U.K. Court Calls Johnson’s Parliament Suspension ‘Unlawful’

Sep 24, 2019

First Read

Hits & Takes
By JLN Staff

Another AFX volume record: The American Financial Exchange (AFX), home of AMERIBOR, announced a weekly volume record of $13.017 billion for the week of September 16 – 20, traded across all AFX products. This is a 20% increase over the previous weekly volume record of $10.82 billion set the week of April 15 – 19, 2019.~SR

Binance, one of the biggest cryptocurrency exchanges in the world, has opened a U.S. branch. According to an announcement published yesterday, Binance’s U.S. trading platform will now support deposits for Cardano (ADA), Basic Attention Token (BAT), Ethereum Classic (ETC), Stellar (XLM) and 0X (ZRX). For now, only deposits are accepted, but the exchange says that withdrawals will be available, as well as full trading services for 13 fiat-to-crypto and crypto-to-crypto trading pairs, in all but 13 states of the U.S. Binance sure seems to like the number “13,” doesn’t it?~MR

EOS, currently the 7th biggest cryptocurrency by market cap, just underwent its first major systemwide upgrade, called a fork, yesterday. EOS has been struggling lately because a large number of programmers formerly dedicated to working on the coin’s digital ecosystem got fed up and left; apparently, nobody’s using it, so those making apps for EOS aren’t making any money. On top of that, the pseudo-decentralized nature of the EOS blockchain has gotten so consolidated, its miners (or the EOS equivalent of them) aren’t making money, either.~MR


Are we truly capitalists?
Bertrand Piccard – Solar Impulse Foundation
The version of capitalism that has dominated global markets for the last half-century is being rightfully questioned as never before. Whilst over a billion people have been pulled out of poverty over the last generation, our economic system has also contributed to skyrocketing inequalities, social unrest, political instability, and put us on the verge of a climate catastrophe which will exacerbate all the rest.

*****I hate labels. The one label I will accept is human being.~JJL


Former Sydney Futures Exchange CEO Les Hosking Joins FEX Global Executive Team
Press Release
The Board of FEX Global is pleased to announce the appointment of Mr. Les Hosking as a senior member of the Executive Team effective today. Mr Hosking has been appointed as Group Executive of Market Infrastructure, and will assist FEX Global in finalising preparation for the launch of the FEX Global Energy, Environmental and Commodities Futures Market, and continue in an ongoing role in the development of FEX.

***** Our friends at FEX bag a big catch for their team.~JJL


The Growing Threat to Journalism Around the World; In many countries, journalists are being targeted because of the role they play in ensuring a free and informed society.
A. G. Sulzberger – The New York Times.
This Op-Ed was originally delivered as a talk at Brown University on Monday. Our mission at The New York Times is to seek the truth and help people understand the world. That takes many forms, from investigations on sexual abuse that helped spark the global #MeToo movement; to expert reporting that reveals how technology is reshaping every facet of modern life; to important and hard-hitting cultural commentary, like when we proclaimed “the Aperol spritz is not a good drink.”

*****Speaking truth to power takes courage.~JJL


We have liftoff: an important milestone for the industry
Kelly Loeffler – Bakkt via Medium
With today’s successful launch of the Bakkt Bitcoin Futures contracts, we have taken an important step toward bringing trusted infrastructure to digital assets. As institutions enter this emerging asset class, they will continue to look to secure infrastructure and the regulatory certainty that it provides. Importantly, these futures contracts now serve as benchmarks established by a trusted price discovery process upon which investors can rely.

*****Best of luck to the Bakkt team and congratulations on the launch. Now if I only knew who Satoshi Nakamoto really was.~JJL


The Hidden Treasure in Treasury Trading
Alastair Hawker, Quantitative Brokers (QB)
The importance of the US Government Bond market cannot be overstated. As the Federal Reserve itself has ?described?: “It is widely regarded as the deepest and most liquid securities market in the world, playing a critical role in the global economy and in the Federal Reserve’s implementation of monetary policy.”

*****QB has run the numbers. Worth listening.~JJL


If world leaders choose to fail us, my generation will never forgive them
Greta Thunberg – The Guardian
We are in the middle of a climate breakdown, and all they can talk about is money and fairytales of eternal economic growth. This is all wrong. I shouldn’t be standing here. I should be back in school on the other side of the ocean. Yet you all come to me for hope? How dare you! You have stolen my dreams and my childhood with your empty words. And yet I’m one of the lucky ones. People are suffering. People are dying. Entire ecosystems are collapsing. We are in the beginning of a mass extinction. And all you can talk about is money and fairytales of eternal economic growth. How dare you!

