‘Something Very Wrong Happened Here’; GameStop Hearing Was No Fun for Free-Trading Business Model

Feb 19, 2021

First Read

$29,351/$300,000 (9.8%)
John Sodergreen


No, Virginia, There is no Santa Claus; He Was Demutualized
Thom Thompson – John Lothian News

If you are, like me, someone who has never bought even a single datum let alone have multiple subscriptions with multiple vendors, Acuiti’s newest report on market data makes for fascinating reading. The most amazing thing in the whole report was this statement on page 7: “Over two-thirds of bank respondents reported their data fees to be in excess of $250,000 per month.”

I spent 30 of my pre-muckraking years working for global derivatives exchanges. For many of those years we heard complaints from our members and customers that data fees were eating them alive. But I had no idea that fees were rising to such levels.

Of course, part of the rise in the reported level of data charges to the banks results from the concentration of trading banks and brokerages. But more than $250,000? Per month. Wow.

Some data are still free for the public, and a little more data are free on exchange members’ trading screens. But even members will pay up for microsecond depth of book indications.

To read the rest of this commentary, go here.


Hits & Takes
John Lothian & JLN Staff

Don’t miss the AFM Virtual Panel Discussion: Technology Innovation on February 26, 2021 at 13:00 – 14:00 CET. The panel will explore the impact that COVID has had on the technology that market professionals have previously taken for granted – is it ahead of the game or has it lagged behind compared to the products developed for the retail market, has technology enabled a wider product set to be taken to market either by the markets directly or through the input of ISVs and other significant connectivity providers and has 2020 seen (will 2021 see) any truly innovative market developments that have taken advantage of the advances that have been made in the use and availability of technology?

The multi-talented Clive Furness of Contango Markets, UK will moderate and the panelists are Louisjan Bonthuys, STT South Africa, Mauricio Eduardo Perez Y Sosa, Planetagro, Mexico, Pat Kenny, CQG, Martyn Bain, Avenir Technologies, Michael Gatny, Connamara and a representative of MATBAROFEX. For registration, please send an email to conference@afmorg.net.

The World Federation of Exchanges issued a report, “Full Year 2020 Market Highlights.” The report offers the first opportunity to study the impact of the events of 2020 on markets holistically and looks across market capitalisation, listed companies, IPOs, volumes and value traded in multiple assets classes including equities, derivatives futures, options and ETFs.

Garry Jones posted to LinkedIn a paper by John R. Bryson, Professor of Enterprise and Economic Geography at the University of Birmingham, titled “London’s Continued Future As A Global Financial Centre.”

Andre Cappon, Leon Bitton, Ricardo Angulo of The CBM Group, New York NY have published a commentary titled “Derivatives Exchanges In Emerging Markets: Key Success Factors.”

I did not understand yesterday at the Congressional hearings about the GameStop issues that John Wick testified. Vlad Tenev looks a lot like Keanu Reeves in the black suit and tie and white shirt.

I really liked the Congressman yesterday who could not pronounce Citadel (“Sight-a-Dell”) correctly and read an unanswerable question to Ken Griffin. When asked to clarify the question, the Congressman just read the question again, which utterly showed he had no idea of the inanity he was asking.

Some Texans are using their 2021 Ford F-150 trucks to power their homes during the storm-induced power outages. The trucks come with a very handy portable generator function.

John Sodergreen, the publisher of Scudder Publishing Group and managing editor of Enelyst.com, is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Scudder Publishing is home to The Desk, a widely circulated weekly digital newsletter, and its companion publication, Early View. Scudder is a leading energy news and information publishing company founded in 1997. I have a lot of respect for the work John does and given the problems of the Southern U.S. right now around energy, John’s company’s work is that much more important. Thank you to John and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

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


Rana Foroohar, an associate editor for the Financial Times and global business columnist, is joining the lineup of keynote speakers at this year’s virtual FIA Boca conference, Boca-V. She is expected to speak about the shifts occurring in globalization, the political economy, and the digital economy and offer analyses on emerging markets, women in the workplace, education, and the disruption of big tech. To register for Boca-V, go here.~SR

Also, the 2021 Options Industry Conference has announced two of their keynote speakers for the conference, which takes place virtually from April 28-29 2021. SEC Acting Chair Allison Lee will be the keynote speaker for day one of the conference. The keynote speaker for day two will be Randal Quarles, Vice Chair for Supervision, Board of Governors of the Federal Reserve System. You can find out more about the conference and register here. ~SR

People in Bermuda will soon be able to buy rum with digital currency. Canadian fintech firm Bidali and Bermuda rum company Gosling’s Limited have announced a new pilot program allowing customers to buy rum with Bermuda’s digital dollar. Gosling’s will accept digital Bermuda dollars through the Stellar Network, and the first phase of the project will reportedly be coordinated by Canadian and Bermudan tech consultant Penrose Partners. Bermuda seems to be quickly becoming a hub of digital asset business. This puts Miami International Holdings (or MIH, the holding company of MIAX) in a fairly advantageous position if they plan to get more into digital assets; MIH acquired a controlling stake in the Bermuda Stock Exchange (BSX) in November 2019, and then one hundred percent ownership last December. Both press releases announcing these moves touted Bermuda’s blockchain-friendly laws, like the Digital Asset Business Act of 2018. BSX and MIH also launched the Hashdex Nasdaq Crypto Index ETF last September.~MR



FIA endorses industry led climate finance principles
FIA President and CEO Walt Lukken today made the following statement on the release of the pan trade financial industry associations statement of principles Financing a U.S. Transition to a Sustainable Low-Carbon Economy: “Climate change poses real risks to financial stability and our global economy. These risks include direct financial risks from extreme weather, as well as the transition risks associated with fundamental changes in how the world does business. FIA endorses today’s principles and commits to working with companies, other trade organizations and governments to address the pressing need of climate change.

*****Timely statement given the events in the Southern U.S. and their weather problems.~JJL


Bill Gates: My green manifesto; The billionaire philanthropist offers four bold ideas to help business take on the climate crisis
Bill Gates – FT
In the conversations I have about climate change, one question comes up more than any other: “How can I help?” Sometimes it’s an individual who simply wants to know whether to stop buying plastic straws. (Answer: it doesn’t do much for climate change, but it does help the environment in other ways.) Just as often, though, the question comes from someone working on a larger scale — for example, a chief executive who wants to know: “What can my company do that will really make a difference?”

*****I don’t like the word “manifesto.” It reminds me of the Unabomber.~JJL


FIA highlights CCP margin procyclicality concerns to European Regulators
Washington, DC–FIA today presented to the European Securities and Markets Authority (ESMA) on the issues experienced in the spring of 2020 when high volatility and procyclicality of margin requirements were experienced in the global clearing system. During this period, the high number and the large size of margin calls drove demand for liquid assets, just as those assets were scarce due to market stresses. Such a drive for liquid assets can contribute to the stress in the financial system. FIA’s presentation consisted of an analysis of data on margin requirements at several major derivatives clearinghouses, and it contained a set of recommendations aimed at mitigating the procyclicality of margin requirements. FIA first issued these recommendations in a white paper published in October 2020.

