SEC hack; Deutsche Boerse to cap executive pay; Yellen’s end of QE

Sep 22, 2017

First Read

Hits & Takes
By JLN Staff

2017 Chicago Block-chain Summit, October 10, 2017, The Most Influential Gathering of Blockchain Influencers in the World. We’ve gathered 30 of the world’s leading block-chain experts from regulators at the SEC to the country’s top lawyers & technologists – Click Here To Register.~JK

Uber has lost its license to operate in London, though it can appeal. That affects 40,000 drivers who have no idea where you are going without the help of Google maps.~JJL

It’s Friday, a good day for a Heineken commercial song – The Asteroids Galaxy Tour.~JK

RJO celebrated work anniversaries yesterday and honored those who have dedicated 10 all the way up to 35 years of service to the company.~JJL

Clarus Financial Technology now has a daily USD swap market recap delivered to your inbox. More information here. ~SD

Last day for discount tix for Rocktoberfest, A Leg To Stand On’s buy three get one free deal for its Chicago event on October 5. Just enter the name Lothian in the promo code for your free tickets.~JK

Flow Traders won the 2017 FOW award for market maker of the year.~JJL

H¸seyin Erkan is now a Senior Advisor to the CEO at Saudi Stock Exchange.~JJL

Anthony Saliba is now CEO at Matrix Holding Group.~JJL

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Bitcoin, Gold, and Jamie Dimon
Lanre Sarumi – Level Trading Field – Blog
There have been several responses to JPMorgan Chase’s CEO, Jamie Dimon’s assertion that Bitcoin is a fraud. I won’t regurgitate them here. Instead I’ll like to do a more structured analysis of Bitcoin, Gold and of course Jamie Dimon, yeah, why not?
/goo.gl/ZbHWcF

**Jamie Dimon really shouldn’t have called bitcoin a fraud. Lanre unloads on JD and JPM, and gold too. ~JK

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Bill Murray’s Golf Company Adds Cubs Owner, Celebs as Investors
Bloomberg
Golf’s most famous groundskeeper is raising capital for his fledgling apparel brand.
William Murray Golf, founded by “Caddyshack” star Bill Murray and his five brothers, has raised more than $1 million from a group that includes Chicago Cubs owner Tom Ricketts, tennis champion Andy Roddick and actor Ed Norton.
/goo.gl/4rhdmn

**”Oh, he got all of dat one. He’s gotta be pleased with that!” ~JK

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Gamma Scalping Intro: Synthetics, Put-Call Parity and Delta-Neutral
Doug Ashburn – The Ticker Tape
A recent article introduced negative thetaóthat is, options positions that lose theoretical value each day due to the passage of time. The article demonstrated how this theta “cost” actually provides a potential benefit in the form of long gamma.
/goo.gl/G3V6k2

***** Column from former JLN superstar Doug Ashburn.~JJL

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Notre Dame Institute for Global Investing establishes lecture series honoring Robert Wilmouth
Dennis Brown
The Notre Dame Institute for Global Investing has established the Robert K. Wilmouth Lecture Series in honor of a longtime Trustee of the University of Notre Dame and past chair of its Investment Committee who passed away Sept. 14. The series has been made possible through a generous gift from members of the Notre Dame family.
/goo.gl/fbZ79e

***** A fitting honor for a Notre Dame stalwart (says a Purdue Boilermaker).~JJL

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Investing Now and for the Future: Trading Technologies and the Asia/Pacific Region
Trading Technologies
Reinforcing Our Customer Commitment: New Leadership Appointments Announced
To further support our presence in the region, we announced yesterday two significant additions to the Asia/Pacific Sales leadership team. Mark Pottle, who has spent more than 15 years as a Sales Manager in our London office, will add invaluable experience as the Regional Executive Sales Director, Singapore. We also welcome back former Managing Director of Australia Michael Peters from Macquarie Group, where he most recently served as Vice President of Client Solutions. Michael rejoins us as Regional Executive Sales Director, Australia.
bit.ly/2wKICUf

