connectHits & Takes
John Lothian & JLN Staff
Bloomberg is reporting that the owner of the 175 West Jackson Building, Brookfield Asset Management Inc., is facing “imminent default” of the building next door to the Chicago Board of Trade Building. This is the Insurance Exchange building that Brookfield bought in 2018, which was bad timing. Also, the owner took on a lot of debt to complete the deal, which is where the imminent default comes in.
As I previously mentioned, JLN is closing its offices in the CBOT Building at the end of the year because of the uncertain real estate market and the ending of our lease. We are continually watching the course of the pandemic and its impact on the downtown market.
Here is an update on the competition between HKEX and SGX for the MCSI A 50 versus the FTSE Russell A50. The HKEX MSCI A 50 shares on November 17 traded 22,623 contracts and had an open interest of 29,679. The 22K contracts was a new record, but also involved traders rolling positions forward from September to December. SGX’s FTSE Russell A50 futures traded 166,338 contracts on November 17, 2021.
For more on the HKEX MSCI, check out episode eight of HKEX’s podcast series, this one titled “One Month On: MSCI China A 50 Connect Index Futures | Kevin Rideout.” — HKEX
Also, HKEX is celebrating the 7th anniversary of Stock Connect, the market access program linking Hong Kong and Mainland China’s equity capital markets. — HKEX
CCP12 has published a Perspective on Transparency. — CCP12
The finalists of the Deutsche Börse Photography Foundation Prize 2022 have been announced. They are Deana Lawson, Gilles Peress, Jo Ractliffe and Anastasia Samoylova. — Deutsche Börse
Inflation is ravaging women’s golf and the CME’s LPGA tournament. The CME Group has increased the winnings purse for the Women’s CME Group Tour Championship to $7 million in 2022, up from $5 million in 2021. The winner of the LPGA tournament, sponsored by the CME Group, will walk away with $2 million, the largest single prize in women’s golf. All the players who compete receive at least $40,000. That is actually a $40,000 participation trophy of sorts.
Here is a statement from the head of the LPGA:
“We could not be more grateful to CME Group, under the bold and visionary leadership of Group Chairman and CEO Terry Duffy, for helping provide the best female golfers in the world with the opportunity to live their dreams,” said LPGA Commissioner Mollie Marcoux Samaan. “The Race to the CME Globe and the CME Group Tour Championship have transformed the LPGA since their inception in 2014. Today’s announcement is another example of CME’s continued pioneering support of the LPGA and their commitment to leveling the playing field for female golfers, and female athletes in general, from around the globe.”
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
CFTC Commissioner Dawn Stump is the featured guest in an event sponsored by the Derivatives and Futures Law Committee and the FinTech Regulation and Enforcement Committee of the D.C. Bar Corporation, Finance and Securities Law Community, on November 22 at 10 a.m. ET. She is expected to focus on fintech and cryptocurrency and digital assets, as well other issues facing the commission. More details are here. ~SC
The Institute for Financial Markets is hosting an online Clearing 101 Workshop with instructor Marti Tirinnanzi on December 13 and 14, from 12-1:30 p.m. ET each day. The course is designed to explain the multilateral systems that provide the infrastructure for transferring, clearing and settling payments for derivatives and other financial transactions among financial institutions and end users, the group says. Details and registration information are here. ~SC
FIA Expo 2021 Video: Greenwood Project Takes Off Like a Rocket
Bevon Joseph, executive director and co-founder of the Greenwood Project — along with his wife, Elois Joseph — is a victim of his own success. The program has boomed, and he is thrilled.
“The impact has been crazy,” he said. “We didn’t see this coming, but we are happy.”
In a video interview with John Lothian News at FIA Expo 2021, Joseph said the program, which introduces high school and college students in underserved communities to the financial services industry, has seen especially dramatic expansion in 2020 and 2021 with the attraction of new talent and the extension of the project to new cities.
