FIA Asia-V: Facing Challenges of Pandemic, Opportunities in Retail, ESG and Crypto
By Suzanne Cosgrove – John Lothian News
Much like its Western counterpart, the Asian derivatives industry spent the last year navigating an ever-changing environment dominated by the pandemic and the emergence of new market trends in retail investment, cryptocurrencies and ESG.
In a discussion on the outlook for Asia-Pacific exchanges on Day One of the FIA’s Asia-V conference, panel participants reported no slowdowns in opportunities despite a host of challenges faced by exchange-traded markets in 2021.
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FIA ASIA-V: Major Exchange Leaders Highlight Growth, Vibrancy in Asia
By Sarah Rudolph – John Lothian News
The leaders of three of the major Asian exchanges spoke separately in keynote addresses on the first day of FIA Asia Expo-V. They talked about the rapid change in the financial industry over the past few years, the opportunities for growth in the region, and what’s on the table for their exchanges in the near future. What follows is a summary of their individual remarks.
Nicolas Aguzin, CEO of HKEX
Although the global backdrop has presented many challenges over the past couple of years, Nicolas Aguzin, the CEO of Hong Kong Exchanges and Clearing Limited (HKEX) said that international capital markets have thrived and that Asia in particular is playing an increasing role in global markets.
Asia contributed an estimated 41% of global growth in 2021 and the forecast was raised to 50% by 2026, Aguzin said, adding “Asia’s equity market has grown both in size and vibrancy.”
According to World Federation of Exchanges (WFE) statistics, the total market cap of public equity markets in Asia grew by 40% year on year to close to $40 trillion U.S. at the end of the first half of 2021, Aguzin said. Equity markets trading volume in Asia grew 33%, compared with flat growth in North America.
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Hits & Takes
John Lothian & JLN Staff
Citigroup’s Jane Fraser, Treasury Secretary Janet Yellen, JPMorgan’s Mary Callahan Erdoes and Nasdaq’s Adena Friedman are all on Forbes’ 18th annual list of powerful women. For the complete list, click HERE.
The Federal Reserve Bank of Chicago published an article titled “Two employers share tips for starting a youth jobs program: Summer youth employment can play a key role in the pandemic recovery—but more opportunities are needed.”
European Association of CCP Clearing Houses has published a paper titled “CCP access to Central Banks’ facilities.”
CME has a deal with QuickStrike to provide all sorts of analytics tools, including an options calculator which “generates fair value prices and Greeks for any of CME Group’s options on futures contracts or price up a generic option with our universal calculator. Customize your input parameters by strike, option type, underlying futures price, volatility, days to expiration (DTE), rate, and choose from 8 different pricing models including Black Scholes.”
It is pretty amazing the list of tools the CME has embedded in their website. Check out the complete list here.
Choey Li, quantitative research lead at NYSE, has published a paper titled “Post Opening Auction Filling Behaviors: Opportunities Early in the Day.” Li writes, “Increased retail activity in the equities market has affected which stocks are trading the most, and when and where those stocks trade. We’ve previously highlighted retail’s impact on pre- and post-market volume and the opening auction, and now focus on the period immediately after the opening auction. Market participants often avoid this time of day due to higher volatility, an approach worth re-evaluating given current trends.”
You can pre-order your copy of Owain Johnson’s book titled “40 Classic Crude Oil Trades; Real-Life Examples of Innovative Trading.” It is to be published January 31, 2022 by Routledge.
Anyone want to hire a college junior studying IT at the University of Missouri as an intern? He has experience in everything from Mediawiki to the Adobe Suite and has mined bitcoin, ethereum and Monero while a 15-year-old. He is also tall, which is good for getting things off of top shelves? Smart kid. He comes from a good family. Also, he is my youngest son, Robby.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
CME Group Names Top Five Teams of 18th Annual University Trading Challenge
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the winners of its 18th annual University Trading Challenge, led by the University of Bogota Jorge Tadeo Lozano, who is the second consecutive Latin American team to top the global competition.
*****Three Illinois teams in the top five: Loyola University (Chicago), University of Illinois and Southern Illinois University.~JJL
CME loses key battle in potentially costly trader lawsuit; Thousands of longtime members of Chicago’s futures exchanges, who say CME Group tanked the value of their memberships, are closer to winning damages that could run well into the hundreds of millions.
Steve Daniels – Crain’s Chicago Business
Thousands of longtime members of Chicago’s futures exchanges are a major step closer to winning substantial damages against CME Group in a lawsuit filed seven years ago. A Cook County Circuit Court judge on Dec. 3 certified the class of plaintiffs, allowing them to go forward with the litigation on behalf of thousands of traders, many of whom are now retired and have seen the value of their memberships plummet since the parents of the Chicago Board of Trade and Chicago Mercantile Exchange combined and went public.
***** Never underestimate the litigiousness of a CBOT (or CME) member.~JJL
US crypto needs clearer rules before punishment, says watchdog member; CFTC commissioner Dawn Stump warns against ‘regulating through enforcement’
Stefania Palma – FT
US financial regulators should provide more clarity on how cryptocurrency groups will be policed before punishing their alleged missteps, according to a member of the US Commodity Futures Trading Commission.
****Dawn Stump is absolutely correct. The regulators enforce first before they consider working with the parties to help resolve the issues. It did not used to be that way.~JJL
Half a Billion in Bitcoin, Lost in the Dump; For years, a Welshman who threw away the key to his cybercurrency stash has been fighting to excavate the local landfill.
D.T. Max – The New Yorker
If things had gone just a bit differently, James Howells might today be as rich as the Queen of England. The decisive moment, he now thinks, occurred one evening in August, 2013, when he was twenty-eight and at home with his family in Newport, a small city on the Welsh coast. Howells and his partner, Hafina, were raising three children, and family trips—like the one that they had taken to Disneyland Paris—were fun but exhausting. So he had made plans to treat himself to what he called a “lads’ vacation”: a trip with friends to a resort in Cyprus. Howells, an engineer who helped maintain emergency-response systems for various communities in Wales, often worked from home, and that night he decided to neaten up his office. As he recently recalled to me, “The thought process was: I’m going to be drinking every day. I don’t want to be on a hangover and cleaning this mess up when I get back.”
