The unsustainable hype around ESG

Jun 10, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

Fifty years ago today, SEC Commissioner A.A. Sommer, Jr. issued a paper titled “The SEC in the Midst of Revolution.” Here is a summary of his speech:

The securities industry is undergoing a significant revolution characterized by rapid and unpredictable changes, much like historical revolutions. Some confident firms may fail, while others with bleak prospects may succeed. The role of the regulator, especially the Securities and Exchange Commission (SEC), is crucial during this period. Historically, the SEC has regulated the industry without drastically altering its structure. However, recent economic shifts and the emergence of dominant market forces like institutional investors have necessitated a re-evaluation of its role. The fixed commission system has shown signs of cartel-like behavior, prompting the SEC to advocate for a central market system and greater market rationalization. The SEC has actively sought industry input and has been flexible in addressing issues such as the costly multiplicity of clearing and settlement systems. Despite criticism, the SEC is committed to maintaining competition and stability in the market. It recognizes the need for reforms, such as allowing institutional investors to pay for research with “soft dollars,” to avoid diminishing research capacities that benefit individual investors. The SEC’s proactive stance aims to steer the industry through its revolution towards a more competitive and healthy future, avoiding excessive government intervention post-revolution.

The June edition of the World Federation of Exchanges Focus highlights several key developments in financial markets. It includes an article by Daria Degtyarenko, senior marketing communications manager at Exactpro, on AI-driven synthetic data engineering, emphasizing a “system-first” approach to software testing that enhances digital resilience. Another feature, by Fredrik Ekstrom, head of carbon markets at Nasdaq, discusses the need for transparent, standardized pricing mechanisms in voluntary carbon markets (VCMs) and advocates for more trade execution via exchanges rather than bilateral agreements. A webinar recap covers upcoming regulatory changes, with insights from Jonathan Gilmour of Travers Smith and Richard Metcalfe of the WFE. Monique Bell from ASX examines the role of financial derivatives in supporting decarbonization efforts. Lastly, an article by Christopher Buttigieg and Nathan Fenech discusses the importance of consolidated tape providers in the EU and US for providing real-time trading information to address fragmented market data.

The Federation of European Securities Exchanges announced on LinkedIn that Rosa Armesto Plaja officially became the director general of the Federation of European Securities Exchanges, following the FESE General Assembly last Friday.

Simplex Trading LLC has named Benjamin Londergan as the managing director of strategic business development. In this role, Londergan will focus on expanding the company’s partnerships and core business into new products and geographies.

TT was named “Best Listed Derivatives Trading Solution” at the TradingTech Insight Awards USA.

The Wall Street Journal today published a summer reading list for personal-finance books which offers a selection aimed at enhancing both financial knowledge and wealth. Curated by financial planners, the list includes books that provide not only practical advice on money management and wealth building but also insights into the psychology of money and its impact on everyday life. These recommended reads are designed to deepen your understanding of financial principles while exploring the emotional and psychological aspects of money, making them perfect companions for a summer dedicated to enriching your financial literacy.

Team HKEX participated in the Stanley International Dragon Boat Championships today in honor of the Tuen Ng Festival, HKEX shared on LinkedIn. This year, HKEX fielded three teams, including its inaugural women’s team competing for the Ladies’ Cup. HKEX teams won the merit awards in both the Mixed Silver Cup and Mixed Bronze Bowl, and its women’s team finished fourth overall.

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


Our most read stories from our previous edition of JLN Options were:
Eras Tour of The Securities and Exchange Commission | The SEC’s 90th Anniversary from the SEC.
Now is the time to consider European style equity options from Eurex.
The European Advantage: Debunking Myths Surrounding US Listings from Euronext. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).


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Nasdaq Embraces Cloud Migration and AI for Options Markets

Sean Feeney, a Nasdaq executive, explained the exchange’s plans to migrate its options markets to the cloud and leverage artificial intelligence (AI) during an interview at the Options Industry Conference in Asheville, N.C. sponsored by the OCC.

Watch the video »


Editorial: A chance for Chicago to take the quantum crown
Crain’s Editorial Board
In reporting on the business world, one hears a lot about The Next Big Thing – and frequently those highly touted “next generation” ideas wind up being blips rather than game-changers. So it’s wise to regard such assertions with a healthy degree of skepticism. And yet, in the tech realm, there are few advances creating more buzz than artificial intelligence, which is generating excitement and hand-wringing in equal measure, and its less-glamorous cousin of sorts: quantum computing. Both promise to change the way humans tackle complex problems – and, in the case of quantum, to potentially change the way we understand reality itself.

***** As much as I would like to see this, I am not sure Chicago can move this fast.~JJL


The Legacy of Black Wall Street and the Tulsa Race Massacre (Podcast)
Featuring: John W. Rogers Jr., Victoria Rogers, Khalil Gibran Muhammad – New York Historical Society
In the decades following the Civil War and amidst the rise of Jim Crow, African Americans throughout the United States fought to build dynamic, thriving communities. Greenwood, a prosperous Black community in Tulsa, Oklahoma, was emblematic of these efforts, becoming a major economic hub and earning the moniker of Black Wall Street. But in 1921, this thriving district became the site of one of the deadliest racial massacres in US history, swept up in a wave of white violence that raged through the country in the early 20th century.

***** This is from February, but we missed it then and I think it is worth a listen.~JJL


Friday’s Top Three
Our top clicked item on Friday was the transcription of Gary Gensler’s Eras Tour of The Securities and Exchange Commission | The SEC’s 90th Anniversary video, from the SEC. Second was The Wall Street Journal’s A Texas Stock Exchange Wants to Take on New York. The Odds Aren’t Good. Third was Honoring Leo – Chicago History Museum Honors Leo Melamed, by Jeffrey Carter in Points and Figures.



Lead Stories

The unsustainable hype around ESG; Several months of fund outflows mark the decline of ESG as a marketing tool
The editorial board – Financial Times
Three letters have demanded outsized attention from companies, consumers, and investors in recent years – E, S and G. The uptick in funds with increased scrutiny over portfolio companies’ environmental, social and governance credentials has been a cause for celebration to some, and an object of derision to others – particularly Republican lawmakers in the US. News last week that patchy outflows from ESG funds have become a firm trend, with $40bn leaving so far this year, similarly divided political opinion.

Equity Listings in Dallas Are No Laughing Matter; Competition for trading volumes is nothing new, but winning more listings would be truly disruptive
Telis Demos – The Wall Street Journal
Equities have been traded in Dallas long enough to be an old Wall Street punchline. But equities being listed in Dallas? New York might not find that so funny. A group backed by BlackRock and Citadel Securities is planning to launch a share-trading venue to be based in Dallas and called the Texas Stock Exchange. It will be an electronic exchange on which companies can also list their shares. It is hardly unprecedented for an upstart to nab trading volume from the traditional big names in U.S. stock trading, the New York Stock Exchange and Nasdaq. Earlier this century, two electronic exchanges, BATS and Direct Edge, grabbed big chunks of exchange volume in part by riding the rise of high-frequency trading firms.

Tradeweb and FTSE Russell Extend Benchmark Closing Prices to U.S. Treasury Markets; Expansion of strategic partnership between Tradeweb and FTSE Russell to produce benchmark closing prices for the U.S. Treasury markets; Tradeweb FTSE U.S. Treasury closing prices utilize an enhanced methodology that provides additional transparency into bid and offer price information
Tradeweb and FTSE Russell today announced that they have launched Tradeweb FTSE U.S. Treasury Closing Prices, extending their combined offering of next generation fixed income pricing, which can be used in index trading products. Similar to the existing Tradeweb FTSE closing prices for UK Gilts and European Government Bonds, these U.S. Treasury closing prices incorporate trading activity from Tradeweb’s electronic platform, which results in more robust benchmark pricing.

Nvidia sparks chatter over possible Dow inclusion after stock split
Nvidia’s 10-for-1 stock split aimed at luring retail investors has taken effect, sparking speculation over chances of the artificial intelligence bellwether’s inclusion in the blue-chip Dow index. The split, aimed at lowering per-share value to make it more affordable for employees and investors, increases the company’s outstanding shares without changing the stock’s valuation.

