Hits & Takes
Intercontinental Exchange Group’s market cap was $42.2 billion yesterday. Last August, it was $38.8 billion. In 2005, after its IPO, it was $2 billion.~JK
Yesterday marked the 228th birthday of the Philadelphia Stock Exchange (PHLX). The following comes from Daniel Carrigan, president of Nasdaq Futures, Inc.: “PHLX was formed to support a fledgling U.S. government which borrowed $77 million from citizens to wage freedom from Britain. The first private debt offering was listed for trading in 1795 for The Penn and Lancaster Turnpike. The certificate contained the first picture imprint on a certificate (a picture of a turnpike). What is a turnpike? It is a gate with a wooden pole with a metal pike on top. Traffic was directed by whichever way the pike was “turned” at the gate. There are no records how much capital was raised, but the turnpike bond interest rate in 1795 was 5% per annum.”~SD
The latest edition of the FIA’s MarketVoice is online now.~JJL
Took a moment to go through recent CME disciplinary actions – there were four that came through the pipeline on April 2. The two actions against individuals – NYMEX related one here and COMEX related one here – were both for spoofing. The two NYMEX actions against companies were for a non-bona fide “Exchange for Risk” transaction and for a violation of position limits in nat gas.~SD
Regardless of CHX’s model – maker taker, taker maker, whatever – the theory is that had it been sold to the previously interested consortium, it would be structured as a tinker, tailor, soldier, spy exchange.~SD
If you want to nominate someone for Global Investor Group’s 2018 Awards and review the categories, go here.~SD
Cryptocurrency derivatives; FCA statement on the requirement for firms offering cryptocurrency derivatives to be authorised.
We are aware of a growing number of UK firms offering so-called cryptocurrencies and cryptocurrency-related assets. As indicated in our Feedback Statement on DLT, cryptocurrencies are not currently regulated by the FCA provided they are not part of other regulated products or services. Cryptocurrency derivatives are, however, capable of being financial instruments under the Markets in Financial Instruments Directive II (MIFID II), although we do not consider cryptocurrencies to be currencies or commodities for regulatory purposes under MiFID II. Firms conducting regulated activities in cryptocurrency derivatives must, therefore, comply with all applicable rules in the FCA’s Handbook and any relevant provisions in directly applicable European Union regulations.
***** Play by our rules or face the consequences.~JJL
CME Is World’s Most Valuable Exchange Brand
Chicago Mercantile Exchange (CME) remains the world’s most valuable exchange brand despite its brand value dropping 1% to US$1.3 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation and strategy consultancy. This achievement comes on the back of their huge business volumes, with steady growth delivering the highest revenues amongst global asset exchanges.
**Cboe Global Markets cracked the top 10, up 52% as the world’s fastest growing exchange brand.~JK
U.S. tax liabilities for crypto currencies in 2017 seen at $25 billion, to pressure bitcoin: Fundstrat
Gertrude Chavez-Dreyfuss – Reuters
Soaring crypto-currency prices last year are estimated to result in U.S. tax liabilities of $25 billion, adding further selling pressure to these assets in the short term, according to a research note by Fundstrat Global Advisers on Thursday.
***** Remember the nephew at Christmas who told you to get into bitcoin? He has a big tax bill and less crypto asset value to pay it.~JJL
Boots on the Ground – Michael Syn, SGX
SGX’s EVP and Head of Derivatives Michael Syn knows the emerging markets ropes. In this video from JLN’s annual series with industry leaders, Syn talks about the role SGX plays in the global exchange economy, the effects of macroeconomic trends and the need for more personnel on the ground overseas.
Watch the video and read the rest here »
Thursday’s Top Three
Yesterday’s top read story was The Trade’s Fidessa names rival acquisition bidders. That would be ION and SS&C Technologies. Second went to a story that affects us all, the crummy weather! Mashable’s forecast Record-setting April cold, snow to sweep across Midwest, Eastern U.S. sent several traders back inside for six more weeks. The third item was the movie trailer for Buy the Dip about two friends who meet a homeless man called Nick who offers them some life changing investment advice involving cryptocurrencies.
