Exclusive: JLN Interviews New Trading Technologies CEO Tim Geannopulos About His Mandate and the Potential Sale of TT
New Trading Technologies Chairman & CEO Tim Geannopulos sat for an exclusive interview with John Lothian News to talk about what brought him back to TT, what his mandate is, and the potential sale of the company.
Hits & Takes
John Lothian & JLN Staff
It was 40 years ago yesterday that President Ronald Reagan was shot. David Prosperi, who was a deputy press secretary in the Reagan White House, was at the hotel for the president’s speech and heard the shot. He is quoted quite extensively in this story from The Guardian about that day.
It was eight years ago yesterday that I published a commentary titled “The Richness of Giving,” after reflecting on the life of my friend and former Assistant Scoutmaster Bill Griswold, who had passed away in 2012. It is a reflection that is worth repeating about Bill, who was not rich as most would think, but rich nonetheless. And it is about some of the great people in our industry and the ways they support all kinds of different charitable organizations. That richness of giving has not stopped and I could probably write another 1,000 to 2,000 words and just scratch the surface about the generous giving of people in our industry.
The sound of today’s interview with TT Chairman and CEO Tim Geannopulos is not great because I forgot to turn off the cooling fan in the room we use as a video studio. The room was hot and that was before I had two other people in the room, along with lots of lights. Lesson learned.
The Women in Derivatives’ (WIND) Annual Washington Update will take place on Wednesday, April 7, 2021 from 12 p.m. to 1 p.m. ET. It will feature a virtual panel discussion with Reagan (McKee) Anderson, Libby Cantrill, CFA, and Deborah North. You can register HERE.
DePaul University professor Lamont Black was interviewed on WGN Radio and explained “What exactly is an NFT?”
The New York Stock Exchange has several employment opportunities they are looking to fill. The jobs include:
Analyst, Listings & Capital Markets, Director, Capital Markets, Consumer, Retail & Wellness, Director, Capital Markets, Healthcare and Marketing Manager, Listings.
The CME Group is looking for a Senior IT Auditor Global Assurance.
Chairman, CEO & Co-Founder of Blackstone Stephen Schwarzman has some advice he offers in his best-selling book that I just bought, “What It Takes.” The advice is: A great manager is enthusiastic, collaborative and leads by example. But most importantly, great managers learn from their failures and are always looking for ways to improve themselves, their teams, and organizations. Secondly, leaders must not only think about the immediate tasks at hand – they need to look ahead, anticipate change, and consider new opportunities for their group or company before being forced to do so. Your competition will defeat you if you are not constantly seeking ways to reinvent and improve yourself.
We received no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday.
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 New York State Senate passed legislation 43-20 to legalize recreational marijuana late Tuesday, making it the 15th U.S. state to do so. New York Gov. Andrew Cuomo has promised to sign the bill. Why is this important? One reason: As Forbes reports, the state of New York’s budding marijuana industry is currently valued at $4.6 billion and could grow to $5.8 billion over five years. In addition, the bill stipulates that half the state’s business licenses go to equity applicants (minorities, women and disabled veterans). We hope the latter effort goes better in New York than it has so far in Illinois.~SC
The Richness of Giving
by John Lothian | Mar 30, 2012
Last week, the last thing I did before taking off for Florida on vacation was to speak at the memorial service for my friend and Assistant Scoutmaster who had passed away in February. I told the overflowing assembly of friends and family the story about how Bill Griswold was a rich man.
Bill was not rich like we often think of rich. He did not have a big house, a fancy car or a large bank account. Rather, Bill was rich because all he did was give and give of himself. He gave his time and his talents generously to our troop, our scouting district and council. Bill was a guy who could always be depended on to help out.
He must have been rich, because all he did was give and give. I had written about Bill when I announced his passing to the troop that he had forgotten more about scouting and camping than I would ever know. He had incredible knowledge about lots of things, big and small. And he was always willing to share his knowledge, whether helping boys in the trail to the First Class rank or as a Merit Badge Counselor for any number of badges.
I am blessed to know other people from this industry who are rich like Bill. One of them is Jim Johanik, who gave up a career in this business to go full time into Christian ministry. Jim took the leap of faith that other faith-filled people would support him and his family as he dedicated his life to his One Way Ministries. Jim has a faith and courage I could only hope to find.
For the rest of this commentary, CLICK HERE.
Eurex expands equity index segment with new factor futures;12 futures covering cash equity factors in the U.S. and European equity markets; The products will meet increasing investor demand for factor-based investment tools
Eurex is expanding its strategically important equity index segment with new factor futures. The products will be launched on 26 April as a response to growing investor demand for factor-based instruments. Factor investment has become one of the most popular index segments. This approach involves targeting specific drivers of return which differ from traditional beta.
*****I was told there would be no math.~JJL
The Women Shaping Global Derivatives Markets
Nahiomy Alvarez, Anna Paulson, Maggie Sklar – Chicago Federal Reserve Bank
In its latest episode, LaSalle Street, a podcast from the Financial Markets Group at the Federal Reserve Bank of Chicago, hosts a conversation on identity, gender and careers in finance with four women shaping global derivatives markets. Joining LaSalle Street for this episode are Laura Astrada, Managing Director at DTCC; Caroline Pham, Managing Director and Head of Capital Markets Regulatory Strategy at Citi; Maggie Sklar, Director of International Engagement, the Federal Reserve Bank of Chicago; Petal Walker, Special Counsel, WilmerHale.
*****This is a powerful title and a powerful group of women.~JJL
‘No High-Fives Rule’ Keeps Tastytrade’s CEO Grounded
Leaders usually love to celebrate big wins with their staff. Beaming bosses pop the champagne and toast their team’s triumph. But Tastytrade founder Tom Sosnoff would rather skip the party. An options trader who co-founded two successful fintech firms, Sosnoff imposes a “no high-fives rule” among his senior managers.
*****Tom Sosnoff recently sat for an Open Outcry Traders History Project video, which we hope to publish next week. He also spoke at our MarketsWiki Education World of Opportunity series three years ago. He is one of the most interesting people in our industry.~JJL
Tuesday’s Top Three
The best-read story on Tuesday was from Bloomberg, Big Oil’s Secret World of Trading. The second best was also in the top three on Monday, Mashable’sPete Davidson explains NFTs in another amazing Eminem parody on ‘SNL’. And the third most-clicked item was JLN’s MarketsWiki page for Andy Nybo. Nybo just joined MIAX as its chief communications officer.
202,129,070 pages viewed; 25,546 pages; 231,269 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,511 pages; 13,768 edits
UK markets regulator unveils plan to reform Spac rules; Financial Conduct Authority’s move comes as government seeks to make London more competitive in booming market
Philip Stafford, George Parker and Daniel Thomas in London – FT
The UK markets regulator has outlined plans to reform its rules on blank-cheque companies, part of the government’s bid to make London more competitive in one of the hottest areas in finance.
Archegos’s Collapse Is a Wakeup Call for Regulators; Post-crisis capital requirements have saved Credit Suisse and Nomura from more serious problems while also pushing risk into darker corners of the financial system
Rochelle Toplensky and Telis Demos – WSJ
The big damage from Archegos’s collapse seems to have been limited to Credit Suisse CS -3.51% and Nomura. But that doesn’t mean all is well in the financial system. As the dust settles on the fund’s implosion, the impact is becoming clearer. Credit Suisse and Nomura were slow to sell shares, costing them dearly relative to early movers Goldman Sachs, GS 1.93% Morgan Stanley MS 1.55% and Deutsche Bank. DB 1.34% The anticipated losses are enough to cause Credit Suisse and Nomura serious pain, but not to threaten their solvency.
Wall Street Faces Yellen’s Scrutiny After Fed Debt-Market Rescue
Paula Seligson and Craig Torres – Bloomberg
‘System only worked because the Fed jumped in,’ an expert says; Wall Street already pushing back against potential new rules
The Federal Reserve saved the corporate bond market after it froze last year. Now regulators want Wall Street to pay the price for that rescue, and the industry is already pushing back. Government officials view the unprecedented steps taken in March 2020 — the central bank pledged to buy corporate bonds, a promise that got the gears of credit turning again — as a mandate to address long-standing concerns that bond liquidity disappears in bad times.
