No Deal: Why Buying the London Stock Exchange Is Hard to Do

Oct 9, 2019

First Read

Hits & Takes
By JLN Staff

Your chance to save on FIA Expo registration runs through Oct. 11. Our friends at the FIA say, “FIA Expo is your destination to engage in meaningful dialogue, build partnerships and share ways to define the future of our industry. Sessions this year cover Brexit, market liquidity, cloud technology, CCP risk management, diversity, clearing and much more!”~JJL

The FIA’s Innovators Pavilion returns for its fifth year featuring 20 fintech startups, and they are introducing new features this year like our TechTalk series. You can learn more about what Expo has to offer you and join FIA in the heart of the futures industry, Chicago, from October 29-31. FIA says you can “explore ways to amplify innovation, fuel progress and take on the industry’s biggest challenges.” Take advantage of special rates and register NOW!~JJL

Cboe Global Markets announced yesterday the completion of its technology migration to the Bats platform with the completion of the Cboe Options Exchange on October 7. The options market was the final step in the multi-exchange migration process that began in January 2018.~JK

Crain’s’ Lynne Marek has a story and a podcast about the life and death of Envestnet founder Judson Bergman titled “Envestnet’s Bergman was innovator, ‘Renaissance man‘” and “Crain’s Daily Gist: How this late fintech pioneer reshaped finance.” If you ever wondered what Lynne Marek sounds like, her podcast is your chance to hear her.~JJL

You are going to want to read “Options Investing: Introducing the Nations NDX PutWrite Index,” by Scott Nations.~JJL

We are going to start publishing more of the Open Outcry Traders History Project videos. So far we have published four of them; Leo Melamed, Jordan Melamed, Mike Fishbain and Tom Gould. We are looking for sponsors for this series. It is a good one to sponsor, as the videos are getting lots of shares from one trader to another and to their trading community friends via social media. Contact me if you are interested in learning more about sponsoring these videos.~JJL

The privacy-focused messaging app Telegram has been curiously silent about its involvement with the TON blockchain project, for which Telegram raised $1.7 billion. Recently, Telegram updated its Terms of Service to include details about transactions on the TON blockchain. What do these details say? Basically, although they developed the blockchain, they don’t have enough control over it to cancel transactions made over TON, nor do they have control over its GRAM token. They seem to be taking a similar tack to http://bit.ly/33krxlBlock.One, which developed EOS – although they made the thing, they want to put it out into the world and trust the blockchain, rather than managing it themselves – after all, that worked out great for Block.One, didn’t it?~MR

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Agencies Finalize Changes to Simplify Volcker Rule
SEC & CFTC
Five federal financial regulatory agencies on Tuesday announced that they finalized revisions to simplify compliance requirements relating to the “Volcker rule.” By statute, the Volcker rule generally prohibits banking entities from engaging in proprietary trading or investing in or sponsoring hedge funds or private equity funds.
bit.ly/2VpP1lG

*****Fixing the fix or putting in the fix.~JJL

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My Plans for CoinDesk: A Web 3.0 Approach to the Biggest Story of All
Michael Casey via LinkedIn
I’m pleased to confirm that on Oct. 28, I’ll be taking on a senior role coordinating all forms of content for CoinDesk, the leading provider of news, event programming and research for the cryptocurrency and blockchain industry. I’ll begin part-time in order to wind down other commitments, but as of Jan. 1, I’ll be the full-time Chief Content Officer.
bit.ly/31Y1Q9y

*****Big changes at Coindesk. Michael Casey is the real deal.~JJL

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Bacon Addicts, Beware: Top Pork Producer Warns of Belly Shortage
Lydia Mulvany – Bloomberg
Spread of pig disease in China will have global ripples; U.S. ham market could also face deficit, Smithfield says
It’s scary news for bacon fans: The U.S. could see tight supplies, or even some shortages of pork bellies along with ham next year as the spread of a pig-killing disease in China ripples through the global market.
/bloom.bg/2M1QawR

*****If pigs could fly, the price of bacon would skyrocket!~JJL

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Tuesday’s Top Three
Our top read story of the day was Bloomberg’s Bond-Trading Bots on Verge of Becoming Masters of the Universe about AllianceBernstein’s new AI for corporate bond trading. Second was the FT’s Tether slammed as “part-fraud, part-pump-and-dump, and part-money laundering.” Third was a top three piece from Monday, RJ O’Brien’s announcement R.J. O’Brien Announces Appointment/Promotions in Global Sales Organization

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Lead Stories

No Deal: Why Buying the London Stock Exchange Is Hard to Do; Hong Kong exchange’s pulled offer for the LSE highlights the difficulties of cross-border deals between trading venues
Ben Dummett and Anna Isaac – WSJ
London Stock Exchange Group PLC’s dismissal of the Hong Kong exchange’s almost $37 billion takeover attempt underscores the challenges global exchanges face trying to complete cross-border deals amid geopolitical upheaval.
/on.wsj.com/2MqUGnz

