JLN REPORTS ON IDX-V DAY ONE – The first virtual IDX conference.
FIA’s Walt Lukken Kicks off Resilient “IDX That Was”
Suzanne Cosgrove – John Lothian News
Opening the first virtual IDX conference, FIA President and CEO Walt Lukken Tuesday talked about the feelings of uncertainty overwhelming many people these days amid the COVID-19 health crisis, political risk and growing populism. “But if you only focus on the negative, you will inevitably lose sight of opportunities that change these circumstances for the better,” Lukken said.
To read the rest of this commentary, go here.
FIA IDX-V: ESMA’s Verena Ross on Regulation and Priorities During COVID-19
By Suzanne Cosgrove – John Lothian News
Verena Ross, executive director of the European Securities and Markets Authority (ESMA), said Tuesday that despite “unprecedented market reaction to the virus and government closings,” overall EU trading structures worked well during the COVID-19 crisis.
To read the rest of this commentary, go here.
Exchange Leaders at IDX-V tout technology, flexibility in weathering the COVID crisis
By Sarah Rudolph – John Lothian News
At the Exchange Leaders panel at IDX-V on Tuesday, Walt Lukken (who moderated) and the panelists patted themselves and the industry on the back – but deservedly so – for maintaining liquid, transparent markets while the world burned, so to speak. With a twofold crisis – extremes of volatility and capacity and everyone removed from physical offices because of coronavirus concerns – the industry came through mostly with flying colors.
To read the rest of this commentary, go here.
Industry Leaders Describe COVID-19’s Impact on the Markets
By Matt Raebel – John Lothian News
Day one of IDX-V concluded with a discussion about much the same topic as the panel that preceded it – that is, how the coronavirus impacted the markets, and how things will be different from now on. This time, it was a panel consisting mostly of managing directors and board members instead of exchange executives discussing how the pandemic affected derivatives trading volume and volatility, the brief short-selling ban in the European markets, and dividends.
To read the rest of this commentary, go here.
Hits & Takes
By John Lothian & JLN Staff
Mark Thornberry passed away at the age of 59 from liver cancer. Mark was a longtime industry derivatives technology sales professional and ultra-runner who responded to his diagnosis of liver cancer by continuing to do what he loved – running – and used the experience to help raise money for liver cancer research. Mark was profiled by Runner’s World in the this piece from June 16, 2020 titled “Remembering Mark Thornberry; The much-loved ultrarunner and fundraiser has died following a long battle with liver cancer.”
In fact, at the time of his death, he had raised £90,915.00 of his target of £100,000.00 as shown on his Virgin money giving page. Wouldn’t it be nice if we could find a way to get Mark’s goal met, even after he is gone?
Jerome Kemp has retired from Citi after 36 years and is therefore stepping down as the chairman of the FIA. Nicholas Rustad, vice chairman of the FIA, has been named acting chair and will take the full-time role in the spring.
ISDA has launched something called the Clause Library. This should not be confused with where Santa goes to read: the Claus Watercloset.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
FINRA Announces Passing of Thomas Gira, Executive VP, Market Regulation and Transparency Services
With great sadness, FINRA today announced that Thomas Gira, Executive Vice President of Market Regulation and Transparency Services, passed away on Saturday, June 20. He was 58. “Tom was a beloved and devoted husband and father, as well as a tremendous leader, colleague and friend, and we are enormously heartbroken by his passing. We extend our most sincere condolences to Tom’s family, who are in our thoughts and prayers during this difficult time,” said President and CEO Robert Cook.
****Our condolences to the family, friends and colleagues of Thoma Gira.~JJL
CME Group Named to IDG’s Insider Pro and Computerworld’s 2020 List of 100 Best Places to Work in IT
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it has been selected by IDG’s Insider Pro (https://www.idginsiderpro.com) and Computerworld (http://www.computerworld.com) as a 2020 Best Places to Work in IT, one of 100 top organizations that challenge their IT staffs while providing great benefits and compensation. This is the third consecutive year CME Group has received this recognition. Organizations will be included in coverage on IDGInsiderPro.com and Computerworld.com along with results from the 2020 Best Places to Work in IT survey.
*****CME is IT!!~JJL
Tuesday’s Top Three
Our top story Tuesday was the Wall St. Journal’s The Pitfalls of America’s Ant Army of Retail Stock Traders. Ant armies can be powerful. Second was ‘Do I need to be here?’: Some New Yorkers decide to pack up and leave, from Reuters. As a former New Yorker, I’d say the answer is no. In third place was Robinhood’s sad story, sorry, from Chris Skinner’s Blog.
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The City of London Has a Slavery Problem; Many of the financial district’s most venerable names were built off colonial oppression.
Alan Crawford, Greg Ritchie, Viren Vaghela – Bloomberg
If there’s one thing that foretold the City of London’s ambition to become the epicenter of finance it was the founding of the Royal Exchange almost 500 years ago. The driving force behind the capital’s first purpose-built center for trading stocks was Sir Thomas Gresham, whose legacy survives in the college, City street and law of economics that bear his name. Less celebrated is the role of his prominent backer in the venture, Sir William Garrard: former Lord Mayor and pioneer of English involvement in the slave trade.
Virus Surges Across U.S., Throwing Reopenings Into Disarray
Margaret Newkirk and Jonathan Levin – Bloomberg
California sees biggest daily jump, hospitalizations record; New Jersey’s transmission rate is ‘creeping up,’ governor says
Newly diagnosed cases of Covid-19 and other indicators of the pandemic’s spread soared in hot spots across the U.S., driving city and state officials to consider slowing or reversing reopening plans. Cases are surging in Texas, Florida, Arizona and in California, which on Tuesday broke its record for new cases for the fourth day in the past week. Even in New Jersey, where numbers have been falling, Governor Phil Murphy warned that the transmission rate is “beginning to creep up.”
EU delays reform to futures market by a year; ‘Open access’ regime, intended to encourage competition, was due on July 4
Philip Stafford and Jim Brunsden – FT
Brussels is delaying by a year the introduction of rules to boost competition in Europe’s futures markets, postponing the measures less than two weeks before they were due to go live.