Can guilt help bankers change for the better? Research suggests that ‘guilt-prone individuals’ may have a ‘moral advantage’ in workplaces and that banks should try to hire them
Gillian Tett – FT
Should financiers feel guilt? If they did, would that make the world of money safer? In the years since the 2008 Financial Crisis, these questions have been raised with a sense of anger by politicians, media pundits and ordinary citizens. Now the mighty New York Federal Reserve is exploring the issue in a more forward-facing — and geeky — way too.
****** We are all guilty. How does this work then?~JJL
Canadian Teen Arrested in Crypto Theft Worth $36.5 Million
Stefanie Marotta – Bloomberg
Case marks the biggest crypto theft reported by one person; Police identified the alleged thief through a gaming username
A Canadian teenager was arrested for allegedly stealing C$46 million ($36.5 million) worth of cryptocurrency from a U.S. victim, the biggest crypto theft reported from one person, according to police in the city of Hamilton, near Toronto.
***** Teens can learn a lot on the internet and YouTube, including how to steal cryptocurrency. This opens up a world of crime for them and headaches for the rest of us. This is why we need values based programs for youth. Keep them busy and give them lots of real examples of good citizens and leaders. ~JJL
City of London Firm Offers ‘Unlimited Holiday’ to Battle Burnout
Tom Metcalf – Bloomberg
FinnCap also sets four-week minimum in new policy from 2022; Broker just had busiest ever six months after dealmaking surge
After a blockbuster year for capital markets and a pandemic to boot, FinnCap Group Plc will allow its employees to take as many vacations as they want in the hopes of preventing staff burnout. The London-based broker is changing its vacation policy to offer employees unlimited paid breaks from 2022, Chief Executive Officer Sam Smith said in a phone interview Thursday. The firm’s investment bankers, salespeople and other staff will be required to take at least four weeks a year and two or three days a quarter, according to Smith.
*****So I get paid and I don’t ever have to go back to work? I am in.~JJL
How widespread is Covid in animals and what are the risks to humans? Zoologists fear wildlife may become reservoir of infection that could be transmitted to people
Clive Cookson – FT
Two studies showing high levels of Covid-19 infection among wild deer in the US have renewed concerns about the virus spreading through animal populations. The findings, released this month, come as more reports of Covid in pets and captive animals are emerging. Lincoln Children’s Zoo in Nebraska lost three rare snow leopards to the disease earlier this month.
***** Be careful the next time you pet a snow leopard.~JJL
Wednesday’s Top Three
It looks like our readers are already thinking about holiday fun – our top story Wednesday was 12 Wines for Thanksgiving and Beyond, from The New York Times. Second was the lead story, GMEX launches interoperable trading and post-trade hub bridging access between traditional and digital asset markets, a GMEX press release. And third was a repeat from yesterday’s top three, Institutional Investor’s Why a California Bartender Won’t Stop Trolling Citadel’s Ken Griffin.
26,651 pages; 236,274 edits
Vaccinated vs. Unvaccinated: Europe’s Covid Culture War; In pockets of Europe, vaccine resistance has become the long tail of the populist nationalist movements that shook up European politics for a decade.
Katrin Bennhold – NY Times
Sven Müller is proudly unvaccinated. He thinks Covid vaccines are neither effective nor safe but a way to make money for pharmaceutical companies and corrupt politicians who are taking away his freedom. Under state rules to stem coronavirus infections, he is no longer allowed to go to restaurants, to the bowling alley, to the cinema or to the hairdresser. From next week, he will be barred from entering most shops, too. But that has only strengthened his resolve.
ASX says its DLT-as-a-Service platform is now production-ready; Exchange says 20 firms already exploring Synfini which uses the same technology as ASX’s flagship CHESS replacement but is offered as a cloud service.
Jonathan Watkins – The Trade
The Australian Securities Exchange’s (ASX) new distributed ledger technology (DLT) as a Service platform is now production-ready, meaning market participants can use the same underlying technology used on its CHESS replacement to bring solutions to market quicker.
