Hits & Takes
John Lothian & JLN Staff
HKEX displays a great understanding of the importance of nurturing human potential with their HKEXMosaic network. It is an expression of their creating a culture in which everyone feels empowered. HKEXMosaic is their new HKEXNetwork that celebrates everyone’s abilities. By empowering their colleagues to bring their whole selves to work, HKEX leverages individuals’ unique abilities helping us to deliver excellence, and create a healthy, fun, and collaborative workplace. Tori Cowley, group chief communications officer and sponsor of HKEXMosaic, had this to say:
“Mosaic is our network for people with different abilities, for those supporting family and friends with disability and for supporting good mental health. We want to celebrate each person’s uniqueness and the contribution they make to our community.”
OCC gave a shout out on LinkedIn to some of its new hires, which is a nice way to publicly welcome them to the organization. The new hires are: Daniel Fernandes, Abhishek Nagpal, Derek Backer, Zephaniah M, Amanda Kijewski, Lina Wen, Jason Todorofsky, Arwa Madhwala, Katie Luther, Sai Ashritha K. and Hector Rubalcava, MBA, CPA, FPAC.
The Frankfurt 2022 Derivatives Forum will take place on March 29-30. The conference is focused on trading and clearing for derivatives and securities financing across asset classes. More information is available HERE.
David M. Solomon is starting his fourth year as chairman and CEO of Goldman Sachs. Has it been that long already?
Congratulations to JLN alumnus Doug Ashburn, who has been promoted to vice president for editorial content at T3 Custom. Doug is a JLN success story who joined us after completing an MBA at the Stewart School of Business at Illinois Tech and a 20-year trading career on the floor of the CME in currency options to lead the effort developing MarketsReformWiki. He went on to develop skills in video and audio production and business development for JLN. Congratulations Doug!
Robin Wigglesworth, a global finance correspondent with the Financial Times, has his first book coming out this week titled Trillions. In the book he looks at the history of passive investing, from the early days that created the first generation of index funds up until now with “titanic multi-trillion investment empires.” You can pre-order the book online via HudsonBooksellers.com.
Speaking of books, the Washington Post has an article titled, “How JFK used James Bond to fight the Cold War” that tells how Jack Kennedy was given a copy of Ian Fleming’s “Casino Royale,” the first of the 007 novels, by a friend while he was in the hospital recovering from back surgery. That started his love of James Bond. — Washington Post
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The STA 2021 conference held in Washington last week covered an array of market structure and regulation topics facing the equity markets, and on Thursday it addressed challenges to equity standards stemming from competition from digital asset investment. In one panel with Greg Tusar, vice president of institutional products for Coinbase, and Tom Chippas, CEO of ErisX, Tusar said it was not until last year that he saw “a surge of interest” in digital assets from institutions. Looking to the “distant forward,” the world of crypto will look very different from equities, Tusar said, with decentralized applications the “general direction of travel.” Crypto trading is inherently very different from that of equities, Chippas said; you can have millions of trades take place on a decentralized exchange without settlement, “and that’s normal.” And the notion of trading 24/7, now discussed by equity market participants, is already taking place. Tusar said when something happens in crypto, “it’s over months, not years. … the challenge is knowing what to bring along and what to leave behind.” ~SC
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID) and the Chief Medical Advisor to the President, said over the past weekend that it is ok for kids to go trick-or-treating this year, particularly if vaccinated. Since it is mainly an outdoor activity he thinks the risk is low. So, put on that Squid Game costume (seems to be the popular one this year) and go get some candy (or steal some from your kid’s goodie bag). ~JB
Most equity markets trek higher, undaunted by debt ceiling debate, jobs report; A fresh take on the Term of the Week
– Stocks up on the week, put options dominate amid roller-coaster moves;
– An all-new look at the Term of the Week with Alex Perry.
Can Your Career Help Change the World? You Have 80,000 Hours to Try; Many of us want jobs that contribute to the social good. Effective Altruists say some lines of work benefit humanity more than others, and those positions might surprise you
Krithika Varagur – WSJ
Most of us hope our jobs make a positive difference in the world. It’s one reason companies have infused their mission statements with lofty goals of improving lives and talk of broader purpose in recent years. Some workers aren’t leaving that to chance, using an evidence-based approach to pursue careers that they believe will provide the maximum benefit to humanity.
*****You can help change the world by just waking up every morning. Start there.~JJL
Citadel and Citadel Securities Partner with Thrive Scholars to Unlock Opportunities for High-Achieving Students of Color From Low-Income Communities
Citadel and Citadel Securities have partnered with Thrive Scholars to provide high-achieving students of color from low-income communities with support to succeed at top colleges and in developing meaningful careers. By working with Thrive, Citadel and Citadel Securities will open opportunities to students with an interest in STEM and finance and invest in increasing industry diversity over time.
***** Ken Griffin is a big part of the Chicago charitable community. I hope Citadel will not relocate its operations as he suggested they might.~JJL
Severe Drought Adds to Afghanistan’s Woes, Endangering Millions as Economy Collapses
Farmers who survived two decades of war abandon land as water sources dry up
Sune Engel Rasmussen – The Wall Street Journal
Afghan farmer Niamatullah survived nearly two decades of conflict, growing beans, wheat and corn in Helmand province as war raged around him. When he finally decided to uproot his family and flee last month, it was because of the weather.
One of the worst droughts in decades in Afghanistan parched the fields of the 38-year-old, who goes by a single name, leaving his crops withered and worthless. He felt he had no choice but to pack his 15-member extended family into a rented truck and head out to search for day labor somewhere less desperate. “Our children are crying because there is nothing to eat,” Niamatullah said.
