Hits & Takes
By JLN Staff
The Chief Scout of the Boy Scouts of America issued a statement yesterday that was more pointed and specific about President Trump’s speech at the National Jamboree the other day. Here is a New York Times story about the BSA statement. ~JJL
A MIAX Equities Exchange and the CFTC Connection: A Few More Words on LedgerX
Spencer Doar – JLN
In case you missed the big news Monday, the CFTC approved LedgerX as a derivatives clearing organization. Miami International Holdings, or MIH (parent company of MIAX), a partner and investor in the crypto exchange, put out its press release regarding the approval Wednesday night.
The key takeaway from the release is a pretty big “Whoa!” stemming from this one-off line regarding MIH’s licensing agreement with LedgerX: “MIH secured similar rights for securities to be listed on its MIAX Equities Exchange, once launched.” An equities exchange? There is not much information out there regarding this proposed endeavor. All the web yields is a trademark filing from 2016 for “MIAX Equities.” (Note: MIH has not yet responded with a comment as of publishing time. This story will be updated with that information once received.)
Read the rest here.
Magnus Bocker, ex-SGX CEO, dead at 55; Industry veteran led mergers of Nasdaq, OMX, then helmed post-financial crisis SGX
Kenneth Lim – The Business Times
Magnus Bocker, who led the Singapore Exchange (SGX) after the global financial crisis, has died from cancer in the United States, the Business Times has learned. He was just over a month shy of turning 56.
Thursday’s Top Three
Not surprisingly, the Bloomberg story Libor Funeral Set for 2021 as FCA Abandons Scandal-Tarred Rate was number 1 yesterday, with the resounding first sentence: “Libor, the nearly 50-year-old global borrowing benchmark that became a byword for corruption, is headed for the trash heap of history.” Second most-read was Sean McLaughlin’s story in Medium, The Career Risk Traders Are Unaware Of. Third was another Bloomberg story/explanation on LIBOR, Libor’s Fall and Why Yawns Are Worse Than Scandal: QuickTake Q&A
105,152,743 pages viewed; 22,629 pages; 207,290 edits
Upcoming Fed Meeting: When and What to Watch
Prepare for the next round of central bank meetings and learn how you can manage your exposure through ICE’s deeply liquid interest rate product portfolio.
U.S. Targets Bitcoin Exchange, Alleging It Facilitated Crime
Ian Talley and Samuel Rubenfeld – WSJ
U.S. law-enforcement authorities took aim at one of the world’s largest digital-currency exchanges this week in an anti-money-laundering operation that spanned two continents and sent a warning to other virtual-money platforms the U.S. says may be facilitating crime.
The 2017 Tech 40
Financial firms and markets have always been awash in data. Now managing and making sense of it has become a business in itself, and the industry’s top technological innovators are aggregating data and deploying advanced analytical tools to set themselves apart.
**Adena Friedman, CEO at Nasdaq, is number one on the list. ICE chairman and CEO Jeff Sprecher is number four, and CBOE’s Chris Concannon ranks in at 15.
Libor: missin’ you already
Everything about the London Interbank Offered Rate is passé — even the scandal that sealed its fate. Small wonder regulators want to replace it with a more “reliable” borrowing benchmark based on real deals. Yet it remains a global reference point for a reason. Phasing it out with no international replacement in sight leaves a gap.
****SD: More from the WSJ on the decision Scandal-Hit Libor to Be Phased Out; U.K. regulator lays out five-year plan for alternative benchmarks
Mnuchin: Volcker Rule, ‘Too Big to Fail’ Set for Changes Treasury secretary says he will discuss potential moves at Friday’s FSOC meeting
Rachel Witkowski – WSJ
The Trump administration is working with bank regulators to roll back postcrisis rules, Treasury Secretary Steven Mnuchin said Thursday, namely the Volcker rule and the system of determining which financial firms are considered “too big to fail.”
