R.J. O’Brien Appoints Mark Phelps as New Managing Director, EMEA for RJO Limited UK Affiliate

Dec 7, 2021

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Fireside Chat Launches FIA Asia with Regulatory Discussion
By Sarah Rudolph – John Lothian News

Regulatory issues were the first order of business at the first panel of FIA Asia Tuesday Morning (Monday night for those of us in Chicago) as Walt Lukken held a virtual fireside chat with Sharon Shi, chair of FIA Asia’s regional advisory board and managing director at G.H. Financials, and Bill Herder, FIA’s head of Asia-Pacific.

Lukken brought up the Draft Futures Law China proposed this year, for which he said the FIA “provided useful industry comments.” The law, intended to provide a comprehensive legal and regulatory framework for the futures markets in China, may become final in 2022, and Lukken asked what this would mean for the derivatives markets globally and in Asia.

“The law will significantly boost the confidence of investors,” Shi said. When some China contracts became accessible in 2018, some of her clients or prospective clients expressed concerns about the lack of a legal framework on the entire China futures market, and “quite a few” international firms were still in wait and see mode, she said.

To read the rest of this story, go here.


Hemp Prices Hold Mostly Steady As Year End Approaches; Added Volatility Seen In 2022
— Hempcrete finds a new role in as a carbon reduction agent
By Suzanne Cosgrove – John Lothian News

As the books close on the fall harvest, most midpoint hemp prices remain steady to marginally higher, according to the November 2021 PanXchange Hemp: Benchmark & Analysis report.

The exchange noted growing expectations for industry consolidation and acreage reductions in 2022 gained a foothold during the harvest season. Reports of acreage and production cuts are unverified, but some analysts predict Colorado’s harvest may total just 3,000 acres, compared with the Farm Service Agency’s estimate of 6,000 acres planted and PanXchange’s calculation of 2,375 acres.

If reports of acreage cutbacks are correct, industry participants can expect more volatility in the new-crop markets, the exchange said.

To read the rest of this report, go here.


Hits & Takes
John Lothian & JLN Staff

Mark Phelps is stepping down from his role as CEO of G.H. Financials and moving to R.J. O’Brien & Associates (RJO) to assume the role of managing director, EMEA, for its London-based affiliate, R.J. O’Brien Limited (RJO Limited). Phelps spent 10 years at GHF and will help facilitate a smooth transition by staying in his current responsibilities as Group CEO of GHF “until a successor has been confirmed in due course.”

Congratulations to Mark on a great run at GHF and on his new position with RJO.

The full U.S. House of Representatives Financial Services Committee will hold a hybrid hearing entitled, “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States” on December 8, 2021 at 10:00 a.m. ET in room 2128 of the Rayburn House Office Building, and on the virtual meeting platform Cisco Webex. The hearing will have one panel with the following witnesses:

– Jeremy Allaire, Co-Founder, Chairman and CEO, Circle
Samuel Bankman-Fried, Founder and CEO, FTX
– Brian P. Brooks, CEO, Bitfury Group
Charles Cascarilla, CEO and Co-Founder, Paxos Trust Company
– Denelle Dixon, CEO and Executive Director, Stellar Development Foundation
– Alesia Jeanne Haas, CEO, Coinbase Inc. and CFO, Coinbase Global Inc.

The jury in the lawsuit against Craig Wright gave the decision to Wright for the disputed $50 billion of bitcoin mined in the Genesis Block supposedly owned by the inventor of bitcoin, Satoshi Nakomoto, but awarded the plaintiffs $100 million due to a partnership. The trial did not determine who Satoshi Nakomoto is, however, AP reported.

ICE Chairman & CEO Jeff Sprecher is a very smart man and that was proven again yesterday when he announced several changes to the senior management positions at ICE and its subsidiaries. Give these key employees a new challenge instead of seeing them pursue something new outside the organization. There is so much movement in jobs, this is inevitable. Heading it off by giving key employees new challenges right now is some good thinking.

According to a DTCC study, cyber risk is the greatest risk to financial markets in 2022, according to The Trade. Fifty-nine percent included cyber risk in their top five choices and 24% cited it as the top threat to the industry, The Trade reported.

Do you want to know how well the world is vaccinated and which countries and regions are doing the best? Then check out the FT’s report from their visual and data journalism team.

MOEX led off the FIA Asia-V conference last night. They mentioned they have expanded trading hours of equities by three hours to 17 hours a day. Also, at MOEX today the following courses were being offered: Financial Fraud Protection Course, “Bonds on the Moscow Exchange” rate and Course “All About Exchange Traded Funds;”

The NFA issued a notice to members that NFA added virtual currency and micro contract-related questions to the Annual Questionnaire. NFA members must complete the questionnaire annually and update it throughout the year to reflect significant changes in business activity.

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


Mark Phelps to step down as Group CEO of G.H. Financials in early 2022
G.H. Financials
G.H. Financials, a leading independent clearing firm for exchange-traded derivatives, announces that a leadership transition is underway with the planned departure of its Group CEO, Mark Phelps, early next year. Mark has decided that following 10 successful years with the Company, latterly as Group CEO since March 2018, it is time for him to pursue new challenges and opportunities elsewhere.

*****Who wants the job of GHF CEO? There is an opening.~JJL


Hedge fund founder Steinhardt will return looted antiquities
Karen Matthews – AP
Billionaire hedge fund manager Michael Steinhardt has agreed to turn over $70 million worth of stolen antiquities and will be subject to an unprecedented lifetime ban on acquiring antiquities, the Manhattan district attorney announced Monday.

