Robinhood shutdown leaves users feeling robbed; Outage on free trading platform came on one of the best days for US stock market in years

Mar 3, 2020

First Read

Hits & Takes
By JLN Staff

Several emails I received yesterday and today said, “See you in Boca, if it is not cancelled.” There is continued speculation that the FIA Boca conference will be cancelled as reports of individual cancellations filter through the industry. Two of our video interviewees have cancelled and will not be attending Boca, though no reason was given. One can only speculate why.~JJL

In Chicago, the International Housewares Association Trade Show was cancelled. They expected to see 60,000 people at the show. Twitter has advised its 5000 employees to work from home after it curtailed non-essential travel and pulled out of the South by Southwest conference scheduled for later this month.~JJL

My alma mater, Purdue University, is making plans to quarantine students in case the virus spreads and to teach the students online.~JJL

There are stories, including locally by me, that there were long lines at Costco and some items, like beef and chicken, were completely gone.~JJL

JLN is still planning on attending the Boca conference, though I need to make new lodging reservations. CNN however, has banned all employee travel.~JJL

The latest Open Outcry Traders History Project video we have published is Ed Ryan, a city kid who found his way to the Chicago Board of Trade with the help of a neighborhood friend he ran into in downtown Chicago. Ryan started as a runner and worked his way up to a member of the exchange, starting out trading night bonds. In the interview, he tells the story about the last day of trading for Charlie D, i.e. Charles DiFrancesca. Ryan left the floor in 1997 and continued in the industry, working in the managed futures field. Today, he is a senior vice president for managed futures for Advantage Futures in Chicago.~JJL

The MGEX had their best February ever, which is saying something.~JJL

OCC had its highest volume month ever for U.S. equity options, announcing that February 2020 total cleared contract volume was 568,899,108 contracts, up 60.7 percent from February 2019 and beating the previous record of 567,833,544 cleared contracts set in October 2018 by 0.19 percent. ~SR

Federal court Judge Blakey denied without prejudice a SEALED motion from Kraft/Mondelez on Monday saying, “All papers in this matter must be filed on the docket without seal and placed in the public record . . .” Kraft is the defendant in a 2015 case brought by the CFTC alleging that the company manipulated the wheat futures market in 2011. The parties told the court last month that they had reached a settlement agreement in the matter which still required approval by the CFTC commissioners. A hearing on the motion is scheduled for March 5. ~Thom Thompson

The DJIA surged nearly 1,300 points in its biggest single-day point gain ever on Monday.~JJL

Bloomberg News is reporting the Pope has tested negative for the coronavirus. The Pope has been slowed by a cold and cough, which raised media speculation he might be infected with the spreading virus.~JJL

Jim Kharouf has a commentary on Medium titled “How data can feed the world.”~JJL


Ed Ryan – Open Outcry Traders History Project

Ed Ryan sat for an interview with John Lothian News for the MarketsWiki Education Open Outcry Traders interview. He was a city kid who had a friend down the street who worked at the Chicago Board of Trade. A chance meeting with his friend brought an invitation to lunch at the CBOT. He started as a runner, like so many others. He started as a member with an IDEM membership trading night bonds. He traded at the CBOT for nearly 10 years as a small trader. Today, he works for Advantage Futures in managed futures.

Watch the video »


The Spread: Pandemic Pandemonium

This week on The Spread – the CME, the OCC, and MIAX break their own records, while coronavirus fears cause global equity markets to crash and options trading and clearing volumes to spike.

Watch the video »


CME Group Reports All-Time High Monthly ADV of 30.1M Contracts in February 2020
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today reported its February 2020 market statistics, showing it reached a record average daily volume (ADV) of 30.1 million contracts during the month, an increase of 58% from February 2019. The company’s Equity Index, Metals, Interest Rates and Energy product lines also reached record ADV. Open interest at the end of February was 132 million contracts. Market statistics are available online in greater detail at

******Amazing what a little virus can do for trading volumes.~JJL


The Coronavirus Checklist: Nine Steps to Protect Your Company; How to keep your business running.
Arianne Cohen – Bloomberg
The business world was caught off guard by Covid-19. According to a report by Dun & Bradstreet, 94% of Fortune 1,000 companies are experiencing supply chain delays—not to mention workplace absences, lower productivity, travel cutbacks, and reduced trade and investment. “Many companies had plans for floods or earthquakes, but their backup factories were in another region of China,” says Razat Gaurav, chief executive officer of Llamasoft Inc., a supply chain software provider. “This should be a wake-up call for a lot of industries.”

