The Broker Who Saved America

Jul 5, 2019

First Read

Hits & Takes
JLN Staff

Our friends at WILD decided to start a new tradition. They sent out an email on July 3 with the words of the Declaration of Independence. What a great idea!~JJL

An interview with CME Group’s Terry Duffy in French.~JJL

A sign of the times? Mad Magazine is going to stop publishing original content until it can fulfill its publishing agreements and then will cease operations.~JJL

The Commodity Futures Trading Commission (CFTC) will hold an open meeting on Thursday, July 11 at 10:00 a.m. at its headquarters in Washington, D.C. to consider the Supplemental Proposal on Exemption from Derivatives Clearing Organization Registration; Proposed Rule on Registration with Alternative Compliance for Non-U.S. Derivatives Clearing Organizations; and Proposed Rule on Customer Margin Rules relating to Security Futures. The meeting is open to the public with seating on a first-come, first-served basis. ~SR

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CFTC Issues Social Media Customer Protection Advisory
CFTC
The Commodity Futures Trading Commission (CFTC) today issued, “There’s Nothing to Like about Scammers on Social Media,” a Customer Protection Advisory that warns customers to beware of and avoid unregistered brokers and advisers, as well as fake testimonials and so-called trading experts on social media platforms. Fraud offenders can create many online profiles or anonymous identities, and use them in a coordinated way to lure people into schemes.
/jlne.ws/30hHCX8

***** I was battling this type of scam on the internet back when the internet was spelled with a capital “I”!~JJL

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The Declaration of Independence Unites and Divides Us; Since July 4, 1776, Americans have cherished the principles of “life, liberty and the pursuit of happiness”—but disagreed fiercely about how to apply them.
Jeffrey Rosen – WSJ
“I have never had a feeling politically that did not spring from the sentiments embodied in the Declaration of Independence,” President-elect Abraham Lincoln declared in Philadelphia in February 1861, standing in front of Independence Hall. The previous month, Lincoln had adapted language from the Book of Proverbs to emphasize to a Southern correspondent the place of the Declaration in his own thought. He wrote that “the expression of that principle [of Liberty for All], in our Declaration of Independence…was the word ‘fitly spoken’ which has proved an ‘apple of gold’ to us. The Union, and the Constitution, are the picture of silver, subsequently framed around it.”
/jlne.ws/30czIxZ

**** They had me at liberty.~JJL

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‘Wolf of Wall Street’ Producer Riza Aziz Arrested on Money Laundering Charges
Patrick Frater – Variety
Riza Aziz, producer of “The Wolf of Wall Street,” was arrested Thursday in Malaysia in connection with the looting of a massive investment fund set up by his step father and former Prime Minister of Malaysia, Najib Razak.
/jlne.ws/2XN0hfG

***** Money laundering inside a movie about money laundering?~JJL

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CryptoMarketsWiki Coin of the Week: Dogecoin (DOGE)
Elon Musk’s favorite digital asset continues to show surprising resilience. In May this year, Coinbase added Dogecoin trading on its platform for retail investors. Fans of the canine meme-themed cryptocurrency rejoiced, seeing it as a legitimizing move. Now Binance, the world’s largest cryptocurrency exchange by trade volume, has announced it will add trading support for Dogecoin later today. In response to the news, the price of Dogecoin spiked almost 32 percent, according to data from Coindesk.
/jlne.ws/2S0Trhh

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Wednesday’s Top Three
There’s something to be said for headline writing. Our top story of the day on Wednesday was Bloomberg’s The Mystery Millionaire Who Haunted London’s Insider-Trading Trial, about a guy named Alshair Fiyaz. Second was Crain’s Crain’s Notable Women in Finance. Third was the link to the new book by Tom Ditmer, former CEO of Refco, called Talkin’ Big: How an Iowa Farm Boy Beat the Odds to Found and Lead One of the World’s Largest Brokerage Firms. Refco went on to crash and burn in 2005 with ripple effects on the industry that lasted for years.

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Lead Stories

The Broker Who Saved America
Joshua M Brown – The Reformed Broker
You know Hancock and Washington and Franklin and Jefferson. You might even know Greene and Knox, Henry and Hale. And we know you know Hamilton, pretty tough to escape that one these days!
/jlne.ws/30eEWcw

High-Tech Disruptors of Bond Market Enjoy Stock Surge; Shares of two electronic bond-trading companies have gained as some investors foresee market transformation
Alexander Osipovich – WSJ
Investors have richly rewarded a pair of companies that are bringing electronic trading to the bond market, which has long been dominated by Wall Street banks making deals by phone, email and instant message.
/jlne.ws/30eI3Bb

Deutsche Bank gambles on a last throw of the dice; Mired in controversy for years, the lender is set to reveal yet another radical overhaul. But is Christian Sewing’s plan too ‘little too late’?
Patrick Jenkins and Stephen Morris and Olaf Storbeck – FT
June 4 1999 was a warm, sunny day in Frankfurt — perfect for the open-air party that Deutsche Bank was throwing in front of its twin-tower headquarters in the heart of Germany’s financial capital.
/jlne.ws/30fSrJe

Deutsche is having a Lehman moment in a roaring bull market; Miserable end to investment bank venture could have been avoided
Tom Braithwaite – FT
From a distance, Deutsche Bank’s capitulation is bizarre. Lehman Brothers failed during a full-blown financial crisis, with 26,000 employees losing their jobs. This weekend, Deutsche Bank’s sweeping restructuring of its investment bank will bring a similar level of mass redundancies — but after a decade-long bull market.
/jlne.ws/30hS4gX