****** When will this poor guy lay his mistake to rest?~JJL
The Most Popular Holiday Online Scams—and How to Avoid Them; We’re in a festive mood, looking to spend money on people we love. And that makes us prime targets for cybercriminals.
Heidi Mitchell – WSJ
The holiday shopping season has officially begun. And as Americans ramp up their online purchasing, cybercriminals will do some shopping of their own—for victims. Cyber fraud is rampant throughout the year, but crooks press even harder during the holidays, when people are often too distracted and frazzled to see through scams. And criminals are expert at exploiting the fears people have at this time of year—from lost packages to tight supplies to canceled flights.
*****Don’t fall for the “buy one piece of coal and get the other one half off” scam. With energy prices soaring and the number of people who have been bad this year, this scam will be a popular one.~JJL
AllianceBernstein launches scholarship program with historically Black colleges and universities
Joel Stinnett – Nashville Business Journal
The Nashville-based finance giant will launch the HBCU Scholars program in June, with an aim to increase the firm’s talent diversity, while introducing students to career opportunities in the financial services industry.
*****Very smart. Diversity pays dividends in lots of ways.~JJL
Tuesday’s Top Three
Our most-read story Tuesday was Mark Phelps To Step Down As Group CEO In Early 2022 from G.H. Financials, followed at No. 2 by R.J. O’Brien Appoints Mark Phelps as New Managing Director, EMEA for RJO Limited UK Affiliate. No. 3 was Bitcoin trial: Defendant wins dispute over $50B in Bitcoin from AP via Yahoo News, about Craig Wright, the computer scientist who claims to be the inventor of Bitcoin, prevailing in court against the family of his deceased business partner.
26,672 pages; 236,442 edits
U.S. risks ‘chilling’ regulations on crypto, industry warns Congress
Pete Schroeder and Katanga Johnson – Reuters
Top executives from six cryptocurrency firms will on Wednesday tell Congress to tread lightly in imposing new rules on digital assets – or risk sending activity underground or outside the United States. Ahead of a hearing at the U.S. House Financial Services Committee starting 10:00 EST, executives leading some of the world’s biggest crypto companies indicated in prepared testimony they will generally support clearer rules. But they will emphasize that overly restrictive ones would not stifle the activity, but merely push it away from U.S. reach. “Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations,” warned Alesia Haas, chief executive of Coinbase Inc, in testimony released on Tuesday. “This could effectively push crypto activity underground or to offshore exchanges that have little or no compliance programs.”
Crypto exchange execs to call on Congress to head off SEC crackdown; Industry appears to prefer CFTC oversight
Chris Matthews – MarketWatch
Executives from some of the nation’s largest and most powerful cryptocurrency companies plan to petition Congress to create a new regulatory framework for digital assets that could help them avoid a costly showdown with the Securities and Exchange Commission, according to prepared testimony published Tuesday.
The EU has a new weapon in the stock market battle; Homegrown start-ups offer Europe a rare opportunity to make itself more attractive for innovative public companies
Brooke Masters – FT
The world’s oldest stock market is on a hot streak. Amsterdam has profited from the upheaval sown by Brexit to surpass London as the busiest European equities market. Euronext Amsterdam, to use its official name, has also benefited from rules allowing prospectuses in English, access to broader liquidity through the other six exchanges under the same ownership, and openness to innovations such as special purpose acquisition vehicles. This year it hit a new high in money raised through initial public offerings. The biotech company BenevolentAI plans to list there via the continent’s largest planned Spac merger even though it is based in London.
The Metaverse Is Going to Be Bigger Than You Think
Eric J. Savitz – Barron’s
The metaverse is going to be really, really big, which is about the only definitive thing you can say about it. That’s the general takeaway from a long report on the evolution of the metaverse by Bernstein internet analyst Mark Shmulik.
Jefferies predicts the metaverse will be the biggest disruption to how we live ever seen, as Wall Street gets excited about virtual worlds
Harry Robertson – Business Insider
Jefferies has said the metaverse will be the biggest disruption to how we live ever seen, as Wall Street bankers warm to the idea of virtual worlds and economies. Investors need to be thinking about the metaverse as akin to the internet in its early days, according to the firm’s analysts. “A single metaverse could be more than a decade away, but as it evolves, it has the potential to disrupt almost everything in human life,” the analysts, led by equity strategist Simon Powell, wrote in a Monday note.
First Trust files for a US-listed metaverse ETF as the virtual-world gold rush heats up
Camomile Shumba – Markets Insider
First Trust, a US investment company, applied to list a metaverse-themed exchange traded fund on Tuesday, as the virtual world expands and people look for more investment products tied to this area. The First Trust Indxx Metaverse ETF would trade on the Nasdaq, according to a filing with the Securities and Exchange Commission. The ETF would use the Indxx Global Metaverse Index as a benchmark, the filing showed.
Wealthy people cause climate change much more than poorer people do, report finds
Ben Adler – Yahoo
The disparity in greenhouse gas emissions between rich and poor countries — and rich and poor people within countries — is just as extreme as economic inequality, a new report finds. Overall, emissions are closely correlated with income, according to a report released Tuesday by the World Inequality Lab, a Paris-based research organization.
Super-rich increase their share of world’s income
The share of wealth owned by the world’s richest people soared during the Covid pandemic, a major study on inequality has found. The World Inequality Report said that 2020 saw the steepest increase in billionaires’ wealth on record.
The Bank of England Needs One Million Missing Workers to Return; Inflation and wages rise with fewer people in jobs market
Philip Aldrick – Bloomberg
Concern that pressures once thought ‘transitory’ will persist; Recruitment Signs As Labor Shortages Hit U.K. Industries
The fallout for the U.K. economy from one of the worst labor shortages among rich nations is on full display at a Meridian Leisure Hotel in Reading, where managing director Moez Janmohamed likens it to a nightmare.
