Hits & Takes
John Lothian & JLN Staff
Deutsche Börse has published a whitepaper that recommends an action plan to strengthen the capital markets. The whitepaper, “Strategies for Sustainable Financing of Germany’s Future,” deals with this question and the results underline the urgent need for a national action plan to strengthen the German and European capital markets. — Deutsche Börse
Today is the day Germany’s flagship DAX® Index expands to 40 from 30 constituent stocks, which Qontigo says is the biggest reform in the benchmark’s +30-year history. The increase was announced in November and simplifies the construction methodology of the DAX Selection Indices (DAX, MDAX®, SDAX® and TecDAX®). — Qontigo
The CME Group launched its first-ever sustainable derivatives clearing service, which allows clearing firms and clients to demonstrate support of ESG objectives and green hedging activities through clearing. The service will “help market participants track and report on how their hedging activities are advancing their sustainability goals. The service will be available from September 27, 2021.” — CME Group
The SEC has denied a request from Nasdaq, NYSE and Cboe Global Markets for a stay of implementing the August 6, 2021-issued “Joint Industry Plan; OrderApproving, as Modified, a National Market System Plan Regarding Consolidated Equity Market Data.” — SEC
We are going to hold a raffle for a free video produced by John Lothian Productions. The video may be up to 5 minutes long and can be animated if wanted. The entry price to this raffle is a contribution to the JLN MarketsWiki Education GoFundMe campaign. Details for the raffle will be forthcoming.
Don’t miss my top 10 list of underappreciated advantages of trading options in John’s Take from The Spread. — JLN
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Cboe Options Institute is hosting a webinar next week on the potential uses of mini Index options and futures, including their place in portfolio management. Speakers include Scott Phillips and Jacob Johnson — both from Lavaca Capital — and TD Ameritrade’s Joe (JJ) Kinahan, along with Cboe’s Matt Moran. It takes place Wednesday, September 29, at 12 p.m. ET. Registration information is here. ~SC
Multiple options expirations add to September market gyrations; Who are the smartest traders in the room?; Strike price pick no simple matter; The Spread – September 17, 2021
– Options markets take a bumpy ride ahead of simultaneous options and futures expirations;
– John’s Take looks at why it’s the smartest traders in the room who trade options;
– Two crucial concepts in strike price choices with Jermal Chandler in the Term of the Week.
Montréal Exchange Extends Trading Hours to Asia Pacific Time Zones; Canada’s Derivatives Exchange further expands global reach, syncing trading hours with Asia Pacific markets in support of growing investor demand
Montréal Exchange (MX), Canada’s derivatives exchange, today launched the next phase of its extended trading hours initiative, offering investors in the Asia Pacific region the opportunity to manage their exposure to Canadian markets and execute cross-market strategies in their local time, almost 24 hours a day.
**** Big news from Montreal Exchange.~JJL
E-waste from every two bitcoin transactions is the equivalent of throwing away an iPad
Tim McDonnell – Quartz
It’s no secret that cryptocurrency mining has a large carbon footprint. The process requires legions of electricity-hungry computers that work around the clock to unlock new coins by cracking math problems. Because these problems get increasingly complex over time, the system rewards energy waste: Any downtime makes the next coin harder to earn, and the only way to get an edge over competitors is to run more computers. And as the price of bitcoin rises—it was $47,318 on Sept. 19, below the peak above $60,000 reached in April—mining activity, and thus emissions, follows suit. The annual carbon footprint today is comparable to that of the London metro area.
***** Send the iPads to me. I know how to turn them into bitcoins.~JJL
Youth involved in the stock market are ‘here to stay’: Teen investor
Ines Ferré – Yahoo Finance
Seventeen-year-old Dylan Jin-Ngo became fascinated with the stock market when he was in sixth grade. Now the Huntington Beach teen spends much of his free time teaching other kids about markets. “Being able to invest without my age being a barrier was something so unique,” Dylan told Yahoo Finance about his motivation. “I learned on my own for the past 3 or 4 years, and I became the youngest certified mutual fund counselor in the nation in 2020.”
****** They have a lot of rallies and non-rallies ahead of them.~JJL
Nearly 70% of millionaires are worried about leaving ‘too much’ money to their kids, survey finds
Nicolas Vega – CNBC
Wealthy celebrities like Daniel Craig and entrepreneurs like Warren Buffett and Kevin O’Leary aren’t the only ones concerned about leaving too much money to their children: Millionaires are increasingly worried about how much of their fortunes to give to their kids.
That’s according to a survey conducted by The Motley Fool, which asked 2,000 high net worth individuals — classified as people with a net worth over $1 million — about their attitudes toward inheritances.
***** It has been a problem for the rich forever.~JJL
Friday’s Top Three
Our top story Friday was the Wall Street Journal’s Why Free Trading Will Never Be Free, about payment for order flow and Robinhood Markets. Second was Critics fear SEC’s Gensler is seeking ‘unlimited powers’ in crypto regulation, from MarketWatch. Third was The dangers of digital assets and tokenisation, from The Trade blog.
26,620 pages; 235,865 edits
The Global Housing Market Is Broken, and It’s Dividing Entire Countries; The dream of owning a home is increasingly out of reach. Democratic and authoritarian governments alike are struggling with the consequences.
Alan Crawford – Bloomberg
Soaring property prices are forcing people all over the world to abandon all hope of owning a home. The fallout is shaking governments of all political persuasions. It’s a phenomenon given wings by the pandemic. And it’s not just buyers — rents are also soaring in many cities. The upshot is the perennial issue of housing costs has become one of acute housing inequality, and an entire generation is at risk of being left behind.
The City of London Finally Gets Back to the Office; After several false starts, workers in the finance industry are returning to their desks in droves.
Harry Wilson and Tom Metcalf – Bloomberg
On the lower floors of HSBC Holdings Plc’s Canary Wharf headquarters, the desks are filling up. Traders, salespeople and close support staff not currently in the office have been told they are expected to be at their workstations on the second to fourth floors of the tower five days a week, according to people familiar with the matter. The only exceptions will be for domestic emergencies and unavoidable family commitments.