****** Michael “Indiana Jones” Steinhardt gives back stolen artifacts.~JJL


Crypto is ‘one of the biggest bubbles ever’: Strategist
Ines Ferré – Yahoo Finance
When it comes to cryptocurrency, financial adviser Ryan Payne agreed with billionaire Charlie Munger when he said, “This era is even crazier than the dot-com era.” “This whole Bitcoin (BTC-USD) thing — this whole cryptocurrency — is one of the biggest bubbles ever,” Payne, president of Payne Capital Management, told Yahoo Finance live on Friday.

*****The first book I was recommended to read when I was a cub reporter with Commodity News Service covering the markets of the Chicago Board of Trade was “Extraordinary Popular Delusions and the Madness of Crowds” by Charles MacKay. The book tells the story of three economic bubbles: Tulipomania, the South Sea Bubble, and the Mississippi Scheme. I would suggest anyone caught up in the thrall of crypto read this book and to understand bubbles and their consequences.~JJL


A Crisis of Masculinity as Robots Replace Men; The loss of blue-collar jobs to automation reduces men’s marriage prospects. That has consequences.
Andreas Kluth – Bloomberg
It’s not easy being female. But it’s often no picnic being male either. The world is changing faster than ever and, with it, so are notions of masculinity. Many men are feeling unmoored, for better or worse. If you happen to be James Bond, you take this flux in stride and effortlessly turn — via a few intermediary incarnations — from the Sean Connery version of manhood into the more vulnerable and complex Daniel Craig variety. But how many real-life men have an inner 007 to channel?

******In derivatives, it was not robots but computers that replaced men. Walking into the CBOT or NYMEX, you could smell the testosterone in the building. Not so much anymore.~JJL


How to Say 2021’s Most Mispronounced Words, From Omicron to Ethereum
William J. Kole – AP
“Cheugy” is apparently a lot to chew on. Grammy Award-winning singer-songwriter Billie Eilish and Philadelphia Eagles center Jason Kelce have something in common — broadcasters butcher their names. And virtually everyone is having trouble with “omicron.”

******I regularly Google words to see how they are pronounced and there is a YouTube video that will pronounce it for you. Try it sometime.~JJL


Monday’s Top Three
Our most-read story Monday was the big news from Intercontinental Exchange, ICE Announces Senior Leadership Changes. No. 2 was the certification order from a lawsuit filed by a group of CME and CBOT members who are suing the CME Group, Memorandum Opinion and Order on Class certification. The third most-read was another press release, FTX Issues Key Principles for Market Regulation of Crypto-Trading Platforms, which outlined the company’s vision for a digital-friendly regulatory environment.


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Lead Stories

R.J. O’Brien Appoints Mark Phelps as New Managing Director, EMEA for RJO Limited UK Affiliate
R.J. O’Brien
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today announced that Mark Phelps, Group Chief Executive Officer of G.H. Financials, will soon assume the role of Managing Director, EMEA for its London-based affiliate, R.J. O’Brien Limited (RJO Limited). Phelps is a nearly 25-year veteran of the futures markets in Europe and globally. Phelps will operate out of London for the Europe, Middle East and Africa (EMEA) region and report to RJO Chairman and CEO Gerald Corcoran.

Investors Are Using Robinhood, Other Platforms to Jump Into Options Trades, Worrying U.S. Regulators; Options contracts are swapping at highest level on record, with retail traders making a quarter of all activity
Paul Kiernan – WSJ
The flood of everyday Americans into options trading has drawn a skeptical eye from U.S. regulators, who are considering possible rule changes for the era of smartphone brokerage apps. Around 39 million options contracts have changed hands on an average day this year, up 35% from last year and the highest level ever, according to Options Clearing Corp. data as of the end of November. Retail traders recently made up around one-quarter of all options activity.

Jury in Satoshi Nakamoto Suit Finds No Evidence of Partnership to Create Bitcoin; Florida civil lawsuit didn’t resolve longstanding questions about the cryptocurrency’s creation
Paul Vigna – WSJ
A Florida jury rejected claims that Craig Wright and David Kleiman formed a partnership to launch bitcoin, ending a high-profile case that revolved around the identity of the digital currency’s anonymous creator Satoshi Nakamoto and the disposition of a multibillion-dollar fortune.

Bitcoin trial: Defendant wins dispute over $50B in Bitcoin
Ken Sweet – AP
Craig Wright, a computer scientist who claims to be the inventor of Bitcoin, prevailed in a civil trial verdict Monday against the family of a deceased business partner that claimed it was owed half of a cryptocurrency fortune worth tens of billions.

Cyber risk viewed as the largest threat to financial markets going into 2022, finds DTCC survey; Alongside cyber risks, COVID-19, geopolitical risks and trade tensions, climate change and inflation were identified as the top five biggest threats to the global financial markets.
Wesley Bray – The Trade
A new survey by The Depository Trust and Clearing Corporation (DTCC) found that respondents viewed cyber risks as the greatest threat to the global financial markets in 2022. Of those surveyed, 59% included cyber risks in their top five, with 24% citing it as the top overall threat to the industry.

NYSE Shakes Up Leadership as President Cunningham Steps Down
Katherine Doherty – Bloomberg
Company names Lynn Martin as third female leader of exchange; Sharon Bowen also takes role as chair, replacing Jeff Sprecher
Intercontinental Exchange Inc. announced a series of leadership changes, including naming Lynn Martin as president of the New York Stock Exchange to replace current head Stacey Cunningham. Martin, 45, will become the third woman to lead the New York Stock Exchange after Cunningham steps aside and joins the board of directors, the company said in a letter sent to employees Monday. ICE also named Sharon Bowen as the first female chair of NYSE, replacing Jeff Sprecher, ICE’s current chairman and chief executive officer.