*****Afghanistan is so complicated, but people starving is not. Forget the politics, they need help and we should all help.~JJL
Five Traders Tell Us How to Survive a World of Disrupted Markets
Trading requires constant vigilance and the ability to adapt and profit from disruptions. But what happens when the act of trading itself is disrupted? To get a glimpse of the life of a trader in 2021, Bloomberg Markets asked five reporters—Justina Lee in London, Divya Balji in Toronto, Liz Capo McCormick and Sonali Basak in New York, and Rebecca Choong Wilkins in Hong Kong—to interview traders. They quizzed them about how they got into the business, what their typical day is like, how their market and investing strategy is changing, and what advice they’d give to budding traders. All are grappling with the Covid-19 pandemic, the rise of new asset classes and technologies, the unprecedented flood of money from the world’s central banks, and the age-old challenge of keeping their emotions in check. The interviews, conducted in late August and early September, have been edited and condensed for clarity.
*****Are these the five guys who started a burger chain?~JJL
Friday’s Top Three
Our top story Friday was Clearing will determine if Brexit self-harm goes both ways, from The Financial Times. Second was CFTC Expanding Anti-Manipulation Powers to Punish Misrepresentations to Futures Exchanges and FCMs from JD Supra. Third was JLN’s SEC Commissioner Allison Herren Lee Addresses PFOF, Retail Trading and Crypto at STA Conference.
26,632 pages; 235,988 edits
Rohit Chopra is going to rock the financial world; Joe Biden’s consumer protection boss favours stiff penalties for corporate bad actors
Gary Silverman – FT
Joe Biden has been struggling in recent weeks to push his ambitious legislative agenda through Congress. But as work has stalled on his spending proposals, the US president has quietly scored a significant victory for progressive supporters who want to change the financial services industry through more aggressive regulation.
The win came in the form of a narrow Senate vote a few days ago confirming Biden’s choice to head the Consumer Financial Protection Bureau — Rohit Chopra. A 39-year-old product of Harvard and the University of Pennsylvania’s Wharton school of business, Chopra is a fervent consumer advocate who favours stiff penalties for corporate bad actors.
Traders at banks fear missing out on the crypto party; Behemoths of traditional finance struggle to come up with a strategy for how to deal with digital currencies
Eva Szalay – FT
Banks have a growing cryptocurrency problem. Internal trading desks and a broadening array of clients are pressuring senior management at large banks to launch services around cryptocurrencies.
Damian Williams, First Black Manhattan U.S. Attorney, Takes Over After Turbulent Period; New head of the Southern District of New York has built a reputation as a securities-fraud prosecutor and has been involved in high-profile white-collar trials
Corinne Ramey – WSJ
Damian Williams is an unusual Manhattan U.S. attorney in some ways. President Biden nominated him from the Southern District of New York’s own ranks of prosecutors, choosing an insider for a role normally given to an outsider in modern times. But he is also a traditional choice in other ways. As the co-chief of the office’s securities-fraud unit, he is steeped in financial-crime prosecutions and has been involved in several high-profile white-collar trials that are the hallmark of the office.
The City of London Is Hiding the World’s Stolen Money
Nicholas Shaxson – NY Times
In 1969, two years after the Cayman Islands, a British territory, passed its first law to allow secretive offshore trusts, an official government report struck an ominous note. A tide of glossy propositions from private developers, it warned, was washing through the islands. Cayman was fast becoming a state captured by shady finance.
Big banks resist most direct road map to net zero emissions; Lenders reluctant to end financing of new oil, gas and coal exploration projects
Owen Walker and Stephen Morris – FT
Banks have resisted committing to the most explicit road map for cutting greenhouse gas emissions to net zero by 2050, just weeks before the COP26 climate talks in Glasgow.
Sustainable investment ‘rebooting’ Europe’s private markets, research finds; Study says ESG strategies likely to account for large slice of private debt, equity and infrastructure
Attracta Mooney – FT
The rise in demand for sustainable investments is driving a “structural reboot” of private market investing in Europe, with environmental, social and governance funds on track to account for up to two-fifths of the industry’s assets in just a few years. According to research from PwC, ESG private market assets could hit between EUR775.7bn and EUR1.2tn by 2025, up from EUR253bn in 2020, as regulation and client demand force an overhaul of private equity, real estate, infrastructure and private debt funds.
Risky Volatility Funds Set to Make a Comeback; Two new ETFs that offer leveraged or inverse bets on the VIX set to debut, despite criticism that they are too risky
Michael Wursthorn and Alexander Osipovich – WSJ
Funds that track stock-market volatility are making a comeback, despite concerns they are too complicated for some investors.
Two new exchange-traded funds that let investors make leveraged or inverse bets on a popular barometer of market fluctuations are set to start trading later this fall. Similar products devastated investors in a high-profile blowup less than four years ago.
Credit Suisse report into Greensill failings hit by delays; Stakes have raised considerably for the Swiss bank after its headquarters were raided by police
Owen Walker and Stephen Morris – FT
Credit Suisse’s much-anticipated report into its own failings around the collapse of Greensill Capital has been delayed as the Swiss lender prepares for a spate of legal battles.
Anyone Seen Tether’s Billions? A wild search for the U.S. dollars supposedly backing the stablecoin at the center of the global cryptocurrency trade—and in the crosshairs of U.S. regulators and prosecutors.
