Top Regulator Worries About Crypto Market Manipulation; CFTC ‘astounded’ as Congress prepares to cut budget

Mar 23, 2018

First Read

Congressional CFTC Budget Decision Lacks Vision and Reason
John Lothian – JLN

A reasonable person could see that the U.S. Commodity Futures Trading Commission needs an increase in its budget to address the growing responsibility it has acquired over US markets in recent years and the dramatic development and investment in fintech and cryptomarkets.

A reasonable person, Democrat or Republican, would vote for the modest increase the CFTC requested unless they suffer from a chronic case of market myopia.

But alas, the budget passed by the U.S. House of Representatives cuts the CFTC’s funding by $1 million to $249 million, and reason was not what ruled the day. The adjective that comes to my mind to describe this is shortsighted.

For the rest of the column, click HERE

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Hits & Takes
JLN Staff

When Josh King joined InterContinental Exchange, Kelly Loeffler told him one of the first things he should do is read the book “Zero Sum Game” about the ICE’s attempt to wrestle the CBOT away from the CME. I am listed in the book beginning on page two and my newsletter comments are used as part of the narrative of the book. King was fascinated, so he interviewed me down in Boca Raton at the FIA International Conference for his ICE House podcast series. HERE is the podcast.~JJL

According to PitchBook, U.S. venture capital investments in artificial intelligence amounted to some $6 billion in 2017. If you missed our video on artificial intelligence yesterday, you can find that here. ~SD

The crypto ventures keep getting curiouser and curiouser. Here’s a new one: Cryptocurrency Backed by Habanero Peppers Is a Thing in Mexico. And it isn’t even the first vegetable-related blockchain enterprise!~SR

The FIA published comments yesterday on CFTC definition of “actual delivery” with virtual currencies.~JJL

A top trending story on Yahoo is “Purdue engineering students make arm brace for Isaac Haas so he can play in Sweet 16.” You have to love Purdue students’ dedication and ingenuity.~JJL

Congratulations to RBC’s George Gero on being named to the FT’s list of top 400 financial advisors.~JJL

Olga Kharif of Bloomberg has been doing some very good reporting. For some reason Jim Kharouf wants to meet Olga Kharif. Might be a long lost cousin, who knows? Meanwhile, Michael Forrester and Spencer Doar are wishing they could merge and be Michael Spencer.~JJL

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How Nasdaq C.E.O. Adena Friedman Beat the Odds on Wall Street; She grew up hanging around the trading floor with her father. Now she’s running a major stock exchange. How? She spoke up, and she got stuff done.
David Gelles – WSJ
It can be notoriously difficult for women to thrive on Wall Street. Adena Friedman says that hasn’t been the case for her. Ms. Friedman, the chief executive of Nasdaq, grew up around finance, and knew from an early age that she wanted to work in the industry. Joining Nasdaq in 1993, Ms. Friedman rose through the ranks, serving as head of corporate strategy and ultimately taking over as chief financial officer in 2009. She left to become the C.F.O. of the Carlyle Group, a major private equity firm, but returned to Nasdaq, becoming chief executive last year.
/goo.gl/LuDCMW

***** We are blessed with the most likeable group of exchange leaders I can remember and Adena Friedman is a great example of that.~JJL

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Sponsored Content

IFM Roundtable

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A 15-year-old hacked the secure Ledger crypto wallet
John Biggs – TechCrunch
A 15-year-old programmer named Saleem Rashid discovered a flaw in the popular Ledger hardware wallet that allowed hackers to grab secret PINs before or after the device was shipped. The holes, which Rashid described on his blog, allowed for both a “supply chain attack” – meaning a hack that could compromise the device before it was shipped to the customer – and another attack that could allow a hacker to steal private keys after the device was initialized.
/goo.gl/NKXW5f

