SEC Charges Intercontinental Exchange and Nine Affiliates Including the New York Stock Exchange with Failing to Inform the Commission of a Cyber Intrusion; The crypto Congress: Momentum builds for ‘most significant’ digital-asset law in history

May 22, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

The World Federation of Exchanges (WFE) released new research cautioning against the indiscriminate adoption of technologies like DLT that drastically reduce settlement time at the expense of market quality. The study highlights that while such technologies may speed up settlement, they also lead to increased trading costs and price volatility. For instance, a one-minute delay in settlement can raise transaction costs by 1.3% and price impact by 1.5%. Moreover, settlement latency can fluctuate significantly, resulting in up to a 3.9% increase in transaction costs and a 4.5% rise in price impact. The research underscores that such uncertainties make it harder for informed traders to execute strategies efficiently, ultimately impairing market pricing.

The “2024 Women in Finance Asia Awards” winners are out and it is an impressive list. Among the winners are the following:
Rising Star – Yolande Escher, BlackRock
Rising Star – Michelle Hosea, Virtu Financial
Rising Star – Karina Kam, Nasdaq
Rising Star – Karen Leung, Liquidnet
Excellence in Exchanges – Minah Kim, CME Group
Excellence in Sustainability – Chaoni Huang, BNP Paribas
Excellence in Hedge Funds – Stella Jang, Citadel
Excellence in Legal & Compliance – Victoria Chen, DTCC
Excellence in Regulation – Tze Min Yeo, FIA
Excellence in Risk Management – Agnes Koh, SGX
Excellence in Talent Management – Alana Newman, Cboe Australia
Excellence in Talent Management – Melanie Tan, Marex Spectron
Excellence in Sell-Side Trading – Serene Cai, SGX
Excellence in Trading Platforms – Indu Rajeev, Citadel Securities
Excellence in ETFs – Keri Neo, Tradeweb
Excellence in Marketing & Communications – Angela Nguyen, BNP Paribas
Excellence in Commodities – Kellee Campbell, ICAP
Excellence in Derivatives – Jerine Chia, UBS

Today I received a phishing LinkedIn message from a purported CME Group recruiter who wrote that she had seen my “profile on LinkedIn and you have a wealth of experience in your field. We are currently recruiting for senior management positions, if you are interested in learning more about our senior vacancies, please leave your phone number. We will arrange for a project leader to contact you.” I could tell from the beginning this person was disconnected from reality in some way. In this case, it seems like a good old fashioned case of attempted phishing.

CME Group, in collaboration with the Dubai Mercantile Exchange (DME), is hosting the APAC Crude Oil Forum on June 6. The event features industry experts from Vortexa and Trading Technologies discussing trading solutions and insights into the Crude Oil market for 2024. The forum, held at NTUC Centre in Singapore, requires registration between 10:00 am and 10:30 am, followed by presentations from 10:30 am to 12:00 pm. Attendance is by invitation only and adheres to Chatham House Rules. Register via the provided link or contact events@cmegroup.com for inquiries.

CFTC Chairman Rostin Behnam is scheduled to deliver the keynote address at the HCMC Public Conference titled “Climate in the Center of Economy” on May 29, 2024. The event will take place at the Grand Hyatt Athens Hotel in Athens, Greece, starting at 2:45 p.m. local time (Athens/UTC +7), or 7:45 a.m. Eastern Time (USA/ET).

He is also slated to engage in a fireside chat at the CCP Annual General Meeting 2024 on May 29, 2024. The event will commence at 1:00 p.m. local time (Athens/UTC +7), or 6:00 a.m. Eastern Time (USA/ET), and will be held at the Royal Olympic Athens Hotel in Athens, Greece.

The London Metal Exchange celebrated Mental Health Awareness Week last week and turned the LME Ring green to show its support for good mental health in the workplace, it shared on LinkedIn. Does that mean that all trades were winners? I know that would improve my mental health.

David Klotz at Metrotrade has the first edition of its “That’s Why We Did That” monthly newsletter out with the title “Choosing CME Group as Our First Market Connection.” MetroTrade wants to share with its customers why it made the decisions it made. David Klotz shared: “As we are building a retail-focused futures brokerage, we know our product offering has to resonate with active traders. Every day we face business decisions that may impact our future customers. As a part of the building process, I’ll be sharing in these monthly posts the rationale behind those decisions. My goal in these posts is to show you some of the inner workings of the industry, and how and why we put customers first in making these decisions. Along the way, if you want to comment, provide counterpoints, or have questions, I encourage you to go for it.”

David Klotz will be substituting for me as editor of JLN the week of June 24 to 28 while I am in Europe after attending IDX the week before.

Asma Awass has given her notice as editor of Options Discovery. We want to thank her for her great work. She is only 19 years old and was recruited by Alex Teng, who was a very hard act to follow. Alex recruited Asma from the UIC boxing team, where they were both members. Thank you, Asma, again.

We are looking for a new editor for this video series aimed at teaching younger investors about the options markets. We would prefer a student, someone who is a peer for the target audience of the group. Also, the OCC has shifted some of its sponsorship dollars from Options Discovery to the JLN Industry Leader video series we shot at the 2024 Options Industry Conference in Asheville, NC. The OCC sponsorship was not exclusive in the first place, but we are looking for additional sponsor support for the Options Discovery series. Email me at johnlothian@johnlothian.com if you are interested.

Also, I am setting up interviews for IDX for June 18 and 19. If you are interested, please email me.

CCP Global published the “2023 CCP Global International Default Simulation (CIDS) Exercise Report.”

Last chance for runners to sign up for the Futures for Kids annual Fun Run on Thursday, May 23. The event, generously sponsored by R.J. O’Brien, G. H. Financials, and Trading Technologies, welcomes registrations via the provided link or on site at Queen Elizabeth Olympic Park.

The story of pit trading set to Queen’s Bohemian Rhapsody by Jeff Bennett. Nicely done.
Chicago Pit Rhapsody.

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

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Our most read stories from our previous edition of JLN Options were:
Nvidia earnings could spark $200 billion swing in shares, options show from Reuters.
SEC contacted exchanges to update spot Ether ETF applications: Report from CoinTelegraph.
Ethereum price soars on spot ETF rumor – How are ETH options markets positioned? from CoinTelegraph. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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Prometheum Co-CEO Aaron Kaplan Discusses Digital Asset Market Structure at FIA Conference
JohnLothianNews.com

BOCA RATON, FL (JLN) – Aaron Kaplan, co-CEO and co-founder of Prometheum, shared his insights on the evolving landscape of digital assets and the integration of blockchain technology into market infrastructure during an interview with John Lothian News at the FIA International Futures Industry Conference in Boca Raton, Florida. This interview is part of the JLN Industry Leader video series sponsored by Wedbush.

Watch the video »

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C. Gordon Bell, Creator of a Personal Computer Prototype, Dies at 89; It cost $18,000 when it was introduced in 1965, but it bridged the world between room-size mainframes and the modern desktop.
Glenn Rifkin – The New York Times
C. Gordon Bell, a technology visionary whose computer designs for Digital Equipment Corporation fueled the emergence of the minicomputer industry in the 1960s, died on Friday at his home in Coronado, Calif. He was 89. The cause was pneumonia, his family said in a statement. Called the “Frank Lloyd Wright of computers” by Datamation magazine, Mr. Bell was the master architect in the effort to create smaller, affordable, interactive computers that could be clustered into a network. A virtuoso at computer architecture, he built the first time-sharing computer and championed efforts to build the Ethernet. He was among a handful of influential engineers whose designs formed the vital bridge between the room-size models of the mainframe era and the advent of the personal computer.
/jlne.ws/3Kega5A

***** We are losing giants from the computer revolution era.~JJL

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Trading stocks all day and all night might be an ‘inevitability’ for investors
Josh Schafer – Yahoo Finance
The stock market’s daily open and close may one day have little meaning if an idea gaining traction on Wall Street becomes widespread. 24X National Exchange, a trading platform backed by hedge fund founder Steve Cohen, is seeking SEC approval to operate an around-the-clock exchange. There’s interest in the idea from bigger players too: The New York Stock Exchange has reportedly polled market participants about interest in 24-hour access.
/jlne.ws/3yvp249

****** Futures markets have traded around the clock for years. There is a reason I still don’t sleep well.~JJL

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SEC-Licensed Prometheum Launches Custody Service Treating ETH as a Security
Hope C – CoinMarketCap
Prometheum, a digital asset trading and custody firm, has reportedly initiated a soft launch of its Ethereum (ETH) custody service, treating digital assets as securities, according to Fortune. The controversial custody solution was made available to a few selected companies on May 17, with a full-scale launch scheduled for June. Prometheum plans to expand its services to retail clients later in 2024. In February, Prometheum announced plans to treat Ether as a security when launching custodial services, a move that drew criticism from the crypto community. Aaron Kaplan explained that this approach allows for compliance with existing laws, stating, “It marks the first time that…an investment contract digital asset security is being custodied and treated under the securities laws.”
/jlne.ws/4dShTuE

***** They said they would do it and they are doing it. What is the problem?~JJL

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Tuesday’s Top Three
Our top story Tuesday was The Wall Street Journal’s FDIC Chairman Martin Gruenberg to Resign Following Report Detailing Sexual Harassment at Agency. Second was Bloomberg’s JPMorgan Says Every New Hire Will Get Training for AI. And third was the Financial Times’ Ivan Boesky, convicted trader, 1937-2024.