CFTC Commissioner Dawn Stump’s Crusade To Clarify Crypto Regulations In 2021
Jason Brett – Forbes
(Part One) Commissioner Dawn Stump of the Commodity Futures Trading Commission (CFTC) lays out what exactly it means that Bitcoin is a commodity – and what she has publicly described as the ‘fallacy’ of the question as to whether other blockchain tokens are a commodity or a security. According to Stump, “there has often been a grossly inaccurate oversimplification offered which suggests these are either securities regulated by the Securities and Exchange Commission, or commodities regulated by the Commodity Futures Trading Commission.”

Small Group of Insiders Is Reaping Most of the Gains on NFTs, Study Shows
Joanna Ossinger – Bloomberg
Chainalysis report says early access via ‘whitelist’ helps; Highly sophisticated investors get most of NFT profits: study
Non-fungible tokens are one of the hottest things in cryptocurrencies right now, with the prospect of big gains should the latest collection rise in value. But a new study from Chainalysis shows that a small portion of participants reap most of the gains. Investing frequently in a wide array of collections appears to lead to the highest profits, Chainalysis said in its report. It added that whitelisting — the practice of allowing a certain set of followers or others to purchase new NFTs at a much lower price than other users during minting events where a digital file is turned into a digital asset on a blockchain– helps those people significantly.

India Is Said to Consider Capital Markets Regulator for Crypto
Abhijit Roy Chowdhury and Shruti Srivastava – Bloomberg
Existing investors may get time to declare, conform with rules; Violations may attract fines of up to 200 million rupees
India is considering appointing its capital markets regulator to oversee cryptocurrencies, according to people with knowledge of the matter, as authorities look to classify them as financial assets.

The next quant revolution: shaking up the corporate bond market; Corporate credit has been largely untouched by computer-driven trading, but some investors are trying to change that
Robin Wigglesworth and Laurence Fletcher – FT
Two years ago Rich Donick strode up the steps of Blackstone’s New York headquarters to pitch the investment group on managing a slice of its money. Blackstone was so taken by his firm’s vision for the bond market’s future that last year it bought the entire company, Diversified Credit Investments.

Liontrust to acquire Majedie Asset Management; As part of the acquisition, the Majedie Fund Management team will be renamed as the Liontrust Global Fundamental team, while maintaining its current investment process.
Wesley Bray – The Trade
Liontrust has agreed to acquire Majedie Asset Management for an initial consideration of £80 million including regulatory capital, plus up to £40 million for excess and NAV and deferred consideration.


Lightfoot: No plans for NYC-style vax mandate
“We will not see that here in the city of Chicago,” the mayor said.
A.D. Quig – Crain’s Chicago Business
Mayor Lori Lightfoot has no plans to take a page out of New York Mayor Bill de Blasio’s book and mandate that private-sector workers receive COVID vaccine. The mandate, which takes effect later this month, is being characterized by the outgoing NYC mayor as a “preemptive strike” to head off an increase in COVID cases due to the omicron variant.
“We will not see that here in the city of Chicago, and frankly I question” whether it will survive a potential court challenge, Lightfoot told reporters today. President Joe Biden’s efforts to require vaccinations for large private-sector employers is facing legal hurdles.

Omicron Leads to New Curbs From NYC to Hong Kong: Virus Update
Bloomberg News
New restrictions are showing up across the world as authorities try to stem the spread of the omicron strain of Covid-19. France shut nightclubs for four weeks, New York City called for a private sector vaccine mandate and Hong Kong imposed quarantine requirements on more countries.

The Omicron variant appeared to spread between two fully vaccinated people in separate hotel rooms in Hong Kong, early research suggests
Natalie Musumeci, Andrea Michelson – Business Insider
The Omicron variant of the coronavirus appears to have spread between two fully vaccinated people who were staying in separate rooms across the hall from each other in a Hong Kong quarantine hotel, researchers say. The early findings raise concerns about how transmissible the new variant may be. Researchers at the University of Hong Kong announced the findings in an online research letter, which has not been finalized, in the Emerging Infectious Diseases journal on Friday.

Denmark’s Health Minister Heunicke Tests Positive for Covid-19
Morten Buttler – Bloomberg
Denmark’s Health Minister Magnus Heunicke has tested positive for Covid-19 and is self-isolating at a hotel in Brussels, where he is currently attending a meeting with his European peers.

Austria to End Lockdown From Sunday, Keep Limits on Unvaccinated
Marton Eder – Bloomberg
Regional leaders meet Wednesday to discuss pandemic measures; Lockdown helped halve new cases, hospitalizations remain high
Austria will end a nationwide lockdown this weekend for people who’ve been inoculated against Covid-19 or have recovered from the virus, while continuing to limit participation in public life for those who refuse to be vaccinated. The government will meet regional leaders on Wednesday to assess the measures needed to keep the pandemic contained and turn a “tendency of falling cases into a trend,” Chancellor Karl Nehammer told reporters in Vienna.

Poland Tightens Covid Restrictions, Moves to Online Schooling
Piotr Skolimowski – Bloomberg
Poland announced tighter Covid restrictions to prevent the pandemic from further straining the country’s health care system, including a switch to remote schooling over an extended holiday period.

Omicron’s less severe cases prompt cautious optimism in South Africa; Early hospital data suggests mild symptoms but scientists warn variant seems more infectious
Oliver Barnes and John Burn-Murdoch – FT
Medics and scientists in South Africa have welcomed early hospital data suggesting that the Omicron coronavirus variant could result in less severe illness than previous waves but warned that higher transmission rates could still overwhelm hospitals.

