Hits & Takes
John Lothian & JLN Staff
Intercontinental Exchange, Inc. reported record futures open interest with 48 million contracts on July 27, 2021 and record liquidity across diverse asset classes. In ICE’s global environmental complex, the exchange reported a record 2.86 million contracts open across futures and options on July 27. The North American environmental complex hit record open interest of 1.13 million contracts on July 27 across futures and options, and the number of participants trading ICE’s global environmental markets increased by almost 30% over the past year. — ICE
Cboe Global Markets released their second quarter results and had the following highlights:
– Diluted EPS for the Quarter of $0.98, Down 5 percent
– Adjusted Diluted EPS¹ for the Quarter of $1.38, Up 5 percent
– Net revenue for the Quarter of $351 million, Up 18 percent
– Returned $79 million to shareholders through share repurchases and dividends
– The company increases its 2021 organic growth target for recurring non-transaction revenue to 12 to 13 percent, from its previous guidance range of 10 to 11 percent² — Cboe Global Markets
Robinhood lived up to its legacy of taking from the rich to give to the poor by closing down 8% on its first day of trading. — Yahoo Finance Some of the stories of the early investors are amazing for the amount of money they made, including one venture capital firm that invested $500,000 and made $3 billion on their Robinhood investments. I guess it pays to hang out in Google Hangouts. — Bloomberg Reuters’ headline for the IPO performance said it was “grim.” — Reuters
An internal report from the U.S. CDC says the Delta variant is as contagious as chickenpox. — Reuters
Reuters is reporting that Edinburgh’s international arts festivals will spring back to life next week, after taking off a year for the pandemic. The festivals are “second only to the Olympics in ticket sales,” Reuters said. It is the world’s biggest cultural event, drawing millions to the Scottish capital, for art, film and book festivals. Get ready for the stories about the festivals becoming superspreader events. — Reuters
Michael Covel has interviewed a former broker client of mine when I was at The Price Group, retired money manager Tom Basso, about trend following. — Trendfollowing.com
An industry friend canceled a meeting with me today because they were exposed to the coronavirus. Luckily their COVID test came up negative, but their trip to Chicago was canceled. I am thankful for the negative test.
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday.
Later today we will publish the video from the July 21 World of Opportunity event as a whole and individual videos for the segments with Small Exchange CEO Donnie Roberts and Get Real VR partner Ed Haravon.
Also, be on the lookout for a video for our The Path to Electronic Trading series featuring Charles Farra, a former Cargill Investor Services executive who later worked for Jump Trading, the Chicago Board of Trade and CME Group.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Registration is now open for the STA’s 88th Annual Market Structure Conference: The Great Return, taking place in Washington, D.C. Oct. 6-8. Washington, D.C. has fully reopened, but because of travel restrictions, this year’s conference will be a hybrid event, with both in-person and virtual components. Keynotes, firesides and panel discussions will be livestreamed along with exclusive virtual-only content presented during networking breaks. The program will feature U.S. regulators and legislators, as well as industry speakers and presenters. You can go here to register.~SR
Cannabis shares pull back as U.S. regulatory momentum fizzles
Nasdaq IR Intelligence analyst Saleem Daya explains why the sector’s heated year-end performance cooled in Q2; cites rising yields, retail investor fatigue as action on U.S federal legislation remains stalled.
Anne Dias returns to money management with new long-short fund; Dias, ex-wife of Citadel’s Ken Griffin, began fundraising last month for a long-short strategy to be managed by her Aragon Global Management.
Hedge fund veteran Anne Dias is planning to manage outside money again. Dias, 50, began fundraising last month for a long-short strategy to be managed by her Aragon Global Management. The New York-based firm, with roots dating back two decades, has been operating as a family office for her personal wealth in recent years.
***** The ex-wife of Ken Griffin is getting back into the money management business. Good luck, Anne! ~JJL
One VC’s Blind Faith in Robinhood Turned $500,000 Into $3 Billion; Index Ventures, the largest shareholder, invested early and kept on investing for an astounding return.
Sarah McBride – Bloomberg
Eight years ago, Jan Hammer heard about a new app that wanted to let anyone buy and sell stocks without fees. At the time, though, Robinhood Markets Inc. was mainly just a business where people could trade stock tips. Hammer, a partner at the venture capital firm Index Ventures, saw the potential and set up a Google Hangouts video meeting with the founders. He wrote them a check for $500,000.
***** You might say that it was a good trade.~JJL
Robinhood IPO Was No Feather in Its Cap; The retail-heavy strategy of its IPO may be questioned after its first-day drop, but the broker’s fundamentals are what matter now
Telis Demos – WSJ
There were warning signs that Robinhood’s men and women weren’t going to be so merry on Thursday. Leading up to its trading debut, Robinhood priced its shares at the bottom of its pre-IPO range and didn’t maximize the potential allocation to its own customers. Instead of as much as 35%, they received around 20% to 25% of the shares, according to The Wall Street Journal. Whatever the reasoning behind those moves, they evidently didn’t leave the impression of a hot issue. The shares fell 8.4% from their offering price by the end of the session.
***** The Robinhood post-IPO surge has yet to occur. Don’t give up hope yet. They have more arrows in their quiver.~JJL
Thursday’s Top Three
Our top story Thursday was Wall Street legend Richard Dennis conducted an intellectual experiment that turned 23 novice investors into overnight millionaires. Here are the 6 trading rules and philosophies that his ‘turtle traders’ live by, from Business Insider. Second was Citadel Securities would buy Robinhood if regulators crack down on this one money-maker: Interactive Brokers founder, from Yahoo News. Third was Insider’s Dubai is coping with its 125-degree heat by using laser-beam-shooting drones to shock rainwater out of clouds.