Nasdaq Releases Data Fabric, New Managed Data API Service Available from Nasdaq Data Link; Cloud-Based Platform Brings Seamless Data Management to Financial Professionals
Nasdaq today announced the launch of Data Fabric, a managed data solution to help investment management firms scale their data infrastructure with enhanced quality, governance and integrity. Built off Nasdaq Data Link, Data Fabric enables firms to significantly improve data time-to-value and can power investment processes and strategies with new datasets in a matter of days or weeks instead of months. The platform provides secure, end-to-end data hosting through fully managed infrastructure and data onboarding services, enabling firms to integrate internal and external data sets quickly to focus on their competitive edge.
SEC Adopts New Rules for Universal Proxy Cards in Contested Director Elections;New Rules Allow Shareholders to Vote for their Preferred Mix of Board Candidates in Contested Elections
The Securities and Exchange Commission today voted to adopt final rules requiring parties in a contested election to use universal proxy cards that include all director nominees presented for election at a shareholder meeting. The rule changes will give shareholders the ability to vote by proxy for their preferred combination of board candidates, similar to voting in person.
Waters Wrap: What TT’s new owners & CEO could mean for the industry going forward; Once the target for acquisition, Trading Technologies is now on the lookout for companies it will look to acquire to expand its asset class coverage. Anthony explores what that might mean for the industry.
Anthony Malakian – Waters Technology
Before we get to my thoughts for this week, let me point you to a couple of opinion pieces by two people far more intelligent than me: Jo Wright and Wei-Shen Wong. First, while Jo is technically our UK editor, she is also the editor of obscure market data policy issues. This week she looked at how aspirant ‘competing consolidators’ were hoping for a lot more leeway than they got from the SEC in an important fee filing. Wei-Shen Wong, our Asia editor and host of the Waters Wavelength Podcast
Brookfield Faces ‘Imminent Default’ on Chicago Office Building
John Gittelsohn – Bloomberg
Brookfield Asset Management Inc. is facing “imminent default” on a downtown Chicago office tower as it struggles to stay current on debt payments.
US Treasury market in need of reform after shocks, policymakers warn; Registration of trading firms and central clearing proposed at Fed conference
Kate Duguid and Colby Smith – FT
US policymakers and other financial experts have escalated calls for reforms to the $22tn market for US Treasury securities to protect it from future shocks after recent episodes of chaotic trading. The world’s most important government bond market was thrown into disarray in March last year when investors spooked by the start of the coronavirus pandemic tried to sell off chunks of their Treasury holdings.
Ontario youth arrested in alleged $46 million cryptocurrency theft
Jessy Bains – Yahoo Finance
A Hamilton, Ontario youth under the age of 18 has been arrested and charged for alleged involvement in the theft of $46 million worth of cryptocurrencies bitcoin and bitcoin cash. Hamilton Police say the victim was located in the United States.
Ex-CFTC Official Quintenz Joins Prediction Market Kalshi’s Board
Kalshi Inc., a firm that lets investors wager on everything from when President Joe Biden will announce his pick to lead the Federal Reserve to New York City weather, has added a former top U.S. Commodity Futures Trading Commission official to its board.
Getting Inflation Right Is a Make-or-Break Moment on Wall Street; For a generation of investing pros, stable prices were a fact of life. What do you do when the old assumptions stop making sense?
Katherine Greifeld – Bloomberg
God help whoever on Wall Street botches the inflation call. After a three-decade hiatus, anxiety about rising consumer prices is testing the analytical skills of money managers and professional traders like nothing since the short-lived pandemic panic. The stakes couldn’t be higher: The long regime of mild inflation and low interest rates has helped to drive up stock and bond valuations. Now, with inflation unexpectedly hitting 6.2% in October from a year earlier, something new is on the horizon. A daisy chain of supply bottlenecks has driven prices higher as companies fight to guard their profits and consumer demand remains high. Is it a post-pandemic blip that will resolve itself? Or a sign of more turbulence to come?
