Nomura Penalized by FSA After Market Information Leaked

May 28, 2019

First Read

Hits & Takes
By JLN Staff

At the end of the week, Mike Forrester and Spencer Doar will be headed to London for IDX. They will be shooting our popular industry leaders video series there. Contact me if you know someone who should be included that has a story or news to share. I will not be in attendance at IDX this year. Hopefully I can attend next year.~JJL

FTSE Russell has renewed their MarketsWiki sponsorship with John Lothian News. We are grateful for their continued support and look forward to continuing to work with them over the next three years.~JJL

The weather last week that spawned tornadoes in Jefferson City, MO also hit Columbia, MO where my son Tim lives. In fact, a tree near his house came down and hit his car. The car was totaled by the insurance company, so he is in the market for another car.~JJL

My daughter Katherine left yesterday for The Summit Bechtel Reserve, the Boy Scout high adventure camp where she will be a lifeguard again this summer. The World Scout Jamboree is also at the Summit later this summer. We had to redirect Katherine’s route to West Virginia yesterday due to severe weather that spawned tornadoes across Indiana and Ohio. I am picking up a theme here. Keep your weather radios powered up this summer.~JJL

ALTSO’s (A Leg To Stand On) Rocktoberfest London is coming up on June 19, the first of three events (the next are in Chicago and New York) to raise awareness and money for children with untreated limb disabilities in the developing world. You can go here for more information and to buy tickets.~SR


R.J. O’Brien Promotes Staniford to Chief Sales Officer; Gilhooly to COO, North America; Northup to Global Solutions Officer; New Management Structure Reflects Continuing Global Growth, Focus on Efficiencies and Client Experience
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today announced several promotions, giving new responsibilities to key executives as a reflection of the firm’s continuing global growth. The new roles further the firm’s strategic priorities of achieving world-class sales and operational excellence, as well as enhancing client experience.

*****Big news from RJO.~JJL


CME sees future in small fry; Exchange isn’t the only industry player courting retail investors.
Lynne Marek – Crain’s Chicago Business
CME Group’s latest overture to retail investors is catching on, just as a new rival eyes the same market. The world’s largest futures exchange operator this month launched its most successful new product ever, targeting smaller traders with a bite-size version of popular contracts tied to stock indexes. Trading in the new “micro E-mini” contracts on the first day tallied more than 308,000 contracts, Chairman and CEO Terry Duffy bragged to shareholders at the Chicago company’s May 8 annual meeting. “It’s pretty amazing,” he said.

****We missed this story from last week.~JJL


Worth reading: How the climate change will affect the banking sector
It is safe to say that global warming and its impact on the world, the people and the economy is currently one of the most discussed topics. “Banking in a changing climate – preparing for what lies ahead” is the title of an article published in the European Central Bank Newsletter in May 2019. The authors describe the affects the banking sector will face and what banks do to be prepared for the challenges ahead. What risks are implied and how can one
ensure sustainable development? The article also features the initiatives started in this field.

*****They had me at “worth reading.”~JJL


The 10 traits that make a truly exceptional employee
Dr. Travis Bradberry – Quartz
A recent international study surveyed more than 500 business leaders and asked them what sets great employees apart. The researchers wanted to know why some people are more successful than others at work, and the answers were surprising; leaders chose “personality” as the leading reason.

*****The number one trait is what I ask for in my employees.~JJL


Monday’s Top Three
Our top read story yesterday was Reuters’ piece Nasdaq pulls out of Oslo Bors battle, handing Euronext victory. Second was the Bloomberg graphic Here’s How America Uses Its Land. Third was Bloomberg’s article Migration’s Biggest Loser Is Connecticut as Florida Profits


MarketsWiki Stats
152,839,534 pages viewed; 23,735 pages; 219,338 edits
MarketsWiki Statistics


CryptoMarketsWiki Website»
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

Recently updated pages include
DigiByte (DGB)
Financial Services Agency (Japan)
Bitcoin Cash SV
Craig Wright

1,099 pages; 9,688 edits
CryptoMarketsWiki Statistics

Lead Stories

Nomura Penalized by FSA After Market Information Leaked
Takashi Nakamichi and Takako Taniguchi – Bloomberg
Brokerage receives first business improvement order since 2012; Staff told clients about proposed changes to Tokyo exchange
Nomura Holdings Inc. has been told to bolster internal controls by Japan’s financial regulator after employees shared sensitive stock-market information with clients, the latest setback for the struggling brokerage.

Deutsche Bank’s Options Are Limited for a Turnaround
Jan-Patrick Barnert – Bloomberg
These days, the path of Deutsche Bank feels a little bit like the final season of a long-running TV show. The latest plot driver: the lender’s stock regularly hitting new lows.

