SocGen Introduces Crypto to a $2 Trillion Market; Micro E-mini Futures Pass 1 Million Contracts Traded

May 9, 2019

First Read

FIA Law & Compliance Conference Kicks Off
Thom Thompson – John Lothian News
The 41st annual derivatives industry regulatory confabulation was called to order on Wednesday afternoon in Washington, DC, by Law & Compliance Division President Tammy Botsford.
Botsford’s daytime job is executive director and assistant general counsel at J.P. Morgan. Botsford called on attendees to make new working connections at this year’s conference so that, in a Ghostbusters meme, they have an answer to “Who you gonna call?” (Somebody you got to know at L&C.) Botsford said that this year’s panels are challenged to address the practicalities of responding to issues. “What you gonna do?” (Something you learned about at Law & Compliance.)


Bcause in Talks With Bitmain, Others To Climb Out of Debt
Matt Raebel – John Lothian News

Bcause, the cryptocurrency mining company whose name is most likely to be autocorrected by one’s phone, is attempting to fight its way out of bankruptcy. Its battle plan? Raise some capital and start new businesses.

The company’s bankruptcy was filed last month, less than two weeks after it lost a lawsuit to Wesco Distribution, which allowed Wesco to garnish the Chicago bank account of Bcause LLC and Bcause Mining LLC.

On May 8th, 2019, Bcause’s bankruptcy hearing took place in downtown Chicago. Thomas Flake, the founder of Bcause, was in attendance, along with his legal representatives, Scott R. Clar and Jeffrey C. Dan of Crane, Simon, Clar & Dan; so were almost a dozen lawyers representing Bcause’s creditors.

To read the rest of the story, go here.


Bridging the Gap Between OTC and Exchange-Traded – Brad Levy, IHS Markit
There still exists some polarization between listed derivatives markets and OTC markets. In this video, Global Head of Loans at IHS Markit and CEO of MarkitSERV Brad Levy talks about why the gap between the two is slowly closing and the generational shift it is going to take to fully transition financial markets to a digitally-enabled world.
Watch the video »

****Thinking of IHS, look in our Fintech section for some firm news.~SD


Hits & Takes
JLN Staff

The CME Group’s Micro E-Mini equity complex continues to set records, trading over 500K contracts yesterday. The total was 505,364 contracts with 254,530 Micro E-Mini S&P 500 Index futures trading, 174,384 contracts of the Micro E-Mini Nasdaq-100 Index futures trading, 60,161 of the Micro E-Mini Dow Jones Industrial Average Index futures trading and 16,289 of the Micro E-mini Russell 2000 Index futures trading.~JJL

To date, over 1 million micro E-Mini equity futures contracts have traded over the first three days, making this the most successful product launch in exchange history. I will be sure to talk ab out this at my panel at the Association of Futures Markets conference later this morning.~JJL

Yesterday, Jacob Morowitz of USA Trading came into the office to do an interview with John L. as part of JLN’s Open Outcry Traders History Project. If you were ever a trader on a floor (Chicago, London, anywhere), check out that link for more information on how to participate.~SD

Preqin released a study on hedge funds embracing Environmental, Societal and Governance (ESG) principles. Investors in hedge funds and hedge fund managers have differing ideas on ESG’s uptake – 65% of investors think ESG will become more important in the next five years versus only 37% of fund managers. Speaking of, the CFA Institute’s blog just had a career-related post on ESG: Candidates With Both ESG Knowledge and Investment Experience Are Key to Furthering ESG Integration.~SD

If any person interested in speaking at our MarketsWiki Education event is in need of a topic for a young audience, look no further than the study addressed in this article in efinancialcareers: The psychopathic traits possessed by students who want to work in finance. Just come prepared with Christian Bale slides.~SD


CME Group Inc. Announces Preliminary Results from its 2019 Annual Meeting of Shareholders
CME Group
CME Group Inc. today announced the preliminary shareholder voting results from its 2019 annual meeting. At the meeting, shareholders elected Terrence A. Duffy, Timothy S. Bitsberger, Charles P. Carey, Dennis H. Chookaszian, Ana Dutra, Martin J. Gepsman, Larry G. Gerdes, Daniel R. Glickman, Daniel G. Kaye, Phyllis M. Lockett, Deborah J. Lucas, Alex J. Pollock, Terry L. Savage, William R. Shepard, Howard J. Siegel, Michael A. Spencer and Dennis A. Suskind, each for a one-year term expiring in 2020; ratified the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm for 2019; and approved, on an advisory basis, the compensation of named executive officers. In addition, the company’s Class B-1 shareholders elected Gedon Hertshten, William W. Hobert and Robert J. Tierney Jr. and the Class B-2 shareholders elected Ronald A. Pankau and David J. Wescott, each for a one-year term expiring in 2020.