Credit Suisse lurches from one risk management crisis to the next; Are scandals at Archegos and Greensill an unlucky coincidence or symptomatic of a wider failing?
Owen Walker and Stephen Morris – FT
Credit Suisse’s chief executive had a blunt message for his bank: it has “an attitude to risk that has to change . . . there has to be consequences” But it was not Thomas Gottstein speaking this week after the Swiss lender warned of huge losses on trades with its client Archegos Capital Management. It was his predecessor, Tidjane Thiam, in March 2016 after uncovering vast and costly hidden bets made by the bank’s traders.
Singapore Explores Getting in on SPACs; Stock exchange starts public consultation on the publicly listed shell companies that seek to invest in—and merge with—private companies
Jing Yang – WSJ
Singapore is trying to get a piece of the red-hot market for blank-check companies. Singapore Exchange Ltd. S68 0.20% started on Wednesday a four-week public consultation on special-purpose acquisition companies. These are publicly listed shell companies with ready pools of cash that seek to invest in—and merge with—private companies.
MEMX CEO Shakes Up Stock Markets With Help From Trading Giants; Jonathan Kellner talks about how Members Exchange has been winning new business even in a pandemic.
Lananh Nguyen – Bloomberg
When he was handed a debit card with $70 million in the bank, Jonathan Kellner realized his startup was different. Members Exchange, known as MEMX, started as a protest by banks and market makers against the rising data and connectivity fees charged by U.S. stock exchanges. In the two years since Kellner, 52, signed on as chief executive officer, MEMX Holdings LLC has locked in more than $135 million in funding from 18 stock trading and investing heavyweights, including BlackRock, Citadel Securities, and Morgan Stanley. Since it went fully live in October, MEMX has clinched 1% of the U.S. market share. Kellner, previously the CEO of Nomura Holdings Inc.’s Instinet, spoke with Bloomberg Markets in February about launching during a pandemic and the surge in meme stocks.
JPMorgan Says Banks’ Archegos Hit May Be Up to $10 Billion
Jan-Patrick Barnert and Marion Halftermeyer – Bloomberg
Credit Suisse faces loss up to $4 billion: Berenberg; JPMorgan analysts say watch out for credit agency statements
Banks roiled by the Archegos Capital fallout may see total losses in the range of $5 billion to $10 billion, according to JPMorgan. Losses from trades unwinding related to Archegos will be “very material” in relation to lending exposure for a business that is mark-to-market and holds liquid collateral, analysts led by Kian Abouhossein wrote in a note. They added that Nomura Holdings Inc.’s indication of potentially losing $2 billion and press speculation of a $3 billion to $4 billion loss at Credit Suisse AG is “not an unlikely outcome.”
Yellen Plans to Reinvigorate Financial Risk Panel; FSOC scheduled to meet Wednesday for first time during Biden administration
Kate Davidson and Andrew Ackerman – WSJ
Treasury Secretary Janet Yellen is reviving a council of regulators tasked with monitoring the stability of the financial system, homing in on risks that emerged during the market turmoil of a year ago when the coronavirus pandemic hit the U.S. economy. Ms. Yellen will lead her first meeting Wednesday of the Financial Stability Oversight Council, focusing on a variety of issues, including money-market mutual funds’ and hedge funds’ activities and their roles in the market turbulence last year, the Treasury Department said last week.
What Is a Total Return Swap and How Did Archegos Capital Use It? The common Wall Street derivative has for years faced scrutiny from regulators and some well-known investors
Quentin Webb, Alexander Osipovich and Peter Santilli – WSJ
Archegos Capital Management’s investments were partly concentrated in a common Wall Street derivative, called a total return swap, that has for years faced scrutiny from regulators and even some well-known investors. Here’s how the use of swaps figures in Archegos’s problems.
Archegos Fiasco Is Latest Reminder How Superrich Love Leverage
Venus Feng – Bloomberg
More than 10% of the world’s wealthiest have pledged shares; Banks risk losses when clients default on their margin loans
Bill Hwang used leverage from across global banks to build his family office into a whale with positions that may have topped $50 billion. Then came the collapse, with more than $20 billion in holdings linked to his Archegos Capital Management liquidated in just days. That’s prompted warnings of losses at banks including Nomura Holdings Inc. and Credit Suisse Group AG, as well as speculation over whether other investors with high leverage could cause more market chaos.
A Glossary to Understand the Collapse of Archegos
Grant Clark – Bloomberg
Understanding the sudden losses made by Bill Hwang’s Archegos Capital Management requires a grasp of some of the more abstract language in financial markets. Here’s a list of terms to help readers unpick the story:
Wall Street refuses to stop trusting ‘The Guy’ — a rich dude with a shady past and good resume — and it keeps blowing up in their face
Linette Lopez – Insider
In Wall Street’s cult of conformity, having the right pedigree and a king’s ransom to play with can turn anyone into an investment-bank Brahmin — someone prime brokers would be privileged to service with barely a question asked. Notice, though, that nowhere in that sentence did I mention skill or integrity.
Apex CEO on Robinhood and Going Public Via SPAC
Bloomberg Markets: The Close
Apex Clearing CEO Bill Capuzzi discusses improving clearing and settlement times and says there would be no Robinhood without Apex. He speaks on “Bloomberg Markets: The Close.”
How to Fix SPACs: Keep Their Backers Locked In Longer; The big names behind blank-check companies don’t always stick around. Could changing that protect investors?
Andrew Ross Sorkin – NY Times
In the summer of 2019, Chamath Palihapitiya, a billionaire venture capital investor, announced that his public shell company would merge with Richard Branson’s spaceflight business, Virgin Galactic.
‘We are a laughing stock’: Covid-19 and Germany’s political malaise; Slow vaccine rollout and inconsistent policies are fuelling a wider loss of confidence in government
Guy Chazan – FT
Steffen Bockhahn does not mince his words when it comes to Germany’s Covid-19 vaccination campaign. “We are the laughing stock of the world,” he says. “Germany was supposed to be world champion at organising things, and look at us.”
Brussels squares up to UK in fight over euro swaps clearing; EU is increasingly worried about London’s dominance over the EUR81tn industry
Philip Stafford and Jim Brunsden – FT
The EU is gearing up for a campaign to seize greater control of one of the City of London’s most prized assets: its dominance over the clearing of EUR81tn worth of derivatives contracts that are vital for global businesses. François Hollande fired the starting gun less than a week after the UK’s shock decision in June 2016 to leave the EU, with the French president at the time warning “the City, which thanks to the EU, was able to handle clearing operations for the eurozone, will not be able to do them”.
Archegos Capital fallout may force Wall Street to review its secret tools to win business
Joe Parsons – The Trade
Two years ago, I interviewed several top-level executives at a handful of banks and prime brokers where I asked if they understand the risk of handing cheap leverage to their hedge fund clients. What I mean by cheap financing, is that the prime broker is charging extremely low rates for hedge funds to borrow cash to make big bets through complex financial instruments.
The Fourth Surge Is Upon Us. This Time, It’s Different; A deadlier and more transmissible variant has taken root, but now we have the tools to stop it if we want.
Zeynep Tufekci – The Atlantic
Across the United States, cases have started rising again. In a few cities, even hospitalizations are ticking up. The twists and turns of a pandemic can be hard to predict, but this most recent increase was almost inevitable: A more transmissible and more deadly variant called B.1.1.7 has established itself at the precise moment when many regions are opening up rapidly by lifting mask mandates, indoor-gathering restrictions, and occupancy limits on gyms and restaurants.
US joins 13 countries in raising ‘concerns’ with data in WHO team’s virus report
Peter Sullivan – The Hill
The U.S. and 13 other countries on Tuesday released a statement raising “concerns” with a report from a World Health Organization (WHO)-convened team into the origins of coronavirus, saying it lacked full access to the information it needed. “We voice our shared concerns that the international expert study on the source of the SARS-CoV-2 virus was significantly delayed and lacked access to complete, original data and samples,” the countries said in a joint statement.