Evergrande contagion threat hits global markets; China and Hong Kong property stocks tumble as payment deadline looms for debt-laden developer
Hudson Lockett, Thomas Hale and Naomi Rovnick – FT
Hong Kong’s stock market slumped on Monday in a decline that spread to European bourses as an escalating liquidity crisis at Chinese property developer Evergrande showed signs of spreading beyond the sector. Chinese and Hong Kong property groups were at the centre of the market slide, falling to the lowest levels in half a decade amid rising angst over the fate of Evergrande, the world’s most indebted property developer.
Big tech companies snap up smaller rivals at record pace; ‘Pac-Man’ buying spree comes as US regulators look to clamp down on anti-competitive acquisitions
Kiran Stacey, James Fontanella-Khan and Stefania Palma – FT
The world’s largest technology companies have snapped up smaller rivals at a record pace this year in a buying spree that comes as US politicians and regulators prepare to crack down on “under the radar” deals. Data from Refinitiv analysed by the Financial Times show that tech companies have spent at least $264bn buying up potential rivals worth less than $1bn since the start of 2021 — double the previous record registered in 2000 during the dotcom boom.
Costa Rica president warns of unrest in developing world without more Covid aid; Carlos Alvarado says rising debt risks instability: ‘we won’t all be OK until we’re all OK’
Christine Murray – FT
Developing countries are at risk of sliding into instability under the weight of the pandemic without more financial support from richer nations and the IMF, Costa Rica’s president has warned.
Deutsche Börse whitepaper recommends an action plan to strengthen the capital market
Deutsche Börse whitepaper recommends an action plan to strengthen the capital market
How efficient is the German capital market? The whitepaper “Strategies for Sustainable Financing of Germany’s Future” , which Deutsche Börse published today, deals with this question . The results underline the urgent need for a national action plan to strengthen the German and European capital markets. The whitepaper also provides specific recommendations for the key points of such an action plan. Germany is facing enormous challenges: digitization, climate neutrality, a pension system that is fair to the generations. These issues will have to be central to the new government. The resources required to accomplish these tasks are immense. At the same time, the public finances are heavily burdened by the corona crisis. Private investments and private wealth creation will be decisive success factors in the future. The capital market therefore plays a key role on the way to a sustainable and successful future.
Qontigo announces new composition of STOXX Global ESG Leaders Index
Today, Qontigo announced the results of the annual review of the STOXX® Global ESG Leaders Index, which tracks the leading companies with respect to environmental, social and governance (ESG) criteria.
Qontigo’s Flaegel: ‘DAX Reform Puts Index Family in Best Possible Position for the Future’
On September 20, Germany’s flagship DAX® Index will expand from 30 to 40 constituents, concluding the biggest reform in the benchmark’s +30-year history. The enlargement is the final step in a comprehensive overhaul of rules announced in November 2020 that reflected responses in an extensive market consultation. The changes seek to simplify the construction methodology of the DAX Selection Indices (DAX, MDAX®, SDAX® and TecDAX®), bolster the quality of member companies, and bring the selection criteria in line with international standards.
China Defends Tech Crackdown in Meeting With Wall Street Chiefs
Sridhar Natarajan and Coco Liu – Bloomberg
CSRC’s Fang Xinghai defends Beijing’s clampdown on tech firms; He says the move is to strengthen rules, reduce social anxiety
China’s top regulators defended their market-roiling crackdown on various industries in a meeting with Wall Street executives, while reassuring them the stricter rules aren’t aimed at stifling technology companies or the private sector.
Interactive Brokers founder on why he owns crypto: People may ‘lose faith in paper money’
Brian Sozzi – Yahoo Finance
Online trading pioneer Thomas Peterffy has become a believer in cryptocurrency. “I have for some time [owned cryptocurrencies]. I do own some cryptos, and I do own some gold. I must say that the cryptos have done much, much better than the gold,” the Interactive Brokers founder said on Yahoo Finance Live. “I mean you have to prepare for the small percentage or probability that things can fall apart — especially with all this crazy issuance of more and more money [by the government]. This deficit spending, I don’t know, people sooner or later could — I am not saying they will — but they could lose faith in paper money.”
‘This is how the SEC regulates’: Crypto investors wary as Coinbase fight heats up, regulators circle
David Hollerith – Yahoo Finance
There’s a storm brewing between the booming cryptocurrency sector and regulators charged with overseeing a white-hot industry, where potential risks to investors are proliferating almost as fast as new products.
The GameStop phenomenon triggers potential restrictions in corporate America
David Hollerith and Ines Ferré – Yahoo Finance
The GameStop phenomenon hit corporate America in the coffers this week. On Sept. 16, MassMutual paid a $4 million fine to settle a litigation with Massachusetts securities regulators, according to a Wall Street Journal report.
Bad for business: World Bank China rigging scandal rattles investors
Tom Arnold and Marc Jones – Reuters
Some investors and campaigners expressed dismay on Friday at revelations that World Bank leaders pressured staff to boost China’s score in an influential report that ranks countries on how easy it is to do business there.
US probe into Binance reportedly expands to investigate insider trading
Jon Fingas – Engadget
Binance is apparently facing more pressure from regulators over possible abuses at its cryptocurrency exchange. Bloomberg sources said US officials have expanded their probe of Binance to include possible insider trading and market manipulation. The company hasn’t been accused of wrongdoing, but Commodity Futures Trading Commission investigators have reportedly inquired with potential witnesses about issues like the location of Binance servers (and thus whether the US can pursue any cases).
More CFOs Add Sustainability Targets to Corporate Loans; The volume of such loans has grown in recent months as companies face pressure to go green
Kristin Broughton – WSJ
An increasing number of companies are tying the interest rates on their corporate loans to environmental and other sustainability targets as they face pressure from investors and regulators to go green.
America’s Next Hot Import Might Be Record Energy Prices; Natural-gas, coal and electricity prices are all running abnormally high, far too early
Jinjoo Lee – WSJ
Today’s high energy prices could be a preview of coming attractions—a real horror movie if this winter is cold. Benchmark U.S. natural-gas prices edged above $5 per million British thermal units this month, near their highest since 2014, but they are fairly tame compared with levels in Europe and Asia. The inventory situation seems less dire at home too as underground natural-gas storage grows. The problem is that seasonal stockpiling isn’t happening quickly enough, with inventories 7.1% below their five-year average and less margin for error.
