SEC Proposes to Push More Treasury Trades Into Clearinghouses

Sep 15, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Life and death keep getting in the way of life. Yesterday, the Rev. Robert Warskow died at the age of 89. Rev. Warskow was one of two ministers who performed the marriage ceremony for my wife Cheryl and me and is one of several “Roberts” for whom our son Robby is named. Papa Bob Warskow was the parish minister at the Glenview Community Church for 25 years during key years of my childhood and early adulthood. He was a close family friend as well.

He was a tour chaperone for the high school church choir, the Singing Stones, that Cheryl and I were part of at different times. There were only two marriages that came from the hundreds of kids who participated in the Singing Stones: my brother Scott and his wife Barb and Cheryl and I. Rev. Warskow was key to helping Cheryl and me manage family issues on her side of the family during our wedding, which aided us greatly as we started our life together.

Ethereum’s long awaited “Merge” has reached the finish line, The New York Times and other publications reported. What is remarkable about this is that it decreases the amount of electricity consumed by 99%.

The FIA can’t decide what city to be in, so they are everywhere, it seems. On September 22 the FIA will hold FIA Forum Paris 2022 to discuss regional issues and developments impacting the use of listed and cleared derivatives. The Forum kicks off with introductory remarks by Stéphane Boujnah, CEO and Chairman of the Managing Board, Euronext, followed by a keynote address by Fabrizio Planta, Head of the Markets and Data Reporting Department, European Securities and Markets Authority (ESMA). For more information and to register, go HERE.

Don’t forget you can still register for the FFK Fun Run 2022 on September 29 at the Queen Elizabeth Olympic Park in Stratford, London E20. More details and registration information are HERE.

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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The FIA is offering a webinar on September 29 from 9:30 a.m. to 11:00 a.m. SGT called “Cross Border: The Asia-Pacific Trading & Execution Landscape.” Host Bill Herder and various speakers will discuss how the exchange-traded derivatives industry has been influenced and shaped by various dynamics, regionally and globally, creating new opportunities for the APAC market while also presenting challenges. To register, go here. ~SR

The TRADE announced the shortlisted nominees for this year’s Leaders in Trading 2022 FinTech of the Year Award, in partnership with Instinet. The award recognizes the most innovative pioneers in the industry. It is presented during The TRADE’s annual gala awards dinner, which returns this year to The Savoy Hotel, London on November 3rd. You can see the list here. ~SR

This week’s S&P Global podcast, “Climate Week countdown: How the Climate Landscape is evolving” discusses Climate Week NYC 2022. Running September 19-25, Climate Week NYC convenes leaders in climate action from business, government, and the climate community, in conjunction with the United Nations General Assembly and the City of New York. The event is in its 14th year, and the tag line this year is “Getting it Done.” Climate Week NYC will feature hundreds of events over ten themes. ~SAED

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MWE SHORT: Jim Hourihane – Careers in Compliance
JohnLothianNews.com

In this video from MarketsWiki Education’s Intern Recruiting Event in Chicago, Jim Hourihane, compliance manager for the National Futures Association, breaks down how the NFA works and what kind of opportunities present themselves in compliance. With mountains of data in the financial sector, one of the goals of the NFA is to make sure that market and member data is safe and secure. Hourihane says the NFA’s new challenge is going international and making sure they can work within the structure of other countries’ regulations.

Watch the video »

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Patagonia founder donates entire company to fight climate change
Lora Kolodny – CNBC
Patagonia founder Yvon Chouinard, his spouse and two adult children are giving away their ownership in the apparel maker he started some 50 years ago, dedicating all profits from the company to projects and organizations that will protect wild land and biodiversity and fight the climate crisis.
/jlne.ws/3qIg9wI

***** You know you have done well when you can donate your whole company to a cause.~JJL

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California Files Antitrust Lawsuit Against Amazon; Rob Bonta, California’s attorney general, said the retailer punishes companies that offer lower prices on other websites.
Karen Weise and David McCabe – The New York Times
California’s attorney general filed an antitrust lawsuit against Amazon on Wednesday, claiming the retailer stifles competition and increases the prices that consumers pay across the internet. The suit is limited to California, where officials said Amazon had around 25 million customers, but if it succeeds it could have a broad impact across the country.
/jlne.ws/3dkiye7

***** This is not the way this is supposed to work, Amazon.~JJL

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Crypto Giant FTX Eyes Raising Money to Fund Acquisitions: Source
Tracy Wang, Ian Allison – CoinDesk
Cryptocurrency exchange FTX is raising capital in parallel with a potential acquisition, according to a person familiar with the matter. It’s evaluating several possible takeover candidates, some of which are companies operating retail-trading platforms, the person said. Negotiations are in preliminary stages. If acquisition talks fall through, it’s less likely FTX will raise money, according to the person.
/jlne.ws/3S5ksOn

******* If you are going to buy/control the cryptosphere, it is good to have some extra cash to pay for it.~JJL

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Putin Apparently Wants to Lose Two Wars at Once; Not satisfied with being humiliated in Ukraine, he is launching a culture war against the West without any ammunition.
Mark Gongloff – Bloomberg
As punishment for Vladimir Putin’s war-crimes extravaganza in Ukraine, Hollywood has cut Russia off from its choicest entertainments, including “Top Gun: Maverick,” “Minions: The Rise of Gru,” “Thor: Love and Thunder” and “Franchise: The IP Returns.” (One of those titles might not be real. I don’t have time for fact-checking!) Despite this affront, the few American movies breaking the embargo still topped Russia’s box office last month, led by “Fall,” about two friends stranded at the top of a radio tower. The highest-grossing domestic movie was “…,” or “Legends of the Eaglet,” about kids having a Scooby-Doo-type experience at an “all-Russian children’s center,” according to IMDB. Placing a distant fifth on the charts, it grossed less than half of “Fall.” An American straight-to-DVD special called “Shark Bait,” which didn’t even run in US theaters and is about people being eaten by sharks, topped several Russian films.
/jlne.ws/3qDTaTC

***** I might be with Putin on some of these movies.~JJL

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Wednesday’s Top Three
Our top story Wednesday was The Wall Street Journal’s Green Exchange Seeks to Jump on ESG Bandwagon. Second was The Billionaire Hedge Fund Manager Disrupting NFL Analytics, also from The Wall Street Journal. And third was the press release Digital Asset Exchange EDX Markets Launches with Backing from Leading Broker-Dealers, Global Market Makers and Venture Capital Firms, from Businesswire.

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MarketsWiki Stats
27,009 pages; 240,713 edits
MarketsWiki Statistics

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Lead Stories

SEC Proposes to Push More Treasury Trades Into Clearinghouses; Measure comes amid broader concerns about the resilience of the $24 trillion Treasury market
Paul Kiernan – The Wall Street Journal
Regulators are moving to reverse a decadeslong shift in the market for U.S. government debt away from central clearinghouses, part of a broader effort intended to make the financial system safer. The Securities and Exchange Commission proposed a rule Wednesday that aims to force more market participants to settle trades in U.S. Treasury securities on clearinghouses. Such platforms sit between buyers and sellers of securities and serve as an alternative to bilateral transactions, reducing the risk to each party that the other side will fail to deliver.
/jlne.ws/3qHHuzm

Ethereum Finishes Long-Awaited Energy-Saving ‘Merge’ Upgrade;Software revision seen cutting network electricity use by 99%; Danger of bugs and other hiccups remain as the chain forks
Olga Kharif – Bloomberg
Ethereum has completed a key revamp of its blockchain network, marking the crypto world’s most-ambitious software upgrade to date. Called the Merge, the upgrade completed in the early hours of Thursday, said Ethereum co-founder Vitalik Buterin in a Twitter post. The change replaced power-hungry computers that were used to order transactions on the network with a more energy-efficient setup using piles of the network’s native token, Ether, placed in special, so-called staking wallets. As a result, Ethereum’s energy consumption will decline by an estimated 99%.
/jlne.ws/3deo0Py