*****Powerful words from an important voice.~JJL


Sponsored Content

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Monday’s Top Three
Our top read story of the day was about the president and the interesting take on what might get him impeached. Politico’s Trump Didn’t Bribe Ukraine. It’s Actually Worse Than That. Second was The New York Post’s Bond King Bill Gross in postage stamp feud with rocker son. Gross wants to sell a postage stamp called an “Inverted Jenny,” which is far less interesting than the name may imply. Third was The Wall Street Journal’s piece on central bank cryptocurrencies in The Coming Currency War: Digital Money vs. the Dollar


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Lead Stories

U.K. Court Calls Johnson’s Parliament Suspension ‘Unlawful’
Jonathan Browning, Jeremy Hodges, and Franz Wild – Bloomberg
Supreme court in unanimous ruling on Parliament’s return; Hale says both houses should return as soon as possible
The U.K.’s top judges inflicted an unprecedented legal defeat on Prime Minister Boris Johnson, branding his controversial decision to suspend Parliament unlawful and calling on lawmakers to return to Parliament as soon as possible.

The Man Behind an Audacious Bid for the London Stock Exchange Isn’t Giving Up
Viren Vaghela, Kiu Yan Wong, and Benjamin Robertson – Bloomberg
HKEX needs to convince investors to accept bid for LSE; CEO Li has often succeeded with seemingly outlandish plans
Charles Li is at it again: trying to persuade doubters that a one-time oil rigger who grew up on the fringes of the Gobi desert is the right buyer for a centuries-old British institution.

Bitcoin Falls as Futures Exchange Makes Its Trading Debut
Matthew Leising – Bloomberg
ICE offers first U.S. contract to settle in actual Bitcoin; Bakkt data shows that 38 one-day contracts issued so far
The first Bitcoin futures contracts that settle in the digital currency debuted Monday in thin trading, starting a new chapter in the coin’s tumultuous 10-year history.

Euronext FX launches in Singapore
Singapore, New York and London – 23 September 2019 – Euronext today announces the successful launch of Euronext FX in Singapore. Having been first announced on 26 March 2019 for a target launch date of Q4 2019, the venue was launched months ahead of schedule, with the first spot foreign exchange trades occurring on 09 September 2019 between two global banks.

Hong Kong Bourse Said to Tap UBS, HSBC to Court LSE Shareholders
Jan-Henrik Foerster, Viren Vaghela, and Dinesh Nair – Bloomberg
Credit Suisse has also helped arrange LSE investor meetings; Hong Kong bourse trying to undercut LSE’s Refinitiv deal
Hong Kong Exchanges & Clearing Ltd. has started working with UBS Group AG and HSBC Holdings Plc as it begins its charm offensive to convince London Stock Exchange Group Plc investors on the merits of its takeover bid, people familiar with the matter said.

LCH connects ForexClear to State Street’s FX Connect TradeNeXus; LCH and FX Connect integration will offer buy-side users straight through processing access to ForexClear clearing services.
Hayley McDowell – The Trade
LCH ForexClear has become the first clearinghouse to integrate with State Street’s institutional FX trading platform to allow buy-side users direct access to LCH’s services.

LSEG chief labels Shanghai the centre for China markets amid HKEX takeover bid; David Schwimmer, CEO of LSEG, bets on the future of Shanghai, as HKEX chief Charles Li, makes the case for the mega-merger at Sibos.
Hayley McDowell – The Trade
Shanghai will be the long-term financial centre in China, according to the London Stock Exchange Group (LSEG) chief executive, as Hong Kong Exchanges & Clearing (HKEX) continues its pursuit of the UK exchange group.

London Stock Exchange CEO Takes a Swipe at Hong Kong
Viren Vaghela and Benjamin Robertson – Bloomberg
Schwimmer and HKEX boss both speak at same London conference; CEOs disagree on likelihood of China relaxing capital controls. London Stock Exchange Group Plc Chief Executive Officer David Schwimmer took an indirect swipe at his unwanted Hong Kong suitor, championing Shanghai as China’s financial center.

Germany’s No. 2 Exchange Launches Bitcoin Spot Trading
William Foxley – Coindesk
Exchange Boerse Stuttgart, Germany’s second-largest stock exchange, has opened a regulated trading venue for digital assets, the company said.

Fighting SEC Over Cryptocurrency, Kik Shuts Chat App; Canadian social-media company lays off most of its staff as it flights U.S. claims that it illegally raised capital
Steven Russolillo – WSJ
Canadian social-media company Kik Interactive Inc., which is fighting U.S. claims that it illegally raised capital, said it would shut its messaging app and lay off most of its staff.