Cboe Global Markets finalises migration to Bats technology; Cboe Options Exchange is the final exchange to transition to the exchange group’s proprietary Bats technology.
John Brazier – The Trade
Cboe Global Markets has completed a multi-year project to migrate its exchanges onto its proprietary Bats technology.
bit.ly/320lTUL

***** HERE is the press release from Cboe about this.~JJL

Bond Funds Move Jumbo Trades Online; Traders are doing billion-dollar deals the easy way on electronic marketplaces
By Matt Wirz – WSJ
Innovations in the corporate debt market are helping bond traders make billion-dollar trades with the click of a mouse.
/on.wsj.com/320MuB7

SNB and Swiss Stock Exchange Team Up on Digital Currency
Catherine Bosley – Bloomberg
The Swiss National Bank and stock exchange SIX will jointly explore how to make central bank digital money available for the trading and settlement among financial market players.
/bloom.bg/2M17xhi

Millions Brace for Unprecedented Power Cuts in California
David R Baker, Mark Chediak, and Jeffrey Taylor – Bloomberg
Most of San Francisco Bay area affected in pre-emptive move; Utility PG&E, driven bankrupt by wildfires, won’t risk another
PG&E Corp., the California utility giant forced into bankruptcy by two years of devastating wildfires, is carrying out the biggest planned blackout yet to keep power lines from sparking more blazes. Cutoffs began overnight Wednesday, with the first phase impacting about 513,000 customers.
/bloom.bg/32aEoGh

Massive trading database project should be ‘killed,’ SEC’s Peirce says
Declan Harty – SPGlobal
A top SEC official wants the CAT “killed.” Known officially as the Consolidated Audit Trail, the massive trading database will use the more than 58 billion records it is expected to receive daily to create an unprecedented view of U.S. stock and option trading for regulators and exchanges.
bit.ly/2VvMEy2

Court approves Sears liquidation plan
Soma Biswas – MarketWatch
Sears Holdings Corp. won court approval Monday of a chapter 11 liquidation plan requiring suppliers that kept its shelves stocked in bankruptcy to wait for their money or take a discounted payoff. Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., said he would sign off on a creditor repayment plan despite the company’s admission that it doesn’t have the cash to pay essential bills, including tens of millions of dollars owed to companies that supplied goods while Sears tried to stay afloat earlier this year.
/on.mktw.net/323Prkw

FCA official: stick with overnight rates for all new contracts; Schooling Latter limits term rates to legacy contracts and wants backward-looking method for loans
Philip Alexander – Risk.net
The UK’s Financial Conduct Authority has urged banks to use backward-looking versions of overnight rates in all new contracts referencing risk-free rates (RFRs), rather than relying on the build-out of new forward-looking term rates to replace Libor.
bit.ly/3137AgO

Heads of fixed income dealing make case for human touch in bond trading; A debate at the Fixed Income Leaders Summit posed the question will bond trading become low-touch and algo-driven like other asset classes.
Hayley McDowell – The Trade
Despite increased adoption of low-touch protocols and algorithmic trading in global fixed income markets, bond trading will still need the human touch for large trades and during times of market stress, according to senior buy-siders.
bit.ly/2nAIFUk

ETF Firms Hit by E-Broker Price War; Arrangements that ETF providers have signed with brokerages like Schwab, TD Ameritrade now in flux
Alexander Osipovich – WSJ
Online brokerages aren’t the only Wall Street firms jolted by Charles Schwab Corp.’s decision last week to eliminate commissions on stock trades.
/on.wsj.com/35njN3d

What’s Fair? It Depends on Your Point of View
Phil Mackintosh – Traders
For those of us who trade every day, it’s easy to dismiss what goes into supporting a listing. We have humans to help with investor relations questions, systems to assist with governance, tech to surveil the market, and we also advocate to improve capital formation. In addition to a great marketing team that helps listed companies grow their brand via their listing.
bit.ly/3204aMZ

Tradeweb Expands Portfolio Trading for Corporate Bonds
Tradeweb
Tradeweb Markets Inc. (Nasdaq: TW), a leading global operator of electronic marketplaces for rates, credit, equities and money markets, today announced a significant expansion of portfolio trading functionality for corporate bonds, enhancing access to competitive liquidity globally.
/bwnews.pr/2VpGhMq

