UK watchdog FCA snarls at EU criticism over derivatives; SEC opens debate on finding alternatives to IPOs

Oct 18, 2019

First Read

Kent Law College Covers Kraft-Mondelez, Renato Mariotti, and US v. Andrei Flotron
Thom Thompson – John Lothian News

The 11th annual Conference on Futures and Derivatives took place on Thursday at Chicago- Kent IIT College of Law. I was going to say the panels covered the waterfront on recent developments in futures law, but I just looked up the phrase. It means “cover every detail” and, thank God, they did not do that. Instead, the panels were interesting and engaging.

My favorite panel of the day was a late-morning solo performance by the conference co-chair, Jake Kahn, partner at Riley Safer, regarding antitrust and futures law. Among other things. antitrust law has many implications for market manipulation cases, especially private cases brought under the 1914 Clayton Act because that federal law provides for the awarding of treble damages as well as covering the plaintiff’s lawyers’ fees. This suddenly clarified for me (Ohhhhhh!) why Kraft and Mondelez are so aggressive about keeping the CFTC from spilling the beans about what Kraft might have done in the 2011 CBOT wheat markets that led to the CFTC charging manipulation in 2015. There is a class action suit out there against Kraft, and Kraft would certainly rather have the plaintiffs conduct lengthy (cost prohibitive) discovery instead of getting ammunition from CFTC findings available on the internet for free.

To read the rest of this commentary, go here.

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Hits & Takes
JLN Staff

Larry Tabb of the TABB Group has an opinion piece in the Financial Times titled “Why payment for order flow is a good deal for investors.”~JJL

My church, the United Church of Christ, has an advocacy campaign to “Take Action to Support Financial Transparency.” You can add your name to an email to Illinois U.S. Senators and Representatives HERE.~JJL

Yesterday we interviewed Pat Arbor for our Open Outcry Traders History Project. We found out a lot of interesting things, including that Pat has never had a drink of alcohol, a cup of coffee or a smoke. He does claim to have a weakness for women. He also shared that while he was in jail earlier this year he passed the time by writing poetry. When his autobiography or biography is written, and it will be, it should be titled “Poems from Prison.”~JJL

Morgan Lewis and Women in Listed Derivatives (WILD) held their panel on “Cyberattacks – Not If, But When” last night in downtown Chicago. The panel was moderated by SocGen’s Katie Cleland and the panelists were experts in the field – they included Theodore Bruckbauer, senior director of cyber risk management at CME Group; Kristin Hadgis, a Morgan Lewis associate who has advised hundreds of companies on privacy, security and data breaches; and John Koleno, senior vp of cyber operations and corporate security at Wintrust Financial. The audience (of men and women) learned about the thorough investigating that goes into determining which threat groups are targeting an exchange such as the CME, the prevalence of cyber espionage as a way of stealing intellectual property, and the importance of having a plan that includes a defined role for everyone on your team. As always, though, the most important lesson for individuals who want to prevent identity theft is: Don’t use the same password on all your web sites! And don’t use your dog’s name as your password if you identify your dog on Facebook. ~SR

CoinMarketCap is hosting a conference in Singapore from November 12-13. The event will feature notable speakers from the cryptocurrency world such as Sunny King, creator of the proof-of-stake consensus mechanism, and CoinMarketCap’s enigmatic founder Brandon Chez, neither of whom has ever made a public appearance.~MR

Here is a “proposed rule change by OCC to establish a regulatory committee of the OCC Board of Directors. To demonstrate its continued strong commitment to compliance with applicable regulations in the conduct of its core clearance and settlement activities, OCC has established a board-level Regulatory Committee that would operate separately from OCC’s current Audit Committee, complement the work done by independent consultants on regulatory compliance matters, continue the work done by the current OCC Regulatory Oversight Working Group, and be solely comprised of OCC’s public directors.” This is an undertaking from their October 4 regulatory settlement that they did not have to move forward with until well into 2020. ~JJL

Seed CX Co-founders Brian Liston, COO, and Edward Woodford, CEO have a very busy schedule for the last quarter of the year and they want everyone to know it.~JJL

Akhil Lodha at Stratifi has written a piece titled “The Higher Purpose of Financial Advisors.”~JJL

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Fidelity rolls out cryptocurrency custody business; CEO Abigal Johnson says operation that started ‘just for fun’ is here to stay
Robin Wigglesworth – FT
Fidelity is ramping up its cryptocurrency custody business, hoping to profit from the scarcity of big, regulated institutions in the chaotic world of digital assets, according to Abigail Johnson, the investment group’s chief executive.
/on.ft.com/31oYE5B

