Hits & Takes
John Lothian & JLN Staff
Do you know the internet domain of the National Futures Association? Their domain is Futures.org, but their website uses the sub-domain NFA.Futures.Org as their home page. The reason this is important is that there are some phishing emails going around that include the names of some NFA staff, including Kathleen Clapper and Joe Hawrysz. Other staff names may be used too. The domain the emails are coming from is “@nfa-futures.com.” We always want to read emails from our regulators, but in this case it is an imposter. The NFA has sent out a notice about this. So let’s be careful out there. — NFA
I interviewed the CME Group’s Global Head of Research, Owain Johnson, a week ago and wrote a feature piece about Johnson. One of the things I learned is that he wrote a book I was unaware of before, “The Price Reporters: A Guide to PRAs and Commodity Benchmarks.”
The book is described on Amazon this way:
“The Price Reporters: A Guide to PRAs and Commodity Benchmarks” brings the mysterious world of price reporting out of the shadows for the first time, providing a comprehensive guide to the agencies that set the world’s commodity prices. This book explains the importance of PRAs to the global commodities industry, highlighting why PRAs affect every consumer around the world. It introduces the individual PRAs, their history and the current state of play in the industry, and also presents the challenges that the PRA industry is facing now and in the future, in particular how regulation might impact on the PRAs, their relationships with commodity exchanges, and their likely direction.”
For the record, I had to look up the acronym PRA, which stands for “price reporting agency.” Look for my feature piece later this week. — Amazon
CME Group’s May 2021 volume numbers are out and there are some doozies. Their interest rate average daily volume, or ADV, was 10.2 million contracts, equity index ADV was 5.6 million and options ADV was 3.3 million contracts. Energy ADV was 2.0 million contracts and agricultural ADV was 1.5 million. Finally, FX ADV was 701,000 and metals ADV was 649,000.
Highlights included overall volume up 15% and interest rate ADV up 24% year over year (y/o/y). SOFR futures were the stars, up 257% compared to May 2020. Agricultural ADV was up 45% over May 2020 and ag options volumes increased 114% year over year. Overall, options ADV was up 30% over May 2020.
Metals ADV at the CME grew 25% y/o/y, and metals options ADV up 14% y/o/y. The Micro futures were 11% of the total metals ADV in May 2021.
Equity index ADV rose by 7% y/o/y, while Bitcoin futures monthly ADV of 11.6K was up 36% y/o/y. The newly launched Micro Bitcoin futures reached an ADV of 30.3K in May, 2021, while Ether futures ADV of 6K was an increase of 146% over last month.
To show the importance of micros in the equity complex, Micro E-Mini futures were 40.2% of the overall equity index ADV during May 2021. — CME Group
OCC recorded its highest May volume on record, with total volume up 32.7% from a year ago. It was also the 5th highest volume month at the OCC. — OCC
On the smaller exchange size, MGEX also had its best May ever. — Mondovisione
Eurex is holding a webinar on “Tick size reduction of EURO STOXX® Index Futures and its impact,” on June 10 at 10:00 to 10:45 AM (New York). Eurex and Quantitative Brokers will outline their research paper that studied the microstructure changes of STOXX® Banks futures (FESB) in December 2020. That analysis serves as a case study for the potential impact of the FESX tick size change. You can register HERE.
Sutat Chew had this to say on LinkedIn after the announcement of his retirement from SGX and his replacement by Pol de Win:
“It has been an exhilarating journey for me working with a fantastic team of colleagues and friends through SGX’s transformation under Hsieh Fu Hua, the late Magnus Bocker, and Loh Boon Chye. I am equally grateful for all the support partners and clients have generously given over the years. Having led SGX CSR & Bull Charge for the last decade, I was and continue to be inspired by community work. I therefore look forward to devoting more time to social sector pursuits and cheering on Team SGX and our capital markets. Please extend the congratulations to Pol de Win who will carry the baton on to new heights at SGX. — LinkedIn
The great Sol Waksman of BarclayHedge is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Waksman is the founder and president of BarclayHedge, a division of Backstop Solutions. BarclayHedge is a firm that provides institutional clients and high-net-worth investors in the hedge fund and managed futures sectors with performance measurement and portfolio management products, niche publications, database and software programs and consulting services. BarclayHedge/Backstop Solutions are the partners of the CME Group in the Managed Futures Pinnacle Awards. Thank you to Sol and all who have given and all who have yet to give. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Today we have an interesting video in our The Path to Electronic Trading series featuring Robin Trott. This is the first of two parts about the experiences of Trott, who worked under Richard Berliand at JP Morgan and helped bring JP Morgan Futures into the electronic trading era.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The Cboe Options Institute is offering a 60-minute webinar with Catherine Yoshimoto and Scott Maidel on Wednesday, June 9, that will look at options for overwriting and strategies for mid-year index reconstitutions. The discussion will include a comparison of the performance, volatility and composition of the Russell 1000 and Russell 2000 indexes. Registration information is here.~SC
Robin Trott – The Path to Electronic Trading Part 1
Robin Trott started out as an undergrad studying philosophy and politics, but it was the peak of the dotcom bust and he realized that wasn’t very practical. So he got a Master’s degree and got on the technology and operations graduate scheme at JP Morgan.