Special Report: Senate Agriculture Committee Holds Hearing on CFTC Nominees
Three CFTC nominees testified at a Senate Agriculture Committee today, a key step in the process for confirming their nominations. The committee has not scheduled a vote on the nominations yet, but the hearing revealed strong support for the nominees from members of both parties. The two most senior members of the committee, Senators Pat Roberts (R-Kansas), and Debbie Stabenow (D-Mich.), welcomed the nominees as well qualified to serve as CFTC commissioners and expressed their support for filling the vacancies at the agency.
CFTC commissioner nominees pledge to complete position limit rules
Sarah N. Lynch – Reuters
Three of President Donald Trump’s nominees to serve as commissioners on Wall Street’s top derivatives regulatory agency on Thursday pledged to work to complete rules that would restrict trading by market speculators who bet on the rise and fall of prices.
Black Executives Are Losing Ground at Some Big Banks
Max Abelson and Jordyn Holman – Bloomberg
Wall Street’s top bosses have pledged for years to boost diversity in their ranks. But the number of black people at some of the biggest U.S. banks is going in reverse.
FCA moots synthetic Libor as rates fallback
Lukas Becker – Risk.net
Existing derivatives contracts could be amended to reference a synthetic Libor rate should the benchmark cease to be produced after 2021, according to Andrew Bailey, chief executive of the UK’s Financial Conduct Authority (FCA). The fallback rate would be created by adding a credit component onto a dynamic, risk-free rate – potentially helping to avoid a sharp transition if Libor is abandoned.
Institutional equity commissions down 40% from 2009, Greenwich finds
Pensions & Investments
Total U.S. institutional equity commissions have fallen 40% from the first quarter of 2009 to March 31 of this year, the result of less stock turnover after the financial crisis, according to a Greenwich Associates report released Thursday.
London asset managers face new Brexit threat
Huw Jones, Anjuli Davies and Simon Jessop – Reuters
British-based investment firms’ long-standing ability to manage billions of euros of assets elsewhere in Europe could be threatened by Brexit, new EU guidance suggests.
Worsening drought conditions in parts of US stressing crops
Drought conditions worsened in several states over the past week from extreme heat and weeks with little rain, raising the prospect that grocery staples such as bread and beans could cost more as the region that produces those commodities is hardest hit.
Exchanges, OTC and Clearing
Magnus Bocker, Former Singapore Exchange CEO, Dies at 55
Andrea Tan – Bloomberg
Magnus Bocker, the former chief executive officer at Singapore Exchange Ltd. and president of Nasdaq OMX Group Inc., has died of cancer. He was 55.
“We will remember him for his infectious optimism, fresh insights, and energetic approach to just about anything, from music to cars to the exchange business and his belief in SGX,” Singapore Exchange said in a statement Friday. He was a driving force for change, the company said.
Deutsche Börse senses opportunity as banks pick Frankfurt
Samuel Agini – Financial News
German exchange is in ‘very good dialogue’ with clients and hopes to benefit from Brexit-related moves from London
Euroclear’s blockchain gold settlement venture with Paxos dissolved
Anna Irrera – Reuters
A partnership between Euroclear and U.S. startup Paxos to develop a blockchain-based service for the London gold market has been dissolved, a spokeswoman for the Belgium-based settlement house said on Thursday.
Permanent rice-future listing doomed as LDP overpowers farm ministry; Exchange extension unlikely as Japanese lawmakers fear end of production controls
Nikkei Asian Review
Japan’s agriculture ministry will likely deny a request from the Osaka Dojima Commodity Exchange for permanent listing of rice futures, now being traded on a trial basis. The ministry had initially warmed to the idea, but apparently folded under pressure from the ruling Liberal Democratic Party.
SGX reports FY2017 net profit of S$340 million
Revenue: S$801 million, down 2% from a year earlier
Sebi, exchanges meet to beef up systems post 3-hour technical glitch at NSE
Business Standard News
The Securities and Exchange Board of India (Sebi) has called for a meeting of stock exchanges on Friday to discuss beefing up of systems and process following the three-hour technical glitch at National Stock Exchange (NSE) earlier this month.
SGX clarifies that existing secondary listing framework allows dual class share companies
Companies with a dual-class share (DCS) structure that are primary-listed in “developed markets” can seek a secondary listing on Singapore Exchange (SGX), SGX said today in response to queries raised during the DCS public consultation process.