*****The word of the day is “procyclicality.”~JJL


SPAC Growth and Sector Trends
SPACs are the talk of the town today but until two years ago, few investors were even familiar with the term “Special Purpose Acquisition Company” (even though SPACs, sometimes thought of as “blank check companies,” have been around since the 1990s). So what exactly is a SPAC? It is an entity formed via a capital raising on the NYSE (or another exchange). The entity is formed by sponsors with particular expertise for the specific purpose of merging with an existing, typically late-stage, private company. The private company is not known to the SPAC investors or the SPAC sponsors at the time of the IPO. The SPAC typically has two years to find a merger candidate, or it is liquidated. In the meantime, the funds raised by the SPAC generate interest in an account. The event of the merger between the SPAC and the private company essentially makes the private company public, so the company needs to be ready for the requirements associated with being a listed entity.

*****NYSE offering some help to explain SPAC.~JJL


Thursday’s Top Three
Our top story Thursday was Bloomberg’s The Real Battle for the City of London. Second was John Lothian News’ Options Basics for Newbies: Mind Your Greeks, Professor Says, from Suzanne Cosgrove. Third was a repeat, Trading Technologies’ Trading Technologies Appoints New President, Chief Financial Officer, EVP Global Head of Sales and Chief Technology Officer.


CryptoMarketsWiki Coin of the Week: Bitcoin (BTC)
Bitcoin began trading at a price exceeding $50,000 per bitcoin this week for the first time ever – though some analysts, including strategists Nikolaos Panigirtzoglou from JPMorgan and Meghan Shue from Wilmington Trust, say that this price point won’t last.


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Lead Stories

‘Something Very Wrong Happened Here’; A high-profile hearing criticized Robinhood’s business model.
Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
A House committee with more than 50 members held a hearing about GameStop and the meme-stock mania for five hours, featuring six witnesses. In the end, it was all about Robinhood. Vlad Tenev, the chief of the brokerage app, fielded the most questions, which often cast him as the villain of the saga.

GameStop Hearing Was No Fun for Free-Trading Business Model; Questions were asked about Robinhood’s decision to restrict trading, but also about how it makes money from order flow. It will be hard to satisfy both concerns.
Telis Demos – WSJ
Lawmakers on Thursday had many questions on the finer points of U.S. equity-market structure, and some didn’t seem satisfied with the answers they were given. But their lines of questioning could still signal shifts in the environment that wouldn’t be to the benefit of online brokerages.

Covid-19 forces electronic shift in bond markets; Digital platforms are shaking up the staid world of corporate bond trading
Joe Rennison – FT
One of Wall Street’s quintessential images is fading in the coronavirus era, as electronic dealing sweeps away scenes of brash bond traders barking orders. As volatility surged last year, so did the percentage of corporate bond trades executed electronically. While consumers switched to online shopping and office meetings moved to Zoom, stuck-at-home traders turned to electronic platforms as a way to continue buying and selling bonds in pandemic-shaken markets.

Robinhood chief apologises over GameStop affair; Vlad Tenev admits a liquidity crisis led to trading curbs that outraged users
James Politi, Miles Kruppa and Eric Platt – FT
Vlad Tenev, the chief executive of Robinhood, apologised for his company’s role in the furore over trading in GameStop shares, as the online trading platform bore the brunt of a political grilling in Washington. “I’m sorry for what happened. I apologise,” Tenev said during an afternoon of questioning from Democratic and Republican lawmakers on the House Financial Services Committee.

Ocasio-Cortez Questions If Free Robinhood Trades Are Really Free
Jeff Kearns – Bloomberg
Representative Alexandria Ocasio-Cortez told Robinhood Chief Executive Officer Vlad Tenev that his firm’s faulty business practices undercut its promise of free trades, while urging him to share revenue it makes selling stock orders with customers. “Robinhood owes its customers a lot more than an apology because it has harmed their interests,” the New York Democrat and progressive icon said by video at Thursday’s House Financial Services Committee hearing on wild market swings in shares of GameStop Corp. and other stocks. She accused Robinhood of providing investors poor execution and lost rebates, adding that that makes its popular app far from free.

Citadel chief voices support for move to shorter settlement for US equities; The comments were made before the US House of Representatives’ Committee of Financial Services, which discussed the increased volatility from retail traders in January.
Joe Parsons – The Trade
Citadel’s Ken Griffin has voiced support to move settlement for the US equities market to T+1, as US lawmakers debate market structure in response to January’s retail trading craze. The comments from Griffin, who is CEO of one of the world’s largest hedge funds, were made before the US House of Representatives’ Committee of Financial Services, which discussed the increased volatility from retail traders that were spurred by the frenzy caused by online Reddit blog WallStreetBets (WSB).

Citadel’s Ken Griffin and Robinhood’s Vlad Tenev call for stock trades to be settled faster as GameStop hearings begin
Harry Robertson – Business Insider
Citadel Securities boss Ken Griffin and Robinhood chief Vlad Tenev will both call for a reduction in the time it takes to settle stock trades when they testify to Congress on Thursday over the GameStop saga.

Robinhood CEO’s Five-Hour Ordeal Is Capped by Ocasio-Cortez Duel
Misyrlena Egkolfopoulou, Annie Massa, and Anders Melin – Bloomberg
Tenev took most of the heat in hearing over GameStop frenzy; Lawmakers probe brokerage’s model, role for retail investors
For Vlad Tenev, the end couldn’t come soon enough. The House Financial Services Committee may have summoned the main actors in last month’s meme-stock frenzy for a hearing, but in reality their attention was centered on the Robinhood Markets chief executive officer and his brokerage’s starring role in the saga.

Robinhood, Citadel Spar With Lawmakers Over Retail Trading
Robert Schmidt, Benjamin Bain, and Jeff Kearns – Bloomberg
Democrats grill executives over wild surge for GameStop; Maxine Waters pledges to dig into potential conflicts
House Democrats sparred with the leaders of Robinhood Markets and Citadel Thursday, with lawmakers pressing the firms on whether they’re profiting at the expense of retail investors and complaining that they got few satisfying answers.

In GameStop Saga, Robinhood Is Cast as the Villain; Lawmakers at a congressional hearing kept coming back to the chief of the stock-trading app with pointed questions and a key argument: “Something very wrong happened here.”
Nathaniel Popper and Matt Phillips – NY Times
Politicians from both parties wanted to identify a villain for the mania that surrounded the trading in GameStop stock last month that roiled the markets, alarmed Wall Street and made winners and losers of many small investors. On Thursday, they took aim at the chief executive of Robinhood, the free trading app that fueled much of the buying and selling.