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Lead Stories

SEC Charges Intercontinental Exchange and Nine Affiliates Including the New York Stock Exchange with Failing to Inform the Commission of a Cyber Intrusion
SEC
The Securities and Exchange Commission today announced that The Intercontinental Exchange, Inc. (ICE) agreed to pay a $10 million penalty to settle charges that it caused the failure of nine wholly-owned subsidiaries, including the New York Stock Exchange, to timely inform the SEC of a cyber intrusion as required by Regulation Systems Compliance and Integrity (Regulation SCI).
/jlne.ws/44Vi70k

The crypto Congress: Momentum builds for ‘most significant’ digital-asset law in history
Chris Matthews – MarketWatch
Crypto industry insiders are becoming more optimistic that new legislation that would sideline the U.S. Securities and Exchange Commission will get strong bipartisan support in a vote this week, and potentially even become law by the end of the year. The House of Representatives is expected to vote on the Financial Innovation and Technology for the 21st Century Act on Wednesday, legislation that would clarify oversight boundaries of the crypto industry, granting the Commodity Futures Trading Commission primary jurisdiction over the industry at the expense of the SEC.
/jlne.ws/3QWRRfY

Chinese sovereign bond trading suspended after frantic retail buying; Small investors hunting for haven assets take advantage of easier access to special 30-year debt
Cheng Leng – Financial Times
Trading in China’s much-anticipated Rmb40bn ($5.5bn) issue of special 30-year sovereign bonds was suspended twice on its market debut on Wednesday, as exchanges warned of “abnormal fluctuations” and urged investors to be rational and pay attention to the risks. Beijing plans to sell a total of Rmb1tn 20 to 50-year sovereign bonds this year to fund government spending in critical areas as a way of trying to spur growth. The first batch of the bonds debuted on the Shanghai and Shenzhen stock exchanges, rather than just over the counter at banks, giving Chinese retail investors greater access than usual.
/jlne.ws/3yCXjOM

CME Group launches corporate bonds and mortgage-backed securities on BrokerTec Quote trading platform; US corporate bonds began trading on 20 May, with the remaining products expected to be live by the end of next month.
Wesley Bray – The Trade
CME Group has launched repo on corporate bonds and mortgage-backed securities (MBS) on its dealer-to-client (D2C) request-for-quote (RFQ) trading platform, BrokerTec Quote. US corporate bonds began trading yesterday, 20 May, with the remaining products expected to be live by the end of next month. CME Group’s US credit futures will begin trading on 17 June.
/jlne.ws/4bsp9vT

Crypto just became a political football, and ether is the early winner
Jared Blikre – Yahoo Finance
Crypto is quickly becoming an election issue, and ethereum is the biggest winner so far. From Monday to Tuesday, ether (ETH-USD) jumped 21% – its best two-day run since January 2021. But just before the giant surge, the prospects for the next big crypto rally had become shaky. The government had cooled on approving a suite of spot ether ETFs. Excitement over a similar array of bitcoin ETFs arguably reignited the entire crypto space late last year and provided a continued boost into this year.
/jlne.ws/3UNVN41

Citi fined $79 million by UK regulators over ‘fat-finger’ failures
Tom Wilson – Reuters
UK regulators fined Citigroup 61.6 million pounds ($78.5 million) for controls failings in its trading operations, one of the biggest sanctions for systems breaches, which in one case saw the Wall Street firm cause a sudden fall in European stocks. The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA), the markets watchdog, both probed and fined Citigroup over the failings that spanned from April 2018 through May 2022, they said in a statement on Wednesday outlining the findings of the investigation.
/jlne.ws/4buBPlM

***** Here is the Financial Times version of this story.~JJL

A $444 Billion ‘Fat Finger’ Trade Crashed Stocks. Now Citigroup Is Paying the Price; A trader’s inputting error in 2022 led the bank to mistakenly sell large amounts of European stocks which prompted a ‘flash crash’
Josh Mitchell – The Wall Street Journal
Call it the $78 million typo. That is how much Citigroup agreed to pay U.K. regulators for a trader’s fat finger when typing in an order to sell shares, an episode that caused a brief “flash crash” in European stocks. In May 2022, the unnamed trader in Citigroup’s global markets unit was working from home in London on a public holiday, The Wall Street Journal previously reported.
/jlne.ws/3V9y4wr

CFTC Commissioner Summer Mersinger on Overzealous Crypto Regulation and the Need for Legislative Action; The commodities regulator has been clear about the dangers of regulating a burgeoning industry through enforcement actions.
Daniel Kuhn – CoinDesk
Commissioner Summer Mersinger, of the Commodity Futures Trading Commission (CFTC), is one of the few U.S. regulators who is routinely willing to defend the crypto industry and call out what she sees as overzealous oversight. She will be speaking at Consensus 2024 in Austin, Texas, on May 30.
/jlne.ws/4bsasc3

FIA backs international effort to promote “effective practices” for variation margin
FIA
FIA has responded to a discussion paper released by international standard setters that sets out eight “effective practices” for streamlining variation margin in centrally cleared markets. The discussion paper addresses the need for greater transparency and understanding of margin practices at central counterparties, particularly in light of recent episodes of market volatility triggered by the COVID crisis and Russia’s invasion of Ukraine.
/jlne.ws/4boOjLN

India’s $6 Trillion Derivatives Frenzy Has Government Worried
Ashutosh Joshi – Bloomberg
The surge in Indian equity derivatives that’s driven up volumes to the highest in the world is spurring concern among the nation’s policymakers that the frenzy may hurt efforts to harness household savings for productive purposes. Finance Minister Nirmala Sitharaman and Chief Economic Advisor V. Anantha Nageswaran sounded caution in recent days about growing retail participation in the equity futures and options market.
/jlne.ws/3K9D1z2

BlackRock whistleblower sues over firing, shutdown of China monitoring tool
Jonathan Stempel – Reuters
BlackRock was sued for $20 million by a whistleblowing former vice president who said it fired him after he objected to a colleague’s self-dealing, and was forced to shut down a search engine for monitoring client discussions about illegal investments, including in China. In a complaint on Saturday, Hamdan Azhar said the world’s largest asset manager ordered him in March 2022 to stop work on Trend Spotter, which he had developed, and transfer his projects to Rightpoint, where the husband of former boss Tiffany Perkins-Munn worked.
/jlne.ws/3wS2wSj

SEC Chair Gary Gensler denounces crypto market bill ahead of House vote
Danny Park – The Block
U.S. Securities and Exchange Commission Chair Gary Gensler publicly expressed his dissent against the Financial Innovation and Technology for the 21st Century Act, or the FIT21 Act, in a statement released Wednesday. “[FIT21] would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk,” said Gensler in the statement. The SEC chair’s main argument centers on his belief that the act, H.R. 4763, undermines the classification of crypto assets as investment contracts, which would remove them from the SEC’s oversight and hinder investor protection efforts.
/jlne.ws/44U5KkN

Crypto world hopes for breakthroughs this week in Washington
Jennifer Schonberger – Yahoo!Finance
The crypto world is hopeful for some gains this week in Washington as it pushes for a new regulatory framework and new products that could expand its mainstream appeal. The House is set to vote Wednesday on legislation that would provide the type of regulatory oversight the industry wants. Separately, investors are hoping the Securities and Exchange Commission is close to approving the first exchange-traded funds that would invest directly in the cryptocurrency ether (ETH-USD).
/jlne.ws/3QXc2ut

Cboe Europe Derivatives Welcomes Interactive Brokers as New Trading Participant
Cboe Global Markets
Cboe Europe Derivatives (CEDX), Cboe’s pan-European equity derivatives marketplace, today announces that Interactive Brokers has successfully joined the exchange as a participant and will provide its clients with access to CEDX’s range of equity index derivatives and equity options in the current quarter. Interactive Brokers has become a direct trading participant on CEDX and a direct clearing participant for equity derivatives on Cboe Clear Europe N.V., Cboe’s leading pan-European clearing house and CEDX’s clearing provider.
/jlne.ws/4bsh5LD

Biden and Big Oil Had a Truce. Now, It’s Collapsing. Companies were enjoying record profits. But the president’s decision to pause permits for gas export terminals has whipped up industry support, and donations, for Donald Trump.
Lisa Friedman and Rebecca Elliott – The New York Times
Early in his term, President Biden seemed to have struck an uneasy truce with the oil and gas industry. Mr. Biden had imposed restrictions on drilling as part of his ambitious climate agenda, but he also approved an enormous $8 billion oil project in Alaska. The United States had become the world’s leading exporter of natural gas, and no other country in history was pumping more crude. The industry was enjoying record profits.
/jlne.ws/3UIpvHm

