NYSE Owner Intercontinental Exchange Makes Takeover Offer for eBay; AI Fintech Goes After BGC With First Bitcoin Trade

Feb 5, 2020

First Read

Hits & Takes
By JLN Staff

Readers have asked and JLN staff have wondered what impact the coronavirus outbreak would have on the FIA International Conference in Boca Raton, Florida in March. The travel restrictions to and from Asia and the cancelled flights are on people’s minds. So JLN reached out to FIA spokespeople and received this response: “Yes, FIA is monitoring the situation closely. As of now, we’ve not had any cancellations from delegates or sponsors, but if people have any questions please contact us for assistance.”~JJL

When Tesla surged 19% on Monday, the result was a record 8067 FANG+ futures contracts traded on ICE. Tesla is one of the 10 stocks in the NYSE FANGplus index. ~JJL

Breaking News: ICE just announced it has agreed to acquire Bridge2 Solutions, a “leading provider of loyalty solutions for merchants and consumers.” ~SR

If ICE buys eBay, does that mean CME Group would look to buy Craig’s List? Asking for a friend.~JJL

The U.S. Securities & Exchange Commission is seeking a supervisory IT specialist to support the Office of Information Technology. ~JJL

Nodal Exchange achieved its 18th consecutive month of record calendar month trading volume in power futures in January 2020 with 179 million MWh ($4.9 Billion per side).~JJL

Apparently an app developed specifically for the Iowa caucus was to blame for the caucus’ meltdown, which still hasn’t released 100% of the votes from Monday. There was an emergency hotline set up for the election, but it got overwhelmed quickly. Reminds me of Voatz, a smartphone app designed to let people vote on a blockchain, which was used in an election in Virginia in 2018. The election went fine, but the technology had security vulnerabilities that even a blockchain couldn’t solve. I’m starting to think using smartphone technology to vote might not be the best idea.~MR

CME Group’s Terry Duffy made an appearance on CNBC’s Closing Bell on Monday.~JJL


Intercontinental Exchange Statement on News Reports Suggesting Possible Transaction with eBay
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, is sharing the following statement in response to news reports published today: ICE approached eBay to explore a range of potential opportunities that might create value for the shareholders of both companies. eBay has not engaged in a meaningful way. We are not in negotiations regarding the sale of all or part of eBay.

***** The question is, what is the reserve price in the auction for the auction business?~JJL


Intercontinental Exchange Announces Record Trading of NYSE FANG+ Index Futures Contract
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced a record trading day for the NYSE FANG+ Index futures contract. On Monday, February 3, a record 8,067 contracts were traded, compared to the last record of 7,884 contracts on February 2, 2018.

*****Wait until you see the volume record for the March Beanie Baby futures.~JJL


Intercontinental Exchange Reports January 2020 Statistics; ADV +27% y/y, OI +11% y/y
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported January 2020 trading volume and related revenue statistics. Highlights include: Average daily volume (ADV) up 27% y/y; record total futures open interest (OI) of 45.8M lots reached on January 30, 2020; total January OI up 11% y/y. Record total energy ADV up 29% y/y; record energy futures OI of 29.9M lots reached on January 30, 2020; total energy OI up 12% y/y

*****But then, ICE is all about the record volume right now.~JJL


Deutsche Bank tutoring staff to handle bad press coverage
Thornton McEnery – NY Post
Deutsche Bank is prepping its workers for a new onslaught of bad press — by offering them corporate talking points on everything from President Trump to Nazi financing.

*****Kein Kommentar!


Traders in World’s Longest Working Day Plead for Shorter Hours
Ksenia Galouchko, William Canny, and Jan-Patrick Barnert – Bloomberg
Bloomberg poll shows 74% of market players support shorter day; Liquidity and diversity among top reasons for shortening hours
People working some of the longest days in world equity markets would like them to be shorter, a Bloomberg News survey showed. Across Europe, 74% of finance professionals, including traders, analysts and fund managers, said they favor reducing the current 8 1/2-hour stock market day — which exceeds the U.S. by two hours.

***** I think the 23-hour trading day is idiotic.~JJL


Tuesday’s Top Three
Our top story Tuesday was the big news from Cboe, Cboe Global Markets Acquires Data Analytics Companies Hanweck and FT Options. In second place was The Wall Street Journal’s Tradebot, Pioneer of High-Speed Trading, Struggles With Profit Slump, about trouble in the high frequency trading world. And third was a repeat of our No. 2 story yesterday, FT’s Citi suspends senior bond trader over alleged theft from canteen.


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Lead Stories

NYSE Owner Intercontinental Exchange Makes Takeover Offer for eBay; A deal could value the online marketplace at more than $30 billion
Cara Lombardo and Corrie Driebusch – WSJ
The owner of the New York Stock Exchange has made a takeover offer for eBay EBAY 8.78% Inc. that could value the sprawling online marketplace at more than $30 billion, according to people familiar with the matter.