The GEM Listing Committee censures Mr Ang Wing Fung, a former executive director of Inno-Tech Holdings Limited (Stock Code: 8202), for breaching the Director’s Undertaking
CENSURES: Mr Ang Wing Fung (“Mr Ang”), a former executive director (“ED”) of Inno-Tech Holdings Limited (Stock Code: 8202) (“Company”) for breaching his obligations under the Declaration and Undertaking with regard to Directors (“Undertaking”) given to The Stock Exchange of Hong Kong Limited (“Exchange”) in the form set out in Appendix 6A to the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (“GLR”), and stating that Mr Ang’s conduct in this matter will be taken into account in assessing his suitability under GLR 5.02 (and its equivalent of the Rules Governing the Listing of Securities on the The Stock Exchange of Hong Kong Limited, “Exchange Listing Rules”) in the event that he should wish to become a director of any issuer listed or to be listed on the Exchange in the future.
FactSet Teams with Liquidnet to offer MiFID II research unbundling
FactSet, a global provider of integrated financial information, analytical applications, and industry-leading services, announced today the integration of Liquidnet’s Broker Vote and Commission Management System with FactSet’s Research Management Solutions (RMS).
Flush times for hackers in booming cyber security job market
Joseph Menn and Jim Finkle – Reuters
The surge in far-flung and destructive cyber attacks is not good for national security, but for an increasing number of hackers and researchers, it is great for job security.
London Fintech podcast this week featuring CloudMargin CEO Steve Husk
London Fintech Podcast Latest Episode: LFP082 – Collateral Management, The Cloud and Scaling-Up Fintechs
‘Relax, Scaramucci isn’t touching your money’
Lindsay Fortado – Financial Times
When Anthony Scaramucci went public with his support for then-US presidential candidate Donald Trump, some investors in his SkyBridge Capital investment company began calling its managers, wary of his politics and how it could affect their money.
SkyBridge had a clear message for them: relax, Anthony’s never been in charge of investment decisions.
Trump urged Washington to stop bank mergers in 2004 letter
Jason Lange and Pete Schroeder – Reuters
President Donald Trump warned the administration of George W. Bush in 2004 that big U.S. bank mergers were “totally out of control” and should be stopped as they were forcing businesses to borrow money from foreigners, according to a letter seen by Reuters.
SEC must improve how it protects against cyber attacks: report
Sarah N. Lynch – Reuters
Wall Street’s top U.S. regulator needs to improve the way it protects its own computer networks from cyber attacks, according to a new report by a congressional watchdog office.
Fewer derivatives than expected face full market transparency in EU ruling
John Rega – MLEX
Fewer derivatives than expected will be subject to full market transparency in Europe, under a ruling from EU regulators that some asset managers believe may underestimate the liquidity of trading.
Who should lead China’s new agency to fend off financial crises?
Wendy Wu and Jane Cai – South China Morning Post
China’s premier or a vice-premier should head a new government agency to draw up polices to regulate financial markets and address risks such as spiralling debt facing the economy, according to analysts.
Sebi, bourses meet to beef up systems
This would be the first meeting of the newly-constituted Sebi panel on cyber security
How can Sebi moderate India’s derivatives cholesterol?
The Securities and Exchange Board of India (Sebi) has released a discussion paper on Growth And Development Of Equity Derivative Market in India. The discussion paper is replete with data on the structure of India’s equity markets across stocks and derivatives. The paper concludes that the market is disproportionately skewed towards derivatives and invites suggestions for policy interventions to correct this abnormality.
FINRA, Bats, NASDAQ, and NYSE Fine Firms for Market Access Rule Violations
Four firms have been censured and fined a total of $4.75 million for violations of various provisions of Rule 15c3-5 of the Securities Exchange Act of 1934 (known as the Market Access Rule) and related exchange supervisory rules. The actions were taken by the Financial Industry Regulatory Authority (FINRA), along with Bats, a CBOE Holdings company; The NASDAQ Stock Market LLC; the New York Stock Exchange; and their affiliated Exchanges (collectively, “Exchanges”). The firms involved in these matters are Deutsche Bank Securities Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, and Interactive Brokers LLC.
