SEC Takes Action Aimed at Proxy Advisers for Shareholders

Aug 22, 2019

First Read

Hits & Takes
JLN Staff

Episode 2 of the CryptoMarketsWiki Podcast is now up! In this podcast, Juan Hernandez, CEO of OpenFinance Network, talks to JLN associate editor Matt Raebel about digital tokens. Click HERE to listen.~MR

Ten contracts of the Cboe Three-Month AMERIBOR Futures traded yesterday. Open interest dropped six contracts to five open.~JJL

A bit of phone and market humor from writer, producer, and actor Sam Lucas Smith. His most recent video is called “Death of Android” (3:38) and his 2018 video was called “Buy the Dip, a cryptocurrency comedy (full film). The latter takes 4:22 to watch.~JJL

DRW in Chicago is hiring a Software Project Manager to work with talented software developers on complex software and hardware projects and applying successful project management techniques.~JJL

FIS has John Omahen, VP product management, post-trade, in a video discussing the two types of technologies disrupting and redefining today’s capital markets industry. The video is titled “The Technologies Driving Transformation in Capital Markets.~JJL

Former CFTC Chief Market Information Officer Andrew Busch has issued a report about the 2020 Presidential election titled “2020 Election Research: The Big Shift.”~JJL

I will be attending the Security Traders Association’s 86th Annual Market Structure Conference: Realizing Opportunity on Oct. 2-4, 2019 in Washington DC.~JJL

This year’s FIA Expo in Chicago is the 35th and will be held on October 29-31. We will be there again with our video crew to conduct our industry leader series, but we are still working on details for a location to shoot.~JJL

Did you know that if you are a remotely located former open outcry trader, you can shoot your own interview for our Open Outcry Traders History Project with your phone and send us the file to edit? If you are interested in details, contact me at johnlothian@johnlothian.com.~JJL

Want to figure out what hypothetical market data costs would be under a variety of different parameters? Check out this market data fee calculator provided by Proof Trading, a new broker started by former IEX employees. You can adjust the number of users, use case, which exchange feeds are included, and plenty more. ~SD

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Fifth Annual Wall Street Rides FAR Event Approaches

JohnLothianNews.com

Is there a chance you’ll be in New York during the first week of October? If so, you’ll want to check out the fifth annual Wall Street Rides FAR bike ride event, which raises money for the Autism Science Foundation. In this video, event founder Bryan Harkins, Cboe executive vice president and co-head of markets division, talks about how the event has evolved and grown over the years.

Watch the video »

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The Concentration of Cleared Derivatives: Can Access to Direct CCP Clearing for End-Users Address the Challenge?
Nahiomy Alvarez, John W. McPartland – Chicago Federal Reserve
Cleared derivatives contracts are now concentrated among a small and dwindling number of institutions. Many policymakers and regulators have argued that this concentration has adverse consequences, some of which may have systemic risk implications. The authors explore the benefits and challenges of encouraging major end-users of derivatives to become direct clearing members of central counterparties (CCPs). If done prudently, increasing and diversifying the pool of clearing members and redistributing outstanding derivatives contracts across them may help CCPs become more resilient.
bit.ly/2Z8rZVv

*****Is this the last paper from John McPartland’s career at the Chicago Fed?~JJL

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Goldman Plans Hiring Spree in Trading (Only Coders Need Apply)
Sridhar Natarajan – Bloomberg
More than 100 engineers will be added in tech-related roles; ‘The firm is putting money where its mouth is,’ executive says
Goldman Sachs Group Inc.’s trading division is planning its biggest hiring spree in years. The catch? The entire effort is focused on coders, a sign of where Wall Street is headed.
/bloom.bg/2No9Dc0

****Another story suggesting that coding is where it’s at for Wall Street jobs. Recall a story from earlier this week: There’s no future for traders who don’t know Python. ~JB

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Wednesday’s Top Three
Our top read item of the day on Wednesday was The Trade’s Chief tech officer at Trading Technologies set to depart, about Drew Shields. Second was FlexTrade’s blog Algo Wheels Spinning into Futures, an interesting piece on the algo selection process. Third was the Acuiti Derivatives Insight Report, Euribor Flash Rally Hits Proprietary Traders, which covers an odd flash rally in the Dec20/March21 Euribor spread that hit several proprietary trading firms.