**TT wins award and bolsters its Asia team.~JK

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Thursday’s Top Three
Yesterday’s top three pieces were led by the uncovering of the Wall Street guru in Bloomberg’s
Wall Street’s Best-Kept Secret Is Russian Chess Master Lev Alburt. Second went to ClarusFT’s piece on the CDS sector, CME Halts CDS – Where’s The CDS Business?. Third went to the CME announcement CME Group Launches CME FX Link

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MarketsWiki Stats
108,004,358 pages viewed; 22,787 pages; 209,380 edits
MarketsWiki Statistics

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Lead Stories

U.S. SEC says hackers may have traded using stolen insider information
Michelle Price – Reuters
The top U.S. markets regulator said on Wednesday that hackers accessed its corporate disclosure database and may have illegally profited by trading on the insider information stolen.
/goo.gl/gw6j21

Deutsche Boerse to cap executive pay
Philip Stafford – FT
Deutsche Bˆrse is to cap executive pay for board members at EUR9.5m per person from this financial year onwards, Europe’s largest exchanges operator said late on Thursday,
/goo.gl/fZ71ji

Yellen’s stock rises as she leads Fed from crisis-era policy
Jonathan Spicer, Ann Saphir – Reuters
From her early days as Federal Reserve chair, Janet Yellen has been the target of criticism from Republicans worried that the central bank’s massive bond-buying programs and near-zero interest rates engineered by her predecessor would be the ruin of the country.
/goo.gl/YPXe9U

Rogue Traders Could Take Advantage of SEC Hacking; Filings in Edgar system eventually go public, but there is often a delay before
Alexander Osipovich, Corrie Driebusch and Gunjan Banerji – WSJ
A hack into the Securities and Exchange Commission is raising fears that filings from thousands of companies could be available to rogue traders eager to profit from market-moving information before the agency makes it public.
/goo.gl/kUpBhJ

SEC Draws Scrutiny for Slow Response to Hack; Top officials at agency remained unaware of breach for months after it occurred
Dave Michaels, Jean Eaglesham and Tatyana Shumsky – WSJ
Many of the most senior officials at the Securities and Exchange Commission remained unaware of a 2016 hack of the agency’s computer system for months after it occurred, raising questions about how the breach was initially handled.
/goo.gl/b1Leiq

Hard Brexit could lead to the next financial crisis, says Deutsche Bank; Germany’s biggest lender said Brexit, ‘has introduced a major risk to economic activity, the financial architecture of Europe and perhaps more concerning, the geo-politics and security of the region’.
Ben Chapman – Independent
Brexit could be an unlikely cause of the next financial crisis, according to research by Deutsche Bank.
/goo.gl/YsCgfA

Trump’s Antitrust Chief Nomination Is Held Up in Senate; Delay creates uncertainty for companies seeking mergers; objections raised by Warren have been a sticking point
Brent Kendall – WSJ
President Donald Trump’s nominee to lead the Justice Department’s antitrust efforts is facing an extended limbo in the Senate, prolonging uncertainty for potential mergers, including AT&T Inc.’s bid to acquire Time Warner Inc.
/goo.gl/ZpD6io

MiFID’s Controversial Dark-Trade Workaround Has Some Crying Foul
Will Hadfield and Silla Brush – Bloomberg
Exchanges complain bank-run dark venues get unfair advantage; MiFID rules on ‘systematic internalizers’ at center of debate
The stock exchanges that once cheered the promise of increased transparency from Europe’s new financial rulebook are now complaining.
/goo.gl/BDBhzc

$2 Trillion Later, Does the Fed Even Know if Quantitative Easing Worked?
James Mackintosh – WSJ
After spending $2 trillion on government bonds in an effort to stimulate the economy, the U.S. Federal Reserve can hardly admit that it doesn’t know how, or even if, it worked.
/goo.gl/XFc4dU

