OneCoin Took In Billions. Then Its Leader Vanished

Aug 27, 2020

First Read

FDIC Enlists Fintech to Serve Pandemic-Challenged Minority Institutions
Suzanne Cosgrove – JLN

While the economic disruptions of COVID-19 are widespread, they have “disproportionately” disrupted minority depository institutions, also known as MDIs, said Jelena McWilliams, chairman of the Federal Insurance Deposit Corporation.

Speaking Wednesday in the second of a series of webinars organized by AFX and co-hosted by the University of Chicago Law School and the Becker Friedman Institute, McWilliams said many Black and Hispanic consumers remain “unbanked,” without banking relationships that allow them to build credit.

“These disparities present challenges” for MDIs (defined as banks that are 51 percent or more minority owned), “which represent a lifeline to the communities they serve” and are vital to mortgage and small-business lending, McWillams said.

Innovative technology is a key to overcoming these challenges, she said. But the cost of new technology is often prohibitive for minority banks. In response, the FDIC is seeking to expand banking services to underserved communities by partnering banks with third-party fintech firms through its FDiTech office, which was launched last year, she said.

As part of its FDiTech initiative, the FDIC last month published a Request for Information in the Federal Register, seeking public comment on the potential for a public-private partnership and voluntary certification program that would promote the adoption of innovative technologies at financial institutions supervised by the FDIC.

You can read the FDIC request here.

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Hits & Takes
JLN Staff

The readers of JLN love nothing better than a good real estate story about an industry leader. Normally it is Citadel’s Ken Griffin, but yesterday it was OCC’s Craig Donohue and the story in Crain’s Chicago Business about him and his wife selling their Kenilworth home.

And readers like to eat, which is why the story about the Chicago restaurants shutting down became of the pandemic was among the top read stories for the third day today.

Yesterday I took my wife up to our family home in Wisconsin and visited my mom, but in a socially distant way. It was a beautiful day and in the evening I was able to watch some sailboat races on Geneva Lake. On the drive home, we went the eastern route, which took us through the west side of Kenosha, Wisconsin. As we neared it, my wife received a notice on her work phone from the Census Bureau that all gas stations east of interstate highway 94 were instructed to turn off their gas pumps. As we approached Kenosha, we were rethinking our decision to go this route. Some of the gas stations near highway 50 and 94 were closed and a little south on 94 there were lots of flashing police lights on the roads to the east. But that is about as close as we were to the problems in Kenosha.

I was moved by the NBA teams and the baseball teams and players who decided not to play yesterday in protest of the shooting of Jacob Blake in Kenosha. That is a big statement to make, not playing.

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

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CNBC reports that the Federal Reserve announced a major policy shift today, saying it is willing to allow inflation to run “moderately” above the Fed’s 2% goal “for some time” in order to support the labor market and broader economy.~SR

France will make the wearing of face masks mandatory across Paris to curb the surge of the coronavirus there, Prime Minister Jean Castex said today. “The virus is spreading all over the country,” Castex told a news conference. “The spread of the epidemic could become exponential if we do not react quickly.” ~SR

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Andre Buckles: MarketsWiki Education Virtual World of Opportunity 2020
JohnLothianNews.com

Andre Buckles is the vice president of talent acquisition at the Options Clearing Corporation. He has been hiring people for more than two decades for a number of financial companies, including Northern Trust and Zurich North America. At the MarketsWiki Education virtual World of Opportunity 2020 event in June, Buckles had some tips for students looking to get hired in the financial industry. During the pandemic, concern about how to get to an office you are unfamiliar with was replaced by things like making sure you have stable access to the Internet and being transparent with the interviewer about circumstances that couldn’t be dealt with ahead of time. Buckles said that before a virtual interview, it’s important to make sure your devices – phone, laptop, etc. – are charged and have a good signal, and that you have a quiet, private space to conduct the interview. In general, he said, it’s important to connect with your interviewer during the interview by showing them why you are interested in working for their company. “You want to think about how you’re engaging with people,” he said.

Buckles also explained how the OCC has adapted its hiring process to the coronavirus pandemic, bringing in 62 people since March 17, the last day the OCC welcomed new employees in person in its offices. The pandemic brought challenges that tested Buckles’ expertise, but virtual hiring is now the norm, so we all need to be prepared for it.

Listen to the podcast »

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OCC Is Making a Major Transformation to Modernize Its Tech Infrastructure. Here’s Why.
Brendan Meyer – Built in Chicago
OCC’s legacy clearing technology, Encore, has been running smoothly for more than 20 years. So why then is the world’s largest equity derivatives clearing organization in the midst of a major tech transformation?
/bit.ly/3lnpyGi

*****This is a great time to be doing this. Maybe never more important to have new and improved technology than right now.~JJL

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The World Federation of Exchanges Publishes First-Half Market Highlights
World Federation of Exchanges
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, today published its first half Market Highlights. In June 2020 companies raised 31.38 billion USD through IPO, which is a nearly triple (294.1%) increase on May 2020. The June figure is among the highest capital amount raised through IPO in the last 6.5 years, even while in the first-half overall, initial public offerings fell both year on year and relative to the second half of 2019.
/bit.ly/2YFzUHF

*****The lowlights are where the real fun is.~JJL

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Unredacted suit shows Google’s own engineers confused by privacy settings
Kate Cox – Ars Technica
Newly unsealed and partially unredacted documents from a consumer fraud suit the state of Arizona filed against Google show that company employees knew and discussed among themselves that the company’s location privacy settings were confusing and potentially misleading.
In 2018, the Associated Press reported that Maps and some other Google services (on both iPhone and Android) were storing users’ location data even when users had explicitly turned Location History off.
/bit.ly/2FXH6bD

*****Google must be really unhappy gathering my location data since it has barely changed in months.~JB

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Wednesday’s Top Three
Our top story Wednesday was Crain’s Chicago’s Kenilworth mansion sells for $7.5 million, about the now former home of Craig Donohue, executive chairman of the OCC, and his wife, Elsa. Second was Running list: Chicago-area restaurants closed permanently due to coronavirus pandemic economic woes, from the Chicago Tribune – the third time in the top three for this story. Third was Cyberattacks Halt New Zealand’s Stock Exchange Twice in Two Days, from the Wall Street Journal.

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MarketsWiki Stats
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MarketsWiki Statistics

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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

Recently updated pages include
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Lead Stories

OneCoin Took In Billions. Then Its Leader Vanished; Federal prosecutors allege Ruja Ignatova, known as the Cryptoqueen, sold the promise of riches—but was really running a pyramid scheme
James Marson – WSJ
The splintering of one of the world’s biggest cryptocurrency frauds began with an act of jealousy. Ruja Ignatova, whose OneCoin raked in billions, suspected her boyfriend of stringing her along in late 2017, her brother later testified in federal court. So, he said, she had an associate rent an apartment beneath the boyfriend’s Florida digs and drill through the floor to eavesdrop. What she discovered was another kind of betrayal: that he was cooperating with the Federal Bureau of Investigation.
/on.wsj.com/32u1ysu

SEC Modernizes the Accredited Investor Definition
SEC
The Securities and Exchange Commission today adopted amendments to the “accredited investor” definition, one of the principal tests for determining who is eligible to participate in our private capital markets. Historically, individual investors who do not meet specific income or net worth tests, regardless of their financial sophistication, have been denied the opportunity to invest in our multifaceted and vast private markets. The amendments update and improve the definition to more effectively identify institutional and individual investors that have the knowledge and expertise to participate in those markets.
/bit.ly/2QohJlt