Repo-Market Tumult Raises Concerns About New Benchmark Rate; Volatility in funding markets sparks a jump in the rate that the Fed has proposed to replace Libor
Daniel Kruger and Vipal Monga – WSJ
The tumult in the market for short-term cash loans highlights some analysts’ concerns about the Federal Reserve’s proposed replacement for the troubled London interbank offered rate. The secured overnight financing rate, known as SOFR, rose to a record 5.25% last week, according to the Federal Reserve Bank of New York, pulled higher by a jump in borrowing rates for overnight repurchase agreements, or repos.

Why the index fund ‘bubble’ should be applauded; High profits of active managers are unlikely to survive the rise of passive funds
Robin Wigglesworth – FT
Thanks to Hollywood, the protagonists of Michael Lewis’s The Big Short enjoy mainstream fame that most financiers can only dream of. But celebrity and clairvoyance are rarely positively correlated.

Hedge funds caught up in a talent war; DE Shaw’s legal battle with a former star manager shows the risks of open conflicts with one-time money-spinners
Lindsay Fortado and Robin Wigglesworth – FT
The legal war between one of the world’s biggest and most secretive hedge funds and one of its former star money managers saw an unlikely new front open up this year: the exclusive Hudson National Golf Club in Westchester.

NY Fed president Williams urges shift away from Libor; Central banker says banks should resist ‘sticking their metaphorical heads in the sand’
Colby Smith and Joe Rennison and Philip Stafford – FT
New York Federal Reserve President John Williams warned financial firms against “sticking their metaphorical heads in the sand”, as a deadline to replace the scandal-tainted Libor benchmark approaches.

Thomas Cook’s Death Is Pure Ernest Hemingway; The company went bankrupt gradually, then suddenly.
Andrea Felsted and Chris Bryant – Bloomberg
In May 2018 Thomas Cook Group Plc’s shares traded as high as 146p, its 2023 bonds yielded a modest 3.5% and analysts were mostly very positive about its prospects. So how did the company go bust barely 16 months later and who’s to blame? To borrow a phrase from Ernest Hemingway, Thomas Cook went bankrupt gradually, then suddenly.

Struggling Farmers See Bright Spot in Solar; Panels take land out of crop production but generate energy revenue. ‘Solar becomes a good way to diversify.’
Kirk Maltais – WSJ
U.S. farmers are embracing an alternative means of turning sunlight into revenue during a sharp downturn in crop prices: solar power.

Exchanges, OTC and Clearing

American Financial Exchange® Announces AMERIBOR® Benchmark Weekly Volume Record Over $13B
The American Financial Exchange (AFX), electronic exchange for direct interbank lending and borrowing for American financial institutions, announced a weekly volume record of $13.017 billion for the week of September 16 – 20, traded across all AFX products. This surpasses the previous weekly volume record of $10.82 billion set the week of April 15 – 19, 2019, marking a 20 percent increase.

MIAX and MGEX Announce SPIKES® Futures Launch Date
SPIKES Futures (Ticker: SPK) to Launch on MGEX Via the CME Globex® Platform on November 18, 2019
Miami International Securities Exchange, LLC
Miami International Securities Exchange, LLC (MIAX) and the Minneapolis Grain Exchange, Inc. (MGEX), a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), today announced the launch date and the achievement of key milestones for futures on the SPIKES® Volatility Index (SPIKES).

SGX to report 1Q FY2020 results on 24 October
Singapore Exchange (SGX) is reporting its first-quarter (1Q) results for Financial Year 2020 (FY2020) after the market closes on 24 October 2019.

AGM address by the Chairman and the Managing Director and CEO

HKEX Enhances Product Offering with Budweiser Debut
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Tuesday) that it will offer investors more options on Budweiser Brewing Company APAC Limited (Budweiser, stock code:1876) shares on the debut date (30 September 2019).

LCH ForexClear teams up with FX Connect TradeNeXus
LCH, a leading global clearing house, today announced that it is the first clearing house to integrate with FX Connect TradeNeXus, State Street’s FX trading platform that provides exception based automated matching, trade and settlement confirmation enrichment and third party messaging. The new link provides users of TradeNeXus with easy access to ForexClear’s clearing service, while retaining the familiarity and functionality of its existing bilateral services. AllianceBernstein LP, Brandywine Global Investment Management, Standard Chartered Bank, and State Street are among the first firms to collaborate with ForexClear and TradeNeXus on the service.

The Stock Exchange of Thailand and Clearstream are introducing bonds for investment funds
Deutsche Börse Group
The Stock Exchange of Thailand (SET) and Clearstream Banking SA, an international CSD, have today opened a bond for cross-border fund transactions.

