Shinzo Abe to step down as Japan’s prime minister

Aug 28, 2020

First Read

Hits & Takes
JLN Staff

John Lothian News is going to start a new podcast experiment, turning the daily JLN hits and takes comments, our original content and the stories and quips in the top box of First Read into a daily podcast. We will push it out via social media after the newsletter comes out.

Overall, we want to increase our video and audio output. Watch our Twitter Feed (@JohnLothian) and LinkedIn and Facebook for this content. You can also find it on www.johnlothian.com and Castos.com.

IEX has had their D-Limit order type approved by the SEC. I wrote a comment letter in support of this move, so I am pleased with the result. Congratulations to IEX and let’s see if it will perform as designed.

For those of you who just love real estate news, Don Wilson is in the news with a commercial real estate story in Crain’s Chicago Business. The headline is “Don Wilson changes course on Gold Coast landmark; The Chicago trader’s real estate business had hired a broker to sell the former Three Arts Club building leased to Restoration Hardware. But it decided to take advantage of low interest rates by refinancing instead.”

Happy birthday to Frank Chaparro of The Block, who turned all of 25. I have t-shirts older than him.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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The LME is holding its Metals Seminar virtually this year and registration is open. The keynote speaker will be Sanjeev Gupta, executive chairman of GFG Alliance, and the event will take place Monday 19 October 2020, 09.00-12.45 BST / 04.00-07.45 EDT / 16.00-19.45 HKT. Registration is free. You can go here to see the full agenda and here to register. ~SR

The FIA is calling for fintech startups to claim a spot at FIA’s annual fintech showcase – the Innovators Pavilion – at the Futures and Options Expo. There is no charge for startups to participate, but to be eligible, firms should be no more than five years old and should have a product or prototype ready to showcase at Expo-V 2020. Applications are due September 18, 2020. Startups selected for the Innovators Pavilion will be notified on a rolling basis. You can go here to apply.~SR

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In twenty years, exchanges have gone from clubby firms to huge conglomerates; They control everything from the software powering back offices to the data pored over by investors
The Economist
The Hong Kong Stock Exchange (HKEX) resembles a financial estuary, says Charles Li, its boss. China’s capital flows mix with the open seas of global markets. In 2014 hkex sought to ride the waves by launching Stock Connect, a conduit allowing offshore and mainland punters to invest in each other’s markets. Later it eased its listing rules for firms with dual share classes. All that has helped make hkex more hospitable to the tech firms that exchanges covet. It has just landed another big catch. On August 25th Ant Group, the fintech affiliate of Alibaba, a Chinese e-commerce giant, filed for a listing that may raise $30bn in Hong Kong and Shanghai (see article). That would make it the largest initial public offering ever.
/econ.st/2QE2wwt

*****This story is no surprise to you if you have been reading JLN since before it had a name; that was 20 years ago.~JJL

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IEX receives SEC’s OK on new order designed to improve displayed liquidity
Declan Harty – S&P Global
IEX Group Inc. plans to launch a new order type that it says will provide traders with a way to avoid adverse selection on its exchange. The stock exchange operator, known for the role its founding executives played as the protagonists in Michael Lewis’ “Flash Boys,” received the U.S. Securities and Exchange Commission’s approval for its proposed Discretionary Limit, or D-Limit, order type Aug. 26.
/bit.ly/32NAyV5

*****It is good to see the SEC embrace this innovation.~JJL

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CryptoMarketsWiki Coin of the Week: Polkadot (DOT)
Polkadot, a digital asset protocol created by Ethereum developer Gavin Wood, may soon be interoperable with Ethereum, a developer working on the project said this week. The project, which is being developed by a software development team called “Snowfork,” is a fork that will act as a “bridge” between Polkadot and Ethereum, allowing users to transfer value held by DOT tokens to ETH, and vice versa, as well as enabling other cross-platform features to be developed. The project is scheduled to launch in mid-September.
/bit.ly/31z0lAG

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Thursday’s Top Three
Our top story Thursday was the Wall Street Journal’s OneCoin Took In Billions. Then Its Leader Vanished, about the alleged pyramid scheme of Ruja Ignatova, known as the Cryptoqueen. Second, for the second time in the top three, was Kenilworth mansion sells for $7.5 million, from Crain’s Chicago, about the former home of Craig Donohue and his wife. Third was the U.S. Securities and Exchange Commission’s press release, SEC Modernizes the Accredited Investor Definition. (And our MarketsWiki Page of the Day Thursday was “Accredited investor.”)

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MarketsWiki Stats
186,031,746 pages viewed; 24,419 pages; 225,896 edits
MarketsWiki Statistics

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CryptoMarketsWiki Website»
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

Recently updated pages include
Deribit
Bitwage
Internal Revenue Service (IRS)
Coinbit

CryptoMarketsWiki Stats

1,438 pages; 12,692 edits
CryptoMarketsWiki Statistics

Lead Stories

Shinzo Abe to step down as Japan’s prime minister; Country’s longest-serving leader announces resignation after relapse in illness
Robin Harding – FT
Shinzo Abe will stand down as prime minister of Japan because of a relapse in his ulcerative colitis, ending an eight-year term that made him the longest-serving leader in his nation’s history.
/on.ft.com/2QzS4Gm

Volatility Markets Brace for Election Drama Like Never Before
Katherine Greifeld and Liz McCormick – Bloomberg
VIX futures spreads, swaption vol higher than recent elections; Traders looking beyond just day-of protection as risks build
Traders across major asset classes are sending the same message: Prepare for what could be the most-contentious U.S. presidential elections in decades. One measure of hedging in the stock market is higher than at any point in the past three presidential elections. In the interest-rates market, implied volatility is well above levels reached in 2016 or 2012. And three-month implied volatility in the dollar-yen pair — a classic haven trade — has risen above the two-month tenor by the most in two decades, signaling demand for protection from turbulence near Election Day.
/bloom.bg/2QwPlgT