The Shortcut That Allows Risky Startups to Raise Billions From Rookie Investors; Crowdfunded companies pull in cash through sleek social-media promotions and mentions of Elon Musk
Dave Michaels – The Wall Street Journal
Risky startups with a flair for digital marketing are using a regulatory exemption that allows them to hype their moonshot products and raise huge sums of money from individual investors. Two companies with completely different products-one is designing three-wheel solar cars, the other builds tiny houses that unfold like tents-exemplify this growing segment of the market, known as crowdfunding. Tens of thousands of small investors have poured $170 million into Aptera Motors and Boxabl, but have little to show for it.

Beneath the Calm Market, Stocks Are Going Haywire; Only once in the past 25 years have individual stocks swung about so much while the overall market stayed placid
James Mackintosh – The Wall Street Journal
It is easy to look at the piddling daily moves in the S&P 500 and think the market has been oh-so-boring recently. There hasn’t been a 2% move since February and the VIX gauge of expected volatility is only up a bit from the postpandemic low reached last month. Under the calm surface, however, there is furious paddling. Only once in the past 25 years have stocks swung about like this while the overall market stayed so placid. Traders in the options markets are betting on its continuing: Prices indicate the biggest swings in stocks for at least 10 years relative to the prevailing calm for the S&P 500.

Archie Norman blames pension funds for decline of London’s stock market; M&S chair says accounting changes that forced schemes to switch to bonds has reduced available money for UK stocks
Emma Dunkley – Financial Times
City grandee Archie Norman has criticised the lack of UK pension fund money invested in British companies and the decline of corporate share options as reasons for the long term malaise of London’s stock market. Norman, who is chair of M&S and sits on the board of private equity firm Bridgepoint, told the Financial Times that it was “undeniable” that the sharp fall in UK pensions investing in equities “has substantially reduced the depth” of available money to back domestic stocks.

Biotechs line up for IPOs in bullish sign for US listings market; Two developers of drugs for inflammatory diseases are latest to disregard poor performance of newly listed companies
Oliver Barnes and Nicholas Megaw – Financial Times
Alumis and Upstream Bio, two US start-ups developing medicines for inflammatory diseases, have filed for initial public offerings as dozens more biotechs gear up to go public this year, according to people familiar with the matter. The biotechs both submitted private filings with the US Securities and Exchange Commission in recent months, with a public offering expected before November’s presidential election, which investors fear could roil markets, the people said.

Wall Street Moves to Texas; Financial firms want competition for the NYSE and Nasdaq.
The Editorial Board – WSJ Opinion
New York politicians, watch out. A new stock exchange based in Texas could soon challenge Nasdaq and the New York Stock Exchange-and the Empire State’s status as America’s financial capital. The TXSE Group on Wednesday announced it has raised $120 million for a new electronic trading platform dubbed the Texas Stock Exchange (TXSE). Its investors, including BlackRock and Citadel Securities, “represent a significant portion of the equity volume on U.S. lit exchanges and together comprise a majority of all U.S. listed retail volume,” the group said. (A lit exchange is an open and public one, in contrast to a so-called dark pool of capital.)

SEC’s Power to Regulate Hedge Funds Dealt Blow by Appeals Court
Matthew Bultman – Bloomberg Law
The Securities and Exchange Commission’s loss in court over new restrictions on hedge funds and private equity firms casts a cloud over its other plans on artificial intelligence and climate change. The SEC based its authority for the private fund disclosure rules, vacated this week by the US Court of Appeals for the Fifth Circuit, on a section of the Dodd-Frank Act. Congress passed that legislation in the wake of the 2008 financial crisis to protect ordinary investors. The appeals court, which has a reputation for being business-friendly, said the SEC can’t rely on that section to dictate sales practices and compensation between private funds and institutional investors.

Calls grow for dealers to unbundle US Treasury clearing; SEC’s Gensler and NY Fed’s Neal turn up pressure on dealers to clear ‘done away’ trades
Bernard Goyder and Janice Kirkel –
Securities and Exchange Commission chairman Gary Gensler has joined growing calls to unbundle client clearing and execution services for US Treasury securities. New rules adopted by the SEC last December will require most US Treasury cash trades to be centrally cleared from the end of next year, with repos following suit in June 2026. Currently, most buy-side firms rely on dealers to submit trades to the Fixed Income Clearing Corporation, which has a monopoly on US Treasury clearing.

Great ‘Bear Market’ in Diversification Haunts Wall Street Pros
Lu Wang – Bloomberg
They did everything right – spreading out bets far and wide across bonds and equities in case things went south. Now, after heeding Wall Street’s mantra to diversify for the long haul, these investors are watching with envy as the US stock rally leaves them in the dust yet again. The numbers are stark. Money managers who obeyed the financial industry’s age-old wisdom to divide investments across markets and geographies are on an epic losing streak versus those who simply bought the S&P 500 and sat still. In one example, out of roughly 370 asset-allocation funds tracked by Morningstar Inc., just one has managed to beat the index since 2009.

“Falling like dominoes”: Could NYSE trading halt lead to industry FIX?
Alex Pugh – Global Trading
Could Monday’s market chaos lead to a more effective industry solution to market outages? The halting of trades on the New York Stock Exchange (NYSE) that occurred on Monday had a domino effect, rippling out across a number of exchanges, dark pools and alternative trading systems (ATSs) in the US. The NYSE halt was reportedly the result of issues with limit up/limit down price bands related to a new software release on the consolidated tape. The Consolidated Tape Association (CTA), which oversees the dissemination of real-time trade and quote information in NYSE listed securities, operates the Security Information Processor (SIP), which links the US markets by processing and consolidating all protected bid/ask quotes and trades from every trading venue into a single, easily consumed data feed.

Catastrophe Bond Sales Soar as Markets Brace for Unusually Active Hurricane Season; Unusually high ocean temperatures, La Nina add to market risks; Cat bonds underpinned the best hedge-fund strategy of 2023
Gautam Naik – Bloomberg
Issuance of catastrophe bonds just hit a record high, as the market braces for a rough hurricane season with the potential to do substantial damage. Sales of so-called cat bonds are 38% higher this year through May than over the same five-month period in 2023, which was already a record, according to Artemis, a compiler of data on insurance-linked securities. What’s more, the $4 billion issued in May alone represents the greatest volume of catastrophe bonds ever sold in a single month, Artemis said.

Roaring Kitty Talked GameStop and Chugged Beer. Shares Plunged. Keith Gill, the investor who spurred the meme stock mania in 2021, attracted a huge audience for his public return to livestreaming Friday. But his favorite buy dropped.
Rob Copeland – The New York Times
Around lunchtime Friday, on a YouTube livestream watched by half a million people, a bandanna-clad man in white sunglasses grinned into his webcam and teased: “I’m about to show it.” Oh, stop it. He meant his brokerage account. Keith Gill, the man better known as Roaring Kitty, who became one of Wall Street’s unlikeliest celebrities during the meme stock mania of 2021 before disappearing from public view, was onscreen – and in his signature fashion, mixing beer, comedy and market commentary.

Five Key Charts to Watch in Global Commodities This Week
Michael Hirtzer, Ruth Liao, and Julian Lee – Bloomberg
China’s monthly streak of gold buying for central bank stockpiling has come to an end. Natural gas traders are skittish over any potential disruptions that could throw markets into disarray. And the US Department of Agriculture releases its latest supply-and-demand estimates Wednesday, with insights on how strong crop conditions are being incorporated into the closely watched forecast. Here are five notable charts to consider in global commodity markets as the week gets underway.

Janus ETF Tracking CLOs Hits $10 Billion in Zero-Sum Race; JAAA now commands $10 billion after its October 2020 launch; Closest runner-up is another Janus fund with $666 million
Katie Greifeld – Bloomberg
The biggest ETF tracking collateralized loan obligations has reached $10 billion in assets, helping Janus Henderson further tighten its grip on the quickly growing niche. The Janus Henderson AAA CLO exchange-traded fund (ticker JAAA) now commands more than $10 billion in assets, giving it roughly 90% share of the market for top-rated CLO ETFs, according to a Monday press release. Its closest runner-up among the dozen or so CLO funds is the Janus Henderson B-BBB CLO ETF (JBBB), which has amassed about $666 million.

