‘Questionable’ Death Prompts Call to Exhume Quadriga CEO’s Body; ASX creates the Aussie Nasdaq

Dec 16, 2019

First Read

Hits & Takes
By JLN Staff

Nasdaq’s TotalMarkets podcast episode 6 features Nasdaq’s chief economist, Phil Mackintosh, interviewing T. Rowe Price’s Mehmet Kinak on the topic of improving market structure.~SR

Do you want to know what life is like at TMX? Do you want to work there? Check out this page from TMX about just that.~JJL

Mavenwave has a paper about “The Pros and Cons of Cloud Data Warehousing in Financial Services.”~JJL

ICYMI last week, DTCC’s latest Systemic Risk Barometer Survey marks the first time in the survey’s seven-year history that cyber risk was surpassed as the top risk, with 23% of respondents citing geopolitical risks & trade tensions as the top overall risk. More than half of them (59%) cited it as a top 5 risk for next year. Cyber risk came in second.~SR

If you missed the John Lothian Newsletter Weekend Update, HERE it is.~JJL

More and more people are still signing the petition for Justice for Jitesh. The count stands at 2173 and counting. Thank you to all who continue to share the link and the story.~JJL

Tata Consultancy Services (TCS), an Indian tech giant, has released a blockchain software development kit that it claims can allow developers to write smart contracts 40 percent faster. Although the Indian government has consistently been anti-blockchain for a long time, the firm says this product is aimed at established blockchain projects based outside the country, like Ethereum, Hyperledger Fabric or R3 Corda.~MR

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A Renaissance In Clearing – John Davidson of the OCC
JohnLothianNews.com

John Davidson, chief executive officer of the OCC, discussed how the clearer is revamping its entire system, replacing its legacy clearing technology with the new Renaissance initiative, which will operate in the public cloud. He also talked about the OCC’s new capital management policy, which for the first time places skin in the game, and the coming reduction in clearing fees which will replace yearly refunds.

Watch the video »

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Bad News Bear Market
JohnLothianNews.com

This week on The Spread – options traders hedge like the world is ending, ICE launches options trades on Bakkt bitcoin futures, Cboe acquires Europe’s biggest stock trade clearing house, and the industry remembers a lost legend.

Watch the video »

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Sponsored Content
Enjoy Greater Efficiency with your Nikkei 225 Options Trading and More.

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Felix Rohatyn: banker who rescued New York dies at 91; Quintessential ‘trusted adviser’ at Lazard guided chief executives and politicians
Sujeet Indap – FT
Felix Rohatyn, who twice fled the Nazis as a child and went on to reach the highest echelons of Wall Street and the New York establishment, has died at age 91.
/on.ft.com/2PrmZVO

*****He led a good life.~JJL

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Newly identified jet-stream pattern could imperil global food supplies, says study
Columbia University
Scientists have identified systematic meanders in the globe-circling northern jet stream that have caused simultaneous crop-damaging heat waves in widely separated breadbasket regions-a previously unquantified threat to global food production that, they say, could worsen with global warming. The research shows that certain kinds of waves in the atmospheric circulation can become amplified and then lock in place for extended periods, triggering the concurrent heat waves. Affected parts of North America, Europe and Asia together produce a quarter of the world food supply. The study appears this week in the journal Nature Climate Change.
bit.ly/34q8DsP

*****As Scoobie-Doo would say, RUH ROH!!!~JJL

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Bridging the Week by Gary DeWaal: December 9 to December 13, and December 16, 2019 (Evaluating New Virtual Currencies; Articulating Elements of Supervision)
Gary DeWaal, Katten Muchin Rosenman LLP
The New York Department of Financial Services proposed a self-certification regime for the approval of new digital coins by licensed virtual currency firms similar to the process applied by the Commodity Futures Trading Commission for new products by registered markets. Some fine tuning is likely required, but this is a welcome, principles-based measure that puts the burden on licensees to develop robust procedures to evaluate new virtual currencies. Separately, ICE Futures U.S. proposed to require certain core elements of a mandatory program of supervision by all firms accessing its markets – whether registered with the CFTC or not, or whether a member of IFUS or not. As a result, the following matters are covered in this week’s edition of Bridging the Week
www.bridgingtheweek.com/

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Friday’s Top Three
Our most read story on Friday was Bloomberg’s Johnson Wins Crushing Majority in Election That Upends Britain. Next was our MarketsWiki page on Ed Tilly, the chairman and CEO of Cboe Global Markets. And third was another Brexit-related story, EU confirms one-year Brexit reprieve for derivatives industry, from The Financial Times.