UK watchdog wants hard evidence from banks on Libor shift
Huw Jones – Reuters
Banks must provide concrete evidence to show that they are ending the use of the Libor interest rate benchmark as a price reference in financial contracts, a senior Financial Conduct Authority official said on Thursday.
/jlne.ws/309HcBK

ErisX CEO explains why partnering directly with large brokers will help them win the cryptocurrency exchange race
Frank Chaparro – The Block Crypto
ErisX obtained a second license from the CFTC, allowing it to clear futures in addition to trading them; The Block sat down with ErisX CEO Thomas Chippas to talk about how ErisX plans to take on the futures market differently from its competitors
After obtaining a DCO license this week, ErisX is poised for a step into the futures market. The company has now acquired both DCM and DCO licenses, allowing them to both trade and clear futures.
/jlne.ws/30cZG4p

Farmers Built a Soybean Export Empire Around China. Now They’re Fighting to Save It; Trade tensions have hammered sales of soybeans to the Chinese, a major export market it took U.S. agriculture decades to create
Jesse Newman – WSJ
The U.S. Farm Belt is fighting to prevent an industry nightmare—the loss of its best customer for its biggest export. The customer is China and the export is soybeans, of which the U.S. shipped $21 billion abroad in 2017, far more than anything else farmers grow. That marked a tripling in two decades, the fruit of a sweeping effort, by nearly every arm of U.S. agriculture, to build a once-obscure crop into a blockbuster.
/jlne.ws/30frAgk

SEC to ease burden on companies that violate securities laws
Agency to make it easier to get waivers from penalties that curb ability to raise money
Kadhim Shubber – The Financial Times
Companies that violate US securities laws will be given quicker access to waivers they need to easily resume raising money for their business, the chairman of the Securities and Exchange Commission indicated on Wednesday. US securities laws include a variety of automatic penalties that kick in when the SEC imposes certain punishments in fraud cases or requires a firm to hire an independent compliance consultant.
/jlne.ws/3278QBn

Boris Johnson was blocked from accessing state secrets as foreign secretary because Downing Street believed he was a security risk
Thomas Colson – Business Insider
Theresa May repeatedly withheld sensitive intelligence from Boris Johnson when he was foreign secretary, because they believed he would leak the information.
/jlne.ws/30e1sSY

Commerzbank Wins Appeal in London Sexual Discrimination Case
Kaye Wiggins – Bloomberg
Bank wins right to a fresh hearing of lawsuit from employee; Gender stereotype issues would likely be key in new hearing
Commerzbank AG won the right to a new hearing in a London lawsuit where an employee successfully claimed she faced sex and maternity discrimination.
/jlne.ws/3094p7c

The Red Flags for Student-Loan Scams; Unscrupulous companies promise debt relief they can’t deliver. Here are the warning signs.
Cheryl Winokur Munk – WSJ
As student debt continues to rise, borrowers often are desperate to find some way, any way, to relieve the burden. And scammers are only too happy to help.
/jlne.ws/30cdqwn

A Fracking Experiment Fails to Pump as Predicted; Encana’s cube project suggests output problems occur if oil wells are drilled too close together
Bradley Olson – WSJ
Two years ago, Encana Corp. ECA -0.81% unveiled a supersize fracking operation that many said would represent the future of the U.S. drilling boom.
/jlne.ws/30cUPAd

Broadridge Buys TD Ameritrade’s Custody and Trust Assets
Zacks Equity Research, Zacks.com
Broadridge Financial Solutions, Inc. BR recently announced that it has completed the acquisition of retirement plan custody and trust assets from TD Ameritrade Trust Company, a subsidiary of TD Ameritrade Holding Corporation AMTD . The deal was announced on Apr 17, 2019.
/jlne.ws/30fvZQq

William Hill to close British betting shops, cut jobs after curbs
Sangameswaran S, Shashwat Awasthi – Reuters
William Hill (WMH.L) plans to cut about a third of its betting shops and jobs in Britain after the government slashed the maximum stake permitted on fixed-odds terminals, dubbed the “crack cocaine” of gambling by their critics.
/jlne.ws/307Vino

Why parts of Wall Street are fretting over ‘toxic’ loans; Leveraged-loan investor says private equity firms are abusing their market power
Robin Wigglesworth- FT
Steve Ketchum is not happy. The hedge fund manager is a big investor in so-called leveraged loans, a corner of the debt market that involves lending to riskier, lower-rated companies.
/jlne.ws/30hJjUu

Jury clears ex-Deutsche Bank executive of rigging Euribor; The verdict is another blow for the UK Serious Fraud Office’s attempts to convict bankers
Jane Croft – FT
A former Deutsche Bank executive has been cleared by a jury of rigging a key interest rate benchmark, handing another setback to the UK Serious Fraud Office in its attempts to convict bankers for alleged pre-crisis wrongdoing.
/jlne.ws/30nuT5h

Exchanges, OTC and Clearing

‘Cities of Tomorrow’ Index Launches Multi-Strategy Approach
STOXX
A new STOXX index combines a thematic approach with responsible criteria and low-volatility/high-dividend screens, highlighting the versatility of passive investing.
/jlne.ws/30dbYtE

