The Coronavirus Trade-Off Was Always an Illusion; CFTC withdraws Reg AT, advances supplemental electronic trading proposal

Jun 26, 2020

First Read



FIA IDX-V: Global economy far from equilibrium, CME economist says
By Suzanne Cosgrove – John Lothian News

The overall economic narrative of the recent pandemic is one of sharp job losses and a “cascading network collapse,” said Blu Putnam, CME Group managing director and chief economist. “We are far from equilibrium,” he added, referencing a chart that showed a freefall in U.S. employment during the first half of 2020.

To read the rest of this report, go here.


Commodity Focus Closes IDX-V
By Thom Thompson – John Lothian News

The last session of this year’s IDX-V was titled “Commodities in Focus,” the only panel of the third day, which itself was titled “Commodities and the unexpected consequences of COVID-19.”

Joanna Williams, Of Counsel at the U.K. law firm Simmons and Simmons, moderated the panel. The participants were all European and the focus remained on conditions in European commodity markets, except for a brief excursion to Cushing, Oklahoma, the proud home of negative oil futures prices, for a thankfully brief mention of the April oil price crash.

To read the rest of this report, go here.


Russell Indexes Ready for Big Reconstitution Day

FTSE Russell’s Sean Smith Explains the Russell Reconstitution

Listen to this Podcast »


Hits & Takes
By John Lothian & JLN Staff

I would like to thank the JLN team, and especially Editor-in-Chief Sarah Rudolph, for all their hard work this week covering IDX-V and covering their normal duties as well. Thank you team!

The next big conference coming up for FIA is EXPO. Given the dynamics in play right now, with no vaccine expected until the end of 2020 at the earliest, or early 2021, my expectations are we will have another virtual event. I encourage you to reach out to the FIA and offer any feedback about IDX-V that you liked, or disliked, and any suggestions for EXPO to make it work even better.

Today is Russell Reconstitution day, or Russell Recon. I interviewed FTSE Russell Managing Director for Derivatives Sean Smith about what it all means. Here is the podcast of the interview.

The people at Prime Trust are looking for a major account executive. Prime Trust provides solutions for some of the largest digital assets OTC and Exchanges.They are looking for a Major Accounts Specialist, which is an account manager with technical & market knowledge of the digital asset space. This person will be handling a selection of major accounts on a daily basis. If interested, send a resume or use the job posting link on LinkedIn. Ideally they would like this person in Chicago; however, they are open to remote locations as well.

The Washington Post has a story about your rights to take video of police in public settings. It is a good reminder of our 1st Amendment rights.

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


Correction: In the article in yesterday’s newsletter titled “Brent Crude: Global Benchmark,” the last paragraph should have said that from January to May 2020, CME had traded almost 30 percent more crude oil futures contracts than ICE. CME: 155,796,474; ICE 120,740,453. ~Thom Thompson

Bloomberg provides a timely reminder that it isn’t just choirboys like Chris Hehmeyer that are drawn to cryptocurrencies: Lobbyist Jack Abramoff Charged in Crypto-Currency Case, U.S. Says. ~Thom Thompson

The latest TotalMarkets podcast with Bloomberg Intelligence Head of Research Larry Tabb examines the SEC’s NMS II plan and how the proposed changes may affect our current equity markets. You can listen to it here. ~SR


Futures Exchanges Get Discretion to Police Technology Glitches; CFTC proposal requires trading venues to create defenses against failures, but lets them decide how best to comply
Dave Michaels – WSJ
Futures exchanges would be expected to create defenses against disruptive technology failures, but might not have to upgrade current policies under a proposal issued by the U.S. derivatives regulator.

*****A new TV show for the fall season: Exchanges Know Best!~JJL


Clayton: Going After The Job As US Atty SDNY Was Entirely My Idea
Ted Knutson – Forbes
In his first public comments on his nomination to be U.S. Attorney for the Southern District of New York after the firing of the incumbent Geoffrey Berman, Securities and Exchange Commission Chairman Jay Clayton told a Congressional panel “it was entirely my idea.”

*****One has to wonder what was going through his head when he came up with that idea.~JJL


Sponsored Content



Desperate Parents Weigh Whether Summer Camp Is Worth It This Year; Operators, too, are in a bind.
Beth Landman – Bloomberg
When Howard Zucker, the state health commissioner of New York, announced on June 12 that sleep-away summer camps in the state were too dangerous to open amid the global coronavirus pandemic, it merely confirmed what parents already knew: The time-honored summer routine has become yet another flash point in a country still struggling to contain the Covid-19 coronavirus.

***My daughter Katherine is the head lifeguard at the Summit Bechtel Reserve, which is the Boy Scouts of America high adventure base and summer camp in West Virginia. They started later than they wanted, but are offering summer camp to Scouts from across the US as many Council’s summer camps are closed this year. My old troops are going to Camp Freeland Leslie, though the program has been altered to minimize the risk of units interacting and potentially widening any potential outbreak of Covid-19. I used to tell the Scouts, you can’t eliminate risk, but you can manage it and that is what we do in Scouting. We manage risks through training, the right equipment and adherence to the Scout Oath and Law.~JJL



CryptoMarketsWiki Coin of the Week: Chainlink (LINK)
SmartContract, the company that created the Chainlink oracle network, has reportedly partnered with China’s national Blockchain Services Network (BSN) to help obtain and organize reliable information from outside the network, or “off-chain” data. Chainlink is a kind of blockchain technology built to increase interoperability between otherwise “closed” blockchain networks. Also, on Friday of last week the Delta exchange announced that it had begun offering options contracts for LINK tokens, a digital asset used in networks that have integrated with Chainlink’s “middleware” network. Chainlink is currently trading at an all-time high.