26,498 pages; 234,861 edits
US benchmark reform panel endorses forward-looking rate to replace Libor; Decision to back term Sofr comes as hunt for alternative to scandal-hit rate reaches ‘home stretch’
Joe Rennison and Philip Stafford – FT
The group overseeing America’s transition away from Libor has endorsed a forward-looking interest rate, marking a crucial step in the race to replace the scandal-tarnished benchmark underpinning hundreds of trillions of dollars in financial contracts.
Euronext assessing how to cut out London Stock Exchange clearing
Huw Jones – Reuters
Pan-European financial markets operator Euronext said on Thursday it has begun assessing how to cut reliance on a London Stock Exchange clearing house in Paris after acquiring an alternative in Italy. Euronext, which runs the Paris, Milan and Amsterdam stock markets among others, uses the LSE’s LCH SA clearing house for its share trades, but since acquiring Borsa Italiana from the London exchange in April, it now has its own clearing house, CC&G.
The Indexing Boom Has Saved S&P Investors a Cool $357 Billion
Sam Potter – Bloomberg
It won’t silence critics of the indexing boom, but S&P Dow Jones Indices reckons passive investing has saved traders a tidy $357 billion over the past 25 years. The firm estimates that managers with assets linked to the S&P 500, 400 and 600 indexes have had their expenses cut big time — helping returns in a world where stock pickers keep failing to outperform benchmarks.
Robinhood’s Race to Meet Meme Stock Moment Faces Harsh Reality
Annie Massa, Crystal Tse and Claire Ballentine – Bloomberg
It was supposed to be a triumph for today’s memeified markets — a validation for all those amateurs who took on the Wall Street pros. Instead, the public debut for Robinhood Markets Inc. turned out to be an embarrassment for the company that’s become synonymous with the rise of individual investors.
U.S. Crypto Traders Evade Offshore Exchange Bans; Americans can easily bypass measures that seek to block them from trading risky crypto derivatives outside the U.S.
Alexander Osipovich – WSJ
Americans are circumventing bans intended to stop U.S. customers from accessing overseas cryptocurrency exchanges, new research suggests. A report released Friday found that hundreds of Americans are trading risky crypto derivatives on offshore exchanges such as FTX and Binance. The report sheds light on an open secret in the industry: U.S. crypto enthusiasts can easily bypass measures that seek to block them from offshore exchanges.
EXCLUSIVE U.S. regulator freezes Chinese company IPOs over risk disclosures
Echo Wang, Scott Murdoch, Kane Wu – Reuters
The U.S. Securities and Exchange Commission (SEC) has stopped processing registrations of U.S. initial public offerings (IPOs) and other sales of securities by Chinese companies while it crafts new guidance for disclosing to investors the risk of a new regulatory crackdown by Beijing, according to people familiar with the matter.
Credit Suisse resorts to rehiring risk staff on elevated salaries after scandals; Reshuffle linked to losses related to Archegos and Greensill implosions
Stephen Morris and Owen Walker – FT
Credit Suisse is rushing to overhaul its risk department, including rehiring on inflated salaries staff who have recently left, following the publication of a damning report into the $5.5bn loss the bank suffered from the collapse of Archegos Capital.
Binance to end futures and derivatives product offerings in Europe
Saleha Riaz – Yahoo Finance
Binance, one of the world’s top cryptocurrency exchanges, announced its plans to wrap up its futures and derivatives products offering across Europe as it reels from regulatory woes. The move will start from Germany, Italy and the Netherlands.
$230 Billion IMF Windfall Lures Investors Into Riskiest Debt Markets
Selcuk Gokoluk and Eric Martin – Bloomberg
Fund plans its biggest-ever injection into members’ reserves; After a similar boost in 2009, debt of riskier nations rallied
A windfall of more than $230 billion from the International Monetary Fund for emerging and developing nations is luring investors into the riskiest debt markets. Countries like Pakistan, Ecuador and Turkey stand to receive a flood of resources to help them deal with Covid-19 health costs. The package is expected to be approved in the coming days.
Malaysia takes aim at Binance chief executive as global crackdown escalates; Changpeng Zhao in focus as exchange also plans to wind down European derivatives business
Adam Samson – FT
Scattered global efforts to crack down on cryptocurrency exchange Binance were again on show on Friday after Malaysia censured chief executive Changpeng Zhao for “illegal” operations and the group also announced plans to close its European derivatives business.
T Rowe Price chief executive Bill Stromberg steps down after 35 years; Chief investment officer Rob Sharps takes helm as asset manager steps up focus on China
Michael Mackenzie – FT
T Rowe Price is changing chief executive, with Rob Sharps promoted to replace the retiring Bill Stromberg at the helm of a $1.6tn asset manager that has consistently delivered strong returns for clients.
Business is booming everywhere except the office; Commercial landlords insist employees are heading back even as companies such as Twitter shut their doors
Tom Braithwaite – FT
Tech booming, drinks flowing, banks throwing caution to the wind. This earnings season has shown many companies are partying like it’s 2019, with stellar results from the likes of Google and Microsoft, a surge in booze sales from spirits groups and sharp cuts to bad debt buffers among lenders from Barclays to Bank of America.
Robinhood push to democratise finance falters with own shares; IPO gives greater voting rights to founders of upstart brokerage
Madison Darbyshire – FT
Robinhood has had a pretty clear pitch as it has taken on Wall Street’s traditional brokerages with its trading app — democratise finance for all. That slogan hearkens back to the origins of the company in 2013 in the wake of the Occupy Wall Street protest movement, which railed against wealth inequality and the power of big banks.
Women Spac founders are good for finance; Diversity makes for lateral thinking, and benefits us all
Gillian Tett – FT
Last month, a special purpose acquisition company (Spac) called Athena used $415m to absorb a midsized California-based entity called Heliogen, which produces solar plants controlled by artificial intelligence.