AI Fintech Goes After BGC With First Bitcoin Trade
Ksenia Galouchko – Bloomberg
AiX last week brokered first trade in cryptocurrency space; Startup seeking approval to work in regulated asset classes
A fintech startup that aims to make voice brokers obsolete has gone live with its first trade — in Bitcoin. London-based AiX last week negotiated its first Bitcoin-U.S. dollar trade using a proprietary artificial intelligence system that communicates with human traders at banks via chat services. The firm, which was founded in 2017 and employs 35 people, is going after voice brokers, such as BGC Partners and TP ICAP Plc., who earn fees from matching buyers and sellers by phone, by replacing them with an AI system.

For ICE, EBay Would Be a Regrettable Online Purchase; Both businesses are marketplaces, in the broadest sense. But that’s not a good enough reason for this takeover.
David Fickling – Bloomberg
You know how things go with eBay Inc. You go online, ask some seller a question about that highly collectible Beanie Baby, they ignore you, and then suddenly people think you’ve lost your head over a frivolous purchase.

Quarantines and Travel Bans May Not Stop Coronavirus Now; The World Health Organization is right to recognize that too-restrictive measures may backfire.
Faye Flam – Bloomberg
Coronavirus is spreading at an accelerating rate, but inappropriate quarantines and travel bans could cause more havoc than the disease itself. The World Health Organization has a duty to protect human health, but also an obligation to protect the world’s citizens from the human rights violations or unnecessary economic hardship that panic could cause. So far, they’re doing a good job of striking this tricky balance.

U.S. Readies for Coronavirus Pandemic Some Experts Now See as Likely; “This is about mitigation at this point.”
Robert Langreth and Michelle Cortez – Bloomberg
Just a couple of weeks ago, scientists held out hope the new coronavirus could be largely contained within China. Now they know its spread can be minimized at best, and governments are planning for the worst.

Central banks ‘hesitant’ on digital currencies, says former governor; Christian Noyer believes projects available to consumers are a way off yet
Philip Stafford – FT
Christian Noyer, former governor of the Banque de France, has raised doubts that major central banks will launch digital currencies for consumers within the next 10 years, but forecast that digital payments between commercial banks “will happen fairly soon”.

A Lacrosse Pro Turned Top Hedge Fund Manager Goes All-In on Tech
Paula Sambo
Software stocks helped Donville fund to 19% gain in 2019; ‘The bigger you get, the harder it is to perform,’ Gamble says
A top hedge fund manager and former professional lacrosse player is betting that the roaring technology industry will continue to produce some of Canada’s top performing stocks.

Credit Suisse Investors Tell Rohner to Back Thiam or Leave
Marion Halftermeyer and Patrick Winters – Bloomberg
Silchester follows Herro backing CEO Thiam amid power struggle; Tensions at the Swiss bank have mounted in wake of spy scandal
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam won the backing of a second top shareholder in an escalating power struggle at the Swiss bank, as a secretive British investor urged Chairman Urs Rohner to resign if he can no longer support the CEO.

‘Everything Is Accelerating’ in the Climate Fight, Billionaire Investor Warns; Disasters caused by warming are speeding up, according to Jeremy Grantham—but so are solutions.
Ben Steverman – Bloomberg
More than a year ago, legendary investor Jeremy Grantham announced he was devoting almost his entire fortune, more than $1 billion, to the fight against climate change.

European markets regulator takes another shot at ‘dark pools’; Watchdog also offers concession on post-Brexit share trading
Philip Stafford – FT
Europe’s markets regulator is boosting its campaign to limit share trading that takes place away from exchanges in so-called dark pools, concluding that sweeping new rules introduced two years ago have only been partially successful.

Exchanges, OTC and Clearing

NYSE parent held takeover talks with eBay; Possibility of deal between Intercontinental Exchange and online retailer off for now
Eric Platt and James Fontanella-Khan and Philip Stafford – FT
Intercontinental Exchange held preliminary takeover talks with eBay, but the discussions between the owner of the New York Stock Exchange and the online marketplace provider fell apart before the two companies could clinch an agreement.

Intercontinental Exchange Announces Agreement to Acquire Leading Loyalty Program Provider Bridge2 Solutions; Acquisition to be Subsequently Combined with Bakkt, ICE’s Majority-Owned Subsidiary, Extending Bakkt’s Push into Consumer Digital Asset Management
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that it has agreed to acquire Bridge2 Solutions, a leading provider of loyalty solutions for merchants and consumers. Following the completion of the transaction, Bakkt, a majority-owned subsidiary of ICE, intends to acquire Bridge2 Solutions from ICE using proceeds from Bakkt’s Series B round of funding, which is expected to close later this quarter.