Doubts over efficacy of Chinese vaccines stoke anxiety at home and abroad; Despite dispensing 2.5bn doses, recent outbreaks raise uncertainty over Sinovac and Sinopharm jabs
Edward White, Michael Pooler and Gideon Long – FT
The Omicron variant of coronavirus forced governments across the world to tighten border controls, hasten vaccination drives and reinstate social distancing last week. But in Dalian, China, authorities reclassified the virus risk in parts of the north-eastern port city from “medium” to “low”.

Covid-19 vaccine tracker: the global race to vaccinate
FT Visual & Data Journalism team
At least 8.25bn doses of coronavirus vaccines have been administered around the world, data from 233 locations show. After a year of breakneck research into more than 230 vaccine candidates, seven coronavirus vaccines are now in use in at least one country.

\World’s first plant-based vaccine a step closer to launch; Pre-Omicron study shows Medicago jab with GSK adjuvant is up to 88% effective against Covid
Donato Paolo Mancini – FT
Canadian biotech Medicago and GlaxoSmithKline are pushing for regulatory approval of the world’s first plant-based vaccine after positive results against a number of coronavirus variants in a late-stage trial.

Exchanges, OTC and Clearing

ICE revamps leadership team with a swathe of top brass changes; Significant changes for NYSE as new president takes over, along with the appointment of the exchange’s first female chair.
Wesley Bray – The Trade
Intercontinental Exchange (ICE) has named its fixed income and data services lead Lynn Martin as the new president of the New York Stock Exchange, replacing Stacey Cunningham who is pursuing a new chapter in her career. While Martin takes on her new role at 11 Wall Street on 3 January, she will also continue to act as chair of ICE fixed income and data services.

Intercontinental Exchange Names Sharon Bowen as NYSE Chair
Chris Wack – Dow Jones Newswires
Intercontinental Exchange Inc. said it named Sharon Bowen as next chair of the New York Stock Exchange. Ms. Bowen is a finance and securities lawyer and formerly a commissioner of the Commodity Futures Trading Commission, ICE said. Lynn Martin, currently president of ICE Fixed Income and Data Services, has been appointed the next president of the NYSE, succeeding Stacey Cunningham, who will join the board of directors of the NYSE, the company said.

Bitcoin Capital and Ficas team up to launch crypto ETFs on Six; The two exchange traded products invest in bitcoin and ethereum
Sandra Heistruvers – FT
Swiss cryptocurrency investment manager Ficas and its subsidiary Bitcoin Capital have jointly listed two actively managed digital assets exchange traded products on local stock exchange Six.

Trading in shares on the Moscow Exchange is now held 17 hours a day
Since December 6, 2021, the duration of the trading day on the stock market of the Moscow Exchange has increased by three hours due to the introduction of the morning trading session. Now trades are held 17 hours a day – from 6:50 to 23:50 Moscow time.

Private investors in November invested a record 91 billion rubles in Russian stocks
The number of brokerage accounts of private investors on the Moscow Exchange in November 2021 increased by a record 1.6 million, to 26.5 million.The number of individuals with access to exchange markets increased in November by 937.6 thousand, to 16.2 million people. This is the largest inflow for the entire observation period.

— Expansion of Strike Price Listing of all Options on E-mini Nasdaq-100 Index® Futures Contracts and Expansion of the Listing Schedule of the European-Style Weekly Options. — CME
— Delisting of Four (4) Commodity Index Forward Swap Contracts — CME
— Performance Bond Requirements: FX Futures Spot Charge Rates Reminder – Effective Wednesday, December 08, 2021 — CME
— Notice Of Summary Action: MEMBER FIRM: ALTURA MARKETS SV SA, RULE VIOLATION: CME RULE 536.B GLOBEX ORDER ENTRY, PENALTY: On November 17, 2021, Altura Markets SV SA, pursuant to Rule 512 (“Reporting Infractions”), was issued a $1,000 fine for its violations of Rule 536.B.1. — CME


Causality Link Works with AWS on AI for Data Analytics (AIDA) solution; Powered by Amazon Athena, Amazon SageMaker, and other AWS services, the Causality Link platform provides analysts with global insights into the current and future performance of public companies, industries, and the macroeconomy
Causality Link
Causality Link, an advanced, artificial intelligence (AI)-driven financial information technology provider, today announced it has been selected by Amazon Web Services, Inc. (AWS) as a partner for its new AI for data analytics (AIDA) partner solutions initiative. With AIDA, AWS and its partners augment popular analytics platforms with machine learning (ML) so that predictive analytics becomes available to more people in an enterprise, including those who best know the business.

Visa-Backed Fintech in Brazil Buys Mexican Card Processor Cacao
Cristiane Lucchesi – Bloomberg
Sao Paulo-based Dock provides infrastructure to fintechs; Firm sees growth potential in region’s big unbanked population
Dock, a Brazilian fintech backed by Visa Inc., said it acquired Cacao Paycard Solutions SA de CV, a Mexico City-based card-processing solutions company. Dock, which provides infrastructure for Latin American financial-technology companies, didn’t disclose the price of the transaction.

Equinix Buys West Africa’s MainOne at $320 Million Valuation
Loni Prinsloo and Yinka Ibukun – Bloomberg
Nasdaq-listed firm moves to tap growing African demand; MainOne has data centers, undersea cable from Europe to Africa
Equinix Inc. is acquiring West African digital infrastructure firm MainOne Cable Co Ltd. at a valuation of $320 million, one of the continent’s biggest tech deals this year, allowing the U.S. data-center investor to tap into a regional data boom.

State Street, Vanguard and Symbiont complete first live trade for FX forward contracts using DLT; The goal of the three firms is to bring post-trade workflow automation and efficiencies while significantly reducing counterparty credit risk through blockchain technology.
Wesley Bray – The Trade
State Street and Vanguard have jointly completed the margin calculation process for a live trade of a 30-day foreign exchange forward contract using Symbiont’s distributed ledger technology (DLT), Assembly.