New Zealand Deploys Spy Agency as Hackers Hit Stock Market
Jamie Tarabay and Matthew Brockett – Bloomberg
Exchange crippled for a fourth day by attacks from abroad; Group claiming to be Fancy Bear may be responsible: ZDNet
New Zealand called in its spy agency and activated security crisis plans to help defend the stock exchange from overseas attack, after hackers disrupted the market for a fourth straight day. “We as a government are treating this very seriously,” Finance Minister Grant Robertson said Friday, adding agencies would coordinate to deal with the threat. “There are limits to what I can say today about the action the government is taking behind the scenes due to significant security considerations.”
/bloom.bg/2D5FPyb

How the Shock Therapy of ‘Abenomics’ Worked in Japan
Yuko Takeo and Enda Curran – Bloomberg
Japan’s Prime Minister Shinzo Abe had a bold strategy: shock therapy for an economy that had been stagnant for 20 years and was overtaken by China as the world’s second-largest in 2010. Launched three years later, Abenomics, as the doctrine is known, departed from the piecemeal measures of previous leaders and antagonized powerful political constituencies. Abe told voters that the strong economic medicine was Japan’s last chance to remain a world power, framing his policies as a matter of national security. Progress was patchy at best, however, even before the hammer blow of the Covid-19 pandemic — and Abe’s decision to step down after a record-setting, eight-year run.
/bloom.bg/3gGTE3L

Shinzo Abe Will Resign as Japan’s Prime Minister, Citing His Worsening Health; The 65-year-old leader has long suffered from an intestinal condition called ulcerative colitis
Peter Landers and Alastair Gale – WSJ
Prime Minister Shinzo Abe said he would resign because of a painful intestinal condition, ending the reign of the man who held the top job longer than anyone else. Mr. Abe, 65 years old, said he would stay in office until a successor is chosen, likely in September.
/on.wsj.com/31yRT4q

Abe Resignation Unlikely to Shift BOJ Path Much, Economists Say
Yuko Takeo – Bloomberg
Japanese equities and the yen shook Friday on news that Prime Minister Shinzo Abe is resigning, but economists said his departure is unlikely to trigger changes in Bank of Japan policy. One reason is that BOJ Governor Haruhiko Kuroda, the architect of the bank’s massive easing policy, isn’t likely to follow Abe in stepping down before his term is up, in April 2023. The pandemic has also made it even more difficult for the bank to contemplate unwinding its bond purchases or lifting rates that have been in negative territory for years.
/bloom.bg/2EFRR1K

Wall Street Is Looking for Inflation in All the Wrong Places; Be wary of expert predictions of how Covid-19 and federal stimulus will affect the direction of consumer prices. The fate of your holdings rides on the outcome.
Jon Sindreu – WSJ
Investors grappling with the shape of the Covid-19 recovery have the same blind spot as they did after the financial crisis: They don’t know how inflation works. The S&P 500 hit new highs this month despite the devastating impact of the pandemic. Similarly, market expectations of inflation have rebounded to their February levels, just months after hitting an 11-year low.
/on.wsj.com/2QKZ57D

Ultra-Rich Club Stockpiles Cash as U.S. Economy Fears Grow
Benjamin Stupples – Bloomberg
Cash holdings from rich investors at about one-fifth of assets; U.S. stock prices keep rising amid Fed support, tech strength
A group of multimillionaire investors in the U.S. are hoarding cash at unprecedented levels. Tiger 21, a club of more than 800 investors, reported Thursday that its members have raised their cash holdings to 19% of their total assets on concerns over the economic consequences of the covid pandemic in the U.S. That’s up from about 12% since the start of the outbreak. About a quarter now expect the crisis to continue until the end of next June, the group said.
/bloom.bg/3b5jVrr

COVID-19 compliance weaknesses to drive rapid surveillance technology spend; Greenwich Associates predicts the trade surveillance technology spend could increase to $1.5 billion in 2021 due to compliance weaknesses identified by the pandemic.
Annabel Smith – The Trade
Trade surveillance technology spending has increased significantly due to compliance weaknesses identified during the COVID-19 pandemic, according to Greenwich Associates. In the last 10 years, the trade surveillance technology market has grown between 13% and 14% year on year.
/bit.ly/2EIEOg9

U.K. Regulator Seeks to Expand Financial Crime Reporting Requirements to More Companies; The Financial Conduct Authority’s proposal would require companies such as cryptocurrency exchanges to report suspected financial crimes
Mengqi Sun – WSJ
A U.K. regulator is proposing to expand an annual financial crime reporting requirement to a wider set of companies, including cryptocurrency exchanges and custodian wallet providers. The Financial Conduct Authority, in a consultation paper published this week, proposed extending its requirements to provide firm-specific information about suspected financial crime to companies that conduct regulated activities that could pose higher money-laundering risks.
/on.wsj.com/3b5u9Il

Chinese Bond Issuers Bypass U.S. Investors; With plenty of dollars already in Asia, borrowers have less reason to look abroad
Frances Yoon – WSJ
Chinese companies are borrowing less from U.S. bond buyers, as the deep pools of dollars held by investors in Asia means the region can be more self-reliant for hard-currency funding. The long-running trend has gained pace in the last couple of years, especially for state-owned enterprises, or SOEs, that are controlled by China’s central government. U.S. buyers took up just 11% of this year’s Chinese dollar bonds by value, BofA Securities data through mid-August shows, down from 20% last year. For central SOEs, the figure tumbled to 4%, from 10% last year and 15% in 2018. The figures don’t include purchases by the international arms of U.S. asset managers, who might also buy some debt via units in Asia.
/on.wsj.com/3hFXdJ8

Will remote traders last the distance?
Chris Hall – Traders Magazine
Operational risks of home trading are being addressed, but human costs might be harder to quantify. Trading from home – in your PJs, with no commute – is some traders’ idea of heaven. But it’s not all sweetness and light for the desk heads facing the op risk curve balls pitched up by the enforced adoption of remote working by US equity traders over the past six months. Culture, compliance, communication and connectivity are among the issues tackled this year by Lynn Challenger, Global Head of Trading and Order Generation at UBS Asset Management, and his peers. In the short term, most key risks appear to be largely under control, but longer-term uncertainties remain.
/bit.ly/3ll84dw