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Lead Stories

SEC Takes Action Aimed at Proxy Advisers for Shareholders; Commission urges proxy advisers to take more steps to disclose how they craft their shareholder recommendations
Andrew Ackerman – WSJ
Public companies notched a victory in a longstanding fight to curb the impact of consultants who influence shareholder votes on topics such as executive pay.
/on.wsj.com/2ZcUK3F

HSBC urges peaceful resolution to Hong Kong protests; Bank breaks silence on political crisis with advert extolling rule of law
Don Weinland and Alice Woodhouse – FT
HSBC and Standard Chartered have broken their silence on the anti-government protests that have rocked Hong Kong in recent months, calling for a peaceful resolution to the crisis in full-page advertisements in local newspapers on Thursday.
/on.ft.com/2Z9GJU5

Markets Should Be Worried About the Music Stopping; A structural decline in trading liquidity could make things very uncomfortable for investors in the next downturn.
Satyajit Das – Bloomberg
Several factors are roiling world markets right now, from fears of a possible U.S. recession to erratic policymaking, trade tensions and general uncertainty. But the unusual size of the moves — regularly on the order of 1% to 3% — is being heightened by something else: the struggle to find someone with whom to trade.
/bloom.bg/2Z79wZD

Patrick Byrne and the comic tragedy of life as a 40-something man; We have reached the point in life where we still have Henry V aspirations, but we look like Falstaff
Robert Armstrong – FT
The corporate world is frequently funny, but mostly in the form of a subtle irony or delicious hypocrisy. Only occasionally does it veer into the ridiculous. It crash landed in that territory this month, with the release of a statement from Overstock.com, a company in the superficially humourless business of selling cut-price housewares and bedding online.
/on.ft.com/2Z6Xu2g

Farm Tensions Escalate as USDA Staffer Is Threatened in Midwest
Mario Parker, Michael Hirtzer, and Isis Almeida – Bloomberg
NASS crop chief Honig was scheduled to address a group on tour; ‘It’s clearly a stressful time right now,’ tour organizer says
In a sign of rising tensions with the farm community, the Trump administration withdrew staff from a privately run tour of Midwestern corn and soybean fields after a government employee was threatened.
/yhoo.it/2NqmI4S

US SEC increases scrutiny of proxy advisers; Regulator opens ISS and Glass Lewis up to fraud lawsuits over voting advice
Patrick Temple-West – FT
A divided US Securities and Exchange Commission has imposed new regulatory oversight on proxy advisory firms, increasing legal scrutiny of their methods for offering shareholder voting recommendations.
/on.ft.com/2Z9x5kn

Bank of New York Mellon Loses Key ETF Customer to State Street; Loss puts a dent in bank’s push to become a bigger player in the market for servicing ETFs
Justin Baer – WSJ
Bank of New York Mellon Corp. BK -0.05% lost VanEck Associates as a client of its servicing business for exchange-traded funds to rival State Street Corp. STT 0.06% , people familiar with the matter said.
/on.wsj.com/2ZauGWA

Facebook cryptocurrency investigated by EU; Antitrust probe launched over concerns Libra coin could unfairly disadvantage rivals
Madhumita Murgia and Javier Espinoza and Mehreen Khan – FT
Facebook’s new digital currency, Libra, is under early scrutiny from the EU’s antitrust regulators, according to two people familiar with the matter.
/on.ft.com/2Z9HnAZ

Hong Kong’s stock market faces a drought of initial public offerings as valuations take a plunge to among the lowest in Asia
Enoch Yiu – South China Morning Post
Companies looking to list in Hong Kong have put their initial public offerings (IPOs) on hold amid an annual decline of as much as 40 per cent in the valuations of new share offerings in some cases, making the market Asia’s cheapest after Pakistan.
bit.ly/2Z5TfUK