Expectations for improved trade with China sends farmer sentiment soaring
CME Group
There was a sharp rise in agricultural producer sentiment in January as the Purdue University/CME Group Ag Economy Barometer rose 17 points from December to a reading of 167. Although the Index of Current Conditions was essentially unchanged, up one point to a reading of 142, the Index of Future Expectations jumped significantly, up 24 points since December to a reading of 179. The sentiment improvement took place as the Phase One Trade Agreement between the U.S. and China was being discussed and signed in mid-January. The Ag Economy Barometer is based on a mid-month survey of 400 U.S. agricultural producers and was conducted from January 13-17, 2020.

Power trading at EEX and OTC clearing at Eurex start the year on a positive note; Both electric and gas trading at the European Energy Exchange showed very solid year-on-year growth in January // OTC clearing volumes at Eurex continue to grow strongly
European equity index derivatives, OTC clearing volumes, and power trading volumes at EEX all reported very positive figures for the first month of 2020. And Eurex Repo’s GC Pooling volumes once again posted strong double-digit percentage growth in January.

FTSE Russell selected by Abu Dhabi Securities Exchange (ADX) as benchmark administrator for tailored domestic indexes.
Press Release
FTSE Russell, the global index, data and analytics provider has agreed a full index partnership with Abu Dhabi Securities Exchange (ADX) to become its benchmark administrator for domestic equity indexes in Abu Dhabi. The signing ceremony took place this morning at ADX in the presence of H.E. Khalifa Al Mansouri, Chief Executive of ADX, and Mr. Waqas Samad, CEO of FTSE Russell.

Management Changes
Hong Kong Exchanges and Clearing Limited (HKEX) today announces the appointment of Ms Glenda So as Head of Post Trade. Ms So will join HKEX on 25 February 2020 and report to HKEX Group’s Chief Executive, Mr Charles Li, and to HKEX Chief Operating Officer, Mr Calvin Tai. She will be a member of the HKEX Management Committee.

Nasdaq January 2020 Volumes
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for January 2020, on its investor relations website.

SGX’s Asian FX futures volume rises as global participants prepare for regulatory changes; Strong growth in trading volumes in US and European trading hours; Provides OTC clients with centralised clearing via its FlexC FX futures as well as an enhanced BidFX OTC platform
Singapore Exchange (SGX) remains the world’s largest Asian foreign exchange (FX) futures marketplace, posting record volumes in 2019 as international investors seek trading opportunities in Asia. The heightened activity also comes as the FX industry moves toward the final stages of regulatory reforms for uncleared OTC derivatives.

Last trading day for Index Futures & Options – February 2020 contract

Derivatives market RFS service public testing
Moscow Exchange:
Dear derivatives market customers, We remind you that we continue public testing for new Request for Stream (RFS) service on T1 test environment. Production launch is planned for February 17th 2020. In…

Nodal Exchange Achieves New Records In Power Futures In January Including Majority Of PJM And ISO-New England Open Interest
Nodal Exchange achieved its 18th consecutive month of record calendar month trading volume in power futures in January 2020 with 179 million MWh ($4.9 Billion per side).

DTCC launches API marketplace
The Depository Trust & Clearing Corporation (DTCC) has launched an API marketplace it hopes will foster innovation and collaboration across developer and business communities.


Credit trading platform Trumid sees record volumes in January; January trading on the Trumid platform surged 325% year-on-year, marking record volumes.
Hayley McDowell – The Trade
Electronic credit trading platform provider Trumid has said it saw record activity in January following increased buy- and sell-side adoption of its trading protocols.

Cboe bolsters data business with acquisition of two derivatives analytics providers; Hanweck Associates and FT Options mark the latest acquisitions by Cboe, after the group confirmed plans to acquire EuroCCP late last year to expand derivatives trading capabilities.
Hayley McDowell – The Trade
Exchange operator Cboe Global Markets has made moves to expand its information solutions division and acquired two derivatives analytics specialist providers.

UBS extends post-trade technology deal with GBST; Swiss-headquartered investment bank will migrate its post-trade operations in Australia to GBST’s automation platform for cash equities and exchange-traded options.
Hayley McDowell – The Trade
UBS in Australia has expanded a partnership with Sydney-based financial technology provider GBST to overhaul its post-trade processes with increased automation.

Here’s why so many fintech startups are loaning to small businesses
Alex Wilhelm – TechCrunch
Everyone wants to lend to small businesses, as the fintech boom continues to bring constituent players closer together in feature-terms. Thinking broadly, the rising focus on small-business lending amongst B2B fintech and finservices companies feels directionally similar to the rise of consumer-oriented fintech startups adding banking-like features last year.
This week, several stories underscored the growing appetite for lending to small companies, including news that Goldman Sachs is “close to a deal with Amazon to offer loans to the e-commerce giant’s merchants,” according to CNBC. Amazon has a host of data concerning its merchant-partners and Goldman has a pile of money; by combining their powers, they can probably make some money loaning out capital.