122,912,320 pages viewed; 23,058 pages; 212,464 edits
Regulators World-Wide Are Cracking Down on Cryptocurrencies. India’s Next.; The country will prevent banks and financial institutions from engaging in digital currencies
Steven Russolillo and Gregor Stuart Hunter – WSJ
The regulatory clampdown on cryptocurrencies is gaining momentum around the world, adding pressure to asset values as governments intensify efforts to rein in speculative trading and criminal activity.
CME Group takes heat over large, private grain trades
Tom Polansek – Reuters
Global grain merchant Bunge Ltd and U.S. farmer-owned cooperatives hit exchange-operator CME Group Inc with complaints at a regulatory advisory committee meeting on Thursday over private transactions which critics say reduce transparency in agricultural markets.
Corporate America Will Bring Next Wave of Pain, Money Managers Warn
John Gittelsohn – Bloomberg
Asset managers are dialing back holdings on rising rate fears; Proportion of highly leveraged global companies has crept up
Corporate America will beget the next wave of financial pain, or even recession, a growing choir of the world’s biggest money managers is warning.
Fintech Could Flop Without Big Banks; An amazing product is nothing without access to money.
Matt Levine – Bloomberg
What is this Bloomberg Markets story about? The headline is “Wall Street’s Big Banks Are Waging an All-Out Technological Arms Race,” and part of the thesis is that, especially in equities, banks are no longer in the business of using their balance sheets to profitably intermediate trades for clients, but are instead in the business of providing technology platforms to those clients to do the trades automatically:
UK watchdog says license needed to trade cryptocurrencies
Simon Jessop, Emma Rumney – Reuters
Britain’s financial watchdog said on Friday that firms offering services linked to cryptocurrency derivatives must meet all relevant rules in the regulator’s handbook or could face sanctions.
$60 Billion Manager Considers Selling All U.S. Assets
Matthew Burgess – Bloomberg
Nader Naemi of AMP says political risk is becoming too much; Investor suggests shorting Boeing, going long Airbus
Nader Naeimi, a money manager at the $145 billion AMP Capital Investors Ltd., is so frustrated by the tariff fight with China that he’s considering dumping all his American holdings.
Crypto-Tracing Software Firm Expands to Cover More Currencies
Olga Kharif – Bloomberg
Chainalysis will track Bitcoin Cash, trace other coins soon; Company raised $16 million in Benchmark-led funding round
Chainalysis Inc., a maker of anti-money-laundering software, is widening the reach of its products that monitor cryptocurrency trading amid heightened demand for secure transactions.
Rosenblatt Securities Expands International Partnerships (and Analysts)
Sanford Bragg – Integrity Research
Rosenblatt Securities, a New York institutional brokerage, has been quietly adding reciprocal arrangements with emerging and frontier market brokerage firms to increase its trading relationships and research coverage. Rosenblatt currently has arrangements with fifteen brokers, surpassing Jefferies but still far short of Auerbach Grayson’s network. The firm also hired two tech analysts as it expands its proprietary research offering.
Monex buys cryptocurrency exchange Coincheck for •3.6bn; Japanese financial services company plans IPO for its acquisition
Leo Lewis in Tokyo and Alice Woodhouse – FT
Shares in Monex Group closed near a 10-year high on Friday after the Japanese online brokerage said it would pay •3.6bn ($33.5m) for cryptocurrency exchange Coincheck and prepare its troubled acquisition for an IPO.
Exchanges, OTC and Clearing
Record activity in Eurex Clearing’s partnership program
Deutsche Bˆrse Group
For the month of March, the off-exchange rate derivatives segment of Eurex Clearing under the new partnership program recorded record activity. Compared to the same month last year, the cleared nominal volume increased by a factor of eleven to EUR 1.7 trillion. The outstanding volume was thus EUR 4.7 trillion after EUR 1.2 trillion in March 2017.