Transitory Inflation Can Be a Lasting Affair; Central banks and investors have different interpretations of how long the current bout of inflation might last
Jon Sindreu – WSJ
Today’s inflation may be transitory, but how long “transitory” means is becoming a real head-scratcher for investors. At the risk of intellectual incoherence, they seem more worried about the next five years than the next 10. Electricity prices are hitting all-time highs in many European countries, making inflation front-page news. Overall eurozone consumer-price growth was 3% in August, much higher than in July, according to official data released Friday. Price gains are even steeper in the U.S., though data for August suggest they may have peaked.
Leaders in Trading 2021: Algorithmic Trading Awards shortlists unveiled; Winners of this year’s Algorithmic Trading Awards across eight categories will be announced during The TRADE’s flagship Leaders in Trading awards ceremony on 4 November.
Annabel Smith – The Trade
The TRADE is delighted to announce the shortlisted nominees for this year’s Algorithmic Trading Awards 2021. After a successful Leaders in Trading: The Digital Experience (LiTDX) earlier this year, The TRADE’s flagship awards night returns to The Savoy in London on 4 November.
Pfizer Covid Shot Safely Bolsters Antibodies in Younger Kids
Robert Langreth – Bloomberg
Drugmaker, partner BioNTech to submit data to U.S. regulators; Calls to immunize children grow as schools open, delta spreads
Pfizer Inc. and partner BioNTech SE said their Covid-19 vaccine was safe and produced strong antibody responses in children ages 5 to 11 in a large-scale trial, findings that could pave the way to begin vaccinating grade-school kids within months.
Pfizer, BioNTech Say Covid-19 Vaccine Is Safe for Young Children, Generates Immune Response; Companies to seek emergency authorization in the U.S. for use of their vaccine in children aged 5 to 11 years as soon as possible
Jared S. Hopkins – WSJ
Pfizer Inc. PFE -1.30% and partner BioNTech SE BNTX -3.61% said their Covid-19 vaccine was found to be safe and generated a strong immune response in children aged 5 to 11 years in a late-stage study, bringing the prospect of broader vaccination coverage closer.
CVS Makes Hiring Push Amid Worker Shortage, Increased Covid-19 Vaccine Demand; Pharmacy chain plans to add 25,000 people this week as stores struggle with long lines, frustrated customers
Sharon Terlep – WSJ
CVS Health Corp. CVS 0.19% , one of the biggest U.S. providers of Covid-19 tests and vaccines, is racing to hire thousands of workers as staffing shortages prompt stores to close drive-through lanes and at times turn away customers seeking shots.
The Real Reason You and Your Neighbor Make Different Covid-19 Risk Decisions; More scientists are trying to explain this pandemic puzzle—and coming up with surprising answers
Andrea Petersen – WSJ
Some people are comfortable going to concerts and clubs now. Others draw the line at indoor dining. And some are avoiding nearly all gatherings. People’s assessment of what is safe has varied wildly during the Covid-19 pandemic—often leaving us baffled about why our risk decisions differ so sharply from those of our neighbors, friends and family members. Now, scientists are starting to better understand why.
Health Experts Urge Patience on Wider Use of Covid-19 Booster Shots; Anthony Fauci and NIH Director Francis Collins expect broader approval of the extra injections in the coming weeks
William Mauldin and Joshua Jamerson – WSJ
Top U.S. health officials urged patience on broader approval for booster shots for the coronavirus vaccine, two days after a Food and Drug Administration advisory panel recommended that a booster from Pfizer Inc. and BioNTech SE should be limited to the elderly and other groups at higher risk.
Doctors Left to Decide Who Gets Extra Covid-19 Vaccines Amid Booster Debate; Physicians are making decisions about whose existing conditions qualify them to get a vaccine again
Robbie Whelan – WSJ
Jennifer Boral badly wants a Covid-19 vaccine booster shot. An asthmatic with a history of getting colds that develop into serious lung infections, the 41-year-old unemployed real-estate agent in Briarcliff Manor, N.Y., is terrified that getting Covid-19 might land her in the hospital or worse.
Covid Vaccine Prompts Strong Immune Response in Younger Children, Pfizer Says Vaccinated kids aged 5 to 11 showed evidence of protection against the virus, the company said. The data must be reviewed by the F.D.A. before children can be inoculated.
Apoorva Mandavilli – NY Times
The Pfizer-BioNTech coronavirus vaccine has been shown to be safe and highly effective in young children aged 5 to 11 years, the companies announced early Monday morning. The news should help ease months of anxiety among parents and teachers about when children, and their close contacts, might be shielded from the coronavirus.
Exchanges, OTC and Clearing
CME Group Launches First-Ever Sustainable Derivatives Clearing Service
Clearing firms and clients will now be able to demonstrate support of ESG objectives and green hedging activities through clearing
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of the derivatives industry’s first-ever Sustainable Clearing service to help market participants track and report on how their hedging activities are advancing their sustainability goals. The service will be available from September 27, 2021. Sustainable derivatives encompass both the trading of products such as carbon offsets, battery metals and bioenergy as well as interest rate and foreign exchange.
TFEX Extends USD Futures Trading Hours and Adds Silver Online Futures Contract Series Starting Late Sept.
Thailand Futures Exchange (TFEX) to Extend USD Futures Trading Hours Until Midnight Starting Sept. 27, 2021 and add a series of Silver Online Futures to cover the nearest 2 quarters starting Sep 29, 2021, to allow investors to manage their risks and adjust their trading strategies.
Astana International Exchange launches AIX Qazaq Index
Astana International Exchange (“AIX”, “Exchange”) is pleased to announce the launch of the AIX Qazaq Index (“AIXQI” “Index”), which measures the performance of the shares of Kazakhstan linked companies. AIXQI is a market-capitalization weighted index with maximum weight cap.