Brexit is a journey without end for Britain; No majority exists for any deal option with the EU. Brexiters are as much to blame as Remainers
Martin Wolf – FT
In 1933, Joseph Goebbels stated that, “The modern structure of the German State is a higher form of democracy in which, by virtue of the people’s mandate, the government is exercised authoritatively while there is no possibility for parliamentary interference, to obliterate and render ineffective the execution of the nation’s will.” It is a measure of how far the UK has fallen that Boris Johnson, the prime minister, often sounds rather like this.
/on.ft.com/31ZUJNT

Former Goldman programmer fails, again, to toss theft conviction
Jonathan Stempel – Reuters
A New York state appeals court on Tuesday refused to toss out a former Goldman Sachs Group Inc (GS.N) computer programmer’s theft conviction, rejecting his claim that he was wrongly prosecuted twice for the same conduct.
/reut.rs/2AU4KQE

Exchanges, OTC and Clearing

Speech by Loh Boon Chye, CEO of Singapore Exchange at the Opening Ceremony of the WFE’s 59th Annual Meeting
SGX
bit.ly/2p7nYiY

Tham Sai Choy appointed SGX Listings Advisory Committee chairman
SGX
Singapore Exchange (SGX) today announced that Mr Tham Sai Choy has been appointed chairman of the independent Listings Advisory Committee (LAC) effective 7 October 2019, replacing Mr Gautam Banerjee who is stepping down. The appointment was made in consultation with the Monetary Authority of Singapore.
bit.ly/2nzHhkM

Nasdaq September 2019 Volumes, 3Q19 Estimated Revenue Capture and Listings Statistics
Nasdaq
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for September 2019, as well as quarterly volumes, number of listings and estimated revenue capture for the quarter ending September 30, 2019 on its investor relations website.
bit.ly/30YzrPj

Intercontinental Exchange Announces New Milestones in TTF and JKM trading
ICE
Amid the liberalization of liquefied natural gas and the corresponding globalization of natural gas markets, Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced new milestones in the trading of the TTF natural gas and JKM LNG (Platts) contracts.
bit.ly/2nAJlJm

TMX Group Thanksgiving Holiday Market Closures
TMX
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Monday, October 14, 2019 for the Thanksgiving holiday.
bit.ly/30YzcDT

Deutsche Börse launches new seminars for investors; Evening seminars from October to December in Eschborn / Second women’s seminar on ETFs and sustainable investing on 23 November
Deutsche Börse
As of October 15, Deutsche Börse is organizing evening seminars for private investors at its corporate headquarters in Eschborn through its Capital Markets Academy.
bit.ly/2M11j0U

Eurex continues to boost futurization with launch of Equity Total Return Futures; Migration of bilateral negotiated swaps into standardized futures / New functionality to trade baskets of ETRFs / Live since 7 October
Eurex
Eurex has taken a further step towards futurization: On 7 October, the derivatives exchange introduced Total Return Futures on single equities. The new futures complement the Eurex suite of equity index derivatives and support the market in complying with new EMIR financial market regulation.
bit.ly/2ARv8ur

Stuart Heath on our new Equity Total Return Futures
Eurex
On 7 October Eurex introduced Total Return Futures on single equities, complementing the Eurex suite of equity index derivatives and supporting the market in complying with new financial market legislation. We spoke to Stuart Heath, Eurex Equity & Index Product Development, about the new futures, how they benefit clients and how they push towards futurization.
bit.ly/2AYl3vG

The World Federation of Exchanges elects four Board Directors
The WFE Communications Team
At the 59th General Assembly in Singapore today, the World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, elected four Directors of the Board.
Today’s four elected Directors of the Board are as follows:
Mr Greg Wojciechowski, President & CEO, Bermuda Stock Exchange – Director, Americas region (3-year term); Mr Juan Pablo Cordoba, CEO, Bolsa de Valores de Colombia – Director, Americas region (3-year term); Mr Jiwon Jung, Chairman & CEO, Korea Exchange – Director, Asia-Pacific region (3-year term); Mr Akira Kiyota, Group CEO, Japan Exchange Group – Director, Asia-Pacific region (3-year term)
bit.ly/30TucQU

Why are the NYSE and private companies fighting over two-millionths of a second?
Sabri Ben-Achour – MarketPlace
The New York Stock Exchange is under fire for constructing a pair of antennas on the roof of its data center in Mahwah, New Jersey.
bit.ly/310kqfZ

Fintech

A Guide to What’s Happening in the Fintech Revolution
Julie Verhage – Bloomberg
Few industry combinations are as alluring to investors as finance and technology. For the past decade fintech startups have offered new ways to help people handle money. As startups face more competition from tech giants and deep-pocketed banks, investors are turning their attention to fintech in new markets. Here’s a look at some of the developments and trends that are driving the industry today.
/bloom.bg/2LYkXKQ