The Fed must address the penalties for ‘banking while black’; US inequality should be the central bank’s concern, despite Jay Powell’s reluctance
Karen Petrou – FT
When US Federal Reserve chairman Jay Powell testified last week before Congress, senior Democrats demanded that the central bank adopt an affirmative action plan to combat systemic racism and economic inequality.
Free Trades, Jackpot Dreams Lure Small Investors to Options; Coronavirus-fueled market swings create opportunities as Robinhood and other brokers offer rock-bottom commissions
Gunjan Banerji and Alexander Osipovich – WSJ
Individuals looking to profit from the stock market’s explosive moves are piling into options, lured by low trading fees and a chance at mammoth payoffs. Coronavirus-fueled market swings this year have created ample opportunities for these traders, who tend to thrive when markets are more volatile. Big market moves tend to benefit traders because they increase the likelihood that stocks will jump or fall toward levels that can make their options contracts exponentially more valuable.
Day Traders Will Have Fun Until They Get Wiped Out; A handful might get rich while almost everyone else loses.
Noah Smith – Bloomberg
One time when I was sitting in my college dormitory, I heard a whoop of joy from down the hall. My dormmate announced that he had just made $500,000 trading in the stock market, after having invested only a few thousand dollars. When I asked him how he did it, he grinned and simply said: “Call options.” I spent the rest of the day reading about how this marvelous financial instrument could be used to make a fortune in a day with just a small initial stake.
New Bond Trade Beloved by Wall Street Booms Toward $100 Billion
Tasos Vossos and Katie Linsell – Bloomberg
Tradeweb tallies $90 billion of deals after first-half surge; Growing market in credit ETFs powers portfolio trades
In the throes of the pandemic panic, more traders turned to a tech-powered tool to price large swaths of corporate bonds in one fell swoop. Portfolio trading, powered by the ETF boom, was gaining converts as markets in many individual bonds all but froze. Transactions cleared by Tradeweb Markets Inc.’s electronic platform have doubled from a year ago, reaching a cumulative $90 billion globally last month. That’s already more than in all of 2019, and puts Europe on track to surpass Wall Street’s tally from last year, too.
A 100-Year Bond at Less Than 1%? It’s No Big Deal; Nothing says it’s cheap to borrow quite like Austria’s latest century bond.
Marcus Ashworth – Bloomberg
Nothing says it’s cheap to borrow quite like a 100-year bond with a yield of 0.88%. Austria returned to the century-bond club on Wednesday with a new 2 billion-euro ($2.3 billion) debt issue on its most favorable terms yet.
Religion Meets Profit Generation in a Slew of New Faith-Based ETFs; Funds aim to attract Muslims and Christians seeking to align their money and their values.
Claire Ballentine, Vildana Hajric – Bloomberg
As much as Samim Abedi loved his job as part of the team that managed Google’s corporate investment portfolio, he couldn’t always square the work with his Muslim faith. He worried that some of the companies whose securities he traded had ties to alcohol or tobacco or gambling.
Americans Will Soon Need Extra Money They Saved in Lockdown
Ben Steverman – Bloomberg
Even middle-class households are often short of liquid assets; Almost 40% say they’d struggle to cover surprise $400 expense
During the worst economic collapse in generations, U.S. households actually managed to put aside more money. It may not be enough to get them through the aftermath.
Key Support for the Economy May Be About to Buckle
Justin Lahart – WSJ
Spending by Americans with the lowest incomes has registered a far bigger bounce since the worst of the Covid-19 crisis than spending among the better off. That recovery may prove fleeting. The drop in spending that started in mid-March, as worries about the novel coronavirus pandemic became widespread, was swift and devastating. An analysis conducted by nonpartisan research group Opportunity Insights of credit- and debit-card data collected by Affinity Solutions shows that by early April, spending by U.S. consumers had fallen 33% from January levels. Then starting in mid-April, when many Americans began receiving stimulus payments, things started picking up. As of June 17, spending was off by just 8.9%.
“The German Enron”
Joshua M Brown – The Reformed Broker
Almost anytime you hear someone say that such and such is like “Madoff” or “Enron” it’s usually hyperbole, but maybe not this time… They arrested the recently resigned CEO of Wirecard in Germany this morning. Hedge funds have been shorting the stock and pointing out accounting irregularities with the company for years and years while Germany’s regulators let them slide. Wirecard is an online payments company in Europe, similar to PayPal. It grew into a $24 billion giant and was even added to the Dax 30 index, which is like the German Dow Jones. After years of allegations, the whole thing just unraveled…
Treasury Dept. May Consider Extending Tax Filing Deadline a Second Time
Paul Kiernan – WSJ
The government may consider postponing the 2019 annual tax-filing deadline a second time, though Treasury Secretary Steven Mnuchin suggested Tuesday that the benefits of doing so would be less clear than before.
EU May Bar American Travelers as It Reopens Borders, Citing Failures on Virua
Matina Stevis-Gridneff – The New York Times
BRUSSELS — European Union countries rushing to revive their economies and reopen their borders after months of coronavirus restrictions are prepared to block Americans from entering because the United States has failed to control the scourge, according to draft lists of acceptable travelers seen by The New York Times.
Wirecard scandal leaves German regulators under fire; Politicians turn scrutiny on BaFin as implosion of payments group hurts Germany’s reputation
Olaf Storbeck and Guy Chazan -FT
Ten days after police raided Wirecard’s Singapore office in February 2019 over allegations of accounting fraud, Germany’s financial regulator made its own move.
‘Massive’ Forgery Helped Hide $3 Billion Hole in Energy Trader’s Books; Report by court-appointed administrators says Hin Leong Trading manipulated inventory and accounts receivable
Chong Koh Ping – WSJ
A distressed energy-trading company overstated its assets by more than $3 billion using “routine and pervasive” forgery, while its founder oversaw years of disastrous bets on oil derivatives, a report filed with a Singapore court said. The study by interim judicial managers, or court-appointed independent administrators, offers the first detailed account of the implosion of Hin Leong Trading Pte. Ltd., a closely held Singapore company that owes $3.5 billion—mostly to banks, including HSBC Holdings PLC.
