U.S. SEC to tighten insider trading rules, propose money market fund changes

Dec 15, 2021

First Read

Hits & Takes
John Lothian & JLN Staff

MarketWatch reported that some errant quotes made cryptocurrency investors ‘quadrillionaires’ on paper. Call it wealth appearing and disappearing out of “thin error.” Coinbase Global and CoinMarketCap.com were two of the sites acknowledging issues with displayed quotes of some of the most popular cryptocurrencies.

Bloomberg has a list of the best business books of the year in a story titled “The 49 Most Fascinating, Mind-Blowing, Challenging, Hilarious, and Urgent Titles of the Year.”

Citigroup has promoted a record number of female managing directors in Asia, Bloomberg reported. Citigroup promoted 18 women to the managing director level, which was 35% of the total of 52 promoted to that level.

And in the field of women advancing in their careers, the mayor-elect of New York City, Eric Adams, named Keechant Sewell as police commissioner. This makes the first time a woman will lead the New York City Police Department, known as NYPD, the U.S.’s largest police department, Bloomberg reported.

Erik Thedéen was appointed vice chair of ESMA, replacing Anneli Tuominen, director-general of the Finnish Finanssivalvonta (FIN-FSA), who has completed her term. Thedéen is the director general of the Swedish Finansinspektionen (FI) and will serve a 2½ year term effective immediately. — ESMA

This is a good time of the year, when things are slowing down, to participate in one of our video series. If you have a story to tell from being part of the open outcry era or the path to electronic trading, please contact me to talk about setting up an interview.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

*****

The FIA and SIFMA’s Asset Management Group are hosting the annual Asset Management Derivatives Forum at The Ritz-Carlton Laguna Niguel in Dana Point, California this coming February. It is an opportunity to meet with market participants from all sides of a trade to examine the latest developments impacting the use of derivatives by asset managers. You can go here for more information and to register.~SR

IG Group, a global online trading firm and the parent company of tastytrade and its brokerage firm tastyworks, said Tuesday it is pledging the equivalent of 1% of the prior financial year’s post-tax profits to charitable causes between 2022-2025. The company said the contributions will be largely aimed at education, with a focus on financial literacy, as well as STEM subjects. The pledge is part of the company’s Brighter Future Fund, established in April 2020 to improve educational opportunities for the least privileged young people and to offer assistance to those that have been hardest hit by the Covid-19 pandemic.~SC

++++

Hackers Backed by China Seen Exploiting Security Flaw in Internet Software; Researchers call it one of the most dire cybersecurity threats to emerge in years and could enable devastating attacks
Robert McMillan, Dustin Volz – WSJ
Hackers linked to China and other governments are among a growing assortment of cyberattackers seeking to exploit a widespread and severe vulnerability in computer server software, according to cybersecurity firms and Microsoft Corp. MSFT -3.26% The involvement of hackers whom analysts have linked to nation-states underscored the increasing gravity of the flaw in Log4j software, a free bit of code that logs activity in computer networks and applications.
/on.wsj.com/3GCK9QK

***** I have never been sent a warning by the CFTC about cybersecurity risks. Yesterday I received this one. FINRA also sent out a notice about this security flaw, as did the UK’s FCA.~JJL

++++

Brain surgeons and rocket scientists no brighter than the rest of us, study finds
Nicola Davis – The Guardian
It may not be rocket science, but researchers have found aerospace engineers and brain surgeons are not necessarily brighter than the general population.
Researchers examined data from an international cohort of 329 aerospace engineers and 72 neurosurgeons who completed 12 tasks online using the Great British Intelligence Test (GBIT) from the Cognitron platform, as well as answering questions around their age, sex and levels of experience in their speciality.
/bit.ly/33qvJVn

******Well, brain surgeons are not exactly as smart as plumbers, that is for certain.~JJL

++++

‘Green defectors’ ditch high-flying careers in business and finance; Growing numbers of executives are quitting blue-chip jobs to work on tackling climate change
Pilita Clark – FT
Six years ago, Samantha Cooper had a high-powered job in London’s Canary Wharf financial district and a hard-charging life to match it. At 42, she was running a global trading team at oil group BP, rising at dawn and heading straight to the gym, checking emails all the way for any market-moving news.
/on.ft.com/3q1VUta

*****Outside of the pandemic, climate change is one of the top 10 or 12 existential challenges we face.~JJL

++++

Tuesday’s Top Three
Our most-clicked story Tuesday was The Financial Times’ Why do Covid boosters offer greater protection against Omicron? Second was John’s Take from our December 10 episode of The Spread, which was third in our top three on Monday. Third was Bloomberg’s Bored Ape NFT Sells for $3,000 Instead of $300,000 After Fat-Finger Error.