STOXX Licenses iSTOXX® Global Cities of Tomorrow Select 30 Index to Citi
Deutsche Börse Group
STOXX Ltd., the global index provider of Qontigo, has licensed the iSTOXX® Global Cities of Tomorrow Select 30 Index to Citi. It forms the underlying for structured products.

Options on VSTOXX® Futures: Reduction of the smallest price change (tick)
The Management Board of Eurex Deutschland decided to reduce the smallest price change (tick) for options on VSTOXX® Futures (OVS2) from 0.05 index points to 0.025 index points.

10 years of political support for regulated trading and clearing; The importance of the 2009 G20 Summit in Pittsburgh for the financial industry and Eurex.
Ten years ago today, on 24 September 2009, the G20 met in Pittsburgh. Another city, another summit, you may think. This particular summit came not long after the financial crisis and finished with a leader’s statement that has had significant impact on the financial industry and for us at Deutsche Börse Goup and Eurex in particular.

Melania Trump Found 10 Kids to Join Her at the New York Stock Exchange; “Someone else was supposed to be here, but their parents didn’t want them,” one child reportedly said.Ke
Kenzie Bryant – Vanity Fair
Despite protest and parent emails both public and private, Melania Trump took a group of 10 students from New York City’s United Nations International School to ring the bell at the stock exchange at 9:30 Monday morning. The Cut had reported that the school’s parents were in an uproar after they received an invitation from the junior school principal for a “unique opportunity” for some students “to tour the Stock Exchange and participate in ringing the opening bell with the First Lady of the United States, Melania Trump.”


Special Report: Future of Fintech
Retail banks hyper-target customers with personalised products and perks. Plus: how AI is cutting the cost of insurance claims; digital upstarts eye US banks’ core services; Singapore takes ‘cutting edge’ stance to expand finance hub; blockchain’s failed promise; Islamic fintech pioneers seek growth through creativity.

Digital upstarts muscle in on US core banking services; Big banks defend lucrative customer relationships from Silicon Valley and overseas platforms
Laura Noonan – FT
Main Street’s biggest banks have grown familiar with conceding market share to hungry upstarts venturing into arenas that were once the preserve of the regulated few.

Singapore expands fintech to stay ahead of other financial centres; Monetary Authority chief says city state’s ‘cutting edge’ law balances regulation and innovation
Stefania Palma – FT
Under Ravi Menon’s leadership, the Monetary Authority of Singapore has been praised for nurturing innovation without sacrificing security, and helping the city state become one of the world’s most advanced financial centres and an attractive hub for fintech start-ups.

No Banking Charter? No Problem. Fintechs Team Up With Small-Town Banks
Julie Verhage – Bloomberg
Customers of Square Inc., the Silicon Valley payments behemoth, might assume that the cash they send to friends on the platform is housed in a glassy building in Silicon Valley, tended to by hoodie-clad tech workers. Actually, that money is more likely to be sitting in a 117-year-old community bank in Iowa.

CloudMargin Named to The FinTech50 2019 List of Leading Innovative Fintech Companies in Europe
Prestigious List Chosen from 2,000 Firms by International Panel of Experts
Press Release
CloudMargin, creator of the world’s first and only collateral and margin management solution native to the cloud, announced today that the company was named to The FinTech50 2019 list of the leading innovative fintech firms in Europe. An international panel of experts included CloudMargin as one of the hottest 50 European fintechs to watch this year.


Blockchain: disillusionment descends on financial services; Too many projects started with the technology rather than the solution
Jemima Kelly – FT
Blockchain was going to make banks irrelevant and allow the world to “be [its] own bank”. Then, it was going to help those very same banks save tens of billions of dollars a year in infrastructure costs, transform the way they process transactions, and create new revenue streams. Some even claim

Crypto Exchange Binance Awarded ISO Security Accreditation
Daniel Palmer – Coindesk
Binance, the top cryptocurrency exchange by trading volume, says it’s been awarded an information security accreditation after meeting standards set out by the International Organization for Standardization (ISO).

For Desperate Mt Gox Victims, Long-Shot Bitcoin Deal Beats Endless Wait
Anna Baydakova – Coindesk
A Russian law firm’s audacious proposal for recovering up to $2 billion stolen from Mt. Gox in return for a steep fee has divided the failed bitcoin exchange’s creditors.

Bitfinex relaunches IEO platform with retooled structure and tech
The Block Crypto
Bitfinex has relaunched its token platform as “Bitfinex Token Sales,” with an inaugural sale from monetization blockchain network K.im. This comes after the first iteration of the platform, Tokinex, was stalled when its primary funder Ethfinex split from sister company Bitfinex in a management buyout.