***** I don’t know what is the bigger story, the hack or the 15-year-old who found it.~JJL

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Thursday’s Top Three
Our top read item yesterday was about the Class B shareholders at CME Group, who have brought a lawsuit forward in Langer v. CME Group, Inc.: Class Action Lawsuit. Second went to the other CME story, FT’s CME pursuit of Nex reflects shift in US money markets. Third was TT’s Report from FIA Boca 2018: Blockchain, Brexit, Bitcoin and More

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MarketsWiki Stats
122,432,229 pages viewed; 23,046 pages; 212,108 edits
MarketsWiki Statistics

Lead Stories

Top Regulator Worries That Crypto Markets Could Be Full of Manipulation
Annie Massa – Bloomberg
SEC official wonders who watches for spoofing, front running; Warding off manipulative behavior a top concern, Redfearn says
Add a top U.S. financial regulator to the list of people concerned that lightly policed cryptocurrency markets make easy targets for manipulators.
/goo.gl/9aCY41

****Reuters – Stock market principles needed in crypto world: SEC official

CFTC ‘astounded’ as Congress prepares to cut budget
Pete Schroeder – Reuters
The U.S. Commodity Futures Trading Commission (CFTC), which has pushed for a budget increase to fund its job of overseeing the multitrillion-dollar derivatives market, said on Thursday it was “absolutely astounded” that the U.S. Congress is preparing to cut its funding.
/goo.gl/oKLL24

Crypto-Focused Hedge Funds on SEC’s Radar; Regulator to examine up to 100 hedge funds starting in the next few months
Dave Michaels – WSJ
The Securities and Exchange Commission is preparing to examine as many as 100 hedge funds focused on cryptocurrencies, according to a person familiar with the matter.
/goo.gl/vWLg49

Paris unit of LCH to overtake London in some euro clearing after Brexit
Huw Jones – Reuters
Paris will overtake London as a center for LCH’s clearing of a core euro-denominated market after Brexit, the UK-based firm said as it seeks to head off French political demands for Britain to be frozen out.
reut.rs/2G5pZQz

Is Your Blockchain Business Doomed?; Europe’s new data protection regulation could spell trouble for companies.
By Olga Kharif – Bloomberg
Blockchain, the technology behind Bitcoin and Ether, can securely record transactions, store huge amounts of data forever, and offer transparency by letting anyone view the information it contains. That makes it ideal for virtual currencies and some applications in insurance, health care, and other industriesóand a thorny problem for a new European law on privacy.
/goo.gl/pn7WZR

Bank regulators to revise capital rules for trading risk
Huw Jones – Reuters
Global regulators plan to revise rules determining the minimum amount of capital banks must set aside to cover risk from trading stocks, bonds, derivatives and currencies.
reut.rs/2IL78f9

A top SEC regulator just ripped crypto exchanges for being amateurish
Frank Chaparro – Business Insider
When Brett Redfearn joined the Securities and Exchange Commission six months ago, he had no idea how much time he was going to have to spend thinking about bitcoin, the JPMorgan alumnus told a crowd at a fintech conference in New York City.
/goo.gl/Kf1UXi

Goldman Sachs no longer one of top three commodities banks
Reuters
Goldman Sachs (GS.N) lost its place among the top three earners of commodities-related revenue in 2017, falling below rivals JPMorgan (JPM.N), Morgan Stanley (MS.N) and Citibank (C.N) for the first time, data from analytics firm Coalition showed.
reut.rs/2ILyn9y

Saga token: Nobel winner Myron Scholes on team launching low-volatility cryptocurrency
Eshe Nelson and Joon Ian Wong – Quartz
Last year, when the price of bitcoin rose 1,000%, you might have regretted not buying in. Now that it has fallen almost 40% so this year, perhaps you don’t have as many regrets. The murky trading and wrenching volatility of cryptocurrencies threaten their place as a fundamental plank of the future financial system, as proponents are pushing. Now, a group of famed economists and financial innovators have a plan to address those challenges by creating “the first non-anonymous blockchain-based digital currency,” called Saga (SGA).
/goo.gl/izqb7S