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MarketsWiki Stats
169,431,103 pages viewed; 24,000 pages; 222,696 edits
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
Whales
Tassat
Swap
New York State Department of Financial Services

CryptoMarketsWiki Stats

1,315 pages; 11,643 edits
CryptoMarketsWiki Statistics

Lead Stories

‘Questionable’ Death Prompts Call to Exhume Quadriga CEO’s Body
Doug Alexander – Bloomberg
Gerald Cotten died last December while on honeymoon in India; Crypto exchange is in the midst of bankruptcy proceedings
Skepticism around the demise of Canadian cryptocurrency exchange founder Gerald Cotten just won’t go away. The “questionable circumstances” behind the death of QuadrigaCX’s chief executive last year in India at 30 led lawyers representing customers of the collapsed trading platform to request on Friday that his body be exhumed.
/bloom.bg/2RYZAMW

ASX creates the Aussie Nasdaq
Paul Smith – AFR
Australian investors will be able to track and back the ASX’s booming tech stocks with greater clarity from next year, with the launch of a new S&P technology index that will highlight the winners and losers in a sector that is growing rapidly with IPOs of companies from around the world.
bit.ly/35rmlx1

The World’s Cash Is Disappearing. Bankers Aren’t Sure Where It Went. Check your pockets. Society is increasingly going cashless, but banknotes are more in demand. Bankers search for clues.
David Winning and James Glynn – WSJ
Some Australians are burying it. The Swiss might be hiding it. The Germans are probably hoarding. Banks are issuing more notes than ever and yet they seem to be disappearing off the face of the earth. Central banks don’t know where they have gone, or why, and are playing detective, trying to crack the same mystery.
/on.wsj.com/2EllyBP

What the U.K. Election Result Means for London’s Future as a Financial Hub; Boris Johnson’s victory is broadly welcomed but some investors predict the euphoria will be short-lived
Julie Steinberg, Simon Clark and Margot Patrick – WSJ
The U.K. capital’s financial center cheered Boris Johnson’s emphatic election victory for alleviating the Brexit uncertainty that has hung over the British economy’s key engine for 3½ years.
/on.wsj.com/2Enrj1V

Rule Change Could Help Tech Firms Advance Into Banking; Potential change in deposit classifications could have big implications for future of bank-tech partnerships
Telis Demos – WSJ
Tech companies’ and banks’ tussle over the future of finance may be getting a bit more intense. Technology companies are moving into retail banking by offering financial products under their name. In almost every case, though, there is a partner bank behind the tech firm.
/on.wsj.com/35q9ESZ

World’s Best Hedge Fund Returns Are Found in Tiny Singapore
David Ramli – Bloomberg
Chong’s Vanda Global Fund has gained more than 300% this year; Success a combination of high-risk appetite, aptitude and luck
On most mornings, Chong Chin Eai starts his day with a jog through Singapore’s Botanic Gardens. After taking his son to school, he trades futures on his laptop at home until it’s time for lunch, after which he might have a massage or perhaps a nap.
/bloom.bg/2EngnBp

Bank of America Says Market Primed for ‘Melt-Up’ in 1Q
Gregor Stuart Hunter – Bloomberg
Sees 5.2% gain in S&P 500 by March 3, Treasury yield rising; BofA strategists expect returns ‘to be front-loaded’ in 2020
Financial markets are set for a “risk asset melt-up” in the first quarter of the new decade, according to Bank of America Corp.
/bloom.bg/35q3xhv

INTL FCStone Agrees to Purchase Tellimer Group’s broking business
INTL FCStone Inc.
INTL FCStone Inc. (NASDAQ: INTL) today announced that it has executed a definitive sale and purchase agreement to acquire the brokerage businesses of Tellimer Group (“Tellimer” or “the Group”). This transaction will involve the purchase of Exotix Partners LLP, Tellimer Capital Ltd (Nigeria) and the broking business of Tellimer Markets Inc. The closing of this transaction is subject to limited conditions including regulatory approval.
/yhoo.it/34r5Q2P