New York Fed Is Losing Talent and ‘Street Cred’ Under John Williams; Top Federal Reserve district bank has seen many senior-level departures, raising concerns about its diminished heft and “swagger”
Alex Harris and Liz Capo McCormick – Bloomberg
John Williams took the helm of the Federal Reserve Bank of New York in 2018 as a highly respected macroeconomist and experienced manager who had run the San Francisco Fed district for seven years. Today he oversees an institution that many veteran market participants worry has suffered a brain drain and seen its influence wane on Wall Street.

Tradeweb and FTSE Russell launched combined US Treasury closing prices; New development will utilise an improved methodology which helps enable additional transparency into bid and offer price information.
Wesley Bray – The Trade
Tradeweb and FTSE Russell have launched Tradeweb FTSE US Treasury closing prices, extending their combined offering of fixed income pricing which can be used in index trading products. As seen with existing Tradeweb FTSE closing prices for UK gilts and European government bonds, the new US Treasury closing prices will incorporate trading activity from Tradeweb’s electronic platform, which the firm claims to result in more robust benchmark pricing.

Ukraine Invasion

Ukraine says latest-generation Russian fighter jet hit for first time
Ukrainian forces have for the first time hit a latest-generation Russian Sukhoi Su-57 fighter jet at an air base inside Russia, Kyiv’s GUR defence intelligence agency said on Sunday, showing satellite pictures which it said confirmed the strike. In a Telegram post, the GUR did not specify how the Su-57 was hit or by which unit of the Ukrainian military. A popular Russian pro-war military blogger who calls himself Fighterbomber and focuses on aviation said the report of the strike on the Su-57 was correct and that it had been hit by a drone.

Under a drone-filled sky, Ukraine tries to retake a town, one house at a time; Hardened Ukrainian veterans hope new supplies of US rockets will help push Vladimir Putin’s forces back
Luke Harding – The Guardian
The two Russian soldiers jogged across an apocalyptic landscape. They kept going, zigzagging over a vegetable patch. At the intersection between Hoholia and Travnia streets, the pair disappeared into a roofless brick building. Around them was the ruined town of Vovchansk. It was a smouldering hell of blackened blocks of flats and shell-dinted cottages. Vovchansk, once home to about 17,000 people, is approximately three miles (5km) from the border with Russia in north-east Ukraine.

90 countries to attend Swiss-hosted Ukraine peace summit that Russia is snubbing
Jamey Keaton – Associated Press
Nearly 90 countries and organizations, half from Europe, have confirmed attending the Swiss-hosted Ukraine peace summit over the weekend despite Russia’s refusal to participate, Switzerland’s president said Monday. Viola Amherd told reporters in the Swiss capital, Bern, that the summit, on Saturday and Sunday, will aim to chart a path toward possible peace nearly 28 months after Russian forces invaded Ukraine and the war grinding on.

Putin says Russian nuclear doctrine could change if threatened
Mike Heuer – UPI
Russian President Vladimir Putin told attendees at the St. Petersburg International Economic Forum that Russia’s nuclear doctrine could be changed to enabled wider use of nuclear weapons. “This doctrine is a living instrument, and we are carefully watching what is happening in the world around us and do not rule out making some changes to this doctrine,” Putin said Friday, according to Russia’s state-run news organization RIA Novosti.

Israel/Palestine Conflict

Opinion: Genocidal Hamas is making peace impossible
Danny Cohen – The Telegraph
Whilst there was great joy in Israel this weekend at the rescue of four hostages after months in captivity, the whereabouts of a further 116 Jews kidnapped on October 7 remains shrouded in darkness. We do not know how many are alive. Nor do we know their condition. Given the way Hamas terrorists raped and tortured Jews when they invaded Israel, it does not bear thinking what is happening to these men, women and children still held against their will.

How Israel Saved a Hostage Rescue Mission That Nearly Failed; Israel called in heavy airstrikes to support an operation that had a ‘thin line between being a huge success and a huge failure’
Carrie Keller-Lynn, Abeer Ayyoub and Michael Amon – The Wall Street Journal
The two Israeli commando teams had just pulled off a historic rescue mission, freeing four hostages from homes where they were held captive in central Gaza. Now came the hardest part: getting out of Gaza alive. A shootout that started Saturday in one of the homes expanded into a full-on gunbattle on the packed streets of Nuseirat between the commandos and responding Israeli forces and militants, the Israeli military said. With the teams’ cover blown, the Israeli Air Force began striking dozens of militant targets in a bid to divert Hamas’s attention and give the hostages a fighting chance to get out.

Israel’s Pursuit of Hamas in Gaza Seen Unswayed by Gantz Exit; Netanyahu still holds a firm majority in the parliament; Opposition has started to shift to other leaders than Gantz
Ethan Bronner – Bloomberg
Benny Gantz’s resignation from Israel’s war cabinet appears dramatic from afar but is unlikely to alter the course of the conflict in Gaza or influence other key policies of Prime Minister Benjamin Netanyahu. Gantz, a leader of the opposition and former military chief of staff, joined the emergency forum eight months ago after the deadly invasion by Hamas militants on Oct. 7, which triggered the ongoing conflict. As part of a three-person cabinet – alongside Netanyahu and Defense Minister Yoav Gallant – he had a seat at the table that would dictate the course of the response.

Exchanges, OTC and Clearing

HKEX confirms Carlson Tong as chairman
Lucy Carter – Global Trading
Hong Kong Exchanges and Clearing (HKEX) has confirmed the appointment of Carlson Tong as chairman of the board of directors, following regulatory approval. He replaces Laura Cha, and will stay in post until the conclusion of HKEX’s annual general meeting in 2025. Tong has more than 45 years of industry experience, and has been a non-executive director since 2023.

OCC Welcomes Citadel Securities CTO Josh Woods to Board of Directors
Options Clearing Corporation
OCC, the world’s largest equity derivatives clearing organization, today announced the appointment of Josh Woods, Citadel Securities’ Chief Technology Officer, to its Board of Directors. Woods has nearly 20 years of experience in finance and technology. “Josh has a deep knowledge and understanding of financial technology, and we are pleased to welcome him as a Director and a member of our Technology Committee,” said Craig Donohue, OCC Chairman. “Our board and members will benefit from Josh’s expertise as we continue to foster innovation for market participants while promoting stability and integrity in our markets.”

LME Aluminum Queue Jumps to Five Months After Trafigura Delivery; Wait to take delivery at Istim in Port Klang is now 159 days; Queue at Malaysian port is longest on the LME since June 2021
Jack Farchy and Mark Burton – Bloomberg
The wait to take delivery of aluminum on the London Metal Exchange went from zero to more than five months after a massive delivery of metal from Trafigura Group in May. Exchange data published on Monday showed a wait of 159 days for aluminum at warehouses owned by Istim Metals at Port Klang in Malaysia at the end of May, while no queue existed in April. That’s the longest queue in the LME system since June 2021, when there was a 168-day wait, also at Istim warehouses in Port Klang.

LSEG Workspace now enhanced by Macabacus’ Productivity Tools; New workflow suite enhances productivity of Investment bankers, financial advisors, research analysts, asset and wealth managers.
London Stock Exchange Group
London Stock Exchange Group plc (“LSEG”) today announces that it has signed an agreement with Macabacus, a leading provider of Microsoft 365 productivity and brand compliance solutions. The agreement will allow LSEG Workspace customers to now add Macabacus’ productivity tools to their Workspace ecosystem. The tools will enable customers to automate workflows related to financial modelling and generation of pitch materials, while improving content accuracy, integrity and consistency. LSEG Workspace is an always open personal ecosystem of data, analytics, insights and news, built to augment workflow and streamline tasks for financial professionals, globally.

Finance IPNet – Nearing the End
At the end of 2022, SIX announced that it will discontinue Finance IPNet as an access channel to its infrastructure services at the end of September 2024. Approximately two-thirds of the customers affected are in the process of migrating to an alternative access channel such as SSFN, and some are close to completing this process.

The Canadian Derivatives Clearing Corporation Announces Launch of Secured General Collateral Notes Program
TMX Group
The Canadian Derivatives Clearing Corporation (CDCC), Canada’s national central clearing counterparty (CCP) for exchange-traded derivative products and repurchase agreements, today announced the launch of the new Secured General Collateral (SGC) Notes program. SGC Notes are short-term discounted money market instruments developed by CDCC in collaboration with Canadian market participants and designed to meet the demand for the transition from Bankers’ Acceptances (BAs) as a result of the Canadian Dollar Offered Rate (CDOR) cessation.