****FT – Economists’ cryptocurrency aims to avoid pitfalls of bitcoin

Goldman Sachs CEO calls reports of pending retirement ‘wishful’
Tim McLaughlin – Reuters
Goldman Sachs Group Inc Chief Executive Lloyd Blankfein said on Thursday a recent media report speculating about his possible retirement this year was wishful thinking, but conceded it would be difficult to decide when to leave his job.
reut.rs/2ucbLM5

Moving towards the light
Hayley McDowell – The Trade
One of the fundamental objectives of MiFID II is to increase transparency and move trading activity onto lit venues, but weeks into the regime record block trading and periodic auction volumes have dominated regulatory headlines. Large-in-scale (LIS) venues were widely tipped to be beneficiaries of new requirements which saw the closure of broker crossing networks (BCNs) and the rise of systematic internalisers (SIs).
bit.ly/2IJC7bN

Inside the Secret Plot to Reverse Brexit; For the first time, a group of rebels is going public with its plan to derail Britain’s decision to leave the EU.
Tim Ross, Kitty Donaldson – Bloomberg
Early every Wednesday morning, 15 people leave their homes and travel separately to a secret location in central London, where, over cups of Indian-style filter coffee and plates of cookies, they plot to stop Brexit. Those who gather, bleary-eyed, in the meeting room are a mix of women and men, old and young. They include politicians and activists, both professional and little-known, though their identities haven’t been formally released. The one thing that unites them is opposition to Theresa May’s plan for Britain to make a clean break from the European Union.
/goo.gl/RuZy7e

Want to Be a High-Frequency Trader? Here’s Your Chance; Crowdsourcing startup aims to bring high-speed trading to ordinary investors
Alexander Osipovich – WSJ
Luke Merrick, a senior at the University of Virginia, sings in the glee club and recently spent a summer in Japan. His latest hobby? High-frequency trading.
/goo.gl/E2GCyh

Trump Closes Era of Constructive Economic Engagement With China
Drew Mayeda – Bloomberg
Tariffs on Chinese goods signal U.S. frustration with talks; China says it doesn’t want trade war but won’t back down
The U.S.’s era of constructive engagement with China on economic matters is over. That was the message as President Donald Trump ordered tariffs on Chinese imports worth $50 billion and investment curbs on Chinese companies. After nearly half a century of trying to woo China into the club of major market-based economies, Trump made clear his administration plans to brandish sticks, not carrots, to achieve U.S. trade goals with Beijing.
/goo.gl/DxC8JP

Eight sets of indirect clearing terms published
FIA
FIA recently published eight sets of contractual indirect clearing terms to help clearing firms document indirect clearing arrangements under MiFIR and EMIR. Developed by FIA with Clifford Chance and member firms,the FIA Indirect Clearing Terms supplement contractual terms based on either the 2011 Professional Client Agreement or the soon-to-be-launched 2018 Terms of Business.
/goo.gl/S8Rjno

Exchanges, OTC and Clearing

TMX’s Shorcan Announces Cryptocurrency Initiatives; Shorcan DCN to team up with Paycase Financial to provide cryptocurrency brokerage services and create global data products
TMX
MX Group today announced that its wholly-owned subsidiary, Shorcan Digital Currency Network (Shorcan DCN) has entered into an agreement with Paycase Financial (Paycase), a Toronto-based, value network and trustware provider for decentralized financial services, most widely known for their mobile-first remittance platform, to launch a new cryptocurrency brokerage service focused on Bitcoin and Ether. BMO Financial Group will provide Shorcan DCN with banking services as part of the payment and settlement infrastructure.
/goo.gl/Hgmbfb

CME Group Announces University of Texas Rio Grande Valley Wins 15th Annual Trading Challenge
PRnewswire
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the winners of its 15th annual CME Group Trading Challenge, including the first-place winners from The University of Texas Rio Grande Valley (UTRGV).
prn.to/2ucLBc1

