Singapore and India exchanges end dispute over derivatives; CME, Nasdaq to Launch Water Futures Contract

Sep 23, 2020

First Read

USA v Vorley and Chanu: DOJ Looking For Conviction Against Spoofers
Thom Thompson – JLN

On Tuesday, the defense finished cross examining the FBI special agent, the prosecution rested its case, defense declined to offer witnesses, prosecution made its closing arguments, defense made its closing arguments, Judge Tharp instructed the jury and the jury began deliberating the fates of James Vorley and Cedric Chanu.

The two were co-workers on the precious metals trading desk of Deutsche Bank in London where they were alleged to have spoofed the COMEX silver and gold futures markets from 2008 to 2013. A third, junior trader, David Liew, pleaded guilty two years ago. Vorley and Chanu did not offer any testimony during the trial.

The bank settled related charges with the CFTC in 2018, accepting a $30 million penalty.

Missing evidence

During closing arguments Tuesday, Vorley’s attorney Roger Burlingame asked repeatedly where all the evidence was against his client. (Burlingame is a familiar presence in the Dirksen courthouse, having recently defended London spoofer Navinder Sarao, getting him a sweetheart time-served/house arrest sentence last year.) As an example of missing evidence, prosecution witnesses established that there were video and voice recordings of interviews of their star witness, David Liew, that were not offered in evidence.

To read the rest of this commentary, go here.


Hits & Takes
JLN Staff

The Financial Markets Group at the Chicago Federal Reserve has published their second episode of the LaSalle Street podcast series. This episode focuses on what the pandemic is teaching us about CCP risk management. Roland Chai, Chief Risk Officer of Nasdaq, and John J. Fennell, Chief Risk Officer of the Options Clearing Corp, join Ketan Patel, Policy Advisor and Head of Financial Markets Risk Analysis in the Chicago Fed’s Financial Markets Group. They discuss market issues ranging from operational risks at central clearing counterparties during the pandemic, to climate change, work from home arrangements and the biggest risks ahead in 2020.

Brian Mehta, the CMO of Trading Technologies, has an interview on the TT blog titled “5 Questions with Jon Regan, CEO of PhillipCapital UK.”

Don’t miss the webinar from the FIA titled “The impending EU CCP recovery and resolution regime and its impact on EU and non-EU firms” tomorrow from 10:00 AM to 11:00 AM ET.

The OCC has a white paper out on ”“OCC Issues Paper on Central Clearinghouse Resiliency and Stability.”

Jill Sommers and Paul Atkins of Patomak Global Partners have a commentary out titled “Central counterparty clearing; a new white paper serves as a useful foundation for the ongoing regulatory dialogue.” It is a comment on the OCC’s white paper.

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


A closely followed lawsuit filed in U.S. District Court on behalf of more than 70 plaintiffs who were shut out of Illinois’s lottery to win new social equity cannabis dispensary licenses was abruptly pulled on Tuesday morning. The action followed the announcement late Monday of a “do-over” of the controversial application process by Gov. JB Pritzker and the Illinois Department of Financial and Professional Regulation. According to a press release from the state, the IDFPR will now ensure that those who did not get a maximum score of 252 points on their license applications receive a supplemental deficiency notice and score sheet identifying where they lost points. They will then be given the opportunity to amend the application or ask for the original to be rescored if they think there was an error. (Many applicants who did not make the final round of the process complained bitterly about scoring inconsistencies by KPMG, the accounting firm hired to do the scoring.) Jon Loevy, attorney for the plaintiffs in the lawsuit, Southshore Restore and Heartland Greens v. Illinois Department of Financial and Professional Regulation; Brett Bender, deputy director, said in a statement that “the governor heard people’s complaints about the concerns about the scoring process, and he listened to those complaints, and he made appropriate fixes.” The dropped lawsuit was the largest one filed after the state released the names of 21 finalists with perfect application scores for the 75 licenses on September 3, but a handful of additional complaints are still pending. The state did not provide a new date for the Illinois lottery to pick the license winners. ~SC


The chiefs of Cboe and CME have a warning for City Hall; “We are no longer four walls with a trading floor,” said CME Group CEO Terry Duffy, cautioning that if the city taxes financial transactions, the exchanges could pick up and leave.
A.D. Quig, Lynne Marek – Crain’s Chicago Business
City officials seeking revenue to help fill a gaping 2021 budget hole got a strong warning from the heads of two big U.S. financial exchanges based in Chicago: Don’t touch LaSalle Street. CME Group CEO and Chairman Terry Duffy and Cboe Chairman and CEO Ed Tilly testified at a virtual Chicago City Council hearing today, telling aldermen if they pursue a tax on the exchanges’ financial transactions, both companies could pick up and leave the city.

*****We missed this story from the 21st, but it reiterates what I wrote previously. The exchanges are looking at moving and have many reasons to do so, not just the threat of new taxes. The progressive income tax proposal Illinois is going to vote on will also impact the executives of the exchanges and their incomes. A nice no-income tax state like Florida looks pretty inviting.~JJL


Libor’s End Nears
Silla Brush – Bloomberg
ISDA awaiting final approval before launching Libor protocols; The discredited benchmark is due to expire at the end of 2021
Banks and money managers will able to take a major step away from Libor in early 2021 in a move that could affect hundreds of trillions of dollars in derivatives contracts. The International Swaps and Derivatives Association, or ISDA, the global trade group for the industry, said plans to transition from the benchmark are awaiting sign-off from the U.S. Justice Department and global competition authorities, and could become effective in the second half of January.

*****The funeral for Libor will be in Zoom. Don’t miss it.~JJL


BornTec Streamlines Trade Data Analytics with Release of CrossCheck 2; The update advances the performance and functionality of the company’s unique trade data integration platform
BornTec, a software solutions provider for trade data analysis and reporting, today announced the release of CrossCheck 2 (CC2), a wholly reimagined version of its ground-breaking platform CrossCheck™. The new platform is available to the public today. “CC2 empowers our customers to harness the power of the data at their fingertips.”

*****I like the “reimagined” aspect of this product. People with imaginations can do amazing things.~JJL


Notre Dame Cancels Wake Forest Game Due to New Covid Cases
Brandon Kochkodin – Bloomberg
Seven student-athletes were positive after testing Monday; A total of 13 are in isolation, with 10 in quarantine
The University of Notre Dame canceled Saturday’s football game against Wake Forest University after seven student-athletes tested positive for Covid-19. In total, 13 players are in isolation because of the virus, the school said in a statement issued Tuesday.

*****I am happy to see schools have the integrity to postpone the games and not sweep covid cases under the rug.~JJL


A new startup is recruiting gig workers to help landlords evict people from their homes, calling it the fastest-growing moneymaking gig because of COVID-19
Aaron Holmes – Business Insider
Millions of Americans have fallen behind on rent amid economic turmoil caused by the COVID-19 pandemic, and many could face evictions. One startup is treating the dire situation as a moneymaking opportunity for gig workers. The company, Civvl, is recruiting freelancers to sign up as eviction crews for landlords, calling it the “FASTEST GROWING MONEY MAKING GIG DUE TO COVID-19.”

