Thin Liquidity in Stock Futures Raises Risk of More Wild Market Moves; Aquis gets go-ahead for £2.7 million NEX Exchange takeover

Mar 5, 2020

First Read

Options thrive as markets nosedive
By Matt Raebel – John Lothian News

February is known as the month of love – the month in which Valentine’s Day takes place. Options traders certainly got a lot of love last week, when the stock market saw its biggest crash since 2008.

Cboe has been seeing far more interest and volume than average for VIX futures since January of this year, especially for contracts expiring around the Iowa caucus and Super Tuesday (the day when the greatest number of U.S. states hold primary elections and caucuses for the presidential election in November), and of course, around the November election itself. The October and November activity is somewhat typical for an election year, but as Cboe President Ed Tilly said at the exchange’s annual press lunch in January, the demand for hedging and hedging vehicles expiring around the Iowa caucus and Super Tuesday has been “unprecedented.”

To read the rest of this commentary, go here.

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Hits & Takes
By JLN Staff

The FT is reporting that HSBC sent home their London research staff after a staff member was confirmed to have the coronavirus.~JJL

JPX has issued a response to spread of novel coronavirus.~JJL

The Associated Press is reporting that dogs and cats can’t pass on coronavirus, but can test positive.~JJL

KelloggInsight, a product of the Kellogg School of Business at Northwestern University, has published a piece titled “Why Financial-Market Pioneer Richard Sandor Is Building “the Most Boring Benchmark in America.” It is a conversation with the creator of AMERIBOR about interest-rate benchmarks in a post-LIBOR world.~JJL

The release of the latest 007 movie has been delayed until November due to the coronavirus. Needless to say, this has shaken the Bond market.~JJL

Next Thursday, CFTC Commissioner Quintenz and CFTC Chairman Tarbert will speak at the D.C. Blockchain Summit 2020. The chairman is a keynote and Commissioner Quintenz is on a panel.~JJL

The John Lothian News team is disappointed that FIA Boca was cancelled as we had over 25 video interviews scheduled with industry leaders with interesting stories to tell and updates on their business to share. We are trying to address this by shooting video interviews in Chicago for local subjects and those traveling through Chicago in the coming weeks. Also, we are asking some firms to shoot the video remotely with their own equipment and send us the files to edit. While this is not optimal from a production quality perspective, the content is what is ultimately important. Lastly, we are also recording audio interviews with some subjects and will post the interviews as podcasts. If we did not connect with you about an interview and you are still interested in one of these alternatives, please reach out to me at johnlothian@johnlothian.com.~JJL

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Information on Coronavirus/COVID-19
NFA
NFA takes the world-wide spread of the Coronavirus extremely seriously and is closely monitoring this fluid situation. NFA is aware that Members are developing contingency plans to deal with the potential impact of the Coronavirus on their operations. In light of these preparations, we also understand that Members may have specific concerns regarding their ability to comply fully with CFTC and NFA regulatory requirements, particularly in the event that some or all of their staff are not able to work in Member firms’ offices or backup facilities. We have been coordinating with the various industry trade associations with respect to the potential areas of concern. NFA and CFTC staff have been in regular contact regarding these and other developing issues, including the possible need for regulatory relief. In the event that regulatory relief is necessary, NFA and CFTC staff intend to take a practical approach that will give Members appropriate flexibility in implementing contingency plans needed to continue to conduct business.
/jlne.ws/2TBahEB

*****A reasonable approach from the regulators.~JJL

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Cboe Global Markets Reports Several Trading Volume Records for February 2020
Cboe
Options ADV up 64%, Futures up 88%, U.S. Equities up 30%, and Global FX up 20%, compared to February 2019; Cboe’s four options exchanges combined set a new monthly ADV record with more than 11 million contracts traded; S&P 500 Index (SPX) options set a new single day volume record with 3.6 million contracts traded on February 28; Cboe’s four U.S. equities exchanges combined set a new single – day volume record with nearly 3.5 billion shares traded on February 28; Cboe FX reached new monthly and single – day highs
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today reported February monthly trading volume.
/jlne.ws/2TESJrc

*****Options, futures, equities, FX all up. Crypto was still a zero though.~JJL

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Coronavirus: Australian newspaper prints extra pages to help out in toilet paper shortage
Ben Smee – The Guardian
It’s the panic that keeps on giving.
#ToiletPaperEmergency or the great #ToiletPaperApocalypse, as it has been dubbed on Twitter, has already rolled out hundreds of memes, witty asides as well as documented the madness of people stockpiling the toilet essential.
In the real world it has led to Australian toilet paper manufacturers ramping up production to keep up with demand from people fearful of coronavirus.
/jlne.ws/38oTBpn

***** This news really stinks.~JJL

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Wednesday’s Top Three
Our top story Wednesday was John Lothian’s A reporter’s story about the Boca cancellation. Second was DV Trading’s announcement that Jeffrey E. Kopiwoda Joins DV Trading, LLC as Chief Operating Officer and General Counsel. Third was the Bloomberg opinion piece Bill Gates Is Really Worried About the Coronavirus. Here’s Why.