A market scoring mechanism for trading of German electricity futures
Tarjei Kristiansen – Risk.net
We present a novel systematic commodity trading model utilizing a time series momentum strategy. The main innovation is a scoring mechanism to generate buy and sell signals, including determining the position size. The model is applied to the German electricity futures market and its price drivers: the momentum and volatility of the German front quarter, the Argus/McCloskey’s Coal Price Index (API 2) coal and emissions. We test the systematic model on data from November 2010 to December 2019 for several strategies. The model outperforms a basic short sale model. The application of the model yields improved risk-adjusted returns. This paper provides, to the best of our knowledge, the first description of a systematic trading approach to German electricity futures.
US megabanks lead push for agency clearing at European CCPs; Clearing through agency model would cut US lenders’ G-Sib capital surcharges
Costas Mourselas – Risk.net
A group of banks led by large US lenders is in talks with European central counterparties (CCPs) to persuade them to set up agency clearing models, which would slash capital charges applying to global systemically important banks, or G-Sibs. The push is in its early stages, according to bank and clearing house sources close to the matter. Risk.net understands that the banks involved are focusing their efforts on Eurex, Ice and LCH’s SwapClear and CDSClear, but will likely want as many other UK
Eurex turns to Asia in euro swaps grab; Asia Risk Congress: German clearing house urges Asian firms to shift euro swaps clearing to EU Risk.net montage
Blake Evans-Pritchard – Risk.net
Eurex is urging Asian firms to switch their clearing of euro swaps trades away from the UK, to help the German clearing house build up market share and persuade the European Commission to block EU firms from trading at rival LCH. “Asian and Australian institutions active in euro swaps need to be aware of the developments in Europe and need to plan for this,” said Markus Georgi, Eurex’s head of fixed income sales for the US and Asia. He was speaking on November 18 at Asia Risk Congress, which
The Ottawa Senators Have a 100% Vaccination Rate—and 40% of the Team Has Tested Positive for Covid; The sidelining of an NHL team this week shows that, while vaccination rates are high, indoor, maskless activities can still lead to an outbreak
Louise Radnofsky and Laine Higgins – WSJ
A substantial Covid-19 outbreak that this week has sidelined the National Hockey League’s Ottawa Senators—despite the entire team being vaccinated—carries a warning for the coming months of professional sports: even with blanket immunization, pandemic disruptions are far from over. The NHL announced the suspension of the Senators’ season through at least Nov. 20 after 10 players and one coach tested positive in recent days. The team says it is fully vaccinated, but hasn’t specified which shots players have received.
Bill Gates Says Covid Deaths May Drop to Flu Levels by Mid-2022
Derek Wallbank – Bloomberg
Covid deaths and infection rates may dip below seasonal flu levels by the middle of next year assuming new dangerous variants don’t emerge in the meantime, Bill Gates said.
U.S. to Pay Pfizer $5.3 Billion for Order of Covid Therapy Pill
John Lauerman – Bloomberg
The U.S. will pay Pfizer Inc. $5.3 billion for an order of 10 million courses of its experimental Covid-19 pill beginning later this year. The purchase is contingent on U.S. clearance of the Covid oral antiviral, which Pfizer has applied for, according to a statement from the company Thursday. Bloomberg News reported the order earlier, citing people familiar with the situation, without the financial details.
Merkel Pushes For Tighter Covid Rules With German Infections Rising
Patrick Donahue – Bloomberg
Outgoing chancellor to discuss next steps with state leaders; SPD, Greens, FDP push new Covid legislation through parliament
Chancellor Angela Merkel is holding talks with Germany’s regional leaders Thursday to agree on tougher restrictions to tackle record gains in Covid-19 infections.
Ho Chi Minh City Again Orders Bars And Spas to Shut Amid Virus
Nguyen Dieu Tu Uyen – Bloomberg
Vietnam’s commercial hub of Ho Chi Minh City ordered the temporary closing of bars, karaoke establishments, spas and other entertainment venues immediately over fears of the spread of the virus just two days after allowing their re-opening.