When Going Gets Tough, Hedge Fund Traders Get Better, Study Says
Elena Popina – Bloomberg
Stocks picked during times of redemptions outperform; Reputational risk, loss of income possible explanations
Sometimes it takes a crisis to bring out your best. True in politics and marriage, and also, according to a new study, in active fund management. University of Manchester researchers Xinyu Cui and Olga Kolokolova found that during times of outflows, highly paid traders exhibit above-average stock-picking skills. Their paper is called “Do Hedge Fund Managers Work Harder Under Pressure?”
/bloom.bg/2Z98j3T

Exchanges, OTC and Clearing

Winners unveiled in SGX Orb Awards recognising excellence in financial news and content; Awards broaden SGX’s efforts to promote financial education by encouraging media and content producers to empower investors with knowledge and insights
SGX
Singapore Exchange (SGX) has unveiled the winners of the second edition of the SGX Orb Awards, which seeks to encourage broader and deeper coverage of financial news to empower individuals to become savvier investors.
bit.ly/2ZcRO79

Traders respond positively to MarketAxess/LiquidityEdge deal
By dan.barnes – FI Desk
Buy-side traders have responded positively to the announcement that electronic bond market operator, MarketAxess, has agreed to buy LiquidityEdge, the US Treasuries marketplace, noting that it puts it more firmly in the footprint of rival Tradeweb. Valued at US$150 million, the deal will significantly increase the government bond business of MarketAxess.
bit.ly/2ZaiBB0

Fintech

Goldman Sachs eyes wider AI adoption in equities as it leads $72 million H2O.ai investment; Goldman Sachs European equity trading head says the bank will adopt AI models more broadly across its equities trading division following investment.
Hayley McDowell – The Trade
Goldman Sachs has led a $72.5 million funding round in an artificial intelligence (AI) and machine learning specialist, as the bank aims to adopt AI models more widely within its equities trading business.
bit.ly/2Z5BLIa

Emerging markets fintech Tala raises $110m; California-based lender that offers small loans to the ‘unbanked’ eyes expansion
Camilla Hodgson – FT
Tala, the fintech lender that offers small loans to millions of people in emerging markets, has raised $110m to expand its operations and take its total equity levels to $200m.
/on.ft.com/2NldC9q

Swiss Fintech Startup Becomes a $1 Billion Unicorn
Stephan Kahl – Bloomberg
Numbrs raises $40 million as it looks to expand beyond Germany; Company counts 50 indivuals and families among its investors
A Zurich-based fintech firm whose investors include Josef Ackermann has raised additional money to value the company at more than $1 billion as it prepares to expand outside its main market of Germany.
/bloom.bg/2ZakoGh

The rise of artificial intelligence comes with rising needs for power;
Study finds that training neural networks require more power, as data centers’ energy efficiency declines for first time in more than a decade of measurement
Karishma Vanjani – Marketwatch
Advances in technology can allow you to order food by voice or unlock your phone with your face, but those new capabilities could take a toll on the environment.
/on.mktw.net/2ZbvBX1

Cryptocurrencies

U.S. Treasury blacklists cryptocurrency addresses associated with Chinese “drug kingpins”
The Block
The Treasury Department’s Office of Foreign Assets Control (OFAC) took actions against three Chinese nationals, who it alleges manufactured and distributed “synthetic opioids or their precursor chemicals.” According to OFAC, the individuals laundered part of their drug proceeds in bitcoin, transmitting these proceed in and out of banks in China and Hong Kong. As a result of its investigation, OFAC has also identified a handful of bitcoin and litecoin wallet addresses associated with these individuals, which it has added to its sanctions list.
bit.ly/2ZhHdCX