We were ‘dangerously close’ to collapse of ‘entire system,’ says Interactive Brokers founder ahead of GameStop hearing
Mark DeCambre – MarketWatch
Thomas Peterffy, founder and chairman of Interactive Brokers Group Inc., on Wednesday explained the dire situation in which the market stood in late January as individual investors on social-media platforms were banding together to send a handful of heavily shorted stocks dramatically higher.

Bitcoin ETF Roars in Debut With $165 Million of Trading Volume
Claire Ballentine – Bloomberg
Purpose Bitcoin ETF, ticker BTCC, debuted in Toronto Thursday; Largest cryptocurrency has surged fivefold in the past year
North America’s first Bitcoin ETF got off to a stellar start in its debut, with investors exchanging $165 million worth of shares. After a relentless surge in the world’s largest digital currency, the first Bitcoin product that’s officially labeled an exchange-traded fund debuted Thursday in Toronto. It’s worth noting, though, that Europe has several crypto-tracking products that function like an ETF. The new fund, called Purpose Bitcoin ETF (ticker BTCC), invests directly in “physical/digital Bitcoin,” issuer Purpose Investments Inc. said in a statement.

How Amsterdam is stealing a march on rivals as Brexit trading hub
Tommy Wilkes, Toby Sterling, Abhinav Ramnarayan, Huw Jones – Reuters
All the talk was of Frankfurt or Paris luring London’s financial business as Britain peeled away from the EU. Yet it is Amsterdam that is proving the most visible early winner.

Citadel and Robinhood reject conspiracy theory they halted ‘meme’ trades; They’ll make their case before the House Financial Services Committee tomorrow. Read Citadel chief Ken Griffin’s prepared remarks here.
Robinhood Markets and Citadel, central players in the GameStop Corp. saga that gripped markets last month, are using congressional testimony to push back against conspiracy theories circulating in Washington that they coordinated to restrict retail investors from adding to their bets.

Bitcoin ETF Roars in Debut With $165 Million of Trading Volume
Claire Ballentine – Bloomberg
Purpose Bitcoin ETF, ticker BTCC, debuted in Toronto Thursday; Largest cryptocurrency has surged fivefold in the past year
North America’s first Bitcoin ETF got off to a stellar start in its debut, with investors exchanging $165 million worth of shares. After a relentless surge in the world’s largest digital currency, the first Bitcoin product that’s officially labeled an exchange-traded fund debuted Thursday in Toronto. It’s worth noting, though, that Europe has several crypto-tracking products that function like an ETF. The new fund, called Purpose Bitcoin ETF (ticker BTCC), invests directly in “physical/digital Bitcoin,” issuer Purpose Investments Inc. said in a statement.

Power Comes Back in Texas, but Water Systems Are Crippled
NY Times
Millions of the state’s residents were urged to boil their water for safety after pipes cracked, wells froze and water treatment plants were knocked offline by this week’s powerful winter storm.

LIBOR Newsflash: Announcement on Official Cessation of LIBOR is Expected Soon
McMillan LLP
With only ten months left until the phase-out of the London Interbank Offered Rate (“LIBOR”), transition efforts should be well underway. In this bulletin, we discuss the ICE Benchmark Administration (the “IBA”) and/or the Financial Conduct Authority’s (the “FCA”) expected announcement about the official cessation of LIBOR, and highlight the modified timelines for transitioning from LIBOR to an alternate risk-free rate (“RFR”) recommended by the relevant working groups.

As Winter Sweeps the South, Fed Officials Focus on Climate Change; A top Federal Reserve official says climate scenario analysis could be valuable in making sure that banks mind their climate-tied weak spots.
Jeanna Smialek – NY Times
A top Federal Reserve official issued a stark warning on Thursday morning: Banks and other lenders need to prepare themselves for the realities of a world racked by climate change, and regulators must play a key role in ensuring that they do.

Texas Storms, California Heat Waves and ‘Vulnerable’ Utilities; Power failures have cast a spotlight on whether energy companies and regulators are doing enough to prepare for climate change and natural disasters.
Ivan Penn – NY Times
In California, wildfires and heat waves in recent years forced utilities to shut off power to millions of homes and businesses. Now, Texas is learning that deadly winter storms and intense cold can do the same.

Farmers From Kansas to Alabama Have Never Dealt With Weather Like This; Tyson, Cargill suspend some meat processing; ranchers race to save newborn calves
Jacob Bunge – WSJ
Brutal winter weather continued to batter the U.S. agriculture industry, as companies and farmers contended with snow, ice and cold temperatures that disrupted processing, snarled transport and killed livestock across the Midwest and South.

U.S. Natural Gas Shortage Hampers Blackout Recovery; Frozen oil and gas wells and pipeline infrastructure have reduced the fuel available to power plants
Christopher M. Matthews and Collin Eaton – WSJ
A giant shortage of natural gas is hindering a recovery from the devastating cold spell that left millions without power in the nation’s midsection. Natural gas production across the U.S. has fallen about 20% over the last week, a rapid decline driven by frozen oil and gas wells and pipeline infrastructure in Texas and other states. In Texas, which produces about a quarter of the country’s gas, production has fallen more than 30% and some of the largest power-plant operators say they have had difficulty getting enough gas.

How David Beats Goliath in Real Life (Audio)
Joshua M Brown – The Reformed Broker
In light of today’s Congressional hearings over the Robinhood / GameStop fiasco, I’m posting the new audio version of my post How David Beats Goliath in Real Life. As a reminder, me, Ben, Barry, Blair and the whole Ritholtz Mafia are now regularly turning our best posts into podcast “golden nugget” episodes – so if you like getting your info this way, be sure to subscribe!

Tiny-Company Boom Makes Markets Look Silly; Fourteen members of the Russell Microcap index have risen so much that they are now larger than the smallest S&P 500 stocks
James Mackintosh – WSJ
Stocks come and go, but every year a few tiny companies get promoted to the small-capitalization indexes. Some eventually make it all the way to the S&P 500. What they don’t do is go in the space of 18 months from being a penny stock with a market value of $39 million to be worth more than a dozen S&P 500 companies, yet that is exactly what FuelCell Energy Inc. FCEL -16.55% has done.

SIFMA, Alongside 10 Trade Associations, Publishes Principles for a U.S. Transition to a Low-Carbon Economy
Today, SIFMA, as a member of the U.S. Climate Finance Working Group, published principles for a U.S. Transition to a Sustainable Low-Carbon Economy.

India’s Stock Market Mania Defies Economic Reality; India’s stocks are outperforming those in similar markets, even as the pandemic may have exacerbated its longer-term economic challenges
Mike Bird – WSJ
Signs of speculation are rife in global markets right now. But India stands out: The roaring stock market there looks particularly disjointed from economic reality. India’s benchmark stock index, the Sensex, is up 22% since the beginning of 2020, almost exactly in line with the S&P 500. But the economic backdrop is quite different.