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Lead Stories

Thin Liquidity in Stock Futures Raises Risk of More Wild Market Moves; E-mini liquidity eroded to near record lows during the coronavirus-fueled selloff of late February
Alexander Osipovich – WSJ
Trading conditions have sharply deteriorated in a popular vehicle for betting on swings in the S&P 500, exacerbating the volatility in the stock market in the past two weeks. E-mini S&P 500 futures play a huge, if little understood, role in financial markets, with hundreds of billions of dollars of trading activity each day. They track the S&P 500 and typically move in lockstep with the broad-based index.
/jlne.ws/2PLq4zC

Aquis gets go-ahead for £2.7 million NEX Exchange takeover; The UK’s FCA has handed Aquis Exchange approval for its acquisition of the exchange business of NEX Group from CME.
Hayley McDowell – The Trade
Pan-European cash equities trading venue Aquis Exchange has been given a green light by the UK’s financial regulator to acquire NEX Exchange from CME Group.
/jlne.ws/2PLqkyA

SEC Plan Would Allow Startups to Raise More Money Under Light-Touch Rules; Under the plan, crowdfunding limit would be raised to $5 million from $1 million
Dave Michaels – WSJ
Startups and small companies would be allowed to raise more money from investors when they opt for light-touch fundraising methods under a plan made public Wednesday by the Securities and Exchange Commission.
/jlne.ws/2VKvUF8

HSBC sends home London research staff after coronavirus case; Bank evacuates section of Canary Wharf office for deep cleaning as employee tests positive
Stephen Morris – FT
HSBC has evacuated dozens of staff from its office in London’s Canary Wharf after a staff member reported a confirmed case of coronavirus.
/jlne.ws/2VOMljQ

Crooked Banker Tapped Professionals to Manage Web of Dirty Money; Lawyers and advisers created a network of shell companies to oversee British mansions and an Italian vineyard for Azerbaijan’s Jahangir Hajiyev.
Edward Robinson, Gavin Finch, Stefania Spezzati – Bloomberg
Jahangir Hajiyev was running out of money. That was the urgent subject before the board of a company based in the tax haven of Guernsey in September 2015. For years, Hajiyev, then chairman of the International Bank of Azerbaijan, had used a chain of trusts and shell companies stretching from Cyprus to the Channel Islands to move tens of millions of dollars out of the state-owned lender, according to allegations in U.K. court filings.
/jlne.ws/32PHHUk

As the ETF turns 30, it is time for active managers to embrace it; Exchange traded funds can provide greater flexibility, lower costs and ready access
Salim Ramji – FT
The dominant narrative surrounding exchange traded funds over their 30-year history has been a kind of active-versus-indexing derby, in which investors must choose one or the other.
/jlne.ws/2VOMd3J

Coronavirus risks downward spiral for events industry; As conferences are cancelled around the world, some are questioning their value
Alice Hancock – FT
Since the coronavirus outbreak erupted, there has been a subtle change in the etiquette at conferences: some delegates have dropped the handshake as a greeting in favour of knocking elbows.
/jlne.ws/2VTrtI6

HSBC London Employee Hit By Virus, Sparks Partial Evacuation
Stefania Spezzati and Eddie Spence – Bloomberg
Canary Wharf research department at the bank is deserted; HSBC had previously curbed international business travel
An employee at HSBC Holdings Plc’s research department in Canary Wharf tested positive for coronavirus, prompting a partial evacuation and marking the first reported case at a major London bank office.
/jlne.ws/39psqvL

Robinhood Offers $15 Outage Credits As Lawsuit Filed in Florida
John Gittelsohn – Bloomberg
Robinhood Financial is offering its gold clients three free months of service — a $15 value — following outages this week when unprecedented volume and market volatility caused the system to crash during some of the stock market’s biggest swings.
/jlne.ws/39s4Len

Hemp Suppliers at Odds With Hazy Regulations; Authorities have seized truckloads of crops they mistook for marijuana
Kirk Maltais – WSJ
Farmers cheered when hemp was legalized nationally for the first time in decades. But more than a year later, differing state regulations and law enforcement’s unfamiliarity with the plant are complicating efforts to capitalize on the crop.
/jlne.ws/2PLpLos

IMF sets aside $50bn for coronavirus-hit countries; Fund’s managing director warns outbreak could force multilateral lender to cut growth forecasts
James Politi – FT
Kristalina Georgieva, the managing director of the IMF, unveiled a $50bn package of emergency financing for countries stricken by the coronavirus, saying the multilateral lender wanted to ensure “that people are not going to die just because of lack of money”.
/jlne.ws/2TD4i2k

How A Profane Subreddit Moved The Market
Tracy Alloway and Joe Weisenthal – Bloomberg
In recent weeks, before the stock market plunged, a page on reddit called r/WallStreetBets suddenly started exhibiting enormous influence on a handful of stocks. The emergence of online chat rooms making huge wagers in the market calls to mind the message boards of the dotcom era. But this page is taking it to a new level. On this week’s episode, we’re joined by Bloomberg News reporter Luke Kawa, who has been covering the page, as well as the page’s founder, Jaime Rogozinski, who started it up in 2012.
/jlne.ws/39uZfri

