OCC Board of Directors Appoints Andrej Bolkovic as CEO-Elect

Jun 23, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Yesterday the OCC named Andrej Bolkovic as CEO-elect. He will take over for John Davidson in October. Davidson will leave in the first half of 2023, so the two will work together and Davidson will hand off the job “to facilitate a smooth transition of responsibilities,” the OCC press release said.

I learned that Davidson was to be replaced back in April and that the OCC board would be forming a CEO search committee. However, my questions about this were denied by OCC corporate communications sources. I must not have asked the “exact” right question to get the answers I needed.

The tip I received was from a credible source, who backed up the tip with people to confirm the information. After the vehement denial of the CEO change in the works by the OCC staff, I decided to go to the Options Conference and ask Davidson himself directly. And so I did.

As luck would have it, Davidson joined the table my wife and son and I were sitting at during the Tuesday night outside dinner party. Davidson told me he had another year on his contract, he was past 65 (by a couple of years) and it was time for someone younger to take over and finish the work he started. He also named a couple of people I should talk to about the ongoing search, though my efforts were rebuffed when I brought up the subject to the first one mentioned.

I did not break the news that the CEO of the OCC was going to be replaced based on unnamed sources. It would have been a great scoop for JLN. I greatly appreciated the tip. My problem is that I have too much respect for the OCC and for Davidson and wanted to try to get this story the right way. I did get a heads up 10 minutes before the press release came out that I read an hour late. And now you know the story I did not share with you.

The NFA has posted the following to its website:

June 22, 2022: NFA has learned of a potentially malicious copycat domain: “cases-nfa.futures.org.” Any email originating from this domain and purporting to be from NFA is not legitimate and should be ignored. All legitimate emails from NFA will come from an address ending in “@nfa.futures.org,” “nfanotifications@mailer.nfa.org” or “@nfa-swaps-proficiency-requirements.moonami.com” in the case of NFA’s Swaps Proficiency Requirements. NFA reminds all Members to diligently scrutinize the sender’s address for any email purportedly sent by NFA.

HKEX celebrated its 22nd listing anniversary with a ceremony hosted by its Chair, Laura M Cha, and CEO Nicolas Aguzin in their newly refurbished Connect Hall. Also attending were the guest of honor, Hong Kong’s Chief Executive Carrie Lam, as well as Hong Kong Financial Secretary Paul Chan and others.

Goldman Sachs announced via LinkedIn that it will be an official partner of the McLaren Formula 1 team. This is Goldman’s effort to accelerate progress towards McLaren Racing’s net-zero goals.

Former CFTC Chairman J. Christoper Giancarlo was the subject of a NFT by CGPantheon powered by the Solana Foundation as part of its 1000 Innovative Minds Collection for girls’ education. Giancarlo is pictured in armor in a viking longboat. He said on LinkedIn he would have preferred it had been a gondola.

If CFTC Commissioner Caroline D. Pham comes over for dinner soon, make sure she takes off her shoes before she comes into the house. She just finished up a farm tour in Nebraska for a deep dive into agriculture and farming, and who knows what is on her shoes. I applaud her getting out into the country and meeting some of the people for whom our markets were created. Nice move, commissioner.

Lionel Laurent, the always interesting columnist at Bloomberg, has a timely piece this morning titled “Crypto Is Not Too Big To Fail, Even With Help From FTX; The billionaire-run platform’s support for distressed peers looks more like a sticking plaster than a credible backstop.”

We are not into the dog days of summer yet, but a bloodhound named Trumpet won the Best in Show award at the Westminster Dog Show. This was the first time a bloodhound came away with this prize. Let’s just say, this hound could hunt.

I will be dead in less than 10 years, according to a story in USA Today that says people who can’t stand on one foot for more than 10 seconds are twice as likely to die in the next decade. With my neuropathy, I am lucky if I can stand on two feet for 10 seconds without falling. I can lie on the floor for more than 10 seconds without being able to get up, though. At least I have that going for me.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


TT’s Todd Talks Talos, Crypto, What Comes Next and Energizing a Motivated Team

Trading Technologies CEO Keith Todd made a deal with Talos, a provider of institutional digital asset trading technology, and John Lothian News wanted to know more about it and what it meant for TT and its customers.

Watch the video »


SEC Rule to Promote Order Competition the Focus of Hitesh Mittal JLN Interview

Hitesh Mittal, the CEO and founder of BestEx Research, talked with JLN in a video interview over Zoom, reflecting on the recent comments by SEC Chairman Gary Gensler about promoting more competition in the market.

Watch the video »


Wall Street Gets Ready to Rumble Over Stock-Trading Rules; The SEC’s Gary Gensler is proposing big changes to the system that’s fueled the rise of free brokerage apps.
Katherine Doherty and Lydia Beyoud – Bloomberg
A battle is brewing in Washington and on Wall Street over how stocks get traded. At issue is whether retail investors get the best bang for their buck. The controversy may be puzzling to anyone outside the industry, given that commissions have fallen to zero on trading apps and discount brokerage services. But US Securities and Exchange Commission Chair Gary Gensler is asking whether those trades come with hidden costs, or if it’s even possible to tell under the current system whether retail investors are getting the best prices when they buy and sell stocks. “The markets have become increasingly hidden from view,” Gensler said in a June speech delivered remotely to an investment banking conference in New York. As he previewed a sweeping proposal for new rules, finance executives in the room sat furiously typing on their phones and shaking their heads, while neglecting their chicken entrees.

****** This story is a good prep for the video interview we published today with BestEx Research founder and CEO Hitesh Mittal. ~JJL


Balancing on one leg for 10 seconds may predict likelihood of living or dying, study says
Scott Gleeson – USA Today
You’re twice as likely to die in the next decade if you’re currently unable to balance on one foot for 10 seconds, according to a new study. Conversely, the study suggests that your ability to balance on one foot points to longer life expectancy. The peer-reviewed study conducted by Brazilian researchers, published Tuesday in the British Journal of Sports Medicine, determined that a person’s balance ability can be preserved into the sixth decade of one’s life – meaning it’s more broad of an indicator of life expectancy across age ranges than aerobic fitness, flexibility or muscle strength. Dr. Claudio Gil Soares de Araújo, the lead author of the study and a sports and exercise physician at the Exercise Medicine Clinic Clinimex in Rio de Janeiro, said poor balance is linked to frailty in older adults and one’s musculoskeletal fitness is a prime indicator of declining health.

******There was a time when I could do this, but then I had a lot more wax left on my candle.~JJL


Abby Joseph Cohen Says Era of Everything Going Up Is Over; Fundamentals, security selection matter again as markets slide; Investors have already priced in ‘a mild recession,’ she says
Elaine Chen and Tom Keene – Bloomberg
With fervor in markets receding, investors will need to critically focus on fundamentals and security selection to ride out the turbulence, Abby Joseph Cohen said. The S&P 500 Index is poised for its worst first half since Richard Nixon’s presidency as red-hot inflation and Federal Reserve interest-rate hikes batter stocks. Amid the current selloff, picking out securities will be important, Cohen, a professor at Columbia Business School and former senior investment strategist at Goldman Sachs Group Inc., said in an interview on Bloomberg Surveillance Wednesday.

******Everything can’t go up, something has to go down, like my bank account as I pay for higher prices.~JJL


UK Gives 100 Days to Spend Last £14.5 Billion of Paper Banknotes; Bank of England says paper £20 and £50 notes will be withdrawn; UK central bank has issued more durable currency on polymer
David Goodman – Bloomberg
The Bank of England said people holding £14.5 billion in old paper banknotes have just 100 days to spend or deposit the money before it becomes worthless. The UK central bank said about 477 million of Britain’s last remaining banknotes printed on paper remain in the hands of the public but will cease to be legal tender after Sept. 30. “The majority of paper banknotes have now been taken out of circulation, but a significant number remain in the economy,” said Sarah John, chief cashier at the BOE. The paper notes are the last of their kind in the UK. The central bank started printing on a plastic-like polymer that’s more durable and has improved security features.

***** At least it will make interesting wallpaper.~JJL


Ohio State University officially wins trademark for the word ‘THE’
David K. Li – NBC News
Ohio State University won a yearslong legal battle for “THE” on Tuesday, gaining trademark protection for a three-letter article that plays an outsize role in school identity. Surely to the sighs and eye rolls of other Big Ten rivals, the U.S. Patent and Trademark Office approved OSU’s application for “THE,” specifically for use on branded products like T-shirts and caps that only feature the single word.

***** I can remember when I was in a meeting with representatives of The New York Stock Exchange back in the day and they referred to the NYSE as “The Exchange.” Of course, the nickname is the Big Board, but that is slang. The NYSE people were very adamant about how it was referred to at this meeting.~JJL


Wednesday’s Top Three
Our top story by a wide margin Wednesday was Meet the Billionaire and Rising GOP Mega-Donor Who’s Gaming the Tax System from ProPublica, about Susquehanna founder Jeff Yass. Second was Citadel Securities: A day in the life of a trader in NYC, from efinancialcareers. Third was The Fire Burning Beneath Crypto’s Meltdown, from The Wall Street Journal.