A U.S. Vaccine Surge Is Coming, With Millions of Doses Promised; New supplies should help the pace of vaccinations double in coming weeks
Drew Armstrong and Tom Randall – Bloomberg
The U.S. vaccine supply is poised to double in the coming weeks and months, according to an analysis by Bloomberg, allowing a broad expansion of doses administered across the country. Currently, the U.S. is administering 1.6 million doses a day, constrained by the recent supply of about 10 million to 15 million doses a week. But Covid-19 vaccine manufacturers and U.S. officials have accelerated their production timelines and signaled that the spigots are about to open, providing hundreds of millions of doses to match the growing capacity to immunize people at pharmacies and mass-vaccination sites.

Single Pfizer Shot Cut 85% of Cases in Israel Health Workers
Ivan Levingston, Robert Langreth, and John Lauerman – Bloomberg
Researchers see big anti-Covid effect within weeks of dose one; Findings boost U.K. move to speed vaccination with first shot
A single dose of the vaccine from Pfizer Inc. and BioNTech SE reduced Covid-19 infections by 85% in a study in Israel, bolstering the U.K.’s decision to speed immunizations by delaying a second shot.

G7 leaders put spotlight on vaccine donations to developing world; Rich countries divided over speed at which the west should share ‘surplus’ doses
George Parker and Aime Williams – FT
Joe Biden and leaders of the G7 group of rich democracies will on Friday vow to boost vaccine supply to the developing world, although divisions remain over the speed at which the west should share “surplus” doses.

Pfizer Vaccine Is Highly Effective After One Dose and Can Be Stored in Normal Freezers, Data Shows; Peer-reviewed study comes as some governments debate whether to delay second vaccine doses
Bojan Pancevski and Dov Lieber – WSJ
The Covid-19 vaccine developed by Pfizer Inc. and BioNTech SE generates robust immunity after one dose and can be stored in ordinary freezers instead of at ultracold temperatures, according to new research and data released by the companies.

Covid-19 Was Spreading in China Before First Confirmed Cases, Fresh Evidence Suggests; The number, and genetic sequencing, of the first cases identified by China suggest coronavirus was spreading before early December 2019
Betsy McKay, Drew Hinshaw and Jeremy Page – WSJ
New evidence from China is affirming what epidemiologists have long suspected: The coronavirus likely began spreading unnoticed around the Wuhan area in November 2019, before it exploded in multiple different locations throughout the city in December.

Behind America’s Botched Vaccination Rollout: Fragmented Communication, Misallocated Supply; The pace of Covid-19 vaccinations is picking up, but distribution sites are still recovering from initial errors in nursing-home plans, limited supplies and a balky flow of information
Sarah Krouse, Brianna Abbott and Jared S. Hopkins – WSJ
The record-fast creation of Covid-19 vaccines was a triumph. So why is it taking so long to vaccinate Americans? The answer starts with tens of millions of Covid-19 vaccine doses that sat unused in medical freezers across the U.S. in the early weeks of the rollout.

Short of Vaccine, States Find Hidden Stashes in Their Own Backyards; Millions of doses of coronavirus vaccine are still sitting in freezers, allocated in excess to nursing homes or stockpiled for later use. Now states are claiming them.
Sharon LaFraniere, Sheryl Gay Stolberg and Abby Goodnough – NY Times
When tiny glass vials of coronavirus vaccine began rolling off production lines late last year, federal health officials set aside a big stash for nursing homes being ravaged by the virus. Health providers around the country figured as well that it was prudent to squirrel away vials to ensure that everyone who got a first dose of vaccine got a second one.

Exchanges, OTC and Clearing

SGX seeks M&A deals to drive multi-asset strategy
Business Times
The bourse has operations in place across asset classes and now will concentrate on bolstering them, chief executive officer Loh Boon Chye said in an interview on Wednesday. That means seeking deals that bulk up the foreign exchange, fixed income, data and capital markets connectivity businesses. PHOTO: BLOOMBERG
[SINGAPORE] The Singapore Exchange (SGX) is exploring mergers and acquisitions (M&A) to drive its ambitions as a multi-asset exchange. The bourse has operations in place across asset classes and now will concentrate on bolstering them, chief executive officer Loh Boon Chye said in an interview on Wednesday. That means seeking deals that bulk up the foreign exchange, fixed income, data and capital markets connectivity businesses.

Arctic Fish lists on Euronext Growth Oslo
The Icelandic salmon farming company Arctic Fish has today been admitted to trading on Euronext Growth (ticker code: AFISH). “We intend to continue to invest and build up profitable and sustainable operations, where the farming is in harmony with the environment and society,” says Stein Ove Tveiten, CEO of Arctic Fish.

Otovo lists on Euronext Growth Oslo
Otovo has today been admitted to trading on Euronext Growth following a private placement of NOK 250 million to finance the solar energy platform’s European growth plans (ticker code: OTOVO).

Toronto Stock Exchange Lists World’s First Bitcoin ETF; TSX welcomes Purpose Investments Inc. and celebrates with a virtual market close tomorrow
Toronto Stock Exchange (TSX) today announced the world’s first bitcoin exchange traded fund (ETF), Purpose Bitcoin ETF, began trading under the symbols TSX:BTCC.B (Canadian dollar denominated ETF non-currency hedged units) and TSX:BTCC.U (U.S. dollar denominated ETF non-currency hedged units).

Full Year 2020 Market Highlights
The World Federation of Exchanges
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today published its Full Year 2020 Market Highlights Report. The report offers the first opportunity to study the impact of the events of 2020 on markets holistically and looks across market capitalisation, listed companies, IPOs, volumes and value traded in multiple assets classes including equities, derivatives futures, options and ETFs.


Cubs Owner Tom Ricketts Merges Bond Broker With Fintech Startup
Nick Baker – Bloomberg
Tom Ricketts, the owner of the Chicago Cubs, says his bond broker Incapital LLC lost its technological edge while he spent the past decade building one of the most-successful teams in baseball.
The billionaire believes he’s found a solution: merging the business with a San Francisco-based fintech startup called 280 CapMarkets LLC. The deal creates a new company called InspereX, with Ricketts serving as the chairman and largest owner. The companies declined to give terms of the deal.

Climate Fintech Is Coming
Nik Milanovic – Forbes
What do you get when you combine the buzziest tech sector with the most high-profile public policy issue? Financial technology combating climate change.
It would seem an unlikely pairing, but the last year witnessed an explosion in climate-focused fintech products and companies. The public’s focus on climate change is here to stay, which could continue to spur more exciting innovation in financial services focused on creating a greener world. It remains to be seen whether these products can generate a meaningful return (and thus merit continued investment), but this will be a common theme over the next year and beyond.

Investing Has Been Crazy. New Fintech Seeks to Make Sense of It All.
Natacha Rousseau – Entrepreneur
As data driven tech continues to pervade our digital lives, what impact can it make on our money?
Front (an automated strategy platform for everyday investors) and Katapult (a lease-to-own platform for consumers with low credit scores) operate at different ends of the market, but both are driven by a passion to give everyone more control over their money.