Coronavirus

The Tour de France Was Obsessed With Germs Long Before the Pandemic; The strangest edition of the world’s most famous bike race begins on Saturday, amid rising coronavirus cases in France
Joshua Robinson – WSJ
When the world suddenly learned this year that it needed to use hand sanitizer all of the time, one group of skinny men in Lycra already knew the drill. Tour de France cyclists had been fretting about hand-washing and microbes for years.
/on.wsj.com/3hC42LN

Tour de France faces uphill battle to stay ahead of Covid-19; World’s biggest cycle race starts with strict rules to prevent spread of coronavirus
Victor Mallet – FT
In normal times, the Tour de France is a brutal and boisterous cycling marathon marked out from rival bike races by the huge crowds that line the roads to catch a glimpse of the riders and spur them on to the finish line on the Champs-Elysées.
/on.ft.com/2EE4tXc

Pret A Manger slashes third of its workforce; Sandwich chain says pandemic has stripped away ‘decade of growth’ as it axes 2,890 jobs=
Judith Evans and Alice Hancock – FT
UK sandwich chain Pret A Manger has said it will cut 2,890 jobs, or almost a third of its workforce, as it reshapes its business after a steep drop in demand for its takeaway food in the pandemic.
/on.ft.com/31B8LYn

UK government launches campaign to get workers back to the office; Growing fears in Downing Street that city centres will be hit by working from home trend
Jim Pickard – FT
The UK government will launch a campaign to encourage people back to their workplaces amid growing fears in Downing Street that city centres could be permanently scarred by the Covid-19 pandemic.
/on.ft.com/2EMRLoU

U.S. Deaths Top 180,000; Abbott Jumps on Fast Test: Virus Update
Bloomberg News
Abbott Laboratories surged after its 15-minute test won emergency clearance in the U.S. The government will buy 150 million of the tests for $750 million, according to people familiar with the matter. The number of Americans killed by Covid-19 surpassed 180,000.
/bloom.bg/31Ctdbk

Sweden Proposes Raising Limit on Some Public Gatherings to 500
Love Liman and Niclas Rolander – Bloomberg
Sweden’s national health agency has proposed raising the limit on certain public gatherings to 500 from 50 owing to a stabilization in Covid-19 infection rates. “We have made a consultation response following a request from the government,” state epidemiologist Anders Tegnell told reporters in Stockholm.
/bloom.bg/3gDMTQv

U.K. Steps Up Quarantine Enforcement With 4,200 Police Referrals
Alex Morales – Bloomberg
Transport Secretary says breaking quarantine isn’t risk-free; Move comes after three countries removed from exemption list
U.K. Transport Secretary Grant Shapps said about 4,200 people have been referred to the police over potential coronavirus quarantine breaches, as he responded to criticism that enforcement has been too lax.
/bloom.bg/2EHQI9U

Remote Work Boom Mints Another Internet Billionaire
Nico Grant – Bloomberg
Businesses, schools tap firm’s tools to secure online access; McKinnon stays cautious on outlook as investors seek growth
The coronavirus pandemic, for all its human and economic tragedy, has spurred a once-in-a-generation opportunity for the technology industry, seized most visibly by the sector’s giants such as Apple Inc., Amazon.com Inc. and Microsoft Corp., and productivity players like Zoom Video Communications Inc. and Slack Technologies Inc.
/bloom.bg/3gCzet1

Merkel Warns Coronavirus Crisis Challenges Germany’s Finances
Arne Delfs and Raymond Colitt – Bloomberg
Chancellor Angela Merkel warned the coronavirus crisis represents a challenge to Germany’s financial health because there’s no certainty how long the pandemic will last. Beating the disease depends on the development and dissemination of a vaccine, and “we don’t know whether that will be three months or 12 months or 15 months,” Merkel said during her annual summer address. “To that extend it is indeed a not known challenge to our financial capacity.”
/bloom.bg/2Quy08x

Covid-19 Live Updates: C.D.C. Is Pressed to Reverse Testing Guidance
NY Times
A coalition of local health departments called on Trump administration officials to change new recommendations that people without Covid-19 symptoms do not need to be tested.
/nyti.ms/3gxMv5P

Zynga’s Not Played Out Just Yet; Mobile-game maker’s pandemic-fueled boost might be most likely to stick
Dan Gallagher – WSJ
Pandemic life has been largely good for videogame companies. Life should stay good for Zynga, ZNGA -1.75% as the rest of the world starts getting back to normal. No one knows just when that will be, of course. And even Zynga Chief Executive Frank Gibeau concedes that the company’s booming mobile-games business will see some level of “normalization” at some point. But unlike titles designed largely for stationary consoles and PCs, Zynga’s games travel anywhere. That convenience makes Zynga’s usage less susceptible to disruption, once all those workers secretly whiling away time on their Xbox and PlayStation consoles at home finally have to get back to the office.
/on.wsj.com/2Qx9eVd

Chinese Covid-19 Vaccine Maker in Talks With Countries on Early Approval; Executive at CanSino Biologics says it is asking nations to agree to distribute vaccine before final phase of clinical trials is complete
Saeed Shah – WSJ
A Chinese pharmaceutical maker is in talks with several countries to get emergency approval to use an experimental Covid-19 vaccine, developed with the Chinese military, before the completion of large-scale safety and effectiveness trials, according to a senior executive at the company.
/on.wsj.com/3gCLeuq

Cities will transform and survive the pandemic; Urban living still has its attractions even if many will move to greener pastures
The editorial board – FT
Cities profit from agglomeration. Cramming millions of people together allows them to spark off one another, not only helping productivity, innovation and economic growth but also fun, creativity and romance. In the time of coronavirus, however, that connectivity has become a curse: a disease that spreads through human contact makes living cheek by jowl with each other a far less appealing prospect. Cities will not die but they will have to, once again, transform.
/on.ft.com/31BXjfe