Review of Collateral Haircuts – Effective June 07, 2024
CME Group
In conjunction with the regular review of market volatility and to ensure adequate collateral coverage, please find below the current acceptable collateral and haircuts for CME Clearing.

Special Change in KRX Constructions index, KRX Governance Leaders 100 index for SSANGYONGC&E
Korean Exchange
KRX will change the constituents of KRX Constructions index, KRX Governance Leaders 100 index

Regular Adjustment of CAP Factor in KOSPI 200 Sector etc
Korean EXchange
Regular Adjustment of CAP Factor will be effective in June 14th, 2024.

Regular Constituents Changes in Strategy & Thematic Indices
Korean EXchange
There will be regular constituent changes in Strategy & Thematic indices effective from June 14th, 2024.


BMLL wins “Best Cloud-Based Market Data Delivery Solution” at the 2024 TradingTech Insight Awards USA
We are delighted to announce that BMLL won “Best Cloud-Based Market Data Delivery Solution” at the 2024 TradingTech Insight Awards USA for its collaboration with Snowflake. These awards recognise excellence in trading solutions, services and consultancy for capital markets, and focus on vendors providing exceptional trading infrastructure, trading technology, and data solutions.

Agile methodology and microservices power B3’s next-gen CSD system
An Inside Look at B3’s New Cutting-Edge CSD System
B3 is breaking new ground with the build-up of its elastically scalable and microservice-based CSD-system built upon Vermiculus’ CSD solution VeriSafe™. This revolutionary project started in early 2023 and has recently completed its initial phase, layering the groundwork for the world’s most modern CSD.

Apple expected to enter AI race with ambitions to overtake the early leaders
Michael Liedtke – Associated Press
Apple’s annual World Wide Developers Conference on Monday is expected to herald the company’s move into generative artificial intelligence, marking its late arrival to a technological frontier that’s expected to be as revolutionary as the invention of the iPhone. The widely anticipated display of AI to be embedded in the iPhone and other Apple products will be the marquee moment at an event that traditionally previews the next version of software that powers the company’s hardware lineup.

Arm’s courtroom battle with Qualcomm risks halting wave of AI-powered PCs
Max A. Cherney – Reuters
A two-year legal battle pitting two tech titans threatens to disrupt an emerging wave of new personal computers powered by artificial intelligence, tech industry executives and experts say. A parade of executives from Microsoft, Asus, Acer and others joined Qualcomm CEO Cristiano Amon on stage last week at the annual Computex trade show in Taipei to pitch a new generation of AI-powered PCs.

The Chinese quant fund-turned-AI pioneer; High-Flyer Capital Management is behind DeepSeek-V2, which ranks among China’s top large language models
Ryan McMorrow and Eleanor Olcott – Financial Times
One of the pack of Chinese AI hopefuls trying to take on the likes of OpenAI comes from an unusual source: a quant fund dominating the country’s financial sector. High-Flyer Capital Management, a Chinese quantitative hedge fund, has grown into a roughly Rmb60bn ($8bn) asset manager since its launch in 2015, partly using AI and algorithms to identify patterns or variables that could affect stock prices.

UK payments industry calls on watchdog to delay fraud refund plan; Trade body tells Payment Systems Regulator timetable for changes to victim reimbursement risks ‘permanent damage’
Akila Quinio – Financial Times
UK payment companies have called on the industry watchdog to delay a contentious fraud reimbursement plan, two weeks after its head resigned amid growing criticism of the proposals. The Payments Association on Monday urged the Payment Systems Regulator to delay incoming rules that would force banks and payment companies to reimburse victims of “authorised push payment” fraud up to £415,000 per claim from October.

Meetings in the metaverse: new tech draws workers to virtual offices; AI assistants, training simulations and data tracking boost developers
Hannah Murphy – The Wall Street Journal
Over the course of a few months last year, Trever Stewart painstakingly scanned his media company’s half-acre animation studio and replicated it in the metaverse. He is now starting to invite advertising agency clients into this virtual space for meetings so they can see how their animated content is made – from within. “The metaverse is a grossly, grossly huge failure – but man did [companies such as Meta] build the tools so we can construct a new world right now!” says Stewart, associate producer of special projects at Bent Image Lab. “It’s bananas.”


Scammers Aren’t Just Selling Fake Gucci. They’re Impersonating Small Merchants; Copycats are using videos and photos to pose as real small-business owners and dupe their customers
Ruth Simon – The Wall Street Journal
Copycats are stepping up their attacks on small businesses. Sellers of products including merino socks and hummingbird feeders say they have lost customers to online scammers who use the legitimate business owners’ videos, logos and social-media posts to assume their identities and steer customers to cheap knockoffs or simply take their money.

Agency cybersecurity incidents grew by almost 10% last year
Peter Musurlian – Federal News Network
OMB’s latest FISMA report to Congress shows an increase from more than 29,000 cybersecurity incidents in 2022 to 32,000 in 2023.

Cybersecurity now a top priority for company boards, Okta CEO says
The CEO of Okta, Todd McKinnon, joins CNBC’s Steve Sedgwick and Arabile Gumede to discuss data security.


Deloitte and Bloomberg Tax & Accounting Announce the Release of a Comprehensive Tax Management Portfolio on Taxation of Cryptocurrency and Other Digital Assets
In an effort to provide clear guidance on complex tax issues involving digital assets, Deloitte and Bloomberg Tax & Accounting today announced the publication of Tax Management Portfolio Taxation of Cryptocurrency and Other Digital Assets, No. 190-2nd, which is now available on the Bloomberg Tax Research platform. As the ultimate guide to the tax treatment of digital assets, Portfolio 190 examines the U.S. federal income taxation of digital assets, including cryptocurrencies. It provides a detailed analysis of the classification of digital assets for tax purposes and offers an inclusive overview of the digital asset ecosystem, tax guidance to date and accounting treatment. The Portfolio further delves into the tax implications of using, dealing, trading and investing in digital assets, and addresses novel tax questions raised by digital asset transactions.

Beyond Bitcoin and Ether: 10 cryptocurrencies you need to know; The crypto world includes some intriguing cryptocurrencies, each with its own unique use cases
Vinamrata Chaturvedi – Quartz
Bitcoin and Ether-the top two cryptocurrencies-are always in the news because their price action determines where the cryptocurrency market will move. The Securities and Exchange Commission approved spot Bitcoin ETFs earlier this year and gave a green signal to spot Ether ETFs last month.

Boomers hold the key to wealth, even in cryptocurrency; Baby boomers hold $68 trillion in assets in the United States alone. Will that cash continue trickling into cryptocurrency markets for the foreseeable future?
Robert Quartly-Janeiro – CoinTelegraph
Since the inception of cryptocurrency, its markets have been driven largely by millennials, along with younger members of GenX and, more recently, members of Gen Z. However, thanks to the introduction of exchange-traded funds (ETFs), the dominance of those younger generations is eroding. ETFs are inducing greater participation from baby boomers, the richest demographic in the world. They control an estimated $68 trillion in assets in the United States alone – the most of any single demographic. As investors, they have typically been overexposed to equities and real estate, for which they own the largest slice. The crypto industry is one in which they are underweight.


Trump pitches himself as ‘crypto president’ at San Francisco tech fundraiser
Alexandra Ulmer – Reuters
Republican presidential candidate Donald Trump presented himself as a champion for cryptocurrency and slammed Democrats’ attempts to regulate the sector during a San Francisco fundraiser on Thursday, three sources present told Reuters. Trump raised $12 million from the fundraiser hosted by tech venture capitalists David Sacks and Chamath Palihapitiya at Sacks’ home in the swanky Pacific Heights neighborhood.

Congressional stock trading law has unintended, but profitable consequence
Deirdre Walsh – NPR
Public polling shows most Americans don’t think much of Congress. But some investors think lawmakers are doing one thing right – picking stocks – and this has prompted a whole new class of products to copy their trades. Traders and market watchers are using publicly available data to track which lawmakers are reporting big stock market gains. They believe that information provides an edge on the market, and companies are selling access to tools that track those profitable lawmaker trades.

