Thinning Liquidity in Key Futures Market Worries Traders

Mar 26, 2019

First Read

The Industry Leader Series: Terry Duffy, CME Group

JohnLothianNews.com

Every year, John Lothian News puts together an industry leader series filmed at FIA’s annual conference in Boca Raton. The number of interviews filmed this year is a JLN record and the footprint of the market participants involved is similarly far-reaching.

In the lead up to the conference, JLN sat down with CME Group Chairman and CEO Terry Duffy to discuss what 2019 holds for the world’s largest derivatives exchange, covering such topics as political uncertainty, the NEX integration, and following up on a record 2018.

Watch the video »

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SG America’s FCM business aims to be different
Jim Kharouf, JLN

In today’s FCM world, it’s tough to be different.

The job is still pretty straightforward – help clients execute trades and manage the post-trade process. There are more steps and pieces that come with that than most participants know or want to know. Most just want to get a trade done and booked and move along to the next one.
The revamp of regulations over the past 10 years has made FCM brokerage more difficult in many ways and certainly more expensive from an audit and compliance perspective. The good news is that the industry has also become far more technology driven. Yes, this is old news, but the growth of FCMs is firmly embedded in technology – for connectivity, trading tools, access to more markets and even in the algorithms used by traders today.

To read the rest of this article, go here.

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Hits & Takes
JLN Staff

Angela Tu has been named Cboe Global Markets’ new director of communications in New York, focused on U.S. equities, ETF and listings.~JK

Our good friend Will Mitting reports that next week Acuiti will launch the first Derivatives Insight Report survey. Over 200 senior figures have joined the network to take part so far and get free business analytics. If you haven’t yet, please do sign up at www.acuiti.io.~JJL

Craig Pirrong’s latest blog post on The Streetwise Professor is titled “Oliver Wyman Misdiagnoses the Causes of the Commodity Traders’ Malaise, and Prescribes Nostrums to Treat It.”~JJL

CB Insights’ recent report on 5G’s impact on various industries says that potential benefits for financial services include faster payments and that 5G could “allow wearable devices to share biometric data with financial services to authenticate user identity instantly and accurately.
“~SD

Ricardo Manrique is now a senior vice president, head of products, investible indexes & alternative data at State Street.~JJL

Gary Katler has retired from ABN AMRO Clearing Chicago. ABN AMRO named a conference room in his honor, and one for the late Mark Cermak and lastly O’Connor & Company.~JJL

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CME’s CEO explains how Main Street is taking more control over its portfolio from Wall Street and how the futures exchange is adapting
Dan DeFrancesco – Business Insider
Main Street investors are more interested than ever in managing their own investments, and CME Group’s chairman and CEO, Terry Duffy, is happy to oblige.
/read.bi/2Fyi5RI

***** Who really is Main Street?~JJL

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Duke Energy Needs ‘Plan B’ If Atlantic Coast Pipeline Fails, CEO Says
Rachel Adams-Heard, Chris Martin, and Alix Steel
Duke Energy Corp. will need another way to shuttle natural gas to customers in the U.S. Southeast if the troubled Atlantic Coast shale pipeline fails to overcome legal setbacks, Chief Executive Officer Lynn Good said.
/goo.gl/YNwUA6

*****Never bet against Duke during March.~JJL

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Monday’s Top Three
Our top read stories of the day on Monday were led by The Wall Street Journal’s Cashing In on Volatility Has Been Tougher Than Expected for Cboe. Our second most read piece was the FT’s story on the Japan Exchange Group, JPX set to acquire Tokyo Commodity Exchange; Merger aims to raise volumes and boost Tokyo as a financial centre. Third was Bloomberg’s Back to the Marc Rich Days as U.S. Probes Commodity Traders

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Lead Stories

Thinning Liquidity in Key Futures Market Worries Traders; E-mini S&P 500 futures have gotten harder to trade since volatility shook U.S. stocks last year
Alexander Osipovich – WSJ
A retreat by traders from an important corner of the U.S. financial system has some worried it could make the stock market more susceptible to shocks. E-mini S&P 500 futures, a huge market where over $200 billion changes hands on average daily, are widely used on Wall Street to bet on market moves or protect against adverse stock swings. The futures have gotten harder to trade since volatility shook U.S. stocks last year, according to trading data and market participants.
/on.wsj.com/2Fx8Hwp