*****Fidelity sounds good.~JJL

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Analysts Have a Few Problems With Trump ‘Chaos Trades’ Article
Sarah Ponczek and Nick Baker – Bloomberg
Story suggests traders made billions front-running policy news; Experts say that implication falls short of being proven
While the idea Donald Trump’s White House might have leaked market-moving news isn’t crazy, a new magazine story suggesting traders made billions of dollars front-running geopolitical events failed to pass the smell test among Wall Street professionals.
/bloom.bg/2BthIoB

*****Too many questions about the data for this to stand up. I love the part about comments from floor traders. Where are we trading emini S&P futures on a trading floor?~JJL

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A Guy on Reddit Turns $766 Into $107,758 on Two Options Trades
Brandon Kochkodin – Bloomberg
Before he became famous for the big short in the 2000s, Michael Burry discussed stock trades on online message boards. Burry’s posts were thoughtful, well-reasoned and showed deep research.
/bloom.bg/2qkUGy1

*****A Robinhood success story.~JJL

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Thursday’s Top Three
Our top read item of the day was the SEC’s SEC Charges 18 Traders in $31 Million Stock Manipulation Scheme. Second was Vanity Fair’s “There Is Definite Hanky-Panky Going On”: The Fantastically Profitable Mystery of the Trump Chaos Trades. Third was Kenny Polcari‘s piece What Will Stock Exchanges Look Like in 20 years?

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MarketsWiki Stats
165,761,884 pages viewed; 23,952 pages; 221,936 edits
MarketsWiki Statistics

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CryptoMarketsWiki Website»
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

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CryptoMarketsWiki Coin of the Week: Libra
Despite the withdrawal of a number of high-profile founding members this week – including eBay, Mastercard, and Visa – the Libra Association officially agreed to a charter, formed a council, elected a board of directors, and appointed an executive team.
bit.ly/2yeZrKi

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Lead Stories

UK watchdog FCA snarls at EU criticism over derivatives; Esma sees ‘significant room for improvement’ as French and Dutch regulators win top ratings
Philip Stafford – FT
UK markets regulators have bitten back at their EU counterparts in a row over the supervision of derivatives markets, after the British watchdog was assessed to be operating at the same level as Cyprus.
/on.ft.com/2VRii9e

SEC opens debate on finding alternatives to IPOs; US markets regulator hears arguments for enabling direct listings to raise capital
Miles Kruppa – FT
The US Securities and Exchange Commission has held exploratory discussions on alternatives to initial public offerings for companies that want to raise capital and list on the public markets.
/on.ft.com/31kpa00

Russia plans exchange for US-sanctioned companies to raise debt; Move is part of a range of measures to bolster country’s capital markets
Katie Martin and Max Seddon – FT
Russia is stepping up efforts to protect its financial markets from the unpredictable ebb and flow of US foreign policy, including plans to launch a special exchange where sanctioned companies can list their bonds, deputy finance minister Alexei Moiseev said on Thursday.
/on.ft.com/32rlWJf

Boris Johnson intensifies efforts to secure Brexit deal majority; Prime minister will need to win over more Labour MPs after DUP rejects agreement
Laura Hughes – FT
Boris Johnson has intensified a charm offensive to convince a majority of MPs to back his new Brexit deal in a crucial House of Commons vote on Saturday.
/on.ft.com/2Mqz9MX

Traders Flout Personal-Dealing Bans Across Industry, Watchdog Says
Silla Brush and Donal Griffin – Bloomberg
Research analysts found to have traded against recommendations; Compliance, surveillance staff seen skirting company policies
Traders and research analysts across London are flouting conflict of interest policies by trading in personal accounts despite numerous attempts to ban such behavior.
/bloom.bg/31u3IWm

Why Facebook’s Libra might be a good thing; In a financial system overly dependent on too-big-to-fail banks, innovations like Facebook’s could be crucial
Richard Waters – FT
When companies are threatened with retaliation by powerful politicians merely for exploring a radical new business idea, it doesn’t bode well for innovation.
/on.ft.com/2MplIgo

What Facebook CEO Mark Zuckerberg Said in His Defense of ‘Free Expression’
Brady Dale, Nikhilesh De – Coindesk
Facebook CEO Mark Zuckerberg defended free expression in a speech at Georgetown University on Thursday. “[The internet] allows people to share things that wouldn’t have been possible to share before,” he said. However, “we’re seeing people across the spectrum try to define more speech as dangerous because it may lead to political outcomes that they see as unacceptable.”
bit.ly/2OVOoPN

CFTC Announces Agenda for 2nd Annual Fintech Forward Conference
CFTC
The U.S. Commodity Futures Trading Commission today announced the agenda for its second annual Fintech Forward conference. This year’s event, Fintech Forward 2019: Exploring the Unwritten Future, will bring together innovators, regulators, market participants, and the general public to discuss the latest in fintech developments and the impact of these emerging technologies on markets and customers. The conference will be held at the CFTC’s headquarters in Washington, DC on October 24, 2019.
bit.ly/35Hy76X