HKEX Supports Global Vaccine Drive, and Offers Employees Holiday Incentive
Hong Kong Exchanges and Clearing Limited (HKEX) fully supports the global vaccine drive in response to the COVID-19 pandemic. HKEX today (Wednesday) confirms that it will offer eligible Hong Kong-based HKEX employees who have received two doses of a COVID-19 vaccine, two additional days of annual leave, recognising their commitment to community health and HKEX’s support of the Hong Kong Government’s ongoing vaccination programme.
*****If you don’t want to get the vaccine, I encourage you to go visit a COVID ward at the hospital so you can see the potential alternatives. ~JJL
CCP12, EACH, FIA and ISDA publish paper to address CPMI-IOSCO category 1 topics
In the report “Central counterparty default management auctions – Issues for consideration”, the Committee on Payments and Market Infrastructures (CPMI) and the Board of the International Organization of Securities Commissions (IOSCO), described issues for further industry work to consider the design and conduct of default management auctions. These issues were structured into three categories of work where the Policy Standing Group of CPMI-IOSCO sought industry action:
*****This headline qualifies for the most unreadable by use of acronyms for 2021 so far.~JJL
New guidance says businesses can require employees to get vaccinated and bar unvaccinated employees from returning
Max Jungreis and Jennifer Ortakales Dawkins – Insider
The federal government on Friday updated its guidance for employers, saying companies may require their workers to get vaccinated for COVID-19. Additionally, it said employers may offer incentives such as bonuses or paid time off for employees who voluntarily receive vaccinations, as long as they are not coercive. In April, the Biden administration announced it would grant tax incentives to small businesses that offered employees paid time off to get vaccinated. Companies small and large have used incentives and flexible policies to increase employee vaccination rates.
*****There are always exceptions and nuances; read the fine print.~JJL
Tuesday’s Top Three
Our top story Tuesday was the New York Times’ How the World Ran Out of Everything. (No, don’t start hoarding toilet paper again, please.) Second was the obituary for William R. Power II, former CBOE trader and board representative as well as MGEX board member and adviser to the NYSE. Third was US regulation on cryptocurrencies could be coming, a podcast from the Financial Times.
206,026,547 pages viewed; 25,969 pages; 232,935 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Senate Passes Bill to Fund CFTC Whistleblower Program; The bill was passed unanimously on Friday; a similar bill may be considered by the House of Representatives
Mengqi Sun – WSJ
A newly passed Senate bill would temporarily create a separate account to pay for the operation of the Commodity Futures Trading Commission’s whistleblower program as the agency confronts a funding crisis over a large potential payout. Currently, the CFTC’s Customer Protection Fund, which is funded by money the agency collects in enforcement penalties, is used to pay successful whistleblowers as well as for operating expenses and educational initiatives associated with the whistleblower office. The bipartisan legislation proposes the establishment of a separate account at the U.S. Treasury Department until Oct. 1, 2022, to ensure that the CFTC’s whistleblower office will be able to continue operations even if the amount in the fund drops to a critical level.
OCC May 2021 Total Volume Up 32.7 Percent from a Year Ago; Highest May volume on record and fifth highest month in OCC’s history
Chicago – OCC, the world’s largest equity derivatives clearing organization, announced today that May 2021 total cleared contract volume was 723,741,756 contracts, up 32.7 percent compared to May 2020 and the highest May volume on record. Year-to-date average daily cleared contract volume through May was 39,367,534 contracts, up 41.9 percent compared to May 2020.
ESMA admits more work is required to obtain a precise view of the EU equity trading landscape; EU regulator says it plans to consult this summer on equity transparency after issues relating to the granularity and accuracy of its data were highlighted by a new report.
Annabel Smith – The Trade
The EU securities and markets regulator has admitted that more work is required to obtain a precise view of the portion of equity trading volumes that take place on venues. ESMA told The TRADE that it was working on a review of the technical standard concerning equity transparency which would include a consultation covering this review in the summer.
New Eurex derivatives facilitate exposure to the Chinese equity market
MSCI China Tech 100 Index Futures to focus on technology value chain in China;MSCI China/HK Listed Indexes offer exposure to Chinese equities; Further derivatives targeting investors in the APAC region
Eurex is further extending its footprint in Asia. The derivatives exchange has launched futures on the MSCI China Tech 100 Index, as well as futures and options on the MSCI Hong Kong Listed Large Cap and the MSCI China Hong Kong Listed Large Cap indexes. The derivatives arm of Deutsche Börse Group is thus responding to growing demand for investment and trading instruments in the Asia-Pacific region.
OCC selects former State Street and Nomura exec for new risk chief; New chief risk officer at the OCC brings over 20 years of experience to the role, after serving in similar positions for both State Street and Nomura.
Annabel Smith – The Trade
The Options and Clearing Corporation (OCC) has appointed a former State Street and Nomura executive as its new chief risk officer. David Ye joins the OCC bringing with him over 20 years of industry experience, most recently serving as chief risk officer for State Street Global Markets and global head of market risk for seven years.
OCC Names Former State Street, Nomura Executive David Ye as Chief Risk Officer; Ye Brings more than 20 Years of Leadership Experience in Financial & Operational Risk Management
OCC, the world’s largest equity derivatives clearing organization, today announced the hire of David Ye as Chief Risk Officer and a member of OCC’s Management Committee. With over 20 years of leadership experience in financial and operational risk management, including executive positions at State Street Global Markets and Nomura Holding Americas, Ye will be responsible for implementing OCC’s risk management strategy.