B&S Group celebrates first day of trading on Euronext
Euronext
B&S Group (ticker symbol: BSGR), a global distribution partner for consumer goods, began trading on Euronext Amsterdam today. The listing follows the company’s Initial Public Offering (IPO), with a total offering of EUR 358 million.
/goo.gl/gMYhtS

Media Lab get listed on Euronext ACCESS; Euronext welcomes its newest addition to its European Tech SME initiative with the listing of the Italian company, Media Lab.
Euronext
Euronext today announced the listing of the dental technology company, Media Lab, on Euronext ACCESS.
/goo.gl/XfLxy4

Introducing a new client type: Eurex “Specified Client”
Eurex
Within our capital asset protection options, Eurex Clearing offer customers a variety of client types to accommodate risk appetite and individual capital requirements. Clients, here a client of a Clearing Member, can be either undisclosed or disclosed (i.e. known) to Eurex Clearing. Depending on the client type, varying levels of position segregation and asset protection can be achieved. In response to client demand, Eurex Clearing has introduced a new, simpler, client type. This new setup will significantly shorten onboarding timelines and ease the operational burden of onboarding clients to Eurex Clearing.
/goo.gl/Qinbcg

Amendments to the Clearing Conditions and the Price List of Eurex Clearing AG; Consultation on amendments to Special Provisions
Eurex
This circular contains information with respect to Eurex Clearing’s service offering and corresponding amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) and the Price List of Eurex Clearing AG (Price List) regarding the following topics:
/goo.gl/f8UXGz

DWS Group listed on the Frankfurt Stock Exchange today; Asset manager listed in the Prime Standard / First Price: 32.55 euros
Eurex
DWS Group GmbH & Co. KGaA (ISIN: DE000DWS1007 ) is listed in the Prime Standard on the Frankfurt Stock Exchange today. The shares of the asset manager listed at the start of trading at 32.55 euros. The issue price was 32.50 euros.
/goo.gl/Bd3LZF

ELITE Club Deal supports eToro in raising $100 million
London Stock Exchange Group
ELITE Club Deal, London Stock Exchange Group’s private placement platform for ELITE companies and professional investors, today announces the completion of its first equity transaction. Supported by ELITE Club Deal, with Rothschild acting as the exclusive financial adviser, social trading and investment platform, eToro, secured $100 million of additional investment. The investment was led by China Minsheng Financial and participated in by SBI Group, Korea Investment Partners, World Wide Investment Company Limited and other investors. The funding will support eToro’s expansion into new markets, as well as its continued research into and development of blockchain technology and the digitisation of assets.
/goo.gl/jxEKHA

HKEX to Reduce Multipliers of 10 Stock Futures Contracts
Products
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) will reduce the multipliers of 10 of its stock futures contracts in two batches next month (April 2018) to align the contract sizes of the stock futures and the corresponding stock options.
/goo.gl/fxrnSM

Fintech

ION Investment Group completes acquisition of Openlink
Openlink Financial LLC
ION Investment Group announced today that it completed its acquisition of Openlink Financial, a global provider of trading and risk management solutions. Financial terms were not disclosed.
/goo.gl/7Ls7xx

Duco Launches Big Data Platform for Analytics
BusinessWire
Duco, the data engineering technology company, today announced the launch of the Duco Cube Data Platform. This extension of Duco Cube, the cloud-based normalization and reconciliation system, enables users to access up to ten years’ worth of results and exception data via a Hadoop-based big data infrastructure. Clients can easily connect in-house or third-party tools, such as Tableau, Power BI and QlikView, for monitoring, trend analysis, reporting and analytics. Three customers are already live on the platform.
bit.ly/2IJ9KKD