CTBC Bank Becomes First Taiwan Client To Clear At LCH ForexClear
Rohit Verma, Head of Asia Pacific, LCH, said: “Taiwan is an important financial hub for the derivatives market and we are delighted to welcome CTBC Bank to the ForexClear service. With new uncleared margin rules phases coming in, firms are looking to optimise their derivatives portfolios through clearing at LCH. Phase 5 of the uncleared margin rules was implemented in September and firms are already preparing for Phase 6, coming into effect September 2022.”
The DAX® reform and its impact on derivatives trading
The increase in the DAX to 40 constituents marks a significant evolution for the leading German index. But what will the impact be on derivatives trading? We spoke to Zubin Ramdarshan, Head of Equity & Index Product Design, Eurex.
Eurex Exchange Readiness Newsflash | Introduction of 3M SARON® Futures with a new naming convention: Reminder
With this Newsflash, we would like to remind our Participants about the introduction of 3M SARON® Futures (with a new naming convention) on 27 September 2021. The new contracts will be titled “3M SARON® Futures” with Eurex product code FSR3. Other than the new naming convention, the new contracts will mirror the contract specifications of the existing Three-Month SARON® Futures (Eurex product code: FSO3).
Western Bulk Chartering lists on Euronext Growth; NOK 130 million raised – market capitalisation of NOK 1,008 million.
Euronext today congratulates Western Bulk Chartering, on its listing on Euronext Growth (ticker code: WEST). Western Bulk is a global major global operator in the Supramax/Ultramax and Handysize dry bulk shipping market with offices in Oslo, Singapore, Seattle, Santiago and Casablanca. The company matches cargo with vessels, chartering vessels from various vessel owners and transporting cargo for customers worldwide.
Amendments to the June 2022 Contract Month Coupon Rate of the 2-Year, 3-Year, and 5-Year Eris US Dollar Swap Futures Contracts and Temporary Suspension of Trading and Clearing of the June 2022 Contract Month
SGX welcomes CapitaLand Investment Limited to Mainboard
Singapore Exchange (SGX) today welcomed CapitaLand Investment Limited (CapitaLand Investment) to its Mainboard under the stock code “9CI”.
Silicius Real Estate receives favourable report from BME Growth;’ It will be the 12th company to join BME Growth this year, with a valuation of 556.13 million euros
The Coordination and Admissions Committee of BME Growth has submitted to the Board of Directors a favourable report on SILICIUS REAL ESTATE SOCIMI following a thorough review of all the information presented by the company.
Google’s Former AI Ethics Chief Has a Plan to Rethink Big Tech; Timnit Gebru says regulators need to provide whistleblowers working on artificial intelligence with fresh protections backed up by tough enforcement.
Dina Bass – Bloomberg
Timnit Gebru is one of the leading voices working on ethics in artificial intelligence. Her research has explored ways to combat biases, such as racism and sexism, that creep into AI through flawed data and creators. At Google, she and colleague Margaret Mitchell ran a team focused on the subject—until they tried to publish a paper critical of Google products and were dismissed. (Gebru says Google fired her; the company says she resigned.) Now Gebru, a founder of the affinity group Black in AI, is lining up backers for an independent AI research group. Calls to hold Big Tech accountable for its products and practices, she says, can’t all be made from inside the house.
Cloud-Storage Firm OVH Aims for $469 Million in Paris IPO
Phil Serafino and Albertina Torsoli – Bloomberg
Founder Octave Klaba plans to retain a majority stake; Listing is part of a wave of French IPOs reviving the market
OVH Groupe SAS kicked off an initial public offering in Paris, looking to raise as much as 400 million euros ($469 million) that will give the cloud-storage provider funding to finance its competition with Amazon.com Inc. and accelerate its international expansion.
Stripe Plans Hiring Push in London Ahead of Potential IPO
Ivan Levingston – Bloomberg
London hiring plans add to pledge to add jobs in Dublin; European roots ‘becoming more and more important’: Henderson
Stripe Inc. is planning to hire dozens of new employees for its London office next year as part of a broader expansion in Europe ahead of the payments company’s potential initial public offering.
Your Organization May Need a Cybersecurity Advisor: Here’s What To Consider
Paul Boulanger – CPO Magazine
The past year has proven just how much of a necessity cybersecurity is for businesses, regardless of an organization’s industry, size, or location. However, every organization’s needs will vary based on different factors, including regulatory requirements, annual budgets, and internal priorities. A cybersecurity advisor can help assess your organization and construct a cyber plan depending on the needs of your business operations.
How to retain the best talent in a competitive cybersecurity market
Isabel Dewey – Help Net Security
We are currently experiencing The Great Resignation, where millions of people are leaving their jobs in search of increased satisfaction. The global pandemic gave many the time to think about what work means to them, their contributions to the industry and the organization they are a part of, how they spend their time, and most importantly, how a career may fulfill their lives.
Experts agree strengthening cybersecurity defenses mean addressing skills gap – Back End News
Marlet D. Salazar – Backend News
At the 3rd Asia Pacific Online Policy Forum by Kaspersky held recently, experts all agree that to bolster cybersecurity on the national, as well as private sector, level, it is imperative to grow and keep the talent pool.
Pre-pandemic, there are already conversations about the cybersecurity skills gap. The lockdowns prompted organizations to accelerate digital transformation to ensure business continuity. The surge in the remote workforce also meant a dramatic increase of vulnerabilities to exploit. If security professionals are limited or at least employees’ education on cyber safety is non-existent, the chances of a breach are more likely to happen.
New licensing conditions for cyber-security service providers to kick in by early 2022
Kenny Chee – The Straits Times
Cyber-security service providers, which verify if businesses are vulnerable to hacking and monitor information technology systems for suspicious activities, will soon have to be licensed.
This aims to give greater assurance of safety to customers and raise the quality of the providers, said the Cyber Security Agency of Singapore (CSA) on Monday (Sept 20).
Vitalik Buterin created a ‘fellowship of the ring’ to build ethereum. But the founders have a history of feuds and are now competing for crypto dominance.