Angry investors count the cost of Woodford collapse; Fury at decision to wind up fund — yet some still back sacked fund manager
Claer Barrett and Kate Beioley – FT
“I feel like I’ve been scammed. I know I’ve probably lost most of that money, and I just have to shrug my shoulders and get on with life.”
/on.ft.com/2J1ILMi

Central banks are tuning in to climate change; Kristalina Georgieva’s appearance on an IMF panel about the issue is an important signal
Gillian Tett – FT
This week is Kristalina Georgieva’s “debut” party: as the newly installed managing director of the IMF, she is presiding over her inaugural annual meeting of the fund.
/on.ft.com/32vVfTW

China’s Cryptocurrency Plan Has a Powerful Partner: Big Brother; Facebook’s Libra project led Beijing to accelerate its efforts. The government could soon know a lot more about how people are spending.
Raymond Zhong – NY Times
When Facebook announced plans this year for a cryptocurrency called Libra, it said its goal was to reinvent money for the internet age. What the company probably didn’t imagine was that its efforts might spur China to get there first.
/nyti.ms/2VQKFnU

Exchanges, OTC and Clearing

Eurex Exchange’s Quarterly Equity Derivatives Highlights – Q3/2019
Eurex
Equity options: The third quarter continued to be dominated by macroeconomic and political news flows. Monetary policies by the FED and ECB in particular, signs of economic stabilization in the U.S. and glimmers of hope for a cease fire in the U.S./China trade war were offset by the ongoing Brexit soap and the numerous dramas surrounding the U.S. presidency. We observed some more market volatility but a noteworthy upward trend is not yet seen.
bit.ly/32DImXO

Enhancement of the Excessive System Usage Fee: Activation of the “No Market Data Impact” Limit type for Options
Eurex
Eurex Circular 099/19 Enhancement of the Excessive System Usage Fee: Activation of the “No Market Data Impact” Limit type for Options
bit.ly/31oVOxt

ETF derivatives: Introduction of options on iShares EUR High Yield Corporate Bond ETF and iShares Core EUR Corporate Bond ETF
Eurex Circular 098/19
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Frankfurt AG took the following decision with effect from 9 December 2019:
bit.ly/2Mrvuic

Exchange Announces the Effective Date of Unwinding the Delegated Authority to Approve GEM Listing Applications and Publishes Related Changes to GEM Listing Rules
HKEX
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) announced the effective date of unwinding the authority delegated to the Listing Department by the GEM Listing Committee to approve GEM listings (Delegated Authority) and published related changes to GEM Listing Rules.
bit.ly/2VRFpk5

LSEG seeks new financial chief as David Warren retires; LSEG confirms several changes to its structure amid search for new CFO, including formation of streamlined post-trade services business, led by LCH’s chief executive.
Hayley McDowell – The Trade
The London Stock Exchange Group (LSEG) is on the hunt for a new chief financial officer after confirming that David Warren will step down from the board and retire by the end of 2020.
bit.ly/2Bt6UH3

LSEG Q3 2019 Trading Statement
London Stock Exchange Group
Strong Q3 performance across all parts of the Group – LCH continues to grow strongly in OTC products; FTSE Russell performing well with growth in subscription revenues; Q3 total income up 12% to £587 million
On a nine-month year-to-date basis total income up 9% to £1,727 million; Proposed acquisition of Refinitiv continues to progress:
bit.ly/33K2LdU

LSEG Directorate Change
London Stock Exchange Group
LSEG to commence succession process for Group CFO, David Warren, who will continue in role through 2020. London Stock Exchange Group (“LSEG plc,” “LSEG,” “the Group”) today announces that David Warren, Group Chief Financial Officer has informed the Group of his intention to retire from the company and step down from the Board by the end of 2020.
bit.ly/2oWktwf

Nadex Product Schedule For The Japan Holiday On October 22, 2019
NADEX
Due to the Japan Holiday on Tuesday, October 22, 2019, the Japan 225 contracts will have a modified trading schedule. Please refer to the Holiday Product Schedule Guidelines for specific product trading hours.
bit.ly/2BlXqNR

HKEX picks TNS for connectivity, managed hosting and market data access
IBSIntelligence.com
Transaction Network ServicesTransaction Network Services (TNS) and Hong Kong Exchanges and Clearing (HKEX) signed an agreement for connectivity, managed hosting and market data access to give financial market participants greater choice of how to trade with the HKEX, the companies said in a statement on Tuesday.
bit.ly/2OZy1Sm

LSE gets earnings boost ahead of Refinitiv deal vote
Noor Zainab Hussain – Reuters
London Stock Exchange (LSE.L) reported higher-than-expected third-quarter income on Friday, putting it in a strong position ahead of next month’s shareholder vote on its planned $27 billion deal to buy data provider Refinitiv.
/reut.rs/2J28PH0