CFTC settles market manipulation case against food groups; Mondelez and Kraft were accused of ‘huge’ wheat futures purchases
Gregory Meyer – FT
Lawyers for the US Commodity Futures Trading Commission have agreed to settle a high-profile futures manipulation case against the food companies Mondelez International and Kraft Heinz, less than four months after the regulator suffered a bruising loss in another case.
/on.ft.com/2FvqdkV

Singapore-Based Crypto Exchange DragonEx Has Been Hacked
Yogita Khatri – Coindesk
Singapore-based exchange DragonEx says it has been hacked for an undisclosed amount in a number of cryptocurrencies.
bit.ly/2FvszAh

Tradeweb aims for $5.8bn valuation in upcoming IPO
Philip Stafford – FT
Tradeweb Markets, the US fixed-income and derivatives trading venue, is aiming for a valuation of up to $5.8bn as it begins a roadshow to sell investors its initial public offering on Nasdaq.
/on.ft.com/2FsG03U

Crypto Mining Giant Bitmain Lets Hong Kong IPO Application Lapse
Crystal Tse – Bloomberg
Bitmain initially filed for listing in the city in September; Company says it will restart application at appropriate time
Bitmain Technologies Ltd., the world’s biggest producer of cryptocurrency mining chips, has let its application for Hong Kong initial public offering lapse.
/bloom.bg/2FsBsum

Wall Street Is Masking the True Cost of Climate Change for Coastal Homes; More and more houses are vulnerable, but that may not be fully reflected in insurance costs.
James Tarmy – Bloomberg
Last November, less than a month after someone paid more than $1 million for an oceanfront house on New York’s Fire Island, a narrow strip of land dividing Long Island’s Great South Bay from the Atlantic Ocean, a storm surge destroyed the pool. “It’s certainly a very vulnerable place for storm and water damage,” says Vincent Petrarca, a broker who specializes in Fire Island Pines real estate. “You just have to look at the beach [to see] that there’s been erosion. But these houses are incredible, it’s a luxury item, and people want it.”
/bloom.bg/2FrSNU3

Citigroup Faces $1.2 Million Fine for Allegedly Manipulating Japanese Government Bond Futures
Takashi Nakamichi and Takako Taniguchi – Bloomberg
Misled investors into believing market was ‘thriving’ – SESC; Follows other regulatory setbacks for the U.S. bank in Asia
Citigroup Inc. faces a 133 million yen ($1.2 million) fine for allegedly manipulating prices in the Japanese government bond futures market, its latest regulatory setback in Asia.
/goo.gl/YyLcEJ

What Does the Future Hold for Securities Lending?
Matt Wolfe, OCC Vice President of Business Development
Strong personal relationships have always been a cornerstone of the securities lending marketplace. Market participants focus on developing a broad, reliable network of relationships, so they can be the first lender borrowers contact in the morning, or the first borrower to be offered hard-to-borrow securities by a lender. While strong relationships will always be important, there is a growing emphasis on data collection. Decisions are being influenced by data analytics. In my view, the future of securities lending will be data-driven and the leaders will be those that make the most effective use of data.
/goo.gl/vH1qnp

Swedish Money Laundering Spins a Widening Web of Intrigue
Niklas Magnusson, Amanda Billner, and Rafaela Lindeberg – Bloomberg
Questions are being asked about impartiality of regulators; Swedbank shareholders will air their views at AGM this week
As Sweden gets to grips with the money laundering scandal battering its oldest bank, questions are being asked about the impartiality of those overseeing the case.
/bloom.bg/2FAhiPg

Three Minutes With Nataliya Manina, Financial Services Attorney; The Widespread Reach of Blockchain
Jessica Darmoni – Hehmeyer
“A typical financial asset has a set of cash flows, and its value is driven by the future expectations of those cash flows. Cryptocurrencies do not have cash flows,” said Nataliya Manina, an attorney in the financial services industry, about why she was at first skeptical of cryptocurrencies. “Digital assets’ values are not backed by sovereign credit. You cannot apply traditional valuation mechanisms to cryptos, as their value is mostly driven by something different: developing useful application-cases for blockchain.”
bit.ly/2Fta0fX