College Is Everywhere Now; Yale students in Barbados. Michigan students in Brooklyn. Berkeley students in Las Vegas? Off-campus housing is way off-campus now.
Taylor Lorenz
Taylor Lorenz – NY Times
As the fall semester begins, many college students will be attending classes from the relative safety of their family homes. Others have arrived to live on university campuses, with varying amounts of success; even schools that enforce strict social distancing guidelines are seeing outbreaks of the coronavirus.
/nyti.ms/3gwNLGs

Exchanges, OTC and Clearing

NZX re-opens following four-day hacking shut down; The New Zealand exchange (NZX) was closed down for four days following distributed denial of service (DDoS) cyber-attacks.
Annabel Smith – The Trade
The New Zealand Stock Exchange (NZX) has re-opened after a hair raising four day hacking induced shutdown. The NZX reported that it had experienced a distributed denial of services (DDoS) cyber-attack on Tuesday and Wednesday earlier this week.
/bit.ly/3b5tCpO

Cboe plans to list new S&P 500 ESG Index Options; The new Cboe S&P 500 ESG Index Options aim to offer investment strategies better focused on environmental, social, and governance (ESG) factors.
Annabel Smith – The Trade
Exchange operator Cboe Global Markets has confirmed it will list new S&P 500 ESG Index Options in a bid to expand its S&P Dow Jones Indices product offering. The Cboe S&P 500 ESG Index Options, which will be available from September 2021, are designed to help market participants trade, hedge or gain exposure to US equities sustainability criteria.
/bit.ly/3gBSbfj

BEWi admitted to trading; BEWi has today been admitted to trading on Merkur Market. “Being admitted to trading is strategically important and a milestone for BEWi”, comments the Chairman of the company’s Board of Directors.
Euronext
BEWi recently raised NOK 275 million through a placement of existing shares. “The placement attracted strong interest from Norwegian and international investors and was significantly oversubscribed”, BEWi announced.
/bit.ly/31BU2MY

Foreign Exchange (FX) derivatives: Amendments to the Liquidity Provider scheme for ETD FX Futures and Rolling Spot Futures
Eurex
The Management Board of Eurex Deutschland, the Executive Board of Eurex Frankfurt AG and the Executive Board of Eurex Clearing AG took the following decision with effect from 1 October 2020:
/bit.ly/31CEYOQ

CME STP Notices: August 27, 2020
CME Group
Enhancement to CME STP Transaction Type – Postponed, BrokerTec Stream on CME STP – December 7, CME STP Support of BrokerTec Markets – Q4
/bit.ly/2D7ELtH

Performance Bond Requirements: Agriculture, Energy, Equity, FX and Metal Margins – Effective August 28, 2020
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/bit.ly/31CFSLe

Performance Bond Requirements: Agriculture Margin – Effective August 28, 2020
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/bit.ly/3gzYX5i

CME Globex Notices: August 24, 2020
CME Group
Critical System Updates:
Update – iLink 3 MSGW Session Migration UPDATE, Update on Order Routing and Front-End Audit Trail Requirements for iLink 3, CME Globex Market Segment Gateway Enhancements – August 30, Options on Micro E-mini Equity Index Futures – August 30, Harmonization of Enable/Disable Implied Behavior for ICS – September 20, New – CME Group Risk Management Tools Enhancement – September 20 NEW
/bit.ly/2QwXhib

Fintech

Barchart and Mercaris Announce Data Distribution Partnership
Barchart
Barchart, a leading provider of market data and technology services to the financial, media and commodity industries, has announced a new partnership with Mercaris, a leader in organic and non-GMO market intelligence, analysis, and trading.
/bit.ly/3aZaF8n

The fintech sub-sectors that have attracted most funding during the pandemic
Isabel Woodford – Sifted
Europe’s fintech startups have continued raising vast amounts of capital over the lockdown period, attracting around EUR2.86bn ($3.4bn) in investment between March and mid-August, according to Dealroom data.
Despite a brief funding blip in March, the second quarter of 2020 saw fintechs rake in EUR1.7bn; only slightly down on the EUR2bn raised in the first quarter.
/bit.ly/31BqChS

Fintech veterans launch blank-check firm to buy a startup
Penny Crosman – American Banker
Blank-check companies are making a big comeback, and two financial industry veterans with an affinity for fintechs have teamed up to join the trend.
Betsy Z. Cohen, founder of The Bancorp Bank, and the venture capitalist Ryan Gilbert have partnered to form a special-purpose acquisition company (or SPAC) named FTAC Olympus Corp. It began an initial public offering on Nasdaq on Wednesday that seeks to raise $750 million.
/bit.ly/2Das9Cc

All Is Fair In Mortgage Lending And Fintech?
Ilona Limonta-Volkova – Forbes
Have Fintechs really bridged the inequality gap? This was the question presented in last week’s inaugural post, in an effort critically examine the performance of the industry. Real estate technology, and mortgage lending in particular, is a key area where Fintechs have not managed to bridge the inequality gap as successfully as anticipated. This second in a three-part series examines the limitations of artificial intelligence, and highlights the ramifications on the rapidly heating US lending and refinancing market.
/bit.ly/31Bq4bO

Fintech unicorn Klarna’s losses rise sevenfold in first half
Ryan Browne – CNBC
Swedish online payments firm Klarna reported a ballooning net loss in the first half of 2020, as the company invested in an international expansion drive and set aside reserves to deal with credit losses amid the coronavirus pandemic.
The Stockholm-based company’s interim first-half report showed a net loss of 522 million Swedish krona ($59.8 million) between January and June, a sevenfold increase from the net loss of 73 million krona it posted in the same period last year.
/cnb.cx/2Qyv6Qc

Brazil fintech Nubank raises $300 million -SEC filing
Carolina Mandl – Yahoo Finance
Brazil’s most prominent financial startup, Nubank, has raised $300 million in equity investments, according to a filing with the U.S. Securities and Exchange Commission.
Five investors participated in the deal, according to the document, which did not disclose their names.
News of the document, which was filed on June 19, did not surface until this week when a Brazilian financial blog noted it.
/yhoo.it/2QvxuH5