Ice Clear Europe default fund contributions jump 21%
Alessandro Aimone – Risk.net
Members’ contributions to Ice Clear Europe’s default fund for the futures and options clearing service rose 21% to $3.4 billion in Q1 2019, the highest level on record.
/jlne.ws/30cDIP1

Cboe Global Markets Reports June 2019 Trading Volume
Cboe Mini – SPX (XSP) options set new monthly total volume, ADV and open interest records in June; Cboe repaid 1.950% Senior Notes due 2019 with cash on hand
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today reported June monthly trading volume and provided selected revenue per contract (RPC) guidance for the second quarter of 2019.
/jlne.ws/2xqt0YU

Aquis Exchange to offer share listings after striking Nex deal; Deal marks a significant step forward for Alasdair Haynes’ stock trading venue, which went public a year ago
Fareed Sahloul – Financial News
Aquis Exchange, the stock trading venue run by City veteran Alasdair Haynes, is moving into equity listings with the acquisition of a market for the UK’s smallest companies. Aquis said on July 5 that it will pay around £2.7m to buy Nex Exchange, which has 89 companies listed with a total market capitalisation of almost £2bn, from CME Group.
/jlne.ws/2JfBGYX

Aquis Exchange to expand into listings with Nex deal; UK share trading venue to buy exchange from CME Group
Philip Stafford – FT
Aquis Exchange, the UK share trading venue, is to expand into corporate listings with a deal to buy Nex Exchange, the market for fledgling shares, for a total of £2.7m.
/jlne.ws/30coFoz

HKEX expands closing auction session for equities and funds; Closing auction session at HKEX will now incorporate more than 2,600 securities.
By Hayley McDowell – The Trade
Hong Kong Exchanges & Clearing (HKEX) has confirmed plans to expand its closing auction session to cover all equities and funds traded on its stock exchange.
/jlne.ws/30nv40r

Traiana looks to automate post-trade processes for equity swaps market; Traiana is rolling out a new service that looks to ease manual, inefficient and risky post-trade processes.
By Hayley McDowell – The Trade
Risk management services provider Traiana has unveiled a new service that aims to fully automate post-trade lifecycle management of the equity swaps market.
/jlne.ws/30hLwiK

Open Interest in ESG Futures increased after June roll; June was the second expiration month for our ESG Futures, which were only introduced in February of this year.
Eurex
Volume in June (137,000 contracts) was more than five times higher than May (25,000 contracts), with particularly high turnover during the roll days. Average daily volume stood at 6,800 contracts in June compared to 1,800 since launch.
/jlne.ws/30hSzI5

Euronext announces volumes for June 2019
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for June 2019.
/jlne.ws/30c57k8

HKEX to Expand Closing Auction Session to All Equities and Funds
HKEX
Further CAS expansion three years after initial introduction in 2016; Effective on 8 October 2019 to cover all equities and funds; Turnover contribution in CAS versus CAS securities’ full day turnover has increased from 6 per cent to over 8 per cent since launch in 2016
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce the further expansion of its Closing Auction Session (CAS) to cover all equities and funds traded on The Stock Exchange of Hong Kong.
/jlne.ws/30hMP18

New Review Structure for Listing Committee Decisions and Appointment of Inaugural Listing Review Committee
HKEX
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), announces the establishment of the new review structure in relation to Listing Committee decisions and the appointment of members to the inaugural Listing Review Committee of the Main Board and GEM (together, the Listing Review Committee1).
/jlne.ws/30fyAK8

Appointment of Listing Committee Members
HKEX
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), announces the appointment of members to the Listing Committee of the Main Board and GEM (together, the Listing Committee1).
/jlne.ws/30fyG4s

Fintech

Traiana to Modernize Equity Swaps Market With Automated Post Trade Lifecycle Management Service
CME Group
Traiana, the leading infrastructure service for trade lifecycle and risk management solutions, today announced that it has launched a new service to fully automate the post trade lifecycle management of the multi-trillion dollar equity swaps market. Traiana’s Equity Swaps Lifecycle Management service will transform the market’s previously manual, labor intensive and inefficient post trade affirmation processes for clients globally.
/jlne.ws/30djR2e

Revolut CEO Nikolay Storonsky on the fintech unicorn’s journey
Ryan Browne – CNBC
“Get sh– done.”
Those are the words on a neon sign at fast-growing fintech firm Revolut’s London headquarters. The first two letters of the word in the middle aren’t lit up, though, so it read “get it done” instead.
/jlne.ws/2XIpWWZ

Cryptocurrencies

Brazil’s BTG Pactual Plans $1 Billion Crypto Token Partnership
Alastair Marsh – Bloomberg
Banco BTG Pactual SA, Latin America’s biggest standalone investment bank, has teamed up with Dubai asset manager Dalma Capital to sell more than $1 billion worth of so-called security tokens.
/jlne.ws/30eBgaI

Japan’s Crypto Exchange Association Just Lost Influential Boss
Tim Alper – CrytpoNews.com
The CEO of Japan’s SBI Group, Yoshitaka Kitao, has stepped aside as the head of the self-governing Japan Virtual Currency Exchange Association (JVCEA) just over two weeks after he was re-elected to the role.
/jlne.ws/308YfE6