A Banker’s Long Prison Term Puts Cum-Ex Suspects on Alert
Karin Matussek – Bloomberg
Former Warburg manager convicted of aggravated tax evasion; German banker could be first to serve time over dividend trade
The sentencing of a former banker at M.M. Warburg & Co. to 5 1/2 years in German prison for his role in the controversial Cum-Ex trading scheme is set to send shock waves through the financial industry, where about 1,000 other suspects in the wide-ranging probe await their fate.
Four Ways to Keep Working From Home When the Boss Wants You Back; Managing a hybrid schedule requires more care as companies start to ask employees to return to the office.
Sarah Green Carmichael – Bloomberg
As offices reopen, some companies are letting workers decide when—or whether—to return. A recent CBS News poll showed that 60% of employees want to keep working remotely, at least part time. But doing so can lead to anxiety: If you’re not in the office every day, will it start to become an issue? We asked experts for advice on how to ensure that a hybrid arrangement can continue to benefit you—and be valuable to bosses.
What Entrepreneurs Have Learned From the Covid-19 Pandemic; One key to staying afloat during a crisis: plan ahead
Molly Baker – WSJ
The pandemic has hit small businesses hard, with millions failing and countless others teetering on the edge of collapse. The survivors have learned hard lessons about keeping a company afloat through a crisis. Here’s a look at some advice that experts and entrepreneurs have taken away from the pandemic.
IOSCO Statement On Benchmarks Transition
The Board of the International Organization of Securities Commissions (IOSCO) reiterates the importance of ensuring a smooth and timely transition away from LIBOR. Sound functioning of systemically important benchmarks is vital to the global economy and financial markets. The timelines for the end of all LIBOR panels are now clear. Continued reliance of global financial markets on LIBOR benchmarks, particularly the most widely used USD LIBOR settings, poses risks to financial stability, market integrity and investor protection, which are IOSCO’s three core objectives. It also creates various consumer protection, litigation and reputational risks.
Maybe Goldman Sachs isn’t migrating to Florida, after all
Lydia Moynihan – NY Post
Yes — Goldman Sachs tested the waters in sunny Florida while the virus raged last year. But now it’s time to come home. As the second wave of coronavirus slammed New York City in December, Goldman was reportedly focusing on expanding its asset management business — a key growth engine for the Wall Street behemoth — by relocating many of its workers to the Sunshine State.
Kenneth E. Bentsen, Jr. Elected Chair Of International Council Of Securities Associations (ICSA)
Kenneth E. Bentsen, Jr., president and CEO of SIFMA and Chair of the Global Financial Markets Association (GFMA), has been elected Chair of the International Council of Securities Associations (ICSA).
The Wall Street Players Who Worry Inflation Heralds Wild Markets; Investors bet that a coming surge of inflation will change 30 years of market behavior
Paul J. Davies – WSJ
Some investors are preparing for wild swings in financial markets, worried that inflation, and the Federal Reserve’s pledge to let it rise, will lead to a more volatile world. The reason: The economic policies aiming to create inflation now are the opposite of the ones that kept markets relatively stable for decades.
U.K. Covid Deaths Fall to Zero as Calls Grow to End Lockdown
Alex Morales and Joe Mayes – Bloomberg
No new daily deaths reported for first time in pandemic; Rising cases of Delta variant have put lockdown end in doubt
The U.K. recorded no new Covid-19 deaths for the first time since the global pandemic began, bolstering demands from industry groups for Prime Minister Boris Johnson to lift restrictions as planned this month. Zero deaths have been reported in the past day, according to the latest statistics published on the government’s coronavirus dashboard at 4 p.m. Tuesday. That’s the first time since March 7 last year that nobody has died in the U.K. from the disease.
Masks, distancing still important even with vaccination, study suggests
Lauren Mascarenhas – CNN
Vaccination alone might not be enough to end the Covid-19 pandemic, researchers reported Tuesday. Even with a majority of the population vaccinated, the removal of pandemic precautions could lead to an increase in virus spread, the researchers reported in the medical journal JAMA Network Open.
WHO Gives Virus Variants New Names, Drawing From Greek Alphabet
Will Davies – Bloomberg
Group of scientists recommend move to help public discussions; Considered easy to pronounce and non-stigmatizing labels
With coronavirus variants sweeping the globe, the World Health Organization has devised a less technical way of describing them than their scientific, number-heavy names — using the Greek alphabet.
Covid or Not, Brits Are Eager for Summer Fun; It would be a blow for pubs and restaurants if the U.K. had to delay lifting its final social-distancing measures. But it would be better than the alternative.
Andrea Felsted – Bloomberg
As Britain basked in a mini-heatwave over the long weekend, you could have almost forgotten there were any remaining Covid-19 restrictions on pubs and restaurants. Beer gardens were full, and unmasked crowds gathered in bars in popular beach resorts.
Mandatory vaccination policies divide US college campuses; Rancour over merits of requiring students to show proof of jab is microcosm of national debate
Nikou Asgari – FT
Every year, millions of students worry about whether their grades will be good enough to win a place at their dream university, and if they can afford to pay for a college education.