Europe’s Richest Man Earns $39 Billion in 2019
Kasper Viita – Bloomberg
LVMH, the owner of luxury brands from Louis Vuitton to Dom Perignon, has gained $82 billion in market value this year, the most among European stocks. That would amount to a gain of about $39 billion for the region’s richest man, Bernard Arnault, who owns nearly half the company, according to Bloomberg data. The Swiss market also enjoyed a strong year, represented by Nestle SA and Roche Holding AG, while technology stocks remain hot, boosting sector giants ASML Holding NV and SAP SE.
/bloom.bg/2r1DaQg

ESG Funds Draw SEC Scrutiny; Wall Street’s growing foray into impact investing has regulators questioning investors’ ESG criteria
Juliet Chung and Dave Michaels – WSJ
Many investment firms have been touting new products as socially responsible. Now, regulators are scrutinizing some funds in an attempt to determine whether those claims are at odds with reality.
/on.wsj.com/2EjplQb

Buy-side rejects “redundant” move to expand MAR to spot foreign exchange; Asset managers have poured cold water on plans to expand MAR to include spot FX due to the impact of the FX Global Code of Conduct.
Hayley McDowell – The Trade
Asset managers across Europe have agreed that EU authorities should not expand the Market Abuse Regime (MAR) to include spot FX markets, as the FX Global Code of Conduct renders the move redundant.
bit.ly/34wqWgg

Villains or visionaries? Hedge funds short companies they say ‘greenwash’
Kirstin Ridley, Simon Jessop – Reuters
Tens of trillions of global investment dollars are pouring into companies touting robust environmental, social and governance credentials. Now short-sellers spy an opportunity.
/reut.rs/2szRQGM

Exchanges, OTC and Clearing

LSEG appoints new operations chief amid strategy rethink; Chris Corrado, who is chief operating and chief information officer at LSEG, will leave at the end of the first quarter next year.
Hayley McDowell – The Trade
The London Stock Exchange Group (LSEG) has appointed a new chief operating officer after confirming Chris Corrado’s intentions to leave early next year, amid moves to streamline its trading and clearing services.
bit.ly/2qWm1at

Scale is now a registered SME growth market; EU initiative aims to facilitate access to capital for small and medium-sized enterprises
Deutsche Börse AG
The Scale segment for small and medium-sized enterprises (SMEs) on the Frankfurt Stock Exchange has been a registered SME growth market today. This is a new category of multilateral trading venues (MTF) in Europe that are specifically geared towards SMEs and meet EU-wide standards. The aim is to facilitate access to capital for SMEs, to increase the reputation of such markets and to increase the attractiveness of capital market financing.
bit.ly/2PpVNXb

NYSE Ranks Once Again as the Global Leader in Capital Raised; Leader in tech IPOs; continues to drive innovation
Intercontinental Exchange
The New York Stock Exchange (NYSE), a wholly-owned subsidiary of Intercontinental Exchange (NYSE: ICE), ranked first once again as the global leader in capital raising in 2019 with $111.6 billion in proceeds raised in IPOs and follow-on offerings, which include some of the world’s highest-profile new listings.
bit.ly/34tqe34

Nasdaq Welcomed 185 IPOs and 15 Exchange Transfers in 2019; Leading U.S. exchange by number of IPOs and proceeds raised
Nasdaq
Nasdaq (Nasdaq: NDAQ) announced today that in 2019 The Nasdaq Stock Market welcomed 185 initial public offerings (IPOs), raising a total of $34.3 billion. With a 78 percent win rate in the U.S. market, Nasdaq has extended its leadership to 24 consecutive quarters. In addition to the successful year in IPOs, 15 companies switched their corporate listings from the NYSE and IEX to join Nasdaq, and eight companies issued 11 new bonds and transferred 37 existing bonds from the NYSE.
bit.ly/34qHAh9

London Stock Exchange Group plc Executive Appointments
London Stock Exchange Group
London Stock Exchange Group plc (“LSEG” “the Group”) today announced the following executive appointments. Chris Corrado, Chief Information Officer (CIO) and Chief Operating Officer (COO), LSEG has informed the Group of his intention to leave the Group to pursue other professional opportunities. Chris will leave LSEG at the end of the first quarter 2020.
bit.ly/2YQ9DWb

Discontinuation of English Email Newsletter JPX Weekly News
JPX
JPX will discontinue its English email newsletter JPX Weekly News in January 2020. The final edition of the newsletter will be sent out on Monday, January 27. We thank subscribers for their support over the years.
bit.ly/2YQIsKG