China reaffirms plans to beef up oversight of foreign listings; Communist party politburo determined to ‘improve’ regulatory framework
Tom Mitchell and Sun Yu – FT
Beijing reiterated its intention to strengthen oversight of overseas listings on Friday, capping a volatile week during which contradictory policy signals rocked the share prices of Chinese companies.
SPACs on Trial; Charges against the founder of Nikola cast a shadow over the blank-check boom.
Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Stephen Gandel, Lauren Hirsch and Ephrat Livni – NY Times
SPACs and fraud: A bug or a feature?
Trevor Milton, the founder of Nikola, is one of the most high-profile figures at the center of the boom in SPAC deals. Yesterday he was hit with criminal and civil charges by the U.S. attorney’s office in Manhattan and the S.E.C. The prosecutors accuse Milton of misleading investors about the technology for the company’s battery- and hydrogen-powered vehicles. Nikola went public in June last year by merging with a blank-check firm, VectorIQ, founded by a former G.M. executive.
New IRA Product Allows for Tax-Free Bitcoin Mining
Brandon Kochkodin – Bloomberg
Compass Mining and Choice to offer tax advantaged account; Will allow miners to avoid income and capital gains taxes
Bitcoin miners just secured a windfall on tax savings. IRA provider Choice and Bitcoin mining and hosting firm Compass Mining announced that they’re offering an IRA that will allow miners to produce the cryptocurrency in a tax advantaged account.
The SEC is trying to make investing apps like Robinhood less ‘fun’ in order to protect investors — but these gamified features are actually a great idea
Jennifer J. Schulp and Nicholas Anthony – Insider
Experience is life’s greatest teacher, and it’s time that financial regulators recognize it. While there are plenty of courses on how to invest, new investors need time in the market to really understand it, as any professional will attest. Like hours behind the wheel while learning to drive, actual investment experience might be precisely what America needs to fix its abysmal financial literacy.
Robinhood Working on Feature to Let Users Invest Spare Change
Mark Gurman and Annie Massa – Bloomberg
Robinhood Markets Inc. is exploring new features that would let customers invest spare change and better protect against volatility in cryptocurrency trading, according to code hidden inside a test version of the company’s iPhone app.
Asian nations impose stricter COVID-19 restrictions due to Delta outbreaks
Asian countries from Australia to Japan and the Philippines announced tighter COVID-19 restrictions on Friday, as they battle worsening coronavirus outbreaks, driven by the more contagious Delta variant.
C.D.C. Internal Report Calls Delta Variant as Contagious as Chickenpox; Infections in vaccinated Americans also may be as transmissible as those in unvaccinated people, the document said, and lead more often to severe illness.
Apoorva Mandavilli – NY Times
The Delta variant is much more contagious, more likely to break through protections afforded by the vaccines and may cause more severe disease than all other known versions of the virus, according to an internal presentation circulated within the Centers for Disease Control and Prevention.
Pfizer says immunity drops to 83% within four months in people who got its COVID-19 shot, further bolstering the company case for a booster
Jaimy Lee – MarketWatch
The effectiveness of Pfizer’s COVID-19 shot can drop to 83.7% within four to six months after getting the second dose of its vaccine. This is the latest indication that vaccine-induced immunity to the virus can wane and some kind of boost may be necessary in the future.
Global Covid surge creates fertile grounds for more dangerous variants; Scientists say third wave is a breeding ground for potentially more infectious and resistant forms of coronavirus
Clive Cookson – FT
Scientists are warning that the world has entered a dangerous new phase of the pandemic, as the coronavirus third wave creates fertile breeding grounds for more infectious and potentially vaccine-resistant new variants.
Mask U-turn dashes Americans’ euphoria at nascent Covid recovery; Recognition that pandemic is far from over and could undermine economic comeback
James Politi and Joshua Chaffin – FT
Rochelle Walensky exuded euphoria in mid-May when she declared that fully vaccinated adults in the US could shed their masks in “indoor and outdoor activities, large or small”.
Thailand outlaws reports that cause ‘fear’ as Covid-19 cases surge; Critics say measure is an attempt to prevent discussion of government’s pandemic management
John Reed – FT
Thailand will allow officials to block online reports that cause “fear”, even if they are true, in a move critics have lambasted as an effort to shut down debate of the government’s handling of the coronavirus pandemic.
Biden pushes incentives and mandates to increase vaccinations; White House official tries to spur holdouts to get jabbed as Delta variant spreads
James Politi and Peter Wells – FT
US president Joe Biden announced a series of new measures to combat the spread of the Delta coronavirus variant, including a call for states to offer $100 incentives for jabs and instructions for federal workers to show proof of vaccination or to wear masks.
What Makes the Delta Variant of Covid-19 So Dangerous for Unvaccinated People; A unique combination of mutations led to this more infectious version of the coronavirus, prompting revised mask guidelines
Josh Ulick and Alberto Cervantes – WSJ
The Delta variant of coronavirus was first detected in India last October, where it helped fuel a devastating Covid-19 surge that set records for new infections and deaths. Delta has since spread to more than 100 countries. Nations that had previously kept Covid-19 cases relatively low, such as Indonesia, Australia and parts of Africa, are now seeing record growth in infections from the more transmissible variant.
Goldman Sachs, Ontario Pension Fund Close to Deal to Buy Covid-19 Test Provider; Deal would value business at close to $1.9 billion, including debt, people familiar with the matter said
Ben Dummett – WSJ
Goldman Sachs GS 0.89% Group Inc.’s infrastructure arm and Canadian pension fund Ontario Municipal Employees Retirement System are part of a group that is nearing a deal to buy a majority stake in Germany’s Amedes Holding GmbH, a provider of medical-diagnostic services including Covid-19 tests, according to people familiar with the matter.