âEUR‹âEUR‹Biden Administration Will Release 1 Million Barrels of Gasoline; The sale, which was mandated by Congress, is timed to the summer driving season but unlikely to have more than a modest effect on gasoline prices.
Zach Montague – The New York Times
The Biden administration announced on Tuesday that it would sell off one million barrels of gasoline over the coming weeks from a strategic reserve in the Northeast, a move it said was designed to keep gasoline prices in check for consumers ahead of the July 4 holiday. The sale of the government-owned stock was mandated by Congress in the spending bill it passed in March, and will culminate in the closure of the reserve, which has facilities in the New York Harbor area and Maine.
/jlne.ws/3UPvoCJ

Severe Flight Turbulence Is a Growing Threat in a Warming World; Research suggests severe turbulence in jet streams could double or even triple in coming decades if the climate continues to change as expected.
Zahra Hirji – Bloomberg
Though severe flight turbulence is rare, it can be deadly. On Tuesday, one passenger died and more than 20 people were injured on an extremely bumpy Singapore Airlines Ltd flight traveling from London to its home country. “Almost immediately after the turbulence hit, I myself, followed by a large amount of others, were thrown in the air, hitting the roof,” passenger Toby Pearl told Bloomberg News after the aircraft made an emergency landing in Bangkok. “It felt like we had crashed. I thought the plane was going down.”
/jlne.ws/4bLHQdJ

Ukraine Invasion

Russia’s fearsome S-400 air-defense system isn’t quite living up to the hype in Ukraine
Sinead Baker – Business Insider
The performance of the Russian military’s top air-defense system in Ukraine has shown it’s vulnerable to even some older Western missiles, and wins against it could give the West new ideas on how to defeat it, experts say. The Russian S-400 is considered one of the world’s most advanced air-defense systems, but in Russia’s invasion of Ukraine, multiple units have been destroyed, including by older Western weapons the system should be able to handle.
/jlne.ws/4awozvC

Ukraine says it may have destroyed Russia’s last cruise missile carrier based out of Crimea
Mia Jankowicz – Business Insider
Ukraine’s navy claims it has likely destroyed the last of Russia’s cruise missile carriers operating out of the crucial Black Sea peninsula of Crimea. In remarks made to Radio Free Europe, Ukraine’s navy spokesperson Dmytro Pletenchuk said the navy was currently trying to verify whether or not it had destroyed the small missile carrier “Tsiklon” on Saturday.
/jlne.ws/3KvYcvz

A Shortage of Men Is Pushing Women Into Ukraine’s Mines; Grappling with personnel shortages, companies are training women in jobs traditionally done by men-but there are hurdles
Isabel Coles – The Wall Street Journal
For years, Olga Khandriga dreamed of working underground at her local coal mine in eastern Ukraine. It wasn’t until Russia invaded that she got the opportunity. As men left their jobs to fight Russia, the Ukrainian government suspended a law that had barred women from employment in “harmful or dangerous” conditions-including underground-allowing Khandriga to take over as deputy head of a section of the mine.
/jlne.ws/4bLHWlB

China to provide ‘lethal aid’ to Russia, says UK defence secretary
Financial Times
UK defence secretary Grant Shapps on Wednesday accused China of providing or preparing to give Russia lethal aid for use by Moscow in its war against Ukraine. Shapps said that new US and British intelligence “can reveal that lethal aid is now or will be flowing from China to Russia and into Ukraine”. He gave no details.
/jlne.ws/3Va497e

Sweden Plans $7 Billion in Military Aid to Ukraine for 2024-2026
Niclas Rolander – Bloomberg
The Swedish government will provide Ukraine with military support worth 25 billion kronor ($2.3 billion) annually under a new three-year framework announced Wednesday. The military aid in the 2024-2026 period could take the form of equipment donations as well as financial contributions and support for procurement of defense materials, the government said in a statement. “Sweden will support Ukraine’s struggle for as long as it takes,” it said.
/jlne.ws/4auWbKC

Israel/Palestine Conflict

Norway, Ireland and Spain formally recognize a Palestinian state; Israel immediately recalled its ambassadors to Oslo and Dublin and said it would do the same for Madrid in protest against what it called a “distorted step.”
Chantal Da Silva – NBC News
Three European nations announced Wednesday they will formally recognize a Palestinian state, a landmark move that drew a swift rebuke from Israel and praise from Palestinians. The announcements from Ireland, Norway and Spain dealt the latest diplomatic blow to Israel, as the United States’ close ally faces mounting international isolation and backlash over its deadly military offensive in the Gaza Strip.
/jlne.ws/4dTwshy

Israeli forces move deeper into Rafah in night of heavy battle
Nidal Al-Mughrabi – Reuters
Israeli tanks advanced to the edge of a crowded district in the heart of Rafah on Wednesday during one of the most intense nights of bombardment of the southern Gaza city since Israel launched its offensive there this month. Israel’s assault on Rafah on Gaza’s southern edge has set hundreds of thousands of people fleeing what had been a refuge for half of the enclave’s 2.3 million people. It has also cut off the main access routes for aid into Gaza, drawing international fears of mass casualties and famine.
/jlne.ws/4bP1IwA

Exchanges, OTC and Clearing

Reducing settlement time – where to draw the line?
The World Federation of Exchanges
The World Federation of Exchanges (WFE), the global industry association for exchanges and CCPs, has published novel research today that warns of the risks of adopting technologies, such as DLT, that radically reduce settlement time at the cost of market quality. The research finds that: When adopting technologies, such as DLT, the cost of making a trade increases, and the price reaction to a trade is intensified. For example, a one-minute increase in settlement latency leads to a 1.3% increase in transaction cost and a 1.5% increase in price impact; This increase isn’t a rare event, and some of our findings showed that settlement latency can easily vary by over 3 minutes, equating to a 3.9% increase in transaction costs and a 4.5% increase in price impact; When there is uncertainty, informed traders will find it more difficult to execute their trading strategies and therefore pricing is less efficient.
/jlne.ws/44RH2BD

SIX and Korea Securities Depository Intensify Cooperation
SIX
SIX, through its SIX SIS subsidiary, has signed a Memorandum of Understanding (MOU) with Korea Securities Depository (KSD) for cooperation in the area of securities depository and settlement. The signing ceremony took place today in Zurich, Switzerland. Based on the terms of the MOU, SIX and KSD will cooperate in the area of securities depository and settlement to foster the prosperity of financial markets, promote cross border investment and explore opportunities for joint development. The partnership also envisages a closer working relationship in the future, regular meetings and the maintenance of communication channels for the exchange of information.
/jlne.ws/3wzkPvK

ASX Group Executive, Technology & Data announces intention to depart
ASX Group
Following almost seven years as a valued member of the Executive Team, ASX Group Executive Technology & Data, Dan Chesterman will depart the Group in the coming months after announcing his intention to resign.
/jlne.ws/46R1Cme

2023 Annual Markets Review In Central Counterparty Clearing
CCCP Global
Message From The Chairman: 2023 Was Another Busy Year For Ccp Global As The Association Continued To Expand Its Engagement With The Industry. As I Noted Last Year, The Association Has Come A Long Way Since It Was Founded In 2001 By
Twelve Major Central Counterparty (“Ccp”) Organizations Located In Europe, Asia, And The Americas. Today, CCP Global Has More Than Tripled Its Membership To Include 42 Members Who Operate Over 60 Individual Ccps Globally Across Europe, The Middle East, And Africa (“Emea”), Asia-Pacific (“Apac”), And Americas.
Https://Jlne.Ws/3Kdspii

Cboe Europe Derivatives Welcomes Interactive Brokers as New Trading Participant
Cboe
Interactive Brokers joins Cboe Europe Derivatives (“CEDX”) and will provide its clients with access to the exchange’s suite of pan-European equity derivatives in the current quarter. The global electronic broker has become a direct trading participant of CEDX and clearing participant of Cboe Clear Europe N.V. CEDX recently expanded its range of equity options and now offers contracts on over 300 European companies. Cboe Europe Derivatives (CEDX), Cboe’s pan-European equity derivatives marketplace, today announces that Interactive Brokers has successfully joined the exchange as a participant and will provide its clients with access to CEDX’s range of equity index derivatives and equity options in the current quarter. Interactive Brokers has become a direct trading participant on CEDX and a direct clearing participant for equity derivatives on Cboe Clear Europe N.V., Cboe’s leading pan-European clearing house and CEDX’s clearing provider.
/jlne.ws/4bsh5LD

Santander joins Eurex for listed FX business
Eurex
Santander Asset Management has started trading FX derivatives business at Eurex. Trend towards listed FX business continues. Eurex’s listed foreign exchange derivatives encounter rising demand. With Santander Asset Management Europe’s leading derivatives exchange welcomes a further global player in its listed FX segment. The Spanish asset manager has started expanding their FX futures business to Eurex, supported by Banco Santander as Clearing Member and Deutsche Bank as liquidity provider.
/jlne.ws/4e4oF0P