Shanghai Stock Exchange Amends, Optimizes Rules On Disciplinary Sanction, Review & Hearing
Mondovisione
Recently, the Shanghai Stock Exchange (SSE) has amended the “SSE Implementation Methods on Review” (the Review Methods for short), the “SSE Implementation Methods on Disciplinary Sanction and Regulatory Measures” (the Disciplinary Sanction Methods for short) and the “SSE Detailed Rules on Implementation for Hearing of Self-regulatory Management” (the Hearing Rules), which shall come into force after being released on October 11, 2019.
bit.ly/31t25YS

Santiago Exchange and S&P Dow Jones Indices announces the new Dow Jones Sustainability Index composition
MarketWatch
Santiago Exchange, S&P Dow Jones Indices and RobecoSAM, announced the new composition of the Dow Jones Sustainability Chile Index (DJSI Chile), effective as of September 23.
bit.ly/2OWO5UX

Fintech

Bahrain fintech model offers blueprint for rest of the region; Middle East lags behind global counterparts on digital innovation in finance
Maissan Almaskati – FT
Fintech has become an obsession across the Arab region’s key financial centres. Ostentatious conferences, seminars, workshops, hackathons, accelerators and even festivals are popping up at an extraordinary pace, while social media platforms such as LinkedIn and Instagram are abuzz with the latest developments.
/on.ft.com/31rbZKT

Tradeweb Markets Announces Pricing of Upsized Follow-On Offering
Tradeweb
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced the pricing of its follow-on offering of 17,287,878 shares of its Class A common stock at a price to the public of $42.00 per share. In addition, the underwriters have a 30-day option to purchase up to an additional 2,593,181 shares of Class A common stock at the public offering price, less the underwriting discounts and commissions. The closing of the offering is expected to occur on October 22, 2019, subject to satisfaction of customary closing conditions.
/bwnews.pr/31rICrI

Fintech launched by Romanians in London raises GBP 2 mln for development
Romania Insider
London-based fintech company Proportunity, launched by two Romanian entrepreneurs, has raised a GBP 2 mln seed investment to drive its analytics and lending platform that offers home equity loans to first-time buyers. The startup is the only ‘Help to Buy’ challenger to date that has actually helped consumers own homes.
bit.ly/2MQMlKe

Virtu Announces Launch of New Outsourced Trading Service
GlobeNewswire
Virtu Financial, Inc. (VIRT), a leading provider of financial services and products that leverages cutting-edge technology to deliver liquidity to the global markets and provide execution services and data, analytics and connectivity products, today announced the US launch of its outsourced trading business, Execution Concierge Service (ECS). Virtu’s ECS combines the full scope of Virtu’s execution services offering—multi-asset, broker-neutral technology platforms, trading tools and analytics, high-touch trading services and global client coverage—into one solution for the entire trade lifecycle.
/yhoo.it/2J15Oql

Cryptocurrencies

Stablecoin regulatory risks need addressing, says G7 report; Further blow for Facebook’s Libra project as concerns raised over financial stability
Hannah Murphy – FT
Company-created digital currencies such as Facebook’s Libra could “pose challenges for competition and antitrust policies” and should not be launched until all legal and regulatory risks are addressed, the G7 has recommended, in the latest blow to the project.
/on.ft.com/2Mp4zDx

Mercury Digital Assets Releases BEACON OTC Crypto Trading Platform
Business Wire
Mercury Digital Assets, a technology provider for digital asset markets, announced the release of BEACON OTC, a turnkey solution for OTC crypto trading. BEACON OTC allows OTC trading desks to move away from telephonic and instant messaging communications to centralize workflows on an institutional-grade platform, which increases operational efficiency, scalability, and profitability.
bit.ly/2pvTnvE

China’s Cryptocurrency Plan Has a Powerful Partner: Big Brother
Raymond Zhong – The New York Times
When Facebook announced plans this year for a cryptocurrency called Libra, it said its goal was to reinvent money for the internet age. What the company probably didn’t imagine was that its efforts might spur China to get there first. China wants to start replacing the cash that people carry with a digital currency soon, a long-discussed project that went into overdrive after Libra was unveiled in June. Facebook has been fighting to defend its initiative against skeptical regulators, and key corporate partners have pulled out of the project. But Beijing’s ambitions appear to be moving ahead at full speed.
/nyti.ms/2VQKFnU

Facebook’s Libra cryptocurrency faces new hurdle from G7 nations
Tom Wilson, Balazs Koranyi – Reuters
Facebook’s plans to launch its Libra cryptocurrency faced a new hurdle on Thursday, when the Group of Seven wealthy nations said such “stablecoins” should not be allowed to launch until the profound international risks they pose are addressed. When launched on a wide scale, stablecoins – digital currencies usually backed by traditional money and other assets – could threaten the world’s monetary system and financial stability, a G7 working group said in a report to finance ministers gathered in Washington for the IMF and World Bank fall meetings.
/reut.rs/2OXO03h