How an Athlete’s Covid Rollercoaster Shows Testing’s Limits for Preventing Contagion; The over-reliance on testing highlights another hole in the Olympics’ pandemic control, experts say. ‘It’s mind-blowing.’
Daniela Hernandez – WSJ
Argentinian pole vaulter German Chiaraviglio described his days in the Olympic village as a sleep-robbing, emotional Covid rollercoaster. First, he tested positive, setting off a mandatory isolation. Several hours and a negative test later, he was set free, allowed to resume normal life, he posted on Instagram.
U.S. CDC internal report says Delta variant as contagious as chickenpox – report
The U.S. Centers for Disease Control and Prevention (CDC) has described the Delta variant of the coronavirus as being as transmissible as chickenpox and cautioned it could cause severe disease, the Washington Post said, citing an internal CDC document.
Exchanges, OTC and Clearing
ICE Reports Record Futures Open Interest of 48 Million Contracts; Record liquidity across diverse asset classes
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced record total futures open interest of more than 48 million contracts on July 27, 2021. Open interest across ICE’s global environmental complex hit a record 2.86 million contracts across futures and options on July 27, up 21% year-over-year (“y/y”), reflecting the importance of these markets in pricing climate risk. As part of this, the North American environmental complex hit record open interest of 1.13 million contracts on July 27 across futures and options. The number of participants trading ICE’s global environmental markets increased by almost 30% over the past year.
Cboe Global Markets Reports Results for Second Quarter 2021
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the second quarter of 2021.
“In the second quarter we achieved strong year-over-year revenue growth driven by robust trading in our proprietary index products and demand for our data and access solutions products. With the closing of our acquisition of Chi-X Asia Pacific on July 1, we further solidified our strategic vision of building one of the world’s largest global derivatives and securities networks. With the addition of Chi-X to the Cboe network, we are eager to leverage our strong ecosystem of proprietary index products and data and access solutions to reach an expanding global network of customers,” said Edward T. Tilly, Cboe Global Markets Chairman, President and Chief Executive Officer.
HSBC signs up to CLS and IHS Markit cross-currency swaps service; CLS and IHS Markit said with the addition of HSBC there are nine settlement members live on the cross-currency swap service including several major banks.
Annabel Smith – The Trade
HSBC has become the latest institution to join the cross-currency swap service offered by IHS Markit and the CLS FX settlement platform, CLSSettlement. The service combines CLS’s payment-versus-payment settlement with IHS Markit’s trade confirmation system, MarkitSERV, allowing members to send cross-currency swaps into CLSSettlement for settlement.
Euronext publishes Q2 2021 results
Q2 2021 strong performance resulting from organic growth driven by record listing and post-trade activity, and from the Borsa Italiana Group acquisition
Euronext, the leading pan-European market infrastructure, today publishes its results for the second quarter of 2021, driven by robust organic growth thanks to a strong performance in listing and post-trade businesses and the first consolidation with Borsa Italiana Group results since its acquisition on 29 April 2021.
CME Group Statement on ARRC Formal Recommendation of CME Term SOFR Reference Rates
CME Group, the world’s leading and most diverse derivatives marketplace, today issued the following statement in response to the Alternative Reference Rates Committee’s (ARRC) formal recommendation of CME Term SOFR Reference Rates for use based on their previously outlined best practices: “We are pleased to be selected by the ARRC to play this important role and have been delivering robust, forward-looking SOFR term rates to the industry, based on our deep and liquid underlying CME SOFR futures market, since September 2020,” said Sean Tully, CME Group Global Head of Financial and OTC Products.
Equity index Derivatives: Tradability of EURO STOXX® Banks Index Total Return Futures and additional MSCI Futures for Participants in the U.S.
With effect from 2 August 2021, the following additional products will be activated for tradability in the U.S.
FX derivatives: Introduction of FX Futures on Scandinavian currency pairs
The Management Board of Eurex Deutschland took the following decisions with effect from 6 September 2021: Introduction of seven new FX Futures on Scandinavian currency pairs; Amendment of the contract specifications for Futures Contracts and Options Contracts at Eurex Deutschland in accordance with Attachment 2
NYSE Pillar Options Migration: Upcoming Weekend Testing Opportunity on August 7, 2021, Arca Options Pillar Prod Shadow
On Saturday, August 7, 2021, NYSE Arca Options (the “Exchange”) will offer the second weekend Pillar Options Production testing opportunity in preparation for its migration in November 2021, pending effectiveness of rule filings. Participants wishing to participate in the August 7th test must register with firstname.lastname@example.org by Thursday, August 5, 2021; registrations received after this date will be processed on a best-efforts basis. A test script will be provided upon registration.
The SOCIMIs Inbest VI and Inbest VIII to start trading on BME Growth on 3 August
The companies, which are the tenth and eleventh to join this BME market so far this year, will debut with a value of 41.1 and 23.1 million, respectively
The Board of Directors of the Market has approved the listing of INBEST PRIME VI INMUEBLES SOCIMI (INBEST PRIME VI) and INBEST PRIME VIII SOCIMI (INVEST PRIME VIII), following a thorough review of all the information presented by the companies and after the favourable assessment reports on their listing issued by the Coordination and Admission Committee.
Asturiana de Laminados registers a 50 million bond programme in MARF
BME’s Fixed Income Market, MARF, has registered today the first bond programme of Asturiana de Laminados (elZinc) through which the company will be able to issue up to a maximum of 50 million euros. The bonds will have a unit face value of 100,000 euros, while their interest rates and maturities will be determined at the time of each issuance. The funds will be used to repay debt, support the company’s growth plan over the next years and make investments.
Fintech is booming, despite a weak economy. Can that last?