NYSE given go-ahead for alternative to rival traditional IPOs; US securities regulator approves proposal for a so-called primary direct floor listing
Eric Platt – FT
The New York Stock Exchange on Wednesday secured regulatory approval for its proposal to let companies raise capital through direct listings, opening the door to a rival to the traditional initial public offering. The decision from the Securities and Exchange Commission will allow companies to issue new shares to the public in a process known as a primary direct floor listing. The process relies on an opening auction that matches buy and sell orders to set a company’s offering price on the day it lists.
/on.ft.com/3b1aQQi

SEC Gives More Investors Access to Private Equity, Hedge Funds; In a 3-2 vote, the agency’s commissioners expanded the definition of accredited investors
Paul Kiernan – WSJ
The Securities and Exchange Commission deemed more investors capable of navigating the opaque world of leveraged buyouts, hedge funds and startups, a decision likely to fuel further growth in loosely regulated private markets.
/on.wsj.com/2EvCNUK

SEC to Allow Businesses More Flexibility in Disclosing Risk, Legal Information; In a 3-2 vote, the regulator approved key changes to Regulation S-K, the first significant modifications in over 30 years
Mark Maurer – WSJ
The U.S. Securities and Exchange Commission on Wednesday voted to give companies more flexibility in disclosing risk factors and legal proceedings in their financial statements. The SEC approved an amendment to Regulation S-K, which serves as the basis of disclosure requirements for U.S. public companies. Regulation S-K hasn’t undergone significant changes in more than 30 years, the SEC said. The regulator had proposed the revisions a year ago.
/on.wsj.com/32uokjZ

Why Hurricanes Can Take Gasoline Prices for a Wild Ride; Major Gulf storms such as Hurricane Laura often threaten vital refineries and risk supply disruptions
Amrith Ramkumar – WSJ
Investors are keeping a close eye on energy markets as Hurricane Laura moves toward the Texas-Louisiana border, the latest potential weather event that could disrupt supplies for gasoline. Here’s what you need to know about how hurricanes and tropical storms can affect prices at the pump:
/on.wsj.com/2FUMvAe

Mission Creep at the Fed; Asking the Federal Reserve to address racial disparities and other complex problems risks conflict with other goals
Greg Ip – WSJ
In a much-anticipated speech this week, Federal Reserve Chairman Jerome Powell is expected to lay out a new framework for meeting its often-elusive goal of 2% inflation. When he’s done, he should keep his jacket on, because a proliferation of other missions await. Full employment and low inflation are no longer enough. In recent years the Fed has been asked to prevent financial crises, shrink the trade deficit, tackle climate change and, now, eliminate racial economic disparities.
/on.wsj.com/2FUMVXk

The Fed’s Evolution Is Coming to a Computer Screen Near You; The 2020 version of the Federal Reserve’s loftiest annual meeting will be webcast this week, allowing the public to tune in for the first time. It could be the stage for an important policy shift.
Jeanna Smialek – NY Times
For more than a year, the Federal Reserve has wrestled with how to achieve its twin goals — maximum employment and stable inflation — in an era of tepid price increases and very low interest rates.
/nyti.ms/2EolPI1

Jackson Hole’s Greatest Hits Keep Focus on Fed’s Annual Retreat
Rich Miller – Bloomberg
Every August, investors around the world obsess over what’s going on in a tiny Wyoming resort on the edge of the magnificent Teton mountain range. This year they can listen directly, because it will be conducted virtually due to the coronavirus pandemic and streamed live to the public for the first time. Over the past two decades, central bankers have used the Federal Reserve Bank of Kansas City’s annual symposium in Jackson Hole to plot out and signal changes in monetary policy.
/bloom.bg/34C4DJv

U.S. LNG Exporters Await Damage Impact as Storm Passes
Kevin Varley and Stephen Stapczynski – Bloomberg
Along with millions of Americans, much of the Gulf Coast’s energy infrastructure is at risk from Hurricane Laura’s “unsurvivable storm surge” that could inflict more than $15 billion in insured losses. Ahead of the storm, liquefied natural gas producers shut wells and vessels steered clear of export terminals including Cheniere Energy Inc.’s Sabine Pass and Sempra Energy’s $10 billion Cameron LNG facility.
/bloom.bg/3aZN1Za

A Billionaire and a Hedge Fund Is a Hard Team to Beat; Arnaud Lagardere has truly let the fox into the henhouse in the battle for the future of the eponymous French company.
Alex Webb – Bloomberg
Arnaud Lagardere is learning the hard way that marriages of convenience in the business world can work for you, and against you. The hedge fund Amber Capital U.K. LLP has for two years been targeting the eponymous Lagardere SCA — a media and retail company founded by Arnaud’s late father, which is now run by the son — for sweeping governance changes. To fend off the activist attack, Lagardere turned to the French establishment for support earlier this year.
/bloom.bg/31CJvkJ

Nikola Founder Giving 50 Employees $233 Million of His Stock
Edward Ludlow and Sophie Alexander – Bloomberg
Trevor Milton’s fortune has ballooned to $4.6 billion; He said on Twitter he doesn’t plan to sell his own stock
Trevor Milton, the founder and chairman of Nikola Corp., is giving the first 50 employees of the electric-truck startup 6 million of his own shares after making a promise when he hired them. “When I first started this company I was looking for the best employees in the world and it was a huge risk,” Milton said in a video posted on his Instagram page. “The likelihood of us ever succeeding was like next to none and luckily I found an incredible group of employees that started with me from day one.”
/bloom.bg/2EEkeNW

Citi’s $900m payment blunder was culmination of months of drama; Hedge funds were furious over a financing deal for Revlon, but then the bank accidentally wired them millions
Sujeet Indap, Eric Platt and Robert Armstrong – FT
When Citigroup accidentally wired $900m of its own money to creditors of the cosmetics group Revlon this month, it was a reminder that even the apparently mundane business of administering corporate loans can blow up into a reputational crisis.
/on.ft.com/2Qvtiaw

SEC Asks Boeing, Coca-Cola to Disclose More About Popular Financing Tool; Agency has increased scrutiny supply-chain finance, which flatters financial statements but may hide risks
Julie Steinberg – WSJ
The U.S. Securities and Exchange Commission is asking blue-chip companies about a popular financing arrangement that frees up cash but potentially hides risks from investors. The agency sent letters in June to Coca-Cola Co. KO 0.52% and Boeing Co. BA -1.62% requesting more information about how they use supply-chain finance, essentially a form of short-term borrowing to pay for goods and services, according to securities filings.
/on.wsj.com/3htQZfb

Millennials Help Power This Year’s Housing-Market Rebound; Generation that was slow to enter U.S. housing market now accounts for more than half of all new home loans
Nicole Friedman – WSJ
Millennials, long viewed as perennial home renters who were reluctant or unable to buy, are now emerging as a driving force in the U.S. housing market’s recent recovery. Demand from millennials, who today range from their mid-20s to late 30s, has been increasingly important to the housing market since at least the middle of the last decade. But more recently, these new homeowners have been pushing aside older generations to become an even bigger influence.
/on.wsj.com/3b2UJlt

Oil Market’s Wild Swings Subdued by Options Trading; Crude prices have crept up amid OPEC production cuts and bets on reduced volatility
Joe Wallace and Pat Minczeski – WSJ
When Laura and Marco barreled toward Louisiana and Texas this week, companies closed more than four-fifths of offshore oil production in the Gulf of Mexico to protect equipment and personnel. Crude-oil prices barely budged. The insouciance was symptomatic of an exceptionally subdued summer in the market.
/on.wsj.com/3b21Me4

