout. Second was the video Tom Sosnoff – The Path to Electronic Trading, from John Lothian News. Third was a repeat from Monday’s top three, NPR’s I Came Close To Dying: Wall Street’s Most Photographed Man Is Ready For Normalcy, about stock trader Peter Tuchman.
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|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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New York wins Brexit swaps shake-up as clearing stays in London
Huw Jones – Reuters
Brexit forced Britain to relinquish 2.3 trillion pounds ($3.25 trillion) in monthly derivatives trading, leaving New York the global winner in a shake-up of that market, consultants Deloitte and data company IHS Markit said in a report on Tuesday.
WHO and global leaders could have averted Covid calamity, experts say; Scathing report criticises authorities in China, Europe and North America while recommending widescale reforms
Clive Cookson – FT
A swift international response could have stopped the 2019 Covid-19 outbreak in China becoming a global catastrophe in 2020, according to a scathing report on the response of world leaders and the World Health Organization to the pandemic.
Wall Street Has a Bond Sale Problem; The allocation of new issues needs to be done better. Given the rampant demand, genuine buyers often feel cut out of the process.
Marcus Ashworth – Bloomberg
Marrying the interests of issuers of new debt with yield-starved investors desperate for access to bond sales is an increasing problem for investment banks. This is a lucrative and high-profile part of bank business that needs to work better because the current feeding frenzy is distorting markets.
India’s Covid Catastrophe Shows World the Danger of Complacency; Governments around the world keep repeating the same mistakes. In a country of 1.4 billion, the consequences are on a whole new scale.
Chris Kay, PR Sanjai – Bloomberg
The snaking queue outside Maasaheb Meenatai Thackeray Hospital terrified Mariselvan Thevar. More than 200 people were in line, sagging in the heat as they coughed and wheezed. Some had come hoping to find a dose of coronavirus vaccine, which remains a scarce commodity in India. Others were trying to get their hands on medication, a bed, oxygen—anything.
Here’s How Good Climate Policy Could Go Bad; A high and rising carbon price is our best shot against global warming. Unfortunately, we’re doing other stuff to prevent it from working.
Andreas Kluth – Bloomberg
There’s good news and bad news in humanity’s struggle against climate change. What’s good is that we have an excellent instrument against global warming that we can extend and improve: a market-friendly carbon price. What’s bad is that we seem bent on gumming it up with other policies that are faddish but misguided, and amount to a new form of central planning.
Meet the Gen Z stock pickers navigating the FOMO and TikTok minefield; Trusting online information is one of the biggest risks for young traders, who are flooding markets in a bid to win big returns
Bérengère Sim – Financial News
Yalda Safi, a 20-year-old student in London, jumped into investing at the start of the pandemic, buying stocks including Snapchat, JustEat, Moderna and Tesla. By March, her portfolio was up 15%. While Safi watched YouTube videos to learn the ropes, she says she has her limits: “TikTok has loads of pages with financial advice and stock recommendations. I wouldn’t ever buy those.”
Crypto’s Anonymity Has Regulators Circling After the Colonial Pipeline Hack; Almost $350 million went to cryptocurrency wallets associated with ransomware attacks last year, quadruple the level of 2019.
Joe Light – Bloomberg
When Berkshire Hathaway Inc. Vice Chairman Charlie Munger earlier this month called Bitcoin “useful to kidnappers and extortionists” and “contrary to the interests of civilization,” crypto enthusiasts mocked his investment performance, compared him to an elderly Muppet, and said he was too old to understand the technology. Michael Saylor, a crypto investor and chief executive officer of MicroStrategy Inc., asked rhetorically in an interview with a precious metals website, “Do you go to your great-grandfather for investment advice on new technologies?”
Central banks get serious on digital currencies; CBDCs could boost government coffers, displace costlier taxation and improve the efficiency of payments
Nicholas Gruen – FT
The Chinese are trialling it. The UK Treasury and the Bank of England have a task force on it. So, after years of talk, central bank digital currency has suddenly become serious business. Think of CBDC as the digital equivalent of banknotes. In the early 19th-century, private banknotes were used in shops. With numerous banks issuing different notes, it was complex and confusing — and bank failure could render your notes worthless.
Dogecoin gives away the crypto game; Success of the ‘joke’ currency shows that we shouldn’t take cryptocurrencies too seriously
Jemima Kelly – FT
It has often been hard to make sense of financial markets in 2021. First there was the 1,500 per cent rally in flailing video game retailer GameStop, then there was the $100m valuation of a New Jersey deli, and then there was a 15,000 per cent surge in dogecoin, a cryptocurrency designed as a joke.
CCP open access meets a ‘disappointing’ death in UK; All eyes turn to EU’s review of listed derivatives clearing, after battle is lost in UK
Samuel Wilkes – Risk.net
The UK Treasury’s decision to scrap rules that allow market users to clear listed derivatives at a central counterparty of their choice has been met with disappointment among a coalition of the rules’ supporters. “This is especially disappointing because both [financial services minister] John Glenn and [Bank of England governor] Andrew Bailey had set out stalls this year and last around the UK paying regard to the principles of openness, competition and resilience,” says Alex McDonald, chief
A Financial Firm’s Collapse Reverberates as Its Founder Answers Questions; Lex Greensill’s company attracted attention in high levels of British government until it failed. Lawmakers are leading an inquiry.