Major Bitcoin Miner Warns The Cryptocurrency Needs Better Privacy
Kyle Torpey – Forbes
The CEO of one of the top three Bitcoin mining pools recently stated that Bitcoin needs better privacy in order to avoid a potential regulatory clampdown. The comments were made by Poolin CEO Kevin Pan in an interview with Bitcoin Magazine. While Poolin is barely a year old, it already accounts for a significant portion of the total Bitcoin network hashrate. The mining pool was created by Pan, COO Fa Zhu, and CTO Tianzhao Li, all of whom were previously at the Bitcoin mining giant Bitmain’s subsidiary BTC.com.
bit.ly/2VTStFm

Islamic finance entrepreneurs eye new frontiers
Chloe Cornish – Financial Times
Daniel Ahmed had raised $2.5m from wealthy Gulf investors to create a sharia-compliant cryptocurrency. But as the blockchain bubble burst last year, he reasoned that “it may not be the right time”. Instead, Mr Ahmed and a co-founder decided to fuse technology and tradition, by matching would-be investors with infrastructure projects funded by Islamic finance.
/on.ft.com/2oSTm5c

Facebook Warns Washington That Beijing Wins If Libra Plan Fails
Benjamin Bain and Kurt Wagner – Bloomberg
Facebook Inc. has a warning for those in Washington determined to derail the company’s plans for creating a cryptocurrency: doing so would be a huge win for China. David Marcus, the executive leading the company’s Libra initiative, said Beijing is plowing ahead in trying to stand up a digital payments system with global reach even as U.S. officials try to figure out how to regulate Facebook’s coin.
/bloom.bg/2pyA4Ss

*****This is what’s called a “Slippery Slope” argument – it’s a logical fallacy made when someone says that if we allow something to happen, it will be the first in a series of events that will lead to something bad and unintended. Also, a state-backed stablecoin is a very different animal from a corporate-backed stablecoin.~MR

Telegram Warns of Losses Unless Crypto Investors Agree to Delay
Anna Baraulina and Ilya Khrennikov – Bloomberg
Telegram Group Inc. is telling investors who helped fund the creation of its digital token that they’ll only receive 77% of their money back unless they agree to postpone the launch of the cryptocurrency for six months. Pavel Durov’s Telegram raised $1.7 billion in early 2018 to fund creating its own cryptocurrency Gram and blockchain infrastructure to operate it. It was scheduled to deliver tokens to investors by Oct. 31. The U.S. Securities & Exchange Commission halted the process last week, arguing that Gram is essentially a security that wasn’t properly registered.
/bloom.bg/31swxT7

CME Group Says Institutional Players Have Increased Appetite for Bitcoin Futures Contracts
Coinspeaker
According to the CME Group, big institutional investors have increased their need for futures and options offerings by more than half.
bit.ly/31m8iG8

Facebook’s Libra Just Got Its First Major Supporter in Congress
Nikhilesh De – Coindesk
Amid a sea of scorn, one U.S. Senator is praising Libra. Sen. Mike Rounds (R-S.D.) wrote a letter to Libra Association member Anchorage, a South Dakota-based trust company, endorsing the Facebook-led project and citing it as an example of a technological advance he feels is needed to aid U.S. consumers.
bit.ly/2pudevo

Bitcoin Has Failed But Global Stablecoins a Threat, Say BIS and G7
William Foxley – Coindesk
Bitcoin and other early cryptocurrencies have failed as an “attractive means of payment or store of value,” says a new report from the G7 and Bank of International Settlements (BIS). However, the October report, argues that widely adopted asset-pegged cryptocurrencies, or stablecoins, such as Libra are a growing threat to monetary policy, financial stability and competition. Widely adopted stablecoins, dubbed “global stablecoins” in the report, have the potential to reach an international audience and have “significant adverse effects” on the current economic system, it argues.
bit.ly/2JgHNvN

Huobi Plans to Open Fiat Gateway with Lira-Tether Pairing in Turkey
David Pan – Coindesk
Global crypto exchange Huobi plans to roll out a fiat gateway in Turkey that could increase access to more than 250 cryptocurrencies for local investors. The move comes as Turkey puts forward a clearer legal framework for the crypto market in a country where many people already hold cryptocurrencies, Mohit Davar, Huobi’s EMEA regional president, told CoinDesk. The company is announcing the project at the Eurasia Blockchain Summit in Istanbul on Friday.
bit.ly/33I0SPa

Binance Hikes Leverage to 125x for Launch of Bitcoin-Tether Futures
William Foxley – Coindesk
Binance’s futures exchange is raising leverage to 125x with the launch of bitcoin (BTC)/tether (USDT) contracts today. The cryptocurrency exchange first announced its futures platform in early July, at the time hinting it would allow 20x leverage. Now, futures traders can now choose leveraged positions between 1x and 125x, it said Friday.
bit.ly/2VRq2rO

