Hits & Takes
Dr. Richard Sandor, chairman and CEO of AFX, will discuss his personal journey of innovation throughout the capital markets during a keynote presentation at Fintech Exchange 2018 in Chicago on April 26.~JJL
Speaking of the AFX, they set a volume record in March.~JJL
CME Group put out a couple of pieces about Asia recently. In case you missed it, March 22 had The Growing Influence of Asia In Derivatives Trading and on March 29 CME published Asia’s Growing Role in Energy Trading. Sensing a theme yet?~SD
According to their 2017 Corporate Citizenship Report, the CME Group gave away $10 million in charitable donations, employees volunteered 3000 hours of time and they had 200 employees involved in sustainability.~JJL
And just for fun, the CME Group reported that their first quarter average daily volume for 2018 was the highest quarter ever at 22.2 million, up 30% from the first quarter of 2017.~JJL
News slipped yesterday that in a few years there will no longer be Intel inside Mac computers. Time to revisit the marketing campaign? Then again, Macs didn’t have those Intel stickers like darn near every PC…~SD
There was an April Fool’s story on IcoExaminer.com that purported to tell who the real Satoshi Nakamoto was based on new information from Edward Snowden. The story included the words “Dia de los inocentes” near the end of the story.~JJL
Would you like a copy of Nasdaq’s “FINTECH TRENDS 2018 – How Technology Is Rewriting The Capital Markets” report? Go HERE and fill out the form to get it.~JJL
ISDA has an updated, comprehensive compliance calendar for OTC derivatives if you’re looking for a one-stop reference document.~SD
Jim Falvey appears in a video about a regulation crowdfunding project with which he is involved. See him at the 3:10 mark in “What is the Eazl Digital Degree Project?‘~JJL
New Roots, More Growth – Nils-Robert Persson, Cinnober
Last year was notable for Cinnober as the company pivoted from organic growth to outside investment to aid its expansion. The now 20-year-old real-time risk and clearing technology provider raised some $20 million from a share offering to fuel the development of Minium – a new Cinnober subsidiary focused on client clearing.
In this sixth video from JLN’s annual series with industry leaders, Cinnober Executive Chairman Nils-Robert Persson details the company’s strategy for 2018 and it’s investment activities in 2017, including the acquisition of Ancoa, now rebranded Irisium.
Watch the video and read the rest here »
Markets That Climbed the Trump Bump Are Tumbling Down From It
Matt Phillips – NY Times
In the first year of Donald J. Trump’s presidency, ebullient investors propelled stock markets to one record high after another. And Mr. Trump was the bull in chief, celebrating the record-breaking march as validation of his economic policies. Those days are done.
****What’s the rhyming phrase for this decline then? The Trump dump?~SD
Monday’s Top Three
Our top read stories on Tuesday were led by Crain’s piece CME to buy NEX in $5.5 billion deal. Second also went to the CME-NEX deal with the FT’s CME rules out asset sales after Nex deal. Third went to TT’s newest surveillance drone product C.A.R.L. April Fools? Or just great new technology from TT?
122,789,784 pages viewed; 23,056 pages; 212,271 edits
SEC charges founders of $32m celebrity-backed crypto offering with fraud
Alice Woodhouse in Hong Kong – FT
The US Securities and Exchange Commission has charged the two co-founders of a celebrity-endorsed initial coin offering which raised more than $32m with “orchestrating a fraudulent initial coin offering”.
*****Here are the NY Times and WSJ versions of the story and the SEC release.~JJL
New York Fed to launch U.S. Libor contender, slow takeup seen
Karen Brettell – Reuters
The New York Federal Reserve will launch a benchmark U.S. rate on Tuesday to potentially replace Libor, and market participants hope it will prove more reliable after a long and complex switchover.
The U.K. Finance Gender Pay Gap Isn’t Bad. It’s Worse; Comparing the median and mean pay gaps reveals a new problem.
Elaine He – Bloomberg
It’s probably worse than it looks. Government-mandated gender pay gap reports are rolling in before Thursday’s deadline. The inequality is stark for U.K. finance companies — data last month from Goldman Sachs Group Inc. showed a median gender pay gap of 36.4 percent — in other words, women earn 64 pence for every pound that men earn.
