Hits & Takes
By John Lothian & JLN Staff
This morning ICE issued a press release titled “ICE ETF Hub Announces Launch of Innovative Custom Basket Negotiation Technology.” The pilot program for issuers, market makers, and authorized participants offers a road test for new functionality.
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 consultancy Supercritical is hosting its first virtual “Sparklist Summit,” a curated cannabis resource fair, next weekend, July 25 and 26, from 12:30 p.m. to 6:30 p.m. each day. The event focuses on education for Illinois cannabis license applicants, prospective applicants and related cannabis businesses. Speakers include Bret Rosol, director of acquisitions at Cookies Retail, and attorney Bill Bogut, co-chairman of the cannabis practice of FoxRothschild LLC. (John Lothian News is one of the summit sponsors.) For more information and to register, go here.~SC
The FIA’s website has a brief rundown of the CFTC’s meeting of its Market Risk Advisory Committee (MRAC) on July 21 via teleconference, written by Jeff Reeves. The meeting covered several topics, including the impact of the pandemic on derivatives markets, the transition away from Libor, and an upcoming report on climate-related financial risks. You can read the article here. ~SR
Cannabis Education Efforts Go Full Throttle Despite COVID-Related Roadblocks
In an interview with Kerry Jordan, co-founder of the consultancy Supercritical, and Amanda Gettes, director of strategic initiatives at Chicago’s Olive Harvey College, JLN provides a midyear update on the state’s nascent cannabis industry, including the delay in Illinois’ new social-equity licenses, college training for dispensary workers, why sales are booming, and a preview of the education-directed Sparklist Summit.
Black Regulators Rarely Appointed to Oversee Wall Street; Just 10 of 327 appointees to roles atop financial watchdog agencies since their founding have been Black, research finds
Dave Michaels – WSJ
Senior roles supervising Wall Street and other parts of the financial sector have gone overwhelmingly to white officials over the years—and today, only one of 21 politically appointed financial regulators at eight agencies is Black, according to new research.
*****This is true in business journalism too, I believe.~JJL
The World Federation of Exchanges calls to address development of global stablecoins with a taxonomy – and to include crypto-assets; The World Federation of Exchanges calls to address development of global stablecoins with a taxonomy – and to include crypto-assets
World Federation of Exchanges
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, called for a response to the growth of stablecoins by developing a common taxonomy that would also cover crypto-assets more broadly. This would create consistent and common regulatory classifications before they fragment further, rather than trying to fix differences after the fact.
*****Everyone wants in on this.~JJL
Citadel Securities pays $700,000 fine; The Chicago trading firm settles allegations of rule violations that a federal regulator says occurred over years, with some as recently as last month.
Lynne Marek – Crain’s Chicago Business
Citadel Securities, the Chicago stock-trading behemoth owned by billionaire founder Ken Griffin, agreed to pay a $700,000 fine and provide restitution to customers for rule violations that a federal regulator alleges occurred over years, with some as recently as last month.
*****Crain’s followed up on this story and did a little more reporting.~JJL
Fake Financial Services Register website
We are aware that there has been an attempt to reproduce our Financial Services Register on a non-FCA website. We are currently working to get the page taken down and have alerted members of the public through our website and social media channels. The domain that is not official is www.thefca.net.
*****Don’t be stupid.~JJL
Coronavirus Infections Far Higher Than Confirmed But Most Americans Still Not Exposed
Jason Slotkin – NPR
Coronavirus infections in the United States are far higher than what has been confirmed, although the number of Americans who have been exposed is far below what is required for widespread immunity, according to data released by the Centers for Disease Control and Prevention. The data appeared on both the CDC website and in the journal JAMA Internal Medicine on Tuesday.
******Just as I thought, the numbers are under-reported.~JJL
Three simple acts can stop Covid-19 outbreaks, study finds
Jen Christensen, CNN
If people washed their hands regularly, wore masks, and kept their social distance from each other, these three simple behaviors could stop most all of the Covid-19 pandemic, even without a vaccine or additional treatments, according to a new study.
*****We can stop this with just these three easy, simple steps. How about we give it a try?~JJL
Tuesday’s Top Three
Our top story Tuesday was The Financial Times’ US regulator fines Citadel Securities over trading breach. Second was A Few Wall Street Traders Stayed When Everyone Fled the Office from Bloomberg. Third was a repeat from Monday’s top three, the YouTube video of Robert Downey Jr. commenting on his visit to the Nymex trading floor back in the day. FYI, this video is not safe for the children.
182,020,886 pages viewed; 24,345 pages; 225,410 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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SGX and Nasdaq seal pact to streamline secondary offerings; Partnership comes as Sino-US tension pushes Chinese companies away from Wall Street
Hudson Lockett and Stefania Palma – FT
The Singapore Exchange has sealed a pact with Nasdaq to streamline dual listings for companies on both stock markets, as the Asian bourse seeks to offset the impact of delistings and governance scandals on its equities business.
ICE ETF Hub launches new basket negotiation technology; New automated functionality for ICE ETF Hub will allow participants to assemble custom basket proposals for exchange traded funds.
Annabel Smith – The Trade
The ETF Hub from US exchange group ICE will now allow participants to assemble custom baskets for exchange traded funds (ETFs) in a bid to boost liquidity and tighten bid-ask spreads.
BNP Paribas Bets on Climate Guilt; Do the environmentally minded really want to know how green their bank is?
Aaron Back – WSJ
Green finance is all the rage these days, but will customers be so keen if it is their activities being monitored for compliance? San Francisco-based Bank of the West this week unveiled what it calls the “first and only checking account designed for climate action.” The bank, which is owned by French banking giant BNP Paribas, will donate 1% of net revenue generated from the account “to support environmental nonprofit organizations focused on creating a healthier planet.” The first donation will go to “Protect Our Winters,” which was founded by a professional snowboarder to advocate for policies addressing climate change.