Hinckley & Rugby Building Society Choose WTMS® Whistlebrook’s Treasury Solution
Whistlebrook Limited
Whistlebrook Limited, a leading provider of back office solutions for the financial services industry, is pleased to announce that Hinckley & Rugby Building Society have successfully implemented Whistlebrook’s Treasury Management System (WTMS®).


Poll reveals public distrust for big tech’s digital money plans; Global survey deals a further blow to Facebook’s Libra project
Delphine Strauss – FT
A majority of people across the world think big tech companies cannot be trusted to issue digital money, according to a global survey that deals a further blow to Facebook’s Libra project.

In the Digital Currency Race, Mark Carney Tops Mark Zuckerberg
Catherine Bosley – Bloomberg
Central banks rather than giant tech companies are considered the preferred issuers of digital currency, according to a survey published by Omfif. While Mark Zuckerberg’s Facebook Inc. may be banking on its large international user base to launch cryptocurrency Libra, the poll for the Official Monetary and Financial Institutions Forum found there’s more faith in central banks. More than half said they’d prefer a digital currency issued by their monetary authority. Major internet technology companies were the least trusted, with a rating of just 37%.

Archax partners with Polymath for digital security listings; Archax to provide secondary market for token issuances
Archax, the forthcoming London-based institutional digital securities exchange, today announced a partnership with Polymath, the security token platform focused on issuance and management of regulated assets. Under this partnership, Archax will support tokens on its exchange that are created using Polymath’s ST20 standard.

Secrets Of A Successful Crypto Trader: Question Absolutely Everything
Jeff Kauflin – Forbes
Sitting side-by-side in a trendy Manhattan cafe where a glass of cold-pressed pineapple-and-carrot juice costs $9, the 29-year-old cofounders of cryptocurrency investment firm Multicoin Capital are ticking off the digital coins they’re shorting. They stand to make millions if the virtual coins tank in value. “Two years from now, zcash is worth zero,” says Kyle Samani of the three-year-old privacy-focused cryptocurrency. Currently, zcash trades for $66.

Pantera, Jack Dorsey’s Square join $14M round for crypto settlement startup Transparent Systems
Yogita Khatri – The Block
Transparent Financial Systems, the Seattle-based startup that is developing a “real-time” decentralized payment settlement network, has closed a $14 million Series A round.

Tough-to-Disrupt Municipal Market Attracts Blockchain Developer
Amanda Albright – Bloomberg
ConsenSys buys Heritage Financial Systems; Terms undisclosed; Firm seeks to ease issuance of tokenized bond offerings
The municipal-bond market, with roots dating back to an 1800’s New York City canal project, has a reputation for being stuck in a different century.

Ripple inks new deal with remittance firm Intermex, which will utilize its XRP payments solution
Yogita Khatri – The Block
Ripple has announced a new partnership with the Nasdaq-listed remittance firm International Money Express (Intermex).

Binance Will Soon Reward Market Makers for Providing Futures Liquidity
Omkar Godbole – Coindesk
Cryptocurrency exchange Binance is adjusting its fee structure to get market makers to add liquidity on its futures platform. Under the revised Binance Futures Market Maker Program, market makers will receive a negative fee for selected trading pairs, according to an official announcement on Monday. A “market maker” is a user who adds liquidity, or buying and selling limit orders in which the limit price is below/above the current market price, by placing a trade in the order book. A “market taker” is the one who takes liquidity off the market by filling a trade already placed.

Tesla’s surging stock is starting to remind Wall Street of bitcoin’s parabolic rally in 2017—here’s why
Mark Decambre – MarketWatch
Tesla Inc. is on a tear. Not just any ordinary tear for shares of a popular company whizzing to records on Wall Street. The ascent for shares of the electric-vehicle maker are near-parabolic and the unabashed run-up in recent days has some investors comparing the jump to bitcoin’s surge back in 2017.

Craig Wright ‘Abusing’ Privilege to Block 11,000 Documents, Kleiman Lawyers Say
Paddy Baker – Coindesk
Lawyers representing the brother of Craig Wright’s deceased business partner have accused the Australian entrepreneur of “abusing” client-attorney privilege to withhold documents and “obfuscate” trial proceedings.

Sony VC Fund Joins ‘Over $14M’ Funding Round for Digital Asset Platform Securitize
Daniel Palmer – Coindesk
A venture capital fund under the management of Sony Financial Ventures (SFV) and Japan-based VC firm Global Brain has invested an undisclosed amount in security token issuance platform Securitize. Announcing the news in a press release Tuesday, San Francisco-based Securitize said the “strategic fundraise” came via corporate VC fund SFV GB L.P. as an extension of the firm’s ongoing Series A round.