BestEx Research Names Richard Chase Chief Compliance Officer; Innovative Algo Provider Continues Strategic Expansion
BestEx Research
BestEx Research Group, LLC, a provider of high-performance algorithmic execution and measurement solutions for equities, futures, and foreign exchange trading, today announced the appointment of Richard Chase as Chief Compliance Officer of BestEx Research Securities, a subsidiary of BestEx Research Group, effective immediately. He will report directly to CEO Hitesh Mittal.

Itiviti and Diginex team up to launch front-to-back crypto trading solution; The pair said the launch was in response to a wholesale shift from institutional investors to digital assets, driven by dwindling returns in traditional assets.
Annabel Smith – The
Trading technology provider Itiviti has partnered with blockchain and cryptocurrency infrastructure specialist Diginex to launch a front-to-back crypto trading solution. Named Access, the front-to-back solution is powered by Itiviti’s Tbricks automation technology and offers portfolio and risk management for the trading of cryptocurrencies and crypto derivatives across platforms.


Robinhood To Let Users Deposit, Withdraw Dogecoin And Other Cryptos: What That Means For Investors
Shivdeep Dhaliwal – Benzinga
Robinhood Markets, Inc will allow its customers to withdraw and deposit cryptocurrencies such as Bitcoin (BTC) and the meme-themed Dogecoin (DOGE). What Happened: The broker said in a series of tweets that it is in the process of building deposits and withdrawals for all listed cryptocurrencies.

Bitcoin Nears $1 Trillion Value as Crypto Jump Tops Other Assets
Eric Lam – Bloomberg
Largest digital token is close to recent record above $52,000; Rally has stoked a more than 100% jump in crypto index in 2021
Bitcoin is closing in on a market value of $1 trillion, a surge that’s helping cryptocurrency returns far outstrip the performance of more traditional assets like stocks and gold. The largest token has added more than $415 billion of value in 2021 to about $956 billion, data c

Bitcoin Is Surging. Americans Still Don’t Get How It Works; A new survey shows that significant swathes of the population do not understand or trust cryptocurrencies.
Charlie Wells – Bloomberg
Mainstream financial institutions have started embracing cryptocurrencies. Main Street hasn’t. More than one in 10 American adults have never heard of cryptocurrencies such as Bitcoin, Ethereum and Dogecoin, according to a new survey by the Harris Poll. The data was provided to Bloomberg during a week when the value of a Bitcoin soared beyond $52,000 for the first time.

North America’s first bitcoin ETF captures flurry of trading on debut; Purpose Investments fund ranked among the most actively-traded securities in Toronto
Joshua Oliver – FT
North America’s first bitcoin exchange-traded fund attracted a jolt of trading volume as it made its debut on Thursday in Canada, marking the latest sign of the frenzy in cryptocurrencies.

Bitcoin Is Hitting Record Highs. Why It’s Not Too Late to Dig for Digital Gold; Investors intrigued by bitcoin’s surge but reluctant to buy it have some options for how to bet on the evolution of banking and payments. But they’re not cheap.
Telis Demos – WSJ
Digital currencies have the attention of the mainstream. Even America’s oldest bank can’t ignore them. Bank of New York Mellon, BK -1.68% founded in 1784 by Alexander Hamilton, announced last week it will help clients hold and transfer bitcoin and other cryptocurrencies. That followed an announcement from Tesla that the electric car maker purchased $1.5 billion worth of bitcoin. The combined excitement generated by two well-known companies likely played a role as the price of bitcoin hit $50,000 for the first time.

A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says; “If any issues arise that could affect the willingness or ability of both domestic and foreign investors to use USDT, the most likely result would be a severe liquidity shock to the broader cryptocurrency market,” the report says.
Omkar Godbole – Coindesk
According to analysts at JPMorgan, the bitcoin market could face severe liquidity shock if traders were to lose faith in Tether (USDT) – a stablecoin widely used to fund cryptocurrency purchases. “If any issues arise that could affect the willingness or ability of both domestic and foreign investors to use USDT (+0.07%), the most likely result would be a severe liquidity shock to the broader cryptocurrency market, which could be amplified by its disproportionate impact on HFT [high-frequency trading]-style market makers which dominate the flow,” analysts at JPMorgan mentioned in an 86-page report published Thursday.

Gene Simmons Endorses Cardano Because It’s ‘Cheaper Than Bitcoin’
Andrew Asmakov – Decrypt
Gene Simmons, the famous bassist of Kiss, has taken to Twitter to talk about cryptocurrencies. This time he said he had purchased $300,000 worth of Cardano (ADA). Explaining his reasons behind the decision, Simmons claimed that ADA is somehow more affordable than other coins. “It’s pennies compared to my other holdings like Bitcoin, which is over $50,000 a single coin. I believe everyone should be able to afford cryptocurrency. And here is one I believe in,” wrote the musician.

North America’s First Bitcoin ETF Hits $165M Trade Volume in First Day; The fund has experienced a flurry of demand where trade volumes hit well above the country’s typical day one ETF threshold.
Sebastian Sinclair – Coindesk
The first publicly traded bitcoin exchange-traded fund (ETF) in North America came out swinging on Thursday, its first day of trading. About $165 million worth of shares of the newly minted ETF changed investor hands in less than a day. The fund, which is managed by Canada-based Purpose Investments, has experienced a flurry of demand where trade volumes hit well above the country’s typical day one ETF threshold, according to Bloomberg Intelligence analyst James Seyffart.

Coinbase, Readying for Public Listing, Gets $77B Valuation From Nasdaq Private Market
Ian Allison – Coindesk
Cryptocurrency exchange Coinbase, which is preparing to trade publicly in the next few months, is being valued at $77 billion, based on trading of the company’s privately held shares on a secondary market. Those shares in the largest crypto exchange in the U.S. are changing hands on the Nasdaq Private Market at $303 a piece, according to two people with knowledge of the auction. That implies a total company value of about $77 billion – greater than Intercontinental Exchange Inc., the owner of the New York Stock Exchange. “The third weekly transaction closed on Friday and the clearing price was $303 a share,” said a source. “The first week it was 200 bucks a share, the second week it was $301 a share, and the third week it was $303 a share. So you can kind of see price discovery happening.” Coinbase declined to comment.

Binance’s BNB becomes the third largest crypto by market cap
Wolfie Zhao – The Block
BNB, the exchange token of Binance, has become the third largest crypto by market capitalization for the first time as its price rally continues. Data from CoinGecko and Binance-owned CoinMarketCap both show that BNB’s market capitalization has surpassed that of Tether around 4:00 UTC on Friday. As of writing, BNB’s market cap stands at $34.4 billion. BNB has mostly remained as one of the top 10 coins by market cap in the past. CoinMarketCap’s most recent snapshot on January 31 showed that BNB was ranked at the 10th spot back then when its price was changing hands at around $40.