LSEG Technology successfully implements the OCG Participant Gateway for HKEX
London Stock Exchange Group
LSEG Technology today announced the go-live rollout of the HKEX Orion Central Gateway (OCG). Working with HKEX, LSEG Technology’s MillenniumIT has successfully delivered and integrated the OCG technology with the Orion Trading Platform enabling all users to electronically connect to HKEX’s securities trading systems. The upgraded direct order gateway will increase capacity and allow HKEX to offer a more robust, low-latency technology service.
Dividend season: positive growth in dividend derivatives
During these times of historically low interest rates, investors around the world seek safety, growth and yield. That is why dividend strategies remain an attractive alternative to low risk / low return fixed interest investments. With dividend season starting, it is a good time to take a closer look at Eurex Exchange’s dividend derivatives and the benefits they provide for investors.
Euronext announces volumes for March 2018
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for March 2018.
Cboe announces leadership for new Markets Division; Firm also outlines plans to migrate Cboe Options Exchange onto Bats proprietary technology.
By John Brazier – The Trade
Cboe has appointed Andy Lowenthal and Bryan Harkins as the co-heads and executive vice presidents of its newly-established Markets Division.
Adjustment of Li & Fung Structured Products, Futures and Options
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to Li & Fung Limited (Li & Fung) structured products, futures and options to account for Li & Fung’s special dividend
Chicago Stock Exchange agrees sale to ICE; Move follows collapse of deal with consortium including Chinese investors
Nicole Bullock and Eric Platt in New York YESTERDAY – FT
The Chicago Stock Exchange has agreed a sale to Intercontinental Exchange, after the collapse of a deal to sell to a consortium that included Chinese investors.
Exchange of the Year 2018: The Nominees
SIX Swiss Exchange AG is proud to be on the shortlist in the category “Exchange Group of the Year” for the FN Trading and Technology Awards 2018.
Post-Trade Industry Leaders To Gather For The WFE’s 35TH IOMA Clearing & Derivatives Conference
Industry leaders will gather in Chicago, USA, next week for The World Federation of Exchanges’ (“The WFE”) 35th IOMA Clearing & Derivatives Conference which kicks off on 11 April through to 13 April 2018.
SGX reports market statistics for March 2018
New bond listings in March see FY2018 to-date beating the FY2017 record of 819 (S$384.7 billion), Another record month for SGX USD/CNH futures volumes as Renminbi internationalisation continues to drive demand for CNH hedging tools
CLS and NEX Extending triReduce Compression Service to Third Parties
Jeff Patterson – Finance Magnates
CLS and NEX have jointly extended the triReduce CLS FX service to third parties, greatly enhancing participation. The joint effort reflects an ongoing bid to expand participation for third parties amidst a strong demand for compression of FX forwards and swaps.
Hey Alexa, Can You Help Amazon Get Into the Payments Business?; Firm looks to make voice commands the next wave of commerce, pushing it in direct rivalry with Venmo
By AnnaMaria Andriotis and Laura Stevens – WSJ
Amazon.com Inc . AMZN 2.92% is considering whether to use its Alexa virtual assistant to start a person-to-person payments feature, a move that would push the retailing giant into new competition with PayPal Holdings Inc.’s PYPL 2.90% Venmo and big banks’ payments efforts, according to people familiar with its strategy.
Russia files lawsuit to block Telegram messaging app
Russia’s state communications watchdog said on Friday it had filed a lawsuit to limit access to the Telegram messaging app after the company refused to give Russian state security services access to its users’ secret messages.
Scottish Fintech Investment Reaches £37 Million According to Government
Scotland’s rapidly evolving Fintech ecosystem, which brings together start-ups, global corporations, universities and the public sector, has attracted nearly £37 million investment over the last 10 years according to new Scottish Government figures.
Fidessa pushes vote on Temenos deal to latest possible date
Cat Rutter Pooley in London – FT
Fidessa, the UK financial technology business that had its plans for a tie-up with Swiss group Temenos knocked off course earlier this week after two other suitors came forward with offers, has rescheduled the shareholder vote designed to rubber stamp the Temenos deal to the last possible moment.