Thursday’s Top Three
Thursday was an all-Hehmeyer day for our top three. Our top story was John Lothian’s column, Chris Hehmeyer: An Endorsement of the Crypto World Like None It’s Ever Seen. Second was The New Hehmeyer (Written from the perspective of Hehmeyer CEO, Chris Hehmeyer), posted in Medium. Third was Hehmeyer Trading + Investments Rebrands as Hehmeyer, a press release via Businesswire. Oh, and our MarketsWiki Page of the Day for Thursday was Chris Hehmeyer.


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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

The Coronavirus Trade-Off Was Always an Illusion; Lockdown or not, there is no alternative to conquering the disease if economies are to recover.
John Authers – Bloomberg
It’s the Coronavirus, Stupid
After at least three months of furious debate over the rival merits of fighting the pandemic and keeping the economy alive, it looks ever more as though this was a false dichotomy. The disease needs to be beaten. Even if it is not as terrifying as some made it seem a few months ago, the economy cannot function on full throttle until the virus has been bottled up and defeated.

CFTC withdraws Reg AT, advances supplemental electronic trading proposal; Commission also finalizes rulemakings on post-trade name give-up, Volcker rule and margin requirements
Kyle Glenn – FIA
The U.S. Commodity Futures Trading Commission advanced a proposed rulemaking, “Electronic Trading Risk Principles,” by a 4-1 vote on June 25. The proposal, which was based on extensive discussions with FIA members and other market participants, calls on exchanges to comply with three principles for protecting markets from disruptions and anomalies caused by electronic trading.

U.S. Breaks Record for Daily Coronavirus Cases
Heather Smith – Bloomberg
The resurgent coronavirus produced a record number of new cases in the U.S., topping the peak seen in April during the initial outbreak, after many Americans let down their guard on social distancing. State health departments reported more than 37,000 new cases on Thursday, led by Florida, Texas, California and Arizona, surpassing the 36,188 level from April 24. Total cases in the U.S. exceeded 2,418,000, according to data compiled by Johns Hopkins University.

Fed Stress Test Finds U.S. Banks Healthy Enough to Withstand the Coronavirus Crisis; In its annual stress test, the Fed said the nation’s biggest banks are healthy but could suffer 2008-style losses if the economy languishes
Ben Eisen and Andrew Ackerman – WSJ
The Federal Reserve on Thursday said a prolonged economic downturn could saddle the nation’s biggest banks with up to $700 billion in losses on soured loans and ordered them to cap dividends and suspend share buybacks to conserve funds.

Covid-19 Is a Puzzle That Wall Street Can’t Solve; A pandemic ended a U.S. bull market and pushed the financial system to the brink of collapse. Then stocks rallied, only to stall again. Investors are still piecing together what happened.
Akane Otani – WSJ
The first half of 2020 was the most dizzying selloff-turned-comeback many investors have witnessed in decades of working on Wall Street. Stocks, commodities and bond prices careened in March as what experts had described as a mysterious illness circulating around central China morphed into a global pandemic. The longest-ever bull market for stocks came to an abrupt end, its demise caused not by a central bank misstep or a global trade war but by the economic fallout from Covid-19. At one point, it appeared the financial system itself was on the brink of collapse.

FCA orders Wirecard’s UK operations to cease activities; Regulator’s move threatens to leave millions of customers unable to access money
Nicholas Megaw – FT
Britain’s financial watchdog has ordered Wirecard’s UK subsidiary to stop carrying out regulated activities, threatening to leave millions of customers temporarily unable to access money or make payments through fintech apps that rely on its technology.

The work-from-home revolution is only just beginning; With new tools to remove barriers within and between organisations, the crisis brings alluring glimpse of the future
Richard Waters – FT
Halfway through a year where working life has been upended, there has been a spate of the kind of “Future of Work” reports beloved by consultants, analysts and business managers.

Fed caps dividends and bans buybacks by big US banks; Wells Fargo and Goldman Sachs shares fall in after-hours trading after central bank acts
Laura Noonan – FT
The Federal Reserve capped dividends and banned share buybacks by big US banks as it released an analysis showing Covid-19 could trigger $700bn of loan losses and push some lenders close to their capital minimums.

Brussels to call for probe into German regulator over Wirecard; Move comes just days before Berlin assumes rotating EU presidency
Jim Brunsden and Sam Fleming – FT
Brussels will call for a probe into whether BaFin, Germany’s banking regulator, failed in its supervision of Wirecard, warning that the payment company’s collapse poses a threat to investor trust in the EU.

ETFs Thrive in a COVID World; ETFs thrive in a COVID world, but other data suggests ETF trading affects underlying stocks a lot less than you’d expect
Phil Mackintosh – Nasdaq
As volumes and volatility spiked during the height of the COVID selloff, ETFs reached over 40% of total market value traded. At their peak, on February 28th, ETFs traded $405 billion in one day. But other data suggests ETF trading affects underlying stocks a lot less than you’d expect. For example, on February 28, creations and redemptions totaled a much smaller $18 billion gross, and the underlying stock market traded an additional $588 billion.

Tackling Tough Legacy
Scott O’Malia – ISDA
How to handle ‘tough legacy’ LIBOR contracts that are all but impossible to amend or renegotiate has been an issue that has worried regulators and market participants ever since it was revealed the benchmark may cease to exist after the end of 2021. The UK has now announced its solution to this problem – one that will see the UK Financial Conduct Authority (FCA) given powers via legislation to force a change in LIBOR’s methodology in the event it is no longer representative in order to allow a ‘synthetic LIBOR’ based on the new methodology to continue to be used for tough legacy exposures.

Futures industry veteran Jerome Kemp confirms retirement from Citi; Jerome Kemp will retire after nine years with Citi leading its futures and clearing, ending his 36-year.
Kiays Khalil – The Trade
Futures industry veteran Jerome Kemp has confirmed he will retire after nine years with US investment bank Citi, drawing his 36-year career to a close. Kemp retires from Citi after first joining the investment bank in 2011 as global head of futures and clearing where he built out the OTC clearing platform, driving the business from a low mid-tier position to top three leadership during his tenure.