Foreign Governments Request Covid-19 Vaccine Doses as U.S. Prepares to Share; Countries such as Pakistan, Afghanistan, Bangladesh and Sri Lanka have asked for help in slowing the spread of the coronavirus
Jared S. Hopkins and Sabrina Siddiqui – WSJ
Countries such as Pakistan, Afghanistan, Bangladesh and Sri Lanka have petitioned the U.S. for Covid-19 vaccines as the Biden administration prepares to share 80 million doses, which foreign governments say they need to slow the spread of the coronavirus.
Exchanges, OTC and Clearing
CME Group Chief Commercial Officer and Global Head of Commodities and Options Products to Present at Deutsche Bank Global Financial Services & FinTech / Info Services Virtual Conference
CME Group announced today that Julie Winkler, Chief Commercial Officer, and Derek Sammann, Global Head of Commodities and Options Products, will present at the Deutsche Bank Global Financial Services & FinTech / Info Services Conference on Wednesday, June 2, 2021, at 11:05 a.m. (Eastern Time).
Nodal and IncubEx Expand Environmental Suite with New EPA Cross-State Air Pollution Rule Contracts
Nodal Exchange and IncubEx today announced the successful launch of new nitrogen oxides (NOx) futures and options, plus extended vintages on two Texas voluntary renewable energy certificate (REC)
Nasdaq Amends Opening Auction For Retail Interaction
Shanny Basar – MarketsMedia
Nasdaq has changed its opening auction to give institutional investors the opportunity to interact with retail flow as there has been a rise in retail participation in US equity markets.
Chuck Mack, head of US equities at Nasdaq, told Market Media: “Asset managers want more access to retail liquidity and we are helping to solve that problem in the opening auction. Increasing the diversity in the ecosystem participating in the opening auction improves the quality of the market so it is a win-win for everyone.”
The Spanish stock market trades 32 billion euros in May
The equity trading volume in May was up 11.1% from the preceding month and 9.2% higher year on year; Fixed-income trading in May amounted to 25 billion, up 19.9% from April.; As regards Stock Derivatives trading in Futures contracts increased 18.6% and 73.5% in Option contracts compared to the same period a year earlier
The Spanish stock market traded 32 billion euros in Equities in May, 11.1% from the preceding month and 9.2% higher year on year. The number of trades in May was 3.5 million, a decrease of 18.3% from the same period last year and down 5.8% compared to April.
Trading Resumes in Biggest Mideast Exchange After Two-Hour Halt
Filipe Pacheco and Farah Elbahrawy – Bloomberg
Equities trading resumed in Saudi Arabia after a technical glitch shuttered the Middle East’s biggest stock exchange for two hours. “The technical issue has been resolved and trading services are now functioning normally,” the Saudi Exchange said in a statement. Shares were trading 0.6% higher when trading restarted on Wednesday.
American Financial Exchange® Announces AMERIBOR® License Agreement with IntraFi Network LLC
AFX Press Release
The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced an agreement to license AMERIBOR to IntraFi Network (formerly Promontory Interfinancial Network), which provides innovative deposit and funding solutions to thousands of the nation’s banks.
Tradovate Announces Commission-free Trading for Futures on FairX
FairX launched the exchange to cater to active retail traders who may feel left out or swamped at the major futures exchanges that are dominated by the big players.
ICE goes head to head with Deutsche Boerse
Tradovate will be one of the first brokers to offer futures trading on FairX as the exchange launches, the commission-free brokerage announced.
Following the new trends that first emerged in 2019 and are now on its way of becoming mainstream, Tradovate will provide commission-free trades with no market data fees, subscription fees, lifetime license fees, inactivity fees, or platform fees.
Equity Index Derivatives: Tradability of FTSE 100 Products and EURO STOXX Select Dividend 30 Index Total Return Futures for Participants in the U.S.
With effect from 7 June 2021, the following additional products will be activated for tradability in the U.S.:
FTSE 100 Index Total Return Futures
FTSE 100 Declared Dividend Index Futures
FTSE 100 Index Futures
EURO STOXX Select Dividend 30 Index Total Return Futures
CME Group Reports May 2021 Monthly Market Statistics
CME Group, the world’s leading and most diverse derivatives marketplace, today reported May 2021 market statistics, including average daily volume (ADV) of 20.6 million contracts during the month. Market statistics are available in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
Initial Listing of the Micro WTI Crude Oil Futures Contract
Effective Sunday, July 11, 2021, for trade date Monday, July 12, 2021, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will list the Micro WTI Crude Oil Futures contract for trading on CME Globex electronic trading platform (‘CME Globex”) and for submission for clearing via CME ClearPort.
Initial Listing of Three Micro Foreign Exchange (FX) Physically-Delivered Futures Contracts – Micro U.S. Dollar/Japanese Yen (USD/JPY), Micro U.S. Dollar/Canadian Dollar (USD/CAD) and Micro U.S. Dollar/Swiss Franc (USD/CHF) Futures
Effective Sunday, June 27, 2021, for trade date Monday, June 28, 2021, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list the Micro U.S. Dollar/Japanese Yen (USD/JPY) Futures, Micro U.S. Dollar/Canadian Dollar (CAD/USD) Futures and U.S. Dollar/Swiss Franc (USD/CHF) Futures contracts (the “Contracts”) for trading on the CME Globex electronic trading platform (“CME Globex”) and for submission for clearing via CME ClearPort as more specifically described below.