Financial advisors should use tech and fintech tools to boost their practice during Covid
Steve Garmhausen – Barron’s
COVID-19 instantly turned technology like videoconferencing and digital onboarding from optional to essential for advisors. That’s meant tech-forward practices have distinctly benefitted, says Joel Bruckenstein, the co-founder of the influential Technology Tools for Today conferences.
In a wide-ranging interview with Barron’s Advisor, the industry consultant, author and former advisor explains how wealth managers should be thinking about tech in the midst of the pandemic. He weighs in on how consolidation in the tech sphere might help advisors, and whether that’s ultimately bad for innovation. And he explains how innovation in big data and artificial intelligence will make advisors more efficient and effective.
/bit.ly/2QyvqhS

Cryptocurrencies

U.S. Moves to Seize Cryptocurrency Accounts Linked to North Korean Heists; In a first, officials say North Korean hackers hit a U.S.-based crypto company
Ian Talley – WSJ
U.S. authorities on Thursday moved to seize 280 cryptocurrency accounts they said were used by North Korean hackers who stole more than a quarter of a billion dollars from cryptocurrency companies around the world, including one in the U.S. The U.S. Justice Department said the accounts targeted in the civil forfeiture filing were used by the North Korean hackers and their Chinese agents to launder some of the money stolen from more than a dozen virtual currency exchanges, a series of cyber thefts over the past two years amounting to more than $300 million.
/on.wsj.com/3b4MiG9

Naspers-backed Luno Takes Bitcoin-Trading Exchange to Australia
Loni Prinsloo – Bloomberg
Naspers Ltd.-backed cryptocurrency platform Luno is expanding into Australia as Bitcoin rallied 59% this year amid the coronavirus pandemic. While Australia’s trading in Bitcoin reached a new record in February, the numbers are still lower than expected considering the size of the country’s economy and economic indicators, Luno General Manager Marius Reitz said in an interview. This make the country an ideal expansion target for the cryptocurrency exchange, that also operates in several other markets, including South Africa, Nigeria, and the U.K., he said.
/bloom.bg/2FZnTGA

OKEx’s Third Elite Trading Team Contest Concluded With a Historic $700M+ in Total Trading Volume
PR Newswire (press release)
OKEx, a world-leading cryptocurrency spot and derivatives exchange, announced the successful conclusion of its third Elite Trading Team Contest. The month-long contest with a total prize pool of 150,000 USDT attracted record-breaking interest, with 8,082 participants forming 231 teams, including 3Commas, CoinCodex, Bitsgap, Gunbotmany and other well-known global trading platforms. During the contest, the competing teams generated a historic $703,658,154 in notional trading volume, which is about seven times the total trading volume of OKEx’s previous Elite Trading Team Contest. The sotaytaichinh.vn team led by user Erik.Chu won the championship.
/prn.to/2EJKGp8

Coinbase, Circle unveil new upgrades to USDC stablecoin
Michael McSweeney – The Block
Circle and Coinbase have announced an upgraded version of the USDC stablecoin — which is managed by the Centre Consortium — including the addition of so-called gasless sends. The “USDC 2.0” update will allow services that offer USDC support to pay transaction fees — known as gas on the Ethereum network — for their users, according to a blog post published Thursday morning.
/bit.ly/3bcmcBm

Chainalysis Report Shows Healthy Crypto Usage in Venezuela
Danny Nelson – Coindesk
The Venezuelan government’s push to create a cryptocurrency-centric economy appears to be working, but perhaps not in the way officials had hoped. That’s the main takeaway of a new Latin America report by blockchain analytics firm Chainalysis. On Thursday, the startup revealed exclusively to CoinDesk that Venezuela ranks third in the world for crypto adoption, according to Chainalysis metrics, behind Ukraine and Russia. “The reason why it ranks so highly is the peer-to-peer marketplaces. That’s why Venezuela stood out to us,” Chainalysis research lead Kim Grauer said in an interview.
/bit.ly/32CNJb2

Digital Currency Group sets up bitcoin mining subsidiary, commits $100M in funding through next year
Yogita Khatri – The Block
Crypto venture capital firm Digital Currency Group (DCG) has entered into crypto mining space. The group has formed a wholly-owned subsidiary called Foundry which provides mining and staking, equipment financing and procurement, and consulting and advisory services. DCG said it has committed to invest more than $100 million into Foundry through 2021.
/bit.ly/3lpSLjO

Bitmain, Ebang Among 21 Bitcoin Mining Farms Stripped of Energy Perks in Inner Mongolia
Wolfie Zhao – Coindesk
Over 20 bitcoin mining farms in China’s Inner Mongolia have been stripped of electricity perks after a clampdown by the local government. A document issued by the Department of Industrial and Information Technology of the Inner Mongolia Autonomous Region on Aug. 24, obtained by CoinDesk, shows the government agency has required a local electricity trade company to disqualify 21 bitcoin mining farms from participating in energy trading.
/bit.ly/3hDnlEq

Whistleblower Kidnapped in Ukraine After Accusing Crypto Firm of Exit Scam
Anna Baydakova – Coindesk
A group of people pushed a man into a gray minivan on a dark street. The man yelled, “Help! Help! No!” and pushed against the van. Passersby shouted, “Let him go!” and tried to stop the van. The man was finally stuffed inside and the van left. This blurry video, apparently filmed by an unidentified witness Wednesday night in Kyiv, Ukraine, and circulated by local news publications Thursday morning, might mark a new chapter in the story of Bitsonar, a crypto investment firm that raised millions of dollars from investors in the U.S. and Europe, which they are now unable to access.
/bit.ly/2QzifNm

Data Ownership Should Be About Software, Not Lawsuits
Shiv Malik – Coindesk
Shiv Malik is the author of two books, the co-founder of the Intergenerational Foundation think tank and a former investigative journalist for the Guardian. He currently evangelizes about a new decentralized data economy for the open source project Streamr. Who controls our data? The capture of so much information placed in the hands of so few is the most pressing technological issue of our age. The problem gives rise to weekly privacy scandals, has super-charged the growth of trillion dollar tech oligopolies and plays one of the most decisive roles in democratic outcomes.
/bit.ly/2DcnYpy