Cyber chief warns of east-west split over the internet; Western countries and China set to diverge over technology, says head of UK digital body
Peter Foster – FT
Boris Johnson’s decision to bar China’s Huawei from the UK’s 5G mobile phone networks may well portend an east-west split in the architecture of the internet, according to the head of the UK National Cyber Security Centre.
/on.ft.com/31z75yy

The 2021 World Economic Forum summit will be rescheduled, organizers say.
NY Times
The World Economic Forum is pushing back its annual summit in Davos, Switzerland, from January to early next summer, it announced on Wednesday.
/nyti.ms/3lqlQf9

Tech Companies Adapt Collaborative Culture to Remote Work; ‘We’re trying to emulate some of the creativity that you’d get in person,’ says Ravs Kaur, chief technology officer of startup Uplevel
Elaine Chen – WSJ
Technology executives are finding ways for their teams to collaborate and be productive as fully remote work persists during the coronavirus pandemic.
/on.wsj.com/3lkBtoe

Coronavirus

France Eyes Lockdown as a Last Resort in Europe’s Virus Fight
Ania Nussbaum and Iain Rogers – Bloomberg
German leaders quarrel over measures to contain Covid-19; Europe struggles to chart a path amid renewed outbreaks
France is ready to institute a new national lockdown as a last resort as Europe grapples with how to contain the resurgent coronavirus. Plans to restrict movement are ready, but the country will do everything possible to avoid measures that clobbered the economy in the second quarter, France’s Prime Minister Jean Castex said on Thursday.
/bloom.bg/2D7nz7M

Japan’s Virus Wave Is Easing Despite Lack of Government Action
Gearoid Reidy – Bloomberg
Japan’s most recent and largest wave of coronavirus infections is showing signs of subsiding, despite a lack of heavy intervention from the government to bring it under control. After peaking at the start of August, the country is on track for a sixth consecutive day where new cases are below 1,000. The seven-day average of cases is falling in almost every hotspot, including in Tokyo where the 250 cases reported Thursday are about half of the peak level found earlier this month. The test positivity rate in the capital has been below 5% for three days.
/bloom.bg/31ymjUE

South Africa May Be First in Region to Produce Covid-19 Vaccine
Antony Sguazzin and Pauline Bax – Bloomberg
State firm Biovac to make announcement when agreement signed; South Africa already hosts three coronavirus vaccine trials
South Africa may sign a deal to help produce a Covid-19 vaccine, potentially boosting access to immunization on a continent with limited manufacturing capacity. The Coalition for Epidemic Preparedness Innovations, a global organization funding vaccine development, is considering the Cape Town-based Biovac Institute as a fill-finish site, according to Helen Rees, the chair of the organization’s Scientific Advisory Board. The state-owned vaccine company is one of a few in the country that has the capacity to package doses into sterile dispensers if clinical trials are successful.
/bloom.bg/3hAPrjp

Passenger Arrivals to U.K. Collapse During Pandemic Travel Curbs
Andrew Atkinson – Bloomberg
Home Office figures show 97% decline in second quarter on year; Immigration had been rising before crisis amid student inflow
The number of passengers arriving in the U.K. almost totally collapsed in the second quarter as coronavirus restrictions brought international travel to a standstill. Home Office figures published Thursday show there were just 1.3 million arrivals between April and June, a 97% decrease compared with the same period of 2019.
/bloom.bg/3hBnesR

Failure by WHO team to visit Wuhan sparks concerns over virus probe; Western governments question China’s commitment to finding source of disease that has killed 800,000
Christian Shepherd, Katrina Manson and Jamie Smyth – FT
A team from the World Health Organization tasked with investigating the origins of coronavirus did not visit Wuhan, fuelling concern from western governments over Beijing’s commitment to identifying the source of the pandemic.
/on.ft.com/2EvF961

New York pushes back against changes to CDC’s Covid-19 test guidance; Cuomo denounces as ‘political propaganda’ new recommendation for asymptomatic people not to get tested
Kiran Stacey – FT
New York’s governor said the state would not follow national coronavirus testing guidelines, after the Centers for Disease Control and Prevention changed them to recommend that people who have been in close contact with an infected person but do not exhibit symptoms should not get a test.
/on.ft.com/34CfDGQ

Pandemic triggers surge in eurozone bank deposits; Companies and households increased holdings at banks by more than 10% in past year
Martin Arnold – FT
Companies and households across the eurozone increased their deposits at banks by EUR184bn in July, as money supply in the bloc rose by the fastest annual rate since the 2008 financial crisis, according to European Central Bank data.
/on.ft.com/2D48NOZ

Pandemic may offset some benefits of negative rates, ECB official warns; Banks grappling with sub-zero rates are set for higher loan defaults, says board member Isabel Schnabel
Martin Arnold – FT
The increase in eurozone loan defaults expected as a consequence of the coronavirus pandemic is set to offset one of the key benefits of negative interest rates for the bloc’s banking system, according to a senior European Central Bank official.
/on.ft.com/32st5dS

The Pandemic’s Effect On The Economy And Banking, Federal Reserve Governor Michelle W. Bowman, At The Kansas Bankers Association CEO And Senior Management Forum/Annual Meeting, Topeka, Kansas (Via Webcast) http://
Mondovisione
Good afternoon. It’s great to be with you, and I look forward to our discussion. As you all know, the COVID-19 pandemic has caused significant disruption and hardship in nearly every aspect of our lives, and it continues to weigh heavily on our national economy, which is why it will be the central focus of my remarks here today. Let me set the stage for our discussion by outlining the economic effects of the pandemic most relevant to the banking sector, describing the Federal Reserve’s response to the crisis, and then making some observations about conditions for smaller banks.
/bit.ly/3lnEfJg

Natural History Museum Union Files Complaint Over Coronavirus App; The app would have asked employees to report if they had a fever and any new symptoms each day. Some see it as an invasion of privacy.
Julia Jacobs – NY Times
New York City’s largest municipal union on Tuesday filed an unfair labor practice complaint against the American Museum of Natural History over the institution’s plan to require employees to record possible coronavirus symptoms on an app. The head of the union called it overly intrusive.
/nyti.ms/3loeRmL

Ford Rethinks the Office, Betting That Work Will Be Partly Remote Longer-Term; The No. 2 U.S. auto maker asks 30,000 employees to clear out their desks to make way for workplace revamp
Mike Colias – WSJ
Thousands of office employees at Ford Motor Co. F -1.73% have come back to work in recent weeks to retrieve their things. All of their things. With its white-collar employees working remotely at least until January because of the coronavirus pandemic, Ford is taking advantage of its empty buildings to reconfigure the workplace for a new era in which employees will have more options to do their jobs remotely, a company real-estate director said in an interview this week.
/on.wsj.com/2FW63Eo

What if the First Coronavirus Vaccines Aren’t the Best? Dozens of research groups around the world are playing the long game, convinced that their experimental vaccines will be cheaper and more powerful than the ones leading the race today.
Carl Zimmer – NY Times
Seven months into the coronavirus pandemic, with more than 30 vaccines rapidly advancing through the rigorous stages of clinical trials, a surprising number of research groups are placing bets on some that have not yet been given to a single person.
/nyti.ms/3jpOsDv

Exchanges, OTC and Clearing

Cappitech completes first porting of CME trade reporting data; The vendor-led porting covered all relevant trade reporting data from CME following the announcement that it would be transitioning out of the market as a repository.
Annabel Smith – The Trade
Compliance technology provider Cappitech has completed the first porting of trade reporting data from US derivatives exchange CME Group. The vendor-led porting conducted by Cappitech follows CME Group’s announcement in May that it would be exiting the market as a trade repository.
/bit.ly/34C5dHl