Statistics on Annual General Shareholders Meeting Dates for Companies with Fiscal Years Ended March 2021
Based on “scheduled dates for annual general shareholders meetings” indicated in earnings reports and the timely disclosure related to schedules for annual general shareholders meetings, TSE has compiled results of “Annual General Shareholders Meeting Scheduled Dates” gathered from companies with their fiscal years ended March 2021 (See Note 1), as noted in the attachment.
The Best May In MGEX History
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), reports that this past month was the best May in MGEX history with a total of 261,078 contracts, which is 44% higher than the previous record holder, May 2018. This past month also entered the total monthly volume top-25 record book in the 17th position.
OSL adds Eventus Systems transaction monitoring capabilities to trade surveillance program; Leading APAC digital asset platform expands use of Validus
Eventus Systems, Inc.
Eventus Systems, Inc., an award-winning global provider of multi-asset class trade surveillance and market risk solutions, today announced that OSL Digital Securities (OSL), Asia’s first and only SFC-licensed, Big-4 audited, and insured digital asset platform for institutions and professional investors, and member of BC Technology Group (stock code: 863 HK), has added Eventus’ transaction monitoring capabilities, growing its deployment beyond OSL’s ongoing use of the Eventus Validus platform for trade surveillance. Trading on the new regulated OSL Exchange went live in March 2021.
Musk Says Panic-Buying of Chips Is Like Rush on Toilet Paper
Craig Trudell – Bloomberg
Supply chain has becomes Tesla’s biggest challenge, CEO says; Automakers are projected to lose out on $110 billion in sales
Elon Musk said the chip shortage is wreaking havoc on Tesla Inc.’s supply chain and blamed companies ordering more microcontrollers than they need, much like consumers hoarded toilet paper in the early days of the pandemic.
Nvidia CEO Says Confident of Getting Regulators OK for Arm Deal
Debby Wu and Pavel Alpeyev – Bloomberg
Still expects approvals for deal later this year or in 2022; Nvidia’s Jensen Huang speaks at Computex conference in Taipei
Nvidia Corp.’s Chief Executive Officer Jensen Huang said he is still confident regulators will green-light its $40 billion acquisition of SoftBank Group Corp.’s Arm Ltd., despite growing skepticism about the deal’s prospects.
FlexTrade integrates with BMLL to offer asset managers pricing data; Through the integration, the BMLL Data Feed will be available to asset managers through the FlexTRADER EMS.
Wesley Bray – The Trade
FlexTrade Systems has integrated with BMLL Technologies to offer pricing data and analytics from the BMLL Data Feed via its FlexTRADER execution management system (EMS). BMLL’s Data Feed is pre-computed from Level 3 order book data and offers users insights across market quality, execution performance and available liquidity at different depths of the book.
ION Investment Group completes DASH Financial Technologies acquisition; Under the terms of the deal, DASH becomes part of the ION markets division, which provides trading automation, analytics and innovation across the trade lifecycle.
Annabel Smith – The Trade
ION Investment Group has completed its acquisition of DASH Financial Technologies after confirming it had entered into an agreement to purchase the company in February. DASH Financial Technologies was acquired by ION from private equity firm Flexpoint Ford, which had previously owned the options technology and execution provider since 2018 when it acquired the firm from private equity firm GTCR in a management-led buyout.
These 2 fintechs are looking to help Muslims invest in a way that’s in line with their values. Here’s how they stay Sharia-compliant.
Carter Johnson – Insider
Interest in personal finance has arguably never been higher after a year stuck at home. And while plenty of retail investors have delighted in pouring money into meme stocks and cryptocurrencies, one group has to be more selective in its investment decisions.
Robinhood’s Chinese competitors want to get into the crypto frenzy by expanding into the US and Singapore – even as their local government cracks down
Natasha Dailey – Insider
Chinese trading apps Futu and Tiger Brokers are working to bring cryptocurrency trading to customers in the US and Singapore, even as regulators in their home country crack down on digital assets. The Robinhood rivals said in their most recent earnings calls that they will apply for digital currency trading licenses in both countries. Futu also applied in Hong Kong.
Robinhood announces 3 new board members as it gears up for IPO
Dominick Reuter – Insider
Robinhood is adding three new independent directors to its board, the company announced on Tuesday, a move that brings the company one step closer to its highly anticipated IPO. The new members, Jon Rubinstein, Paula Loop, and Robert Zoellick will join current members Jan Hammer and Scott Sandell, as well as Robinhood co-founders Vlad Tenev and Baiju Bhatt.
JBS Poised to Reopen Most Meat Plants Hobbled by Cyberattack
Mike Dorning, Fabiana Batista, and Sybilla Gross – Bloomberg
‘Our systems are coming back online,’ JBS USA CEO says; Attack had earlier idled all of its U.S. beef plants: union
JBS SA, the world’s largest meat producer, has made “significant progress” to resolve the cyberattack that hit its global operations and will have the “vast majority” of its plants operational on Wednesday. “Our systems are coming back online and we are not sparing any resources to fight this threat,” JBS USA Chief Executive Officer Andre Nogueira said in a statement late Tuesday. A union Facebook post said a shift at Greeley in Colorado was set for a regular production day on Wednesday.
Russian criminal gang likely hacked meat supplier JBS, says White House; Kremlin says it has no information on attack that led to workers being stood down
Bryan Harris, James Politi, Jamie Smyth and Henry Foy – FT
A criminal organisation that is probably based in Russia was behind a ransomware attack that has disrupted animal slaughtering at JBS, the White House said based on information from the world’s largest meat processor.