Eshe Nelson – NY Times
Greensill Capital collapsed because it lost insurance coverage for the loans it offered — not because of its risky business model, Lex Greensill insisted in testimony on Tuesday, breaking his silence more than two months after his company abruptly filed for bankruptcy.
The Untold Story of the NFT Boom; Digital creators used the blockchain to create a whole new art scene. Then their work started selling for thousands — sometimes millions of dollars.
Clive Thompson – NY Times
“It’s at 40.7 ETH,” FEWOCiOUS gasped. “That’s crazy.”
It was not quite 4 in the afternoon, and Victor Langlois, an 18-year-old cryptoartist, was at his desktop computer, watching a frenzied bidding war between two art collectors. Langlois — known by his art name FEWOCiOUS, or Fewo, to his friends and fans — was dressed in a white hoodie that he had designed, its arms covered in his own psychedelic art, including an eyeball and sunflower afloat in a blue sky. The room’s window had been covered with cardboard to keep things dark, and a string of blue LED lights shone down from the ceiling. As the numbers rose, Langlois nervously pulled his beanie off and on, running his hands through his poofy black hair.
Five Questions with…Colin Lambert, The Full FX
Martina Doherty – MD Consulting
Colin Lambert, founder and publisher of The Full FX, is the latest guest in our Five Questions series of blogs, in which we we talk to senior people in FinTech, RegTech and financial markets about their business and the wider market. Colin gives some excellent and honest advice on how to pitch stories to journalists in the B2B space as well as some insights into the opportunities and challenges for tech firms in FX.
Experts Call for Sweeping Reforms to Prevent the Next Pandemic; Swift mask mandates and travel restrictions, an international treaty and the creation of new bureaucracies are among the recommendations presented to the W.H.O.
Sheri Fink – NY Times
The next time the world faces an outbreak of a fast-spreading and deadly new pathogen, governments must act swiftly and be ready to restrict travel or mandate masks even before anyone knows the extent of the threat, according to a pair of new reports delivered to the World Health Organization.
Businesses Offer Employees Time ‘to Heal’ as Virus Ravages India
Nupur Acharya and Dhwani Pandya – Bloomberg
Some companies in India are temporarily halting business or offering unusual assistance to employees as a devastating wave of the coronavirus sickens and kills hundreds of thousands. Feng Tay will suspend its Indian factories for 10 working days to keep its employees safe, the Nike-supplier told the Taiwan stock exchange Wednesday. It follows firms including Honda Motor Co. and Suzuki Motor Corp. that have announced similar decisions in recent days.
World’s most vaccinated nation sees COVID-19 resurgence, raising questions over Chinese vaccine
Brigid Kennedy – The Week
Despite its standing as the world’s most vaccinated country, the 115-island archipelago Seychelles is seeing a dramatic resurgence in COVID-19 transmission, bringing its daily case rate to “a higher number of infections per capita than India,” The Wall Street Journal reports.
U.K. Said to Reconsider Plan to Buy Astra Covid Antibody Drug
Suzi Ring – Bloomberg
U.K. government said last year it had bought one million doses; Role of antibody cocktails in U.K. strategy undecided: source
The U.K. has reconsidered plans to buy one million doses of AstraZeneca Plc’s Covid-19 antibody treatment, according to two people with knowledge of the situation.
Major Overhaul of WHO Needed After Failures, Says Covid Panel
Jason Gale – Bloomberg
Covid situation ‘could have been prevented’: Johnson Sirleaf; Covid is estimated to cost world economy $22 trillion by 2025
The World Health Organization should be overhauled and given more authority to investigate global disease threats, according to a review of the international Covid-19 response that found a myriad of failures, gaps, and delays allowed the coronavirus to mushroom into a pandemic.
Intellectual property must not be an obstacle to fair vaccine supply; No one will be safe until everyone is safe, which is why global collaboration is essential
Pedro Sánchez – Prime Minister of Spain via FT
Covid-19 has affected the world profoundly. But as we mourn the millions of victims, we can now see the light at the end of the tunnel thanks to the speeding up of vaccination campaigns. Never before has humanity developed safe and effective vaccines against a new disease in such a short space of time. Scientific pro
EU is the vaccine good guy that manages to look like the villain; World’s second-largest exporter of Covid jabs finds itself on wrong side of the argument again
Ben Hall – FT
The development of Covid-19 vaccines has been a scientific marvel, offering a way out of a catastrophic pandemic. It is the source of hope of life returning to something like normal. For the EU, though, it seems to be a source of perpetual embarrassment.
CDC Panel to Consider Covid-19 Vaccine for 12-to-15-Year-Olds; Advisory committee expected to recommend Pfizer-BioNTech vaccine for adolescents
Jared S. Hopkins and Betsy McKay – WSJ
A federal advisory panel is scheduled to meet Wednesday to decide whether to recommend adolescents receive the Covid-19 vaccine from Pfizer Inc. PFE -1.28% and BioNTech BNTX -2.14% SE. U.S. regulators on Monday approved the two-dose shot for use in children as young as 12 years old, the first Covid-19 vaccine for children in the nation. Now the Advisory Committee on Immunization Practices, or ACIP, which advises the Centers for Disease Control and Prevention on vaccination policy, will review clinical trial data and other relevant information.
