Hits & Takes
By JLN Staff
Today we have published the Open Outcry Traders History Project video of James Gordon of Straits Financial LLC. Gordon spent eight years on the Cboe trading floor with Timber Hill. His is the first video we have published of someone who worked for a trading group as part of a team approach to trading.
It looks like we need a plexiglass futures contract, as everyone is going to need to separate themselves from each other at the office, restaurants and other public-facing venues. I would also go long the stocks of firms that teach lip-reading, as we are going to need to learn to read lips through plexiglass.
The World Federation of Exchanges has published an update on industry cyber efforts during the pandemic.
In its latest edition of Focus, the WFE has an interview with Mike McClain, DTCC’s managing director and general manager of equity clearing and DTC settlement services, about “Distributed ledger technology and accelerated settlement.”
Have a great weekend, but stay safe~JJL
OCC reported on Twitter that its total cleared volume yesterday was 29,454,754 contracts, 6.21% higher than the YTD daily average of 27,731,614. That and more OCC volume information is available here.~SR
James Gordon: Former Timber Hill Open Outcry Trader Story
James Gordon spent eight years working on the Cboe trading floor as a trader for Timber Hill. His experience, and how he was treated as a trader, was different from others’. He found his way to the exchange through a brother who was a clerk at the CME. Gordon was an English major and graduated from the University of Michigan. He wanted a year off before heading to law school. He started as a runner for Prudential at the CME and worked his way up by showing aptitude and interest. He was introduced to Timber Hill, took their math test and scored a 95% with one question wrong. He was told he had a better chance of getting a seat at the Cboe, rather than the CME. He talks about Timber Hill, PTSD from trading and what happened on 9/11. He eventually moved to the compliance side of the business as order flow on the trading floor diminished. He sat down for an interview with John Lothian News for the MarketsWiki Education Open Outcry Traders History Project.
Life Returns to London’s Finance Hub — Doused in Disinfectant
Stefania Spezzati and Edward Robinson – Bloomberg
Temperature checks are in; spontaneous coffee meetings are out; Experts say return to workplace key to restoring City’s spark
There are signs of life in the City of London. Brokers and traders are popping into a newly re-opened takeaway-only Pret a Manger for coffee. Gardeners are preparing flowerbeds around the Duke of Wellington’s statue overlooking the Bank tube station in the heart of the district. Cleaning teams are rubbing down door handles and polishing floors in bank lobbies, the odor of disinfectant wafting down the street. It smells like progress.
*****What is that sexy aftershave you have on? ~JJL
C.D.C. Recommends Sweeping Changes to American Offices; Temperature checks, desk shields and no public transit: The guidelines would remake office life. Some may decide it’s easier to keep employees at home.
Matt Richtel – WSJ
Upon arriving at work, employees should get a temperature and symptom check. Inside the office, desks should be six feet apart. If that isn’t possible, employers should consider erecting plastic shields around desks.
***** Go long plexiglass!~JJL
CryptoMarketsWiki Coin of the Week: Ethereum (ETH)
Ethereum is more popular than ever, according to data from Delphi Digital and Skew Analytics. User activity on the Ethereum blockchain is higher than ever, and open interest for Ethereum options on the cryptocurrency exchange Deribit is higher than ever, reaching $108 million this week. Binance, one of the biggest unregulated cryptocurrency exchanges by trade volume, also announced this week that the exchange will begin offering options contracts on ETH, as well as XRP.
Thursday’s Top Three
Our top story Thursday was the on-air fight between Joe Kernan and Andrew Ross Sorkin of CNBC via the Twitter account of Julie Verhage. Second was Bloomberg’s This Is How Deeply the Coronavirus Changed Our Behavior, showing (with graphs) the worldwide economic costs of the virus. Third was Extinction by Algos Threatens Chicago’s Silenced Trading Pits, also from Bloomberg.
178,241,088 pages viewed; 24,134 pages; 224,235 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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The World’s Oldest Exchange Is Europe’s Hottest Listing Venue
Swetha Gopinath and Ruben Munsterman – Bloomberg
JDE Peet’s IPO adds to roster of Amsterdam’s big listings; Investor base, governance rules make Dutch capital attractive
For two years in a row, Europe’s largest stock-market listings have taken place in Amsterdam, which has beguiled companies with a deep pool of international investors and corporate governance norms that tilt in favor of management teams.
Battle for Hong Kong Is Shifting to City’s Financial Markets
Sofia Horta e Costa and Richard Frost – Bloomberg
Hang Seng Index has worst month versus world since 1998; Mainland funds are helping shore up city’s battered stocks
The struggle to maintain confidence in Hong Kong’s future is manifesting in its stock and currency markets. Waves of mainland capital are flooding into equities, especially megacap Chinese banks, countering losses sparked by sweeping national security legislation. Tension is also building in the foreign exchange market, where options and forwards show the pegged currency will reach the weak end of its trading band.
New US stock exchange MEMX will go live in September; US trading venue MEMX is set to take on incumbent exchanges Nasdaq and NYSE as it confirms September launch date.
Kiays Khalil – The Trade
US equities exchange MEMX has confirmed it will launch in September, following an initial delay due to disruptions caused by the coronavirus pandemic.
Traders’ happy return to work belies long recovery; Economic reality does not quite match the optimism on the markets
Brooke Fox – FT
The image this week of masked traders returning to their posts at the New York Stock Exchange, thumbs aloft, was the clearest sign yet that financial life is starting to get back to normal after the darkest days of the coronavirus crisis. Two months after the NYSE shut its doors for the first long spell since its inception 228 years ago, around a quarter of traders were allowed back into the building.