Low-quality cryptocurrency exchanges still dominate market, says new report
Nicholas Marinoff – Decrypt via Yahoo Finance
The cryptocurrency trading market is thriving, yet it’s exchanges with less than stellar reputations for regulatory compliance and data security that are still getting the lion’s share of trades. That’s according to cryptocurrency data firm CryptoCompare, which today released its July 2019 Exchange Review.
/yhoo.it/2P6rGGl

Authorities Seize Crypto Mining Equipment from Nuclear Power Plant
Daniel Kuhn – Coindesk
Ukraine’s top law-enforcement and counterintelligence agency uncovered crypto mining equipment on site at a nuclear power plant. According to local media reports, the Security Service of Ukraine (SBU) confiscated six Radeon RX 470 GPU video cards, a motherboard, power supplies and extension cords, a USB and hard drive, and cooling units installed in the South Ukrainian Nuclear Power Plant on July 10.
bit.ly/31T2W5P

Gemini Heads Down Under With Crypto Exchange Launch in Australia
William Foxley – Coindesk
Cryptocurrency exchange Gemini announced Wednesday that it is officially opening its doors to customers in Australia. The exchange’s fifth international move, the development means that Australian users can buy and sell five cryptocurrencies on Gemini including bitcoin, bitcoin cash, ethereum, litecoin, and zcash. The startup, founded by investors Tyler and Cameron Winklevoss, is also making available its iOS and Android application to this market.
bit.ly/2MCPNdR

Binance to Launch US Platform Soon, Helped by a Little-Known Partner
Samuel Haig – Cointelegraph
Binance is expected to launch its upcoming exchange platform in the United States by the end of the year, with the company’s executive estimating that the platform will launch within “a month or two.” In the interview, Changpeng Zhao (aka CZ), the CEO of Binance, predicted the launch despite acknowledging that many things are still “in flux” regarding the platform’s planned operations in the U.S.
bit.ly/2MCQjbN

SEC Approves Blockchain Tech Startup Securitize to Record Stock Transfers
Nathan DiCamillo – Coindesk
Securitize, a provider of technology for issuing blockchain tokens, has registered as a transfer agent with the U.S. Securities and Exchange Administration (SEC), a move it says will boost adoption. Announced Wednesday, the registration means Securitize can now act as the official keeper of records about changes of ownership in securities. While that might sound redundant given that blockchains are supposed to track asset transfers, the San Francisco-based startup says it’s expedient.
bit.ly/30o8eWD

Tether to Issue Stablecoin Backed by Yuan in Belgian Bank: Insider
Wolfie Zhao – Coindesk
Tether is planning to issue a stablecoin pegged to the Chinese renminbi, according to a trader with ties to the company. Zhao Dong, an over-the-counter (OTC) trader in China and a shareholder of crypto exchange Bitfinex – which shares managers and owners with Tether – revealed the move on WeChat on Wednesday, saying Tether plans call the stablecoin CNHT.
bit.ly/2Hg2Z3F

R3 hires Societe Generale electronic trading connectivity associate for senior role; Bryan D’Souza joins R3 from Societe Generale where he has worked for the past seven years in various trading technology roles.
Hayley McDowell – The Trade
Blockchain technology specialist R3 has hired an electronic trading client connectivity associate from Societe Generale.
bit.ly/2Z7bR6R

Facebook’s Libra Bets It Can Bank the Unbanked; Social-media giant wants to bring financial services to those who don’t have them, but bitcoin has struggled to do so
Paul Vigna – WSJ
?FB -0.14% Facebook Inc. FB -0.14% has an ambitious goal for its proposed cryptocurrency, Libra: to bring financial services to the hundreds of millions of people world-wide who don’t use banks or other traditional institutions. The cryptocurrency sector has for years tried to do the same and failed.
/on.wsj.com/2Nr0OhB

More trouble in blockchain-land
Izabella Kaminska – FT
By any measure, R3 was supposed to be one of the surest of the enterprise blockchain consortium bets. Headed by financial-platform industry veteran David Rutter, of ICAP and Prebon Yamane heritage, it was one of the earliest of the blockchain projects to pull in serious backing from the banking community.
/on.ft.com/2ZbexjI