THE BUZZ about fintech in Lagos, the commercial capital of Nigeria, is so loud that even those without access to the internet cannot miss it. Flashing billboards advertising Kuda, a digital bank, loom over traffic jams, and signs for Paga, a mobile-payments company, adorn thousands of corner shops. Investment has been flowing in, too. In March Flutterwave, a digital-payments firm, raised $170m, making it Africa’s latest unicorn (ie, a startup valued at more than $1bn). Interswitch, a payments processor, acquired its horn in 2019 when it sold a 20% stake to Visa, a credit-card company. Last October Stripe, the most valuable private fintech in the West, snapped up Paystack, a Nigerian digital-payments company, for $200m.
TP ICAP appoints sales and liquidity manager for data division; New sales and liquidity manager at Parameta Solutions previously worked at MTS Markets, sold to Euronext by LSEG as part of its Refinitiv deal earlier this year.
Annabel Smith – The Trade
Interdealer broker TP ICAP has appointed a new sales and liquidity manager for its rebranded data and analytics and post-trade business, Parameta Solutions. Johanna Wikstedt joins TP ICAP as Parameta Solutions’ sales and liquidity manager after seven years with MTS Markets as a senior key account manager for its repo business.
Appital partners with Turquoise to launch bookbuilding buy-side tech; The partnership will see Appital and Turquoise expand the liquidity opportunities and efficiencies available to mutual buy-side clients.
Annabel Smith – The Trade
Equity capital markets platform Appital and the London Stock Exchange Group’s (LSEG) pan-European trading venue, Turquoise, have partnered to launch bookbuilding technology for the buy-side. Mutual buy-side users will gain access to liquidity sourced on Appital’s platform and a single point of access for deal execution via the Turquoise venue, with straight through processing to its network of settlement venues.
What the Proposed North Carolina Regulatory Sandbox Could Mean for Fintech and the Financial Services Community
Bradley Arant Boult Cummings LLP – JDSupra
Technology is booming and financial technology (“fintech”) is advancing society in new and innovative ways. In 2021 alone, North Carolina has been the target for some very high-profile technology announcements, including Google’s plans to open a cloud engineering hub in Durham and Apple’s new campus in Research Triangle Park. Given the upward trajectory of this financial technology boom, it seems that the “innovation” business is ripe for opportunity — an opportunity that appears poised to take off in North Carolina with the newly proposed regulatory sandbox.
How Unlocking Payroll Data Can Accelerate Fintech Innovation
Gary Drenik – Forbes
Innovation in the fintech space is at an all-time high, as consumers increasingly demand better solutions for managing and improving their financial lives. According to a recent Prosper Insights & Analytics Survey, over two thirds of Americans rely on mobile payments apps today, and that only continues to grow. The survey also showed that a quarter of people have used a “buy now, pay later” solution and a third of people use mobile apps for trading stocks.
Submission of a Comment Letter on IFRS Foundation Exposure Draft on Proposed Targeted Amendments to the IFRS Foundation Constitution
Japan Exchange Group, Inc. and Tokyo Stock Exchange, Inc. have submitted a comment letter on IFRS Foundation Exposure Draft on Proposed Targeted Amendments to the IFRS Foundation Constitution, published on April 30, 2021.
July 2021 Security Intelligence Roundup: Ransomware, Security by Design and How to Analyze in Windows With Frida
Megan Crouse – Security Intelligence
Getting and staying ahead of threat actors means knowing the cybersecurity landscape. Today, that still often means ransomware and changing the ways and places we work. July’s top stories include a supply chain attack from the REvil ransomware gang and how to fold security into design.
The Life Cycle of a Breached Database
Brian Krebs – Krebs on Security
Every time there is another data breach, we are asked to change our password at the breached entity. But the reality is that in most cases by the time the victim organization discloses an incident publicly the information has already been harvested many times over by profit-seeking cybercriminals. Here’s a closer look at what typically transpires in the weeks or months before an organization notifies its users about a breached database.
Why Marketers Should Care About Cybersecurity
Becca Chambers – Forbes
The pandemic heightened the need for every department within an organization to pay more attention to cybersecurity. That makes sense, right? The more tech we use in our processes and day-to-day work, the more vulnerable we could be to a breach. What if I told you that the adoption of better cybersecurity begins with well-versed marketing teams?
Cyber Security Today, July 30, 2021 – Canada consultation on social media regulation, a new ransomware group, abuse of WeTransfer and more
Howard Solomon – IT World Canada
Remember the feared REvil and Darkside ransomware gangs? They said they were disbanding after adverse publicity following the Colonial Pipeline and Kaseya attacks. But researchers at a security firm called Recorded Future say a new gang has emerged: Called BlackMatter, this ransomware-as-a-service group says it has the best features of Darkside, REvil and LockBit. It promises to not attack governments, critical infrastructure or non-profits. It’s looking to buy IT access hackers have to anyone else.
Russian Hackers Continue With Attacks Despite Biden Warning
Ryan Gallagher – Bloomberg
Security researchers say they have uncovered an ongoing hacking campaign carried out by suspected Russian spies who are continuing to stage attacks amid U.S. pressure on the Kremlin to curtail its alleged cyber-intrusions.
19 crypto and blockchain-focused lawyers who are inking deals, fighting lawsuits, and navigating fast-evolving regulations
Jack Newsham – Insider
Ten years ago, lawyers could be forgiven for thinking bitcoin and blockchain were a flash in the pan. Over the past decade, though, digital assets have boomed. Big names like MassMutual, MicroStrategy, and Tesla have bought Bitcoin; PayPal and Square’s CashApp have made it easy to buy crypto with the tap of a finger; and major financial players like BNY Mellon and Visa and Mastercard have said they’re planning to offer custody and transaction services for certain digital assets.
Crypto Volatility Index 2.0 Rolled Out With USDC Support
Jamie Crawley – Coindesk
Fintech platform COTI revamped the Crypto Volatility Index (CVI) to offer a set of new features including USDC support for staking.