To Vaccinate Younger Teens, States and Cities Look to Schools, Camps, Even Beaches; The F.D.A.’s authorization of Pfizer’s Covid shot for 12- to 15-year-olds is a milestone in battling the coronavirus, but actually getting them vaccinated involves new challenges.
Abby Goodnough and Jan Hoffman – NY Times
The race is on to vaccinate the nation’s nearly 17 million 12- to 15-year-olds against Covid-19. The Food and Drug Administration’s decision on Monday to authorize the Pfizer-BioNTech vaccine for younger adolescents presents a new opportunity in the push for broad immunity against the coronavirus in the United States. But the challenges of getting them vaccinated are more complicated than for adults and older teenagers.
Exchanges, OTC and Clearing
ICE Expands ESG Reference Data Service and Shares Key Findings from Database; Coverage now includes key U.S. indices and benchmarks; Data shows 48% of U.S. large-cap companies disclose carbon emissions; 62% of companies in the ICE U.S. 1000 Index have at least 25% female board representation
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced that it has expanded its environmental, social and governance (ESG) reference data platform to include high-quality, granular data that enables actionable comparisons across companies and sectors. The company also shared a selection of findings from across each of the three categories.
TMX Group Limited Increases Dividend by 10% to $0.77 per Common Share
The Board of Directors of TMX Group Limited today declared a dividend of $0.77 on each common share outstanding, an increase of $0.07 or 10% from the previous $0.70. This dividend is payable on June 11, 2021 to shareholders of record at the close of business on May 28, 2021.
TMX Group Limited Reports Results for First Quarter of 2021
TMX Group Limited [TSX:X] (“TMX Group”) today announced results for the first quarter ended March 31, 2021.
Performance Bond Requirements: Energy Margins – Effective May 12, 2021
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.
Product Modification Summary: Expansion of the Listing Schedule of the Cobalt Metal (Fastmarkets) Futures Contract – Effective June 07, 2021
Effective Sunday, June 6, 2021 for trade date Monday, June 7, 2021, and pending all relevant CFTC regulatory review periods, please be advised that the Commodities Exchange, Inc. (COMEX or EXCHANGE) will expand the listing of contract months for the product listed below on CME Globex and available for submission for clearing on CME ClearPort.
New Product Summary: Initial Listing of Two (2) Petrochemical Futures Contracts – Effective June 07, 2021
Initial Listing of Two (2) Petrochemical Futures Contracts.
Initial Listing of the Adjusted Interest Rate FTSE® 100 Total Return Declared Dividend Index Futures Contract
Effective Sunday, June 6, 2021, for trade date Monday, June 7, 2021, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list the Adjusted Interest Rate FTSE® 100 Total Return Declared Dividend Index Futures contract (the “Contract”) for trading on the CME Globex electronic trading platform (“CME Globex”) and for submission for clearing via CME ClearPort, as noted below
SGX RegCo wants Sakae to adopt internal control recommendations
Singapore Exchange Regulation (SGX RegCo) refers to Sakae Holdings Ltd’s (Sakae) announcement of 17 October 2019 on its annual report for the financial year ended 30 June 2019 (FY2019). Sakae’s statutory auditor, Deloitte & Touche LLP (Deloitte) had issued then a disclaimer of opinion for the company’s FY2019 accounts. Deloitte had not been provided with sufficient audit evidence to evaluate, among others, the following matters:
Approval of Initial Listing (TOKYO PRO-BOND Market): List USD-Denominated Foreign Bond on TOKYO PRO-BOND Market with Value of USD 1 billion (The Metropolis of Tokyo)
Today, Tokyo Stock Exchange approved a USD-denominated bond with a total value of USD 1 billion (tenor: 5 years, coupon: 1.125%) from the Metropolis of Tokyo for listing on the professional-oriented TOKYO PRO-BOND Market.
CME Group Announces Record Copper Options Volume on May 10
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that a record 25,010 Copper options contracts were traded on May 10, 2021, surpassing the previous record of 16,029 contracts set on November 7, 2019. “As economies reopen and boost their investments in infrastructure and sustainable energy initiatives, we are increasingly seeing our customers utilize the transparency and liquidity of our Copper options markets to manage their price risk,” said Young-Jin Chang, Managing Director and Global Head of Metals at CME Group. “CME Group is home to the world’s leading commodities marketplace, and we remain focused on providing our customers with the benchmark metals products they need to manage today’s fast-evolving metals markets.”
Trayport announces acquisition of Tradesignal; The primary network and platform for European wholesale energy markets to acquire a leading systematic and technical charting solutions provider
Trayport Limited (Trayport), a wholly owned subsidiary of TMX Group, today announced that it has entered into an agreement to acquire Tradesignal, a leading provider of rule-based energy trading and analysis solutions. “The acquisition of Tradesignal is another milestone in our growth strategy, as we continue to focus on meeting the increasing market demand for data and analytics, to support quantitative and automated approaches to trading,” said Peter Conroy, President, Trayport. “Tradesignal complements Joule, and combined with Trayport’s Data Analytics and autoTRADER solutions, will further enhance decision making and the trading experience. A large number of major European energy market participants are already existing Tradesignal clients, and we look forward to working with the Tradesignal team to offer mutual and new clients the opportunity to harness a full suite of interconnected data & automated trading tools.”