Crypto derivatives traders are abandoning Telegram for a newly launched chatting app to do large trades; Paradigm, a messaging platform for cryptocurrency traders, is looking to replace Telegram to facilitate over-the-counter (OTC) trading
Celia Wan – The Block Crypto
Some of the biggest players in cryptocurrency derivatives are swapping Telegram for a newly launched trading platform.
bit.ly/2Z9KIjv

Palestinian Civilians Are Using Bitcoin More Than Terrorists; Experts say Hamas is now using bitcoin for cross-border fundraising at an unprecedented rate. Still, even the largest estimates of terror financing in the region are apparently dwarfed by civilian bitcoin usage in the Gaza Strip, local experts tell CoinDesk.
Leigh Cuen – Coindesk
Terrorists aren’t the only Palestinians using bitcoin. Sources in Gaza told CoinDesk bitcoin is now more popular than ever among civilians, too.
bit.ly/2Z7280c

White House Advisory Says Cryptocurrencies Used for Fentanyl Purchases
William Foxley – Coindesk
The White House issued two advisories on drug purchases in the U.S. Wednesday, using the communications to make specific references to the role of cryptocurrencies in such transactions.
bit.ly/2Np8alV

Politics

Trump Says He’s Not Planning ‘Elitist’ Capital Gains Tax Break
Jordan Fabian and Laura Davison – Bloomberg
He studied the issue for ‘a long time,’ doesn’t ‘love’ it; President says he could act on indexing without Congress
President Donald Trump said Wednesday that he’s not looking to cut taxes by indexing capital gains and that doing so would be perceived as “somewhat elitist” as it would benefit the wealthy.
/bloom.bg/2ZeXspr

Fannie and Freddie Plan Is Likely Released Next Month; Trump administration favors returning mortgage-finance firms to private-shareholder ownership
Andrew Ackerman – WSJ
The Trump administration is preparing to release as early as the first part of September its long-awaited plan to return Fannie Mae and Freddie Mac to private-shareholder ownership, according to people familiar with the matter.
/on.wsj.com/2Z9xBij

US farmers have high hopes for hemp crops; Demand for cannabidiol could see the market expand to $20bn in 5 years
Gregory Meyer – FT
Trade wars have crushed US grain sales. Tobacco is in terminal decline. However, for farmers in Kentucky the future may lie in a crop of the past: hemp.
/on.ft.com/2ZgoiNX

Multilateralism Is Dead. Long Live the G-7; Host Emmanuel Macron has vowed to “innovate,” but that likely won’t be enough to save the international order.
Tim Rossy, Gregory Viscusi, Arne Delfs – Bloomberg
By 2 a.m. on June 29, officials locked away in the negotiating room at the Group of 20 summit in Osaka, Japan, were starting to fall asleep.
/bloom.bg/2NlC4HL

Cut the Trump Uncertainty Tax; His best stimulus policy would be to end his tariff campaign.
The Editorial Board – WSJ
President Trump isn’t famous for consistency, but his reversal on a new round of tax cuts may be a record. On Tuesday he said he was considering a cut in the payroll tax and indexing capital gains for inflation, but on Wednesday he took it all back.
/on.wsj.com/2Nq7Y5Q

U.S. farmers, lawmakers dial up pressure on Trump over biofuel policy
Humeyra Pamuk, Jarrett Renshaw – Reuters
The agriculture and biofuel industries and their U.S. congressional allies ramped up pressure on the Trump administration on Wednesday over the relief he has given oil refiners from rules requiring use of biofuels.
/reut.rs/2NlH3rX

Regulation

Time is running out: the pressure is on to prioritise PPI
UK FCA
With one in five Brits reporting they’ve left making a decision to the last minute and with a week to go to the PPI complaints deadline, the time for decision-making is now.
bit.ly/2Za8Ti6