SEC backs fresh push to shore up $24tn Treasury market; US regulator supports new rules to help increase resiliency in a market that underpins global financial system
Kate Duguid and Stefania Palma – Financial Times
Wall Street’s top regulator has advanced new rules to push more Treasury bond deals by high-speed traders and hedge funds through clearing houses, in one of its most assertive attempts to shore up the $24tn market. Clearing houses stand between trading counterparties and require insurance, or margin payments, to prevent a default from cascading through the market. Requiring their broader use is an attempt to add safeguards to cash and repo markets, which trade billions of dollars a day to set the price of US government debt but have been tested repeatedly over the past decade.
/jlne.ws/3UpAIMn

Your Utility Bill Is Going to Hurt, but the Market Might Benefit; Lingering high electricity prices should spark conversations about optimal electricity-market design.
Jinjoo Lee – The Wall Street Journal
Thanks to cheap natural gas, electricity prices have been a relatively stable part of Americans’ budgets for many years. But the commodity’s price surge this year could lead to a rude awakening for consumers and a moment of reflection for policy makers. Consumers spent 16% more on utility payments in August than they had a year earlier, according to Bank of America. The U.S. Energy Information Administration said last week that it expects retail electricity prices to surge 7.5% this year. That would be the biggest percentage jump since 2006, when prices rose 10.4% in tandem with rising natural-gas prices—the culprit this time, too. The price of natural gas, which accounts for 38% of U.S. power generation, has more than doubled so far this year.
/jlne.ws/3diiL1s

The Rise of Crypto Gambling on Twitch; The streaming platform, known more traditionally for gaming, is stepping into the online gambling arena, with crypto as its currency.
Victoria Vergolina, Stacy-Marie Ishmael, and Cecilia D’Anastasio – Bloomberg
You might not have heard of Twitch, but it’s one of the most popular places on the internet. Millions of people every day use the app to do everything from watch their favorite live streams to play videogames to solve math problems in real time. Video games are still the biggest category of live streams people tune into on Twitch, and the biggest games — like Grand Theft Auto and Fortnite — still dominate time spent on the platform. Recently however, there’s been a new addition to the top 10: gambling. It’s now the seventh most-popular content category on Twitch. And it’s not just any gambling. It’s crypto gambling. Many streamers are paid handsomely by casinos to take part in this activity. But what about those who actually pay to play? And where is all this coming from?
/jlne.ws/3LelaXz

Hunger in Africa Soars by Almost a Third in Two Years, IMF Says; 12% of people in sub-Saharan Africa are acutely food insecure; Food crisis being driven by climate change, war, Covid-19
Monique Vanek – Bloomberg
One in eight people in sub-Saharan Africa is expected to suffer from high malnutrition this year, an increase of almost a third since 2020 because of soaring food prices and depressed incomes, according to the International Monetary Fund. The IMF estimates that at least 123 million people — 12% of the region’s population — will be unable to meet their minimum food consumption needs, 28 million more than just two years ago.
/jlne.ws/3Bmp8sq

How Power Trading Tries to Keep Lights On in Europe
Lars Paulsson – Bloomberg
Europe’s power networks face a crucial test this winter, with supplies compromised by a collapse in imports of Russian energy, nuclear outages in France and dwindling hydropower reserves. The battle to avoid blackouts will be waged partly by the specialist traders who send electricity across borders to where demand, and prices, are highest. There’ll be no room for error. Any unplanned halts of big power stations or sudden failures on transmission cables could plunge cities into darkness and bring factories to a juddering halt.
/jlne.ws/3ePOFCL

Patagonia founder hands company to trust to tackle climate crisis; Yvon Chouinard expects outdoor clothing group to give $100mn a year to environmental causes
Emma Dunkley and Gary Jones – Financial Times
Patagonia’s billionaire founder is handing the outdoor clothing company to a trust that will use future profits to battle the climate crisis. Yvon Chouinard said in an open letter to shareholders that the money the company makes after reinvesting in the business will be used to “help fight” climate change.
/jlne.ws/3eWZaEA

US shale bosses tell Europe: ‘There’s no bailout coming’; Executives say they cannot increase oil and gas supplies in time to stop winter energy crunch
Justin Jacobs, and Derek Brower and Myles McCormick – Financial Times
The US shale industry has warned it cannot rescue Europe with increased oil and gas supplies this winter amid fears that a plunge in Russian exports will send crude prices soaring back above $100 a barrel. Even though oil markets have softened in recent weeks, the respite could end when an EU embargo on Russian sales comes into full effect later this year. US Treasury secretary Janet Yellen this week warned the embargo “could cause a spike in oil prices”.
/jlne.ws/3qG7Fq3

U.S. Bid to Revive Chip Manufacturing Collides With Wall Street’s Demands; Intel is among companies facing both political push for more factories in U.S. and investor resistance to capital spending—conflict Chinese competitors don’t face
Greg Ip – The Wall Street Journal
Intel Corp.’s Patrick Gelsinger might be Washington’s favorite chief executive right now. At the groundbreaking for a $20 billion-plus semiconductor-fabrication plant near Columbus, Ohio, on Friday, he was joined by legislators from both parties, Ohio Gov. Mike DeWine, a Republican, and President Biden, a Democrat. “We’re going to build the most advanced stuff in the world, right here, in Ohio,” Mr. Gelsinger declared. “We put our chips on the table, to help the U.S. regain its manufacturing heart, as well as unquestioned technology leadership.”
/jlne.ws/3UoeMBc

Crypto’s Long-Awaited ‘Merge’ Reaches the Finish Line; Ethereum, the most popular cryptocurrency platform, completed its much-anticipated switch to a more energy-efficient infrastructure.
David Yaffe-Bellany – The New York Times
The moment finally arrived, in the last minutes before midnight on the West Coast on Wednesday. After years of delays, discussions and frantic experimentation, the popular cryptocurrency platform Ethereum completed a long-awaited software upgrade known as the Merge, shifting to a more environmentally sustainable framework.
/jlne.ws/3BhAD4o

Ethereum ‘Merge’ concludes in key moment for crypto market; Second-biggest blockchain upgrades to more energy-efficient processing system
Joshua Oliver – Financial Times
Ethereum has completed a long-awaited upgrade to its system in a move expected to slash its energy costs and intended to prepare the ground for more use of crypto technology in mainstream finance. The upgrade, known in the industry as the “Merge”, which changes how new transactions are verified on the Ethereum blockchain, completed on early Thursday, said co-founder Vitalik Buterin.
/jlne.ws/3ddHgwP

The Ethereum Merge Is Done, Opening a New Era for the Second-Biggest Blockchain
Sam Kessler – CoinDesk
The massive overhaul of Ethereum known as the Merge has finally happened, moving the digital machinery at the core of the second-largest cryptocurrency to a vastly more energy-efficient system after years of development and delay. It was no small feat swapping out one way of running a blockchain, known as proof-of-work, for another, called proof-of-stake. “The metaphor that I use is this idea of switching out an engine from a running car,” said Justin Drake, a researcher at the non-profit Ethereum Foundation who spoke to CoinDesk before the Merge happened. “I like to think of it as kind of like the switch from gasoline to electric.”
/jlne.ws/3BHzhkQ

SEC’s Gensler Holds Firm That Existing Laws Make Sense for Crypto
Nikhilesh De – CoinDesk
Securities and Exchange Commission (SEC) Chair Gary Gensler told the Practising Law Institute last week that existing securities laws fit the crypto markets in a speech that’s garnered attention from all parts of the digital currency ecosystem. Prior to the speech, I had the opportunity to speak with the longtime regulator about his agency’s approach to crypto.
/jlne.ws/3xrAlH8