*****Not the kind of gig job I would want to sign up for.~JJL


Tuesday’s Top Three
Our top story Tuesday was Yahoo News’ Sen. Kelly Loeffler Roasted For Ad Saying She’s ‘More Conservative Than Attila The Hun’. Second was the New York Post’s Hedge fund Bridgewater set up tent offices in the woods to beat COVID-19. Third was Bloomberg’s Wall Street Commodity Traders Head for Best Year in a Decade.


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Lead Stories

Singapore and India exchanges end dispute over derivatives; Asian bourses will launch trading link after calling time on long-running legal tussle
Hudson Lockett and Stefania Palma and Mercedes Ruehl – FT
The stock exchanges of Singapore and India have ended a long-running battle over derivatives and agreed to launch a trading link across the two markets, marking a substantial improvement in relations between the Asian bourses. Singapore Exchange said it had agreed with the National Stock Exchange of India to push ahead with a market connect platform, and that both sides would withdraw from arbitration proceedings over the trading of Indian equity derivatives in the south-east Asian city-state.

CME, Nasdaq to Launch Water Futures Contract; Market will be first of its kind for world’s most crucial commodity, organizers say
Ryan Dezember – WSJ
Farmers are known to pray for rain. Now they can hedge against unanswered invocations. Exchange operators CME CME -0.66% Group Inc. and Nasdaq Inc. NDAQ 1.04% are planning to launch a futures contract later this year that will allow farmers, speculators and others to wager on the price of water. The market will be the first of its kind, its creators say, putting water on the board for investors alongside other raw materials like crude oil, soybeans and copper.

Stock Exchanges Present Opportunity as Volumes Surge; Shares of American exchange operators have mostly performed well this year, especially compared with other financials
Telis Demos – WSJ
Stocks might be very expensive right now. But stock exchanges aren’t. Shares of American exchange operators have mostly performed well this year, especially compared with other financials. The engine for exchanges has been the U.S. stock market’s highly elevated trading levels, record options volumes and new public listings—all three of which are in no small part being driven by a surge in retail activity. This has helped Nasdaq and Intercontinental Exchange, owner of the NYSE, to sharply outperform. They are up 7% and 15%, respectively, versus a more than 20% decline for financials overall.

New Jersey’s Wall Street Tax Plan Will Backfire; Estimates of the amount of revenue the state hopes to raise are probably too optimistic.
Jared Dillian – Bloomberg
New Jersey is worried about its expanding budget deficit and is contemplating a tax on financial transactions to help close the gap. Although financial transactions taxes are a sort of “microtax” on the value of any stock, bond or derivative traded in the capital markets and don’t directly impact the wallets of consumers, they add up very quickly.

Boris Johnson’s Policies Have Bolstered Scotland’s Nationalists
His handling of Covid-19 and Brexit has increased calls for another referendum on independence.
Rodney Jefferson, Alastair Reed – Bloomberg
Crossing into Scotland on the A1 highway after passing the English town of Berwick-upon-Tweed is a blink-and-you’d-miss-it moment. A sign says “Welcome to Scotland” in both English and Gaelic, and a couple of blue-and-white Scottish flags flap in the wind off the North Sea. A dilapidated burger van caters to anyone who decides to stop. While the 96-mile border may be largely invisible, this is a different country, where the legal and educational systems, health service, some taxation, and—most prominently as infections spread again—the handling of coronavirus all diverge from England’s. The two nations that joined together politically in 1707 to form Great Britain feel more like a socially distant couple still cohabiting in the same household.

Rival or partner? Shenzhen turns 40 with busiest stock exchange eclipsing Hong Kong, Tokyo, Seoul; While about same number of companies got listed in Shenzhen and Hong Kong since 1990, IPO proceeds were 5.5 times higher in Hong Kong; Sum of Shenzhen and Hong Kong markets may be larger than value of each individual strength, adviser Neoh says
Enoch Yiu – South China Morning Post
Shenzhen turned 40 last month as a special economic zone. Fashioning itself after Silicon Valley, the mainland Chinese city is home to some of the world’s biggest companies such as Huawei Technology, Tencent Holdings and Ping An Insurance.

Citigroup halts market making in retail options; Closure of business is latest sign of computer-driven rivals forcing out Wall Street banks
Richard Henderson in New York and Philip Stafford – FT
Citigroup has closed its market making business in retail options, in a move that underscores how the boom in zero-commission trading has squeezed the profitability of the industry’s middlemen. The bank closed the business, which serves retail broker-dealers such as Charles Schwab and Fidelity, at the start of last month, according to three people with knowledge of the decision. However, Citi has maintained its market making operations for institutional investors and high-net-worth customers, the people said.

Uncle Ben’s Changes Brand Rooted in Racist Imagery. Now It’s Ben’s Original; Mars is one of handful of food companies that are reviewing or changing branding on products
Annie Gasparro and Jennifer Maloney – WSJ
Mars Inc. is changing the name of Uncle Ben’s rice to Ben’s Original and dropping the image of a bow-tied Black man from its packaging, the latest company to change branding rooted in racist imagery. Mars was one of a handful of food companies that said in June that they would review or change branding on products including Cream of Wheat, Mrs. Butterworth’s and Eskimo Pie.

A 32-Year-Old Finance Tycoon Looms in Obscure Stock Market
Alexander Sazonov, Nariman Gizitdinov, and Tom Maloney – Bloomberg
Turlov’s stake in U.S.-listed Freedom is worth $1 billion; Freedom has become one of Russia’s 10 biggest brokers
Timur Turlov’s sleepy brokerage used to rely on just two dozen day traders for most of its volume. These days, thanks to raging demand for stocks from retail investors, his Freedom Holding Corp. is booming and the 32-year-old is a billionaire.

Russia’s Dominance of the Wheat World Keeps Growing
Anatoly Medetsky and Megan Durisin – Bloomberg
Major wheat importer Algeria will allow Russian supplies; Russia has steadily expanded market share in recent years
Russia looks set to cement its place as the dominant force in the wheat world. In 20 years, Russia has gone from being reliant on wheat imports to accounting for a fifth of global sales, as its fertile soils generate bigger harvests at attractive prices. More than 100 nations from Egypt to the Philippines buy its grain, and Russia has sought to extend that list by adding markets where its wheat has been excluded because of rules over grain quality.

BNP Shuts Swiss Commodity Trade Finance Team Amid Frauds
Alexandre Rajbhandari – Bloomberg
Plan could impact as many as 120 employees in Geneva; Hin Leong, other frauds push multiple banks to exit business
BNP Paribas SA is shutting its Swiss commodity trade finance business, exiting a sector it once dominated and which was hit by massive fraud. The plan could impact as many as 120 employees in its Geneva offices, the French bank said in a statement late Tuesday. Closing the business had been under consideration since at least the summer, people familiar with the situation told Bloomberg at the time.