Zeke Faux – Bloomberg
In July, Treasury Secretary Janet Yellen summoned the chair of the Federal Reserve, the head of the Securities and Exchange Commission, and six other top officials for a meeting to discuss Tether. The absurdity of the situation couldn’t have been lost on them: Inflation was spiking, a Covid surge threatened the economic recovery, and Yellen wanted to talk about a digital currency dreamed up by the former child actor who’d missed a penalty shot in The Mighty Ducks. But Tether had gotten so large that it threatened to put the U.S. financial system at risk. It was as if a playground snowball fight had escalated so wildly that the Joint Chiefs of Staff were being called in to avert a nuclear war.
SEC throws sop to US investors with bitcoin ‘lite’ equity ETFs; Latest regulatory approval and fund launches still leave direct investment in crypto via ETFs off limits in the US
Steve Johnson – FT
Two bitcoin “lite” equity ETFs have begun trading in the US and a third has been approved by the Securities and Exchange Commission as the regulator throws out a sop to investors calling for a bona fide bitcoin ETF.
An SEC Rule Was Meant to Protect Individual Investors. Chaos Ensued; Thousands of stocks and bonds in the over-the-counter market are now out of reach for small investors. Professionals are still trading.
Jason Zweig – WSJ
Never take liquidity for granted. The ability to convert securities into cash promptly, at a price close to the last trade, isn’t a permanent property of markets; it’s a privilege that can disappear almost instantly at the worst possible time.
SEC Digs Deeper Into Companies’ EPS Manipulation; Regulator uses analytics database based on research that spotted absence of numeral ‘4’ in companies’ quarterly reports to detect potential law violations
Mark Maurer – WSJ
The Securities and Exchange Commission’s review of companies’ earnings per share has brought cases against three firms over the past year or so, and could come into greater focus under the regulator’s new leadership. The initiative, launched a few years ago, reviews earnings per share for the majority of U.S. public companies at least once a year, looking to spot questionable reported figures. The team working on the effort, part of the SEC’s enforcement division, uses analytics and has built a database to try to pinpoint potential manipulators of EPS, the commonly used measure of a company’s financial performance.
Moscow’s EU envoy urges Europe to fix ties to avoid gas shortages; Supply crisis would be resolved more quickly if bloc stopped treating Russia as ‘adversary’, says ambassador
Henry Foy and Sam Fleming – FT
The Kremlin’s ambassador to the EU has called on Europe to mend ties with Moscow in order to avoid future gas shortages, but insisted that Russia had nothing to do with the recent jump in prices.
World’s Energy Chaos Turns Russia Into Top Emerging-Market Pick
Karl Lester M Yap, Netty Idayu Ismail, and Srinivasan Sivabalan – Bloomberg
Investors shift cash from Chinese assets to energy exporters; Ruble, Colombian peso to benefit from higher oil revenues
Surging energy prices are kindling bullish bets on developing-nation exporters, with Russia emerging as traders’ favorite investment destination. Russia’s ruble has gained more than any other emerging-market currency this month, bolstered by the prospect of higher oil revenues, while the nation’s stocks outperformed as a broad gauge of developing equities sank. OPEC’s monthly report will be closely watched this week as investors seek further clues on the outlook for the oil industry.
Manhattan’s office towers are a tale of the haves and the have-nots; Post-pandemic shake-up in New York’s buildings could change the nature of the city
Joshua Chaffin – FT
When the mayor and other dignitaries gathered a year ago to cut the ribbon on One Vanderbilt, one of Manhattan’s newest and most advanced office towers, the festivities were marred by a pandemic that has raised existential questions about the future of such buildings.
US workers overwhelmingly comply with Covid vaccine mandates; Warnings that forcing staff to get jabs would worsen labour shortages are being proved wrong
Taylor Nicole Rogers – FT
The vast majority of Americans subject to workplace vaccination mandates have complied with them, confounding predictions that such requirements would worsen labour shortages by prompting unvaccinated workers to resign en masse.
Thousands March in Rome to Protest Workplace Vaccine Rule
Frances D’Emilio – AP
Thousands of demonstrators marched down Rome’s famous Via Veneto and other streets on Saturday, some smashing their way into a union office and clashing with police as they protested Italy’s new “Green Pass” vaccination requirement for employees to enter their offices.
Merck Seeks Emergency Use Authorization for Pill for Covid
Jason Gale and Riley Griffin – Bloomberg
If cleared, molnupiravir may be first oral antiviral for Covid; Study found pill reduced hospitalization risk by about 50%
Merck & Co. and its partner Ridgeback Biotherapeutics LP sought emergency use authorization in the U.S. for molnupiravir, moving the pill closer to becoming the first oral antiviral treatment for Covid-19.
Minks to Get Covid Jabs in Finland After Danes Culled Millions
Leo Laikola – Bloomberg
Half a million jabs to be given to minks against Covid-19; Nordic nation’s program is the first in the European Union
Keen to avoid the total annihilation of farmed minks as seen in Denmark during the pandemic, the Finnish fur industry is organizing an inoculation program for the animals.
AstraZeneca says its Covid drug cuts risk of severe disease or death by 50%; Developments from Merck and AstraZeneca raise hopes of bringing more coronavirus treatments to market
Donato Paolo Mancini – FT
AstraZeneca’s Covid-19 antibody cocktail cuts the risk of severe disease or death in patients by half, the company said on Monday. The drug, AZD7442, had previously shown a significant effect in preventing any symptom of coronavirus.