The Government of the Kingdom of Eswatini issues new R4 billion Protea Bond programme on the JSE
Johannesburg Stock Exchange
The Government of the Kingdom of Eswatini, through Absa Bank Limited, recently issued a R4 billion bond programme on the Johannesburg Stock Exchange’s (JSE) debt board. The Government of the Kingdom of Eswatini, through Absa Bank Limited, recently issued a R4 billion bond programme on the Johannesburg Stock Exchange’s (JSE) debt board. This new issuance is the latest bond to list under the “Protea Bonds” segment. Protea bonds are a unique offering that describe ZAR-denominated bond issuances by foreign Governments on the JSE.
/jlne.ws/3UZJstI

Caution for Investors
Multi Commodity Exchange of India
It has been brought to the notice of the Exchange that an entity named “Tradeyarr” and website name “www.tradeyarr.com” is operating through mobile number +91 9769107723 and allegedly providing illegal (dabba) trading platform as well as misusing the Multi Commodity Exchange of India Ltd. (MCX) brand name. It may be noted that MCX is in no way connected to such illegal (dabba) trading platform. A police complaint is filed in this regard. It may be further noted that “Tradeyarr” and website named “www.tradeyarr.com”, are neither a member nor an Authorized Person of any of the Members of the Exchange.
/jlne.ws/3wKOdz3

TMX Group to Host 2024 Investor Day
TMX Group
TMX Group today announced Xccelerating Growth, the company’s 2024 Investor Day, will be held on Thursday, June 20, 2024, in Toronto. This year’s event will provide a detailed overview of TMX Group’s global growth initiatives and strategic priorities, featuring presentations from John McKenzie, CEO, and other members of the senior leadership team. WHAT: 2024 TMX Investor Day. WHEN: Thursday, June 20, 2024. 12:20 p.m. – 4:00 p.m. ET To register for the event and for more information please visit the TMX 2024 Investor Day website.
/jlne.ws/3Ke86So

Performance Bond Requirements – Metal Margin – Effective May 22, 2024
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below. The rates will be effective after the close of business on May 22, 2024.
/jlne.ws/4avycKY

Product Modification Summary: Amendments to the Listing Schedule for Three (3) Argus Futures Contracts and the Temporary Suspension of Trading and Clearing of the Previously Listed Contract Months – Effective June 04, 2024
CME Group
Amendments to the Listing Schedule for Three (3) Argus Futures Contracts and the Temporary Suspension of Trading and Clearing of the Previously Listed Contract Months.
/jlne.ws/3UUuhBE

Base price and daily price limits for newly listing ETF : Global X India Top 10+ ETF (Code: 188A)
Japan Exchange Group
The base price, etc. of Global X India Top 10+ ETF (Code: 188A), which is scheduled for initial listing on May 23, are as below.
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Moscow Exchange announces financial results for the first quarter of 2024
MOEX
PJSC Moscow Exchange ( MOEX ) announces financial results for the first quarter of 2024 based on consolidated financial statements under IFRS. Unless otherwise indicated, all indicators are given for the first quarter of 2024, and dynamics (changes in percentage) are compared to the first quarter of 2023.
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Fintech

DriveWealth Announces New Executive Hires Across Product and Operations Teams; Former Morgan Stanley leaders Kyla Murphy and Lauren Veisz bring specialized expertise, deep industry experience to the DriveWealth team
DriveWealth
DriveWealth, a leading financial technology platform providing Brokerage-as-a-Service, announced today the hiring of two new executives: Kyla Murphy, as Chief Product Officer and Lauren Veisz as Head of Operations. In their respective roles, Murphy and Veisz will help to further expand DriveWealth’s footprint in global markets, develop deeper relationships with current and potential partners, and build out the company’s product roadmap. “DriveWealth powers our global partners’ investing and trading applications through a combination of world-class technology and deep industry and regulatory knowledge,” said Michael Blaugrund, CEO of DriveWealth. “Kyla and Lauren each bring specialized expertise in their respective fields, strengthening DriveWealth’s ability to serve our partners globally and expand our platform at scale to meet their needs.”
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Charles Schwab’s mobile app ‘sucks,’ says Robinhood’s chief brokerage officer
Weston Blasi – MarketWatch
After Charles Schwab finished transitioning TD Ameritrade users to its platform last week, hundreds of users complained about the switch. Dozens of new Schwab users who recently had their accounts forcibly moved from TD Ameritrade contacted MarketWatch to complain about Schwab’s financial platform. And rival brokerage Robinhood says it has seen an influx of new customers since that time from TD Ameritrade, a brand partially known for its user-friendly app and website.
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Electricity grids creak as AI demands soar
Chris Baraniuk – BBC
There’s a big problem with generative AI, says Sasha Luccioni at Hugging Face, a machine-learning company. Generative AI is an energy hog. “Every time you query the model, the whole thing gets activated, so it’s wildly inefficient from a computational perspective,” she says. Take the Large Language Models (LLMs) at the heart of many Generative AI systems. They have been trained on vast stores of written information, which helps them to churn out text in response to practically any query. “When you use Generative AI… it’s generating content from scratch, it’s essentially making up answers,” Dr Luccioni explains. That means the computer has to work pretty hard.
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AI Fake Reporters Make It Harder for Readers to Tell Truth From Fiction
Ellen Huet – Bloomberg
Credibility Gap: Nina Singh-Hudson’s name sits atop a lot of articles on Hoodline, a local news site covering San Francisco. Until recently, there was also a smiling headshot and a bio that said Singh-Hudson was a “long-time writer and a Bay Area native” who writes about “tantalizing tech & bustling business.” This isn’t true. The name is a fake one slapped atop stories generated with artificial intelligence, as are the names of her apparent colleagues at Hoodline SF – Tony Ng, Leticia Ruiz, Eileen Vargas and Eric Tanaka.
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AI-intensive sectors are showing a productivity surge, PwC says
Reuters
The types of business which are most likely to use artificial intelligence are seeing growth in workers’ productivity that is almost five times faster than elsewhere, raising hopes for a boost to the broader economy, accountancy firm PwC said. Productivity in professional and financial services and in information technology grew by 4.3% between 2018 and 2022 compared with gains of 0.9% across construction, manufacturing and retail, food and transport, PwC said.
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I Tried Microsoft’s New AI-Focused PCs. Windows Is Exciting Again; Microsoft CEO Satya Nadella told our columnist new efficient, powerful chips equip Windows Copilot+ laptops to compete with Apple’s MacBooks
Joanna Stern – Financial Times
AI-puter (noun): A computer designed to execute AI tasks better than older, non-AI computers. Example sentence: “I’ll be at the coffee shop, working on my AI-puter.” OK, fine, nobody’s really going to use my new term, but plenty of big names will try to sell you one. And Microsoft is leading the charge-with a new Windows platform optimized for artificial intelligence announced on Monday.
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Why Microsoft Is Spreading Its AI Bets to PCs; Software giant’s stock has lagged behind peers as investors worry about AI’s costs-and time to payoff
Dan Gallagher – The Wall Street Journal
Microsoft has come a very long way from depending on personal computers for its livelihood. But the world’s most valuable company needs all the help it can get these days. The software giant kicked off its annual Build developers conference this week with a focus on hardware. The wares on display were mostly new versions of the company’s Surface laptops and tablets designed with generative artificial-intelligence capabilities on the device. The new machines also use Qualcomm’s Snapdragon processors and an optimized version of Windows that together are designed to perform powerful AI-computing functions with smartphonelike battery life.
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Amazon to Charge Monthly Fee For AI-Infused Alexa, CNBC Reports
Robin Ajello – Bloomberg
Amazon.com Inc. plans to charge Alexa users a monthly fee when it rolls out an AI-infused version of the voice assistant later this year, CNBC reported. The Alexa subscription will help pay for the upgrade, the news site said, citing people familiar with the situation. The company hasn’t decided on a price, CNBC reported.
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China’s latest answer to OpenAI is ‘Chat Xi PT’; Internet regulator uses Chinese leader’s political philosophy to help answer questions posed to latest large language mode
Ryan McMorrow – Financial Times
Beijing’s latest attempt to control how artificial intelligence informs Chinese internet users has been rolled out as a chatbot trained on the thoughts of President Xi Jinping. The country’s newest large language model has been learning from its leader’s political philosophy, known as “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”, as well as other official literature provided by the Cyberspace Administration of China.
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Meta AI chief says large language models will not reach human intelligence; Yann LeCun argues current AI methods are flawed as he pushes for ‘world modelling’ vision for superintelligence
Hannah Murphy and Cristina Criddle – Financial Times
Meta’s artificial intelligence chief said the large language models that power generative AI products such as ChatGPT would never achieve the ability to reason and plan like humans, as he focused instead on a radical alternative approach to create “superintelligence” in machines.
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Cybersecurity