Everything You Wanted To Know About Data Pricing, In 90 Seconds – The World Federation Of Exchanges Releases Market Data Animation
World Federation of Exchanges
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and central counterparties (“CCPs”), has today released an animation designed to educate stakeholders on the importance of valuing stock market data correctly for users who profit from it. The animation forms part of the WFE’s work to ensure that role of exchanges in creating market data is well understood.
bit.ly/2EmaG6D

London Stock Exchange to extend revamp of senior management team; Anthony McCarthy to replace Chris Corrado as chief operating officer
Philip Stafford – FT
The London Stock Exchange Group is to tackle underperformance at its trading technology subsidiary with a shake-up that will see the departure of the group’s chief operating officer.
/on.ft.com/2PreMRy

Fintech

Fintech Lenders Tighten Standards as They Become More Like Banks
Shahien Nasiripour – Bloomberg
LendingClub now favoring borrowers with high internal grades; ‘We’re being selective about who we’re bringing in,’ CEO says
Lara Briehl had a desperate client who was itching to accept an offer. The man was struggling to pay his bills, and an online lender had offered him a personal loan to pay off some 10 credit cards. Accepting, he thought, would help him escape crushing debt. The interest rate offered, however, was about 10 percentage points higher than on his plastic.
/bloom.bg/2YPBfe2

Front-office warned as CSDR penalties threaten to wipe out commissions, says DTCC; Daily penalties mean the upcoming Settlement Discipline Regime (SDR) is an issue for the front-office as well as the back, according to the DTCC.
Jon Watkins – The Trade
Penalties for failed settled trades could result in commissions for buy-side traders being wiped out in as little as two days, according to the DTCC.
bit.ly/2qVuj2j

Venmo Glitch Opens Window on War Between Banks, Fintech Firms; Fintech firms accuse banks of blocking their access to customers’ account information
Yuka Hayashi – WSJ
Customers of PNC, the Pittsburgh bank, are getting front-row seats on a fight breaking out in the rivalry between the banking and financial-technology industries.
/on.wsj.com/2EqKw2w

Cryptocurrencies

QuadrigaCX creditors request proof of the exchange CEO’s death
Celia Wan – The Block
Some QuadrigaCX users affected by the exchange’s sudden shutdown are now asking the police to confirm that the CEO is indeed dead.
bit.ly/2qVitVW

Bitmain Rival’s Founder Arrested as War of Crypto Miners Heats up
Zheping Huang – Bloomberg
Ex-Bitmain chip designer has rapidly built up a serious rival; Selling mining rigs is a lucrative and litigious business
A Chinese chip designer who helped Bitmain Technologies Ltd. become the world’s largest maker of Bitcoin mining rigs before starting his own company has been arrested, according to three people familiar with the matter.
/bloom.bg/2swaC1w

Electronic Swiss Franc? Not So Fast, Government Says
Reuters via the New York Times
The Swiss government took a downbeat view of creating a central bank digital currency for public use, saying it could do more harm than good and destabilize the financial system. “Universally accessible central bank digital currency would bring no additional benefits for Switzerland at present. Instead, it would give rise to new risks, especially with regard to financial stability,” the cabinet said after meeting on Friday.
/nyti.ms/34sqPC4

Basel Committee calls for ‘prudential’ rules for crypto as they pose risks to banks
Yogita Khatri – The Block
The Basel Committee on Banking Supervision, which includes banking regulators from the U.S., U.K., Japan, and several other countries, has called for “prudential” regulatory treatment of cryptocurrencies and stablecoins. The committee, a unit of the Bank for International Settlements, has published a discussion paper, saying that the growth of cryptocurrencies and related services could pose risks to financial stability and banks, and therefore, a “conservative prudential” treatment to cryptocurrency exposures should be applied..
bit.ly/35xEjy4

Fidelity Digital Assets intends to support Ethereum in 2020
Celia Wan – The Block
If the client demand is there, then Fidelity Digital Assets could support Ethereum in 2020. In a recent episode of The Scoop, the venture’s president Tom Jessop told The Block that the firm has “done a lot of work on Ethereum” when asked if they would soon offer custody for the digital currency. Launched at the beginning of 2019, Fidelity Digital Assets (FDAS) offers cryptocurrency custody and trading tools for institutional investors and traders.
bit.ly/2YQHdLw