New statistics quantify record-high equities and derivatives volumes in H1; The World Federation of Exchanges (WFE) has released the trading statistics for equities and derivatives in the first half of 2020 confirming record volumes for both.
Annabel Smith – The Trade
Statistics published by the World Federation of Exchanges (WFE) have shown just how high trading volumes were in the first half of 2020 for equities and exchange traded derivatives (ETDs) with records set and huge upticks in comparison with the 2019 figures.
/bit.ly/2YFu60P

BlueCrest Capital Management goes live on LCH’s CDSClear; BlueCrest Capital Management has successfully gone live with CDSClear and cleared a trade at the central counterparty service.
Annabel Smith – The Trade
BlueCrest Capital Management has cleared its first European index trade on LCH’s CDSClear as the central counterparty continues to bolster its buy-side network. The clearing house has been working with buy-side firms through the service since March 2017 when Amundi went live on CDSClear.
/bit.ly/2FXzWEh

Futures and options on EURO STOXX® and STOXX® Europe 600 Sector Indexes: Introduction of further derivatives following the introduction of new ICB supersectors
Eurex
The Management Board of Eurex Deutschland took the following decisions:
/bit.ly/2YE4HVo

DAX 50 ESG index licensed to Raiffeisen Centrobank
Deutsche Börse Group
Qontigo has licensed the DAX® 50 ESG index to the Austrian Raiffeisen Centrobank as the base value for a certificate. The DAX 50 ESG index uses two complementary approaches to depict ESG principles: standardized negative screens for companies that are active in controversial or unsustainable business areas and ESG scores. The methodology is designed in such a way that a sustainable German stock market index is created whose liquidity and risk-return properties are similar to those of the flagship DAX®.
/bit.ly/3li4MI9

CME Group Risk Management Tools Enhancement – Effective: September 21, 2020
CME Group
Effective Sunday, September 20 (trade date Monday, September 21) CME Group will enhance Access Manager functionality in the CME Group Risk Management Tools user interface. This enhancement will give Clearing Firm Risk Administrators the option to prevent new order entry at the Execution Firm level during the two-day period prior to expiration in the front-month contract of CL, CLT, CLL, and CLS. These are the only products in scope for this enhancement.
/bit.ly/34QbAqL

Position Limit and Large Trader Reporting Requirements in Connection with the Initial Listing of Six (6) Options on Micro E-Mini Standard and Poor’s 500 Stock Price Index Futures and Six (6) Options on Micro E-Mini Nasdaq-100 Index Futures Contracts
CME Group
In connection with the listing of the Chicago Mercantile Exchange Inc. (“CME”) Six (6) Options on Micro E-Mini Standard and Poor’s 500 Stock Price Index Futures and Six (6) Options on Micro E-Mini Nasdaq-100 Index Futures Contracts on trade date Monday, August 31, 2020 (see SER-8587 published July 14, 2020), please note below and in Appendix C of CME Submission No. 20-295 the corresponding all-month position limit (Rule 559), aggregation allocations (Rule 559.D) and reportable levels (Rule 561) for the Contracts.
/bit.ly/3ji3eMo

Product Modification Summary: Delisting of Certain Previously-Listed Contract Months and Subsequent Delisting of the UAN FOB NOLA Swaps (Clearing Only) Contract – Effective: August 24, 2020
CME Group
Effective Sunday, August 23, 2020 for trade date Monday, August 24, 2020 The Board of Trade of the City of Chicago, Inc. (“CBOT”) will sunset the UAN FOB NOLA Swaps contracts through March 2021 and delist contracts without Open Interest (April 2021 and beyond).
/bit.ly/34Gtiwy

Product Modification Summary: Reduction of the Minimum Price Fluctuation of the Micro Silver Futures Contract – Effective: September 21, 2020
CME Group
Effective Sunday, September 20, 2020 for trade date Monday, September 21, 2020, and pending all relevant CFTC regulatory review periods, please be advised that Commodity Exchange, Inc. (COMEX or EXCHANGE) will amend the minimum price increment for Micro Silver Futures. The minimum tick is changing from 0.01 to 0.005. There is no change to DPL (Display Price Locator) which is already set at 3 to enable spread transactions.
/bit.ly/32wuG2g

Product Modification Summary: Amendments to the Exercise Price Rule of the Options on Three-Month Eurodollar and Three-Month SOFR Futures Contracts – Effective: September 14, 2020
CME Group
Effective Sunday, September 13, 2020, for trade date Monday, September 14, the Chicago Mercantile Exchange, Inc. (CME or Exchange) will amend the strike listings for Options on Three-Month Eurodollar Futures and Options on Three-Month SOFR Futures, as defined below, on CME Globex, the CME Trading Floor and for submission for clearing on CME ClearPort.
/bit.ly/34Hg6aL

The Bermuda Stock Exchange And Parent Company Miami International Holdings, Inc. Announce $1.35 Billion Debt Listing For The Government Of Bermuda
Mondovisione.
Miami International Holdings, Inc. (MIH), the majority stockholder of the Bermuda Stock Exchange (BSX) and parent holding company of the MIAX Exchange Group™, today announced that the BSX has listed Senior Notes totaling principal amount of US$1.35 billion for the Government of Bermuda.
/bit.ly/32y4ggj

Fintech

The Pandemic Is Supercharging the Wildly Profitable Video Game Business; While sales have soared, the industry still must address lingering issues.
Jason Schreier – Bloomberg
The pandemic has sent Hollywood into a tailspin, plunged travel into its deepest funk in memory, and left restaurant owners on the brink of starvation. And video game makers? They’re thriving. People stuck at home for months picked up controllers and consoles to ease the lockdown blues by stealing cars, hunting zombies, and planting trees in villages full of talking animals.
/bloom.bg/3b8cccb

American Investors Have a Whole Lot Riding on Big Tech; Financial advisers are getting nervous about all that risk.
Suzanne Woolley – Bloomberg
Many Americans have hitched their financial future to Big Tech, whether they realize it or not. Just five companies make up about 24% of the S&P 500 Index — Apple Inc., Amazon.com Inc., Microsoft Corp., Facebook Inc. and Alphabet Inc. — up from 17% at the start of the year. That means a significant chunk of Americans’ net worth and the security of their retirement may hinge on the success or failure of a handful of stocks. Some financial advisers, nervous about the exposure, say they are struggling to get clients to switch things up.
/bloom.bg/3hA9Mp4

States entice fintechs by giving them freedom to experiment
Miriam Cross – American Banker
The inventors of Grain had the idea, the research and the coding in place for an app to help bank customers build credit, but they lacked a viable way to test their product.
Enter the fintech sandbox.
Regulatory sandboxes, which provide a framework for startups to vet products with consumers before pursuing a license or jumping through onerous hoops, have caught on more slowly in the United States than in other countries like the United Kingdom, which pioneered the concept.
/bit.ly/2QHyecB

Deutsche Bank opens applications for second Female Fintech Competition
Finextra
Deutsche Bank has joined forces with Atos, Google and TechQuartier to launch the second Female FinTech Competition.
FinTechs with a female founder or female(s) in the top management groups are invited to enter the competition to pitch their business case. First prize is a place on Atos’ FinTech programme. Other winners will have the opportunity to access and benefit from Deutsche Bank and Google Innovation resources, including spending time in Deutsche Bank’s Innovation Lab and working with experts and coaches in the global Innovation Team.
/bit.ly/31vfQtx