Kik is reportedly considering shutting down its messaging app, sending layoff notices to Kin employees
The Block Crypto
Kik Interactive, the Ontario-based startup behind popular mobile messaging app Kik, is considering shutting down the app, according to a report by local media outlet Calcalist. Citing anonymous sources, Calcalist is reporting that Kik Interactive is moving Kik app users to alternative platforms

Fidelity-backed crypto custody provider KNØX launches today, claiming to provide up to 100% insurance via Marsh
Yogita Khatri – The Block Crypto
A new Canada-based cryptocurrency custody provider has entered the marketplace today, claiming to provide up to 100% insurance coverage for clients’ assets. KNØX, which is backed by Fidelity Investments Canada, has officially launched, according to an announcement Tuesday. The startup said it recently raised $6.2 million in funding led by Initialized Capital and iNovia, with participation from Fidelity Investments Canada, FJ Labs, and Ferst Capital.

Bitcoin Volatility Falls To Its Lowest Since April
Charles Bovaird – Forbes
Bitcoin, the world’s most prominent digital currency, has been stuck in the doldrums lately, trading within a relatively modest range as altcoins (cryptocurrencies other than bitcoin) experience larger price fluctuations.

Bakkt sees 72 bitcoin futures contracts traded on first day of launch
The Block Crypto
Bakkt, the bitcoin derivatives trading platform, has completed its first full day of trading. The firm saw 71 monthly futures contract and 1 daily futures contract traded through its platform—approximately $711K in notional trading value.

The Libertarians on the Anti-Krugman Cruise Just Want to Be Left Alone
Lizzie O’Leary – Bloomberg
A cruise ship, by its very nature, is a floating monument to capitalism. Thousands of passengers are paying thousands of dollars for the chance to be upsold. Special dinner? Excursion ashore? Botox? All available for a price. Cruises offer distinct fare classes, staff primed to cater to any impulse, and all-day ice cream buffets.

Bakkt’s Bitcoin Futures Already Open to Retail Investors, COO Says
Nikhilesh De – Bloomberg
Well, that was a bit anticlimactic. After two years of work and more than a year of hype and regulatory delays, the Bakkt bitcoin futures market had a lackluster first day of trading.

Bitcoin’s Competitors Are Missing The Point Of Cryptocurrency And Blockchain Technology
Kyle Torpey – Forbes
In a Medium post published earlier this month, Castle Island Ventures Partner Nic Carter explained the utility of Bitcoin (BTC) as a revolutionary alternative to the traditional, government-approved banking system. Additionally, Carter wrote about how the thousands of Bitcoin competitors that have popped up over the years have missed the point of this new technology.

Crypto Startup Sues Exchange Group for $500 Million Over Soured Deal
Nathan DiCamillo – Coindesk
Canadian startup Paycase Global Corp. is suing TMX Group, for breach of contract after the operator of the Toronto Stock Exchange terminated their deal to create cryptocurrency-related products and services.

SEC Charges Adult Entertainment Token Platform With 2017 ICO Fraud
David Pan – Coindesk
The U.S. Securities Exchange Commission charged Jonathan Lucas, 27, the CEO of online adult entertainment marketplace, with running a fraudulent initial coin offering (ICO) scheme.

Binance Seals Accreditation From Global Security Standards Organization
Marie Huillet – Cointelegraph
Cryptocurrency exchange Binance has been awarded an internationally recognized security accreditation, ISO/IEC 27001, following two external audits of its information security systems. The exchange shared news of its accreditation in an official tweet on Sept. 23. The ISO/IEC 27001 standard that underpins Binance’s new accreditation is the international standard that provides the specification for information security management systems (ISMS).

In Rare Deal, Crypto Custodian Wins Insurance on Full Value of Client Assets
Ian Allison – Coindesk
Marsh & McLennan, the world’s largest insurance broker, has arranged an unusually generous and comprehensive insurance program for a new cryptocurrency custodian called KNØX. Unveiled Tuesday, Montreal-based KNØX is courting wealth managers and hedge funds with its cold storage service, in which the cryptographic private keys to a wallet are kept offline.


China Gives New Waivers for Tariff-Free U.S. Soy Purchases
Bloomberg News
Companies receive 2m-3m tons in tariff waivers for U.S. soy; Firms already bought at least 20 cargoes on Monday, people say
The Chinese government has given new waivers to several domestic state and private companies to buy U.S. soybeans without being subject to retaliatory tariffs, according to people familiar with the situation.