++++

MarketsWiki Stats
26,675 pages; 236,568 edits
MarketsWiki Statistics

++++

Lead Stories

U.S. SEC to tighten insider trading rules, propose money market fund changes
Katanga Johnson – Reuters
The U.S. Securities and Exchange Commission (SEC) on Wednesday will propose tightening a legal safe-harbor that allows corporate insiders to trade in the company’s shares, and other rules to improve the resilience of money market funds. The agency will also propose rules to fix problems highlighted by the meltdown of New York-family office Archegos earlier this year.
/yhoo.it/3DYRw3l

Finance industry in last-minute sprint to switch away from Libor; Banks step up efforts to prepare for end of scandal-tainted benchmark
Philip Stafford – FT
Banks, fund managers and other companies are rapidly stepping up their use of replacement rates for Libor in derivatives trades in the final quarter of 2021, as the tainted lending benchmark nears its switch-off day. The majority of volumes of new privately negotiated swaps deals in the British pound, Japanese yen, Swiss franc and Singapore dollar, now largely use the new so-called “risk free” rates that authorities prefer instead of Libor, according to data from Osttra, a UK data provider.
/on.ft.com/3m6XIQs

S&P Dow Jones, Securitize Partner on Tokenized Crypto Funds
Vildana Hajric – Bloomberg
Two new funds will be based on crypto, ‘new economies’ indexes; The products are an option for institutional investors: Daye
Digital-asset firm Securitize is launching two tokenized funds that will track crypto indexes from S&P Dow Jones Indices. The funds, which will track the Cryptocurrency Large Cap Ex-MegaCap Index as well as the Kensho New Economies Composite Index from S&P, are among the first such funds and will only be available to accredited investors. The large-cap one gives investors exposure to more than 30 different cryptocurrencies, while the latter is centered around fintech, artificial intelligence and virtual reality, among other things.
/bloom.bg/3oSZQx3

SGX mandates climate and board diversity disclosures
SGX
Singapore Exchange (SGX) today unveiled its roadmap for issuers to provide climate-related disclosures based on recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). All issuers must provide climate reporting on a ‘comply or explain’ basis in their sustainability reports from the financial year (FY) commencing 2022. Climate reporting will subsequently be mandatory for issuers in the (i) financial, (ii) agriculture, food and forest products, and (iii) energy industries from FY 2023. The (iv) materials and buildings, and (v) transportation industries must do the same from FY 2024.
/bit.ly/3dVb1is

Japan overstated some construction order data for years, PM says
Tetsushi Kajimoto and Kantaro Komiya – Reuters
Japan’s prime minister said on Wednesday that the government had overstated the value of some construction orders received from builders for years, in a blow to the credibility of official statistics widely used by investors and economists. Officials and analysts said the builders involved were relatively small firms and therefore this practice was likely to have had only a minimal impact on gross domestic product (GDP) figures.
/reut.rs/3m6W4OM

China offshore listings clampdown threatens Wall Street; Didi’s switch from New York to Hong Kong suggests US banks may struggle to retain lucrative IPO work
Hudson Lockett, Stephen Morris and Joshua Franklin – FT
It took just five months from going public in New York for Didi Chuxing, the Chinese ride-hailing platform, to beat a humiliating retreat. Didi, which listed overseas despite warnings from Beijing to delay because of data security concerns, confirmed this month it would delist from the New York Stock Exchange and prepare to go public in Hong Kong.
/on.ft.com/3m6BNsT

Musical chairs and the world of US sales trading; Annabel Smith speaks with the intimate; community that covers US equities markets out of the UK and Europe, exploring everything from execution and desk configuration to turnover and people moves.
Annabel Smith – The Trade
As the hectic market Close concludes and 5pm approaches, most of the UK’s and Europe’s sales traders begin to wind down for the day, switching off their screens and preparing for the commute home. However, a small community of individuals remain at their desks flying the flag for a foreign land.
/bit.ly/3GMMnNm

Erik Thedéen appointed Vice Chair of ESMA
ESMA
The Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed Erik Thedéen as its Vice Chair. Mr Thedéen, who is the Director General of the Swedish Finansinspektionen (FI), will serve a 2½ year term effective immediately. He replaces Anneli Tuominen, Director-General of the Finnish Finanssivalvonta (FIN-FSA) who has completed her term.
/bit.ly/3F2j49k

OneChronos Announces Independent Research Lab to Pave New Pathways in Capital Markets Trading Venue Design; OneChronos forms “OneChronos Labs,” chaired by 2020 Nobel Prize recipient Prof. Paul Milgrom, to advance research into novel “Smart Market” auctions and matching mechanisms for use in capital markets
OneChronos
OneChronos, a venture-backed operator of electronic markets for the trading of financial assets, today announced the formation of OneChronos Labs, an independent group of leading academics and industry practitioners focused on the multidisciplinary problem of bringing transformative auction formats to capital markets.
/bwnews.pr/3EYfI6Z

Baton Claims World First with Non-CLS PvP Settlement
Colin Lambert – The FullFX
The world’s first interbank Payment vs Payment (PvP) settlement outside of CLS has been completed using HSBC’s FX Everywhere solution, which runs on Baton Systems’ Core-FX solution, that uses proprietary distributed ledger technology (DLT) and is governed by the Baton Rulebook.
/bit.ly/3oVplOb