***** Congratulations to the returning board members, especially the B-2 members Ron Pankau and David Wescott. Ron and I used to play basketball together at a church in Glenview. Dave is a neighbor in the CBOT Building and there is more history, too…~JJL


A Slack director is in hot water with the SEC for saying the company, which just filed to go public, ‘will be one of the most important tech companies in the world’
Benjamin Pimentel – Business Insider
A Slack director who said the company will be “one of the most important tech companies in the world” is in hot water with the Securities and Exchange Commission for making “unauthorized statements” ahead of the company’s IPO.

****If Elon’s Tesla-pumping Twitter activities hadn’t become the butt of the SEC’s ire, would this instance of braggadocious rhetoric get the same treatment?~SD


Captains of Iron Ore
Michael Syn – The Business Times
It was supposed to be fair winds and following seas. For much of 2018, the good ship “Iron Ore” drifted along with breezy supply and a steady tug of demand through a narrow channel of US$64-US$74 a metric tonne. Market lookouts in the crow’s nest declared not a cloud of price shock on the macro horizon: an economic slowdown was depressing downstream demand in China, where most of the world’s iron ore goes into steelmaking for infrastructure, cars and machinery. Interminable US tariff talks splashed cold water over animal spirits, leaving Chinese consumer and business confidence at 30-year lows.

****Michael Syn, SGX’s head of derivatives, is as well-written as he is well-spoken. If you didn’t see JLN’s recent video with him, check it out: FX Futures, Japanese Equity Repo and Marine Fuel.~SD


Burned-Out Broker Got Rich Giving Free Trades to Millennials
Rahul Satija – Bloomberg
After a decade working as a trader and a broker in India, Nithin Kamath was burned out and frustrated with a securities industry that seemed stuck in the past.
So in 2009, Kamath did something radical. With markets still reeling from the global financial crisis, he struck out on his own to start an online brokerage from a 700 square-foot office in Bengaluru. At the time, people called him crazy. Not anymore.

***** I identified with the “burned-out broker” part of this story.~JJL


FIA Launches Podcast to Feature the Issues, People and Trends of the Global Futures, Options and Derivatives Industry
FIA today launched FIA Speaksóa podcast to provide greater insight into the people, major topics and trends in the global futures, options and derivatives industry. FIA Speaks will feature executives, regulators, industry experts and business visionaries that explore the issues and the trends of the industry. FIA Speaks will be hosted by FIA President and CEO Walt Lukken with contributions from other FIA senior staff members.
***** I always said Walt Lukken had a face for radio.~JJL
****I have a voice for print.~SD


Wednesday’s Top Three
Yesterday’s top story was Bloomberg’s piece on Citadel, in Citadel Looms Large as a Future Fed Primary Dealer. Second was Feds Seize News Site Deepdotweb as Darknet Crackdown Intensifies in Third was Jefferies helped a rogue hedge fund partner trade with tons of leverage that bankrupted his fund, a new ruling finds from Business Insider.


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Lead Stories

SocGen Introduces Crypto to a $2 Trillion Market
Alastair Marsh – Bloomberg
This asset-backed debt is latest proving ground for tokens; French bank issues 100 million euros of bonds to itself
A bond market as old as capitalism itself has emerged as the latest proving ground for cryptocurrencies. A unit of Societe Generale SA sold 100 million euros ($112 million) of covered bonds — debt backed by mortgages — in the form of digital tokens with the French bank as the only buyer. The idea of last month’s pilot issue conceived by what the bank called an internal startup was to test how the technology behind virtual currencies can be used to cut costs and speed settlement for the securities.

Micro E-mini Futures Surpass 1 Million Contracts Traded
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that Micro E-mini equity index futures volume has surpassed 1 million contracts in less than three full days of trading. This total cumulative volume represents trading across all four indexes – S&P 500, Nasdaq-100, Russell 2000 and Dow Jones Industrial Average – making Micro E-mini futures the most successful product launch ever at CME Group.

BlackRock’s Realism Leaves a Bank on the Brink; The U.S. money manager’s interest in Italy’s Carige always looked strange. It’s hard to see why new investors would be won over by the bank’s new strategy.
Elisa Martinuzzi – Bloomberg
Shock, horror. Banca Carige SpA, the Italian lender that’s being administered by the European Central Bank, has failed to secure a rescue. After weeks of negotiations with BlackRock Inc., the world’s biggest money manager, it’s back to square one.