Beijing’s new digital yuan test features ATMs that convert digital currency to cash
Wolfie Zhao – The Block
The latest digital yuan test in Beijing featured automatic teller machines that could convert China’s central bank digital currency to physical cash and vice-versa. The Chinese capital is the latest city to conduct a real-world digital yuan test. The $1.5 million trial took place during the Lunar New Year holiday in early February. As part of the test, the Industrial and Commercial Bank of China (ICBC) debuted eight ATMs in two of its branches in Beijing that had the icon of e-CNY (electronic Chinese yuan) on them.

Nvidia unveils new processor chip built specifically for Ethereum mining
Michael McSweeney – The Block
Graphics card maker Nvidia unveiled a new processor chip dedicated to Ethereum mining on Thursday — while also moving to render one of its top-shelf GPUs less useful for the process. Dubbed the Cryptocurrency Mining Processor or CMP, the product is specifically designed for use by miners who might otherwise use traditional GPUs to mine ETH or other cryptocurrencies that rely on similar processes. With the move, Nvidia is wading into the long-running tension between cryptocurrency miners and gamers, both of whom actively seek out the latest-generation GPUs upon release. This state of affairs has led to intermittent shortages and, more often than not, grumbling from gamers — particularly when cryptocurrency prices are on the rise.

Nvidia Redesigns Graphics Cards to Limit Their Use in Ethereum Mining
Zack Voell – Coindesk
Nvidia has announced new efforts to ensure its graphics cards “end up in the hands of gamers” instead of cryptocurrency miners.


A Tale of Two Carbon Prices to Shape Biden’s Climate Policy; The U.S. is updating a number with the potential to push federal regulations into overdrive
Gernot Wagner – Bloomberg
Imagine a $50 price per ton of carbon dioxide this year. Exxon Mobil Corp. has. The oil giant has joined BP Plc, Royal Dutch Shell Plc and others in support of just such a price. It would rise at an annual rate of 5%, plus inflation. In exchange, these companies expect that “all current and future federal stationary source carbon regulations, for example, would be displaced or preempted,” according to the Climate Leadership Council. The group’s plan is also backed by a number of economists.

Texas Restricts Sales of Natural Gas Outside the State—Is This OK? The Constitution’s powerful Commerce Clause seems to be an obstacle.
Peter Coy – Bloomberg
On Feb. 17, Texas Governor Greg Abbott resorted to a desperate measure to restore electricity. He told reporters he was banning natural gas from leaving the state through Feb. 21 to ensure that in-state power generators have enough, according to a Bloomberg News article. A copy of the order seen by Bloomberg showed that he’s requiring Texas gas to be offered for sale in-state before it can be shipped out, which is different but still a big change. As the Bloomberg article says, “Under the Constitution’s so-called commerce clause, state governments are prohibited from interfering in interstate trade. Abbott said a disaster declaration he issued on Feb. 12 gave him latitude to impose such restrictions.”

Biden to Ditch ‘America First’ in Appeal for Global Partnership
Justin Sink – Bloomberg
President to describe new foreign policy in G-7 summit, speech; Biden plans to urge against austerity, encourage investment
President Joe Biden will re-introduce himself and the U.S. to world leaders at a pair of international conferences on Friday, calling on industrialized democracies to partner in confronting the pandemic and climate change in a sharp departure from his predecessor’s foreign policy.

US lawmakers focus ire on Robinhood in GameStop recriminations; Trading app’s founder was on the defensive from start of a fiery hearing
FT reporters
Less than a minute into Vlad Tenev’s opening statement, Maxine Waters was already impatient with the Robinhood chief executive and pounding on the gavel. “I would like you to use your limited time to talk directly to what happened January 28 and your involvement in it,” said the veteran California Democrat who chairs the House financial services committee.

Robinhood, Citadel CEOs Grilled by Lawmakers in Wake of GameStop Saga; House panel presses executives, investors about recent options-trading drama
Paul Kiernan and Peter Rudegeair – WSJ
Robinhood Markets Inc. Chief Executive Officer Vlad Tenev offered an apology for the company’s decision to temporarily curb trading in some stocks, including GameStop Corp. , on Jan. 28 amid extraordinary volatility. “Despite the unprecedented market conditions in January, at the end of the day, what happened is unacceptable to us,” Mr. Tenev said after being questioned at a congressional hearing Thursday.

Some Democratic Lawmakers Push for Wealth Tax on New York Billionaires; State lawmakers search for revenues as the state faces an $8.2 billion deficit
Jimmy Vielkind – WSJ
New York state lawmakers are considering an unprecedented form of wealth tax as they search for revenues to plug a budget hole exacerbated by the coronavirus pandemic. A growing coalition of unions, progressive advocacy groups and Democratic officials has endorsed a slate of six revenue bills, including a so-called mark-to-market tax on billionaires, which would require them to pay capital-gains taxes each year as their assets appreciate, even if they don’t sell.

Texas, Land of Wind and Lies; When post-truth politics meets energy policy.
Paul Krugman – NY Times
Politicians are neither gods nor saints. Because they aren’t gods, they often make bad policy decisions. Because they aren’t saints, they often try to evade responsibility for their failures, asserting either that they did as well as anyone could have or that someone else deserves the blame.

Robinhood and Citadel come under fire during Reddit Rally hearing
Thornton McEnery – NY Post
The Reddit Rally saga made its way to Capitol Hill on Thursday with key players like billionaire Ken Griffin getting reamed out by lawmakers probing whether small investors are given a fair shake in investing. “You are doing a great job of wasting my time,” Rep. Brad Sherman, a California Democrat, blared at Griffin amid questioning over whether online brokers like Robinhood get the best deals for their clients by sending customer trades through Citadel.

2.5 Million Women Left the Work Force During the Pandemic. Harris Sees a ‘National Emergency.’; “In one year,” Vice President Kamala Harris said, “the pandemic has put decades of the progress we have collectively made for women workers at risk.”
Katie Rogers – NY Times
Vice President Kamala Harris said on Thursday that the 2.5 million women who have left the work force since the beginning of the pandemic constituted a “national emergency” that could be addressed by the Biden administration’s coronavirus relief plan.

A congressman asked Robinhood’s CEO to listen to the 12-second message that ends with a hang-up when users call the support line
Grace Kay – Business Insider
During the hearing conducted by the House Financial Services Committee on the GameStop frenzy, Rep. Sean Casten (R-IL) called Robinhood’s helpline and played the company’s 12-second message that ends in a hang-up to give viewers a sense of the support Robinhood users receive from the company.