‘Let’s punish predatory short selling to the moon’: RFK Jr. invests $24K in GameStop, calls for ‘Ape retail rebellion’ and promises Wall Street reforms
Jing Pan – Moneywise
What do independent presidential candidate Robert F. Kennedy Jr. and Keith Gill, a.k.a. Roaring Kitty, have in common? A passion for GameStop (GME) stock. The latter was a pivotal figure in the meme stock frenzy in early 2021. Through his YouTube videos and social media posts, Gill advocated for the potential of GameStop’s undervalued shares, attracting a massive following of retail investors. This movement culminated in a dramatic short squeeze, where the stock price skyrocketed and short sellers betting against the stock were forced to buy it, sending it even higher. GameStop recently got back in the spotlight after Gill’s return to social media. And now, Kennedy is in the game, too.

Trump Tax Cut Renewal Is Winning Wall Street, But Could Cost $4.6 Trillion; Many Republicans reject CBO estimate of $4.6 trillion cost; Federal debt and interest rates have soared since 2017 tax law
Christopher Condon and Steven T. Dennis – Bloomberg
The prospect of a fresh round of tax cuts next year is helping Donald Trump woo Wall Street donors but threatens to add trillions of dollars to the national debt. The estimated $4.6 trillion cost of extending expiring portions of Trump’s 2017 tax cuts isn’t dampening Republican enthusiasm for renewal next year. Many simply reject cost projections, asserting that tax cuts pay for themselves through economic gains. Independent analyses show that wasn’t true of Trump’s 2017 tax cuts and won’t be the case if they’re renewed in 2025. That sets up a big political fight over how – and even whether – to pay for them.

Lib Dems outline vision for net-zero by 2045 in new manifesto; The Liberal Democrats have set out bold green policy pledges in a new Party manifesto, including moving the UK’s net-zero target forward to 2045 and boosting funding for environmental regulators.
Sarah George – edie
The Party is the first to release its manifesto for next month’s general election in full. Most others are expected to publish manifestos later this week. The Lib Dems have promised a “fair deal for the environment”, under which nature access should be improved and the low-carbon transition would form the cornerstone of a new industrial strategy. The manifesto stipulates that well-designed green policy can “boost the economy and enhance everyone’s quality of life”.

Traders place record bets ahead of UK election on carbon credits price jump; Move driven by expectations of a newly elected Labour government adopting stricter approach to big polluters
Kenza Bryan – Financial Times
Traders are placing a record level of bets that the price of UK carbon credits will rise, in anticipation that a future Labour government would bring in tougher climate policies making it more expensive to pollute. The benchmark price for UK carbon market allowances, which give industrial polluters the right to emit CO₂, has climbed 9 per cent since Prime Minister Rishi Sunak last month called a general election.

Far-right fossil fuel company allies pressure US supreme court to shield firms in unprecedented campaign; Groups linked to billionaire Leonard Leo, who seems to have ties to Chevron, are pressing the court to intervene in lawsuits that could cost billions
Dharna Noor – The Guardian
Far-right fossil fuel allies have launched a stunning and unprecedented campaign pressuring the supreme court to shield fossil fuel companies from litigation that could cost them billions of dollars. Some of the groups behind the campaign have ties to Leonard Leo, the architect of the rightwing takeover of the supreme court who helped select Trump’s supreme court nominees. Leo also appears to have ties to Chevron, one of the plaintiffs in the lawsuit.

Russia’s blackmail ‘concealed’ by Angela Merkel
James Jackson – The Telegraph

Scholz’s SPD Suffers Record Rout in Germany’s EU Vote
Michael Nienaber and Natalia Drozdiak – Bloomberg

Switzerland flags cyberattacks, disinformation ahead of Ukraine summit
Dave Graham – Reuters

Exclusive-G7 plans to warn small Chinese banks over Russia ties, sources say
Trevor Hunnicutt and Lananh Nguyen – Reuters


Commodity Trader Hit With CFTC Complaint Over $2 Million Fraud
Ufonobong Umanah – Bloomberg Law
A Tennessee commodity trader already facing 51 months in prison for a $2 million investment fraud scheme was hit with a new lawsuit from the Commodity Futures Trading Commission. Donald Wray Rodgers “knowingly or recklessly made fraudulent and material misrepresentations and omissions about his commodities trading and returns to persuade” about 50 people to invest in him and his company Three Bridges Trading Fund, only to use that money for his personal use, the CFTC said in the US District Court for the Western District of Tennessee.

Former Allianz Fund Manager Pleads Guilty to Defrauding Investors; Gregoire Tournant, the former chief investment officer at Allianz Global Investors U.S., pleaded guilty to two counts of investment adviser fraud
Mengqi Sun – The Wall Street Journal
A former Allianz fund manager who ran the investment group responsible for steep losses the firm suffered during the 2020 market meltdown sparked by the Covid-19 pandemic pleaded guilty to fraud charges. Gregoire Tournant, the former chief investment officer at Allianz Global Investors U.S., pleaded guilty Friday before Judge Laura Taylor Swain in the U.S. District Court for the Southern District of New York to two counts of investment adviser fraud. He also agreed to forfeit about $17 million as part of his plea. He faces up to 10 years in prison and will be sentenced on Oct. 16.

CityMD Agrees to Pay $12 Million to Justice Department Over Alleged Covid-19 Payments Violation; CityMD allegedly knowingly submitted payment for Covid-19 testing to the Uninsured Program for individuals who had health insurance coverage when CityMD administered those tests, the DOJ said
Sabela Ojea – The Wall Street Journal
CityMD has agreed to pay more than $12 million to the Justice Department for allegedly submitting false claims for payment for Covid-19 testing to the Health Resources and Services Administration governmental program for uninsured patients. The urgent-care chain’s settlement resolves allegations related to the violation of the False Claims Act, the Justice Department’s Office of Public Affairs said Friday. The act encourages people with knowledge of suspected false claims to sue on the government’s behalf.

India proposes tighter rules for derivatives trading on individual stocks
Jayshree P Upadhyay – Reuters
India’s markets regulator has proposed tighter rules on trading in individual stock derivatives, arguing the rules were needed to avert risks of market manipulation after recent explosive growth particularly in options trading. The move comes after two sources familiar with the matter told Reuters in April that India’s top financial regulators would form a committee to assess stability risks emerging from a surge in derivatives markets.

SEC sued by trade association for details on record-keeping probe
Mike Scarcella – Reuters
A financial industry trade association has sued the U.S. Securities and Exchange Commission for information about the agency’s multibillion-dollar crackdown on how banks and other firms handle work-related communication on personal devices. The American Securities Association said in its lawsuit in Tampa federal court on Thursday that the SEC had improperly rejected its request under federal public records law for information detailing the enforcement effort, which began in late 2021 and has resulted in civil fines of more than $1.7 billion overall. The SEC has filed administrative complaints against dozens of firms, including JPMorgan Chase, Credit Suisse, Wells Fargo, Goldman Sachs and Morgan Stanley, as part of the initiative. The cases broadly allege record-keeping compliance failures involving employees’ “off-channel” communications. None of the companies have admitted any wrongdoing.

SEC Charges Three New Yorkers for Raising More Than $184 Million Through Pre-IPO Fraud Schemes; After Commission shut down original ploy, defendants started another one
The Securities and Exchange Commission today charged three individuals with fraud for selling unregistered membership interests in LLCs that purported to invest in shares of pre-IPO companies, first on behalf of StraightPath Venture Partners LLC, the subject of the Commission’s emergency action in May 2022, and, later, on behalf of Legend Venture Partners LLC, the subject of the Commission’s emergency action in June 2023. Both StraightPath and Legend are now under court-ordered receiverships.

SEC Obtains Final Judgment Against Defendant for Role in Bribery Scheme
On June 7, 2024, the Securities and Exchange Commission obtained a final judgment against defendant Jared Mitchell, whom the SEC previously charged for his role in an illegal kickback scheme to defraud investors whose broker purchased technology company shares in their accounts without informing them that he was receiving kickbacks in connection with the purchases.