Two more crypto firms shutting down over impending EU money-laundering rules
Yogita Khatri – The Block
Two more firms – cryptocurrency mining pool Simplecoin and bitcoin gaming platform Chopcoin – are shutting down over the AMLD5 European Union regulation coming into effect Jan. 10, 2020. A notice on the Simplecoin website reads that it is closing down on Jan. 1 because the new rules will require the firm to implement several anti-money laundering (AML) know-your-customer (KYC) requirements and it is against those to protect users’ privacy.
bit.ly/2Z0bFTK

NYAG continues pushing for its case against Bitfinex, calling its argument “forfeited and meritless”
The Block
The New York Office of the Attorney General (NYOAG) recently filed a brief in a New York Appellate Court on December 4, responding to an appeal by Bitfinex and describing the exchange’s arguments as “backward,” “forfeited,” and “meritless.” The appeal arises out of an underlying investigation by the NYOAG of Bitfinex under New York’s Martin Act into potential securities and commodities fraud by the exchange.
bit.ly/36H9mHL

TikTok owner works with Chinese media outlet to register new blockchain, AI company
Celia Wan – The Block
TikTok owner ByteDance and Chinese media company Shanghai Dongfang Newspaper Co. have launched a new company to focus on developing blockchain, AI, and other business lines, according to data from Qichacha, a website that hosts business registration information.
bit.ly/2rUJPMv

At a Refugee Camp in Iraq, a 16-Year-Old Syrian Is Teaching Crypto Basics
Leigh Cuen – Coindesk
How do you explain ethereum to someone who doesn’t know how to use email? What’s the best way to convey how many satoshis add up to a single bitcoin? Those are among the questions faced by Yousif Mohammed Nor Aldeen, a 16-year-old Syrian refugee in Iraq’s Arbat refugee camp, who teaches other people in the camp about cryptocurrency. “I want to solve a problem in my community. We have a lot of problems, like corruption,” Aldeen said.
bit.ly/2r1LsaQ

R3 Completes Trade Finance Blockchain Trial With More Than 70 Organizations
Nathan DiCamillo – Coindesk
R3 has closed what it’s calling the largest open-account trade finance trial ever conducted on its Corda platform. This trial included more than 70 organizations from more than 25 countries. Upwards of 340 participants from those organizations were involved and came out from sectors like financial services, information technology, telecommunications, logistics, the maritime industry, real estate, hospitality and the automotive industry. The trial tested working capital applications developed by TradeIX and focused on the receivables finance product on Marco Polo’s platform, TradeIX announced Thursday.
bit.ly/2qVexo8

Nasdaq-listed AMD enters into blockchain gaming space after its crypto mining gear business failed to take off
Yogita Khatri – The Block
Nasdaq-listed hardware manufacturer AMD has ventured into blockchain gaming space, after betting big on cryptocurrency mining equipment business once. AMD has joined the Blockchain Game Alliance, which includes gaming giant Ubisoft and ethereum development studio ConsenSys as its members, among others. With the initiative, AMD plans to provide industry partners with “high-performance computing technologies” that could “potentially transform the way games are created, published, purchased and played.”
bit.ly/2rQygG4

Founder of Bitmain Rival MicroBT Arrested for Alleged Embezzlement
Wolfie Zhao – Coindesk
Yang Zuoxing, founder and CEO of Shenzhen-based bitcoin miner maker MicroBT, has been arrested for the alleged embezzlement of about $15,000. The arrest, noted by the Shenzhen Nanshan District Prosecutor on Dec. 12 and reported by business publication Caixin on Sunday, comes amid ongoing battles between mining giant Bitmain and MicroBT, which has been a rising competitor this year challenging Bitmain’s market dominance.
bit.ly/36xLtCq

Bank of International Settlements Requesting Feedback for Crypto Regulation; The policy would apply to over 60 central banks.
Andrey Shevchenko – Cryptobriefing.com
The Bank of International Settlements, an international body owned by 60 worldwide central banks, published a discussion paper on treatment of crypto assets. The committee is requesting the opinion of all industry participants to develop a “prudential” treatment policy.
bit.ly/2YTo23H

Politics

Mike Bloomberg’s spending spree: $8 billion in philanthropy and tens of millions to political causes
Michael Scherer – Bloomberg
Billionaire Mike Bloomberg has been steadily pumping tens of millions of dollars into the broader Democratic effort to defeat Donald Trump, part of a move to improve his standing in the party for his unconventional presidential campaign. Though he has sworn off fundraising for his own campaign, he has made himself a top Democratic Party donor in just the past few weeks, quietly giving the party $625,000 to distribute to infrastructure efforts atop the $175,000 required of all candidates for access to the Democratic National Committee’s voter data.
/wapo.st/2PqCxJh