The myth of independent central banks; Despite inflation it is time for investment caution, not panic
John Redwood – FT
Trying to get investments right in this pandemic-tossed world requires careful examination of the policies of the major central banks. The US Federal Reserve led the rescue from the virus crash in March 2020. The Bank of Japan and the European Central Bank have been important sources of support to financial markets and economies.
First lab results show omicron has ‘much more extensive escape’ from antibodies than previous variants; Experimental results are not surprising, given number of mutations in new variant
Carolyn Y. Johnson and Joel Achenbach – Washington Post
The first in-depth laboratory study of the omicron variant of the coronavirus offers a mixed bag of bad news and good news. The bad: This variant is extremely slippery. It eludes a great deal of the protection provided by disease-fighting antibodies. That means people who previously recovered from a bout of covid-19 could be reinfected. And people who have been vaccinated could suffer breakthrough infections.
Will there be another lockdown before Christmas as omicron cases rise? New variant raises alarm and prompts Boris Johnson to impose first social restrictions since summer
Joe Sommerlad – Independent
The emergence of the omicron variant of the coronavirus in southern Africa last month is causing concern around the world, not least because it is thought to be highly transmissible and because the 32 mutations of its spike protein suggest it might be able to resist current vaccines.
Fauci says omicron Covid variant ‘almost certainly’ not more severe than delta; The doctor said that while less severe, the omicron variant is still highly transmissible
Graig Graziosi – Independent
Dr Anthony Fauci, the director for the National Institute of Allergy and Infectious Disease, said that the omicron coronavirus variant is “almost certainly” not more severe than the delta variant the US experienced over the summer.
Republicans’ trust in doctors is eroding. It’s a symptom of a larger disease.
Joel Mathis – The Week
What would happen if GOP voters just stopped trusting their doctors? It’s not an idle question. A new Gallup poll indicates that Republicans are feeling increasingly shaky about the medical profession: The number who say they are confident in their physician’s medical advice has dropped 13 points since 2010. Twenty-two percent report they trust their doctor less than they did just a year ago.
Merck’s Covid Pill Must First Overcome Anti-Vax Misinformation; Unproven claims on social media that ivermectin is effective against coronavirus could trim demand for the drugmaker’s new treatment.
Emma Court – Bloomberg
Thirty-five years ago drug manufacturer Merck & Co. invented a groundbreaking treatment for river blindness, a disease that affects millions of people in Africa. The company donated billions of doses and frequently touted its philanthropy, building a narrative about the good a drugmaker can do.
How to Cope When a Pandemic Crushes Your Business Overnight; David Marriott, Tony Capuano, and Leeny Oberg talk about preserving a people culture while instituting furloughs and layoffs.
Sherry Ahn – Bloomberg
The pandemic has been hard on almost every business. But for a company that depends on travelers, like Marriott International Inc., the world’s largest hotelier, it’s been particularly tough. Its top executives told us how they coped while keeping their people-first focus.
Boris Johnson to introduce new restrictions in England to curb Omicron spread; Reports of rule-breaking by UK government figures prompt fears that future restrictions could be undermined
Sebastian Payne, Laura Hughes and George Parker – FT
UK prime minister Boris Johnson is set to announce fresh restrictions in England to curb the spread of the Omicron coronavirus variant, as he faced new questions over parties held in Downing Street last Christmas.
Pfizer says three vaccine doses offer protection against Omicron; Preliminary research suggests two shots show significantly reduced effectiveness against new coronavirus variant
Jamie Smyth and Oliver Barnes and Donato Paolo Mancini – FT
A third shot of the BioNTech/Pfizer Covid-19 vaccine offers protection against the Omicron coronavirus variant while just two doses show significantly reduced effectiveness against it, according to a preliminary study conducted by the vaccine makers.
Pfizer Says Booster Neutralized Omicron but Variant May Elude Two Doses; mTwo doses of the vaccine were significantly less effective against the variant but could still protect against severe disease, Pfizer and BioNTech say
Joseph Walker -WSJ
Pfizer Inc. PFE 0.47% and BioNTech SE BNTX 8.17% said that a third dose of their Covid-19 vaccine neutralized the Omicron variant in lab tests but that the two-dose regimen was significantly less effective at blocking the virus. A third dose increased antibodies 25-fold compared with two doses in the Omicron variant, the companies said. Still, two-doses may prove effective in preventing severe illness from Covid-19, they said, because immune cells are still able to recognize 80% of parts of the spike protein that the vaccine targets.
Covid-Era Travel Risks Are Changing: What to Consider So You Don’t Get Stranded; Sudden border closures. Quarantines. Given the new risks, the days of improvised trips for business or pleasure have become endangered in the Covid-19 era
Scott McCartney – WSJ
At least you can see hurricanes coming. The new Omicron variant did more than prompt governments to quickly close borders and tighten Covid-19-related travel restrictions. It signaled that health disruptions are here to stay as a normal part of travel concerns, right along with storms, strikes and terrorism.
Not Vaccinated? In Singapore, You’ll Pay for Your Own Covid-19 Treatment; People who haven’t received shots account for a disproportionate amount o the strain on healthcare resources, authorities say
Jon Emont – WSJ
As countries battle to persuade holdouts to get vaccinated, Singapore has settled on one of the most aggressive strategies: The city-state is going to stop fully covering Covid-19 medical bills for the unvaccinated.
Exchanges, OTC and Clearing
NYSE reveals sweeping changes to top leadership; President Stacey Cunningham and chair Jeffrey Sprecher to step aside
Nicholas Megaw and Mamta Badkar – FT
Intercontinental Exchange has made sweeping changes to its top management, including the two most senior positions at the New York Stock Exchange. Stacey Cunningham, who became the first woman to lead the NYSE in 2018, will step aside as president. Jeffrey Sprecher, ICE’s co-founder and chief executive, will relinquish his role as chair of the NYSE, which he has held since ICE bought the Big Board in 2013 for $8.2bn.