US money market funds waive fees to stave off negative returns; Decline in yields on short-term debt prompts action from asset managers
Joe Rennison, Robert Armstrong and Colby Smith – FT
US asset managers are cutting the fees they charge for money market funds after the dramatic decline in yields on the short-term debt they rely on threatened to leave clients with negative returns.
Home trading triggers bank ‘black hole’ surveillance alerts
Huw Jones – Reuters
Potential breaches of market rules have spiked since traders began working from home in March, drawing scrutiny from regulators and piling pressure on banks to plug “black holes” in surveillance systems, industry officials say.
IOSCO Encourages Issuers’ Fair Disclosure About COVID-19 Related Impacts
The Board of the International Organization of Securities Commissions (IOSCO) today issued a public statement highlighting the importance to investors and other stakeholders of having timely and high-quality information about the impact of COVID-19 on issuers´ operating performance, financial position and prospects.
US crude imports surge as Saudi oil ‘armada’ arrives; Supplies to US jump by almost 1m barrels a day while domestic production slumps
Derek Brower – FT
US oil imports surged last week, with almost half of the extra crude arriving from Saudi Arabia, as foreign producers took market share from the struggling American shale patch.
What Hong Kong Losing Its ‘Special Status’ Would Mean
Iain Marlow and Daniel Flatley – Bloomberg
Under the United States-Hong Kong Policy Act of 1992, the U.S. treats Hong Kong, a semi-autonomous part of China, differently than the mainland in trade, commerce and other areas. Now U.S. President Donald Trump could rescind that “special status” to punish China for recent moves to tighten its grip on the city amid a resurgence of pro-democracy street protests. In its most extreme form, that would effectively mean treating the global financial hub no differently than any other Chinese city, a seismic shift that could harm both economies at an already difficult time. China has promised countermeasures against any foreign “interference.”
Citi Banker Sees Nations Targeting Wealthy to Recoup Virus Costs
Benjamin Stupples – Bloomberg
More taxes, even expropriation possible, Luigi Pigorini says; He says rich clients worried about worsening social tensions
From the Black Monday market crash to the bursting of the dot-com bubble to the collapse of Lehman Brothers, Citigroup Inc.’s Luigi Pigorini has lived through plenty of economic crises. Still, he hasn’t seen a downturn as rapid as the one spawned by the novel coronavirus. And as nations seek to recoup the cost of the pandemic, the result will likely be that some of the world’s biggest fortunes end up in the crosshairs, he said.
Credit Suisse Takes Fight Over Spy Investigator to Top Court
Hugo Miller and Marion Halftermeyer – Bloomberg
Bank appeals April decision; says law firm isn’t independent; Credit Suisse is looking to move beyond 2019 spying scandal
Credit Suisse Group AG has asked the Swiss Supreme Court to review whether the lawyer leading a probe into a spy scandal should be removed because of an alleged conflict of interest.
Credit Suisse to Review Lending to Clients at Wealth Unit
Patrick Winters and Marion Halftermeyer – Bloomberg
Bank to reshape team that lends to rich, review oil exposure; Wealth unit recently lost executive in charge of large loans
Credit Suisse Group AG is preparing a review of one of its most profitable business lines under new Chief Executive Officer Thomas Gottstein after the coronavirus pummeled markets and a key wealth unit executive departed.
E-trading in European corporate bond markets broke down at peak of crisis; Study from ICMA suggests that corporate bond traders were forced to revert back to voice trading at the height of the recent market volatility.
Hayley McDowell – The Trade
Electronic trading in European corporate bond markets essentially broke down at the peak of the recent pandemic volatility, according to a new study from the International Capital Markets Association (ICMA).
More than two dozen North Korean bankers charged in $2.5 billion money-laundering scheme; CNN Digital Rebranding 2015 David Shortell Photo: Jeremy Freeman
David Shortell, CNN
The US Justice Department on Thursday unsealed criminal charges against more than two dozen North Korean bankers, alleging they were behind an international money laundering scheme that moved some $2.5 billion in violation of US sanctions.
Fear of Covid-19 Leads Other Patients to Decline Critical Treatment; Psychologists say anxiety and uncertainty prompt irrational decisions — like turning down a transplant when an organ becomes available.
Katie Hafner – NY Times
It was the call Lance Hansen, gravely ill with liver disease, had been waiting weeks for, and it came just before midnight in late April. A liver was available for him. He got up to get dressed for the three-hour drive to San Francisco for the transplant surgery. And then he panicked.
Blood of Recovered Covid-19 Patients Is Becoming a Hot Commodity; Demand buoys blood brokers but challenges makers of antibody tests; $1,000 for one milliliter
Denise Roland | Photographs by Rose Marie Cromwell for The Wall Street Journal
The blood business is booming. This normally obscure trade has been set alight by the race to develop Covid-19 antibody tests, which use blood to tell whether someone has already been infected with the coronavirus. The tests are seen as key to easing lockdowns that have shut down economies around the world.
Coronavirus will have a long-term impact on work and retirement; Demographic upheaval will be felt for years to come influencing size of future labour forces
John Dizard – FT
People like me are invited to the best houses once, and generally only once. At dinner, when comfortable opinions and comic stories are traded, I announce to the room: “Nobody here has as much for retirement as they think they do.” Then I go on and on about how it is arithmetically impossible, let alone physically impossible, for a third of the population to be “rich” high consumers, at the expense of working people or foreigners.
China rounds up Wuhan’s citizen journalists for ‘provoking quarrels; Questioning the Communist party’s handling of the Covid-19 crisis is risky
Don Weinland and Christian Shepherd – FT
In her last report posted to YouTube on May 13, citizen journalist Zhang Zhan stood outside a train station in Wuhan and described conditions in the city where the coronavirus pandemic began.