Citi opens Málaga hub for junior bankers as talent battle heats up; US lender says move is not a gimmick and will create a different career path into the industry
Stephen Morris – Financial Times
Citigroup has opened its new hub for junior investment bankers in the beachside Spanish city of Málaga, insisting the move is more than a gimmick as Wall Street lenders battle for young talent amid criticism of burnout in banking. The US bank selected 27 analysts from more than 3,000 applicants for the two-year programme, which started on Wednesday. Promising eight-hour days and work-free weekends, it aims to distinguish itself from the punishing seven-day working weeks common for young staff in London and New York.
/jlne.ws/3Dw301s

Crypto Exchange Launches Fully Confidential Trading Platform
Anna Lyudvig – Traders Magazine
The institutional market participant is significantly underserved in crypto markets compared to traditional markets particularly from a market infrastructure perspective, according to David Wells, CEO of Enclave Markets. “Growing institutional adoption of crypto as an asset class has led to the opportunity to serve this customer segment with products that have a proven model in traditional markets, like a Crossing Network, but with infrastructure and settlement improvements offered by distributed technologies,” he told Traders Magazine. On September 8, Enclave Markets, an institutional-grade digital asset trading platform, announced the launch of Enclave Cross, a novel service that allows participants to trade blocks of digital assets at the given market price without any information leakage or market impact.
/jlne.ws/3UeR7CX

SEC set to advance reforms to head off next crisis in $24 trillion market for U.S. government debt
Chris Matthews – MarketWatch
The Securities and Exchange Commission is taking another step to address concerns over stability in the markets for U.S. government debt, with the agency set to propose new rules Wednesday to encourage central clearing Treasury security trades. U.S. government debt loads have increased rapidly in recent decades, as the federal government combatted the economic effects of the 2008 financial crisis and the COVID-19 pandemic at the same time that an aging population has led to greater spending on healthcare and Social Security. The market for U.S. Treasuries has grown to more than $24 trillion, expanding nearly ten fold over the past 20 years at the same time that major regulatory changes have blunted the ability of some bank-owned dealers of government debt to increase their purchases.
/jlne.ws/3BGWrYA

A $3.2 Trillion Option Expiration Seen Worsening Post-CPI Rout
Lu Wang – Bloomberg
Another wrinkle in a chaotic stock market where everything from the frenetic activity of quant traders to an ever-hawkish Federal Reserve is making investing harder than usual: A looming $3.2 trillion options expiry played a notable role in the Tuesday selloff. As a hotter-than-expected inflation reading rocked Wall Street, a slew of bearish options that had become worthless during last week’s rally jumped back in the money, forcing market makers to sell underlying stocks to hedge their positions. With those put contracts expiring Friday, the activity of dealers turned more sensitive to the movement in the cash market. After the S&P 500 fell below 4,000 — an area that harbors one of the highest open interest to roll out — selling intensified, according to Steve Sosnick, chief strategist at Interactive Brokers LLC.
/jlne.ws/3Ue0djy

Railroad Unions and Companies Reach a Tentative Deal to Avoid a Strike; President Biden announced the agreement after negotiations brokered by the labor secretary lasted deep into the night.
Jim Tankersley – The New York Times
Freight rail companies and unions representing tens of thousands of workers reached a tentative agreement to avoid what would have been an economically damaging strike, after all-night talks brokered by Labor Secretary Martin J. Walsh, President Biden said early Thursday morning. The agreement now heads to union members for a ratification vote, which is a standard procedure in labor talks. While the vote is tallied, workers have agreed not to strike.
/jlne.ws/3eH51NU

Ukraine Invasion

Russia says longer-range U.S. missiles for Kyiv would cross red line
Maria Zakharova – Reuters
Russia’s Foreign Ministry said on Thursday that if the United States decided to supply Kyiv with longer-range missiles, it would cross a “red line” and become “a party to the conflict”. In a briefing, Foreign Ministry spokeswoman Maria Zakharova added that Russia “reserves the right to defend its territory”.
/jlne.ws/3Legj8N

Russian companies are issuing bonds in the Chinese yuan amid sanctions. Putin’s government may follow suit.
Huileng Tan – Business Insider
Some Russian companies are issuing bonds denominated in the Chinese yuan amid sanctions over the war in Ukraine. State-owned oil giant Rosneft was the latest to offer 15 billion yuan, or $2.1 billion, in a bond offering, Interfax reported on Tuesday. This followed a 4.6 billion yuan issuance from Polyus, Russia’s largest gold producer, in August.
/jlne.ws/3QJP5rB

Putin’s War Machine May Be Giving His Economy A Quiet Boost; Defense production may be helping offset drops in other industries, economists say.
Bloomberg News
President Vladimir Putin’s expanding war effort appears to be lifting Russian industrial production, helping his economy outperform many of the worst forecasts amid sanctions. The secrecy surrounding the manufacture of military hardware hasn’t fully obscured the impact it’s starting to have on output. Production of “finished metal goods” — a statistical line that besides items like cutlery includes weapons, bombs and various types of ammunition — surged almost 30% in July from a year earlier after steep declines in the previous months.

Ukrainian President Zelenskiy Involved in Car Crash After Izyum Visit
Daryna Krasnolutska – Bloomberg
A car carrying Ukrainian President Volodymyr Zelenskiy collided with another vehicle after a visit to Izyum and there were no major injuries reported, a spokesman for the leader said in a social media post. “Doctors who accompany the president checked him, no serious injuries were detected,” Serhiy Nykyforov, a spokesman for Zelenskiy said in a post on Facebook.
/jlne.ws/3xqeSOQ

Germany Has the Tanks Ukraine Needs. It Must Send Them ASAP; Leopards could turn the war even more in Kyiv’s favor.
Andreas Kluth – Bloomberg
Dmytro Kuleba, Ukraine’s foreign minister, said it best in a tweet this week: “What is Berlin afraid of that Kyiv is not?” Kuleba and his compatriots, along with their friends all over the world, are celebrating the heroic rout by Ukrainian forces of the Russian invaders in Kharkiv over the previous week. These stunning tactical successes proved, if proof was needed, that the Ukrainians have not only the courage and grit but also the military skill to defeat the increasingly demoralized Russian invasion force — provided they also have state-of-the-art weapons.
/jlne.ws/3BgQhgA

Russia’s Richest Person to Transfer Rosbank Shares to Foundation
Bloomberg News
Sanctioned billionaire Vladimir Potanin, Russia’s richest person, said he’s transferring some of his shares of Rosbank PJSC to his charitable foundation. Potanin’s firm, Interros, “has begun the process of transferring up to 50%” of shares in the Russian bank to his foundation, the company said Wednesday in a statement on its website. It’s also shifting as much as 10% of its Rosbank holdings to an incentive program for the lender’s employees, who will receive digital financial assets linked to the stock.
/jlne.ws/3BIaE7y

Exchanges, OTC and Clearing

NYSE’s president wouldn’t mind a crystal ball to see the future, but her focus on leadership is clear
Fortune Editors
On this week’s episode of Fortune’s Leadership Next podcast, co-hosts Alan Murray and Ellen McGirt talk with Lynn Martin, president of the New York Stock Exchange, about the pushback against ESG investing and how today’s data and technology help individual investors. Also on the show: why Martin says “it’s just a really interesting time for CEOs.” Hint: It has to do with human capital. Listen to the episode or read the full transcript below.
/jlne.ws/3xpJMqq

Nasdaq Launches Nasdaq Primary in Partnership with Onbrane
Nasdaq
Nasdaq (Nasdaq: NDAQ) today announced the launch of Nasdaq Primary, helping companies digitalize the process of raising debt capital by bringing all market actors together on one platform. The product is launched in partnership with Onbrane, a European fintech company focused on producing sustainable and innovative solutions for the debt market leveraging web-based technology.
/jlne.ws/3BdGfwy