Global Commodity Technology Association Formed to Promote Commodity Modernization
Traders Magazine Online News, October 8, 2019
Press Release
Motivated by a desire to evaluate and accelerate digitization opportunities in the global agricultural commodity industry, the Global Commodity Technology Association (GCTA) has launched and named financial services industry veteran David Lehman as its Managing Director.
bit.ly/2MuUwM9

Connamara Systems Announces New Advisory Board
Press Release
Connamara Systems, an exchange solutions provider and custom software developer for the capital markets, announced today the formation of an advisory board, a group of trusted advisors consisting of Peter Willmott, Travis Schwab, and Maureen Downs. The advisory board will advise Connamara on a wide range of issues including growth strategies, talent acquisition/retention, business structure, and governance.
/bwnews.pr/2VpSlgE

Cryptocurrencies

Facebook’s Libra Hits Extra Regulatory Roadblocks in Europe; Valdis Dombrovskis, who is slated to stay on as vice president of the European Commission, says planned digital currency poses a risk to the euro
Valentina Pop – WSJ
The European Union will introduce legislation aimed at preventing libra, Facebook FB Inc.’s proposed digital currency, from undermining Europe’s single currency and being used as a money-laundering tool—representing one of the toughest regulatory responses so far.
/on.wsj.com/35jcsBH

UNICEF launches Cryptocurrency Fund
UNICEF (press release)
UNICEF will now be able to receive, hold and disburse donations of cryptocurrencies ether and bitcoin, through its newly-established UNICEF Cryptocurrency Fund. In a first for United Nations organizations, UNICEF will use cryptocurrencies to fund open source technology benefiting children and young people around the world.
/uni.cf/30TojDi

***See also: UNICEF launches crypto fund, accepting donations in bitcoin and ether – The Block Crypto~MR

2 Bitcoin Developers Explain How The Cryptocurrency Could Still Fail
Kyle Torpey – Forbes
In a few months, it will have been eleven years since the Bitcoin network was launched by Satoshi Nakamoto. The fact that the digital cash system has simply existed for this long is a grand achievement, but this is still an experimental project that could fail.
bit.ly/2p0pqnn

Quadriga Founder’s Finances Add to Mystery of Missing Millions
Doug Alexander – Bloomberg
Jennifer Robertson to return C$12 million in assets to company; Widow’s stepfather to relinquish 2017 Toyota Tacoma truck
QuadrigaCX founder Gerald Cotten and his wife Jennifer Robertson had a “significant” fortune that included real estate, vehicles, a sailboat and an airplane. Yet, the duo apparently earned less than the typical Canadian couple.
/bloom.bg/2VtslRv

The U.S. Government Tried To Shut Down Bitcoin
Billy Bambrough – Forbes
Bitcoin conspiracy theorists have long suspected the U.S. government, among others, would like to shut down bitcoin. Bitcoin’s first decade has seen its price explode, making early adopters overnight millionaires, and prompting some of the world’s biggest technology companies to create their own versions of bitcoin. Now, it’s been revealed federal prosecutor-turned bitcoin and cryptocurrency expert Katie Haun was asked to look into “shutting down” bitcoin by her boss at the U.S. attorney’s office in 2012.
bit.ly/2M3fGSx

Bank of England warns Facebook that Libra faces tough oversight; Central bank says digital coin must be regulated as ‘systemically important’ payment system
Caroline Binham – FT
The Bank of England has put Facebook on notice that its plans to upend global payments through its digital coin, Libra, must be subject to tough oversight across its ecosystem prior to launching.
/on.ft.com/2IySk56

Binance to support WeChat and Alipay for buying bitcoin in China
Yogita Khatri – The Block Crypto
Cryptocurrency exchange Binance is set to add two more channels to its fiat gateway – WeChat and Alipay, allowing users in China to buy bitcoin (BTC) with the two payment options. Binance CEO Changpeng Zhao “CZ” confirmed the move on Twitter on Wednesday. People familiar with the matter told The Block that the initiative is currently in a testing phase for Android users and will eventually be fully rolled out on iOS and Web. Cryptocurrency exchanges have officially been banned in China by the country’s central bank, the People’s Bank of China (PBoC), since late 2017.
bit.ly/32cDSXW

US lawmakers ask Visa, Mastercard and Stripe to reconsider their Libra partnerships
Yogitra Khatri – The Block Crypto
Two U.S. lawmakers – Senator Sherrod Brown of Ohio and Senator Brian Schatz of Hawaii – have asked three payments giants Visa, Mastercard and Stripe to reconsider their partnerships with Facebook-led proposed stablecoin project, Libra. In three letters sent to the companies’ CEOs, Brown and Schatz said that the Libra project poses risks to consumers, financial institutions, global financial system, as well as the three companies’ broader payments business.
bit.ly/2AV4l0v