Barchart Releases Free Commodity Price Reports with CPN Partners;Coverage includes Renewable Energy, Food & Beverage, Energy, Grain, and Scrap Metals
Barchart, a leading provider of market data and technology services to the financial, media, and commodity industries, announces a new collaborative partnership with members of the cmdty Pricing Network (CPN) to democratize access to physical commodity prices through a series of free price reports.
Ebay takes on banks and PayPal with loans to businesses; ‘Landmark’ move is ecommerce group’s most significant step into financial services
Nicholas Megaw – FT
Ebay will start offering loans to businesses that sell through its marketplace in the UK, pitting the ecommerce group against high street banks and its former subsidiary PayPal.
India emerges as China’s tech challenger with record run; Start-up valuations soar as pandemic boosts online services
Wataru Suzuki – FT
India is rapidly closing the gap with China in minting new unicorns — privately held start-ups valued at $1bn or more — highlighting growing investor appetite for tech start-ups in the country as the pandemic accelerates the adoption of digital services.
Broadridge completes $2.5 billion Itiviti acquisition; The acquisition of Itiviti was announced by Broadridge in March and has extended its capital markets franchise and its back-office capabilities into the front-office.
Annabel Smith – The Trade
Broadridge Financial Solutions has completed its $2.5 billion acquisition of trading technology provider Itiviti after entering into a definitive agreement to buy the firm in March. The all cash acquisition was announced by Broadridge earlier this year with the expectation that it would not close until the fourth quarter.
Broadridge Completes Acquisition of Itiviti, Extending Capital Markets Franchise; Acquisition expands Broadridge’s Capital Markets into the front office and strengthens multi-asset capabilities, while driving additional global scale and ability to serve clients world-wide
Broadridge Financial Solutions, Inc.
Broadridge Financial Solutions, Inc. (NYSE:BR), a global Fintech leader, has completed its previously announced acquisition of Itiviti Holding AB (“Itiviti”), a leading provider of trading and connectivity technology to the capital markets industry. The acquisition enhances Broadridge’s position as a global Fintech leader and significantly strengthens Broadridge’s Capital Markets franchise. It extends Broadridge’s market leading back office capabilities into the front office and deepens its multi-asset class solutions, better enabling the company to help financial institutions adapt to a rapidly evolving marketplace. The addition of Itiviti’s footprint in APAC and EMEA also increases Broadridge’s scale outside of North America to better serve global clients.
New Fintech Delivery Model Transforming Financial Services Through Mutualized Services, Highlighted in Whitepaper from Broadridge; To address innovation, digitization and resiliency, firms are modernizing and better optimizing operations through flexible architecture, cloud-based applications and data-driven insights
Broadridge Financial Solutions, Inc.
As the financial services industry confronts the new realities of a post-pandemic era, many firms are beginning to shift toward mutualization models for their technology and operations, according to a new whitepaper released today by global Fintech leader Broadridge Financial Solutions, Inc. (NYSE:BR). Mutualization is a model where participants more quickly gain access to new technologies, scalability, and resiliency while saving time, money, and risk; by sharing in the benefits of an industry solution provided by a reliable, trusted, and independent third party.
Fintech giant Ant Group’s MYbank joins China’s digital yuan platform
Coco Feng – South China Morning Post
MYbank is the first online lender to join a group of major financial institutions that have set up e-wallets on China’s digital yuan app;The participation of these banks shows how China is bolstering efforts to lead major economies in developing a central bank digital currency
MYbank, an online lender affiliated with financial technology giant Ant Group, has become the first internet bank to join China’s digital currency platform, in a move that strengthens support for Beijing’s rapid development of a “sovereign digital yuan”.
Brazil B3 to Be the Latest Addition to TNS’ Growing Global Portfolio
Transaction Network Services (TNS) today announced it now offers traders access to market data at one of the world’s largest exchanges, B3, in Brazil. This new offering is the first Latin American exchange connection for TNS, which has comprehensive access to all the world’s major exchanges delivered globally over its low latency network.
Indonesia considers plan to tax trade in cryptocurrencies
Indonesia is considering a plan to tax the trading of cryptocurrencies after a surge in popularity among local investors, a tax official said on Tuesday. The Southeast Asian country has been seeking to shore up state revenues amid the coronavirus pandemic, though Neilmaldrin Noor, a spokesman at Indonesia’s tax office, said a tax scheme for cryptocurrency was still at the discussion stage.
Hungary Plans 50% Tax Cut on Crypto Earnings to Encourage Disclosure
Zoltan Simon – Bloomberg
Reduced rate an attempt to boost visibility of digital profits; Authorities around the world grapple with ways to tax crypto
Hungary plans to slash the tax on cryptocurrency earnings by 50% from next year in an effort to encourage investors to declare income from trading digital tokens such as Bitcoin. The government said it will lower the rate on such earnings to 15% from 30.5% starting in 2022, which would bring it in line with capital gains levies on stocks. The impetus appears to be fears among officials that investors are shielding crypto gains from authorities because of the higher tax rate.