Cricket-mad Australia welcomes back the game after Covid-19 stopped play; T20 tournament offers hope to a sport struggling to cope with intense financial stress
Jamie Smyth – FT
Two months after Covid-19 brought competitive cricket to a shuddering halt around the world, the game will resume in Australia, where the national team captain’s job is considered by many to be more important than the prime minister’s.
U.S. Can’t Beat Coronavirus, But Americans Can Cope With It; There’s no refuge from Covid-19, but masks, testing improvements and other protections should temper its ravages.
Michael R. Strain and Scott Gottlieb – Bloomberg
Lots of Americans have been disappointed by the inability of their leaders to speedily deploy the tools public-health experts prescribed to contain the spread of the coronavirus: mass testing, contact tracing and isolation of people who are infected. As states ease life-saving lockdowns that devastated the economy, it’s reasonable to wonder whether the U.S. is catching up, or whether there are other ways to prevent a recurrence of the public-health emergency that struck in March. To find out, the economist and Bloomberg Opinion columnist Michael R. Strain spent a few hours this week with Dr. Scott Gottlieb, his colleague at the American Enterprise Institute and a physician, investor and public-health specialist who led the U.S. Food and Drug Administration for two years ending in 2019. His forecast was sobering but far from hopeless. These are excerpts of their conversation.
Boston Marathon Canceled for 1st Time in 124-year History
The Associated Press
Organizers canceled the Boston Marathon on Thursday for the first time in its history, bowing to the social distancing requirements of the coronavirus outbreak and ending a 124-year run that had persisted through two World Wars, a volcanic eruption and even another pandemic.
Kenyan Banks Seen Sheltering in Bonds as Virus Slows Lending
Eric Ombok – Bloomberg
Provisions for bad debts expected to rise from second quarter; Covid-19 to hit interest income and non-interest income
Kenya’s banks are likely to issue fewer loans this year and boost investments in government debt to safeguard earnings under threat from the fallout of the coronavirus.
EU Has the Cash for Virus Recovery So Here’s How to Spend It
Paul Gordon and Alessandra Migliaccio – Bloomberg
Economists say both consumption and investment need supporting; Moral hazard remains an important, but not overriding, concern
The guardians of the European Union’s new 750 billion-euro ($827 billion) recovery plan will have to avoid some big pitfalls to ensure their grand show of unity doesn’t fail.
Air Traffic Won’t Recover for at Least Three Years, S&P Says
Anurag Kotoky – Bloomberg
Rating agency warns of more airport downgrades due to virus; Global air passenger numbers could drop as much as 55% in 2020
The aviation industry’s recovery from the coronavirus outbreak will be long and slow, with passenger numbers likely to stay below pre-pandemic levels through 2023, according to S&P Global Ratings, which warned of more rating downgrades for airports over the next few months.
De Blasio Expects New York City To Head Back To Work Next Month
Colin Dwyer – NPR
Mayor Bill de Blasio expects up to to 400,000 New York City residents to head back to work in the first half of next month, as the city prepares to begin lifting some of its most stringent coronavirus restrictions. That’s the upshot of the mayor’s news conference Thursday at City Hall, during which he laid out what to expect from a city that emerged weeks ago as the epicenter of the outbreak in the U.S.
Tyson Foods will shut U.S. pork plant as more workers catch COVID-19
Tom Polansek – Reuters
Tyson Foods Inc (TSN.N) said on Thursday it will temporarily close an Iowa pork plant due to the coronavirus pandemic, a month after U.S. President Donald Trump ordered slaughterhouses to stay open to protect the country’s food supply.
Exchanges, OTC and Clearing
Deutsche Börse enters partnership with Chinese data provider Wind; Deutsche Börse is looking to further its strategy in Asia through partnership through latest partnership with Wind.
Kiays Khalil – The Trade
Exchange group Deutsche Börse has teamed up with Chinese data provider Wind to expand access to markets in Europe for investors in China.
Euronext ceases London regulatory activities
Euronext today announces that it intends to cease its Recognised Investment Exchange (RIE) activities in the UK by 30 June, 2020. Today’s announcement follows an application to the FCA to revoke its licence for regulatory operations in the UK market. Euronext London’s RIE will remain regulated by the FCA until, subject to FCA approval, revocation becomes effective.
Intercontinental Exchange Chairman & CEO Jeffrey C. Sprecher to Present at the Piper Sandler Global Exchange & FinTech Conference on June 4
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Jeffrey C. Sprecher, Chairman and CEO, will present at the Piper Sandler Global Exchange and FinTech Conference. The presentation will take place on Thursday, June 4 at 10:30 a.m. ET. The presentation will be available live and in replay via webcast and can be accessed in the investor relations and media section of ICE’s website at http://ir.theice.com/.
MEMX Timeline Update — Launch Set for September 4th
Jonathan Kellner – MEMX
We are making great progress at Members Exchange as we’ve released our production protocol specifications, initiated onboarding of trading members, and formally set our launch date of September 4, 2020.
Chicago Fintech Links Lender Web Sites To Provide Vetted Help For Borrowers
Tom Groenfeldt – Forbes
Loan collection agents at BMO Harris Bank have a new tool for helping people who have fallen behind on their payments — a link from the bank’s web site to a carefully vetted list of nearby nonprofits and government agencies that can provide help such as heating assistance, discounted prescriptions and food assistance.
The service, free to bank customers, is from a fintech startup called SpringFour which, like BMO Harris, is headquartered in Chicago.
Fintech’s Money 20/20 Still Plans 6,000-Person Vegas Conference
Jennifer Surane – Bloomberg
For Money 20/20, the show must go on.