Covid response hampered by population data glitches; Imperfect figures mean many countries do not know how many residents have been vaccinated
Oliver Barnes and John Burn-Murdoch – FT
In less than a year, almost 80 countries worldwide have managed to offer all eligible citizens a Covid-19 vaccine and are on the verge of hailing completion of their primary vaccination campaigns. But all is not as it seems.
Investment helps Italy’s economy accelerate out of pandemic; Vaccination success provides basis for confidence as Rome eyes reforms to unlock EUR205bn from EU
Valentina Romei and Davide Ghiglione – FT
Matteo Dell’Acqua never thought Italy’s rebound from Covid would be this good. The 31-year-old boss of a family business says his investment in digitalisation and more environmentally friendly products made during the pandemic is paying off and has contributed to a 20 per cent annual increase in orders.
Exchanges, OTC and Clearing
LSEG partners with FINBOURNE to enhance digital data program across its business; FINBOURNE’s LUSID platform has been adopted by LSEG to innovate and evolve data services solutions across its wealth and investment solutions business areas.
Wesley Bray – The Trade
London Stock Exchange Group (LSEG) has partnered with FINBOURNE Technology to adopt its SaaS investment data management platform, LUSID, as a digital data component for its wealth and investment solutions businesses.
ICE Clear Europe to pay $450,000 penalty for violating customer protection regulations; According to CFTC, ICE Clear Europe failed to obtain executed acknowledgement letters from the depository before, during or after the opening of six customer segregated accounts.
Wesley Bray – The Trade
The Commodity Futures Trading Commission (CFTC) has issued an order simultaneously filing and settling charges against ICE Clear Europe (ICEU) for violating customer protection regulations. ICEU violated regulations that require derivatives clearing organisations (DCOs) to obtain written acknowledgement letters from a depository.
The Big Interview: Natan Tiefenbrun; Cboe Europe’s head of equities, Natan Tiefenbrun, sits down with Annabel Smith to discuss ongoing market trends and events that are impacting the European equities landscape.
Annabel Smith – The Trade
Annabel Smith: How does consolidation impact the market?
Natan Tiefenbrun: Consolidation is a natural response to competition as operators seek out more efficiencies to remain competitive. Efficiency is one of the key metrics on which the entire sector should be judged; the less we cost issuers and investors to facilitate their activity then the better job we are collectively doing.
Women are stock market investors but still a long way from leadership positions in publicly traded companies; B3’s unprecedented survey among 408 publicly traded companies lays out the numbers for female executive officers and female board members
Out of the 100 publicly traded companies in Brazil, only six have three or more women in senior management positions, 25 only have one and 61 have no female executive officers at all. These data are part of an unprecedented survey by Brazil’s exchange B3, which seeks to go beyond providing yet another blank portrait of the Brazilian female world.
Top Fintech Recruiters — Goldman Settles With Former Intern — Ex-Trader Becomes YouTuber
Jordan Parker Erb – Business Insider
Hoping to land a job at a firm like Coinbase, Robinhood, or SoFi? We’ve compiled a list of the best headhunters to know if you’re looking to break into the industry. Meet the top fintech headhunters in the US.
UK banks plan to grow partnerships with fintech firms in wake of pandemic
More UK financial institutions are targeting acquisitions and partnerships with fintech firms to boost their position in the post-pandemic market, according to a report from Lloyds Bank.
Lloyds Bank’s sixth annual Financial Institutions Sentiment Survey found that more than two fifths (46%) of financial services firms plan to extend their relationships with fintech firms in the next year, compared with a third (32%) in 2020.
Fintech and the Growth of Islamic Finance
Abdullo Kurbanov and Zuhursho Rahmatulloev – Bloomberg
Global Islamic finance exerts considerable influence in the international banking sector. Forecasts from 2020 estimate that the total value of global Islamic finance assets will reach $3.69 trillion by 2024, with the sector posting 10.6% growth in 2020. While this may already seem an impressive figure, the reality is that Islamic finance is still finding its footing.
Social-investing app Commonstock wants to be the ‘Bloomberg terminal of Main Street’ and weed out the meme-stock trolls
Natasha Dailey – Business Insider
A new middleman between brokerage apps like Robinhood and retail traders is emerging.
The app, called Commonstock, aims to attract retail traders looking to share trades and insights into the market – like Reddit, but less chaotic.
Indian fintech CRED seeks funds at $5.5 billion valuation
Manish Singh – TechCrunch
CRED has begun to engage with investors to raise money at a valuation of $5.5 billion as the Indian fintech startup eyes international expansion and inorganic growth, a source familiar with the matter told me.
The startup has received a number of inbound requests from investors and has also held talks with some in recent days to raise capital at a pre-money valuation of $5.5 billion, the source said, just weeks after the three-year-old startup was finalizing an investment of over $200 million at a pre-money valuation of about $3.75 billion from Tiger Global and Falcon Edge Capital among others, according to multiple people familiar with the matter.
Women in Fintech: Smashing the Glass Ceiling with Zumo, Oxygen Digicel Group and Urban Jungle
Francis Bignell – The Fintech Times
This October at The Fintech Times we are championing the fantastic females in the fintech industry. Around 30% of the fintech workforce are women, and we want to spotlight those who have not only made it to the top, but those who have overcome hurdles, bulldozing a path for the women to follow.
Game of loans: Fun and finance in the world of fintech
Joanna England – FinTech Magazine
Traditionally, financial services have been the stomping ground of the rich and dull. Grey-faced accountants in cookie-cutter suits, alongside endless columns of numbers, are the caricatures of the industry.
Thankfully a new wave of fun financiers has injected some colour into the monochrome world of finserv – finally making it colourful, competitive, and goal-orientated for users.