Toronto Stock Exchange Announces the 2022 TSX30?, Celebrating the Exchange’s 3-Year Performance Leaders; 2022 Edition of the Exchange’s issuer showcase program highlights energy and natural resources.
TSX
Toronto Stock Exchange (TSX) today announced the 2022 TSX30?; an annual ranking of the 30 top-performing stocks over a three-year period, based on dividend-adjusted share price performance. The flagship TSX30 program, established in 2019, recognizes the successes of our listed companies, highlights the overall strength of Canada’s diverse and ever-evolving public markets, and the efficacy of this powerful ecosystem in driving growth for issuers, investors and the overall economy.
/jlne.ws/3RLEXQv

Green Stock Exchange Focused On ESG Seeks Path to Wall Street; Public firms to be required to meet ESG requirements or delist; GIX is seeking regulatory approval, expects to go live in 2023
Katherine Doherty – Bloomberg
Green Exchange PBC is seeking regulatory approval to operate an exchange that allows investors to trade equities with a demonstrated commitment to ESG, according to executives. The Green Impact Exchange, GIX, would require public companies to show and stick to their ESG efforts, according to GIX Chief Executive Officer Daniel Labovitz. “We are looking at how company’s govern themselves so green thinking isn’t just an afterthought, but threaded through their decision making from the very beginning, part of their core DNA,” Labovitz said in an interview.
/jlne.ws/3DoZg1F

UK Bank Holiday
CME
Following the recent announcement from the UK government, declaring Monday, September 19, a UK bank holiday, certain energy contracts will not be available for trading on CME Globex nor for submission for clearing via CME ClearPort. The schedule and expiration changes are detailed in the Special Executive Report – SER-9056.
/jlne.ws/3SogT6j

Notification of dividend / distribution
ASX
Update to the Appendix 3.A1 released on 18 August 2022 to notify the currency exchange rate – refer to section 2B.2.
/jlne.ws/351gPmZ

Index Total Return Futures: Introduction of calendar strategies
Eurex Circular 089/22 Index Total Return Futures: Introduction of calendar strategies. Effective 26 September 2022, calendar strategies will be available for Index Total Return Futures (“Index TRFs”) on the following products. https://jlne.ws/3QNO9lU

Federal Holiday, September 19, 2022
MX
The Montreal Exchange Inc. (MX) is advising all clients that the MX will be open for trading on
Monday, September 19, 2022 and regular operating hours will be in effect for all products.
/jlne.ws/3xqgkRf

Fintech

Web3 founders and top VCs break down how blockchain gaming can take crypto mainstream – and explain potential hurdles for widespread adoption
Morgan Chittum – Business Insider
Blockchain gaming raked in $2.5 billion in funding during Q2, 2022, according to a DappRadar report. The burgeoning space has attracted some of the biggest names in Silicon Valley, with Andreessen Horowitz debuting a $600 million fund for gaming startups in May. Animoca Brands, a Hong Kong-based game developer and crypto investor, also secured a $75 million raise at a $5.9 billion valuation in July. Total investments in the sector this year, by some measures, are outpacing last year’s by around 33%. Franklin Bi, the director of portfolio development at crypto hedge fund Pantera Capital, previously told Insider that it is blockchain gaming’s “perfect moment” to “take off.”
/jlne.ws/3RKcVVC

Linux Foundation Project Will Tackle Digital Wallet Interoperability
Brandy Betz – CoinDesk
The Linux Foundation, a nonprofit dedicated to open-source software development, plans to form the OpenWallet Foundation (OWF), a collaborative effort to encourage the development interoperable digital wallets for a variety of use cases.
/jlne.ws/3BHAfxu

Google’s $4B Fine May Threaten Web3 Protocols, Legal Expert Says
Jack Schickler – CoinDesk
A European Union (EU) court judgment issued Wednesday didn’t just uphold one of the world’s biggest-ever antitrust fines, but it also carries a warning for developers of future Web3 open-source protocols, a legal expert has told CoinDesk.
/jlne.ws/3RNUzmm

Leaders in Trading 2022: FinTech of the Year Award shortlist announced; The winner will be revealed during The TRADE’s flagship gala awards night at The Savoy Hotel in London on 3 November.
Laurie McAughtry – The TRADE
The TRADE is delighted to announce the shortlisted nominees for this year’s Leaders in Trading 2022 FinTech of the Year Award, in partnership with Instinet. Recognising the most innovative pioneers in the industry, the Fintech of the Year Award is one of our most highly coveted categories, with past winners going on to shape the face of trading and execution in both material and measurable ways.
/jlne.ws/3ROCMeS

Smarter machines risk creating dumber humans; The exciting and impressive use of new, powerful AI models could cause harm to individuals and society
John Thornhill – Financial Times
When one of Google’s senior researchers asked the company’s LaMDA chatbot whether it was a “philosophical zombie” (exhibiting human-like behaviour without having any inner life, consciousness or sentience) it replied: “Of course not.” Unconvinced, Blaise Aguera y Arcas asked the AI-enabled chatbot how he could know this was true. “You’ll just have to take my word for it. You can’t ‘prove’ you’re not a philosophical zombie either,” LaMDA answered.
/jlne.ws/3eUmeU7

Citi’s global head of FX data science departs for role at Tradefeedr; New head brings considerable experience in developing trading and analytics frameworks to Tradefeedr, having previously served at Citi and S&P.
Wesley Bray – The Trade
Alexis Fauth, who previously served at Citi, has been appointed as head of data science and client analytics by Tradefeedr. As part of the role, Fauth will be responsible for identifying and developing new tools for clients, which will allow them to gain increased insights from their data and to optimise their trading.
/jlne.ws/3U7SJ1z

JPMorgan Backs $20M Round for Blockchain Infrastructure Startup Ownera
Brandy Betz – CoinDesk
Ownera, a startup building infrastructure to connect the tokenized asset networks of the traditional finance world, has raised $20 million in a Series A funding round from backers that included banking giant JPMorgan and private asset management firm LRC Group.
/jlne.ws/3deSalJ

Cybersecurity

EU Proposes Strict Cybersecurity Rules for Digital-Product Makers
Catherine Stupp – The Wall Street Journal
Companies that make digital devices and software will need to prove they fulfill basic cybersecurity requirements under a new European proposal intended to reduce hacking risks in a range of products, from home appliances and wearable devices to software and computers.
The draft legislation introduced Thursday also requires manufacturers that do business in the European Union to provide security patches and updates for the product’s lifetime or five years after going to market, whichever is shorter. Companies that break the rules would face fines of up to 15 million euros, equivalent to $15 million, or 2.5% of global revenue.
/jlne.ws/3xmLrNl

EU proposes rules targeting smart devices with cybersecurity risks
Foo Yun Chee – Reuters
From laptops to fridges to mobile apps, smart devices connected to the internet will have to assess their cybersecurity risks and fix them under draft European Union rules announced on Thursday, amid concerns about a spate of cyber attacks.
Companies face fines of as much as 15 million euros ($15 million) or up to 2.5% of their total global turnover if they fail to do so under the European Commission’s proposed law known as the Cyber Resilience Act.
/jlne.ws/3qHCFGg

Cybersecurity firm Fortanix secures capital to provide confidential computing services
Kyle Wiggers – TechCrunch
Companies (and VCs) spend billions of dollars on cybersecurity, but primarily focus on protecting infrastructure or endpoints. That’s not always the right approach in a world where — thanks to the pandemic — data is increasingly distributed across clouds, software-as-a-service apps, and storage systems. According to one 2021 survey, 61% of security leaders in the enterprise believed their cybersecurity teams to be understaffed.
/jlne.ws/3eWXomU