Binance’s Bitcoin ‘Bid-Ask Spreads’ Tighten as Cryptocurrency Markets Mature
Omkar Godbole – Coindesk
Getting in and out of a large bitcoin trade on cryptocurrency exchanges like Binance or BitMEX isn’t costing as much as it used to. That might be a healthy sign that digital-asset markets are maturing. At Binance, the world’s biggest cryptocurrency exchange by trading volume, the daily average spread between buy and sell orders on bitcoin futures for $10 million quote size declined to a record low of 0.25% on Monday, according to data provided by research firm Skew. The spread, which typically narrows as an exchange’s order book depth increases, spiked to 7.95% during the March crash but dropped shortly after. It has been in a declining trend ever since.
/bit.ly/3b5tnuU

Politics

Trump says Biden would bring chaos and socialism to America; President accuses Democratic rival of being soft on crime against backdrop of violence in Wisconsin
Demetri Sevastopulo and Courtney Weaver – FT
Donald Trump said Joe Biden would bring chaos to US cities and spread socialism across the nation, as he used his speech on the final night of the Republican convention to portray his Democratic rival as soft on crime.
/on.ft.com/31GbG2d

China Says Trump Putting Republican Party Needs Above the U.S.
Bloomberg News
Trump said China would ‘own our country’ under Joe Biden; President told RNC he’d take America’s business out of China
China said Donald Trump was putting his and the Republican Party’s needs over those of the U.S., after the president said that under him, America would take its business out of China. “I believe this is their act which tries to put their self-interests and the interests of their parties above the interests of the United States,” Chinese Foreign Ministry spokesman Zhao Lijian said at a briefing in Beijing on Friday. “Such political manipulation is unfeasible.”
/bloom.bg/2EIx11T

Trump Pitches Second Term With Selective Retelling of His First
Justin Sink – Bloomberg
Biden portrayed as ‘Trojan Horse of socialism’ by president; Trump sidesteps how he’d address coronavirus if re-elected
For one night on the South Lawn of the White House, President Donald Trump painted a vision of the campaign he wished he were waging — where the pandemic was an afterthought, his first term was an unqualified success and his Democratic opponent Joe Biden was little more than a “Trojan horse for socialism.”
/bloom.bg/3b3QdDf

Regulation

FCA tests investigator’s patience with delayed disclosures; Former judge leading probe into handling of LCF scandal tires of regulator’s hold-ups
Matthew Vincent – FT
There are certain people you should never keep waiting — as they will only consider lateness the height of bad manners. Former High Court judges, for example. Or Dame Commanders of the Order of the British Empire. Or old girls of Roedean.
/on.ft.com/31z170I

U.K. Regulator Seeks to Expand Financial Crime Reporting Requirements to More Companies
Mengqi Sun – WSJ
A U.K. regulator is proposing to expand an annual financial crime reporting requirement to a wider set of companies, including cryptocurrency exchanges and custodian wallet providers. The Financial Conduct Authority, in a consultation paper published this week, proposed extending its requirements to provide firm-specific information about suspected financial crime to companies that conduct regulated activities that could pose higher money-laundering risks.
/on.wsj.com/31y4AN0

Continental Coal directors and company secretary charged with breaches of directors’ duties and making false and misleading statements
ASIC
Following an ASIC Investigation, former directors of ASX-listed Continental Coal Limited (in Liquidation) (Continental Coal), Peter Neil Landau and Dr Ashley Paul D’Sylva, and company secretary, Jane Rosemary Flegg, have each been charged with breaching their duties as officers of the company. ASIC alleges that:
/bit.ly/31GinBn

Former financial adviser Brett Gordon charged with fraud
ASIC
Former financial adviser Brett Andrew Gordon has today appeared before the Maroochydore Magistrates Court charged with 10 counts of fraud to the total value of $975,600, following an ASIC investigation.
/bit.ly/2QyZ9ak

Corporate finance director pleads guilty to conspiring to manipulate market
ASIC
On 27 August 2020, Ananda Kathiravelu, of Perth, WA appeared before the Supreme Court of Western Australia and pleaded guilty to a charge of conspiracy to commit an offence of market manipulation.
/bit.ly/3gBAUTA

ESMA Proposes to Further Postpone CSDR Settlement Discipline
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published a final report on draft regulatory technical standards (RTS) definitively postponing the date of entry into force of the Commission Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) until 1 February 2022.
/bit.ly/3gAnuHh

5 Financial Tips for New Parents
FINRA
Many people tend not to focus much on their finances until a major life event occurs. In the case of new parents, that often is the birth of their first child, which can spark conversations about wills and 529 college savings plans.
/bit.ly/3gCJuS3

FINRA Foundation News: Military Spouses Receive Fellowships to Conduct Financial Counseling
FINRA
Military service members and their families often face unique financial challenges complicated by frequent moves, cost of living adjustments and un- or underemployment of military spouses. In an ongoing effort to increase the financial capability of service members and their spouses, the FINRA Investor Education Foundation Military Spouse Fellowship awarded 50 fellowships to military spouses seeking to earn their AFC® (Accredited Financial Counselor®) designation.
/bit.ly/3b3b21H

Wirecard has announced that it is winding-down its business
UK FCA
Wirecard Card Solutions Limited (‘Wirecard’) is authorised and supervised by the FCA to issue e-money and provide payment services including, issuing e-money onto prepaid cards. Wirecard is authorised under the Electronic Money Regulations 2011 (‘the EMRs’) and its activities are also subject to requirements under the Payment Services Regulations 2017 (‘the PSRs’).
/bit.ly/31DxbAG

Investing and Trading

What Is a Stock Split and How Does It Affect Your Portfolio? The ins and outs of stock splits, which don’t happen as often as they did in the past
Michael Wursthorn – WSJ
The stock splits of Apple Inc. AAPL -1.20% and Tesla Inc. TSLA 3.97% take effect Monday. These change the stock price and not much else, but they can be confusing anyway. Stock splits rarely happen these days. Once nearly a given when shares topped $100 or so, stock splits have all but disappeared from the corporate playbook. Stock splits by companies in the S&P 500 faded from prominence after the dot-com bust in 2000, while those by companies in the Dow Jones Industrial Average are even less frequent.
/on.wsj.com/3hPMTyl