SEC Clarifies Investment Advisers’ Proxy Voting Responsibilities and Application of Proxy Rules to Voting Advice
SEC
The Securities and Exchange Commission today provided guidance to assist investment advisers in fulfilling their proxy voting responsibilities. The guidance discusses, among other matters, the ability of investment advisers to establish a variety of different voting arrangements with their clients and matters they should consider when they use the services of a proxy advisory firm. In addition, the Commission issued an interpretation that proxy voting advice provided by proxy advisory firms generally constitutes a “solicitation” under the federal proxy rules and provided related guidance about the application of the proxy antifraud rule to proxy voting advice. Both of these actions explain the Commission’s view of various non-exclusive methods entities can use to comply with existing laws or regulations or how such laws and regulations apply.
bit.ly/2Z70H1O

ASIC proposes ban on the sale of binary options to retail clients, and restrictions on the sale of CFDs
ASIC
ASIC has released a consultation paper Product intervention: OTC binary options and CFDs (CP 322) on proposals to use its product intervention power to address significant detriment to retail clients resulting from over-the-counter (OTC) binary options and CFDs.
bit.ly/2Zgq5CF

ASIC Regtech Financial Advice Files Symposium – Opening statement
ASIC
Opening statement by Daniel Crennan QC, Deputy Chair, Australian Securities and Investments Commission at the ASIC Regtech Financial Advice Files Symposium, (Sydney, Australia) 22 August 2019
bit.ly/2ZacNHC

FINRA Advises Member Firms to Submit Questions to the SEC on Regulation Best Interest – FINRA advises broker-dealers about the SEC’s recently adopted Regulation Best Interest and solicits implementation questions.
Sergio Alvarez-Mena, David Bergers, Michael Butowsky, Eric Love, Laura Pruitt – Jones Day via JD Supra
On August 7, 2019, the Financial Industry Regulatory Authority (“FINRA”) issued a Regulatory Notice (the “Notice”) intended to advise broker-dealers about the Securities and Exchange Commission’s (“SEC”) recently adopted Regulation Best Interest (“Reg BI”) and to encourage firms to submit any implementation questions to the SEC in preparation for Reg BI’s upcoming June 30, 2020, compliance date. Reg BI requires, among other things, that broker-dealers providing recommendations to retail customers act in their customers’ best interest. (For additional information about Reg BI, please see the Jones Day Commentary “Final Rule on Regulation Best Interest Now Complete.”)
bit.ly/2ZeaO5i

Investing and Trading

Yield-Curve Inversion Hits World’s Biggest Covered-Bond Market
Frances Schwartzkopff – Bloomberg
Recession fears may be driving market in Denmark, Nordea says; Mortgage lenders are holding quarterly refinancing auctions
For the first time since the financial crisis, yields at the very shortest end of Denmark’s $500 billion covered-bond market are higher than on longer-dated notes.
/bloom.bg/2Z9Rztt

Investment Robots Are Listening to CEOs and Reading Your Twitter Feed
Justina Lee – Bloomberg
Systematic funds mine alternative data for trading signals; Patents, auditor changes, news stories all dissected for alpha
In less than a decade, Danske Bank A/S changed auditors four times before a $230 billion money-laundering scandal hammered its share price.
/bloom.bg/2Z8CtnZ

Investors Hoard Most Gold in ETFs in Six Years
Ranjeetha Pakiam – Bloomberg
Worldwide holdings have rebounded since 2016 on rising demand; Goldman Sachs has forecast further gains in bullion to $1,600
Gold’s faring extremely well as a haven asset, with inflows into exchange-traded funds hitting 1,000 tons since holdings bottomed in early 2016 after a prolonged unwind in the wake of the global financial crisis.
/bloom.bg/2Nqb7Ts

Traders Spot Opportunity With LNG Prices at Rock Bottom
Anna Shiryaevskaya and Stephen Stapczynski – Bloomberg
Frenzied LNG buying seen ahead of higher seasonal demand; Expanding global supply will likely curb price gains
It’s bargain time in the liquefied natural gas market. After prices plunged to their lowest on record for this time of year, traders say buyers from Japan to India have started to snap up cargoes in anticipation of a pickup in winter demand. Procurement for the colder season is only expected to intensify over what’s left of the summer.
/bloom.bg/2NpJhq4