How Covid Changed the American Workforce; Companies are racing to automate, as older workers and parents work less or quit.
William A. Galston – WSJ
Economic forecasting is a tricky business—at best, an art rather than a science—and even the best observers get it wrong sometimes, as the Federal Reserve Board has this year with inflation. Disjunctive events, such as a pandemic, make predictions even more difficult. No doubt the pandemic has accelerated changes that were already under way. (The shift toward remote work is a good example.) But there is also mounting evidence that the pandemic is triggering changes that wouldn’t have happened otherwise.
/on.wsj.com/3274n6g

Coronavirus

Omicron Infects 70 Times Faster But Is Less Severe, Study Says
Chris Kay – Bloomberg
Observations are part of a study by University of Hong Kong; Omicron growth was 10 times lower in the human lung issue
The omicron variant infects around 70 times faster than delta and the original Covid-19 strain, though the severity of illness is likely to be much lower, according to a University of Hong Kong study that adds weight to the early on-ground observations from South African doctors.
/bloom.bg/3yvEhFT

Unvaccinated Covid Patients Push Hospital Systems Past the Brink
Drew Armstrong – Bloomberg
In a Kentucky hospital bed at the end of November, a Covid-19 patient from the state’s latest wave of infections lay alone behind the glass isolation wall. A high-flow oxygen mask pushed extra air into his damaged lungs. His heart beat fast, though he lay frail and still. His mouth opened and closed to take tiny gulps of air. It looked like he was suffocating.
/bloom.bg/3snEPNp

Dimon’s Disdain of Zoom Tested as Health Conference Attendees Back Out
Hannah Levitt and Riley Griffin – Bloomberg
Moderna, Amgen won’t go to JPMorgan’s annual health-care event; Bank is said to mull changes to in-person gathering next month
Few of the corporate world’s most prominent leaders have been as effusive this year as Jamie Dimon in cajoling office workers back into pre-pandemic routines, arguing his army of bankers at JPMorgan & Chase & Co. can’t tend relationships nearly as well on Zoom.
/bloom.bg/3GKEOqG

EU Regulators Recommend Booster of Johnson & Johnson Vaccine
Thomas Mulier – Bloomberg
European Union health regulators recommended giving a booster dose of Johnson & Johnson’s Covid vaccine in adults. Countries should consider offering an extra shot to people 18 and above at least two months after the initial dose, the European Medicines Agency said Wednesday. An advisory committee also concluded that the J&J shot can also be used as a follow-up to two doses of the Moderna Inc. or Pfizer Inc.-BioNTech SE vaccines.
/bloom.bg/3m3SBkg

Google Will Sack Staff Who Refuse to Comply With Vaccine Policies: CNBC
Edwin Chan – Bloomberg
Employees have till Jan. 18 to comply with internal policy; Staff may get fired, CNBC cites Google saying in memo
Google has threatened to reduce pay or even fire staff who fail to comply with internal policies on Covid 19 vaccinations, CNBC reported, citing internal documents.
/bloom.bg/3q1zW9B

U.S. study suggests vaccines may be ineffective against Omicron without booster
Michael Erman – Reuters
All three U.S.-authorized COVID-19 vaccines appear to be significantly less protective against the newly-detected Omicron variant of the coronavirus in laboratory testing, but a booster dose likely restores most of the protection, according to a study released on Tuesday.
/reut.rs/3m7fx1I

Canada likely to toughen travel curbs as Omicron concern grows – CBC
Reuters
Canada is expected to toughen restrictions on international travel with new measures to be announced on Wednesday as it looks to limit the spread of the Omicron coronavirus variant, CBC News reported.
/reut.rs/33yoyL5

Omicron to be dominant variant in London in next 48 hours – health minister
Reuters
The Omicron variant of the coronavirus is spreading swiftly and will become the dominant variant in the British capital in the next 48 hours, Health Secretary Sajid Javid said on Monday. “No variant of COVID-19 has spread this fast,” Javid told parliament.
/reut.rs/3q1V6Va

No more Covid restrictions needed in England before Xmas, says minister; Grant Shapps’ comments follow humiliating rebellion by Tory MPs against Boris Johnson’s Plan B curbs
Laura Hughes – FT
The UK transport secretary has insisted that current restrictions introduced to curb the spread of the Omicron variant in England should “see us through to the new year” after Boris Johnson suffered a humiliating rebellion over his “Plan B” measures in the Commons.
/on.ft.com/3GPsPYX

Sinovac Provides Inadequate Shield Against Omicron in Hong Kong Study
Jinshan Hong – Bloomberg
Chinese shot is one of the most widely used globally; Three doses can neutralize omicron better: Sinovac study
The vaccine made by Sinovac Biotech Ltd., one of the most widely used in the world, doesn’t provide sufficient antibodies in two doses to neutralize the omicron variant and boosters will likely be needed to improve protection, initial lab findings showed.
/bloom.bg/3dQ7lyF