Bank of Japan: Adopting Central Bank Crypto Would Mean Dropping Cash
Daniel Palmer – Coindesk
An official at the Bank of Japan (BoJ) has ruled out the use of central bank digital currencies because to do so may require the country to abandon cash. According to a report by Reuters, Masayoshi Amamiya, deputy governor of the Japanese central bank, on Friday cast shade on the notion that central banks could make negative interest rate policies more effective by issuing their own digital currencies (CBDCs).
/jlne.ws/2xwgRBA

Cryptocurrency Derivatives Face U.K. Ban; Financial Conduct Authority calls products unsuitable for small
investors
Steven Russolillo – WSJ
A British regulator proposed a ban on selling derivatives based on bitcoin and other digital currencies to individual investors, calling these products “unsuitable investments” for nonprofessionals.
/jlne.ws/30cUEF3

Dogecoin Price Surges 37% Following Binance Listing Announcement
Daniel Palmer – Coindesk
The price of the popular dogecoin cryptocurrency is surging after the announcement that it will soon be listed on the Binance exchange. Binance said in a support notice that trading will open for dogecoin (DOGE) at midday (UTC) Friday. The exchange will at launch offer trading pairs for DOGE against Binance coin (BNB) and bitcoin (BTC), as well as the stablecoins tether (USDT), Paxos standard (PAX) and USD Coin (USDC). Users can already deposit DOGE in preparation for trading, the exchange said.
/jlne.ws/2XSCbjw

‘I Guess I’ll Have to Hodl It’ — Peter Schiff Admits Having Bitcoin
William Suberg – Cointelegraph
Veteran gold bug and bitcoin (BTC) skeptic, Peter Schiff, has taken delivery of $1,350 worth the cryptocurrency after the industry sent him donations on July 4. Schiff, who is well known for warning investors not to trust bitcoin as replacement for gold, triggered the goodwill gestures after becoming the topic of a Twitter debate with Morgan Creek Digital co-founder, Anthony Pompliano. Pompliano (also known as Pomp), highlighted the fact that Schiff in fact does own some BTC despite his negative comments. Schiff responded that it was a token amount given as a gift – just $100 – after which Pompliano requested his BTC address in order to double it.
/jlne.ws/2NBRMQK

Banco de Venezuela Must Accept Petro Cryptocurrency, Maduro Says
Rachel McIntosh – FinanceMagnates
Venezuelan President Nicolas Maduro has ordered Banco de Venezuela, the country’s largest bank, to begin accepting deposits of the Petro, the nation’s controversial cryptocurrency, in all of its branches. The news was originally reported in a Tweet by the country’s Finance Ministry on July 4th.
/jlne.ws/2XrKoH6

Six Arrested Over Cloned Crypto Exchange That Stole EUR24 Million
Daniel Palmer – Coindesk
A fake exchange website has managed to steal EUR24 million (over $27 million) in cryptocurrency from thousands of victims. European law enforcement agency Europol said in a press release Wednesday that six individuals have now been arrested over the scam in an operation that also involved the UK’s South West Regional Cyber Crime Unit and National Crime Agency, along with Dutch police and Eurojust.
/jlne.ws/309CmV6

Coinsquare buys majority stake in Just Cash in bid to make world’s ATMs crypto-friendly
The Block
Cryptocurrency trading platform Coinsquare is making a bid to make digital assets more accessible. Coinsquare has announced it has made a controlling investment in software provider Just Cash, whose tech will allow any ATM to sell cryptocurrency. The software does not disrupt the ATM network, no hardware changes are required and there are no additional costs to the operator. Coinsquare CEO Cole Diamond believes crypto-friendly ATMs are key to making digital assets accessible to the masses.
/jlne.ws/2FTGXmX

Crypto Conference Shows Bitcoin Getting Whole Lot More Fun Again
Joanna Ossinger – Bloomberg
As little as six months ago, Bitcoin was moribund, with prices languishing at a fifth of their record high, disappointing a mass of cryptocurrency enthusiasts who had grown use to extreme — and often upwards — moves in the virtual currency. But this week’s Asia Blockchain Summit in Taipei highlighted how volatility is back, reviving the excitement around crypto trading.
/jlne.ws/2NIVlV8

Federal Judges Orders Jail Following Civil Contempt Hearing Featuring Crypto Assets
Stephen D. Palley – The Block
If you have been following the ongoing Kleiman v. Wright case in Florida federal court you know that the court is currently considering whether Craig Wright should be held in civil or criminal contempt of court. What does this mean? Is there anything special about contempt in crypto cases? A June 27, 2019 opinion from federal court in California suggests that the basic rules remain the same: cryptocurrency and lying to a federal judge don’t go together very well, at least not if you’re interesting in staying out of jail, and judges are free to disregard or discount the testimony of witnesses they don’t believe.
/jlne.ws/2Xr71vp

Craig Wright Uses Falsified Docs to Prove Innocence in Kleiman Case: Report
Helen Partz – Cointelegraph
Self-proclaimed Bitcoin (BTC) creator Craig Wright has allegedly provided fabricated court documents to prove a trust deed with his plaintiffs, as seen from documents revealed by trial lawyer Stephen Palley on Twitter on July 3. According to Palley, the self-styled Satoshi Nakamoto has failed to prove his case by presenting court documents that Palley alleges to be fake, as they contain multiple chronological discrepancies.
/jlne.ws/2xw0u8f

Bitcoin investment scam steals tens of thousands from couple as cryptocurrency losses grow
Jordan Hayne – ABC.net.au
Canberra couple warns they were drawn into a sophisticated scheme over more than a year
The couple were able to withdraw thousands of dollars, but lost tens of thousands more
/jlne.ws/30eJ0cK