MarketsWiki Stats
26,863 pages; 239,018 edits
MarketsWiki Statistics


Lead Stories

OCC Board of Directors Appoints Andrej Bolkovic as CEO-Elect; Bolkovic will succeed CEO John Davidson, who will retire in the first half of 2023
OCC, the world’s largest equity derivatives clearing organization, today announced that its Board of Directors has appointed Andrej Bolkovic, currently CEO of Akuna Capital, LLC, as its next Chief Executive Officer, replacing John P. Davidson who will retire in the first half of 2023. Bolkovic will officially join OCC as CEO-Elect on October 3, 2022, and will work closely with Davidson, the Board of Directors and Management Committee to facilitate a smooth transition of responsibilities.

SEC to Propose New Rules for Online Brokers’ Game-Like Features; Regulator may announce new regulations as soon as October; Gary Gensler has raised concerns over retail-trading apps
Lydia Beyoud – Bloomberg
The US Securities and Exchange Commission plans to propose new rules this year to crack down on the behavioral prompts and data analytics used by some online stock brokerages and investment advisers. The agency’s bid to impose restrictions on trading and investing apps popular with retail traders follows a review by the SEC of “digital engagement practices,” which critics refer to as the gamification of investing. Wall Street’s main regulator said last August that it was concerned that game-like features are putting investors at risk by encouraging excessive trading.

Germany Warns of Lehman-Like Contagion From Russian Gas Cuts
Arne Delfs and Vanessa Dezem – Bloomberg
Germany warned that Russia’s moves to slash Europe’s natural gas supplies risked sparking a collapse in energy markets, drawing a parallel to the role of Lehman Brothers in triggering the financial crisis. With energy suppliers piling up losses by being forced to cover volumes at high prices, there’s a danger of a spillover effect for local utilities and their customers, including consumers and businesses, Economy Minister Robert Habeck said Thursday after raising the country’s gas risk level to the second-highest “alarm” phase.

Germany Looks at Potential Rationing of Natural Gas After Russia Cuts Supply; The potential move could push Europe’s biggest economy into a recession
Bojan Pancevski, Georgi Kantchev – WSJ
The German government moved closer to rationing natural gas on Thursday after Russia cut deliveries to the country last week in an escalation of the economic war triggered by Moscow’s invasion of Ukraine. Berlin triggered the second of its three-step plan to deal with gas shortages after the Kremlin-controlled energy giant Gazprom, the country’s biggest gas exporter, throttled delivery via the Nordstream pipeline by around 60% last week. Germany’s gas reserves are at 58% capacity, and the government now expects a gas shortage by December if supplies don’t pick up, Economy Minister Robert Habeck said.

Hunger Is Getting Worse Since the Pandemic; As war and inflation make food more expensive and harder to get, US lawmakers must accept that hunger isn’t a passing problem but an enduring reality for the country.
Amanda Little – Bloomberg
Covid-19 made hunger a critical concern as millions of Americans lost their jobs, families were homebound and supply chains disrupted. Now inflation and war are making it worse. Ensuring that people had enough food to feed their families wasn’t a partisan issue during the pandemic, when Congress approved relief measures to boost aid. And it shouldn’t be a partisan issue now, as economic and environmental pressures far beyond the control of any individual make food insecurity an enduring and defining crisis of our time.

Can Crypto’s Richest Man Stand the Cold? Changpeng Zhao built Binance into the world’s biggest digital currency exchange. Now he faces a looming regulatory crackdown in a brutal crypto winter.
Justina Lee and Max Chafkin – Bloomberg
During the first few months of this year—back when buying digital tokens named after dog memes was still seen, at least in some of the most forward-thinking circles, as a perfectly reasonable way to participate in finance’s bright new future—the cryptocurrency exchange Binance promoted a new, low-risk way to get in on the action. It urged its customers to invest in something called TerraUSD. The token was what’s known in the trade as a “stablecoin,” a type of cryptocurrency that functions a bit like a savings account and promises to always be worth $1. Binance told customers who used its service to buy, sell, and invest in various cryptocurrencies that this particular stablecoin offered something special: the promise of annual returns of almost 20%. TerraUSD, Binance suggested to customers, could be somehow both “safe” and “high yield.”

LinkedIn Lists OCC in Top Companies to Work for in Financial Services
OCC, the world’s largest equity derivatives clearing organization, today announced that it was recognized by LinkedIn as a 2022 Top Company in Financial Services for the first time ever. LinkedIn’s annual Top Companies: Industry Edition List highlights the top 25 companies in which to grow a career across nine different industries in the U.S., serving as a resource for professionals at every stage of their career journey.

FTX Unit Buys Stock-Clearing Platform Embed to Expand Equity Trading Infrastructure
Michael Bellusci – Coindesk
FTX.US liked working with stock-clearing company Embed Financial Technologies so much, it bought the company. FTX.US said Tuesday it was buying Embed as part the expansion of its equities division, FTX Stocks. No deal terms were provided in an announcement Tuesday.

Retail Army Defies Bond Logic to Drive Revlon Stock 600% Higher; In an echo of meme-stock mania, individual investors are piling into Revlon shares even after the troubled cosmetics company filed for bankruptcy.
Claire Ballentine and Jeremy Hill – Bloomberg
With Revlon Inc. spiraling toward bankruptcy last week, Justin Brain, an insurance salesman in South Florida, saw a rare opportunity to make a killing. Brain, 37, snapped up $40,000 of stock in the cosmetic giant.

Small Businesses Plead With SEC to Show Restraint on Climate Rules; While larger companies gave the SEC’s climate proposal mixed reviews, comment letters from small business groups had a tone closer to existential dread
Richard Vanderford – WSJ
Small businesses, normally outside the domain of the Securities and Exchange Commission, say the regulator’s proposal on climate disclosures will saddle them with a compliance burden they won’t be able to handle. Farms, independent manufacturers and other small businesses that don’t trade on stock exchanges normally don’t fall within the SEC’s purview; the agency regulates public companies and some other market participants. But small firms fear they will be forced to cough up heaps of information on their roles, however small, in emitting carbon because the SEC wants large public companies to catalog emissions in their entire supply chains.

Stakeholder Capitalism Isn’t Working as Planned; It’s a prescription for culture wars, political backlash, managerial paralysis and human-resources nightmares. And it’s anything but nice.
Virginia Postrel – Bloomberg
Wouldn’t it be nice if companies cared less about profits and more about the social good? It’s popular to think so. Stakeholder capitalism is fashionable. Shareholder capitalism is not. Many high-profile business leaders and academics now condemn the idea Milton Friedman laid out in a famous 1970 New York Times Magazine essay: a corporate executive is an employe of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.

Crypto Fund Three Arrows’ Troubles Spill Over to Exchange; Voyager Digital plunges after disclosing $660 million exposure; Contagion-risk implications cloud prospect of crypto sector
Yueqi Yang – Bloomberg
The fallout from troubled crypto hedge fund Three Arrows Capital Ltd. has reached Voyager Digital Ltd., sending shares of the crypto exchange down 51% in Toronto trading with analysts raising the prospect of further damage. Voyager said it may issue a notice of default to Three Arrows for failure to repay a loan, the exchange disclosed in a statement. The broker’s exposure to Three Arrows includes 15,250 Bitcoin and $350 million of stablecoin USDC, worth roughly $660 million based on Bitcoin’s price on Wednesday in New York. New York-based Voyager, which offers crypto trading, staking — a way of earning rewards for holding certain cryptocurrencies — and yield products, is listed on the Toronto Stock Exchange and its shares are traded over-the-counter in the US. It had about $5.8 billion of assets on its platform as of quarter-end in March.

Hedge Fund Manager Taunts Apes With AMC Short Position: ‘I Dare All The Meme Stock Maniacs To Try To Hurt Us’
Adam Eckert – Benzinga
The AMC Entertainment Holdings Inc apes must be pounding their chests after AQR Capital Management’s Cliff Asness called them out on Wednesday. What Happened: The hedge fund manager announced that he has a small short position in AMC on CNBC’s “Closing Bell.” If that wasn’t enough to get the attention of the retail trading crowd who call themselves apes and look to feast on short sellers like bananas, his next proposition surely provoked the primates. “I dare all the meme stock maniacs to try to hurt us,” Asness said.

Ousted Barclays CEO Turns £1 Million Into £600 Million Startup; One-time establishment banker Antony Jenkins is now looking to upend the finance industry
Harry Wilson – Bloomberg
In an office not far from the Houses of Parliament, Antony Jenkins is plotting the future of global banking. His ambition is to serve one tenth of the world’s population — or one billion people — by providing the technology behind everything from checking savings to loans. Jenkins’ business, 10x Banking Technology, is a player in London’s burgeoning fintech scene. It was valued at about £600 million ($756 million) at its most recent funding about a year ago, with Jenkins’ own stake worth £200 million. Among its backers are JPMorgan Chase & Co., Blackrock Inc. and Ping An Insurance Group Co.

The Age of Credibility for Central Banks Is Over; Inflation blunders have destroyed the trust that’s anchored the global financial system since the end of the gold standard.
John Authers – Bloomberg
Monetary regimes don’t fall often. Half a century ago, in 1971, Richard Nixon ended the Age of Gold by formally eliminating the dollar’s peg to the precious metal. Since then, the dollar and other currencies have rested on fiat—they’re worth something because governments say they are. You could call this the Age of Credibility. In place of gold, currency’s anchor is the trust in the central banks that issue them. Now credibility appears to be at an end. With central banks desperately ripping up their playbooks to try to rein in inflation that’s veered far beyond target, they’re admitting they’ve been wrong, and giving up on trying to steer the markets on their plans for the future.