Don’t Believe the Doomsayers. Vaccines Will End The Pandemic; A new CDC study showing vaccines cut Covid infections, not just symptoms, is the good news we’ve all been hoping to hear.
Faye Flam – Bloomberg
Following pandemic news too closely can be an emotional roller coaster, with dire public health warnings immediately followed by hopeful new studies. The latest soaring discovery: a new CDC study showing vaccines sharply cut all Covid-19 infections — not just symptoms. That news puts to rest one worst-case-scenario: that vaccines might protect the vaccinated against hospitalization, but allow millions of silent infections to continue circulating.
Germany Restricts Use of AstraZeneca Vaccine for Under-60s; Move follows 31 brain blood-clotting incidents and nine deaths in Germany after vaccination
Bojan Pancevski – WSJ
Germany’s government said Tuesday it will restrict the use of the AstraZeneca PLC’s Covid-19 vaccine for people younger than 60 following fresh blood-clotting incidents among recipients, potentially presenting the country’s sputtering vaccine rollout with fresh delays.
Coinbase Hires Ex-SEC Director to Run Capital Markets Division; Cryptocurrency company’s appointment of Brett Redfearn marks key hire as it prepares to go public
Paul Vigna – WSJ
Coinbase Global Inc. hired a former high-ranking director from the Securities and Exchange Commission to run its capital-markets division as the cryptocurrency company prepares to go public. Coinbase named Brett Redfearn, most recently the director of the SEC’s division of trading and markets, to run its capital-markets group, which includes its exchange operations and capital-markets products.
Pfizer Covid-19 Vaccine 100% Effective in Study of 12- to 15-Year-Olds, Company Says; Study didn’t find any major safety issues with the shot, which could be up for regulatory authorization in coming weeks
Jared S. Hopkins – WSJ
The Covid-19 vaccine from Pfizer Inc. PFE -1.39% and BioNTech BNTX 8.89% SE safely protects kids 12 years and older, the companies said, results likely to lead to inoculating the children before the next school year. The vaccine was 100% effective in protecting against symptomatic disease in a study of more than 2,200 children, the companies said Wednesday.
Bloomberg Employees Get Access to Hospital’s Vaccine Slots; A company memo on Tuesday informed the staff that NYU Langone would “provide vaccines for Bloomberg employees who meet the eligibility requirements.”
Katie Robertson – NY Times
NYU Langone Health, a major New York hospital system, has set aside Covid-19 vaccination shots for employees of Bloomberg L.P., the financial data and media company owned by the billionaire Michael R. Bloomberg.
Pfizer to Test Covid-19 Vaccine That Doesn’t Need Ultracold Storage; Freeze-dried version would make handling the shots easier in rural areas and low-income countries
Jared S. Hopkins – WSJ
Pfizer Inc. PFE -1.39% and partner BioNTech SE BNTX 8.89% plan to begin soon testing a freeze-dried version of its Covid-19 vaccine, which if proven to work safely could ease storage and handling of the shots in rural U.S. areas and low-income countries.
France Leaning Toward Nationwide Lockdown Due to Covid Spike
Ania Nussbaum – Bloomberg
Macron to address nation at 8 p.m. to present new measures; School closures are on the table, according to people familiar
France is headed toward a nationwide lockdown to contain the epidemic, with measures that could include school closures and extending a ban on intercity travel, two people familiar with the matter said.
Vaccine Heroes Wake Up to Bruising Reality; Anger over inequitable distribution and access shouldn’t be allowed to fester.
Lionel Laurent – Bloomberg
The discovery of multiple safe and effective Covid-19 vaccines has been the reputational boost the pharmaceutical industry needed. As science has caught up to the coronavirus, the price-inflating antics of Martin Shkreli and manufacturers’ roles in the opioid epidemic have faded into the background while people literally raise their glass to drugmakers like Pfizer Inc.
World’s Worst-Hit Covid Region Grapples With Surge in Deaths
Zoltan Simon – Bloomberg
Hungary has highest death rate, fatalities rise 10% to record; Czech Republic’s tough curbs lead to drop in new virus cases
Hungary, which currently has the world’s highest Covid-19 death rate, reported a jump in fatalities as the virus situation worsened sharply across most of eastern Europe. The rapid spread of the virus is testing the resolve of the region’s governments to enact even tougher curbs to arrest the more contagious U.K. variant, which is now widespread. Currently 10 out of the 11 countries with the highest level of fatalities as a share of population are from eastern Europe.
France poised for new lockdown measures to combat Covid crisis; Emmanuel Macron urged to close schools as third wave overwhelms intensive care units
Victor Mallet – FT
French President Emmanuel Macron is expected to announce strict new lockdown measures on Wednesday to try to control a third wave of Covid-19 that is overwhelming the country’s hospitals, and may be forced to close schools after pleas from teachers, doctors and local officials.
China rejects WHO criticism and says Covid lab-leak theory ‘ruled out’; Chinese scientist says international Wuhan mission had access to same data as local officials
Christian Shepherd – FT
China has rejected accusations from the World Health Organization that it restricted access to key data on the origins of the coronavirus pandemic as strained relations between Beijing and the global body worsened.
Return to school playing key role in slowing fall in UK Covid cases; Debate under way on whether to let virus ‘run hot’ as pressure on hospitals eases
Anna Gross – FT
The reopening of schools has played a significant part in slowing the steady decline in UK coronavirus cases in recent weeks, even as the effect of lockdown restrictions and the rollout of vaccines have sharply cut hospital admissions and deaths from Covid-19.
Germany will only use AstraZeneca jab on over-60s; Commission advising Berlin recommends limits amid fears of side-effects
Guy Chazan – FT
The German government has decided that the Oxford/AstraZeneca vaccine should be used only on people over the age of 60 amid concerns over possible side-effects.
Lloyd’s of London braced for £6bn Covid hit; Pandemic payouts push insurance market to worst underwriting result in 3 years
Ian Smith – FT
The coronavirus hit to Lloyd’s of London is expected to top £6bn in claims, with the impact of the pandemic pushing the specialist insurance market to its worst underwriting result in three years.
Exchanges, OTC and Clearing
DTCC’s ALERT Surpasses Ten Million Standing Settlement Instructions
The Depository Trust & Clearing Corporation (DTCC), the premier market infrastructure for the global financial services industry, today announced that DTCC’s ALERT, the industry’s largest and most compliant web-based global database for the maintenance and communication of account and standing settlement instructions (SSIs), has passed a key milestone with over ten million SSIs now included in the service— an increase of 12% in the past twelve months
Convening of the Annual General Meeting of Euronext N.V.
Euronext today announced that the virtual Annual General Meeting (“AGM”) will take place on Tuesday 11 May 2021 at 10:30 CET. Formally, the virtual AGM will be held at Beursplein 5, 1012 JW Amsterdam, The Netherlands.
Euronext publishes its 2020 Universal Registration Document
Euronext has filed its 2020 Universal Registration Document including the 2020 Annual Financial Statements and Directors’ Report to the Stichting Autoriteit Financiële Markten (the “AFM”), on 30 March 2021, as competent authority under Regulation (EU) 2017/1129. The 2020 Universal Registration Document has been filed in English and is available:
Eurex to List Futures on STOXX Industry Neutral Ax Factor Indices
Eurex is listing futures tracking 12 STOXX® Industry Neutral Ax Factor Indices covering the European and US markets, allowing investors to target well-researched and robust factor strategies relying on Axioma’s Risk Models and optimization tools.
Final results For The Year Ended 31 December 2020
Aquis Exchange PLC
Aquis Exchange PLC (“Aquis”, the “Company” or the “Group”) Final results for the year ended 31 December 2020 Strong growth across the…
GPW Publishes Best Practice for GPW Listed Companies 2021
The Exchange Supervisory Board has approved a new code of corporate governance for GPW listed companies; The Best Practice for GPW Listed Companies 2021 comes into force on 1 July 2021
The Exchange Supervisory Board has passed a resolution on 29 March 2021 approving the Best Practice for GPW Listed Companies 2021, a new version of the code of corporate governance for companies listed on the GPW Main Market, originally adopted in 2002.