Jay Powell is not alone in thinking small business needs support; US recovery will never come until the companies that account for most jobs get back on their feet
William Cohan – FT
When Jay Powell urged Congress this week to provide struggling small US companies with “direct fiscal support”, the Federal Reserve chairman’s words were music to Mei Zhang’s ears. Like tens of millions of other small business owners in the US, she is a victim of Covid-19: not of the actual virus, but rather its economic fallout.

London-based manager aims to raise Europe’s biggest cannabis fund; Chrystal Capital hopes to profit from legalisation moves even though shares in sector have struggled
Laurence Fletcher and Patricia Nilsson – FT
Europe’s small market for investing in cannabis is showing signs of life, with a London-based investment firm focused on wealthy individuals hoping to raise the region’s biggest dedicated fund. North America dominates cannabis investment, with 12 out of 14 cannabis-focused exchange traded funds globally listed there, according to data group ETFGI. Returns have often been poor.

Jet-fuelled white van man bodes ill for the oil market; Overcapacity in refineries and demand hit by coronavirus make for a grim mix
David Sheppard – FT
It is a long-running observation of UK drivers that the fastest vehicle on the motorway is not a supercar, or even the BMWs and Audis beloved of mile-churning regional businessmen, but the white Mercedes-Benz Sprinter van that stays just inches from your bumper in the fast lane.

BMO to follow Vanguard and exit Hong Kong’s ETF market; Canadian asset manager has struggled to raise substantial assets in any of its ETF strategies
Selena Li and John Sedgwick – FT
Canada’s BMO Global Asset Management plans to exit from Hong Kong’s exchange traded fund market, and to offload its seven locally listed ETFs on to China Asset Management (Hong Kong), two people with knowledge of the matter have confirmed to Ignites Asia.

What CEOs Really Think About Remote Work; Top executives at Netflix, BlackRock and other companies weigh in on at-home arrangements, office reopenings and the future of work
Chip Cutter – WSJ
CEOs and other executives say they’ve seen enough to judge whether remote work is working. But the verdict depends on whom you ask.

Dust Off Desks and Boot Up Terminals: Wall St. Returns, Fitfully; New York’s finance industry is beginning to reoccupy offices in fits and starts, impeded by uncertainty around the virus.
Kate Kelly – NY TImes
Six months ago, New York’s financial industry abandoned its corner offices, conference rooms and trading floors almost overnight as the coronavirus raged across the city. The industry’s return to office life, by contrast, has been shambolic.

Muddy Waters’ Carson Block to roll out internet TV channel for short selling
Reuters Staff
Muddy Waters Research founder Carson Block on Wednesday will launch Zer0es TV, an internet video channel dedicated to informing investors about the mechanics and processes of short-selling.

Exclusive: U.S. regulator to relax proposed whistleblower caps, tighter tip deadlines – sources
Katanga Johnson – Reuters
The U.S. securities regulator is poised to walk back a proposal to impose discretionary caps on whistleblower awards and tighten deadlines for formally filing tips when it votes to overhaul the bounty program this week, five people briefed on the matter told Reuters.

UBS CEO Says It’s Hard to Sustain Culture Working at Home
Marion Halftermeyer – Bloomberg
Finance executives see damage to productivity, company culture; Continued virus outbreaks hamper efforts to bring workers back
UBS Group AG Chief Executive Officer Sergio Ermotti added his voice to a chorus of finance executives concerned about having so many employees working remotely. It’s especially difficult for banks to create and sustain cohesiveness and a culture when employees stay at home, he said at a Bank of America conference on Tuesday. A rate of 85% of people working remotely is “not sustainable” for banks and a normal level for UBS should be about 20% to 30% at any time.


Banks Halt U.K. Office Return; J&J Tests Vaccine: Virus Update
Bloomberg News
Banks from Goldman Sachs Group Inc. to HSBC Holdings Plc paused plans to return workers to the office in London after Prime Minister Boris Johnson urged Britons to work from home to curb Covid-19. The euro area’s economic recovery stalled as consumers fretted about a resurgence of the virus and governments reinstated some restrictions. Singapore, meanwhile, will allow more people to head back to the office as community cases in the city-state remain low.

Double Whammy for Minorities Key in Vaccine Race, Fauci Says
Reg Gale – Bloomberg
Often hold essential jobs that don’t allow working from home; Covid pandemic biggest challenge in four decades, Fauci says
Anthony Fauci, the nation’s top infectious disease expert, highlighted how Covid-19 disproportionately sickens people of color, and said they must be strongly represented in the race to find a vaccine. Fauci, who heads the National Institute for Allergy and Infectious Diseases, said in an interview at the Bloomberg Equality Summit that people of color often hold essential jobs that don’t allow them to work from home. At the same time, they have higher prevalence of conditions including diabetes, hypertension and obesity.

Italy’s harsh lessons help keep second wave at bay; While Spain, France and UK suffer Covid-19 surge, the country has adapted since brutal first phase
Miles Johnson and Davide Ghiglione, John Burn-Murdoch – FT
When Covid-19 struck Europe, Lombardy’s flooded hospitals and spiralling death toll provided a grim template for Italy’s neighbours. In the past weeks, however, it is offering a more upbeat, alternative path: while Spain, France and the UK are experiencing a second surge in infections after loosening lockdown restrictions, Italy has kept the disease under control.

J&J launches first phase 3 trial of single-dose Covid-19 vaccine; World’s largest healthcare company hopes to catch rivals working on two-jab products
Hannah Kuchler – FT
Johnson & Johnson became the first leading pharmaceuticals company to test a single-dose Covid-19 vaccine with the launch this week of a phase 3 trial that will recruit 60,000 participants across three continents.

Zambia headed for Africa’s first Covid-related debt default; African nation made international bond market debut in 2012 and is now seeking repayment delays
Joseph Cotterill and Tommy Stubbington – FT
Zambia has asked investors in its US dollar bonds to accept delays in their interest payments into next year, in what would be the first African debt default on private creditors since the pandemic.

Wisconsin rejoining city’s quarantine travel order;”Unfortunately, Wisconsin is currently in very poor control,” said Chicago Health Commissioner Dr. Allison Arwady.
A.D. Quig – Crain’s Chicago Business
Wisconsin will be added to Chicago’s travel quarantine order this Friday, Chicago Department of Public Health Commissioner Dr. Allison Arwady said today. Eighteen states and Puerto Rico will be covered by the order, which requires travelers from COVID hotspots to self-isolate for two weeks. Montana, Idaho, Minnesota, and Puerto Rico will also be added to the list, while Kentucky and Louisiana will be removed.