Spending Is Just a Symptom of This Illness; Payments companies say the new coronavirus is hitting some spending, but that isn’t the real risk
Telis Demos – WSJ
Global payments companies are seeing a pattern: People are mostly still buying things from other places—they just aren’t traveling there. Visa this week joined rival Mastercard in warning investors that cross-border travel spending growth is at risk from efforts to fight the spread of novel coronavirus. Think of things like canceling major business conferences and restricting cross-border flights.
/jlne.ws/2TDSRr8

Harvard prof: ‘Stakeholder’ corporate paradigm is just P.R. – and bad for everyone
Alison Frankel – Reuters
Fashions change and presidential administrations come and go, but the feud between corporate guru Martin Lipton of Wachtell Lipton Rosen & Katz and Harvard law professor Lucian Bebchuk will apparently always be with us.
/jlne.ws/2Io5ykE

Special Report: Before coronavirus, China bungled swine epidemic with secrecy
Dominique Patton – Reuters
When the deadly virus was first discovered in China, authorities told the people in the know to keep quiet or else. Fearing reprisal from Beijing, local officials failed to order tests to confirm outbreaks and didn’t properly warn the public as the pathogen spread death around the country.
/jlne.ws/2VIzgZv

BGC Partners Takes Proactive Preventative Measures to Maximize Health and Safety; Restricts Non-essential Business Travel for Employees due to COVID-19; Will Not Attend Upcoming Conferences; Postpones Previously Scheduled Fenics Event for Investors and Analysts
BGC Partners, Inc.
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC” or the “Company”), a leading global brokerage and financial technology company, today announced that it is taking certain proactive and preventative safety measures due to the spread of the novel coronavirus (“COVID-19”).
/jlne.ws/2Tm648P

The Dow Is Soaring. It Probably Doesn’t Matter.
Ben Levisohn – Barron’s
The Dow Jones Industrial Average is up nearly 500 points in Wednesday morning trading, an abrupt turnaround following Tuesday’s nearly 800 point tumble. Just don’t get too excited. Yes, the stock market is staging a major rally. The Dow is up 490.26 points, or 1.9%, to 26,407.67, while the S&P 500 has gained 1.6% to 3051.61, and the Nasdaq Composite has risen 1.5% to 8811.06. And you’ll hear plenty of reasons about why the market is up as much as it is, ranging from Joe Biden’s strong showing in the Super Tuesday primaries to a delayed response to the Federal Reserve rate cut.
/jlne.ws/2TqLk01

Morgan Stanley execution sales head to join Virtu Financial in senior APAC role; Jessica Morrison has been with Morgan Stanley for more than two years and will join Virtu Financial in June this year.
Hayley McDowell – The Trade
Executive director and head of execution services sales at US investment bank Morgan Stanley is set to depart to take on a leadership role at Virtu Financial in Asia.
/jlne.ws/2TDN2Kd

China Traders Are Making Easy Money While Rest of World Panics
Bloomberg News
China’s CSI 300 stock index rallies to close at two-year high; Government response to crisis has spurred speculative trading
Global markets in turmoil. Central banks rushing to arrest panic. But in China, the country most affected by the virus outbreak, it’s boom time for traders.
/jlne.ws/2wtLR8c

Leverage Is Exploding in the Fine-Art World;Investor Dan Sundheim has an estimated $300 million collateral pool
Katya Kazakina – Bloomberg
A $28 million Warhol. A $35 million Basquiat. A $70 million Twombly. Hedge-fund manager Daniel Sundheim has acquired all these works — and more — while wielding one of the most powerful tools in finance: leverage.
/jlne.ws/2VONWGm

U.S. opposes releasing a dying Bernard Madoff from prison early
Jonathan Stempel – Reuters
The U.S. government opposed Bernard Madoff’s request to be freed from prison even if he is close to death from kidney failure, saying he has never accepted responsibility for his massive Ponzi scheme or shown compassion for victims.
/jlne.ws/3cxN3rM

Exchanges, OTC and Clearing

The Spanish Stock Exchange opens the trading session today Ringing the Bell for Gender Equality; BME, Banco de España and the Global Compact join an initiative taking place in more than 80 exchanges worldwide
BME Bolsas y Mercados Españoles
Today the Spanish Stock Exchange started the trading session Ringing the Bell for Gender Equality for the third consecutive year, a ceremony in which more than 80 markets around the world participate. The initiative – hosted by BME and the United Nations Global Compact’s Spanish Network – is part of the international movement Ring the bell for Gender Equality, supported by Sustainable Stock Exchanges (SSE) and the UN’s Global Compact.
/jlne.ws/2IjblrB

JPX response to spread of novel coronavirus
JPX
In regard to the spread of the novel coronavirus, Japan Exchange Group (JPX) understands the need to fulfil its duty as public infrastructure by ensuring continued smooth operation of the market. For this reason, JPX has responded by establishing a BCP (Business Continuity Plan) Emergency Headquarters headed by Group CEO Kiyota Akira and implementing the following measures.
/jlne.ws/3aukQjB