Ronaldo Is Hawking One of the World’s Riskiest Derivatives
Donal Griffin – Bloomberg
Last month, Cristiano Ronaldo sent a short message to his 59 million Twitter followers.
“Happy with my new partnership with @EXNESS,” the Real Madrid striker and world’s most famous soccer star wrote. He also retweeted a statement from a firm called Exness Group, in which he praised how it “gives back to the world,” offers the “highest quality of services” and fosters a “socially conscious culture.”
/bloom.bg/2xqXY3S

The head of the New York Stock Exchange explains the overlooked trait he sees in almost every great entrepreneur
Frank Chaparro – Business Insider
Thomas Farley has seen countless entrepreneurs walk in and out of the New York Stock Exchange since he assumed his position as head of the iconic Wall Street institution close to four years ago.
/goo.gl/7y3iqA

IPO market could be slowed down by revenue recognition rules
Caitlin Huston – MarketWatch
Deloitte found that only 8% of companies considering an IPO have started work on implementing the new rules
Though the market for initial public offerings has been improving, it may hit another speed bump as most companies are not prepared to comply with new accounting rules.
/goo.gl/hnsc3g

N.Y. Company Accused of Running Bitcoin Ponzi Scheme; In civil complaint, CFTC accuses Gelfman Blueprint of fraud and issuing false account statements in connection with solicited investments
Austen Hufford – WSJ
The Commodity Futures Trading Commission has accused a New York company of operating a bitcoin-related Ponzi scheme, in the regulator’s first fraud-related action involving the cryptocurrency.
/goo.gl/JZWZU8

UK to diverge from EU on financial services rules after Brexit; Ministers say long term competitive advantage for sector involves discrete regulation
Sarah Gordon, Laura Noonan, Patrick Jenkins and George Parker – FT
The UK government has told the financial services industry that Britain will seek to develop a distinct regulatory framework from the EU after Brexit in an effort to secure a long term competitive advantage for banks, fund managers and insurers.
/goo.gl/GaQQSQ

China’s central bank tells banks to stop doing business with North Korea: sources
Reuters Staff
China’s central bank has told banks to strictly implement United Nations sanctions against North Korea, four sources told Reuters, amid U.S. concerns that Beijing has not been tough enough over Pyongyang’s repeated nuclear tests.
/goo.gl/p2oQj5

Goldman Sachs slumps to its worst ever position in IB ranking; Fixed income trading woes relegate bank to joint third, its lowest since tables began
Laura Noonan in London – FT
Goldman Sachs’ fixed income woes have relegated the Wall Street stalwart to its worst ever position in a benchmark ranking of the world’s biggest investment banks.
/goo.gl/uTYUUj

Dearth of IPOs leads early tech backers to the ‘unicorn shuffle’; Selling out early can be seen as a vote of no confidence
Tom Braithwaite – FT
“We had access to too much money, too much equipment and little by little we went insane.”
I thought of Francis Ford Coppola’s quote this week while meeting the founder of Improbable. Mr Coppola only had to make Apocalypse Now. Improbable’s Herman Narula has a mind-bending mission of creating virtual worlds ó and much more money.
/goo.gl/Uf8kXs

Exchanges, OTC and Clearing

Pay capped for top Deutsche Bˆrse execs; German exchange operator caps pay as regulatory scrutiny continues.
John Bakie – The Trade
Deutsche Bˆrse has announced it is capping executive pay for board members from this financial year onwards.
/goo.gl/pWgVXf

Supervisory Board of Deutsche Bˆrse AG decides on the upper limit of compensation for members of the Management Board
Deutsche Bˆrse AG
Deutsche Bˆrse AG is continuing to develop its Management Board remuneration system and, among other things, introduces an upper limit for total remuneration. The Supervisory Board of Deutsche Bˆrse AG decided at its today’s ordinary meeting.
/goo.gl/Y1WFxU