Lightning Network development firm ACINQ raises $8M Series A
The Block Crypto
ACINQ, one of the three main Lightning Network development firms, has raised an $8 million Series A led by Idinvest Partners, with the participation of Serena and Bpifrance, a state-owned French investment bank. According to ACINQ, the new round of financing will be used to expand its business as a major Lightning node operator and liquidity provider. To date, ACINQ has raised a total of $10 million in venture funding.
bit.ly/2M0c7wf

Bitfinex Says It Shouldn’t Have to Collect Documents for NYAG During Appeal
Nikhilesh De – Coindesk
Bitfinex is clutching its documents despite objections from the office of the New York Attorney General (NYAG). In a letter filed to the New York State Supreme Court Tuesday, attorneys for Bitfinex, Tether and other affiliated entities wrote that a request made by the NYAG’s office relating to a $900 million loan between sister companies Bitfinex and Tether should be denied.
bit.ly/2ASLoLQ

Tiny $217 Options Trade on Bitcoin Blockchain Could Be Wall Street’s Death Knell
Brad Keoun – Coindesk
The cryptocurrency industry isn’t replacing Wall Street just yet. But inventors and entrepreneurs are working on it, with some initial success, albeit modest. In this case, an option premium of 0.0202 bitcoin ($217 at the time) paid via a smart contract may have just become the proof of concept.
bit.ly/2VoDoeL

Hong Kong’s Securities and Futures Commission releases new policy targetting crypto fund managers
TokenPost
The Securities and Futures Commission (SFC) of Hong Kong has officially released regulations for crypto fund managers.
bit.ly/2nzGYXc

Politics

Investment protectionism is bad news for global economy; Blocking free flow of capital puts the financial system at risk
David McCormick – FT
In recent weeks, rising trade tensions between the US and China and around the world have increased the likelihood that investment protectionism — blocking the free flow of capital across borders — is the next policy shoe to drop. Coupled with what some see as a growing probability of recession, this development poses added risk to the health of the global financial system and economy.
/on.ft.com/33l2tu5

Why central banks are edging away from the dollar; Political risks prompt rethink of US currency’s weighting in foreign exchange reserves
Eva Szalay and Colby Smith – FT
The US dollar has long towered over global markets and finance. But cracks are starting to appear in the edifice. The greenback’s pre-eminent role in official funds and international trade is formidable and unlikely to fade quickly. But the latest data from the IMF on central banks’ reserves show a subtle shift away from the dollar that analysts say could signal a rethink on the political risk embedded into US assets.
/on.ft.com/2IBTi0j

Elizabeth Warren’s Fracking Proposal Has Shale Investors Weighing E&P Risk
Michael Bellusci – Bloomberg
The prospect of Elizabeth Warren becoming the 2020 Democratic presidential nominee, or the 46th president of the United States, has energy investors worrying about risks to hydraulic fracturing.
/bloom.bg/2Mq1vWD

U.S. Farms Face Long-Term Losses From Trump Trade War, BCG Warns
Mike Dorning – Bloomberg
Growing risk U.S. won’t recapture share of exports to China; Difficult for farmers to find ‘meaningful’ alternative markets
U.S. farmers and agribusinesses face a rising threat of long-term losses in export sales as President Donald Trump’s trade war with China continues, Boston Consulting Group warned in a report.
/bloom.bg/2M2vWmO

U.S. expands blacklist to include China’s top AI startups ahead of trade talks
David Shepardson, Josh Horwitz – Reuters
The U.S. government widened its trade blacklist to include some of China’s top artificial intelligence startups, punishing Beijing for its treatment of Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week.
/reut.rs/2M0dkUj

Trump Tax Return Ruling Could Open a Door to Indictment; A New York judge says the president can be subpoenaed, investigated and maybe even prosecuted while in office.
Noah Feldman – Bloomberg
A federal district judge in New York has held that the Manhattan district attorney may subpoena Donald Trump’s tax records as part of a criminal investigation.
/bloom.bg/2p1DQUr

G.O.P.-Led Senate Panel Affirms Russia Attacked Election, and Urges Action
David McCabe – NY Times
As President Trump amplifies unsubstantiated claims of Ukrainian interference in the 2016 election, the Republican-led Senate Intelligence Committee reaffirmed on Tuesday that Russian operatives engaged in a widespread social media campaign to improve his chances in the race.
/nyti.ms/2nAP9Ta

Russian Operative Said ‘We Made America Great’ After Trump’s Win
Steven T. Dennis and Ben Brody – Bloomberg
Agents for Russia uncorked champagne in 2016: Senate panel; Burr warns other adversaries are following Russia’s lead
Kremlin-directed operatives opened champagne when Donald Trump won the presidency in 2016, according to a communication disclosed in a new Senate Intelligence Committee report outlining Russia’s sweeping social media efforts to help him win.
/bloom.bg/2p2XHCy