Coronavirus has brought US ‘to its knees’, says CDC director; Dr Robert Redfield tells hearing that public health capabilities underfunded as US sees more than 2.3 million cases
Amanda Holpuch – The Guardian
A US public health chief told Congress on Tuesday that coronavirus has “brought this nation to its knees” as America struggles with more than 2.3 million confirmed cases and more than 121,000 deaths so far. Dr Robert Redfield, director of the federal Centers for Disease Control and Prevention (CDC), told a hearing in Washington that core public health capabilities in the US had been vastly underfunded for a long time and needed urgent investment. “We have all done the best that we can do to tackle this virus and the reality is that it’s brought this nation to its knees,” Redfield told the House energy and commerce committee.
‘California hospital admitting only COVID-19 patients as outbreak ravages state’s breadbasket
Sharon Bernstein – Reuters
The COVID-19 spike in California’s agricultural breadbasket is so steep that a hospital in Lodi is not accepting some patients who have other illnesses, as infections mount at nearly four times the rate called for in state guidelines for reopening the economy.
Hospitals Are Counting Beds Again With Virus Cases On the Rise
John Tozzi, Emma Court, and Joe Carroll – Bloomberg
Texas Children’s Hospital admits adults to handle surge; Emergency doctors fear that ‘we don’t have that cushion’
As several U.S. states see a rising swell of Covid-19 patients, hospitals are trying to avoid a scenario where they face more sick patients than they have beds to hold them. The situation reflects the persistent threat that unchecked spread of the virus can overwhelm hospitals, as it did in Wuhan, China, and Lombardy, Italy. That fear prompted radical measures across the U.S. to lock down movement and commerce, allowing hard-hit areas like New York City, Detroit and New Orleans to handle the outbreak without needing to triage patients.
The Pandemic’s Worst-Case Scenario Is Unfolding in Brazil; Overflowing hospitals. Widespread corruption. And a chloroquine-obsessed populist in charge.
Julie Leite, Simone Preissler Iglesias, Martha Viotti Beck, Ethan Bronner – Booomberg
On a recent afternoon in São Luís, the capital of Maranhão state in northeastern Brazil, Hosana Lima Castro sat on a flimsy plastic chair in front of her house as stray dogs sniffed potholes in the narrow street and a few neighborhood kids launched kites. The bar across the way, where a few months ago an acquaintance of Castro’s had been shot, was closed because of the pandemic. Her job at a convenience store had disappeared too, so Castro, who’s 43 and shares her modest home with her father, two brothers, and two of her kids, had nowhere else to be. Although the novel coronavirus is widespread across Brazil’s northeast, she wasn’t wearing a mask. Nor was anyone else in her crowded neighborhood, where basic services have been so neglected that many residents have no access to clean water.
N.J.’s Waning Virus Crisis Casts $10.1 Billion Gap as New Menace
Elise Young – Bloomberg
For Murphy, wide political risk after pandemic buoyed approval; Slow reopenings with cases spike a possibility later in year
It took a pandemic to propel Governor Phil Murphy to his highest approval ratings ever. That support may be short-lived as the first-term Democrat confronts the depth of New Jersey’s fiscal crisis.
Sanofi Targets Speedier Approval of Coronavirus Vaccine
Thomas Mulier and James Paton – Bloomberg
French drugmaker sees nod for first shot early next year; Sanofi, Translate Bio are in vaccine pact for Covid-19, flu
French drugmaker Sanofi expects to win approval for a Covid-19 vaccine in the first half of next year as it strengthens a pact with Translate Bio Inc. to develop other shots in a deal that could be valued at as much as $2.3 billion. The experimental coronavirus vaccine that Sanofi is developing with GlaxoSmithKline Plc was previously targeting approval in the second half of 2021.
School Children Don’t Spread Coronavirus, French Study Shows
Marthe Fourcade – Bloomberg
School kids don’t appear to transmit the new coronavirus to peers or teachers, a French study found, weighing in on the crucial topic of children’s role in propagating Covid-19.
The Coronavirus Savings Glut; Normal consumption patterns re likely years, rather than months, from returning, meaning a boom in savings and depressed interest rates
Mike Bird – WSJ
Three months after Western nations began locking their cities down to prevent the rampant spread of the new coronavirus, and with many in East Asia further along in the recovery process, one enduring effect of the pandemic is becoming clear. Consumer demand has been crushed, and savings are rising in an unprecedented manner.
Sweden’s Covid Expert Says ‘World Went Mad’ With Lockdowns
Niclas Rolander – Bloomberg
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. The man behind Sweden’s controversial Covid-19 strategy has characterized lockdowns imposed across much of the globe as a form of “madness” that flies in the face of what is known about handling viral outbreaks.
Exchanges, OTC and Clearing
SIX Launches A New Triparty Agent To Enhance Collateral And Liquidity Management
The new comprehensive solution Triparty Agent from the Swiss Stock Exchange incorporating the Collateral Cockpit, streamlines front and back office processes to provide seamless and effective collateral management for its clients. The benefits are a highly automated management of cash and securities, further increasing the attractiveness and resilience of the secured Swiss money market, which serves as the calculation basis for the reference rate SARON.
The evening trading session started on the Moscow stock market
On June 22, 2020, in the stock market of the Moscow Exchange, in addition to the main trading session, which runs from 10:00 to 18:50 Moscow time, an evening trading session from 19:00 to 23:50 has become available. Thus, the total trading time on the stock market per day is 13 hours and 40 minutes. During evening trading, it is possible to make transactions with the 25 most liquid shares from the Moscow Exchange, by the end of the year, the list of traded instruments will include all shares from the Moscow Exchange (38 shares), as well as the 50 most liquid foreign shares from the S & P500.
BME Brings Together 19 Companies With European Investors For The Spring European MidCap Event
It is the sixteenth edition of this Conference, traditionally held in Paris, which this year will be held virtually; Today and tomorrow the companies represented will meet with more than 100 investors from France, Belgium, the Netherlands, the United Kingdom and Switzerland.
Today marks the start of the 16th edition of the Spring European Midcap Event, a two-day Conference that will bring together 19 small and medium-sized Spanish companies with more than 100 European investors. The event, which used to be held in Paris, will be held virtually this year.
Wells Fargo Joins ICE ETF Hub for Enhanced Access to the ETF Primary Market
Intercontinental Exchange, Inc
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that Wells Fargo has become an authorized participant on ICE ETF Hub and has joined the platform’s advisory committee. An Authorized Participant is an institutional firm authorized by an ETF issuer to facilitate creations or redemptions of ETF shares.