MiFID II: Illuminating the Dark
Denver Currie, Product Manager – Vela
MiFID II is already more than two months old, but while Systematic Internalisers (SIs) and Approved Publication Arrangements (APAs) create a framework to improve transparency, firms need the right technology to navigate the post January 3rd marketplace.
bit.ly/2IJWHsr

Sterling Trading Tech Names Andrew Actman New Director of Business Development
PRNewswire
Sterling Trading Tech (STT) is pleased to announce the appointment of new Director of Business Development, Andrew Actman. Mr. Actman joins the STT team to lead STT’s products and services growth initiatives throughout the industry.
prn.to/2ubvfQZ

Liquidnet adds best ex analytics to Virtual High Touch suite; Liquidnet ‘Best Ex Replay’ tool allows traders to replay market conditions at time of execution to help meet MiFID II best execution requirements.
Hayley McDowell – The Trade
Liquidnet has launched a best execution analytics tool to its Virtual High Touch (VHT) suite allowing traders to recall market conditions at the time of execution.
/goo.gl/pM5ygv

HSBC joins major banks with Visible Alpha investment; HSBC becomes latest financial backer for investment research platform alongside Goldman Sachs, BNP Paribas Exane and Wells Fargo.
Hayley McDowell – The Trade
Research platform provider Visible Alpha has added HSBC to its list of investors following a $38 million funding round in January.
/goo.gl/2ojsw2

Opinion: Financial data should be as free to transfer as your mobile phone number; Give bank customers ownership of their own financial records
Kathryn Petralia – MarketWatch
As fintech companies expand access to online financial services and innovative offerings, their activities are generating an increasingly rich stream of data about Americans’ financial lives.
/goo.gl/k2BtoZ

Cryptocurrencies

JPMorgan working on potential spin-off of main blockchain project
Martin Arnold and Ben McLannahan – FT
JPMorgan Chase is working on a potential spin-off of its main blockchain technology project after the biggest US bank by assets decided it was more likely to achieve widespread adoption as an independent operation.
/goo.gl/CixqyX

Inside the bizarre upside-down bankruptcy of Mt. Gox
Adrianne Jeffries – The Verge
Every six months for the past four years, some number of former customers of the defunct Mt. Gox bitcoin exchange have gathered in a small room in a Tokyo courthouse to hear an update from Nobuaki Kobayashi, the stoic Japanese attorney appointed as the trustee for the case.
/goo.gl/Mivuvn

Crypto Finds a Friendly EU Island in the Sun
Yuji Nakamura – Bloomberg
Binance to announce banking partnership in Malta: Zhao; Move to Europe comes after crackdowns in Japan, China
Binance, the world’s largest cryptocurrency exchange by traded value, is seeking a fresh start in the Mediterranean.
/goo.gl/A6gfyk

Enough About Cryptocurrency. Let’s Talk About Virtual Cats
Eric Newcomer – Bloomberg
We spend way too much time talking about digital currencies and not nearly enough time on digital cats.
/goo.gl/ZqEQqa

Former Google employee wants to apply blockchain to pigs and hotel bookings; Taiwan wants to ensure it isn’t left behind as companies from US to China race to unlock the potential of blockchain technology
Cindy Wang – The Independent Online
A Taiwanese startup led by a former Google employee intends to employ the same technology that underpins bitcoin and ethereum to shake up animal husbandry and travel.
/goo.gl/9JKHTU

Politics

Trump has been summoned in a lawsuit alleging that he’s violating the Constitution
Allan Smith – Business Insider
President Donald Trump was issued a summons in a lawsuit filed by the attorneys general for both Maryland and Washington, DC, alleging he is violating the Emoluments Clause of the Constitution.
/goo.gl/pUUxVP

Blankfein Says He Appreciates How Trump Skirts the Media on Twitter
Max Abelson, Dakin Campbell – Bloomberg
One of Lloyd Blankfein’s inspirations for joining Twitter: Donald Trump. “It’s on ly with some great trepidation I’d say anything positive about the president in this crowd, or any crowd,” Goldman Sachs Group Inc.’s chief executive officer said at an event in Boston. “But I would say that one of the things I admire is the way he disintermediated the press. I mean, really, you have to say it.”
/goo.gl/WKAYK5