The Global Currency Wars Have Begun Because, Well, Inflation; Desperate to tame rising prices, central bankers are vying to boost domestic buying power at the expense of exporters.
Amelia Pollard and Saleha Mohsin – Bloomberg
The European Central Bank’s Isabel Schnabel started it. In February she flashed a chart showing how much the euro had weakened against the US dollar. Two months later, the Bank of Canada’s Tiff Macklem bemoaned the decline of the Canadian dollar. Swiss National Bank President Thomas Jordan suggested he’d like to see a stronger franc.

What’s a Reverse Currency War and Who’s Fighting One?
Amelia Pollard and Libby Cherry – Bloomberg
Currency wars flare up from time to time, usually during moments of economic tumult. They typically involve countries jockeying for a competitive export edge by driving down their currencies. What’s less common is a so-called reverse currency war. But it’s possible that one could be brewing, whether as the result of deliberate policies or as a side effect of steps central banks are taking to fight inflation. In particular, the sharp rise in the value of the dollar as the US Federal Reserve pursues its most aggressive interest-rate hikes in almost 30 years is posing challenges to currencies and central banks around the world.

US banks saw trading revenues jump almost 50% for Q1; The cumulative trading revenue of US commercial banks and savings associations hit $10.6 billion in the first quarter of the year, according to OCC data.
Laurie McAughtry – The Trade
US commercial banks saw their cumulative trading revenue reach $10.6 billion in the first quarter of this year, a jump of 47.8% ($3.4 billion) compared to the previous quarter, according to the latest data released this week from the Washington-based Office of the Comptroller of the Currency (OCC), although just a 0.1% ($10 million) bounce from the first quarter in 2021.

Work From Home to Save Fuel, Pakistan’s Central Bank Tells Staff; Employees asked to hold virtual meetings, cut down on air con; Pakistan petroleum import bill increased by 99% in 11 months
Kamran Haider – Bloomberg
Pakistan’s central bank asked its employees to work from home two days a week as the country looks to conserve fuel and ensure it doesn’t run out of dollars. In a Twitter message Thursday, State Bank of Pakistan told its staff to opt for virtual meetings, car pooling and cutting down on air conditioning. It also suspended purchases of furniture and restricted travel.

Ukraine Invasion

Estonia’s Kallas Warns of Existential Russian Threat to Baltics; NATO’s tripwire concept is outdated, the prime minister said; Bucha massacres seen as turning point for NATO strategy
Ott Tammik – Bloomberg
Estonian Prime Minister Kaja Kallas warned of the grave consequences of any future Russian aggression in the Baltics ahead of an important NATO summit next week. Speaking to journalists in Tallinn on Wednesday, Kallas said NATO’s “tripwire” strategy for defending the three Baltic countries of Estonia, Latvia and Lithuania, under which allies would arrive with reinforcements only after a Russian invasion and take back territory, was outdated after the war in Ukraine. “If you compare the size of Ukraine and the Baltic countries, then it would mean a complete destruction of our countries, of our culture,” Kallas said. “Those of you who have been to Tallinn and know our Old Town and the centuries of history and culture that is here, that would all be wiped off from the map, including our people, our nation.”

Russian Oil Disappears as Tankers Go Dark Near Azores; Unseen ship-to-ship transfers take place in mid-Atlantic; Some eastbound cargoes are also starting to vanish mid-voyage
Julian Lee – Bloomberg
Russian oil cargoes are increasingly disappearing from view in the Atlantic Ocean as sanctions against the nation’s exports ratchet up. In the past 10 days, at least three tankers have vanished from vessel-tracking systems as they approached the Azores, a tiny group of islands about 950 miles west of mainland Portugal. They probably transfered their consignments onto other vessels. Such transfers didn’t happen there before Russia invaded Ukraine, let alone out of view of satellite monitoring.

Panic Over Gasoline Prices Only Serves Putin; Adaptability needs to be the rediscovered strength of the West’s market economies.
Holman W. Jenkins, Jr. – WSJ
Actually, today’s oil price isn’t that high. The recent peak of $128, after inflation, is still $33 lower than the price in April 2011. For all the talk of Ukraine, 55% of the current increase since last December occurred prior to the Russian invasion. Even more important to note: The rise in retail gasoline has been disproportionately large in relation to the underlying oil price hike. If gasoline had risen as much in April 2011, consumers would have paid the equivalent of $6.72 a gallon (in fact, they paid about $5 in 2022 dollars).

Russia seeks new fuel markets in Africa, Middle East as Europe turns away
Russia is increasing gasoline and naphtha supplies to Africa and the Middle East as it struggles to sell fuel in Europe, while Asia is already taking bigger volumes of Russian crude, Refinitiv Eikon data showed and sources said. The development is likely to increase competition for Asian customers between Russia and other big fuel exporters – Saudi Arabia and the United States – which are the top three suppliers to Asia.

Russia sent dollar-Eurobond coupon payouts to NSD in roubles – Fin Ministry
The Russian finance ministry on Thursday said it had fulfilled its obligations on two issues of dollar-denominated Eurobonds “in full” by sending 12.51 billion roubles ($234.5 million) in coupon payments to the National Settlement Depository (NSD).

Foreign Firms’ Russian Assets Are Lousy Deals for Locals; Most are essentially caretaker arrangements that represent, for both sides, bets on normalization, with Russian buyers bearing much of the risk.
Leonid Bershidsky – Bloomberg
The full or partial curtailing of more than 1,000 foreign companies’ operations in Russia since Vladimir Putin ordered an invasion of Ukraine on Feb. 22 has provided perhaps the most spectacular evidence of the damage the imperialist adventure has inflicted on Russia. There is, however, another side to it: It’s a potential bonanza for Russians willing to take over the assets orphaned by the Western stampede for the exits.

Crypto Is Not Too Big To Fail, Even With Help From FTX; The billionaire-run platform’s support for distressed peers looks more like a sticking plaster than a credible backstop.
Lionel Laurent – Bloomberg
“Turtles all the way down” is a handy phrase for describing how the human mind creatively fills in holes of logic. It allegedly springs from one person’s attempt to justify to the philosopher Bertrand Russell her belief that the world was floating on a giant turtle by imagining another turtle underneath it, and then another, to infinity.

A ‘Price Cap’ on Russian Oil — What Would That Mean?
Julian Lee – Bloomberg
Since the US and its allies decided to stop buying Russia’s oil, there’s been little sign that the measure is inflicting the kind of pain that might force President Vladimir Putin to rethink his war in Ukraine. Plenty of other countries are still buying Russian crude, and a surge in prices has softened the blow from the sanctions by bringing Moscow enough revenue to stave off economic collapse. So the US is pushing a new idea: make Russia sell its oil so cheaply that it can no longer afford to wage war at all.

Russia’s gas squeeze: a moment of truth for Europe; EU countries are turning back to coal but they should be speeding up the transition to renewables
The editorial board – FT
Russia is tightening its natural gas squeeze on Europe. Moscow has cut capacity through the main pipeline to Germany by 60 per cent since last week, claiming EU sanctions have caused maintenance problems — but has failed to step up supplies via other routes. Many capitals believe the Kremlin is using energy to exert pressure as its troops wage a war of attrition in Ukraine. European gas prices have soared 50 per cent in the past week and the shortfalls are making it hard to refill gas storage before the wintertime. Ten EU states have declared early warnings of a gas emergency. The International Energy Agency has said the continent should be ready for a complete cut-off of Russian gas exports this winter.

Putin warns ‘Satan-2’ nuclear missiles could be deployed in months
Snejana Farberov – NY Post
Russian President Vladimir Putin bragged this week that Moscow’s newest nuclear missile, dubbed “Satan-2” by NATO, could be ready for deployment by the end of the year. The Kremlin strongman issued the warning while addressing graduates from Russia’s military academies Wednesday. Putin boasted that the 14-story-tall intercontinental ballistic missiles, which are officially known in Russia as “RS-28 Sarmat,” have no competition in the world.

Russian commodities traders are scrambling to set up shop in Dubai after fleeing Switzerland
Phil Rosen – Markets Insider
Thanks to war-time sanctions in Switzerland, Russian commodities traders who normally work within Swiss territory are rushing to set up business operations in Dubai. According to Bloomberg, Switzerland’s ramp-up of restrictions is making it increasingly difficult for commodities traders to use the country as a base to deal with Moscow. It has spurred an exodus to Dubai as traders leave the nation that has long been home to middlemen matching Russian producers and their buyers.