HKEX reclaims crown of world’s most valuable exchange group; Shares in bourse rise almost 10% after Ant Group announces plans to list in the city
Hudson Lockett – FT
Shares in Hong Kong Exchanges & Clearing notched their sharpest daily rise in five years on Tuesday, making it the world’s most valuable bourse, after Alibaba’s payments arm announced plans to sell shares in the city.
Investors hail Brussels as a new force in bond markets; Only Italy, France and Germany will eclipse EU’s own debt pile by the end of 2021
Tommy Stubbington and Martin Arnold – FT
The EU itself is set to become one of Europe’s largest bond issuers as it turns to financial markets to fund the EUR750bn coronavirus recovery package agreed on Tuesday morning.
US orders China to close its Houston consulate; Shares fall as Beijing threatens retaliation over move it says violates international law
Ryan McMorrow – FT
The US has ordered China to shut its consulate in Houston on concerns over the protection of American intellectual property, ratcheting up tensions between the world’s two most powerful nations
London’s finance sector under scrutiny over damning Russia report; The UK’s National Crime Agency estimates more than £100bn in illicit funds impacts the economy each year
Penny Sukhraj, Shruti Tripathi Chopra and Emily Horton – Financial News
The damning parliamentary report into Russian influence in the UK has put London’s financial heartland under the spotlight, with politicians and anti-money laundering heavyweights calling on City firms to scrutinise business links with the Kremlin.
Malaysia Bourse Beats World as Glove Mania Spurs Record Volumes
Abhishek Vishnoi – Bloomberg
Shares of Bursa Malaysia have jumped about 60% this year; Exchange will deliver record quarterly profit: Hong Leong
Amateur traders and a spectacular rally in rubber glove stocks are driving record volumes on Malaysia’s stock exchange, helping the bourse operator outperform the rest of its major global peers this year. Bursa Malaysia Bhd. has jumped 60% this year, eclipsing the 43% gain by Hong Kong Exchanges & Clearing Ltd. — the world’s biggest exchange by market value — even as the latter surged 10% on Tuesday after billionaire Jack Ma’s Ant Group announced plans to seek a dual listing in Hong Kong and Shanghai.
Banks Scramble to Cut Derivatives Losses on Eve of Market Reset
William Shaw, Nishant Kumar, and Donal Griffin – Bloomberg
EU benchmark reform may wipe millions from swaption portfolios; U.S. banks are on guard for similar upheaval in SOFR switch
They call it the big bang transition, the day when European interest-rate derivatives markets finally shift to a new benchmark next week. And in the run-up, banks and money managers that find themselves caught on the wrong side of trades are scrambling to limit their losses while their counterparts look to cement their gains.
UBS chief hits out at share buyback critics; Swiss lender considers returning more capital to shareholders in the coming months after a challenging first half
Owen Walker – FT
UBS chief executive Sergio Ermotti has hit out at critics of share buybacks as the Swiss lender considers returning more capital to shareholders in the coming months after a challenging first half.
EU regulators revolt over fund performance forecasts; Rare spat between Brussels and EU financial watchdogs piles pressure on policymakers to review controversial Priips rules
Siobhan Riding – FT
EU regulators have staged an unusual rebellion against Brussels lawmakers over reforms to consumer protection rules, marking the latest escalation in a long-running dispute centred on fund performance disclosures.
UBS Says U.S. Will Soon Label Switzerland a Currency Manipulator
Catherine Bosley – Bloomberg
Switzerland will probably get named a currency manipulator by the U.S., making life more difficult for the country’s central bank, according to UBS Group AG. The Swiss, who for years have been using foreign exchange interventions to prevent the franc from appreciating too much, now meet all three criteria for manipulators set out by the U.S., namely a high trade and current account surplus plus large-scale interventions, economist Alessandro Bee wrote in a note to clients.
Europe’s $3.5 Trillion Unity Rally Leaves Britain Far Behind
Cecile Gutscher and John Ainger – Bloomberg
Risk of a no-deal Brexit is keeping investors away from U.K.; Pound is heavily shorted among currencies, Scotiabank says
The differences between European and U.K. markets are looking starker than ever. As European Union leaders forge a historic rescue deal to save the bloc’s weakest economies, Brexit talks continue to fail in making any progress. By almost every market metric, investors are rewarding European unity and punishing the U.K.’s intractable problems.
EU fund seen as turning point for eurozone financial assets
Yoruk Bahceli, Olga Cotaga, Elizabeth Howcroft – Reuters
Investors cheered a key step toward fiscal integration in the European Union via a new recovery fund agreed on Tuesday, seeing it as a turning point for the region’s financial assets plagued for years by debt crises and a north-south divide.
The Pandemic Isn’t Bringing Back Factory Jobs, at Least Not Yet; It’s a moment of reckoning for global supply chains. But that doesn’t mean companies are flocking back to the United States.
Ana Swanson and Jim Tankersley – WSJ
For companies with supply chains that snake around the globe, the crises have just kept coming: First the prolonged and painful U.S.-China trade war, then a pandemic that snarled shipments, stalled international travel and shut factory doors.
US spends $2bn to secure Covid-19 vaccine; Trump administration commits to buy 100m doses of a potential inoculation from BioNTech of Germany and Pfizer
Joe Miller and Clive Cookson – FT
The Trump administration has committed to spend $1.95bn on 100m doses of a potential Covid-19 vaccine being developed by Germany’s BioNTech and US pharma giant Pfizer, which will be distributed free of charge to American citizens.
Regulator says companies must improve Covid-19 reporting; UK companies should have disclosed more information to their investors about the impact of the pandemic, says FRC
Matthew Vincent – FT
UK companies should have told their investors more about the impact of coronavirus, the accounting watchdog has found, in its first review of corporate reporting since the onset of the pandemic.
Sweden Says Covid Immunity Can Last 6 Months After Infection
Niclas Rolander – Bloomberg
Sweden’s top health authority says people who have had the novel coronavirus are likely to be immune for at least six months after being infected, whether they’ve developed antibodies or not. In new guidance published on Tuesday, the Swedish Public Health Agency said it’s now considered safe for individuals who’ve been infected to come into contact with people in high-risk groups.