Organizers of the event — among the largest for financial-technology and payments executives — said on Thursday they still plan to have the October gathering in Las Vegas with attendance capped at 6,000. Last year’s crowd was 10,000. Safety measures including self-service for registration and additional hand-sanitizing stations are planned to limit spread of the coronavirus, event director Monique Ruff-Bell said in an email.
RegTech on the rise as FinTech seeks to remain compliant and competitive
David Clee – Finextra
Whilst lockdowns are being lifted in some parts of the world, few expect a return to pre-coronavirus norms. However, while work-life habits may have changed, in sectors such as FinTech working patterns were already much more flexible and fluid.
Indeed, in financial services more broadly, rapid and transformative change is constant and has been given fresh impetus by the pandemic. Notably, we’ve seen widespread adoption of advanced digital communication capabilities with sophisticated platforms, not least content-rich company websites, which are now a necessity for even the most established players.
New Fintech Promises Higher Returns On Savings With ‘Savetech’ Platform
Donna Fuscaldo – Forbes
Americans are saving money at record rates as COVID-19 pandemic uncertainty drives a desire for bigger safety nets. But earning a return on that savings is tough to come by with interest rates near zero.
New financial technology startup Save Advisers thinks it has the answer. Its gearing up to launch a FDIC-insured savings platform this summer it says is a low-risk way to earn a higher yield. Taking a page from robo advisors, customers open a savings account with a minimum of $1,000 and instead of getting a fixed rate of interest, Save invests the customer’s interest in a portfolio of ETFs that cover stocks, bonds, real estate, and commodities. The startup is currently in talks with banks to insure the savings accounts and has teamed up with Apex, a fintech custodian to mange the assets of customers.
Oakland fintech charged up with $150 million in fresh funding
Ted Andersen – San Francisco Business Times
Oakland fintech Marqeta, which issues payment cards for startups, announced Thursday morning that it has raised $150 million in investor funding and has doubled its valuation, which now stands at $4.3 billion.
The company said the money came from a leading institutional investor but did not name the investor.
Singapore to establish AI framework for ‘fairness’ credit scoring metrics; Monetary Authority of Singapore tasks two teams, comprising banks and artificial intelligence industry players, to develop metrics that ensure the “responsible use of AI” for credit risk scoring and customer marketing.
Eileen You – ZDNET
Singapore has kicked off efforts to develop a framework to ensure the “responsible” adoption of artificial intelligence (AI) and data analytics in credit risk scoring and customer marketing. Two teams comprising banks and industry players have been tasked to establish metrics that can assist financial institutions in ensuring the “fairness” of their AI and data analytics tools in these instances.
Goldman Sachs betrays bitcoin
Jemima Kelly – FT Alphaville
Remember when Goldman Sachs <3’d bitcoin? Back in the heady days of 2017 and 2018, the investment bank was so excited about this potential new asset class that it was said to be considering launching a bitcoin trading desk, a huge step in the direction of “mainstream adoption”.
What Goldman Gets Wrong About Bitcoin (From Someone Who Used to Work There)
Jill Carlson – Coindesk
Jill Carlson, a CoinDesk columnist, is co-founder of the Open Money Initiative, a non-profit research organization working to guarantee the right to a free and open financial system. She is also an investor in early-stage startups with Slow Ventures.
Goldman Sachs unintentionally sparked a war with cryptocurrency evangelists
Ryan Browne – CNBC
“Cryptocurrencies including bitcoin are not an asset class,” Goldman Sachs declared in a slide deck released ahead of an investor call on Wednesday. Crypto enthusiasts had eagerly anticipated the Goldman call, with some assuming it might lay out a case for investing in bitcoin. Industry figures like the Winklevoss twins quickly took to Twitter to criticize the investment bank’s claims.
Mark Zuckerberg says Libra could help boost Facebook’s ad revenue
Yogita Khatri – The Block
Facebook CEO Mark Zuckerberg was asked during an annual shareholder call on Wednesday how Libra, the stablecoin projected bootstrapped by the social media giant, could help it financially. The question, posed by Brett Young, was: “I am very supportive of Libra, but I’d like to know how does this benefit Facebook financially? How is Libra going to make money for Facebook?”
Calibra’s Rebrand to ‘Novi’: An Effort to Create Distance from Facebook?
Rachel McIntosh – Finance Magnates
Earlier this week, Facebook announced that it would be renaming its ‘Calibra’ wallet initiative to ‘Novi’. The announcement comes not so long after Libra unveiled Libra 2.0, a newer version of the global cryptocurrency project that is believed to have been designed to have greater regulatory appeal.
Samsung Partners With Winklevoss Exchange to Expand Crypto Push
Olga Kharif – Bloomberg
Gemini Trust Co., the cryptocurrency venture run by the Winklevoss brothers, is partnering with Samsung Electronics Co. to allow users to more easily trade and store digital assets on mobile phones. Gemini is the first crypto exchange to let U.S. and Canadian users of Samsung’s blockchain wallet view balances in their wallet app. Customers wishing to trade will be directed to Gemini’s mobile app, but won’t have to go through another log-in to start buying and selling.
Kingdom Trust acquires company from CoinShares founders, enables hybrid IRA with bitcoin bonus
Aislinn Keely – The Block
Kingdom Trust, the $13 billion custodian, has acquired a crypto retirement company created by former CoinShares founders. The acquisition of Choice Holdings enabled the launch of Kingdom Trust’s Choice platform, a unified retirement account where individuals can hold different asset classes, including crypto. The custodian is also offering a bitcoin bonus to the first 1,000 users of the Choice platform. Once opened, they’ll receive $62.50 in BTC in their account.