Scared Central Banks Face Up to Threats From Climate Change
Jill Ward – Bloomberg
Policy makers are recognizing threats to growth, stability; BOE, Bundesbank and PBOC leading global initiatives on climate
Bank of England Governor Mark Carney was in no mood for laughter as he stood in his tuxedo before the great and good of the British insurance industry.

We’re Likely Headed for Impeachment; House Democrats are fed up with Donald Trump’s lawlessness. Watergate offers a blueprint for what to do next.
Jonathan Bernstein – Bloomberg
Folks, I think the president of the United States is going to be impeached. The signals are clear. First, seven new members of the House, all with national-security backgrounds, published an op-ed Monday demanding that the administration hand over a whistle-blower complaint that reportedly alleges misconduct by President Donald Trump – and saying that impeachment would be the proper response if the reports about the complaint are true. Then two allies of House Speaker Nancy Pelosi said much the same.

Trump Asks Mnuchin Why U.S. Canceled Chinese Farm Visits
Josh Wingrove – Bloomberg
Donald Trump asked his Treasury secretary, Steven Mnuchin, on Monday to explain why the administration requested that a Chinese trade delegation cancel its plans to visit U.S. farms and indicated that he disagreed with the decision.

China Gives New Waivers for Tariff-Free U.S. Soy Purchases
Bloomberg News
Companies receive 2m-3m tons in tariff waivers for U.S. soy; Firms already bought at least 20 cargoes on Monday, people say
The Chinese government has given new waivers to several domestic state and private companies to buy U.S. soybeans without being subject to retaliatory tariffs, according to people familiar with the situation.

Releasing the Ukraine Transcript; The call will leak eventually, so Trump might as well get it out.
The Editorial Board – WSJ
Democrats are having another impeachment moment, and this time they think they have the goods with Donald Trump ‘s phone-call request that Ukraine’s President investigate Joe Biden and his son Hunter for their Ukraine interventions. The best defense for Mr. Trump here is a good offense, specifically releasing the transcript of his call.


ESMA publishes study on the exposure of the EU fund industry to CLOs
Following the significant pickup in the issuance of leveraged loans and collateralised loan obligations (CLOs) in the US and EU, supervisors have expressed concerns about the potential risk to investors.

ESMA updates its financial instrument reference database
The European Securities and Markets Authority (ESMA) released a new version of its Financial Instrument Reference Database (FIRDS) on 23 September 2019.

SEC Charges PwC LLP With Violating Auditor Independence Rules and Engaging in Improper Professional Conduct
The Securities and Exchange Commission today charged accounting firm PricewaterhouseCoopers LLP with improper professional conduct in connection with 19 engagements on behalf of 15 SEC-registered issuers and violating auditor independence rules in connection with engagements for one issuer where the firm performed prohibited non-audit services. The SEC also charged PwC partner Brandon Sprankle with causing the firm’s independence violations. Both respondents have agreed to settle the charges and PwC will pay over $7.9 million in monetary relief.

SEC Charges Nissan, Former CEO, and Former Director with Fraudulently Concealing from Investors More than $140 Million of Compensation and Retirement Benefits
The Securities and Exchange Commission today filed settled fraud charges against Nissan, its former CEO Carlos Ghosn, and its former director Greg Kelly related to false financial disclosures that omitted more than $140 million to be paid to Ghosn in retirement.

EU court strikes down Brussels EUR30m tax ruling against Starbucks; Judge says Vestager failed to prove ‘existence of an economic advantage’ to US company
Mehreen Khan and Javier Espinoza – FT
EU judges have struck down a European Commission order for Starbucks to pay EUR30m in back taxes to the Netherlands, in a blow for Brussels’ state-aid enforcer Margrethe Vestager.

How Carlos Ghosn Hid $140 Million in Compensation From Nissan
Reed Stevenson – Bloomberg
SEC offers most detailed look yet into how pay was concealed; Ghosn still faces charges in Japan as trial to start in 2020
The settlement between the Securities and Exchange Commission, and Nissan Motor Co. and Carlos Ghosn offers a rare glimpse into the steps that were taken to make sure more than $140 million paid to the ex-chairman wasn’t disclosed publicly.

Investing and Trading

FX Global Code of Conduct still missing buy-side buy-in; Over two years since the introduction of the FX Global Code of Conduct, the buy-side continues to keep it at arm’s length say Sibos panel.
John Brazier – The Trade
Take-up of the Global Code of Conduct for the foreign exchange (FX) markets is still lacking among the buy-side community, according to a panel of speakers at this year’s Sibos conference in London.

FX industry urged to better understand flash crashes; Panelists at Sibos in London agreed that flash crashes are more common in markets today, but the industry still lacks understanding.
Hayley McDowell – The Trade
Senior FX market participants have urged the industry to gain a greater understanding of flash crashes, amid warnings that increasing market electronification could see flash crash-type events happen more frequently and with greater impact.