*****It is hard to plan for the known unknowns, let alone the unknown unknowns.~JJL


Jack Welch Inflicted Great Damage on Corporate America
Joe Nocera – Bloomberg
There are well-known people who are vilified during their careers only to seem heroic in retrospect. And then there are others who are lionized in their prime, and only later do we realize how harmful their actions truly were.

****But he made a lot of money?~JJL


Monday’s Top Three
Our top story Monday was Gary DeWaal’s Bridging the Weeks: February 17 to 28, and March 2, 2020 (Sanctioned Again; Spoofing; Denied Again; Bitcoin ETF). Second was a 2017 article from The Smithsonian about How the Horrific 1918 Flu Spread Across America. And third was the FIA Policy on the COVID-19 Coronavirus at its 2020 Boca Conference (as of Friday, February 28, 2020).


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Lead Stories

Financial Traders Are Getting Their Coronavirus Test; Banks have been doing trial runs of remote working, but there are still questions about how this will work without making systems vulnerable.
Elisa Martinuzzi – Bloomberg
Efforts to contain the spread of the novel Coronavirus are prompting a slowdown that poses the biggest danger to the world economy since the financial crisis, according to the OECD. Stocks last week suffered their biggest selloff since 2008. But the market dislocations aren’t the only virus perils to rattle Wall Street’s traders and their colleagues in overseas financial hubs.

Robinhood shutdown leaves users feeling robbed; Outage on free trading platform came on one of the best days for US stock market in years
Richard Henderson – FT
Robinhood, the free stock trading app, suffered a prolonged outage on Monday, separating its 10m users from one of the best days for the US equity market since the financial crisis and denting its reputation ahead of its UK launch.

Barclays acquittals show SFO’s ‘waste and incompetence’; Defence lawyer calls for top-to-bottom review of UK fraud agency
Michael O’Kane – FT
Last week’s acquittals of my client Richard Boath and two other former Barclays bankers should serve as the starting gun for a top-to-bottom review of the UK Serious Fraud Office for waste and incompetence.

‘Intense’ trading sends exchange volumes to record; Platforms report soaring activity after coronavirus outbreak spooks investors
Philip Stafford and Richard Henderson – FT
Trading volumes on stock and futures exchanges surged in February after fears over the impact of the spreading coronavirus sent important asset classes reeling. Data from bourses showed that trading flows jumped sharply last week, when the US benchmark S&P 500 stock index tumbled more than 10 per cent from a recent peak to record its fastest correction since the 1930s.

Robinhood Trading Site Seizes Up, Customers Miss Stock Rally
Julie Verhage and Annie Massa – Bloomberg
Clients were unable to make brokerage trades for entire day; Company says it has identified the issue and is working on fix
Online brokerage platform Robinhood suffered an outage that lasted the entire U.S. trading day and prevented customers from making trades as stocks surged after last week’s rout.

The rise and dramatic fall of European investment banks in the US; Europe’s lenders spent billions to crack the American market. But many have made a humbling retreat
Laura Noonan – FT
When HSBC interim chief executive Noel Quinn announced a dramatic overhaul last month to try to restore the bank’s fortunes, he took aim at what has now become a familiar target for European bank bosses — the US market.

TP Icap launches M&A trading desk in Europe; Move comes amid signs of a recovery in M&A in Emea and the ongoing march of activist investors in the region
Financial News
TP Icap is betting on corporate takeovers in Europe. The broker has launched a so-called special situations desk in London under its Icap brand to help companies and investors trade around announced mergers and acquisitions, as well as rights issues, in the region.

Eurex to allow remote trading in case of coronavirus spread; If market participants are impacted by a further spread of coronavirus, Eurex will allow trading from outside approved locations in an emergency situation.
Hayley McDowell – The Trade
Eurex Exchange has taken steps to ensure that trading on its markets will not be impacted by the potential spread of coronavirus across Europe.

Can We Get a Vaccine Early? How the Rich Are Preparing for Coronavirus
Max Abelson – Bloomberg
Langone dials hospital experts, others hunt supplies or meds; ‘It’s been a full-on war room,’ says head of concierge service
One investor may fly to Idaho with or without family. A doctor in a Colorado ski town is soothing wealthy clients who want a cure. And one New Yorker called up the hospital with his name on it.