Cyberattacks are soaring-and more lucrative for criminals than drugs. It’s time to treat them as an ‘act of war,’ health care exec warns
Beth Greenfield – Fortune
The Change Healthcare cyberattack that disrupted nationwide health care systems earlier this year-affecting a third of Americans at a total loss of $100 million-was a major wake-up call: Such attacks in the health care industry are on the rise. And they should be treated with utmost seriousness, agreed a panel at Fortune’s Brainstorm Health conference in Dana Point, Calif., on Tuesday. “In my world, it’s almost an act of war,” said Stephen Gillett, chairman and CEO of Verily, a life sciences company. “It’s that level of aggression toward infrastructure. Those are people’s lives, their personal information. That is not something that should just be a tech issue that we’re solving for.”
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Some Online Finance Scam Losses Are on You; If we automatically compensate people who lose money in scams, they might become even less vigilant.
Paul J. Davies – Bloomberg
Payment frauds against consumers and small businesses are a huge problem, but in the UK at least the pace is slowing. Banks are fretting, however, that new rules on mandatory refunds for victims could be about to make fraud costlier. They’re right to be concerned. The latest industry data show that education and prevention efforts by banks, payment companies and regulators are making some progress: Total losses of £1.17 billion ($1.5 billion) in 2023 were down 4% from the year before, according to UK Finance, a trade body. Still, £1 billion is a lot to lose, especially for banks that refund many of the victims. And this could become more costly because Britain’s payments regulator is introducing rules that make full reimbursement of as much as £415,000 per case a lot more likely for all victims.
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Cryptocurrencies

UK’s first crypto ETPs to launch on May 28
Financial Times
WisdomTree has been given the green light by the Financial Conduct Authority, the UK’s financial market regulator, to list ETPs investing in “physical” spot bitcoin and ether, the two most popular digital tokens, on the London stock exchange on May 28. It means the UK’s first cryptocurrency exchange traded products will begin trading almost a decade after the first such vehicles appeared in Sweden.
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Politics

The crypto Congress: momentum builds for ‘most significant’ digital asset law in history
Chris Matthews – Morningstar
Industry hopes to see at least 40 Democrats support the bill Crypto industry insiders are becoming more optimistic that new legislation that would sideline the U.S. Securities and Exchange Commission will get strong bipartisan support in a vote this week, and potentially even become law before the end of the year. The House of Representatives is expected to vote on the Financial Innovation and Technology for the 21st Century Act on Wednesday, legislation that would clarify oversight boundaries of the crypto industry, granting the Commodity Futures Trading Commission primary jurisdiction over the industry at the expense of the SEC.
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Legislature looks at tax breaks for quantum computing
John Pletz – Crain’s Chicago Business
Illinois legislators soon will be asked to consider a series of incentives as part of the state’s intensifying push to become the nation’s hub for quantum computing. Among the proposals is the creation of an “enterprise zone” that would allow the state to provide quantum companies exemptions from sales, payroll and utility taxes for up to 40 years.
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Foreign Purchase of U.S. Ammo Maker Sparks National-Security Battle; Opponents of deal stress need for American ownership amid gunpowder shortage and concern over China-Russia influence
Brett Forrest – The Wall Street Journal
The potential sale of an American ammunition maker to a Czech arms company is drawing scrutiny from some lawmakers, highlighting concern about foreign ownership in a key industry in the midst of global arms shortages sparked by the continuing wars in Ukraine and Gaza. Minnesota-based Vista Outdoor announced in October that it had agreed to a $1.91 billion sale of its firearms business-which includes ammunition brands such as Remington-to the Czechoslovak Group, or CSG, based in Prague, a major supplier of munitions and military equipment to Ukraine.
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Robert F. Kennedy Jr. invests $24K in GameStop in attempt to secure the ape vote
Gordon Gottsegen – MarketWatch
Retail investors may have just gained an unlikely ally. On Tuesday, Robert F. Kennedy Jr., the independent candidate for the 2024 U.S. presidential election, posted on X pledging to bring greater transparency, stronger regulatory oversight and tougher legal penalties to Wall Street. To show that he’s putting his money where his mouth is, Kennedy also revealed that he just invested $24,000 into GameStop Corp. using the legal fees he earned when suing agrochemical company Monsanto.
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Donald Trump’s campaign says it will begin accepting contributions through cryptocurrency Fatima Hussein – AP via Yahoo!Finance
Donald Trump ‘s presidential campaign said Tuesday it would begin accepting donations in cryptocurrency as part of an effort to build what it calls a “crypto army” leading up to Election Day. The Trump campaign launched a fundraising page that allows “any federally permissible donor the ability to give” to its political committees using any crypto asset accepted through the Coinbase cryptocurrency exchange.
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BuzzFeed Shares Soar as Vivek Ramaswamy Takes Stake, Seeks Talks
Molly Schuetz and Cam Baker – Bloomberg
BuzzFeed Inc. shares soared early Wednesday after the entrepreneur and former US presidential candidate Vivek Ramaswamy reported a stake in the online media company and asked for talks with the board. Ramaswamy, who ended his candidacy in January and threw his support behind Donald Trump, has taken a 7.7% stake in BuzzFeed, worth about $6.81 million based on Tuesday’s closing share price. The purchase makes Ramaswamy the fourth largest shareholder in BuzzFeed, trailing Comcast Corp., NEA Management Co. and Hearst Communications Inc.
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Russia unsettles Nato with plan to redraw Baltic Sea borders; Defence ministry’s proposal draws condemnation from Lithuania and Finland
Richard Milne and Max Seddon – Financial Times
Moscow has sparked condemnation from Nato members after proposing to redraw Russia’s borders in the Baltic Sea. The Russian defence ministry late on Tuesday laid out a plan to unilaterally expand the country’s maritime borders with Lithuania and Finland, both members of the military alliance. Less than 24 hours later, it deleted the proposal from the government website.
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End of China’s Boom Years Risks Political Peril for Xi; Are You Better Off?’ Asking Reagan’s Question in Xi’s China; Unlike his reform-era predecessors, Xi Jinping can’t count on rapid gains in prosperity to underpin support for Communist Party rule.
Rebecca Choong Wilkins and Tom Orlik – Bloomberg
China’s economic miracle is ending, leaving President Xi Jinping with a challenge none of his predecessors faced: how to govern after the boom. For four decades, China’s 1.4 billion population experienced unparalleled gains in income and wealth. But recently the blows have just kept coming. Real estate collapse, trade war with the US, a crackdown on entrepreneurs, and extended Covid lockdowns have stalled the prosperity engine.
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Taiwan’s New President Calls On China to End Threat of War
Cindy Wang – Bloomberg
New Taiwan President Lai Ching-te urged China to stop its campaign of pressure of the democratic island, comments aimed at calming a dispute at the heart of a geopolitical rivalry involving the world’s two biggest powers. “I call on China to stop intimidating Taiwan verbally and militarily, and, together with Taiwan, to shoulder our responsibility to the world to do our utmost to maintain peace and stability in the Taiwan Strait and the region,” Lai said Monday in his inaugural address on a breezy, overcast day in Taipei.
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Regulation