Exchanges, OTC and Clearing

A Cautionary Tale about Basis Risk: Liquidity and Credit Spreads Leading into the 75-bps
Tightening on June 15th, 2022
Leading into and following June 15th’s FOMC meeting, the American Financial Exchange’s Overnight Unsecured AMERIBOR® Loan Market has experienced a nearly threefold surge in volume in week-over-week trading, touching levels above $2 billion in daily volume after a period of relatively light demand. The primary driver of this rapid increase in demand was based on an anticipated rate increase by the Fed. This resulted in an early upwards repricing in other sources of liquidity such as SiFis and the Federal Home Loan Banks (FHLBs). We had numerous members come onto the platform – from across the country, particularly out of the east and west coasts – with single trades reaching $400 million and de minimis impact on price. This liquidity is facilitated by our large web of counterparty credit lines – about 1,800 lines approaching $80 billion in new credit lines since inception

American Financial Exchange Publishes Research Note on First Half 2022 Performance of AMERIBOR® Overnight Benchmark
The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American financial institutions, published today a research note on the performance of the AMERIBOR® overnight rate for the first half of 2022.
The research piece, titled, “A Cautionary Tale about Basis Risk: Liquidity and Credit Spreads Leading into the 75-bps Tightening on June 15th, 2022” provides statistical evidence the primary driver of this rapid increase in demand was based on an anticipated rate increase by the Fed. This resulted in an early upwards repricing in other sources of liquidity such as SiFis and the Federal Home Loan Banks (FHLBs).

BME brings together ten small and mid-cap companies with international investors in Paris
This 18th Spring European Midcap Event resumes its in-person format this year and will have investors from France, United Kingdom, Germany and Switzerland. The 18th edition of the Spring European Midcap Event starts today. The event, which is being held in Paris today and tomorrow, returns this year to the face-to-face format after two virtual-only editions due to the pandemic. With the assistance of BME, ten Spanish medium and small capitalisation listed companies will meet during these two days with investors coming mainly from France (45%), United Kingdom (15%), Germany and Switzerland.

Cboe Signs Licensing Agreement with Validus, Creating Framework for Index Innovation; Agreement furthers Cboe’s growing global index business and track record in index innovation; Enables Cboe to exclusively develop and offer new indices and solutions based on select Validus’ proprietary methodologies
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced it has signed a licensing agreement with Validus Macro Strategies, a provider of rule-based options-based solutions for institutional investors, that creates the framework for Cboe and Validus to collaborate on the development of new indices and solutions.

EBS Market on CME Globex Notice
CME Group
Topics in this issue include: Critical Information; Product Changes; Announcements and Additional Resources.

Eurex Bitcoin Futures exceed EUR 100 million traded notional since inception
So far, 2022 marked quite an impressive year for the BTCetc ETN Futures. The traded notional exceeded EUR 100 million compared to last year’s EUR 20 million (+408%).

Australian Gas Products
FEX Global (FGL) is listing four cash-settled monthly Gas Futures Contracts
against Australian Energy Market Operator (AEMO) reference prices for the
Victorian Declared Wholesale Gas Market (DWGM) and the Short Term Trading
Markets (STTM) for Adelaide, Brisbane and Sydney. These new products will be
launched on 11 July 2022 commencing with a July 2022 spot month and with a
24 month series available.

Shanghai-Hong Kong stock connect – end-to-end testing on the migration to new shanghai stock exchange trading gateway enquiry:
China Connect Exchange Participants (CCEPs) are requested to note that Shanghai Stock
Exchange (SSE) has published the technical guide (in Chinese only) for introducing a new trading gateway which will also be applicable for northbound trading of stock connect. Subject to market readiness, the Exchange will migrate Orion Trading Platform – China Stock Connect (OTP-CSC) to the new trading gateway. The effective date will be further announced.

Trading by Type of Investors

On the entry into force of the documents of the Moscow Exchange
Please be informed that June 27, 2022 is determined as the date of entry into force of Part I. General part, with the exception of paragraph 1.3.8 of subsection 1.3 “Schedule for the provision of services”, of the Rules for trading on the stock market, the deposit market and the loan market, approved by the decision of the Supervisory Board of PJSC Moscow Exchange dated June 20, 2022 (Minutes No. 2) .

On June 23, 2022, 3 deposit auctions of the Territorial Development Fund will be held

Nasdaq Announces Results from 2022 Annual Meeting of Shareholders
Ten Directors Re-elected; Nasdaq Board Re-elects Michael R. Splinter as Chairman of the Board
Nasdaq, Inc. (Nasdaq: NDAQ) shareholders elected all nominated directors at the company’s Annual Meeting of Shareholders on Wednesday, June 22, 2022. All directors will serve one-year terms. The elected board members are:

TMX Group Limited announces release date for Q2 2022 financial results and analyst conference call
TMX Group Limited will announce its financial results for the second quarter ended June 30, 2022 in the evening of Thursday, July 28, 2022. An analyst conference call to review the results will be held on Friday, July 29, 2022 at 8:00 a.m. ET.


Clubhouse Tests Private Groups, Part of a Bid to Regain Relevance; The feature, known internally as Social Clubs or Houses, would let anyone in a group join the conversation.
Ellen Huet and Ashley Carman – Bloomberg
Clubhouse, the voice chat app that captured the attention of Hollywood and Silicon Valley early in the pandemic, is experimenting with a new feature that lets users join private groups. Testing of the tool has expanded in recent weeks, around the same time that Clubhouse reduced headcount and embarked on a change in strategy.

UK Payments Firm SumUp Reaches EUR8 Billion Valuation; Startup raises 590 million euros in debt, equity combination; Bain Capital, BlackRock and Crestline among investors
Silas Brown – Bloomberg
SumUp has achieved an 8 billion euro ($8.4 billion) valuation in its latest funding round, raising 590 million euros in a deal split between debt and equity in a bid to develop new products and gain clients.

Data sharing network Glimpse Markets goes live; The bonds data sharing network has gained significant traction with the buy-side in preparation for its launch.
Annabel Smith – The Trade
Data sharing network, Glimpse Markets, has gone live. The network has gained significant traction with the buy-side in preparation for its launch with major firms NN Investment Partners, Invesco, Columbia Threadneedle, Carmignac and Quoniam all joining it in the last year and PGGM, Allianz Global Investors, Bluebay Asset Management, Cowen, Exoé, Federated Hermes, and Natixis TradEx Solutions voicing their support.

TS Imagine to offer regulated crypto trading through connection to Coinbase Prime; The move will allow institutional clients to gain improved efficiencies and to trade cryptocurrencies in a safe, regulated way.
Wesley Bray – The Trade
TS Imagine has successfully connected with digital assets prime broker Coinbase Prime to provide institutional clients with a fully regulated method of trading cryptocurrencies. Clients of TS Imagine are now able to connect to Coinbase Prime through the all-asset execution and order management system, TradeSmart, alongside gaining access to the full range of crypto-trade functionalities native to the TradeSmart platform.

Northern Trust enhances tool to improve transparency in the investment analysis process; The firm’s improved Investment Analysis module of its Front Office Solutions platform will increase data capacity, improve performance, and offer more flexibility and visualisation for custom reporting.
Wesley Bray – The Trade
Northern Trust has bolstered its Front Office Solutions platform’s Investment Analysis module to improve decision-making for institutional investors managing sophisticated portfolios, including alternative investments. The web-based solution has been improved to better meet the needs of complex asset allocators who require a unified capability to support their investment strategy – with improvements including increased data capacity, faster performance, and more flexibility and visualisation for custom reporting.


TV writer Peter Kosminsky: ‘You see the effects of cyber warfare everywhere’; The creator and cast of GCHQ-set drama ‘The Undeclared War’ on why their new series is a cautionary tale
Gabriel Tate – FT
Even amid the glut of the streaming era, a Peter Kosminsky series is an event. Shows by the maker of The Promise, Wolf Hall and The State take longer to make, attract remarkable casts (often including Mark Rylance), spark debate and gather awards (seven Baftas so far for Kosminsky). His new spy drama The Undeclared War already looks set to tick all those boxes.

Bolt-On vs Baked-In Cybersecurity
Herb Lin – Law Fare
A few weeks ago, the annual RSA Conference met in San Francisco. The conference is among the world’s largest cybersecurity events, and it thus provides a useful opportunity to reflect on current issues in cybersecurity.

CISA advisors recommend agency cut onboarding time to 90 days
Justin Doubleday – Federal News Network
The Cybersecurity and Infrastructure Security Agency is looking to streamline and speed up its hiring process based upon a suite of recommendations from agency advisors who found CISA is not moving quickly enough to address a critical dearth of cyber talent.
CISA’s Cybersecurity Advisory Committee approved its first tranche of recommendations during a meeting Wednesday. The federal advisory committee met for the first time late last year. The personnel recommendations approved during the latest meeting were issued by the “Transforming the Cyber Workforce” subcommittee, led by Mastercard Chief Security Officer Ron Green.

How the board can help in the fight against cybersecurity threats
Dan Reilly – Fortune
With the proliferation of malware and a rise in threats related to Russia’s invasion of Ukraine, it’s no wonder that businesses are more concerned with cybersecurity than ever. As attacks grow on a yearly basis, companies are having to rethink not only their responses to data breaches and other digital crimes, but also the ways their boards are structured to place cybersecurity near the forefront of operations.


Stablecoin Rules Are a Hot Topic for People in Money Markets; Funds face new round of SEC clampdowns to avert market turmoil; Stablecoin issuers hold similar assets, face fewer disclosures
Alex Harris – Bloomberg
Money-market funds — facing a third round of industry clampdowns since the financial crisis — are wondering whether Washington should pay more attention to less transparent investment vehicles to avert turmoil in short-term lending markets. Cryptocurrency stablecoins, for example, are often backed by assets including Treasury bills and short-term corporate IOUs. They have been referred to as money-fund-like instruments, but aren’t held to the same disclosures and requirements as the $4.5 trillion industry, according to some money managers speaking at the Crane’s Money Fund Symposium in Minneapolis on Tuesday. That mismatch could pose a risk to financial market stability with digital-asset prices tumbling, they say.