Bloomberg pushing Wall Street execs, mega donors to back DNC fundraising
Sasha Pezenik ASHA – ABC News
Former New York mayor and billionaire Mike Bloomberg is set to meet with several executive Wall Street influencers and mega donors on his home turf Thursday, ABC News has learned.
/yhoo.it/2PozfX0

Singapore invokes fake news law over opposition party posts
Reuters
Singapore’s government invoked a fake news law on Saturday to order an opposition party to publish corrections on two social media posts and an article on its website about local employment, an official statement showed.
/reut.rs/35rzypD

So you changed your mind about a political donation like some of Pete Buttigieg’s ex-supporters — can you get a refund?
Meera Jagannathan – MarketWatch
The hashtag #RefundPete has been trending on Twitter as some donors to Pete Buttigieg’s campaign demanded their money back, citing reasons like the 2020 presidential candidate’s embrace of big-money donors and his onetime portrayal of small-dollar donations as “pocket change.”
/on.mktw.net/2YUdXnh

Buttigieg’s Bundlers Include Blackstone Vice Chair, Tech Chiefs
Bill Allison – Bloomberg
Candidate releases names after attacks from Elizabeth Warren; Buttigieg vowed to make fundraisers accessible to reporters
Pete Buttigieg’s campaign on Friday released the names of nearly 150 people who raised at least $25,000 for his presidential bid, including Blackstone Group Vice Chairman Tony James and Silicon Valley entrepreneur Swati Mylavarapu.
/bloom.bg/2EjvX0X

Regulation

UK regulators step up external probes of financial groups; Reviews rise for first time in 4 years amid money-laundering and white-collar crime fears
Caroline Binham – FT
The number of independent investigations ordered by UK regulators into financial institutions has risen for the first time in four years, driven by concerns around money-laundering and white-collar crime, according to new data.
/on.ft.com/2YTgzBH

UK antitrust body approves fiduciary management standards; Metrics will allow pension funds to compare providers’ performance for first time
Attracta Mooney – FT
Pension funds will be able to compare the performance of fiduciary managers for the first time after the UK’s antitrust regulator signed off new metrics.
/on.ft.com/2YUwtf2

ASIC reports on assessment of licensing and professional registration applications
ASIC
As part of efforts to increase transparency and provide guidance to prospective applicants, ASIC has released its latest report on its assessment of licensing and professional registration applications.
bit.ly/2EjyoAF

ESAs transform the way competent authorities cooperate with each other on AML/CFT matters
ESMA
The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published today Joint guidelines on cooperation and information exchange, establishing colleges of anti-money laundering and countering the financing of terrorism (AML/CFT) supervisors for the first time in the EU to ensure effective cooperation and information exchange between competent authorities. These measures are needed to strengthen the EU’s AML/CFT efforts.
bit.ly/2ElKBF1

December 2019 Board Update
FINRA
FINRA CEO Robert Cook, members of the FINRA Board of Governors and FINRA staff provide updates from the December 2019 FINRA Board of Governors meeting.
bit.ly/2sBuO1V

Active Investors Could Score on Taxes With SEC Ruling on ETFs
John Coumarianos – Barron’s
Investors who want to put their money in actively managed funds now have a more tax-efficient option.
bit.ly/35v1bxS

Investing and Trading

ESG controversies wipe $500bn off value of US companies; Environmental, social and governance funds hit the $1tn asset mark last year
Chris Flood – FT
Quarrels involving environmental, social and governance issues have wiped more than $500bn off the value of large US companies over the past five years, according to an analysis by Bank of America.
/on.ft.com/2Pt9zZs

Nuns take on BlackRock over climate change; Sisters of Mercy of the Americas add voice to those of Al Gore and other critics of the $7tn fund manager
Attracta Mooney – FT
A group of Catholic nuns has taken aim at BlackRock’s record on climate change, adding their voice to a growing chorus including Al Gore that claim the world’s biggest fund manager is not doing enough to tackle global warming.
/on.ft.com/2YTPLl5

Small-cap managers sharpen liquidity focus post-Woodford; Fund groups strengthen systems and readjust portfolios following fund crises
Siobhan Riding – FT
Small-cap fund managers have ramped up their checks on hard-to-sell assets as they try to reassure investors spooked by recent high-profile liquidity crunches.
/on.ft.com/2EpaWSl