CoinList Raises $9.2 Million in First Round as ICOs Boom
By Camila Russo – Bloomberg
CoinList, a digital coin sales platform, raised $9.2 million in an initial round of funding, the company said in a statement.
Former Mt. Gox CEO Is No Longer a Bitcoin Believer
By Olga Kharif – Bloomberg
In Reddit chat with users, Karpeles talked about jail, fraud; He said he wants to reimburse users from any funds he gets
The former chief executive officer of the once-largest Bitcoin exchange, Mt. Gox, said he no longer is a Bitcoin believer, and sounded pessimistic about cryptocurrencies in general.
Hacked Crypto Exchange Sold for $34 Million
By Fuji Nakamura, Hikeki Sagiike – Bloomberg
Japanese retail brokerage agrees to acquire Coincheck; Monex’s Katsuya to run the exchange, replacing CEO Wada
Coincheck Inc., the cryptocurrency exchange that lost about $500 million of customer deposits to hackers in January, was acquired by Monex Group Inc. in a deal that sent shares of the Japanese retail brokerage soaring to a five-year high.
Japan explores ways to formally regulate cryptocurrency ICOs
Aaron Hankin – MarketWatch
As U.S. government watchdogs increase scrutiny of initial coin offerings, or ICOs, Japan is exploring ways to formally regulate the form of venture-capital fundraising.
RBI bans Bitcoins, other virtual currencies, prohibits any dealing with banks
By Saloni Shukla, ET
In February this year Finance Minister Arun Jaitley outlawed the use of cryptocurrencies in India while presenting the Union Budget 2018.
A ‘seismic shift’ is taking place in the cryptocurrency sector, analyst says
Aaron Hankin – MarketWatch
The days of overnight bitcoin millionaires are fading fast. As the price of the No. 1 digital currency continues to fall ó declining more than 40% in the first quarter ó the crypto hall of fame is fast becoming a hall of shame.
India’s central bank issues cryptocurrency ban
The Reserve Bank of India (RBI) has banned regulated banks and its account holders from dealing in cryptocurrencies. The growing bubble around bitcoin and other virtual currencies has unnerved a number of central banks in recent months but the RBI’s blanket ban is the furthest measure so far taken by a major regulator.
A 200-Year-Old Idea Offers a New Way to Trace Stolen Bitcoins
Andy Greenberg – WIRED
Bitcoin’s blockchain provides inalterable evidence, stored on thousands of computers, of every Bitcoin transaction that’s ever taken place. Many of the transactions recorded on that distributed ledger are crimes: Billions of dollars in stolen funds, contraband deals, and paid ransoms sitting in plain sight, yet obscured by unidentifiable Bitcoin addresses and, in many cases, tangles of money laundering. But a group of Cambridge cybersecurity researchers now argues that one can still distinguish those contraband coins from the legitimate ones that surround them, not with any new technical or forensic technique, but simply by looking at the blockchain differently – specifically, looking at it more like an early 19th century English judge.
A New Way to Invest in Cryptocurrency
Avi Salzman – Barron’s
Matt Hougan was a pioneer in the world of exchange-traded funds at a time when most institutions shunned them. He served as chief executive of ETF.com, a ratings and analytics firm, and Inside ETFs, an educational company.
In February, Hougan joined another nascent industry, the world of cryptocurrencies. He is now global head of research at Bitwise Asset Management, which recently started a privately traded cryptocurrency index fund called the Bitwise HOLD 10 that invests in the 10 largest digital coins by market cap. (It’s available only to accredited investors, those with $1 million in investible assets or annual income of $200,000 or more.)
Initial Coin Offerings: The Future of the Future of Finance
Sviatoslav Rosov – CFA Institute Blog
The question of whether the blockchain will end up as nothing or everything continues to be asked with no definitive answer as of yet. With the price of Bitcoin bouncing around US$10,000, and the mass media moving on from breathlessly covering the issue, it may not be obvious to readers whether the revolution may have stalled. Initial coin offerings (ICOs) are a good lens through which we can view the issues challenging regulators and market participants.