Russian Criminal Group Finds New Target: Americans Working at Home; A hacking group calling itself Evil Corp., indicted in December, has shown up in corporate networks with sophisticated ransomware. American officials worry election infrastructure could be next.
David E. Sanger and Nicole Perlroth – NY Times
A Russian ransomware group whose leaders were indicted by the Justice Department in December is retaliating against the U.S. government, many of America’s largest companies and a major news organization, identifying employees working from home during the pandemic and attempting to get inside their networks with malware intended to cripple their operations.

E.U. Barring U.S. Visitors Would Be a ‘Huge Deal’ for Airlines; International travel, a big profit generator for airlines, has been slow to recover and could take a big blow if European countries bar American travelers.
Niraj Chokshi – NY Times
Delta Air Lines was hoping to restart flights next month from New York to Athens and Lisbon, two popular summer destinations, but it may have to wait a little longer.

Satellites reveal major new gas industry methane leaks
Shadia Nasralla – Reuters
Last fall, European Space Agency satellites detected huge plumes of the invisible planet-warming gas methane leaking from the Yamal pipeline that carries natural gas from Siberia to Europe.

American Financial Exchange launches AMB1s, Fed Chairman Powell believes it may be a replacement for Libor
Zhao Bin – Futures Daily
On June 8, the American Financial Exchange (AFX) and Cboe Global Markets launched a set of one-month Ameribor futures called AMB1s. Fed Chairman Powell believes that Ameribor may become a replacement for Libor.


As Virus Surges, Younger People Account for ‘Disturbing’ Number of Cases; People in their 20s, 30s and 40s account for a growing proportion of the cases in many places, raising fears that asymptomatic young people are helping to fuel the virus’s spread.
Julie Bosman and Sarah Mervosh – WSJ
Younger people are making up a growing percentage of new coronavirus cases in cities and states where the virus is now surging, a trend that has alarmed public health officials and prompted renewed pleas for masks and social distancing.

Nobody in Sports Knows the Long-Term Effects of Covid-19; Athletes are returning to their sports uncertain about what happens if they contract the virus—or what happens next
Ben Cohen and Louise Radnofsky – WSJ
A young man in Boston was feeling uneasy when he asked his followers on social media a question about the pandemic that has vexed the brightest minds in medicine. “What are the long term effects of Covid-19?” wrote Celtics star Jaylen Brown. “Asking for a friend.”

Texas Pauses Reopening, as CDC Says Millions More May Have Had Coronavirus; The government estimates 20 million Americans were infected, significantly higher than official case counts, as Texas sees surge
Jennifer Calfas, Brianna Abbott and Andrew Restuccia – WSJ
Texas paused reopening plans Thursday, as new coronavirus cases and hospitalizations increased in many U.S. states, and a government estimate showed more than 20 million Americans may have contracted the virus, far exceeding diagnosed infections.

Texas puts reopening on hold in face of new Covid-19 outbreak; State leads nation in new coronavirus cases as US tallies another one-day record increase
Peter Wells and David Crow- FT
Texas slammed the brakes on its economic reopening in the face of a leap in coronavirus cases, halting plans to ease lockdown restrictions and banning elective surgeries in its four biggest cities to free up hospital beds.

Pandemic causes ‘unprecedented’ fall in global trade; Eurozone hardest hit as goods volumes drop more than 12% in April
Valentina Romei – FT
World trade experienced an “unprecedented” decline in April as most big economies suffered from strict coronavirus lockdowns, according to widely watched data which found that the eurozone was the hardest-hit area.

No Apps, Just Old-School Contact Tracing in Japan
Lisa Du – Bloomberg
Japan has so far kept its coronavirus cases relatively low, with only about 18,000 infections, and a large amount of the credit goes to a system that has its roots in the 1930’s fight against tuberculosis.

A Devastating New Stage of the Pandemic; The U.S. has seen more cases in the past week than in any week since the pandemic began.
Robinson Meyer, Alexis C Madrigal – The Atlantic
For the past few weeks in the United States, the awful logic of the coronavirus seemed to have lifted. Stores and restaurants reopened. Protesters flocked to the streets. Some people resumed going about their daily lives, and while many wore face masks, many others did not.

Still Reeling From Oil Plunge, Texas Faces New Threat: Surge in Virus Cases; Businesses were reopening in recent weeks and oil prices had climbed north of $40 a barrel before coronavirus infections accelerated in the state.
Clifford Krauss – NY Times
Things were looking up for Texas in recent weeks. Oil prices had managed an impressive rebound, more than doubling to just above $40 a barrel. Restaurants and small businesses were opening up in Houston, Dallas and elsewhere. And tens of thousands of people were getting back to work.

Exchanges, OTC and Clearing

LEX Selects Nasdaq to Power Groundbreaking Commercial Real Estate Securities Trading Platform; Nasdaq’s market technology, the backbone of 120+ global market operators, will power LEX’s platform and bring new sophistication to LEX’s real estate securities trading venue
LEX, the leading commercial real estate securities marketplace that enables accredited and unaccredited investors to invest in individual properties, today announced it has partnered with Nasdaq to power its trading platform. LEX will leverage the cloud matching service via the Nasdaq Marketplace Services Platform to provide the same robust, low latency and high-performance trading features used by 120+ global market operators around the world. The technology partnership sets a new market infrastructure standard for trading real estate securities and establishes an exclusive trading venue for commercial real estate securities.

CME’s Reg Reporting Rollback: A Sign of What’s to Come; Sources say the exchange group’s scaleback is a result of pricing wars, unsustainable business models, and the realities of commercially supporting a regulatory reporting business.
Josephine Gallagher – Waters Technology
In the world of financial technology, M&A is simply a way of life. In May 2016, Nex Group was born after Icap sold its broking business to Tullett Prebon. Five months later, Nex (still using the Icap moniker) bought Abide Financial to bolster its suite of regulatory reporting services. Just over two years later, on Nov. 2, 2018, CME Group closed its acquisition of Nex.

Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange Closed for Canada Day
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Wednesday, July 1, 2020, for the Canada Day holiday. The Exchanges will re-open and resume regular trading hours on Thursday, July 2, 2020.