Exchanges, OTC and Clearing

Clearstream processes the first dematerialized securities via D7
Deutsche Börse Group
The D7 central register supports the issue of electronic securities for the first time in Germany;Deka Bank and MünchenerHyp carried out the first dematerialized issues together with DZ BANK; Test phase started for the fully integrated digital issuance of electronic securities via D7
Clearstream has put a central register for electronic securities into operation in Germany, which has supported the first dematerialized issues carried out by Deka Bank and MünchenerHyp together with DZ BANK. With this step, Deutsche Börse Group is introducing the first active component of its recently announced D7 platform – a regulatory-compliant, fully digital post-trade infrastructure – which enables market participants to digitize their financial products while providing access to established central and decentralized infrastructures and markets.
/bit.ly/3yskKGx

Exchanges to Innovate for Increased Retail Flow
Shanny Basar – Markets Media
US exchanges are expected to continue to innovate to allow institutions to interact with the increased volumes of retail trading, which mostly takes place off exchanges. Jack Miller, head of trading, institutional equities at Robert W. Baird & Co, said the increase in retail volumes has brought topics such as payment for order flow and exchange rebates to the forefront.
/bit.ly/3qexGfF

Aurora Eiendom lists on Euronext Growth Oslo
Euronext
Market capitalisation of approximately NOK 2 billion;199th listing on Euronext markets and 66th on Oslo Børs markets in 2021
Oslo Børs, part of the Euronext Group, today congratulates the Norwegian real estate company Aurora Eiendom on its listing on Euronext Growth Oslo (ticker: AURA). It is the 66th listing on Oslo Børs markets so far this year.
/bit.ly/31RQx85

HealthBeacon lists on Euronext Growth Dublin
Euronext
EUR25 million raised – market capitalisation of EUR98.35 million; First IPOready participant to list on Euronext markets
Euronext today congratulates HealthBeacon, an Irish digital therapeutics company that develops products for managing injectable medications for people in the home, on its listing on Euronext Growth Dublin (ticker code: HBCN). It is the first alumnus of Euronext’s pre-IPO programme, IPOready, to list on Euronext markets.
/bit.ly/3IS6cF6

The Spanish financial markets bid farewell to 2021 with growth in financing and market value
BME-X
BME today presented the 2021 Market Report, featuring the financial market highlights of the past year. During a meeting with the media, Jos Dijsselhof, Chairman of BME, and the CEO, Javier Hernani, set out the key milestones of a year marked by the evolution of the Covid-19 vaccination programme, the economic recovery and market growth.
/bit.ly/3ysYTPa

— CME Group Holiday Calendar – Juneteenth Holiday 14 Dec 2021 — CME
— Decrease of the Contract Size of the Nasdaq-100® Volatility Index? Futures Contract — CME
— Storage and Handling Rate Changes for Access World (USA) LLC — CME
— SPAN Risk Parameter Files are now available via CME DataMine — CME
— Product Modification Summary: Decrease of the Contract Size of the Nasdaq-100® Volatility Index? Futures Contract – January 10, 2022 — CME
— UPDATED: December 2021 Final Foreign Currency Settlement Prices — CME

Fintech

It’s Awkward Being a Woman in the Metaverse; Meeting people in virtual reality was fun but messier than Mark Zuckerberg’s vision. Also beware the foul-mouthed kids and the griefers.
Parmy Olson – Bloomberg
Mark Zuckerberg has said the “metaverse” is where we’ll connect with family and friends. The chief executive officer of Meta Platforms Inc. (a.k.a. Facebook) is betting that we will express ourselves “in new, joyful, completely immersive ways.” He’s bet the future of his company on it.
/bloom.bg/3yH5shr

Marubeni to Invest in Covantis Digital Blockchain Start up
Covantis
Marubeni Corporation of Japan and Covantis SA announced that an agreement has been reached for Marubeni to invest and acquire shares in the Swiss-based digital Blockchain start up. The deal will be finalized subject to regulatory approval.
Covantis founding members are ADM (NYSE: ADM), Bunge (NYSE: BG), Cargill, Cofco Corporation, Louis Dreyfus Company and Viterra. Covantis was first announced as an initiative in late 2018 to accelerate the transformation of global trade execution processes. https://bit.ly/3pZ2h0n

Appital begins onboarding of buy-side firms ahead of platform launch date; Over 30 asset managers are currently taking the necessary legal and technical steps to be able to join Appital at launch.
Wesley Bray – The Trade
New trading platform Appital is taking the final steps in preparation for its platform launch, which it says will bring technological innovation and automation to equity capital markets and improve liquidity discovery and price formation for illiquid equity positions.
/bit.ly/3GMFegc

A new trading tech era: why the technological arms race is intensifying
The Trade
The financial services industry has been through a period of intense change since the start of the pandemic, a change which has made clear our reliance on electronic infrastructure and the importance of trading technology. The industry is entering 2022 in robust shape, with investment in technology set to continue, driven by three major themes.
/bit.ly/3scP1bd