Elizabeth Warren is now leading the 2020 polls
Ian Millhiser – Vox
Sen. Elizabeth Warren now holds a slight lead in national polls of the 2020 Democratic primary, according to the polling aggregation site RealClearPolitics — the first time that she, not former Vice President Joe Biden, has led the race. Warren’s new lead in national polls comes on the back of a Quinnipiac poll, released on Tuesday, which shows her leading the Democratic field: 29 percent of registered Democrats and Democratic-leaning voters said they would vote for her if the primary were held today.
bit.ly/30WkjSp

Regulation

Reyker Securities PLC enters special administration
UK FCA
On Tuesday 8 October 2019, the Court appointed Mark Ford, Adam Stephens and Henry Shinners, all of Smith & Williamson LLP, as Joint Special Administrators of Reyker Securities Plc, following an application by the Directors.
bit.ly/2p0pJyx

Effective Date for Updated Interpretive Notice Regarding the Supervision of Branch Offices and Guaranteed IBs
NFA
NFA’s Interpretive Notice entitled Compliance Rule 2-9: Supervision of Branch Offices and Guaranteed IBs establishes minimum requirements that each FCM, IB, CPO and CTA Member and FDM should implement to supervise its branch offices and guaranteed IBs. NFA updated this Interpretive Notice to reflect advances in electronic trading, electronic communications and other technologies and to incorporate references to existing anti-money laundering, information systems security program and bunched order requirements. The updated Interpretive Notice provides Members with increased flexibility while continuing to subject branch offices and guaranteed IBs to robust supervision, surveillance and annual inspection requirements.
bit.ly/326zxWA

FINRA Provides New Reg BI and Form CRS Resources to Assist Member Firms in Complying with SEC Rules by June 30, 2020
FINRA
FINRA today announced it has made available new resources to assist member firms in their efforts to comply with the Securities and Exchange Commission (SEC) Regulation Best Interest (Reg BI) and Form CRS by the rules’ compliance date of June 30, 2020. FINRA is assisting members in a variety of ways including by providing a new Reg BI and Form CRS Checklist – available on FINRA’s Reg BI webpage along with a number of other resources – and by hosting several FINRA Reg BI events in the coming months.
bit.ly/2AUzfWu

ESMA publishes Annual Report on the application of waivers and deferrals under MiFIR
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its Annual Report on the application of waivers and deferrals under MiFIR.
bit.ly/2AXZ5ce

SEC Names Katharine E. Zoladz as Associate Regional Director in Los Angeles Office
SEC
The Securities and Exchange Commission today announced that Katharine E. Zoladz has been named Associate Regional Director for enforcement in the Los Angeles Regional Office. Ms. Zoladz succeeds John Berry, who left the agency in July 2019. Ms. Zoladz will now oversee the Los Angeles office’s enforcement efforts in Southern California, Arizona, Hawaii, and Nevada, along with fellow Associate Regional Director Alka Patel.
bit.ly/2VrIebe

Investing and Trading

Modern monetary theory poses a serious threat to Gen Z; Like Greta Thunberg, I’m worried about my generation’s dreams being stolen by our elders
Leyla Winston – FT
At the age of just 16, the Swedish activist Greta Thunberg has become the most prominent voice in defence of both the planet and the rights of her generation. “You have stolen my dreams and my childhood,” she told collected world leaders at the UN Summit last month.
/on.ft.com/2Ms8xdb

Meet 2019’s Rising Stars of Wall Street shaking up investing, trading, and dealmaking
Meghan Morris, Dan DeFrancesco and Casey Sullivan – Business Insider
Meet the 2019 class of Wall Street’s rising stars. From starting a hedge fund before age 30 to running their own alternative-data shops and helping lead $27 billion investments, this group of young finance leaders is in a league of its own. It was harder than ever this year to select just 25 people. We received hundreds of entries from bosses, colleagues, recruiters, and others working in the finance industry.
bit.ly/2Mp5djf

Online stock trading is free now. What that means for E-Trade and Charles Schwab
CNN Wire – WGNO
There is no such thing as a “discount broker” anymore. In the span of just a few days last week, nearly every major online brokerage company eliminated commissions. It’s now essentially free to trade. So what will companies like Charles Schwab, TD Ameritrade and E-Trade do now to differentiate themselves in an increasingly crowded market where price is no longer a selling point?
bit.ly/2IxHCM0

Central Banks Can’t Create Negative Rates by Themselves; Advances in technology and a growing global savings glut are pushing inflation and bond yields lower.
Jim Bianco – Bloomberg
It’s been a decade since the worst financial crisis since the Great Depression, and yet here we are in a world where the highest government bond yield starts with the number “2.” Among the world’s major developed economies, only the English speaking countries – the U.S., U.K., Canada, New Zealand and Australia – still have monetary policy rates above zero. But there is more to low yields than monetary policy rates, and those factors are likely to stay in place for an extended period.
/bloom.bg/311O3gC