Ransomware Disrupts Meat Plants in Latest Attack on Critical U.S. Business; All of JBS’s beef plants in the U.S. were shuttered on Tuesday, and many of its pork and poultry plants were affected, according to a union and Facebook posts meant for employees.
Julie Creswell, Nicole Perlroth and Noam Scheiber – NY Times
A cyberattack on the world’s largest meat processor forced the shutdown of nine beef plants in the United States on Tuesday, according to union officials, and disrupted production at poultry and pork plants. The attack could upset the nation’s meat markets and raises new questions about the vulnerability of critical American businesses.
Crypto Exchange Bybit Gets Warning From Japan’s FSA
Matthew De Saro – Be[in]Crypto
On Monday, Japan’s Financial Services Agency (FSA) issued a warning to crypto exchange Bybit over unregistered operations. Crypto derivatives exchange Bybit Fintech Limited has been officially warned by the FSA for running its operation without proper registration. Bybit functions as a crypto derivative exchange offering futures in digital currency, perpetual swaps, and a number of other contracts used by crypto traders.
Coinbase just wants to tell the truth, its own truth and nothing but the truth; The company’s new “fact-checking” service throws financial journalism into existential crisis.
Jemima Kelly – FT
As we have written about before, Coinbase — one of the biggest crypto exchanges in the world, a $50bn company that charges 1.5 per cent for the privilege of buying and selling bitcoin; a company that made $771m in profits in the first quarter of this year largely from doing just that — is really all about making this planet a better place.
Dogecoin Price Jumps on Coinbase Debut Prospect; Joke cryptocurrency rose over 20% after exchange operator said it would allow trading, prompting cheers from Elon Musk
Caitlin Ostroff – WSJ
Dogecoin got a new lease on life Wednesday, with the price rallying sharply after Coinbase COIN 1.01% Global Inc. said it would allow users to trade the joke cryptocurrency on a platform that is geared toward more experienced investors. Fresh tweets from Tesla CEO Elon Musk also provided a fresh catalyst.
Cybersecurity firm NortonLifeLock will let customers mine crypto
Paul R. La Monica – CNN
Mining for bitcoin and other cryptocurrencies is typically done by companies that own massive server farms operating outside of the United States. But cybersecurity firm NortonLifeLock is hoping to bring mining to your desktop.
NortonLIfeLock (NLOK) announced Wednesday morning that it is launching a new feature for a select group of early customers of its Norton 360 platform that will allow them to mine for ethereum, the world’s second most valuable cryptocurrency, on their personal computers.
China’s crypto crackdown may be DC’s blueprint
Kristin Tate – TheHill
China recently announced a major crackdown on cryptocurrency. The relative ease of use of existing currencies such as Bitcoin and Ethereum and their transparent operating code is apparently too much for the People’s Republic to allow its citizens to use. The development mirrors an apparent, but not as well-defined, push by Biden administration officials and members of the media to sink, or at least control, the crypto market. With recent public attention on the role of cryptocurrencies, there is a unique window for Washington to shape or strangle the rise of what it increasingly sees as a competitor and threat to its system of fiat currency.
Goldman’s top commodity analyst sees copper as alternative to crypto
Elliot Smith – CNBC
Cryptocurrencies are an alternative to copper — not gold — when it comes to hedging against inflation, according to Jeff Currie, global head of commodities research at Goldman Sachs.
Inflation is rising as the global economy recovers from the effects of the Covid-19 crisis as central banks keep monetary policy historically loose and demand outstrips supply on multiple fronts. The U.S. Federal Reserve’s preferred inflation gauge, the core personal consumption expenditure index published Friday, increased 3.1% in April from a year earlier, exceeding expectations.
Cryptocurrency Ban: Unworkable and Unwise; While it is unfortunate that Mr. Reiners’ proposed ban mimics the Chinese approach, it is also technically impossible.
Kristin Smith – Letters to WSJ
Regarding Lee Reiners’s “Ban Cryptocurrency to Fight Ransomware” (op-ed, May 26): Emulating the Chinese government’s approach to cryptocurrencies is misguided, impractical and un-American. As Mr. Reiners concedes, “banning anything runs counter to the American ethos,” a statement that encapsulates the open approach to new technology that we, as a country, have often pursued. While it is unfortunate that Mr. Reiners’s proposed ban mimics the Chinese approach, it is also technically impossible. Open blockchain networks run on open-source software, meaning the government couldn’t enforce a ban on digital assets without shutting down the entire internet. We doubt such a solution would have much of a durable constituency on Capitol Hill or in the White House.
ECB: Lack of Official Digital Currency Risks Loss of Control
Carolynn Look – Bloomberg
Countries that decide not to introduce digital versions of their currencies may face threats to their financial systems and monetary autonomy, the European Central Bank warned.
Consumers and businesses in places that don’t have their own digital currency could end up being reliant on a small number of dominant payment-service providers, including foreign tech giants, the ECB said in a report published Wednesday. That could affect the central bank’s ability to fulfill its mandate and act as a lender of last resort, the ECB said.
The Greensill Scandal Isn’t Quite Done Yet; A parliamentary probe into the supervision of Greensill paints a worrying picture. It’s also missing some key testimony.