Iranian hackers moonlight their expertise
Tim Starks – The Washington Post
Yesterday the Justice Department unsealed an indictment alleging that three Iranian men encrypted hundreds of systems around the world and demanded ransoms to unlock them.
But the unsealed indictment said the men did so independently of the Iranian government, while the Treasury Department said they were linked to Iran’s Islamic Revolutionary Guard Corps (IRGC). That called attention to how — for some of the United States’ top adversaries in cyberspace — the lines between nation-state hacker and cybercriminal, between government employee and freelance contractor, aren’t always clear.
/jlne.ws/3QPtUEu

Biden issues cybersecurity guidance for software vendors
Alexander Culafi – TechTarget
The White House released guidance Wednesday as an extension of a cybersecurity-focused executive order President Biden signed last year.
Biden signed “Improving the Nation’s Cybersecurity” on May 12, 2021, outlining plans to modernize the United States’ cybersecurity posture and implement technologies like multifactor authentication. One piece of the order referenced plans to provide guidelines for the software purchased and deployed within government networks; Wednesday’s memorandum comprises these guidelines.
/jlne.ws/3UfQEkb

4 ways organizations fail to address cybersecurity risk
Security Magazine
Ninety percent of security leaders believe their organization is failing to adequately address cybersecurity risk, according to a survey of information technology (IT) and security leaders.
The 2022 Security Priorities Study, released by Foundry (formerly IDG Communications), looks at the security-related priorities IT and security leaders are focused on now and in the near future. In its sixth year, the study shares insights into the security structure of organizations, perceived risks, continued challenges and investments being made to better secure organizations.
/jlne.ws/3djpzMe

Cryptocurrencies

Crypto’s Long-Awaited ‘Merge’ Reaches the Finish Line; Ethereum, the most popular cryptocurrency platform, completed its much-anticipated switch to a more energy-efficient infrastructure.
David Yaffe-Bellany – The New York Times
The moment finally arrived, in the last minutes before midnight on the West Coast on Wednesday. After years of delays, discussions and frantic experimentation, the popular cryptocurrency platform Ethereum completed a long-awaited software upgrade known as the Merge, shifting to a more environmentally sustainable framework. Ethereum is arguably the most crucial platform in the crypto industry, a layer of software infrastructure that forms the basis of thousands of applications handling more than $50 billion in customer funds. The upgrade is expected to reduce Ethereum’s energy consumption and set the stage for future improvements that will make the platform easier and cheaper to use.
/jlne.ws/3RRJErZ

Cryptocurrency lobby group seeks to weigh in on SEC vs Ripple’s XRP lawsuit
Timmy Shen – CoinDesk
Cryptocurrency advocacy group Chamber of Digital Commerce (CDC) has sought to be an amicus curiae (Latin for friend of court) in the lawsuit between the Securities and Exchange Commission and Ripple Labs.
/jlne.ws/3eLWSrz

Huobi becomes third global exchange to sign with S.Korea’s Busan city
Danny Park – Forkast
Global cryptocurrency exchange Huobi Global announced it will sign a memorandum of understanding with South Korea’s Busan city on Wednesday to help the city establish its first crypto exchange and promote its blockchain ecosystem.
/jlne.ws/3BkMzCl

Crypto Unit of Japan’s SBI Wins Capital Markets License in Singapore
Sandali Handagama – CoinDesk
SBI Digital Markets, a subsidiary of the digital asset arm of Japan’s financial services giant SBI Holdings, has been granted a Capital Markets Services (CMS) license to offer securities and futures trading services in Singapore, according to a Thursday announcement.
/jlne.ws/3Dsu5Cz

Crypto Exchange Bybit Halts Derivatives Trading in Brazil After Exchange Commission Ban
Paulo Alves – Coindesk
This article is adapted from CoinDesk Brasil, a partnership between CoinDesk and InfoMoney, one of Brazil’s leading financial news publications. Follow CoinDesk Brasil on Twitter. Singapore-based cryptocurrency exchange Bybit will stop offering crypto futures and options in Brazil on Thursday after a ban was imposed on Bybit by Brazil’s Securities and Exchange Commission (CVM) last week.
/jlne.ws/3UeZZZc

Thailand’s SEC Bans Crypto Firms From Offering Staking and Lending Service
Oliver Knight – CoinDesk
Thailand’s Securities and Exchange Commission (SEC) has banned crypto companies from offering staking and lending services, according to a press release on Thursday. The decision to ban “depository services”, which includes paying returns to depositors, was made to protect traders from the risks associated with crypto lenders, the release said.
/jlne.ws/3eRYr7v

Judge Approves Use of Independent Examiner in Crypto Lender Celsius’ Bankruptcy Case
Elizabeth Napolitano – CoinDesk
A federal judge has granted a motion for the U.S. Trustee’s office to appoint an independent examiner to investigate crypto lender Celsius Network’s financial management that led the firm to file for bankruptcy earlier this summer.
/jlne.ws/3S2wZ5e

Solana COO on NFT Markets, Ethereum Merge, Network Stability
CoinDesk
Solana-based non-fungible token (NFT) marketplaces are seeing booming sales volumes, although the wider NFT sector is down roughly 80% year-to-date. Solana Labs Chief Operating Officer Raj Gokal shares insights into the Solana ecosystem and how it differentiates from the competition. Plus, Gokal’s take on the upcoming Ethereum Merge and Solana’s Web3 mobile phone.
/jlne.ws/3U9vAM2

Politics

U.S. Senate Banking Committee holds hearing to examine the Securities and Exchange Commission on Capitol Hill in Washington
Pete Schroeder and Michelle Price – Reuters
An aggressive regulator is critical to maintaining the United States as the “gold standard” for capital markets, U.S. Securities and Exchange Commission (SEC) chair Gary Gensler will tell the U.S. Senate Banking Committee on Thursday. Gensler will appear before the panel for its regular oversight duties, but the hearing comes at a time of Republican frustration over his agenda. They claim he has overstepped his authority with a broad assault on U.S. capital markets and adopted a hostile stance toward the financial industry.
/jlne.ws/3QJUmiL

Biden approval rises sharply ahead of midterms: AP-NORC poll
Josh Boak, Hannah Fingerhut – Associated Press
President Joe Biden’s popularity improved substantially from his lowest point this summer, but concerns about his handling of the economy persist, according to a poll from The Associated Press-NORC Center for Public Affairs Research.
/jlne.ws/3UeExnq

White House sounds alert on inbound Chinese investment; Biden signs executive order urging closer scrutiny of deals involving critical technologies
Demetri Sevastopulo – Financial Times
President Joe Biden has urged his administration to pay close attention to inbound investment deals involving critical technologies such as semiconductors, as part of a continuing effort to address security threats from China. Biden on Thursday issued an executive order aimed at boosting scrutiny of deals involving foreign companies in high-tech industries such as artificial intelligence, quantum computing and biotechnology. It was aimed at the Committee on Foreign Investment in the US, an inter-agency panel that vets inbound investment for security risks.
/jlne.ws/3diF07q

Janet Yellen Will Pledge 5,000 New I.R.S. Hires to Bolster Taxpayer Responsiveness; The Treasury secretary is scheduled to give remarks at a Maryland I.R.S. facility as the agency begins an $80 billion overhaul.
Alan Rappeport – The New York Times
Treasury Secretary Janet L. Yellen will pledge on Thursday to bolster the Internal Revenue Service’s beleaguered customer service by hiring 5,000 new workers to answer telephone calls and more quickly respond to the questions of taxpayers. Ms. Yellen will speak on Thursday during her first visit as Treasury secretary to an I.R.S. facility, as the tax collection agency prepares an $80 billion overhaul with funds that were approved through the so-called Inflation Reduction Act that Congress passed last month. Long depleted of resources, the I.R.S. has for years frustrated taxpayers by not answering calls or leaving them languishing on hold. Ms. Yellen notes that fewer than two out of every 10 calls to the I.R.S. were answered in the most recent tax season and that the average wait was nearly half an hour.
/jlne.ws/3Dxqtj3