The Fed Doesn’t Understand How Inflation Works; The central bank’s complicated formulas don’t align with real world experiences.
Jim Bianco – Bloomberg
The concept of inflation has been a constant thorn in the side of central bankers. Although price stability is one of the main goals at many central banks, inflation targeting has proven a difficult exercise. Many central bankers have gone as far as questioning whether economists even understand the drivers of inflation. Without understanding its basic building blocks, how can central banks be expected to control inflation?
/bloom.bg/2FAloa6

Banks Get Break on Hedging
Derivatives regulators loosen rules for regional bank swap trades
Gabriel T. Rubin – The Wall Street Journal
Banks will be able to more easily hedge against the risks of the loans they originate without triggering stricter regulatory requirements, under rule changes made Monday by a federal markets regulator.
/goo.gl/26v9BC

Mayer Brown fires partner for ‘inappropriate’ conduct
Claire Bushey- Crain’s Chicago Business
Chicago law firm Mayer Brown has fired a partner for “inappropriate personal conduct with a subordinate.” Zachary Barnett, the global head of the firm’s fund finance practice, is no longer with the firm because of his conduct, according to an email Chairman Paul Theiss sent to the firm on Thursday. The news was first reported by legal news website Above the Law.
bit.ly/2FyQUVX

Exchanges, OTC and Clearing

Eurex to introduce ESG futures in the US
Hayley McDowell – The Trade
European derivatives exchange Eurex will soon launch sustainable futures contracts in the US to provide investors with environmental, social and governance (ESG) standards with access to hedging instruments.
bit.ly/2FvqDI1

Eurex’s ESG Futures soon tradable in the U.S.
Eurex
Eurex has received approval from the Commodity Futures Trading Commission (CFTC) to offer its sustainable futures in the U.S. This gives U.S. based investors that apply environmental, social and governance (ESG) criteria direct access to hedging instruments for their portfolios. The new futures will be available in the U.S. starting 8 April.
bit.ly/2FAdYTY

Euronext to launch FastMatch matching engine in Singapore; FastMatch matching engine is expected to be fully operational in Singapore in the fourth quarter this year.
Hayley McDowell – The Trade
Euronext has outlined plans for its FX trading business FastMatch to expand into Asia with the launch of a matching engine and new commercial office in Singapore.
bit.ly/2FtjRm7

****Press release here.

Leading Swap Dealers Join GlobalCollateral Margin Transit Utility Community
DTCC
DTCC-Euroclear Global Collateral Ltd. (GlobalCollateral), an award-winning joint venture of Euroclear and The Depository Trust & Clearing Corporation (DTCC), today announced that the Margin Transit Utility (MTU) collateral settlement infrastructure community continues to grow, as the firm moves beyond its pilot production phase.
/goo.gl/TNM1df

Technology consolidation: Introduction of additional services to Eurex Clearing’s C7 architecture with focus on securities in 2020/2021
Eurex
As part of Eurex Clearing’s strategic roadmap to improve market safety, to follow market requirements, which are in harmony with T2S, and to prepare for upcoming regulatory changes, Eurex Clearing proceeds with the migration of Equity and Repo Clearing to the C7 architecture.
bit.ly/2FrV5mg

NSE eyes 350-375 tonnes of domestically refined gold market for derivatives; So far, only London Bullion Market Association recognised bullion is accepted as good delivery on the exchange platform
Rajesh Bhayani – Business Standard
With over 350-375 tonnes of the domestically refined gold market still away from the organised trading platforms in India, the National Stock Exchange of India (NSE) has decided to accept it as good delivery on its derivatives platform. So far, only London Bullion Market Association recognised bullion is accepted as good delivery on the exchange platform.
bit.ly/2Fy8bOX

Fintech

Highlights from the FinTex Chicago Event Attract, Engage, Convert: Executing a Marketing Strategy for FinTech Firms
Sarah McNabb – Gate39
On Thursday, March 21st FinTex / Startup Leader Round Table (SLRT) and event sponsor Gate 39 Media hosted the event Attract, Engage, Convert: Executing a Marketing Strategy for FinTech Firms at the ITA TechNexus Venture Collaborative space in Chicago.
bit.ly/2JCucRP

The Health of a Country’s Economy Is Hiding in Plain Tweets
Jeff Kearns and Saijel Kishan – Bloomberg
Web-search queries can help predict nonfarm-payroll revisions; Cell-phone location data can show the health of retail chains
/goo.gl/BbWzkk