Making The Digital Money Revolution Work for All
Tobias Adrian and Tommaso Mancini-Griffoli – IMF Blog
History moves in uneven steps. Just as the telegraph erased time and distance in the 19th century, today’s innovations in digital money may bring significant changes in the way we lead our lives. The shift to electronic payments and social interactions brought on by the pandemic may cause similarly rapid and widespread transformations.
Binance to Wind Down Derivatives in Europe; Malaysia Orders Closure
Jamie Crawley – Coindesk
Binance’s regulatory woes worsened Friday as Malaysia ordered it to halt operations in the country, and the cryptocurrency exchange said it’s planning to wind down futures and derivatives products across Europe, starting with Germany, Italy and the Netherlands.
Germany to Allow Institutional Funds to Hold up to 20% in Crypto
Stephan Kahl – Bloomberg
Law would let billions of euros flow into crypto assets; Spezialfonds effected currently manage 1.8 trillion euros
Germany plans to allow certain institutional funds to invest billions of dollars in crypto assets for the first time. A law taking effect on Monday will let so-called Spezialfonds with fixed investment rules put as much as 20% of their holdings in Bitcoin and other crypto assets. The funds, which can only be accessed by institutional investors such as pension companies and insurers, currently manage about 1.8 trillion euros ($2.1 trillion).
Crypto Deals Attract Bigger Players Who Push Up Prices, PwC Says
Joanna Ossinger – Bloomberg
Large VC firms, pension funds are coming in: PwC Crypto leader; Prices of early-stage fundraising are getting a boost
Fundraising by cryptocurrency companies has seen a rapid rise in valuations as large investors push up prices, according to professional services firm PwC.
Ireland’s Central Bank Says Digital Euro Not Matter of If, But ‘When and How’
Sebastian Sinclair – Coindesk
The head of Ireland’s main monetary authority has likened the purchase of cryptocurrencies to collecting stamps, while praising the potential for a digital euro.
The inside story of one of China’s last bitcoin mining tycoons
Theo Wayt – NY Post
A Chinese crypto mogul who says he was once responsible for nearly 10 percent of all bitcoin mining in the world is opening up about how China’s crackdown has decimated his business. A 40-year-old businessman named Liu Weiman, who spoke to news Web site Caixin (paywall) under a pseudonym, operated more than 10 bitcoin farms in China’s Sichuan province that would mine 70 to 80 bitcoins per day during peak seasons.
Nonprofits Get a New Type of Donation: Cryptocurrency; There are risks for both the donor and the receiver, starting with the yo-yoing values. A $5 million gift today may be worth $3 million or $7 million next week.
By Paul Sullivan – NY Times
The University of Pennsylvania recently announced a $5 million gift to Wharton, its business school. The donation was not one of its largest, but the university announced the gift with the type of fanfare it usually lavishes on gifts many times its size.
Senators push through bill with surprise crypto tax amendment
Sam Cooling – Coin Rivet
In a surprise amendment to a massive bipartisan US infrastructure bill, senators have moved to collect tax on cryptocurrency – requiring transactions of more than $10,000 to be reported to the IRS. With the amendment approved, the bill will now be presented to the House of Representatives and the US Senate where it could soon be written into law.
Republicans urge Gensler to investigate Chinese companies
Kellie Mejdrich – Politico
Senate Republicans are calling on SEC Chair Gary Gensler to investigate Chinese companies that list shares on U.S. stock exchanges after American investors suffered from a surprise crackdown on the firms by government officials in China.
Framework to Regulate Crypto, Stablecoins Introduced in US Congress
Tanzeel Akhtar – Coindesk
Legislation to provide a “comprehensive legal framework” to regulate the digital asset market and possibly grant the federal government the ability to ban some stablecoins was introduced in the House of Representatives Wednesday.
Exclusive-U.S. regulator freezes Chinese company IPOs over risk disclosures -sources
Echo Wang, Scott Murdoch and Kane Wu – Reuters
The U.S. Securities and Exchange Commission (SEC) has stopped processing registrations of U.S. initial public offerings (IPOs) and other sales of securities by Chinese companies while it crafts new guidance for disclosing to investors the risk of a new regulatory crackdown by Beijing, according to people familiar with the matter.
Monzo discloses money laundering probe, losses increase
Iain Withers – Reuters
British digital bank Monzo is facing a potential civil and criminal money laundering investigation by the Financial Conduct Authority (FCA), the lender disclosed in its annual report released on Friday.
India Said to Probe Binance in Betting App Laundering Probe
Shruti Srivastava – Bloomberg
India’s anti-money laundering agency is examining if Binance Holdings Ltd. had a role to play in an ongoing investigation involving betting apps, according to people with knowledge of the matter.
Nikola Founder Pleads Not Guilty, Freed on $100 Million Bail
Chris Dolmetsch – Bloomberg
Nikola Corp. founder and former chairman Trevor Milton was freed by a judge on $100 million bond, after pleading not guilty to charges that he misled investors about the status of the electric-vehicle maker.
Nikola Founder Trevor Milton Charged With Securities Fraud; Federal prosecutors say alleged scheme targeted individual investors
Corinne Ramey – WSJ
Trevor Milton, the founder of Nikola Corp. NKLA -15.22% and onetime executive chairman of the electric-truck startup, was indicted Thursday on securities-fraud charges for allegedly lying to investors about its business making commercial trucks powered by alternative fuel.
Ex-Pilgrim’s Pride executives indicted in chicken price-fixing case
A federal grand jury has indicted four former executives at Pilgrim’s Pride, one of the largest US poultry producers, for their roles in an alleged price fixing conspiracy for broiler chicken products. Koch Foods, an Illinois chicken company, was also indicted separately for allegedly being part of the conspiracy to fix the prices, the Justice Department said Thursday. Koch did not immediately respond to a request for comment.