Robinhood Joins the Online Cash War
Lisa Beilfuss – The Wall Street Journal
Robinhood Markets Inc. said it would offer a new higher-yielding cash account, in a bid to grow from its commission-free trading roots as bigger rivals scrap trading fees. The brokerage said Tuesday it would offer 2.05% annually on uninvested cash in customers’ brokerage accounts, through partner banks, making it the latest fintech to use higher yields on cash to try to win business.
/on.wsj.com/2OyDxv0

Robinhood Gives Banking Another Shot a Year After Botched Launch; The startup’s new Cash Management service will offer 2.05% interest.
By Julie Verhage – Bloomberg
Robinhood Markets Inc. is giving banking another shot, 10 months after its first attempt at a checking and savings product flamed out in spectacular fashion. On Tuesday, the company laid out a new feature, called Cash Management, which takes a more traditional regulatory approach than the startup’s last foray into bank accounts.
/bloom.bg/2VvOpLE

Investors get lost in Big Oil’s carbon accounting maze
Shadia Nasralla, Ron Bousso – Reuters
Wide variations in the way oil companies report their efforts to reduce carbon emissions make it difficult to assess the risk of holding their shares as the world shifts away from fossil fuels, senior fund managers say.
/reut.rs/2B7YKEd

Institutions

Nomura and Standard Chartered FX heads join FX options trading firm Digital Vega; FX options electronic platform provider Digital Vega has expanded its senior team as it looks to support ongoing product development and expansion.
Hayley McDowell – The Trade
FX options electronic trading firm Digital Vega has made two senior hires from Standard Chartered Bank and Nomura to support its expansion efforts.
bit.ly/2AWFo4Q

Robinhood Joins the Online Cash War; The move comes as e-brokers match the firm’s zero-comission trading
Lisa Beilfuss – WSJ
Robinhood Markets Inc. said it would offer a new higher-yielding cash account, in a bid to grow from its commission-free trading roots as bigger rivals scrap trading fees.
/on.wsj.com/2OyDxv0

BlackRock launches fund to cash in on recycling push; Money will buy stocks that stand to benefit from the ‘circular economy’
Henry Sanderson – FT
BlackRock, the world’s largest asset manager, has teamed up with the Ellen MacArthur Foundation to help fund a shift towards a “circular economy”, saying the rise of recycling represents a big opportunity for investors.
/on.ft.com/2ovglD0

Credit Suisse Considers Return to U.S. Private Banking After Exit
Patrick Winters – Bloomberg
Bank considers Miami office for wealthy Latin American clients; Lender offloaded U.S. wealth business to Wells Fargo in 2015
Credit Suisse Group AG is considering a return to U.S. wealth management after a four-year absence as Chief Executive Officer Tidjane Thiam seeks to boost growth in private banking.
/bloom.bg/35lKmWI

Deutsche Bank board member faces likely veto by regulators; ECB and BaFin raise conflict of interest concerns over Jürg Zeltner’s other job as KBL chief
Olaf Storbeck and Stephen Morris – FT
European regulators are leaning towards rejecting Jürg Zeltner as a member of Deutsche Bank’s supervisory board on conflict of interest concerns, unless he resigns as chief executive of Qatari-backed European private banking group, KBL.
/on.ft.com/2nu5c4Y

Regions

Jamaican stock exchange rallies to become world’s best-performing; Caribbean nation’s strict adherence to IMF programme helps turn economy round
Robin Wigglesworth and Steve Johnson – FT
Jamaica’s stock market ranks as the world’s best-performing over the past year, thanks to a dramatic economic turnround that culminated in the country exiting its IMF programme with flying colours last month.
/on.ft.com/2B7OTyd

China Loses a Tech Generation as the Big Payoff Promise Fades
Amid mounting job losses, startup employees are pushing back against a relentless work culture.
Lulu Yilun Chen, Zheping Huang – Bloomberg
Terry Hu first sensed trouble at the Beijing gaming startup where he worked when his boss stopped showing up. Then the stockpile of freebies for users—gift cards, plush toys—ran out. The founder finally said funding had dried up for the company. Hu and about two-thirds of his colleagues were fired, he says. “He told us we were the best and brightest, that we might come back and work for the company someday,” Hu says, asking that the company’s name not be disclosed out of fear that it would worsen his career prospects. “It was a load of garbage.” It took him three months to land a job at an English-language center, outside the tech sector that once held so much appeal. “I’ve learned my lesson,” he says.
/bloom.bg/2p4L0XR