Cboe and LME could close iconic trading pits if coronavirus spreads
Financial News (subscription required)
Two of the world’s last open-outcry trading floors could temporarily go fully electronic under emergency plans
/bit.ly/39spBdl

TMX Group Consolidated Trading Statistics – February 2020
TMX
TMX Group Limited today announced February 2020 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange.
/jlne.ws/2PNpJwv

Straits Times Index (STI) quarterly review – March 2020; No changes to the constituents of the STI
SGX
FTSE Russell announces that there will be no changes to the constituents of the Straits Times Index (STI), following the March 2020 quarterly review.
/jlne.ws/2TGl5By

BTON expands outsourced dealing desk with hires from LSE and Millennium; LSE technology sales veteran, Justin Hudson, and former quant trader at Millennium Capital Management, Emmett Cawley, have joined BTON in senior roles.
Kiays Khalil – The Trade
Outsourced dealing desk BTON Financial has made two senior hires to its business as it looks to expand amid growing appetite for front-office outsourcing on the buy-side.
/jlne.ws/2VLMdSc

EEX Group: Monthly Report February 2020 – Significant Increases Across Majority Of Portfolio
Mondovisione
/jlne.ws/3asodHU

HKEX Monthly Market Highlights
MondoVisione
Securities – Market capitalisation was $36.2 trillion at the end of February 2020, an increase of 10 per cent from $33.0 trillion for the same period last year.
/jlne.ws/2VTx1SW

MOEX Rings The Bell For Gender Equality
MondoVisione
On 5 March 2020, Moscow Exchange opened the trading day by holding a Ring the Bell for Gender Equality ceremony in support of gender equality and the empowerment of women in business, politics and the economy.
/jlne.ws/2PLuias

Fintech

FIA Tech Selects Baton for Futures Payments
Julie Ros – P&L
FIA Tech, which provides fintech solutions for the futures industry, has selected post-trade service provider Baton Systems, to accelerate brokerage payments and shorten the settlement cycle for its customers.
/jlne.ws/2Tp0W3X

Women in FinTech Powerlist 2019 Released
Mondovisione
Today Innovate Finance announced their Women in FinTech Powerlist 2019.
/jlne.ws/2VLYwxV

S&P Platts Taps Kensho’s AI to Solve Commodities’ Big Data Woes; Following initiatives with S&P Global Market Intelligence, Kenosho’s Technologies is tackling new projects for sibling department S&P Global Platts.
Rebecca Natale – Waters Technology
After acquiring AI specialist Kensho Technologies almost two years ago, S&P Global is keen to leverage Kensho’s skillsets across its business silos.
/jlne.ws/32PCmMP

Fintech Firms AccessFintech And Cappitech Announce Expansion Of Partnership – Workflow Collaboration Combined With Regulatory Compliance Delivers Greater Governance And Risk Controls In An Increasingly Scrutinized Marketplace
MondoVisione
AccessFintech, which delivers collaboration, transparency and control to the financial services industry, and Cappitech, a leading provider of regulatory reporting, best execution analysis and business intelligence solutions for the financial services industry, today announced they will collaborate to deliver greater governance and risk controls for market participants by providing their combined solution to clients across the financial ecosystem.
/jlne.ws/2TLDNb4

Cryptocurrencies

Trustology Rolls Out Credentials Wallet For Crypto Funds To Manage On-Exchange Risks; Exchange Credentials Wallet will safeguard exchange account credentials across all decentralized and centralized exchanges
Trustology
Leading custodial wallet specialist Trustology, has today announced a new solution for traders and crypto funds, an Exchange Credentials Wallet. This all-in-one solution, now available in Trustology’s TrustVault platform, provides advanced controls for managing on-exchange assets to help meet emerging investor and regulatory demands on Funds who are expected to secure assets both on-chain, as well as on-exchange.
/jlne.ws/2xdaVkp

State Street exec: digital assets will help the private market become the standard in 5-10 years
Yilun Cheng – The Block
Digital assets will help the private market become the standard for trading in the next five-to-ten years, according to Jay Biancamano, who leads the crypto charge at custodian bank State Street. In a new episode of The Scoop podcast, Biancamano told The Block that much of the current market inefficiency lies in high-performance drag. Due to fees and other costs involved in securities trading, the actual return for many traders is much lower than what they could have gotten if all transaction costs are removed.
/jlne.ws/2PQGdDV

German Regulator Shuts Down Operator of Crypto-Currency ATMs
Nicholas Comfort – Bloomberg
Germany’s financial regulator has shut down the local operations of a company that allows consumers to buy and sell crypto-currencies at ATMs.
/jlne.ws/2POGg2Z

Two more bitcoin developers receive grants from Square Crypto
Yogita Khatri – The Block
Square Crypto, the payment firm’s bitcoin development initiative, has awarded new grants. Announcing the news on Wednesday, Square Crypto said bitcoin developers Jon Atack and Tankred Hase are receiving grants. It did not disclose the sum involved. Atack is a bitcoin core contributor and protocol researcher, according to his GitHub profile, while Hase is a Germany-based software engineer, according to his personal website. Square Crypto said Atack has been doing bitcoin core development work for almost a year. As for Hase, it said he is a UX-focused bitcoin developer, whose plans include “simplifying self-custody of smaller amounts of bitcoin, creating a public key server that makes it possible to text sats.”
/jlne.ws/3cycjOB