Securities Commission Malaysia Cautions Investors Against Unauthorised Initial Coin Offerings And Digital Asset Exchanges
Mondovisione
The Securities Commission Malaysia (SC) has noted an increase in the number of queries and complaints from members of the public regarding initial coin offerings (ICOs) and digital asset exchanges (DAX).
/jlne.ws/30cWRAl

Politics

Judy Shelton, a Goldbug Who Bends to Fit Trump; The Fed benefits from alternative thinking, but Ms. Shelton’s has flaws
Greg Ip – WSJ
Ever since the world left the gold standard, a die-hard band of goldbugs has demanded the U.S. return. President Trump just said he intends to nominate one of them, Judy Shelton, to be a Federal Reserve governor.
/jlne.ws/30hOl2X

Trump’s Border Obscenities Will Shame America for Decades; The president’s unwillingness to chart a different immigration course is being thrown into high and tragic relief along the southern U.S. border.
Timothy L. O’Brien – Bloomberg
“Insanity is relative. It depends on who has who locked in what cage.” ? Ray Bradbury
We’ve now had several months of reports of inhumane and obscene conditions at the migrant detention camps managed by the Trump administration along the southern U.S. border with Mexico. The myriad, sordid details are already part of a larger stain on America’s collective ethos; they will disfigure the country’s reputation for generations to come.
/jlne.ws/30cjhSn

Boris Johnson is poised to become prime minister. Is he up to the job?; How colleagues, critics and Tory members view the man most likely to enter Downing Street
George Parker and Sebastian Payne- FT
Tie askew, hair mussed into a state of tonsorial turmoil, one sock inside out, Boris Johnson is facing his first major audition for the job he has craved all his life. He knows what is coming. “Why were the police called to your house in the early hours of Friday morning?” asks Iain Dale, the moderator of last month’s Conservative leadership hustings in Birmingham. An uneasy murmur spreads along the gathered rows of party members.
/jlne.ws/30hOVh9

Osborne eyes top IMF role to replace Lagarde; Former UK Chancellor thinks he is a strong candidate
Anna Fedorova – Investment Week
Former UK Chancellor George Osborne has thrown his name into the hat for the role of head of the International Monetary Fund (IMF), after current boss Christine Lagarde was nominated to become the next chief of the European Central Bank (ECB).
/jlne.ws/3091RGa

Be ‘Prepared for Anything’ as Trump Slams Europe, China on FX
Katherine Greifeld – Bloomberg
Dollar falls to day’s low after president’s latest tweet; Call-to-action has FX analysts considering U.S. intervention
U.S. President Donald Trump’s latest accusation of currency manipulation has foreign-exchange analysts game-planning the administration’s next move.
/jlne.ws/309FYXa

Why Bernie Sanders’ Wall Street Tax Isn’t Likely to Raise Trillions Like He Says
Michael Rainey – The Fiscal Times
Presidential candidate Sen. Bernie Sanders has proposed a financial transactions tax to cover the cost of making some types of higher education free while canceling $1.6 trillion in student debt. Here are the details of the plan from Sanders’ campaign:
/jlne.ws/2NtaCcI

Regulation

National Futures Association Proposes Overhaul of its Member Requirements for the Supervision of Branch Offices and Guaranteed Introducing Brokers
Gary DeWaal, Kevin M. Foley, Christian Hennion, Carl Kennedy, Leonard Licht – Katten Muchin Rosenman LLP
The National Futures Association (NFA) has proposed updated guidance (the Proposed Guidance) for all of its member firms—including futures commission merchants (FCMs), retail foreign exchange dealers (RFEDs), introducing brokers, commodity pool operators and commodity trading advisors—related to those firms’ supervision of their branch offices and/or relationships with their guaranteed introducing brokers (G-IBs).1 The Proposed Guidance will supersede and replace existing interpretive guidance associated with NFA Rule 2-9 for the supervision of branch offices and G-IBs.2
/jlne.ws/30eDgQe

John Berry, Associate Regional Director in Los Angeles Office, to Leave Agency
SEC
The Securities and Exchange Commission today announced that John W. Berry, Associate Regional Director for enforcement matters in the Los Angeles Regional Office, is leaving the agency this month after eight years of service.
/jlne.ws/30eETgN

SEC Proposes to Align Margin Requirements for Security Futures With Requirements for Similar Financial Products
SEC
The Securities and Exchange Commission (SEC) announced today that it has proposed to align the minimum margin required on security futures with other similar financial products. The proposal—which, if the CFTC votes in favor of, would be a joint CFTC-SEC proposal—would set the minimum margin requirement for security futures at 15 percent of the current market value of each security future.
/jlne.ws/30hEaf8

Statement on Margin for Security Futures
Commissioner Robert J. Jackson – SEC
As always, I want to begin by thanking our Staff for the hard work reflected in today’s release. In particular, Tom McGowan and Sheila Swartz provided helpful briefings to my Office, addressing a wide range of questions in connection with this proposal.
/jlne.ws/3091awy

Statement Regarding Offers of Settlement
Chairman Jay Clayton – SEC
When the Securities and Exchange Commission is considering filing (or has filed) an action alleging violations of the federal securities laws, it often is in the public interest to pursue a timely, reasonable and consensual resolution of the matter. The Commission has long recognized that an appropriately-crafted settlement can be preferable to pursuing a litigated resolution, particularly when the settlement is agreed early in the process and the Commission obtains relief that is commensurate with what it would reasonably expect to achieve in litigation. In plain language, the sooner harmed investors are compensated, the offending conduct is remediated, and appropriate penalties are imposed, the better.
/jlne.ws/30cUUnt