Elisa Martinuzzi and Therese Raphael – Bloomberg
British Prime Minister Boris Johnson might be tempted to breathe more easily. A parliamentary inquiry — which was given reams of correspondence and hours of testimony from witnesses — has failed to determine a clear link between the lobbying efforts of Johnson’s predecessor, David Cameron, and Greensill Capital’s access to the U.K.’s pandemic loan schemes.
Biden Administration Suspends Oil Leases in Arctic Refuge; Trump administration approved leases in the pristine wilderness, but no major oil companies had bid for rights
Timothy Puko – WSJ
The Biden administration on Tuesday suspended oil leases in the Arctic National Wildlife Refuge in Alaska, blocking plans for the first-ever drilling program in the pristine 19-million-acre wilderness. The Interior Department said the program will be on hold until it completes a comprehensive analysis under the National Environmental Policy Act. The review could ultimately lead to the leases being voided altogether, the department said.
Biden Suspends Drilling Leases in Arctic National Wildlife Refuge; The decision blocks, for now, oil and gas drilling in one of the largest tracts of undeveloped wilderness in the United States.
Coral Davenport, Henry Fountain and Lisa Friedman – NY Times
The Biden administration on Tuesday suspended oil drilling leases in the Arctic National Wildlife Refuge, unspooling a signature achievement of the Trump presidency and delivering on a promise by President Biden to protect the fragile Alaskan tundra from fossil fuel extraction.
NFA warns of fraudulent phishing emails purporting to be from NFA
NFA has learned of an ongoing phishing campaign that involves fraudulent emails purporting to be from NFA staff, including Kathleen Clapper and Joe Hawrysz (see Sample Phishing Email below). Other staff member names may be used as well. These emails have a source domain name “@nfa-futures.com” and may include an attachment.
Tesla Failed to Oversee Elon Musk’s Tweets, SEC Argued in Letters; SEC said Musk flouted court-ordered policy in 2019 and 2020, records show
Dave Michaels and Rebecca Elliott – WSJ
Securities regulators told Tesla Inc. TSLA -0.21% last year that Chief Executive Elon Musk’s use of Twitter had twice violated a court-ordered policy requiring his tweets to be preapproved by company lawyers, according to records obtained by The Wall Street Journal.
Senate Economics Legislation Committee – Opening statement – 2 June 2021
Opening statement by ASIC Chair Joseph Longo at the Senate Economics Legislation Committee, 2 June 2021, Parliament House, Canberra.
Forex CT ordered to pay $20 million penalty and sole director disqualified, fined $400,000
The Federal Court has ordered Forex Capital Trading Pty Ltd (Forex CT) pay a $20 million penalty for engaging in systemic unconscionable conduct, paying conflicted remuneration to its team leaders and account managers and failing to act in the best interests of its clients.
PODCAST:2021 Annual Conference: Robert Cook and Eileen Murray Fireside Chat
The 2021 FINRA Annual Conference was like no other with the event held entirely online. Nonetheless, like in any other year, the event provided the opportunity for practitioners, peers and regulators to connect and exchange ideas.
Joint letter with PRA on Delivery versus Payments clients
We and the Prudential Regulation Authority (PRA) have sent a Dear Chief Risk Officer letter to firms which shares our observations on good practices related to monitoring and mitigating counterparty credit risks in relation to Delivery versus Payment clients that we encourage firms to incorporate within their control framework. The letter can be read here.
Investing and Trading
‘Game over’: Investors hunt for new model after years of broad gains; Stocks and bonds rally has left asset managers seeking ways to secure long-term returns
Robin Wigglesworth – FT
Institutional money managers are grappling with a grim investing outlook, sending them on a hunt for the next big idea decades after the late David Swensen triggered a revolution when he arrived at Yale’s endowment in 1985.
US money market funds struggle as short-term rates near negative territory; Glut of cash in the financial system has strained the $4tn industry’s business model
Colby Smith and Joe Rennison – FT
A sector of the US finance industry that looks after $4tn of savings for individuals and businesses has come under severe strain as US markets flirt with negative interest rates.
A huge day for meme stocks sees Mudrick reportedly dump AMC stock, and Roaring Kitty returns to rally GameStop die-hards
Thornton McEnery – MarketWatch
An extended holiday hiatus hasn’t stopped the meme stock mojo, with GameStop and AMC Entertainment registering stellar returns to start June, sending supporters of the social-media-driven assets into a frenzy Tuesday.
Environmental, Social and Corporate Governance
Fund Managers in World’s Greenest Market Struggle With ESG Rules; New EU disclosure regulations have left asset managers in climate-friendly Scandinavia wondering how to adapt.
Frances Schwartzkopff – Bloomberg
Even in Denmark, recently ranked the world’s greenest country, asset managers are trying to figure out how to adapt to new and evolving requirements for climate-friendly portfolios. Danske Bank A/S, Denmark’s biggest financial group, says it’s starting out with a “conservative” interpretation of new rules being developed in the European Union that are intended to steer capital away from the worst greenhouse gas emitters.
Big Oil’s Green-Spending Boost Isn’t Enough, IEA Says
Will Mathis – Bloomberg
Power sector to see record $820 billion investment, IEA Says; Clean energy investment needs to triple by 2030, IEA says
The oil and gas industry is set to boost investments in clean energy this year, but that still won’t be enough to put the world on a path to limit a dangerous rise in global temperatures.