Exchange Seeks Views on Proposed Rule Changes relating to Capital Raisings by Listed Issuers and its Delisting Framework
HKEX
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published consultation papers on (1) Capital Raisings by Listed Issuers and (2) Delisting and other Rule Amendments. Both papers include proposed changes to the Exchange’s Listing Rules (the Rules).
/goo.gl/jFiqqV

FTSE Russell and State Bank of India launch Indian bond index series
London Stock Exchange Group
FTSE SBI Bond Index Series launched; Provides investors with tools to analyse India’s domestic government bond market
FTSE Russell, the global index and data provider and the State Bank of India (SBI) have launched the FTSE SBI Bond Index Series. The index series gives market participants from India, the UK and internationally the tools they need to analyse India’s government bond market.
/goo.gl/14s4R9

OSE Wins “Exchange of the Year – Derivatives”, the Asia Capital Markets Awards
JPX – OSE
Osaka Exchange, Inc. (OSE), the derivatives arm of Japan Exchange Group, the mother market of Nikkei 225, announced that it has won the award for “Exchange of the Year – Derivatives” at the FOW and Global Investor Asia Capital Markets Awards ceremony held in Singapore.
/goo.gl/Yc3Wwb

MSE Starts Drive To Give Various Incentives To Brokers; The incentive scheme is part of a member activation drive announced by the exchange today
by BW Online Bureau
Metropolitan Stock Exchange of India (MSE) today said it will reimburse clearing fee paid by its registered brokers to their clearing members, a move which will help reduce the transactional cost for brokers.
/goo.gl/5hYNbh

Fintech

Artists are mining cryptocurrency with wind to fund climate science
Michael J. Coren – Quartz
Cryptocurrencies like bitcoin rely on millions of computers to crank out the math that process transactions on a public ledger. These “mines” typically depend on cheap electricity to keep the bitcoin flowing. The demand now is enough electricity to power entire countries. Taken together, miners of bitcoin, the biggest cryptocurrency, consume enough electricity to rank 73rd in the world for consumption, much of it from dirty coal burned in China.
/goo.gl/xzPVUX

How bitcoin could overcome its wild reputation; A lack of liquidity may be to blame for bitcoin’s excessive volatility nature, an expert tells CNBC; Cedric Jeanson, CEO of BitSpread, suggests adding market makers to bitcoin exchanges as a solution.
Luke Graham – CNBC
A major problem for bitcoin is its extreme volatility, which is a cause of concern for many investors. A lack of liquidity may be to blame for the cryptocurrency’s volatile nature, an expert tells CNBC.
/goo.gl/Z73dKY

Ex-Barclays CEO Jenkins Bags $46 Million for His Fintech Startup
Edward Robinson – Bloomberg
China’s Ping An and Oliver Wyman lead Series A Round in 10X; Fintech champion Jenkins plans to help banks revamp technology
Ever since Barclays Plc ousted Antony Jenkins as chief executive officer in 2015, he has been warning the banking industry to embrace new technology or face a “Kodak moment” of obsolescence.
/goo.gl/nadNG2

ITG to form new derivatives execution and tech business; ITG will launch Matrix Holding Group in partnership with Option Technology Solutions in Q1 2018.
Hayley McDowell – The Trade
ITG has confirmed plans to launch a new derivatives execution and technology business in partnership with Option Technology Solutions.
/goo.gl/UFg6ME

Politics

Skadden, Big New York Law Firm, Faces Questions on Work With Manafort
Kenneth Vogel and Andrew E. Kramer – NY Times
Five years ago, Paul Manafort arranged for a prominent New York-based law firm to draft a report that was used by allies of his client, Viktor Yanukovych, the Russia-aligned president of Ukraine, to justify the jailing of a political rival. And now the report is coming back to haunt it.
/goo.gl/ZAfKGh

Regulation

CFTC files civil charges over alleged Bitcoin Ponzi scheme
Eric Walsh – Reuters
The U.S. Commodity Futures Trading Commission has filed civil fraud charges against a New York man and his company over an alleged Bitcoin investment scheme, the agency said in a statement on Thursday.
reut.rs/2wJYxlL