Hong Kong Local Cases Hit Record 105 in ‘Most Severe Moment’
Jinshan Hong and Iain Marlow – Bloomberg
Some 63 of the cases are unlinked to previous infections; City expands mask-wearing requirement to indoor public venues
Hong Kong reported a record 105 new local virus cases as the city’s “most severe” situation since the epidemic began prompted health officials to expand virus-protection measures. Of the additional local cases, more than half — 63 — were unlinked to previous cases, according to data from the city’s health department on Wednesday. The Asian financial hub has been caught off-guard by the sudden eruption of infections, with the number of untraceable cases signaling that hidden chains of transmission are widespread.
Hong Kong Sets Daily Record; Tokyo Says Stay Home: Virus Update
Hong Kong reported a record number of daily local virus cases, while Tokyo’s governor warned against unnecessary trips outdoors over an upcoming holiday weekend. Australia, once hailed as a virus success, also set a daily infection record.
Convent outside Detroit lost 13 religious sisters to Covid-19 with 12 dying in one month
Amanda Jackson, Rebekah Riess and Sharif Paget – CNN
Coronavirus spread so quickly through a convent in Michigan that it claimed the lives of 12 sisters in one month, beginning on Good Friday. They were all members of the Felician Sisters convent in Livonia, outside of Detroit, ranging in ages from 69 to 99, the executive director for mission advancement, Suzanne English, confirmed to CNN on Tuesday. A 13th sister initially survived the virus but passed away from its effects in June.
Covid-19 Testing Is Broken and There’s No Plan to Fix It; Washington needs to help upgrade America’s laboratory network before the next coronavirus wave arrives.
Timothy L. O’Brien – Bloomberg
Many of the recent stories are familiar, but still distressing and perplexing. There was the gentleman in Tucson who waited 27 days to get results from a Covid-19 test, only to discover he didn’t have the virus and the two weeks he spent in quarantine had been pointless. There was the nonprofit nursing home chain in the Phoenix area that waited five days for test results, only to learn that several staff members and residents had the coronavirus; the asymptomatic staffers had roamed freely until the results arrived. And there have been many tales of Arizona residents waiting a week, on average, to get test results — and sometimes much longer — even though their state has been a coronavirus hotspot for more than a month. Texas, Florida, California and many other newly resurgent corona-states have similar stories.
Pandemic’s economic hit will be here ‘for a long time’ even if a vaccine is approved, economist says
Saheli Roy Choudhury – CNBC
Countries must gear up for a ‘much longer’ virus fight with more sustainable policy decisions
While markets reacted positively this week to promising news of potential coronavirus vaccines in development, a top economist warned that the economic hit from the pandemic will be here for a long time.
Prepare to Lose a Bundle on Stocks Boosted by a Coronavirus Vaccine; For investors, there is no safety in betting on Covid-19 vaccine candidates
Charley Grant – WSJ
A Covid-19 vaccine success could boost economic output by trillions of dollars. Those trading vaccine stocks shouldn’t expect to share much in the benefits.
Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments
Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually and markets will recover with time. Nearly a quarter (23%) were planning to increase existing investments or make new investments in the year ahead.
Exchanges, OTC and Clearing
SGX RegCo and Nasdaq announce regulatory cooperation to help companies access capital in both jurisdictions
Singapore Exchange Regulation (SGX RegCo) and Nasdaq have extended their partnership by entering an agreement to cooperate on regulatory matters, building on an existing collaboration to help companies access capital markets funding in both jurisdictions. The latest cooperation agreement will facilitate the regulatory exchange of information on issuers which are dual listed on both exchanges, including a streamlined framework for issuers seeking a secondary listing on SGX. This streamlined framework allows secondary listing documents required for the SGX listing to be based on information contained in the US listing and subsequent filing documents to the US Securities and Exchange Commission and/or Nasdaq, together with additional disclosure in compliance with Singapore prospectus disclosure requirements.
Reference Prices for Transferred Products
On Monday July 27, 2020, the scheduled date for the transference of products from Tokyo Commodity Exchange, reference prices of price limits for contracts of above products shall be set as attached.
Shanghai’s Remodeled Index Still Not Reliable Benchmark for the World’s No.2 Stock Market
China revamped its Shanghai share index on Wednesday for the first time in 30 years, but critics say the changes don’t go far enough to fully address distortions in the benchmark of the world’s second biggest stock market.
Dubai International Financial Centre And Dubai FDI To Jointly Stimulate Foreign Investment In The Emirate; Agreement to nurture collaboration between entities, attracting more regional and international businesses and investments to Dubai
Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region has signed a Memorandum of Understanding (MoU) with the Dubai Investment Development Agency (Dubai FDI).
First Ever Minority Owned Stock Exchange — Dream Exchange
Dream Exchange and Cadiz Capital Holding LLC have partnered to create the first-ever minority-owned stock exchange in the history of America. The Dream Exchange will become a new stock exchange that will focus on small business capital formation and diversity using the power of the American investing public. This new stock exchange will allow investors to empower innovators and emerging businesses in a way that has never been done before. Cadiz Capital Holding LLC, a minority-owned private equity firm, has agreed to become the majority owner in Dream Exchange, making this a historic event as there has never before been a majority Black-owned stock exchange in the 230-year history of US stock exchanges.
Eventus Systems appoints Joseph Schifano to new role of Global Head of Regulatory Affairs; Names Mikhail Gasiorowski Sales Director, North America and Diane Imas Director of Marketing
Eventus Systems, Inc., a multi-award winning global trade surveillance and risk management software platform provider, today announced the appointment of Joseph Schifano as Global Head of Regulatory Affairs, Mikhail Gasiorowski as Sales Director, North America, and Diane Imas as Director of Marketing. Schifano is an attorney with more than 20 years of experience in market surveillance matters, most recently as Deputy General Counsel and Global Chief Compliance Officer (CCO) of Tower Research Capital in New York, along with senior regulatory roles at two global banks and the New York Stock Exchange (NYSE).