A Citi trader intending to sell $58 million of shares ended up selling $1.4 billion. Now the bank has been fined.
Steve Goldstein – MarketWatch
Trading incidents including one where Citigroup executed $1.4 billion of sell orders when intending to sell $58 million of shares led British regulators on Tuesday to fine the bank over trading controls. The Bank of England and the Financial Conduct Authority fined Citi a combined £61.6 million ($78.4 million) for failings in trading systems and controls between 2018 and 2022.
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ESMA unveils 20-point plan for “more effective and attractive capital markets”; The European market is facing significant challenges with financing needs which currently “far exceed” the capacity of the region’s fragmented markets, said Christine Lagarde, president of the European Central Bank, as she called for the market to embrace ESMA’s proposals.
Claudia Preece – The Trade
The European Securities and Markets Authority (ESMA) has today unveiled their position paper outlining a 20-point plan for a more effective and attractive capital market union through a unified approach. The overarching idea from the authority is for more concrete actions to be taken and aâEUR¯holistic approach to change adopted, wherein all 20 points should be taken on board as a whol
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Trader’s error sees Citigroup Global Markets face £61 million penalty from UK watchdogs; The imposed penalty from the UK’s Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) is linked to an inputting error made by a trader on the firm’s Delta 1 desk back in May 2022.
Claudia Preece – The Trade
The UK’s Financial Conduct Authority has given a final notice of a £27,766,200 financial penalty to Citigroup Global Markets due to breaches of the regulator’s ‘Principles for Businesses’, specifically “skill, care and diligence” and “management and control”.
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SEC Chair Gensler Statement on Upcoming Implementation of T+1 Settlement Cycle
SEC
Securities and Exchange Commission Chair Gary Gensler today issued the following statement on the conversion of the U.S. securities market to a T+1 standard settlement cycle, which will take place on May 28, 2024: “For everyday investors who sell their stock on a Monday, shortening the settlement cycle will allow them to get their money on Tuesday. Shortening the settlement cycle also will help the markets because time is money and time is risk. It will make our market plumbing more resilient, timely, and orderly. Further, it addresses one of the four areas the staff recommended the Commission address in response to the GameStop stock events of 2021.”
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Forget about Collaborating-Stop, Pay-Up, and Listen: Statement on Intercontinental Exchange et al.
Commissioner Hester M. Peirce and Commissioner Mark T. Uyeda – SEC
Today, the Commission imposed a civil penalty of $10 million on the Intercontinental Exchange (“ICE”) because certain of its subsidiaries (collectively, “the ICE SCI subsidiaries”) failed to notify the Commission of a systems intrusion as required by Regulation SCI-Systems Compliance and Integrity.[1] This disproportionately large penalty for failure to report in a timely manner an incident that the ICE SCI subsidiaries ultimately determined was de minimis suggests to us that the Commission is more concerned with generating large penalties than with ensuring that important market entities address technological vulnerabilities.
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Disclosure of Cybersecurity Incidents Determined To Be Material and Other Cybersecurity Incidents[*]
Erik Gerding – SEC
The cybersecurity rules that the Commission adopted on July 26, 2023 require public companies to disclose material cybersecurity incidents under Item 1.05 of Form 8-K.[1] If a company chooses to disclose a cybersecurity incident for which it has not yet made a materiality determination, or a cybersecurity incident that the company determined was not material, the Division of Corporation Finance encourages the company to disclose that cybersecurity incident under a different item of Form 8-K (for example, Item 8.01). Although the text of Item 1.05 does not expressly prohibit voluntary filings, Item 1.05 was added to Form 8-K to require the disclosure of a cybersecurity incident “that is determined by the registrant to be material,” and, in fact, the item is titled “Material Cybersecurity Incidents.”[2] In addition, in adopting Item 1.05, the Commission stated that “Item 1.05 is not a voluntary disclosure, and it is by definition material because it is not triggered until the company determines the materiality of an incident.”[3] Therefore, it could be confusing for investors if companies disclose either immaterial cybersecurity incidents or incidents for which a materiality determination has not yet been made under Item 1.05.
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Statement on the Financial Innovation and Technology for the 21st Century Act
Chair Gary Gensler – SEC
For 90 years, the federal securities laws have played a crucial role in protecting the public. These critical protections were created in the wake of the Great Depression after many Americans suffered the consequences of inadequately regulated capital markets. We saw sky-high unemployment, bread lines, and shantytowns springing up due to mass foreclosures. Back then, the rules didn’t exist. That’s why President Roosevelt and Congress created the SEC and the laws it administers.

ASIC bans former financial adviser for three years
ASIC
ASIC has banned former financial adviser Gawad Nabi from providing financial services for a period of three years. Mr Nabi was an authorised representative of Life Plan FP Pty Ltd from 23 March 2018 to 31 March 2021, a director from 15 November 2019 to 30 December 2022, and a responsible manager from 19 January 2020 to 31 August 2022. Mr Nabi is also a director of Guardian Group Financial Planning Pty Ltd, a position he has held since 5 January 2018.
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ASIC releases guidance on the experienced provider pathway for financial advisers
ASIC
ASIC has released Information Sheet 281 FAQS: Relevant providers – Accessing the experienced provider pathway (INFO 281) to provide guidance to financial advisers and Australian financial services (AFS) licensees about the experienced provider pathway following changes to the law made by the Treasury Laws Amendment (2023 Measures No. 3) Act 2023. Since 1 January 2019, professional standards have applied to financial advisers. This includes the qualifications standard and the professional year standard.
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Opening remarks at the ASIC UTS AI Regulators Symposium
Address by ASIC Chair Joe Longo on 21 May 2024.
I was last here in January, when I had the privilege of delivering the keynote address at the university’s Shaping Our Future Symposium. At that forum, I spoke about the current and future state of AI regulation. Today, we are continuing the conversation, as we bring together academics, industry experts and government to consider how we bridge the divide between the regulation we have and the regulation we need. While generative AI technology is well advanced – and its development continues apace – we should not cede to defeatist notions that the horse has bolted.
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National Anti-Scam Centre releases its first Investment Scam Fusion Cell Report
ASIC
The National Anti-Scam Centre (NASC) has released its Investment Scam Fusion Cell Report, which outlines findings of the first Fusion Cell co-led by Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commissions (ASIC) to combat investment scams. The Fusion Cell, which ran from August 2023 to February 2024, was designed to identify investment scam campaigns and their enablers, to block the use of these enablers, and to identify barriers to better coordinate scam prevention and disruption.
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ESMA makes recommendations for more effective and attractive capital markets in the EU
ESMA
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Consultation: Class exemption renewal for disclosure of relevant interests by directors and senior managers, and NZCDC Settlement System
FMA
We are reviewing whether to renew two existing class exemption notices for a further five years:
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FCA fines CGML £27,766,200 for failures in its trading systems and controls
FCA
Failures in the firm’s systems and controls led to US$1.4bn of equities being sold in European markets when they should not have been. On 2 May 2022, a CGML trader had intended to sell a basket of equities to the value of US$58m. The trader made an inputting error while entering the basket in an order management system. This resulted in a basket to the value of US$444bn being created.
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Bellwethers of the economy: the need to engage with corporate treasurers to shape our markets
FCA
Speech by Nikhil Rathi, FCA Chief Executive, delivered at the Association of Corporate Treasurers Annual Conference 2024.
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Bank of Japan Review
Foreign Currency Liquidity Risk Management at Japanese Major Banks: Efforts and Enhancement
Financial Services Agency
Securing stable foreign currency liquidity is one of the most important issues for Japanese major banks, as it is the basis of the expansion of their overseas businesses. The Financial Services Agency and the Bank of Japan have been conducting the “Joint Survey on Foreign Currency Liquidity Risk Management” for major banks classified as G-SIBs in fiscal 2021 until fiscal 2023. Moreover, the March 2023 banking turmoil in foreign countries shed new light on the importance of liquidity risk management.
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Investing and Trading

The Exxon Directors and the Proxy Abusers; Progressives retaliate after the company fights back against a shareholder resolution that would harm other investors.
The Editorial Board – The Wall Street Journal
Progressives are abusing the shareholder proxy process to drive their climate and social agenda, and now they want to punish Exxon Mobil for daring to fight back. California Public Employees’ Retirement System (Calpers) on Monday said it would vote against all of Exxon’s directors at its shareholder meeting next week. Proxy adviser Glass Lewis last week recommended that shareholders reject Exxon’s lead independent director Joseph Hooley’s re-election, citing “unusual and aggressive tactics” against activist investors.
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Some Corporations Seek to Silence ‘Trojan Horse’ Activists; Lawsuits by Exxon Mobil and others challenge a system that gives even small-dollar investors an audience to air climate and culture grievances
Richard Vanderford – The Wall Street Journal
The Securities and Exchange Commission under the Biden administration has made it easier for investors to try to drag corporations into political and cultural battles, but brewing lawsuits seek to silence the activists. After a change in SEC policy eased the path for shareholders to bring forward certain proposals, investors of all political stripes have increasingly pressed companies on hot-button issues such as climate, abortion, guns and diversity, filing hundreds of proposals each year.
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New Goldman Sachs National Survey: Black Women are Charting Their Own Paths to Wealth Creation; New data from Goldman Sachs One Million Black Women reveals the majority of Black women value entrepreneurship as a pathway to wealth creation – and with fewer barriers, would start a business to support themselves, their families, and their communities.
Goldman Sachs
A new Goldman Sachs One Million Black Women (OMBW) survey released today finds that six in 10 Black women view entrepreneurship as an important pathway to wealth creation, and believe more can be done to advance entrepreneurship opportunities. By addressing the systemic barriers they face when building their businesses, entrepreneurship could become a viable pathway to help narrow the opportunity gap.
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Gold’s Latest Allure? It’s Sanctions-Proof; Buying from central banks, particularly from China, can keep the gold rally going even if anxious individual investors don’t jump in
Jacky Wong – The Wall Street Journal
Gold is having its moment. Geopolitical hedging from global central banks could keep it shining. Now at its highest level ever, above $2,400 per troy ounce, general jitters about the world alone can’t explain gold’s strength. The yellow metal got a boost following the death of Iran’s president this week, for example, but it has been on a tear over the past two years, appreciating 33% since the end of 2022.
/jlne.ws/3UNYpyR

Clock Runs Down on BHP’s $43 Billion Bid for Anglo American; Decision looms ahead of 5 p.m., Wednesday deadline in London; World’s biggest miner wants control of rival’s copper assets
Bloomberg News
BHP Group Ltd. has just hours to launch a blockbuster bid to buy smaller mining rival Anglo American Plc. – or put its audacious takeover plan on the shelf. The proposal by the world’s biggest miner to spin off two units and then buy the remainder of Anglo would create a global copper behemoth, heralding the industry’s return to mega-deals after more than a decade. Anglo has already rejected two non-binding offers from BHP – the last worth $43 billion – and unveiled its own plans for a radical restructuring.
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Environmental, Social and Corporate Governance