Harry Robertson – Business Insider
Vitalik Buterin has compared the eight founders of the ethereum blockchain to JRR Tolkien’s close-knit “fellowship of the ring”, according to the Financial Times. Yet, the story of the group is one marked by feuds and competition, with two members splintering off to create ethereum rivals cardano and polkadot. Buterin recently said choosing seven other founders “nondiscriminately” to build the network was his biggest regret.
Coinbase Secures US Contract in Throwback to Soured Deal
Gerelyn Terzo – FX Empire
Coinbase continues to gain influence despite regulatory headwinds. The leading U.S.-based cryptocurrency exchange has secured a contract with the Department of Homeland Security that’s worth a potential $1.4 million, surpassing the amount of another similar mandate for the company. Based on the terms of the agreement, Coinbase will deliver “application development software as a service” for the U.S. Immigration and Customs Enforcement (ICE) division.
Coinbase Strikes Deal With Homeland Security, Offering Analytics Tools
Ryan James – BeInCrypto
The Immigration and Customs Enforcement department of the U.S. Department of Homeland Security has paid Coinbase $1.36M dollars for a license to use Coinbase Analytics to study American residents’ knowledge.
China roundup: Beijing is tearing down the digital ‘walled gardens’
Rita Liao – Techcrunch
Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. This week, China gets serious about breaking down the walled gardens that its internet giants have formed for decades. Two major funding rounds were announced, from the newly established autonomous driving unicorn Deeproute.ai and fast-growing, cross-border financial service provider XTransfer.
Decentral Games Secures Support From Binance Smart Chain Fund
Joanna Ossinger – Bloomberg
Decentral Games has secured funding and support from Binance Smart Chain’s $100 million accelerator fund to help it expand. Decentral is a top play-to-earn platform and game developer for the metaverse, which is a vision of a virtual world where people interact through avatars. It didn’t disclose the exact amount, but said it plans to use the financing to help expand non-fungible token (NFT) markets on the Binance Smart Chain, and accelerate the creation of new games and features for its existing six metaverse venues, according to a statement from the company.
Facebook exec says stablecoins ‘probably’ require more regulation
Max Zahn with Andy Serwer – Yahoo Finance
SEC Chair Gary Gensler put forward a wide-ranging view of potential cryptocurrency regulation at a Senate hearing this week, saying that a type of digital asset called stablecoins may be considered a security. The comments come as the Treasury Department works with other federal agencies to draft a report by next month on potential regulations for stablecoins, a form of cryptocurrency that pegs its value to a commodity or currency, like the U.S. dollar.
U.K. Government Meets With Industry to Avert Chaos: Power Update
Rachel Morison, Alex Morales and Vanessa Dezem – Bloomberg
U.K. energy companies are seeking a massive government bailout as a surge in gas and electricity prices threatens to push small suppliers with limited hedging out of business.
Climate Populism Is a Gathering Storm in Europe; Faced with potential social unrest, European leaders move to help consumers deal with rising energy costs.
Lionel Laurent – Bloomberg
After European governments sought to do “whatever it takes” to protect people from the economic effects of pandemic lockdowns, politicians are once again taking out their checkbooks to help consumers — this time to ride out a post-reopening jump in energy prices.
Why Wokeism Will Rule the World; The woke movement could be the next great U.S. cultural export — and it is going to do many other countries some real good.
Tyler Cowen – Bloomberg
I am decidedly un-woke. As a professor of economics, I strongly favor a market-oriented approach. I have worked hard to defend the positions of non-woke right-wing and libertarian colleagues in academia. What’s more, I am on record as saying that wokeism is stupid and inflexible, and will state here and now that it is also boring and predictable.
Johnson Downplays Chance of Reaching $100 Billion Climate Pledge
Kitty Donaldson – Bloomberg
Johnson asks wealthy nations for cash to tackle climate change; Biden, Amazon’s Bezos on Johnson’s visit list for U.S. trip
Prime Minister Boris Johnson downplayed the chance of securing the $100 billion a year target from wealthy nations to tackle climate change by the time the U.K. hosts a United Nations summit at the end of October.
U.K.’s CMA ‘Puts Businesses on Notice’ Over Greenwashing
Katharine Gemmell – Bloomberg
Review, action on misleading green claims to start in 2022; New guidance given to help firms comply with the law
The U.K.’s competition watchdog has told British businesses they have until next year to clean up any misleading green marketing claims. The Competition and Markets Authority said it’ll carry out a full review of environmental boasts made by companies at the start of 2022, and will take action against offending firms. Industries where consumers have the most concern, including fashion and travel, will be investigated, the regulator said Monday.
Oil Companies to Be Sidelined at U.N.’s Climate Conference; BP and Shell’s presence at COP26 in Glasgow is set to be limited by the host country’s requirement for detailed emissions-reduction plans
Sarah McFarlane – WSJ
Some big oil companies say they want to play a key role in reducing carbon emissions, but they are set to be sidelined at the coming United Nations climate conference. Retailers, tech companies and consumer products makers have all been named as “principal partners” for COP26 in Glasgow—allowing them greater involvement with the event—but major oil companies like BP BP -0.39% PLC and Royal Dutch Shell PLC will have a lower profile. That is because the oil industry has yet to agree on science-based plans for how it will reduce carbon emissions, a hurdle U.K. organizers set as a prerequisite for involvement in the event.
Japan Takes Step Toward First Female Premier as Two Women Run
Isabel Reynolds – Bloomberg
Two women are in contention to become prime minister of Japan for the first time in its history — a potential turning point for a country that ranks below Saudi Arabia in terms of female political representation.
The SEC has now paid $1 billion to tipsters. Here’s an inside look at the crazy world of whistleblower lawsuits.
Samantha Stokes – Insider
Thanks to a recent $110-million payout, the Securities and Exchange Commission has reached a new milestone: the agency has doled out more than $1 billion to whistleblowers. Since the SEC issued its first whistleblower award program in 2012, it has paid out cash to 207 individuals through a Congress-established fund that’s financed by securities law violators.
Hong Kong court finds a broker and three former executives guilty of fraud, in a win for ICAC’s clean-up of Convoy’s financial scandal
Enoch Yiu – South China Morning Post
Hong Kong’s graft busters scored a victory in their attempt to prosecute one of the city’s biggest financial fraud cases in recent decades, when a court declared three former executives of Convoy Global Holdings and a broker guilty of conspiracy to commit fraud.