Investing and Trading

AI stock frenzy helps mint 600,000 millionaires in the U.S., trouncing the rest of the world
Marco Quiroz-Gutierrez – Fortune
Artificial intelligence’s boost to financial markets helped the U.S. trounce the world in millionaire growth last year, when their ranks swelled by 600,000. That’s more than the population of Baltimore, bringing the total number of Americans who have at least $1 million in investable assets, not including their primary residence, to 7.5 million, CNBC reported citing data from Paris-based consulting company Capgemini.

The Investing Boom That’s Squeezing Some People Dry; Bundles of real estate and other private assets are easy to buy and hard to sell. Make sure you know how you’ll get out before you get in.
Jason Zweig – The Wall Street Journal
If your financial advisers haven’t yet tried to sell you any “alternative” investments, they might soon. Flogging these assets that aren’t listed on a stock exchange-bundles of real estate, buyout deals, private debt and so on-is one of Wall Street’s biggest obsessions. Getting in is easier than ever. But I doubt most buyers understand how hard getting out can be. Just three categories of alternatives-nontraded real-estate investment trusts and business development companies, plus interval funds that permit you to withdraw a portion of your money only a few times a year-raised a combined $55.8 billion in 2023. That was up from $26 billion a decade earlier, according to Blue Vault, a research firm in Cumming, Ga.

Here’s a Tax Break That Married Couples Often Overlook; Spousal IRAs could help many couples increase their retirement savings
Lori Ioannou – The Wall Street Journal
Saving for retirement can be tough for married spouses who stay home to care for family or otherwise have scant income. But there is a tax break offered by the Internal Revenue Service that can help them and their partner save for retirement: a spousal IRA. Spousal individual retirement accounts allow a working spouse to contribute to a nonworking or low-earning spouse’s retirement savings. They can be set up as a traditional IRA or Roth IRA, which allow couples to save for retirement on a tax-deferred or tax-free basis, respectively.

The Unfortunate Truth About Claiming Social Security at Age 70
Adam Levy – The Motley Fool
Most personal finance experts recommend waiting as long as necessary to claim Social Security in order to qualify for the largest possible benefit. For most, that means applying for retirement benefits at age 70. While 70 is, statistically speaking, the optimal age to claim for the majority of retirees, it doesn’t mean there are no downsides to waiting that long before taking Social Security. In some instances, waiting until 70 could even be detrimental to your finances and your ability to enjoy your retirement.

Roaring Kitty is taking us to GameStop fantasyland: No short squeeze is coming
Cody Willard – MarketWatch
The suspension of disbelief that watching a movie requires reminds me of people who are buying meme stocks now. Suspension of disbelief means ignoring reality and logic. When you see someone on a social-media platform post a picture of a man playing videogames that causes a struggling videogame retailer’s – in this case GameStop GME – stock to go up 300% in the premarket, it feels like you’re watching a movie because you can hardly believe it’s happening in real life.

Drilling for default: dry run gives CCPs a Lehman-like lesson; Member default simulation finds standardisation and porting could help in a crisis, and moots unscheduled repeat drill
Luke Clancy –

Trumid claims 33% market share growth in May
Lucy Carter – MarketsMedia

His Ex Is Getting His $1 Million Retirement Account. They Broke Up in 1989; A legal fight over a forgotten form offers a cautionary tale
Ashlea Ebeling – The Wall Street Journal

Environmental, Social and Corporate Governance

Climate Change Is Coming for the Finer Things in Life; Wine. Olive oil. Coffee. Cocoa. ‘It does feel a little apocalyptic.’
Jon Emont – The Wall Street Journal
Joe Shaw makes his salads with a light dressing of balsamic vinegar, lemon juice and olive oil. At least he used to. The price of olive oil has doubled over the past two years as hot weather and drought have baked olive groves around the Mediterranean. Shaw decided it didn’t make sense to pay $10 for a half-liter bottle, up from about half that one or two years ago. He now squeezes the lemon juice and drizzles the vinegar, but with nothing to balance the acidic mixture.

Climate’s impact on sports and a call to arms – a round-up of environment books; New titles include billionaire climate investor Tom Steyer on a way of life we can all pursue and a meditative take on nature’s resilience
Pilita Clark – Financial Times
Global warming is no longer a distant problem. Rising temperatures are already changing the way people play sport, garden, run companies and learn at school, as a new batch of climate books show. But all is by no means lost, writes billionaire investor, Tom Steyer, in his punchy and admirably readable call to arms, Cheaper, Faster, Better: How We’ll Win the Climate War (Spiegel & Grau, $28). Steyer is best known for lavishing millions of dollars on a bid to be the Democratic nominee in the 2020 US presidential election race. But his many years of climate activism have in total cost him “between three and 10 billion dollars – and probably a lot closer to 10”, he writes. That makes him what he calls a “climate person”, a rewarding way to live, by his account, that he thinks we can all pursue if we choose.

Wall Street Backers See Breakthrough Moment for Carbon Offsets; Investors in carbon credits have withstood greenwashing scandals and sagging prices. Now there are finally signs of a turnaround
Natasha White and Alastair Marsh – Bloomberg
After more than three decades on Wall Street – first at Goldman Sachs Group Inc. and then at Bank of America Corp. – Tom Montag thought he’d seen most forms of financial wizardry. Then Hank Paulson asked him to tackle carbon offsets. It was the summer of 2022, and the former US treasury secretary had recently taken the helm at TPG Inc.’s Rise Climate, the private-equity firm’s main green investment vehicle. Paulson wanted to build a new multimillion-dollar venture called Rubicon Carbon that buys up credits derived from funding forest projects or backing wind farms as a way to let polluters compensate for their own contributions to climate change. A burst of corporate pledges to address emissions had sent a niche market, still only worth about $1 billion today, into a full-fledged rally. TPG injected $300 million into Rubicon, Bank of America bought in, and JPMorgan Chase Co. joined as a strategic partner.

New York’s Congestion Pricing U-Turn Blows a Proven Climate Win; Tolling drivers to enter city centers has brought fast, tangible environmental benefits elsewhere – and won over the public.
Brian Kahn – Bloomberg
New York Governor Kathy Hochul’s sudden decision last week to pause New York City’s congestion pricing program, less than a month before it was set to start tolling drivers, will leave disused license-plate readers as a reminder of what could have been: A rare policy that both rapidly curbs planet-warning emissions and becomes popular soon after implementation. There’s a clear climate upside to the now-shelved program, which would have been the first of its kind in the US. “We know transport is the No. 1 source of greenhouse gasses, and a really good way to address that is getting people to drive less,” said Nicholas Klein, a professor of city and regional planning at Cornell University. “Congestion pricing is an amazing tool to get people to do that.”

Big Oil executives spark controversy after calling efforts to phase out dirty energy a ‘fantasy’ – can the world stay on track?
Kristen Lawrence – The Cool Down
Despite agreeing to phase out polluting fuels at a recent global climate summit, oil executives are now backtracking on that promise, calling it a “fantasy” to transition to cleaner energy sources. At the 2023 United Nations Climate Change Conference, or COP28, nearly 200 countries reached a historic agreement to accelerate the move away from oil and gas so the world could achieve its critical pollution-reduction goals by 2050, per Reuters and the World Economic Forum.

Former BP boss calls for end to new North Sea drilling licences; Lord John Browne offers implicit endorsement of Labour party’s policy on fossil fuels
Jim Pickard and Malcolm Moore – Financial Times

Energy boss calls for urgent reforms to hit UK green targets; Scottish Power chief executive warns planning delays and skills shortages are holding back green transition
Rachel Millard – Financial Times

Tesla turns to Musk’s small shareholder fans to back $56 billion payday
Ross Kerber – Reuters


Index Ventures’ Danny Rimer: ‘The talent is what’s going to drive the difference’; Markets and technology matter, says the VC veteran, but people are the decisive factor in choosing investments
John Thornhill – Financial Times
Danny Rimer is one of Europe’s leading venture capital investors (second in the Forbes Midas Europe list last year), who has built a reputation among his peers as a top talent spotter and start-up champion. After stints as a West Coast banking analyst, working on the IPOs of Amazon and Netscape, and as a general partner at investment firm Barksdale Group, Rimer moved to London to open an office for Index Ventures in 2002. A decade later, he opened Index’s San Francisco office, giving him a good comparative perspective on both the US and European tech scenes, before returning to London in 2018.