JERA Considers Direct Power Futures Trading Within A Year: Hokkaido Electric Power and Hokuriku Electric Power Utilize Hedge Transactions; Jiji Press article on Japanese Power futures – translated by EEX Japan
The Electricity and Gas Market Surveillance Commission of the Ministry of Economy, Trade and Industry held a Market Design Expert Meeting on the 26th, and announced the status of major electric power companies’ participation in the power futures market.
International Care Company lists on Euronext Growth Milan
34th listing of 2021 on Euronext Growth Milan; International Care Company brings the total number of companies listed on Euronext Growth Milan to 165; Total placement volume of the offering equal to EUR2.5 million
Borsa Italiana, part of the Euronext Group, today congratulates International Care Company on its listing on Euronext Growth Milan. International Care Company operates as an assistance services company in activities related to personal assistance and the management of satellite alarms.
ICE Introduces Reference Data for Leveraged Loan Market; Leverages U.S. Bank’s leading loan administration franchise to offer high-quality, granular data
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced it will begin offering leveraged bank loan reference data through its ongoing collaboration with U.S. Bank. The offering will provide investors and other market participants with high-quality and detailed reference data from the largest administrator of loans in the United States.
Farmer sentiment weakens as production cost concerns mount
The Purdue University/CME Group Ag Economy Barometer slipped 5 points in November to a reading of 116 as producers continue to be pessimistic about both the current and future outlook of the agricultural economy. The Index of Current Conditions declined 7 points in November to a reading of 128 and the Index of Future Expectations fell 4 points to 110. November marked the lowest reading of 2021 for all three measures of producer sentiment and comparing year-over-year, the barometer is 30% lower than in November of 2020. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between November 15-19, 2021.
Keynote Address at FIA Asia Derivatives Conference by SGX CEO Loh Boon Chye
Congratulations to our friends at the FIA for bringing together the industry, virtually, once again. We applaud your efforts in putting together a strong agenda for the Asia Derivatives Conference year after year – well done.
Change of Central Contract Month for TOPIX Futures Trading
Concerning TOPIX Futures, since the trading volume of the March 2022 contract (second contract month) surpassed that of the December 2021 contract (nearest contract month) in today’s auction market, the central contract month pertaining to temporary trading halt (Circuit Breaker rule) is as follows from December 9, 2021 (trading day).
JPX Monthly Headlines – November 2021
JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users.
Moscow Exchange introduces opening auction on FX Market
On 6 December 2021, Moscow Exchange introduced new instruments and services for FX Market participants. Trading on the FX Market now starts with an opening auction for all spot instruments from 6:50 am to 7:00 am Moscow time. The auction mechanism reduces the risk of significant fluctuations in the morning hours and increases the efficiency of market pricing. In the first days of trading with the auction mechanism, more than 20 banks and brokerage companies generated primary liquidity.
— Position Limits, Accountability Levels and Large Trader Reporting Requirements in Connection with the Initial Listing of Two (2) Freight (Baltic) Futures Contracts — CME
— Expansion of Strike Price Listing of all Options on E-mini Nasdaq-100 Index® Futures Contracts and Expansion of the Listing Schedule of the European-Style Weekly Options — CME
— Industry Survey Regarding Feedback on Certain Contract Specifications of the Random Length Lumber Futures Contract — CME
Shadow payment system on rise among European people smugglers
Layli Foroudi – Reuters
When Kaiwan Hussein, a 26-year-old from Iraqi Kurdistan, arrived in Germany on Nov. 23 after he slipped across the European Union border from Belarus, he sent a one-word WhatsApp message to his brother back home saying “OK.”
Exegy Deepens Investment in Partner Ecosystem and Go to Market Team with Addition of Two Industry Leaders
Continuing the mission to be the most innovative, dynamic and trusted provider of market data and trading infrastructure to the financial services industry, Exegy Incorporated announced today the addition of two experienced industry leaders to its global sales organization.
Disrupting data delivery: AWS Data Exchange gains ground with addition of FactSet content; Leveraging AWS’s presence on Wall Street, Data Exchange has the potential to shake up traditional financial data delivery and contracts, if it can add relevant content and overcome challenges like real-time streaming and connectivity in the cloud.
Rebecca Natale, Max Bowie – Waters Technology
At Amazon Web Services’ re:Invent conference in Las Vegas last week, the cloud giant unleashed a flurry of news, including the announcement that Nasdaq will move its matching engine to the cloud service beginning next year, and Goldman Sachs launched the Financial Cloud for Data, a suite of cloud-based data and analytics solutions that leverage AWS. But a third announcement flew largely under the radar: The AWS Data Exchange (ADX), unveiled two years ago, recruited its first major financial data
Tide opens up its app to customers of rivals in boost to open banking
Simon English – Evening Standard
TIDE, the finance app for business, is poised to attempt a major shake-up of the market by opening its services to non-account holders. The fintech firm, founded in 2015, is ready to let all small and medium sized firms connect their existing bank accounts to its platform. That means Barclays or Natwest customers, for instance, can try the Tide offer without switching banks.
Broadridge Names Dipti Kachru Global Chief Marketing Officer
Broadridge Financial Solutions
Broadridge Financial Solutions (NYSE: BR), a global Fintech leader, today announced the appointment of Dipti Kachru as Global Chief Marketing Officer, effective January 18. As Global CMO, Kachru will be responsible for leading all aspects of Broadridge’s global marketing organization — brand and digital strategy, product positioning, lead generation and thought leadership. She will focus on driving measurable growth, building Broadridge’s global brand reputation, expanding client relationships, and support the organization’s revenue growth ambitions. Kachru will be a member of Broadridge’s Executive Leadership team, reporting to Chris Perry, President of Broadridge. She will be based in New York.