Ripple CEO claims to sign over 30 deals a week with financial institutions for blockchain payments
Yogita Khatri – The Block Crypto
Brad Garlinghouse, chief executive officer of blockchain payments firm Ripple, has said that the company signs more than 30 deals a week with financial institutions.
bit.ly/31ucT9g

Fake Tor Browser Has Been Spying, Stealing Bitcoin ‘For Years’
Daniel Palmer – Coindesk
Hackers have been distributing a compromised version of the official Tor Browser that’s packed with malicious tools used to both spy on users and steal their bitcoin.
bit.ly/32st0pg

Archax selects R3’s Corda Enterprise platform for digital exchange DLT infrastructure; Partnership to revolutionise post-trade space in financial markets
Archax
Archax, the London-based institutional digital securities exchange, today announced a partnership with R3, the enterprise blockchain software firm. Under this partnership, Archax will use R3’s Corda Enterprise platform to handle post-trade activities on a distributed ledger.
bit.ly/31mPczz

Politics

Mulvaney walks back his remarks that Trump held up Ukraine aid for political reasons
Allan Smith – NBC News
Acting White House chief of staff Mick Mulvaney on Thursday walked back comments he made earlier in the day suggesting that President Donald Trump held up military aid to Ukraine until it moved to investigate a conspiracy involving the 2016 U.S election. “There was absolutely no quid pro quo between Ukrainian military aid and any investigation into the 2016 election,” he said in a statement contradicting remarks he made during an earlier press briefing.
/nbcnews.to/2MrDaAP

Perry to Resign as Energy Secretary
Maggie Haberman and Lisa Friedman – The New York Times
Rick Perry, the energy secretary who has drawn scrutiny for his role in the controversy surrounding President Trump’s efforts to push Ukraine officials to investigate the son of a political rival, told the president on Thursday that he would resign from the cabinet. The Perry resignation had been anticipated for several weeks, even before the news emerged of his involvement in efforts to pressure the new president of Ukraine, Volodymyr Zelensky, to investigate a company that had worked with Hunter Biden, the younger son of former Vice President Joseph R. Biden Jr.
/nyti.ms/2J2NMnF

Congress Pushes Forward On Turkey Sanctions Despite Ceasefire
Daniel Flatley and Anna Edgerton – Bloomberg
Graham-Van Hollen sanctions bill includes sovereign debt; Measure seeks to punish Turkey for invasion of northern Syria
Republican and Democratic lawmakers vowed to move ahead with sanctions on Turkey despite the announcement by Vice President Mike Pence that Turkish President Recep Tayyip Erdogan agreed to temporarily halt hostilities in northern Syria.
/bloom.bg/31tVAoK

Regulation

ESMA rebukes FCA for poor handling of derivatives data under EMIR; The FCA has disputed a peer assessment that its analysis and integration of EMIR data in its supervisory approach is not meeting expectations.
Hayley McDowell – The Trade
The UK’s financial watchdog has fallen behind its EU counterparts when it comes to quality controls and analysis of vital derivatives data under EMIR, according to the European Securities Markets Authority (ESMA).
bit.ly/2BqQS0k

Ex-Pimco Chief Will Plead Guilty in College Scandal
Janelle Lawrence and Patricia Hurtado – Bloomberg
Move comes after nine parents sentenced, eight of them to jail; Douglas Hodge paid hundreds of thousands in bribes, U.S. says
Douglas Hodge, the former Pimco chief accused of using a middleman to cheat his kids’ way into elite colleges, will plead guilty, according to prosecutors.
/bloom.bg/2MpPj9g

Oleg Deripaska-Linked Firm Was Raided for Undisclosed U.S. Inquiry
Jonathan Browning – Bloomberg
Filings in U.K. reveal ‘live and ongoing’ U.S. criminal probe; Laundering investigation grew out of Robert Mueller’s work
U.S. prosecutors are seeking records from a company associated with Russian billionaire Oleg Deripaska as part of a previously unreported investigation, according to documents filed in a London court.
/bloom.bg/2nVZvgq

Lime FS Pty Ltd agrees to shut down digital advice tools
ASIC
Sydney-based Australian financial services (AFS) licensee, Lime FS Pty Ltd (Lime FS), has voluntarily shut down two digital advice tools following concerns raised by ASIC.
bit.ly/31pAwje

ESMA sees significant room for improvement in national regulators’ supervision of derivatives data
ESMA
The European Securities and Markets Authority (ESMA) has today published the results of a peer review it conducted into supervisory actions of six National Competent Authorities (NCAs) regarding their approaches at enhancing the quality of derivative data reported under the European Market Infrastructure Regulation (EMIR).
bit.ly/2Bl0UjO