Cybersecurity

Feds scramble to assess security flaw that threatens ‘hundreds of millions’ of devices
Eric Geller – Politico
“Hundreds of millions” of internet-connected devices are vulnerable to hackers because of a newly discovered security flaw in a widely used piece of computer code, a federal official said Tuesday — though there is no indication that U.S. government agencies have been compromised.
“Across the federal government, we have no known reports of compromises using this vulnerability,” Eric Goldstein, the executive assistant director in charge of the cybersecurity division at the Cybersecurity and Infrastructure Security Agency, told reporters during a briefing about the expanding crisis around the flaw.
/politi.co/3yurdkd

Guardio raises $47 million led by Tiger Global for cybersecurity browser extension
Sophie Shulman – CTech
Cybersecurity startup Guardio announced on Tuesday that after three years in bootstrap mode it has completed a $47 million first funding round, led by Tiger Global. According to estimates, the round of funding was held at a company valuation of $500 million. Along with Tiger Global, which has been significantly increasing its activity in Israel over recent months, the round included Emerge, with additional participation from Vintage, Cerca Partners, Union and Samsung Next.
/bit.ly/3yBtE4I

Final Rule Places New Cybersecurity Reporting Requirements on Banks
Anthony Hendricks – JDSupra
Last month, the Federal Reserve System’s Board of Governors, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency approved a final rule that places reporting requirements on banks and banking service providers. Under this new rule, banks must report cybersecurity incidents within 36 hours to federal regulators. In addition, banking service providers must notify banks as soon as possible after suffering a computer security incident. This new rule also requires banks to inform customers of any computer security incident lasting more than four hours.
/bit.ly/33qSLeR

Britain to push back against China and Russia in cyberspace
Guy Faulconbridge – Reuters
Britain said it would push back at what it casts as attempts by Russia and China to establish national sovereignty over the communications arteries and emerging technologies which will shape the 21st Century. Britain depicts China and Russia as strategic rivals whose rush for control of some major technologies such as artificial intelligence, quantum computing and microprocessor design could threaten both Western security and a relatively free internet.
/reut.rs/3m9mVtM

Cryptocurrencies

Kevin Durant Signs Deal to Promote Crypto Platform Coinbase; The NBA star is part of the industry’s push to go mainstream and lure new users.
Kim Bhasin – Bloomberg
Basketball star Kevin Durant and his company Thirty Five Ventures have signed a multiyear deal with Coinbase Global Inc. to promote the cryptocurrency platform across his businesses.
/bloom.bg/3m53K40

Binance curbs UK trader access to risky crypto derivatives; Exchange makes renewed push to charm regulators after summer FCA censure
Joshua Oliver – FT
Binance has moved to restrict UK customer access to crypto derivatives after its chief executive said the exchange plans to renew its push for regulatory approval to operate in the country. The crypto exchange, which clashed with the Financial Conduct Authority earlier this year, sent notices to UK customers on Tuesday requiring them to provide additional information to continue to access derivatives and other features on the platform.
/on.ft.com/3pVYYas

UK advertising regulator issues rebukes to crypto industry; ASA criticises leading players including Coinbase and eToro over misleading ads
Joshua Oliver and Akila Quinio – FT
The UK advertising watchdog has taken the crypto industry to task for “widespread” problems with misleading and irresponsible ads, issuing rulings against several of the sector’s biggest firms, including Coinbase and eToro. The Advertising Standards Authority on Wednesday released formal rebukes to seven firms for breaching UK ads industry standards with a wide range of promotions, from online campaigns to endorsements by social media influencers.
/on.ft.com/3m6M08J

Bitcoin Firm NYDIG Raises $1 Billion From Investors; New York firm valued at more than $7 billion in latest blockbuster funding round by a crypto startup
Alexander Osipovich – WSJ
New York-based bitcoin firm NYDIG said Tuesday that it had raised $1 billion at a valuation of more than $7 billion, the latest in a series of blockbuster funding rounds this year by cryptocurrency startups. Earlier known as New York Digital Investment Group, the firm runs a bitcoin trading, brokerage, custody and asset-management business that caters to institutional investors.
/on.wsj.com/3IU8jrZ

Listed companies’ Bitcoin holdings hit $9.6 billion as institutional and corporate interest in digital assets grows; But the Bank of England’s latest Financial Stability Report sounds a cautionary note and calls for greater transparency of institutional investor holdings of crypto assets to reduce spillover effects.
Anita Hawser – The Trade
A staggering $60 billion worth of Bitcoin is held through various Bitcoin closed-ended trusts and exchange traded products, according to analysis conducted by London-based digital assets hedge fund manager Nickel Digital Asset Management.
/bit.ly/3pThH6m