Cryptocurrency’s Value Surges to $45 Billion One Day After Its Debut
Olga Kharif – Bloomberg
Dfinity’s Internet Computer is ranked among 10 largest coins; Digital ledger seeks to ease publication onto the internet
A digital token that was launched Monday and goes by the name Internet Computer is already one of the largest cryptocurrencies in the world, with a market value of about $45 billion. That makes it the eighth-largest digital asset among the top 10 in CoinMarketCap.com’s rankings. The token and its related digital ledger are supposed to help anyone — software developers or content creators — publish anything they want onto the internet, without having to go through digital giants such as Amazon.com Inc. or Facebook Inc., or to use servers or commercial cloud services. The idea is to avoid corporate walled gardens and to reduce costs, according to Dominic Williams, founder of the project. Users could potentially build social-media and other services that compete with internet titans.
SoftBank’s Masayoshi Son Isn’t So Sure About Bitcoin
Gearoid Reidy – Bloomberg
SoftBank Group Corp. founder Masayoshi Son isn’t sure if Bitcoin is headed to the moon. Asked about the growing number of firms such as Tesla Inc. that have invested in the cryptocurrency, Son was noncommittal. “There’s a lot of discussion over if it’s a good thing or a bad thing, what’s the true value or is it in a bubble — honestly speaking, I don’t know,” Son said at the tech and investing giant’s earnings news conference.
Coinbase and SoftBank Help Fund Brazilian Crypto Firm
Vinicius Andrade – Bloomberg
Hashdex raises $26 million in round led by Valor Capital; Firm seeks to launch new products in Brazil, expand abroad
A Brazilian money management firm focused on cryptocurrencies said it raised about $26 million of new funding from investors including SoftBank Group Corp. and Coinbase Global Inc.
Billionaires Peter Thiel and Alan Howard back new $10bn crypto exchange; The venture, Bullish Global, is betting on decentralised finance disrupting traditional markets
Philip Stafford and Eva Szalay – FT
Billionaires Peter Thiel, Louis Bacon and Alan Howard are among the backers of a new cryptocurrency asset exchange that will bet heavily on decentralised finance radically reshaping trading and investment in digital assets.
Goldman Sachs executive quit after making a killing on dogecoin: report
Will Feuer – NY Post
A Goldman Sachs managing director reportedly raked in millions of dollars from cryptocurrency dogecoin — and then quit the Wall Street titan. The London-based executive, Aziz McMahon, was with the bank for more than 14 years, his LinkedIn profile shows, according to eFinancialCareers. McMahon might be starting a hedge fund, according to the site, which cited sources at Goldman.
Here’s how Coinbase, Kraken and others have been deciding which cryptos are securities
Kollen Post – The Block
The Crypto Rating Council has published its rubric for appraising whether or not a cryptocurrency is a security. The Crypto Rating Council, or CRC, is an industry group uniting many of the biggest names in crypto to put together standards for deciding which tokens are securities. Members include Coinbase, Anchorage, Kraken and Circle. The newly publicized rubric aims to provide an objective means of scoring tokens. It is based on a series of questions, the answers to which yield numerical ratings that are supposed to quantify how likely it is that a given digital asset is a security. The CRC has published ratings for 27 tokens, but this is the first time the group has made its methodology public.
Bitcoin ETP From Iconic Funds Starts Trading on Deutsche Boerse Xetra Today
Tanzeel Akhtar – Coindesk
Iconic Funds, a German investment-product provider, is listing a bitcoin (BTC, +2.44%) exchange-traded product (ETP) on Deutsche Boerse’s Xetra market. The ETP will begin trading under the ticker “XBTI” on Wednesday with a total expense ratio of 0.95%. The product is structured as a traditional ETP and aims to remove the technical complications of investing in and holding bitcoin for investors, the Frankfurt-based firm said.
David Cameron Told Sunak Excluding Greensill Would Be ‘Nuts’
Tim Ross – Bloomberg
Former PM’s extensive text messages to officials is released; Cameron lobbied key Johnson aide and even Brexit rival Gove
Former U.K. Prime Minister David Cameron bombarded Chancellor of the Exchequer Rishi Sunak and other top government officials with a stream of text messages as he tried to persuade them to include Greensill Capital in a program of state-backed pandemic lending.
PIMFA urges government to tackle online investment fraud; Comments come as government publishes Online Safety Bill
Jon Yarker – InvestmentWeek
PIMFA is calling on the government to protect investors by tackling clone investment fraud and fake online adverts. The trade body’s comments come as the government has published its Online Safety Bill for parliamentary consideration. The draft legislation includes several measures, such as new powers for Ofcom and care of duty rules for tech firms to block dangerous content.
Bloomberg Gives $150 Million to Help Universities Diversify STEM Doctorates; The initiative, which will benefit Johns Hopkins and six other institutions, will be named in honor of Vivien Thomas, best known for his work treating “blue baby syndrome.”
Azi Paybarah – NY Times
Michael Bloomberg is donating a total of $150 million to Johns Hopkins University and six other institutions of higher learning to increase racial diversity among students seeking Ph.D.s in science, technology, engineering and math.
Samantha Power wants to restore U.S. prestige by getting American-made vaccines ‘into arms’ around the world
Karen DeYoung – Washington Post
Late last fall, as Joe Biden prepared to take office and act on his promise to restore America’s global leadership, Samantha Power had something to say. It was all well and good for Biden to declare “America is back.” But nothing would prove it more, after four years of Donald Trump, than a show of sheer American competence.
ESMA consults on its MiFID II/MiFIR Annual Report
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today launched a consultation seeking input from market participants on its MiFIDII /MiFIR Annual Review Report under Commission Delegated Regulation (EU) 2017/583 (RTS 2). The consultation closes on 11 June 2021.