Why the SEC hack is a really big deal
Chris Isidore – CNN
A lucrative corporate takeover is in the works. The accountants at a big company think it might go under. An embattled CEO has decided to quit.
/goo.gl/HtKyoC

U.S. Considers Dropping Federal Oversight of AIG; Regulators to discuss removing ‘systemic’ tag from insurer on Friday
Ryan Tracy and Leslie Scism – WSJ
U.S. officials are considering whether to remove federal oversight of insurer American International Group Inc., AIG 0.63% according to people familiar with the matter.
/goo.gl/3MkVsL

CFTC Charges Nicholas Gelfman and Gelfman Blueprint, Inc. with Fraudulent Solicitation, Misappropriation, and Issuing False Account Statements in Bitcoin Ponzi Scheme
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a federal civil enforcement action in the U.S. District Court for the Southern District of New York against Defendants Nicholas Gelfman, of Brooklyn, New York, and Gelfman Blueprint, Inc. (GBI), a New York corporation, charging them with fraud, misappropriation, and issuing false account statements in connection with solicited investments in Bitcoin, a virtual currency.
/goo.gl/ZXxSK2

Exclusive: U.S. Homeland Security found SEC had ‘critical’ cyber weaknesses in January
Sarah N. Lynch – Reuters
The U.S. Department of Homeland Security detected five “critical” cyber security weaknesses on the Securities and Exchange Commission’s computers as of January 23, 2017, according to a confidential weekly report reviewed by Reuters.
/goo.gl/ZuW6Tr

When Will the Cold Hand of Regulation Come for Startups?
Eric Newcomer – Bloomberg
A master of the universe-type figure graced Bloomberg’s offices recently, chatting about some of the day’s big business themes, particularly as it relates to Silicon Valley. There was some soothsaying about the regulatory backlash that big companies like Amazon.com Inc., Facebook Inc. and Alphabet Inc. might face for their increasingly anti-competitive postures. There was a discussion of whether the stock market has overestimated the chances of tax reform.
/goo.gl/iKtb8X

Canadian Regulatory ‘Sandbox’ Seeks to Avoid Crypto Coin Quicksand
Natalie Wong – Bloomberg
Testing net for ICOs exempts them from some securities rules; But Kik takes its $125 million ICO outside of country anyway
New guidance for issuing digital currencies in Canada may make them safer for investors but they’ve also prompted one company to shun its home country as it kicks off one of the largest initial coin offerings to date.
/goo.gl/R17NZK

No more big lunches: Pension advisers face grilling over ‘conflicts of interest’
Lucy Burton – Telegraph
Britain’s competition watchdog is to grill the £1.6 trillion UK pension adviser industry on its relationships with asset managers to work out if there are any conflicts of interest when giving advice.
/goo.gl/rx7CGY

SEC chairman refused to answer questions about 2016 hack
Carleton English – NY Post
Securities and Exchange Commission boss Jay Clayton was feeling the heat on Thursday after he refused to publicly answer questions about a 2016 hack of a key regulatory database.
/goo.gl/CFLx25

ASIC facilitates crowd-sourced funding by public companies
ASIC
The Australian Securities and Investments Commission (ASIC) has released guidance for public companies and crowd-funding platform operators to support them in using the new crowd-sourced funding (CSF) regime, which commences on 29 September 2017.
/goo.gl/WkXjzu

SEC Adopts Interpretive Guidance on Pay Ratio Rule
SEC
The Securities and Exchange Commission has approved interpretive guidance to assist companies in their efforts to comply with the pay ratio disclosure requirement mandated by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the Commission’s rule implementing the pay ratio requirement, companies are required to begin making pay ratio disclosures in early 2018.
/goo.gl/WpM7Uf