SEC and Morehouse College Announce Atlanta Event for Minority Entrepreneurs
SEC
The Securities and Exchange Commission and Morehouse College will co-host a panel discussion on strategies to attract investment capital to minority businesses from 4 – 7 p.m. ET on Thursday, Oct. 24 during homecoming week. The special event, which will be held on the campus of Morehouse College, will feature conversations with minority entrepreneurs and investors who will explore solutions for overcoming barriers and share business successes.
bit.ly/2MqHW1z

SEC Issues Statement on Market Structure Innovation for Thinly Traded Securities
SEC
The Securities and Exchange Commission today issued a statement that invites exchanges and other market participants to submit innovative proposals designed to improve the secondary market structure for exchange listed equity securities that trade in lower volumes, commonly referred to as “thinly traded securities.”
bit.ly/2J4BriW

Investing and Trading

Super-rich should be leading the way in investing sustainably; Too often, one hears advisers say ESG is all well and good but needs to form part of a ‘balanced portfolio’
Alice Ross – FT
Last year was not a stellar one for family offices. That is not a huge surprise, given falls in stock markets. They still made money, of course: an average return of 5.4 per cent, according to a global family office report by UBS and Campden Wealth, down from 15.5 per cent in 2017.
/on.ft.com/2Mo8Oz4

How bonds became stocks and stocks became bonds; Investors are struggling to adjust to a world where people buy debt for capital gains
Robin Wigglesworth and Jennifer Ablan – FT
Bonds have become the new equities, say fund managers, stirring concerns that dangers are lurking in the supposedly safest corners of financial markets.
/on.ft.com/2psZr8u

Investors balk at green bond from group specialising in oil tankers; Poor market reception for Teekay issue throws spotlight on eco-friendly financing
Billy Nauman – FT
Teekay Shuttle Tankers’ attempt to float a green bond has partially run aground, with investors balking at the notion that a company specialising in oil tankers can qualify for eco-friendly financing.
/on.ft.com/32qcO7L

Endowments Say They Cut Use of Hedge Funds Because of High Fees
Michael McDonald – Bloomberg
Poll shows 37% of institutions reduced hedge fund wagers; Institutions redeployed to fixed-income, private equity
Endowments and foundations cut their hedge fund exposure in the last year, citing high fees and concerns about liquidity and transparency.
/bloom.bg/31t39fk

Institutions

Morgan Stanley looks to drive ‘profitable share’ in prime brokerage; Prime brokerage is ‘the centre of the machine’ for equity sales and trading, according to Morgan Stanley, as revenues rise in the third quarter.
Hayley McDowell – The Trade
Morgan Stanley has said it will target driving its profitable market share in prime brokerage, after referring to the business as “centre of the machine” of its equity trading division.
bit.ly/32tDiW3

No one emerges from the Woodford debacle with any credit; Light-touch regulation continues to fail retail investors
Claer Barrett – FT
You can no longer find the article online, but I have kept a hard copy of the Hargreaves Lansdown customer magazine, the Investment Times, from June of this year.
/on.ft.com/31u4SRI

Law firm considers legal claim against Hargreaves Lansdown; Group assesses recourse for investor losses due to broker’s support for Woodford
Kate Beioley – FT
A UK law firm is investigating a potential legal claim against Hargreaves Lansdown on behalf of angry investors who stand to lose money as a result of the demise of Woodford Investment Management.
/on.ft.com/2BnIC1f

Ex-RBS Trader Ruined in Film Scam Keeps $4 Million London Home for Now
Eddie Spence – Bloomberg
Walsh lost suit against his wealth manager, couldn’t pay costs; Court dismisses order to seize house in wake of bankruptcy
The fallout from a film-investment scandal cost a former Royal Bank of Scotland Group Plc trader nearly everything. But his bankruptcy shielded his multi-million-dollar London house from one creditor, at least for now.
/bloom.bg/2nSIXpw

Barclays’ Jenkins was London’s ‘Great Rainmaker,’ Lawyer Says
Ellen Milligan and Eddie Spence – Bloomberg
It took “the great rainmaker in the City,” former Barclays Plc executive Roger Jenkins, to save the lender by negotiating billions of dollars in investment from Qatar at the height of the 2008 financial crisis, a lawyer for a fellow defendant told a London jury.
/bloom.bg/2VSjDwn

Ex-Credit Suisse Banker Says Secret Affair Helped Fuel $45 Million Fraud
Patricia Hurtado – Bloomberg
Pearse says VTB banker got $2 million kickback from Privinvest; Ex-banker says Mozambique bribe offer made at Riviera estate
A former Credit Suisse Group AG banker told a federal jury in New York that his decision to take millions of dollars in bribes was fueled in part by his secret love affair with a subordinate.
/bloom.bg/31rahsX

ING Vies With Credit Suisse for Oil Tycoon’s London Flats
Ellen Milligan – Bloomberg
Banks trying to seize properties to recover $5 million debt; U.K. court to rule on assets linked to Igho Sanomi, Taleveras
Two of Europe’s biggest banks want to seize oil trader Igho Sanomi’s London homes. Let the battle commence.
/bloom.bg/2VSiMvF