Pakistan Stock Exchange CEO Richard Morin resigns
Pakistan Stock Exchange on Tuesday said its Chief Executive Richard Morin has resigned from his position, without elaborating on the reasons behind his departure.

Wall Street’s Big Moneymaker Isn’t Sexy; Cash management may not have the whizz-bang appeal of fintech. But there’s plenty of disruption in this staid corner of the financial industry.
Nisha Gopalan and Andy Mukherjee – Bloomberg
Few dispute that Chinese tech giants have shaken up retail banking, changing how millions of customers do everything from paying their bills to choosing insurance. But the real disruption may be occurring in a more staid corner of finance – and it’s being led by Wall Street.

This $72 Billion Fund is Shorting the Dollar in a Contrarian Bet
Ruth Carson – Bloomberg
Brandywine Global is buying Treasuries to hedge EM bond risk; Policy stimulus seen helping global economy reach soft landing
The dollar’s rally may be approaching an end as pressure mounts on U.S. President Donald Trump to strike a trade deal with China, according to Brandywine Global Investment Management LLC.

No-Deal Brexit Looks More Likely, But Could a Tory Leader Pull It Off?
Emma Ross-Thomas – Bloomberg
The Brexit Party’s victory in European elections has lit a fire under the Conservative leadership race, with candidates vying to show how willing they are to rip the U.K. out of the bloc without a deal.

New CCP12 Position Paper Elaborates On Best Practices To Further Bolster The Resilience Of Central Counterparties And Global Financial Markets
The critically important role of central counterparties (CCPs) in the global financial marketplace has been subject to heightened focus since the G20 mandate to centrally clear standardized over-the-counter derivatives. This clearing mandate and other post- crisis regulatory reforms, was driven by the robust performance of CCPs during the 2008 global financial crisis. The stability of cleared derivatives markets during this time of unprecedented stress is unsurprising in light of the long history and best practices of the clearing for exchange-traded derivatives.

The right way to fight currency manipulation
Jeff Spross – The Week
Currency manipulation is back, baby! During his campaign and the early days of his administration, President Trump routinely threatened to label other countries “currency manipulators,” particularly China. But once Trump’s trade war got underway, currency manipulation fell off the radar, replaced by concerns over intellectual property and technology transfer. Which was a shame, since the question of currencies actually gets much closer to the root causes of America and China’s toxic trade relationship.

The Oracle Of Apopka: Meet Eddie Brown, One Of Wall Street’s Greatest Untold Stories
Antoine Gara – Forbes
Inside a four-story, sumptuously restored 19th-century town house in the historic Mount Vernon district of Baltimore, three of Wall Street’s best stock pickers are roasting each other in a wood-paneled boardroom as sunlight streams through stained-glass windows.

A Convertible-Bond Boom in China Isn’t All Good News for Shareholders; Companies have become more sophisticated in using capital markets to raise funds, but existing shareholders could see holdings diluted
Shen Hong – WSJ
Chinese companies have become avid issuers of bonds that convert into shares, building on a stock-market rally to raise funds at low interest rates.

Japan firms set up consortium to enhance climate-related financial disclosure
Japanese companies set up a consortium on Monday to help improve reporting of the financial impacts of climate-related risks and opportunities, aiming to enhance green investments and promote innovation that helps tackle climate change issues.

Exchanges, OTC and Clearing

Nodal Exchange and IncubEx Debut Slate Of New REC Futures
Nodal Exchange and IncubEx are pleased to announce the listing of their second tranche of North American environmental contracts on May 31, 2019, with nearly a dozen new Renewable Energy Certificate (REC) futures contracts, including Washington, D.C. Solar RECs, Ohio Solar RECs and several others in NEPOOL, (New England Power Pool). The new contracts are the first exchange-listed REC futures for these states or district, or for particular REC classes. The Friday launch is pending all relevant regulatory review periods. The new REC products complement the first set of environmental contracts launched on Nodal on November 16, 2018 that included futures and options on: California Carbon Allowances, Regional Greenhouse Gas Initiative Allowances (RGGI), New Jersey Solar Renewable Energy Certificates, PJM Tri-Qualified Renewable Energy Certificates and 11 other emissions and renewable contracts.

Exchange Q&A: Nasdaq
Markets Media
Nasdaq won Best Exchange Group at the 2019 Markets Choice Awards. Markets Media caught up with Nelson Griggs, President of Nasdaq Stock Exchange, to learn more.