Crypto Investment Fund Suffers Hack Exposing Data of 266,000 Users: Report
Anna Baydakova – Coindesk
In the latest privacy breach to hit the cryptocurrency space, Malta-based Trident Crypto Fund has suffered a major data leak, Russian newspaper Izvestia reports on Thursday. Ashot Oganesyan, CTO of cybersecurity firm DeviceLock, told the publication that the personal data of about 266,000 people registered with the fund was posted on a number of file-sharing websites following the breach.
The stolen database, including email addresses, cellphone numbers, encrypted passwords and IP addresses, was posted online around Feb. 20, along with the description of the website vulnerability that made the breach possible, Oganesyan said. On March 3, the unknown hackers decrypted and published a dataset of 120,000 passwords, he added.
/jlne.ws/2Trn0e4

BitMEX ‘not authorized’ to operate in UK, says it is working to assess the situation
Yogita Khatri – The Block
The U.K.’s finance watchdog has issued a warning against BitMEX, saying that the exchange is “not authorized” to operate in the country A BitMEX spokesperson told The Block: “We are working closely with our advisors to assess the situation.” A source with knowledge of the matter told The Block that warning notices against Deribit, CoinFLEX, and Bybit could be issued next Deribit CEO John Jansen told The Block that the exchange is not actively seeking clients in the U.K. or is not actively promoting its services in the country, so “there is no problem at all.”
/jlne.ws/2VN0IFx

Bank of England governor-designate: ‘If you want to buy bitcoin, be prepared to lose all your money’
Yilun Cheng – The Block
Andrew Bailey, who is set to lead the Bank of England, has issued yet another warning to would-be bitcoin investors: “Be prepared to lose all your money.” Bailey previously stated his unfavorable opinions about bitcoin in Dec. 2017 during an interview with BBC’s Newsnight. Buying bitcoin is similar to gambling, he contended, because “[bitcoin] is not a currency” and is “a very volatile commodity in terms of its pricing.” Bailey was the deputy governor of the Bank of England from April 2013 to July 2016. He was recently appointed as the Bank’s governor and will begin his term on March 16, 2020.
/jlne.ws/32Wtu8e

This Utility Heats New York State—And Mines Its Own Bitcoin
Olga Kharif – Bloomberg
A power plant in New York’s Finger Lakes region has set up its own Bitcoin mining operation, using the electricity it produces to generate about $50,000 worth of the virtual currency every day. Atlas Holding LLC, the private-equity firm that runs the operation, has installed some 7,000 crypto mining machines at the Greenidge Generation plant in recent months that can mine about 5.5 Bitcoins per day. The 65,000-square-foot facility in Dresden, New York, was built in 1973 as a coal plant and later converted to natural gas.
/jlne.ws/3cuggUB

As crypto credit bubble concerns loom, BitGo announces launch of a $150 million lending business
Frank Chaparro – The Block
Crypto custody provider BitGo has been quietly building out a lending business, the latest company to throw its hat in the ring of a growing market. Announced Thursday, the new business will be a separate legal entity, christened BitGo Prime LCC. The name hints at BitGo’s ambitions to build out a full-scale prime broker, which in addition to offering its bread-and-butter custody services, will also cover trading and lending, according to people familiar with the situation.
/jlne.ws/2TF08qx

Tagomi: Why We Joined Facebook’s Libra Association
Rachel McIntosh – Finance Magnates
With just two years under its belt, Tagomi is a young company – but it’s growing fast. At press time, the New Jersey-based electronic agency prime brokerage is operational in 30 states, with offices spread across several major cities in the US and in the UK. Tagomi has formed partnerships with some major players within the space, including ICE’s Bakkt and Binance.
/jlne.ws/2IoriN4

ConsenSys and EY announce enterprise-targeted protocol that’s built on Ethereum and backed by Microsoft
Yilun Cheng – The Block
ConsenSys and EY have announced the formation of Baseline Protocol, a project aimed at enterprises. The project has garnered support from 12 other companies and organizations, including Microsoft, AMD, ChainLink, and MakerDAO. The new protocol will allow enterprises to access decentralized finance (DeFi) services built on the Ethereum blockchain without having to publicize all their private information. According to John Wolpert, ConsenSys’ group executive for enterprise mainnet, businesses using internal record-keeping systems like ERP and CRM have a hard time synchronizing their data with counterparts. While blockchain provides a potential solution, many are deterred from using public blockchains due to the risk of exposing business secrets to potential competitors.
/jlne.ws/39qEGvX

After Court Victory, Indian Exchanges Gear Up for Crypto Trading Surge
Omkar Godbole – Coindesk
The decision by India’s Supreme Court to lift the central bank’s ban on cryptocurrency trading could soon translate into notable growth in trading volumes, according to cryptocurrency exchanges in the country. India’s Supreme Court on Wednesday quashed a Reserve Bank of India (RBI) order dated April 6, 2018, which prohibited banks from providing services to entities dealing with cryptocurrencies. The top court called RBI’s ban unconstitutional, bringing cheer to the crypto market community.
/jlne.ws/2PMd10H