Pfizer Is On Track to Be First to Find Out If Its Covid Vaccine Works
Robert Langreth – Bloomberg
Moderna, AstraZeneca plan to wait for more results to appear; Vaccine protocols give detailed look at companies’ trials
The Covid-19 vaccine trial designed by Pfizer Inc. and its German partner BioNTech SE may allow them to find whether their shot works before their fastest-moving rivals. The companies plan a first look after a mere 32 coronavirus infections have accumulated in their massive 44,000-person trial. That case total could be reached as soon as Sept. 27, according to Airfinity Ltd., a London-based analytics firms tracking vaccine trials.

Exchanges, OTC and Clearing

New trading link in Singapore and India to end spat between exchange groups; A disagreement over market data and derivatives trading between SGX and India’s NSE has been resolved as plans to launch a trading link have been cemented.
Hayley McDowell – The Trade
A two-year dispute between Singapore Exchange (SGX) and India’s National Stock Exchange (NSE) over derivatives and market data will come to an end as both venues have agreed to form a new trading link.

ICE adds Citi to ETF Hub as authorised participant; Having been a founding member of the ICE ETF Hub advisory committee, Citi has now signed up as an authorised participant for the exchange group’s ETF ecosystem.
Annabel Smith – The Trade
US exchange group Intercontinental Exchange (ICE) has confirmed that Citi has become the latest bank to join its exchange traded funds (ETFs) ecosystem as an authorised participant. The exchange said Citi was also a founding member of the ICE ETF Hub advisory committee and had given early feedback on the design of the platform.

Execution services head at Standard Chartered joins MarketAxess as Asia Pacific boss; Riad Chowdhury joins MarketAxess as head of APAC after serving as head of global execution services in Asia at Standard Chartered.
Annabel Smith – The Trade
Standard Chartered’s head of global execution services for Asia has departed after just over three years to join MarketAxess in Singapore and lead its business across the Asia Pacific region.

MarketAxess takes over Deutsche Börse Group’s Regulatory Reporting Hub
Deutsche Börse Group
MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic fixed income trading platform and provider of market data and post-trade services for the global fixed income markets, has signed an agreement closed for takeover of the Regulatory Reporting Hub of Deutsche Börse Group. MarketAxess will acquire Deutsche Börse’s regulatory reporting services division through Trax NL BV, its wholly owned subsidiary in the Netherlands.

IPO of Knaus Tabbert AG on the Frankfurt Stock Exchange; Recreational vehicle manufacturer listed in the Prime Standard
Deutsche Börse Group
The Knaus Tabbert AG share (ISIN: DE000A2YN504 ) has been listed in the Prime Standard segment of the Frankfurt Stock Exchange since today . The shares of the recreational vehicle manufacturer quoted at the start of trading at EUR 58.00. The issue price was 58.00 euros.

CME Group Announces First Trade of New European Renewable Fuel Contract
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the first trade of the Used Cooking Oil Methyl Ester (UCOME) futures contracts. Ten contracts were traded on September 16, 2020. Open interest is at 65 contracts as of September 22, 2020.

Dubai Financial Market And Nasdaq Dubai Highlight Significant Role Of IR In Strengthening Listed Companies’ Links With Investors
Investor Relations (IR) is playing a growing role in strengthening the relationship between companies listed on Dubai’s capital markets and investors locally and internationally. Dubai Financial Market (DFM) and Nasdaq Dubai, the comprehensive capital markets network in Dubai that provides a world-class market infrastructure for issuers and investors alike, are actively implementing a widespread IR excellence program to promote issuers’ expansion in this field through numerous initiatives. These include the international investor roadshows organized annually since 2007, developing smart solutions enabling listed companies’ seamless connectivity with investors as well as launching practical guides, organizing educational workshops on IR best practices and the IR Graduate Program for Emiratis.

Shenzhen Stock Exchange To Further Strengthen Regulation On Stock Issuance And Underwriting On ChiNext Board To Give Better Play To The Role Of The Market-Oriented Resource Allocation Mechanism
Since the implementation of the reform of the ChiNext Board and the pilot project of the registration-based IPO system, Shenzhen Stock Exchange (SZSE) has systematically advanced new stock issuance and underwriting, the important link for pre-IPO companies to enter the capital market, by actively giving play to the role of the market-oriented book building, pricing and placing mechanisms. For the recent new circumstances regarding the book building and pricing of some new stocks, SZSE has attached great importance and conduct special surveys to seek relevant opinions and suggestions from main market players. Through these efforts, SZSE aims to better leverage the role of the market-oriented issuance pricing mechanism so that it can further optimize resource allocation and promote the high-level circulation of technology, capital and the real economy.

SIX Launches Industry-First Data Service To Simplify Assessment Of Tax-Related Costs For The Front-Office
SIX today launches “SIX Tax Score”, designed to analyse the tax consequences of financial products, available to banks, wealth managers and asset managers in the form of a benchmark covering Swiss, UK and French tax jurisdictions.


TransferWise doubles profits despite ‘volatility’ from pandemic; Money transfer group says volumes had been ‘fluctuating’ but trading was in line with expectations
Nicholas Megaw – FT
TransferWise doubled profits in the last financial year and said it had continued to grow in 2020 despite the “volatility” brought by the coronavirus pandemic.

London-based fintech startup TrueLayer can’t wait to see the open finance economy grow; raises EUR21.3M to pave the way
London-based TrueLayer believes that open banking should be the default way to save money safely and instantly. Operating with this objective, the fintech startup makes it easy to integrate financial services such as open banking into any website or app.

Digital collaboration: Shaping the Future of Finance 1
Ryan Lester – Global Banking and Finance
With heightened economic uncertainty and increased customer expectation becoming the norm in the banking industry, it is understandable that the sector is struggling to keep afloat. Due to its precarious nature, banking institutions are trying their best to ensure they remain relevant in the competitive landscape and guarantee that their customers continue to be a priority.

Nav, fintech connecting SMBs to lenders, is revamping its platform
Shannen Balogh – Business Insider
Small businesses have historically been underserved by traditional financial institutions. It’s a common refrain in fintech, and there’s no shortage of VC-backed startups looking to tap into the broad segment of small business.
And that’s because small-business lending is complicated. The types of credit available to a business owner vary depending on the size of their company, their location, even their personal credit scores.

Council Post: What Banks Can Learn From How Fintech Firms Handled The Paycheck Protection Program
Brad Rosenfeld – Forbes
In March 2020, the federal government enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act) that included the Paycheck Protection Program (PPP). According to the U.S. Small Business Administration, through June 30, 2020, nearly 4.9 million PPP loans were issued to businesses by 5,461 lenders, totaling over $521 billion.
Not surprisingly, many lending institutions, especially small and midsized banks, were initially not prepared to process loans under the PPP and could not service their small business clients for months after the program was initiated.