Can I create a trust fund for alternative investment profits? I want to put aside money for my children that I have made by buying and selling jewellery
Lucy Warwick-Ching – FT
I invest in alternative investments, including watches and jewellery, and am becoming quite successful. I would like to channel the profits into a trust for my two young children. Is this the best way to safeguard the money for them?

Oil industry refuses to back away from fossil fuels; Energy groups set up rival gathering on climate change just blocks from UN summit
Gregory Meyer – FT
A who’s who of the global oil industry sketched out a persistent role for fossil fuels on Monday, blocks away from the UN where 66 nations pledged to reach “net zero” carbon emissions by the year 2050.

New York Fed injects $66bn into short-term lending markets; Latest auction shows reduced demand from banks for cash as strains subside
Joe Rennison – FT
The Federal Reserve Bank of New York injected $66bn into short-term lending markets on Monday, building on a series of operations from last week to support the market after a severe bout of turmoil.

Insider stock sales rise to two-decade high in the US; Top executives are looking to cash in on high equity prices as outlook weakens
Richard Henderson – FT
Executives across the US are shedding stock in their own companies at the fastest pace in two decades, amid concerns that the long bull market in equities is reaching its final stages.

Go on ‘High Guard’ Against U.S. Stock Volatility, LPL Warns
Joanna Ossinger – Bloomberg
S&P 500 remains near record as VIX stays below 2019 average; Deutsche Bank, LPL expect elevated stock swings ahead
U.S. stock swings may be poised to increase into the end of September. The Cboe Volatility Index, or VIX, is pushing higher after ending Friday at 15.32 — its greatest level in two weeks. That came on a day with quadruple witching, when options and futures on indexes and equities expire, so extra price swings amid heavier-than-normal volume weren’t that surprising. But a reading just above 15 isn’t terribly volatile when one considers that the markets have endured a spate of central-bank decisions, trade-conflict ups and downs, the attack on Saudi oil facilities, tweets from U.S. President Donald Trump and more.

The World’s Wealthiest Families Are Stockpiling Cash as Recession Fears Grow
Suzanne Woolley and Benjamin Stupples – Bloomberg
Majority surveyed by UBS expect a global recession by 2020; About 42% of family offices say they’re raising cash reserves
Rick Stone, a former partner at Cadwalader, Wickersham & Taft, sees treacherous times ahead for family offices trying to deploy cash.


Deutsche Bank begins prime brokerage migration process with BNP Paribas; The two firms agreed on a deal in principle in July as part of the German bank’s major restructuring and a complete withdrawal from equities trading,
Joe Parsons – The Trade
Deutsche Bank has officially begun the migration process of clients from its prime brokerage and electronic equities business to BNP Paribas.

JP Morgan hits $500 billion in prime brokerage hedge fund balances; JP Morgan has increased prime brokerage balances by 25% over the year, following near-record levels set across the cash and synthetic businesses.
Joe Parsons – The Trade
JP Morgan has surpassed $500 billion milestone in prime brokerage balances, as it looks to become the go-to provider for the world’s largest hedge funds.

HSBC’s Gamble Pays Off as $37 Million Euribor Fine Scrapped
Hugo Miller – Bloomberg
Fine toppled by European bloc’s General Court in Luxembourg; Decision is the latest antitrust setback for EU’s Vestager
HSBC Holdings Plc won its court fight against a 33.6 million-euro ($37 million) European Union antitrust fine for conspiring with other banks to rig the Euribor benchmark, raising questions about whether the fines slapped on other institutions will hold on appeal.

Lloyd’s of London Survey Reveals ‘Shocking’ Sexual Harassment
Gavin Finch – Bloomberg
Insurance market says 8% of respondents witnessed harassment; Women’s answers more negative than men’s for every question
Lloyd’s of London Chief Executive Officer John Neal condemned what he termed shocking sexual harassment in the insurance industry after a survey showed that 8% of its members had witnessed such behavior in the last year alone.

Deutsche Bank’s Top Shareholders Search for New Chair
Deutsche Bank’s top shareholders are taking the unusual step of making their own search for candidates to replace Chairman Paul Achleitner. It’s another sign investor patience is running out amid the lender’s long-running troubles.

Bank Job Cuts Approach 60,000 as Commerzbank Plans to Swing Ax
Nicholas Comfort and Steven Arons – Bloomberg
Job cuts announced by banks this year are approaching 60,000, almost all of them in Europe, where negative interest rates and a slowing economy prompt lenders including Germany’s Commerzbank AG to step up cost reductions.