Dirty banknotes may be spreading the coronavirus, World Health Organisation warns; People have been warned to wash their hands after using banknotes – and if possible to use contactless payments instead
Bill Gardner – Telegraph
Banknotes may be spreading the new coronavirus so people should try to use contactless payments instead, the World Health Organization has said.

The Energy Elite Have Started Listening to Their Enemy No. 1 in Houston; Jim Blackburn, an environmental lawyer, is trying to protect the city from a climate disaster.
Ben Steverman – Bloomberg
Climate change is a touchy topic in Houston, even if hardly anyone doubts the climate is changing. An already damp city is getting wetter, obvious in the muddy sidewalks and the puddles that linger long after a routine rain. The bigger downpours block highways. The really huge storms—and not just 2017’s Hurricane Harvey, which killed at least 94 people—keep arriving with a size and frequency that meteorologists once insisted was impossible. With initial support from Texas’s governor and U.S. senators (all conservative Republicans), the Army Corps of Engineers wants to spend $23 billion to $32 billion on a coastal bulwark against the rising waters.

High-fives, hugs, kisses discouraged as U.S. companies respond to growing coronavirus threat
Helen Coster – Reuters
As news broke of more cases of coronavirus spreading across the United States, T-Mobile had a novel response to the threat: fewer hugs, kisses or high-fives.

Is it a currency? A commodity? Bitcoin has an identity crisis
Tom Wilson – Reuters
So bitcoin’s a currency, right? Well, yes, it can be used to buy, sell and price goods much like dollars and euros.

Exchanges, OTC and Clearing

NYSE – Extension of Pillar Port Transition Cap
In June 2019, NYSE announced the Pillar Transition Cap for NYSE Pillar port fees, which was to remain in place through March 2020, or until a firm had fully transitioned to using only Pillar phase II ports, whichever came first. Pending effectiveness of a filing with the SEC, the NYSE intends to extend the Pillar Transition Cap through August 2020.

WFE: Exchanges, CCPs Implementing Advanced, Embedded ERMmm
Regulation Asia
Market infrastructures – exchanges and CCPs – are implementing advanced and embedded enterprise risk management right across their organisations, the WFE says. The WFE (World Federation of Exchanges) has published a benchmarking paper examining the organisational structures for enterprise and operational risk within market infrastructures.

LSEG Highlights Growth In Clearing
Shanny Basar – MarketsMedia
The London Stock Exchange Group reported record volumes of over-the-counter clearing across all its services despite the UK leaving the European Union and increased competition.

2/29/20 – Weekend Listening from Intercontinental Exchange
Joshua King – Intercontinental Exchange & The New York Stock Exchange
Trading weeks like the one that ended yesterday at four o’clock don’t happen every week, thank God.
Emblematic of the last five days was this piece of color from this morning’s Wall Street Journal, written by Akane Otani and Peter Santilli, under the headline, “The Week That Wiped $3.6 Trillion Off the Stock Market”:

CME Group Reports All-Time High Monthly ADV of 30.1M Contracts in February 2020
CME Group (press release)
CME Group, the world’s leading and most diverse derivatives marketplace, today reported its February 2020 market statistics, showing it reached a record average daily volume (ADV) of 30.1 million contracts during the month, an increase of 58% from February 2019. The company’s Equity Index, Metals, Interest Rates and Energy product lines also reached record ADV. Open interest at the end of February was 132 million contracts.

Goldman Sachs latest to join ICE ETF Hub; Goldman follows JP Morgan, Bank of America, Citadel Securities and Virtu Financial in joining the ICE ETF ecosystem.
Hayley McDowell – The Trade
US exchange group ICE has confirmed that Goldman Sachs has connected to its exchange traded funds (ETF) hub as an authorised participant.

PIERER Mobility AG new on the regulated market of the Frankfurt Stock Exchange
Deutsche Börse Group
PIERER Mobility AG (ISIN: AT0000KTMI02) has been listed in the General Standard of the Frankfurt Stock Exchange since today . The listing on the SIX Swiss Exchange will remain.