Telecommunications Company Paying $965 Million For FCPA Violations
SEC
Sweden-based telecommunications provider Telia Company AB has agreed to pay $965 million in a global settlement with the Securities and Exchange Commission, U.S. Department of Justice, and Dutch and Swedish law enforcement to resolve charges related to violations of the Foreign Corrupt Practices Act (FCPA) to win business in Uzbekistan.
/goo.gl/BhHcPL

Important notice regarding financial statement filings by independent IBs
NFA
In order to more efficiently review financial statements filed by independent introducing brokers (IB), NFA has added questions to its filing systems regarding certain financial statement balances and questions regarding audited and consolidated financial statement filings. The majority of these additional questions simply require a “yes” or “no” response. Previously, NFA collected answers to these questions by contacting an IB after it submitted its financial statements to NFA. These additional questions will streamline NFA’s review process by reducing and/or eliminating phone calls from NFA to IBs.
/goo.gl/6JG8nB

Investing and Trading

U.S. bond funds, tech stocks attract huge inflows: Lipper
Trevor Hunnicutt – Reuters
U.S.-based taxable-bond funds took in $7 billion during the latest week, the largest weekly intake since July, adding to an already strong year for debt against the backdrop of a rate-hiking cycle, Lipper data showed on Thursday.
/goo.gl/oHoZ75

Index IDEA: US small caps rock while US small cap futures roll
FTSE Russell Blog
After losing ground in July and August as reflected by a 0.5% negative return for the Russell 2000 Index, US small cap stocks have rebounded, rising 2.9% in September as of market close on September 20.
/goo.gl/Xyxj2p

DJSI Push Companies to Achieve the SDGs
Manjit Jus – S&P Indexology Blog
On Sept. 7, 2017, RobecoSAM and S&P Dow Jones Indices (S&P DJI) announced the results of the annual rebalancing of the Dow Jones Sustainability Indices (DJSI). This year, a record of 942 companies (up 9 %) from around the world that had participated in RobecoSAM’s annual Corporate Sustainability Assessment (CSA) eagerly waited to learn whether they had been included in one of the most prestigious indices.
/goo.gl/UPhQF5

There’s a New Yield Curve to Predict Recessions; High-yield credit markets are a now a better barometer of economic conditions than Treasuries.
Ash Alankar – Bloomberg
There have been plenty of warnings in recent months that a reduction in the amount of extra yield earned by holders of long-maturity Treasuries compared with owners of shorter-dated debt is a signal of an impending economic slowdown. The spreads between two-, five- and 10-year Treasury note yields are well below average. Should short-term rates move higher than longer-term rates, it’s a sure sign of a recession.
/goo.gl/SD2Y7b

Bet With Buffett, Not Against Him; The greatest investor of our era is trying to teach us all a lesson.
Barry Ritholtz – Bloomberg
Do you want to bet with or against Warren Buffett? That is a simple question. Yet it has surprisingly complex meanings and ramifications. It comes up today because of several seemingly unrelated news items that are actually deeply entwined.
/goo.gl/McfQLp

Toys ‘R’ Us Is a Cautionary Tale for Technology
Shira Ovide – Bloomberg
How about this setup for a joke: What does Toys “R” Us Inc. have in common with business software companies?
/goo.gl/SmrWsW

Three tips for smart dividend ETF plays
Chris Taylor – Reuters
Pop quiz: What percentage of long-term stock market returns are thanks to the humble dividend? Five? 10? 20?
/goo.gl/BHtyi2

Corporate America Has Amassed a Record Amount of Cash
Sho Chandra – Reuters
Corporate America has never been in better shape to put its cash hoard to use on everything from investment to acquisitions, share buybacks and dividends. Or just hold on to it.
/goo.gl/EBexPa

How College Endowments Learned to Love Risk; This week, Harvard is moping about its 8 percent investment return. Blame McGeorge Bundy.
Stephen Mihm – Bloomberg
Pushing out the “Prudent Man.” Photographer: Bettmann/Getty Images
Let us weep tears of sympathy for Harvard University. On Tuesday, the nation’s oldest – and arguably, most distinguished – institution of higher learning announced that its vast $37.1 billion endowment had earned a paltry 8.1 percent return over the past fiscal year. Harvard glumly described the results as “disappointing and not where it needs to be.”
/goo.gl/kgsbgf