Chinese Citizens Are Now Able to Inherit Cryptocurrency
Ting Peng – Cointelegraph
China’s new civil code will include cryptocurrency such as Bitcoin to be part of the legal inheritance. The Thirteenth National People’s Congress and Chinese People’s Political Consultative Conference has come to an end on May 28. According to Xinhua news, the same day the parliament passed a new civil code; a legislation package that includes protecting the civil rights of inheritance, marriage, property, personality, contract and infringement.
Leading digital asset platforms make their move into prime brokerage; As digital asset firms look to reach institutional investors, the largest players have realised the need for prime brokerage services and appear to have all made their moves at once.
Jon Watkins – The Trade
Three of the largest digital asset platforms have moved into the crypto prime brokerage space over the past seven days, as the importance of the function to attract institutional investors becomes abundantly clear.
Chinese Communist Party’s new blockchain book casts Libra as a threat to its currency system
Yilun Cheng – The Block
China has published a new book to educate government officials on digital currency and propose policy measures to deal with emerging challenges like Facebook’s Libra. The book, Discussing Digital Currency with Leading Officials, is part of a series that explores the political and economic consequences of technologies like cryptocurrency and artificial intelligence. The publisher, the Central Party School, is a higher education institution that trains government officials for the Communist Party.
Bitcoin’s intrinsic value is now in line with its market price, says JPMorgan strategist
Yogita Khatri – The Block
Bitcoin’s intrinsic value, or the fundamental value, is now in line with its market value, according to JPMorgan strategist Nikolaos Panigirtzoglou. The gap between the two values “has now effectively closed” after the halving, said Panigirtzoglou in a research note published last week. In January, the strategist said bitcoin’s intrinsic value is lower than its market price, meaning bitcoin was overvalued.
JPMorgan Chase Pays $2.5M to Settle Cryptocurrency Fees Lawsuit
Aziz Abdel-Qader – Finance Magnates
The largest bank in the United States, JP Morgan Chase, had agreed to pay $2.5 million to settle a class-action lawsuit over its extra fees and higher interest rates it charged from cryptocurrency transactions. The case stemmed from a lawsuit filed in a Manhattan federal court two years ago, accusing Chase of charging surprise fees when it stopped letting customers buy cryptocurrency with credit cards and, instead, treated their purchases as cash advances.
Telegram CEO Donates 10 BTC to Pandemic Relief Effort
Anna Baydakova – Coindesk
Telegram messenger founder and CEO Pavel Durov reportedly donated about $90,000 worth of bitcoin (BTC) to help alleviate the financial burden of the COVID-19 pandemic in Russia. Egor Zhukov, a student political activist who organized a crowdfunding campaign to help people cope with the pandemic-related crisis, announced Durov donated 10 BTC to the effort.
Donald Trump orders legal review targeting social media groups; US president seeks to change law that gives Twitter and others immunity from lawsuits
Kiran Stacey and Hannah Murphy – FT
Donald Trump ordered a wide-ranging review of the law that underpins how social media platforms operate, in a move which threatens to undermine legal protections internet companies have enjoyed for decades.
Trump’s Order on Social Media Could Harm One Person in Particular: Donald Trump; Without certain liability protections, companies like Twitter would have to be more aggressive about policing messages that press the boundaries — like the president’s.
Peter Baker and Daisuke Wakabayashi – NY Times
President Trump, who built his political career on the power of a flame-throwing Twitter account, has now gone to war with Twitter, angered that it would presume to fact-check his messages. But the punishment he is threatening could force social media companies to crack down even more on customers just like Mr. Trump.
U.S. to Cancel Visas for Some Chinese Graduate Students; President Trump’s move would target scholars associated with Chinese universities with ties to the People’s Liberation Army
Andrew Restuccia and Kate O’Keeffe – WSJ
President Trump is expected to announce Friday that the U.S. will cancel the visas of some Chinese graduate students and researchers, according to administration officials and others familiar with the matter.
Hong Kong Chief Appeals for Citizens’ Support as Trump Moves Loom; Trump is expected to unveil countermeasures in response to Beijing’s Hong Kong security legislation
Natasha Khan – WSJ
The city’s top official appealed to people to support new national security legislation imposed by Beijing, as international criticism of China’s decision to bypass city lawmakers mounted.
The case for libertarian lockdowns — ‘don’t be a dickhead’; Laws cannot cover every situation but common sense is not always enough
Tim Harford – FT
In March, an employee of a Melbourne bank was sacked after the bank concluded they had falsely claimed to be infected with coronavirus, triggering alarm for everyone working in the same building. The hands-off response of the local police chief: “It’s not against the law to be a dickhead”.
Twitter hides Trump post for ‘glorifying violence’; Tech company’s action comes as US president seeks to curb power of social media groups
Kiran Stacey, Hannah Murphy and Tim Bradshaw – FT
Twitter has intensified its feud with Donald Trump by warning that his latest post breaks its rules for “glorifying violence”, just hours after the US president signed an executive order designed to curtail the power of social media companies.
EU Is Set to Air ‘Grave Concern’ Over China’s Move in Hong Kong
Jonathan Stearns – Bloomberg
The European Union is poised to express “grave concern” over sweeping new Chinese national-security legislation in Hong Kong and to question China’s respect for its international commitments. The stance is outlined in a draft EU statement drawn up as part of a video conference on Friday of the 27-nation bloc’s foreign ministers. China is a main subject of the meeting, which is being led by EU foreign-policy chief Josep Borrell.
Boris Johnson Gets a Hong Kong Reality Check; Britain can no longer put business first in its dealings with Beijing. China’s new national security law for Hong Kong demands a broader response.
Therese Raphael – Bloomberg
China’s new national security law for Hong Kong poses a major test of Britain’s foreign policy principles, and its mettle. The law bans subversion, secession and foreign interference. While Beijing has yet to specify exactly how the new powers will work, its objectives hardly need spelling out.