Citigroup Enters Banking’s Hottest Business With New Payments Unit; Financial giant takes on startups and big rivals, entering field of linking merchants to customers
Telis Demos – WSJ
Citigroup Inc. is starting a consumer-payments business, joining its biggest rivals and a host of financial-technology startups jockeying for position in the hottest corner of banking.
/on.wsj.com/2FwXUlQ

Billionaire Power Couple Give $75 Million for Canadian AI Push
Doug Alexander – Bloomberg
Schwartz, Reisman make record gift to University of Toronto; Funds will be used to build complex to study tech and society
Canada’s billionaire power couple, Gerald Schwartz and Heather Reisman, have donated C$100 million ($75 million) to the University of Toronto for an artificial intelligence complex.
/bloom.bg/2FFMmNB

Exclusive: Robinhood Made Its First Acquisition Ever — And It’s a Financial Newsletter
Polina Marinova – Fortune
Robinhood, a no-fee trading stock trading startup, just made its first acquisition, and it’s a millennial-focused media company called MarketSnacks.
bit.ly/2Ftritr

Cryptocurrencies

Cryptocurrency Miner Bitmain’s Hong Kong IPO Application Lapses; Company names Haichao Wang as its new CEO
Saumya Vaishampayan – WSJ
One of the world’s largest makers of cryptocurrency mining equipment shelved plans for an initial public offering, becoming the latest casualty of the industry’s worst slump in years.
/on.wsj.com/2FsJKm2

Plans for world’s largest cryptocurrency IPO at risk of being shelved; Bankers say listing of miner Bitmain is ‘highly unlikely’ after bitcoin fall spooks investors
Louise Lucas – FT
Bitmain Technologies’ application for a blockbuster initial public offering will lapse this week, after the fall in the price of bitcoin spoiled the fortunes of the world’s biggest cryptocurrency miner.
/on.ft.com/2FrSSHu

A Critic of Cryptocurrencies Says Bitcoin Needs To Be Burnt With Fire
Tracy Alloway and Joe Weisenthal – Bloomberg
There’s a problem in many debates about cryptocurrencies and blockchain technology. While many people are inclined to dismiss them as fraudulent ponzi schemes, most of those critics aren’t particularly well informed by them, so their dismissals are hollow and uncompelling. On this week’s episode, we speak with Nicholas Weaver, a Berkeley computer scientist who is well versed on the technology, who argues why the entire space ought to be burnt down in a fire.
/bloom.bg/2VTK8Bb

Crypto Aggregator Says Concerns Over Inaccurate Data Are Valid
Olga Kharif – Bloomberg
CoinMarketcap.com to add data on liquidity, exchange traffic; A report out last week called the site’s Bitcoin data wrong
CoinMarketCap.com, one of the biggest aggregators of cryptocurrency market data, said concerns over inaccuracies “are valid” and it will be adding more information to its website to help users make better decisions.
/bloom.bg/2FuNbse

Rakuten Wallet to relaunch as registered virtual currency exchange
The Block Crypto
E-commerce company Rakuten has finished the registration of its Rakuten Wallet cryptocurrency exchange, the company announced in a press release. The exchange, which was formerly called Everybody’s Bitcoin, changed its name to Rakuten Wallet this month. It will stop current service by the end of the month and relaunch services in April.
bit.ly/2Fw3fdh

HitBTC Crypto Exchange in Trouble after a Reddit User Threatens Legal Action
Bitcoin Exchange Guide News
Crypto exchanges have played an important role in linking stakeholders within the industry. The firms behind these projects focused on building ecosystems that enable P2P interactions for investors and traders to exchange crypto coins. However, their growth has not been as smooth as one would imagine given the volatile nature of crypto markets. HitBTC, a leading crypto exchange was recently backlashed by one reddit user who seems to be at cross paths with the exchange. This is not new as many crypto users have in the past spoken up against poor services.
bit.ly/2FsFhQe

Crypto Exchange OKEx Is Developing Its Own Blockchain
Coin Telegraph
Cryptocurrency exchange OKEx is developing its own blockchain and decentralized exchange, according to a blog post published on March 2
bit.ly/2FyF3qz

‘A Sad Joke’: Bitcoin Cash’s Lead Coder Quits Bitcoin Unlimited Project
Alyssa Hertig – Coindesk
Amaury Séchet, a leading developer of bitcoin cash, is renouncing his membership in one of the projects that paved the way for the controversial cryptocurrency.
bit.ly/2Fs2MJ1