Michael Dell says blockchain technology is ‘underrated’
Dan Whateley – Insider
Michael Dell is bullish on blockchain technology. The founder and CEO of Dell Technologies said that blockchain as a category is “probably underrated,” but declined to comment on whether bitcoin was underrated or overrated. The remarks came during an interview with the New York Times’ newsletter DealBook on Saturday.
Digital Payments Are Convenient. They Also Can Wreak Havoc on Your Finances; The good news: There are ways to regain control of your spending
J. J. McCorvey – WSJ
For some people, a financial wake-up call manifests in the form of a credit-report ding or the need to eat ramen for a few weeks. For Jeremy Eisengrein, it was what happened after he took a tumble and tore a knee tendon during a trip to the beach.
Majority of Americans concerned about cyberattacks on critical groups: poll
Maggie Miller – The Hill
The vast majority of Americans are concerned about cyberattacks on critical groups, in particular those in the financial and national security sectors, a poll released Monday found.
The poll, conducted by The Associated Press-NORC Center for Public Affairs and the University of Chicago’s Pearson Institute, found that around three-quarters of those surveyed are especially concerned about cyberattacks from the Russian and Chinese governments, while just over half were concerned about attacks from cybercriminal groups.
Ransomware: Even when the attackers are in your network, it’s not too late to fight back
Danny Palmer – ZDNet
Ransomware is one of the biggest cybersecurity issues facing the world today with gangs routinely breaking into enterprise networks to encrypt files and networks.
Often, victims only realise that they’ve been compromised when files, servers and other systems have been encrypted and they’re presented with a ransom note demanding a payment in cryptocurrency for the decryption key.
McAfee/FireEye merger completed, CEO says automation only way forward for cybersecurity
Jonathan Greig – ZDNet
McAfee Enterprise and FireEye completed their merger on Friday, closing the $1.2 billion all-cash transaction that merges the two cybersecurity giants.
FireEye announced the sale of its FireEye Products business to a consortium led by Symphony Technology Group (STG) in July, separating the company’s network, email, endpoint and cloud security products from Mandiant’s software and services.
Defense Official Said Quit Because US Cybersecurity No Match for China
Bill Bostock – Business Insider
A senior cybersecurity official at the Pentagon said he quit because he thinks it’s impossible for the US to compete with China on AI.
Nicolas Chaillan joined the US Air Force as its first chief software officer in August 2018, and worked to equip it and the Pentagon with the most secure and advanced software available.
The inescapable problem of cyber attacks; Greater openness on hacks is needed to mount a robust defence
The editorial board – FT
Another day, another huge cyber security breach. Last week it was Twitch, Amazon’s live streaming platform, which suffered the public revelation of its source code, the income of its big stars and other sensitive information.
Crypto mega-billionaire Sam Bankman-Fried says he’s bought billions of tethers in order to trade other coins
Ethan Wu – Business Insider
FTX CEO Sam Bankman-Fried recently revealed that he has bought billions of tethers to help along trading in other cryptocurrencies, according to a feature piece on the stablecoin in Bloomberg Businessweek. Interviewed at a sold-out bitcoin conference in Miami in June, Bankman-Fried told Bloomberg that transacting with tether, the largest of the dollar-pegged stablecoins, had one key advantage over using dollars.
ConsenSys funding round would value crypto start-up at $3bn; Ethereum co-founder Joseph Lubin’s venture has profited from the boom in decentralised finance
Miles Kruppa – FT
ConsenSys, a cryptocurrency start-up that has profited from the boom in decentralised finance, is raising funding that would value the company at $3bn, according to people briefed on the plans.
How to Get Cryptocurrency Regulation Right; Companies that want to influence the inevitable rules for crypto businesses such as decentralized finance should engage with the government.
Adam Szubin – WSJ
As the cryptocurrency universe expands, with innovative offerings and thousands of new users each week, the U.S. regulatory response has been slow and uneven.
In certain areas, U.S. regulators have successfully applied traditional models. The Securities and Exchange Commission treats those who issue new speculative cryptocurrencies like issuers of securities. The Treasury Department’s anti-money-laundering office, the Financial Crimes Enforcement Network, regulates firms that transfer or exchange cryptocurrencies as money-service businesses—like Western Union —with the accompanying responsibility of knowing their customers and monitoring for suspicious activity.
The $1tn coin is a poor replacement for US treasuries; Platinum currency is a short-term tactic for the White House but not a long-term fix
Brendan Greeley – FT
The US Mint is a factory. It buys metal, stamps it into coins, then sells those coins to the Federal Reserve at face value. The mint’s profit is called “seigniorage.” It goes to the person known in Middle English as the seigneur — the person in charge. Think of Janet Yellen as America’s seigneur.
UK’s ex-chancellor Philip Hammond joins crypto start-up Copper; Company launched in 2018 provides digital currency custody and trading services to institutional investors
Harriet Agnew and Joshua Oliver – FT
Former UK chancellor Lord Philip Hammond has joined Copper, a UK group that specialises in cryptocurrency custody and trading, as an adviser, becoming one of the best-known political figures to join the fast-growing digital assets industry.
Can Crypto Go Green?; DealBook gathered experts to debate the solutions to cryptocurrency’s climate problem.
Ephrat Livni – NY Times
The cryptocurrency industry is growing quickly, as are concerns about its environmental impact. The original and most popular crypto, Bitcoin, is energy-intensive by design, “mined” by millions of high-powered computers around the world.