IQ in Brief: AGM Special – Day 2
Day two of ISDA’ s virtual Annual General Meeting on May 11 featured sessions on implementation of the phase-five margin requirements, developing China’s derivatives market, benchmark reform in Japan and environmental, social and governance issues.
Modifications to TRACE Dissemination Protocols for Specified Pool Transactions (MBS) – Postponement
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. FINRA previously announced that this change will become effective on Monday, May 17, 2021. However, this change is now postponed and will become effective on Monday, July 26, 2021. On this day TRACE RDID Master File will be updated with the security changes.
FINRA Notification for TRACE MBS Securities
For May 11, 2021, transactions disseminated in Ginnie Mae issued mortgage-backed securities traded in specified pool transactions (MBS transactions) do not reflect reference data element updates published by Ginnie Mae as of the end of the day on May 10, 2021. Consequently, the dissemination ID (RDID) used for MBS transactions in Ginnie Mae securities will reflect security reference data information prior to the end of May 10, 2021.
CFTC’s Energy and Environmental Markets Advisory Committee to Meet June 3
CFTC Commissioner Dan M. Berkovitz, the sponsor of the Energy and Environmental Markets Advisory Committee (EEMAC), today announced that the EEMAC will hold a public meeting on Thursday, June 3, 2021. The meeting will begin at 9:00 a.m. (EDT) and be held via videoconference in accordance with the agency’s implementation of social distancing due to the COVID-19 (coronavirus) pandemic.
Vatican broker at heart of extortion probe arrested in London
Gianluigi Torzi, detained at the request of Italian authorities, has denied wrongdoing
Miles Johnson – FT
A Mayfair-based broker who represented the Vatican in a deal to buy a property development in London has been arrested in Britain’s capital on money laundering allegations. Gianluigi Torzi, a London-based Italian businessman, was detained on Tuesday by UK police carrying out a request from Italian authorities, his lawyers said in a statement. The arrest is part of a criminal probe into the Vatican property transaction.
A risk not worth taking: how banks can avoid millions in regulatory fines
Barry Cashman – Global Banking and Finance Review
Banks are increasingly under the regulatory microscope. The criminal case brought against NatWest for allegedly failing to comply with money laundering rules is case in point of this. If found guilty, the high street bank could face ‘unlimited’ fines.
City watchdog pays Google £600k of taxpayers’ money on adverts in war on scammers
Lucy White, Matt Oliver – Daily Mail
The City watchdog spent almost £600,000 on Google adverts last year as it tried to warn consumers about internet scams. The Financial Conduct Authority (FCA) is locked in a battle over advertising space with fraudsters, who are also splashing out millions of pounds every year on Google and other sites to promote their dodgy schemes.
FCA’s “gamechanger” illiquid fund proposal welcomed by industry
A UK plan to introduce a fund structure that would create more liquidity in traditionally illiquid asset classes, such as private equity, has been welcomed.The UK’s Financial Conduct Authority (FCA) announced a consultation on the open-ended structure last week. The Investment Association (IA), the UK’s funds industry trade body, was among those supporting the idea.
Investing and Trading
Hedge Funds Are Guarding Against a Bond Tantrum; While the reflation debate rages, traders are acting. They’re running their biggest short positions against junk bonds for more than a decade.
Mark Gilbert – Bloomberg
As the debate rages about whether surging commodity prices, rebounding economies and fiscal stimulus will spark a sustained acceleration in inflation, government bond yields have been slowly but surely heading higher. In the riskier corners of the debt market, hedge funds are taking some chips off the table to defend themselves in case of a full-blown bond market tantrum. It’s a smart move given the unusually febrile economic and market environments.
How $1 Billion in Investor Money Was Wiped Out By a Property Pitch; From the U.K. to Singapore, investors are questioning whether the glossy developments displayed in a real estate company’s slick marketing were real.
Emily Cadman, Karin Matussek, Youkyung Lee – Bloomberg
The pitch was as compelling as it as was dramatic: A German-born son of a British army officer would transform old monasteries, historic military sites and castles into gleaming apartments. Potential investors would get double-digit returns after two to five years, with Germany’s reputation as a safe place to do business providing additional reassurance. The reality was very different.
Chocolate’s About to Get More Expensive
The tropical oil has jumped 120% in the past year to a record; Soaring prices seen leading to changes in consumption habits
The meteoric rise in palm oil prices to record levels is poised to inflate costs for everyone from restaurants to confectionery and cosmetic manufacturers, and could potentially change consumption patterns. The world’s most consumed edible oil is found in products as diverse as chocolate, pastries, soaps, lipstick and biofuel, and is widely used in Asian restaurants. The tropical oil has surged more than 120% in the past year and burst through 4,500 ringgit ($1,091) a ton to a record on Wednesday.
Markets weigh prospect of new commodities supercycle; Prices from corn to copper are rallying as economies reopen but sceptics think it will be transient
Neil Hume and Emiko Terazono – FT
It’s been a decade since the last commodity market boom, triggered by China’s emergence as a global economic powerhouse, finally ran out of steam. But a wide-ranging rally that has propelled the price of key raw materials including copper, lumber and iron ore to all-time highs and also boosted agricultural commodities is fuelling expectations that a new commodities “supercycle” has arrived.