Cryptocurrencies

(Podcast) Why commodities veteran Chris Hehmeyer is “committing to crypto”
Aislinn Keely – The Block
Chris Hehmeyer has long been a big player in the U.S. futures and commodities industry, but now he’s all in on crypto. On this week’s episode of The Scoop, Hehmeyer explained why. Hehmeyer began its push into crypto during the 2017 bull run. Competitive pressures in its traditional futures business led to the firm’s pivot earlier this year full-time into crypto. Hehmeyer said he wanted to signal to clients that the firm was ready to commit to the growing crypto market.
/bit.ly/34Khb1o

Fidelity Launches Inaugural Bitcoin Fund for Wealthy Investors
Michael McDonald and Vildana Hajric – Bloomberg
Money manager to offer Wise Origin Bitcoin Index Fund I; Qualified clients must make minimum investment of $100,000
Fidelity Investments is launching its first Bitcoin fund, adding its establishment name and star power to the fledgling and often controversial asset class. The Boston-based money manager said in a filing to the Securities and Exchange Commission that it will begin to offer the Wise Origin Bitcoin Index Fund I through a new business unit called Fidelity Digital Funds. Peter Jubber, head of Fidelity Consulting, will run the new business unit, the filing shows.
/bloom.bg/2EHT0FT

Dark Web Drug Marketplace Fueled by Crypto Goes Offline
William Turton – Bloomberg
Empire Market among biggest English-language dark web markets; Site likely closed due to police or ‘exit scam,’ experts say
A popular dark net marketplace for buying and selling drugs has been offline for three days, fueling speculation about its fate and despair among some users. Empire Market, similar to the infamous Silk Road site shut down by law enforcement in October 2013, had become of the most trafficked illicit online marketplaces in recent years, following the demise of other sites such as AlphaBay and Hansa. In addition to selling drugs, Empire Market offered fake documentation like passports and drivers’ licenses and off-the-shelf malware.
/bloom.bg/3b8RWr2

OneCoin Took In Billions. Then Its Leader Vanished.
James Marson – WSJ
The splintering of one of the world’s biggest cryptocurrency frauds began with an act of jealousy. Ruja Ignatova, whose OneCoin raked in billions, suspected her boyfriend of stringing her along in late 2017, her brother later testified in federal court. So, he said, she had an associate rent an apartment beneath the boyfriend’s Florida digs and drill through the floor to eavesdrop. What she discovered was another kind of betrayal: that he was cooperating with the Federal Bureau of Investigation.
/on.wsj.com/32uma3H

Deribit Suffers Outage Over ‘Hardware Issues,’ May Miss Thursday’s Options Expiry
Daniel Palmer – Coindesk
The most popular cryptocurrency options exchange, Deribit, is suffering a severe service outage. According to company tweets early on Thursday, the trading platform is suffering “hardware issues” and a technician has been called to reboot its servers and (hopefully) bring services back to normal functionality. “We are not hacked and your funds are safe,” an initial tweet stated. Deribit went on to warn that it may not have its systems back online in time for today’s daily options expiry. In that case, the firm will “manually adjust the options expiry to reflect the actual market at the time of expiry.”
/bit.ly/2YDHi6x

House Members call for briefing on recent seizure of crypto assets from terrorist groups
Momina Khan – The Block
Representatives Josh Gottheimer (D-NJ) and Emanuel Cleaver (D-Mo) asked the Trump administration this Monday for more information on the recent seizure of some major terrorist groups’ cryptocurrency assets. “It is vital that Members of the Subcommittee on National Security, International Development and Monetary Policy receive a briefing, at the appropriate classification level, on this action, the largest ever seizure of online terrorist financing, from the Department of Justice, the Department of the Treasury on this investigation,” Cleaver, the chairman of the House Financial Services Subcommittee on National Security and Gottheimer, a member of the subcommittee wrote, according to a news report by The Hill.
/bit.ly/34BAKsL

Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
Omkar Godbole – Coindesk
Bitcoin’s options market foresees little price turbulence in the short-term, even as central bank watchers expect fireworks during a speech by the chairman of the Federal Reserve on Thursday morning. Bitcoin’s implied volatility on one-month options, a gauge of the market’s expectations for price gyrations over the four week period, fell to 52% early Thursday – the lowest level since July 25, according to data source Skew. Short-term price expectations have declined sharply from 70% to 52% over the past two weeks. Over three months, the gauge has pulled back from 80% to 68%, while the six-month line has declined from 80% to 72%.
/bit.ly/31yjKSv

Libra Association hires former Homeland Security general counsel as its top lawyer
Yogita Khatri – The Block
The Libra Association has hired a new top lawyer for the second time in three months. Steve Bunnell, a former general counsel at the U.S. Homeland Security Department, has joined the association as its chief legal officer, according to Bunnell’s LinkedIn profile. Bloomberg Law first reported the news. Bunnell previously also had a stint with the U.S. Department of Justice and the U.S. Attorney’s Office.
/bit.ly/2YFuqN5

Australian company takes Ripple to court over alleged violations of trademark laws
Saniya More – The Block
Australian financial services company New Payments Platform Australia (NPPA) is suing Ripple for allegedly breaching several Australian trademark laws with what it claims is the unauthorized use of the brand, name and trademark “PayID.” NPPA launched its PayID brand in Australia in February 2018. The brand was accompanied by an AU$3.3 million advertising campaign.
/bit.ly/3gAocUQ

Crypto tax software provider starting to support DeFi protocols, including Uniswap V2
Yogita Khatri – The Block
TokenTax, a crypto tax software provider that helps users file taxes, has added support for Uniswap V2. The integration means users would have to just connect their Ether (ETH) addresses, and their Uniswap V1 & V2 transactions would automatically be imported into their TokenTax accounts. TokenTax said it is set to also support two other decentralized finance (DeFi) protocols — Curve Finance and Aave. The news comes at a time when the U.S. Internal Revenue Service has sent a new batch of letters to suspected crypto holders about whether they correctly reported their transactions.
/bit.ly/2YzoqWj

Politics

TikTok’s CEO Quits Months Into the Job After Trump’s Ban
Kurt L Wagner – Bloomberg
Disney vet Kevin Mayer is leaving the company amid tensions; Microsoft among those in talks to buy ByteDance’s prized asset
TikTok Chief Executive Officer Kevin Mayer has resigned just months after taking the helm of the viral short video app, stepping out of the crossfire as the Trump administration targets the business owned by China’s ByteDance Ltd. Mayer told employees of his decision in an internal memo and a company spokeswoman confirmed his resignation. Vanessa Pappas, currently general manager of ByteDance’s prized international service, will take his place
/bloom.bg/2YEuOvq

Japan’s Abe to Serve Out Term as Ruling Party Leader, Aide Says
Isabel Reynolds and Emi Nobuhiro – Bloomberg
Suga says he expects Abe to explain his health properly; Government spokesman says he sees no change in Abe’s condition
Japanese Prime Minister Shinzo Abe should be able to serve out the remainder of his term as party leader ending about a year from now, his right-hand man said, after recent hospital visits raised questions about the premier’s health. Chief Cabinet Secretary Yoshihide Suga, 71, said in an interview with Bloomberg on Thursday that he expects Abe to explain his health condition in a proper way. Abe is scheduled on Friday at 5 p.m. to give his first full news conference since June, at which time he’s expected to discuss virus policy as well as his own health.
/bloom.bg/31vpWui