Orsted Unveils $57 Billion Strategy to Be Top Green Supermajor
Will Mathis – Bloomberg
Danish company eyes 50 gigawatts of renewable capacity by 2030; Orsted seeks to keep market-leader role amid tough competition
Orsted A/S, the biggest developer of offshore wind farms, plans to spend 350 billion Danish kroner ($57 billion) by 2027 to be the world’s leading green energy provider.
Turning Carbon Offsets Into Catnip for Commodities Traders; For the global trade in offsets to reach $50 billion or more, the market for carbon removal will need a benchmark like Brent crude.
Akshat Rathi – Bloomberg
As net-zero commitments from companies ramp up, so does interest in carbon offsets. It’s often the cheapest way to claim credit for eliminating a ton of carbon dioxide, typically through a small fee to protect forests or fund renewable energy. The company buying the offset gets to erase emissions from its ledgers without spending far larger sums to clean up its business.
G7 criticised for Covid bailouts with no ‘green strings’ attached; More than $189bn of recovery funds spent on fossil fuels despite pledges to cut emissions
Camilla Hodgson – FT
The world’s leading economies have allocated more than $189bn of pandemic recovery funds in support of fossil fuels, despite government pledges to “build back greener” and cut carbon emissions.
Deal near on forcing companies to disclose climate risks, says central bank chief; François Villeroy de Galhau says global framework could be agreed at November’s COP26
Martin Arnold and Patrick Temple-West – FT
A global agreement is within reach that would require all listed companies to disclose the risks they face from climate change in a standardised way, the governor of France’s central bank has said.
Oil’s Sunset Years Could Be Profitable for Some; Western producers’ transition plans create an opportunity for state-backed peers that are insulated from shareholder pressure over their climate impact
Rochelle Toplensky – WSJ
The oil industry could face a golden sunset, particularly for companies still developing new reserves. How long it lasts depends on the speed at which economies shift to cleaner energy sources.
The ‘Mean Greens’ Are Forcing Exxon to Clean Up Its Act
Thomas L. Friedman – NY Times
Since the 1990s, the wisest oil-producing countries and companies have regularly reminded themselves of the oil patch adage that the Stone Age did not end because we ran out of stones; it ended because we invented bronze tools. When we did, stone tools became worthless — even though there were still plenty on the ground.
More Than a Third of Heat Deaths Are Tied to Climate Change, Study Says; Sweeping new research found that heat-related deaths in warm seasons were boosted by climate change by an average of 37 percent.
John Schwartz – NY Times
More than a third of heat-related deaths in many parts of the world can be attributed to the extra warming associated with climate change, according to a new study that makes a case for taking strong action to reduce greenhouse gas emissions in order to protect public health.
Amid Historic Drought, a New Water War in the West; A drought crisis has erupted in the Klamath Basin along the California-Oregon border, with fish dying en masse and farmers infuriated that they have been cut off from their main water source.
Mike Baker – NY Times
Through the marshlands along the Oregon-California border, the federal government a century ago carved a whole new landscape, draining lakes and channeling rivers to build a farming economy that now supplies alfalfa for dairy cows and potatoes for Frito-Lay chips.
‘Big risk’: California farmers hit by drought change planting plans
Christopher Walljasper – Reuters
Joe Del Bosque is leaving a third of his 2,000-acre farm near Firebaugh, California, unseeded this year due to extreme drought. Yet, he hopes to access enough water to produce a marketable melon crop.
Credit Suisse plots lawsuit against SoftBank over Greensill; Dispute between bank and tech investor centres on US construction group Katerra
Arash Massoudi and Owen Walker, Tabby Kinder and Kana Inagaki – FT
Credit Suisse is preparing for litigation against SoftBank after the collapse of Greensill Capital soured the relationship between the Swiss bank and one of the world’s largest tech investors, according to people briefed on the plans.
Invesco Forges a Different Path in China From Its Bigger U.S. Rivals; After 18 years in the country, the American asset manager wants to keep its local partner and is targeting a role in China’s $400 billion social-security fund
Jing Yang – WSJ
As the world’s biggest asset managers gear up to make inroads into China’s mutual-fund industry, Invesco Ltd. IVZ -4.70% has its eyes on a different prize. The Atlanta-based investment firm is hoping to manage a piece of China’s national pension fund, betting its nearly two-decade record of investing ordinary Chinese citizens’ money could help it win the coveted job.
Latest Gulf Delisting Ends Almost Four-Decade Era for Investcorp
Matthew Martin – Bloomberg
Asset manager to remain headquartered in Bahrain, co-CEO says; Low trading volumes have led several Mideast firms to delist
Investcorp Holdings BSC, the Middle East’s biggest alternative asset manager, will delist from the Bahrain stock exchange after almost four decades in response to low trading volumes, the latest in a string of companies in the region to go back into private ownership.
Another Sign Meme Stocks and Crypto are the Same Trade
Joe Weisenthal – Bloomberg
The meme stocks are going nuts again today, with AMC surging pre-market. It feels like we’re in this never-ending market timewarp where the same stories keep happening day after day. In addition to AMC going nuts, there’s another story about traders buying a stock because of an Elon Musk tweet. It never ends. Also Dogecoin is up over 30% over the last 24 hours after Coinbase Pro added it to its trading platform.
If it all looks like one big trade, well… there’s a reason for that.