Institutions

Why It’s So Hard for Europe’s Big Banks to Do Big Deals; Commerzbank should be a takeover targetóbut it is tough getting investors, executives, regulators and politicians in agreement
Paul J. Davies – WSJ
Everyone wants bank deals in Europeóthe problem is finding one acceptable to investors, executives, regulators and politicians.
/goo.gl/okDf9X

National Bank of Canada says tech glitch may have exposed customer data
Reuters Staff
National Bank of Canada, the country’s sixth largest lender, said on Thursday a website glitch earlier this week may have exposed personal information of about 400 customers.
/goo.gl/WYR6AW

Exclusive: Macquarie leapfrogs Goldman to join top tier of commodity banks
Eric Onstad – Reuters
Australia’s Macquarie Group Ltd has overtaken Goldman Sachs to break into the top three banks for commodities business, having significantly expanded its U.S. energy operations in recent years while rivals cut back.
/goo.gl/CcJcqU

Wells Fargo CEO to testify before Senate as questions linger over scandal
Patrick Rucker – Reuters
Wells Fargo (WFC.N) Chief Executive Tim Sloan is due to testify before Congress on Oct. 3 as the bank deals with fallout from a sales scandal a year ago that continues to spark new revelations.
/goo.gl/DufuwC

Mutual fund giant Vanguard says hack at SEC won’t hurt clients
Reuters Staff
Vanguard Group, the largest U.S. mutual fund company, said on Thursday that the hack into the Securities and Exchange Commission’s electronic filings database will not hurt clients.
/goo.gl/J1qTM9

ECB may ask fintech banks to hold bigger buffers
Reuters Staff
High-tech banks looking to enter the fintech zone may be asked to hold bigger liquidity and capital buffers due to the unique nature of their risks, the European Central Bank said in draft licensing guidelines on Thursday.
/goo.gl/HJpHs6

The definitive Wall Street scorecard is out ó and Goldman Sachs is slipping
Alex Morrell – Business Insider
The latest ranking of Wall Street supremacy is out, and there’s a notable shift at the top of the league tables.
/goo.gl/eVJBWN

The Federal Reserve has declared the financial crisis over
Myles Udland – Yahoo Finance
The Federal Reserve has declared the financial crisis over.
/goo.gl/uCh4ky

Banking remains far too undercapitalised for comfort; Leverage ratios closer to 5:1 will help give creditors confidence in liabilities
Martin Wolf – FT
Just over 10 years ago, the UK experienced, with Northern Rock, its first visible bank run in one-and-a-half centuries. That turned out to be a small event in a huge crisis. The simplest question this anniversary raises is whether we now have a safe financial system. Alas, the answer is no. Banking remains less safe than it could reasonably be. That is a deliberate decision.
/goo.gl/aXr8eF

From Ugly Duckling to En Vogue: Commerzbank Luring Suitors
Steven Arons – Bloomberg
UniCredit is said to have held talks with German officials; European banks desperate for growth after years of cleaning up
Commerzbank AG may not be your first pick if you’re looking to expand in European banking. Bailed out by the government in 2009, it’s still struggling to make money in Germany’s notoriously cut-throat consumer market.
/goo.gl/wJWvKg

JPMorgan to Hire Thousands for Mid-, Back-Office Jobs in Warsaw
Marek Strzelecki – Bloomberg
Deputy Prime Minister Morawiecki says deal has been sealed; JPMorgan to offer jobs including risk management, logistics
Poland has sealed a deal with JPMorgan Chase & Co. to open an operational headquarters in Warsaw, Deputy Prime Minister Mateusz Morawiecki said.
/goo.gl/1UtRCN