Mystery Surrounds $500 Million Outflow From Bitcoin ETF; Purpose Bitcoin ETF saw about $500 million in outflows; Fund operator declines to comment on client activity
David Pan and Vildana Hajric – Bloomberg
North America’s first Bitcoin exchange-traded fund is at the center of a crypto-market guessing game after it saw record one-day outflows of $500 million last week. The withdrawals from the Purpose Bitcoin ETF (ticker BTCC) equaled about 24,510 Bitcoin, or around 51% of its asset under management on Friday, according to data compiled by Bloomberg and analysts. “Obviously, this one was more of a larger outflow in this case, and, to me, this is more of a reflection of investors’ views on the market,” said Vlad Tasevski, chief operating officer at Purpose Investments. He added that the company does not have direct visibility into who’s doing the trades given how the ETF’s structure works. “Even if we knew, typically we don’t actually comment on what our clients are doing.”

Once-Dull Crypto Strategies Are Now Shining in the Bear Market; Crypto funds with no directional bets are gaining traction; BlockTower, Nickel both see increased demand from investors
Muyao Shen and Vildana Hajric – Bloomberg
As the “to the moon” refrains quiet down, crypto is seeing increased demand from hedge funds in a trading strategy that does not take directional views on the market. There’s no question that 2022 has been a tough year for crypto: Bitcoin’s down 50%, and digital assets have shed more than $1 trillion as central banks around the world tighten monetary policy to combat inflation. But funds like Miami-based BlockTower Capital and Nickel Digital Asset Management, which utilize so-called market-neutral strategies, said they are still notching positive returns. BlockTower Capital’s market-neutral fund, which manages more than $100 million, has about a 3% return so far this year. And London-based Nickel Digital, with $300 million in assets under management, advanced 0.49% in May when the collapse of Terra sent shock waves throughout the rest of the market and dragged a wide-encompassing index of digital assets down 25%.

Brussels’ Fledgling Crypto Industry Flexes Its Muscles
Jack Schickler – Coindesk
The crypto community in the city of Brussels is attempting to amplify the voice of its fledgling crypto ecosystem, as European Union negotiators reach the closing stages of landmark licensing laws for 27 countries.

TerraUSD and the Nats: A Cautionary Tale in Crypto Sponsorship Despite Terra’s collapse, the Washington Nationals still sport its logo
Victoria Vergolina – Bloomberg
The Washington Nationals baseball team didn’t have a great start to their season, and that’s not just because of their losing record. They also managed to debut a sponsorship deal with the organization behind the not-so-stable stablecoin, TerraUSD. The name of that organization, Terraform Labs, is now splashed all over billboards, uniforms, seats – everything. It might have seemed like a good play when they signed the contract, but by the time TerraUSD crashed and burned in early May, it started to look more like a strikeout.

Trevor Lawrence chides Barstool after $15M crypto-loss confusion
Ryan Glasspiegel – NY Post
No, Trevor Lawrence did not lose $15 million of his NFL signing bonus in the crypto collapse. Over the last couple years, it was all the rage for athletes — including Odell Beckham Jr. and Russell Okung — to publicize that they were taking their pay in Bitcoin or other cryptocurrencies, so a chart has been making the rounds showing how much each of them lost. A number of outlets, including Barstool Sports, covered the eye-popping figure that Lawrence’s $24 million signing bonus, allegedly taken in crypto, was now worth just $9 million — a staggering $15 million loss.

UK Has ‘Missed A Trick’ on Crypto, Minister-Turned-Adviser Says; Former official says Britain risks being left behind on digital asset trading
Sommer Saadi – Bloomberg
The UK must make moves over the next couple of months or it will lose its chance to take the lead on crypto, the country’s former Chancellor of the Exchequer Philip Hammond warned. “It isn’t too late for us to catch up and recover, but we are getting very close to the point where it will be too late.” Speaking to David Merritt and Francine Lacqua, Hammond said progress has been slow in setting clear regulation on the crypto industry. The former politician, who stepped down in 2019, is now a senior adviser to Copper.co, a London-based crypto custodian and trading services provider.

Voyager Digital shares crash after warning of Three Arrows crypto loss; Crypto broker cautions it could lose more than $650mn from hedge fund loan
Kadhim Shubber – FT
Shares of Voyager Digital crashed more than 60 per cent on Wednesday after the crypto broker revealed it could lose more than $650mn it had loaned to struggling hedge fund Three Arrows Capital. Toronto-listed Voyager said it had loaned $350mn worth of the stablecoin USDC along with 15,250 bitcoin to Three Arrows, a crypto hedge fund that failed to meet margin calls from several lenders earlier this month.

Do Kwon’s Crypto Empire Fell in a $40 Billion Crash. He’s Got a New Coin for You; Luna’s relaunch might be the ultimate act of chutzpah by the South Korean entrepreneur
Alexander Osipovich, Jiyoung Sohn – WSJ
Do Kwon used swagger and a cultlike Twitter following to build a cryptocurrency empire that collapsed last month in a $40 billion crash. Now, despite angry investors, government investigations and a crypto-market downturn, the South Korean entrepreneur is attempting a comeback. “I have great confidence in our ability to build back even stronger than we once were,” Mr. Kwon told The Wall Street Journal.

South Korea metaverse ETF performance slumps; 10 have launched in the country since October last year
Lisa Kim – FT
South Korea has seen a host of metaverse-focused exchange traded funds launched over the past eight months, but while the hype for the metaverse helped create a successful start for the new funds, their performance has slumped. The metaverse purports to be a new iteration of the internet, creating new virtual realities that may allow users to immerse themselves in a range of possible activities. New technologies and companies have emerged as the metaverse rose as an alternative to in-person work and social life last year when the Covid-19 pandemic kept many people cooped up in their homes.


US Senators Ask GitHub Users for Input on Crypto Legislation; Lummis, Gillibrand is calling for consumer protection; Bipartisan bill attempts to create a ‘regulatory framework’
Immanual John Milton – Bloomberg
Two US senators are seeking feedback on a new bipartisan crypto legislation and they are using Microsoft-owned GitHub to reach the masses. Wyoming Republican Cynthia Lummis and New York Democrat Kirsten Gillibrand, posted the legislation on GitHub, a software development and version control platform, on Tuesday. As of Wednesday 4:55 p.m. New York time there were no comments. The duo introduced the bill, which aims to regulate digital assets, on June 7. “The senators seek comments from industry stakeholders, consumers and interested parties to ensure that this landmark legislation reflects the innovative nature of the industry it regulates, while also adding confidence, trust and stability for consumers,” Lummis’ office said in a June 22 email to Bloomberg.

Big Tech Gets Caught Up in Europe’s Energy Politics; As the war in Ukraine threatens supplies, some countries are pushing for tighter control over data centers that consume vast amounts of electricity.
April Roach and Ewa Krukowska – Bloomberg
When Google wanted to build a new $1.1 billion data center in the Luxembourg countryside, the government championed the investment and helped the company to acquire the land. Authorities in the Netherlands granted Meta Platforms Inc. permission for what promised to be an even bigger one, part of the country’s ambition to become Europe’s “digital hub.”

The time to put Trump on trial is drawing near; Washington consensus is that the former president will escape prosecution, but avoiding a case would impose a high toll
Edward Luce – FT
Pity Merrick Garland. Whichever path America’s attorney-general takes — to prosecute Donald Trump or not — entails great risk. Putting the former president on trial would hasten the country’s drift towards political violence. Letting him walk away would make another coup attempt more likely. Garland is damned if he does and damned if he doesn’t. Either route could endanger US democracy.

Oil Refiners an Easy, but Odd, Target for Pump-Price Surge; Refiners are being blamed for surging fuel prices. While they are logging bumper profits, that tends to be the exception, not the rule.
Jinjoo Lee – WSJ
Gasoline prices are at records, and refiners’ spectacular profits are putting them in the hot seat. They are an obvious, but odd, target. The White House confirmed in a briefing on Tuesday that oil majors and refinery executives will meet with Energy Secretary Jennifer Granholm on Thursday to discuss ways to reduce costs for energy consumers. Last week President Biden sent a letter to oil-refinery executives, accusing them of reaping profits at the expense of consumers and urging them to expand capacity.

UK Markets Are Suffering From a Six-Year Brexit Hangover; Sterling, UK corporate bonds and stocks are struggling; Divorce from EU exacerbates inflation, supply chain problems
Naomi Tajitsu, Abhinav Ramnarayan, and Joe Easton – Bloomberg
Brexit is an albatross hanging around the neck of the UK’s markets. Britain’s shock vote to split with the European Union six years ago is still depressing the country’s assets and making it harder to recover from this year’s global market meltdown. The pound has dived nearly 10% in 2022 to be one of the worst-performing major currencies, sterling company bonds are on the longest losing run ever and years of stock malaise has made UK Plc cheap for takeovers.

Qatar to Demand EU Sign Long-Term LNG Deals If It Wants More Gas
Stephen Stapczynski and Verity Ratcliffe – Bloomberg
Qatar plans to insist on terms that will lock Europe Union countries in for two decades of liquefied natural gas purchases, a move that will complicate the bloc’s goal to cut emissions while also reducing its dependence on Russian fuel.