Senator Pat Toomey Still Sees Chance of Stablecoin Legislation This Year; A potential first step towards clearer crypto rules.
Joe Weisenthal and Tracy Alloway – Bloomberg
Senator Pat Toomey believes there’s still a chance for Congress to pass a meaningful bill regulating stablecoins this year. In an interview with the Odd Lots podcast, the retiring Pennsylvania Republican and ranking member of the Senate Banking Committee said that the implosion of the Luna algorithmic stablecoin this spring served to galvanize interest in Washington, D.C. for bringing regulatory clarity to the crypto industry.
/jlne.ws/3Ude9Kv

Biden Orders Deeper Scrutiny of Foreign Investment in Tech and Supply Chains; A new executive order directs the panel screening foreign investment, Cfius, to look at deals in areas U.S. officials say are of interest to China
Charles Hutzler – The Wall Street Journal
The Biden administration is ordering a panel that screens foreign investment for national security risks to heighten scrutiny of deals that may give China and other adversaries access to critical technologies or may endanger supply chains and personal data. An executive order signed by President Biden on Thursday doesn’t expand the purview of the Committee on Foreign Investment in the U.S. Rather, it is intended to sharpen the interagency panel’s focus on administration priorities and signal to businesses the types of transactions that might deserve added screening, administration officials said.
/jlne.ws/3BKkBlc

Sweden’s Prime Minister Resigns as Full Vote Tally Confirms Her Defeat
Niclas Rolander and Jonas Ekblom – Bloomberg
Swedish Prime Minister Magdalena Andersson conceded defeat and announced she will resign as surge in support for a nationalist party helped the right-wing opposition win one of the closest elections ever in the largest Nordic country. Andersson — who became the nation’s first female prime minister last year — told reporters in Stockholm that she will submit her resignation early on Thursday.
/jlne.ws/3SagFQ1

China Shuts Down Videos of WHO Saying End of Pandemic in Sight; Beijing appears to censor some media reports of Tedros remark; Criticism against Covid Zero remains sensitive topic in China
Bloomberg News
The World Health Organization chief’s comment that the end of the pandemic is within reach sparked lively online debate — and some censorship — in China, the only major country still trying to stop the spread of the virus.
/jlne.ws/3eOnVCG

Regulation

CFPB Director Defends Novel Regulatory Tactics; At an event hosted by a watchdog group, Rohit Chopra responded to a letter from Republicans, saying his agency would push ahead with reforms to consumer lenders such as student-loan and credit-card companies
Dylan Tokar – The Wall Street Journal
The director of the U.S.’s consumer financial regulator is pledging to push ahead with regulatory actions targeting banks, credit-card companies and the student-loan industry, days after a group of Republican senators accused the Biden appointee of straying outside the bounds of the agency’s authority. Rohit Chopra said Wednesday that, among the items on its agenda, the Consumer Financial Protection Bureau would continue looking broadly at how the agency can tackle what it views as problematic fees banks and credit-card companies charge for overdraft transactions and late payments.
/jlne.ws/3QQUJIl

FASB Moves Forward With New Disclosure Requirements for Joint Ventures; The U.S. accounting standards-setter has advanced new requirements that would close a current accounting gap for joint ventures
Jennifer Williams-Alvarez – The Wall Street Journal
Businesses would have to start reporting on the assets they bring into certain joint ventures under a new proposal from the U.S. accounting standards-setter that is aimed at filling a void in existing disclosure requirements. Companies that enter joint ventures typically share costs and liabilities. But U.S. generally accepted accounting principles don’t state how joint ventures should account for what each party initially contributes to the joint entity, such as buildings and equipment. The proposed disclosures would offer more clarity to audit firms as well as companies that set up joint ventures, accounting experts said.
/jlne.ws/3qG8But

Commissioner Johnson to Participate in a Fireside Chat at the ABA Derivatives and Futures Law Committee Virtual Event October 06, 2022
CFTX
Commissioner Kristin N. Johnson will participate in a fireside chat at the American Bar Association’s Derivatives and Futures Law Committee Virtual Event. Thursday, October 6, 2022 10:00 a.m. (EDT).
/jlne.ws/3LeWfmG

U.S. SEC proposes clearing reforms to boost resilience of $24 trillion Treasury market
Michelle Price and Pete Schroeder – Reuters
The U.S. Securities and Exchange Commission (SEC) on Wednesday proposed draft rules to boost the use of central clearing in the $24 trillion Treasury market in a bid to boost its resilience. The proposals, which would apply to cash Treasury and repurchase agreements traded by a range of firms including broker dealers and hedge funds, follow liquidity crunches in recent years which have raised regulatory concerns about the Treasury market’s ability to function during times of stress. Most notably, Treasury market liquidity all but evaporated in March 2020 as COVID-19 pandemic fears gripped investors, prompting the Federal Reserve to prop up the market. Traders say they continue to see liquidity problems with some securities, Reuters reported last month.
/jlne.ws/3BJSnHi

SEC Charges Loop Capital Markets in First Action against Broker-Dealer for Violating Municipal Advisor Registration Rule
SEC
The Securities and Exchange Commission today charged Chicago-based Loop Capital Markets, LLC for providing advice to a municipal entity without registering as a municipal advisor. The action marks the first time the SEC has charged a broker-dealer for violating the municipal advisor registration rule. According to the SEC’s order, between September 2017 and February 2019, Loop Capital advised a Midwestern city to purchase particular fixed income securities, which the city purchased using the proceeds of its own municipal bond issuances. In addition, the Commission’s order found that Loop Capital did not maintain a system reasonably designed to supervise its municipal securities activities and had inadequate procedures, including insufficient methods to identify potential violations of the municipal advisor registration rules.
/jlne.ws/3BG9V74

SEC Proposes Rules to Improve Risk Management in Clearance and Settlement and to Facilitate Additional Central Clearing for the U.S. Treasury Market
SEC
The Securities and Exchange Commission today proposed rule changes that would enhance risk management practices for central counterparties in the U.S. Treasury market and facilitate additional clearing of U.S. Treasury securities transactions. The proposed rule changes would update the membership standards required of covered clearing agencies for the U.S. Treasury market with respect to a member’s clearance and settlement of specified secondary market transactions. Additional proposed rule changes are designed to reduce the risks faced by a clearing agency and incentivize and facilitate additional central clearing in the U.S. Treasury market.
/jlne.ws/3S6qbUd

FASB Moves Forward With New Disclosure Requirements for Joint Ventures; The U.S. accounting standards-setter has advanced new requirements that would close a current accounting gap for joint ventures
Jennifer Williams-Alvarez – The Wall Street Journal
Businesses would have to start reporting on the assets they bring into certain joint ventures under a new proposal from the U.S. accounting standards-setter that is aimed at filling a void in existing disclosure requirements. Companies that enter joint ventures typically share costs and liabilities. But U.S. generally accepted accounting principles don’t state how joint ventures should account for what each party initially contributes to the joint entity, such as buildings and equipment. The proposed disclosures would offer more clarity to audit firms as well as companies that set up joint ventures, accounting experts said.
/jlne.ws/3Do17nz

CFPB Director Defends Novel Regulatory Tactics; At an event hosted by a watchdog group, Rohit Chopra responded to a letter from Republicans, saying his agency would push ahead with reforms to consumer lenders such as student-loan and credit-card companies
Dylan Tokar – The Wall Street Journal
The director of the U.S.’s consumer financial regulator is pledging to push ahead with regulatory actions targeting banks, credit-card companies and the student-loan industry, days after a group of Republican senators accused the Biden appointee of straying outside the bounds of the agency’s authority. Rohit Chopra said Wednesday that, among the items on its agenda, the Consumer Financial Protection Bureau would continue looking broadly at how the agency can tackle what it views as problematic fees banks and credit-card companies charge for overdraft transactions and late payments.
/jlne.ws/3QQUJIl