Hut Group brings boost to sleepy London IPO market; Pace of stock market listings in UK has been slow while US and Asia shine
Camilla Hodgson – FT
Online beauty and nutrition specialist The Hut Group is preparing to deliver a boost to London’s stock market, becoming one of just a handful of companies to list this year.
/on.ft.com/2QA4jmt

Monstrous capital structures are a menace to corporate America; Neiman Marcus restructuring shows recoveries are made harder by financial engineering
Sujeet Indap – FT
Dan Kamensky may have risked his career over shares that turn out to be worthless. The New York hedge fund manager has been accused of a breach of his duty to fellow Neiman Marcus creditors, after trying to persuade a rival investor not to bid for preferred shares issued by a unit of the bust retail chain, which had filed for Chapter 11 protection in May.
/on.ft.com/2EG1bTh

Mars family accused of ‘vindictive’ targeting of departing executive; Former CFO of group’s petcare unit claims board member stamped on his foot when he left for JAB
Judith Evans – FT
An executive at the centre of a trade secrets lawsuit between Mars and JAB Holdings has claimed the legal action was revenge for him quitting the US-based confectioner, saying a board member “literally stamped on my foot” when he resigned.
/on.ft.com/2D7xdqR

Apple and Tesla turn spotlight back on stock splits; Companies may have added fresh fuel to recent market advance
Richard Waters – FT
Two of the main companies behind Wall Street’s great coronavirus rally of 2020 just put the issue of stock splits back on the corporate agenda — and may have added fresh fuel to the stock market’s recent advance. After equities trading ends this week, Apple will hand its shareholders four shares for every one they already own, while Tesla will complete a five-for-one split.
/on.ft.com/31GbAHT

Ronald Perelman Aims to Sell Art Worth Hundreds of Millions
Katya Kazakina and Tom Maloney – Bloomberg
Billionaire has asked Sotheby’s to find buyers for his artwork; Some of the proceeds will be used to repay a Citigroup loan
Ronald Perelman, who sold two of his paintings for $37.3 million last month, has authorized Sotheby’s to find buyers for hundreds of millions of dollars of additional works from his vast collection as the billionaire pares his holdings. Most of the pieces from his trove of 20th and 21st century art are being offered privately, but some may come to auction, according to people with knowledge of the matter, who asked not to be identified because the information is private.
/bloom.bg/3hDAE7A

Norwegian Air Seeks More Funds as Insolvency Threat Looms
Mikael Holter and Siddharth Vikram Philip – Bloomberg
Troubled discount carrier reports loss for first half; Air travel remains highly uncertain as rules keep changing
Norwegian Air Shuttle ASA said it will need more funds to avert insolvency and announced plans to scale back the discount long-haul operations that it pioneered in order to survive. The beleaguered carrier, which reported a pre-tax loss of 4.8 billion kroner ($541 million) for the first half, said it will require additional working capital in the first quarter of 2021 to meet its obligations and will consider another private placement of shares as well as selling assets. That’s after the carrier already received a government-backed loan and converted debt into equity.
/bloom.bg/2QDTBuZ

Options Market Signals Lingering Caution Over U.S. Stock Surge
Joanna Ossinger – Bloomberg
The options market is flashing warning signs about the record-setting rally in U.S. stocks. A measure of how much bearish options cost versus bullish ones, known as skew, is down from recent highs but remains elevated, according to Evercore ISI’s Dennis DeBusschere. A gauge of sentiment from the American Association of Individual Investors is also in bearish territory, he wrote in a note.
/bloom.bg/2Quz3W1

Low Rates Lead Investors to Look Beyond the Classic 60/40 Mix; Pros have lots of choices, but for individuals, the best move may be to start saving more.
Liz McCormick, Anchaleee Worrachate, Vivien Lou Chen – Bloomberg
It’s an investing strategy that many trace back almost a century, when a young accountant named Walter Morgan started to become alarmed at the rampant speculation in the booming 1920s stock market.
/bit.ly/34BPbx8

Environmental, Social and Corporate Governance

World’s Biggest Wealth Fund Accelerates Transparency Push
Mikael Holter – Bloomberg
Norway’s $1.2 trillion wealth fund will publish all voting intentions ahead of shareholder meetings from 2021, which is at least one year earlier than previously indicated. The world’s biggest sovereign investor says it wants to be more transparent in how it exercises its ownership, in a bid to promote good corporate governance and similar goals, including environmental standards. The fund has already started explaining its reasoning when it votes against company boards.
/bloom.bg/3hC2Asx

ESG Investors Find That Diversity Data Is Hard to Come By; Companies are reluctant to share demographic information, and in some places it’s illegal.
Ishika Mookerjee – Bloomberg
Calls for racial diversity at every level of the corporate world have inspired socially conscious investors. It’s a powerful group, with more than $30 trillion in global assets backing companies that prioritize environmental stewardship, social impact, and good governance, known by the shorthand ESG. But when it comes to how integrated companies are—or aren’t—the data are painfully limited. “I would be surprised if we have full transparency on this topic,” says Remy Briand, head of ESG at index provider MSCI Inc.
/bloom.bg/2QtB70q

World Bank suspends business climate index over data ‘irregularities’; Multilateral lender to conduct ‘systematic review’ of last five Doing Business reports
Tom Wilson – FT
The World Bank has suspended the publication of its global business climate index after identifying “irregularities” in its data that may have affected the ranking of certain countries. The annual Doing Business report, first launched in 2002, has become an influential global metric to assess the business environment and relative competitiveness of countries. High rankings are prized by governments seeking to attract investment and a motivation for policymakers to improve conditions for business. A country moving up in the rankings tends to boost foreign direct investment.
/on.ft.com/2EJP0Vo