Hong Kong Denies Visa to Foreign Journalist in Another Blow to Press Freedom; Journalist was hired to work for an independent local news outlet after living in the city since 2014
Dan Strumpf – WSJ
Authorities denied a work visa to a Hong Kong-based foreign journalist after he was hired to join an independent local news outlet, the most recent sign of eroding press freedoms in the city after Beijing’s imposition of a new national-security law. The decision adds to concerns over the new law, which says media operating in the city must be more rigorously controlled by state authorities. Weeks earlier, police raided the offices of a local newspaper that supported antigovernment protesters and arrested its owner.
/on.wsj.com/2Qqhark

The Lesson We’re Learning From TikTok? It’s All About Our Data; We should minimize how much we share with all of our favorite and not-so-favorite apps. Here’s how.
Brian X. Chen – NY Times
Is TikTok, the Chinese-owned social network that is used mostly by teenagers to post dance videos, a national security threat? It depends on whom you ask. President Trump has said it is and has threatened to ban the app in the United States. But security experts are more hesitant to draw conclusions. While there is no direct evidence that TikTok has done anything malicious with people’s data, sharing information could be fundamentally less safe with a company that might allow the Chinese authorities to intercept it.
/nyti.ms/2EzbkBB

Regulation

Handling complaints and paid representatives: ASIC provides financial firms with guidance
ASIC
ASIC recently published Regulatory Guide 271 Internal Dispute Resolution (RG 271). The guide updates requirements for financial firms in dealing with consumer and small business complaints under their Internal Dispute Resolution (IDR) procedures.
/bit.ly/32sxw8k

ASIC provides relief for companies planning an initial public offering
ASIC
Following public consultation, ASIC has issued regulatory relief to help reduce red tape for companies undertaking an initial public offer (IPO). ASIC Commissioner, Cathie Armour, said, ‘Given the significant costs involved in undertaking an IPO, our new legislative relief will help reduce the regulatory costs for companies considering going public, while upholding an orderly and transparent market’.
/bit.ly/3lvO5sX

ESMA selects Chair and Independent Members for its CCP Supervisory Committee
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has selected the candidates for the CCP Supervisory Committee set-up under the amended European Market Infrastructure Regulation (EMIR 2.2).
/bit.ly/3lsdaF8

Risk parameters in ESMA’s guidelines on stress test scenarios under the Money Markets Fund Regulation to be updated
ESMA
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, today confirms that the 2019 Guidelines on stress test scenarios under the Money Market Funds Regulation (MMFR) will be updated in 2020 to include a modification of the risk parameters to reflect recent market developments related to the COVID-19 crisis.
/bit.ly/3jhONb8

Additional Weekend Testing Opportunities – MEMX and MIAX – August 29, 2020
FINRA
The Members Exchange (“MEMX”) and the MIAX Pearl Equities Exchange (“MIAX”) are providing additional testing opportunities this weekend in preparation for their respective launch dates. Firms participating in the August 29, 2020 test may send OATS data related to those orders to the OATS Certification Testing environment before the following Monday’s OATS reporting deadline. OATS will then attempt to match to MEMX and MIAX test data. Matching statistics for the weekend test will be provided to firms upon request and will not be published to OATS CT Website.
/bit.ly/2YE646u

Three Resources for Senior Investors
FINRA
In case you missed it, Senior Citizen’s Day was August 21. Designated by President Ronald Reagan in 1988, the day offers a time to pay tribute to the many contributions seniors make to their communities, and to bring awareness to issues of particular importance to America’s older citizens.
/bit.ly/32kz0Bp

SEC Charges BorgWarner for Materially Misstating its Financial Statements
SEC
The Securities and Exchange Commission today announced settled charges against BorgWarner Inc., a motor vehicle parts manufacturer headquartered in Auburn Hills, Michigan, for materially misstating its financial statements by failing to account for certain asbestos liabilities.
/bit.ly/2YDXipa

SEC Monitoring Impact of Hurricane Laura on Capital Markets
SEC
The Securities and Exchange Commission is closely monitoring the impact of Hurricane Laura on investors and capital markets. The SEC divisions and offices that oversee companies, accountants, investment advisers, mutual funds, brokerage firms, transfer agents, and other regulated entities and investment professionals will continue to closely track developments. They will evaluate the possibility of granting relief from filing deadlines and other regulatory requirements for those affected by the storm. Entities and investment professionals affected by Hurricane Laura are encouraged to contact Commission staff with questions and concerns:
/bit.ly/34CEHgV

SEC Halts Fraudulent Offering by Florida Investment Adviser
SEC
The Securities and Exchange Commission today announced that it has filed an emergency action against Florida-based investment adviser Coral Gables Asset Management LLC and its sole owner, David C. Coggins, in connection with an alleged fraudulent offering. On Aug. 20, 2020, U.S. District Court Judge Kathleen M. Williams granted the SEC’s request for emergency relief, including an asset freeze and an order for records preservation, against Coggins and Coral Gables, as well as two entities charged by the SEC as relief defendants
/bit.ly/3loRR7e

SEC Adopts Rule Amendments to Modernize Disclosures of Business, Legal Proceedings, and Risk Factors Under Regulation S-K
SEC
The Securities and Exchange Commission today announced that it voted to adopt amendments to modernize the description of business (Item 101), legal proceedings (Item 103), and risk factor disclosures (Item 105) that registrants are required to make pursuant to Regulation S-K. These disclosure requirements have not undergone significant revisions in over 30 years. The amendments the Commission is adopting today update these items to reflect the many changes in our capital markets and the domestic and global economy in recent decades.
/bit.ly/2FUKdkC

Speech: PLI Investment Management Institute – Dalia Blass
SEC
Good Morning. Thank you Barry [Barbash] and Paul [Roye] for the kind introduction and thank you and PLI for inviting me to speak again with you. I looked back at my remarks the last time I was with you. Two years ago, the focus of our discussion primarily centered on SEC rulemaking regarding Standards of Conduct for Financial Professionals and Liquidity Risk Management.[1] This year, we have many more items on the agenda, and COVID-19 has reshaped our lives, tested our markets and reordered – but not reduced – our priorities.
/bit.ly/2YE1GUS

Modernizing the Framework for Business, Legal Proceedings and Risk Factor Disclosure – Chairman Jay Clayton
SEC
Good morning. This is an open meeting of the U.S. Securities and Exchange Commission, under the Government in the Sunshine Act. I would like start today’s meeting by welcoming Commissioner Crenshaw to her first open meeting.
/bit.ly/34CexuF

Statement at Open Meeting on Modernization of Regulation S-K 101, 103, and 105 – Commissioner Hester Peirce
SEC
Today’s final amendments to the description of business, legal proceedings, and risk factor disclosure requirements are common sense reforms that continue the Commission’s efforts to modernize, simplify, and update public company disclosure requirements. The release represents another step in the right direction by making the rules more principles-based and rooted in materiality, which provides registrants with sufficient flexibility to tailor disclosures to their unique circumstances.
/bit.ly/32v66P5

Opening Remarks at the Open Commission Meeting to Adopt Amendments to Items 101, 103, and 105 of Regulation S-K – Commissioner Elad L. Roisman
Thank you, Chairman Clayton, for taking the long overdue step of presenting the Commission with the opportunity to amend Items 101, 103, and 105 of Regulation S-K. The amendments we are voting on today will modernize some of the most pertinent disclosure that we require our public reporting companies to provide to investors and potential investors. These items of Regulation S-K mandate disclosure of a company’s description of its business, its pending legal proceedings, and the factors that make an investment in the company speculative or risky. This is the narrative disclosure that allows investors to assess a particular company’s prospects for success, including whether the company has an understanding of the risks it faces and how it plans to address them.
/bit.ly/3jmVtEK