Credit Suisse Equities Trading Chief Plots Return to World Top 5
Jan-Henrik Foerster – Bloomberg
UBS veteran Mike Stewart says management revamp is complete; Focus on hedge fund business, derivatives, trading systems
While wealth management may be the business Credit Suisse Group AG favors growing these days, the Wall Street veteran who took over the bank’s equity trading unit has no intention of taking a back seat.
OTC crypto market flourishes, powered by Skype
Anna Irrera, Jemima Kelly – Reuters
Trading firms are negotiating buying, selling and lending digital currencies like bitcoin and ether over Skype, catering to big investors looking to avoid rocking already volatile online exchanges.
Blockchain executive Amber Baldet to leave JPMorgan
Anna Irrera – Reuters
Amber Baldet, a blockchain program lead at JPMorgan Chase & Co (JPM.N), is leaving the bank to launch her own venture, JPMorgan said on Monday.
BSE launches arbitrage rate index in a S&P Dow Jones Indices joint venture
Asia Index, a joint venture between S&P Dow Jones Indices and BSE, has launched arbitrage rate index. The S&P BSE Arbitrage Rate Index will equally weigh long positions in the Sensex and equivalent short positions in the futures contracts, Asia Index CEO Alka Banerjee said in a statement. It will provide market participants with a transparent benchmark to compare the performance of similar arbitrage strategies.
Exchanges, OTC and Clearing
CME Group Reaches Highest-Ever Quarterly Average Daily Volume of 22.2 Million Contracts for First-Quarter 2018
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it reached an all-time high quarterly average daily volume (ADV) of 22.2 million contracts during first-quarter 2018, up 30 percent from first-quarter 2017. CME Group first-quarter 2018 saw record options volume, averaging 4.9 million contracts per day, up 31 percent versus first-quarter 2017, with electronic options averaging a record 3.1 million contracts per day, up 45 percent over the same period last year.
OCC Cleared Contract Volume Up 15 Percent in March
OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in March reached 442,945,572 contracts, a 15 percent increase from March 2017. OCC’s year-to-date volume is up 32 percent with 1,400,345,396 cleared contracts in the first quarter of 2018, compared to 1,058,670,212 contracts in the first quarter of 2017.
Yuan-denominated oil futures mark a significant move
Editorial Board – South China Morning Post
The launch of the Shanghai Futures Exchange’s first commodity derivative that is open to foreign investors suits the needs and demands of the region, especially for those countries that are taking part in President Xi Jinping’s “Belt and Road Initiative”
Cboe Global Markets to Celebrate 25th Anniversary of Cboe Volatility Index Throughout April
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today kicked off a month-long celebration of the 25th anniversary of the Cboe Volatility Index (VIX Index), which Cboe began publishing in April 1993.
Cboe FX (Hotspot) March trading cools down 14% to $38.1 billion ADV
After setting two consecutive trading volume records in January and February, data from institutional Forex ECN Cboe FX Markets – formerly known as Hotspot FX – indicates that the company saw a marked decline in activity during March.
NYSE sets Spotify reference price at $132
The New York Stock Exchange on Monday set the reference price for shares of music streaming service Spotify Technology SA at $132.
NEO Dark Book
Five years ago, Aequitas brought its vision for the Canadian capital markets forward. Founded by a diverse ownership group of investors, dealers and companies, all focused on the founding vision of making markets better.
Nasdaq To Hold First Quarter 2018 Investor Conference Call
Senior management will be available for questions from the investment community following prepared remarks via the following telephone numbers using conference ID 9877537:
Nasdaq partners with Arctic15 Scale-Up Summit May 31
Maarit Bystedt – Linkedin
Arctic15 is a matchmaking startup event in the Nordics and Baltics in Helsinki, Finland on 30-31 May 2018. The 2-day event is organized by ArcticStartup, a leading startup media covering Nordics and Baltics. Nasdaq is proud to be part of Arctic15 Scale-Up Summit on May 31. Nasdaq will host an Opening Bell Ceremony and participate in a panel discussion. @Nasdaq Arctic15 2018
Opening Remarks by HKEX Chief Executive Charles Li at Legislative Council Panel on Financial Affairs
HKEX Chief Executive Charles Li made the following opening statement when he attended a meeting of the Legislative Council’s Panel on Financial Affairs in relation to the “Report on Consultation on a Listing Regime for Companies from Emerging and Innovative Sectors” today (3 April 2018).