Swiss Firm Executive Operates Secret Surveillance Operation, Sources Say; Mitto AG’s network used to track people via mobile phones, former employees say.
Ryan Gallagher and Crofton Black – Bloomberg
The co-founder of a company that has been trusted by technology giants including Google and Twitter to deliver sensitive passwords to millions of their customers also operated a service that ultimately helped governments secretly surveil and track mobile phones, according to former employees and clients.

Microsoft seizes websites from Chinese hacking group
Ivana Saric – Axios
Microsoft announced Monday that it has seized a number of websites that were being used by a China-based hacking firm to carry out cyberattacks in 29 countries, including the U.S. Why it matters: Microsoft said it believed the sites “were largely being used for intelligence gathering from government agencies, think tanks and human rights organizations.”

Too many bosses are reluctant to spend money on cybersecurity. Then they get hacked
Danny Palmer – ZDNet
Many businesses still aren’t willing to spend money on cybersecurity because they view it as an additional cost – and then find they have to spend much more cash recovering from a cyber incident after they get hacked.

The defensive power of diversity in cybersecurity
James Hadley – TechCrunch
There are plenty of barriers to entry for a career in cybersecurity — or so the workforce of today believes. At the (ISC)² Security Congress 2021 event, panelists noted that individuals are put off because they believe they need to have advanced technical abilities gained in further education.
Not only do such hurdles hinder equality, but they could also hamper an organization’s ability to defend against an attack.

Cybersecurity startup CloudSEK bags $7 million in funding led by MassMutual Ventures
Nirmal John – The Economic Times
Cybersecurity companies with Indian roots are slowly making their presence felt. CloudSEK, a cybersecurity startup headquartered in Singapore and having most of its operations and engineering based in India, has raised $7 million in Series A funding, its largest round yet.
This round, led by MassMutual Ventures, increases the total amount raised by CloudSEK to around $10 million.

Threat Intelligence is Key to Cybersecurity
Traders Magazine
In an increasingly networked world, where financial services companies and their customers are constantly connected, threat intelligence is essential to protecting firms from pervasive cybersecurity risk. Threat intelligence is business-critical insight into the most common vulnerabilities and attack vectors influencing industrywide cyber posture. It is available to security management providers who can both see across their like-sized, similarly structured clients and can engage with industry peers to share anonymized data.


Crypto Complex Erased $480 Billion in ‘Cascade of Liquidations’
Justina Lee – Bloomberg
As Wall Street traders bedded down for the weekend after the stock volatility last week, Nikita Fadeev in London was woken up by a Bitcoin market alarm at 4:55 a.m. Thanks to the cell-phone notification on Saturday morning, the head of cryptocurrency hedge fund Fasanara Digital was back at his desk as the world’s biggest token plunged 20% in an hour.

Ethereum developer sees crypto impacting ‘every corner of society’
Jennifer Schonberger – Yahoo Finance
When people hear about cryptocurrencies, they think about alternative forms of money. But Lane Rettig, one of Etherium’s (ETH-USD) former core developers, says crypto could change everything – from the way businesses are formed and run, to how tickets are purchased for sporting events and concerts, and how salaries are paid.

YouTube’s Crypto Influencers Try Shouting Over the Scammers; As crypto goes more mainstream, a crop of YouTube creators are competing with fraudsters for attention.
Mark Bergen – Bloomberg
In October, Brian Jung, a 24-year-old YouTube creator, posted his first video analyzing Shiba Inu, a canine-themed digital token, which was soaring in value. At first, Jung explained to his viewers, he’d been “a hater” of so called “memecoins,” favoring instead “fundamentally strong cryptocurrencies, with real backing and utility.” But even if the whole thing started as a joke, he explained, there was no denying Shiba Inu’s prowess. It was up more than 460 percent in the past month.

Thailand Tells Banks to Avoid Activity in Digital-Assets Trading
Suttinee Yuvejwattana – Bloomberg
The Bank of Thailand said commercial banks should avoid “direct involvement” in trading of digital assets, citing their high volatility and potential risks to financial and payment stability.

Bitcoin’s weekend tumble hints at Wall Street traders’ growing sway; Abrupt drop occurred just hours after close of volatile week in traditional markets
Eva Szalay – FT
Bitcoin’s rocky weekend marked one of the first times a storm in traditional financial assets triggered big waves in cryptocurrencies, underscoring how large investors are playing an increasing role in digital asset markets.

The Bank of England should beware the lure of digital currency; There are serious concerns about the likely effect on privacy and credit
Oonagh McDonald – FT
The Bank of England is still mulling over the introduction of a central bank digital currency (CBDC), a digital version of notes and coins, directly convertible into cash and deposits. The bank argues this will increase financial inclusion. But introducing the basic bank account has already achieved that — by 2018-19, the number of “unbanked” in the UK had dropped to just 1.2m out of a total population of 67.1m.

NFTs and Cryptocurrencies Replace Cash as a New Holiday Gift; Nonfungible tokens and digital money are an alternative for the adventurous gift giver; here are some options and necessary steps
Julia Carpenter – WSJ
Cash in little wrapped boxes or tucked inside Hallmark cards is one of the most reliable and beloved gifts. But this holiday season, cash gifts are taking a new form as cryptocurrencies and nonfungible tokens, or NFTs. Giving digital money requires planning, though, as you can’t simply buy one of these assets and send someone a link. Instead, they need someone to have a digital wallet already created, through a provider such as Rainbow, MetaMask or Coinbase. COIN -0.91% The wallet then holds the assets, effectively acting as a bank account.