Politics

Which US president is best for stock markets — a Republican or a Democrat? Markets have favoured Republicans, but investors have done better under Democrats
Matthew Vincent – FT
‘The reason our stock market is so successful is because of me.” Of the many phenomena US president Donald Trump has taken credit for — factory openings that predate his political career; the Ethiopian prime minister’s Nobel Peace Prize; people saying “merry Christmas” to each other — this is perhaps one that bears some scrutiny.
/jlne.ws/2PS9nTk

US rich need not fear Bernie Sanders’s love of Nordic socialism; Sweden and its ilk have even more billionaires per capita than the US
Martin Sandbu – FT
Bernie Sanders, the firebrand socialist contender for the US Democratic presidential nomination, has said that “billionaires should not exist”. He also admires the Nordic countries’ social democracy.
/jlne.ws/38nepgL

Why Michael Bloomberg Spent Half a Billion Dollars to Be Humiliated; The former mayor of New York spent $500 million in 16 weeks, then dropped out less than 12 hours after polls closed on the first day he was on the ballot.
Edward-Isaac Dovere – The Atlantic
When Joe Biden walked into the Brown Chapel AME Church in Selma, Alabama, on Sunday, the crowd welcomed him to a seat behind the pulpit like he was Norm walking into Cheers.
/jlne.ws/2vHAwBh

Bloomberg Greets Public Failure With Public Emotion. He’s Not Used to Either; As he dropped out of the presidential race, the billionaire former mayor of New York confronted a moment he had never quite faced: a big, heaping, public loss.
Matt Flegenheimer – NY Times
There is no billionaire way to end a presidential campaign. The candidate still finds a hotel ballroom, still stands before a preponderance of flags, still gives a little wave to supporters from the microphone — no, thank you — no matter how many salaries he has paid, or field offices he has opened, or delegates he has won in American Samoa.
/jlne.ws/2vuVnrH

Wall Street, Encouraged by Biden’s Wins, Breaks Out Its Checkbooks; Fearful of the more progressive candidates, some finance executives had sidelined themselves from the elections until Mr. Biden surged.
Kate Kelly – WSJ
After weeks of worrying that Senator Bernie Sanders would trounce his rivals on Super Tuesday and set the tone for a rancorous Democratic nomination, Michael Novogratz, the longtime trader and merchant banker, was newly motivated on Wednesday morning.
/jlne.ws/3cDIqwv

Bloomberg’s $500 Million Experiment Worked; There was just one problem: “The product was bad.”
Charlie Warzel – NY Times
Mike Bloomberg made a media splash, but won no states. Credit…Brittainy Newman/The New York Times
Perhaps you can’t buy the presidency after all. That’s one potential lesson from the 2020 Bloomberg campaign, a 101-day billionaire media supernova that burned hot and fast — and through upward of $500 million in mostly ad money — but won no states in the primary contest. (At least Mike Bloomberg can expect a warm welcome the next time he visits American Samoa.)
/jlne.ws/3asRYrX

2020 Democrats learned the lesson of Trump’s GOP takeover: Unite or die
Jon Ward- Yahoo News
If President Trump is defeated in the fall election this year, history books will most likely pinpoint Leap Day weekend as a decisive moment, when Democrats did what Republicans could not do four years earlier.
/jlne.ws/2x5DzUe

Amid A Global Crisis, Trump Keeps Lying And Misleading About Pretty Much Everything; At a time when Americans need accurate information, Trump and his White House seem more interested in praising him and downplaying the coronavirus threat.
S.V. Date – Huffington Post
The threat of a coronavirus pandemic has not slowed down President Donald Trump’s habit of lying to and misleading Americans on any number of topics ? including that same coronavirus threat.
/jlne.ws/2TBtjuC

Trump Claims Thousands Could Still Go To Work With Coronavirus And Get Better; “Do not go to work, school or public areas. Avoid using public transportation, ride-sharing or taxis,” CDC advises.
Josephine Harvey – Huffington Post
President Donald Trump suggested during an interview on Fox News Wednesday that many people with mild coronavirus symptoms could still go to work and get better. This goes against advice from medical professionals around the world who say that infected individuals should remain in isolation.
/jlne.ws/3cA6n7R

It’s Biden’s Bounce But Newton’s Stock Market; Momentum is very much alive in equities, even if Super Tuesday casts doubt on it as a political concept.
John Authers – Bloomberg
Joementum, Schmomentum
Sir Isaac Newton’s laws of motion have been around for more than three centuries now, and they have stood the test of time. They remain a powerful description of movement in the physical world. They also appear to offer a great description of movements in markets, and in the political world — but that appearance may be deceptive.
/jlne.ws/3awcmbW