Have we reached peak financialisation?
FT Video
The rise of financialisation has been a driving force in the global economy for the last few decades. But the FT’s Rana Foroohar believes companies that focus more on markets than the real economy will begin to experience diminishing returns, while high levels of corporate debt could be a harbinger of future economic trouble.

The Bond Market Just Sent a Disturbing Message
Robert Burgess – Bloomberg
Global markets got a glimpse of the unthinkable Wednesday when the U.S. held a key bond auction. The $27 billion sale of 10-year notes – the world’s benchmark securities – didn’t go well at all. It wasn’t a failure; that would have triggered no less than an Armageddon-type event on par with the financial crisis. But the poor demand sure sparked a lot of questions, including whether this was a sign that investors finally had enough of the government’s profligate spending and borrowing.

CTAs continue positive run led by trend-following strategies
Following on from an improvement in February and a strong March, April has been another positive month for CTAs. The SG CTA Index was up 2.76 per cent, and now it’s firmly in positive territory for 2019 year to date (+4.74 per cent).

****Also via Hedgeweek: Hedge funds positive again in April after robust first quarter.~SD

Investors pull billions from quant king AQR as performance slumps; Quantitative fund manager had a difficult 2018 and its alternative risk premia funds continue to struggle
Tom Teodorczuk – Financial News
AQR Capital Management, one of the biggest quantitative fund managers, is undergoing a prolonged performance downturn that has led to investors withdrawing increasing amounts in 2019.

Itiviti gears up to accelerate sell-side OMS adoption, providing upgrade path for Bloomberg SSEOMS clients
Itiviti, a leading technology and service provider to financial institutions worldwide, today announced that its multi-asset Order Management System has been selected by several customers who were currently using Sell-Side Execution and Order Management Solutions (SSEOMS) from Bloomberg L.P. Following Bloomberg’s recent announcement that the firm will discontinue its SSEOMS product, clients need to consider other options.

As tariff hike looms, China asks U.S. to meet it halfway, denies backtracking
Yawen Chen, Se Young Lee – Reuters
China appealed to the United States to meet it halfway to salvage a deal that could end their trade war, with its chief negotiator in Washington for two days of talks hoping to stave off U.S. tariff increases set to be triggered on Friday.

Cybersecurity Jobs Abound. No Experience Required; Companies like IBM and Palo Alto Networks scramble to hire hundreds of thousands of corporate hackers to defend networks and data
Kelsey Gee – WSJ
As companies struggle to fill hundreds of thousands of open cybersecurity jobs around the U.S. they are casting a wider net to find and develop experts, pursuing workers without traditional four-year degrees or formal experience to help them protect computer networks and customer data.

Amazon Hit by Extensive Fraud With Hackers Siphoning Merchant Funds
Jonathan Browning – Bloomberg Inc. said it was hit by an “extensive” fraud, revealing that unidentified hackers were able to siphon funds from merchant accounts over six months last year.
Amazon believes it was the victim of a “serious” online attack by hackers who broke into about 100 seller accounts and funneled cash from loans or sales into their own bank accounts, according to a U.K. legal document. The hack took place between May 2018 and October 2018, Amazon’s lawyers said in a redacted filing from November that can now be made public.

UK regulator plans to issue fines over unsuitable pensions advice; Three investment firms and directors challenge FCA penalties on pushing high-risk products
Caroline Binham – FT
The UK financial regulator is cracking down on three investment firms and their top brass that it alleges gave over 2,000 people unsuitable pensions advice, urging them to switch a total of £76m of their life savings into high-risk products.

MTS And Marco Polo Expand Access To Frontier And Emerging Markets
MTS Markets International (MMI), part of London Stock Exchange Group (LSEG), and Marco Polo Securities have recently entered into a marketing agreement in relation to its US trading platform, MTS BondsPro. As part of the agreement, Marco Polo will introduce the MTS BondsPro corporate bond electronic trading platform to its extensive list of institutional clients in frontier and emerging markets covering nearly 20 countries across Africa, Asia and the Middle East.

Berkshire Hathaway Victim of ‘Ponzi-Type’ Solar Scheme
Katherine Chiglinsky and Brian Eckhouse – Bloomberg
Berkshire Hathaway Inc. thinks it was duped.
Billionaire Warren Buffett’s company took a $377 million charge after investing hundreds of millions in tax-equity investment funds tied to a company that federal authorities say engaged in fraud, according to Berkshire’s first-quarter regulatory filing. The investments were tied to DC Solar, Debbie Bosanek, Buffett’s assistant, said Wednesday in response to Bloomberg’s questions about the expense. That’s the mobile solar generator company that federal authorities have alleged ran a fraudulent scheme involving tax benefits.