Rise of Shiba Inu Signals New Meme Coin Trends in Cryptocurrency; Why meme coins are rivaling some of the largest digital tokens in the world
Wall Street Journal
Shiba Inu Coin’s recent surge, and subsequent fall in value, is part of a growing trend of meme coins that are rivaling some of the largest digital tokens in the world. WSJ retail investing reporter Caitlin McCabe explains why investors are pouring money into this meme based cryptocurrency.


West could cut Russia from SWIFT, sanction Nord Stream, Latvia says
Guy Faulconbridge – Reuters
The West must send a strong message to Russia to deter the Kremlin from invading Ukraine, including cutting Russia off from the SWIFT payment system, sanctioning the Nord Stream 2 pipeline and strengthening NATO’s eastern flank, Latvia said on Tuesday.

AOC reveals she doesn’t hold bitcoin because she wants to be an unbiased lawmaker
Shalini Nagarajan – Business Insider
Rep. Alexandria Ocasio-Cortez isn’t getting caught up in the craze for cryptocurrencies. The New York Democrat, who has said it’s “absolutely wild” that members of Congress can buy and trade stocks, believes the same applies to digital assets.

6 Crypto CEOs Called to Testify Before a Skeptical House Finance Committee This Week
Tor Constantino – Motley Fool
Timing is everything, and timing couldn’t be worse for the cryptocurrency industry right now. This weekend a centralized cryptocurrency trading exchange — BitMart — confirmed a security breach where the equivalent of $196 million was stolen from investors who were storing programmable money on BitMart’s network.

Why War With Taiwan Would Be a Huge Gamble for China’s Xi; Deaths, economic sanctions and possible defeat are all deterrents.
Iain Marlow – Bloomberg
For all the talk of Chinese President Xi Jinping’s desire to invade Taiwan, one counterpoint is often overlooked: The domestic risks involved in starting a potentially devastating war.

US announces diplomatic boycott of Beijing Winter Olympics; Chinese government threatens to take unspecified countermeasures against Washington
Demetri Sevastopulo – FT
Joe Biden will not send a US government delegation to the Beijing Winter Olympics, initiating a diplomatic boycott in protest against China’s persecution of Muslim Uyghurs in Xinjiang. Jen Psaki, White House press secretary, said the administration would boycott the Games, which start in February, because of the “ongoing genocide and crimes against humanity” in Xinjiang. But she said the US Olympic team had the “full support” of the president and his administration.


MAS suspends BitGet over ‘scam’ linked to K-pop band BTS
Teuta Franjkovic – Coin Rivet
The Monetary Authority of Singapore (MAS) has suspended BitGet – a Singapore-based digital currency exchange that got into a dispute after promoting the digital currency Army Coin, named after the South Korean boy band BTS’s followers.

The SEC is investigating the Trump SPAC deal, one of many new right-wing tech ventures
Brigid Kennedy – The Week
Federal regulators are investigating a deal between former President Donald Trump’s latest social media venture and the special purpose acquisition company — or, SPAC — taking said venture public, The Wall Street Journal reports Monday.

SPAC Merging With Trump Media Gets SEC Information Request
Sophie Alexander – Bloomberg
Digital World slumps in trading after disclosing probes; The firms revealed on Saturday they have $1 billion in funding
Digital World said the information requests do not mean the regulators have determined any rules have been violated. Its shares slumped 5% to $42.71 at 10:11 a.m. in New York.

ASIC launches financial advice webpage
ASIC launches Financial Advice Hub for advice licensees and advisers.
In response to industry feedback, ASIC is releasing a centralised financial advice webpage to make it easier to find ASIC guidance relevant to the financial advice industry; The Financial Advice Hub centralises relevant regulatory content, and will continue to be updated with new, user-friendly material; We encourage industry participants and stakeholders to visit the new Financial Advice Hub.
Today ASIC launches our new Financial Advice Hub. This centralised webpage is a one-stop access point for pertinent guidance and information impacting financial advice licensees, advisers, and relevant stakeholders.

SEC Charges Dialysis Provider and Three Former Senior Executives with Revenue Manipulation Scheme; American Renal Associates Agrees to Pay $2 million Civil Penalty
The Securities and Exchange Commission today charged American Renal Associates Holdings, Inc. (ARA), a provider of dialysis services through clinics across the country, with engaging in a revenue manipulation scheme that resulted in the restatement of several years of financial reporting. The SEC also charged two of ARA’s former chief financial officers, Jonathan Wilcox and Jason Boucher, and former ARA Controller, Karen Smith, for their misconduct related to the scheme.

Joint Statement of Appreciation for Rebecca Olsen’s Service as Director of the Office of Municipal Securities
Commissioner Hester Peirce, Commissioner Elad L. Roisman, Commissioner Allison Herren Lee, Commissioner Caroline A. Crenshaw – SEC
We want to thank Rebecca Olsen for her exceptional leadership in the Office of Municipal Securities. Rebecca has been a mainstay of the office for many years, ultimately rising to the role of Director in 2018. Her passion for the markets and protecting investors has shone through her work, and we are grateful that she will continue serving the Commission as Deputy Chief for the Division of Enforcement’s Public Finance Abuse Unit.

Statement on OCA’s Continued Focus on High Quality Financial Reporting in a Complex Environment
Paul Munter – SEC
The events of the past year bring to mind the old saying that “change is the only constant in life.” Our capital markets continue to evolve and adapt in response to changes in the economic environment, investors’ needs for new types of information, and challenges related to the ongoing effects of the pandemic. Amidst these changes, the U.S. financial reporting system remains strong, largely due to the cumulative efforts of thousands of stakeholders who have exhibited resilience and adaptability, while remaining focused on the need for high quality financial reporting for the benefit of investors.