Borsa Istanbul Announces Constituent Changes To The BIST-KYD Fund Indices For The Third Quarter Of 2020
Referring to article 3.3. of the BIST-KYD Indices Ground Rules, constituent changes to the BIST-KYD Fixed Income Fund Index and BIST-KYD Equity Fund Index for the third quarter of 2020 are determined. All changes will be effective on July 1, 2020.

ASX intends to list a 5 Year Treasury Bond Futures contract on ASX24
ASX today announced that it intends to list a 5 Year Treasury Bond Futures contract on the ASX24 market in late Q4 2020, subject to regulatory approval and internal/external readiness.

Benchmark Futures during Asian trading hours: Amendment of Liquidity Provider schemes
The Management Board of Eurex Deutschland and the Executive Board of Eurex Frankfurt AG took the following decision:

Changes to the Third-Party Information Provider framework
With this circular, Eurex Deutschland and Eurex Frankfurt AG announce amendments to the Third-Party Information Provider (“TPIP”) framework. These changes required adjustments to the following rules and regulations with effect from 1 July 2020:

SET And TFEX To Extend Temporary Rules Until No Later Than Sept 30
The Stock Exchange of Thailand (SET) will prolong its recent trading rule amendments, which are short-selling and ceiling & floor, until September 30, 2020, or before, (from June 30 previously) due to continued market volatility as well as uncertain global economy and the COVID-19 pandemic situation. Likewise, Thailand Futures Exchange’s (TFEX) daily price limit rule will be extended to the same effective end date. The period extension has already undergone the hearing from stakeholders and has been approved by the Securities and Exchange Commission (SEC).

Pregnant Women Are at Higher Risk of Severe Covid-19, CDC Says
Anna Edney – Bloomberg
Agency finds pregnant women more likely hospitalized, in ICU; Director Redfield recommends limiting contact with others
Pregnant women with Covid-19 are at higher risk for being hospitalized and ending up in an intensive-care unit than women who aren’t pregnant, the U.S. Centers for Disease Control and Prevention said.

Houston Facing ‘Apocalyptic’ July 4 Holiday as Virus Surges
Joe Carroll – Bloomberg
Cases in Harris County seen tripling or quadrupling in weeks; ‘We can’t go there,’ says tropical medicine specialist Hotez
Houston’s Covid-19 outbreak is accelerating at an exponential pace that will swamp the fourth-largest U.S. city’s medical infrastructure by the Independence Day holiday, less than two weeks away, a leading disease specialist warned.

Strokes, Altered Mental States Seen in Some Acute Covid Patients
James Paton – Bloomberg
Severe cases of Covid-19 are linked to brain complications including strokes, psychosis and dementia-like symptoms in some patients, a new study shows.


Deutsche Bank adds WhatsApp to client communication channels with Symphony; Deutsche Bank said it is one of the first institutions to integrate WhatsApp into its list of client interaction platforms via the Symphony Connect Solution.
Annabel Smith – The Trade
Deutsche Bank has moved to expand its client communication channels enabling clients to chat securely using WhatsApp as part of its latest partnership with Symphony.

BNY Mellon expands relationship with Microsoft as it rolls out new data platforms; BNY Mellon will collaborate with Microsoft to build new services on Microsoft Azure as it launches three data solutions.
Annabel Smith – The Trade
BNY Mellon has launched three new data and analytics and confirmed the expansion of its relationship with Microsoft to create data services for investment managers.

Wirecard Auditors Say ‘Elaborate’ Fraud Led to Missing Billions
Natalia Drozdiak, Steven Arons, and Sarah Syed – Blooomberg
Ernst & Young says was provided false statements in its audit; Investors take aim at EY after Wirecard declared insolvency
Wirecard AG’s long-time auditors, Ernst & Young, accused their client of “an elaborate and sophisticated fraud” that allowed more than $2 billion to go missing. Now that Wirecard has filed for court protection from creditors, the accountants who signed off on the fintech firm’s books for a decade are rejecting responsibility for their role in the debacle and preparing for the inevitable avalanche of lawsuits.


Lobbyist Jack Abramoff Charged in Crypto-Currency Case, U.S. Says
Joel Rosenblatt – Bloomberg
Jack Abramoff, the onetime Washington insider who went to prison in a lobbying scandal, was charged with a criminal conspiracy related to crypto currency and lobbying disclosure, a U.S. prosecutor said. Abramoff has agreed to plead guilty and faces as long as five years in prison, San Francisco U.S. Attorney David Anderson said Thursday at a press conference in San Francisco. A second man, from Texas, is pleading not guilty.

Jack Abramoff faces return to prison for bitcoin fraud; Disgraced lobbyist pleaded guilty over a fraudulent cryptocurrency scheme
Joshua Chaffin – FT
Jack Abramoff, a lobbyist and fraudster who rose to notoriety in the 1990s alongside a powerful conservative movement in Washington, is facing a return to prison after being charged in a criminal conspiracy involving cryptocurrency.

Kadena Launches Blockchain App to Verify COVID-19 Tests
Jaspreet Kalra – Coindesk
Kadena said Thursday its new app can verify COVID-19 tests are the real deal by letting users track test kits. The Brooklyn, N.Y., blockchain company said the open-source application would be available to use on its testnet immediately, and would provide a secure way for medical professionals and patients to communicate and store test results.

Vanguard applies blockchain technology to FX forwards trading with Symbiont; Industry heavyweights Vanguard, BNY Mellon, Franklin Templeton, and State Street completed a pilot to trade FX forwards using DLT.
Hayley McDowell – The Trade
Vanguard has collaborated with blockchain specialist Symbiont and other industry heavyweights including BNY Mellon, State Street, and Franklin Templeton, to apply distributed ledger technology (DLT) to FX forwards trading processes.