Volante Technologies Collaborates With Goldman Sachs To Launch Digital Transaction Banking In The Cloud
Volante Technologies, the global leader in cloud payments and financial messaging, today announced that Volante has been collaborating with Goldman Sachs Bank USA (“Goldman Sachs”) to provide the payments technology underpinning the bank’s recently launched digital transaction banking service built entirely from scratch in the cloud, an industry first. Volante has also become a client of the platform.

Cobalt Expands Into Digital Asset Market
Over the last few years, the foreign-exchange (FX) post-trade infrastructure provider Cobalt has designed and built a secure 24/7 middle office platform, which it is delivering for some of the industry’s largest participants.

TransferWise reports fourth straight year of profitability
Ryan Browne – CNBC
TransferWise, one of Europe’s most valuable private financial technology firms, just posted its fourth consecutive year of profitability.
The online money transfer service said Wednesday that its net profit more than doubled to £21.3 million ($27.1 million) in the fiscal year ending March 2020. Annual revenues came in at £302.6 million, TransferWise said, up almost 70% from the previous year.

Xignite Wins Best Real-Time Market Data Initiative at Inside Market Data & Inside Reference Data Awards; Firm recognized for collaboration with SoFi, which resulted in a significant spike in engagement on new SoFi Invest platform
Global Newswire
Xignite, Inc., a provider of market data distribution and management solutions for financial services and technology companies, today announced it won the Best Real-Time Market Data Initiative at the Inside Market Data & Inside Reference Data Awards.

Episode 350 Travis Schwab from Eventus
This episode was produced remotely using the ListenDeck standardized audio production system. You can subscribe to this podcast and stay up to date on all the stories here on Apple Podcasts, Google Play, Stitcher, Spotify and iHeartRadio. In this episode the host John Siracusa chats remotely with Travis Schwab, Co-founder & CEO of Eventus. Eventus Systems provides software solutions that enable intelligent decision making for compliance, trade surveillance, and risk management.


CEO Says Bitcoin Is Safer After Moving Firm’s Cash to Crypto
Olga Kharif – Bloomberg
MicroStrategy’s Saylor invested $425 million into coin; “We were on a $500 million melting ice cube,” CEO says
MicroStrategy Inc. Chief Executive Officer Michael Saylor says the Federal Reserve’s recent relaxing of its inflation policy helped convinced him to put the remainder of the enterprise-software maker’s cash into Bitcoin. “We feel pretty confident that Bitcoin is less risky than holding cash, less risky than holding gold,” Saylor said in an interview.

Crypto Hedge Fund Looks for $50M to Buy DeFi Tokens Amid Market Pullback
Bradley Keoun – Coindesk
The cryptocurrency money manager Panxora seeks to raise up to $50 million for a new hedge fund to buy digital tokens associated with the fast-growing decentralized finance (DeFi) sector.

0x, Kraken and Stellar Awarded Board Seats at Top Crypto Lobbying Association
Danny Nelson – CoinDesk
Cryptocurrency industry advocacy group the Blockchain Association bolstered its board Tuesday with members from 0x, the Stellar Development Foundation and Kraken. Decentralized finance and regulatory precedence are some hallmarks of the associationâ??s new board members. 0x powers a decentralized exchange, Stellar maintains the Stellar ecosystem and Kraken is a crypto exchange that also just became a chartered U.S. crypto bank.

Crypto Is Beating Gold as 2020’s Top Asset So Far
Joanna Ossinger – Bloomberg
A cryptocurrency mania known as decentralized finance has helped to turn digital currencies into this year’s best-performing asset by far. The Bloomberg Galaxy Crypto Index of digital coins is up about 66% in 2020, exceeding gold’s jump of more than 20% as well as returns from global stocks, bonds and commodities. A key reason for the move higher is a surge in Ethereum, which accounts for more than a third of the crypto gauge’s weight. Increased adoption of decentralized finance, or DeFi, has driven the climb in Ethereum, which “appears to be maintaining its platform leadership status” in the sector, said Mike McGlone, a strategist at Bloomberg Intelligence.

Facebook’s Libra Co-Founder Morgan Beller Departs to Return to VC
Danny Nelson – Coindesk
Libra digital currency project co-founder Morgan Beller has left Facebook in a pivot back to her venture capital roots. Beller, 27, will become a general partner at early stage startup-focused VC firm NFX, according to TechCrunch. At Facebook, which she joined in 2017, Beller reportedly helmed the social media giant’s blockchain initiatives, working behind the scenes to bring Libra and its Calibra digital wallet (now rebranded as Novi) to life.

Square seeks new attorney to spearhead its crypto patent effort
Saniya More – The Block
Financial services company Square is hiring an attorney to lead its recently established Crypto Open Patent Alliance (COPA). Through the consortium, Square aims to increase access to crypto technology by creating a collaborative patent library where developers can share their crypto patents and develop more technologies in the space. According to a job description posted on the company website, the role will entail combining internet protocol (IP), legal and business skills to promote the mission of COPA: “to create open access to patents covering foundational cryptocurrency technologies to empower the crypto community to grow, freely innovate, and build new and better products.”

China Central Bank ‘Blacklists’ Local Bitcoin OTC Merchants
Shaurya Malwa – Decrypt
The People’s Bank of China (PBoC), the nation’s central bank, is flagging accounts related to large cryptocurrency traders in its latest crackdown, according to local news outlet WuBlockchain. The move is part of a broader crackdown on money laundering in China. Earlier this year, the PBoC launched its drive to eradicate illegal earnings and partnered with the country’s local banks to share account information and transactional details to prevent the proliferation of unlawful funds, of which cryptocurrencies form a part in China.

Are we dumb? Financial illiterates ‘twice as likely to own crypto’
Turner Wright – Cointelegraph
A report from Canada’s central bank shows that while most Canadians are knowledgeable about basic finance and Bitcoin, few actually hold any crypto assets. According to the results of Bank of Canada’s 2019 Cash Alternative Survey published in August 2020, financial literacy is positively associated with the awareness of cryptocurrencies but negatively associated with ownership. The bank considers financial literacy as a basic understanding of investing and saving for retirement, with 47% of respondents from August to September 2019 estimated to have a high level of financial literacy and 18% a low level. The results suggest that Canadians with a lower level of understanding of finance could be twice as likely to invest in crypto assets.

Blockchain trade association adds former White House acting chief of staff, Visa and Goldman to its ranks
Aislinn Keely – The Block
A former White House senior staffer is joining the board of blockchain trade association Chamber of Digital Commerce, and traditional finance giants have been added to its members list as well. Former Acting White House Chief of Staff Mick Mulvaney will join the Chamber of Digital Commerce as of today, while Visa and Goldman Sachs become Executive Committee members. The Chamber represents the digital asset and blockchain industry, working to educate policymakers and advocating for policy clarity in the U.S. Mulvaney joins other leaders like former chair of the Commodity Futures Trading Commission Chris Giancarlo and former J.P. Morgan head of global commodities Blythe Masters.