CME Group to launch Micro Bitcoin futures; The Micro Bitcoin futures will offer traders another tool to hedge their spot Bitcoin price risk or execute Bitcoin trading strategies.
Annabel Smith – The Trade
US derivatives exchange CME Group has made plans to launch new Micro Bitcoin futures on 3 May pending regulatory approval. The new smaller-sized futures are one tenth of the size of one Bitcoin and are designed for institutions and sophisticated, active, or individual traders.
Futures on STOXX Industry Neutral Ax Factor Indices to List on Eurex
STOXX Industry Neutral Ax Factor Indices were introduced in February and leverage Axioma’s advanced portfolio-construction tools and risk models. They provide a robust choice for investors looking to remove unintended industry exposures and access the pure return of factors.
FX derivatives: Amendments to the ESU Parameters
In the beginning of March 2021, FX Options started trading on Eurex, and unfortunately it was discovered that the current ESU parameters for the type “All transactions” were too restrictive. Hence Eurex has decided to recalibrate the respective parameters for FX Options.
Eurex Exchange Readiness Newsflash | Member Section 2.0: Reminder regarding set-up of contacts, availability of updates about known limitations
The redesigned and updated Member Section 2.0 went live on 1 February 2021. With the go-live, some additional functionalities and improvements were introduced (see Eurex Circular 101/20). With this Newsflash, we would like to draw your attention to some important aspects. This will enable you to verify if all required users and contacts have been set up and registered correctly.
Effective on trade date Tuesday, April 13, 2021, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA2102-5 from February 5, 2020. It is being issued to amend Section 6 to codify the minimum quantity thresholds for Ukrainian Wheat (Platts) futures and options on Ukrainian Wheat (Platts) futures contracts when they are part of certain inter-commodity spreads.
Initial Listing of the Micro Bitcoin Futures Contract
Effective Sunday, May 2, 2021, for trade date Monday, May 3, 2021, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list the Micro Bitcoin Futures contract (the “Contract”) for trading on the CME Globex electronic trading platform (“CME Globex”) and for submission for clearing via CME ClearPort as more specifically described below.
SGX consults on SPACs listing framework
Singapore Exchange (SGX) is seeking market feedback on a proposed regulatory framework for the listing of Special Purpose Acquisition Companies (SPACs) on its Mainboard. “SPAC listings have attracted interest in major markets due to their speed to market and ability to offer price certainty in valuing target companies. In reviewing the viability of SPACs, we note that recent SPACs developments have brought to the fore certain risks, in particular excessive dilution and the rush to de-SPAC. We are therefore proposing measures to address these risks, with the aim of creating credible listing vehicles that will increase investor choice and result in successful, value-creating combinations for their shareholders,” said Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo).
LuxSE Named Exchange Of The Year For Fifth Consecutive Year
Following the official announcement of the winners of Environmental Finance’s Bond Awards 2021 earlier today, the Luxembourg Stock Exchange (LuxSE) is proud to announce that it has been awarded the prize of Exchange of the Year for the fifth consecutive year.
Grão Direto announces innovative agreement with CME Group to align the Brazilian physical grain market with leading derivatives market data
Alexandre Borges – LinkedIn
Brazilian startup and leader in digital grain marketing, in innovative collaboration with CME Group, launches pricing solution for the physical grain market based on real-time quotes of agricultural commodities prices at CBOT and several other variables.
Matrix IDM And Reformis Form A Strategic Partnership To Deliver Long Term Data Strategy Projects For Buy Side Firms Globally
Matrix IDM, a leading solution provider to asset owners and managers, today announces a significant partnership with expert business transformation consultants Reformis. The new partnership has been created to ensure Matrix customers enjoy a quality implementation and support experience, delivered by an experienced team with unparalleled industry knowledge. Furthermore, the relationship is already in action, working for a top three (by AUM) $200bn superannuation fund to deliver a long-term data strategy project.
FIS Recognized for Quality and Innovation of Corporate Liquidity Solutions; FIS receives three awards in recent prestigious treasury award programs.
Financial technology leader FIS® (NYSE: FIS) recently earned several awards in prestigious treasury award programs for the quality and innovation of its corporate liquidity solutions. In the Global Finance World’s Best Treasury & Cash Management Banks and Providers 2021 program, FIS was named the overall winner for Best Treasury Management Software for its FIS Quantum solution while the FIS Trax solution earned Best Cross-Border Payments Solution for Corporates. This is the fifth year in a row that Global Finance has recognized FIS for its corporate liquidity solutions.
Hitachi agrees to buy US software group for $9.5bn; Acquisition of GlobalLogic part of plan to turn Japanese conglomerate into digital powerhouse
Kana Inagaki and Leo Lewis – FT
Hitachi has agreed to buy GlobalLogic, a Silicon Valley software engineering company, for $9.5bn in its largest-ever acquisition as the Japanese industrial group seeks to become a global powerhouse in digital services.
Liquidnet founder Merrin joins portfolio construction FinTech as executive chairman; Seth Merrin joins Neuravest as executive chairman after departing Liquidnet following its acquisition by interdealer broker TP ICAP.
Annabel Smith – The Trade
Liquidnet founder and former CEO, Seth Merrin, has joined artificial intelligence (AI) driven portfolio construction specialist for institutional investors, Neuravest, just over a year after confirming he would step back from leading Liquidnet.
Robinhood to Remove Controversial Digital Confetti From Trading App; The confetti, which critics alleged was a gamification strategy, will be replaced with new designs
Caitlin McCabe – WSJ
Robinhood Markets Inc. is eliminating digital confetti from its trading app, the latest sign that the popular brokerage is working to correct concerns from critics, as it moves forward with plans to go public. Robinhood’s digital confetti, which historically has rained down on users’ screens to celebrate occasions such as making a first trade, has become a point of contention for the brokerage in recent months. Critics have pointed to the animation as a sign that the company “gamifies” investing. Robinhood repeatedly defended the design.
Chipotle plans to give away $100,000 in both Bitcoin and free food this Thursday
Chris Morris – Fortune
You have to give the marketing department at Chipotle some credit. They certainly know how to turn heads. The fast-food chain has announced plans to give away $100,000 in Bitcoin this Thursday as part of its National Burrito Day promotion. (It will also give away $100,000 in free food.)
Tether Says Cryptocurrency Backed by Undisclosed Reserves
Olga Kharif – Bloomberg
Cayman Islands-based Moore Cayman provides assurance; Report isn’t part of requirement in New York settlement
The company behind the Tether cryptocurrency said an accounting firm provided an assurance that its assets exceed liabilities, though the firm didn’t specify what assets backed the so-called stablecoin. Tether had been at the center of speculation for years that the coin, used to facilitate trades in the crypto market, wasn’t backed one-to-one with dollars as claimed. In February, the companies agreed to provide quarterly reports to New York as part of a settlement over allegations that it hid the loss of funds and lied about reserves.
Art’s NFT Question: Next Frontier in Trading, or a New Form of Tulip? As the prices of blockchain-secured works skyrocket and speculators swoop, experts are warning of an unsustainable bubble.
Scott Reyburn – WSJ
In February 1637, at the height of the speculative frenzy in the Netherlands we now know as “tulip mania,” a single bulb of the prized Viceroy tulip sold for 6,700 guilders, enough to buy a grand house in one of Amsterdam’s most desirable districts.
Bakkt Launches Its Digital Wallet, Bakkt App, to Manage All Forms of Digital Assets, Debuting with Starbucks, GolfNow, and Best Buy Among Other Marquee Brands; The company’s new app is an innovative tool for consumers to unlock the value of $1.2+ trillion in digital assets currently held in cryptocurrencies, loyalty and rewards points, and gift cards
Bakkt Holdings, LLC
Bakkt Holdings, LLC (“Bakkt”), the digital asset marketplace founded in 2018, today announced the launch of the Bakkt App, the game-changing digital wallet that brings together bitcoin and other forms of digital assets into one platform. The Bakkt App gives consumers the power to use their digital assets how they prefer – converting participating rewards points to cash or using bitcoin as payment, for example – all within one easy-to-use application. By enabling consumers and merchants to unlock the value of the $1.2+ trillion in digital assets currently held in cryptocurrencies, loyalty and rewards points, and gift cards, the Bakkt App is designed to amplify consumer spending, reduce payment costs, and bolster merchant loyalty programs.