DOJ Indicts Founder of Anti-Money Laundering Bitcoin Project for Money Laundering
Nikhilesh De – Coindesk
The U.S. Department of Justice (DOJ) indicted the founder of “AML Bitcoin” on money laundering and wire fraud charges. The U.S. Securities and Exchange Commission (SEC) also filed charges, alleging the AML Bitcoin team violated federal securities laws.

Price of Grayscale Ethereum Trust has fallen 65% from its June high
Celia Wan – The Block
Grayscale Ethereum Trust, a crypto-connected investment vehicle geared toward traditional investors, experienced one of its most drastic price drops since inception this week. The trust, named ETHE, hit an $82.5 monthly bottom this week, representing a 65% decline from the $239 year-to-date high around June 4. The current share price sits around $98.

New York Regulator Adds 3-Strike Rule for BitLicense Applicants
Paddy Baker – Coindesk
New York’s financial watchdog has warned crypto companies that their BitLicense applications could be thrown out without warning if its feedback is not heeded. In an update Wednesday, New York’s Department of Financial Services (DFS) said a new three-strikes rule would authorize it to deny any applications that didn’t address or consider any deficiencies highlighted by the regulator.

Monaco Selects Fintech Firm Tokeny Solutions as its Tokenization Platform
Julia Bahr – Finance Magnates
The government of Monaco has formalized a Memorandum of Understanding with Tokeny Solutions as its technology provider to support the issuance of tokenized financial instruments, the firm revealed today.

Crypto debit cards issued by Wirecard stop working after UK FCA’s action
Yogita Khatri – The Block’s MCO Visa debit cards have stopped working after the U.K.’s Financial Conduct Authority (FCA) suspended Wirecard Card Solutions (WCS), a subsidiary of scandal-hit Wirecard. The news means’s U.K. and European customers will not be able to top-up their cards or transact. CEO Kris Marszalek said the FCA has “effectively shut down” WCS.

EU Creating a Regulatory Regime for Cryptocurrencies, Says Economic Chief
Paddy Baker – Coindesk
The European Union is preparing a new cryptocurrency regime that could include stricter requirements for “global stablecoin” projects, such as Libra. The bloc’s lead economics minister, Valdis Dombrovskis – or to give him his full title, the European Union’s Executive Vice President of the European Commission for An Economy that Works for People – said Europe had to seize the opportunity to become one of the main rule-makers for digital finance.

SEC Orders Telegram to Pay $18M Fine, Refunds $1.2 Billion to Investors
Aziz Abdel-Qader – Finance Magnates
Messaging giant Telegram is a step closer to end its year-long battle with the US regulators over the TON blockchain. Today, the U.S. Securities and Exchange Commission (SEC) revealed a proposed settlement with Telegram that involves civil penalties, as well as limitations for any future plans to revive its crypto ambitions.

Australia Post Now Lets Customers Buy Bitcoin at Over 3,500 Outlets
Sebastian Sinclair – Coindesk
Australians can now purchase bitcoin at outlets of one of the country’s oldest organizations, its postal service. In a collaborative effort between Australia Post and, customers will now be able to use the Post Billpay feature to purchase bitcoin and other cryptocurrencies at over 3,500 post office shops across the country. AusPost confirmed the news to CoinDesk via email on Friday. The post service will accept cash and card payments for digital currency purchases made via, a cryptocurrency exchange based in Cremorne, Victoria.


IRS Wasting Millions on Audits With No Results, Watchdog Says
Laura Davison -Bloomberg
47% of audits on large companies found no added taxes due; Report found IRS ‘not examining the most productive cases’
The Internal Revenue Service wasted $22.7 million auditing tax returns that resulted in no additional revenue for the federal government, according to an agency watchdog. Almost half — 47.2% — of the audits on large companies from fiscal years 2016 through 2018 resulted in the IRS concluding that no additional tax was due, the Treasury Inspector General for Tax Administration said in a report released on Thursday.

Boris Johnson Played Trump ‘Like a Fiddle, Too,’ Bolton Says
Alex Morales – Bloomberg
Just like the Russian President, the U.K.’s Boris Johnson also played Donald Trump “like a fiddle,” according to John Bolton, who suggested the British prime minister can use that ability to his advantage. The U.S. president’s former national security adviser told Channel 4 News he wasn’t in his post long enough to witness specific incidents, but noted there had been a sea-change in the U.S.-U.K. relationship after Johnson replaced Theresa May as premier last July. Trump and May had a famously awkward relationship.

U.S. lawmakers move to fight Treasury bid to curtail pandemic watchdog
Chris Prentice – Reuters
A clutch of powerful U.S. Senators is pushing back against a bid by the Trump administration’s Treasury Department to weaken a watchdog panel involved with overseeing $2.4 trillion in pandemic aid, according to three congressional aides.

Trump Rally Drew People From Counties Experiencing Covid Spikes
Rachel Adams-Heard, Andre Tartar, and Aaron Kessler – Bloomberg
Rally-goers came from 44 counties, 33 with rising virus cases; Too soon to know whether the event acted as a ‘super-spreader’
Mobile-phone location data from people who attended President Donald Trump’s rally in Oklahoma show that most came from outside Tulsa, hailing from at least 44 counties spread across 12 states. Covid-19 is on the rise in 33 of them.

The Week It Went South for Trump; He hasn’t been equal to the crises. He never makes anything better. And everyone kind of knows.
Peggy Noonan – WSJ
Something shifted this month. Donald Trump’s hold on history loosened, and may be breaking. In some new way his limitations are being seen and acknowledged, and at a moment when people are worried about the continuance of their country and their own ability to continue within it. He hasn’t been equal to the multiple crises. Good news or bad, he rarely makes any situation better. And everyone kind of knows.

Tammy Duckworth Is Battle Tested. Could She Help Joe Biden in His Biggest Mission? The Biden campaign is vetting Ms. Duckworth, a senator and a veteran with a compelling life story, as a potential running mate. “I can push back against Trump in a way others can’t,” she says.
Jennifer Steinhauer – WSJ
Dan Milberg is a retired Army helicopter pilot who voted for Donald J. Trump in 2016, and does not wish to vote for him again. But before he can consider pulling the lever for former Vice President Joseph R. Biden Jr., he needs to know who his running mate will be.