Errant quotes made cryptocurrency investors ‘quadrillionaires’ on paper today. Here’s how the crypto community reacted.
Mark DeCambre – MarketWatch
Bitcoin has minted more than a few millionaires in recent years as its value has surged since its inception more than a decade ago, but an apparent display issue made investors substantially wealthier — at least on paper — for a time Tuesday. Crypto sites, including digital-asset exchange Coinbase Global COIN, +1.79% and CoinMarketCap.com, were acknowledging issues with displayed quotes of some of the most popular cryptocurrencies, including bitcoin BTCUSD, -1.05% and Ether ETHUSD, -0.74% on the Ethereum blockchain.
/on.mktw.net/3pXtJf4

Politics

Column: Trump’s latest deal could set a high water mark for investment scams
Michael Hiltzik – LA Times
For a while there, it seemed that the SPAC boom had run out its string. Then came Donald Trump. Already confused? Let’s start with first principles. SPACs, or special purpose acquisition companies, are shell companies that collect funds from investors on the expectation that they’ll find a private company to merge into within a given period of time, usually 24 months.
/yhoo.it/3EYe31x

The Gas Weapon in a Russia-Ukraine Conflict; What happens if Putin decides to meddle with Europe’s gas supply this winter?
Liam Denning – Bloomberg
According to Vladimir Putin, “true sovereignty of Ukraine is possible only in partnership with Russia.” Besides the delicious contradiction there, it shows how far the Russian president’s designs on Ukraine stretch beyond the gas pipelines that fueled previous crises. (You can read the whole, rather turgid essay here.) Yet if Russia does invade Ukraine (again), the effect on energy markets this winter is something Western countries will need to contend with.
/bloom.bg/3dPRoZj

Tesla’s Musk Berates Warren on Twitter Again in Spat Over Taxes
Tom Maloney and Cecile Vannucci – Bloomberg
Elon Musk is sparring with Senator Elizabeth Warren on Twitter over taxes again. After the Massachusetts senator blasted the tax code for being “rigged” and asking to change it “so The Person of the Year will actually pay taxes and stop freeloading off everyone else,” Musk tweeted that he’s contributing more than any other U.S. citizen this year.
/bloom.bg/3pTc8Vw

White House taps insider to run agency that oversees Fannie, Freddie
Jacob Passy – MarketWatch
President Joe Biden announced that he will nominate Sandra L. Thompson to lead the Federal Housing Finance Agency. Thompson has served as the agency’s interim director since June after the president fired the agency’s previous director, Mark Calabria. Biden’s ability to fire Calabria, who had been appointed by President Trump in 2019, was granted via a Supreme Court decision in a case involving shareholders of Fannie Mae and Freddie Mac. The FHFA is the main regulator overseeing the mortgage giants. According to the White House, Thompson has four decades of government experience. Before she joined the FHFA, she worked at the Federal Deposit Insurance Corp.
/on.mktw.net/3oWB0MP

Regulation

K financial regulator rebuked for handling of banks’ mis-selling scandal; Independent review finds FSA should have conducted more ‘intensive investigation of root causes’
Laura Noonan – FT
The UK’s financial regulator did not do enough to hold banks accountable for a £2.2bn interest rate hedging mis-selling scandal that began 20 years ago, and used flawed criteria to exclude some customers from the redress scheme, an independent review has found. The report by John Swift QC published on Tuesday sharply rebuked the Financial Services Authority, the forerunner of the Financial Conduct Authority, for not being transparent enough with customers affected by the scandal and giving unrealistic timelines on how long the redress scheme would take.
/on.ft.com/3GMC2kM

Opening statement by ASIC Chair Joseph Longo at the inquiry into the Sterling Income Trust, 15 ASIC
1. Good afternoon Chair. I would like to make a brief opening statement today.
2. In recent weeks, we have heard more details about the devastating impact of the Sterling collapse on former tenant-investors and general investors. I am meeting with victims here in Perth later this week, to hear first-hand about their experiences.
/bit.ly/321MCVN

Opening statement to the inquiry into corporate sector engagement with Aboriginal and Torres Strait Islander consumers – 15 December 2021
ASIC
(Sean Hughes): Thank you for the opportunity to appear today on behalf of the Australian Securities and Investment Commission, attendees from ASIC will take a moment prior to our opening statement to provide their names, roles and lands from where they are attending:
/bit.ly/324UZ2K

Charge withdrawn against former director James Feng
ASIC
ASIC notes the decision of the Commonwealth Director of Public Prosecutions (CDPP) to withdraw the charge against Mr James Jianshu Feng, a former director of Australasia Wealth Services and Management Pty Limited (AWSM).
/bit.ly/327CryT

ASIC sues OnePath for fees for no service misconduct
ASIC
ASIC has commenced civil penalty proceedings in the Federal Court against superannuation trustee OnePath Custodians Pty Ltd (OnePath) for allegedly charging fees for no service and making false and misleading representations to fund members. ASIC alleges OnePath incorrectly charged over $4 million in fees to more than 18,000 fund members when it was not entitled to do so.
/bit.ly/3EYCYC1