‘Misleading’ Term Stablecoin Should Be Ditched, Says ECB
Paddy Baker – Coindesk
The European Central Bank (ECB) has said the term “stablecoin” should be replaced with something less “confusing” or potentially “misleading”. The Eurozone’s primary financial institution said in a report Tuesday that a properly designed and well-regulated digital asset could live up to the name, but that existing examples fell short of the intrinsically stable money substitute that the term “stablecoin” implies.

MakerDAO won’t compensate Vaults affected by liquidations during the March market crash
Yogita Khatri – The Block
MakerDAO, a top decentralized lending protocol, has concluded a governance poll in which Maker (MKR) token holders decided not to compensate Vault owners who suffered losses by liquidations during the March 12-13 market crash. A total of 38 MKR holders participated in the poll, who own around 88,000 MKR tokens. More than 57,000 MKR, or 65% of the total votes, voted against any compensation on Tuesday. Technically, 1 MKR is one vote.

Jeremy Allaire talks USDC, multi-chain support and new stablecoin guidance
Frank Chaparro – The Block
Circle’s Jeremy Allaire has spent decades at the cutting edge of technology. Before building crypto payments firm Circle, he launched a company during the heady days of the early Internet, dubbed Allaire Corporation, to create development software for the nascent Web. To build out Centre’s USDC, Allaire is taking a leaf out of that playbook: interoperability. “You couldn’t just use the Web on Windows,” Allaire said in an interview. “We need more and more support for USDC on different blockchains.”


China Threatens to Kill TikTok Deal Over ‘Dirty’ Trump Tactics
Bloomberg News
State media denounce sale to American firms in strident terms; Their opposition adds to the uncertainty hanging over the deal
Just a few days ago, the TikTok deal looked like a win for China. Now its state-run media are denouncing it as “an American trap” and a “dirty and underhanded trick.” The quick shift in sentiment shows the complications of concluding an agreement that is about much more than finding a proper valuation for an addictive video app that has enthralled teenagers around the world. It also has big ramifications for how the world’s biggest economies handle security threats related to new technologies that will drive growth over the next few decades.

Europe to Accelerate Asylum Relocations in New Migration Plan
John Ainger – Bloomberg
Previous proposals in wake of 2015 crisis have been log jammed; Contentious Dublin Regulation will be overhauled in proposals
The European Union will rely on all its member states, not just front-line countries, to help accelerate the return of migrants who don’t qualify to remain in the bloc, according to a new proposal unveiled on Wednesday. If a member state is struggling with large numbers of migrants a “mandatory solidarity mechanism” will be activated, where upon another country will either take responsibility for relocation, for returning the person back to their home country or through investing in asylum centers, according to the proposal.

200,000 Americans dead, but Trump says Covid affects ‘virtually nobody’
Zach Wolf – CNN
More Americans have now died of Covid than of five wars combined. Or, the US Covid deaths are the equivalent of US deaths on 9/11 occurring every day for 66 days. Or, the US has suffered an average of 858 deaths every day since February 6, the date of the first known US coronavirus death.

Bill Gates says he thinks Trump’s travel ban made outbreak in US worse. Here’s why
Bill Gates told Fox News that he believes President Trump’s travel ban on China made the coronavirus outbreak in America worse.Source: CNN

A Divided America Is a National Security Threat; Political polarization is a “force multiplier” that deepens other threats and cripples our ability to combat them.
Susan E. Rice – NYTimes
While foreign policy has barely figured in the presidential campaign, national security is plainly on the ballot. If everything feels chaotic and dangerous, it’s because we face a remarkable convergence of security challenges.

Trump’s Motto: Your Money or Your Life; The president claims you have to make a choice, but you don’t.
Thomas L. Friedman – NY Times
Whenever I talk about Covid-19 or climate change with skeptics, I use a simple analogy: Imagine that your child is sick with a disease and you decide to take her to 100 different doctors to get multiple opinions — and 99 doctors give you the same diagnosis and prescribed treatment and one tells you that there’s nothing to worry about, that your child’s disease will “disappear … like a miracle, it will disappear.”

Vladimir Putin Thinks He Can Get Away With Anything; Why has the poisoning of Alexei Navalny been met with Western silence?
The Editorial Board – NY Times
It is now an established fact, confirmed by laboratories in Germany, France and Sweden, that Alexei Navalny was poisoned with Novichok, a nerve agent developed by the Soviet Union. The powerful poison, which has been used in at least one previous assassination attempt against foes of the Russian regime, was this time employed against a domestic opposition leader who operated openly to expose corruption and challenge the Kremlin. It requires a serious response.

The Russian Trolls Have a Simpler Job Today. Quote Trump; As part of their attempt to interfere with the 2020 election, Russians are grabbing screenshots of President Trump’s tweets, or quoting his own misleading statements, analysts and officials say.
David E. Sanger and Zolan Kanno-Youngs – NY Times
Four years ago, when Russian intelligence agencies engaged in a systematic attempt to influence the American presidential election, the disinformation they fed American voters required some real imagination at the troll farms producing the ads.

Facebook Removes Fake Accounts Spreading Chinese Propaganda
Sarah Frier, Kartikay Mehrotra, and Alyza Sebenius – Bloomberg
Chinese users sought to influence local issues, U.S. election; The campaign appeared to focus on China’s power in Asia
Facebook Inc. said it detected and removed a small scale network of fake accounts aimed at distributing Chinese propaganda and disinformation across Southeast Asia and the U.S.

Eric Trump Gave ‘False’ Reason for Dodging Deposition, New York AG Says
Erik Larson – Bloomberg
President Donald Trump’s son Eric gave a judge a “false” explanation for why he backed out of a July deposition in a civil probe of the family business, New York’s top law enforcement officer said in a court filing.

Bloomberg raises $16m to help ex-felons in Florida vote; Billionaire media executive plans to spend $100m to boost Biden’s chances of winning swing state
Lauren Fedor – FT
Michael Bloomberg, the billionaire media executive who ran for president, has raised more than $16m to pay outstanding fines and fees for tens of thousands of Florida voters with criminal convictions as part of an effort to defeat Donald Trump.


Former Vitol manager charged over alleged Ecuador bribery; Javier Aguilar accused in US of paying $870,000 to secure business for oil trader
Kadhim Shubber and David Sheppard and Neil Hume – FT
A former manager at Vitol, the world’s largest independent oil trader, has been indicted in the US for his alleged role in paying bribes to Ecuadorean officials. Javier Aguilar, 46, was accused late on Tuesday of paying $870,000 in bribes to help Vitol win business in Ecuador, specifically a $300m deal in 2016 involving Petroecuador.