Webinar Series: Disclosure Reporting
Join us during this webinar series as we discuss topics related to disclosure reporting. These sessions are designed for compliance professionals who submit filings and documents to FINRA regarding disclosure events that are reportable for registered representatives.

Notices to Members; Action required: NFA adds virtual currency and micro contract-related questions to Annual Questionnaire
NFA Members must complete the Annual Questionnaire annually and update it throughout the year to reflect significant changes in business activity. Due to recent increased interest and activity in virtual currency and micro contract products, NFA has updated the Questionnaire to address Members’ spot/physical virtual currency, virtual currency derivatives and micro contract transactions.

Investing and Trading

Inflation Is the Biggest Threat to the Bedrock 60/40 Portfolio
Michael Mackenzie and Liz McCormick – Bloomberg
Popular retirement asset-allocation strategy could be at risk; Expensive stocks drive gains in 2021 with bonds in the red
Wall Street likes to warn that past performance doesn’t guarantee future results, but when it comes to the traditional 60/40 mix of stocks and bonds, it kind of has. Persistent inflation could bring that to an end.

How the Pandemic Changed the Terms of Investment; Long- and short-term expectations aren’t what they used to be, from corporate decisions to the fidgets in equities. And you’ll need to rethink sovereign wealth funds.
John Authers – Bloomberg
The Long and the Short of It
It’s always tempting in this job to try to construct a narrative to explain a series of disconnected events. In the last few days, trying to impose a pattern on short-term market movements has moved from difficult to impossible, so I’ll attempt to focus on the long term.

Peter Lynch Says All-In on Passive Investing Is All Wrong
Tom Moroney and Joe Shortsleeve – Bloomberg
Ex-Fidelity Magellan manager says move to passive is a mistake; Lynch is donating 30 works of art to McMullen Museum of Art
Peter Lynch has a word for people who have gone all-in on passive investing: You’re losing out. “The move to passive is a mistake,” the former Fidelity Magellan fund manager said in an interview with Bloomberg Radio’s Baystate Business to be broadcast Tuesday. “Our active guys have beat the market for 10, 20, 30 years, and I think they’ll keep on doing it.

Credit World’s Top 2022 Play Is ‘Stock Picking’ as Risks Rev Up
Alice Gledhill and Tatiana Darie – Bloomberg
Investors who home in on corporates will be rewarded: Amundi; Price pressures, slowing growth, less stimulus among threats
Credit investors are going to be picky about what they buy in Europe’s expensive debt markets next year. Amundi SA, Newton Investment Management Ltd. and Western Asset Management are drilling down into company balance sheets, looking at how they make their money, gauging profit margins and weighing how well they can cope with rising interest rates and slowing global growth. And that’s in addition to stretched valuations, the prospect of fewer central-bank asset purchases and a new coronavirus strain the market knows little about.

Why to Invest in U.K. Stocks in 2022
Joe Easton – Bloomberg
Fidelity International, Liberum Capital like U.K. equities; FTSE 100 has gained 13% this year, underperforming the S&P 500
A growing chorus of investors is highlighting opportunity in Britain’s laggard stock market in their 2022 outlooks. “The U.K. still stands out as cheap and unloved,” Fidelity International portfolio manager Alex Wright wrote in a report on Tuesday, adding that retail investors have pulled about 1.3 billion pounds ($1.7 billion) from the country’s equities this year.

Oil Demand Isn’t Taking a Big Hit From the Omicron Variant Yet
Alex Longley – Bloomberg
Mobility indicators remain robust despite virus spreading; Crude prices tumbled when the new strain first emerged
Glance across the world and there’s little sign of a major impact of the omicron variant on oil demand — for now. On some days, the skies have been filled with as many planes as they were in 2019, according to figures from FlightRadar24. U.S. highways are at their most congested levels since the pandemic began, the latest government data show.

Environmental, Social and Corporate Governance

Wildfires in 2021 Spewed CO2 Equal to Half of EU’s Annual Emissions; Blazes in Siberia broke emissions records, while others were well-above normal, according to Copernicus
John Ainger – Bloomberg
Wildfires from Greece to Siberia this year weren’t just devastating for forests and economic livelihoods, they also emitted an estimated 1.7 billion tons of carbon dioxide into the atmosphere, according to the European Union’s satellite program Copernicus.

EU Aims to Unveil Green Rules for Gas, Nuclear Projects Dec. 22
Alberto Nardelli and Ewa Krukowska – Bloomberg
Bloc’s executive arm is drafting sustainability criteria rules; Green label for natural gas and nuclear sparks controversy
The European Union is likely to unveil on Dec. 22 its plan for how natural-gas and nuclear-energy projects would be classified under its green investment rules.

Activist investor Elliott attacks SSE over renewable energy plans; US hedge fund criticises long-term chief and calls for two new independent directors to join board
Tom Wilson – FT
Hedge fund Elliott Management has called for sweeping changes at Scottish energy group SSE, including the appointment of two new independent directors, in a searing attack on SSE’s energy transition strategy.

Carbon price surge triggers UK ‘cost containment’ market mechanism; Energy crunch drives price paid by polluters to new highs and could mean government must act
Camilla Hodgson – FT
A sustained rally that has brought the price of carbon allowances to new highs has triggered a market mechanism that could see the UK government intervening to bring down prices.


Millennium, Citadel Winning the War to Keep Client Cash Longer
Katherine Burton and Nishant Kumar – Bloomberg
Citadel changed terms on investors to extend withdrawal period; Schonfeld lowered fees to steer clients toward longer lockup
It’s a sellers’ market for some prominent hedge funds, and they’re using that advantage to keep client cash locked up for longer. Izzy Englander’s $57 billion Millennium Management told investors last month that it had raised a record $10 billion for a fund that takes a minimum of five years to exit. At least four other large multi-manager funds have changed their terms or started new share classes this year, all extending the time it takes for investors to get out.