Bitcoin’s Trading Range Narrows In March to Hit Two-Year Low
Sam Ouimet – Coindesk
Bitcoin’s average daily trading range so far in March is its lowest in nearly two years when, at the time, the world’s largest cryptocurrency was worth roughly a quarter of what it is now.
bit.ly/2Fx1HzA

This Canadian crypto trader sent $75,000 bitcoin to Quadriga’s exchange—then it went bust
Aaron Hankin – MarketWatch
The fallout from the Canadian cryptocurrency exchange QuadrigaCX saga continues to unravel in the courts with droves of angry investors demanding answers.
/on.mktw.net/2Fw4nxx

CME Group CEO Terry Duffy: No Bitcoin Deficit a Problem for Regulators
Cointelegraph
Terry Duffy, CEO of leading United States derivative market CME Group, told Business Insider Monday, March 25, that Bitcoin’s finite amount is a challenge for regulators. According to Duffy, the inability to run Bitcoin (BTC) on a deficit is challenging for regulation. He further explained:
“The governments can’t run unless they can run on a deficit. I am trying to figure out why they would say, ‘Sounds good to me, because I want to be responsible and run everything on even-for-even basis. I can’t borrow against anything.'”
bit.ly/2FuQks2

Politics

France to seal deals with China but challenge on Belt and Road project
Michel Rose, John Irish – Reuters
France and China planned to sign trade deals worth billions of euros on Monday during a visit by Chinese President Xi Jinping but Paris will also take the opportunity to push back against Beijing’s “Belt and Road” infrastructure initiative.
/goo.gl/hzuEqF

Regulation

SEC Urges Judge to Act, Accusing Musk of Muddying Contempt Case
Heather Smith – Bloomberg
The Securities and Exchange Commission told a New York judge that she should be able to decide whether Tesla Inc. Chief Executive Officer Elon Musk violated the terms of his settlement with the regulator and whether to punish him for that without holding a hearing “because there are no material issues of disputed fact.”
/bloom.bg/2FyLQ3T

The CAT Saga Continues
Harshad Pitkar, RegEdge – Tabb Forum
Despite murmurs about Thesys’s ability to deliver on the Consolidated Audit Trail and several missteps along the way, the news that it would be replaced as the plan processor still came as a surprise to most industry participants. Though further changes to the current rollout plan under FINRA are not expected, the transition will be complex. RegEdge CEO Harshad Pitkar looks at what happens next, why there likely will be another delay, and what the industry should do now.
/goo.gl/hejBh8

STA Partners with Knopman Marks on Financial Training
GlobeNewswire
The Security Traders Association (STA) today announced an agreement with Knopman Marks Financial Training, a leading provider of licensing examinations training and course material for professionals within the financial services industry. The agreement extends to STA members, and members’ friends and families, on Knopman Marks’s training program for the Securities Industry Essentials (SIE or Essentials) Exam, FINRA’s newest exam for securities industry professionals.
/goo.gl/ciWG3d

The ASIC Podcast; Episode 44: Former financial adviser Gabriel Nakhl sentenced to 10 years imprisonment
ASIC
Mr Nakhl engaged in dishonest conduct and was found guilty in the District Court of New South Wales. The court set Mr Nakhl a non-parole period of 6 years.
bit.ly/2FwZpAu

ESMA responds to EC consultation on update of reporting guidelines to reflect climate-related disclosures
ESMA
The European Securities and Markets Authority (ESMA) welcomes the European Commission’s proposal to update the non-binding Guidelines on non-financial reporting with the introduction of a specific supplement addressing climate-related disclosures. ESMA takes the opportunity to make some recommendations on how the Guidelines can be further developed to promote higher quality disclosures.
bit.ly/2Fy5Y67

Proposed Rule Change to Adopt FINRA Rule 7640B (Data Products Offered By NYSE)
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to adopt FINRA Rule 7640B (Data Products Offered By NYSE) to (1) describe FINRA’s practices relating to the distribution of market data for over-the-counter (“OTC”) transactions in NMS stocks generated through the operation of the FINRA/NYSE Trade Reporting Facility (“FINRA/NYSE TRF”) by NYSE Market (DE), Inc. (“NYSE Market”) and its affiliate, New York Stock Exchange LLC (“NYSE”); and (2) identify NYSE products that distribute FINRA/NYSE TRF data to third parties.
bit.ly/2FsDPNM