Oslo Børs: Andfjord Salmon Admitted To Trading
Andfjord Salmon has today become the first company to ring the bell at the start of trading since the start of the pandemic. The coronavirus crisis has not stopped Oslo Børs from being a source of capital. Since March, companies listed or traded at Oslo Børs have raised NOK 13.2 billion in new equity capital through share issues.
Appointment Of Members Of The Supervisory Board Of The Warsaw Stock Exchange For A New Term
GPW’s Annual General Meeting has appointed seven members of the GPW Supervisory Board for a new three-year term of office
BME To hold An Extraordinary Shareholder Meeting On 30 July
Among the items on the agenda are the ratification of Jos Dijsselhof and Daniel Schmucki as Board directors; The appointments of Marion Leslie, Head of Financial Information at SIX, Belén Romana, as independent director, and the reelection of Javier Hernani and David Jiménez-Blanco to be submitted for approval; The Meeting will be held remotely
The Board of Directors of BME today agreed to call an Extraordinary General Shareholders’ Meeting for July 30th, which will be held remotely due to the attendance restrictions in place for events held in enclosed spaces, due to the Covid-19 crisis. The attending shareholders´ participation, voting and information rights will thus be preserved without risk to their health.
Ossiam Selects ICE Data Services for Carbon Reduction ETF
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that Ossiam has selected the ICE 3-5 Year Euro Government Carbon Reduction Index, administered by ICE Data Indices, LLC, as the benchmark for a new exchange traded fund (ETF), called the Ossiam 3-5 Year Euro Carbon Reduction ETF. Ossiam is a leading smart beta investment management firm and is an affiliate of Natixis Investment Managers.
BOX Exchange Permanent Penny Program Issues
BOX Exchange (“BOX”) recently distributed RC-2020-17 stating that BOX would be implementing the Penny Interval Program (the “Program”) on a permanent basis in accordance with the recently approved OLPP amendment.
SIFMA Fixed Income Market Close Recommendations In The U.S., The U.K. And Japan For The U.S. Independence Day Holiday
SIFMA has confirmed its previous holiday recommendations for the trading of U.S. dollar-denominated fixed income securities in the U.S., the U.K., and Japan in observance of the U.S. Independence Day Holiday.
Fixed income derivatives: Introduction of options on Euro-Buxl Futures
The Management Board of Eurex Deutschland took the following decision with effect from 28 September 2020:
Nasdaq Launches the Marketplace Services Platform
SaaS platform purpose-built to operate marketplaces, everywhere; Platform also offering the Digital Assets Suite to support the transaction lifecycle of digital assets and tokenized markets
Today, Nasdaq (Nasdaq: NDAQ) has announced the launch of the Marketplace Services Platform. The platform provides next-generation marketplace capabilities spanning the transaction lifecycle to facilitate the frictionless exchange of assets, services and information across various types of market ecosystems and machine-to-machine transactions, including, but not limited, to standard financial assets, tokenized assets, credit card receivables, loyalty points, real estate, insurance contracts, gaming and wagering and more. The already established universal marketplace services, which includes matching, risk management and market surveillance, will be accessible on the platform.
Former Wirecard CEO freed on bail in missing billions case
Jörn Poltz – Reuters
Former Wirecard (WDIG.DE) CEO Markus Braun, who was arrested on suspicion of falsifying the German payments firm’s accounts, has been released from custody, his lawyer told Reuters on Wednesday.
How German Fintech Darling Wirecard Fell From Grace
Stefan Nicola and Sarah Syed – Bloomberg
Until June, German payments company Wirecard AG was a hot growth story that had shaken off allegations of accounting fraud. Then came the admission that about $2 billion of company funds had gone missing. The scandal led to the resignation and arrest of the company’s former Chief Executive Officer Markus Braun, and threatens to ensnare more executives, banking officials, auditors and even regulators. The broad impact of Wirecard’s potential demise is rattling Germany’s financial industry.
Murex And Duco Join Forces To Offer An End-To End Reconciliation Solution To Capital Markets
Duco, the global provider of self-service data integrity and reconciliation services, and Murex, the leading provider in trading, risk and processing solutions for treasury and capital markets, have teamed up to provide clients with a comprehensive data reconciliation solution enabling improved automation and straight-through processing across a range of asset classes. Murex is committed to bringing innovative solutions to its 50,000 users who rely on MX.3, Murex’s platform, to support their daily business activities.
Wirecard Shares May Be Worth Just 1 Euro, Bank of America Says
Wirecard AG’s shares, which were trading at just over 100 euros a week ago, may be worth a single euro apiece, according to an analyst at Bank of America Corp. “Recent news flow suggests that customers may have started to leave Wirecard and lenders may be weighing closure of credit lines,” analyst Adithya Metuku said in a note to clients on Wednesday. “Clarity on the underlying business is unlikely to arise for some time.”
Philippine authorities search for Wirecard’s number two in fraud probe; Payments group wins short reprieve from creditors over possible termination of EUR2bn loan
John Reed, Olaf Storbeck and Stefania Palma – FT
Philippine authorities are searching for Wirecard’s former number two executive Jan Marsalek as part of a broader probe into the payments group, which is battling to survive after acknowledging EUR1.9bn was missing in a potential fraud.
Veteran Commodities Trader Chris Hehmeyer Goes All In on Crypto
Nikhilesh De – Coindesk
Hehmeyer Trading + Investments, the commodities investment firm, is pivoting to crypto full-time. The Chicago-based company, which began offering cryptocurrency services in 2017, will now focus solely on being a market maker and algorithmic trader in the space, rebranding to Hehmeyer in the process. This means the company will no longer be offering its old brokerage services, prop trading, commodity pool or trading advisor services.
Final judgment reached in ICO fraud cause brought by SEC against Shopin founder
Michael McSweeney – The Block
A lawsuit brought by the U.S. Securities and Exchange Commission (SEC) last year against the founder of a company that launched an allegedly fraudulent initial coin offering (ICO) has concluded. The final judgment was handed down on Tuesday, according to a statement from the SEC. Shopin and its founder Eran Eyal were sued in mid-December and accused of misappropriating funds obtained from a $42 million ICO.