Chinese bitcoin miner eyes IPO, prefers to list outside mainland
China’s Canaan Creative, one of the world’s largest crypto-currency mining equipment makers, said it was considering an IPO outside the mainland, although it did not provide details on a possible time frame or how much the company expects to raise.
Have you ever meta crypto joke you didn’t like?
Jemima Kelly – FT
Vitalik Buterin, the 24-year-old wunkerkind creator of Ethereum, took to developers’ forum GitHub on Sunday to propose capping the total supply of ether at just over 120m – twice the amount of the digital tokens originally released:
Director of firm involved in bitcoin scam held
Press Trust of India
The director of an online multi-level marketing company and his brother have been arrested from Delhi today in connection with an alleged multi-crore bitcoin ponzi scheme, a senior Pune police officer said.
Crypto Selloff Driven by $25 Billion Capital Gain Hit, Tom Lee Says
By Joanna Ossinger – Bloomberg
Fundstrat sees selling pressure easing after tax day; U.S. households may see record realized capital gains in 2017
Selling pressure in cryptocurrencies could ease after tax day.
China signals tough trade stance as U.S. officials push negotiations
Michael Martina, Susan Heavey – Reuters
China would win any trade war with the United States, the country’s state media said on Thursday, as U.S. officials sought to ease market jitters over escalating tensions between the world’s two biggest economies.
Trump Says He’ll Take ‘Very Serious Look’ at Amazon’s Business
By Jennifer Epstein – Bloomberg
President Donald Trump said he will take a “very serious look” at Amazon.com Inc. and what he said is an “uneven playing field” the retailer enjoys against competitors.
Trump tariff move ‘seriously violates’ international trade rules: Xinhua
Alice Woodhouse and Yuan Yang – FT
China’s state news agency said on Friday that Donald Trump’s latest threats to introduce an additional $100bn in tariffs on imports from China “seriously violates” international trade rules.
SEC Awards More Than $2.2 Million to Whistleblower Who First Reported Information to Another Federal Agency Before SEC
The Securities and Exchange Commission today announced a whistleblower award of more than $2.2 million to a former company insider whose tips helped the agency open an investigation that led to an enforcement action. The whistleblower first reported the information to another federal agency and later provided the same information to the SEC.
FCA warns fund sector executives of ‘personal’ responsibility; Watchdog says senior officials will be required to act in investors’ best interests
Attracta Mooney and Jennifer Thompson – FT
Senior executives in the fund industry will be personally on the hook for ensuring investors are getting value for money, the man behind the UK financial watchdog’s far-reaching investigation into the sector has warned.
Regulatory requirements reminder for CPO, CTA, FCM, FDM and IB Members
NFA is committed to providing its Members with the resources they need to meet their regulatory obligations as efficiently as possible. This Notice to Members serves as a reminder that Members can access information on certain annual and ongoing requirements from the Members section of NFA’s website.
Insurers breach FCA rules on renewal premiums for customers; Study finds that motorists are wasting millions each year in ‘loyalty tax’
Lucy Warwick-Ching – FT
Motorists are paying over the odds for insurance and breakdown cover despite new rules designed to put an end to expensive renewals.
New York Attorney General Schneiderman Releases New Report On Mutual Fund Fees, Announces Agreement By 13 Major Firms To Make New And Enhanced Disclosures To Retail Investors Following Industry-Wide Investigation
Attorney General Eric T. Schneiderman announced that after an industry-wide investigation into mutual fund disclosures and fees, 13 major mutual fund firmsóincluding those run by some of the largest players in the mutual fund industryóhave agreed to voluntarily publish important information about their mutual funds to all retail investors. Under the agreements announced today, the firms will disclose new information that can help retail investors determine whether a higher-cost, actively managed mutual fund fits their investment goals better than another, lower-cost alternative.
Statement of Commissioner Rostin Behnam before the Agricultural Advisory Committee Meeting
Statement of Commissioner Brian Quintenz before the CFTC Agricultural Advisory Committee
Remarks for Chairman J. Christopher Giancarlo at the 2018 Agricultural Commodity Futures Conference, Overland, Kansas
Investing and Trading
BlackRock Plans to Exclude Gun Makers, Sellers From Some Funds
Sabrina Willmer and Polly Mosendz – Bloomberg
BlackRock Inc., the world’s largest asset manager, plans to start two exchange-traded funds that will exclude civilian firearm makers and large sellers in the wake of the Florida high school shooting.