Why US regulators should allow payment for order flow to continue; Banning practice would throw a wrench into the well-oiled machine of the most efficient markets in the world
Hal Scott – FT
The new Securities and Exchange Commission chair Gary Gensler has said that one of his first acts may be to ban payment for order flow for retail trades in US equity markets. That would be a big mistake.
Realtors Face Federal Scrutiny of Broker Commissions; Justice Department probe, civil lawsuits pose challenge to real-estate industry practices
John D. McKinnon – WSJ
The residential real-estate industry is bracing for a challenge to the commissions charged by its sales agents, one that could put downward pressure on the fees paid by home buyers and sellers. The Justice Department is investigating home sale commissions, and in a wide-ranging executive order President Biden asked the Federal Trade Commission to adopt rules to address unfair or exclusionary practices in the real-estate industry.
RBC to pay $800,000 for municipal bond unfair dealing ‘flipper’ charges; The Securities and Exchanges Commission (SEC) found that RBC allocated bonds intended for institutional investors to parties who then resold them to broker-dealers at a profit.
Annabel Smith – The Trade
RBC has agreed to pay $800,000 to resolve charges relating to an SEC order which found that it failed to give priority to institutional and retail investors trading in municipal bonds. According to the US regulator’s order, RBC improperly allocated bonds intended for institutional investors to “flippers” – parties who purchase and then re-sell bonds to other broker dealers for a profit – over a four-year period.
SEC Charges Former Pharmaceutical Global IT Manager in $8 Million Insider Trading Scheme
The Securities and Exchange Commission today announced insider trading charges against Dayakar R. Mallu, of Orlando, Florida, who generated gains and avoided losses totaling over $8 million by trading in the securities of his former employer, Mylan N.V., ahead of four public announcements between Oct. 3, 2017, and July 29, 2019.
SEC Awards $11.5 Million to Two Whistleblowers
The Securities and Exchange Commission today announced awards of approximately $11.5 million to two whistleblowers whose information and assistance contributed to the success of an SEC enforcement action.
Upcoming Retirement of the OTC Bulletin Board (OTCBB)
As announced in Regulatory Notice 21-28, FINRA is deleting the Rule 6500 Series and other rules related to the OTC Bulletin Board (OTCBB) – a FINRA-operated inter-dealer quotation system – and is planning to cease its operation. The OTCBB closure will not occur until the steps specified in Regulatory Notice 21-28 have been completed. Although the closure date has not yet been finalized and will not occur prior to October 1, 2021 (consistent with the Regulatory Notice), it may occur as soon as the fourth quarter of 2021 and members and vendors should be taking steps to prepare for its closure.
Proposed Rule Change to Amend FINRA Rule 2231 (Customer Account Statements)
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to: (1) amend Rule 2231 (Customer Account Statements) to (a) add new supplementary materials pertaining to compliance with Rule 4311 (Carrying Agreements), the transmission of customer account statements to other persons or entities, the use of electronic media to satisfy delivery obligations, and compliance with Rule 3150 (Holding of Customer Mail); and (b) incorporate without substantive change specified provisions derived from Temporary Dual FINRA-NYSE Rule Interpretation 409T (Statements of Accounts to Customers) pertaining to information disclosed on customer account statements, externally held assets, use of logos and trademarks, and use of summary statements; (2) delete Temporary Dual FINRA-NYSE Rule 409T (Statements of Accounts to Customers) and Temporary Dual FINRA-NYSE Rule Interpretation 409T; and (3) make other non-substantive and technical changes in Rule 2231 and to other FINRA rules due to this proposed rule change.
FINRA Adopts Amendments to Rule 6432 Regarding Compliance With the Information Requirements of SEC Rule 15c2-11;= Effective Date: September 28, 2021
FINRA adopted amendments to Rule 6432 (Compliance with the Information Requirements of SEA Rule 15c2-11)1 in light of the Securities and Exchange Commission’s (SEC) amendments to SEC Rule 15c2-11 (SEC Rule 15c2-11).2 As amended, Rule 6432 will require a qualified inter-dealer quotation system (Qualified IDQS)3 to submit a modified Form 211 filing to FINRA in connection with each initial information review, and a daily security file to FINRA containing summary information for all securities quoted on its system on each day that it makes a publicly available determination permitted under SEC Rule 15c2-11, among other amendments. The amendments to Rule 6432 will take effect on September 28, 2021—in line with the compliance date for the amendments to SEC Rule 15c2-11.
OPBAS publishes report on progress and themes from 2020/21
The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has today released its latest report on progress made in tackling money laundering by professional body supervisors over the past year.
Investing and Trading
Forbes CEO on going public: Soon our business will be as big as our brand
Forbes CEO Michael Federle joins Yahoo Finance Live to discuss the company going public via SPAC and outlook for growth for the business publication.
MFA launches Partnership Program with regional US alternative investment groups
The Managed Funds Association (MFA), an organisation representing the global alternative investment industry, has launched a partnership programme to support regional and state association growth and further strengthen the voice of the alternative investment industry.
White Striping Disease Hits 99% of U.S. Supermarket Chicken, Study Finds
Amelia Pollard – Bloomberg
Disease stems from fast-growth farming, Humane League says; Chickens with ailment have 224% higher fat content than normal
Ten years ago, the poultry muscle disease known as white striping was almost nonexistent. Now, the fat-boosting ailment shows up in 99% of U.S. store-brand chickens, according to a Humane League study to be released Monday.
Investors rein in risk for fear of ‘doing something stupid’ before year end; More cautious mood sinking into markets as economic optimism fades
Katie Martin – FT
The end of the year is almost in sight. Pumpkin spice lattes are back and supermarkets are starting to plaster images of mince pies on their apps. (Too soon, in my view.) At this point in the calendar, fund managers have one key task: Don’t do anything stupid. The largesse of central banks and governments has propped up their returns rather nicely in 2021, and unless they break that golden rule with an ill-fated blowout bet, most are on track to post respectable figures for the full year.