Institutions

Deutsche Bank Now Requires CEO Approval to Fill Job Vacancies
Steven Arons – Bloomberg
Deutsche Bank AG has tightened the way it fills vacancies amid the bank’s largest ever job-cutting program.
/bloom.bg/2Z8CqIP

Futures Brokerage Capital Trading Group Announces Launch of Managed Futures Podcast
CTG
Capital Trading Group, LP (“CTG”), an investment firm specializing in execution and account management for commodity trading advisors, has announced the release of its new Managed Futures Podcast hosted by firm principal and alternative investments specialist, Nell Sloane.
bit.ly/2Nm51TS

Deutsche Bank becomes largest foreign bank for onshore Bond Connect volumes; Deutsche Bank expects activity on China’s Bond Connect to increase, forecasting a further $120 billion flow into onshore bonds in the next few years.
Hayley McDowell – The Trade
Deutsche Bank has said that it has become the top foreign investment bank by trading volumes for China’s cross-border trading and settlement link, Bond Connect.
bit.ly/2NphXZl

London hedge fund Eisler Capital hires Goldman Sachs veteran and global electronic futures head; Henry Howell has been with Goldman Sachs for 16 years, but has departed for a business development role at London-based hedge fund Eisler Capital.
Hayley McDowell – The Trade
London-based macro hedge fund, Eisler Capital, has hired managing director and the global head of electronic futures at Goldman Sachs for a business development role.
bit.ly/2NocqSF

Commerzbank Investor Norway Raises Stake After Stock Falls to Record Low
Steven Arons – Bloomberg
One of Commerzbank AG’s biggest investors, Norway’s $1 trillion sovereign wealth fund, raised its stake in the German lender after the stock fell to a record low.
/bloom.bg/2NqFFEk

Hedge Funds Have Already Bled $55.9 Billion This Year
Oliver Telling – Bloomberg
July net outflows across the industry amounted to $8.4 billion; Event-driven funds fared best; long/short equity funds suffer
Hedge funds have already bled 50% more money this year than in all of 2018, as the industry struggles to win back investors fed up with high fees and poor performance.
/bloom.bg/2Ze4NWg

Regions

Germany Regrets Size of Bond That Pays Nothing as Auction Flops
John Ainger – Bloomberg
Debt agency admits sale of 2050 bond may have been ‘too large’; Getting paid to borrow draws new attack from Trump on Fed
The world’s first 30-year bond featuring zero income struggled to find buyers, prompting Germany’s debt agency to admit the sale may have been “too large.”
/bloom.bg/2Z9RiGX

Bavaria’s Leader Wants Germany to Outlaw Negative Rates
Piotr Skolimowski – Bloomberg
Germany needs a law that bans banks from passing negative interest rates on to retail clients, Bavaria’s Prime Minister Markus Soeder told Bild newspaper on Wednesday.
/bloom.bg/2ZcFd3W

Dutch Gas Shutdown Puts at Risk Future of Europe’s Biggest Hub
Vanessa Dezem – Bloomberg
TTF future questionable as country become importer: GasTerra; Groningen’s production to be reduced until it halts by 2030
Even the seller of natural gas from Europe’s largest field was taken aback by the Dutch government’s decision last year to close it forever.
/bloom.bg/2Z8gLRd

Indians pawning the family gold amid credit crunch
Rajendra Jadhav, Nupur Anand – Reuters
Refused a loan by a state-run lender and desperate for funds to buy cotton seeds before the summer sowing season window closed, Indian farmer Babasaheb Mandlik ran out of choices – he pawned his wife’s gold jewelry.
/reut.rs/2NobAoY