Institutions

Global X launches two ETFs in Japan; Provider lists funds on Tokyo Stock Exchange a year after striking partnership with Daiwa
Ysrael Dumasig – FT
Global X, the exchange traded fund provider owned by South Korea’s Mirae Asset Global Investments, has launched two ETFs in Japan almost a year after it struck a partnership with Tokyo-based Daiwa Asset Management.
/on.ft.com/2QtSoXc

Marshall Wace makes record bet against Lloyds; London hedge fund’s short position in UK lender comes as the pandemic hammers the economy
Nicholas Megaw and Laurence Fletcher – FT
Marshall Wace, one of Europe’s biggest hedge funds, has built the largest short position against Lloyds Banking Group on record, highlighting a confidence among some investors that UK bank stocks still have further to fall even after a torrid first half of the year.
/on.ft.com/3gKgEiJ

Credit Suisse Uncovers Client Fraud at Wealth Management Unit
Archana Narayanan and Patrick Winters – Bloomberg
Lender ousts rogue advisor after losses in Africa wealth; Swiss bank says clients affected by unauthorized actions
Credit Suisse Group AG is dealing with the fallout of a fraud at its international wealth management business two years after it was criticized by a regulator in a similar case that rattled the bank and raised questions about controls.
/bloom.bg/3b6mdH2

Regions

Abe, Japan’s Longest-Serving Premier, Resigns Due to Health
Isabel Reynolds and Lily Nonomiya – Bloomberg
Abe to stay on as leader until his party picks a successor; Party member calls Abe’s decision ‘an absolute surprise’
Japanese Prime Minister Shinzo Abe said he would resign to undergo treatment for a chronic illness, ending his run as the country’s longest serving premier in an announcement that surprised some members of his party. Abe confirmed reports that he was dealing with ulcerative colitis, a chronic digestive condition that also forced him to step down as premier in 2007. He said he would stay on until leaders of his Liberal Democratic Party hold an internal vote to pick a successor, and then he would like to remain a lawmaker after handing over power. A general election isn’t due until October of next year.
/bloom.bg/31B67lp

Japan’s PM Shinzo Abe resigns, saying: ‘I apologise form the bottom of my heart
Danielle Demetriou – ,The Telegraph
Japan’s longest-serving prime minister Shinzo Abe announced his resignation on Friday due to his ill health, in a bombshell development that kicks off a leadership contest in the world’s third-largest economy.
/yhoo.it/3gDFCQs

Taiwan to Ease Limits on American Pork and Beef, Smoothing Path for Trade Talks; U.S. officials have long regarded the restrictions as the main barrier to closer trade links with Taiwan
Chun Han Wong – WSJ
Taiwanese President Tsai Ing-wen said she would ease restrictions on imports of U.S. beef and pork, clearing the biggest obstacle to free-trade talks with Washington. At a televised news briefing Friday, Ms. Tsai said she had instructed her government to ease regulations to allow imports of American pork containing trace amounts of an animal-feed additive used by some U.S. farms, as well as U.S. beef products from cattle age 30 months and older.
/on.wsj.com/2EFUEIg

China’s IPO Mania Creates Three New Billionaires in One Week
Venus Feng – Bloomberg
ChiNext board allows IPOs to trade without limit in debut week; Hu Kun, Steven Yang and Dai Lizhong are all new billionaires
The pace of wealth creation in China just reached a whole new level. Just ask Hu Kun, chairman of Contec Medical Systems Co. Shares of the instruments maker surged more than 10-fold in its market debut Monday and recorded a 986% jump through Thursday. That means the 49% stake Hu owns with his father took their combined fortune to $3.1 billion practically overnight, according to the Bloomberg Billionaires Index. Wang Guili, a Contec director who owns 15% of the company, is now worth $947 million after briefly hitting billionaire status earlier in the week.
/bloom.bg/3b5jWeZ

Brexit

Davey Says His Liberal Democrats Accept Brexit But Not No-Deal
Freya Pratty-Williams – Bloomberg
The new leader of the U.K.’s Liberal Democrats said his party will oppose a no-deal Brexit and focus on holding Prime Minister Boris Johnson to his promises over leaving the European Union.
Ed Davey, who was confirmed as leader on Thursday, said the Liberal Democrats accept the government has a mandate to deliver the U.K.’s split from the bloc but said the country needs a trade deal that minimizes the economic shock. This has become more critical, he told Bloomberg TV on Friday, due to the coronavirus pandemic and its impact on the economy.
/bloom.bg/2YKpNl7

Brexit: EU Presses U.K. to Reveal State-Aid Plans to Save Talks
Ian Wishart and Kitty Donaldson – Bloomberg
The European Union is pleading with the British government to reveal its plans for its post-Brexit state-aid policy or risk destroying the chances of a deal on the two sides’ future relationship.
With just weeks remaining to secure a wide-ranging trade accord, the U.K. has so far rebuffed EU demands to publicly set out its planned rules for granting subsidies to business after the end of this year. Talks ended last week with both sides accusing the other of causing deadlock.
/bloom.bg/2YKAjZv

Here’s how Scotland can avoid scars of Brexit vote
RJ Barry Jone – Financial Times
The rumblings about a second Scottish independence referendum highlight some basic questions about using this method to settle big constitutional issues (The Big Read, August 20).
The best referendums are those in which the details of what is entailed are fully worked out in advance — like the alternative voting system for the UK. The Brexit referendum, in contrast, offered no serious detail about what would follow and this, in turn, allowed the proliferation of fanciful, if not fantastical, statements about the possible benefits and costs of the UK’s separation from the EU.
/on.ft.com/3jqr48y

Miscellaneous

Publishers Brace for Impact From Apple’s New Privacy Controls; Media outlets worry the change in Apple’s operating system will hurt ad sales at a critical moment for the industry
Lukas I. Alpert and Patience Haggin – WSJ
Privacy changes in Apple Inc.’s AAPL -1.20% new operating system are sending ripples through the digital publishing world, with outlets that rely heavily on advertising bracing for a sizable drop in revenue from iPhone users.
/on.wsj.com/3gwGrKY

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