Broadridge rolls out ESG Performance Dashboard
A company’s ESG ratings has become increasingly important to both investors and shareholders alike and achieving an accurate comprehensive understanding of those ratings has grown more complex and time consuming.
Cash Is Dying, But We Aren’t Ready to Bury It; Convenience is one thing but consumers are likely to lose government protection if money is suddenly electronic and privatized.
Andy Mukherjee – Bloomberg
The demise of cash is near. As consumers, though, we should hope that the end doesn’t arrive too soon. It isn’t the pandemic that’s putting this popular means of payment out of existence. All that Covid-19 has done is to accelerate a trend that was already with us. When Steve Jobs unveiled the first iPhone in 2007, he began killing the need for banknotes. Autonomous cars, self-ordering refrigerators and our digital avatars in the metaverse will put the final nails in King Cash’s coffin.
MillTechFX claims its new margin-saving solution for FX hedging, cuts execution costs in half for buy-side firms; MillTechFX and Investec’s new solution aims to reduce cash drag on funds by removing the need to post initial and variation margin for FX forward contracts.
Anita Hawser – The Trade
MillTechFX and Investec have introduced a margin-free FX hedging solution as part of a new partnership between the two companies. MillTechFX, the FinTech affiliate of Millennium Global Investments, and Investec say their new “margin-free hedging solution” enables transparent best execution across more than 10counterparty banks without the cash drag associated with having to fund initial and variation margin calls.
Bloomberg launches CSDR workflow tools ahead of regulation deadline;The new tools resolve nearly 100% of exceptions one day after the settlement date using Bloomberg Central Securities Depositories Regulation (CSDR) data.
Annabel Smith – The Trade
Bloomberg has launched a set of CSDR penalty, eligibility, and workflow tools to help buy- and sell-side firms minimise penalties and augment successful settlement rates. CSDR’s Settlement Discipline Regime (SDR), which is due to come into effect in February next year, requires firms across the street to pay penalties if trade exceptions are not quickly resolved.
The 10 Hottest New Cybersecurity Tools And Products Of 2021
Michael Novinson – CRN
Vendors have spent 2021 advancing security everywhere from endpoint and identity to the cloud and web, debuting tools that respond to threats across the criminal underground, protect remote workers’ homes and small businesses from malware, ransomware and phishing attacks, and allow for the management of access, governance and privileges from a single, centralized dashboard.
Softbank backs $400m investment in Israeli industrial cybersecurity firm Claroty
Ricky Ben-David – The Times of Israel
Japanese investment giant SoftBank co-led a $400 million investment in Israeli cybersecurity firm Claroty, a maker of software to defend factories and industrial plants from cybersecurity attacks, according to a joint announcement Wednesday.
SoftBank’s Israel operations are headed by former Mossad head Yossi Cohen, who stepped down from the security agency position in June after more than five years on the job. As part of the investment, Cohen will join Claroty’s board of directors.
16 Potential Cybersecurity Solutions For Protecting Sensitive Data In The Cloud
A move to the cloud comes with multiple cost and productivity benefits for companies, including outsourcing hardware maintenance, the ability to quickly expand and easy access to the latest software. But while the cloud offers convenience, it can also add to a company’s cybersecurity risks. A significant cyberattack on a cloud provider can trickle down and affect all of that provider’s clients.
Google temporarily disrupts a botnet that infected 1 million PCs; Glupteba is the largest publicly known botnet to date.
Igor Bonifacic – Engadget
On Tuesday, Google disclosed it recently disrupted a massive network of computers infected by Glupteba. The company estimates the malware has infected approximately one million Windows PCs globally, which would make it one of the largest known botnets to date.
Cybersecurity startup Grip raises $19 million in Series A nine months after founding
Meir Orbach – CTech
Cybersecurity company Grip Security, founded in February of this year, announced on Tuesday that it has raised $19 million in Series A funding, taking it to a total of $25 million in just nine months since its inception. The round was led by Intel Capital with participation from existing investor YL Ventures, who led Grip’s $6 million Seed round in April this year.
Portland cybersecurity firm lands $50 million
Mike Rogoway – The Oregonian
Cybersecurity startup Torq, formerly called StackPulse, announced $50 million in new funding Tuesday, bringing total investment in the Portland company to $78 million.
That’s a big sum by Oregon funding standards, but Torq’s presence here is limited. Its CEO and his co-founders are in Israel. The company considers its headquarters to be in Northwest Portland, though, and its chief operating officer is a former vice president at Portland software company Puppet.
Australia to regulate crypto and BNPL in payments overhaul
Renju Jose and Byron Kaye – Reuters
Australia will create a licencing framework for cryptocurrency exchanges and consider launching a retail central bank digital currency as part of the biggest overhaul of its payments industry in a quarter of a century. The country will also broaden its payment laws to cover online transaction providers like Apple Inc and Alphabet Inc’s Google as well as buy-now-pay-later (BNPL) providers like Afterpay Ltd, ending their run of operating without direct supervision.
Blockchain.com opens waitlist for its NFT marketplace beta
Kyt Dotson – Siliconangle.com
Crypto finances company Blockchain.com Inc. announced Thursday that it’s launching a nonfungible token marketplace into beta along with a waitlist for users to sign up. This launch follows the ongoing surge in popularity in the NFT market that caused it to hit $10.67 billion during the third quarter of 2021, according to a report from DappRadar. That represented an increase of 704% over the previous quarter. Leading the industry has been collectible artwork pieces on the Ethereum blockchain – such as the CryptoPunks and Bored Ape Yacht Club – and blockchain games, which include Axie Infinity and Splinterlands.
Visa launches crypto consulting services in push for mainstream adoption
Ryan Browne – CNBC
Visa is launching new consulting and advisory services to help its clients navigate the world of cryptocurrencies. The payments processor said Wednesday its crypto advisory practice, housed within its consulting and analytics division, will offer advice to financial institutions, retailers and other firms on everything from rolling out crypto features to exploring non-fungible tokens.