Investors find themselves part of the China-US trade fight; Beijing seeks to strengthen political hand by targeting specific industries
Chloe Cornish and Joe Rennison – FT
The swings in US stocks over the past 48 hours undermine the notion that investors know what a trade war would mean for markets.
European Banking Authority Updated Risk Dashboard Shows Significant Improvements Across EU Banks But Elevated NPLs Are Still The Main Challenge For Their Profitability
The European Banking Authority (EBA) published today the regular update of its Risk Dashboard summarising the main risks and vulnerabilities in the EU banking sector for Q4 2017. The progress is positive for European banks, but risks remain heightened on sustainable profitability. Following the ESRB recommendation on commercial real estate markets, the EBA’s Risk Dashboard has an additional page showing the aggregated real estate exposures referred to real estate activities and the construction sector.
Some Colleges Bail from TIAA, Objecting to Increase in Fund Fees; Groups in Wisconsin, Virginia combine members’ retirement assets to gain scale after TIAA raised fees
Gretchen Morgenson – WSJ
More than a dozen small colleges have joined to yank the management of their employee retirement accounts from TIAA, the largest provider of retirement-plan services to nonprofit organizations, after it raised the fees on some of its most popular funds.
BlackRock to offer funds that exclude gun makers, sellers; Asset manager is one of biggest shareholders of the three largest US manufacturers
Chris Flood – FT
BlackRock, the world’s largest asset manager, is to launch a range of new funds that exclude firearms manufacturers and retailers following a deadly school shooting in Florida in February.
JPMorgan readies bond desk to catch Mifid II trades
Samuel Agini – Financial News
JPMorgan is preparing to launch a bond execution and reporting desk for fund managers, in an early sign of how the world’s biggest banks are adjusting to Europe’s new trading landscape.
Deutsche Bank Trading Boss Ritchie Is Said to Weigh Leaving
Donal Griffin – Bloomberg
Ritchie weighing all his options amid contract talks: source; South African native a two-decade veteran of Deutsche Bank
Deutsche Bank AG’s Garth Ritchie, co-head of the investment bank, is considering leaving the firm as soon as this year, according to people with knowledge of the talks.
New Goldman Office Dumps Dress Code for Kombucha on Tap
Dakin Campbell – Bloomberg
Former Uber executive Jeff Winner takes on Marcus recruiting; Silicon Valley engineers sought for digital consumer bank
There’s no sign on the door, no dress code, and kombucha flows freely from a tap in the break room.
Some Tiger Management-related hedge funds boast gains in turbulent 2018
Svea Herbst-Bayliss – Reuters
Several hedge funds who trace their ancestry to billionaire investor Julian Robertson’s Tiger Management are boasting positive returns for the year even as tumbling markets have left many rivals with losses.
AQR Capital launches its first quantitative bond fund
Jennifer Ablan – Reuters
AQR Capital Management, LLC, led by widely regarded hedge fund manager Clifford Asness, announced the launch on Thursday of its first quantitative bond fund, with the aim of capturing different sources of returns.
U.S. to Consider Additional $100 Billion in China Tariffs; Trump cited China’s ‘unfair retaliation’ as a reason for additional potential levies
Bob Davis – WSJ
President Donald Trump threatened a major escalation in trade tensions with Beijing on Thursday, saying he was considering imposing tariffs on an additional $100 billion in imports from China.
China ‘not afraid’ of trade war with Trump; Beijing condemns new US tariff threat and warns of ‘comprehensive countermeasures’
Yuan Yang, Emily Feng and Alice Woodhouse – FT
Beijing has condemned Donald Trump’s threat of an additional $100bn in tariffs on imports from China, as Chinese experts warned the US it stood more to lose politically from a worsening tit-for-tat trade dispute that has unnerved global markets.