Brazil’s central bank suspends WhatsApp’s new payments service
Yogita Khatri – The Block
The central bank of Brazil has suspended WhatsApp’s payments service just a week after its launch. The central bank said it had ordered Visa and Mastercard to immediately stop payments and transfers via WhatsApp. The decision aims to “preserve an adequate competitive environment, which ensures the functioning of an interoperable, fast, secure, transparent, open and inexpensive payment system,” said the central bank.
FATF Meets Wednesday to Discuss ‘Travel Rule’ for Digital Assets
Ian Allison – Coindesk
The Financial Action Task Force holds its summer plenary meeting Wednesday, covering a gamut of topics around anti-money laundering (AML) and counter-terrorist financing (CTF). With cryptocurrency now firmly in the global watchdog’s sights, here’s what to expect from the hearing, which will be the first time a FATF plenary will take place virtually.
Ex-Morgan Stanley Executives Bring Expertise to Crypto Trading
Connor Blenkinsop – Cointelegraph
A cryptocurrency derivatives exchange led by eight former Morgan Stanley executives claims it is the world’s fastest. Phemex says its “user-oriented” approach has led to the creation of an ecosystem where traders can buy and sell contracts with confidence. The platform offers latency speeds of under one millisecond, and the company claims that its infrastructure can handle more than 300,000 transactions per second.
Spain to Impose Registration for Crypto Businesses Under AMLD5 Rules
Aziz Abdel-Qader – Finance Magnates
Spain is reportedly set to approve new measures to modify its money laundering legislation in order to comply with the EU’s Fifth Money Laundering Directive (AMLD 5). Spanish parliament is slated to vote on the updated regulations in the second half of 2020, which would the allow the central bank to police the nation’s crypto providers. Once the draft bill approved, that would force crypto exchanges, wallet providers and crypto custodial service providers operating in Spain to register with a financial regulator and prove that they are meeting AML requirements if they want to continue their operations.
Argo Buys $500K-Worth of Zcash Miners as Bitcoin Revenue Shrivels
Paddy Baker – Coindesk
Argo has nearly doubled its mining capacity for zcash, possibly as it looks to diversify from bitcoin. The publicly listed mining firm has bought 750 Antminer Z11s, that specialize in the Equihash algorithm, for a total of $474,000. The rigs are now already in operation and were working at full capacity, Argo said in a filing at the London Stock Exchange (LSE). Only a handful of coins use the Equihash algorithm and the largest, by far, is Zcash.
CoinGecko’s new loyalty system won’t use cryptocurrency—yet
Liam Frost – Decrypt
Crypto analytics platform CoinGecko has announced the launch of its own loyalty points system, dubbed Candy. While “candies” are not tokens or cryptocurrency, they still can be used in some tangible ways. At launch, users will be able to get the reward points only through daily check-ins via CoinGecko’s website or smartphone app for iOS or Android. The points are not transferable or tradeable, so the developers suggest users to “hoard them as a dragon and redeem them for freebies.” The bonus will increase with each consecutive daily login—up to seven days in a row.
Crypto exchange Bithumb has reportedly started its IPO work with Samsung Securities
Yogita Khatri – The Block
South Korean cryptocurrency exchange Bithumb has reportedly begun its initial public offering (IPO) work with Samsung Securities as an underwriter. Local media outlet MoneyToday reported the news on Wednesday. Specific details of the offering aren’t clear. The Block has reached out to Bithumb and Samsung to know more and will update this story should we hear back.
World’s Oldest Central Bank Reviews Possible Digital Currency With Mixed Results
Sebastian Sinclair – Coindesk
Sweden’s Riksbank has looked into the viability of central bank digital currencies (CBDCs) for its local market and declared mixed results. In a 96-page economic review, updated June 18, the world’s oldest central bank presents four models for supplying a digital version of the Swedish krona (e-krona) as well as outlining how well the different models would fit its policy goals. Those goals include fostering a stable store of value and unit of account, being a lender of last resort (LOLR) providing a secure means of payment and settlement and providing tools for preserving financial stability.
Contactless NFC Hardware Wallet Authorizes Crypto Transactions With a Tap
Jack Martin – Cointelegraph
A new cryptocurrency hardware wallet stores private keys securely and fully isolated, while NFC technology enables authorization of transactions through a mobile device. Keycard is a new credit-card sized hardware wallet featuring near-field communication (NFC) to authorize cryptocurrency transactions. At launch, it features integration with combined private messenger/wallet/DeFi browser, Status App, although further integrations are planned.
‘Social Money’ Startup Inks Deal With Rapper Ja Rule, Releases Song With Lil B
William Foxley – Coindesk
Platinum records are coming to cryptocurrency with a new integration between rapper Ja Rule and social currency startup Roll. Announced Tuesday, Billboard Hot 100 artist Ja Rule has inked a deal with Roll, an Ethereum-based protocol that allows content creators to control their own platforms using cryptocurrency’s native digital scarcity. “I’ve been following Roll and blockchain technology for a while actually on the sidelines,” Ja Rule said in a statement. “I think it’s the perfect time to partner with a company that can take blockchain technology mainstream. I see it happening in the next few years with the right partners and it’s a very big play.”
Twitter permanently suspends account that created doctored video tweeted by Trump
Maria Ponnezhath – Reuters
Twitter Inc has permanently suspended the account of a rightwing online personality for violating its copyright policy, a week after he posted a doctored video of toddlers that was tweeted by President Donald Trump.
Approval of Trump’s coronavirus response sinks to lowest on record amid surge in cases: Reuters/Ipsos poll
Chris Kahn – Reuters
American approval of President Donald Trump’s handling of the coronavirus pandemic has dropped to the lowest level on record, the latest Reuters/Ipsos opinion poll shows, as new COVID-19 cases surged and Trump was widely criticized for suggesting he wanted to slow down testing.
From Bolton to Mattis, Trump Faces Aides Turned Adversaries
Josh Wingrove – Bloomberg
Former national security adviser joins chorus of critics; Detractors are striking for number, seniority and vehemence
As President Donald Trump’s battle for re-election heats up, he faces an unusual and potent foe: a raft of former top aides and Cabinet members — including John Kelly, James Mattis, and now, John Bolton — who have turned against him.