Brazilian President Bolsonaro Says He Thinks He’s Had Covid-19
Martha Viotti Beck – Bloomberg
He had denied catching the virus, long downplaying its danger; Many members of his inner circle contracted the virus in March
Brazilian President Jair Bolsonaro said he believes he’s already had the coronavirus, after denying he’d had it and months spent downplaying its seriousness as he mingled with supporters without a facemask.

Trump Administration Targets ESG Funds With 401(k) Rule; The Labor Department wants to restrict where retirement plan managers put your money, which may hurt sustainability focused funds.
Emily Chasan – Bloomberg
One in four of every professionally invested U.S. dollar is tied to environmental, social and governance criteria. But the Trump administration’s latest proposed rule change may make it harder for ESG funds to attract interest from retirement plans.

A Bad New Tax Idea Is Doing the Rounds; European governments have started cutting VAT, but this won’t foster a consumer-led recovery.
Ferdinando Giugliano – Bloomberg
There’s a new bad idea doing the rounds in Europe. Many governments are convinced that a reduction in value-added tax will help relaunch their economies. Some, including Germany, have already wielded the ax. Others, such as Italy and the U.K., are taking this option seriously. But the benefits of cutting VAT are limited, and the costs are large.


Requirements have been imposed on Wirecard’s authorisation
Wirecard Card Solutions Limited (FRN 900051) is authorised and supervised by the FCA to issue e-money and provide payment services including, issuing e-money onto prepaid cards. Wirecard is authorised under the Electronic Money Regulations 2011 (the EMRs) and its activities are also subject to requirements under the Payment Services Regulations 2017 (the PSRs).

FINRA Gateway – Changes to Form U4 User Interface and Access to Continuing Education
FINRA’s Digital Experience Transformation is changing the way that firms and their personnel access and interact with FINRA’s systems and complete their compliance and regulatory tasks. This Information Notice highlights near-term changes to the manner in which firms and their personnel access, and interact with, FINRA’s registration and continuing education applications and provides relevant dates when FINRA anticipates those changes will occur. As discussed below, some of these changes will require registered persons (and persons seeking registration) to exclusively use FINRA’s Financial Professional Gateway (FinPro).1

SEC Charges Issuer, CEO, and Lobbyist With Defrauding Investors in AML BitCoin
The Securities and Exchange Commission today charged NAC Foundation, its Chief Executive Officer Marcus Andrade, and political lobbyist Jack Abramoff with conducting a fraudulent, unregistered offering of AML BitCoin, a digital asset security the defendants claimed was a new and improved version of bitcoin.

SEC Charges Novartis AG with FCPA Violations
The Securities and Exchange Commission today announced that Novartis AG, a global pharmaceutical and healthcare company headquartered in Basel, Switzerland, has agreed to pay over $112 million to settle charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA).

Financial Regulators Modify Volcker Rule
Five federal regulatory agencies today finalized a rule modifying the Volcker rule’s prohibition on banking entities investing in or sponsoring hedge funds or private equity funds—known as covered funds. The final rule is broadly similar to the proposed rule from January.

CFTC Approves Two Final Rules and Two Proposed Rules at June 25 Open Meeting
Agency Also Withdraws Proposed Rule and Supplemental Proposal for Regulation AT
The Commodity Futures Trading Commission at its open meeting today approved two final rules, withdrew a previously proposed rule and supplemental proposal, and advanced two proposed rules on the following matters:

Statement of Chairman Heath P. Tarbert in Support of the Final Rule to Revise the Volcker Rule
As I have previously remarked, the Volcker Rule is “among the most well-intentioned but poorly designed regulations in the history of American finance.[1]” While today’s final rule does not fix the fundamental flaws of the Volcker Rule[2]—only congressional action can do that—it at least represents a more accurate reading of the law Congress actually passed and brings us a step closer to a reasonable implementation of the rule.[3]

Dissenting Statement of Commissioner Rostin Behnam Regarding Revisions to the Volcker Rule
I respectfully dissent as to the Commission’s decision to finalize additional revisions to the Volcker Rule. As we approach the ten year anniversary of the Dodd-Frank Act,[1] and cautiously begin mapping a path out of the current pandemic, I believe it is a good time to reflect on the lessons learned from the 2008 financial crisis, the efficacy of our responses, and whether our objectives have changed, or just our perspective. One of the many critically important provisions of the Dodd-Frank Act is the Volcker Rule. The Volcker Rule, in simple terms, contains two basic prohibitions: (1) banking entities may not engage in proprietary trading; and (2) banking entities cannot have an ownership interest in, sponsor, or have certain relationships with a covered fund.

Dissenting Statement of Commissioner Dan M. Berkovitz Regarding Volcker Covered Funds Final Rule
The Volcker covered funds final release (“Covered Funds Rule”) adopts with only minor changes the rule amendments as proposed by the agencies in January of this year (“the Proposal”). I voted against[1] the Proposal because the agencies had only superficially considered the additional risks that banks would incur under the loosened regulations. Nothing in the Covered Funds Rule final release dispels this concern. Therefore I dissent from the final release.

Statement of Chairman Heath P. Tarbert in Support of the Proposed Rule on Electronic Trading Risk Principles
The mission of the CFTC is to promote the integrity, resilience, and vibrancy of U.S. derivatives markets through sound regulation. We cannot achieve this mission if we rest on our laurels—particularly in relation to the ever evolving technology that makes U.S. derivatives markets the envy of the world. What is sound regulation today may not be sound regulation tomorrow.