SEC Charges Founder of Nikola Corp. With Fraud
The Securities and Exchange Commission today announced charges against Trevor R. Milton, the founder, former CEO and former executive chairman of Nikola Corporation, for repeatedly disseminating false and misleading information – typically by speaking directly to investors through social media – about Nikola’s products and technological accomplishments.
ESMA publishes data for the systematic internaliser calculations
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published today data for the systematic internaliser quarterly calculations for equity, equity-like instruments, bonds and for other non-equity instruments under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
ESMA Makes New Bond Liquidity Data Available
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today made available new data for bonds subject to the pre- and post-trade requirements of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) through its data register.
ESMA Makes First Ctp Data Available
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today made available the first consolidated tape provider (CTP) data.
Former director charged with authorising the making of a false or misleading statement to ASIC
James Jianshu Feng, a former director of Australasia Wealth Services and Management Pty Limited (AWSM) from Ryde, NSW, has been charged with authorising the making of a false or misleading statement to ASIC.
Chair Joe Longo outlines agenda
On 29 July 2021, Joe Longo gave his first media interview as ASIC Chair to ABC Radio National Breakfast with Fran Kelly. Speaking to ABC reporter Peter Ryan, Mr Longo covered a range of topics including ASIC’s focus on supporting business and consumers during COVID-19.
Investing and Trading
What Happens When a Brokerage Firm Doesn’t Have Enough Capital To Cover Trades?
John Csiszar – Go Banking Rates
Brokerage firms are required to keep sufficient capital on hand to cover all customer trades. If for whatever reason a firm doesn’t meet those capital requirements, it must immediately make moves to cover that shortfall in liquidity. Typically, any shortfalls in capital are very short-term in nature. However, in times of great financial stress, such as the Great Recession at the end of the last decade, some firms actually went under. The important thing to know is that even in the event of a firm bankruptcy, customer assets are protected.
Why Robinhood shares fell in the first day of trading
John Detrixhe – Quartz
The debut of Robinhood—the controversial brokerage that ignited an explosion in retail trading—on the public stock market was expected to be a wild ride. Robinhood wilted 8.4% to $34.82 per share yesterday after the company’s IPO initially priced the stock at $38, which was the bottom of the expected range. CEO Vladimir Tenev, whose eight-year-old brokerage helped introduce a new generation to financial markets, made as much as 35% of the shares available to retail investors (normally, institutional investors get dibs on fresh shares), but only ended up allocating some 20% to 25% of the stock to them, according to Bloomberg.
Are Stratospheric Stock Valuations Here to Stay? The past 30 years have either been an anomaly or a new normal. Don’t bet against the latter.
Nir Kaissar – Bloomberg
The biggest question facing U.S. stock investors isn’t about the pandemic or economic growth or even inflation. It’s about whether the stock market can maintain its historically high valuation, a perch it has commanded for most of the past three decades. Investors who want to know what to expect from the market in the coming years must address that question, and there is a lot riding on the answer.
Archegos Was Too Busy for Margin Calls; Also Robinhood, Nikola and Wall Street interns.
One important thing that investment banks do is lend money to hedge funds to buy stocks. This is risky: If the stocks go down, the hedge fund might not repay the loans, and then the bank might lose money. So a central question of risk management is whether the hedge fund has posted enough collateral — that is, that the stocks it owns are worth significantly more than the money the bank has loaned it, so that if the stocks go down the bank will not lose money.
Get Ready to Pay More for Coffee, Beer, Bread and Snacks; From Procter & Gamble to Nestle to Unilever, the world’s biggest consumer companies are figuring out how to manage inflation.
Andrea Felsted – Bloomberg
Anxiety about inflation is high. Even as demand roars back, the world’s biggest manufacturers, from The Procter & Gamble Co. to Nestle SA, are seeing the cost of raw materials, whether chemicals or coffee, soar.
Robinhood Fails to Get Much Love From Retail Investors at Debut
Abhishek Vishnoi and Bailey Lipschultz – Bloomberg
Robinhood Markets Inc. suffered a lukewarm reception at its stock market debut from individual investors, the very group of customers courted by the popular trading app for long-term growth.
Glencore Boosts Outlook for Another Bumper Trading Year
Thomas Biesheuvel – Bloomberg
Glencore cuts production forecasts for zinc, nickel and coal; Company said it’s producing some cobalt from Mutanda
Glencore Plc is set to report another year of bumper profits from its trading business as the commodities giant cashes in on soaring prices, but lowered expectations for production of its own material.
Chinese ructions test the buy-the-dip reflex of investors; After market bouncebacks from a series of shocks, fresh test of sentiment looms
Katie Martin – FT
Whatever the shock to markets, equity investors have a strong impulse: buy the dip. The latest ructions relating to China’s apparently poorly anticipated crackdown on foreign-listed shares could test this reflex.
Big Oil Companies, Back in the Money, Keep Spending Tight; Exxon and Chevron reported strong profits as some economies recover from the pandemic, but the oil giants preach capital discipline
Christopher M. Matthews – WSJ
Big oil companies are raking in their highest profits since the onset of the coronavirus pandemic, but they plan to continue spending sparingly to boost production despite higher commodity prices.
Environmental, Social and Corporate Governance
Bridgepoint Turns to Green Investments With Stake in Carbon Firm
Will Mathis and Isis Almeida – Bloomberg
Buyout firm acquires minority stake in consultancy ACT; ACT sees growing business in cutting carbon emissions
U.K. buyout firm Bridgepoint Group Plc is seeking to capitalize on growing demand for green investments, buying a minority stake at a consultancy that helps companies cut carbon emissions.
Brazil’s Water Crisis Adds to the World’s Supply-Chain Misery
Fabiana Batista and Mariana Durao – Bloomberg
Drought is causing navigation woes on three major waterways; Transport time and costs may rise for corn, iron ore, oilseeds
Drought is making one of Brazil’s most important river systems unnavigable, making it more challenging and costly for the commodities powerhouse to get grains and iron ore out to global markets.