Regulation S-K and ESG Disclosures: An Unsustainable Silence – Commissioner Allison Lee
SEC
Let me start with a warm welcome to our newest colleague, Commissioner Crenshaw. She has been a tremendous asset to the Commission for many years, and I know that she will continue to serve the agency, investors, and the public with great distinction. I also want to thank the staff for their hard work on today’s rule.[1] They’ve done exemplary work under trying circumstances, and I am, as always, grateful.
/bit.ly/3lqiOrh

Statement on the “Modernization” of Regulation S-K Items 101, 103, and 105 – Commissioner Caroline Crenshaw
SEC
Good morning, and thank you to the Chairman, my fellow Commissioners, and to the staff for helping me get up to speed on this rule in my first week and a half on the job. Thank you also to the staff for your dedication and hard work.[1] I have worked with some of you for many years now, and I appreciate your thoughtfulness and your unwavering dedication to the Commission’s mission.
/bit.ly/3jhQg18

Statement on Modernization of the Accredited Investor Definition – Chairman Jay Clayton
SEC
Today, the Commission adopted final rules to modernize and add much needed flexibility to the definition of “accredited investor” by adding new categories of qualifying individuals and entities that have demonstrated financial sophistication such that they should not be excluded from the very large, multifaceted and important private capital markets. The private capital markets are important to investors and issuers of various types, as well as our economy more generally. The accredited investor definition is the principal test for investor participation in significant segments of our private capital markets. It also plays an important role in other state and federal securities law contexts.
/bit.ly/32xr6Vs

Statement on Amending the “Accredited Investor” Definition – Commissioner Hester Peirce
SEC
Today’s cautious expansion of the accredited investor definition to include additional categories of natural persons and entities is a step in the right direction. Series 7, 65, and 82 license holders and knowledgeable employees of private funds clearly have the knowledge and expertise to evaluate the merits and risks of an investment. These newly minted accredited investors are not your typical mom and pop retail investors, a fact that should assuage the concerns of those that fear any expansion of the definition.
/bit.ly/32v66P5

Commissioner Roisman Statement on Amending the “Accredited Investor” Definition – Commissioner Elad L. Roisman
SEC
Today, the Commission considered and updated a definition in our rules that has long been an insurmountable hurdle for most people who may wish to access investment opportunities outside of our public markets.
/bit.ly/3jmVtEK

Joint Statement on the Failure to Modernize the Accredited Investor Definition; Commissioners Allison Herren Lee and Caroline Crenshaw
SEC
The accredited investor definition is the single most important investor protection in the private market.[1] Today’s amendments purport to “update” that definition while leaving in place 38-year old wealth thresholds, declining to index the thresholds to inflation, and declining to provide economic analysis to show how the failure to index will affect American investors—the bulk of whom are seniors—going forward.
/bit.ly/2FULHvc

New Zealand Financial Markets Authority Appoints New Director Of Investment Management
Mondovisione
The Financial Markets Authority (FMA) has strengthened its executive team, appointing Paul Gregory to the newly created role of Director of Investment Management.
/bit.ly/34ChGut

Investing and Trading

Eighty Years After Hindenburg, Startup Pitches Hydrogen Flight; A former Airbus executive thinks he has a solution to the airline industry’s carbon problem
David R Baker – Bloomberg
The aviation industry is under pressure to do something about the immense amount of carbon emissions its engines generate. The output is accelerating many times faster than from sectors such as energy and agriculture, contributing to global warming.
/bloom.bg/3b1ikCT

A Warning Flashes for Record U.S. Stock Rally
Joanna Ossinger – Bloomberg
S&P 500, Nasdaq 100 moving together with volatility gauges; That’s a pattern that sometimes preceded drops in equities
Fear gauges for the S&P 500 and Nasdaq 100 indexes may be providing fresh reasons for caution about the relentless rally in U.S. stocks. The S&P 500 and Nasdaq 100 scaled new peaks Wednesday, but their respective measures of implied volatility also rose in tandem. Simultaneous increases in equity and volatility gauges are unusual, and a reason for concern for some.
/bloom.bg/2QtxjMD

Russian Diamond Giant Follows De Beers With Price Cuts
Thomas Biesheuvel and Yuliya Fedorinova – Bloomberg
Alrosa follows De Beers in reducing rough diamond prices; Biggest producers lowered prices for first time since pandemic
Russian diamond miner Alrosa PJSC joined rival De Beers in cutting prices for its gems, but with a twist — the company changed its billing system so buyers can’t tell which stones are discounted, or by how much. The two biggest producers for months refused to cut prices even as sales collapsed during the coronavirus pandemic, to avoid giving up too much ground before demand returned. De Beers and Alrosa don’t publish prices for their rough stones and their dominance in the often-secretive diamond industry has allowed the two companies to dictate terms to their customers over the years.
/bloom.bg/2Qty08H

The lofty promises of cash shells; Surge in new listings is welcome but investors should be cautious
The editorial board – FT
There is a hot new fashion on Wall Street. Special purpose acquisition companies — Spacs for short — are all the rage, with everyone from sports coaches to politicians joining a queue to raise money on public markets on the promise of a great deal to come. So far, Spacs have raised close to $24bn globally this year — already eclipsing last year’s record by 70 per cent. Blank cheque companies now account for one in every five dollars raised in initial public offerings: about three times the share of last year.
/on.ft.com/3jhKgp8

Mark Carney joins Brookfield to launch ‘impact investing’ fund; Former governor takes on first big business role since leaving Bank of England in March
Mark Vandevelde and Chris Giles – FT
Mark Carney is joining asset manager Brookfield to launch an “impact investing” fund focused on social and environmental benefits as well as financial returns, in his first big business role since his near seven-year term as Bank of England governor ended in March.
/on.ft.com/2QtusmR

Going Negative: The ECB’s Experience – Speech By Isabel Schnabel, Member Of The Executive Board Of The ECB, At The Roundtable On Monetary Policy, Low Interest Rates And Risk Taking At The 35th Congress Of The European Economic Association
Mondovisione
In June 2014, the ECB was the first major central bank to lower one of its key interest rates into negative territory.[1] As experience with negative interest rates was scant, the ECB proceeded cautiously over time, lowering the deposit facility rate (DFR) in small increments of 10 basis points, until it reached -0.5% in September 2019. While negative interest rates have, over time, become a standard instrument in the ECB’s toolkit, they remain controversial, both in central banking circles and academia.[2]
/bit.ly/2YzsHJl

Environmental, Social and Corporate Governance

Hurricane Laura and the California Fires Are Part of the Same Crisis; Human-caused climate change has made the world warmer than it used to be, and the consequences have started to show.
David R Baker, Eric Roston, and Brian Eckhouse – Bloomberg
As Hurricane Laura pounds the U.S. Gulf Coast with nearly 150 mile-per-hour winds, causing water levels to rise almost 10 feet above normal, wildfires in California are still raging across more than a million acres, the result of a heatwave that spiked as high as 130° Fahrenheit (54.4° Celsius)—possibly the hottest temperature ever sustained on Earth. In the middle of the country, an inland hurricane flattened a large part of Iowa and darkened Chicago homes. And a tropical storm left thousands in New York without electricity for a week or more.
/bloom.bg/3gzXRGG

US short-termism on ESG investing will hurt growth; Europe is better at recognising the financial value of companies that look to the future
Sarah Keohane Williamson- FT
In Europe, the regulatory pressure on environmental, social and governance issues is strong and growing stronger, from new rules on reporting such data and integrating it into investment decisions to required disclosure of ESG risk analysis.
/on.ft.com/3gy3UeW