Cash market sales in February were almost 60 percent higher than in the previous year
Deutsche Börse Group
Due to the high volatility on the financial markets in the last week of February, monthly sales on the cash market platforms of Deutsche Börse were significantly higher than in the previous year. In February the trading volume was EUR 183.0 billion compared to EUR 116.0 billion in the same month last year, which corresponds to an increase of almost 60 percent. With 2.8 million orders executed and a trading volume of EUR 18.6 billion, last Friday (February 28) was the strongest trading day on Xetra since 2008.

TMX Group Welcomes International Mining Community to PDAC 2020; Toronto Stock Exchange and TSX Venture Exchange are patron sponsors
TMX Group, the global exchange leader in mining, is pleased to welcome delegates from around the world to the 2020 Prospectors and Developers Association of Canada’s (PDAC) International Convention, Trade Show & Investors Exchange, taking place this week in Toronto. Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV), home to approximately half of the world’s public mining companies, will mark the event with a series of market open and closing ceremonies throughout the week featuring delegations from key international mining centres.


Refinitiv Launches Tick History in Google Cloud to Speed Access and Lower Storage Costs
Refinitiv has made its archive of historical pricing and trade data – five petabytes’ worth of information – available to clients via the Google Cloud Platform (GCP). The offering will allow customers will also be able to access, query and analyse Refinitiv’s tick data using the machine learning capabilities of Google Cloud’s BigQuery.

Africa’s cloud computing boom creates data centre gold rush; Continent’s capacity has doubled in the past three years as global investment surges
Neil Munshi – FT
International investors are rushing to fund a boom in the African cloud computing market, as the proliferation of smartphones and mass adoption of business software on the continent leads to soaring demand for data centres to power the technology.

Don’t believe the hype about AI and fund management; Machine learning can generate marginal improvements but nothing truly transformational
Ewan Kirk – FT
Hardly a day goes by without investors being told that artificial intelligence will revolutionise investment management. After all, AI is being hailed as a way to enhance image recognition, healthcare, movie recommendations, fake news and even the humble toothbrush. Surely it is only a matter of time before AI allows investors to sit at home getting rich, while watching movies with sparkling teeth?

Cyber security: are fund managers keeping up with regulators? Watchdogs are stepping in as financial institutions remain vulnerable
Ben Watford – FT
An arms race — unseen, digital and all too little understood — is raging. The UK’s chief of the defence staff, Nick Carter, recently stated that “the risk of cyber warfare with Russia is now a greater threat than terrorism”.

Sharia fintech: Startups race to tap Indonesia growth by aligning with Islam
Fanny Potkin – Reuters
Like millions of other Indonesians, Gandi Iswara had for years carried a wad of currency notes for dropping into donation boxes after prayers at mosques in suburban Jakarta. From late last year, though, the 35-year-old engineer switched to a more convenient option: whipping out his mobile phone, firing up a digital payment app from Google-backed GoPay and tapping the QR code stickers that are now affixed to the boxes.

U.S. Fintech Funding Climbed To Near $15 Billion Last Year Led By Insurance Says S&P
Ted Knutson – Forbes
U.S. fintech funding climbed to near $15 billion last year led by insurers, according to a new report from S&P Global Market Intelligence.
Insurtech accounted for $3.8 billion of the $14.8 billion total.
Digital lending and payments were tied for third place with $3.2 billion each.


Halting $9.8 Billion in Theft Is Key to Crypto Growth, KPMG Says
Matthew Leising – Bloomberg
Digital assets are vulnerable to lax security and weak code; Industry custodians ‘have a tremendous opportunity to profit’
The cryptocurrency market needs to improve how it secures digital assets for the $245 billion industry to keep growing, according to KPMG.

Tron takeover? Steem community in uproar as crypto exchanges back reversal of blockchain governance soft fork
Yilun Cheng – The Block
Steemit and TRON have moved to reverse a recent blockchain soft fork that sought to reduce their ability to sway governance decisions, according a blog post. The effort was seemingly assisted by crypto exchanges Binance, Huobi, Poloniex and other exchanges, as tokens held by those firms were used by Tron and Steemit to overturn the soft fork and maintain control over the Steem network for at least 4 to 6 weeks The “hostile takeover” has angered community members, prompting some developers to pull back their Steem-related apps.

London leads the way as blockchain hub; Report on London’s blockchain ecosystem from Outlier Ventures labels the city the best destination in Europe for blockchain startups.
Kiays Khalil – The Trade
The UK’s capital city is the preferred hub globally for blockchain-related ventures, according to a report from private equity firm Outlier Ventures.