The $30 Billion Exodus: Foreign Oil Firms Are Bailing on Canada
Kevin Orland – Bloomberg
Persistent pipeline delays, opposition have hampered industry; Little improvement seen near as Alberta extends output limits
Capital keeps marching out of Canada’s oil industry, with Kinder Morgan Inc.’s sale of its remaining holdings in the country on Wednesday adding to more than $30 billion of foreign-company divestitures in the past three years.
/bloom.bg/2NlGJtf

Fires Destroy Amazon Rainforest, Blanketing Brazilian Cities in Smog; Criticism of President Jair Bolsonaro’s environmental policies widens; darkness descends two hours early in São Paulo
Samantha Pearson and Luciana Magalhaes – WSJ
SÃO PAULO—Vast fires, many of them set by loggers, are ravaging the Amazon at a rate not seen in years, sending plumes of smoke that darken skies over Brazilian cities at a time when there is international pushback against President Jair Bolsonaro ‘s environmental policies.
/on.wsj.com/2Nqi8Ui

Brexit

France Says It Now Sees No-Deal Brexit as the Likeliest Scenario
Helene Fouquet and Ian Wishart – Bloomberg
Official in Macron’s office warns of immediate border checks; EU will still expect U.K. to pay exit settlement: official
The French Government expects the U.K. to leave the European Union without a withdrawal agreement, an official in President Emmanuel Macron’s office said, meaning the immediate imposition of border controls after Brexit at the end of October.
/bloom.bg/2Z6C4m8

UK to halve emergency petroleum stocks after no-deal Brexit; Industry will no longer be required to hold EU-mandated levels of strategic reserves
David Sheppard – FT
The UK’s emergency petroleum stocks will more than halve in the event of a no-deal exit from the EU, reducing the buffer of strategic reserves available in the event of severe global supply disruption.
/on.ft.com/2Za7S9B

U.K. Drops Non-Disclosure Agreements From Most Brexit Contracts
Tiago Ramos Alfaro – Bloomberg
The U.K. government is dropping most non-disclosure agreements on contracts for Brexit-related work, as it steps up preparations for leaving the European Union.
/bloom.bg/2NonCyx

Tough Brexit Talk But Neither Side Has Given Up on Breakthrough
Ian Wishart – Bloomberg
EU officials, though pessimistic, say there’s time for a deal
Angela Merkel’s challenge to Boris Johnson to find a Brexit solution in the next 30 days sounds impossible. But while both sides are talking tough, officials in private say there’s still time to salvage a deal.
/bloom.bg/2NlVKLs

Number of EU citizens moving to UK for work has halved since Brexit vote; ‘The weak pound and the uncertainty over Brexit are likely to be prime explanations’ for decline, think-tank says
Lizzie Dearden – The Independent
The number of EU citizens moving to the UK for work has halved since the Brexit referendum. New statistics showed the number plummeted from 190,000 in the year to June 2016 to 92,000 in the year to March.
bit.ly/2NvnT2G

EU commissioner launches withering attack on ‘unelected’ Boris Johnson; Prime minister accused of gambling with peace process
Jon Stone Brussels – The Independent
Ireland’s EU commissioner has launched a scathing attack on Boris Johnson, accusing the “unelected prime minister” of “gambling” with the Irish peace process.
bit.ly/2ZcDnji

France’s Macron says no-deal Brexit would be Britain’s fault
Michel Rose – Reuters
French President Emmanuel Macron on Wednesday said a no-deal Brexit would be of Britain’s own making and not the European Union’s, adding that any trade pact London cut with Washington would not mitigate the cost of leaving the bloc without a deal.
/reut.rs/2Z9NPrH

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Past Newsletters

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Index Funds Are the New Kings of Wall Street

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Are Bankers Mobsters Becomes Question in German Cum-Ex Probe

Get a FREE 90 day trial of John Lothian Newsletter First ReadHits & TakesBy JLN StaffDon't miss the regulation section today. The CFTC, SEC, FINRA and ASIC are all in the news along with lots of statements from the CFTC about their recent...

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