CFTC Finalizes Rule to Help US Small Businesses and Job Creators
CFTC
The Commodity Futures Trading Commission (CFTC) today in an open meeting of the Commission adopted the final rule for the de minimis exception for swaps entered into by Insured Depository Institutions (IDIs) in connection with loans to customers.
bit.ly/2FyPb2V

CFTC Provides Further Brexit-Related Market Certainty
CFTC
The Commodity Futures Trading Commission (CFTC) passed by unanimous vote at today’s open Commission meeting a provision to provide greater certainty to the global marketplace in the event of a “no-deal Brexit” precipitated by the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union without a negotiated withdrawal agreement.
bit.ly/2FtuOUF

Statement of Chairman J. Christopher Giancarlo on the Final Rule Regarding De Minimis Exception to the Swap Dealer Definition – Swaps Entered into by Insured Depository Institutions (IDI) in Connection with Loans to Customers
CFTC
The Commission will today consider the final rule for the de minimis exception for swaps entered into by Insured Depository Institutions (“IDIs”) in connection with loans to customers. Today’s action builds upon the strong public support the CFTC has received for providing a narrowly-tailored exception that promotes the use of loan-related swaps in a commercially practicable and cost-effective manner.
bit.ly/2Ftm3dl

Opening Statement of Commissioner Brian Quintenz before the Open Commission Meeting on March 25, 2019
CFTF
Open Meeting on Interim Final Rule Regarding Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants in Light of Brexit; and Final Rule Regarding the De Minimis Exception to the Swap Dealer Definition – Swaps Entered into by Insured Depository Institutions in Connection with Loans to Customers
bit.ly/2Fs91N4

Statement of CFTC Commissioner Rostin Behnam on the Final Rule amending the De Minimis Exception to the Swap Dealer Definition—Swaps Entered into by Insured Depository Institutions in Connection with Loans before the Public Meeting
CFTC
Thank you Mr. Chairman. I would like to start by thanking all of the Commission staff who worked to make today’s meeting possible – both those who will be presenting at the table today and those who provided the knowledge and analysis supporting their statements. I will keep this statement brief as I have submitted a statement for publication with the final rule.
bit.ly/2FwXD2o

Opening Statement of CFTC Commissioner Dawn D. Stump before the Commission Meeting
CFTC
Thank you to the Chairman for calling this open meeting and to the staff for their diligence in preparing the items we will consider today. I have just returned from a trip to Europe where I was visiting our regulatory counterparts across various jurisdictions and many market participants and market infrastructure providers who operate truly global businesses. That trip reinforced my belief that every jurisdiction, including the US, needs to recommit to the global coordination envisioned at the Pittsburg G-20 Summit in 2009, when global leaders committed to work together to improve the system. The alternative of duplicative supervision creates a new web of regulatory vulnerabilities and serves to complicate, not improve, the intended benefits of the recent reforms.
bit.ly/2FuPmMq

Opening Statement of CFTC Commissioner Dan M. Berkovitz before the Commission Meeting
CFTC
Good morning Mr. Chairman and my fellow Commissioners. I’d like to begin by thanking Commission staff. The CFTC has been particularly busy lately on issues of global importance. Your hard work and dedication to our mission allows us, despite our size, to be one of the world’s preeminent financial regulatory agencies. In particular, I appreciate your work on the issues we’ll be discussing today, your consideration and incorporation of many of my office’s comments, and the time you’ve spent with my staff in preparation for this meeting.
bit.ly/2Fx0msy

NFA Amends Rules and Adopts Interpretive Notice Implementing Swaps Proficiency Requirements
NFA
NFA recently amended NFA Bylaw 301 and NFA Compliance Rule 2-24 and adopted a new Interpretive Notice entitled NFA Bylaw 301 and Compliance Rule 2-24: Proficiency Requirements for Swap APs to implement NFA’s Swaps Proficiency Requirements.
bit.ly/2FtYCjZ

FCA acts to help mortgage prisoners
UK FCA
Mortgage customers who have previously been unable to switch mortgages despite being up-to-date with their payments (commonly known as mortgage prisoners), could soon be able to find a cheaper deal after the Financial Conduct Authority (FCA) proposed changes to how lenders assess whether or not a customer can afford the loan.
bit.ly/2FtpdxK