Paulson Investment Signs with Trillium Surveyor for Trade Surveillance
Trillium, a pioneering financial and technology service provider, announced today that Paulson Investment Company, a boutique investment banking firm, will now use Trillium’s trade surveillance product, Surveyor. “In addition to Surveyor being an excellent product, Trillium’s diverse client base and the level of dedicated service provided by its sales and technology teams made the decision to choose Trillium an easy one,” said Ron D’Angelo, Managing Director, Sales and Trading at Paulson Investment.
Self-Driving Money Is Coming To Consumer Fintech
Nik Milanovic – Forbes
Fintech today is dominated by consumer tech platforms looking to reinvent financial services. Even in-spite of the reported slowdown in fintech financing activity, founders in the space still raised $8.3 billion in Q2 2020. A common criticism of these startups – neobanks, marketplaces, lenders – is that they provide the same undifferentiated products already available offline, but with a better user interface.
More Payments Evolution Is Coming, Boosting Case for Fintech ETF
Tom Lydon – ETF Trends
The ARK Fintech Innovation ETF (NYSEARCA: ARKF) is at the center of some seismic shifts in the financial services industry and in a testament to the fund’s growth prospects, that list is getting longer.
While financial technology, or fintech, might still be in its nascent stages, this means investors looking to capitalize on the space need to exercise due diligence.
US Fintech Episode Six Raises $7 Million from HSBC, Mastercard
Arnab Shome – Finance Magnates
Episode Six, a developer of financial and payments products, has secured $7 million in a recently closed Series A funding round, the company announced on Wednesday.
The round was led by HSBC and was participated by financial giants like Mastercard and SBI Investments, an existing investor in the company.
Fintech Firm Lufax Said to Target $3 Billion in U.S. IPO
Chinese fintech giant Lufax, backed by Ping An Insurance Group Co., is targeting to raise at least $3 billion in a U.S. initial public offering, according to people familiar with the matter.
The company is weighing a U.S. share sale as soon as this year after previously exploring an offering in Hong Kong, said the people, who asked not to be identified as the information is private.
Cowen Partners with n-Tier for a Successful Consolidated Audit Trail (CAT) Go-Live
n-Tier, an innovative technology company that helps institutions minimize the risks and costs of regulatory reporting, announced today that Cowen Inc., a diversified financial services firm, has completed a successful Consolidated Audit Trail (CAT) go-live using n-Tier’s Compliance Workbench platform.
Coinsquare Exchange Execs to Resign Over Wash Trading Scandal
Sebastian Sinclair – Coindesk
Canada-based crypto trading platform Coinsquare has agreed to settle with the Ontario Securities Commission (OSC) after it was found senior executives told employees to make fake trades on the platform. Between Q4 2018 and Q1 2019, 90% of Coinsquare’s reported volume was faked in an illegal practice known as wash trading, the OSC said. As part of the settlement agreement reached Tuesday, Coinsquare admitted that around 840,000 illicit wash trades were conducted on the platform, amounting to a total value of around 590,000 bitcoin (worth almost $5.5 billion at press time).
Bitcoin Daily Transaction Value Is Set to Fall Below Tether’s
Olga Kharif – Bloomberg
Bitcoin was supposed to be the cryptocurrency for the masses. Instead, a different type of digital token has emerged as the blockchain world’s dominant force. The aggregate daily dollar value of transactions made in stablecoins –essentially, digital assets such as Tether and USD coin that are pegged to world currencies like the greenback — surpassed that of Bitcoin’s for the first time on June 29, according to researcher Coin Metrics. Tether is poised to surpass Bitcoin by itself, according to researcher Messari. “At this pace it looks like Tether alone will catch Bitcoin within a month or two,” said Nic Carter, co-founder of Coin Metrics, whose data Messari used.
Decentralized finance is now a $3 billion industry, or a bubble
Liam Frost – Decrypt
The total value locked up in decentralized finance (DeFi) applications has surged from $2 billion to $3 billion in just two weeks. DeFi is a phenomenon largely growing on the Ethereum blockchain that allows people to create financial applications without the need for a trusted third party. The most common applications let people lend cryptocurrency to (or borrow from) some unknown party around the world. Those using DeFi often have to lock up some cryptocurrency as collateral in order to use the services (this stops them from running off with money they’ve been loaned, for example). And the amount of Bitcoin, Ethereum and US dollar-backed stablecoin Tether locked up in these protocols have been increasing at a rapid rate.
Are Cryptocurrency Loans Taxable?
Shehan Chandrasekera – Forbes
Cryptocurrency lending and borrowing have become popular thanks to the rise of stablecoins and DeFi platforms. In the fiat world, borrowing and lending dollars do not typically result in any taxable events. However, borrowing and lending using cryptocurrencies like bitcoin and ether could result in taxable income because cryptocurrencies are treated as property by the IRS.
Robinhood’s crypto head is no longer with the brokerage firm
Frank Chaparro – The Block
The former head of crypto at popular stock brokerage firm Robinhood is no longer with the company, according to several people familiar with the personnel move. Sina Nader, a former director at private investment cryptocurrency firm CryptoLux Capital, is seeking a new opportunity in the crypto market after exiting from the Silicon Valley firm, several sources told The Block. He previously held positions at Morgan Stanley and Credit Suisse. Robinhood initially launched its cryptocurrency trading service, Robinhood Crypto, in February 2018.
DeFi Hype Has Sent Ethereum Fees Soaring to 2-Year High: Coin Metrics
Paddy Baker – Coindesk
Ethereum fees are at a two-year high as the hype around decentralized finance (DeFi) leads to a surge in network activity, according to Coin Metrics. Coin Metrics’ data shows median transaction fees were just under $0.50 at press time – the highest since early August 2018. Transaction fees increase alongside activity to avoid congestion in busy times. Ethereum’s median gas price – a component of the transaction fees – has also reached levels not seen since early July 2018, according to Glassnode.