White House Won’t Issue Economic Projections This Summer, Official Says; Projections wouldn’t provide a ‘meaningful snapshot’ of economy because of uncertainty caused by pandemic
Andrew Restuccia and Kate Davidson – WSJ
The White House won’t issue updated economic projections this summer because of uncertainty caused by the coronavirus pandemic, according to a senior administration official.
Nicola Sturgeon tells Boris Johnson his lockdown exit does not apply to Scotland; Nicola Sturgeon has urged Boris Johnson to make it clear that any lockdown exit measures he announces today will not apply in Scotland.
Scott Macnab – The Scotsman
The Prime Minister has insisted that the all four UK leaders agreed that joint working would be critical in the next stage of battling Coronavirus.
Pence Chief Of Staff Owns Stocks That Could Conflict With Coronavirus Response
Tim Mak – NPR
Marc Short, the chief of staff to Vice President Pence, owns between $506,043 and $1.64 million worth of individual stocks in companies doing work related to the Trump administration’s pandemic response — holdings that could run afoul of conflict of interest laws.
Trump campaign is creating an alternate reality online about coronavirus
Elyse Samuels and Meg Kelly – Washington Post
The Trump administration’s mishandling of key moments in the novel coronavirus outbreak has been well documented. Early travel restrictions from China and Europe were meant to buy time, but inaction or poor planning squandered much of the benefit. Delays in testing allowed the virus to spread across the country largely undetected. A shortage of personal protective equipment while cases surged overwhelmed hospitals and health-care workers. The president promoted unproven, and sometimes dangerous, medical approaches to fighting the disease, in some cases with potentially deadly consequences. He misrepresented how quickly a vaccine will be available.
Talking ETFs With the SEC’s Hester Peirce
Eric Balchunas and Joel Weber – Bloomberg
Exchange-traded funds have upended investing, so how does the Security Exchange Committee feel about them? Eric and Joel, along with Nathan Dean of Bloomberg Intelligence, interview SEC Commissioner Hester Peirce about the recent environment, passive investing, ownership trends, the ETF Rule, exotic products, ESG, Bitcoin, and more. They also discuss what she hopes to accomplish before her term ends and the contribution ETFs have made to investing.
Banks Told by EU to Take Climate Change Into Account in Lending
Silla Brush – Bloomberg
European authorities have told banks for the first time to take account of environmental risks in lending decisions, ramping up pressure on the financial industry to respond to climate change. In lending guidelines issued Friday, the European Union’s top banking regulator said banks must incorporate climate considerations in credit policies. Banks should also assess whether borrowers could be liable for contributing to global warming.
ESMA updates its Q&As on MiFID II and MiFIR transparency and market structures topics
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers regarding market structures and transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
ESMA publishes updates to EMIR Q&As
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today updated its Questions and Answers document on practical questions regarding data reporting issues, under the European Markets Infrastructure Regulation (EMIR).
FINRA Shares Practices Implemented by Firms to Transition to, and Supervise in, a Remote Work Environment During the COVID-19 Pandemic
The COVID-19 pandemic significantly affected firms’ day-to-day operations across the securities industry, including requiring firms to transition most or all their staff to remote work environments and implement remote supervisory practices. FINRA is committed to providing guidance, updates and other information to help firms and stakeholders stay informed about the latest regulatory developments relating to COVID-19, which can be found on FINRA’s COVID-19/Coronavirus Topic Page, as well as in recent Notices issued to address COVID-19-related fraud, cybersecurity threats and other emerging issues.
FINRA Sanctions Stifel, Nicolaus & Co., Inc. More Than $3.6 Million for Violations Involving Unit Investment Trusts
FINRA announced today that it has ordered Stifel, Nicolaus & Company, Incorporated to pay approximately $1.9 million in restitution, plus interest, to more than 1,700 customers in connection with early rollovers of Unit Investment Trusts (UITs). FINRA also fined the firm $1.75 million for providing inaccurate information to customers related to rollover costs incurred, and for related supervisory violations.
SEC Issues Agenda for June 1 Meeting of the Fixed Income Market Structure Advisory Committee
The Securities and Exchange Commission today released the agenda for the June 1 meeting of the Fixed Income Market Structure Advisory Committee (FIMSAC). The Commission established the FIMSAC to provide a formal mechanism through which the Commission can receive advice and recommendations on fixed income market structure issues
Unregistered $25.5 Million ICO Issuer to Return Money for Distribution to Investors
The Securities and Exchange Commission today announced charges against blockchain services company BitClave PTE Ltd. headquartered in San Jose, California, for conducting an unregistered initial coin offering (ICO) of digital asset securities. BitClave agreed to settle the charges by returning proceeds from the offering and paying additional monetary relief to be distributed to investors through a Fair Fund.
CFTC to Hold an Open Commission Meeting on June 4
Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the CFTC will hold an open meeting on Thursday, June 4, 2020 at 10:00 a.m. (EDT). The meeting will be held via conference call in accordance with the agency’s implementation of social distancing due to the COVID-19 (coronavirus) pandemic.
Remarks of CFTC Director of Enforcement James McDonald at Futures Industry Association Fireside Chat
Thank you for that introduction and thanks to all the folks at FIA for hosting me. And thank you all for being with us today, if only virtually. We at the CFTC are wishing everyone the best, and hoping all of you stay safe and healthy during this difficult time. We look forward to being back together in person, hopefully before too long.
CFTC Unanimously Approves an Interim Final Rule and a Proposed Rule at May 28 Open Meeting
The Commodity Futures Trading Commission at its open meeting today unanimously approved an interim final rule to grant an extension of the compliance schedule for initial margin requirements for uncleared swaps in response to operational challenges certain entities are facing due to the COVID-19 (coronavirus) pandemic. The Commission also unanimously approved a proposed rule which provides an exemption from registration as a commodity pool operator (CPO) for certain foreign persons.