Microsoft backs tree-planting carbon removal scheme in Panama
Virginia Furness – Reuters
Microsoft Corp has struck a deal to buy 1.6 million carbon removal credits from what the developers say is one of the largest fully financed nature-based removals projects in Central America. The 10,000 hectare project in Panama is part-financed by Microsoft, which is one of the largest corporate buyers of credits, and aims to remove 3.2 million tonnes of carbon from the atmosphere by planting over 6 million trees in areas degraded by cattle ranching.
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Top oil firms’ climate pledges failing on almost every metric, report finds; Oil Change International says plans do not stand up to scrutiny and describes US fossil-fuel corporations as ‘the worst of the worst’
Dharna Noor – The Guardian
Major oil companies have in recent years made splashy climate pledges to cut their greenhouse gas emissions and take on the climate crisis, but a new report suggests those plans do not stand up to scrutiny. The research and advocacy group Oil Change International examined climate plans from the eight largest US- and European-based international oil and gas producers – BP, Chevron, ConocoPhillips, Eni, Equinor, ExxonMobil, Shell and TotalEnergies – and found none were compatible with limiting global warming to 1.5C above pre-industrial levels – a threshold scientists have long warned could have dire consequences if breached.
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Europeans at risk from tropical illnesses due to climate change; EU health commissioner warns over heatwaves, disease-spreading floods and preparedness for mosquito-borne infections
Andy Bounds – Financial Times
Climate change poses a growing threat to the health of Europeans, with killer heatwaves, disease-spreading floods and tropical illnesses on the rise, a senior EU official has warned. Health commissioner Stella Kyriakides told the Financial Times in an interview that having co-operated to fight the Covid pandemic in 2020-21, the 27 member states must increase efforts to do so in other areas.
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Shell investors back oil major’s move to weaken climate targets; Shareholders reject resolution by activist group Follow This urging tighter goals
Tom Wilson – Financial Times
Shell shareholders largely backed the oil major’s decision to weaken its climate targets in a blow for environmental groups that have pushed the company to take stronger action to cut emissions. About 78 per cent of shareholders on Tuesday voted for the group’s revised energy transition strategy under which it will cut emissions more slowly than previously planned.
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Significant Environmental and Climate Impacts Are Impinging on Human Rights in Every Country, a New Report Finds; In its annual State of the World’s Human Rights report, Amnesty International also concludes that threats to environmental activists are growing globally.
Katie Surma – Inside Climate News
Climate change and environmental destruction are becoming increasingly central to the human rights movement. Droughts, toxic pollution, water shortages, desertification, severe storms and related events touched the lives of millions of people around the world last year, according to Amnesty International’s annual “State of the World’s Human Rights” report covering 2023.
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The EPA Cop Who Became a Warrior for ‘Forever Chemicals’; Toxicologist Michael Dourson says he learned to ‘honor industry’s knowledge’; critics call him biased
Susan Pulliam – The Wall Street Journal
As a young toxicologist at the Environmental Protection Agency in the 1980s, Michael Dourson played a central role in figuring out how to gauge whether chemicals are harmful to humans, and at what levels. “Mike was a young up-and-comer,” said Jennifer Orme-Zavaleta, a former senior EPA official who once worked under Dourson as a risk assessor. “He was at the forefront of helping to develop the guidelines for evaluating risk at the agency”-work that to this day is cited favorably by environmentalists.
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Climate change criminal claim targets TotalEnergies and investors; Activists attempt to bring action in French courts on behalf of victims of extreme weather events
Kenza Bryan – Financial Times
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Horrifying. Gross’: mosquitoes bug Houston after recent storms; Humid climate makes Texas city attractive to the insects, but with rainfall and major flooding, residents are forced indoors
Erum Salam – The Guardian
/jlne.ws/3ywsQSJ

Texas to Face Extreme Heat in New Test for Its Power Grid: Weather Watch; Soaring temperatures and extreme weather across the US are on Bloomberg Green’s radar today.
Brian K Sullivan – Bloomberg
/jlne.ws/3V9A3kn

Heavy storms and prolonged rainfall on the rise in UK and Ireland, study shows; Farmers nurse losses of £1bn after climate change triggers floods and devastates crops
Attracta Mooney – Financial Times
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Adani suspected of fraud by selling low-grade coal as high-value fuel; Indian conglomerate rejects accusations of inflating prices in transactions with state utility
Dan McCrum and Chris Cook and John Reed – Financial Times
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African Chocolatiers See Increased Demand Even as ESG Rules Roll Out; More consumers in the US, Europe and Asia are seeking out ethically made candy. Here are five notable producers to look out for.
Eileen Gbagbo – Bloomberg
/jlne.ws/3yxhWw0

Apple Taps Bank of America Veteran as Latest Diversity Chief; Cynthia Bowman taking job after leaving bank earlier this year; Executive is Apple’s fourth new diversity head in recent years
Mark Gurman – Bloomberg
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Institutions

Interactive Brokers joins Cboe Europe Derivatives as new trading participant; New development will allow Interactive Brokers to provide its clients with access to CEDX’s suite of pan-European equity derivatives in the current quarter.
Wesley Bray – The Trade
Cboe Europe Derivatives (CEDX) has welcomed Interactive Brokers as a participant, providing its clients with access to CEDX’s equity index derivatives and equity options this quarter. Interactive Brokers has become a direct trading participant on CEDX and a direct clearing participant for equity derivatives on Cboe’s pan-European clearing house and CEDX’s clearing provider, Cboe Clear Europe.
/jlne.ws/4dRAeYT

Slowing EV Sales Are Upending Banker Climate Strategies; The collateral damage from decelerating EV adoption will be far wider than the energy transition.
Alastair Marsh – Bloomberg
Electric vehicles have swiftly gone from a rare bright spot in the fight against climate change to a cause for concern. A slowdown in EV adoption has potentially huge implications for the energy transition. It also has ramifications for the many financial institutions that have pledged to decarbonize the loans and investments they make.
/jlne.ws/3K8FUjL

Santander Asset Management joins Eurex for listed FX business; The asset manager will expand its FX futures business to Eurex, supported by Banco Santander as clearing member and Deutsche Bank as liquidity provider.
Wesley Bray – The Trade
Eurex has welcomed Santander Asset Management as a global player in its listed FX segment. The Spanish asset manager has begun to expand its FX futures business to Eurex, supported by Banco Santander as clearing member and Deutsche Bank as liquidity provider.
/jlne.ws/4bJmbCO

Morgan Stanley Was ‘Angry’ as Archegos Fell, Witness Says; Hwang launched ‘project’ to raise cash days before disaster; Star witness describes desperate cash scramble, lies to banks
Chris Dolmetsch and Bob Van Voris – Bloomberg
When Archegos Capital Management reached out about looming margin calls in March 2021, Credit Suisse took a “very soft tone,” while Morgan Stanley was “much harsher, angry.” But both were responding to the same set of talking points for counterparties that Archegos Chief Financial Officer Patrick Halligan came up with on a Zoom call with founder Bill Hwang and several others, the firm’s former risk management head testified. It was Scott Becker’s second day on the stand as one of the star prosecution witnesses in the fraud case against Hwang and Halligan.
/jlne.ws/4bjyB4B

Work & Management

The average back-end developer earns six-figures in the U.S., and top-earners live in these states
Sam Becker – Fortune
Imagine yourself shopping for a brand-new car. It’s easy to get pulled in by the sleek lines and contours, the deep colors, and the flashy tech. But it’s what’s under the hood that really matters for most vehicles-and the same holds true for websites and applications. That’s why back-end web developers are so important. Back-end developers operate “under the hood,” so to speak, on websites and apps. While front-end developers may code and work with the visuals and design, “back-end developers work with databases, may build custom content management systems, and work with SQL and PHP,” says Dan Martino, the digital director and founder of 914Digital, a New York-based digital media company.
/jlne.ws/4bOehbn

Blackstone to Grant Equity to Most Employees in Future U.S. Buyouts; Effort follows a broad-based ownership push by KKR and others
Miriam Gottfried – The Wall Street Journal
Blackstone wants rank-and-file employees at the companies it buys to own a piece of their business. The investment giant will grant equity to most employees at its large U.S. buyouts, executives at the firm said. The initiative, which it plans to announce to its investors at a conference this week, will apply to all new deals going forward in which its private-equity business buys control of a company. The plan by Blackstone, whose $143 billion private-equity business employs more than 400,000 people via its portfolio companies, is part of a broader movement in the buyout industry to expand ownership beyond management ranks.
/jlne.ws/3V9qZff