Boston, Dallas Fed Banks Pledge Cooperation With Stock-Trading Probe; The Fed inspector general investigation comes as the central bank is undertaking its own review of its ethics rules
Michael S. Derby – WSJ
The Federal Reserve Banks of Dallas and Boston said they would cooperate with an internal central bank investigation into the trading controversy surrounding their leaders, who have both announced their resignations.
ESMA proposes changes to ‘burdensome’ MiFID II best execution reporting requirements; The markets regulator has set out proposed changes to streamline current MiFID II reporting requirements under RTS 27 and RTS 28.
Annabel Smith – The Trade
ESMA has invited market participants to comment on its consultation paper setting out proposed changes to current reporting requirements under MiFID II, which the regulator labelled as “burdensome”.
Alert: ‘Follow up’ scams – offers to help recover lost funds
ASIC is alerting consumers about offers to recover money lost to scams
If you have been scammed, and someone contacts you with an offer to help recover money, it is a scam
The best thing to do is to hang up, delete the email or otherwise ignore the contacts
FINRA Encourages Firms to Consider How to Incorporate the Government-wide Anti-Money Laundering and Countering the Financing of Terrorism Priorities Into Their AML Programs
The Financial Crimes Enforcement Network (FinCEN) has issued the first government-wide priorities for anti-money laundering and countering the financing of terrorism policy,1 which was mandated by the Anti-Money Laundering Act of 2020 (AML Act).2 FinCEN also issued a statement to provide covered non-bank financial institutions (NBFIs), including broker-dealers, with guidance on how to approach the AML/CFT Priorities.3
FINRA webinars are free, online video programs delivered right to your desktop. Webinars include panel discussions with FINRA staff and/or industry experts and feature online resource materials that participants can access from their own computers.
CFTC Charges North Carolina Companies and Their Owners in $1 Million Foreign Currency Fraud and Misappropriation Scheme; Federal Court Issues Restraining Order Against Defendants Freezing Assets and Preserving Records
The Commodity Futures Trading Commission announced today that it filed a civil enforcement action in the U.S. District Court for the Western District of North Carolina, charging defendants Storm Bryant and Elijah Bryant, III of Los Angeles, California and CapitalStorm, LLC, GenerationBlack, LLC and NCome, LLC, all North Carolina limited liability companies, with fraudulent solicitation, misappropriation and registration violations relating to a $1.05 million fraudulent scheme operated by the Bryants through their corporate entities.
CFTC Charges Two Men and Their Companies with Commodity Pool Fraud, Other Violations
The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the U.S. District Court for the District of Arizona, charging defendants Purvesh Mankad and his affiliated entities CTAX Series, LLC, a CFTC-registered commodity pool operator, and CTAX Partners, LLC, a CFTC-registered introducing broker, with fraudulent solicitation, misappropriation of pool participant funds, and making false statements to the National Futures Association (NFA) regarding the fraud.
The Global Markets Advisory Committee Will Meet on October 25
The Global Markets Advisory Committee (GMAC) will hold a public meeting on Monday, October 25, 2021. The meeting will begin at 8:45 a.m. (EDT) via teleconference in accordance with the Commodity Futures Trading Commission’s implementation of social distancing due to the coronavirus (COVID-19) pandemic. Commissioner Dawn Stump is the sponsor of the GMAC.
British Columbia Securities Commission Alleges Failure To Disclose Material Information And Insider Trading Connected To Canada Jetlines Ltd.
The British Columbia Securities Commission (BCSC) alleges that an ultra-low-cost airline failed to disclose material information and that its director committed insider trading.
British Columbia Securities Commission Panel Finds That B.C. Men And Their Company Misled Investors
A British Columbia Securities Commission (BCSC) panel has found that two B.C. men and their Vancouver-based mineral exploration company failed to disclose information, concealed financial losses and made false or misleading statements.
Ontario Securities Commission Dialogue 2021 To Take Place Virtually And Examine Conditions For Financial Industry Growth – Event Features Ontario Minister Of Finance, Keynote Presentation By Bank Of Canada Deputy Governor, And Luncheon Remarks
The Ontario Securities Commission (OSC) today announced a selection of speakers headlining its annual conference, OSC Dialogue 2021. This year’s theme is Creating Conditions for Growth. Speakers will discuss the role of the financial community, regulators and policymakers in fostering vibrant capital markets as we emerge from the COVID-19 pandemic. This virtual conference will feature important conversations about transforming Ontario into an even more attractive destination for investors, innovators and entrepreneurs.
The S.E.C. has issued a subpoena to Archegos, the $10 billion firm that collapsed spectacularly.
Matthew Goldstein – NY Times
Lawyers with the Securities and Exchange Commission have served a subpoena on Archegos Capital Management, the $10 billion family investment office that suddenly collapsed in March, roiling the stock market as its losses reverberated through the banking industry.
Justice Department Makes Quiet Push on Antitrust Enforcement; Spotlight on Biden administration enforcement has focused on FTC, but DOJ has been more active so far, despite lengthy period of transition
Brent Kendall – WSJ
The Justice Department has been quietly ramping up antitrust enforcement under the Biden administration, despite not having a politically confirmed official to serve as antitrust chief.
Investing and Trading
Measuring the Effects of the Covid-19 Delta Wave on the U.S. Hourly Labor Market
Scott A. Brave, Ross Cole, Stephanie Grove – Federal Reserve Bank of Chicago
In this article, we take a closer look at the implications of rising Covid-19 cases and vaccination rates for the U.S. hourly labor market. To do so, we rely on geographic variation in the high-frequency data collected by the firm Homebase with its timekeeping software. This data source allows us to make use of U.S. state-level variation on a daily basis in order to decompose the effects on hourly employees and hours worked from both rising cases and vaccinations.