Institutions

Goldman Sachs Asks Staff to Return to London Office: WFH Tracker
Bloomberg News
Thousands of bankers, brokers and wealth managers have spent the past few months turning kitchen tables into corner offices, selecting the best backdrops for video conferences and constructing their own trading rigs. The precise nature of their future working environment remains an open question but some employers have started to offer glimpses of what to expect.
/bloom.bg/3hyCWox

TD Expects Bigger Losses From Loans in Canada Than in the U.S.
Doug Alexander – Bloomberg
Toronto-Dominion Bank is bracing for a bigger Covid-19 impact on consumer loans in Canada than in the U.S. The Canadian lender, which has a U.S. bank-branch network that stretches from Maine to Florida, set aside C$951 million ($723 million) for souring loans in its domestic retail division, compared with C$897 for its U.S. operation. Higher provisions eroded profit in the fiscal third quarter, with results beating analysts’ estimates.
/bloom.bg/3hyDjPX

Morgan Stanley Preps for Bigger Fed-Engineered Risk Rally
Todd White – Bloomberg
Fixed-income PM Jim Caron buying emerging-market debt; New Fed approach could keep rates near zero for 5 years
The Fed is about to bestow more gifts on the market, stoking a new phase in the risk rally, according to Morgan Stanley Investment Management portfolio manager Jim Caron. With the Federal Reserve poised to adopt a policy that could suppress rates for years to come, Caron is adding higher-yielding debt including from emerging markets to Morgan Stanley’s global fixed-income funds.
/bloom.bg/3gAZgwB

Investment banks in line for bumper payday from Ant IPO; Chinese payments company’s dual listing is expected to deliver at least $300m in fees
Hudson Lockett and Mercedes Ruehl – FT
Wall Street banks including Citigroup, JPMorgan and Morgan Stanley are poised to share at least $300m in fees from the blockbuster dual listing of Chinese payments company Ant Group, in what is likely to be the biggest windfall in a decade for bankers in Asia’s top financial hub.
/on.ft.com/2QuA4gB

Small band of bulls keeps faith in beaten-up bank stocks; Soros and Brandywine among fund managers that see value in shares at these prices
Robert Armstrong – FT
The double threat of pandemic-related loan losses and persistent low interest rates has driven investors from bank stocks, leaving behind a small group of bulls who believe that the beaten-up sector is the best way to play the recovery from Covid-19.
/on.ft.com/31z7Ebu

Two best-performing funds since pandemic are run by Morgan Stanley; Concentrated bets on ecommerce stocks have proved very successful
Carmen Germaine and Richard Henderson – FT
Two Morgan Stanley mutual funds have navigated the pandemic better than any other US funds, thanks to big bets on some of the year’s hottest technology stocks. The New York-based company’s Insight mutual fund had gained 59 per cent and its Institutional Growth fund is up 55 per cent since February 19, the market’s pre-coronavirus peak, as of Wednesday.
/on.ft.com/34EayO8

Two Black-Led Banks Merge to Form a $1 Billion Lender; The expanded City First Bank, which concentrates on underserved neighborhoods, will be the nation’s largest Black-controlled federally insured commercial lender.
Stacy Cowley – WSJ
A merger announced Wednesday will create the nation’s largest Black-controlled bank and the first with assets of more than $1 billion. Broadway Federal Bank, a Los Angeles-based commercial lender founded in 1946, will combine with City First Bank in Washington, which opened in 1998.
/nyti.ms/2YCHNxA

Regions

Vanguard uproots staff from Hong Kong to focus on Shanghai; World’s second-largest asset manager says its new regional hub will be mainland China
Thomas Hale, Siobhan Riding and Robin Wigglesworth – FT
Vanguard Group has said it will leave Hong Kong and plans to relocate staff from the territory to Shanghai, becoming the latest US firm to focus on the opening up of mainland China’s vast fund industry.
/on.ft.com/3gvIOxx

Turkey Braces for Yet Another Currency Crisis; A sharp drop in the value of the lira is testing businesses and residents while they are coping with the pandemic.
Jack Ewing – NY Times
When the Turkish lira plunged to a new low against the dollar and euro this month, Hakan Bulgurlu did not panic. This was not the first time that Mr. Bulgurlu, the chief executive of Arcelik, a Turkish maker of home appliances, had steered through a currency crisis.
/nyti.ms/3aZsOCO

Brexit

Abbott’s new British trade role called into question as gig exposes European jaunt
Latika Bourke – Sydney Morning Herald
British Labour is stepping up its opposition to the appointment of former Australian prime minister Tony Abbott as an adviser to the British Board of Trade and is demanding UK Prime Minister Boris Johnson explain the details of the plum job. In Australia, Abbott’s critics have called on him to be stripped of his $300,000-a-year parliamentary pension while he is working for a foreign government that is negotiating a trade deal with Australia.
/bit.ly/2YERBak

Germany scraps plans for Brexit talks at EU ambassadors summit
Jennifer Rankin – The Guardian
Germany has scrapped plans to discuss Brexit at a high-level diplomatic meeting next week because there has not been “any tangible progress” in talks, the Guardian has learned, as Brussels laments a “completely wasted” summer. EU officials now believe the UK government is prepared to risk a no-deal exit when the transition period comes to an end on 31 December, and will try to pin the blame on Brussels if talks fail.
/bit.ly/31CSm5X

Barnier Planning a Brexit Book After Four Years of Negotiations
Ania Nussbaum – Bloomberg
The Brexit negotiations aren’t even over, but Michel Barnier is giving thought to writing a book on Britain’s exit from the European Union. “I think it would be worthwhile that I tell how I’ve lived these negotiations in more detail,” the EU’s chief Brexit negotiator told a business conference in Paris on Wednesday. “I don’t just want to tell how we’ve handled the consequences of Brexit, but also why we need to take time to look into the lessons of Brexit.”
/bloom.bg/3hzPYlJ

The Guardian view on Brexit deadlines: Boris Johnson’s nemesis
The Guardian Editorial Staff
Boris Johnson’s government is too often caught unawares by events that were not only predictable but scheduled. The start of a new school term has been a feature of autumns for a lot longer than Gavin Williamson has been education secretary, yet arrangements for keeping classrooms safe from Covid-19 are still uncertain. Ministers cannot answer a question as simple as whether masks should be worn. As with the mess over exam results, guidance issued one day is contradicted the next.
/bit.ly/2QvfpsM

Brexit: More than 60,000 EU citizens apply to settle in NI
John Campbell – BBC News
More than 62,500 people in Northern Ireland have applied to the scheme that will allow them to remain in the UK when the Brexit transition ends. The settlement scheme is designed to give EU citizens – who entered the UK under the EU’s freedom of movement principle – the right to remain. The highest number of applications in Northern Ireland have, so far, come from Polish (16,890) people. The next highest came from Lithuanian (8,700) and Romanian (6,310) nationals. The majority of concluded applications (65%) have been granted settled status with 33% granted pre-settled status.
/bbc.in/3lpNE32

Miscellaneous

California’s Wildfires Came at the Worst Time for Wine Industry; Harvest time is now, but fires are preventing grape picking in many places, while smoke threatens to taint acres of crops.
Elin McCoy – Bloomberg
Vineyard owners in California’s Napa and Sonoma regions and the Santa Cruz Mountains had planned to harvest grapes over the next few weeks. But with flames threatening wineries and homes, thousands of people have had to evacuate, although some winemakers and winery workers stayed to help fight the fires alongside Cal Fire, the state Department of Forestry and Fire Protection.
/bloom.bg/2EuSrQc

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