??Wellness industry director convicted of making false statement
ASIC Australia
Tatiana De Oliveira, also known as Tatiano De Oliveira, of Byron Bay, New South Wales, has been convicted of making a false or misleading statement to ASIC. Between 8 June 2018 to 21 August 2020, Mr De Oliveira was the sole director of Shiera Wellbeing Centre Pty Ltd (ACN 626 309 939), a Brisbane-based business that provided alternative and holistic health and beauty services.
/jlne.ws/3BFzepN

Court overturns 20-year ban against James Mawhinney, reinstates interim injunctions
ASIC Australia
The Full Federal Court has allowed an appeal by James Mawhinney to overturn a 20-year ban restraining him from advertising investments and raising funds from the public through financial products. Mr Mawhinney is the director of various companies in the Mayfair 101 Group. On 19 April 2021, the Federal Court granted the restraining order against Mr Mawhinney after finding that he engaged in ‘serious, incompetent and reckless’ conduct (21-076MR). Mr Mawhinney appealed that decision.
/jlne.ws/3S3dWYz

FMA confirms new enterprise leadership team structure
FMA New Zealand
The Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko today announced changes to its executive leadership team as part of its programme to evolve and transform the way it operates, prepare for its expanding mandate, and continue to foster a strong and trusted financial sector that treats people fairly. Announcing the new leadership team structure, Samantha Barrass, FMA Chief Executive, acknowledged the positive participation from the current FMA Executive Committee in the recent consultation process.
/jlne.ws/3QNaW1s

Gloucestershire Credit Union Limited enters administration; Gloucestershire Credit Union Limited was placed into administration on 14 September 2022 and has now stopped trading. James Sleight and Peter Hart of PKF Geoffrey Martin & Co Limited have been appointed as joint administrators.
FCA UK
Gloucestershire Credit Union Limited is a financial co-operative owned by its members. It is regulated as a deposit taker by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) under Firm Reference Number (FRN) 214254. The Financial Services Compensation Scheme (FSCS) is stepping in to protect members and will return members’ money within 7 days from when the Credit Union was declared in default (14 September 2022).
/jlne.ws/3eT4skk

“ITM 2025: Forging New Growth Pathways” – Opening Address by Mr Lawrence Wong, Deputy Prime Minister and Minister for Finance, and Deputy Chairman of the Monetary Authority of Singapore, at the Financial Services Industry Transformation Map 2025 Launch Event on 15 September 2022
MAS Singapore
MAS Board Members, Industry Partners, Distinguished Guests, I am happy to be here today to share with you the road ahead for our financial services sector. Singapore has come a long way in finance. We emerged as an international financial centre in the sixties with the establishment and rapid growth of the Asian Dollar Market. Over the decades, we’ve anchored reputable banks and other financial institutions here, and developed strengths in the capital markets, reinsurance, and wealth and asset management sectors.
/jlne.ws/3xsNaB3

MAS launches Financial Services Industry Transformation Map 2025
MAS Singapore
Mr Lawrence Wong, Deputy Prime Minister and Minster for Finance, and Monetary Authority of Singapore (MAS) Deputy Chairman, launched the Financial Services Industry Transformation Map (ITM) 2025 today. The ITM 2025 lays out the growth strategies to further develop Singapore as a leading international financial centre in Asia – to connect global markets, support Asia’s development, and serve Singapore’s economy. MAS projects the financial sector to grow by an average 4% to 5% per annum during 2021 – 2025 and create 3,000 – 4,000 net jobs on average each year.
/jlne.ws/3Bl9aio

Investing and Trading

Hedge Funds Facing Tighter SEC Clearing Rules for Treasuries
Lydia Beyoud and Liz Capo McCormick – Bloomberg
Hedge funds would have to start centrally clearing many of their transactions in US Treasuries under a new regulatory plan designed to protect against a market meltdown. The Securities and Exchange Commission on Wednesday voted unanimously in favor of proceeding with a plan to give clearinghouses — which sit between buyers and sellers and ultimately backstop the transactions — a much bigger footprint in the $24 trillion dollar market for American government bonds. The draft regulations would make trading safer and limit the chance of any single firm harming the broader financial system, according to the SEC. If finalized, the regulations would represent a significant overhaul for the market and are likely to draw pushback from parts of Wall Street.
/jlne.ws/3BfGWW5

Will Central Banks Kill or Nurture the Polar Bear? The sad life of Knut the zoo cub mirrors today’s decisions on rates — is it better to ease pain on the economy and risk more inflation, or to let it die for a greater good (and save institutional reputations)?
John Authers – Bloomberg
Knut’s Lessons for Us
Is the peak in (for inflation)? And is the trough in (for share prices)? And are these questions related? And if so, what should central banks do about it, and how should the rest of us protect ourselves?
/jlne.ws/3dhCUEM

Dollar’s Strength Prompts Question: What Will Japan Do With Its Bounty of Bucks?; As yen plunges against dollar, Government Pension Investment Fund scores currency gains on its dollar-denominated assets
Megumi Fujikawa – The Wall Street Journal
The U.S. dollar’s rise to a 24-year high against the yen is great news for Japanese savers who put a chunk of their retirement nest eggs into dollar-denominated assets. The biggest such saver is the Japanese government. Now it faces decisions about what to do with its windfall—including whether to sell some of its dollar stash. Tokyo’s piggy bank is called the Government Pension Investment Fund, the world’s largest of its kind with assets equivalent to $1.34 trillion as of June 30. That is about three times the size of the California Public Employees’ Retirement System, or Calpers.
/jlne.ws/3QKWYgv

An Investing Playbook for These Uncertain Times; Almost everything is down this year. A rare bright spot? A backwater called trend following.
Michael P. Regan – Bloomberg
It’s easy to spot the trend followers at back-to-school time: Just look for the kids wearing the coolest sneakers. It’s easy to spot them in the markets these days, too. Look for fund managers with returns that are so hot they make most other types of investors look as if they’re sporting a pair of worn-out Keds.
/jlne.ws/3RMY7p8

Environmental, Social and Corporate Governance

Biden hops into Corvette, declares Detroit ‘back’ at EV-focused auto show
David Shepardson and Jeff Mason – Reuters
President Joe Biden took a victory lap on Wednesday at the Detroit auto show as he highlighted automakers’ electric-vehicle push, including billions of dollars in investments in battery plants, on the back of new government support. Self-declared “car guy” Biden climbed into a silver electric Cadillac SUV and an orange Corvette, glad-handed with the industry’s union workers and declared the city, the birthplace of the auto industry, was making a comeback.
/jlne.ws/3RHXNrE

Kerry Announces US Backing for African Methane-Abatement Drive; US to give AfDB $5 million, joining other donor pledges; Methane has 84 times carbon dioxide’s global-warming power
Katarina Hoije and Antony Sguazzin – Bloomberg
US climate envoy John Kerry announced financial support for an African Development Bank program to reduce methane emissions in Africa. The US will give the Abidjan-based lender $5 million for its Africa Climate Change Fund and an additional $5 million will come from the Global Methane Hub over the next three years, while $1.2 million will be sourced from a number of other donors, the AfDB said in a statement on Thursday.
/jlne.ws/3qEnygu

Hunger in Africa Soars by Almost a Third in Two Years, IMF Says; 12% of people in sub-Saharan Africa are acutely food insecure; Food crisis being driven by climate change, war, Covid-19
Monique Vanek – Bloomberg
One in eight people in sub-Saharan Africa is expected to suffer from high malnutrition this year, an increase of almost a third since 2020 because of soaring food prices and depressed incomes, according to the International Monetary Fund. The IMF estimates that at least 123 million people — 12% of the region’s population — will be unable to meet their minimum food consumption needs, 28 million more than just two years ago.
/jlne.ws/3RPWFCo