Valour Launches World’s First Fee-Free Ethereum Exchange Traded Product (ETP)
In a world first, Valour, the issuer of investment products focused on innovative technologies, has announced the launch of Ethereum Zero (ETH ZERO SEK – CH1104954362), an Ethereum (ETH) exchange-traded product (ETP) that comes with zero management fees.
After NFT Surge, Traders Worry Reopening Will Stifle Rally; About $1.3 billion of nonfungible tokens have traded through ethereum network this year, dwarfing 2020 activity
Caitlin Ostroff and Sebastian Pellejero – WSJ
Prices for digital art and collectibles soared in the first quarter, lifted by traders’ exuberance for volatile wagers from bitcoin to GameStop. Now many are wondering whether those gains can hold as people prepare to leave home more in the coming months.
ErisX and Midland Trust Enable IRA Crypto Investments
ErisX is pleased to announce that customers of Midland Trust are now able to utilize their self-directed Individual Retirement Accounts (IRAs) to invest in crypto assets. In concert with ErisX, Midland has expanded IRA holders’ investment options to include cryptocurrency products available on ErisX (Bitcoin, Ether, Litecoin, and Bitcoin Cash) to help achieve financial goals.
Coinbase hires Brett Redfearn as VP, Capital Markets
Surojit Chatterjee – Coinbase
Over the past 12 months, we’ve increased the performance of our exchange, rolled out support for new assets, grown our coverage team in the US, APAC and Europe, crossed $90B in assets on platform as of December 31, 2020, utilizing the enhanced trading tools from our Tagomi acquisition to win large public clients, and launched a market maker program while building the institutional brand more widely.
Crop-Trading Blockchain Startup Pilots Token for Grain Deals
Isis Almeida – Bloomberg
30,000 tons of Mexican white corn is backing tradable token; Cerealia’s next step is to launch grain-token trading platform
A Swiss crop-trading blockchain startup has piloted the use of technology that will allow grain to be traded using virtual tokens. Cerealia SA created a non-fungible token backed by 30,000 metric tons of Mexican white corn, according to Filipe Pohlmann Gonzaga, chief operating officer of the Pully, Switzerland-based company. The token was issued by Mercanta for grain stored at the Triple T terminal, both owned by Mexico’s Grupo Ceres.
China’s Qiming Leads $30 Million Investment in Crypto Wallet
Zheping Huang – WSJ
ImToken, a Chinese startup that built one of the most used cryptocurrency wallet apps, has raised $30 million from investors including Qiming Venture Partners and Breyer Capital.
PayPal CEO Uses Bitcoin to Pay for His New Ostrich Cowboy Boots
Jennifer Surane – Bloomberg
Dan Schulman is the proud owner of the world’s first pair of cowboy boots to be bought using Bitcoin on PayPal. But he may have wanted to wait to make his purchase. The 63-year-old chief executive officer of PayPal Holdings Inc., known for being partial to boots and jeans, used the payment giant’s new “Checkout with Crypto” service that allows customers to sell cryptocurrencies to pay for goods from the millions of merchants with a PayPal button on their websites.
Coinbase hires former SEC director Brett Redfearn as capital markets lead
Frank Chaparro – The Block
Coinbase has hired a big voice from the market structure world to lead its capital markets division ahead of the company’s much-anticipated direct listing on Nasdaq. Former Securities and Exchange Commission (SEC) director Brett Redfearn—who is best known for his contributions to policy proposals within market structure oversight—is taking on the role of VP of capital markets at Coinbase this week. Redfearn, who left the SEC in December, previously was the global head of market structure at JPMorgan. As director of its division of trading and markets, Redfearn oversaw exchanges, high-frequency trading firms, and other brokers. He has sided against exchanges in US equities on issues like rising market data costs.
Do I need to pay tax on cryptocurrency holdings? I put £5,000 into bitcoin and more recently bought a dogecoin
Lucy Warwick-Ching – FT
I put £5,000 into bitcoin in September 2019 and more recently I purchased a dogecoin. I understand that I may need to pay both income tax and capital gains tax. Is this true? If so, what steps do I need to take to ascertain my tax liability?
Exclusive: Jamie Dimon speaks out on voting rights even as many CEOs remain silent
Matt Egan, CNN Business
JPMorgan Chase CEO Jamie Dimon is speaking out in defense of voting rights in the wake of Georgia’s restrictive voting law and as other battleground states consider similar actions. The company’s “employees span the United States and as state capitals debate election laws, we believe voting must be accessible and equitable,” Dimon said in a statement provided exclusively to CNN Business.
JPMorgan’s Jamie Dimon says voting ‘must be accessible and equitable’ in wake of Georgia law
Mike Murphy – MarketWatch
Jamie Dimon, chief executive of JPMorgan Chase & Co. JPM, +1.18%, on Tuesday expressed his support for voting rights, days after Georgia approved a new law that restricts access to voting. In a statement to CNN that did not specifically mention Georgia, Dimon said his bank’s “employees span the United States, and as state capitals debate election laws, we believe voting must be accessible and equitable. We regularly encourage our employees to exercise their fundamental right to vote, and we stand against efforts that may prevent them from being able to do so.”
America’s digital defender is underfunded, outmatched and ‘exhausted’; The agency that protects the U.S. from hackers is hobbled by funding woes, a talent shortage and growing pains that are jeopardizing its ability to counter sophisticated threats.
Eric Geller – Politico
As the Biden administration hustles to contain the fallout from two massive cyberattacks that hit in the span of four months, the fledgling agency created to fend off such assaults is so overwhelmed by the deluge that many insiders doubt its ability to counter another major breach. Staffers are worn out, money is tight and the Cybersecurity and Infrastructure Security Agency is struggling to keep up with multiple competing crises, including the recently uncovered intrusions blamed on Russia and China, according to interviews with 15 people familiar with CISA’s work. Among them are four current employees and five former agency officials.
Covid Brings a Surge of Asian Violence and Hate to the U.S.
Akayla Gardner and Carolina Gonzalez – Bloomberg
Since the pandemic began, attacks against Asian Americans have skyrocketed. Nearly 3,800 anti-Asian incidents have been reported in the last year, according to Stop AAPI Hate, a nonprofit that tracks discrimination Asian Americans and Pacific Islanders in the United States, with women reporting 2.3 more incidents than men.
U.S. Climate Groups Call on Kerry to Shut Off Wall Street Funds; “We must recognize that Wall Street isn’t yet an ally,” the groups wrote in a five-page letter.
Alastair Marsh – Bloomberg
Climate groups are calling on John Kerry to shut off the flow of money from Wall Street to the fossil-fuel industry and acknowledge the role of U.S. finance firms in warming the planet. A total of 145 organizations, including the U.S. divisions of Friends of the Earth and Greenpeace, wrote to Kerry, the special presidential envoy for climate, requesting his support in addressing the contribution that banks and investors make to climate change by financing companies involved in fossil-fuel extraction and deforestation. If the U.S. is to be a global leader on climate issues, it must take action to cut off the money pipeline to polluters, the groups said.
China Calls on WHO to Respect Scientists’ Covid Origin Findings
China called on the World Health Organization to take the lead in respecting the conclusions of scientists, a day after the international organization’s director-general faulted the findings of a mission to study the origins of Covid-19 in China.
Black Executives Call on Corporations to Fight Restrictive Voting Laws; Dozens responded after companies in Georgia said little against state legislation that put strict rules in place.
Andrew Ross Sorkin and David Gelles – NY Times
Dozens of the most prominent Black business leaders in America are banding together to call on companies to fight a wave of voting-rights bills being advanced by Republicans in at least 43 states. The campaign appears to be the first time that so many powerful Black executives have organized to directly call out their peers for failing to stand up for racial justice.