Biden Opens Up Largest Polling Lead of the Year Over Trump
Gregory Korte – Bloomberg
New York Times/Siena Poll shows 14-point Biden advantage; Voters give Trump low marks for handling of virus and protests
Joe Biden leads President Donald Trump 50% to 36% in a new nationwide poll Wednesday, the latest alarm bell for the president’s campaign as the economy, coronavirus and Black Lives Matter protests continue to weigh on his re-election bid.
Putin Puts His Post-Covid Comeback to a Vote; Buffeted by things he can’t control, Russia’s president turns to a tried and true method for affirming his power.
Clara Ferreira Marques – Bloomberg
Russia’s president has not had a good pandemic. But Vladimir Putin is staging a comeback, with a touch of foreign-policy grandstanding, a dash of military theater and a plebiscite on constitutional reforms that could allow him to stay in power until 2036.
Trump’s Re-Election Prospects Are Threatened by Economic Misery
Olivia Rockeman – Bloomberg
Historically, late-term recessions signal loss for incumbent; Gains in stocks, home prices continue to favor Trump
The misery spreading through the U.S. economy is posing a significant threat to President Donald Trump’s re-election in November. The Misery Index, the unemployment rate added to the year-over-year change in the main consumer price index, is expected to be at a record high in November, based on calculations by Bloomberg Economics.
Mnuchin Says Stimulus May Pass Congress in July to Boost Economy
Saleha Mohsin and Erik Wasson – Bloomberg
Treasury secretary says ‘very seriously considering’ stimulus; Mnuchin met with Senate Republicans to discuss measure
The Trump administration is discussing another stimulus package with lawmakers that could be passed in July, the latest effort to revive the U.S. economy amid the coronavirus pandemic, said Treasury Secretary Steven Mnuchin.
What Is Owed: Without Economic Justice, There Can Be No True Equality –
The New York Times
If true justice and equality are ever to be achieved in the United States, the country must finally take seriously what it owes black Americans.
Rise in investment scams during COVID-19 pandemic
ASIC has seen a rise in the number of investment scam reports from Australian consumers and investors during the COVID-19 (coronavirus) pandemic. Reports of misconduct received by ASIC from March to May 2020 are up 20% compared to the same period last year.
FCA announces pensions value for money consultation
The FCA is today bringing forward proposals that are designed to promote value for money for the members of workplace personal pension schemes with the announcement of a new Consultation Paper.
Hong Kong Securities And Futures Commission Bans Former Responsible Officer Of Guosen Securities (HK) Brokerage Company, Limited For 12 Months
The Securities and Futures Commission (SFC) has prohibited Ms Joanna Chu Lai Wa, former responsible officer (RO), director and head of dealing of Guosen Securities (HK) Brokerage Company, Limited (Guosen) from re-entering the industry for 12 months from 23 June 2020 to 22 June 2021 (Note 1).
BIS: Basel Committee Proposes Amendment To Capital Rules For Non-Performing Loan Securitisations
Proposal sets out a prudent treatment for securitisations of non-performing loans with a risk weight floor of 100% for these exposures; Proposal addresses a gap in the regulatory framework and was being developed before Covid-19; Comments on this technical amendment welcome until 23 August
The Basel Committee on Banking Supervision published today the technical amendment Capital treatment of securitisations of non-performing loans. This proposal, which the Committee started developing before the onset of the Covid-19 pandemic, addresses a gap in the regulatory framework and sets out a prudent treatment for securitisations of non-performing loans.
SEC Awards $125,000 to Whistleblower
The Securities and Exchange Commission today announced an award of about $125,000 to a whistleblower whose information and assistance helped both the SEC and another agency bring successful actions against the perpetrator of a fraudulent securities offering.
Canadian Securities Regulators Collaborate To Protect Investors And Enforce Securities Law: CSA Fiscal Year 2019/20 Enforcement Report – Report Highlights CSA Member Efforts To Detect, Disrupt And Deter Securities Misconduct
The Canadian Securities Administrators (CSA) today released its fiscal year 2019/20 Enforcement Report, which outlines how securities regulators are protecting investors and the integrity of Canada’s capital markets.
SIFMA Statement On SEC And DOJ Review Of Market Data Fees
SIFMA today issued the following statement from SIFMA president and CEO Kenneth E. Bentsen, Jr. on the review by the SEC and DOJ of the fees the exchanges charge for data:
Ontario Securities Commission Announces New Vice-Chair And Commissioner Appointments – Wendy Berman Has Been Appointed Vice Chair, Cathy Singer As Part-Time Commissioner
Ontario Securities Commission Acting Chair and Chief Executive Officer Grant Vingoe today announced the appointment of Wendy Berman as Vice-Chair for a one-year term, and Cathy Singer as part-time Commissioner for a two-year term.
ISDA Launches Clause Library
ISDA has launched a new drafting tool intended to introduce greater standardization in how firms negotiate and agree clauses within their ISDA documentation. Called the ISDA Clause Library, the tool sets out standard drafting options for frequently negotiated provisions within the ISDA Master Agreement, as well as the most common variants of these provisions. The aim is to cut down on instances of differently worded clauses that essentially achieve the same outcome, making contract negotiation more efficient and improving the consistency and accuracy of legal agreement data. Increased standardization is also a necessity for the digitization of legal documentation and the development of smart contracts, offering the potential for further automation of derivatives processes.
UK confirms it will not adopt CSDR buy-in regime; The Treasury has said it will not implement SDR in February 2021, but UK firms will still have to comply with the buy-in regime for EU transactions.
Hayley McDowell – The Trade
The UK Treasury has confirmed it will not implement the Settlement Discipline Regime (SDR) next year, including the controversial buy-in regime.
Investing and Trading
With contracts canceled and debts mounting, offshore oil drillers face another shakeout
Liz Hampton, Nerijus Adomaitis – Reuters
The companies that operate offshore drilling rigs for major oil producers face a second wave of bankruptcies in four years amid a historic drop in energy prices that likely will leave surviving drillers more closely tied to big oil firms.
Central Banks Take Next Step in Fight Against Climate Change
Jana Randow – Bloomberg
NGFS outlines how global warming can impact monetary policy; Various scenarios highlight weaknesses in financial system
Global central banks have developed a “concrete toolbox” to prepare for the risks climate change poses to the economy.