Trump’s Lies Will Keep Failing in Court; His voter fraud shtick just blew up. Are immigration claims next?
Francis Wilkinson – Bloomberg
The truth still matters somewhere. In November 2016, after Donald Trump had issued his feeble lie that millions of illegal ballots cost him the popular vote, Kansas Secretary of State Kris Kobach came to the aid of the president-elect’s damaged pride. Trump, said Kobach, was “absolutely correct” about the existence of these phantom voters.
/goo.gl/ZV66E3

Exclusive: Democrats plan crackdown on booming stock buybacks
Matt Egan – CNN
Democrats in Congress want to rain on Wall Street’s buyback parade.
Senator Tammy Baldwin plans to introduce a bill on Thursday that would prohibit companies from repurchasing their shares on the open market, Baldwin told CNNMoney.
/goo.gl/kD49yv

The Investor Visa Program Should Be Scrapped; It’s widely misused and failing to work as intended.
Editorial Board – Bloomberg
The omnibus spending bill currently before Congress includes a small but ill-conceived program that deserves to be noticed, then deleted. The EB-5 Regional Center program that gives visas to investors invites abuse and is failing to do what it’s meant to.
/goo.gl/sKrmoi

Congress Passes Mammoth Spending Bill, Averts Shutdown; The $1.3 trillion budget bill now goes to President Donald Trump for his signature
Kristina Peterson and Siobhan Hughes – WSJ
The Senate passed a $1.3 trillion spending bill early Friday, acting to avert a government shutdown with less than 24 hours to spare and bringing to a close a messy negotiating process over the sprawling measure.
/goo.gl/TW6hnm

Trump Fundraiser Offered to Help Lift Sanctions on Russian Firms
Zachary Mider, david Voreacos – Bloomberg
Elliott Broidy proposed work for clients of Moscow lawyer; Pre-inauguration discussions didn’t lead to Broidy’s hiring
Elliott Broidy, a top fundraiser for President Donald Trump, offered last year to help a Moscow-based lawyer get Russian companies removed from a U.S. sanctions list.
/goo.gl/r1Wj8M

Regulation

Commissioner Behnam Statement on the CFTC Budget Cut
CFTC
Commodity Futures Trading Commission (CFTC) Commissioner Rostin Behnam issued the following statement on the congressional budget proposal that reflects a decrease in the CFTC’s funding level:
/goo.gl/MS7DuM

UK Fintech Sector Strategy Launched At International Fintech Conference
Mondovisione
A new cryptoassets task force, the next steps in ‘robo-regulation’ and a UK-Australia ‘fintech bridge’ are in the government’s first Fintech Sector Strategy.
bit.ly/2G4PAJc

Top UK bank executive dubbed regulatory official ‘little lady’, FCA says; Watchdog reveals anecdote as it pledges to boost gender equality in finance
Caroline Binham – FT
A top executive at one of the UK’s biggest banks called a regulatory official “little lady” during a recent supervisory visit, the Financial Conduct Authority revealed.
/goo.gl/Fg5Meu

British and Australian regulators strengthen cooperation on fintech through Enhanced Cooperation Agreement
ASIC
The United Kingdom’s Financial Conduct Authority (‘FCA’) and ASIC have signed an Enhanced Cooperation Agreement between their Innovation Hubs to extend their existing agreement of cooperation and coordination on fintech innovation. This agreement forms part of the broader Fintech Bridge signed by the UK Chancellor of the Exchequer and the Australian Treasurer.
/goo.gl/mK5Nfm

ESMA updates MiFID/MiFIR investor protection Q&As
ESMA
The European Securities and Markets Authority (ESMA) has included 7 new or updated items in its Questions and Answers (Q&A) document on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR).
/goo.gl/4wTnjy