FTX US selects Eventus for trade surveillance and risk monitoring of crypto spot, futures and options markets
Eventus Systems/FTX US
The US-regulated cryptocurrency exchange to deploy Validus platform
FTX US, a leading U.S.-regulated cryptocurrency exchange, and Eventus Systems, Inc., an award-winning global provider of multi-asset class trade surveillance and market risk solutions, announced today that the exchange will deploy the Eventus Validus platform to conduct trade surveillance and risk monitoring on FTX US, and FTX US Derivatives, its recently acquired licensed cryptocurrency futures and options exchange and clearinghouse.
Bitcoin Investing Giant Slams Bond Markets as a ‘Ponzi Scheme’
Sonali Basak – Bloomberg
Dan Morehead, the chief executive officer of Pantera Capital and longtime macroeconomic investor, sounded an alarm on what he called bubbles created by the Federal Reserve’s efforts and says digital assets should be bought instead.
New York City Casino Pitch Includes Cryptocurrency Trading Floor
Christopher Palmeri – Bloomberg
Ader’s $3 billion plan includes landing pad for flying cars; State has requested information from operators on new licenses
Money manager Jason Ader will submit plans on Dec. 10 for a casino in the New York area that features what he said would be the world’s largest cryptocurrency trading floor and a landing pad for flying cars.
Crypto ‘Fear & Greed’ Index Is Latest Talisman for Bitcoin Fans; Crypto fans are turning to an old Wall Street idea as the latest way to justify buying the dip after the recent slump.
Alice Kantor – Bloomberg
A group of indefatigable Bitcoin investors aren’t going to let Saturday’s 21% plunge, in the span of a few hours, curb their enthusiasm. They’re now promoting a “Fear & Greed” index via Twitter and other social media to justify their claim that the recent drop in prices is actually a great opportunity to get on the Bitcoin bandwagon.
U.S. Wants Nord Stream 2 Halted If Putin Invaded Ukraine
Alberto Nardelli and Vanessa Dezem – Bloomberg
The U.S. will push Germany to agree to stop the contested Nord Stream 2 gas pipeline if Russian President Vladimir Putin invades Ukraine, according to documents seen by Bloomberg and people familiar with the plans.
Bank predicts $3.6 million windfall from Manafort loans
Josh Gerstein – Politico
A bank that loaned former Trump campaign manager Paul Manafort $16 million expects a $3.6 million surplus from foreclosure on Manafort’s properties, even though the loans played a role in the prosecution of Manafort and a separate charge against a Chicago banker who tried to get a job in the Trump administration.
Trump lashed out at the SEC for investigating his new social-media company, alleging the regulator is biased
Tom Porter – Business Insider
Former President Donald Trump lashed out at federal regulators after they were reported to be launching an investigation into the special purpose acquisition company (SPAC) backing his new social-media venture.
Crypto CEOs to Testify Before Lawmakers Weighing Greater Regulation; Executives are expected to tout the potential benefits of cryptocurrencies, while playing down the risks
Paul Kiernan – WSJ
The chief executive officers of half a dozen cryptocurrency firms are set to appear before Congress on Wednesday, as lawmakers and regulators wrestle with how to bring the more than $2 trillion market under government oversight.
Republicans Want Robinhood to Keep Ripping Off Day Traders; A new bill from Sen. Pat Toomey seeks to protect a time-honored tradition.
Alexander Sammon – The American Prospect
Few arcane financial transactions have attracted more widespread attention than payment for order flow, the stock and securities trading system in which a brokerage firm sells the market orders of its users to different market makers (such as Citadel Securities) for execution. In turn, the brokerage firm receives a small payment, usually a fraction of a penny per share, as compensation for directing the order to one third-party executor over another. It’s the signature process of trading apps like Robinhood, Charles Schwab, E-Trade, and others.
Scholz takes over as German chancellor, ending Merkel era
Michael Nienaber – Reuters
German lawmakers elected Social Democrat Olaf Scholz as chancellor on Wednesday, ending 16 years of conservative rule under Angela Merkel and paving the way for a pro-European government that has promised to boost green investment.
Joe Biden’s pick to lead bank regulator withdraws her nomination; Saule Omarova says going ahead ‘no longer tenable’ after fierce criticism from Republicans and Wall Street
Stefania Palma – FT
Saule Omarova, Joe Biden’s pick to head a big US bank regulator, has withdrawn her nomination, dealing a blow to the White House after it had defended her amid pushback from Congress and Wall Street over her academic writings and her upbringing in the former Soviet Union.
Proposed India bill banning crypto payments could mean jail for violations -document
Aftab Ahmed and Nupur Anand – Reuters
Proposed legislation that would ban the use of cryptocurrencies as a method of payment in India also seeks to make those who infringe the law subject to arrest without a warrant and being held without bail, according to a source and a summary of the bill seen by Reuters.
What will Treasurer Frydenberg’s crypto reform plan look like?
Ronelle Richards – Yahoo Finance
Treasurer Josh Frydenberg is planning a major cryptocurrency payments reform. (Source: Getty)
Federal Treasurer Josh Frydenberg has announced a reform plan for cryptocurrency and digital currency exchanges to shake up the payments system and put Australia at the forefront of new technology—but what will it actually look like?
SEC Issues Whistleblower Nearly $5 Million Award
The Securities and Exchange Commission (SEC) today announced an award of nearly $5 million to a whistleblower who provided critical information and assistance that led to the success of a covered action. The whistleblower’s information helped the SEC to more quickly and efficiently bring an action that returned millions of dollars to harmed investors.
SEC Staff Statement on LIBOR Transition—Key Considerations for Market Participants; Staff of the U.S. Securities and Exchange Commission
This statement is being issued to remind investment professionals of their obligations when recommending LIBOR-linked securities and to remind companies and issuers of asset-backed securities of their disclosure obligations related to the LIBOR transition. This statement follows previous staff statements addressing various aspects of the forthcoming LIBOR transition.