Design choices for central bank digital currencies need to follow customer needs: BIS report
Yilun Cheng – The Block
The Bank for International Settlements (BIS) outlined design alternatives for central bank digital currencies and analyzed their tradeoffs based on customer needs The four key factors are: indirect or direct claims; DLT-based or conventional central bank infrastructure; account or token-based access technology; and wholesale or retail interlinkages.

US charges two Chinese nationals over North Korea cyber attack
Don Weinland – Financial Times
The US justice department has charged two Chinese nationals with laundering more than $100m worth of virtual currency connected to a North Korean hacking operation. The indictment is the first of its kind in the US government’s fight to stop Kim Jong Un from raising billions of dollars through cyber attacks that have been used to fund North Korea’s weapons programmes.

U.S. Sues to Tap Crypto Accounts Tied to North Korean Hack
Erik Larson – Bloomberg
North Korea keeps building military arsenal despite sanctions; State media says Kim oversaw ‘firepower strike drill’
The U.S. sued to gain control of cryptocurrency accounts North Korea allegedly used to steal more than $250 million from Bitcoin and Ether exchanges in 2018 in a move that comes as Kim Jong Un’s regime launched one of its biggest military provocations in months.

What Do the US Presidential Candidates Have to Say About Crypto?
Rachel McIntosh – Finance Magnates
And then there were four… The American presidential race has picked up speed. Within the last several days, three democratic candidates have suspended their campaigns, and with so many primary races happening today, “Super Tuesday”, it will undoubtedly be more clear by the end of the week who will be running against the incumbent President, Donald Trump: as of the morning of March 3rd, there were still four candidates in the democratic presidential race: Joe Biden, Bernie Sanders, Elizabeth Warren, and Mike Bloomberg.

Bitfinex to Delist Nearly 50 Cryptocurrency Trading Pairs on March 6
Helen Partz – Cointelegraph
Bitfinex, the 11th largest cryptocurrency exchange by daily trading volume, will remove dozens of cryptocurrency trading pairs later this week. According to a March 2 blog post, Bitfinex will remove 46 crypto trading pairs on Friday, March 6 due to low liquidity on the platform. The cryptocurrency exchange noted that the delisting of the trading pairs is a common measure that is expected to improve liquidity on Bitfinex platform and lead to a “more streamlined and optimized trading experience for our users.”

New Platform to Buy & Sell Bitcoin with No Self-Directed IRA Custodial Fees
PR Newswire via Yahoo! Finance
IRA Financial (IRA Financial Group & IRA Financial Trust Company), a leading financial technology self-directed IRA and 401(k) plan provider & custodian, is excited to announce its digital solution for Bitcoin and other cryptocurrency investments. Cryptocurrency investors can now make investments directly through Gemini without any LLC fees, broker fees or custodial fees.

98% of bitcoin mining machines will never produce a block, says PwC analyst
Yogita Khatri – The Block
Alex de Vries, a blockchain specialist at “Big Four” consultancy firm PwC and founder of crypto analytics site Digiconomist, has said that 98% of bitcoin mining machines will fail to produce a block of transactions during their average lifetime of 1.5 years. Around 4 million machines are currently active and nearly 75,000 blocks are produced every 1.5 years – meaning less than 2% machines are able to produce a block to verify bitcoin transactions, de Vries tweeted Monday. The remaining 98% of machines never produce any blocks, he contended.

Uphold Teams Up With TaxBit to More Accurately Report Users’ Crypto Trades
Nikhilesh De – Coindesk
Uphold is hoping to prevent its customers from being audited by reporting their crypto trades as property trades – not income, as many exchanges have done in the past. The platform, which provides trading in crypto, fiat currencies and assets like metals, is partnering with Taxbit to provide customers with a tax liability dashboard on its user portal, and intends to help customers file more accurate tax returns, streamlining what has to date been an opaque process for crypto investors.

US Treasury met with industry leaders to discuss crypto regulatory challenges
Yogita Khatri – The Block
The U.S. Department of the Treasury held a meeting yesterday to discuss the challenges of regulating the digital assets space. Industry thought leaders and compliance experts joined the working session to discuss how cryptocurrencies can be prevented from the misuse by money launderers, terrorist financiers, and other bad actors. Treasury said it would not tolerate the use of crypto in support of illicit activities.