Exchanges, OTC and Clearing

Traiana provides central clearing connectivity to Eurex
Traiana, a leading infrastructure service which provides trade life-cycle and risk management solutions, today announced that it has provided direct central clearing connectivity to Eurex.

IIROC and Nasdaq unveil state-of-the-art market surveillance technology to enhance oversight of Canada’s capital markets; New tools to help national regulator better protect investors
The Investment Industry Regulatory Organization of Canada (IIROC) and Nasdaq (Nasdaq: NDAQ) today launched IIROC’s upgraded market surveillance system using Nasdaq’s SMARTS – a leading-edge technology that significantly enhances the way IIROC oversees Canada’s capital markets and protects investors from potential market abuses.

LCH Clearing in ‘Robust Health’
Shanny Basar – MarketsMedia
LCH, the London Stock Exchange Group’s clearing arm, is in “robust health” according to Chris Turner, analyst at German bank Berenberg, despite the possible threat to the business as the UK leaves the European Union.

C7 Release 6.0: Production launch announcement
With this circular, Eurex Clearing announces the production launch of C7 Release 6.0 on Monday, 18 November 2019.

New members of the Supervisory Board of Deutsche Boerse AG
Deutsche Boerse AG
The shareholders of Deutsche Boerse AG elected Charles Stonehill and Clara-Christina Streit to the Supervisory Board at today’s Annual General Meeting. The previous members Prof. Dr. med. Dr. Ann-Kristin Achleitner and Richard Berliand retired from the board at the end of the Annual General Meeting. The Supervisory Board of Deutsche Boerse AG has a total of 16 members. Chairman is Dr. Joachim Faber.

Clearstream launches new fund distribution services
Deutsche Bˆrse AG
Clearstream provides support services for fund distribution through the fund settlement platform Vestima / Swisscanto Funds Center Ltd. Fully integrated into Clearstream Banking SA as “Clearstream Fund Desk” / New service offering to help clients meet regulatory requirements for transparency and standardization in fund distribution

TMX Group Equity Financing Statistics – April 2019
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for April 2019.

SGX reports market statistics for April 2019
Iron ore derivatives volume continued to rise, amid one of the most volatile periods for the industry
Total securities market turnover increased month-on-month, as the STI outperformed global markets
Singapore Exchange (SGX) today released its market statistics for April 2019. Total derivatives traded volume rose 37% year-on-year (y-o-y) to 20.8 million contracts, as global demand for risk management across asset classes continued. Total securities market turnover by volume was up 7% month-on-month (m-o-m) to 22.9 billion shares, driven largely by real estate and consumer sectors.

Moscow Exchange: Risk Parameters Change On FX And Precious Metals Market
CCP NCC sets the following risk parameters on FX and precious metals market for Japanese yen starting from May 14, 2019:


MTS targets frontier and emerging markets with Marco Polo partnership
Hayley McDowell – The Trade
US broker-dealer Marco Polo Securities will introduce the London Stock Exchange Group’s MTS BondsPro trading platform to its clients in frontier and emerging markets as part of a new agreement.

New for 2019, Buy More Grain with Barchart’s cmdtyView 2.0 Release
Barchart, a leading provider of data and analytics to U.S. agribusinesses, is releasing cmdtyView 2.0, the latest evolution in the world’s most powerful commodity trading platform. All cmdtyView Pro users will automatically get access to all of the new data, tools, and features that are solely focused on helping commodity buyers make better decisions and get better pricing.

****Barchart’s cmdtyExchange event is today. I’ll be there for a while.~SD

Nasdaq Launches ConnectIR For Investor Relations Professionals
Press Release
Nasdaq, Inc. (Nasdaq: NDAQ), today announced the launch of ConnectIR, a new solution designed to simplify capital markets stakeholder engagement for investor relations (IR) professionals. ConnectIR will be available as a supplementary service to Nasdaq IR Insight, Nasdaq’s award-winning IR technology platform trusted by 3,000 public companies listed on all major exchanges, allowing IR professionals to seamlessly communicate and schedule meetings with the buy-side and sell-side directly from the platform.

Tradeweb Markets : Reports First Quarter 2019 Financial Results
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today reported financial results for the quarter ended March 31, 2019.1

TradAir integrates with Seed CX’s settlement services
Seed CX, the leading institutional trading and settlement infrastructure for digital assets, today announced a partnership with TradAir, the global provider of trading technology solutions for banks, brokers, prime of primes and regulated marketplaces.