Watchdog imposes $5.8 mln fines on Deloitte, partner for audit failures
Reuters
The Financial Reporting Council has fined Deloitte and one of its partners a total of 4.62 million pounds ($5.81 million) for misconduct in relation to the audit of financial statements of Serco Geografix Ltd for the years 2011 and 2012.
/jlne.ws/30djsNg

Barclays censured by UK watchdog over treatment of small businesses; UK bank made smaller companies open account to access other products, regulator says
Sarah Provan – FT
Barclays must reimburse smaller businesses compensation that amounts to a drop in the ocean compared with the bank’s own income after it broke rules that were designed to protect the companies, the UK’s competition watchdog said on Thursday.
/jlne.ws/30cWPbF

Secondary Private Securities Market Gets Revamped
Rob Daly – Traders Magazine
Although blockchain and smart contracts continue to push illiquid private securities secondary market towards greater transparency and liquidity, the US Securities and Exchange Commission is mulling a possible comprehensive update to their regulatory framework.
/jlne.ws/2FR6CfS

Beyond Ratings SAS’ CRA registration withdrawn
ESMA
The European Securities and Markets Authority (ESMA) has today withdrawn the credit rating agency (CRA) registration of the French Beyond Ratings S.A.S.
/jlne.ws/30h3YYq

Investing and Trading

This Easy Climate Fix Has More Potential Than Previously Thought; A new analysis finds nations could be growing forests where they aren’t, removing millions of tons of carbon from the atmosphere.
Eric Roston – Bloomberg
A simple climate fix may be hiding in plain sight: 3.5 million square miles of land capable of supporting new forests and removing 750 billion tons of CO2 from the air. The amount raises the potential upper bound for carbon renewal enough to make international reforestation goals “undoubtedly achievable,” according to new research.
/jlne.ws/30gSOD0

Billionaire U.S. Coal Baron Chris Cline Dies in Helicopter Crash
Lynn Doan – Bloomberg
Cline created Foresight Energy to expand into Illinois mining; Born into coal, he was among the industry’s richest chiefs
Christopher Cline, the billionaire coal tycoon best known for reviving Illinois’s mining industry and making a fortune doing it, died in a helicopter crash Thursday.
/jlne.ws/30fKB2g

After brutal spring floods, U.S. farmers face big losses
Stephen Starr – Reuters
The planting season ended more than a month ago, but much of 39-year-old Greg McGlinch’s 450-acre farm in Darke County, Ohio, is either under water or still saturated from record spring rains.
/jlne.ws/30jjseP

Mamma mia! Italy plays catch up with world bond rally
Dhara Ranasinghe – Reuters
Italy has joined a huge rally in world bond markets, with yields set on Friday for their biggest weekly fall in more than a year as Rome avoided a clash with the European Union over its fiscal policy for now and hopes for monetary easing soon grow.
/jlne.ws/2L2setT

Why Can’t Global Equity Markets Match the U.S.?; The recent outperformance isn’t a new phenomenon. Also, REITs get no boost from low rates, equity inequality and EU male resentment.
John Authers and Robert Burgess – Bloomberg
Americans have a fair amount to celebrate on this national holiday. Or at least, those who have money tied up in the stock market do. The main U.S. stock indexes closed at all-time highs on the eve of Independence Day. There are many reasons to find this surprising or disconcerting, which I will come to, but it is worth stepping back to look at the awe-inspiring way in which Corporate America continues to outpace the rest of the world.
/jlne.ws/30c0qH2

Climate change lawsuits spreading around the world, says report
Jack Guy, CNN
Legal action on climate change has become a global phenomenon, with lawsuits launched against governments and corporate interests in 28 countries so far, according to new research published Thursday.
/jlne.ws/309GVic

Too Many Companies Drain Value From the Economy; That’s the opposite of what they’re supposed to do.
By Noah Smith – Bloomberg
Defenders of free markets have always portrayed them as rife with healthy competition. Striving to outdo each other in providing high-quality products to consumers at ever-lower prices, according to this narrative, companies only profit from the hard work they do and the risks they take. This means that corporate profits should grow roughly at the rate of the economy as a whole. As for stock prices, they can grow faster than profits if investors’ appetite for risk increases, or if interest rates go down.
/jlne.ws/30fRpgk

Institutions

Billionaire Alwaleed Hires Deutsche Bank’s Saudi CEO for Deals
Matthew Martin – Bloomberg
Tamim Jabr is set to join Kingdom Holding later this year; Firm has stakes in ride-hailing firm Lyft, hotel chain Accor
Prince Alwaleed bin Talal’s investment firm Kingdom Holding Co. hired Deutsche Bank AG’s chief executive officer in Saudi Arabia as head of international investments, people familiar with the matter said.
/jlne.ws/30ezZ3n