Singapore Banks Probe Rich Clients After Laundering Case
Chanyaporn Chanjaroen and Joyce Koh – Bloomberg
Citigroup Inc., DBS Group Holdings Ltd. and other banks caught up in Singapore’s biggest money-laundering scandal are ramping up scrutiny of their wealthy customers and potential clients to avoid exposure to illicit flows, according to people familiar with the matter. Private bankers at several institutions are also receiving additional training to help them spot tricks used by criminals to mask their backgrounds and sources of funds, said the people, who asked not to be identified discussing private matters. The moves, which are voluntary, show how lenders are trying to close loopholes that enabled a group of criminals from China to launder more than S$3 billion ($2.23 billion) in proceeds from online gambling through at least 16 financial institutions in the island nation. The scandal has tarnished Singapore’s image and exposed weaknesses in how local and foreign banks and brokerages screen their clients.

Coffee, sculptures and financial advice. Banks try to make new branches less intimidating
Ken Sweet – Associated Press
It’s like Sephora or Starbucks now offered a checking account. After years of closing or mostly neglecting physical bank branches across the U.S., the nation’s largest banks are spending hundreds of millions of dollars on refurbishing old locations or building new ones, and in the process changing the look, feel and purpose of the local bank branch.

Julius Baer Targets Rich Indians in Dubai With UBS, JPMorgan Hires
Nicolas Parasie and Archana Narayanan – Bloomberg
Swiss wealth manager Julius Baer Group Ltd. hired senior bankers from UBS Group AG and JPMorgan Chase & Co. to beef up its business catering to rich Indians in Dubai. Sanjay Advani has joined from UBS as a managing director and team head of Julius Baer’s global non-resident Indians business in the emirate, according to a statement. Nisar Sindhi, previously at JPMorgan, has been named managing director and senior adviser.

Meme Stocks Are Back, but Fund Investors Moved On; Those wanting to track the meme-stock mania lost their chance when Roundhill’s MEME ETF closed last year
Jack Pitcher – The Wall Street Journal
Wild trading in meme stocks such as GameStop and AMC Entertainment has once again captured the imaginations of individual investors, but the frenzy of YOLO trading hasn’t lifted the fortunes of the fund industry. Assets in U.S. thematic funds peaked at nearly $200 billion in 2021 and have since dropped to $120 billion, according to Morningstar Direct, even though major stock indexes are trading near records.

How Much Is That Private-Equity Investment Really Worth?
WSJ Staff
How do pensions and other funds accurately assess the value of their private-equity investments? An obscure corner of the financial world shows how murky the answer can be. Investors in private-equity funds are allowed to estimate their stakes’ fair value by relying on what the managers of the funds say they are worth. But investment managers might be able to scoop up stakes for far less on a relatively thinly traded secondary market for private-equity investments.

Ossiam ETFs hit by ‘significant’ outflows over past six months; Natixis arm has suffered consecutive monthly outflows totalling EUR1.4bn or 20% of its ETF assets
Dom Lawson – Financial Times
Natixis Investment Managers affiliate Ossiam has been hit by “significant” outflows from its exchange traded funds over recent months. Ossiam ETFs posted consecutive monthly net outflows totalling EUR1.4bn over the past six months, amounting to more than 19 per cent of its ETF assets, Morningstar data shows.

Work & Management

If staff don’t want to work any more, leaders should step up; Managers complaining about a poor work ethic should look at the difference they can make
Stefan Stern – Financial Times
“Nobody wants to work anymore”, reported York County’s Gazette and Daily, one of America’s oldest newspapers, in 1937. It was not a new story. “Nobody wants to work as hard as they used to”, declared a food wholesaler to a reporter from the Binghamton Press in New York, in 1916. If today’s managers are aware of these century-old reports, too few show it. Qu Jing, PR chief at Chinese tech giant Baidu, recently made headlines after telling colleagues that if they work in public relations they should not “expect weekends off”. She most likely has both weekdays and weekends free, after being ejected from the company following her comments.

Wake up and smell the coffee: working from home is here to stay; Perhaps companies should listen to their employees and understand why so many have profoundly reassessed their working patterns
Harry Wallop – The Times of London
Before Covid, office jargon was all about touching base in a thought shower and lunching al desko. Ludicrous, yes, because most office jobs are ludicrous, but so are phrases that hint at an office fizzing with people running up strategic staircases before they fly a kite. In the past four years, however, the phrases to emerge have suggested something darker. The Great Resignation, quiet quitting, loud quitting, bare minimum Mondays, barely there Tuesdays, lazy girl jobs and grumpy stayers are howls of corporate desperation, a vocabulary for workers fed up with the world of work.

Quit Being a Cynic at Work. It’s Holding You Back; There are ways to fight the tendency to see the worst in everyone
Rachel Feintzeig – The Wall Street Journal
We don’t want to be friends with our co-workers. We don’t want to help out with that project. We don’t trust the CEO…or our boss…or that guy in accounting. Have we taken our cynicism at work too far? In some ways, our bad attitude makes sense. Many of us made work our church, only to end up laid off, burned out or underpaid. Now we check out, do less, gossip and snark.

For Years, an Esteemed Law Professor Seduced Students. Was He Too Important to Fire? Joshua Wright’s achievements drew millions in donations to his university, but complaints about his personal behavior and cozy ties with Google, Facebook and other tech giants went nowhere
Brody Mullins – The Wall Street Journal
Anhvinh Wright called Lindsey Edwards to ask if she was having an affair with her husband, setting off a string of damning conversations that threatened one of Big Tech’s greatest allies. Lindsey says you have a lot of things to tell me. Like about other women, she told her husband, Joshua Wright, in February 2020. Wright had hidden a yearslong sexual relationship with Edwards that started when she was a law student and he was a professor at her school. Wright helped Edwards join him at the law firm Wilson Sonsini Goodrich & Rosati in Washington, where the affair continued.

Hubris, Revenge and a Breakup Brought Down Big Tech’s Proudest Ally; Joshua Wright enjoyed a career as the cleverest mind in antitrust law-until his past caught up with him
Brody Mullins – The Wall Street Journal
For a time, Joshua Wright juggled a wife, three children, three mistresses and a well-paid career as a law professor and antitrust consultant for Google, Qualcomm and Facebook. He might have been able to keep it going. But in October 2021, Wright ended a yearslong affair with Elyse Dorsey, and everything started to tumble. He dumped Dorsey in a text, saying he was back with a former lover. “I’m so embarrassed for thinking you ever respected me,” she told him.

Wellness Exchange

How to Minimize Your Exposure to Microplastics; Furniture, clothing and food packaging can all shed tiny particles that can end up in our bodies.
Sarah Sloat – The New York Times
Matthew Campen, a toxicologist at the University of New Mexico, wasn’t surprised when his team found microplastics in human testicles during a new study. The tiny particles had already been found in human breast milk, lungs and blood. At this point, Dr. Campen said, he expects to find them in every part of the body. The particles are so small that it’s easy to ingest or inhale them. Scientists still aren’t sure how that might affect human health, but some early research points to cause for concern: One 2021 study found that patients with inflammatory bowel disease had more microplastics in their feces than healthy subjects, while another recent paper reported that people with microplastics in their blood vessels had an increased risk of heart complications.

Planet-first diet cuts risk of early death by nearly a third, study says
Sandee LaMotte – CNN
Closely following a planet-friendly diet of mostly fruits, vegetables and whole grains reduces the risk of premature death by nearly one-third in people, while also dramatically cutting the release of greenhouse gases devastating the planet, a new study found. “Eating more whole plant foods, less animal foods, and less highly processed foods is better for people and planet alike,” said Dr. David Katz, a specialist in preventive and lifestyle medicine who was not involved in the study.

Moderna hails successful trial of combined Covid and flu shot; Vaccine maker to seek approval for jab as it tries to diversify product pipeline
Oliver Barnes – Financial Times
Moderna’s combined Covid-19 and flu vaccine matched the efficacy of single shots in late-stage trial results published on Monday, opening the door for the mRNA vaccine maker to seek approval for its third product. In a phase 3 trial studying antibody responses in more than 8,000 adults aged 50 and over, Moderna said its combination vaccine proved as effective as its Covid shot administered separately alongside two popular seasonal flu jabs, Fluzone and Fluarix, which were given selectively to different age groups.