IHS Markit Launches Solution to Speed New Account Onboarding
Press Release
IHS Markit (Nasdaq: INFO), a world leader in critical information, and analytics, today announced the launch of Onboarding Accelerator, a new solution to help banks and other service providers open accounts with institutional clients more quickly.

New Fintech Tools Aim to Protect the Elderly; Financial-technology companies expand from millennials to cater to needs of older people and their adult children
Yuka Hayashi – WSJ
A small but growing crop of financial-technology companies are offering online tools meant to help adult children manage and monitor their parents’ finances and well-being.

Horizon Software hires AI expert to lead Asia business; Fabrice Fischer previously founded a consultancy focused on artificial intelligence in financial markets.
Hayley McDowell – The Trade
Electronic trading and algorithmic technology specialist Horizon Software has hired an artificial intelligence (AI) expert to lead its business in Asia Pacific.


Binance on guard for further breaches after revealing $40m hack; Chief of cryptocurrency exchange asks users for ‘forgiveness’ as he halts withdrawals
Adam Samson and Daniel Shane – FT
Cryptocurrency exchange Binance said it was not sure of the extent of its latest security breach, or whether it had cleared intruders from its systems, hours after it revealed a $40m hack and halted withdrawals.

LGC-Coin fights back against the Financial Times
Jemima Kelly – FT
Last week, we told you about a “prestigious” cryptocurrency for the luxury sector that markets itself as an “exit coin” (we don’t understand either): LGC-Coin. It claims to have a devilishly high market cap of a $6.666bn (genuinely), yet doesn’t seem to be listed on any exchange.

Binance CEO Spurs Outcry by Suggesting Blockchain Rollback
Olga Kharif and Alastair Marsh – Bloomberg
Binance CEO discusses reversal of transactions after hack; Rewriting of transactions risks loss of confidence in Bitcoin
The cryptocurrency world was shaken to its foundations Wednesday after Binance’s Zhao Changpeng suggested that the Bitcoin network may not be as immutable as advertised.

Crypto Traders Ponder Blacklist to Keep Scammers, Thieves at Bay
Alastair Marsh -Bloomberg
Digital firms discuss fraud prevention at Chicago gathering; Accreditation of companies in good standing also considered
The biggest cryptocurrency traders are calling time on the horde of con artists and criminals that have flocked to their largely unregulated market.

Mike Novogratz Says Bitcoin Won the War of Cryptocurrencies
Olga Kharif and Erik Schatzker – Bloomberg
Bitcoin has won the war of cryptocurrencies. That’s the view of Michael Novogratz, the billionaire co-founder and chief executive officer of Galaxy Investment Partners LLC, one of the most prominent companies in the embryonic digital-asset market. The original cryptocurrency is viewed as a store of value, like gold, while other coins still have to find their uses, he said.

Florincoin – The 2014 Altcoin You Don’t Remember – Is Attracting Real Users
Bailey Reutzel – Coindesk
One of the most recognizable names in the crypto space (and perhaps even outside of it) is using one of the least recognizable blockchains.

JPMorgan Has Quietly Rebooted the Blockchain Tech Behind Its JPM Coin
Ian Allison – Coindesk
JPMorgan Chase has quietly replaced the guts of its blockchain. Over the last six months, technologists spread across London, Singapore and the U.S. have “rebooted” Quorum, the megabank’s private version of the ethereum blockchain, said Oli Harris, JPM’s head of Quorum and crypto-assets strategy.

Facebook Softens Policy on Crypto and Blockchain Ads
Yogita Khatri – Coindesk
Over a year after its outright ban, Facebook has further lifted some restrictions on cryptocurrency and blockchain-related advertisements.


Economic pundits must not swap stats for stories in the age of fake news
Harold James – Financial News
In today’s irrational world of fake news and bad-faith politics, a new mantra has emerged: It’s all about narratives. Power today lies in one’s ability to tell a story. As a case in point, consider Ukrainian President-elect Volodymyr Zelensky, a comedian whose only political experience is that he played a president on TV. Zelensky beat the incumbent, Petro Poroshenko, because he knew how to spin a yarn.

Let’s put Trump’s massive 1980s financial losses into context
Philip Bump – Washington Post
We learned that Tuesday evening, when the New York Times published a story looking at 10 years of data from Trump’s tax returns. (The source of that information was not identified.) The numbers are stunning when you consider that Trump lost more than $1 billion from 1985 to 1994.