Cheap masks carry a high cost for US manufacturing; The plight of America’s textile makers sums up the country’s complicated trade relationship with China
Rana Foroohar – FT
In a speech last week about America’s trade relationship with China, the US trade representative, Katherine Tai, said “this bilateral relationship is complex and competitive”. That’s the understatement of the decade. Let me share an illustrative example.
For Every Pulled IPO, Two New Deals Hit Europe’s Crowded Market
Swetha Gopinath – Bloomberg
Four new listings were announced in Europe on Monday alone; More IPOs are being pulled as inundated buyers turn selective
This year’s initial public offering boom in Europe is facing its biggest test yet, with billions of dollars in deals coming to market while failed listings and flops pile up. Nearly 20 companies have kicked off listings in Europe this month, with Swedish automaker Volvo Cars leading the pack. Four new share sales, including that of electric-vehicle charging firm Pod Point, launched on Monday alone. Yet, IPOs worth billions of dollars have also been called off in recent weeks, including German language app Babbel’s.
China’s Little Red Book to Shift IPO to Hong Kong From U.S.
Julia Fioretti and Vinicy Chan – Bloomberg
Xiaohongshu put U.S. IPO plans on hold in the summer; China has signaled tougher rules for overseas listings
Chinese startup Xiaohongshu, or “Little Red Book,” is weighing a Hong Kong initial public offering to raise at least $500 million, after putting its U.S. listing plans on hold, according to people familiar with the matter.
Mexico Stock Market Is So Dead That Buyouts Are the Only Action
Michael O’Boyle – Bloomberg
It’s been 15 months since last Mexican IPO, and it was tiny; Five companies started de-listing process in the past year
IPO records are being smashed all around the world, and companies have already raised $500 billion this year. Not a penny of that money has come from Mexico.
US companies authorise more than $870bn in stock buybacks; Record share repurchases in 2021 so far could signal optimism despite recent market dips
Nicholas Megaw – FT
US companies have announced record levels of share buybacks as confidence recovers after a lull at the height of the coronavirus pandemic.
Environmental, Social and Corporate Governance
How methane-producing cows leapt to the frontline of climate change
From garlic-infused pellets to face masks — the lengths employed by farmers to cut greenhouse gas emissions
Emiko Terazono and Camilla Hodgson – FT
Holding a fistful of pungent beige pellets, Ed Towers warns that those averse to garlic should stand back. The scent hits anyone within a few feet of him but rather than seasoning for the dinner table, these small garlic-infused cylinders are being fed to dairy cows at the Brades family farm in the verdant hills of the northern English county of Lancashire.
New York City’s Future Is Very, Very Wet; How the city deals with climate change will affect not only the tens of millions of people in the region, but cities worldwide that follow its example.
Francis Wilkinson – Bloomberg
New York City saw it coming. In May, in the kind of clarifying document that invariably gets noticed when it’s too late, the city mapped out the sort of devastation that Hurricane Ida would bring just a few months later.
U.K. Turns to Coal as Low Wind Output Increases Power Prices
Jesper Starn and Rachel Morison – Bloomberg
Uniper turned on its Ratcliffe-2 coal unit this morning; Drop in wind power exposes U.K. market to high fuel prices
U.K. power prices rose after a coal power plant switched on Monday to make up for a shortfall in wind generation and limited flows on two power cables to Ireland.
We’ll Need More Than Hot Air to Keep Warm This Winter; Unless oil producers raise their supply targets, prices will continue to be volatile.
Julian Lee – Bloomberg
Like British motorists, energy markets seem to be running on hot air right now. We’ll need more than that to get through winter. Oil producers in the Organization of Petroleum Exporters, along with their allies that make up the bigger OPEC+ group, aren’t living up to their mission to “ensure the stabilization of oil markets.”
Two Dozen More Nations Join U.S.-EU Methane Cutting Climate Pact
John Ainger and Jennifer A Dlouhy – Bloomberg
Signers now represent 30% of global methane emissions; Would see at least 0.2 degrees cut from global warming by 2050
Two dozen more countries have joined a global pact to pare methane emissions, the U.S. and the European Union announced Monday, as world leaders seek to galvanize momentum against the potent greenhouse gas before critical climate talks in Scotland.
Liz Weston: Fortify Your Finances Against Natural Disaster
Liz Weston – Nerdwallet via AP
Emergency preparedness experts recommend that you have a “go bag” and a “stay bin” for disasters: kits with supplies to help you survive a few days if you have to evacuate your home or shelter in place.
Professional black women paid less as careers stagnate, says UK survey; Almost three-quarters struggle in ‘mirror-tocracy’ as they try to adapt to company culture
Attracta Mooney – FT
Professional black women in the UK are paid less and have to work twice as hard to be noticed or gain the same opportunities as peers with their careers stagn
Robinhood Shares Clouded By Looming Stock Sale, Crypto Rules
Thyagaraju Adinarayan – Bloomberg
Early holders of stock may get first chance to sell Wednesday; Firm sees rising regulatory risk to crypto, order flow payment
A looming share sale by early Robinhood Markets Inc. investors and a toughening regulatory environment for cryptocurrencies are adding to the headwinds in the stock market for the darling of the U.S. retail trading mania.