Appointment of Members to the Consultative Panels
The Panel Member Selection Committee of Hong Kong Exchanges and Clearing Limited (HKEX) today (Tuesday) approved appointments to the Cash Market Consultative Panel, the Clearing Consultative Panel and the Derivatives Market Consultative Panel since the service terms of certain members are due to expire. HKEX wishes to take this opportunity to thank all the retiring members for their dedicated service to the panels.

HKEX Welcomes its First Listing of Two-Time Inverse Product
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to welcome today (Tuesday) its first listing of a two-time Inverse Product, the CSOP Hang Seng Index Daily (-2x) Inverse Product (stock code: 7500).

Deutsche Börse wins two Eastern European electricity market operators for trading platform M7; Deutsche Börse supports further connections to Europe-wide intraday electricity market XBID / Successful expansion to Central and Eastern European participants
Deutsche Börse
With its technical infrastructure and its IT applications, Deutsche Börse supports the progressive establishment of the joint Europe-wide intraday power market XBID. With the integration of two new Eastern European electricity market operators, XBID is taking another step in its planned expansion to Central and Eastern European countries.

Hong Kong stock exchange unveils confidential process to attract secondary listings by publicly traded companies
Enoch Yiu – South China Morning Post
Hong Kong’s stock exchange has introduced a confidential application process for companies that are already listed in New York or London to raise funds on its bourse, part of the process to sharpen the city’s edge in the race to be the global fundraising hub.Unlike initial public offering (IPOs) applications that are publicly disclosed, the confidential process will be kept under wraps to shield applicants’ existing shares from volatility and speculation, according to the exchange’s listing…

Intercontinental Exchange Announces Record Open Interest In Global Energy Futures
Press Release
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced record open interest of over 29 million contracts in its global energy futures complex, on May 23, 2019. The record level of open interest held by market participants is being driven by ICE’s global oil and European natural gas futures business.

Moscow Exchange Partners With Avelacom To Expand Its Presence In Asia And The Middle East
Moscow Exchange
Moscow Exchange has facilitated connectivity options for professional market participants and their clients from Asia and the Middle East. In collaboration with Avelacom, it has deployed new Points of Presence (PoPs) in the most sophisticated and largest data centers in Hong Kong, Singapore, Shanghai, Dubai and Mumbai. Market participants have received high speed access to MOEX’s markets without the need to build extra infrastructure and pay for low latency network connection to Moscow.


Fintech arms race heats up with $21.5 billion takeover
Matt Egan – CNN
Global Payments announced a $21.5 billion deal on Tuesday to acquire rival Total System Services. It’s the latest salvo in the fintech arms race.
The all-stock transaction creates a payments giant serving 3.5 million small-to-medium-sized merchants and 1,300 financial institutions in more than 100 countries.

Global Payments to buy TSYS for $21.5 billion in latest fintech deal
Arjun Panchadar – Reuters
Payment technology company Global Payments Inc said on Tuesday it would buy peer Total System Services Inc (TSYS) for about $21.5 billion in stock, adding scale in a fiercely competitive and fast-growing industry.
The deal, Global Payments’ biggest ever and the sector’s third major acquisition this year, comes as payment technology companies consolidate to battle competition from banks making inroads into digital payments and fintech start-ups such as Adyen and Stripe chipping away market share.


Bitcoin rises again as analysts declare end of ‘crypto winter’; Recent gains across many other digital assets reminiscent of the boom of late 2017
Laurence Fletcher and Hudson Lockett – FT
Cryptocurrencies, the asset class written off by most investors after enormous price falls last year, are back.

South Korea’s Shinhan Bank Turns to Blockchain to Speed Up Loan Issuance
Yogita Khatri – Coindesk
Shinhan, one of the oldest and largest banks in South Korea, is using blockchain technology to speed up the approval process for loan products.

Korean Government Plans Action Over Risks of Resurgent Crypto Market
Daniel Palmer – Coindesk
With the price of bitcoin surging to a yearly high Monday, the South Korean government has held an emergency meeting over the risk of losses for investors, CoinDesk Korea reports.

JPMorgan Adds New Privacy Features to Its Ethereum-Based Quorum Blockchain
Ian Allison – Coindesk
JPMorgan Chase’s blockchain team has developed a privacy feature for ethereum-based blockchains, obscuring not only how much money is being sent but who is sending it.

ECB Official Says Wholesale Central Bank Digital Currency a ‘Viable Option’
Yogita Khatri – Coindesk
A European Central Bank (ECB) official has come out generally in favor of wholesale central bank digital currencies (CBDCs).