Dry Russian Weather Boosts Wheat Prices in Food Inflation; Threat Bumper harvests have capped futures in recent years, but bad conditions are now pushing them higher.
Celia Bergin – Bloomberg
Wheat’s getting expensive again, and it’s largely down to one producer. Russia, the grain’s biggest exporter, has been the market’s main threat as well as its saving grace over the past couple of years. President Vladimir Putin’s invasion of Ukraine sent prices spiraling to a record high in 2022 on worries that the two nations wouldn’t be able to get their crops to the world. But Russia’s subsequent back-to-back bumper harvests have cooled the market since then.

France May See Worst Wheat Damage in Years Due to Non-Stop Rain; Farmers could see damage to 12 to 20% of wheat areas Excess rain, lack of sunshine have also hurt wheat quality
Nayla Razzouk – The Wall Street Journal
French farmers are bracing for big hit to their wheat harvest as ceaseless rains and a lack of sunshine brings flashbacks of a weather-devastated crop eight years ago in Europe’s top producer. “The situation is shaping up to be the worst we can imagine,” said Eric Thirouin, president of French grains growers’ group AGPB. “It is extremely difficult in the first week of June to make a prediction, but all the indicators are flashing red.”

Retail traders push India stock option volumes above S&P 500; Small investors join trading rush as stock market hits record highs
George Steer in London and Chris Kay in Mumbai – Financial Times
Trading volumes of options on Indian equities have eclipsed those on Wall Street stocks, as retail investors pile into short-term bets on the country’s surging benchmark index. The notional value of options on India’s Nifty 50 index has grown to an average of about $1.64tn a day this year compared with average volumes on the S&P 500 index of $1.44tn, according to Bank of America data.

South Korea’s Yoon heads to Central Asia for talks on energy, minerals
South Korean President Yoon Suk Yeol embarked on a trip to Central Asia on Monday to hold talks on strengthening diplomatic ties and cooperating in areas such as energy and minerals, Yoon’s office said. Yoon will visit Turkmenistan with the first lady for a state visit before heading to Kazakhstan and Uzbekistan where he will sign agreements and attend business forums, according to his office.

French shock election news adds to unease in event-packed week
Dhara Ranasinghe – Reuters
A selloff in Europe set the tone for global markets on Monday as French President Emmanuel Macron’s decision to call a snap election weighed on everything from the euro to banking stocks and government bonds. Asia shares apart from Japan fell and U.S. stock futures pointed to a weak open on Wall Street, with an event-packed week ahead including the release of U.S. inflation data as well as Federal Reserve and Bank of Japan meetings.

Giorgia Meloni puts brakes on Italy’s solar energy rollout; Prime minister says photovoltaics are threatening nation’s ‘food security’, but farmers disagree
Amy Kazmin – Financial Times
Italian Prime Minister Giorgia Meloni has always insisted she is not a climate change denier and that her rightwing government is committed to greener sources of energy. But her coalition is putting the brakes on the rollout of solar panels on farmland, which Meloni has described as a “threat to our food sovereignty” – a claim refuted by some farmers and solar energy experts.

AFME releases securitisation market revitalisation plan
Lucy Carter – Global Trading
The Association for Financial Markets in Europe (AFME) has provided a five-point reform plan to revitalise the securitisation market in the EU. The combined measures should increase both supply and demand for product, the association said, advocating for increased risk sensitivity within the bank prudential framework, an adjustment to how securitisation is treated within the liquidity coverage ratio and the revitalisation of demand from the insurance sector. Also recommended is the introduction of proportionality for investors conducting regulatory due diligence, along with the fine-tuning of regulatory reporting requirements and a simplification of simple, transparent and standardised (STS) criteria for traditional and synthetic securitisations.

European companies step up efforts to decouple from China; Move comes as Brussels increases scrutiny of goods from world’s largest export economy
William Langley and Chan Ho-him – Financial Times
European buyers are seeking to reduce their dependence on China, sourcing executives say, as Brussels increases scrutiny of goods from the world’s largest export economy. Brussels has launched probes investigating Chinese government subsidies for manufacturing and the European Commission is expected to soon disclose any further tariffs on Chinese electric vehicle imports.

Keeping Sanctioned Russian Timber Out of the EU Is Tricky. This Nonprofit Has a Solution; Mapping chemical signatures of wood could help companies like IKEA keep illegal timber shipments out of bookcases and bed frames
Dylan Tokar – The Wall Street Journal
Scientists are embarking on an effort to keep sanctioned Russian timber out of Europe by mapping the unique chemical fingerprints of trees, a process that could be used to vet corporate supply chains for other banned commodities. The project aims to bring science to bear in a fight by companies and governments to stop illegal wood from seeping into timber supply chains-complex, difficult-to-police networks of logging companies, sawmills, wood manufacturers and traders.

Russian Oil Tanker Does Secret Cargo Switch Near Singapore to Dodge US Sanctions; SCF Primorye appears to have moved its cargo to another ship; Transfer made east of Singapore in area favoured for switches
Julian Lee – Bloomberg
The first Russian oil tanker attempting to deliver crude while under US sanctions made a secret cargo transfer onto another ship, a sign of the lengths to which Moscow is going to undermine the effectiveness of American restrictions on its fleet. The SCF Primorye was sanctioned by the US Treasury’s Office of Foreign Assets Control in October, after which it didn’t load oil again for about six months. But in late April, the tanker went to Russia’s Black Sea port of Novorossiysk and collected a cargo of Urals crude before embarking on a 7,500-mile voyage to a location about 70 miles east of Singapore.

Brazil Enables the Black Market; A case study in how barriers to commerce make smuggling a huge business.
Mary Anastasia O’Grady – The Wall Street Journal
Fifteen miles upstream from this city, built where the Iguazu River meets the larger Paraná, are the towering Iguazu Falls. The largest of the falls and the main attraction is the “Devil’s Throat,” an exhilarating and terrifying site. For a real thrill tourists can view the cascade of rapids, 492 feet wide and 269 feet high, tumbling over the precipice from a catwalk in the river. There’s also a promenade overlooking the falls, where I lingered one evening last week to watch a glowing red sun sink behind Argentina, across the river. Soon the stars glittered against a midnight-blue sky. The rushing waters seemed to roar louder in the darkness as a reminder of the awesome power of creation and the infinity of the Creator. It’s no wonder a million visitors come every year to see this place.


For Diamonds, It Matters Who De Beers Hooks Up With Next; As more American couples opt for lab-grown stones, whoever buys the diamond producer needs to be as sharp at marketing as mining
Carol Ryan – The Wall Street Journal
Is it more romantic to buy a diamond that formed in the bowels of the earth than one grown in a lab? Young American couples don’t think so. That is awkward for diamond miner De Beers, especially now that it is looking for a new owner. Mining conglomerate Anglo American, which has been a top shareholder in the world’s best-known diamond producer for almost a century, wants to sell or separately list it as part of a radical breakup plan.

Colorado’s Weed Market Is Coming Down Hard and It’s Making Other States Nervous
Mona Zhang – Politico
On Jan. 1, 2014, Iraq War veteran Sean Azzariti made headlines worldwide as the first person in the U.S. to buy legal weed. More than 10 years later, 3D Cannabis, the dispensary in Denver’s Elyria-Swansea neighborhood where the historic purchase was made, displays a makeshift sign announcing it is “temporarily closed.” The windows and doors on the side of the building have been boarded up. Plastic bags, discarded coffee cups and other trash collect in the corners of the abandoned parking lot.

Investment Bank Moelis Probes Incident After Video of Employee Appearing to Punch Woman
Todd Gillespie and Liana Baker – Bloomberg
Moelis & Co. is investigating an incident involving one of its employees after a video circulated online showing a man identified as one of the firm’s senior bankers appearing to punch a woman. The video, posted on X, shows a man striking a woman, who then falls to the ground. The man, whose jacket is visibly wet, walks away from the scene as he’s criticized by onlookers.

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The Spread

Traders Betting on China Easing Boost Bearish Options on Banks

Observations & Insight Miami International Holdings, Inc. (MIH) announced that the SEC has approved MIAX Sapphire LLC's application to become a national securities exchange. MIAX Sapphire, MIH's fourth national securities exchange for U.S. multi-listed options,...

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