Regions

Venture fundraising in yuan soars as investors target Chinese tech firms
Elzio Barreto – Reuters
China-focused venture capital funds are increasing their bets on local technology companies and a further opening of Chinese domestic capital markets, raising money in the yuan at the fastest pace in five years.
/goo.gl/8EepHA

Carlyle targets first-close of new Asia buyout fund at over $4 billion: sources
Sumeet Chatterjee, Kane Wu – Reuters
Carlyle Group (CG.O) is targeting the first closing of a new Asia buyout fund within the next couple of months at over $4 billion, three people familiar with the matter said, bulking up in a region that has become a key market for global funds.
/goo.gl/2p5DwT

India Plans to Let Foreign Funds Buy More Company Debt
Shruti Srivastava – Bloomberg
Quota may be raised by $5 billion to $10 billion, person said; The increase is likely to be staggered, the person said
India’s government is planning to allow foreign investors to increase purchases of the nation’s corporate debt, a person familiar with the matter said.
/goo.gl/fb7t7F

China Finance Ministry Says S&P’s Downgrade Is ‘Wrong Decision’
Bloomberg News
Cut called ‘perplexing’ because economy is on a solid footing; Debt analysis framework ‘has problems,’ state researcher says
China rebuffed the S&P Global Ratings downgrade of its sovereign credit rating, calling it a “wrong decision” that ignores sound economic fundamentals and development potential. The government is fully capable of maintaining financial stability if it remains prudent on lending, strengthens supervision, and controls credit risk, the Ministry of Finance said in a statement Friday, a day after S&P cut China’s sovereign rating for the first time since 1999. The decision is “perplexing” because the economy is on a solid footing, the ministry said.
/goo.gl/TFfdUM

OPEC’s ‘Problem Children’ Are Holding Down Oil Prices; Rising output in strife-torn Libya and Nigeria is threatening the cartel’s bid to cut off oil supplies and balance the market
Benoit Faucon, Summer Said, and Sarah Kent – WSJ
The Organization of the Petroleum Exporting Countries is scrambling to contain output from its strife-torn members Libya and Nigeria, where surging production could threaten to derail the oil cartel’s efforts to withhold crude supply and raise its price.
/goo.gl/2c3KSv

Brexit

May to Reboot Brexit Plan by Requesting Transition Period
Tim Ross, Ian Wishart and Simon Kennedy – Bloomberg
Prime minister to seek time-limited implementation period; May will outline new Brexit strategy in Florence speech
U.K. Prime Minister Theresa May will reboot her Brexit strategy on Friday by proposing a period of transition after the split with the European Union even if that means continuing to send money to Brussels and observing its rules until 2021.
/goo.gl/yV7r5Y

Miscellaneous

Two construction workers die in separate falls in Manhattan; A death in the morning at 161 Maiden Lane was followed by a fall at 400 W. 33rd St. that killed one and injured another
Peter D’Amato – Crain’s New York Business
After a construction worker fell to his death Thursday morning at a Financial District residential development, one worker died and a second was injured in another fall at a Midtown West site on Thursday afternoon.
/goo.gl/Cu96Kz

Goldman Sachs Partner Carlotti Nixes Finance for Fine Art World
Katya Kazakina – Bloomberg
Will join Sotheby’s as global head of business development; Carlotti is among array of financiers lured by Sotheby’s
Financiers just can’t stay away from Sotheby’s — and not just for its Warhols. After more than two decades on Wall Street, Goldman Sachs Group Inc. partner Valentino Carlotti is swapping a career in investment banking for one in fine art by moving to Sotheby’s as global head of business development.
/goo.gl/o8MkYn

Finance: How it made civilization possible
Paul McCaffrey – City AM
What is finance, where does it come from, and why does it matter?
William N. Goetzmann, of the Yale School of Management, addressed these questions in his presentation at the 62nd Annual Financial Analysts Seminar. He led participants on a tour through financial history, illuminating distinctive artefacts that demonstrate the critical role finance has played in the development of human civilization and laying out a hopeful vision of how it will continue to propel human progress.
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