ErisX Taps Silvergate Network for No-Fee USD Transactions
Aziz Abdel-Qader – Finance Magnates
Chicago-based crypto exchange ErisX has joined the Silvergate Exchange Network (SEN) to give its clients more choice as they manage their assets. By joining SEN, ErisX enables its clients to deposit and withdraw U.S. dollars from Silvergate accounts with no fees. ErisX, which is backed by US brokerage TD Ameritrade, joins crypto exchanges, miners and custodians who benefit from the service that also offers leveraged trading options. The crypto-friendly lender already counts major crypto exchanges like Coinbase and Kraken as clients.
Silvergate Exchange Network Expands to Include ErisX
ErisX today announced membership into Silvergate Bank’s Silvergate Exchange Network (SEN) enabling ErisX Exchange and Clearing Members to make nearly instantaneous U. S. Dollar (USD) transfers. By joining SEN, ErisX’s Members have access to the USD payment platform to make withdrawals and deposits 7am to 7pm cst.
(Podcast) Larry Cermak breaks down why the Twitter hackers are amateurish
Aislinn Keely – The Block
The Block spends a lot of time on Twitter, combing the signal from the noise and looking out for market-moving memes. Sometimes that pays off. On Wednesday, our Director of Research Larry Cermak noticed a tweet from a well-known trading account, @AngeloBTC, alerting its followers that it was launching a paid group. Cermak thought that was strange, and suspected that the account had probably suffered a hack.
China’s Blockchain Infrastructure to Extend Global Reach With Six Public Chains
David Pan – Coindesk
China’s state-backed Blockchain-based Service Network (BSN) has integrated with six public chains including Tezos, NEO, Nervos, EOS, IRISnet and Ethereum. Developers on these six blockchains will be able to build dapps and run nodes using data storage and bandwidth from BSN’s overseas data centers starting Aug 10. This is part of China’s plan to be the one and only infrastructure provider for blockchain firms around the world. Global users will have access to China’s enterprise chains and financial data via the network’s cross-chain structure and partnership with China UnionPay.
Google, Twitter and Facebook Face $600M Lawsuit Over Crypto Ad Bans
Sebastian Sinclair – Coindesk
Corporate giants Google, Twitter and Facebook could soon face the wrath of cryptocurrency business owners in a class-action lawsuit relating to the banning of cryptocurrency-related advertising in 2018. According to a Sunday report from Daily Mail Australia, Australian crypto business owners, represented by Sydney-based law firm JPB Liberty, allege they were harmed by the banning of their advertisements and are seeking damages amounting to A$872 million (US$600 million). That amount could rise to A$300 billion in total as more litigants join the class action, according to the report.
South Korea to Charge 20% on Crypto Gains Under New Tax Law
Arnab Shome – Finance Magnates
After months of debate, the South Korean government has finalized its decision to tax cryptocurrency earnings at 20 percent. In the taxation policy amendment notice published on Wednesday, the country’s Ministry of Economy and Finance detailed that all annual income above 2.5 million won (around $2,000) obtained from crypto trading or liquidation will be taxed at 20 percent, while any amount less than that will not attract any taxation.
Grayscale Moves to List Bitcoin Cash and Litecoin Trusts for OTC Traders
Danny Nelson – Coindesk
Grayscale Investments has announced that its digital asset funds Bitcoin Cash Trust and Litecoin Trust have cleared a regulatory hurdle in their march to begin being quoted on over-the-counter markets. The U.S. Financial Industry Regulatory Authority (FINRA) on Monday verified that the trusts’ broker-dealer OTC Link LLC had completed its required diligence check. It’s one step in the security quoting process, but more lie ahead.
Trump’s Request of an Ambassador: Get the British Open for Me; Woody Johnson, the N.F.L. owner, Trump donor and ambassador to Britain, was warned not to get involved in trying to move the tournament to a Trump resort in Scotland, but he raised the idea anyway — and he failed.
Mark Landler, Lara Jakes and Maggie Haberman – NY Times
The American ambassador to Britain, Robert Wood Johnson IV, told multiple colleagues in February 2018 that President Trump had asked him to see if the British government could help steer the world-famous and lucrative British Open golf tournament to the Trump Turnberry resort in Scotland, according to three people with knowledge of the episode.
Trump, in a Shift, Endorses Masks and Says Virus Will Get Worse; Rather than just “embers” of the disease, as he has repeatedly characterized recent outbreaks afflicting much of the country, President Trump conceded that there were now “big fires.”
Peter Baker – NY Times
President Trump acknowledged on Tuesday that the coronavirus pandemic was growing more severe in the United States and endorsed mask wearing in a shift after weeks of playing down the seriousness of the crisis that has killed more than 140,000 Americans.
Gretchen Whitmer: Mask Up, America; Trump says it is “patriotic” to wear a face covering. He can back that up by issuing a nationwide mandate.
Gretchen Whitmer – NY Times
LANSING, Mich. — My state was hit hard by Covid-19. For many weeks, we had the nation’s third-highest number of deaths despite having only the 10th-largest population. As a result, we took some of the most aggressive measures in the country in the fight against the disease, and our hard work paid off. Our actions saved thousands of lives.
‘The Whole of Liberal Democracy Is in Grave Danger at This Moment’; Trump’s America has accelerated “the authoritarian dynamic.”
Thomas B. Edsall – NY Times
In the continuing debate over whether liberals or conservatives are more open minded, whether those on the left or the right are more rigid in their thinking, a team of four Canadian psychologists studied patterns of “cognitive reflection” among Americans. They found that a willingness to change one’s convictions in the face of new evidence
was robustly associated with political liberalism, the rejection of traditional moral values, the acceptance of science, and skepticism about religious, paranormal, and conspiratorial claims.