How a German Banker’s Milan Holiday Led to Arrest, U.K. Trial
Jonathan Browning, Sergio Di Pasquale, and Kaye Wiggins – Bloomberg
Hauschild arrested in Italy during trip with his spouse; Ex-Deutsche Bank trader was acquitted of fixing Euribor
Andreas Hauschild’s Italian holiday lasted a lot longer than he expected. The quick trip to Milan nearly ended in disaster when Italian police swooped on the former Deutsche Bank AG executive, arresting him at a hotel where he was staying with his wife last year. Hotel staff had taken his passport details, triggering an alert that there was an extradition warrant from the U.K. where he was wanted on charges from 2015 that he conspired with other traders to fix a key benchmark rate.
/jlne.ws/30eEmLQ

BNP Paribas to cut Asia analysts in outsourcing pact with Morningstar; Move comes as French group continues to look for ways to cut costs at its investment bank
Emily Horton – Financial News
BNP Paribas will cut around a dozen analysts in Asia Pacific after striking a deal to outsource coverage of stocks in the region to Morningstar, the information provider. It comes as the French group continues to look for ways to cut costs at its investment bank.
/jlne.ws/30hN8bV

Deutsche Bank staff at ‘panic stations’ with fresh job cuts looming
Paul Clarke and Fareed Sahloul – Financial News
Deutsche Bank could begin a fresh round of job cuts across its business at the start of next week, as part of a radical new restructuring affecting as many as 20,000 staff at the stricken German lender.
/jlne.ws/2JchYNw

Deutsche Bank plans separate “corporate bank” unit as part of overhaul – report
Reuters
Deutsche Bank is planning to create a separate “corporate bank” unit that will include its transaction banking activities, the Sueddeutsche Zeitung reported on Thursday.
/jlne.ws/30eFYoS

Brevan Howard Main Hedge Fund Posts Best First Half in a Decade
Nishant Kumar and Will Mathis – Bloomberg
The hedge fund gained 3.9% in June, the most since May 2018; May gains helped drive Master Fund up 9.3% in first six months
Brevan Howard Asset Management’s flagship hedge fund returned 3.9% in June, capping off its best first half since 2009. The Master Fund is up 9.3% in the first six months, building on a 12.4% gain in 2018, according to an investor document seen by Bloomberg. That kind of performance is helping fuel a turnaround for billionaire Alan Howard’s fund, which in May saw its first net inflows in five years.
/jlne.ws/309F2lC

German prosecutors intensify Deutsche Bank client investigation: source
John O’Donnell, Tom Sims – Reuters
German prosecutors are escalating a money laundering inquiry involving Deutsche Bank (DBKGn.DE), including planned raids on wealthy former clients, a person with direct knowledge of the matter told Reuters.
/jlne.ws/30fvpSI

Deutsche Bank Investment Bank Head Ritchie Leaves Amid Overhaul
By Steven Arons – Bloomberg
Deutsche Bank AG investment bank head Garth Ritchie is leaving amid an imminent overhaul that’s shaping up to be the largest in the lender’s recent history.
/jlne.ws/30eJDD7

Deutsche Bank’s Fleeting U.S. Dreams to Be Unraveled in Revamp
By Steven Arons – Bloomberg
German lender may start informing staff of cuts as from Monday; Board is set to decide on sweeping job cuts at weekend meeting
A little over two decades ago, Deutsche Bank AG set out to become a Wall Street giant. This weekend, Chief Executive Officer Christian Sewing will probably pull the plug on that dream for good.
/jlne.ws/30aC1BN

Bank CEOs Wanted After Wave of Departures in Northern Europe
By Ruben Munsterman , Frances Schwartzkopff , and Niklas Magnusson – Bloomberg
From ABN Amro to Swedbank, there are vacancies at the top; Headhunters see challenges in dwindling pool of executives
Top bankers in Northern Europe should expect calls from headhunters.
/jlne.ws/30kDAND

Societe Generale restructures business lines amid cost cutting plans; Major restructure at Societe Generale is part of the bank’s plans to reduce costs by EUR500 million.
By Hayley McDowell – The Trade
Societe Generale has made several major changes to its business lines and appointed a new head of investment banking, as it continues with plans to drastically cut costs by EUR500 million.
/jlne.ws/30kKxyh

Regions

In Water-Stressed India, Farmers May Be Asked to Irrigate Less
Bloomberg
India should provide incentives to farmers to adopt efficient water use to avert a looming crisis, according to the Economic Survey presented by Finance Minister Nirmala Sitharaman in parliament.
/jlne.ws/30cRaSX

China’s War on Trash Is the World’s, Too; Shanghai’s ambitious recycling program will be a critical test of whether the globe can handle a growing mountain of garbage.
Adam Minter – Bloomberg
Trash is the talk of Shanghai. Starting Monday, the city will require residents and businesses to sort their waste and recyclables into separate bins. The task is towering: Shanghai generates more than 9 million metric tons of garbage every year and — like every other city, town and village in China — it lacks even a rudimentary municipal recycling system.
/jlne.ws/30eCx1u

Global Bond Party Bypasses China; Yields on sovereign debt have dropped to multiyear or record lows in many places. In China, they are roughly where they were at the start of the year.
Shen Hong – WSJ
China’s $2.2 trillion government bond market has been noticeably absent from a global rally this year. Some investors are betting Chinese debt catches up to the trend in the months ahead.
/jlne.ws/30dhH2C

New green bond scheme to support sustainable commodities; Initiative aims to cut impact on Brazil’s Cerrado by financing use of degraded savannah
Shaun Kingsbury – FT
Global trade is already dominated by the world’s major commodities and this shows no sign of changing or slowing down. But buyers and traders are increasingly calling for cleaner, greener `commodities, not just to minimise environmental impact but also to bolster and secure clean supply chains.
/jlne.ws/30gAcmN