SEC Announces Whistleblower Award of More Than $1.7 Million
The Securities and Exchange Commission today announced a whistleblower award of more than $1.7 million to a company insider who provided the agency with critical information to help stop a fraud that would have otherwise been difficult to detect. Millions of dollars were returned to harmed investors as a result of the SEC’s ensuing investigation and enforcement action.
Ex-Lehman trader loses most of $83 million bonus bid: U.S. appeals court
Jonathan Stempel – Reuters
A former star Lehman Brothers Holdings Inc [LEHMB.UL] trader can try to recoup only about $7.7 million of an $83 million bonus he claimed to be owed after the investment bank collapsed in 2008, a federal appeals court ruled on Thursday.
Sports gambler Walters sentenced to 5 years for insider trading
Kara Scannell – Financial Times
Professional sports bettor Billy Walters was sentenced to five years in prison for a “brazen” $45m insider trading scheme that tapped into the corporate boardroom of Dean Foods and on to the golf course.
****SD: Reuters here.
Investing and Trading
Private equity’s dirty finance secret
Chris Flood – Financial Times
Tighter rules are required to stop private equity managers from artificially inflating claims about their performance, according to the largest association representing investors in buyout funds.
The Washington-based Institutional Limited Partners Association (ILPA) last month appealed for private equity managers to come clean about financial engineering techniques that are increasingly used to flatter returns and trigger lucrative performance bonuses.
The Bull Market’s Growth Problem
Justin Lahart – WSJ
Stocks are hitting records and valuations are at 15-year highs, both signs of confidence. But a closer look at what is driving the rally shows that the eight-year bull market may be nearing its end.
What are ICOs and why is the SEC taking steps to protect investors from them?
Shawn Langlois – MarketWatch
The murky world of cryptocurrencies has exploded into the mainstream lately. That tends to happen when an investment like bitcoin surges almost fourfold over the past year.
Howard Marks Trashes Bitcoin: ‘An Unfounded Fad’
Paul Vigna – WSJ
Howard Marks is not going to get invited to this weekend’s Ethereum anniversary party, that’s for sure. Mr. Marks, the billionaire investor and cofounder of Oaktree Capital Management, takes a scythe to digital currencies in his latest investment letter. To be fair, he swings the same scythe across basically the entire investment landscape, seeing warped valuations everywhere and nothing but lousy returns to come. Uncertainties abound, from economic growth to central-bank impacts, inflation and political dysfunction, yet investors are still embracing risk and pushing up prices. “In general, the best we can do is look for things that are less over-priced than others.”
BlackRock Launches Commodities Etf For iShares Range
US asset manager BlackRock has unveiled a diversified commodities exchange traded fund (ETF) with a total expense ratio of 0.19% as part of its iShares range of passive index trackers.
France Shows Germany How to Do Investment Banking
Fabio Benedetti Valentini – Bloomberg
Second-quarter profit of 2.4 billion euros beats estimates; French bank’s equity, prime services revenue jumps 26%
BNP Paribas SA is showing it’s still possible to build a big investment bank franchise from Europe.
UBS, Credit Suisse Boost Earnings After Strategic Shift; Swiss banking giants bet that managing money for well-heeled clients is the right path
Brian Blackstone – WSJ
Swiss banking giants UBS Group AG and Credit Suisse Group AG posted better-than-expected profit last quarter, suggesting their bets that managing money for well-heeled clients is the right path for steady returns have paid off despite an uncertain outlook.
Deutsche Bank Reports Sharp Rise in Profit but Broad Revenue Decline
Jenny Strasburg – WSJ
Deutsche Bank AG’s cost-cutting moves helped it beat analysts’ expectations in the second quarter, but year-over-year revenue fell in all three business divisions as its chief executive faces pressure to revive results amid a continuing overhaul.