MSCI flags risks of small pool of women on multiple boards; Study finds companies turning to same candidates as they strive to meet diversity targets
Cat Rutter Pooley – FT
Companies boosting the number of women on their boards have hired from a small pool of candidates, a report by index provider MSCI has shown, raising concerns that some may be stretched too thin.
/on.ft.com/35rTs3M

Bond funds revel in white-hot year for fixed income; Investors have added new money every week in 2019, extending a record run of inflows
Richard Henderson, Colby Smith and Jennifer Ablan – FT
Investors have poured money into fixed income funds at a record pace this year, fuelling a blowout bond market rally that has taken veteran traders by surprise and sent borrowing costs back to their lowest levels on record.
/on.ft.com/2EkNK7J

Junk Bond Sales Heading for Shakeup After Big But Boring Year
Laura Benitez and Marianna Duarte De Aragao – Bloomberg
Europe supply tally of 78.2 billion euros topped only in 2017; LBOs and lower rated credits seen as key drivers for next year
After a year dominated by refinancings, things could be about to get a lot more interesting for Europe’s high-yield market in 2020.
/bloom.bg/2sAfouN

Huge Disparity in Corporate Profits Hints at Something Amiss; Some worry that gap between weak profits in official U.S. government data and record earnings of S&P 500 repeats warnings of late 1990s
James Mackintosh – WSJ
Are U.S. companies making more money than ever before, or are they mired in one of their longest profit slumps since World War II? Widely used measures have diverged in recent years, leaving many investors worrying that something is amiss.
/on.wsj.com/34k11Is

How You Can Get Big Gains That Wall Street Can’t; A dirty secret of the investment business is that fund managers don’t buy and hold. Not because they don’t want to, but because they can’t.
Jason Zweig – WSJ
The best-performing stock of the past 30 years isn’t Warren Buffett’s Berkshire Hathaway Inc., BRK.B -0.24% Microsoft Corp. or Apple Inc. It’s little-known Jack Henry & Associates Inc., JKHY -0.63% which provides technology to banks and other financial firms from its headquarters in Monett, Mo. (population 8,873).
/on.wsj.com/2sBslEH

Institutions

UK fund industry has had a year to forget — especially the regulator; Woodford and M&G scandals undermine FCA’s role as industry watchdog
Chris Flood – FT
No one involved in UK asset management can look back at 2019 with any satisfaction as the industry’s most difficult year since the financial crisis draws to a close.
/on.ft.com/2YRnkUI

Repo blame game moves focus to hedge funds; Hunt for triggers of September’s funding market blow-up lands at new location
Joe Rennison – FT
Gaps between the prices of US government bonds and futures may seem small, but the money to be made from exploiting them, by those in the know, is enormous.
/on.ft.com/2PsDLDT

Banks have learnt their lesson on risk management; Cultural changes mean lenders will stay cautious despite looser US rules
Alexander Dill – FT
In October, US banking agencies loosened restrictions on large banks that had been put in place after the 2008 financial crisis. The rules divide banks into tiers by size and risk, reserving the tightest regulation for the largest, systemically important banks.
/on.ft.com/2Pomzzp

UBS’s Iqbal Khan to Restructure Unit Catering to Super Rich
Marion Halftermeyer and Patrick Winters – Bloomberg
Some ultra rich clients to be moved into regional divisions; Global Family Office will double in size as a result of change
UBS Group AG plans to restructure the unit that serves the bank’s top billionaire clients in the first sweeping changes under its new co-head of wealth management, Iqbal Khan.
/bloom.bg/2ElW2wb

Goldman Sachs’ top execs are ditching offices to sit among the people; A new WeWork memo reveals a pay package overhaul
Meredith Mazzilli – Business Insider
This week, Goldman Sachs told employees that its management team is embracing an open floorplan. Goldman CEO David Solomon explained in a memo how, by moving out of 41st floor offices to a mezzanine above the New York headquarters’ open-air Sky Lobby, the bank’s leaders will be able to soak up a natural “buzz.” That means the rank-and-file will be able to watch top brass as they work, and see and be seen by big clients as they come and go for meetings.
bit.ly/2YSWsDF