Sonos Has a Few Laws on Its Side; Ability to raise prices while demand is booming is an even better sign than a patent win against Google
Dan Gallagher – WSJ
For Sonos, SONO 1.91% the laws of economics trump the laws of patents, though both have been good to the company of late. The pandemic-fueled phenomenon of people being stuck at home with money to spend has turned out to be great for the maker of premium speakers. When Sonos wraps its fiscal year later this month, revenue is expected to be up 29% from last year—the best annual growth since 2014. Device unit sales for the first nine months of the year have jumped 14% from the same period last year.
Tax Strategies You Don’t Want to Miss Before the End of the Year; Many taxpayers will benefit from tax-loss harvesting this year, as well as changes in the rules around charitable giving
Tom Herman – WSJ
To paraphrase an old saying, nothing may be certain in this world except death, taxes and thorny questions about tax-saving tactics. This is an especially perplexing time for many taxpayers trying to figure out the best strategies, such as timing income, deductions and other maneuvers, amid major uncertainties about possible tax-law changes. More will be coming on that once the legislative picture becomes clearer.
Environmental, Social and Corporate Governance
Lloyd’s of London delays setting ethnic diversity targets; Corporation seeking to fix culture where non-white colleagues do not feel as supported as peers
Ian Smith – FT
Lloyd’s of London has had to delay the setting of targets for ethnic diversity in the more than 300-year old insurance market because not enough of its participants have yet provided data on their staff.
Goldman Sachs announces the latest part of its $10 billion racial justice investment ?— this time supporting Black women in STEM
Marguerite Ward – Insider
On Wednesday, Goldman Sachs announced it is rolling out the latest part of its $10 billion investment in Black women in the US. The financial behemoth is partnering with Black-led financial services firm Loop Capital. Together, they’re providing clients of both firms with funds to invest in programs that support Black women pursuing STEM careers. Google is supporting the initiative with a $500 million investment.
Minority-owned banks are scoring more roles in large Wall Street deals
Kate Marino – Axios
Wall Street has long had a reputation for being a boys club with a diversity problem. But recently, the biggest banks have done something surprising: elevated women and minority-owned banks as partners in deals.
Can Firms Ask What Your Parents Did For a Living? KPMG wants more working-class staff. That means asking some personal questions, but more importantly, being responsible with the answers.
Chris Hughes – Bloomberg
Class hasn’t had enough attention in the drive for workplace equality. Perhaps thanks to a British preoccupation with this topic, the U.K. arm of accounting giant KPMG is addressing the deficit. The firm has been analyzing its workforce by nosing around what employees’ parents used to do for a living. It’s a legitimate inquiry. The tricky issue is what to do with the answers.
Investment Consultants With $10 Trillion Make Net-Zero Pledge
Melissa Karsh – Bloomberg
Cambridge, Willis Towers Watson among 12 participants in group; Big investors and banks are also committing to climate goals
A dozen investment consultants advising on $10 trillion of assets are pledging to cut net greenhouse-gas emissions to zero by 2050.
The evolution of the chief diversity officer; It is the newest senior leadership function in many organisations but the role can be hard to navigate
Emma Jacobs – FT
The protests following George Floyd’s murder last year forced many businesses to recognise their shortcomings on diversity and inclusion. The effect was immediate: research by the Royal Bank of Canada last year showed 40 per cent of S&P 500 companies discussed diversity policies during earnings calls in the second quarter of 2020, up from 6 per cent the same time the previous year.
Climate change ETFs found to be undermining war on global warming; Academic research shows the funds also starve sectors of capital to invest in transition to cleaner energy
Steve Johnson – FT
Climate-focused investment funds are undermining the fight against global warming by routinely engaging in greenwashing, academic research has claimed. Passive exchange traded funds tracking “low carbon”, “climate change” or “Paris-aligned” indices allocate little of their money to the greenest companies and habitually increase the weighting of companies whose environmental performance is deteriorating.
Greenhouse gas levels going ‘in the wrong direction’, UN report card shows; Scorecard puts global emissions on track to rise 16% by 2030 as Biden convenes world leaders on climate targets
Leslie Hook – FT
The world’s climate pledges are far off track from meeting the goals of the Paris climate accord, according to a new UN report card that tallies up national climate goals, as global emissions head in the “wrong direction”.
Credit Suisse charges investors to prop up Greensill Capital; Clients facing billions in losses are furious but Swiss bank cites need to keep collapsed company ticking over to recoup funds
Stephen Morris and Robert Smith – FT
Credit Suisse has angered investors facing billions of dollars of losses from its defunct supply-chain finance (SCF) funds with plans to charge them another $145m this year, part of which is being used to prop up Greensill Capital. In March, the Swiss lender suspended a $10bn suite of SCF funds linked to Greensill, which collapsed into administration amid allegations of fraud. While about $7bn has been collected, the bank has warned that about $2.3bn will be difficult to recoup.
Hedge fund Element hires former MPC member Gertjan Vlieghe; Element is one of world’s biggest macro hedge funds with $15bn in assets
Laurence Fletcher – FT
New York-based hedge fund Element Capital has hired Gertjan Vlieghe, who until last month was a member of the Bank of England’s rate-setting Monetary Policy Committee, as its chief economist.
Mystique of Elliott Management at issue in challenge from Twitter shareholder; Lawsuit over 2020 settlement says social network’s board folded after being intimidated by aggressive hedge fund
Sujeet Indap – FT
Elliott Management is so feared that its mere arrival at a company can immediately trigger misconduct by the leadership of its prey. That is the provocative theory of a lawsuit brought by a shareholder of Twitter that, just 10 days ago, gained traction in a Delaware court.
Green Bulls See Path to Growth for Europe’s Downtrodden Bank Stocks; Banks such as HSBC and Barclays could benefit from a boom in lending to companies cutting carbon emissions, analysts say
Simon Clark – WSJ
European banks such as Barclays BCS -1.17% PLC and Deutsche Bank AG DB -1.60% say lending to environmentally minded companies is the future. Some analysts think the strategy could pay off for their share prices, which have lagged behind faster-growing U.S. rivals for years.