Joint Statement of the 7th ASEAN Finance Ministers and Central Bank Governors’ Meeting (AFMGM)
1. The 7 th Joint Meeting of the ASEAN Finance Ministers and Central Bank Governors (AFMGM) was convened under the co-chairmanship of Hon. Dato Dr. Mohd Amin Liew Abdullah, Minister at the Prime Minister’s Office and Minister of Finance and Economy II of Brunei Darussalam, and Hajah Rokiah Haji Badar, Managing Director of the Autoriti Monetari Brunei Darussalam. The Meeting was held via video conference due to the lingering effects of the COVID-19 pandemic.
Future consultation on strengthening investor protections in Special Purpose Acquisition Companies (SPACs)
We confirm that we will be consulting shortly on amendments to our Listing Rules and related guidance to strengthen protections for investors in Special Purpose Acquisition Companies (SPACs). The consultation will consider the structural features and enhanced disclosure, including a minimum market capitalisation and a redemption option for investors, required to provide appropriate investor protection. Our proposals will help to ensure that SPACs operate within a framework of high regulatory standards and oversight. Where such protections are in place, we consider that the existing presumption of suspension of the listing for such companies at the point of announcement of an acquisition target is no longer required and we therefore intend to consult on this basis, aligning this element of our rules more closely with other major jurisdictions.
FCA urges Claims Management Companies and High Cost Lenders to work better together
We are aware that many complaints being made to High Cost Lenders (HCLs) are handled by Claims Management Companies (CMCs) on behalf of their customers. This has given rise to some tensions, which have been reported to us by both CMCs and HCLs.
FCA publishes letter of concerns in relation to Amigo Loans’ proposed scheme of arrangement
Amigo Loans’ application to implement a scheme of arrangement (the ‘Scheme’) was heard at the High Court yesterday. Prior to the court hearing, we made Amigo Loans aware that the FCA did not support the Scheme and set out our concerns with the Scheme in a letter. The letter of concerns provided by the FCA to Amigo Loans was referred to during the court proceedings.
SC probes syndicate suspected of running unlicensed investment schemes
Tan Siew Mung – MSN.com
The Securities Commission Malaysia (SC) is investigating a syndicate suspected of running five unlicensed investment schemes, including two clone firm schemes, that had duped hundreds of investors of over RM7 million into unlicensed investment activities.
The CFTC: An Increasingly Necessary Agency for Combatting International Fraud
Maraya Best of Kohn, Kohn & Colapinto via The National Law Review
The Commodities Exchange Act (“CEA”) essentially provides the Commodity Futures Trading Commission (“CFTC”) broad jurisdiction over trades and transactions involving swaps or contracts of sale of a commodity for future delivery. This means, in the commodity futures context, the CFTC is the analog of the Securities and Exchange Commission (“SEC”), and overall, the CEA and its promulgating rules mirror those of the SEC, including in its whistleblower program. Although few are aware of this program and even fewer understand the CEA rules when it comes to commodities, the reach of the CFTC enforcement has steadily expanded in direct correlation with changing market trends and increased commodity futures fraud.
U.K. FCA Is Investigating Eight People Over Tax Scandal
Jonathan Browning – Bloomberg
U.K. data disclosed by London law firm after FOI request; FCA probes have been stymied by adverse court ruling
The U.K. markets regulator is investigating eight people connected to the Cum-Ex tax scandal before it was effectively stopped in its tracks by a London judge. The February data on the Financial Conduct Authority investigations was disclosed by London law firm Rahman Ravelli Wednesday following a Freedom of Information request. The number is up from the six people that Bloomberg reported in October the FCA was investigating.
Danish Court Rules in Favor of Pre-Trial Detention for Hedge-Fund Trader Sanjay Shah
Christian Wienberg – Bloomberg
A Danish court has ruled that hedge-fund trader Sanjay Shah and an associate should be detained before their trial begins, after the two were charged with tax fraud as part of a wider Cum-Ex investigation. The decision, which was widely expected and announced by multiple local media outlets on Wednesday, paves the way for Denmark to seek formal extradition of Shah, who lives in Dubai, and his alleged accomplice, Anthony Mark Patterson, whose address is in the U.K. Both were charged earlier this year for their roles in claiming what police say were illegal refunds on dividend taxes.
UK regulator accuses 5 companies of operating cartel in card market; Mastercard among the groups watchdog says took advantage of vulnerable consumers for 7 years
Nicholas Megaw – FT
The UK’s payments regulator has accused five companies including card group Mastercard of operating a cartel that took advantage of “some of the most vulnerable people in society” for seven years.
ASIC prosecutes companies for failing to lodge financial reports
ASIC prosecuted three companies between 1 July 2020 to 31 December 2020 for failing to comply with their financial reporting obligations. Australian companies are required by law to lodge annual financial reports with ASIC within a specified period after the end of the financial year.
ESMA clarifies corporate disclosures obligations for UK issuers after Brexit
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published a statement concerning the application of transparency requirements by UK issuers with securities admitted to trading on regulated markets in the European Union (EU), now third country issuers, under the Transparency Directive (TD).
U.K. Revises SPAC Rules in Bid to Lure Blank-Check Firms
Tom Metcalf and Silla Brush – Bloomberg
Britain’s market watchdog plans to revise disclosure rules for blank-check firms by the summer, which could help remove a key obstacle to their taking off in the U.K. market. The Financial Conduct Authority said it will shortly be consulting on changes to listing rules that will align its regulations closer to markets like New York and Amsterdam, according to a statement Wednesday. The additional disclosure and redemption protections, the FCA said, will then no longer require such companies to suspend their listing when they announce an acquisition.
The European Supervisory Authorities issue a report on the application of their Guidelines on complaints-handling
The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published today a Report on the application of their Guidelines on complaints-handling. The Report concludes that the Guidelines have contributed to a consistent approach to complaints-handling across the banking, insurance and securities sectors and have resulted in better outcomes for consumers.
ESMA Updates EMIR Q&AS
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today updated its Questions and Answers document on practical questions regarding reporting issues under the European Markets Infrastructure Regulation (EMIR).
ESMA Updates CSDR Q&AS
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today updated its Questions and Answers (Q&As) on the Central Securities Depositories Regulation (CSDR).
ESMA updates its Q&As relating to the Prospectus Regulation
The European Securities and Markets Authority (ESMA), the EU’s securities and markets regulator, has today updated its Questions and Answers (Q&As) on the Prospectus Regulation (PR) with four new Q&As.
ESMA updates Q&As on the BMR Transitional Provision
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today updated its Questions and Answers on the EU Benchmarks Regulation (BMR).
ESMA promotes coordinated action on the suspension of best execution reports
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is issuing a Public Statement to promote coordinated action by National Competent Authorities (NCAs) under MiFID II. The statement relates to the temporary suspension of the obligation on execution venues to make available to the public data related to the quality of execution of transactions on their venues (RTS 27 Reports).
Investing and Trading
Don’t Confuse Archegos Collapse With Contagion; Mistakes were made, money was lost, but not for a lack of attention or knowledge.
Aaron Brown – Bloomberg
A lot of overheated rhetoric is wafting around concerning the inability of Bill Hwang’s Archegos Capital Management to meet margin calls. But this is an everyday Wall Street story writ large, not a disaster that should worry regulators or anyone outside of Archegos and its lenders. The fund was not overly levered and its risk was not hidden. We may find out additional details, but from what we currently know there’s no reason to assume this was more than a losing trade by a very rich person.
Governments Flirt With ‘MMT-lite’, Reshaping Markets Globally
Eric Lam – Bloomberg
Policy makers continuing with huge fiscal, monetary stimulus; Some say mix is close to MMT, with major market implications
If there’s one key takeaway for financial markets after a year of pandemic, it’s that officials now seem predisposed to throwing huge amounts of money at each new problem. For some strategists such willingness to embrace ultra-low interest rates and record fiscal spending is becoming a flirtation with Modern Monetary Theory, which says governments can spend heavily when price pressures are low.
Lessons From a Liquidation; The Archegos affair holds cautionary tales for bankers and regulators alike.