ConsenSys to Cut 14% Staff Amid Major Restructuring
Arnab Shome – Finance Magnates
ConsenSys, an Ethereum-bases blockchain outfit, is slashing 14 percent of its workforce amid a major restructuring in its core business model. First reported by The Block, the decision was propagated by the company in an all-staff meeting on Tuesday.The fresh layoffs will add to the 13 percent downsizing of the company’s staff done in December 2018. The company, however, did not reveal the exact headcount to be cut off from the workforce.

Cryptocurrency custodian BitGo now allows clients to trade directly from their BitGo accounts
Yilun Cheng – The Block
The $2 billion cryptocurrency custodian, BitGo, has partnered with financial services provider SettleBit to allow institutions to trade directly from their BitGo accounts. Founded in 2013, BitGo offers institutional clients security, custody, and liquidity solutions. The platform now processes approximately $15 billion worth of cryptocurrencies on a monthly basis.

NYSE parent company ICE approaches eBay with takeover offer: report
Frank Chaparro – The Block
Intercontinental Exchange, the derivatives and equities trading giant, has made online market-place eBay a takeover offer that would value the company above $30 billion, according to a report by The Wall Street Journal.

Giving Cryptocurrency Users More Bang for Their Buck
Rob Matheson -Traders Magazine
A new cryptocurrency-routing scheme co-invented by MIT researchers can boost the efficiency — and, ultimately, profits — of certain networks designed to speed up notoriously slow blockchain transactions.

Digital Asset gains backing from Samsung and Salesforce; The funds from the latest financing round will be used to accelerate adoption of the Digital Asset Modelling Language for smart contracts.
Hayley McDowell – Global Custodian
Salesforce and Samsung Venture Investment Corp have made strategic investments in Digital Asset, as the FinTech looks to accelerate adoption of its smart contract language.


Donald Trump hails economy during tense State of the Union; Differences between president and House speaker are laid bare on eve of Senate impeachment vote
James Politi, Katrina Manson, Brendan Greeley and Kiran Stacey- FT
Donald Trump claimed “incredible results” in boosting the US economy in an often tense State of the Union address that highlighted the president’s bet that resilient job growth and a pair of trade deals can propel him to re-election this year.

The Money Behind Trump’s Money; The inside story of the president and Deutsche Bank, his lender of last resort.
David Enrich – NY Times
One Day in early 2017, Mike Offit went to the Yale Club in Manhattan for a lunch hosted by a group called Business Executives for National Security. Offit, who has a craggy face and shoulder-­length hair, had spent much of his career in banking, but that had ended nearly two decades earlier. Since then, he had puttered around the outskirts of finance, dabbled in journalism and even published a novel about a pair of murders at a fictional German-­owned Wall Street bank that bore a striking resemblance to the one that he worked for until 1998: ­Deutsche Bank.

Trump touts stock market’s record run, but who benefits?
Jonnelle Marte – Reuters
(Reuters) – Donald Trump loves to trumpet the hot U.S. stock market as a key achievement of his presidency, and

U.S. Lawmakers Nominate Hong Kong Protesters for Nobel Prize
Iain Marlow – Bloomberg
Move by Rubio, McGovern could anger China amid virus crisis; Follows months of demonstrations over Beijing’s grip
A bipartisan group of prominent U.S. lawmakers has nominated Hong Kong’s pro-democracy protesters for the Nobel Peace Prize, a move that could anger China amid continued tensions between the two countries.

U.S. Crackdown on Chinese Stocks Hasn’t Been Ruled Out Yet
Jenny Leonard and Sridhar Natarajan – Bloomberg
Bank executives confident U.S. dropped talks to curb flows; Kudlow says discussion ongoing, no concrete policies decided
There is a sense in the upper echelons of Wall Street that discussions within the Trump administration about limiting Americans’ investment in Chinese companies will ultimately lead to nothing.

Trump Set for Acquittal With Democrats Second-Guessing Strategy
Billy House – Bloomberg
Some House Democrats question speed and scope of inquiry; Senate trial will conclude with final vote at 4 p.m. Wednesday
President Donald Trump’s inevitable acquittal in the Senate’s impeachment trial on Wednesday has some House Democrats fretting that they should have delivered a more complete case to argue for his removal.

Poll: Capitalism trounces socialism — but Sanders beats Trump
The Week
Voters narrowly back Sen. Bernie Sanders (I-Vt.) in a hypothetical face-off against President Trump, even as a majority has a negative view of socialism, a new poll has found.

Merkel ‘Regrets’ Austria’s Rejection of German FTT Proposal
Bloomberg Law
Chancellor Angela Merkel said she “regrets” that Austria rejects Germany’s proposal for a financial transaction tax and warned that any further changes could prompt other European Union members to reject it.