Norway Wealth Fund’s Former Chief to Head Aker Asset Management
Lars Erik Taraldsen and Stephen Treloar – Bloomberg
Billionaire Kjell Inge Rokke’s Aker ASA has named Yngve Slyngstad as chief executive officer and senior partner of its newly created asset management unit.

Liontrust strikes deal to buy Majedie Asset Management; Tie-up marks latest example of industry consolidation as groups seek new growth avenues
Harriet Agnew – FT
Two well-known London-based asset management boutiques have announced a tie-up as consolidation sweeps across the industry. FTSE 250 listed Liontrust said on Tuesday it has agreed to acquire Majedie Asset Management for an initial £80m, plus an additional deferred consideration of up to £40m.

Shadow banks must come out of the shadows; Market ructions in 2020 show the need for transparency in non-bank finance
The editorial board – FT
When the first wave of the coronavirus pandemic hit in the spring of 2020 it provoked, along with lockdowns, a sudden financial crisis. It was a mercy for the global economy, however, that the banks at the bedrock of the monetary system were for the most part not involved. Instead the trouble was in the growing and poorly regulated “non-bank sector”, which the Bank for International Settlements estimates now accounts for nearly half of all financial assets. It is time for these shadow banks to step out of the shadows and be regulated more like their conventional peers.

Neil Woodford investors hit transfer hurdles; Red tape can make switching Isas between advisers tricky
Lindsay Cook – FT
The pains of Woodford go on. More than two years after the suspension of fund manager Neil Woodford’s Equity Income Fund, some retail investors have found that their much-devalued holdings are blocking access to other parts of their portfolios.


Hong Kong loses shine amid tough coronavirus restrictions
Zen Soo – AP
The bustling, cosmopolitan business hub of Hong Kong may be losing its shine among foreign companies and expatriates with its stringent anti-pandemic rules requiring up to 21 days of quarantine for new arrivals. The restrictions are discouraging both visitors and business travelers and add to other challenges the semi-autonomous Chinese territory faces as Beijing exerts ever more control over the former British colony.

China’s Policy Pivot Has Traders Wondering How Far It Will Go
Bloomberg News
Central bank lowers required reserve ratio for banks; Politburo adopts more dovish tone, Macquarie’s Hu says
As Chinese economic policy makers shift toward easing mode, the question on traders’ minds is how far the government is prepared to go. Financial markets are showing some expectations of further easing after the People’s Bank of China said it will cut the amount of cash banks have to hold in reserve. Turnover has climbed to an 18-month high on a popular tool used by traders to finance their bond purchases, a sign of increasing leverage. Government-bond yields are near a three-month low. A gauge tracking Chinese developer shares rallied more than 3% on Tuesday after the Politburo signaled a loosening of curbs on real estate.

Uber suffers blow as High Court ruling triggers overhaul of London business model; Decision will affect all ride-hailing companies in UK capital
Jane Croft and Hannah Murphy – FT
Uber has lost a High Court case over whether its operations were compatible with transport operating laws in London, in a decision that will trigger an overhaul of the entire ride-hailing sector in the capital.

Why the Turkish Lira Is Falling Like a Rock; Investors and economists fear Turkey’s embattled economy could get worse before it gets better
Caitlin Ostroff – WSJ
The Turkish lira has shed nearly half of its value against the dollar this year and inflation is spiraling skyward. For Turkey’s embattled economy, investors and economists fear it could get a lot worse before it gets better.


Illinois Marijuana Sales Double, Likely to Hit $1.5 Billion for 2021
Dylan Sharkey – Illinois Policy.org
Illinois marijuana revenue in 2021 will likely more than double that of 2020, but high taxes keep illegal drug dealers thriving.
November 2021 was the ninth consecutive month with over $100 million in marijuana sales in Illinois dispensaries, according to new state data. Illinois surpassed the 2020 sales total of $669 million in June this year.

Chicago billionaire donates $5 million toward Miami’s Underline park project
Andres Viglucci – Miami Herald
The Chicago hedge-fund billionaire who last month bought the last privately owned first-edition copy of the U.S. Constitution is splurging on something else: The Underline, the 10-mile linear park and urban trail now under construction beneath Miami’s elevated Metrorail line. CItadel CEO Kenneth Griffin, an art patron and philanthropist who supports a broad range of causes, has made a $5 million gift to the ambitious project, overseen by a nonprofit group and Miami-Dade County.

Fund Manager Michael Steinhardt Surrenders 180 Pieces of Stolen Artifacts
Christian Berthelsen – Bloomberg
Steinhardt returning 180 artifacts valued at $70 million; No criminal charges filed in investigation begun in 2017
Michael Steinhardt, the money manager and art collector caught up in legal battles over ancient artifacts, agreed to surrender 180 pieces valued at $70 million and accept a lifetime ban from the antiquities market, New York prosecutors said.

Picasso, Cassatt Art Among Pieces Donated to Boston College
Works by Pablo Picasso, Mary Cassatt and Winslow Homer are among 30 pieces of art worth more than $20 million that alumnus and legendary investment manager Peter Lynch is donating to Boston College’s art museum, the university announced Tuesday. The works — 27 paintings and three drawings — were collected by Lynch and his late wife Carolyn.

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The Spread

Volatility ETFs Aren’t Flashing Signs of Market Fear

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SEC charges 11 in ‘massive’ crypto Ponzi scheme

SEC charges 11 in ‘massive’ crypto Ponzi scheme

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