Listing Nominating Committee Extends Application Period for Listing Committee Candidates
The Listing Nominating Committee of The Stock Exchange of Hong Kong Limited, a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), has extended the application period for nominations to the Listing Committee to 18 April 2018 from 2 April 2018 to provide more time for applications from potential candidates. The Listing Nominating Committee is seeking applications from individuals interested in serving on the Listing Committee and the GEM Listing Committee1. Appointments will be for a term of approximately 12 months commencing in June or July 2018.
OneChicago Announces Trading Volume For March 2018
OneChicago, LLC (ONE), a securities finance exchange, today announced its March 2018 volume of 696,700, a decrease of 53% year-over-year. OneChicago is a CFTC and SEC regulated exchange offering Single Stock Futures (SSF), a Delta One product, on approximately 1,800 equities, including ADRs and ETFs.
The Listing Committee censures Mr. Fu Ji Wen, a former executive director of Huarong International Financial Holdings Limited (stock code: 993), for breaching the Director’s Undertaking.
Thomson Reuters adds MSCI RiskMetrics to Eikon
Thomson Reuters has enhanced its investment portfolio risk management solutions on its financial flagship desktop product, Eikon, with the addition of MSCI RiskMetrics.
DTN acquires agritech sensor startup Spensa Technologies to provide a more comprehensive solution to its customers
After weeks of speculations, DTN finally put the rumors to rest with the news of its acquisition of Spensa Technologies. In a company release, the Minneapolis-based DTN announced that it has agreed to acquire Spensa, a Purdue University spinout that operates from West Lafayette, IN. The financial terms of the deal which still needs approval from Spensa shareholders, were not disclosed.
Fintech Firm GreenSky Files Confidentially for IPO; Atlanta company could seek to raise $1 billion at a valuation of roughly $5 billion in public offering
Peter Rudegeair and Maureen Farrell – WSJ
Financial-technology firm GreenSky LLC has confidentially filed paperwork with the Securities and Exchange Commission for a sizable initial public offering that could come as soon as this summer, according to people familiar with the matter.
The Crypto Hedge-Fund Bubble Is Starting to Deflate
Olga Kharif – Bloomberg
The reckoning is starting for crypto hedge funds.
Demand and profits are drying up at many of the more than 150 funds that popped during last year’s spectacular surge in Bitcoin — which brought cryptocurrencies to the attention of scores of institutional and individual investors. This year’s 50 percent plunge in the value of Bitcoin has many investors thinking twice. At about $7,000, the currency is at its lowest since November.
Asia’s cryptocurrency arbitrage boom fizzles, but profits persist
Winni Zhou, Andrew Galbraith – Reuters
When China closed its local cryptocurrency exchanges late last year, an underground ecosystem of bitcoin “mules” and peer-to-peer platforms sprung up to allow bitcoin trading to thrive, away from regulators’ watchful eyes.
DoubleLine’s Gundlach says bitcoin leads stock market movements
Jennifer Ablan – Reuters
Bitcoin, the highly volatile digital currency, is proving to be the new stock market indicator, influential investor Jeffrey Gundlach said on Monday, adding that this is hardly just a “gut feeling” given the recent price movements.
Alibaba files trademark lawsuit against Dubai firm behind ‘Alibabacoin’
Jonathan Stempel – Reuters
Alibaba Group Holding Ltd (BABA.N) on Monday sued a Dubai-based firm it said has caused confusion by using its trademarked name to raise more than $3.5 million in cryptocurrency known as “Alibabacoins.”
Google Just Made It Harder to Mine Cryptocurrency with Chrome
Google has had enough of Chrome browser extensions that mine cryptocurrency using the processing power of users’ computers. The company had already been taking down extensions that mine cryptocurrency without informing the extensions’ usersóa practice known as cryptojacking. But now it’s targeting any extension that runs similar code, whatever the intentions of the people behind the plugin.
Bitcoin Network Researchers See ‘Substantial’ Overvaluation
Janine Wolf – Bloomberg
Given Bitcoin’s meteoric rise in 2017, and persistent slump this year, it’s easy to wonder just how much the digital currency is really worth.