Germany, Austria at Odds on European Financial Trade Tax
The Associated Press
Germany and Austria are at odds over plans for a new tax on financial transactions, raising more questions about the chances of the levy becoming reality after years of talks.


Commissioner Behnam to Deliver Remarks at the 56th Crop Insurance and Reinsurance Bureau Annual Meeting

Commissioner Behnam to Deliver Remarks at the 56th Crop Insurance and Reinsurance Bureau Annual Meeting

AMP to pay $5.175 million penalty for failing to prevent insurance churn by its financial planners
The Federal Court has today ordered AMP to pay a $5.175 million penalty after the court found AMP failed to take reasonable steps to ensure its financial planners complied with the best interests duty and related obligations under the Corporations Act.

ASIC obtains order to wind up Brisbane based financial services company
The Federal Court of Australia in Melbourne has ordered that Global Merces Funds Management Ltd (Global Merces) be wound up on just and equitable grounds and appointed Mr Anthony Connelly and Michael Hill of McGrathNicol, as joint and several liquidators of the company.

Ontario Securities Commission Announces New Securities Proceedings Advisory Committee Members
The Ontario Securities Commission (OSC) is pleased to announce the updated membership of the Securities Proceedings Advisory Committee (SPAC).

ESMA proposes to amend the technical standards in view of the postponing of the entry into force of the CSDR settlement discipline
The European Securities and Markets Authority (ESMA) has published today a Final Report on draft regulatory technical standards (RTS) on postponing the date of entry into force of the Commission Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) to 1 February 2021.

ESMA launches a Common Supervisory Action with NCAs on MiFID II suitability rules
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is launching a common supervisory action (CSA) with national competent authorities (NCAs) on the application of MiFID II suitability rules across the European Union (EU). The CSA will be conducted during 2020.

Encore | Insider Trading: Finding the Needle in the Haystack
When it comes to detecting insider trading, it really is like finding a needle in a haystack with more than 15,000 different stocks, options and bonds trading every day across millions of transactions. Yet, Sam Draddy and the Insider Surveillance team in the Office of Fraud Detection and Market Intelligence manage to find those needles.

Proposed Rule Change to Eliminate Transaction Credits and Trade Reporting Fees Applicable to Retail Participants that Use the FINRA/Nasdaq Trade Reporting Facility
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rules 7610A and 7620A to eliminate transaction credits and trade reporting fees applicable to Retail Participants that use the FINRA/Nasdaq Trade Reporting Facility Carteret (the “FINRA/Nasdaq TRF Carteret”) and the FINRA/Nasdaq Trade Reporting Facility Chicago (the “FINRA/Nasdaq TRF Chicago”) (collectively, the “FINRA/Nasdaq TRF”).

Update – OTC Transparency Data API
On January 14, 2020, FINRA issued a Technical Notice regarding the 100 record limit for the FINRA API Platform, which provides access to FINRA’s OTC Transparency Data. As stated in that Notice, on January 15, 2020, FINRA temporarily increased the limit to 100,000 records to accommodate firms’ API implementations.

SEC Wins Jury Trial Against Massachusetts Man Charged in Multi-Year Insider Trading Scheme
Yesterday evening, jurors in Boston federal court returned a verdict finding that Lexington, Massachusetts restauranteur Charlie Chen engaged in illegal insider trading in advance of five earnings announcements of Lexington-based company Vistaprint, N.V.

Ex-Pimco CEO Douglas Hodge Should Go to Jail for Two Years, U.S. Says
Janelle Lawrence – Bloomberg
Federal prosecutors file sentencing memo in college scam case; Hodge’s lawyers say similar crime recently drew six months
Former Pimco CEO Douglas Hodge, who admitted paying bribes of more than $625,000 to get his children into the University of Southern California and Georgetown University, should serve two years in prison, federal prosecutors said in a court filing.

Investing and Trading

Coronavirus Threatens a Popular Crude Trade; Sudden shift poised to erase profits for investors who purchase new, later-dated oil futures
Joe Wallace – WSJ
The fall and winter of 2019-20 looked like easy money for investors in the oil market. Then the coronavirus hit. Beyond the virus’s human toll, with hundreds dying in China and thousands sickened there and elsewhere, the global response to the health crisis has rippled through financial markets. Volatility returned to the U.S. stock market after months of relative calm, while bond yields have fallen and commodity prices have seesawed.

Lex in depth: the $900bn cost of ‘stranded energy assets’; Climate targets may force energy groups to leave huge reserves of coal, oil and gas in the ground
Alan Livsey – FT
Donald Trump was thinking about the teenage climate activist Greta Thunberg when he took aim at what he called the “prophets of doom” at Davos in January. But just as easily he could have been targeting global investors whose trenchant criticism of hydrocarbons has led to a shift in investment away from the traditional energy sector and into renewables.