Statement of Chairman Heath P. Tarbert in Support of Extending the Phase 5 Initial Margin Compliance Deadline
If there were no uncertainty, there would be no derivatives markets. Indeed, the CFTC is in the business of regulating markets that enable market participants to hedge their risks. But there are some exogenous events that come but once a century—a so-called Black Swan—which even prudent risk management can neither foresee nor adequately prepare for. The United States and much of the world is now facing such an event in the form of the COVID-19 (coronavirus) pandemic.
Statement of Support by Commissioner Brian Quintenz Regarding Amendments to Regulation 23.161 – Extending the Compliance Schedule for Initial Margin Requirements for Uncleared Swaps in Response to the COVID-19 Pandemic
I am pleased to support the interim final rule to defer the phase 5 compliance date of September 1, 2020 to September 1, 2021 in light of the unprecedented economic and social impacts of COVID-19. Under these difficult circumstances, I think it is appropriate to provide phase 5 firms with additional time to comply, ensuring that their already strained resources are not diverted from ongoing business continuity efforts. I would also support a one year deferral for the phase 6 compliance date, in line with the BCBS-IOSCO recent amendments to the recommended margin framework to push out, respectively, the phase 5 and phase 6 compliance dates by one year. As I have noted previously, given the large number of firms brought into scope during phases 5 and 6, the estimated 7,000 initial margin relationships that need to be negotiated, and the small overall percentage of swap activity these firms represent, a one year deferral for these final phases is appropriate in order to facilitate an efficient, orderly transition for the market into the uncleared margin regime.
Statement of Commissioner Rostin Behnam Regarding Interim Final Rule with Request for Comment on Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants
A little over two months ago, the Commission cancelled a scheduled open public meeting due to the COVID-19 pandemic. One of the three matters on the agenda for deliberation that day was the most recent amendment to the CFTC Margin Rule, which sought to align the compliance schedule for initial margin or “IM” requirements with recent changes to the BCBS/IOSCO framework extending implementation dates through September 1, 2021. The Commission ultimately voted to approve a final rule, the April 2020 Final Rule, extending the schedule one year by dividing the last compliance “phase”—which had been phase 5—into two phases, now phases 5 and 6. The primary stated purpose for the extension was to mitigate the potential for market disruption that could result from the large number of entities—approximately 700—coming into compliance with IM requirements at the same time. The Commission’s action reflected further efforts to coordinate and harmonize with international counterparts and U.S. Prudential Regulators, who establish the margin requirement for the uncleared swaps of swap dealers and major swaps participants for whom they are the primary regulator.
Statement of Commissioner Dawn D. Stump Regarding Extending the Compliance Schedule for Initial Margin Requirements for Uncleared Swaps in Response to the COVID-19 Pandemic
In 2018 and 2019, I had the opportunity to participate in a number of discussions with the International Organization of Securities Commissions (IOSCO) Board related to the final phase of margin requirements for non-centrally cleared derivatives. Unique considerations for this phase were evident, and the global talks ultimately resulted in recommendation by the Basel Committee on Banking Supervision (BCBS) and IOSCO to extend and stagger the final implementation periods. These recommendations were agreed to in July 2019 and therefore pre-date COVID-19. In response, and unrelated to the pandemic, the Commodity Futures Trading Commission (CFTC) finalized in March of this year an amendment to its Margin Rule to extend the compliance schedule for initial margin by splitting Phase 5 into two parts and creating a new “Phase 6.”
FCA Using NLP, Machine Learning to Regulate Businesses; The regulator is advancing with its strategy to improve its use of tech in its oversight role, says data chief.
Joanna Wright – Waters Technology
The Financial Conduct Authority (FCA) is using emerging technology like machine learning and natural language processing, as part of its broader strategy to utilize data more effectively, said Steven Green, who is head of central data services, part of the innovation division in strategy and competition at the regulator.
Securities Commission Malaysia: Clone Firms Scams On The Rise
The Securities Commission Malaysia (SC) today issued a warning to the investing public on the rise of clone firm scams where a fraudulent company will set itself up to look like a capital market intermediary that is licensed or registered with the SC, in order to deceive investors.
Investing and Trading
Federal Reserve Ramps Up Deliberations on Asset Purchases, Rate Guidance; Central bank’s June 9-10 policy meeting could lay groundwork for coming reset to support virus-stricken economy
Nick Timiraos – WSJ
Federal Reserve officials head into their next policy meeting deliberating how to assist an economy in a deeper hole than it faced after the 2008 financial crisis at a time when their tools might have less zip.
Designing insurance for the next pandemic; The industry is already planning for the next crisis — and the threat of a second wave means it might be only months away
Oliver Ralph and Anna Gross and Robert Armstrong – FT
The grade Ihttps://on.ft.com/36HvFynI-listed Blackpool Grand Theatre has seen a lot in its 126 years, from the town’s rise as a booming seaside resort to its long decline into one of the most deprived parts of the UK. Now coronavirus might be about to deliver a fatal blow.
Federal Reserve adds just $1bn of new corporate debt to balance sheet; Only modest use made of US central bank’s emergency lending facilities in the past week
Colby Smith and Brooke Fox and Joe Rennison – FT
The Federal Reserve’s emergency lending facilities attracted little additional use over the past week, as an expansion of the US central bank’s purchases of bond funds and commercial paper was partially offset by continued https://on.ft.com/3dfWQ5Adeclines in other programmes put in place to prop up financial markets in March.