City Financial Investment Company Limited enters administration
UK FCA
On 21 March 2019, City Financial Investment Company Limited (City Financial), a firm authorised and regulated by the FCA, appointed Jason Baker and Geoffrey Rowley of FRP Advisory LLP (FRP) as joint administrators. We explain what this means if you have invested in any of the funds managed by the firm.
bit.ly/2Ftmww7

Investing and Trading

Negative-yielding government debt jumps above $10tn; Federal Reserve’s gloomy outlook exacerbates concerns over the global economy
Robin Wigglesworth – FT
The amount of government debt with negative yields has vaulted back over the $10tn mark, after the Federal Reserve’s unexpectedly downbeat outlook exacerbated concerns over the health of the global economy and sent investors scurrying for the apparent safety of sovereign bonds.
/on.ft.com/2FuNxPA

Do alternatives deserve a place in your portfolio?; As volatility stalks world equity markets, wealth managers look to alternatives
Matthew Vincent – FT
“Alternative facts” were first unleashed upon a part-suspecting world by president Donald Trump’s political adviser in 2017. Since then, the US candour-mangler-in-chief has provided no shortage of his own — most recently about the economy and interest rates.
/on.ft.com/2FrRxjW

Wall Street braced for ‘earnings recession’ as margins fall; US companies struggle to pass on rising labour, transportation and raw materials costs
Andrew Edgecliffe-Johnson i- FT
US profit margins are on track to suffer their first fall since 2015, as companies increasingly struggle to pass on costs of rising labour, transportation and raw materials to customers.
/on.ft.com/2FyMsXf

Stock Investors Bet the Analysts Are Wrong; The bulls are foolishly banking on companies finding lots of unexpected profits from somewhere. Also, more on the book club.
John Authers – Bloomberg
As the financial media exhaustively explained last week, the U.S. bond market is projecting a lot of pessimism about the economic outlook. The yield curve is inverted, which is never a good sign. Stocks, however, seem far more optimistic.
/bloom.bg/2Fx9PjD

Climate Setback as Carbon Emissions Hit a Record High
Mathew Carr and Jeremy Hodges – Bloomberg
U.S. boosted use of oil as India and China burned more coal; IEA report marks a setback for effort to curb global warming
Carbon emissions from fossil-fuel use hit a record last year after energy demand grew at its fastest pace in a decade, reflecting higher oil consumption in the U.S. and more coal burning in China and India.
/bloom.bg/2Fs6baS

WeWork’s Annual Loss Doubles to Nearly $2 Billion Amid Rapid Expansion; The company spent heavily last year to increase its network of shared offices
Eliot Brown – WSJ
WeWork Cos. on Monday said its loss last year doubled to nearly $2 billion, as the nine-year-old company spent heavily in an effort to rapidly expand its network of shared offices around the world.
/on.wsj.com/2FyAzjJ

Global carbon dioxide emissions hit record high; Surge in world energy demand of 2.3% in 2018 was mainly met by fossil fuels, says IEA
Leslie Hook – FT
Global carbon dioxide emissions rose to their highest levels last year after a surge in energy demand stoked by a strong economy and extreme weather, according to the world’s energy watchdog.
/on.ft.com/2Fs5tdI

Institutions

ABN Amro steps up efforts to secure US banking licence; Dutch group aims to strengthen presence despite downsizing by European rivals
Laura Noonan, David Crow and Claire Jones – FT
ABN Amro is gearing up to apply for a US banking licence in a move that will take the Dutch bank deeper into a market where its European peers have long struggled with poor profits and intrusive regulation.
/on.ft.com/2FrTrRC

DE Shaw: inside Manhattan’s ‘Silicon Valley’ hedge fund; The secretive group mixes quant investing with common sense to manage $50bn, but it faces a fight to keep its edge
Robin Wigglesworth – FT
In 1988, Revolution Books, a tatty Communist bookstore near New York’s Union Square, got some strange new upstairs neighbours: a bunch of geeky programmers trying to crack the code to financial markets.
/on.ft.com/2FrTay4

Goldman Joins Chorus Warning Against Yield Curve Panic
Joanna Ossinger – Bloomberg
Bank sticks with view on low-but-positive returns for equities; Fidelity says move getting excessive, advising underweight
Goldman Sachs Group Inc. added its voice to those advising against panic over the inversion of the U.S. yield curve, which has served as a recession warning in the past.
/bloom.bg/2FuMPSq