ESMA updates the CSDR Q&As
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding the implementation of the Central Securities Depository Regulation (CSDR).
/goo.gl/ZjHZvr

ESMA updates its market abuse Q&As
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) on the implementation of the Market Abuse Regulation (MAR). The purpose of the Q&A document is to promote common supervisory approaches and practices in the application of MAR and its implementing measures.
/goo.gl/Jyw4ik

Podcast: CFTC Talks EP035: PWC Julien Corbe
CFTC
This week on CFTC Talks, we bring on PwC’s Julien Corbe, who leads their US Financial Services Advisory…
/goo.gl/Qh6USM

Australia’s big banks broke laws and failed public, inquiry reveals
Paulina Duran – Reuters
Australia’s top banks routinely and repeatedly breached laws when issuing home loans, credit cards and other consumer loans, according to a scathing summary of the first round of hearings at the country’s inquiry into financial misconduct.
/goo.gl/cQbNkq

Investing and Trading

Money Markets Are Messed Up, With Real Consequences; Banks are paying more to borrow money now than during the 2012 euro crisis, a sign of trouble ahead
James Mackintosh – WSJ
The Federal Reserve raised rates just 0.25 percentage point this week, but distortions in the money markets mean many borrowers are seeing their interest rates rise far faster.
/goo.gl/mmA2xe

Volatility Swings Reach New Milestone; Cboe Volatility Index rose as much as 27% Thursday
Asjylyn Loder – WSJ
Wall Street’s fear gauge has hit a record-breaking bout of turbulence. The Cboe Volatility Index, a measure that investors use to track the speed and severity of market moves, rose as much as 27% Thursday as U.S. stocks fell for a second consecutive day.
/goo.gl/zJHFJj

Commodity traders eye digital disruption and consolidation; Highlights from the seventh annual Financial Times Commodities Global Summit
Neil Hume, Anjli Raval and Emiko Terazono – FT
Digital disruption, decarbonisation and consolidation were the key themes to emerge as the world’s most powerful commodity traders and miners gathered in Lausanne for the seventh annual Financial Times Commodities Global Summit.
/goo.gl/MVfz32

Noncompete Agreements Take a Toll on the Economy; States are starting to wise up and restrict them. It worked out well for California.
Noah Smith – Bloomberg
Despite sky-high housing prices, Silicon Valley remains the vital center of the U.S. tech industry. Once an industry takes root in a particular place, it’s very hard to pull it away. Which makes it all the more important to understand: Why did Silicon Valley become Silicon Valley in the first place?
/goo.gl/JKQ4M3

Institutions

Deutsche Bank’s DWS puts IPO price at EUR32.50 a share
Olaf Storbeck – Financial Times
Deutsche Bank has priced the initial public offering of its asset management arm DWS at EUR32.50 a share, slightly below the mid-point of its target range of EUR30 to EUR36 a share, Germany’s largest lender said in a statement on Thursday evening.
on.ft.com/2IHDyY0

Deutsche Bank floats asset management arm despite shaky markets
Olaf Storbeck in Frankfurt – FT
Deutsche Bank’s asset management arm has listed in Frankfurt despite fragile market conditions.
/goo.gl/Q2wsW5

Goldman Sachs CEO says sovereign balance sheets look risky
Tim McLaughlin – Reuters
Goldman Sachs Group Inc Chief Executive Lloyd Blankfein said on Thursday sovereign country balance sheets look risky to him as deficits become a larger percentage of their gross domestic product.
/goo.gl/nNoM36

Citigroup Sets Restrictions on Gun Sales by Business Partners
Tiffany Hsu – NY Times
Citigroup is setting restrictions on the sale of firearms by its business customers, making it the first Wall Street bank to take a stance in the divisive nationwide gun control debate.
nyti.ms/2ILgPdy