Statement of Support by Commissioner Brian Quintenz Regarding Proposed Rule on Electronic Trading Risk Principles
I support today’s proposal that would require designated contract markets (DCMs) to adopt rules that are reasonably designed to prevent, detect, and mitigate market disruptions or system anomalies associated with electronic trading. It would also require DCMs to subject all electronic orders to pre-trade risk controls that are reasonably designed to prevent, detect and mitigate market disruptions and to provide prompt notice to the Commission in the event the platform experiences any significant disruptions. I believe all DCMs have already adopted regulations and pre-trade risk controls designed to address the risks posed by electronic trading. As I have noted previously, many—if not all—of the risks posed by electronic trading are already being effectively addressed through the market’s incentive structure, including exchanges’ and firms’ own self-interest in implementing best practices. Therefore, today’s proposal merely codifies the existing market practice of DCMs to have reasonable controls in place to mitigate electronic trading risks.

FCA publicly censures Redcentric PLC for market abuse
The FCA has today issued a public censure to Redcentric PLC (Redcentric) for committing market abuse between 9 November 2015 and 7 November 2016. Redcentric has agreed to provide compensation to affected investors.

ASIC’s responsible lending appeal dismissed by the Full Federal Court
On 10 September 2019, ASIC filed an appeal with the Federal Court of Australia against the decision of the Honourable Justice Perram regarding ASIC’s allegations against Westpac Banking Corporation (Westpac) for contraventions of responsible lending provisions of the National Consumer Credit Protection Act 2009 (Cth) (Credit Act). The matter was heard in February 2020 and today the Full Federal Court handed down its majority decision two to one dismissing ASIC’s application.

ASIC permanently bans Melbourne former responsible manager from providing financial services
ASIC has permanently banned former responsible manager Anthony ‘Tony’ David Wynd of Melbourne from providing financial services. Mr Wynd was the sole director and responsible manager of Financial Circle Pty Ltd (Financial Circle), a financial services and credit business ordered by the Federal Court to pay $8,980,000 in total penalties after contravening financial services, credit and consumer protection laws (18-334MR).

Danish Watchdog Tells Banks to Withhold Investor Rewards, Bonuses
Frances Schwartzkopff – Bloomberg
Denmark’s financial regulator is advising banks not to pay out shareholder rewards or extra bonuses until 2021 at the earliest, in keeping with European Union guidelines. The Financial Supervisory Authority in Copenhagen said it expects banks to spend cash freed as result of laxer requirements on lending, in a statement on Friday.

Ontario Securities Commission Publishes 2020-2021 Statement Of Priorities
The Ontario Securities Commission (OSC) published today its 2020-2021 Statement of Priorities, which sets out 15 priority areas where the OSC intends to focus resources and actions over the coming fiscal year, as well as the expected outcomes.

Canadian Securities Regulators Seek Comment On Self-Regulatory Organization Framework
The Canadian Securities Administrators (CSA) today announced that it is seeking input from investors, industry and the public on the framework for self-regulatory organizations (SROs) in Canada.

CPMI-IOSCO Publish A Report On CCP Auctions
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have today published a report entitled “Central counterparty default management auctions – Issues for consideration”.

Investing and Trading

How to invest when ‘safe’ assets are no longer really safe; Investors were unsettled during Covid sell-off when Treasuries dropped alongside equities
Sophie Huynh – FT
Before the coronavirus crisis, US government bonds were trusted by investors as one of the best instruments to hedge against market sell-offs. As virus-related panic sent riskier assets plunging in March, investors found out the hard way that this hedge could not always be relied upon.

An ETF called WFH offers new way to ride remote working trend; Launch from Direxion is the latest in a long line of thematic exchange traded funds
Camilla Hodgson and Robin Wigglesworth – FT
Working from home has become part of millions of people’s daily lives. Now it is also an investment strategy. Fund provider Direxion launched an exchange traded fund on Thursday using the ticker WFH, to tap into US-listed companies positioned to benefit from the mass move to remote working.

‘Atrocious’ governance in oil and gas allows huge rewards for failure; Top executives are taking big bonuses even as companies stagger into bankruptcy
Myles McCormick – FT
The collapse in crude prices this year has sent activity among US oil and gas producers tumbling and left more than 100,000 workers out of a job. But for one small handful of employees things are not looking so bad.

Riskiest US companies are left behind in rush to buy debt; Weaker borrowers have ‘door closed’ to them as Covid-19 effects continue to be felt
Joe Rennison – FT
The lowest-rated companies in the US are struggling to raise much-needed cash despite a resurgent market for selling bonds, signalling that investors are staying away from borrowers that went into the Covid-19 crisis with the sickliest balance sheets.

Wheat Forecasts Grow Bleaker for Europe’s Top Exporters
Megan Durisin – Bloomberg
French soft-wheat harvest is seen just above 30m tons: EU; Soft-wheat crops in Romania and Germany are also shrinking
The outlook for wheat harvests in the European Union’s top shippers is growing slimmer, shrinking export prospects for the season that kicks off next month. The soft-wheat crop in France, the bloc’s largest grains producer, is seen at 30.3 million tons this year, down by more than a fifth from last year’s near-record haul, the European Commission said Thursday. Romania’s harvest will run more than 10% below the five-year average, and Germany’s crop is also dropping from last year.

Private Equity Abuzz Over Access to $6 Trillion 401(k) Market; The government cracks open the door for the industry to target retirement plans.
Benjamin Bain, Sabrina Willmer – Bloomberg
The Trump administration has cracked open the door for private equity funds to get into 401(k) workplace retirement plans. There’s roughly $5.6 trillion in such accounts, and the prospect of capturing even a sliver of it has the industry abuzz. A more complicated question is whether ordinary investors will really want their money going into buyout funds.

Unrest Is Changing the Way Americans Spend Money; They’re buying Black, they’re buying healthy and some aren’t buying at all.
Anita Sharpe, Jordyn Holman, Gerald Porter Jr., and Matthew Townsend – Bloomberg
The back-to-back shocks of a deadly virus, lockdowns and civil unrest have a growing number of Americans reevaluating not just their life priorities, but also how — or even, if — they’ll spend their money.