U.S. Loses Top Spot to Singapore in Competitiveness Rankings
Fergal O’Brien – Bloomberg
Hong Kong, the Netherlands, Switzerland make up the top five; WEF calls for fiscal action to help boost productivity
The U.S. dropped from the top spot in the World Economic Forum’s annual competitiveness report, losing out to Singapore. Hong Kong, the Netherlands and Switzerland made up the rest of the top five, according to the WEF survey published on Wednesday. On the U.S., it noted growing uncertainty among business leaders and said trade openness has declined.
/bloom.bg/2LYdlrK

Russian Wealth Fund Opens First Office Abroad in Saudi Arabia
Sarah Algethami – Bloomberg
The Russian Direct Investment Fund opened its first overseas office in Saudi Arabia as the sovereign wealth fund scouts for investment opportunities in the oil-rich kingdom.
/bloom.bg/33qjMdl

Goldman evaluating role in China’s Megvii IPO after U.S. blacklist
Joshua Franklin, Julie Zhu – Reuters
Goldman Sachs Group Inc said on Tuesday it was reviewing its involvement in Megvii Technology Ltd’s planned initial public offering after the U.S. government placed the Chinese artificial intelligence firm on a human rights blacklist.
/reut.rs/31XXYFy

Brexit

Brexit Talks Go On Hold as Leaders Focus on Pinning Blame
Robert Hutton and Ian Wishart – Bloomberg
All sides pessimistic that a compromise can be reached; Only chance lies with Johnson-Varadkar meeting later in week
The Brexit talks have turned into an angry stalemate, as U.K. and EU leaders focused on blaming each other for refusing to budge.
/bloom.bg/2Muc0b9

Brexit is tragedy, should be as soft as possible – Dutch finance minister
Reuters
Dutch finance minister Wopke Hoekstra said on Wednesday that Brexit was a “tragedy” for Britain and the European Union, and should be agreed under the softest possible terms.
/reut.rs/31YIlNW

Queen Can Call Boris Johnson’s Latest Brexit Bluff; A precedent from Australia shows that the British monarch doesn’t have to sit by meekly.
David Fickling – Bloomberg
Boris Johnson has spent the past week hinting that he’d be prepared to defy an Act of Parliament that would force him to request a third extension to the U.K.’s exit from the European Union. Now, he’s challenging the queen to a constitutional duel. The fate of an Australian prime minister 44 years ago suggests that could be a fatal mistake.
/bloom.bg/310wUUw

US clearing houses need not take collateral damage from Brexit; There are signs the US and EU will pull back from the brink in dispute over CCPs
Philip Alexander – Risk.net
In July, the US Commodity Futures Trading Commission proposed two new ways for foreign clearing houses to service US clients without submitting to US regulations.
bit.ly/2B7YAg5

Brexit: Special sitting for MPs to decide UK’s future
BBC News
MPs will be called to Parliament for a special Saturday sitting in a decisive day for the future of Brexit. Parliament will meet on 19 October after a crunch EU summit – seen as the last chance for the UK and EU to agree a deal ahead of 31 October deadline. If a deal is agreed, Boris Johnson will ask MPs to approve it – but if not, a range of options could be presented. The BBC’s Laura Kuenssberg says these could include leaving without a deal, and halting Brexit altogether.
/bbc.in/2MpbwmR

Miscellaneous

Apple Angers China by Approving Cop-Tracking Map App for Hong Kong
Yoko Kubota – The Wall Street Journal
Apple Inc. has joined the list of American companies under fire in China over the Hong Kong protests. The iPhone maker triggered an angry response from Chinese state media and consumers when it approved a map app that allows protesters to track police movements. Apple is among the most recognizable U.S. brands in China, a country that it relies on heavily for manufacturing and sales. The Cupertino, Calif.-based giant was lambasted for approving the app and accused of showing support for the protesters.
/on.wsj.com/35krOpF

Wall Street Turns Out for Beethoven, Bradley Cooper, Osso Buco
Amanda L Gordon – Bloomberg
Philharmonic holds New York gala before heading to Oklahoma; Cleveland Orchestra performs at Carnegie Hall opening night
It was Monday night at David Geffen Hall, and the New York glitterati were out in full force. Alec Baldwin caught up with Broadway producer James Nederlander and Bradley Cooper had the women swooning. Richard LeFrak stuck close to his wife Karen, a composer and author.
/bloom.bg/2Mp2HcJ

Ex-MUFG Banker Invokes Human Rights in Paternity Leave Case
Takashi Nakamichi – Bloomberg
A Canadian banker who claims he was harassed and later fired by Mitsubishi UFJ Morgan Stanley Securities Co. for taking paternity leave appeared in a Tokyo court Wednesday to argue his case.
/bloom.bg/32cGCoc

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