Biggest Three Banks Gobble Up $2.4 Trillion in New Deposits Since Crisis; Now that many transactions are done online or through smartphones, customers are increasingly choosing national banks
Rachel Louise Ensign – WSJ
Americans are parking more money with the biggest banks than ever before, cementing the firms’ dominance of the financial industry less than a decade after the 2008 crisis.
/goo.gl/tLgwa8

Fallen-Angel ETF Takes the Hunt for Downgraded Bonds Global
Yakob Petersell – Bloomberg
Global version of fund targeting downgraded debt lists today; U.S. version has outperformed junk and high-grade markets
One of the best-performing exchange-traded bond funds in the U.S., which hunts for corporate credits newly downgraded to junk, is shaking off its domestic focus and going global.
/goo.gl/zJUvEh

Blankfein Says His Goldman Departure Must Come Before He’s Ready
Dakin Campbell – Bloomberg
Lloyd Blankfein said a lack of clear options for a second career means he’ll need the resolve to relinquish his post atop Goldman Sachs Group Inc. before he has something else lined up.
/goo.gl/2zW5TF

Credit Suisse boosts management pay under revamped plan; Top staff to receive 5.5% increase despite $1bn loss
Laura Noonan in London – FT
Credit Suisse is planning to award its top executive team about SFr115m in 2018 under a revamped incentive plan that would pay them more than proposals that last year met with sharp resistance from shareholders.
/goo.gl/k7Vc8F

Regions

Insider-Trading Paradise: Where No One Worries About Jail Time
Michelle Davis – Bloomberg
Mexico has made insider-trading fines public only since 2008; Only Colombia has a worse enforcement record in Latin America
A stock plunges just before bad news hits, or soars ahead of a bullish headline. On Wall Street, that sounds like it could be insider trading. In Mexico, it’s more like business as usual.
/bloom.bg/2IMqJfe

Nobody Knows Anything About China
James Palmer – Foreign Policy
As a foreigner in China, you get used to hearing the retort “You don’t know China!” spat at you by locals. It’s usually a knee-jerk reaction to some uncomfortable modern issue or in defense of one of the many historical myths children in the mainland are taught as unshakeable facts about the world. But it’s also true. We don’t know China. Nor, however, do the Chinese ó not even the government.
/goo.gl/Z7LrXf

From Boeing to Soybeans, China Has a Long Retaliation List
Bloomberg News
Donald Trump plans tariffs on $50 billion of Chinese goods; China announces tariffs on $3 billion of U.S. exports
China’s $3 billion counter punch to Donald Trump’s tariffs is just the first move from the world’s second-largest economy. History suggests it won’t be the last.
/goo.gl/2N8qwD

Investor Who Won Big Betting on Housing Collapse Falters With China Bets; Kyle Bass says ‘the subprime market was similar to what is happening in China today’
Chelsey Dulaney – WSJ
A decade after the financial crisis, The Wall Street Journal has checked in on dozens of the bankers, government officials, chief executives, hedge-fund managers and others who left a mark on that period to find out what they are doing now. Today, we spotlight former Treasury Department administrator Neel Kashkari and hedge-fund manager Kyle Bass.
/goo.gl/jzfoiZ

Brexit

Morgan Stanley Said to Relocate 80 Jobs to Paris After Brexit
Gavin Finch – Bloomberg
Bank will add jobs in various EU cities, with hub in Frankfurt; About 300 roles in total will be moved out of London
Morgan Stanley plans to relocate as many as 80 U.K.-based roles to Paris in the years after Brexit, according to a person with knowledge of the bank’s contingency arrangements.
/goo.gl/9TgSxQ

EU leaders agree to Brexit transition; Guidelines for negotiating future relationship adopted in matter of minutes
George Parker, Mehreen Khan and Jim Brunsden – FT
European leaders on Friday agreed to extend Britain’s de facto EU membership until the end of 2020, backing a transition deal to smooth the implementation of Brexit.
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