Former director charged with making false statement
Mr Zinan Ou of Beverley Park in New South Wales has been charged with making a false or misleading statement in a document lodged with ASIC. Breaching section 1308(2) of the Corporations Act carries a maximum penalty of 5 years’ imprisonment.

ASIC extends COVID-19 relief for certain capital raisings and financial advice
ASIC is extending the temporary relief for capital raisings and financial advice due to the continuing uncertain impacts of COVID-19. ASIC is also extending the financial advice relief related to the COVID-19 early release of superannuation scheme in light of the extension of the scheme by the Government.

ESMA appoints Chair and independent members of the CCP Supervisory Committee
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has formally appointed Klaus Löber as Chair of the CCP Supervisory Committee and Nicoletta Giusto and Froukelien Wendt as Independent Members.

Proposed Amendments to the Codes of Arbitration Procedure Relating to Requests to Expunge Customer Dispute Information, Including Creating a Special Arbitrator Roster to Decide Certain Expungement Requests
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and the Code of Arbitration Procedure for Industry Disputes (“Industry Code”) (together, “Codes”) to modify the current process relating to the expungement of customer dispute information.

Update on the FCA enquiry into the Bank of England audio issue
In late 2019 concerns were raised regarding the use of an audio feed from the Bank of England’s press conferences.

FCA launches consultation on the regulation of international firms
The FCA has launched a consultation on its approach to the authorisation and supervision of international firms operating in the UK.

ESMA Appoints Chair And Independent Members Of The CCP Supervisory Committee Mondovisione
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has formally appointed Klaus Löber as Chair of the CCP Supervisory Committee and Nicoletta Giusto and Froukelien Wendt as Independent Members.

ISDA: Asian Options – IQ September 2020
Both Brexit and benchmark reform emerged as headline issues relatively close together – June 2016 for the Brexit referendum and July 2017 when the UK Financial Conduct Authority revealed that LIBOR might not exist after the end of 2021. They are now also approaching their denouement in lockstep: both will require a big push by firms in the remaining months of 2020 in order to be ready for the changes they will bring in 2021 and beyond.

SIFMA Calls on SEC to Modernize the Regulatory Communications Framework to Meet Investor Needs for the 21st Century
The Securities Industry and Financial Markets Association, the SIFMA Asset Management Group, the Financial Services Institute, the Investment Advisers Association, the Committee of Annuity Insurers, the Insured Retirement Institute, and the American Council of Life Insurers today issued a discussion paper urging the Securities and Exchange Commission (SEC) to update its rules and related guidance to allow the implementation of a digital approach establishing electronic delivery as the primary means for delivering investor communications. The Associations make clear that any investor wishing to receive paper communications can continue to do so.

Embattled Fed Nominee Celebrates Free Markets, but Not in Her Backyard; Judy Shelton, a longtime Federal Reserve critic and gold standard fan, could soon clinch a job on the Fed board. Her views have often been inconsistent.
Jeanna Smialek and Emily Cochrane – NYTimes
Judy Shelton has spent her career pushing for free markets and criticizing the far-reaching power of the Federal Reserve — an institution she may join as a governor and could one day lead, given the right chain of events.

Investing and Trading

Rich Families View Markets With ‘Extreme’ Caution, Citi Says
Julia Fanzeres – Bloomberg
Survey finds Covid-19, government actions driving investments; About one-in-four respondents worried about social unrest
The coronavirus pandemic and the response by governments and central banks have family offices and ultra-wealthy individuals around the world on the defensive, according to a survey from Citigroup Inc.’s private bank. About three-quarters of respondents described their 12-month investment sentiment as “cautious.” That increased to 84% when adding those who said they plan to exercise “extreme caution,” according to the survey, which was administered in June and July to about 180 participants. Almost one-in-four said they were concerned about social unrest.

For Fed’s Disaster Junkie, Pandemic Was One of 99 Bad Scenarios; Andreas Lehnert and his team try to anticipate the unexpected in financial markets—and beyond.
Craig Torres – Bloomberg
A red alert sounded at the Federal Reserve in mid-March when Americans began pulling out of prime money-market funds, one of the safest places to park cash. As policymakers cut interest rates to near-zero, it quickly became clear that they’d need to get creative, and fast, to prevent a shutdown in the flow of credit.

Crypto Is Beating Gold as 2020’s Top Asset So Far
Joanna Ossinger – Bloomberg
Decentralized finance, DeFi, powers 66% jump in crypto gauge; Experts say DeFi spurred leveraged crypto bets via derivatives
A cryptocurrency mania known as decentralized finance has helped to turn digital currencies into this year’s best-performing asset by far. The Bloomberg Galaxy Crypto Index of digital coins is up about 66% in 2020, exceeding gold’s jump of more than 20% as well as returns from global stocks, bonds and commodities. A key reason for the move higher is a surge in Ethereum, which accounts for more than a third of the crypto gauge’s weight.

State now says it will hold weed lottery this fall; Amid complaints about scoring, the state says it’s making sure procedures were followed evenly.
John Pletz – Crain’s Chicago Business
The state of Illinois hopes to complete a review of retail marijuana applications this fall, Gov. J.B. Pritzker said today. The process of awarding 75 licenses for new cannabis dispensaries already has been delayed by COVID and other challenges. When the state announced that only 21 applicants that achieved perfect scores would be eligible for a lottery to determine who gets the licenses, unsuccessful applicants complained of problems in the process.

Short Sellers Are Rushing Back Into Stocks as Volatility Returns
Lu Wang and Vildana Hajric – Bloomberg
Some say that’s likely to put near-term pressure on market; Contrarians view sales as a source of future demand for stocks
One group of equity skeptics who faded out of view during the summer rally are making a comeback with the S&P 500 heading for its worst September in almost a decade. Investors who sell borrowed shares in anticipation of price declines are back in force. Bearish wagers climbed to ab

Accidental Insider Trading Is a Very Real, Very Expensive Mistake
Julia Glum – Money
Insider trading seems like it should be black and white — if you don’t use secret stock tips to make a quick buck, you should be good to go. But what about doing it unintentionally? The pandemic has caused millions of people to work remotely, often within earshot of roommates, relatives and spouses. Gone are the days of conference rooms and exclusive meetings — you can listen in on someone else’s calls without even trying. You could find out information the public isn’t privy to. And if you’re an investor, that could land you in trouble.

Environmental, Social and Corporate Governance

Why ‘Carbon Neutral’ Is the New Climate Change Mantra
Jeremy Hodges – Bloomberg
The industrialized world has been spewing carbon dioxide and other greenhouse gases faster than they can be contained for centuries. Climate change, and growing popular frustration about the inadequate response, is pushing countries to take action, or at least say they will. Becoming carbon neutral — also known as climate-neutral or net zero — is now a legal requirement in some countries, while European authorities are adopting legislation to become the first net zero continent. Even oil companies are getting in on the act.