UK financial services co-operation with EU hit by Northern Ireland row; Lords committee finds sector has become ‘collateral damage’ in post-Brexit dispute over trade agreement
Daniel Thomas and Stephen Morris – FT
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The breakdown of regulatory co-operation between the UK and EU over financial services has become “collateral damage” in the dispute over the Northern Irish protocol, according to peers. The House of Lords committee looking at how Brexit is hitting the City of London raised concerns on Thursday about the lack of a functioning framework for UK-EU co-operation.


Singapore regulator vows to be ‘unrelentingly hard’ on crypto; Stance marks shift in rhetoric from city-state that had courted digital currency companies
Oliver Telling – FT
Singapore will be “brutal and unrelentingly hard” on bad behaviour in the crypto industry, according to its fintech policy chief, marking a stark shift in rhetoric after years of the city-state courting the sector.

Revamped DOJ Compliance Unit Takes On Greater Role in Corporate Settlements; The Justice Department’s corporate enforcement, compliance and policy unit is hiring as it assumes more responsibility in overseeing settlements with companies
Dylan Tokar – WSJ
A revamped unit in the Justice Department’s fraud section is bulking up with new staff as it takes on an expanded role in corporate settlements, an official said on Wednesday. Now known as the corporate enforcement, compliance and policy unit, the division previously focused on internal strategy and policy, including providing specialized training to the prosecutors who handle some of the Justice Department’s biggest investigations into corporations and their executives.

Keynote Address by Commissioner Caroline D. Pham, 98th Annual Convention of the American Cotton Shippers Association
We’re Finally on the Job—Now Let’s Get to Work
Thank you very much for inviting me here to speak with you all today. I’m so glad to be here, especially because my very first meeting as a Commissioner was with ACSA. It just seems right that my first keynote speech is with you all too. And it’s an honor to be part of a historic Commission, and the first full Commission in over two years—finally. I know a lot of people have been waiting for this.

Keynote Address of Commissioner Summer K. Mersinger: There’s a Little Bit of Everything in Texas
Thank you all for the opportunity to talk with you today. I am very excited to be here at the FIA Forum: Commodities 2022. It is a real honor to speak as part of this forum, and even more so as the keynote for today’s lunch. I need to give my standard disclaimer that the views I share today are my own and do not reflect the views of the Commission or my fellow commissioners. I will go ahead and add another disclaimer: this is my first keynote address. Maybe that is more of a warning than a disclaimer. But, with that in mind, if you would like to offer feedback at the end of this speech in lieu of asking me detailed, technical questions, I will have no issues with that approach.

FINRA Orders National Securities Corp. to Pay $9 Million for Attempting to Artificially Influence the Aftermarket in 10 Offerings, and Other Violations
NSC Ordered to Pay Over $625,000 in Restitution to Customers Who Bought GPB Capital Private Placements After NSC Failed to Inform Them of Material Information
FINRA announced today that it has sanctioned National Securities Corporation (NSC) approximately $9 million, including disgorgement of $4.77 million in net profits the firm received for underwriting 10 public offerings in which NSC attempted to artificially influence the market for the offered securities.

A Caution on the Limits of Authority: Statement Regarding In the Matter of The Brink’s Company
Commissioner Hester M. Peirce
SEC statement
I support the Commission’s finding that, for the reasons explained in the Order Instituting Cease and Desist Proceedings, The Brink’s Company (“Brinks”) violated Exchange Act Rule 21F-17(a)’s prohibition against taking “any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement . . . with respect to such communications.” I nonetheless again write to explain my view regarding the scope of the Commission’s authority under that rule.[1] When it adopted Rule 21F-17 in 2011, the Commission explained that “Section 21F of the Exchange Act evinces a Congressional purpose to facilitate the disclosure of information to the Commission relating to possible securities law violations and to preserve the confidentiality of those who do so.”[2] Adopting Rule 21F-17(a), as the Commission further explained, was “necessary and appropriate because . . . efforts to impede an individual’s direct communications with the Commission staff about a possible securities law violation would conflict with the statutory purpose of encouraging individuals to report to the Commission.”[3] The Commission’s authority to adopt and enforce Rule 21F-17 necessarily is limited to the scope and purpose of Exchange Act Section 21F, which is to ensure the free flow of information to the Commission.

Rip Current Rulemakings: Statement on the Regulatory Flexibility Agenda
Commissioner Hester M. Peirce
SEC statement
Chair Gensler’s Regulatory Flexibility Agenda[1] for the Securities and Exchange Commission sets forth flawed goals and a flawed method for achieving them. The agenda, if enacted, risks setting off the regulatory version of a rip current—fast-moving currents flowing away from shore that can be fatal to swimmers. Just as certain wave and wind conditions can create dangerous rip currents,[2] the pace and character of the rulemakings on this agenda make for dangerous conditions in our capital markets.

SEC Announces Spring 2022 Regulatory Agenda
Rulemakings address each part of agency’s three-part mission
The Office of Information and Regulatory Affairs today released the Spring 2022 Unified Agenda of Regulatory and Deregulatory Actions. The report, which includes contributions related to the Securities and Exchange Commission, lists short- and long-term regulatory actions that administrative agencies plan to take.

ASIC releases new and updated guidance for corporate collective investment vehicles
ASIC has today released a range of documents to support the licensing and other requirements for corporate collective investment vehicles (CCIVs). The requirements come into effect on 1 July 2022, when the CCIVs regime commences.

Cyber security must be a priority for financial sector, FMA says
The Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko has published an information sheet to help financial services firms enhance the resilience of their technology and operational systems, and meet any relevant licence obligations.

Scam alert for OMF
We are concerned that OMF that operates the website/platform https://www.omfzp.club is involved in a scam.

Changes to FCA Firm Reference Numbers (FRNs) and Product Reference Numbers (PRNs)
We currently use six-digit Firm reference Numbers (FRNs) to uniquely identify firms, and six-digit Product Reference Numbers (PRNs) to uniquely identify funds. We’re likely to reach the six-digit limit (999999) during 2023, given the volume of applications and notifications we receive.

Consumer Price Developments in May 2022
MAS Core Inflation picked up to 3.6% on a year-on-year (y-o-y) basis in May 2022,
from 3.3% in April.

Annual update to the list of Financial Services Providers under the OTC derivatives regulatory regime
The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) today issued the joint consultation conclusions on the annual update to the list of Financial Services Providers (FSP List) (Note 1) under the over-the-counter (OTC) derivatives clearing regime.

Investing and Trading

World’s Biggest Dairy Exporter Forecasts Record Milk Prices
Matthew Brockett – Bloomberg
Fonterra Cooperative Group, the world’s biggest dairy exporter, forecast a record milk price for the new season amid strong global demand. Auckland-based Fonterra on Thursday raised the midpoint of its 2022-23 forecast range by 50 NZ cents to NZ$9.50 ($6) a kilogram of milksolids, which would be the highest price it has ever paid to its 10,000 New Zealand farmer shareholders. It also issued earnings guidance of 30-45 NZ cents per share for FY23, up from 25-35 cents for the current year ending July 31.

Wall Street Faces Billion-Dollar Losses on Sinking Buyout Debt; Lenders get a reality check on bumper deals as sentiment sours; US and European banks feel the pain amid rising risk premiums
Davide Scigliuzzo and Claire Ruckin – Bloomberg
Investment bankers in the US and Europe are bracing for potentially billions of dollars in total losses on big-ticket leveraged buyouts as they struggle to offload risky corporate debt that’s plunging in value amid a sweeping market selloff.

‘Buy the Dip’ Faith Has a Last Bastion: Individual Investors; They remain big net buyers of stocks as professional money managers sell, but the scale of losses such investors are racking up could eventually lead them to capitulate
Jon Sindreu – WSJ
Contrary to their caricature as the fickle winds of finance, individual investors are the only ones keeping the “buy the dip” faith alive. But even their appetite for losses may have limits. The S&P 500 index is close to notching its worst first half in decades, yet individual investors have still purchased a net $24 billion worth of U.S. stocks over the past month, in line with the average of the past two years, according to the latest data published Wednesday by flow tracker VandaTrack. Even purchases of single equities, which are typically more susceptible to shifts in sentiment than those of exchange-traded funds, have remained robust, unlike during the Covid-19 selloff in February 2020 and the late-2021 rout.

Environmental, Social and Corporate Governance

The Rich-Poor Divide on Clean Power Is Getting Wider; The solution is simple. Developed nations should unleash the flood of pent-up capital to help emerging economies fund their decarbonization efforts.
David Fickling – Bloomberg
To look at the way richer countries are spending money on the energy transition, you might think we’re within reach of bringing climate change under control. Investment in clean energy has only accelerated in the years since Covid-19 struck. In the second half of the last decade, it grew at a 2% annual rate. Since 2020, that’s risen to 12% a year. This year, it will hit $1.4 trillion, the International Energy Agency wrote in its annual investment report Wednesday, putting green power comprehensively ahead of the roughly $1 trillion that’s being spent on fossil fuels.