JDE Peet’s raises EUR2.25bn in Europe’s biggest IPO since 2018; Shares jump 12% in early trading to give in JAB-backed coffee group a market value of EUR16.8bn
Anna Gross and Arash Massoud – FT
Shares in coffee group JDE Peet’s climbed more than 12 per cent in its first day of trading, after it raised EUR2.25bn to complete Europe’s biggest initial public offering since 2018.
Stocks Have Reached a Tipping Point; There is genuine belief that the recovery can go further, coronavirus and U.S.-China tensions permitting.
John Authers – Bloomberg
When Things Move Fast
Tipping Points, as Malcolm Gladwell pointed out, can be hard to spot in advance, but when they happen things can move fast. It looks as though the market is at or approaching a tipping point right now. What happens next will be driven by the two most important narratives of the day — the attempt to reopen economic activity after the Covid-19 pandemic, and worsening relations between the U.S. and China. But a look at the markets in their own right suggests that investors have reached a point where they are prepared to believe the best.
Credit Suisse Sells Time Off to Managers in New Cost-Saving Maneuver
Marion Halftermeyer – Bloomberg
Credit Suisse Group AG is offering to sell extra time off to top executives and managers based in Switzerland to give them a personal stake in the bank’s cost saving efforts. Switzerland’s second-largest bank is recommending higher ranking employees purchase two additional weeks of vacation this year, according to a Credit Suisse spokesman.
JP Morgan and Bloomberg look to transform post-trade workflow with new partnership; Major partnership will provide mutual buy-side clients a real-time settlement solution, in the first of a series of ongoing front-to-back integration points between the two firms.
Joe Parsons – The Trade
JP Morgan and Bloomberg are aiming to transform the way buy-side firms consume post-trade data through a new collaboration that will integrate front-to-back processes and products.
Northern Trust forms alliance with BlackRock for ‘whole office’ strategy; Northern Trust has created a service to cover all points of the investment lifecycle with landmark BlackRock partnership a key component of the plan.
Jon Watkins – The Trade
Northern Trust has partnered with BlackRock to create an end-to-end investment ecosystem for both its asset manager and allocator clients that will encompass everything from trading services and operations to data insights and analytics.
BGC Partners to Webcast Two Investor Events
BGC Partners, Inc.
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners” or “BGC” or the “Company”), a leading global brokerage and financial technology company, today announced that its Chairman and CEO, Howard W. Lutnick, is scheduled to present at Piper Sandler’s Global Exchange and Brokerage Conference at 1:30 p.m. ET on Wednesday, June 3, 2020. The Company also announced details on its annual meeting of stockholders, which will be held virtually at 10:00 am ET on Thursday, June 11, 2020.
China to stop green bond financing for ‘clean coal’ projects; Landmark move could help convince foreign investors to play a bigger role in sustainable debt market
Christian Shepherd and Don Weinland – FT
China is set to halt financing for so-called clean coal projects through green bonds, in a landmark move that could help convince foreign investors to play a greater role in its huge sustainable debt market.
China’s stimulus will not stop metal demand falling; Copper likely to benefit most from the new infrastructure spend
Jumana Saleheen – FT
For commodity markets, China’s annual “Two Session” parliamentary meetings are arguably the most important events of the year. It is when policymakers announce their macro economic objectives and fiscal plans for the world’s biggest consumer of raw materials.
Deutsche Bank Joins With BOE to Ask Who Owns Venezuelan Gold
Jonathan Browning – Bloomberg
The lawsuits over the ownership of Venezuelan gold are starting to stack up. Deutsche Bank AG wants a judge to decide whether about 100 million pounds ($123 million) held by receivers following a terminated gold deal should be delivered to President Nicolas Maduro’s administration or one run by opposition leader Juan Guaido.
U.K. May Have Given Up on Brexit Deal, EU’s Trade Chief Says
Jonathan Stearns and Nikos Chrysoloras – Bloomberg
The U.K. may have already given up on the prospect of getting a trade agreement with the European Union, one of the bloc’s most senior officials said, adding to signs of increasing friction in the negotiations. “We’re not making much progress at the moment,” EU Trade Commissioner Phil Hogan told the European Parliament’s trade committee on Thursday in Brussels. “Perhaps the United Kingdom has come to the conclusion that there’s not going to be a deal.”
Sterling sinks to two-month low as Brexit fears loom
Joice Alves – Reuters
The pound fell to a two-month low against the euro on Friday as Brexit talks and speculation about negative interest rates in Britain continue to weigh on sterling, which also fell against the dollar.
Deutsche Bank Really Doesn’t Like Pound on Lockdown, Brexit Woes
Eddie Spence – Bloomberg
The pound is due to be hit by a combination of Brexit, negative rates and the U.K. government’s management of coronavirus measures, according to Deutsche Bank AG. “The lockdown has not been managed well and economic reopening is lagging,” strategists for the bank including George Saravelos wrote in a note introduced with the words “We really don’t like GBP”. They recommend selling the pound on a trade-weighted basis.
EU executive seeks higher EU budget guarantees in case of ‘hard’ Brexit
The European Commission wants higher guarantees for the next long-term EU budget to back Commission borrowing for economic recovery and as a safeguard against a “hard Brexit”, EU Budget Commissioner Johannes Hahn said on Thursday. Britain left the European Union at the end of January, but has various financial obligations to the 27-nation bloc that will last many years.
SAT and ACT May Never Regain Their Role in College Admissions; A growing list of schools are dropping the requirement for test scores, even beyond the current chaos.
Janet Lorin – Bloomberg
Coronavirus has shattered the spring rituals of college admissions this year, with tours canceled and standardized testing dates scratched off the calendar. The campus tours will resume someday, and the SAT and the ACT will be administered again – but the stakes of those once-feared exams may be lower.