Wellness Exchange

I went a week without ultra-processed foods. Here’s what I learned; As I report more, I’ve stopped thinking of UPFs as food at all – and I suspect corporations don’t care how their products affect consumers; Ultra-processed foods are ultra bad for you. Here’s what to know
Cecilia Nowell – The Guardian
I’ve been standing in the dairy aisle at my local grocery store, poring over the nutrition labels on the backs of different soy, almond and oat milk containers, for 15 minutes when I decide: maybe not this week. I’ve spent the past four months reporting on ultra-processed foods and wanted to see whether it’d be possible to go even a week without them. The problem is, I can’t find any dairy-free milks that fit the bill. The soy creamer that I’ve fixed my morning cups of tea with for nearly a decade is chock-full of ingredients I now recognize as markers of an ultra-processed product: maltodextrin, soy lecithin and locust bean gum. There are alternatives with fewer ingredients, but I’m not sure any of them fits the rules I’m trying to abide by. So I sheepishly pop my trusty soy creamer in my basket and kick the can down the road another week.
/jlne.ws/3KhfCvq

Regions

Emerging market credit ratings are finally looking up again
Marc Jones – Reuters
From Brazil, Nigeria and Turkey to even some of the riskiest emerging markets such as Egypt and Zambia, evidence is growing that a decade-long deterioration in sovereign credit ratings has finally started to reverse. Economists watch ratings because they influence a country’s borrowing costs and many are now highlighting a turnaround that seems incongruous with the usual warnings about rising debt pressures.
/jlne.ws/4buGIeC

G7 finance chiefs seek common line on Russian assets, China
Gavin Jones and Giuseppe Fonte – Reuters
G7 finance chiefs meeting in Italy this week will attempt to find common ground over how to use frozen Russian assets to help Ukraine’s war effort and how to address China’s growing export strength in key markets, officials said. Finance ministers and central bankers from the Group of Seven wealthy democracies – the United States, Japan, Germany, France, Britain, Italy and Canada – will gather in the northern Italian lakeside town of Stresa on Friday and Saturday.
/jlne.ws/44UH0ch

Hedge funds buy Chinese stocks for fourth consecutive week
Summer Zhen – Reuters
Global hedge funds added to their holdings of Chinese equities for a fourth straight week, joining hordes of investors trying to get ahead of a rebound in the market. The beaten-down stocks (.SSEC) in the world’s second-largest economy have been rallying since February as Beijing ramped up measures to address economic challenges and as macro data showed signs of recovery.
/jlne.ws/4ayQVFw

Chinese sovereign bond trading suspended after frantic retail buying; Small investors hunting for haven assets take advantage of easier access to special 30-year debt
Cheng Leng – Financial TImes
Trading in China’s much-anticipated Rmb40bn ($5.5bn) issue of special 30-year sovereign bonds was suspended twice on its market debut on Wednesday, as exchanges warned of “abnormal fluctuations” and urged investors to be rational and pay attention to the risks. Beijing plans to sell a total of Rmb1tn 20 to 50-year sovereign bonds this year to fund government spending in critical areas as a way of trying to spur growth. The first batch of the bonds debuted on the Shanghai and Shenzhen stock exchanges, rather than just over the counter at banks, giving Chinese retail investors greater access than usual.
/jlne.ws/3yCXjOM

Japan’s 10-year yield tops 1% for first time in 11 years; Investors have been increasing bets BoJ will raise interest rates further
Kana Inagaki – Financial Times
Japan’s 10-year government bond yield climbed above 1 per cent on Wednesday for the first time in 11 years as investors braced for higher borrowing costs as part of the central bank’s historic policy shift. In recent weeks, investors have increased their bets that the Bank of Japan will lift interest rates further and begin to reduce its purchases of government debt after it ended eight years of negative rates in March.
/jlne.ws/4br8dG9

EU trade deficit with China shrinks to lowest level since 2021; Weak domestic demand and US tariffs on China provide boost to Europe’s transatlantic exports
Martin Arnold – Financial Times
The EU’s trade deficit in goods with China has shrunk to its lowest quarterly level for almost three years, despite fears about the bloc being flooded with cheap Chinese products. There are also signs of growing transatlantic demand for European products, after the EU’s trade surplus with the US rose to a record high in the first quarter, according to data published by Eurostat on Tuesday.
/jlne.ws/3ywvEzf

City of London calls for financial regulators to find a growth ‘mindset’
Huw Jones – Reuters
Britain’s regulators lack the mindset to boost growth and the financial sector’s global competitiveness, and need parliamentary backing to accept more risk when applying rules, the City of London said on Wednesday. Chris Hayward, policy leader at the City, which administers the capital’s financial district, said that a new public-private body is needed to attract foreign investment. The sector is worried about its competitiveness after being largely cut off from the European Union since Brexit, and as UK companies choose to list in New York.
/jlne.ws/3KhhLHu

The Gulf Exchanges, They Are A-Changin’
Ulf Axman, Chief Commercial Officer – Exberry
A couple of weeks ago I had the chance to visit the Gulf region. In particular, I attended both the Arab Federation of Capital Markets (AFCM) Annual Conference in Qatar, as well as The Capital Market Summit in Dubai. Returning to this area after two years (the very first time was 25 years ago!), it was really great to reconnect with many old friends. I’ve also had the chance to meet some of the new crew, and I’m impressed by how competent many of these younger people are.
/jlne.ws/3UU7Cpa

Germany sets out concept for green industry market in bid for decarbonization
Reuters
Germany’s economy ministry presented on Wednesday its concept to create a market for climate-friendly products as Germany aims to become carbon neutral by 2045 and seeks ways to cut emissions in its steel, cement and chemicals industries. In addition to subsidies to help energy-intensive firms switch to green production the government launched earlier this year, Berlin wants to build demand for goods built with a lower greenhouse footprint which are usually more expensive than those conventionally-made.
/jlne.ws/3QV2qQI

ETG threatens international arbitration in dispute over $60mn seizure; Commodities house urges Mozambique to resolve commercial fight after rival seizes food export
Joseph Cotterill and Susannah Savage, Chris Kay and Benjamin Parkin – Financial Times
African commodities house ETG has warned Mozambique that it will seek international arbitration in a dispute over the seizure of up to $60mn in goods, in an escalation of a long-running fight over exports of an Indian food staple. Lawyers for Mauritius-headquartered ETG wrote to President Filipe Nyusi’s government last week warning that ETG “will have no choice but to commence international arbitration” if Mozambique does not offer talks to resolve the dispute, according to a letter seen by the Financial Times.
/jlne.ws/3V8iKAf

The Sri Lanka-linked future of macro-linked bonds; Facile hurdles undermine a good idea
Thilina Panduwawala and Chayu Damsinghe – Financial Times
Thilina Panduwawala is an economist at Frontier Research and writes a Sri Lanka-focused newsletter. Chayu Damsinghe is head of macroeconomic advisory at Frontier Research. Sri Lanka’s plans to include macro-linked bonds as a restructuring sweetener for creditors that will have to swallow some harsh losses has garnered a lot of attention recently, including from MainFT. Rightly so, because they’re fascinating instruments.
/jlne.ws/4bL1erc

British Land seeks new investor for Citadel’s London tower; Landlord wants to bring in additional investment for Broadgate development
Joshua Oliver – Financial Times
British Land is hoping to lure an additional investor to back the development of Citadel’s new City of London office tower, as the landlord expects a shortage of new office space in the coming years to boost returns. The FTSE 250 landlord on Wednesday said it would probably bring in a new investor for the development project at 2 Finsbury Avenue alongside its existing joint venture partner, Singapore’s GIC, which owns 50 per cent of British Land’s Broadgate office campus.
/jlne.ws/3yyR7Yo

Brazil central bank plans year-end proposal for crypto regulation
Reuters
Brazil’s central bank announced on Monday that it has decided to divide the process of regulating crypto-assets and virtual asset service providers into phases, with regulatory proposals expected by the end of this year. The decision effectively delays the completion of the process following a 2022 law on the subject, which paved the way for subsequent regulation by the central bank. In a congressional hearing last year, the bank’s director of regulation, Otavio Damaso, had projected regulation to be wrapped up by June 2024.
/jlne.ws/3V7whbj

Miscellaneous

Exactly how stupid was what OpenAI did to Scarlett Johansson? We ranked it on our list of the 7 most boneheaded self-owns by technology companies.
Shira Ovide – The Washington Post
In September, OpenAI said a new talking version of its ChatGPT assistant that sounded like Scarlett Johansson wasn’t meant to resemble the actress. The company said so again last week when it unveiled a chattier ChatGPT that featured the Johansson sound-alike. The same day, OpenAI CEO Sam Altman posted on X a one-word reference to the 2013 movie “Her,” in which Johansson was the voice of an emotional companion AI. On Monday, Johansson said OpenAI was full of it.
/jlne.ws/3ywABrP

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The Spread

The Stock Market Has Rarely Been This Sleepy

Lead Stories The Stock Market Has Rarely Been This Sleepy Gunjan Banerji - The Wall Street Journal It's eerily calm out there in the stock market. The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices...

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