Robinhood Sees Crypto, Order Flow Payment Risks in Filing Update
Annie Massa – Bloomberg
Robinhood Markets Inc. said that regulatory intervention in cryptocurrency trading, and in a payment arrangement between brokerages and trading firms, could pose risks to its business. The Menlo Park, California-based brokerage cited the risks Friday in an amended filing, seeking to speed up approval for a previously announced shareholder stock sale. The firm pointed to comments by Securities and Exchange Commission Chair Gary Gensler on recent projects the agency is undertaking, including reviewing a system called payment for order flow that accounts for a significant slice of Robinhood’s revenue, and evaluating digital currency markets.
Credit Suisse to Delay Publishing Findings From Greensill Report
Marion Halftermeyer – Bloomberg
Bank said to mull implications for its ability recover money; Stakes have risen after Credit Suisse offices were searched
Credit Suisse Group AG is delaying the publication of findings from a report into the collapse of a $10 billion group of investment funds that it ran together with Greensill Capital.
UK funds split over disclosing how much ‘skin in the game’ they have; Retail platform Interactive Investor has challenged its ‘best buy’ funds to reveal staff stakes
Joshua Oliver – FT
A transparency push by Interactive Investor has divided some of the UK’s largest retail fund houses over whether portfolio managers should have to disclose personal stakes in the funds they manage.
The Pandemic’s Over for Big Banks. Now Comes the Hard Part; Bank profits are expected to plateau, exposing weak growth in banks’ core businesses
David Benoit – WSJ
Banks are moving past the pandemic that sent quarterly profits on a wild ride. That is drawing attention to their weak spots. America’s biggest banks report third-quarter earnings this week, starting with JPMorgan Chase JPM 0.08% & Co. on Wednesday. Analysts expect banks in the S&P 500 to report aggregate profits of about $31 billion, up about 20% from a year ago but down 20% from the second quarter, according to FactSet. Profits are expected to hold steady in the fourth quarter.
Credit Suisse adds to equities team with the hire of Citi’s head of event driven content in London; New hire sees Credit Suisse tap Citi again after adding two risk arbitrage traders from the investment bank in 2019.
Will Canny – The Trade
Credit Suisse has strengthened its equities team in London with the hire of Susan Stryker Marinello from Citi. Stryker Marinello was employed as a director and head of event driven content at Citi, and re-joins former colleagues Andy Martin and Simon Scott, both risk arbitrage traders, who left the investment bank for Credit Suisse in March 2019.
Goldman Sachs has reached a settlement with a former intern who accused the investment banking firm of fostering a ‘fraternity culture’
Yelena Dzhanova – Insider
Goldman Sachs has reached a settlement with a former intern who accused the investment firm of fostering a “fraternity culture” that promoted hazing and violence. Patrick Blumenthal was a Drexel University student who interned for Goldman Sachs in San Francisco beginning in September 2017.
Indonesia’s novice investors get burnt by frequent IPO reversals
One million people have started trading this year, causing dizzy share prices
Shotaro Tani – FT
Novice investors crowding into the Indonesian stock market have had baptisms of fire after a number of hot initial public offerings, including the ecommerce group Bukalapak, crashed below their early trading prices.
US-listed Chinese group Renren settles investor complaint for $300m; The company once dubbed ‘Facebook of China’ had been accused of steering a valuable stake in SoFi to insiders
Sujeet Indap and Antoine Gara – FT
Renren, the once high-flying Chinese social network turned start-up investor, has settled with US shareholders for $300m over allegations of corporate misconduct
Dissident investors had accused the company of steering its best assets, including a stake worth hundreds of millions of dollars in the digital lender SoFi, towards Renren insiders including SoftBank.
India’s Stock Market on Track to Overtake U.K.’s in Value
Abhishek Vishnoi and Swetha Gopinath – Bloomberg
India’s market cap is less than 4% away from matching the U.K.; IPOs, growth rate have boosted India as Brexit weighs on U.K.
India’s equity market is on the cusp of overtaking that of the U.K. in value to join the world’s top-five club, at least by one measure. The likely feat comes as record-low interest rates and a retail-investing boom propel stocks in the former British colony to record highs.
China Faces Power Hikes And That’s Likely to Cut Metals Output
Copper, aluminum and zinc production declined last month; Electric-arc furnaces to see biggest impact among steel mills
China’s energy crisis is likely to mean higher electricity prices, forcing the nation’s army of metals smelters to reduce output and threatening the industrial activity that has underpinned the nation’s recovery from the pandemic.
The High Financial Price of Burning Out at Work—and What to Do About It
Overspending and exhaustion often go together. And young people are especially vulnerable.
Julia Carpenter – WSJ
Burnout has a cost—a dollar cost. In my own life, I’ve learned to recognize the physical cost burnout exacts: trouble talking about anything but work; difficulty falling asleep after hours glued to my laptop; my heart racing with every new ping from Slack.
Columbus Day and Indigenous Peoples’ Day: What to Know; The two days, celebrated on the same Monday in October, have sparked controversy
Allison Prang – WSJ
The movement in the U.S. to declare the second Monday of October, traditionally celebrated as Columbus Day, as Indigenous Peoples’ Day got a major political boost this year.
President Biden on Friday issued a proclamation naming Oct. 11 Indigenous Peoples’ Day. It will be observed the same day as Columbus Day, which was first declared a national holiday in 1934.
Fairness Is in the Eye of the Beholder. So Be Tolerant; A new study shows how personality traits, not objective standards, determine what people find just or unjust.
Andreas Kluth – Bloomberg
When exactly is something either fair or unfair? Whether the topic is taxation, pay and bonuses, government benefits, crime and punishment, or almost anything else, we just can’t seem to agree.