Credit Suisse to review surveillance ordered on star who defected; Executive joining UBS has raised case with authorities saying he had been followed
Stephen Morris and Sam Jones – FT
Credit Suisse’s board has launched an inquiry into the bank’s decision to hire private investigators to follow a high-flying executive who defected to arch-rival UBS.

Former JPMorgan, Deutsche Bankers Seek $2 Billion for Pot Funds
Kristine Owram – Bloomberg
Silver Spike will launch direct lending, PE and hedge funds; ‘We love messy, choppy markets,’ says CEO Scott Gordon
Former investment bankers from JPMorgan Chase & Co. and Deutsche Bank AG are launching a new cannabis-focused asset manager, betting that the recent plunge in pot stocks is a good entry point to make loans and do private equity deals in the sector.

The German Bank That’s Painfully Honest About Profit; Commerzbank’s new financial targets after the failure of its potential merger with Deutsche Bank are realistic. But they’re depressing too.
Elisa Martinuzzi – Bloomberg
Commerzbank AG, Germany’s second-biggest publicly traded bank, has just unveiled a strategic overhaul that is supposed to secure its future as a standalone company. But even if everything goes well, its new “Commerzbank 5.0” plan foresees meager profitability at best.

Citadel’s Griffin Reaps Windfall From Company’s Bond Sale; Company sold $500 million in investment-grade bonds this month to fund dividend to owners
Juliet Chung and Sam Goldfarb – WSJ
Citadel Limited Partnership sold $500 million in investment-grade bonds earlier this month to fund a dividend to its owners, an unusual move for most hedge funds but the second time in three years Citadel has done so.

KPMG and AlixPartners to oversee Thomas Cook liquidation; The travel company announced it had collapsed after rescue talks failed over the weekend
Emily Horton – Financial News
KPMG, the Big Four auditor, and consultancy AlixPartners have been appointed to oversee the liquidation process of Thomas Cook, after the travel company announced it would dissolve following a failed rescue attempt.


Alibaba wins approval to restructure Ant Financial relationship; Restructuring paves the way for the long-awaited stock market listing of Ant
Louise Lucas – FT
Alibaba has won the green light for the proposed restructuring of its relationship with payments affiliate Ant Financial, more than 18 months after unveiling the deal, and just weeks after chairman Jack Ma bowed out.

BOJ’s Kuroda Expounds on Virtues of Negative Rates
Toru Fujioka – Bloomberg
Bank of Japan Governor Haruhiko Kuroda expounded the virtues of negative interest rates Tuesday in comments that will keep market players on high alert that the central bank will take action in October.

China’s Tech Industry Brings Home the Bacon; Gaming company NetEase is building a pig farm; e-commerce companies think they can use technology to raise pork output
Jacky Wong – WSJ
Chinese technology companies are onto the next pig thing. China’s second-largest gaming company, NetEase , agreed last week to invest 1.5 billion yuan ($211 million) to build a pig farm in Shaoxing, a coastal city south of Shanghai. The farm will produce half a million swine a year, according to the local government’s website.


Trading costs rise after Switzerland’s loss of EU access rights
Price of trading shares in small and mid-cap companies has increased by a fifth, analysis shows
Philip Stafford – The Financial Times
Switzerland’s loss of access rights to EU stock markets has concentrated trading in Zurich while raising costs for buying shares in smaller companies, according to research that sheds light on the potential consequences of Brexit.

Canada’s Manulife opens Dublin office as part of Brexit planning
The asset and wealth arm of Canada’s Manulife Financial Corporation said on Monday it had opened an office in Ireland to expand its European operations and as part of planning for Britain’s exit from the European Union.

Court ruling could throw Johnson’s Brexit plan into more disarray
Estelle Shirbon – Reuters
The UK Supreme Court will say on Tuesday whether Prime Minister Boris Johnson acted unlawfully when he suspended parliament just weeks before Brexit, a ruling that may further complicate his plans to lead his country out of the European Union next month.

Brexit: What just happened in the UK Supreme Court?
BBC News
We keep having to say this about Brexit – we haven’t seen anything like this before. The Supreme Court of the United Kingdom has ruled that the government shut down parliament illegally, just weeks away from the final Brexit deadline. But what does this all mean? And why is this so significant?

Jeremy Corbyn Wins Brexit Showdown With His Labour Party
Stephen Castle – The New York Times
BRIGHTON, England — Jeremy Corbyn, Britain’s left-wing opposition leader, on Monday survived a serious challenge to his noncommittal approach to Brexit, winning a critical vote despite deep divisions at what most analysts expect to be the Labour Party’s last conference before a general election.

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Past Newsletters

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