Virtual Remarks at the Center for American Progress and Sierra Club: Down the Rabbit Hole of Climate Pledges
Commission Caroline A. Crenshaw – SEC
Thank you Daniella [Gibbs Léger], I am thrilled to be here today. And I want to commend the Center for American Progress and the Sierra Club for the hard work and dedication behind the important research that is being recognized today. Climate change is a crisis that poses an existential threat to our society, and our capital markets will not escape the impact.[1] But before I continue, I must give my standard disclaimer that the views I express are my own and do not necessarily reflect the views of the Commission or its staff.
/bit.ly/3dT2ZXl

Participant Data Management (PDM) System
FINRA
FINRA is introducing a new system for FINRA member firms to submit the FINRA Participant agreement and FINRA order form. Beginning January 31, 2022, FINRA Member firms will be required to use the Participant Data Management platform to perform the following functions for the TRACE, ORF or ADF facilities:
/bit.ly/327TBwg

FINRA Alerts Firms to “Log4Shell” Vulnerability in Apache Log4j Software
FINRA
/bit.ly/3yxiwG2

Apache Log4j cyber vulnerability
UK FCA
We are aware of a remote code execution vulnerability (CVE-2021-44228) that is affecting multiple versions of the Apache Log4j 2 library.
/bit.ly/3yvdObu

Investing and Trading

Summers Warns Markets Are at Risk of a ‘Spontaneous Deflating’
Rich Miller – Bloomberg
Former U.S. Treasury Secretary Lawrence Summers warned of the risk of a “spontaneous deflating of financial markets” that have been pumped up by retail buying and exuberant investors. There is “a lot of euphoria,” Summers said at an American Council for Capital Formation webinar on Tuesday — pointing, among other things, to cryptocurrencies, so-called meme stocks and technology shares. “Super-excited retail is usually a sign of trouble to come,” he added.
/yhoo.it/3yvwtUY

Crash in Shimao Bonds Stokes Contagion Fear, Bailout Speculation
Bloomberg News
Developer had been seen as one of the sector’s healthier firms; Shimao collapse would be ‘far worse’ than Evergrande: Lombard
Its balance sheet is less than a third the size of China Evergrande Group’s and it doesn’t even crack the top 10 list of Chinese property companies by sales. But for many investors, Shimao Group Holdings Ltd. has suddenly become the single biggest worry in a Chinese real estate sector with no shortage of things to worry about.
/bloom.bg/3m7JHSx

Interest Rate Derivatives Trading Activity Reported in EU, UK and US Markets: September 2021
ISDA
ISDA has expanded its SwapsInfo analysis to include interest rate derivatives (IRD) trading activity reported in Europe. The analysis is based on transactions publicly reported by 30 European approved publication arrangements (APAs) and trading venues (TVs).
Key highlights for September 2021 include:
– Total European IRD trading activity reported by APAs and TVs in the EU and UK was $16.1 trillion, the highest level since ISDA started tracking European trading activity in May 2021. Both UK and EU trading activity almost doubled compared to August 2021.
– 49.2% of total European IRD traded notional was executed on TVs, 39.3% was executed by systemic internalizers and 11.4% was executed off venue.
/bit.ly/3EaExM5

Traders See More Currency Volatility No Matter What Omicron Does
Robert Fullem – Bloomberg
Options activity suggests swings will continue into 2022; Central banks balance inflation with Covid’s threat to growth
Volatility traders are betting that gyrations in foreign-exchange markets will likely last well into next year — even if fears of the omicron Covid variant subside.
/bloom.bg/31RQ7i5

Plato Partnership and FMSB to partner on multi-asset research; Strategic agreement will stimulate debate on future market structure and help market participants make better informed decisions.
Anita Hawser – The Trade
Plato Partnership and FICC Markets Standards Board (FMSB) will co-operate on fixed income, currencies and commodities (“FICC”) academic research. The strategic agreement with FMSB will allow Plato’s Market Structure Academic Research programme (MI3), which was launched in September 2019, to drive its vision of becoming a multi-asset class academic research division.
/bit.ly/3GMFziY

Environmental, Social and Corporate Governance

Pimco, Fidelity Shun Net-Zero Alliance Embraced by BlackRock
Alastair Marsh and Silla Brush – Bloomberg
A group of Wall Street giants has decided to sit out one of the industry’s biggest coalitions: the Glasgow Financial Alliance for Net Zero.
/yhoo.it/3yvC79f

Wall Street could crumble under the weight of a ‘carbon bubble,’ these groups warn
Rachel Koning Beals – MarketWatch
If Wall Street were a country, it would be the fifth-largest emitter of atmosphere-warming carbon emissions, nestling it right between Russia and Indonesia, a new report says. A study with a title warning of “Wall Street’s Carbon Bubble” by the Sierra Club and the left-leaning Center for American Progress released Tuesday shows that eight of the largest U.S. banks and 10 of the largest U.S. asset managers combined to finance an estimated 2 billion tons of carbon dioxide emissions based on year-end disclosures from 2020.
/on.mktw.net/3dUMkTq