Danske Bank crisis has a warning for all banks
TheStar.com.my
Danske Bank A/S has been dealing with negative interest rates longer than any other major bank. That’s why its latest crisis, which cost a top executive his job, carries an important warning for its peers in Europe.
/jlne.ws/30cWllR

Rogue Trader Skirts U.S. Sanctions to Buy Maduro Regime’s Oil
Lucia Kassai – Bloomberg
MS Internacional has done deals worth $130 million with PDVSA; It’s owned by Dragoslav Ilic, a Serb with a Panama base
U.S. efforts to drive Venezuelan President Nicolas Maduro from power by sanctioning Americans who buy and finance his country’s oil have failed so far partly due to people like Dragoslav Ilic, a Serb with a Panamanian business who’s trading Venezuelan oil in the shadows and helping to prop up the embattled regime.
/jlne.ws/30joAj5

A giant heat dome over Alaska is set to threaten all-time temperature records
Ian Livingston – Washington Post
All-time heat records are at risk in Alaska in coming days as a massive and abnormally intense area of high pressure locks in and strengthens over the region.
/jlne.ws/30gB7DL

Li Ka-Shing’s Canadian Bet Aims to Halt Doctors’ Paper Trails
Natalie Obiko Pearson – Bloomberg
Billionaire is biggest outside investor in Well Health; Shares of the healthcare startup have doubled this year
It’s an unexpected bet by Hong Kong’s richest man: a penny stock seeking to modernize clinics for Canada’s overstretched family doctors, many of whom are stuck in the age of paper charts.
/jlne.ws/30e7hzO

Quantum Global Says Swiss Probe Over Angola Fraud Closed
By Hugo Miller – Bloomberg
U.K. freezing order on Quantum-managed assets reversed in 2018; Angolan charges against Bastos dropped earlier: Quantum
Swiss prosecutors ended an investigation that had involved Jean-Claude Bastos and his company Quantum Global Group after Angolan prosecutors dropped a similar case earlier this year.
/jlne.ws/30e9k6Y

Hedge fund Marshall Wace cranks up bets against Germany Inc; EUR289m short position in BASF is latest in series of wagers against German giants
Laurence Fletcher – FT
Marshall Wace has taken a huge short position in chemicals group BASF, the latest in a string of iconic German companies to be targeted by the London-based hedge fund.
/jlne.ws/30d0B4P

China ‘cracks down’ with probe into iron ore price increase; Steel demand and lower supply this week drive prices to five-year high
Christian Shepherd – FT
China is investigating the cause of a steep rise in iron ore prices imported into China in an effort to “crack down on abnormal behaviour”, an industry association official has said.
/jlne.ws/30cn9Tp

Brexit

The Battle for Bankers After Brexit Is Heating Up
By Viren Vaghela – Bloomberg
Bank of America Corp. has hired traders from rivals Morgan Stanley and Credit Suisse Group AG for its new European hub in Paris as it moves some trading operations away from London in the wake of Brexit.
/jlne.ws/30eJkYZ

Future of British Union Becomes Battleground for No-Deal Brexit
By Jess Shankleman – Bloomberg
Theresa May warns her successor not to risk splitting U.K.; Boris Johnson says delivering Brexit is key to keeping unity
Boris Johnson, the front-runner to replace Theresa May as British prime minister, said delivering Brexit would be key to keeping the U.K. together, just hours after May warned her successor not to put the union at risk with a no-deal Brexit.
/jlne.ws/30eGxz2

No-deal Brexit is a tripwire into economic chaos; Tory promises of tax cuts and cutting red tape won’t be enough to undo the damage
Carolyn Fairbairn – FT
The incoming UK prime minister faces a gargantuan task. Not since the second world war have times been as turbulent, or the responsibility for national and economic security as serious.
/jlne.ws/30cIps7

‘He’s A Flawed Character And They Do Not Care’: The Rise Of U.K.’s Boris Johnson
Frank Langfitt – NPR
Boris Johnson is a larger-than-life British politician who likes to project the image of a bumbling, fun-loving man of the people. His many supporters in Britain’s Conservative Party find him charismatic, entertaining and — to their minds — refreshingly politically incorrect. Many critics, however, see him as unprincipled, offensive and driven wholly by ambition.
/jlne.ws/32amOm8

Miscellaneous

Millennials and Gen Z Are Increasingly Pessimistic About Their Lives, Survey Finds
Marie Patino – Bloomberg
Gen Zs, Millennials have a diminishingly poor view of business; 43% of millennials dissatisfied with paycheck vs 34% Gen Zs. Uneasiness and pessimism abound among the majority of the world’s population. Deloitte has released its Global Millennial Survey of 13,416 Millennials (born between 1983 and 1994) spread across 42 countries and 3,009 Gen Z respondents (born between 1995 and 2002) from 10 countries. The firm has conducted the survey for the past eight years.
/jlne.ws/30fr3ek

Martin Wolf accepts the Gerald Loeb Lifetime Achievement Award; ‘My views have changed as the world has changed — but my values have not altered’
Martin Wolf – FT
On June 27, at a ceremony in New York, Martin Wolf, the FT’s chief economics commentator, received the Gerald Loeb Lifetime Achievement Award for distinguished business and financial journalism.
/jlne.ws/30gxTA9

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