Regulation

CFTC Clarifies Cross-Border Regulatory Commitments in Unanimous Vote
CFTC
The Commodity Futures Trading Commission today announced it unanimously approved amendments to § 30.10 of CFTC regulations to codify the agency’s authority to terminate exemptive relief issued to foreign firms. Part 30 of CFTC regulations governs the offer and sale of foreign futures and options to customers located in the United States.
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Please Consider Adding a Trusted Contact to Your Account
FINRA
FINRA and the SEC’s Office of Investor Education and Advocacy are issuing this Investor Bulletin to urge you to consider adding a “trusted contact person” to your brokerage account.
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SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework; Proposed amendments would provide a more rational framework, eliminate complexity and increase access to capital while preserving and enhancing important investor protections
SEC
The Securities and Exchange Commission today announced that it has voted to propose a set of amendments that would harmonize, simplify, and improve the exempt offering framework to promote capital formation and expand investment opportunities while preserving and enhancing important investor protections.
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SEC Provides Conditional Regulatory Relief and Assistance for Companies Affected by the Coronavirus Disease 2019 (COVID-19); SEC is closely monitoring the impact of the coronavirus on investors and capital markets
SEC
Today, the Securities and Exchange Commission announced that it is providing conditional regulatory relief for certain publicly traded company filing obligations under the federal securities laws. The impacts of the coronavirus may present challenges for certain companies that are required to provide information to trading markets, shareholders, and the SEC. These companies may include U.S. companies located in the affected areas, as well as companies with operations in those regions.
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CFTC, K-State Announce Agenda for AgCon2020; Panels Will Delve into Issues Impacting Derivatives Markets and the Agricultural Sector
CFTC
The Commodity Futures Trading Commission and Kansas State University (K-State) today announced the agenda for the third annual Agricultural Commodity Futures Conference (AgCon2020). The conference, presented in conjunction with K-State’s Center for Risk Management Education and Research, is scheduled for April 1-2 in Overland Park, Kansas. The full conference agenda can be found HERE. Registration for AgCon2020 is available HERE.
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FCA encourages firms to develop purposeful cultures
UK FCA
We have published a discussion paper on driving purposeful cultures. The paper is a set of essays which present a range of views from industry leaders, professional bodies and culture experts to help firms embed purposeful cultures.
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Our approach to ensuring firms treat vulnerable customers fairly
UK FCA
Speech by Nisha Arora, Director, Consumer and Retail Policy at the FCA, delivered at the TISA Vulnerability Conference.
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Investing and Trading

Andrew Bailey insists Bank of England will move quickly on coronavirus; Incoming governor forced to defend record at City watchdog in front of MPs
Delphine Strauss and Chris Giles – FT
Andrew Bailey promised on Wednesday to lead the Bank of England in swift action to soften the economic impact of the coronavirus outbreak, divest the central bank’s holdings in polluting companies and review the balance of fiscal and monetary policy.
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Investors in US Treasuries contemplate yields tumbling to zero; Markets expect half-point rate cut from the Fed this week to be followed by more
Colby Smith – FT
In the wake of the first emergency interest-rate cut from the US Federal Reserve since the global financial crisis, investors have begun to grapple with a question that was once not even in the back of their minds: could US Treasury yields fall to zero?
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Coronavirus could cost airlines more than $100bn, industry body warns; Iata calls on governments to consider helping embattled carriers
Philip Georgiadis – FT
Disruption caused by the coronavirus could cost global airlines more than $100bn in lost revenues this year as carriers slash flights in response to the outbreak, the industry’s body has warned.
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Oil traders warn of ‘zero growth’ in 2020 demand due to coronavirus; Outbreak expected to cut consumption increase to weakest levels since 2008 crisis
David Sheppard, Derek Brower and Anjli Raval – FT
The coronavirus outbreak has led the world’s biggest oil traders to slash their projections for global demand growth to the weakest levels since the financial crisis, with many expecting consumption to stay steady or even shrink in 2020.
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West Coast Shows the Damage Outbreak May Do to U.S. Businesses
Ben Elgin, Michael Sasso and Sophie Alexander – Bloomberg
Downturn dents San Francisco as virus fears spur cancellations; Cascade effect from drop in travel hits restaurants, hotels
For a look at the potential economic fallout of the coronavirus, San Francisco’s Union Square presents a worrisome sight.
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Short Sellers Made Over $50 Billion During Coronavirus Sell-Off
Kristine Owram – Bloomberg
Total domestic short interest was $848 billion as markets fell; Most profitable short positions included Tesla, Tellurian
Short sellers added to their U.S. positions during the recent coronavirus-related sell-off, making more than $50 billion in profits over seven trading days, according to data from financial analytics firm S3 Partners.
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Institutions