Sustainable Leaders Have These Traits in Common
Emily Chasan – Bloomberg
Investors have long used environmental, social and governance investing as a technique for finding high quality corporate managers, but companies have yet to do the same when looking at their own staff. As companies grapple with challenges from the coronavirus to climate change inequality, finding future leaders capable of managing and reorienting their business is going to be more crucial, said Clarke Murphy, CEO at recruiting firm Russell Reynolds Associates.
Can a Private-Equity Giant Invest in Oil While Saving the Planet? Carlyle sees itself as a force for good, even while investing in some things that aren’t.
Jess Shankleman – Bloomberg
Carlyle Group Inc. bought a business that sells harsh chemical cleaning products to put streak-free shines on kitchen appliances and swiftly remove dried paint. Then private-equity executives set about changing the products and even the office lightbulbs. Now the company, Weiman Products, sells a line of cleaning sprays made to emphasize sustainability and appeal to eco-conscious shoppers. Business has improved, which should help when it’s time to sell the company.
Why Public banned its users from trading in Hertz shares
Joshua M Brown – The Reformed Broker
Josh here – this week I talked with Jannick Malling, co-founder and CEO of Public, one of the leading trading and investing apps, about the principled stand they took to protect their customers. Sometimes the regulators don’t catch on to potential risks for investors as quickly as they arise. That’s why we need entrepreneurs in the fintech space to live up to the values they say are important to them. Protecting customers from unnecessary losses and inappropriate activity is important. If young investors get exploited or tricked early in the learning process, they may never come back.
SoftBank’s Son Hawks a Hot Stock for Cool Cash; T-Mobile shares have long been the envy of the industry. Now, thanks to a complex set of transactions, there will be more for investors.
Tara Lachapelle – Bloomberg
As Japan’s SoftBank Group Corp. unloads about 200 million shares of T-Mobile US Inc., more investors get a chance to own a top-performing stock that had been hogged by insiders. SoftBank’s fire sale isn’t a knock on T-Mobile, but rather a reluctant move by billionaire Masayoshi Son to shore up his own troubled conglomerate. Indeed, his loss will be someone else’s gain.
The Big U.S. Stock Indexes Are Telling Different Stories; A handful of growth stocks that have surged this year have an outsize influence on the Nasdaq and the S&P 500
Karen Langley – WSJ
The divergence in the performance of the major U.S. stock indexes this year is the widest in more than a decade. A surge in big technology stocks has helped the Nasdaq Composite rally 13% in 2020, while the Dow Jones Industrial Average of blue-chip stocks is down 8.3%. The benchmark S&P 500 is hovering in between them, off 3.1%.
Are Companies More Productive in a Pandemic? Many claim their employees are hyper efficient while working from home. But there are social and emotional costs to ambition in isolation.
David Gelles – NY Times
When the online learning company Chegg started working remotely in March, Nathan Schultz, a senior executive, was convinced that productivity would plummet 15 to 20 percent.
These Companies Gave Their C.E.O.s Millions, Just Before Bankruptcy; Corporate boards are handing out millions to top executives before their companies seek bankruptcy protection, and courts can’t do much about it.
Peter Eavis – NY Times
The coronavirus recession is pushing many companies into bankruptcy, a painful process that has led to layoffs, wiped out some investors and hurt the economy. But the chief executives of some of these businesses are doing just fine.
Matt Levine – Bloomberg
I never really understood SPACs until WeWork. A SPAC is a special purpose acquisition company (or “blank-check company”), a corporate shell, sponsored by a well-known investor, that goes public and raises money from investors with a plan to find a private company to merge with. The merger effectively takes the target company public, without an initial public offering; the SPAC effectively transforms into the target company. Investors who buy the SPAC in its initial public offering don’t know what they’re buying; it will eventually transform into a real company (the target), but they don’t know what company it will transform into. They are effectively buying the target company’s IPO in advance, without knowing what the target company is, or the price. (If they don’t like the target, though, they can get their money back before the merger closes.)
Credit Suisse Reviews Funds Linked to SoftBank-Backed Firm; The funds invest primarily in securities seeded by Greensill Capital
Julie Steinberg and Duncan Mavin – WSJ
Credit Suisse Group AG CS 1.47% has launched an internal review into funds it manages that have invested in billions of dollars worth of securities sold by a SoftBank Group Corp. 9984 -1.84% -backed firm, the bank said.
Black-Owned Investment Firm Sues New Jersey for Racial Bias; Blueprint Capital Advisors alleges state pension ‘usurped’ its ideas and hired BlackRock to run its investment strategy
Dawn Lim – WSJ
A Black-owned investment firm sued New Jersey for racial bias on Tuesday, saying officials told it that the state’s pension was averse to hiring money-management firms owned by minorities.
Volatility forces closures of Credit Suisse VelocityShares; Fresh problems for leveraged exchange traded products as market turmoil shakes investors’ confidence
Chris Flood – FT
Credit Suisse is to close nine exchange traded products that allow investors to multiply bets on gold, silver and natural gas prices as well as the volatility of the US stock market.
Blackstone to Bypass Scramble for Investment-Bank Talent in Bid to Diversify Hiring; On-campus recruiting will be expanded to 44 schools from nine in 2015
Miriam Gottfried – WSJ
Blackstone Group Inc., BX 0.46% one of the most coveted employers on Wall Street, is throwing out a key section of its recruiting playbook in a bid to improve its hiring process and increase diversity.
Wall Street bonus forecast not as dire as in May
Thornton McEnery – NY Post
With the economy slowly bouncing back from coronavirus quarantines, Wall Street bonus season is shaping up to be less of a nightmare and more of a very bad dream.
Virtu Financial promotes ITG veteran to global head of new sales; ITG Veteran Akiko Imai has been appointed as the global head of New Sales at Virtu Financial.
By Kiays Khalil – The Trade
Virtu Financial has moved to promote an ITG veteran to global head of new sales following its $1 billion takeover of the agency broker last year.
Demand for BOJ Virus Loans Jumps Fivefold on New Lending Program
Toru Fujioka – Bloomberg
Demand for Bank of Japan loans aimed at helping struggling companies jumped fivefold after the introduction of a second loan program, the latest data show. The central bank lent another 8.3 trillion yen under its two virus-response lending programs in an operation Wednesday. The second program aims to offer loans to a broader range of banks so that the BOJ can extend its reach to smaller companies in need of help amid the pandemic.