Corporate Bonds Aren’t Worried About a Trade War; IBM, Bristol-Myers and even some junk-rated borrowers rush to market and find willing buyers.
Brian Chappatta – Bloomberg
Even before markets opened this week, President Donald Trump set the tone with a pair of tweets that threatened additional tariffs on China and lamented that a trade deal was coming along “too slowly.” Instinctively, investors’ eyes were glued to the S&P 500 Index, watching to see whether it would tumble from its recent record levels.

Trump’s Trade War Brings Out the Worst in Investors; They appear to have overestimated the potential damages from any escalation in U.S.-China tensions.
Stephen Gandel – Bloomberg
Investors’ math on President Donald Trump’s proposed new tariffs appears to be one plus one equals roughly 4.


KPMG pays £10m in fines but auditors owe the public more
Matthew Vincent – Financial Times
In most offices, a Bank Holiday makes the week easier to get through. You ease yourself back on Tuesday and, before you know it, it’s Thursday lunchtime and practically the weekend again. Except, it seems, for the auditors at KPMG. They could not even make it beyond Wednesday morning without being fined again: a second multimillion-pound penalty from the Financial Reporting Council in the space of six working days.

CFTC’s Division of Enforcement Issues First Public Enforcement Manual
The Commodity Futures Trading Commission’s (CFTC) Division of Enforcement (DOE) published its Enforcement Manual (Manual) today. This is the first issuance of a public Manual by DOE. The Manual provides an overview of the CFTC and DOE, and it establishes certain general policies and procedures that guide the work of DOE staff in detecting, investigating, and prosecuting violations of the Commodity Exchange Act (CEA) and the CFTC Regulations.

Remarks of CFTC Director of Enforcement James M. McDonald at the 41st Annual Conference of the Future Industry Association’s Law & Compliance Division
Over the last few years, under Chairman Giancarlo’s leadership, the CFTC has implemented a number of measures to make our regulations simpler, more accessible, and more transparent. These reforms have been policy neutralónot designed to advance one particular viewpoint over another. Instead, these efforts were rooted in common senseódesigned to make us better regulators, which in turn would lead to more efficient markets and greater economic growth.[1]

Testimony of Chairman J. Christopher Giancarlo Before the Senate Committee on Appropriations Subcommittee On Financial Services And General Government, Washington, DC
Thank you, Chairman Kennedy, Ranking Member Coons, and Members of the subcommittee. I appreciate the opportunity to appear before you today, along with my fellow colleague from the Securities Exchange Commission (SEC), Chairman Jay Clayton.
I want to start by saying thank you to all the members of this subcommittee for supporting the work of the Commodity Futures Trading Commission (CFTC), and for the budget increase you provided with the enactment of the FY 2019 budget.

FCA publishes Decision Notices against three firms and five individuals for acting without integrity in relation to their pension advice business and misleading the FCA
The Financial Conduct Authority (FCA) has today published Decision Notices in respect of three firms (Financial Page Ltd, Henderson Carter Associates Limited and Bank House Investment Management Limited) and five individuals (Andrew Page, Thomas Ward, Aiden Henderson, Robert Ward and Tristan Freer).

Effective Date for Amendments to Incorporate Swaps into Certain Compliance Rules and Interpretive Notices
NFA | I-19-12
NFA recently amended several Compliance Rules and Interpretive Notices to expressly incorporate swaps, counterparties and related concepts. The amendments also clarify that certain rules apply to all commodity interests and specify that other rules only apply to specific membership categories. The amendments will become effective on July 1, 2019.

ECB in touch with Carige after BlackRock pulls out of rescue
The European Central Bank has been in touch with special administrators who run Banca Carige after BlackRock pulled out of rescuing the ailing Italian lender, an ECB spokeswoman said on Thursday.

Regulators urge financial institutions to plan for LIBOR transition
The Australian Securities and Investments Commission (ASIC) has written to the CEOs of several major Australian financial institutions regarding their preparations for the end of LIBOR. This initiative is strongly supported by the Australian Prudential Regulation Authority (APRA) and the Reserve Bank of Australia (RBA).

Super fund removes ‘independent’ financial advice message and pays penalty
HostPlus Pty Ltd (HostPlus) has paid a $12,600 Infringement Notice penalty issued by ASIC. The Infringement Notice related to alleged misleading claims about offering ‘independent advice’ in a recorded telephone message on HostPlus’ main consumer telephone number.