BNP Paribas Asset Management Adopts Euronext CAC 40 ESG Index
BNP Paribas Asset Management has announced that the BNP Paribas Easy CAC 40 UCITS ETF will now replicate the CAC 40 ESG NTR, administered by Euronext and launched on 22 March 2021. The change means that BNPP AM now manages the first French market index fund to track this index. The index consists of 40 mainly French companies with the best ESG practices, the firm writes.
Allianz Asset Management Head Jacqueline Hunt in Talks to Depart; Departure talks come as the company deals with a DOJ investigation into billions of dollars in losses in its Structured Alpha funds
Julie Steinberg and Justin Baer – WSJ
Allianz SE’s ALIZY -1.52% top asset-management executive is in talks to leave the company, according to people familiar with the matter, as it navigates a Justice Department probe into a group of investment funds that suffered steep losses last year.
Senior Eaton Vance executives depart for Artisan Partners to expand new emerging markets franchise; Among those to depart is the asset manager’s former global director of trading, co-director of emerging markets, and its emerging markets portfolio manager.
Annabel Smith – The Trade
Three senior executives, including the global director of trading at Eaton Vance, have left the firm to join independent Boston-based investment management firm Artisan Partners.
Chinese Property Developer Sinic Halts Trading After Sinking 87%
Lianting Tu and Low De Wei – Bloomberg
Sinic Holdings Group Co. has halted trading after an 87% slump in its shares Monday afternoon. The Shanghai-based developer didn’t give any reason for the trading halt in Hong Kong. The sudden selloff in the last two hours leading up to the suspension was accompanied by a surge in trading volume that was about 14 times its average in the past year, according to Bloomberg-compiled data.
China defends clampdown on tech firms in a meeting with Wall St execs – Bloomberg News
China’s top securities regulator defended their crackdown on various industries in a private meeting with Wall Street executives, Bloomberg News reported on Saturday.
Iron Ore’s Rout Keeps Rolling as China Imposes More Steel Curbs
Krystal Chia – Bloomberg
Iron ore extended its slump below $100 a ton as China stepped up restrictions on industrial activity in some provinces. Futures in Singapore tumbled as much as 12% on Monday in thin trading due to a holiday in China. Prices have collapsed about 60% since a record in May, and are below three figures for the first time in more than a year, as Chinese demand wanes.
London Bets $1.5 Billion Tube Extension Will Spur Jobs, Business
James Paton – Bloomberg
Two new stations are set to open in south London on Monday; First big expansion in decades is expected to help developers
The first major extension of London’s Tube system in decades — a 1.1 billion-pound ($1.5 billion) project that began about six years ago — finally comes to fruition on Monday. The opening of the Nine Elms and Battersea Power Station stops in south London is expected to create thousands of jobs and benefit developers who in some cases have struggled to sell the hundreds of apartments being built in the area. It also will improve access to the City of London financial district and the West End, where many private equity and hedge fund firms are based.
Russia’s Markets Are Booming Despite Putin’s Political Crackdown
Jake Rudnitsky and Anna Andrianova – Bloomberg
Kremlin’s zero tolerance of dissent doesn’t bother investors; Stock market rises to record ahead of parliament elections
The appeal of Russian markets is eclipsing risks from President Vladimir Putin’s crackdown on political rivals as the nation goes to the polls in parliamentary elections.
Russian wildfires send black carbon plumes across North Pole; Presence of soot is one factor behind the heating of the Arctic
Steven Bernard and Leslie Hook – FT
Smoke from Russian wildfires this summer reached all the way across the North Pole to hit Greenland and Canada, according to new satellite data. Carbon emissions from global wildfires have set a record high for August this year, after extensive blazes in Russia’s Far East, as well as California and Canada, pushed past the previous highest level for the month.
Commodities: the Chinese real estate exposure; What might the fallout from Evergrande mean for demand?
Jamie Powell – FT
In markets, being right early is the same as being wrong. Fortunately for FT Alphaville, the same rule doesn’t apply to journalism. Back in 2018, FT Alphaville took a look at Evergrande — China’s largest property developer — and its ballooning balance sheet, which included 408,000 car parking spaces, a land bank the size of Malta, and a curiously low yield on its rental properties.
Hong Kong Tycoons Won’t Escape Chinese Populism; Investors are clearly worried that Beijing’s recent ‘common prosperity’ call could soon be heard in the freewheeling financial center, too
Jacky Wong – WSJ
The world’s least-affordable real estate market may not escape China’s call for “common prosperity” either. Hong Kong’s biggest property developers plunged Monday. Shares of billionaire Li Ka Shing’s CK Asset fell 9.3%, while Henderson Land lost 13.2%. The immediate trigger seems to be a Reuters story on Friday saying that Chinese officials told property tycoons in Hong Kong to be more patriotic and back Beijing’s interests in the city, including solving the city’s acute housing shortage. The Wall Street Journal reported in March that Beijing is planning to target the city’s wealth gap and runaway housing prices, with proposals like broadening the city’s tax base and increasing land supply.
LinkedIn may be the nerdiest social network — but its strategy is working; The platform has confounded its critics with a boom in new users and increased revenues
Elaine Moore – FT
It is so easy to make fun of LinkedIn. The professional network is 18 years old — Methuselah by social media standards. Its insistence on adding Instagram-style features can seem cringeworthy. Why would anyone want to put disappearing photos on their LinkedIn page? Who wants to become a LinkedIn influencer anyway?
Working and Living in an RV Camper: Where to Start; Life on the road can be very rewarding. But it pays to know the difficulties you can expect.
Glenn Ruffenach – WSJ
My wife and I would like to retire early, buy a recreational vehicle and start seeing the country. At the same time, I would like to continue working, in some fashion, from the road. Have you talked with retirees who are RVers and work while traveling? Any resources you can recommend?
Old McGraw-Hill building free to start new chapter
Steve Cuozzo – NY Post
Finally free from a pesky preservationists’ lawsuit, the landmarked former McGraw-Hill Building at 330 W. 42nd St. is stepping into a new life as a modern office tower attuned to 21st century needs.