Not Every Carbon Price Actually Makes You Pay; Carbon prices vary widely, meaning some sway company behavior much more than others.
Nathaniel Bullard – Bloomberg
In mid-August, Europe’s carbon price hit an all-time high of just over 99 euros for a ton of carbon dioxide emissions. It has since declined, but this was a watershed for the EU’s cap-and-trade carbon market, first launched in 2005. Under the program, companies can trade allowances for the tons of CO2 they emit, so the higher the price the more incentive they have to cut emissions of the planet-warming gas.
/jlne.ws/3qDtg2i

The Biggest Copper Mine in the US Stalled in Dispute Over Sacred Ground; Rio Tinto’s Resolution project has enough of the metal for 275 million EVs. Some locals say it should never be developed.
Joe Deaux – Bloomberg
Deep beneath the arroyos and canyons of the Sonoran Desert lies one of the Earth’s biggest deposits of copper—18 million metric tons, enough of the indispensable metal to supply more than half the electric vehicles expected to be produced in the US in the coming decades. But the scrubby, arid land above that reserve is the site of the Apache Nation’s Sunrise Ceremony, a four-day rite in which young women dance and sing to mark their coming of age. “It’s been a part of us since creation,” says Wendsler Nosie Sr., an Apache leader who opposes efforts to extract the copper.
/jlne.ws/3xsm4d4

Shell chief Ben van Beurden to step down; Energy major’s gas and renewables boss Wael Sawan to take over at end of year
Tom Wilson – Financial Times
Shell chief executive Ben van Beurden is to step down after almost a decade in the job, with head of gas and renewables Wael Sawan named to replace him as leader of the energy major. Thursday’s announcement ends months of speculation over who would succeed van Beurden at the FTSE 100 company. Big Oil chief executives rarely serve longer than 10 years, and initial preparations for van Beurden’s departure began shortly after Sir Andrew Mackenzie’s installation as chair in May last year, according to people familiar with the matter.
/jlne.ws/3S4DAfl

Institutions

HSBC Eyes Long-Awaited Turnaround; The bank is starting to make billions of dollars more from higher interest rates. Investors remain skeptical.
Josh Mitchell – The Wall Street Journal
HSBC Holdings PLC, Europe’s largest bank, is counting on rising interest rates to help revive its share price after a sluggish decade—and to fend off an attack from its biggest shareholder. The British bank has for years asked investors for patience as it retrenches from some major markets and sharpened its focus on Asia. That strategy has kept the bank’s finances steady—but it has also kept a lid on profits and depressed its stock. HSBC’s share price in Hong Kong remains roughly a third of its 2007 peak.
/jlne.ws/3Dwpe3p

Barclays Is Buying Back $7.7 Billion of Securities After Mistake; U.K. Property as Persimmon Backs Market Resilience
Leonard Kehnscherper – Bloomberg
Barclays Plc is close to concluding a buyback of securities after the bank accidentally issued billions of dollars more structured and exchange-traded notes than it had registered with the Securities and Exchange Commission. The total cost of the error is still unknown. The British lender said in a filing Thursday that $7.7 billion of securities have been submitted for the so-called rescission offer through a tender process, out of a total of $9.5 billion eligible. These will be settled today, it added.
/jlne.ws/3dclN7r

Federal Reserve Wants Citigroup to Move Faster to Fix Problems With Its Risk Systems; The bank is due to submit a new plan Thursday that executives hope will ease regulators’ concerns
David Benoit – The Wall Street Journal
Regulators are frustrated with the progress Citigroup Inc. has made in the two years since they reprimanded the bank for problems with the systems it has in place to prevent costly mistakes, according to people familiar with the matter. Federal Reserve officials have repeatedly grilled Chief Executive Jane Fraser about the bank’s plans to fix its risk-management system, demanding to see more progress, the people said. In a meeting this summer, officials from the Office of the Comptroller of the Currency warned the bank’s board that there could be consequences for not getting a handle on the situation, they said.
/jlne.ws/3UgU1aC

Chicago Faces Deep-Seated Ills in Shadow of Citadel-Boeing Defections; Crime, taxes dim city’s luster as business leaders seek new course.
Shruti Singh, Isis Almeida, and Alexandre Tanzi – Bloomberg
Earlier this year, as Chicago’s frigid weather was finally giving way to spring and commuters began returning to downtown office buildings, the city got an unwelcome jolt. In the space of just seven weeks in May and June, Chicago was hit by a pair of corporate defections: Illinois’s richest man, Ken Griffin, announced he’s moving the home of his $57 billion Citadel hedge fund to Miami and Boeing Co. said it would pull its headquarters from the city. Caterpillar Inc. also decided to move its global headquarters to Texas from the nearby suburb of Deerfield.
/jlne.ws/3BJ9rx2

Wellness Exchange

New Data Show Broad Shift to Remote Work During Pandemic; Fewer people drove alone to work or took public transit as habits changed
Gwynn Guilford – The Wall Street Journal
The number of Americans working remotely more than tripled in 2021 from 2019, according to new federal data, and the trend shows signs of persisting this year. In 2021, 27.6 million people reported primarily working from home nationwide, up from 9 million in 2019, according to new 2021 American Community Survey estimates released Thursday by the Census Bureau. In percentage terms, that translated to 17.9% of employees who worked mainly remotely in 2021, compared with 5.7% in 2019. The vast majority of these are likely white-collar jobs; in many occupations such as those involving in-person customer interactions or operating machines, remote work isn’t an option.
/jlne.ws/3BIGb9z

Regions

Traffic, water shortages, now floods: the slow death of India’s tech hub?
Devjyot Ghoshal and Nivedita Bhattacharjee – Reuters
Harish Pullanoor spent his weekends in the late 1980s tramping around the marshes and ponds of Yemalur, an area then on the eastern edge of the Indian metropolis of Bengaluru, where his cousins would join him catching small freshwater fish. In the 1990s, Bengaluru, once a genteel city of gardens, lakes and a cool climate, rapidly became India’s answer to Silicon Valley, attracting millions of workers and the regional headquarters of some of the world’s biggest IT companies.
/jlne.ws/3UeXlme

Households a Wild Card as Europe Moves to End Russian Gas Dependence; Economists are worried that the continent’s consumers won’t follow companies in reducing their energy use David Uberti – The Wall Street Journal
COLOGNE, Germany—A painful push by businesses to cut their natural-gas use is bringing Europe closer to its goal of weaning itself off Russian energy. Getting consumers to follow suit might prove more difficult. Businesses, facing skyrocketing prices during a widening economic conflict running in parallel with Russia’s invasion of Ukraine, have ratcheted down their gas use in recent months. The reduction has exacted a significant economic cost, with slowing production at chemical plants and closed metals factories now widely expected to tip Europe into a recession.
/jlne.ws/3QG6QIt

Norway Willing to Negotiate With Europe to Resolve Energy Crisis; PM says extraordinary gas price hikes not in Norway’s interest; EU is seeking ways to ease energy costs as Russia cuts supply
Kari Lundgren – Bloomberg
Norway and its gas producers are willing to negotiate with the European Union in order to resolve the continent’s energy crisis. “We are not closing any doors for any kind of dialogue or contact,” Prime Minister Jonas Gahr Store told reporters in Oslo Thursday. “It’s not in Norway’s interest that we have extraordinary gas price hikes. We are ready to listen to the companies and see whatever role we can play.”
/jlne.ws/3RMYAro

India’s State Bank Opening Rupee Accounts for Trade With Russia
Anup Roy – Bloomberg
State Bank of India, the country’s largest lender, is opening special rupee accounts to handle Russia-related trade settlements in the local currency but is not the main bank for such business. SBI is “making necessary arrangements and processing requests received from various banks, including Russian banks,” following guidelines laid out by the Reserve Bank of India, it said in a statement. The banking regulator had allowed Indian banks in July to open special rupee vostro accounts with lenders of other countries to settle overseas trades in the Indian currency.
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