These Stock Options Deserve the SEC’s Scrutiny; Spring-loaded grants allow executives to enrich themselves at the investing public’s expense. Regulators are right to get tougher on the practice.
Michelle Leder – Bloomberg
In principle, corporate directors and executives, who naturally have privileged information about their companies, aren’t supposed to use it to enrich themselves at the investing public’s expense. Yet there remain many ways in which they can nonetheless do so. In a seemingly obscure accounting guidance, the Securities and Exchange Commission has moved to shut down a significant one. It’s a good decision, signaling a tougher approach to insider trading more broadly.
Libor trader Tom Hayes refused chance to appeal against conviction; Former UBS and Citi employee was found guilty in global conspiracy to manipulate benchmark interest rate
Kate Beioley – FT
Tom Hayes, the former UBS and Citigroup trader jailed for conspiring to rig the Libor benchmark interest rate, has been refused the chance to appeal against his conviction and sentence in a provisional ruling handed down on Tuesday.
Treasury Department eyes new rule to weed out corruption
The US Treasury Department’s crimefighting arm on Tuesday moved to expand reporting requirements for certain domestic and foreign companies as part of a broader push to crack down on corruption and shell companies. A new rule would implement reporting provisions under the Anti-Money Laundering Act of 2020, aimed at expanding data on who actually owns or controls a company and closing loopholes in existing US law.
Fidelity Digital Assets granted UK licence to offer custody as institutional interest in crypto grows; FCA makes digital asset custody and trade execution provider permanent member of its register.
Jon Watkins – The Trade
Fidelity Digital Assets, has been granted registration with the UK Financial Conduct Authority for its digital asset custody and trade execution business.
FINRA Forms Issue (FINRA Order Form, FINRA New Issue Form, FINRA Participant Agreement Form)
Currently, any users attempting to submit a TRACE or Over the Counter Reporting Facility (ORF) form filing will incur an error. Firms should contact FINRA Market Operations or call (866) 776-0800; Option 2, with questions or for assistance in setting up new issues. FINRA will advise when this issue has been resolved.
FINRA Appoints Bill St. Louis Executive Vice President of National Cause and Financial Crimes Detection Program
FINRA announced today that it has appointed Bill St. Louis to Executive Vice President and Head of its National Cause and Financial Crimes Detection Program (NCFC). St. Louis, currently Senior Vice President and Firm Group Leader in FINRA’s Member Supervision department, will begin his new role on December 13 and report to Greg Ruppert, Executive Vice President and Head of Member Supervision. St. Louis will succeed Ruppert, who previously led the NCFC.
Action encouraged: CPO and CTA Members should ensure Executive Representative information is accurate prior to December 27, 2021 to facilitate voting in upcoming contested election; Contested Election in CPO and CTA Category
The upcoming 2022 Board of Directors election includes a contested election in the CPO and CTA category for a position with no conditions as to funds under management, as of June 30, 2021. Two individuals have been nominated for this position and therefore NFA will be conducting an election for CPO and CTA Members to vote for the individual to fill this Board position. More information on the candidates and the election process will be provided prior to the election period.
Overview of the Discussion Summary : the “Advisory Council on the System of Accounting and Auditing (2021)”
Investing and Trading
Corporate America Is Buying Back Its Own Stock at a Furious Pace, BofA Says
Lu Wang – Bloomberg
As U.S. stocks suffered one of this year’s worst declines last week, one big ally of this bull market stepped up its buying at a furious pace. Corporate America bought back $3.4 billion worth of its own stock, twice the level from the previous week and reaching the highest measure since March, according to client activity compiled by Bank of America Corp.’s research team. While wealthy individuals and institutional investors also bought the dip, buybacks from companies accounted for almost half the total purchases by the bank’s clients.
Barefoot Investor snaps back after being labelled an ’embarrassment’ over his most recent financial advice
Kevin Aires – Daily Mail Australia
Australian finance guru Barefoot Investor Scott Pape has dismissed his critics after he was branded an ’embarrassment’ over his tips on cryptocurrency. The risk-averse financial advisor has refused to push new digital cryptocurrencies to his followers despite them making astronomical increases over the last few years. Now one reader of his newsletter has called him out over it – and earned a feisty rebuke in return.
Trafigura Scores $3 Billion Profit on Commodities Rebound; Commodity trading house scored by loading up on oil when prices dropped early in pandemic
Joe Wallace – WSJ
Trading house Trafigura Group Pte. Ltd. rode rising commodity prices to post record profit, making it a big winner from the pandemic economic rebound. Trafigura reported $3.1 billion in net profit on $231.3 billion in revenue in the 12 months through September. Wednesday’s results made the 2021 financial year the most profitable for the company since it was founded in 1993.
Goldman Sachs Has Bad News for Investors Rushing to Buy the Dip
Anchalee Worrachate and Denitsa Tsekova – Bloomberg
GS Risk Appetite Indicator below zero may have farther to fall; Deutsche Bank sees turnaround in the next three to four weeks
Goldman Sachs Group Inc. is issuing words of caution for dip buyers plunging back into stocks: The December volatility breakout has room to run — and risk gauges aren’t yet flashing buy signals.
Coffee hits 10-year high as shipping bottlenecks squeeze supply; Concerns about challenging weather have also driven up prices
Emiko Terazono – FT
Coffee prices on futures markets have rallied to a 10-year high, with companies and traders dashing to lock in supplies as they contend with shipping bottlenecks and a late-year rise in demand.
Flow Traders offers name-disclosed bond liquidity on MarketAxess; This will be the first time the market maker will act as a name-disclosed liquidity provider for US high yield corporate, Euro-denominated investment grade and high yield, and emerging market sovereign bonds.
Annabel Smith – The Trade
Flow Traders is set to become the latest name-disclosed liquidity provider available on MarketAxess’ live order book, Live Markets, after servicing it anonymously for several years.