Bitcoin’s Option Market Sees Low Chance of Post-Halving Rally
Omkar Godbole – Coindesk
Bitcoin (BTC) is unlikely to get bid up after the May 2020 mining-reward halving, based on the way the cryptocurrency’s options are valued. The top cryptocurrency is currently trading around $8,800, representing an 20 percent gain on a year-to-date basis. Meanwhile, the options market is reporting the probability of prices holding above the $8,000 mark by the end of September at coin toss levels, according to crypto derivatives research firm Skew.

FCMs clamour for formal rule on separate account margin; Costly compliance effort will be to no avail if CFTC relief expires in June 2021
Robert Mackenzie Smith
Clearing firms are still seeking clarity on margin protections for separate accounts, more than six months after the US derivatives regulator set new conditions on ring-fencing and loss guarantees.

Inside the World’s Largest Bitcoin Fund
Joshua M Brown – The Reformed Broker
Michael Sonnenshein, Managing Director of Grayscale Investments, stopped by The Compound to discuss bitcoin with Josh and Michael. Grayscale runs the largest bitcoin fund in the world, with nearly $3 billion in AUM. What does the future of bitcoin look like? Let us know your thoughts in the comments!


The U.S. Is Uniquely Hamstrung on Virus Response; The peculiarities of the American health-care system present big barriers to matching the success of Singapore and other nations.
Max Nisen – Bloomberg
It was never a case of if, but when the novel coronavirus would start spreading in the U.S. — and now it’s happening. Multiple states reported new cases over the weekend, and more are likely to emerge in the next few days. It’s becoming clear that the country isn’t as prepared, and its early response wasn’t as robust as President Donald Trump has claimed.

Morgan Stanley Vice Chairman Tom Nides Says He’s Backing Biden
Max Abelson – Bloomberg
Tom Nides, Morgan Stanley’s vice chairman and a major Democratic fundraiser, was one of Amy Klobuchar’s most prominent Wall Street supporters. Now he says he’s all-in for former Vice President Joe Biden.

Coronavirus Is Creating a Fake-News Nightmarescape; The first true epidemic of a polarized, plugged-in era comes with all the attendant conspiracy theories—and they’re spreading on social media almost as fast as the virus itself.
Nick Bilson – Vanity Fair
Donald Trump Jr.’s comments to Fox & Friends on Friday might be the purest example of the sort of misinformation that’s spreading almost as quickly as the coronavirus. “For [Democrats] to try to take a pandemic and seemingly hope that it comes here and kills millions of people, so that they could end Donald Trump’s streak of winning, is a new level of sickness,” he said. “You know, I don’t know if this is coronavirus or Trump derangement syndrome, but these people are infected badly.” To some extent, propaganda has always cropped up alongside mass disease—the whole black-cats-and-bubonic-plague thing, for example—but as technology has evolved, and information reaches exponentially more people exponentially faster, the potential for misinformation to spread has become correspondingly voluminous. “The scariest thing about this virus is the fact that there are a lot of people out there who don’t believe this is a scary virus,” a biomedical investor told me. “This is a bad one, and you’ve got people conspiring that it’s a hoax made to get Trump thrown out of office.”


Relief from CTA-PR filing requirement for CTAs that solely direct trading of pools for which the firm operates as a registered or exempt CPO
The CFTC recently amended CFTC Regulation 4.27 to no longer require commodity trading advisors (CTA) that solely direct trading of pools for which the firm operates as a registered or exempt commodity pool operator (CPO) to file the Form PR. This relief is effective immediately and applies to the March 31, 2020 Form PR. This relief is self-executing and CTAs are not required to file a notice of exemption to obtain it.

EMIR: ESMA advises Commission on C6 energy derivatives
The European Securities and Markets Authority (ESMA) has issued today a report on C6 energy derivatives and related obligations under the European Market Infrastructure Regulation (EMIR).

ESMA seeks experts in corporate finance to join its industry advisory group
The European Securities and Markets Authority (ESMA) has today published an open call for candidates for industry experts in corporate finance.

SEC Amends Rules to Improve Disclosure and Encourage Issuers to Conduct Debt Offerings on a Registered Basis
The Securities and Exchange Commission adopted amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees. These changes are intended to both improve the quality of disclosure and increase the likelihood that issuers will conduct debt offerings on a registered basis.