Three Minutes With Bcause’s Sean Ristau; Crypto vs. Cash
Jessica Darmoni – Hehmeyer
“The fact that banks don’t want to engage with cryptocurrencies is a challenge,” said Sean Ristau, Director of Exchange Integration and Education at Bcause LLC. “However, crypto was not created to circumvent banks, it is a byproduct of what happened. It is a faster method of moving money and a different way to store it. Banks serve a purpose but like everything, they need competition.”
Trump’s Amazon Tweets Dent His Stock Market Bragging Rights
Jeremy Herron – Bloomberg
Donald Trump has long bragged how his presidency has been a boon to the stock market. His recent attacks on Amazon.com Inc. are undermining that position.
New York high-speed firm Tower must face Korean ‘spoofing’ claims: U.S. court
Jonathan Stempel – Reuters
A U.S. appeals court on Thursday revived a lawsuit by five Korean traders accusing the New York high-frequency trading firm Tower Research Capital LLC and its founder Mark Gorton of conducting illegal “spoofing” trades at their expense.
****Missed this at end of last week.
NFA not to change announcement about action against FXCM
Maria Nikolova – FinanceFeeds
The United States National Futures Association (NFA) has won a dismissal of a defamation lawsuit brought against it by Effex Capital, the firm embroiled in the exit of FXCM from the US retail FX market.
SEBI mulls ‘concentration margin’ in derivatives
Ashish Rukhaiyar – The Hindu
Traders with a very high or significant exposure to commodity and equity derivatives market may soon have to pay a higher margin compared with other traders as the Securities and Exchange Board of India (SEBI) is planning to create a structured framework for levying a ‘concentration margin,’ according to a person familiar with the development.
Asset managers set for MiFID II research price ‘shock’; According to co-founder of Electronic Research Interchange
Mike Sheen – Investmentweek
Chris Turnbull, co-founder of independent research provider Electronic Research Interchange (ERIC), has warned asset managers will face a “shock” at the end of Q1, when they “discover they owe more for research than they anticipated”, following the introduction of MiFID II at the start of 2018.
Treasury Meets With Banks, Trading Firms As It Weighs Releasing More Market Data; The debate over making the data public divides the financial-services industry
Andrew Ackerman and Daniel Kruger – WSJ
U.S. policy makers are meeting with banks and trading firms about whether to release to the public data on the $14 trillion U.S. Treasury market that the government has been collecting since last summer.
Washington insider’s ‘secret sauce’ fueled NY hedge fund, U.S. says at trial
Jonathan Stempel, Brendan Pierson – Reuters
A federal prosecutor said a political consultant used his Washington contacts as his “secret sauce” to uncover market-moving tips about policy decisions from a U.S. healthcare agency, enabling a big New York hedge fund firm to conduct insider trading.
SEBI may soon allow fund houses to invest in gold futures
The Hindu Business Line
The capital and commodity market regulator SEBI will soon allow mutual funds to invest in gold futures by letting them amend the investment objective of existing gold schemes to have an exposure to commodity futures markets.
ESMA continues to focus on convergence in enforcement of IFRS across the EU
The European Securities and Markets Authority (ESMA) today publishes its 2017 annual report on the enforcement and regulatory activities of accounting enforcers within the European Union (EU).
Mozido Founder Accused of Stealing Millions to Fund Luxurious Lifestyle
Peter Rudegeair and Rob Copeland – WSJ
Like so many startups, the financial-technology firm Mozido Inc. hyped its prospects in grand terms. Mozido founder Michael Liberty in 2010 claimed that new products would generate billions of dollars of revenue and two years later said the company was worth over $100 billion, according to regulators. That year, regulators say, his partner also told investors “there is no risk,” and that committing more money was the “biggest no brainer in the history of the universe.”
CFTC Chairman Giancarlo to Give the Jacobson Lecture at Concordia College
CFTC Chairman Giancarlo to Give the 2018 Sims Lecture at Vanderbilt Law School
Investing and Trading
The Reformed Broker
You are going to run into people who are so certain of what higher volatility means for the markets that it’s as if they are reciting their own name and phone number. Be terrified of their indefatigability about a topic like this. Imagine the sheer arrogance and borderline mental illness required for a person to assume that they can accurately foretell the actions of a hundred million investors around the world.