Environmental, Social and Corporate Governance
An ESG Fund Changes the World, One Company at a Time
Lewis Braham – Barron’s
When Cheryl Smith wanted to get involved in sustainable investing in the 1980s, there were few places she could go. The lead manager of the Green Century Balanced fund had been an economics professor at Yale University for four years, but was more interested in changing the world than doing academic research.
JPMorgan Sees Asia ESG Dollar Bonds Hitting $100 Billion in 2022
Filipe Pacheco – Bloomberg
Bilibili, Posco among firms selling equity-linked debt in 2021; Companies from tech to energy are mulling ESG-themed notes
JPMorgan Chase & Co. expects Asian companies to raise as much as $100 billion next year through environmental, social and governance dollar-denominated bonds, with an increasing number of firms considering notes that can be converted into equity.
Hedge Fund Northlander Surges 116% in 2021 Boosted by Carbon Bet
Will Mathis – Bloomberg
Northlander is having best year since launch on carbon gains; EU carbon prices rose in 2021 on climate goals and coal power
Northlander Commodity Advisors LLP’s flagship hedge fund gained more than 116% this year, driven by bets on the soaring price of European Union carbon emission permits. The fund advanced almost 13% in November, helping push it to its best year since launching in 2012, according to a letter to investors seen by Bloomberg News. Northlander’s assets under management were about $340 million at the start of December.
BlackRock to Pull Bulk of U.S. ETF Assets From State Street
Silla Brush – Bloomberg
BlackRock Inc., the world’s largest issuer of exchange-traded funds, will move most of its U.S. ETF assets from State Street Corp. to reduce its reliance on the bank’s custody services.
Hedge funds’ November performance worst since March 2020 – HFR
Hedge funds posted their worst performance in 20 months in November, after a global market selloff sparked by concerns over the Omicron COVID variant, according to data from HedgeFund Research.
Investing in Investors Was a Bad Investment Idea; European asset managers underperformed the broader market this year. The outlook for 2022 is even worse.
Mark Gilbert – Bloomberg
As Leo Tolstoy taught us at the beginning of Anna Karenina, “Happy families are all alike; each unhappy family is unhappy in its own way.” It’s a lesson being relearned by investors in European asset managers, whose shareholdings have woefully missed out on the gains enjoyed across the broader equity market this year.
Two London Hedge Funds Agree to Rare Combination
Nishant Kumar – Bloomberg
The deal will boost assets by $1.5 billion, add new traders; The combination is expected to close by the end of March
Eisler Capital, a $4.5 billion hedge fund firm, has struck a deal to acquire Neil Phillips’s Glen Point Capital in a rare consolidation in the industry.
RJ O’Brien appoints GH Financials CEO as managing director for EMEA; New director brings to RJO over two decades worth of experience in the futures markets in Europe and globally, having previously served as CEO for GH Financials.
Wesley Bray – The Trade
Independent futures brokerage and clearing firm RJ O’Brien & Associates (RJO) has appointed a new managing director, EMEA for its London-based affiliate.
Judge Blasts Najib as ‘National Embarrassment’ as Court Upholds 1MDB Guilty Verdict
Hadi Azmi and Anisah Shukry – Bloomberg
A Malaysia court upheld former leader Najib Razak’s guilty verdict from the first of a series of trials linked to troubled state fund 1MDB, with a judge referring to his actions as a “national embarrassment.” Najib failed to overturn his 12-year prison sentence after the Court of Appeal Wednesday affirmed he was guilty of all seven charges in the case involving 42 million ringgit ($10 million) of funds belonging to SRC International, a former unit of 1MDB. He immediately applied for a stay of execution that would keep him out of jail while he appeals to Malaysia’s highest court.
China ‘modified’ weather to create clear skies for CCP anniversary parade, new study says
Ryan General – NextShark
China reportedly used weather modification technology to clear Beijing’s skies for the Chinese Communist Party’s (CCP) centenary earlier this year. Making it rain: Scientists from Tsinghua University suggested that the Chinese government conducted a cloud-seeding activity the day before the CCP’s 100th-year celebration in Tiananmen Square on July 1, reported
South China Morning Post.
Venezuela Is Resurrecting Its Oil Fields With Backpacks of Cash; State-owned producer PDVSA is resorting to desperate tactics to increase production from historic lows
Fabiola Zerpa – Bloomberg
Amid the rusted remnants of Venezuela’s once-mighty oil industry, a motley crew of obscure drillers has achieved a feat few thought possible: It’s more than doubled the country’s crude production in the space of a year.
Europe needs to wake up to the costs of hosting massive data centres; Meanwhile, companies must be more transparent in their planning applications
Marietje Schaake – FT
When asked about plans to develop a “hyperscale” data centre on one of the rare swaths of free land in the Netherlands, Facebook replied: “We do not respond to rumours.” Meanwhile, the company engaged high-end engineering and law firms to advance its interests and help build the largest data centre in Europe.
Former Malaysian Prime Minister Loses Appeal of 1MDB Conviction; Najib Razak will remain free on bail pending an appeal to country’s highest court on charges related to his role in one of the world’s largest financial scandals
Feliz Solomon and Chester Tay – WSJ
Former Malaysian Prime Minister Najib Razak lost an appeal against his conviction last year on charges related to his role in one of the world’s largest financial scandals, dealing a setback to the disgraced ex-leader amid a resurgence of his political clout.
Cannabis industry in Illinois sees increasing minority ownership — but delayed startups say they may have to sell out
Robert McCoppin – Chicago Tribune
The Illinois cannabis industry is transforming to the point where half of new licenses are owned by minorities — but critics say many of those newcomers may never get to open. The Illinois cannabis industry is transforming to the point where half of new licenses are owned by minorities — but critics say many of those newcomers may never get to open. At least half of 118 new licenses issued for craft growers, infusers and transporters have gone to companies majority-owned by nonwhite applicants, in contrast to the previous all-white ownership, said Danielle Perry, the state’s cannabis regulation oversight officer. Forty-three percent of the Department of Agriculture licensees are black-owned, 10% by Latinos, 9% by coalitions of people of color and 4% by Asians, she said.