Why coffee has been caught up in the coronavirus sell-off; China’s imports have more than tripled in the past decade
Emiko Terazono – FT
The coronavirus outbreak has unsettled global markets, hitting equity and commodity prices as concerns grow about its impact on economic growth. A less obvious casualty has been the humble coffee bean.

Leverage Is Exploding in the Fine-Art World; Investor Dan Sundheim has an estimated $300 million collateral pool
Katya Kazakina – Bloomberg
A $28 million Warhol. A $35 million Basquiat. A $70 million Twombly. Hedge-fund manager Daniel Sundheim has acquired all these works — and more — while wielding one of the most powerful tools in finance: leverage.

The Saudis’ Giant Wealth Fund Sold Almost All Its Tesla Shares Before Epic Surge
Dana Hull -Bloomberg
Public Investment Fund had been among the five biggest owners; Musk’s ‘funding secured’ explanation upset Saudi officials
Saudi Arabia’s sovereign-wealth fund sold almost all of its Tesla Inc. shares last quarter, nearly exiting what had been one of the largest holdings in the electric-car maker.

Marubeni cuts annual profit forecast, warns virus may hit global economy
Japanese trading house Marubeni Corp (8002.T) on Wednesday cut its full-year net profit forecast by 17% due to a one-off loss on its energy assets and lower profits from U.S. agri-business in the wake of a prolonged U.S.-Sino trade war.


Barclays under pressure over financing fossil fuel producers; Second influential investor group demands lender adopts stricter climate change policy
Attracta Mooney and David Crow – FT
Barclays is under intense pressure over its role in financing fossil fuel producers after a second influential group of big shareholders demanded the British lender adopts a stricter climate change policy.

Nomura Pushes Ahead With China Hiring, Says Virus May Slow Plans
Takashi Nakamichi and Takako Taniguchi – Bloomberg
Outbreak may slow expansion but no delay seen yet: Iiyama; Nomura weighs offering investment trusts, ETFs for the rich
Nomura Holdings Inc. is moving forward with plans to hire wealth managers for its new China operation, though the coronavirus outbreak threatens to slow the expansion, according to an executive overseeing the project.

Goldman Is Poised to Enter Japan Wealth Management Business
Takashi Nakamichi – Bloomberg
Goldman Sachs Group Inc. plans to enter the wealth management business in Japan, a person with knowledge of the matter said.

BNY Mellon, SocGen May Have to Pay Lost Taxes in Fraud Trial
Karin Matussek – Bloomberg
Bonn court issues statement on money seizure from banks, fund; Warburg may have to shoulder biggest part of $440 million case
Bank of New York Mellon Corp., Societe Generale SA, M.M. Warburg & Co. and German investment company Hansainvest will likely have to reimburse the roughly 400 million euros ($440 million) in lost tax revenue at stake in the first German Cum-Ex trial, a court said.

Credit Suisse revisits ex-U.S. employee’s spying claim
Koh Gui Qing, John O’Donnell – Reuters
Lawyers for Credit Suisse (CSGN.S) last week re-interviewed a former bank executive who said the Swiss lender had her followed in New York, according to a person familiar with the matter, weeks after the company dismissed her allegation as baseless.

Danske Bank Profit Slumps After Money-Laundering Scandal
Frances Schwartzkopff – Bloomberg
Danske Bank A/S expects its profits to plunge this year as Denmark’s biggest lender continues to grapple with the consequences of its money-laundering scandal.

Avocados Are the New Coal for Hedge Funds Chasing Sustainable Cash; Clients are increasingly willing to hold their asset managers to account on climate issues—and the managers are beginning to listen.
Nishant Kumar – Bloomberg
Some of the world’s most cynical investors may finally be coming around to climate change. As clients prepare to reward and punish managers on their green credentials, more hedge funds are taking note and taking action—from planting avocado trees to dumping coal assets. It’s been a rapid change of heart: just over a year ago, fewer than 4 in 10 hedge funds felt environmental, social and governance factors were becoming more important.

Goldman Sachs partner barred from banking industry over 1MDB; Andrea Vella has been forced out of Wall Street bank as part of Fed settlement
Laura Noonan -FT
Andrea Vella, formerly one of Goldman Sachs’ most senior investment bankers in Asia, has been permanently barred from the US banking industry for his alleged role in the 1MDB money laundering and bribery scandal.

Morgan Stanley donates $20 million to children’s mental health programs
Elizabeth Dilts Marshall – Reuters
Morgan Stanley (MS.N) said on Monday it will give $20 million to seven nonprofit groups working to prevent youth suicide and fight depression and other children’s mental health problems.