UBS Shares Drop Most Since January as Capital Ratio Declines
Jan-Henrik Foerster – Bloomberg
CFO says capital ratio remains strong on call with analysts; Bank posts lower-than-expected U.S. wealth management results
Dutch to Sell $1.7 Billion ABN Amro Stake After Share Rally
Keith Campbell – Bloomberg
Sale of 7% holding adds to wave of European bank offerings; State to reduce stake to 63%, with further sales planned
The Dutch state will sell an additional 7 percent of ABN Amro Group NV, a stake worth about 1.5 billion euros ($1.7 billion) at current prices, taking advantage of steady demand for European bank stocks as it progresses toward full privatization.
Citigroup hires Deutsche’s former listed head Wilson
Luke Jeffs – FOW
Wilson is set to join Citigroup in London as a managing director in early September
Deutsche Bank to Keep $45 Million in Ex-Executives’ Suspended Bonuses
Jenny Strasburg – WSJ
Deutsche Bank AG said 11 mostly former executives have agreed to waive EUR38.4 million in bonus payments that had been frozen by the bank, to help offset costly legal missteps during the executives’ tenures.
Moody’s raises China’s banking outlook to stable from negative as shadow banking concerns ease
Leslie Shaffer – CNBC
Moody’s raised its outlook on China’s banking system to stable from negative; Moody’s said government efforts to curb shadow banking were easing risks
The Liberty Times Editorial: Purges could spark financial crisis
The apparent mass exodus of business tycoons from China and Hong Kong that we have been seeing of late —Dalian Wanda Group chairman Wang Jianlin taking his investment overseas, just as Hong Kong billionaire Li Ka-shing has been shifting his focus to Europe — have led to both men coming under considerable criticism online.
Foreign investors tuck into India’s masala bonds
Simon Mundy – Financial Times
As Indian banks stagger under a wave of business defaults, some in Mumbai are hoping that their crisis could have the side-effect of catalysing a long-stagnant corporate bond market.
China will take measures to get more foreign investment, boost private investment
China will take measures to introduce more foreign investment, including relax restrictions to allow more access to its services and manufacturing sectors, state radio reported on Friday, citing the government’s cabinet.
Malaysia, Home to the World’s Longest Bull Market, Faces an Election Test
Shamim Adam – Bloomberg
The world’s longest-ruling coalition and the longest bull market could be facing a pivotal moment. Malaysia is set to hold a general election by mid-2018 but there are whispers a vote could be called sooner, between the third quarter and fourth quarter of 2017, setting up a showdown between Prime Minister Najib Razak and his opponents.
Bitcoin Ethereum based ICOs may go to Asia
Frank Chaparro – Business Insider
Initial coin offerings, the hot blockchain-based investing trend, are set to face increased scrutiny following an announcement by the US Securities and Exchange Commission. But ICO enthusiasts in Asia think the news could be good for them.
As reported by Business Insider’s Rob Price, the SEC said on Tuesday that initial coin offerings (ICOs), in some cases, can be considered securities; and as such will be required to subscribe to the necessary regulations.
EU warns of possible delays to Brexit talks, London confident of schedule
Jan Strupczewski and Gabriela Baczynska
Talks between Britain and the European Union on their future relationship are now less likely to start in October, the EU’s top negotiator has said, due to a lack of progress on Brexit divorce issues so far, EU officials said.
Michiko Kakutani, the Legendary Book Critic and the Most Feared Woman in Publishing, Is Stepping Down from The New York Times
Joe Pompeo – Vanity Fair
Kakutani, who helped make the careers of writers from Foster Wallace to McEwan, and put fear in the hearts of Mailer and Vidal, will leave her post as one of the most formidable critics in the Times history.
Swedish Government Scrambles to Contain Damage From Data Breach
Christina Anderson – NY Times
Sweden’s government is scrambling to contain the political fallout from a huge breach of confidential data, including the possible disclosure of the identities of undercover operatives, under the watch of a government contractor.
Amazon’s Jeff Bezos becomes world’s richest: Forbes
Amazon.com Inc (AMZN.O) Chief Executive Jeff Bezos has unseated fellow tech billionaire Bill Gates as the richest person in the world, profiting from the e-commerce company’s meteoric stock rise to reach a fortune of $90.6 billion, Forbes reported.