ESG strategies still buoyant despite Covid, say in-house lawyers; Pandemic shows purpose can defy sceptics. Plus: six general counsel who stand out on sustainability
Pilita Clark – FT
When the coronavirus crisis hit, Springer Nature responded in several striking ways. The publishing group, known for its flagship Nature science journal, made thousands of articles from its journals and books freely available to help researchers get on top of the pandemic. The group is already a pioneer in open access publishing, making some content available online for free, but it had never acted quite on this scale before. By June, it had made more than 19,000 pandemic-related articles available.

Credit Suisse Is Said to Freeze Plans for Miami Wealth Hub
Patrick Winter – Bloomberg
Swiss bank was planning to boost Latin America assets managed; Legal considerations and investment costs at heart of issue
Credit Suisse Group AG has frozen plans for a wealth management hub in Miami to attract billions in new money from the rich in Latin America, two people familiar with the matter said. The early-stage discussions have cooled because legal considerations and investment costs outweighed expected returns, the people said, asking not to be identified because the talks are private. A bank spokeswoman declined to comment.

Amazon-Like Future Awaits Banks as Virus Hastens Online Push
Charlie Devereux – Bloomberg
As Spaniards endured one of Europe’s most stringent pandemic lockdowns, Banco Santander SA’s digital-only Openbank did roaring business. Its brokerage client base expanded 58% in the first four months of the year and trading in shares, ETFs and warrants on its platform more than doubled.

Goldman, JPMorgan Among Banks Trading New ESG Credit Swaps Gauge
Katie Linsell and Alastair Marsh – Bloomberg
Benchmark tracking ESG credits started trading on Monday; Index administrator aims for six market makers by end of week
Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among banks that have started trading credit-default swaps referencing bonds with high sustainability credentials.


Owners of Ailing Energy Trader Hit Back at Critical Report; Hin Leong’s founder wasn’t given real chance to make his case, family says
Chong Koh Ping – WSJ
The family owners of Hin Leong Trading Pte. Ltd. claimed unfair treatment after a report alleged serious irregularities at the distressed energy trader, including a $3 billion-plus overstatement of its assets. The report was filed with a Singapore court earlier this week by interim judicial managers—court-appointed independent administrators—from PricewaterhouseCoopers Advisory Services Pte. Ltd.

Brazil’s banks face pincer threat from big tech and fintech; Online competitors are eating into market share and WhatsApp has launched a new payments service
Bryan Harris – FT
When WhatsApp announced it had picked Brazil to debut its digital payments service, it seemed a perfect fit to try out the new technology. Latin America’s largest economy is already home to 120m users of the messaging app, as well as millions of small retailers.

Congo’s Deadliest Ebola Outbreak Is Declared Over; The World Health Organization called the end of the country’s 10th outbreak, the second deadliest in history, “a victory for science.” Health workers had faced mistrust and treatment centers were attacked.
Abdi Latif Dahir – WSJ
The second-worst Ebola outbreak in history is over, the World Health Organization said on Thursday, after nearly two years and 2,280 deaths.

Why London’s Mayor Is Moving Out of City Hall; Say goodbye to “The Glass Gonad”: Mayor Sadiq Khan plans to relocate city government to cheaper, greener office space in a bid to save money and energy.
Feargus O’Sullivan – Bloomberg
Anyone want to rent a city hall? Following a June 24 announcement by the city’s Mayor Sadiq Khan, London will soon have one to spare. In a bid to cut the city’s budget deficit, Khan has recommended that his offices and the headquarters of the London Assembly should move out of the eye-catching Norman Foster-designed blob they have inhabited since 2002. When its current lease comes up for renewal in 2021, the Greater London Authority will move to the altogether cheaper and less centrally located Crystal Building, located in the Royal Docks a few miles to the east. The move, Khan says, could save the city £55 million ($69 million) over five years, money that could be diverted into essential services that Londoners need far more than they do a splashy-looking political HQ.

Amazon gold rush: illegal mining threatens Brazil’s last major isolated tribe
Simon Scarr, Anthony Boadle – Reuters
Illegal gold mining activity has risen sharply over the last five years in Brazil’s indigenous Yanomami reservation in the heart of the Amazon rainforest, a Reuters review of exclusive data from satellite images shows.


U.K. Firms Get Ready for a No-Deal Brexit With Time Running Out
Joe Mayes, Andrew Marc Noel, and Siddharth Vikram Philiip – Bloomberg
Companies stockpiling, bringing forward EU orders to prepare; Even if trade talks make progress, firms prepare for worst
However much Prime Minister Boris Johnson says he will be able to arrange a trade deal with the European Union by the year-end, firms in Britain are already bracing themselves for the possibility he won’t. Renold Plc, a Manchester-based maker of vehicle chains and gearboxes, is among them. It’s planning to fast-track deliveries to customers in the coming months to ensure they aren’t caught up in any potential border disruption due to Brexit in January, according to Chief Executive Officer Robert Purcell.

Support for Brexit is collapsing as poll finds big majority of British people want to be in the EU
Adam Bienkov – Business Insider
A newly-released survey shows just 35% of British people support Brexit with 57% wanting to rejoin. Support for European Union membership has surged in the UK according to the European Social Survey. Almost 60% of people said they wanted Britain to be in the EU compared to the 48% who backed Remain in 2016. Support for EU membership has risen right across Europe, according to the survey.


A Penny for Your Thoughts Could Be a Lot Harder to Find; Coins have become scarce as virus lockdowns keep people from emptying their coin jars in exchange for paper bills.
Jeanna Smialek and Alan Rappeport – NY Times
Randy Graham, the chief executive of the First National Bank of Tennessee, was surprised to learn in mid-June that the Federal Reserve would not be filling his entire order of pennies, nickels, dimes and quarters.

Google to pay some publishers for content; others dubious
Foo Yun Chee – Reuters
Alphabet’s Google on Thursday took a step towards resolving its spat with publishers, saying it would pay some media groups in Australia, Brazil and Germany for high-quality content and expects to do more deals, but others were sceptical.

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