Bobby Ghosh – Bloomberg
As Wall Street picks through the wreckage of the Archegos Capital implosion, my colleagues at Bloomberg Opinion have been pondering the larger lessons. John Authers runs his rule over the inevitable debate about regulating financial innovation while preserving a free market. He counsels against blaming derivatives for the dastardly — or plain dumb — things people do with them, but he argues that everyone stands to benefit from greater transparency.
Transparency or Market Impact? The Quandary of the 4pm Fix
The Full FX
It has cost banks billions of dollars in fines, dozens of people their jobs and remains the subject of ongoing litigation, but the London 4pm WMR Fix remains as popular as ever. Colin Lambert looks at how the flow is handled, and what attitudes are to the mechanism amidst debate over its future.
When the Global Foreign Exchange Committee (GFXC) released a statement in mid-March 2020 highlighting the challenging liquidity conditions likely to be faced by market participants using the quarter-end London 4pm WMR Benchmark Fix, it was dipping its toe into a running sore in the FX industry – market impact during fixing windows.
The Four Goals of Investing
Michael Oyster – Options Solutions
What many investors have been told to expect by Wall Street has not always meshed with the actual experience. After multiple historic stock market corrections and subsequent dizzying advances, one of the most common feelings among investors is a feeling of “what now?”
In the Meme-Stock Era, Even Bad Voltswagen Jokes Are Worth Billions; You can’t blame VW for wanting a little bit of Tesla’s glamor. But its April Fools’ Day calamity shows the dangers of trying to be cool and funny.
Chris Bryant – Bloomberg
In a January column about how Elon Musk is basically in charge of the stock market now, I noted how others would try to copy the Tesla Inc. boss’s success in co-opting retail investors. I had one caveat, though: “Charming young Redditors in an authentic way isn’t an easy act to pull off.”
When the Workers Own the Business, They Need a New Kind of Finance; Co-ops that share profits and voting power with workers may struggle to get conventional loans, but impact investors are trying to fill the gap.
Lawrence Lanahan – Bloomberg
At a small table in an empty retail storefront in Baltimore, Nicole Foster pores over blueprints with her husband, Dwight Campbell, and architect Evan Wivell. For years, Foster and Campbell had made plant-based ice cream from scratch for their lactose-intolerant children. It turned out the public liked it, too. Could Cajou Creamery squeeze a production space and a cafe into 700 square feet? The architect was doing his best. “I spent some time in Rome in college,” Wivell says. “Tight cafes with three or four seats. That’s the inspiration—that and the scarcity of space you have.”
Environmental, Social and Corporate Governance
ESG A Growing ETF Phenomenon
Debbie Carlson – ETF Report.]
Environmental, social and governance investing has been popular with institutions and certain niche investors for years, but interest in ESG investing has ballooned beyond those groups.
We sampled tap water across the US – and found arsenic, lead and toxic chemicals; In a nine-month investigation by the Guardian and Consumer Reports we found forever chemicals, arsenic and lead in samples taken across the US
Ryan Felton and Lisa Gill of Consumer Reports and Lewis Kendall for the Guardian
In Connecticut, a condo had lead in its drinking water at levels more than double what the federal government deems acceptable. At a church in North Carolina, the water was contaminated with extremely high levels of potentially toxic PFAS chemicals ( a group of compounds found in hundreds of household products). The water flowing into a Texas home had both – and concerning amounts of arsenic too.
EDF Sees Huge Market for Small Reactors to Replace Fossil Fuels
Francois De Beaupuy – Bloomberg
Utility bets countries will need nuclear to meet climate goals; EDF sees big demand for compact reactors from 2030-2040
Electricite de France SA, the world’s biggest operator of atomic plants, sees a huge global market for small reactors from the next decade to replace fossil-fuel generators as countries scramble to meet carbon-emission reduction goals.
BMW, Volvo and Google vow to exclude use of ocean-mined metals; Groups say they will not buy any deep sea minerals for supply chains until risks to environment are ‘comprehensively understood’
Henry Sanderson – FT
BMW, Volvo and Google will not buy any metals produced from deep sea mining before the environmental risks are “comprehensively understood”, in a setback to companies that plan to mine the deep ocean this decade.
Record Nordic ESG Bond Sales Mask ‘Worrying’ Concentrations
Leo Laikola – Bloomberg
Investors in the Nordic region are increasingly having to sacrifice diversification if they want to buy into a sustainable debt boom.
Sweden’s real-estate industry is behind roughly half the country’s traded debt, much of which is issued under a climate-friendly label.
The SEC’s Fund Proxy Voting Disclosure Isn’t Helping ESG Investors
Lewis Braham – Barron’s
It’s no secret to anyone who looks at the voting data of ESG funds on climate-related shareholder proposals that many don’t exactly practice what they preach. Some of the largest funds with environmental, social, and governance, or ESG, investment mandates routinely vote against proposals for increased climate-risk disclosure as well as a host of other ESG-related proposals. This has been true at the largest shops with ESG offerings for years.
The Cannabis Industry Should Lead ESG Adoption
Robert Hoban – Forbes
Last year reminded many folks about the vital importance of integrating social, environmental, and corporate governance (ESG) principles into business. Simply put, to not do so is to be left behind. The cannabis industry is uniquely connected to these issues because of the historical criminalization and propaganda-driven stigma surrounding the plant, which has disproportionately affected underprivileged populations.
Credit Suisse’s Horrible Year Is Just Starting; The Swiss bank’s capacious appetite for risk is at the heart of its Bill Hwang and Lex Greensill calamities.
Elisa Martinuzzi – Bloomberg
Credit Suisse Group AG’s recent history has been marked by a spying scandal, executive brawls and huge fines. But even by its low standards, 2021 is shaping up to be a horrible year. Within the space of a few weeks the Swiss bank has been caught on the wrong side of two spectacular financial-market implosions. An unfortunate coincidence? Unlikely. The firm’s ethos and business model are at the heart of the mishaps.
Colony Capital’s Barrack Steps Down as Executive Chairman
Gillian Tan – Bloomberg
Colony Capital Inc. founder Tom Barrack is taking another step back from the firm, relinquishing his role as executive chairman. Barrack, 73, who left the chief executive officer post last year, will retain a director role at the company he founded, while Nancy Curtin, already a Colony director, will become non-executive chairman effective April 1, the company said in a statement late Tuesday.
Bank of America’s 1,800 Campus Hires to Be Trained Online, Work in Offices
Daniel Taub and Lananh Nguyen – Bloomberg
Bank of America Corp. said the 1,800 new graduates it’s hiring will be trained online, but are likely to work in offices. Virtual training and orientation, including any licensing needed, will begin in July for the bank’s campus hires, with the aim of having new employees at offices in October, Bank of America said Tuesday. In-office assignments will depend on local health conditions across the U.S. as the country works to come back from the Covid-19 pandemic, the company said.
Archegos Gives Investors Warning Signs; Question is whether Archegos is just an accident on a lonely road or a pileup waiting to happen
James Mackintosh – WSJ
On the highway, the most dangerous moment is when everything is calm and the outlook is great, because that’s when you put on the cruise control, turn up the music and miss the lumbering RV pulling out of a rest stop. It is the same in the markets. Booming stocks and fabulous returns soothed the worries of risk departments, leaving some banks nursing multibillion-dollar losses when the concentrated bets of Archegos Capital Management went from 90 mph to an emergency stop.
Wells Fargo Plans to Bring Employees Back to the Office in September; The bank said in a memo, ‘We believe most of us benefit by being physically together’
Ben Eisen – WSJ
Wells Fargo WFC 2.47% & Co. plans to start bringing employees back to the office after Labor Day, citing the increasing availability of vaccines. The bank, which has been telling employees each month that they should keep working from home for another month, now hopes that operations will begin to return to normal after Sept. 6, according to a memo circulated to staffers Tuesday afternoon.
BNP Paribas Asset Management names new global head of trading; Inés de Trémiolles joins the asset management arm as global head of trading within its global trading function after over 20 years with BNP Paribas.
Annabel Smith – The Trade
BNP Paribas Asset Management has appointed a BNP Paribas executive with 20 years’ experience, Inés de Trémiolles, to become its next global head of trading. De Trémiolles joins BNP Paribas Asset Management as global head of trading within its global trading function (GTF).