China’s carbon pledge revives hopes of renewed global climate efforts; Xi Jinping aims for carbon neutrality by 2060 but how he plans to meet that goal is still unclear
Christian Shepherd – FT
A pledge by China to be carbon neutral by 2060 has revived hopes in Beijing’s commitment to global climate change goals but left unanswered questions over how the world’s largest emitter can achieve the ambitious target.

The big 4 of Deloitte, PwC, EY, KPMG announce ESG reporting standards
Marguerite Ward – Business Insider
Executives of the “Big Four” accounting firms — Deloitte, PwC, EY, and KPMG — announced Tuesday a new reporting framework for environmental, social, and governance standards (ESGs), the Financial Times’ Gillian Tett reports.
ESG standards are a set of criteria used to measure a company’s performance on things such as how the company is impacting the environment (like its amount of toxic emissions), how it manages relationships with its employees (does it encourage employees to volunteer), and how the company runs internally (boardroom diversity).

Hamilton Lane Names ESG Head
Chris Cumming – WSJ
Hamilton Lane Inc. has named Paul Yett as its first head of environmental, social and governance investing, tasked with coordinating the private-equity firm’s efforts in sustainable investing.
A longtime Hamilton Lane managing director, Mr. Yett is now director of ESG and sustainability, the firm said Wednesday. He will oversee ESG integration across the different investment teams of the Bala Cynwyd, Penn., firm, which has about $516 billion under management and supervision.

Hedge Funds’ Top Clients Step Up Demands for ESG Strategies
Jonas Cho Walsgard – Bloomberg
Hedge funds are having to shift gears as a growing number of their biggest clients want more investment strategies that target environmental, social and governance goals.
In Scandinavia, where pension investors are arguably ahead of the rest when it comes to ESG, hedge funds vying for their business are under pressure to step up their game.


China Traders Eyeing Ant IPO Will Get More Access With New Funds
Bloomberg News
Five money managers launch funds with Ant stock included; Ma’s finance firm plans $35 billion IPO in Shanghai, Hong Kong
Chinese investors hoping to get a slice of Ant Group Co.’s massive stock debut can boost their chances by buying into new funds that are kick-starting sales this week. Five firms have agreed to subscribe to Ant’s Shanghai listing via new funds, Ant said in a filing Tuesday. The fintech giant’s shares in the new funds will be capped at 10%, based on existing rules for mutual funds.

Active managers fail to beat the market again; Two-thirds of US equity funds underperformed benchmarks over last 12 months, report shows
Michael Mackenzie – FT
Most active fund managers in the US failed to beat the market over the past year, according to another dispiriting report on an industry that often claims it will come into its own during periods of volatility.

Outsourcing is accelerating through the pandemic, says Northern Trust; COVID-19 crisis is accelerating outsourcing among asset managers who face a myriad of additional challenges such as competition, fee pressure and regulation.
Jon Watkins – The Trade
Buy-side firms have sought to expand their outsourcing options to include certain trading and middle-office functions, as they look to alleviate the operational pressures caused by the global pandemic.

Goldman, Citi, HSBC Halt U.K. Office Return on Johnson Plea
Sridhar Natarajan and Viren Vaghela – Bloomberg
Goldman, Citi London offices, some HSBC sites to stay open; Deutsche Bank, Barclays, Mizuho also reconsidering plans
Banks from Goldman Sachs Group Inc. to Citigroup Inc., and HSBC Holdings Plc have hit pause on plans to return workers in London after Prime Minister Boris Johnson appealed to Britons to work from home to help tame a resurgent coronavirus.

This big-time private-equity player is heading west as it grows; Thoma Bravo, which is about to close on the biggest fund ever raised by a Chicago firm, has tripled its headcount in the past five years, mostly in San Francisco.
Lynne Marek – Crain’s Chicago Business
The good news: Thoma Bravo, which has grown into a big-time private-equity tech investment firm, is about to close on the biggest fund ever raised by a Chicago firm—about $16.5 billion.


Can Palm Oil Demand Be Met Without Ruining Rainforests?
Anuradha Raghu – Bloomberg
One of the world’s most widely used commodities — palm oil — is also one of its most controversial. Cheap, efficient and extraordinarily versatile, it’s found in thousands of everyday products, from cookies and ice cream to shampoo and fuel. Yet surging cultivation of oil palm trees has come at the expense of vast swathes of tropical rainforest in Southeast Asia. Environmental concerns spurred the introduction of so-called sustainable palm oil, but the uptake has been slow and the program has faced criticism.


EU Tells Boris Johnson to ‘Stop Playing Around’ With Brexit Deal
Ian Wishart – Bloomberg
The European Union stepped up its attack on U.K. Prime Minister Boris Johnson’s attempt to unpick the Brexit divorce deal, warning that the bloc won’t cave into pressure as negotiations over a trade accord reach a critical final few weeks. During their first discussion since Johnson announced plans to break international law by rewriting the agreement signed last year, EU governments resolved to stand firm. The standoff has ratcheted up tension ahead of the final scheduled round of negotiations between Britain and the EU next week.

JPMorgan to Move $230 Billion Assets to Germany Under Brexit
Steven Arons and Nicholas Comfort – Bloomberg
Migration will make the U.S. firm a top 10 bank in the country; Head of the Frankfurt unit has taken on more responsibilities
JPMorgan Chase & Co. is moving about 200 billion euros ($230 billion) from the U.K. to Frankfurt as a result of Britain’s exit from the European Union, a shift that will make it one of the largest banks in Germany.

UK warns of 7,000-truck queues to cross Channel after January 1; Cabinet minister Michael Gove says there could be 2-day delays in Kent for freight to clear customs after end of Brexit transition
Peter Foster – FT
The UK government has warned industry there could be two-day delays in getting freight across the Channel after the end of the Brexit transition period, with queues of up to 7,000 lorries in Kent.

UBS Wealth says no-deal Brexit would weaken pound to $1.25, sees sharp fall in banking stocks
Reuters Staff
UBS Global Wealth Management said it expects the British pound to weaken to $1.25 and domestic banking stocks to slump 15-20% if the UK fails to strike a trade deal with the European Union.

No-deal Brexit will cost UK more than Covid, report finds
Lisa O’Carroll – The Guardian
The economic cost of a no-deal Brexit could be two or three times as bad as the impact of Covid, a report has concluded.
Analysis by the London School of Economics and UK in a Changing Europe says “a no-deal Brexit would represent a further major shock to a UK economy” with a “major set of changes” to the economic relationship with the country’s largest trading partner.

Brexit bill moves on despite MPs’ concerns
The UK’s controversial Brexit bill has passed its latest stage in Parliament after potential Conservative rebels backed a compromise with ministers. The government promised to hand the Commons a say before it uses powers in the Internal Market Bill to override parts of the Brexit divorce deal. The bill has prompted a row with the EU, which has threatened legal action unless sections are withdrawn. MPs will vote on it again next week, before it goes to the House of Lords.

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