Austria Finance Regulator Sees Frauds Rising Amid Crypto ‘Hype’
Leonard Kehnscherper – Bloomberg
Austria’s Financial Market Authority has seen a record in whistle-blower reports of potential fraud in 2020, with crypto currencies being a focus. Two thirds of the investment fraud reports were related to crypto- and digital currencies trading products, while the rest was, among others, related to stocks and gold, FMA said in a statement. The regulator said it saw a rise in scam offerings for digit

City regulator under fire from UK parliament over Woodford probe; Treasury select committee chairman demands clear timetable for investigation by FCA
Attracta Mooney and Chris Flood – FT
The UK’s financial watchdog is facing urgent calls by a senior parliamentarian to set out when it will conclude its long-running investigation into the implosion of Neil Woodford’s investment company, as anger grows over the disgraced stockpicker’s plans to launch a new asset management business.

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Evidology Systems Shortlisted For Two Awards At The 2021 RegTech Insight Awards
The revolutionary Regtech company, Evidology Systems Ltd., has been nominated for two awards at this year’s European RegTech Insight awards. The firm, which ensures businesses and financial services can be confident in their compliance, has been chosen as finalists in the “Best Vendor Solution for Managing Operational Risk” and “Best Innovative Technology for Regulatory Compliance” categories.

Federal Reserve Board announces final rule intended to reduce risk and increase efficiency in the financial system by applying netting protections to a broader range of financial institutions
Federal Reserve Board
The Federal Reserve Board on Thursday announced a final rule that is intended to reduce risk and increase efficiency in the financial system by applying netting protections to a broader range of financial institutions. The final rule amends Regulation EE (Financial Institution Netting) to apply netting provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) to certain new entities including swap dealers. The rule would also make minor clarifications to the existing activities-based test in Regulation EE to clarify how the activities-based test applies following a consolidation of legal entities.

Investing and Trading

Inflation Puzzle Has $42 Billion Fund Considering Rate Options
Rafaela Lindeberg – Bloomberg
The $42 billion Swedish pension fund AP1 may veer from its usual investment strategies and buy options as diverging outlooks for inflation look set to create a new opportunity for returns, its chief executive officer said. AP1 doesn’t typically invest in interest rate and foreign currency options “very intensively,” but circumstances are different now, Kristin Magnusson Bernard said in a phone interview.

Do not rule out a market panic next month; Immediate signal has been plunge in short-term T-bill rates since start of the year
John Dizard – FT
“Beware the Ides of March” (Julius Caesar, act one scene two) Everybody seems to be having a hard time finding the most tradeable forms of dollar cash. In the financial markets this has led to a shortage of T-bills, the form of issuance that can be most readily used as collateral for other trades. As Zoltan Pozsar of Credit Suisse says: “The long, three-year period of front-end collateral glut, which lasted from 2018 [to the beginning of February] is over.”

Jakob Stausholm: Rio Tinto’s man for a crisis; New chief promises a more collegiate approach after outcry over group’s destruction of a sacred Aboriginal site last year
Neil Hume – FT
Jakob Stausholm knows all about dealing with the fallout from a corporate crisis. As chief internal auditor at Royal Dutch Shell, he was one of the executives charged with getting to the bottom of a reserves reporting scandal that rocked the company in the early 2000s.

Tyson Foods Reaches Partial Deal to Save the Beef at Bankrupt Easterday Ranches; Meat giant will start moving some cattle to rival ranches while bankruptcy feud continues
Peg Brickley – WSJ
Tyson Foods Inc.’s meat-producing unit and bankrupt Easterday Ranches Inc. have a court-approved pact that will keep cattle moving toward the market while the ranch operation and Tyson try to settle their differences in bankruptcy court.

Are Broker Commissions Too High? Online home buyers do much of the work involved in acquiring a house. So why are brokers’ fees still calculated under the old system?
Debra Kamin – NY Times
Forty-four percent of new home buyers now begin their home search online as opposed to through referrals, according to the National Association of Realtors. The same organization found that 35 percent of brokers say they are relying on virtual tours to sell homes. And yet, despite technology shifting the power dynamic from brokers to buyers in the real estate industry, real estate commissions — notoriously higher in the United States than in other developed countries — haven’t budged.

Palantir Becomes an Unlikely Darling of the GameStop Crowd; Quarterly results and a lock-up expiration hit shares of the richly valued software maker, but it is finding support in online forums
Dan Gallagher – WSJ
Even a powerful crystal ball couldn’t have foreseen this. On Thursday, as the GameStop saga moved officially into the halls of Congress, the crowd that has been favoring the videogame retailer turned its eye to Palantir Technologies PLTR -7.05% —a Denver-based software company named for such a magical element in the “Lord of the Rings” saga. Palantir spent the day as a top trending stock on Reddit’s WallStreetBets forum—coming in second only to GameStop—according to TopStonks.com.

Environmental, Social and Corporate Governance

ECB Is Said to Weigh Disclosing Climate Risk in Bond Programs
Jana Randow – Bloomberg
Policy makers now focused on collecting data to gauge risks; Any initiatives said to build on risk-management concerns
The European Central Bank is strongly considering disclosing climate risks in its bond programs and will now focus on collecting the data that will help achieve that, according to officials familiar with the matter.

Central Banks Can’t Fix Climate Change, Czech Policy Maker Says
Peter Laca – Bloomberg
Central banks shouldn’t try to fight climate change, as doing so could endanger financial stability and undermine their independence, a top Czech monetary official said. Marek Mora, a deputy governor of the Czech National Bank, said regulations can’t be used to benefit banks financing projects aimed at fighting global warming or penalize those that don’t. Central banks “shouldn’t create the perception that they’re omnipotent,” and they must leave environmental policies to elected leaders, he said in a video blog published on Thursday.

Surge in ESG queries spurs ETF hiring spree at DWS; Clients need more detailed discussions to explain index differences, executive says
Dawn Cowie – FT
DWS is hiring salespeople in Switzerland, the UK, the Nordics and France to help support the growth of its exchange traded fund business, and respond to a surge in queries about environmental, social and governance issues.

Principles For A US Transition To A Sustainable Low-Carbon Economy
Climate change is one of the greatest global challenges facing our society, and financial firms as global capital providers play a key role in financing the creation and deployment of solutions that mitigate greenhouse gas emissions, promote green energy generation and strengthen community resilience. While individual institutions have a significant role to play in the global effort to address climate change, policy must provide a critical foundation.


BofA Names New Leaders in Fixed Income, FX After Departures
Lananh Nguyen – Bloomberg
Bank of America Corp. named Michael Maras head of global fixed-income, currencies and commodities research after David Woo decided to leave the company. It also appointed a new head of currency trading for Brazil.

Neil Woodford’s rocky return; A more remorseful man might have had a better chance of a comeback
Merryn Somerset Webb – FT
All political lives, unless they are cut off in midstream at a happy juncture, end in failure. So said Enoch Powell. Is it the same for fund managers? Hedge fund manager Paul Marshall of Marshall Wace thinks so — and says so in his new book 10.5 Lessons from Experience. I’m not sure he’s right. If you say it’s a failure to more or less benchmark an index for 30 years and retire to the Home Counties with a lucrative defined benefit pension long before you are 60, then, perhaps they have all failed.