Biodiversity Loss May Push Developing World Closer to Default; Study shows credit rating risk from damge to ecosystems; China faces multi-notch downgrade under business-as-usual
Philip Aldrick – Bloomberg
Loss of biodiversity across the world may push many developing nations close to default and trigger massive downgrades for China and India, according to the first sovereign credit rating adjusted for ecological destruction. A “partial ecosystems collapse” of fisheries, tropical timber production and wild pollination would increase annual borrowing costs for 26 nations including the US by $53 billion, according to a team led by academics at Cambridge University. The research is groundbreaking, extending earlier work on how government finances will be threatened by climate change.

After Historic Fall, Carbon Emissions Are Now Coming Back Fast; In December, global emissions were higher than during the same month in 2019, according to new data from the International Energy Agency.
Eric Roston – Bloomberg
Pandemic restrictions in 2020 caused the largest absolute drop in carbon-dioxide pollution from energy use since World War II. But lockdowns eventually lifted, and as economic activity picked up, emissions resumed very quickly by year’s end. In December, worldwide emissions were 2% higher than the same month in 2019, according to new data from the International Energy Agency. Emissions from energy fell by about 2 billion metric tons, or 5.8% in 2020, from the prior year. Such a plunge “is without precedent in human history — broadly speaking, this is the equivalent of removing all of the European Union’s emissions from the global total,” the authors wrote. Both the U.S. and EU saw emissions fall by 10%, with the steepest reductions concentrated in March, April, and May. China was the only large economy that saw emissions increase, by 0.8% on an annual basis. Much of that rise came toward the end of the year. China’s emissions were 7% higher in December 2020 than they were in December 2019.

Why Fracking Won’t Solve the Global Oil and Gas Squeeze
David Wethe – Bloomberg
A tsunami of oil and gas from the technique called fracking has made the US the world’s biggest producer of both, giving the country the energy independence its leaders have sought for decades and upending the geopolitics of the world energy trade. Now, with the world crying out for more oil and gas, American frackers are theoretically in a position to provide it. Instead, they are riding the brakes, having changed their business models to focus on generating profits for investors rather than increasing production.

Giant Methane Cloud Seen Near Algeria Gas Pipeline That Feeds Spain; Powerful plumes of the greenhouse gas were spotted by satellite in northwest Algeria.
Aaron Clark and Laura Millan Lombrana – Bloomberg
Powerful clouds of the super-emitter methane have been spotted by satellite in northwest Algeria, near a conduit that appears to branch off from the Medgaz Gas Pipeline, which supplies about a quarter of the natural gas consumed in Spain.

The UK Has a Shortfall of 560,000 Women in Managerial Ranks
Neil Callanan – Bloomberg
More than half a million female managers will have to be added in the UK before supervisors reflect the labor force, according to a report by the Chartered Management Institute that highlights a failure by companies to develop female talent. The data adds to a wealth of evidence of female underrepresentation in the best-paid roles in UK business. Half of the country’s smaller listed companies still have all-male leadership teams, while Aviva Plc Chief Executive Officer Amanda Blanc said that the sexism she encounters has worsened as she has risen through the ranks in finance.

Why Australia’s Power-Grid Debacle Matters for Global Energy; The country’s suspension of its electricity market last week shows how volatile the transition from fossil fuels to clean energy will be.
Nathaniel Bullard
Less than two weeks ago, Australia’s electricity market stopped working. Facing the prospect of insufficient supply to meet demand, the national operator AEMO suspended the country’s spot power market. Volts kept flowing to customers and lights stayed on, but the market itself was broken. Bloomberg Opinion’s David Fickling described the event as “an extraordinary failure.”

Google’s Plan for 24/7 Carbon-Free Energy Ran Into Headwinds in 2021; Project delays held back growth of carbon-free electricity for data centers; Google says long-term trend is going in the right direction
Dieter Holger – WSJ
Google edged further away from an ambitious climate goal last year as supply-chain disruptions and grid connection delays held up clean-energy projects. By 2030, the Alphabet Inc. unit aims to use carbon-free energy round-the-clock to power its campuses and data centers, which are by far its biggest source of direct greenhouse-gas emissions.

World’s Dirtiest Oil and Gas Fields Are in Russia, Turkmenistan and Texas; A new analysis finds the emissions from fossil-fuel production — not just end use — are substantial, and cutting methane should be the oil and gas sector’s top priority.
Naureen S Malik – Bloomberg
Oil and natural gas fields in Russia, Turkmenistan and Texas are the most climate-damaging on Earth, according to a first-of-its kind analysis that looks at greenhouse-gas emissions across entire supply chains and finds they vary widely. The dirtiest fields emit more than 10 times as much carbon dioxide equivalent as the least emissions-intensive sites, it finds.

UK Agency to Invest $200 Million in African Hydropower Projects; Norway’s development investment fund to put in $100 million; Project pipeline is for 675 megawatts to serve five nations
David Herbling – Bloomberg
The UK’s development finance agency will invest about $200 million in African hydroelectricity projects to boost the continent’s renewable energy portfolio.


Eurex launches first futures on thematic indices
acts are based on STOXX Global Thematic Indices; New segment extends Eurex’ leading role in sector and ESG derivatives; Complementing the eco-system for thematic investing
Eurex, one of the world’s leading derivatives exchanges, has introduced a new segment with the launch of its first thematic index futures. The new contracts are based on three indices from the STOXX Thematics Index family, which are calculated by sister company Qontigo. Eurex is thus responding to the growing demand from many asset managers to align their investments with projected long-term structural trends that are transforming modern economies and societies.

JPMorgan China Fund Ramps Up Bets on Tech as Bullish Calls Grow; Fund has added exposure to Alibaba, JD.com this year; China stocks continue to rally in the face of global downturn
John Cheng – Bloomberg
JPMorgan Asset Management is doubling down on China tech stocks after enduring a tumultuous selloff, betting that an easing of regulatory crackdowns and attractive valuations will pay off well. Rebecca Jiang, who co-manages three China equity funds with almost $20 billion of assets, said she is becoming more optimistic on the sector as regulatory hurdles are being cleared, while macro policies offer support. The flagship China fund has snapped up shares of Alibaba Group Holding Ltd. and JD.com Inc. this year, according to filings as of end-May.

SoftBank’s Son Faces Shareholders Shaken by $34 Billion Loss; Portfolio losses dent faith in Vision Fund, Son’s skill; Board’s ability to supply true check on Son also in doubt
Min Jeong Lee and Takahiko Hyuga – Bloomberg
SoftBank Group Corp. founder Masayoshi Son is used to praise and encouragement from shareholders. But the company’s loss of $34 billion in market value over the last year is a test for even his most faithful admirers when they gather for the annual shareholders’ meeting on Friday. Investors stuck by Son when SoftBank announced a holding company strategy in 2015 to hive out its staid but profitable domestic telecom business to become the world’s largest investor in volatile tech startups. When the Vision Fund booked an $18 billion loss on investments like WeWork and Uber Technologies Inc. in 2020, they pointed to Son’s ability to win thousands-fold returns on Alibaba Group Holding Ltd. When Son preached patience as the stock began a downward trajectory from a March peak last year, they listened and hung on.

Goldman Sachs Plans Office Tower in Dallas for 5,000 Workers
Natalie Wong – Bloomberg
Goldman Sachs Group Inc. plans to occupy a new office tower in Dallas that would hold thousands of employees, part of the bank’s expansion beyond its Manhattan base.

Danske Bank Used by Lithuanian to Launder $4.1 Billion, Court Finds
Christian Wienberg – Bloomberg
A court found a Lithuanian woman guilty of taking part in a scam that used Danske Bank A/S accounts to launder 29.5 billion kroner ($4.2 billion) for wealthy people from Russia and the Baltic countries. The 49-year-old woman, who has lived in Denmark for 20 years, will serve eight years in prison, Danish prosecutors said on Thursday. Her sentence adds to a previous jail term received for a similar, but smaller, case.

Quant hedge funds profit from cryptocurrency turmoil; Laurence Fletcher – FT
A small group of hedge funds are profiting from turmoil in the digital asset market that has already wiped trillions of dollars off the total value of cryptocurrencies. Some computer-driven funds — which use algorithms to try to predict and trade price moves in crypto and other markets — have picked up winnings from rapid declines in assets such as bitcoin and luna, even as many other investors are suffering huge losses.

BlackRock Plans Singapore Expansion With Dozens More Employees; Asset manager said in discussions to add three office floors; Part of the expansion includes relocating some Hong Kong staff
heryl Tian Tong Lee and Faris Mokhtar -Bloomberg
BlackRock Inc. is poised for a major expansion in Singapore as it follows other international firms looking to tap capital flows into Southeast Asia. The world’s largest asset manager is in discussions to double its floorspace at an office block in the city-state’s central business district, according to people familiar with the matter. The US firm is expecting to add dozens of staff from local hiring and some relocations from Hong Kong, said one of the people, who asked not to be identified as the matter is confidential. Plans are still at an early stage, the people said.

Wellness Exchange

South Africa Ends Covid Curbs Including Wearing of Face Masks
Monique Vanek – Bloomberg
South Africa’s Health Minister Joe Phaahla has repealed the country’s remaining coronavirus-related restrictions, according to a government gazette published Wednesday. These include the wearing of masks, curbs on gathering sizes and border checks for Covid-19. Phaahla earlier this week suggested the restrictions be dropped following the decline in hospitalizations and reported cases, according to a statement dated June 20.