Twitter to Crack Down on QAnon as Movement’s Influence Grows
Max Zimmerman – Bloomberg
Twitter Inc. will ban thousands of accounts associated with the QAnon conspiracy theory movement, which claims there is a deep state plot against President Donald Trump — the latest battle front in the social media company’s campaign against disinformation.
Twitter Takedown Targets QAnon Accounts; The company permanently suspended thousands of accounts associated with the fringe conspiracy theory movement. Facebook was said to be preparing to take similar action.
Kate Conger – NY Times
Twitter said Tuesday evening that it had removed thousands of accounts that spread messages about the conspiracy theories known as QAnon, saying their messages could lead to harm and violated Twitter policy.
Twitter Bans QAnon Accounts, Citing Risk of Offline Harm; Adherents of discredited conspiracy theory have become more active recently, company says; ban covers thousands of accounts
Jeff Horwitz – WSJ
Twitter Inc. TWTR -0.13% said it would step up enforcement against followers of the QAnon conspiracy theory, becoming the first major platform to take aggressive action to limit the spread of a discredited movement that has festered online for years.
Russia Report Shows Just How Vulnerable Britain Is; Closing the front door to China hardly does much good if the back door’s left open for Russia.
Therese Raphael – Bloomberg
For months, Britain’s foreign policy establishment has been focused on China as it tries to shift from a stance of eager engagement to one of containment and conflict management. The same reset is long overdue for Russia too, as any reading of the just-released parliamentary report on Russian interference in U.K. democracy makes clear.
End of $600 Unemployment Bonus Could Push Millions Past the Brink; A weekly supplement has helped the jobless to pay their bills and cushioned the economy. As it expires, Congress will determine what comes next
Ben Casselman – NY Times
When millions of Americans began losing their jobs in March, the federal government stepped in with a life preserver: $600 a week in extra unemployment benefits to allow workers to pay rent and buy groceries, and to cushion the economy.
Trump Fed Nominees Shelton, Waller Confirmed by Senate Committee; Nomination of Shelton to Fed board approved in 13-12 party-line vote
Paul Kiernan – WSJ
A controversial Trump administration nominee for the Federal Reserve’s policy-making board cleared a major hurdle in her path to confirmation Tuesday after a Senate panel voted to support the choice.
CFTC Announces Whistleblower Awards Totaling More Than $1 Million
The Commodity Futures Trading Commission today announced it will award more than $1 million to two whistleblowers who voluntarily provided original information that led the Commission to bring a successful enforcement action. The CFTC opened an investigation after the first whistleblower’s information was deemed to be sufficiently specific, credible, and timely. The second whistleblower significantly contributed to the matter by providing investigative staff with first-hand information obtained through participation in the underlying scheme.
CFTC Chairman Pushes to Finalize Dodd-Frank Rules
Heath Tarbert has made it his mission to finish implementing several thorny parts of the Dodd-Frank Act, 10 years after it was enacted
Dylan Tokar – The Wall Street Journal
If everything goes according to Heath Tarbert’s plan, the Commodity Futures Trading Commission will soon finish implementing decade-old legislation that mandated a massive regulatory overhaul of the U.S.’s derivatives markets.
Opening Statement of Commissioner Rostin Behnam before the Market Risk Advisory Committee
Good morning and welcome to a virtual meeting of the CFTC’s Market Risk Advisory Committee (“MRAC” or “Committee”). I want to thank Chairman Tarbert and Commissioners Quintenz, Stump, and Berkovitz for joining today’s meeting. I also want to thank and acknowledge the MRAC members, the subcommittee chairs, and the speakers who will participate on today’s panels.
Opening Statement of Chairman Heath P. Tarbert Before the Market Risk Advisory Committee Meeting
Good morning and thank you all for attending this Market Risk Advisory Committee (MRAC) meeting via teleconference. I would especially like to thank Commissioner Behnam and his staff for convening this meeting. I am also grateful to Alicia Lewis, the Designated Federal Officer for the MRAC, for organizing the meeting. And of course, I must thank Nadia Zakir for serving as the MRAC Chair, and all the MRAC members for taking the time to share your valuable perspectives.
ICYMI: Chairman Tarbert Recaps His First Year Leading the CFTC on Bloomberg TV
Chairman Tarbert on the First Year of His Chairmanship and the Impact of COVID-19:
“It has been a tremendous twelve months and we have gotten so much done. The men and women of the CFTC have really risen to the occasion. We have had twelve open meetings and this week we are going to have meetings thirteen and fourteen, and that’s more than in the last six years the CFTC had combined. That said, in the middle of it, as you mentioned, we’ve had this major challenge, COVID-19 and its impact on our markets. And the good news for everyone is that our derivatives markets have remained incredibly resilient. They’re working just as we intended them to work. The system is safe and sound, and its enabled many Americans to go ahead and hedge the risk they’re experiencing because of this crisis.”
Virtual Conference Panels: Fireside Chat on Current Issues
With the cancellation of the 2020 FINRA Annual Conference and other in-person events throughout the year, we’ve gone virtual with a variety of on-demand conference panels on regulatory hot topics. On this episode, we’re dropping in for a quick listen to the latest FINRA Virtual Conference Panel with FINRA CEO Robert Cook, Member Supervision Head Bari Havlik and Chief Legal Officer Bob Colby, moderated by Chip Jones, head of Member Relations and Education, as they talk about the continued impact of the coronavirus on firm and FINRA operations, recent conversations around racial justice in America and more.
Organised crime investigation charges 12 over complex fraud; Joint media release with the Australian Federal Police and the Australian Taxation Office
A joint-agency investigation into an elaborate $17 million fraud has resulted in charges against 12 people across the east coast of Australia – including people who have been of long-term interest to transnational and serious organised crime investigators.
ASIC will not appeal Federal Court decision on Westpac’s ‘responsible lending’ obligations
ASIC will not seek special leave to appeal to the High Court in the Westpac ‘responsible lending’ matter, following the full Federal Court’s 2-1 decision to reject its earlier appeal (20-149MR ASIC’s responsible lending appeal dismissed by Full Federal Court).