Citigroup Promotes a Record 18 Female Managing Directors in Asia
Cathy Chan – Bloomberg
Senior female promotions represent 35% of total new MDs; About half of newly-named MDs are in institutional business
Citigroup Inc. has appointed 18 female managing directors in Asia, a record number of such promotions for the region. They accounted for 35% of the 52 managing directors promoted for 2022, according to a memo sent by the bank’s chief executive officer in the region, Peter Babej. A Hong Kong-based spokesman confirmed content of the memo.
/bloom.bg/3m7UTPg

Shell Uses Cow Dung to Power German Trucks and Cut CO2
Rachel Graham – Bloomberg
Trucks to run on bio-LNG in Germany within about 2 years; Shell now looking to build or buy plants that make biomethane
Trucks in Germany could soon be running on fuel that’s made partly from manure at one of Europe’s biggest oil refineries.
/bloom.bg/3IP2lsd

Institutions

Why hedge funds are warming up to crypto
Alexandra Semenova – Yahoo Finance
Wall Street is getting more comfortable with crypto as regulation looms and investment-grade infrastructure shapes up for the emerging asset class, with more traditional hedge funds reporting plans to boost their exposures and get in on the digital asset boom.
/yhoo.it/3dPPzvr

JPMorgan Grants Pinto Stock Award as He Becomes Sole President
Steve Dickson – Bloomberg
JPMorgan Chase & Co. granted Daniel Pinto a special stock award ahead of his promotion next month to sole president of the biggest U.S. bank. The firm’s compensation and management-development committee awarded Pinto 750,000 options in the form of stock-appreciation rights, the New York-based company said Wednesday in a regulatory filing.
/bloom.bg/3p5rOpH

A Towering Mizuho Bond Trader Has Some Interesting Friends; Claus Jorgensen’s links to controversial German financier Lars Windhorst go back years.
Laura Benitez, Donal Griffin, and Luca Casiraghi – Bloomberg
Like most financiers, Claus Jorgensen knows the value of relationship building. The Danish-born bond trader enjoys entertaining clients at 67 Pall Mall, an oak-paneled drinking club close to Buckingham Palace that he cofounded with other wine-devoted bankers. Yet there’s one business contact and fellow oenophile who may matter more than most to Jorgensen: Lars Windhorst, the controversial financier, former bankrupt and one-time wunderkind of German industry.
/bloom.bg/3EU2loq

UBS Plans to Shut its Global Banking Office in India
Baiju Kalesh and Cathy Chan – Bloomberg
Three investment bankers leaving, two may be transferred; Swiss bank will serve India clients from offshore operations
UBS Group AG is moving its investment banking coverage in India offshore, cutting jobs as it closes down its global banking presence in the country. The Swiss bank plans to serve its India clients from its operations outside the South Asian nation, the people said, asking not to be identified as the information is private. Staff were informed Wednesday, they said.
/bloom.bg/3208YqX

JPMorgan’s Big Healthcare Conference Goes Virtual on Omicron Concerns; The move comes after several biotechnology companies pulled out of planned in-person appearances at San Francisco event
David Benoit and Charley Grant – WSJ
JPMorgan Chase JPM 0.77% & Co. is moving its big annual healthcare conference in San Francisco to a virtual setting, telling participants the spreading Omicron variant of Covid-19 had made the in-person gathering too risky. The bank’s annual gathering is one of the biggest events for global healthcare professionals and CEOs, and it is often full of deal making. This year’s event, scheduled for the middle of January, will be the 40th version. The move comes after several biotechnology companies pulled out of planned in-person appearances, which were first reported on Tuesday by Stat News.
/on.wsj.com/3pTfsQu

Regions

Hong Kong’s Tybourne to Shut $2.8 Billion Hedge Fund
Bei Hu and Nishant Kumar – Bloomberg
Tybourne Capital Management is shutting its $2.8 billion hedge fund, retreating from bearish bets that have become increasingly difficult to make money from, said people with knowledge of the matter.
/yhoo.it/3EYttTr

Billionaire Stephen Ross Sees Florida ‘Gold Rush’ as Firms Shift South
Natalie Wong and David Westin – Bloomberg
Related Cos., the developer behind Manhattan’s Hudson Yards project, is making more investments in Florida than New York these days as finance and tech firms look for office space in the Sunshine State. “It’s almost like a gold rush going on in Florida,” Stephen Ross, chairman of the New York-based real estate company, said in an interview with Bloomberg Television’s David Westin.
/bloom.bg/3IQm9vo

Puerto Rico’s Bankruptcy-Exit Plan Offers Island a Fresh Start
Michelle Kaske – Bloomberg
Workout cuts $33 billion of debt, creates pension reserve fund; Exit ‘removes a huge cloud’ over the economy: Marxuach
Puerto Rico is inching closer to ending its more than four-year bankruptcy as the judge overseeing the workout is reviewing a restructuring plan that cuts billions in debt, fixes a broke pension system and potentially returns the commonwealth to balanced budgets.
/bloom.bg/3IS0mDy

We visit more than 100 financial news websites daily (Would YOU do that?)

The Spread

Past JLN Newsletters

Pin It on Pinterest

Share This Story