Chinese LNG importers consider invoking force majeure; Buyers weigh temporary cancellation of contracts due to coronavirus impact
Sun Yui, David Sheppard and Harry Dempsey – FT
Chinese state-backed importers of liquefied natural gas are examining if they can provisionally halt contracts for the supercooled fuel, as the coronavirus outbreak depresses energy demand in the world’s second-largest economy.

UK accounting watchdog plans shake-up to improve regulation; FRC will expand its enforcement powers and speed up investigations
Sarah Provan and Tabby Kinder – FT
The UK’s accounting regulator has announced a shake-up of its remit that will expand its enforcement powers and speed up investigations into auditors as it moves towards its transition to a new regulatory body.

U.S. Readies for Coronavirus Pandemic Some Experts Now See as Likely; “This is about mitigation at this point.”
Robert Langreth and Michelle Cortez – Bloomberg
Just a couple of weeks ago, scientists held out hope the new coronavirus could be largely contained within China. Now they know its spread can be minimized at best, and governments are planning for the worst.

Indonesia’s ‘Scariest Market’ Takes Bat Off Menu Over Virus Fear
Yoga Rusmana – Bloomberg
Health officials warn of wild animal consumption risk; Country increases surveillance of livestock transport
Bats and snakes are gone from the menu at Indonesia’s “scariest market” after officials ordered vendors to take the animals off the shelf to protect the nation from the fast-spreading coronavirus.

Coronavirus Impedes Alberta’s Drive to Reach Oil Markets in Asia
Robert Tuttle – Bloomberg
Outbreak prompts energy group to scrap plans to visit China; Canadian oil companies want to raise exports to East Asia
The coronavirus is hampering the Canadian oil industry’s efforts to build relations with crude buyers in Asia.


The UK is about to shoot itself in both feet; Britain’s demands for its negotiations with the EU are unrealistic
Martin Wolf – FT
Boris Johnson has an autonomy fetish. The UK prime minister’s fetish is the belief that his country not only has the sovereign right to shoot itself in both feet, but also has a duty to do so if the alternative is to allow EU institutions any role in its affairs. Brexit, he insists, means autonomy. If he persists with this demand, it is likely that, early next year, the UK will suffer the complete rupture of trading relationships it has built up over 47 years.

Banks Have a Key Weakness in Preparing for Brexit: Their Clients
Nicholas Comfort and Silla Brush – Bloomberg
Germany’s top financial regulator says banks are well prepared for Brexit, until you look at their list of clients. While many details of the U.K.’s future relationship with the European Union remain unclear, global banks have already set up units in the bloc to retain access to those markets. The problem is that London is still the docking station for huge pools of international capital, and companies and investors aren’t keen to move their business until the politicians hammer out the details, BaFin President Felix Hufeld said in an interview.

Irish Farmers Prepare for Brexit Season, and an Election
Paul Hannon – The Wall Street Journal
Ireland has avoided its Brexit nightmare of a U.K. border dotted with customs posts, but Britain’s withdrawal from the European Union threatens to aggravate problems that could cost Irish Prime Minister Leo Varadkar his job this weekend. Ireland’s rural-urban divide, which Brexit threatens to widen, a housing shortage and a troubled health-care system are all weighing on Ireland’s first national election since the U.K. voted to leave the bloc in 2016, with Sinn Féin, which once acted as the political wing of the Irish Republican Army, gaining ground.

Britain out, EU centering on Balkans for enlargement
Raf Casert – Associated Press
Down one country with the departure of Britain, the European Union’s executive proposed a new system for adding members in a move made all the more urgent by the recent objections to open enlargement talks with two Western Balkan nations. The European Commission proposed on Wednesday to streamline rules to avoid further delaying the start of access negotiations when aspiring members have met the conditions for such talks.

EU-UK deal or no deal? Brussels baffled by Boris Johnson’s threat to walk away
Jim Brunsden – FT
Michel Barnier walked into a packed European Commission press room on Monday to make Boris Johnson an offer he thinks the prime minister cannot refuse.


Steve Cohen’s Talks to Acquire Mets Have Collapsed, NY Post Says
Eben Novy-Williams – Bloomberg
Hedge fund billionaire Steve Cohen is ending talks to buy the New York Mets, the New York Post reported, walking away from a deal that some fans had hoped would give new life to the long-suffering franchise.

Jailed Banker’s Wife Loses U.K. Fight Over Freeze on House
Jonathan Browning – Bloomberg
Hajiyeva was first target of U.K.’s unexplained wealth orders; Hajiyeva spent $20.9 million without clear funding source
The wife of a jailed Azeri banker lost her fight to overturn the U.K.’s first unexplained-wealth order — a tool heralded by police that forces individuals to prove that their funds are from legitimate sources.

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Past JLN Newsletters

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