Thematic investing: customised indices are over-indexed; Tailoring to a client’s narrow instructions may not provide the best performance standard
LEX – FT
There are many ways to be a passive investor, some 3m to be precise. That is the number of indices that have flourished as asset managers flock to launch exchange traded funds, ESG-related and thematic funds.
Oil Glut Returns to Near Pre-Pandemic Levels; IEA cuts global demand growth forecast as India battles Covid-19 wave
David Hodari – WSJ
The oil supply glut that built up after the pandemic forced producing countries to slash output has almost returned to normal levels, the International Energy Agency said Wednesday. But in its monthly report, the IEA cut its 2021 global demand growth forecast by 270,000 barrels to 5.4 million barrels a day. Demand in Europe and the Americas in the first quarter was weaker than previously thought, the IEA said. The agency cut its second-quarter forecast for Indian demand as the country struggles with high coronavirus infection rates.
Tin Prices Soar on Electronics Demand, Shipping Trouble; The metal has climbed 47% in 2021 and is approaching record highs
Joe Wallace – WSJ
High demand for consumer electronics and difficulties shipping metal out of Asia have created a shortage of tin, pushing prices for the metal close to record highs for the first time in a decade.
Investors Rush Into ‘Pick-Your-Poison’ Junk Bonds; Borrowers are selling debt at low rates and with easier terms, especially in Europe
Paul J. Davies – WSJ
Risky companies are selling junk bonds at a record pace, getting ultralow borrowing costs and increasingly loose borrowing terms, such as “pick-your-poison” clauses. One recent example was the debt package that funded the buyout of Birkenstock GmbH. The maker of frumpy-but-expensive German sandals was taken over in April by the private-equity fund of Bernard Arnault, the French billionaire who controls LVMH Moët Hennessey Louis Vuitton SE.
Environmental, Social and Corporate Governance
‘Transition Washing’ Is the Newest Sustainability Dodge; Wall Street predicted 2021 would be the year polluting companies would issue debt to fund greener projects. Not so much.
Tim Quinson – Bloomberg
At the end of last year, debt market participants were predicting 2021 would be the year of the transition bond. The expectation was that fossil-fuel companies and other heavy corporate emitters, which have largely been barred from selling green bonds, would start issuing this new type of debt by the truckload to help finance their efforts to reduce greenhouse gas emissions.
Cities Aren’t Making Climate Investments Where They Matter Most; Buildings, transport, energy and waste have the most potential to reduce emissions, according to a CDP report
Laura Millan Lombrana – Bloomberg
More cities than ever are implementing measures to fight climate change and mitigate the impact of extreme weather events on their communities, but there’s still a large gap between what’s needed and what they’re doing.
AIIB touts ESG bond framework to simplify verification process; Campaign groups criticise Beijing-based development bank for oversight of its investments
Edward White – FT
When the Asian Infrastructure Investment Bank tested investor appetite for a A$500m (US$392m) “sustainable kangaroo” bond last month, it presented an unusual proposition: rate the bank, not the five-year, Australian dollar-denominated note.
Three key ESG trends advisors need to be aware of
Dustyn Lanz – Investment Executive
As responsible investment (RI) continues to grow and evolve at a rapid pace, it is important for investment advisors to stay abreast of key trends and leading practices in the field. Of course, that is easier said than done in a pandemic world characterized by chronic stress and nonstop Zoom meetings — especially when the RI market is evolving so quickly. To help you stay informed in this fast-moving market, this article provides a quick overview of three big issues in RI that every advisor should know about: stewardship, impact measurement and net zero.
Putting ESG at the centre of investing
Sustainable investing and smart investing can go hand in hand. Increasingly, that means measuring and engaging in progress around ESG: environment, social and governance factors. “In my opinion, focusing on the sustainability of the business can improve the risk-return profile,” says Patrick Blais, Senior Managing Director and Senior Portfolio Manager, Manulife Investment Management. ESG covers how companies fare around climate impact, natural resource use, waste management, employee health and safety, diversity and inclusion, respect for the community, board and executive composition and oversight, shareholder rights, and more.
Evaluating Climate Risk As Business Risk
Bob Conlin – Forbes
It wasn’t that long ago that “climate risk” was an assessment of how climate or weather-related issues could impact business operations and supply chains. That’s certainly still a good and essential practice for risk managers. Today, however, there is a different climate discussion happening in the board room. This discussion focuses on how business operations impact climate. It’s a bilateral relationship, of course, between business and climate. In this discussion, climate isn’t just an operational risk — it’s reputational as well. In simple terms, changing stakeholder concerns about the environment are driving these discussions.
Almost half of investors to ramp up allocations to ESG bonds, says CoreData study
Institutional Asset Manager
The CoreData Research study of 200 institutional investors conducted in February 2021 found 45 per cent will raise their exposure to ESG bonds such as green bonds and sustainable bonds because of the pandemic. This figure increases to 59 per cent of investors in Europe and 53 per cent in the Asia Pacific. North American investors are less enthusiastic, with a third (34 per cent) set to raise their exposure to ESG bonds.