U.S. SEC Sues Alleged $26m ‘Crypto Pyramid’ Scheme Perpetrator, Is It The Last?
The U.S. Securities and Exchange Commission (SEC) filed a civil injunctive action this past week against a resident of San Clemente, California, Daniel Pacheco, that promised “cryptocurrency riches” and who as individual is described as the “alleged perpetrator” of a multimillion-dollar pyramid scheme by the financial regulator headquartered in Washington D.C.


Merkel: We must face up to the specters of our past
Luke McGee, CNN
German Chancellor Angela Merkel has said “there is work to be done” in Germany to face up to the dark forces that are finding mainstream support there and in other parts of the world.


IOSCO Requests Feedback On Key Considerations For Regulating Crypto-Asset Trading Platforms
The Board of the International Organization of Securities Commissions is seeking comments on a consultation paper that describes the issues associated with crypto-asset trading platforms (CTPs) and sets forth key considerations to assist regulatory authorities in addressing these issues.

Publication of the 190th issue of the FSA’s journal, Access FSA
FSA Japan
The 190th issue of the FSA’s journal, Access FSA (in Japanese), is now available on the website (

Japan’s financial watchdog orders Nomura to improve business after leak
Japan’s financial watchdog on Tuesday ordered Nomura Holdings to improve its business practices after the country’s biggest brokerage admitted an employee had leaked market information.

Administrative Action against Nomura Holdings, Inc. and Nomura Securities Co., Ltd.
FSA Japan
According to the Article 57-23 report request order based on the Financial Instruments and Exchange Act (“FIEA”) and its report submission by the Nomura Holdings, Inc. (Address: Chuo City, Tokyo / Japan Corporation Number: 7010001034881 / hereinafter referred to as “NHI”) and the investigation result from the NHI Audit Committee conducted by a special investigation team including external professionals, the FSA found significant inadequacies at NHI and the Nomura Securities Co., Ltd. (Address: Chuo City, Tokyo / JCN: 6010001074037 / hereinafter referred to as “NSC”) as follows:

ESMA consults on tiering, comparable compliance and fees under EMIR 2.2
The European Securities and Markets Authority (ESMA) has today published three consultation papers under EMIR 2.2 on tiering, comparable compliance and fees. EMIR 2.2 amends EMIR’s regulatory and supervisory regime for central counterparties (CCPs).

Regulators, Investors Zero In on Corporate Debt Market; An increase in corporate issuance, coupled with more lower-quality borrowing, has raised concerns
Sam Goldfarb and Avantika Chilkoti – WSJ
A decadelong rise in corporate borrowing is prompting new scrutiny about how debt markets might hold up in an economic downturn.

Investing and Trading

Low-Volatility and ‘Buffer’ ETFs Draw Billions Amid Jitters Over Market Swings; Two popular tactics: Picking stocks with steady performance, and limiting losses using options
Asjylyn Loder – WSJ
With every bout of stock-market volatility, nervous investors start snapping up products meant to protect them in a downturn.

Louis Dreyfus tries sustainable finance with $750 million loan
Agricultural commodity group Louis Dreyfus Company has agreed to renew a $750 million loan in North America that will be priced in relation to how the company performs in relation to a number of sustainability goals.

Investors Try Stock Picking as Volatility Rises; Some view sharper equity moves as an opportunity to beat the broader market
Michael Wursthorn – WSJ
Volatility in the market is driving a stock-picking comeback. The stock market’s sharp moves up and down over the past 18 months have caught the attention of some individual investors who believe the market has reached a point where picking the right stocks matters more than throwing money into index-tracking funds.


Hedge funds build bets on shorter-dated Treasuries; Long and short positions are now almost equal for first time since last summer
Laurence Fletcher – FT
Hedge funds expecting the Federal Reserve’s pivot on monetary policy to lead to a rate cut have spied an opportunity in short-term US government debt. Two-year Treasury debt now yields 2.15 per cent — not far from the 2.31 per cent on offer from 10-year notes and without the volatility that afflicts the longer-dated paper.

Ex-Berenberg Bankers Raise $2.2 Billion, Take On FX Markets
Stephan Kahl – Bloomberg
7orca focusses on currency overlay, short volatility strategy; Asset manager found niche in industry that is under pressure
7orca Asset Management AG, a Hamburg-based company set up by eight former Berenberg bankers, has raised almost 2 billion euros ($2.2 billion) in customer money in the first 18 months after its launch, Chief Executive officer Tindaro Siragusano said in an interview.

Banks in Firing Line If Danish Opposition Wins: Handelsbanken
Frances Schwartzkopff – Bloomberg
A Social Democratic government in Denmark would be bad for the country’s financial industry, according to Handelsbanken.