Millennium emerges as top hedge fund investor in Spacs
Izzy Englander’s group had more than $4.4bn in blank-cheque companies at end of 2020
Ortenca Aliaj and Miles Kruppa – FT
Izzy Englander’s Millennium Management increased its investments in blank-cheque companies almost six-fold last year as hedge funds poured tens of billions of dollars into Wall Street’s hottest investment product.

HSBC Doesn’t Have to Give Documents to Huawei CFO, U.K. Judge Says; U.S. Justice Department has accused Meng Wanzhou of misleading the bank about Huawei’s ties to Iran
Simon Clark – WSJ
HSBC Holdings PLC doesn’t need to hand over banking documents requested by Huawei Technologies Co. Chief Financial Officer Meng Wanzhou as part of her effort to resist a U.S. extradition order, a judge in London’s High Court said.


Why Even Pristine Sweden Struggles With Green Energy
Jesper Starn – Bloomberg
As a world leader in renewable energy and a major exporter of low-carbon electricity, Sweden is among the green elite. Yet a cold snap provoked a political storm this winter when, in order to keep the lights on, the authorities started up a 52-year-old oil-fired power plant. A furious debate centered on the wisdom of decommissioning nuclear plants, and even the use of vacuum cleaners, exposing a divide over plans to rely more on wind power for everything from transport to factories. The fracas offers pointers to the many countries trailing Sweden on the path to a greener future.

Foreign Investors Cut Their Turkish Stock Holdings to Record Low
Tugce Ozsoy – Bloomberg
Portion of equity market held by non-residents falls to 45.5%; Overseas investors sold $857 million of equities in four weeks
Analysts may be talking up Turkish stocks, but foreign investors aren’t heeding the call. Non-residents held 45.5% of the market as of Feb. 17, the lowest since the data was first recorded in 2004, figures from Turkey’s shares depository show. As they headed for the exits, foreign investors were net sellers of $857 million of Turkish equities in just four weeks ended Feb. 12.

Ireland Readies to Fend Off ‘Vultures’ as NatWest Exits
Peter Flanagan – Bloomberg
U.K. lender in talks to sell loans to AIB, Permanent TSB; Move would lock investment funds out of mainstream banking
As NatWest Group Plc’s prepares to sell off about 20 billion euros ($24.2 billion) of loans as part of Ulster Bank’s demise, Ireland’s banks have been handed a head start over their international rivals. NatWest, which said Friday it’ll close down Ulster in coming years, is already in talks to sell 4 billion euros of commercial loans to AIB Group Plc. It also confirmed “early discussions” with Permanent TSB Group Holdings Plc and other banks about retail loans.

China Mulls Easing Capital Controls on Offshore Investments
Bloomberg News
China is considering relaxing restrictions to allow its citizens to invest in securities outside its mainland in a bid to facilitate two-way capital flows as it opens its own capital markets to more foreign participation. The State Administration of Foreign Exchange will conduct a study to see if it can allow domestic investors to use their $50,000 annual forex quota for purchases of securities and insurance offshore, Ye Haisheng, director of its capital account management department, wrote in an article published in China Forex Magazine. It also plans to remove the quota limit for individuals who take part in stock incentive programs of offshore-listed firms.

One Uniqlo Share for $1,000 Sparks Concern Over Nikkei Dominance
Shoko Oda, Toshiro Hasegawa, and Gearoid Reidy- Bloomberg
Fast Retailing operator increasingly influences the Nikkei 225; Tick size has jumped fivefold, weighting now at nearly 13%
Shareholders are cheering the record share price of Fast Retailing Co., the operator of casual fashion giant Uniqlo that’s just become the most valuable apparel retailer in the world. But some other market observers are sounding notes of caution over the stock’s ever-increasing influence on Japan’s Nikkei 225 Stock Average, as technical changes caused by its recent highs raise its already-outsized impact on the blue-chip gauge.

China’s clampdown on Jack Ma’s Ant boosts rivals; High-interest lenders fill market vacated by fintech group, increasing fears of rising defaults
Sun Yu in Beijing and Tom Mitchell – FT
China’s crackdown on Jack Ma’s Ant Group is boosting rival lenders that charge much higher interest rates, raising fears that Beijing’s drive to lower credit risk could actually spur a wave of defaults.

Italy’s Eni swings to annual loss after oil price collapse; The group made a return to profitability in the fourth quarter
Anjli Raval – FT
Italian oil company Eni swung to an annual loss in 2020, marking what its chief executive said was “a year like no other in the history of the energy industry”.


Could Brexit Destroy British Fashion?
Elizabeth Paton – NY Times
Not long before the latest fully-digital London Fashion Week began on February 19 — with a pared-down schedule that reflected the ongoing fallout of the pandemic on the sector — more than 450 leading industry figures, including designers like Paul Smith, Katherine Hamnett and Roksanda Ilincic, sent an irate letter to 10 Downing Street.

How performers lost out in ‘eye for an eye’ Brexit talks – POLITICO
Anna Isaac – Politico
No one expected a pitch-perfect Brexit trade deal — but musicians are demanding to know why the two sides were so out of tune on visa-free travel.
Artists are proving to be the first casualty in what one British official called “an unholy war” on labor mobility between the EU and the U.K. that ultimately saw both sides put politics before people, according to officials familiar with the negotiations.

Brexit Supply Chain Friction Persists as UK Manufacturing at Weakest in 9 Months
Lucy Meakin – Bloomberg
Supply chain disruptions pushed U.K. manufacturing output to its weakest level in nine months as friction moving goods across the border after Brexit persisted.
IHS Markit said more than half of all companies reporting lower exports in February blamed the decline on Britain’s departure from the European Union. That came as the rest of the economy showed signs of stabilizing after a rapid slump caused by the third national lockdown starting in January.

Brexit and the Financial Services Sector
The EU-UK Trade & Cooperation Agreement (‘TCA’), signed at the end of last year did not cover financial services. Commentators had been sanguine about the potential impact on the City of London as a global financial centre. Figures showing that only 7,500 jobs had been re-located to the EU (out of the approximately 1.1 million who work in the sector) and that already this year, four companies have floated on the main London stock market, with two more on Aim, seemed to dispel any fears that London might lose business to the EU.

Northern Ireland firms optimistic Brexit barriers will be eased
Lisa O’Carroll – The Guardian
Business leaders in Northern Ireland are optimistic that Brexit barriers preventing parcels, pets, potatoes and plants getting to the region from Britain will be eased after a meeting between Michael Gove and his EU counterpart, Maroš Šefcovic, on Thursday. They said the UK and the EU had a legitimate reason to remove or ease the barriers because they were having an impact on daily lives, in breach of a pledge in the Northern Ireland protocol that states the “application of this protocol should impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland”.

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Cboe set to launch Amsterdam derivatives exchange

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