Hot Corner of ESG Investing Is Cooling Fast and Losing Cash
Claire Ballentine – Bloomberg
After a stellar 2020, the record-breaking boom in clean-energy funds is rapidly giving way to a bust. Investors are yanking cash from the sector at the fastest pace in a year, while two of the biggest exchange-traded funds tracking the industry — the iShares Global Clean Energy ETF (ICLN) and Invesco Solar ETF (TAN) — have each tumbled at least 24% in 2021. Since the beginning of May, about $154 million has been pulled from clean-energy ETFs.
Opinion: How to use ESG to pick the winning stocks in risky emerging markets
Michael Brush – MarketWatch
Though the rewards are often phenomenal, investing in emerging markets is risky. Throw in environmental, social and corporate governance standards — because you give a darn about the future of the planet — and navigating the EM world as an investor gets downright complicated. But it’s worth doing, because EM offers diversification and potentially great gains. For help with ESG + EM, I turned to Charlie Wilson, who manages the Thornburg Developing World Fund THDIX, -1.07%. He’s a good Sherpa because of his great record. Wilson and co-manager Ben Kirby have beaten their diversified emerging markets and MSCI Emerging Markets index by 4 percentage points annualized over the past three years, says Morningstar, which gives the fund five stars.
ABN Amro Posts Loss as Fine Hits Earnings, Loan Income Falls
Nicholas Comfort – Bloomberg
Dutch bank hiring staff to fix weak money laundering controls; Interest income reduced by efforts to shrink investment bank
ABN Amro Bank NV posted a loss in the first quarter on a slump in lending income and a fine for weak money-laundering controls. The shares slid the most in more than five months. The net loss in the three months through March was a bigger-than-expected 54 million euros ($65.5 million) after a loss of 395 million euros a year earlier. That wiped out gains made by releasing 77 million euros from its credit loss reserves.
BlackRock wins approval to run wealth business in China; World’s biggest investment group is early mover in push to gain slice of $18.9tn market
Thomas Hale – FT
BlackRock has received approval to begin operating a wealth management business in mainland China, as the world’s biggest international investors push to access the country’s vast pool of savers.
JPMorgan ordered to disclose US documents in Nigeria oil case; Ruling comes ahead of trial in which bank is accused of enabling $875m in misappropriated payments
Anjli Raval – FT
Nigeria has succeeded in an effort to force JPMorgan Chase to disclose more documents ahead of a trial in which the US bank stands accused of enabling the misappropriation of almost $900m in state funds.
UniCredit undergoes major leadership restructure under new chief Orcel; Key factors of UniCredit’s changes include streamlining the executive committee down to 15 people, removing a layer of management and increasing responsibility for country chiefs.
Annabel Smith – The Trade
Italian banking group UniCredit has restructured its leadership team under new chief executive, Andrea Orcel, who took one the role just last month. The leadership changes are effective immediately and are designed to help the company deliver its new strategic plan for the second half of this year which UniCredit said was aimed at “simplifying” the organisation.
Investigating the Impact of Commodity Transaction Tax on India’s Commodity Derivatives Markets
Nilanjan Ghosh, Renita D’Douza – Observer Research Foundation
The Commodity Transaction Tax (CTT) was imposed on non-agricultural commodity derivatives trading in India from 1 July 2013. This paper investigates the impact of the CTT on some of the efficiency parameters of the commodity derivative markets in India. The authors analysed daily trading data from January 2006 to December 2019 of Multi Commodity Exchange (MCX) of India for five non-agricultural commodities: aluminium, copper, crude oil, gold, and silver. The analysis finds that the efficacy of price discovery was eroded in the case of copper, gold and silver in the post-CTT era; and there has been a decline in hedging efficiency for crude oil, gold and silver. Tax revenue dipped, too, due to the drop in traded volumes in the non-agricultural commodities. These trends amount to a decline in the overall market quality because of the CTT.
Japan Passes Digital Law As Virus Underscores Tech Struggles
Isabel Reynolds – Bloomberg
Japan’s parliament approved a law to set up a new Digital Agency as the government’s handling of the coronavirus pandemic, including stumbles in its vaccine rollout, underscored the country’s need to catch up on technology.
Brexit Chaos Gone, the U.K. Is Too Cheap to Ignore; Britain has stable government, a world-leading vaccine program and a head start over other economies. Five years is a long time in politics.
John Authers – Bloomberg
Next month brings the fifth anniversary of the U.K.’s decision to leave the European Union. I didn’t vote for it, and still wish that the country had chosen a different direction. But at this point, after an initial hit that was worse than Brexit’s proponents had forecast, followed by four years of political chaos that shook the country to its foundations, the damage is looking rather more limited than opponents like me had expected. The U.K. continues to show signs that it could be an interesting investment opportunity. It is also set up to be a fascinating testing ground for post-Covid economic effects as countries emerge from the pandemic.
Clean tech offers breath of fresh air for carbon-reliant Canada; Start-ups tap oil industry expertise to extract and store CO2
Patrick McGee – FT
Ask environmentalists about the Canadian province of Alberta and they will almost certainly mention the oil sands: a 50,000 square mile area with 165bn barrels of crude reserves — the third largest, globally, behind those of Venezuela and Saudi Arabia.
YouTube to launch $100 million creator fund for Shorts video feature
Sheila Dang – Reuters
Alphabet Inc’s YouTube on Tuesday announced a $100 million fund to pay content creators who make hit videos on its new short-form video feature Shorts, as YouTube aims to court more influencers.