Companies to Notch Big Win Over Activists in SEC Proxy Overhaul
Benjamin Bain – Bloomberg
Regulator to vote on rules reining in ISS and Glass Lewis; Hedge funds and environmental groups oppose agency’s changes
U.S. companies will get a long-sought win Wednesday when the Securities and Exchange Commission approves new rules that are expected to make it harder for activist investors to push for changes in corporate strategy.
Investing and Trading
Tesla Knocks on S&P 500’s Door; Tesla’s shares could get another jolt if the electric-car company delivers a surprise profit, making it eligible for the index
Gunjan Banerji – WSJ
Tesla Inc.’s TSLA -4.54% stock rally has made it bigger than many behemoths of American industry, but the electric-car company has yet to achieve one major milestone: inclusion in the S&P 500.
Insiders Who Nailed Market Bottom Are Starting to Sell Stocks
Lu Wang – Bloomberg
Sell-buy ratio jumps to the highest level since 2017; Ratio nearing levels that have tended to mark market tops
As U.S. stocks climb to their most expensive levels in two decades, the executives in charge of the companies benefiting from the rally are showing signs of anxiety. Corporate insiders, whose buying correctly signaled the bottom in March, are now mostly sellers. Almost 1,000 corporate executives and officers have unloaded shares of their own companies this month, outpacing insider buyers by a ratio of 5-to-1, data compiled by the Washington Service showed. Only twice in the past three decades has the sell-buy ratio been higher than now.
Environmental, Social and Corporate Governance
Big US investors urge regulators to treat climate as systemic risk; Pension funds managing $1tn push Federal Reserve, SEC and CFTC to make policy shift
Matthew Vincent – FT
US investors managing nearly $1tn of assets have written to Federal Reserve chair Jay Powell and other regulators urging them to treat climate change as a systemic financial risk. In a series of letters sent on Tuesday, multibillion-dollar pension funds including Calstrs and the Seattle City Employee Retirement System, as well as the New York State and New York City Comptrollers, called on US authorities “to implement a broader range of actions to explicitly integrate climate change across [their] mandates”.
Investing on a greener theme; There will be opportunities as people make huge changes to their lives
John Redwood – FT
It looks as if there is going to be wave of capital destruction around the world. This time it will be unleashed not by capitalism, but by the policies of governments.
Venture capitalists must do more than stand in solidarity with Black Lives Matter; Investing in black founders and taking unconscious bias training can shake an industry that has failed to act
Richard Robinson – FT
The venture capital industry structurally discriminates against minorities. That statement should provoke alarm, but most people that work in the technology ecosystem have come to accept it.
Big Oil can play big role in frontier markets’ energy transition; Large E&P groups have capabilities critical in making projects in developing countries work
Gerald Kepes and Fareed Mohamedi – FT
Recent multibillion-dollar asset writedowns by BP and Shell, signalling that at least a portion of their portfolio did not represent future value, have come amid the rising tide of references to oil and gas as a sunset industry. Perhaps the exploration and production business has passed its apogee. But that does not mean oil and gas companies have lost their purpose as energy producers. The future of E&P companies may be different than the future of the E&P industry itself.
Bailey Hires First Woman for BOE’s ‘Unofficial Governor’ Role
Lucy Meakin – Bloomberg
Laura Wallis appointed as the governor’s private secretary; Previous job holders have gone on to senior BOE positions
Bank of England chief Andrew Bailey has broken new ground in his choice of private secretary — a role described by one lawmaker as the central bank’s “unofficial governor.”
Apple Pledges to Be Carbon Neutral by 2030; Tech giant’s push to fight climate change includes urging suppliers to use renewable energy
Sarah E. Needleman – WSJ
Apple Inc. AAPL -1.38% is pledging to become carbon neutral across its business, including its mostly overseas supply chain, within the next 10 years, the latest corporate giant planning to shift its operations to battle climate change.
Facebook Creates Teams to Study Racial Bias, After Previously Limiting Such Efforts; Facebook and Instagram plan to examine how Black and minority users are affected by the company’s algorithms as compared with white users
Deepa Seetharaman and Jeff Horwitz – WSJ
Facebook Inc. FB -1.50% is creating new teams dedicated to studying and addressing potential racial bias on its core platform and Instagram unit, in a departure from the company’s prior reluctance to explore the way its products affect different minority groups.
Barclays EMEA electronic equities product head departs for Citi; Graham Wayne joins Citi as EMEA product manager for equities and securities services after almost three years with Barclays.
Hayley McDowell – The Trade
Citi has hired a senior electronic equities product manager at Barclays for a similar role, The TRADE understands, marking the latest departure for the investment bank’s electronic trading division.
Wells Fargo CFO John Shrewsberry to Leave the Bank After 22 Years; Bank of New York Mellon’s Mike Santomassimo named to take Shrewsberry’s position
Ben Eisen and Dave Sebastian – WSJ
Wells Fargo WFC 6.63% & Co. said Tuesday it will replace its long-serving chief financial officer, the latest executive to leave as the bank’s new CEO shakes up top management.
Robinhood Cancels U.K. Launch Amid U.S. Outages, Controversy; Instead of making its first expansion outside the U.S., the online brokerage plans to strengthen its core business
Simon Clark and Alexander Osipovich – WSJ
Robinhood Markets Inc. canceled its U.K. launch plans, a fresh setback for the online brokerage that has driven an industrywide shift to commission-free trading in recent years.
Arkansas teachers fund sues Allianz over coronavirus losses; Asset manager accused of employing ‘reckless strategy’ during market turmoil
Ortenca Aliaj – FT
A US teachers’ pension fund has sued Allianz Global Investors, accusing one of the world’s biggest asset managers of employing a “reckless strategy” that cost retirees almost $800m during this year’s market turmoil.