SEC Amends Exemptions from Investment Adviser Registration for Advisers to Rural Business Investment Companies
The Securities and Exchange Commission adopted amendments to two rules in order to implement congressionally mandated exemptions from registration for investment advisers who advise rural business investment companies (RBICs). These exemptions were enacted as part of the RBIC Advisers Relief Act of 2018, which amended the Investment Advisers Act.

SEC Requests Comment on Fund Names Rule; Seeks to Eliminate Misleading Fund Names
The Securities and Exchange Commission requests public comment on its current requirements that restrict the use of potentially misleading fund names. Fund names are often the first piece of information investors see and they can have a significant impact on an investment decision. The request seeks feedback on whether the current requirements are effective and whether there are viable alternatives that the Commission should consider. The request is the latest in the Commission’s ongoing efforts to review and improve our existing rules to better inform and protect investors.

Investing and Trading

Central bankers pledge action to ease coronavirus hit to economy; G7 finance ministers to consider options as Carney warns shock ‘could be large’
Chris Giles, Martin Arnold, Sam Jones and Jamie Smyth – FT
Central bankers have pledged to take decisive action to stem the economic harm caused by the spread of coronavirus, as finance ministers from the G7 group of leading economies prepare to discuss possible stimulus measures.

Stock Price Boost from Bank of Japan’s Record ETF Buying Fizzles
Min Jeong Lee and Toshiro Hasegawa – Bloomberg
Topix lost 1.4% after a 1% gain Monday when BOJ bought ETFs; What monetary policies can do is side support: Mitsubishi UFJ
The Bank of Japan’s surprise purchase of a record volume of exchange-traded funds turbocharged the nation’s shares on Monday, but the effect vanished on Tuesday with investors talking down odds of a lasting impact.

Investors Could Be Better Off Changing Hedging Habits, RBC Says
Joanna Ossinger – Bloomberg
Wu Silverman says bounce-back days might be best point to act; Strategist sees EFA ETF as a top vehicle for protection
Some investors might benefit from changing when they think about buying protection, RBC Capital Markets suggests.

Big Bounces Are Poor Stock Market Indicators; The rebound after a major plunge doesn’t tell us a lot about the future direction.
John Authers – Bloomberg
Bouncing’s what Tiggers do best, as we all know. And after a big fall, we can all expect a stock market to stage a Tigger. That is certainly what happened Monday, as the S&P 500 gained more than 4% for its third best day in the last 10 years:

ECB Will Consider Using Bank Loans to Combat Virus Impact
Carolynn Look and Boris Groendahl – Bloomberg
Issue will be discussed at next week’s monetary policy meeting; Austria’s Holzmann says there is no urgency for policy action
The European Central Bank will consider how its long-term loan program for banks can help support the economy through the coronavirus outbreak, though it may not rush into action at next week’s policy meeting.

Tim Cook and Apple Bet Everything on China. Then Coronavirus Hit; Quarantines, tariffs and slumping sales have caused agitation about the company’s strategy of assembling most of its products there
Tripp Mickle and Yoko Kubota – WSJ
Long before the coronavirus struck, Apple Inc.’s AAPL 9.31% operations team began raising concerns about the technology giant’s dependency on China.

Hottest Bond Market in History Is Starting to Make Some Nervous
Cecile Gutscher and Anchalee Worrachate – Bloomberg
Duration bets at a record as coronavirus spurs caution; Haven play may turn dangerous if doomsday doesn’t come
Surging rate-cut expectations and a desperate lunge for safe assets amid the coronavirus outbreak have earned the bond market a lot of fans in recent weeks. The resulting rally is creating a few detractors, too.


Asset managers demand companies take action on gender diversity; Columbia Threadneedle and RBC GAM pledge to vote against boards of businesses that fail to promote women
Attracta Mooney – FT
Columbia Threadneedle and RBC Global Asset Management are stepping up their efforts to improve gender diversity at public companies, pledging to vote against board directors of businesses that are failing to promote women to top jobs.

Swiss Re Picks UBS CEO Ermotti as Next Chairman; Banker is stepping down after nine years leading Switzerland’s largest lender by assets
Simon Clark – WSJ
Sergio Ermotti will become chairman of Swiss Re, SSREY 2.16% one of the world’s biggest insurers, after he steps down as chief executive of UBS Group AG UBS 2.36% later this year.