Citigroup’s head of corporate derivatives trading quietly moved aside
Sarah Butcher – efinancialcareers
Something has occurred at Citi. Insiders say that Gilles Dahan, who has been with the bank since the beginning of time (1999) is no longer in his role. Dahan was Citi’s head of strategic equity solutions (effectively corporate equity derivatives trading). French by birth, he joined the bank straight out of university and has occupied pivotal roles in Citi’s equity derivatives trading business since at least 2008.
/goo.gl/gGo7Pj

Former Goldman Sachs exec Harvey Schwartz reportedly turned down the top spot at Wells Fargo
Callum Burroughs – Business Insider
A year after missing out on becoming Goldman Sachs CEO Harvey Schwartz is keeping his options open.
/read.bi/2FtVBA8

Charlotte Snags Another Banking Headquarters Without the Amazon Hoopla
Amanda Albright and Jennifer Surane – Bloomberg
North Carolina city didn’t offer lender any incentives; Mayor says affordable living is big part of the city’s appeal
It was early on a February morning when Charlotte, North Carolina, Mayor Vi Lyles got the call: BB&T Corp. would combine with SunTrust Banks Inc. in the largest bank deal in a decade and wanted to place its headquarters in her city.
/bloom.bg/2FyFGAr

Industry Veteran, Basil Williams, Joins Welton Investment Partners As President
Welton Investment Partners
Welton Investment Partners today announced the hiring of Basil Williams as President, a new position. Williams joins Welton’s senior leadership in managing the overall business, including oversight of the firm’s investment products, operations, and expansion initiatives. Based in New York City, Mr. Williams will report to Dr. Patrick Welton, CEO and CIO.
/prn.to/2Fvufd3

Regions

China’s Former Top Internet Regulator Jailed for 14 Years
Bloomberg News
Lu Wei was found to have accepted some $4.6 million in bribes; He spearheaded President Xi’s ‘Clear Cyberspace’ campaign
China’s former top internet regulator was sentenced to 14 years in prison for corruption, completing the downfall of a once-high-flying official who mingled with executives from Apple Inc. and Facebook Inc.
/bloom.bg/2FtRvIg

China Plans Record U.S. Pork Imports to Resolve Trade War
Bloomberg News
Asian nation could buy as much as 300k tons of American pork; Volume depends on African swine fever progress, person says
China could increase U.S. pork imports to the highest ever this year as part of its commitment to bolster purchases of American farm goods to resolve the trade war between the two countries, according to people familiar with the situation.
/bloom.bg/2FwWhEK

U.S. Business Group Warns Russia on Impact of Investor Jailing
Henry Meyer and Stepan Kravchenko – Bloomberg
U.S. presence at key Russia forum at risk, AmCham says; Arrest of prominent U.S. investor shocked business community
The head of a major U.S. business group told Russia’s foreign minister that the jailing of a prominent American fund manager last month has cast a pall on the investment climate.
/bloom.bg/2FvY2Cf

Turkish Lira Swap Rates Erupt as Offshore Liquidity Dries Up
Constantine Courcoulas and Kerim Karakaya – Bloomberg
Turkish authorities have made it virtually impossible for foreign investors to short the lira.
/bloom.bg/2Ftlmkg

Brexit

Brexit is part of a wider European struggle; All of the EU’s big six countries are facing deep internal divisions
Gideon Rachman – FT
The largest pro-EU demonstration in history took place last Saturday. Ironically, this display of Europhilia happened in a country that is about to leave the EU, as up to 1m people took to the streets of London to protest against Brexit. Leaving the EU has had the paradoxical result of creating something entirely new — a passionate pro-European movement in Britain.
/on.ft.com/2FrSkkU

U.K. Parliament Votes to Take Control of Brexit From May; Embattled prime minister, who says she will bring twice-rejected proposal to Parliament this week, opposes lawmakers’ plans to consider alternatives
Max Colchester and Jason Douglas – WSJ
Britain’s Parliament moved to pry control of the Brexit process away from Prime Minister Theresa May, forcing votes on alternatives to her unpopular plan on how to extract the U.K. from the European Union.
/on.wsj.com/2FrSwAv

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