Japan’s dormant central bank may have to rouse itself once more; Pioneer of radical monetary policies will soon have to innovate again
Takuji Okubo – FT
What more can the Bank of Japan do? This is the question economists in Japan have long grappled with. The BoJ was the first central bank in modern times to adopt a zero-interest rate policy in 1999, quantitative easing in 2001, and in 2010 it started buying equity exchange traded funds. In late 2016, the BoJ broke more new ground by targeting long-term interest rates through a yield curve control policy.

Risk of liquidity shocks haunts China’s fast-growing bond markets; Foreign investors pile into Chinese bonds but worry about market glitches
Don Weinland – FT
Foreign investors beware: a byzantine regulatory framework and patchy trading volumes could cause a shock in the country’s debt market, say analysts — just as Beijing is opening it up to outsiders.

Pakistani clerics declare fatwa against ‘sinful’ dollar buying; Moral suasion campaign comes as Imran Khan’s government faces balance of payments crisis
Farhan Bokhari and Stephanie Findlay – FT
Religious scholars in Pakistan have declared that hoarding dollars is a “grave sin”, following an increase in speculative buying of the US currency as the government of Prime Minister Imran Khan struggles to contain a balance of payments crisis.

China banks and asset managers fined for masking bad debt; Institutions including ICBC penalised as Beijing works to bring problem under control
Yizhen Jia and Don Weinland – FT
China’s financial regulators are stepping up penalties on banks and asset managers caught hiding bad debts as Beijing grows increasingly wary of the country’s opaque cache of unpaid loans.

Hackers Attack New Zealand’s Treasury
Matthew Brockett – Bloomberg
Treasury Secretary says hacking has been referred to police; Finance Minister calls hacking of budget ‘extremely serious’
New Zealand’s annual budget has been thrown into disarray after the main opposition National Party released parts of it early and the Treasury Department said its computer systems had been hacked.

China Proposes Coal Price Cuts to Ease Burden on Power Producers
Bloomberg News – Bloomberg
NDRC wants domestic benchmark to drop below 600 yuan a ton; Utilities under pressure to deliver 10% cut to power prices
China is seeking to lower domestic coal prices to aid power producers, and has proposed that miners bring the benchmark grade to below 600 yuan ($87) a ton, according to people with knowledge of the matter.

Norway’s largest pension fund divests from gambling and alcohol; KLP is latest fund to drop ‘sin-stocks’ from portfolio
Madison Darbyshire – FT
Norway’s largest pension fund will divest from companies that generate revenue from alcohol and gambling, a further push by KLP to drop so-called “sin stocks” from its portfolio.

Asia’s Top Chocolate Producers Can’t Meet the Growing Demand
Yoga Rusmana and Anuradha Raghu – Bloomberg
Bean output has dwindled in the region as consumption rises; Processors are having to increase imports to meet demand
Demand from Asia’s growing legions of chocoholics has outpaced the ability of local farmers to supply cocoa beans, prompting a surge of shipments into the region from Africa and South America.


Jeremy Hunt warns Conservatives of no-deal Brexit political suicide; Foreign secretary says he could negotiate a better withdrawal agreement
Laura Hughes- FT
Jeremy Hunt has launched his pitch to be next Conservative party leader and UK prime minister by saying that he could negotiate a better Brexit agreement and avoid the “political suicide” of attempting to push a no-deal exit through the House of Commons.

Brexit helps New York take top finance spot from London – survey
Fallout from Brexit has helped New York overtake London to become the world’s pre-eminent financial centre, a survey of financial executives by Duff & Phelps showed on Tuesday.

[et_social_follow icon_style="slide" icon_shape="circle" icons_location="top" col_number="4" counts="true" counts_num="0" total="true" outer_color="dark"]

John Lothian Newsletter

So you want to know what’s happening in the financial markets?We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past Newsletters

Hedge Fund Talent Schools Are Looking for the Perfect Trader

Hedge Fund Talent Schools Are Looking for the Perfect Trader

First Read Hits & Takes John Lothian & JLN Staff FIA's IDX concluded last night on a high note with the gala dinner in support of the Futures For Kids charity and the end of Rama Pillai's Kilt Challenge. The dinner gala raised a total of 150K British pounds, including...

William Donaldson, Investment Banker Who Led SEC, Dies at 93

William Donaldson, Investment Banker Who Led SEC, Dies at 93

First Read Hits & Takes John Lothian & JLN Staff The FIA today announced, rather early, that nominations for the FIA Hall of Fame Class of 2025 are open and you can submit them via this online form. This is a grand idea for the FIA to announce it during IDX...