Market-Beating Bank CEOs Are a Rare Breed; Most of the superstar bosses of big European lenders have failed to outperform. The search for their successors needn’t be so hard.
Rochelle Toplensky – WSJ
European banks on the hunt for superstar chief executives might be overcomplicating things. The data suggests they should think local and low-key.


ING Bank Weighs Sale of Turkish Unit
Kerim Karakaya and Ercan Ersoy – Bloomberg
Dutch bank has held preliminary talks with potential advisers; Italy’s UniCredit is cutting stake in Yapi ve Kredi Bankasi
ING Groep NV, the biggest Dutch lender, has been considering a sale of its Turkish business, people with knowledge of the matter said.

World’s Largest Wealth Fund Reveals Talks With Danske on Laundering Case
Mikael Holter – Bloomberg
Danske Bank A/S was among 14 lenders singled out for talks by the world’s biggest wealth fund last year to find out whether it’s doing enough to prevent another money laundering scandal.

U.K.’s Wettest-Ever February Is Turning Farm Fields Into Lakes
Megan Durisin – Bloomberg
Recent floods are threatening farmers’ spring-planting plans; European growers have faced extreme weather since the fall
British farmer Richard Bramley should be about to plant barley and sugar beet on his land near York. Instead, he’s watching the waves roll over his flooded fields.

Satellite Pollution Data Shows China Is Getting Back to Work; Nitrogen dioxide concentrations are rising again after a sharp decline linked to coronavirus.
Jonathan Tirone – Bloomberg
Satellite data show economic activity in China could be picking up following a steep drop off caused by the coronavirus.

U.K. Firms Are Warned 20% of Staff Could Be Off With Virus
Robert Hutton, Olivia Konotey-Ahulu, and Greg Ritchie – Bloomberg
Government publishes action plan to tackle coronavirus in U.K.; Steps include potentially closing schools, canceling events
British businesses were warned as many as 20% of their workers could be forced to take time off during peak periods of infection if the U.K. is hit by a widespread outbreak of coronavirus.

Coronavirus shatters trust in Iran’s leaders after cases surge; Islamic regime isolated and under pressure as outbreak spreads
Najmeh Bozorgmehr – FT
In less than two weeks the number of confirmed cases of coronavirus in Iran has jumped from two to more than 2,300, shaking public trust in the Iranian regime’s capacity to contain the disease and exacerbating the country’s economic isolation.


UK trade minister says hopes to start U.S. trade deal talks as quickly as possible
Elizabeth Piper, Kylie MacLellan – Reuters
Britain is aiming to begin negotiations on a post-Brexit trade deal with the United States as quickly as possible, trade minister Liz Truss said on Monday. Earlier, Britain published its negotiating mandate for trade talks with the United States, vowing to drive a hard bargain in negotiations that are set to test the two allies’ “special relationship”.

Freedom of movement ‘could be retained in Scotland’ post-Brexit
Chris McCall – The Scotsman
Immigration experts at the Fragomen legal firm said it would be “be entirely possible to maintain the free movement rights of European citizens in Scotland”. It also said “emergency visa measures” could be introduced north of the border to deal with “immediate economic threat associated with Brexit”. The report claimed the Scottish Government could negotiate a time-limited regional visa arrangement with the Home Office as short-term measure.

Peugeot maker says UK factory plans dependent on Brexit talks
Gilles Guillaume, Matthieu Protard and Sarah White – Reuters
Peugeot maker PSA (PEUP.PA) does not expect to make a call before the end of 2020 on whether to keep its British factory at Ellesmere Port running, depending on how Brexit talks evolve, Chief Executive Carlos Tavares said on Tuesday.
The French carmaker manufactures models for its Vauxhall and Opel brands at the plant in northwest England and had earmarked it as one of the possible sites to make new Astras.


Tokyo Olympics Could Be Delayed; Officials Want Starting Gun Fired on Time; ‘We are doing all we can to ensure that the Games go ahead as planned,’ Seiko Hashimoto says
Alastair Gale – WSJ
Tokyo’s contract to host the Olympics might allow for the Games to be delayed until later this year, but organizers are focused on ensuring that they go ahead as planned despite the coronavirus epidemic, a Japanese minister said.

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First Read $51,906/$300,000 (17.3%) ++++ Hits & Takes John Lothian & JLN Staff The STA is holding the 88th Annual Market Structure Conference in person on October 6-8 at the JW Marriott in Washington, DC with the title "The Great Return." That is a very good...

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