The Derivatives Service Bureau Opens Its 2019 Consultation – To Encourage Industry Feedback And Participation In Setting The DSB’s Roadmap

Investing and Trading

What to tell a new graduate about investing in stocks
Vitaliy Katsenelson – MarketWatch
College graduation ceremonies this time of year remind me of my own graduation from the University of Colorado in 1997.
I felt completely lost, with no idea what to do next. Now, more than 20 years later, I can offer some experience-based advice about investing and how to go about it realistically. Here’s what I would tell my younger self and his generation:

Hong Kong’s IPO Market Loses Steam as U.S. Soars
Nisha Gopalan – Bloomberg
Hong Kong’s stock exchange is poised to lose its crown as the world’s leading IPO fundraising venue again, and this time there may be no easy way back.
The bourse trails in third place behind the Nasdaq and New York exchanges so far this year, having topped the global rankings in three out of four years between 2015 and 2018. 1 Companies have raised $4 billion in the city in 2019, a fraction of the $35.6 billion garnered in the whole of last year, according to data compiled by Bloomberg.

Thomson Reuters profit tops Wall St. forecasts, shares hit all-time high
Ken Li and Nick Zieminski – Reuters
Thomson Reuters Corp on Wednesday reported stronger-than-expected quarterly profit, boosted by demand for information it sells to legal professionals, and reaffirmed its forecast for the rest of this year and 2020.

401(k) Accounts at Fidelity Grow Sixfold to $300,000 in Decade
Michael McDonald – Bloomberg
Investors who’ve had 401(k) accounts at Fidelity for a decade saw their average balance grow sixfold to almost $300,000 since the market bottomed after the global financial crisis, the company said.

Trade War Tops List of Global Risks, Oxford Economics Says
Catherine Bosley – Bloomberg
The fate of the global economy lies in the hands of Washington and Beijing.

Global Meat Output to Fall as Fever Ravages China Pig Farms
Aine Quinn – Bloomberg
Meat production to fall for the first time in two decades: UN; Pork decline offsets growth in chicken, beef, report shows
Meat production is likely to fall for the first time in two decades because of a deadly disease that’s wiping out Chinese hog herds.

ExxonMobil pledges $100m for emissions-reduction research
Ed Crooks – Financial Times
ExxonMobil is promising up to $100m over the next 10 years to US government laboratories to research technologies that could cut greenhouse gas emissions, as it seeks to show that it is responding to the threat of climate change.

`Crazy Premiums’ for Gold Assets Are Over, Mining CEO Says
Justina Vasquez – Bloomberg
A wave of consolidation is coming in the gold mining industry, but don’t count on buyers overspending on assets, B2Gold Corp. Chief Executive Officer Clive Johnson said.
“You have an environment now where people are learning their lesson, which is don’t get in bidding wars and pay crazy premiums to acquire companies,” Johnson said in a telephone interview Wednesday. That means “companies that aren’t doing too well” won’t be appealing to better-managed miners.


GAM’s Rogue Manager Won’t Go Gentle Into the Night
Mark Gilbert – Bloomberg
It’s eighteen months since Swiss fund manager GAM Holding AG was first alerted to the possibility that Tim Haywood, the manager of its flagship absolute return bond funds, might be in breach of his fiduciary duties. With the scandal still ongoing, it’s little wonder that GAM has yet to appoint a new chief executive officer – or find a buyer for itself.

BlackRock Drops Rescue of Italian Lender
Sonia Sirletti and John Follain – Bloomberg
U.S. fund’s investment committee rejects backing rescue plan; Divided coalition could be forced to step in as EU vote looms
BlackRock Inc. handed Italy’s populist coalition a new dilemma on the eve of European elections, ditching a possible rescue of Banca Carige SpA in a move that could force the government to step in or see the lender fail.

Bank Workers Who Survive Robot Uprising Stand to Make More Money
Hannah Levitt – Bloomberg
If you’re lucky enough to survive banks’ coming robot apocalypse, you can expect a raise.
While the headcount for front-office workers — the bankers and traders historically seen as among the companies’ most valuable assets — could drop by almost a third amid an automation push, remaining employees will be more highly rewarded, according to a McKinsey & Co. report released Thursday. Compensation costs could drop by as much as 20 percent, with savings potentially reaching $600 million a year, the consulting company said.

Investors Suing JPMorgan May Redefine the Leveraged Loan Market
Lisa Lee – Bloomberg
Trustee for Millennium Health lenders alleges securities fraud; Banks, industry groups hold that loans aren’t securities
A group suing JPMorgan Chase & Co. and other Wall Street banks over a loan that went sour four years ago is alleging the underwriters engaged in securities fraud. If successful, the lawsuit could radically transform the $1.2 trillion leveraged lending market.