After Three Centuries, Royal Bank of Scotland Becomes NatWest
Stefania Spezzati – Bloomberg
Bank is adopting name used in most of its branch network; RBS brand will still feature in Scottish consumer business
Royal Bank of Scotland Group Plc is due to become Natwest Group Plc today, ending three centuries under its old name. The change, which was announced in February, exchanges the group’s Scottish lineage for the name used in most of its branch network following a takeover in 2000. RBS will remain in use as a consumer brand.
BNP Paribas Asset Management Appoints Steven Billiet As Head Of APAC
BNP Paribas Asset Management (‘BNPP AM’) announces the appointment of Steven Billiet as Head of Asia Pacific, with effect from 8 August 2020. He succeeds Ligia Torres, who is retiring from the firm and will return to Europe in August.
UK Treasury to require digital tax returns every quarter; Landlords, self-employed and VAT-registered businesses affected by move to cut losses from filing errors
Emma Agyemang and George Hammond – FT
UK landlords, the self-employed and all businesses registered for value added tax will be obliged to keep digital records and report their income every quarter in a move designed to clamp down on tax lost through errors. Currently, only businesses with taxable turnover — or total sales of items not exempt from VAT — above £85,000 are covered by the system, which requires them to keep digital records and provide VAT returns through software.
Thai Rice Exports Falling to Two-Decade Low on Baht, Drought
Randy Thanthong-Knight – Bloomberg
Association cuts Thai export target by 13% to 6.5 million tons; Volume dropped 40% in first half amid drought, strong currency
Thailand is set to lose its status as the world’s No. 2 rice exporter this year, as drought and a resilient currency make shipments more expensive than those from other growers including India and Vietnam.
South Africa Currency Trader JP Markets to Oppose Liquidation Bid
Roxanne Henderson – Bloomberg
South African currency-trading platform JP Markets (Pty) Ltd. plans to oppose a court application by the nation’s financial-services regulator to shut it down. The Financial Sector Conduct Authority has said it wants the firm liquidated for operating an unlicensed over-the-counter derivatives business and in June provisionally suspended its financial-services provider’s license. Its bank accounts were frozen earlier this month.
Japan’s Largest Bank Plans to Digitize Millions of ‘Hanko’ Documents
Taiga Uranaka and Yuki Hagiwara – Bloomberg
Japan’s largest bank is installing giant robot scanners to digitize millions of documents, as it seeks to break from the long tradition of using paper records to verify its customers’ identities. Mitsubishi UFJ Financial Group Inc. will use the machines of Ripcord Inc. to scan 300 million pages of files that record clients’ personal seals known as hanko, the Tokyo-based lender said Wednesday. The U.S. startup said last year its first foray abroad will be to work with a large bank in Japan.
New York’s Taxes Will Stalk You Even If You Fled During the Pandemic; To escape payments, people need to have cut ties with the city in a way that won’t be easy to undo in a year or two.
Ben Steverman – Bloomberg
As far as the taxman is concerned, home is where the heart is. That’s the difficult message accountants and lawyers are delivering to clients these days, after the Covid-19 pandemic scattered New Yorkers across the country. The city levies its own income tax of as much as 3.876% in addition to the state’s top rate of 8.82%, and people often assume that they can avoid paying by spending more than half the year somewhere else. Nope.
European Rescue Fund Creates a New Big Beast in Bond Market; Paying for the EU’s recovery fund through bond sales should be a breeze.
Marcus Ashworth and Mark Gilbert – Bloomberg
Congratulations to the European Union for agreeing a groundbreaking deal to distribute 750 billion euros ($864 billion) of grants and loans among its 27 members to bolster the recovery from the pandemic. Now it has to find a way to pay for it. And bond investors are ready, willing, able and eager to help.
Boris Johnson’s Global Britain Collides With Global Reality; The post-Brexit version of the U.K. is asserting itself, but the question is whether the world is really paying attention.
Alan Crawford, Archana Chaudhary, and Kait Bolongaro – Bloomberg
In early February, just after leaving the European Union and before Britain was engulfed by the coronavirus, Prime Minister Boris Johnson declared his country ready to make its mark on the world again. The U.K. was embarking on a “great voyage” to champion free trade, he said in a speech in London. While not wishing to exaggerate British influence, he warned against downplaying “the eagerness of our friends around the world to hear once again our independent voice.”
ISDA:Brexit FAQs – Version 8
These FAQs address the possible UK position post-Brexit, i.e. after the conclusion of the exit process under Article 50 of the Lisbon Treaty. The exit negotiations, and the position in respect of cross-border financial services, are still evolving and will depend upon the final relationship negotiated between the UK and the European Union (the “EU”).
Britain nears abandoning Brexit trade deal hope: The Telegraph
Aakriti Bhalla – Reuters
Britain and the European Union will fail to sign a post-Brexit trade deal, with only a few days left before Prime Minister Boris Johnson’s July deadline, The Telegraph reported. The UK government’s assumption is that there will not be a deal, though it remains possible that a “basic” agreement could be reached if the EU gives ground in the autumn, the newspaper said, citing government sources.
Brexit: NI drivers need green card to cross the border
Kevin Sharkey – BBC
Drivers from Northern Ireland will have to carry an insurance green card while driving across the border to the Republic of Ireland from January. The new rule will apply after the end of the Brexit transition period. The Irish Department of Transport has confirmed the requirement to BBC News NI. “A green card is a document issued by your insurer that proves you have motor insurance cover when driving in another jurisdiction,” a spokesperson said.
WSJ Journalists Ask Publisher for Clearer Distinction Between News and Opinion Content; Letter to publisher Almar Latour cites concerns about Opinion section’s accuracy and transparency
Jeffrey A. Trachtenberg – WSJ
A group of journalists at The Wall Street Journal and other Dow Jones NWS 0.24% staffers sent a letter on Tuesday to the paper’s new publisher, Almar Latour, calling for a clearer differentiation between news and opinion content online, citing concerns about the Opinion section’s accuracy and transparency.