R.J. O’Brien Named Best Independent FCM At HFM US Quant Awards 2020 – Award For Exceptional Client Service And Innovation Marks 8th Win For RJO And UK Affiliate In HFM Global Award Series
PR Newswire
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, has won the award for Best Independent FCM (Futures Commission Merchant) at the HFM US Quant Awards 2020. The award series expanded on the honors given for the previous six years in the CTA Intelligence Awards, making the win the eighth honor bestowed on RJO and its UK affiliate by the HFM Global network of publications.
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HSBC combines markets and securities services divisions in major restructure; Global markets and securities services businesses will be combined at HSBC into a single unit, with new roles for its two custody heads.
Joe Parsons – The Trade
HSBC will combine its global markets and securities services businesses into a single unit, sparking a series of changes to its senior leadership.
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Goldman, JPMorgan Traders Eye Fleeing Virus, Central London
Viren Vaghela, Harry Wilson, and Lucca De Paoli – Bloomberg
FCA scrutinizes efforts and stresses maintaining compliance; Banks test sites from Croydon and Heathrow to Basingstoke
As the coronavirus spreads, British bankers are preparing to use trading sites miles from London’s City and Canary Wharf — and their regulators are keeping a keen eye on that contingency planning.
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Glencore Found ‘Facts That May Be Relevant’ to Corruption Probes
Jack Farchy – Bloomberg
Comment marks first indication of substance of investigations; Company is being investigated in the U.S., U.K. and Brazil
Glencore Plc has uncovered “facts that may be relevant” to the corruption probes it’s facing and shared them with the relevant authorities, according to the company’s auditor.
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Regions

China Deploys Drones, Citizens and Big Data to Tackle Coronavirus; China Deploys Drones, Citizens and Big Data to Tackle Coronavirus
Mike Cherney – WSJ
More cases of the novel coronavirus were reported globally, from Australia to South Korea, as some health officials warned it would be impossible to fully contain the pathogen now that infections are spreading within many communities.
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India’s $476 Billion Firepower May Arrest Rupee’s ‘Panic’ Drop
Kartik Goyal – Bloomberg
RBI can raise intervention to curb rupee’s losses: Edelweiss; Rupee declined 2.1% in five days to Wednesday, most in Asia
India’s central bank kept amassing dollars all through 2019, ending the year with Asia’s biggest jump in foreign-exchange reserves. That may come in handy now.
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Barclays, Merrill Resurface in Third German Tax Indictment
Karin Matussek – Bloomberg
Lenders were Maple Bank trading partners, indictment says; Filing says Maple’s 2008 deals caused 243 million-euro refunds
Barclays Plc and Bank of America Corp.’s Merrill Lynch have been caught up once more in Germany’s expanding Cum-Ex dividend scandal, with prosecutors in a third criminal case saying they provided crucial elements in some transactions.
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Brazilian Real Plunges to Record Low Against Dollar
Aline Oyamada – Bloomberg
Real is worst-performing currency in the world this year; Central bank interventions via FX swaps failed to halt slide
Brazil’s real, the world’s worst-performing currency this year, plunged to an all-time low beyond 4.60 per dollar on Thursday after the central bank opened the door for more interest rate cuts.
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Climate Change Affected Australia’s Wildfires, Scientists Confirm
Henry Fountain -,The New York Times
Confirming what had been widely suspected, researchers have found that human-caused climate change had an impact on Australia’s recent devastating wildfires, making the extremely high-risk conditions that led to widespread burning at least 30% more likely than in a world without global warming.
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Asia Is Becoming Even More Important to World Markets
Christopher Fix – Open Markets
ch the attention of investors, with the region’s GDP expected to overtake GDP for the rest of the world combined in 2020, according to the World Economic Forum. As Asia becomes an increasingly popular investment destination, its derivatives markets are also growing in importance.
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Brexit

Brexit Fishing: Battle Lines Drawn On Access To U.K. Waters
Alasdair Lane – Forbes
Floundering trade talks. Gunboat diplomacy. Stormy waters ahead. With Brexit and fishing, the puns come easily. But for the fishing industry’s 180,000 European employees, Britain’s E.U. departure is no joke. Its economic significance may be slight—1.6% of GDP at most—but across the continent, fishing sustains whole coastal communities. With London and Brussels at loggerheads over the sector’s future, their survival is in doubt.
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Sajid Javid planned to pay for tax cut with Brexit ‘dividend’
George Parker and Chris Giles – Financial Times
Sajid Javid, the former chancellor, has told colleagues he could have funded a possible 2p income tax cut in his abortive Budget by using a “Brexit dividend” arising from Britain’s departure from the EU. Mr Javid told The Times last week that he would have used his Budget to cut the basic rate of tax from 20 per cent to 18 per cent, but it was unclear how he would have funded a policy costing about £10bn a year. Friends of the former chancellor, who resigned last month in a power struggle with Number 10, say the policy could have been paid for with money saved from the UK’s annual net contribution to the EU budget.
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More firms expect Brexit uncertainty to stretch into 2021: Bank of England
William Schomberg – Reuters
More than three-quarters of British firms that took part in a Bank of England survey expect uncertainty about Brexit to last until 2021 at least, the central bank said on Thursday. “Businesses expect uncertainties around Brexit to take longer to be resolved than in the January survey,” the BoE said as it published the Monthly Decision Maker Panel (DMP) survey of chief financial officers.
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UK seeks to convince EU to talk financial services
Jim Brunsden – Financial Times
EU and UK negotiators have knuckled down to detailed negotiations on their future relationship, but one of Britain’s most economically important sectors is barely covered. The UK financial services industry’s access to the European market will not be settled in the trade talks that began this week in Brussels.
The EU has consistently rebuffed attempts by successive British governments to do a deal that would preserve as much as possible of the City of London’s role as Europe’s financial supermarket.
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