Rational Markets Theory Keeps Running Into Irrational Humans; In theory, the smart money weeds out foolish speculators. The reality is different.
Noah Smith – Bloomberg
To many young people, the idea of efficient financial markets — the idea that, in the words of economist Eugene Fama, “At any point in time, the actual price of a security will be a good estimate of its intrinsic value” — probably seems like a joke. The financial crisis of 2008, the bursting of the housing bubble, and gyrations in markets from gold to Bitcoin to Chinese stocks have put paid, at least for now, to the idea that prices are guided by the steady hand of rationality. The theory won Fama an economics Nobel Prize in 2013, but he shared it with Robert Shiller, whose research poked significant holes in the idea decades ago.
Podcast: The History of High-Frequency-Trading with Babulak and Sadowski (Wes)
Family Office Networks Launches FON Search
Family Office Networks
Family Office Networks announced today the launch of FON Search, an affiliate of The Quest Organization, as a new division dedicated to identifying and recruiting top tier talent for family offices.
Deutsche Bank’s troubles are more than personal
“There is no difference of opinion here,” John Cryan, Deutsche Bank’s chief executive, insisted in a message to staff last week following reports of the tension between him and the chairman, Paul Achleitner. He was stretching the truth: Germany’s leading private sector bank has been full of differences for a long time.
UBS nominates two new board members at upcoming AGM
UBS (UBSG.S) said it is nominating Jeremy Anderson and Fred Hu for election to its Board of Directors at its annual general meeting in May.
Deutsche Bank Plans Board Shifts as Chiefs’ Future Is Questioned
Nicholas Comfort, Steven Amos – Bloomberg
Thain is among nominees expected to fill positions this year; German lender is struggling despite multiple strategy resets
Deutsche Bank AG is preparing to reshuffle its supervisory board as the future of Chief Executive Officer John Cryan and Chairman Paul Achleitner is called into question.
JPMorgan Accused of Wrongful Death by Estate of Star Broker
Christian Berthelsen – Bloomberg
Lorig committed suicide after he was forced to retire; Bear Stearns futures department co-founder ran marathons
The estate of a deceased broker filed a wrongful death lawsuit against JPMorgan Chase & Co., saying he took his life after becoming despondent because he was forced to retire.
Swedes Voice Data Fears After Facebook Scandal, Targeting Banks
Frances Schwartzkopff – Bloomberg
Swedish consumer group wants stricter data protection bank law; Sweden’s status as world’s most cashless society raises fears
In one of the world’s most digitally advanced corners, consumer groups are now demanding much better data protections against the financial industry.
Latin America Under Tightening Global Liquidity Conditions: Emerging Markets In A Changing Global Environment
Fernando J. Losada – International Banker
Emerging-market (EM) assets enjoyed significant support from investors during 2017. An environment of economic-growth recovery with moderate inflation across developed markets combined with solid commodity prices and abundant liquidity searching for yieldóall contributed to remarkable interest from international investors in EM securities. More than US$75 billion worth of inflows into dedicated EM funds was observed last year, which resulted in significant increases in local stock markets and compression of sovereign yields.
China’s Big Banks Are Turning to Short-Term Financing
Top five banks boost certificates of deposit sales to record; Largest lenders’ reliance on NCDs will grow: Citic Securities
China’s biggest lenders are increasingly using short-term financing to meet demand for loans, in a development that could push up money-market rates.
City’s Brexit transition deal is nothing to be cheered; Pledge to ‘underpin’ EU companies operating via passporting may not work in practice
Patrick Jenkins – FT
There was a lot of backslapping last week in the corridors of the British financial establishment, following the political agreement on a Brexit transition deal. So has a post-Brexit disaster scenario for the City of London been averted?
The Next Big Thing in Agriculture: Smart Collars for Cows
Mike Cherney – WSJ
The fences that crisscross the vast ranches of the U.S. and Australian Outback seem like an unlikely candidate for tech disruption.
But several startups are betting that high-tech collars for cattle, goats and other livestock could render the fences obsolete, enabling farmers to round up animals more easily than they do now with workers, dogs and even helicopters.