Jack Ma Dethroned as China’s Richest by Tencent’s Pony Ma
Venus Feng – Bloomberg
Virus boost has sent Chinese internet companies surging; Four of China’s five richest people are from tech sector
Tencent Holdings Ltd.’s $40 billion surge this week and the recent ascent of Pinduoduo Inc. have reshaped the landscape of China’s richest people. The country’s largest game developer has surpassed Alibaba Group Holding Ltd. as Asia’s most-valuable company, with its shares rising above HK$500 ($64.50) in intraday trading Wednesday for the first time ever. Pinduoduo, a Groupon-like shopping app also known as PDD, has more than doubled this year.
U.K. Firms Plan to Cut 25% of Furloughed Workers in September
Edward Robinson – Bloomberg
Survey of small companies finds lost cash flow taking a toll; Firms say it may take up to two years to get back to normal
A quarter of furloughed workers in the U.K. are likely to lose their jobs when the government begins reducing the amount it pays out to those on the program in September, a poll of employers shows.
Egypt’s El-Sisi Suffers a Stunning Reversal of Fortunes; Trump’s “favorite dictator” can’t bank on the U.S. to bail him out.
Bobby Ghosh – Bloomberg
Twelve months ago, President Abdel-Fattah El-Sisi seemed to be enjoying the best year of his reign. The general-turned-politician was presiding over an economic rebound that had made Egypt the Middle East’s fastest-growing economy and a honeypot for emerging-markets investors. A referendum had just allowed him to remain in office until 2030, making his political position well-nigh impregnable.
The Tiny Bank That Got Pandemic Aid to 100,000 Small Businesses; Cross River has cranked out more loans under the federal Paycheck Protection Program than all but three of the country’s biggest lenders.
Stacy Cowley – NY Times
From its address on the west side of the Hudson River to its tiny balance sheet, Cross River Bank is nothing like Manhattan’s Wall Street behemoths. But as part of the government’s efforts to stave off an economic catastrophe, it stands among giants.
Turkey faces threat of MSCI downgrade to ‘frontier’ market; Index provider warns of substantial deterioration in accessibility
Laura Pitel in Ankara – FT
Turkey could be demoted to the status of “frontier” market by one of the world’s most important index providers, after a series of measures by local authorities made it harder for foreign investors to buy and sell assets.
UK’s post-Brexit financial rules add pressure on EU over market access; Brussels must decide whether Britain’s financial services sector can be granted ‘equivalence’
Matthew Vincent and Peter Foster – FT
The UK government published plans on Tuesday for post-Brexit financial regulation that it claims will maintain the “highest” standards — challenging the EU to decide if it is sufficient to allow British groups continued access to its markets.
Brexit’s Cliff Edge Is Like ‘No Deal’ All Over Again
The threat of a chaotic split between the U.K. and Europe hasn’t gone away. While Britain agreed an orderly departure from the European Union on Jan. 31, averting the threat of a “no-deal” Brexit, the second stage of the divorce hinges on forging a wider accord encompassing trade, security cooperation and fisheries. The risk of a potentially disruptive “cliff edge” remains if an accord isn’t reached by Dec. 31.
Brexit talks hit by row over EU subsidies for farmers
Daniel Boffey – The Guardian
British and EU negotiators have hit a new obstacle to securing a trade and security deal after clashing over EUR70bn of subsidies handed to European farmers by Brussels, the Guardian can reveal. The EU’s negotiating team led by Michel Barnier was accused in the latest round of talks of seeking to block the government from defending British farmers from cut-price European imports. The row centres on the EU’s demand for what it is claimed would be an unprecedented commitment not to retaliate through tariffs on European goods even where it could be potentially shown that British farmers are being unfairly undercut.
Sterling broadly flat against dollar and euro; Brexit weighs
Elizabeth Howcroft – Reuters
The pound was little changed against the dollar and euro on Wednesday, having erased its recent gains against the dollar as risk appetite soured somewhat and dollar strength returned. Global market sentiment turned more cautious, with the safe-haven dollar spiking after Bloomberg News reported the United States was considering tariffs on $3.1 billion (£2.5 billion) of exports from Britain, France, Spain and Germany.
New York City Fireworks Complaints Surge 40,000%
Donald Moore, Tom Maloney, and Henry Goldman – Bloomberg
Noise complaints skyrocket to more than 11,000 in NYC; Retailers bringing in multiple truckloads a day to meet demand
For weeks, New Yorkers have been treated to the crackling of the Machine Gun Shell, the roar of the God of Fire and the boom of the Suicide Kings — just a sample of the fireworks being set off on city streets.
MLB Players Resolve Issues, Clearing Way for 2020 Season
Derek Wallbank and Brandon Kochkodin – Bloomberg
Major League Baseball players and owners have settled their differences over plans for the 2020 season, clearing the way for what would be the shortest schedule in more than a century.
Ballpark Peanuts, a Classic Summer Pleasure, Have Been Benched; No hawkers, no piles of shells, empty stands — and in the pandemic, no easy way to sell these snacks bred so carefully for the stadium.
Kim Severson – NY Times
Classic stadium food like garlic fries, Dippin’ Dots and pump-cheese nachos are touchstones of something that feels heartbreakingly far away this summer: the thrill of being part of a huge crowd sharing a singular experience.
They Wanted You to Bet on Sharks. The Odds Were Not in Their Favor.; Gambling on shark migration patterns could raise awareness, some experts say. But it could also fuel the animals’ reputation as mere entertainment.
Katherine J. Wu – NY Times
Some bookies warn that you’ll sleep with the fishes. But one oddsmaker wanted you to bet on them instead. Last Wednesday, MyBookie, an online sportsbook, invited gamblers to place wagers on the summer migration patterns of nine great white sharks. The company’s website displayed odds on various aspects of each shark’s travel itinerary, using data mined from Ocearch, a nonprofit that’s been tracking the animals’ movements for years. An interactive map on Ocearch’s website monitors shark migration in near-real time, providing gamblers ample fodder for wagers — akin, perhaps, to a virtual horse race, conducted entirely at sea.