Billionaire Rokos Tightens Reins at $9 Billion Hedge Fund
Nishant Kumar – Bloomberg
Core portfolio team led by Rokos will oversee all investments; Managers at the firm previously ran their own trading books
Billionaire Chris Rokos is back to calling all the shots at his $9 billion eponymous hedge fund firm.
/bloom.bg/2BjlP6T

State Street Reports 24% Drop in Earnings; Custody bank’s assets under management rose 5.1% in latest quarter; results beat analysts’ estimates
Robert Barba – WSJ
State Street Corp. STT 1.00% reported a nearly 24% drop in earnings in the third quarter as revenue fell and expenses increased.
/on.wsj.com/2oWb1c2

Point72, Balyasny Led Decline Among Big Multi-Strategy Funds
Katia Porzecanski – Bloomberg
Early September market shift ‘drew blood,’ Credit Suisse says; Gelband’s ExodusPoint among winners, gaining 0.4% last month
Billionaire Steve Cohen led losses among his biggest multistrategy hedge fund peers last month as sweeping market shifts blindsided investment managers.
/bloom.bg/2VTYS3J

INTL FCStone sees more growth in precious metals after third-quarter record volume
Mai Nguyen – Reuters
INTL FCStone, a top global bullion broker, expects further growth on its trading platform after reporting a 50% jump in precious metals trading volumes in the year ended Sept. 30, the Asia head of precious metals at the firm said.
/reut.rs/2Ms0COw

Regions

Why Barcelona Is Burning
The Wall Street Journal Editorial Board
Catalonia in Spain descended into disorder this week after a court handed down harsh sentences for sedition to separatist leaders. Socialist Prime Minister Pedro Sanchez has tried to contain this crisis by balancing firmness with appeasement, and in a few weeks Spanish voters can show whether they approve.
/on.wsj.com/31mKBxp

The Minority Rule: A Trader’s Guide to Canada’s Tight Election
Susanne Barton – Bloomberg
Minority government likely scenario, according to latest poll; Loonie leads gains among G-10 currencies before Oct. 21 vote
Canada’s dollar is the best-performing major currency this year and the nation’s stocks are going strong. But now isn’t the time for investors to rest on their laurels. The upcoming federal election is the next big event to test the market’s resilience.
/bloom.bg/2BoykOw

Brexit

London Bankers Ready for Wave of Debt Deals If Johnson Wins Vote
Marianna Duarte De Aragao and Ruth McGavin – Bloomberg
Resolution may boost junk-rated debt supply in U.K.: JPMorgan; Sterling bond and loan sales have dwindled since spike in 2017
Britain’s junk-rated debt market could be on the verge of a deal bonanza if the U.K. Parliament backs Boris Johnson’s Brexit deal on Saturday.
/bloom.bg/2o0TfEg

Betting Firm That Called May Votes Sees Johnson Beaten on Brexit
Dara Doyle – Bloomberg
U.K. Prime Minister Boris Johnson is set to lose Saturday’s vote on his Brexit deal by seven votes, Sporting Index said Thursday. The firm established its political credentials calling correctly the result of earlier votes.
/bloom.bg/2nSINOW

Johnson Sells Brexit Deal to Parliament Before Knife-Edge Vote
Tim Ross and Kitty Donaldson – Bloomberg
Prime minister secures historic political accord in Brussels; Crunch Saturday vote on Brexit agreement hangs in the balance. Boris Johnson is battling to sell his new Brexit deal to skeptical members of the U.K. Parliament ahead of a crucial vote on Saturday.
/bloom.bg/2MqCwnf

Sterling Traders Are Trapped in a Brexit Tunnel; A win for Johnson on Saturday would see the pound settle into a higher range, but an election and the need for an EU trade deal muddies the water.
Marcus Ashworth – Bloomberg
Boris Johnson and the European Union may have emerged from their famous negotiating “tunnel” to brandish a new Brexit deal, but currency traders are still very much in the dark.
/bloom.bg/2BmaGCd

What’s in the Brexit Deal? Here’s Some of the High Points
Edward Evans – Bloomberg
Following is a set of extracts from the Political Declaration that forms part of the European Union and U.K.’s Brexit deal. You can view the document in full here.
/bloom.bg/2pygTIq

Miscellaneous

Why It’s Worth Knowing Who Imported Your Wine
Lettie Teague – The Wall Street Journal
If I’m browsing for wine in a retail shop and chance upon an unfamiliar one, I’ll turn the bottle around and check the back label for the name of the importer. That name may be writ small or large, depending on the importer’s ego and/or typeface selection. Either way, it can be a useful indicator of the character, quality and even style of the wine.
/on.wsj.com/2BmTZqa

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