Weakest U.S. Bond Auction in Decade Validates Dimon’s Warning
Elizabeth Stanton and Chris Anstey – Bloomberg
Demand for $27 billion sale was poor by several metrics; JPMorgan’s Dimon says U.S. yields are ‘extraordinarily low’
The U.S. Treasury on Wednesday saw the weakest demand for its benchmark 10-year note in a decade, illustrating the diminishing appetite among some investors to accept current yields.

BNY Mellon Pershing CEO Lisa Dolly to step down; Lisa Dolly announces intentions to step down as CEO of Pershing after more than three years in the role.
Hayley McDowell -The Trade
BNY Mellon veteran Lisa Dolly has announced her intentions to step down as CEO of Pershing after three years in the role.


Foreigners Are Dumping Chinese Stocks Before Tariff Deadline
Bloomberg News
Foreign investors in Chinese equities aren’t hanging around to see how the latest round of trade talks plays out.

China’s Bond Market Reaches a Tipping Point
Mary Schapiro – Bloomberg
For those who watch China closely, there has never been a more pivotal moment in the evolution of its economy and financial markets. More than 40 years since the start of its “Reform and Opening Up” process, and despite the volatility in U.S.-China relations, China’s commitment to market reform remains. This year will likely see the improvement of market access and the rise of new investment opportunities.

Italian bank UniCredit to divest non-core assets as profit rises; Milan-based group to trim Italian bond exposure in what some see as potential M&A set-up
Rachel Sanderson – FT
UniCredit chief executive Jean-Pierre Mustier says he plans to shed non-core assets and trim the Italian bond exposure of Italy’s largest bank by assets in what analysts consider to be steps that presage a potential M&A move.

China’s clean tech boom may disrupt status quo; Beijing’s green energy industry brings challenges alongside benefits
The editorial board – FT
Extinction Rebellions against climate change have swept much of the western world in recent weeks, stirring public emotion and political debate. In one moment of pique, UK politician Boris Johnson declared that protesters would do better to go to Beijing’s Tiananmen Square because pollution levels in China have been rising “vertiginously”.

Chinese bank employee convicted of ‘leaking state secrets’ after sharing policy draft on WeChat
Cissy Zhou – South China Morning Post
China has convicted a local bank employee of “leaking state secrets” after she shared a draft of a top secret financial policy document with people outside the government, according to a recently released verdict.

Carige’s temporary administrators summon trade unions: sources
The temporary administrators in charge of Banca Carige have summoned union representatives for an urgent meeting, two sources close to matter said on Thursday.

BlackRock pulls out of rescue for Italian bank Carige
Stephen Jewkes – Reuters
U.S. fund manager BlackRock has pulled out of a proposed rescue of Italian bank Carige, a move that could push Rome’s fragile government into another costly state bailout.

AngloGold Ashanti begins sale of final South African gold mine
Henry Sanderson and Joseph Cotterill – FT
AngloGold Ashanti has begun the sale of its final gold mine in South Africa, marking an end to an era of gold mining in the country.

Australia Prints $1.6 Billion of Currency With a Typo
Adveith Nair – Bloomberg
Australia’s most widely circulated banknote has a typo. The A$50 ($34.9) banknote released last October misspells the word “responsibility.” The note features a portrait of the country’s first female parliamentarian, Edith Cowan, and the error appears in microprint featuring excerpts of her first speech to the Western Australian Parliament.


UK’s Brexit minister accuses EU politicians of ‘lazy thinking’; Stephen Barclay says Britain’s exit should be seen as an opportunity
Jim Brunsden – FT
The UK Brexit minister has accused Europe’s politicians of “lazy thinking”, saying the EU should see Britain’s departure as an opportunity to build a new relationship rather than as “something to be punished”.

Regulator urges post-Brexit deal for City of London
Caroline Binham and Patrick Jenkins – Financial Times
The bookies’ favourite to be the next Bank of England governor has a stark message for the government and its efforts to strike a compromise Brexit deal: any agreement with Labour on a customs union will do nothing for the UK’s all-important financial services industry.


Princeton Looks to Break Up the White Male Money Monopoly; The university’s $25.9 billion endowment moves (slowly) to hire managers owned by women and minorities.
Janet Lorin – Bloomberg
One morning in May 2018, two venture capitalists rented a Zipcar in Midtown Manhattan. They picked a 300-Class Mercedes on special for $15 an hour, perfect for the occasion and their tight budget. On a pilgrimage to suburban New Jersey, Aaron Holiday and Nnamdi Okike were heading to the audience of a lifetime.

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Past Newsletters

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