Robinhood gave a very sweet deal to investors like Ribbit Capital, NEA, and Index when they saved it from the GameStop meme-stock drama
Julie Bort – Insider
No matter what happens during Robinhood’s highly anticipated first day of trading as a public company, there’s a group of investors that will automatically make extra profit. They are the investors that stepped up to rescue the company when it got caught in the crosshairs of the GameStop and AMC short-seller mania last winter. At the time, Robinhood was forced to stop trading those stocks until it could pony up a boatload of cash to cover massive increases in regulatory deposits demanded by The Depository Trust & Clearing Corporation (DTCC).
Bitter Hedge Fund Rift Exposed in U.K. Court
Ellen Milligan – Bloomberg
A London hedge fund dispute exposed a bitter rift between two former business partners who were targeted for their alleged roles in the sprawling Cum-Ex tax scandal a year ago. Duet Group’s CEO Henry Gabay was ordered by a judge in London to pay Alain Schibl $2.5 million to cover debt outstanding from an arbitration settlement this week. The pair, who founded the London-based hedge fund together in 2002, traded insults and allegations of improper conduct at the hearing that pushed their spat into the public domain.
Fund Manager Nursing Loss in China Stocks Says He Made ‘Mistake’
Bei Hu, Nishant Kumar and Katia Porzecanski – Bloomberg
The founder of Hong Kong’s Brilliance Asset Management Ltd. said he made a mistake in underestimating the impact of Beijing’s reforms in the education sector, but struck an optimistic note about two players in an industry many are writing off.
Archegos Sued by Vornado Over $160,000 in Rent on NYC Offices
Maria Heeter – Bloomberg
The collapsed investment firm Archegos Capital Management is being sued by New York landlord Vornado Realty Trust over about $160,000 in rent.
Robinhood Gets Cathie Wood’s Backing Despite Miserable First Day
Joanna Ossinger – Bloomberg
Robinhood Markets Inc. may have performed poorly after its initial public offering, but it got some high-profile support from Cathie Wood. Wood’s flagship ARK Innovation exchange-traded fund (ticker ARKK) purchased almost 1.3 million shares of the company on Thursday, according to Ark Investment Management’s daily trading report. At Robinhood’s closing price of $34.82, that gives the ETF a more than $45 million stake.
Deutsche Bank Struggles With Slew of Departures in U.S. Wealth
Steven Arons and Jennifer Surane – Bloomberg
At least 10 senior wealth bankers have left amid cost cuts; Lender started to replenish ranks in red hot market for talent
Deutsche Bank AG has lost a string of U.S.-based wealth management executives over the past year, as Chief Executive Officer Christian Sewing struggles to expand in the lucrative business of managing rich people’s money while keeping a lid on expenses.
NatWest Plans Buyback After Reversing More Loan Provisions
Stefania Spezzati and Aoife Kearins – Bloomberg
British lender beat earnings forecasts in the second quarter; Bank now plans to pay out at least 1 billion pounds per year
NatWest Group Plc is reversing more of the provisions it took early in the Covid-19 pandemic as the British economy rebounds, helping it beat earnings forecasts in the second quarter and return cash to shareholders.
BNP Profit Beats as CEO Bonnafe Sees Rebound in Equities
Alexandre Rajbhandari – Bloomberg
Lower-than-expected provisions for bad loans help lift profit; But fixed-income trading and corporate banking both decline
BNP Paribas SA got a boost from lower provisions for bad loans and a rebound in equities trading last quarter, as Chief Executive Officer Jean-Laurent Bonnafe builds up the trading business.
Credit Suisse creates new asset management risk role
Oliver Hirt and Brenna Hughes Neghaiwi – Reuters
Credit Suisse, recently hit by the Archegos and Greensill scandals, has created a new role of chief risk officer for asset management that will be filled by Wolfram Peters, former chief risk officer at Allianz Global Investors, executives of the Swiss bank said in an internal memo seen by Reuters.
Nomura quarterly profit dives 66% on trading slowdown, Archegos hit
Makiko Yamazaki – Reuters
Nomura Holdings Inc, Japan’s biggest brokerage and investment bank, on Friday reported a 66% drop in first-quarter net profit due to a slowdown in the trading business and a previously flagged loss from the Archegos debacle.
China Orders 25 Tech Giants to Fix Raft of Problems
Alibaba, Tencent, Meituan among firms summoned to meetings; MIIT has announced 6-month campaign on the internet sector
China ordered more than two dozen technology firms to carry out internal inspections as part of a campaign to root out illegal online activity. The Ministry of Industry Information Technology on Friday told 25 of its largest internet and hardware companies including Alibaba Group Holding Ltd. and Tencent Holdings Ltd. to carry out internal reviews and rectify issues ranging from data security to consumer rights protections. The twin giants and 10 other firms were also asked separately on Wednesday to step up data security protections, including the export of key information, by the Internet Society of China, which was acting on behalf of MIIT.
Turkish lira a rare bright spot for emerging market currencies in July; Bounce back follows painful rout earlier in 2021 sparked by monetary policy jitters
Tommy Stubbington and Ayla Jean Yackley – FT
The Turkish lira has clawed back part of its steep decline from earlier in the year in recent weeks, bucking the trend in a bruising period for emerging market currencies.
Summer camps reopen to staff shortages and Covid tests; An American vacation staple struggles with the kinks of an economy emerging from the pandemic
Joshua Chaffin – FT
It was two weeks into this summer’s session when Camp Caribou, a camp for boys in Winslow, Maine, received a worrying message from its longtime food supplier: The camp’s $10,000 order would not be fulfilled because of labour shortages at their warehouse.