Long Covid Affects Few Kids But Curbs Impact All, Study Finds; Chances of children experiencing lasting symptoms seen as low; Largest long-Covid study in kids is considered ‘reassuring’
James Paton – Bloomberg
The largest study of long Covid in children found kids can experience symptoms persisting at least two months, but researchers say the indirect effects of the pandemic probably carry a more lasting impact. Children who test positive for Covid are more likely to experience at least one long-lasting symptom than children who have never been diagnosed, according to findings published in The Lancet Child & Adolescent Health journal. But the study results can be seen as “reassuring,” Maren Rytter of the University of Copenhagen wrote in comments accompanying the data.

US to Expand Monkeypox Testing to Large Commercial Labs; Five labs will be able to use tests by early July, HHS says; US cases have increased to more than 140 across 24 states
Madison Muller – Bloomberg
The US plans to start testing for monkeypox at five of the nation’s largest commercial laboratories, broadening its effort beyond government facilities in an effort to address rising case numbers, the Department of Health and Human Services said Wednesday. Health-care providers will be able to use the testing services in early July, and more tests will be available throughout the month, according to HHS. Commercial labs that can receive the tests approved by the Food and Drug Administration include Aegis Science, Labcorp, Mayo Clinic Laboratories, Quest Diagnostics and Sonic Healthcare.

Global Life Expectancy Falls for First Time Since 1950s Due to Covid
Luke O’Reilly, The Press Association – Bloomberg
Global life expectancy has fallen for the first time since the 1950s following the Covid-19 pandemic, according to new analysis. The analysis, published by the ONE Campaign, has found that global life expectancy has fallen 1.64 years between 2019 and 2021. They warn that the situation could be worsened by a global food security crisis and the impact of climate change. This is the first time that global life expectancy has fallen since records began in 1950.

Faster Progress Is Needed on Treatments for Long Covid; The “persistent virus” theory merits more investigation — including trials to understand whether antiviral drugs can treat lingering symptoms.
Lisa Jarvis – Bloomberg
Long Covid is making it hard for millions of Americans to return to normal life, pushing some out of the workforce altogether, sometimes permanently. Yet medical efforts to figure out how best to help these patients are proceeding only slowly.

Polio Virus Found in London Sewage: Should the UK Worry? Several closely related viruses found in sewage samples; UK government urges public to stay up-to-date with vaccines
Deirdre Hipwell – Bloomberg
Britain’s polio-free status could be at risk for the first time in almost two decades after several samples of vaccine-derived poliovirus were found during routine London sewage testing. The findings suggest some spread between closely linked individuals and the virus has continued to evolve and is now classified as a vaccine-derived poliovirus type 2, according to the UK Health Security Agency. The government has set up a national incident team to investigate the matter and it is working with other bodies, including the World Health Organization.

Moderna’s Covid-19 Vaccine for Kids 6 to 17 Years Faces CDC Review; Advisers to agency are set to consider recommending shot following on FDA’s authorization for young age group
Liz Essley Whyte – WSJ
Advisers to the Centers for Disease Control and Prevention are set to decide whether to recommend Moderna Inc.’s Covid-19 vaccine for children ages 6 to 17 years. Children in the age group already have access to Covid-19 vaccines made by Pfizer Inc. and its partner BioNTech SE. The advisers are scheduled to discuss on Thursday whether Moderna’s shot should also be made available for that age range.


Fertilizer, Worker Shortages to Cut Malaysia Palm Oil Output; Industry associations see output well below government target; Efforts to bring in foreign workers not happening fast enough
Anuradha Raghu – Bloomberg
A hoped-for recovery in Malaysian palm oil output in the second half of the year is looking unlikely as the world’s second-biggest grower continues to struggle with shortages of fertilizer and workers. The price of fertilizers, which make up about 40% of palm oil’s production cost, surged over the last year on logistics snarl-ups and then the Russian invasion of Ukraine. Prices have retreated over the last few months, but many growers struggled to buy enough earlier in the season, curbing yields. On top of that, government efforts to bring in more foreign plantation workers aren’t happening fast enough to revive production this year. The shortage has worsened to around 120,000 workers, compared with 36,000 before the pandemic, according to Jeffrey Ong, president of the Malaysian Estate Owners’ Association, whose members are mainly small and medium-sized planters.

Foreigners Bail Out of Japan Bonds at Record Pace on BOJ Policy; Withdrawals hit 4.8 trillion yen, an all-time high last week; Sales come amid growing questions over central bank policy
Matthew Burgess – Bloomberg
Overseas investors sold a record amount of Japanese bonds last week amid growing questions about the Bank of Japan’s capacity to cap yields as rates surge globally. Withdrawals hit 4.8 trillion yen ($35.3 billion) in the week to June 17, an all-time high, according to data from the Ministry of Finance. Bearish sentiment against Japanese bonds has mounted as traders bet the BOJ will have to tweak its curve-control policy, which keeps 10-year yields capped in a bid to boost a moribund economy. The central bank defied its critics Friday, holding firm with rock-bottom interest rates despite pressure on bonds and the yen.

London Commute Quiet Between Rail Strikes as Talks Fail; Passenger numbers on Tube network down 53% from a week ago; Labor negotiations break down ahead of next walkout Thursday
Christopher Jasper and John Bowker – Bloomberg
Large numbers of London commuters stayed home again Wednesday as train companies ran a reduced timetable between Tuesday’s strike and another that’s set to go ahead Thursday after talks on a deal failed. Passenger numbers on the UK capital’s subway network or Tube were down 53% through 10 a.m. compared with a week ago, according to Transport for London, suggesting that many people opted to avoid traveling into the city amid warnings of continued disruption. The National Union of Rail, Maritime and Transport Workers said on Twitter that Thursday’s nationwide strike would go ahead after talks broke down. “Until the government unshackle Network Rail and the train operating companies, it is not going to be possible for a negotiated settlement to be agreed,” it said.

Swiss Gold Refiners Say They Didn’t Import Mystery Russian Metal; Industry association says members didn’t buy the bullion; Swiss customs data show 3 tons of Russian gold shipped in May
Eddie Spence – Bloomberg
The industry association for Switzerland’s gold refiners said its members didn’t import gold from Russia last month, raising questions about who bought the country’s precious metals. Over 3 tons of gold — worth about $200 million — was shipped from Russia to Switzerland in May, almost all of which was marked as being for refining, according to data from the Swiss Federal Customs Administration. It was the first recorded shipment between the countries since February, when the war in Ukraine began.

Shell Permits Probed Over Loss of $200 Million in Nigeria; Motion argues state lost revenue through 30-year licenses; Investigation targets joint venture operated by Shell
William Clowes – Bloomberg
Nigeria’s Senate will investigate Shell Plc’s historic license renewals in the West African state to determine whether they were extended unlawfully and cost the government up to $200 million. Senate President Ahmad Lawan formed a committee on Wednesday to probe the oil major’s permits that expired in 1989 and 2019, according to a statement emailed by his spokesman. The decision followed a motion submitted by Senator George Sekibo who said the duration of the licenses should have been 20 years rather than 30 years under Nigerian law.


Hamptons Landmarks Up for Sale in East End Version of Monopoly; A new take on the board game highlights iconic Hamptons locations like Shelter Island and Montauk Point Lighthouse.
Josephine Walker – Bloomberg
New York’s Shelter Island has been a fashionable destination for decades and now you can own it — at least in board game form. The 8,000-acre island and other iconic landmarks at the tip of Long Island are available to buy in the Hamptons edition of Monopoly, which was released by Top Trumps USA just in time for the busy summer season. Shelter Island is the most expensive property at $400 in Monopoly money, taking the square occupied by Boardwalk in the original Atlantic City-themed game. The 110-foot Montauk Point Lighthouse, this version’s Park Place, can be purchased for $350.

4 Reasons Good Employees Lose Their Motivation
Richard E. Clark and Bror Saxberg – Harvard Business Review
Motivation — the willingness to get the job done by starting rather than procrastinating, persisting in the face of distractions, and investing enough mental effort to succeed — accounts for 40% of the success of team projects. Yet managers are often at a loss as to how to effectively motivate uninspired employees. Our review of research on motivation indicates that the key is for managers to first accurately identify the reason for an employee’s lack of motivation and then apply a targeted strategy. Carefully assessing the nature of the motivational failure — before taking action — is crucial. Applying the wrong strategy (say, urging an employee to work harder, when the reason is that they’re convinced they can’t do it) can actually backfire, causing motivation to falter further.

Two Former Goldman Sachs Bankers Are Now in the Chocolate Business; Elements Truffles specializes in vegan sweets.
Kate Krader and Debarati Roy – Bloomberg
When he was a vice president at Goldman Sachs Group Inc, managing portfolio analytics for the fixed-income desk, Kushal Choksi would stress when the short end of the interest rate curve steepened. “Then all my hedges were off, and I would have to recalibrate my models.” Now, he says, “the biggest stress of my life is when the UPS truck doesn’t show up.”

Naked Wines shares tumble on sobering outlook; Online retailer warns of slower growth as inflation hits customer demand
Emma Dunkley – FT
Naked Wines, the online retailer, lost nearly 40 per cent of its market value on Thursday after it warned of “greater uncertainty” in the economy. The Norwich-based company, which connects shoppers with independent winemakers, reported signs of waning customer retention and slower growth. Its share price fell by 37 per cent on Thursday morning to 176p.

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The Spread

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