Brevan Howard Runs $50 Billion Unit Like BlackRock’s Aladdin
Nishant Kumar – Bloomberg
Coremont counts SoftBank, hedge fund Penso among clients; Aims to double assets and clients over a three year period
Brevan Howard is making money for its billionaire co-founder Alan Howard and other partners through more than just hedge fund fees. The investment firm best known for running macro trading strategies has persuaded the likes of SoftBank Group Corp., hedge fund Penso Advisors and 15 others to use its high-tech operational infrastructure that once only served as the trading backbone for Brevan Howard’s more than $40 billion in assets.
Hedge Funds Facing Loss Resist German Bank Move to Retire Bonds
Antonio Vanuzzo and Alice Gledhill -Bloomberg
Bank expected to redeem notes at heavy discount to face value; Holders dispute the bank’s justification for the redemptions
A fight is brewing between NordLB and some of its investors over the German bank’s decision to redeem some legacy bonds, a step that’s likely to impose large losses on the holders.
UK’s largest asset manager takes tough line on big bonuses; LGIM warns companies it will vote against bumper payouts for executives
Attracta Mooney – FT
Legal and General Investment Management, the UK’s largest asset manager, has warned it is “on the watch” for outsized executive bonuses during the upcoming annual meeting season, saying it will vote against companies that fail to rein in CEO pay in the wake of the pandemic.
Archegos makes it a trifecta of debacles for Credit Suisse; Three troubling situations involving huge clients suggest the Swiss bank has a risk-management problem
Brooke Masters – FT
Banking by definition involves risk. If you lend money to people and companies, some of them won’t be able to pay it back. The difference between a good bank and a bad one lies in how it manages that risk.
Built on a Lie by Owen Walker — Woodford’s fall from star stockpicker; A salutary tale about Britain’s best known fund manager that will invoke the ire of investors
Philip Augar – FT
“These funds are built on a lie, which is that you can have daily liquidity for assets that fundamentally aren’t liquid. And that leads to an expectation of individuals that it’s not that different to having money in a bank.”
Goldman Sachs bosses reportedly buy snack boxes for burnt-out bankers
Noah Manskar – NY Post
Nothing like a fruit basket to get you through a 100-hour work week. Goldman Sachs bosses have bought their UK underlings boxes of snacks in response to their concerns about grueling hours taking a toll on their health, a new report says. Managing directors paid out of pocket to buy the bundles of fruit and other munchies for burnt-out junior bankers in the megabank’s London office, the Guardian reported Tuesday.
Asia’s Worst-Performing Currency Takes a Hit From Tourism’s Wipeout
Lilian Karunungan – Bloomberg
Commerzbank AG sees baht dropping to 32 against the dollar; Japanese outflows, current-account deficit work against baht
A perfect storm is engulfing Thailand’s baht and the one group of people who can save it are stuck in lockdown, thousands of kilometers from the arrivals lounges of Bangkok, Phuket and Chiang Mai.
In Empty Amsterdam, Reconsidering Tourism; Before Covid-19, the city was packed with visitors. Now efforts to rein in the expected post-pandemic crowds are ramping up, but not without controversy.
Paige McClanahan – NY Times
When international travel came to a halt last year, Amsterdam — like cities everywhere — was drained of tourists almost overnight. The effect, according to Sonia Philipse, the owner of the restaurant Lavinia Good Food, was both surreal and serene: Without the crowds, her city was quieter and more beautiful than she had ever seen it.
How Japanese Investors Accelerated the Treasury Selloff; Banks focused on booking profits by the Japanese fiscal year-end unloaded bonds in recent weeks
Paul J. Davies, Megumi Fujikawa and Frances Yoon – WSJ
The sharp rise in Treasury yields in recent weeks looked like a test of whether the Federal Reserve can keep interest rates low after the economy regains its footing. Under the surface, other factors drove the selloff in U.S. government bonds, pushing prices down and yields up, according to investors and analysts. One factor was heavy selling by investors in Japan who were locking in investment returns for their year-end.
H&M responds to a firestorm in China over Xinjiang cotton
Elizabeth Paton – NY Times
More than a week after the Swedish retailer H&M came under fire in China for a months-old statement expressing concern over reports of Uyghur forced labor in the region of Xinjiang, a major source of cotton, the company published a statement saying it hoped to regain the trust of customers in China.
Ivory Coast Cuts Farmers’ Pay by 25% for Smaller Harvest
Leanne de Bassompierre – Bloomberg
Pay of 750 CFA per kilogram is 9% drop from last mid-crop; Cocoa regulator urges farmers to plant less to boost prices
Ivory Coast reduced cocoa farmers’ pay by a quarter for the smaller of two harvests due to dwindling global demand for chocolate. The world’s top producer, which increased pay rates to 1,000 CFA francs for the main harvest amid a commitment to improve the income of farmers, was unable to sustain the raise for the smaller harvest, which begins April 1. While the mid-crop harvest tends to attract a lower price than the main-crop, this still represents a 9% drop from last year’s mid-crop price.
India to Inject $2 Billion Capital in Four Weakened State Banks
Suvashree Ghosh – Bloomberg
Government plans funds infusion through zero-coupon bonds; The money may help some lenders emerge from RBI’s sanctions
India will infuse 145 billion rupees ($2 billion) into four state-run banks to help strengthen capital buffers and potentially free some of the lenders from regulatory curbs.
What Brexit changed for clothes, flower and sausage firms
The UK is at a “real risk” of falling behind the EU when it comes to workers’ rights, the Trade Union Congress (TUC) says. The union body said the EU had “various initiatives” in the pipeline which would improve standards once they became law. But it said the UK had no similar legislation on the way. The government said in protecting workers’ rights the UK already “goes further than the EU in many areas”. The TUC’s call comes three months after a new post-Brexit trade deal came into force between the UK and EU. Both sides have committed not to lower labour standards in a way that impacts trade or investment – but that does not mean they have to match each other.
U.K., EU Brexit Forum Seeks Dialog on Finance Market Access
Alberto Nardelli and Silla Brush – Bloomberg
The newly-agreed forum between Britain and the European Union will seek “transparency and appropriate dialog” about cross-border financial market access, according to the accord reached last week for post-Brexit regulatory cooperation. That marks a slight change from earlier drafts that said the two sides would have “informal consultations” on equivalence. The agreed version also no longer explicitly commits the two sides to discuss taxes on the financial industry, as an earlier EU draft did, according to a person with knowledge of the document. The memorandum of understanding said the two sides will have a dialog on “the process of adoption, suspension and withdrawal of equivalence decisions” that are needed by each side to repair the ongoing rupture to banking and trading. The agreement emphasizes that equivalence remains a separate and unilateral process.
U.K. Ambassador Karen Pierce On The U.K.’s Foreign Policy Future
Ari Shapiro – NPR
The U.K. aims to keep its relationship with the U.S. front and center in the coming years, according to the U.K. government’s new foreign policy overview called “Global Britain in a competitive age.” With Brexit complete and the U.K. out of the European Union, the U.K. is now looking to establish a new trade agreement with the U.S. and increase security ties. “In all our endeavors, the United States will be our greatest ally and a uniquely close partner in defense, intelligence and security,” Prime Minister Boris Johnson said earlier this month.
Workplace Coaching Isn’t Just for Bosses Anymore; A focused conversation with the right person can rejuvenate a tired team.
Adam Blenford – Bloomberg
To retool companies for the new world of work, managers need fresh insights into what makes their teams tick. With staff routinely working from home, and many expecting to visit offices much less frequently, leaders can no longer rely on water-cooler moments to fuel innovation and growth. One solution is performance coaching, a talking technique that proponents say can untangle gnarly workplace problems. Coaching has long been the preserve of senior management, but leaders and coaches alike say it’s time to open it up to lower-level workers.
Returning to the office? Here’s what to expect.
As company heads are once again planning for a return to the office, it is not only safety measures but also the new work arrangements that are driving discussions about the post-pandemic workplace. More than 80 percent of companies are embracing a hybrid model whereby employees will be in the office three days a week, according to a new survey by KayoCloud, a real estate technology platform.