JPMorgan Chase C.E.O. Says It Needs to Do More to Tackle Racism; The comments came days after The New York Times published a report detailing allegations of racism at branches of JPMorgan in the Phoenix area.
Aimee Ortiz – NY Times
Jamie Dimon, the chairman and chief executive of JPMorgan Chase, on Friday tackled allegations of racism at the banking giant, telling employees that such behavior “does not reflect who we are as a company and how we serve our clients and communities every day.”
/nyti.ms/34sRCy6

Regions

Doubts raised over US claim of $40bn China farm purchases; Trump administration says Beijing committed to higher imports as part of trade agreement
Gregory Meyer and James Politi -FT
US claims that China will purchase $40bn of American agricultural goods were greeted with scepticism over the feasibility of a deal that would surpass all previous shipments by at least $10bn.
/on.ft.com/2YQXSPj

Could private capital become the world’s latest ‘peso problem’? Historical data is not an infallible indicator of future performance
Robin Wigglesworth – FT
Once upon a time in Mexico, there seemed to be a magic money tree. Back in the 1970s, the country had hitched its peso to the dollar, but Mexican banks offered much higher interest rates than US banks. It seemed a no-brainer to simply borrow money in America and deposit it south of the border and bank the proceeds. Yet few did.
/on.ft.com/35BS4fb

Can Palm Oil Demand Be Met Without Ruining Rainforests?
Anuradha Raghu – Bloomberg
Palm oil is one of the world’s most widely used and controversial commodities. Cheap, efficient and extraordinarily versatile, it’s found in thousands of everyday products, from cookies to shampoo to fuel. Yet surging cultivation of oil palm trees is linked to burning of tropical rainforests and the destruction of wildlife habitats in Southeast Asia. Environmental concerns have spurred the introduction of so-called sustainable palm oil, but its credibility has been questioned and it’s not clear yet whether there’s adequate market demand for the “greener” version.
/bloom.bg/2Po11CS

Japan’s Regional Banks Get a Fresh Look From Big Investor; Yoshitaka Kitao, former No. 2 at SoftBank, says more than 10 regional financial institutions have asked him to invest
Suryatapa Bhattacharya and River Davis – WSJ
One of the biggest and seemingly least attractive corners of world finance is getting another look.
/on.wsj.com/34rVOyn

Biggest Saudi Bank Abandons Talks to Create Mega Lender
Matthew Martin – Bloomberg
NCB, Riyad Bank merger would have formed a $200 billion bank; The move comes amid consolidation in Gulf banking industry
National Commercial Bank, Saudi Arabia’s biggest lender, ended talks to merge with Riyad Bank, a deal that would have created a lender with $200 billion in assets.
/bloom.bg/35s9BpY

Top Turkey Bankers Say They Were Fired on Regulators’ Orders
Bloomberg News
Dismissals began in late 2017, continued through October 2019; Campaign came as lira, mounting debt stressed economy
Turkish authorities have extended their campaign against perceived political enemies into the $750 billion financial industry.
/bloom.bg/2r1O60g

Brexit

Liquidity, Brexit and job cuts spell tricky 2020 for fund groups; Appetite for impact investing and private assets is increasing
Jennifer Thompson and Leke Oso Alabi – FT
With several executive changes and the downfall of former star stockpicker Neil Woodford, 2019 was a tumultuous year for the investment industry — and 2020 promises to be similarly turbulent.
/on.ft.com/34rfxOo

What next for UK markets? Financial Times reporters look ahead to the week in markets
FT Reporters
What next for UK markets?
Last week brought no shortage of drama. The general election produced an emphatic victory for Boris Johnson’s Conservative party, pumping up sterling and stocks, and denting UK government bonds — all signs of relief and risk-seeking now that some political clarity is at hand.
/on.ft.com/2qX5tiJ

Investors Pour Into U.K. Markets as Election Result Calms Brexit Jitters; Stocks rally as markets cheer increased likelihood of split from the European Union by end of next month
Anna Isaac – WSJ
A decisive victory for Prime Minister Boris Johnson’s Conservative Party in the British election sent investors scrambling to buy U.K. stocks.
/on.wsj.com/2EoJynG

Miscellaneous

When business journalists become the product
Andy Serwer and Max Zahn – Yahoo Finance
You may not know about Talking Biz News unless you’re a business journalist, in which case you’re probably familiar. The site, which was founded and run for years by now former University of North Carolina journalism school professor Chris Roush, has become more or less the unofficial chronicler of the business of business journalism.
/yhoo.it/2Ejwj7N

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