European countries bring back Covid restrictions as cases rise; Ireland, Slovakia and Czech Republic to roll out measures to curb spread of virus
Jude Webber, James Shotter, Valentina Pop and Erika Solomon – FT
Ireland is to reintroduce Covid-19 restrictions this week, including a return to working from home wherever possible and a midnight curfew for pubs and clubs, in an effort to curb a fourth wave of the virus that has pushed infections to their highest level in nearly a year.
Fauci says COVID-19 booster might become new standard for being vaccinated
Jesse O’Neill – NY Post
COVID-19 booster shots may become the new standard to be considered fully vaccinated, according to the nation’s top doctor. Dr. Anthony Fauci discussed the impending need for hundreds of millions of Americans to roll up their sleeves and get the jab during a pre-taped interview that aired at the 2021 STAT Summit in Boston this week, according to ABC News.
Exchanges, OTC and Clearing
NYSE Sees Appetite for Chinese Listings Once Rules Are Agreed
Kiuyan Wong and David Ramli – Bloomberg
The New York Stock Exchange sees appetite for Chinese company listings in the U.S. once the two nations’ governments resolve a stalemate over regulatory scrutiny. The bourse needs to strike a balance between investor protection and access to opportunity to fast-growing companies, NYSE President Stacey Cunningham said at the Bloomberg New Economy Forum in Singapore Wednesday.
ICE to Host Carbon Credit Auctions for Permian Global, a Leading Developer of Large-Scale Tropical Forest Protection and Restoration Projects
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that it plans to begin carbon credit auctions for Permian Global, a leading developer of large-scale tropical forest protection and restoration projects. The auctions are expected to launch in 2022 and further details on timing will be announced in due course.
ICE will host auctions for Permian Global’s verified emission reduction certificates (VERs), which are the quantifiable emissions that would have been released into the atmosphere had deforestation and forest degradation occurred.
European Healthcare Acquisition & Growth Company B.V (EHC) lists on Euronext Amsterdam
Successfully raising EUR200 million, fully dedicated to the European healthcare sector; 19th SPAC listing on Euronext markets in 2021, of which 13 in Amsterdam
Euronext today congratulates the European Healthcare Acquisition & Growth Company B.V. (EHC), a special purpose acquisition company (SPAC), on its listing on Euronext Amsterdam (ticker code: EHCS). It is the 19th SPAC to list on Euronext markets, 13 of which have listed on Euronext Amsterdam.
Introduction of eligible foreign security futures products for trading by eligible U.S. customers
Eurex Deutschland offers foreign security futures products (FSFPs) eligible under U.S. Securities and Exchange Commission (SEC) and U.S. Commodity Futures Trading Commission (CFTC) rules (eligible FSFPs) for trading by eligible U.S. customers (eligible U.S. customers) with effect as of 1 January 2022.
Finalists of the Deutsche Börse Photography Foundation Prize 2022 announced; The four finalists of the Deutsche Börse Photography Foundation Prize 2022 are Deana Lawson, Gilles Peress, Jo Ractliffe and Anastasia Samoylova.
The Deutsche Börse Photography Foundation awards the influential prize, which was established in 1996, annually in partnership with the Photographers’ Gallery in London. The prize is awarded to artists and projects who have made the most significant contribution to photography in the past 12 months. In its 26-year history, the Prize has become one of the most internationally renowned awards for photographers. At the same time, it is an important guide for the development of the medium of photography. It honors outstanding, innovative and critical work that pushes the boundaries of the photographic medium and shows its influence and relevance as a cultural force.
Restated Revenue Segment Reporting Reflecting New Structure
FINRA/NYSE TRF Technical Issue Update – SIP Trade Reports with an Incorrect ‘Sold’ Modifier
FINRA/NYSE TRF has identified the cause of the previously reported processing issue and will be installing a fix tonight to prevent the application of incorrect ‘Sold’ modifiers to trade reports beginning on November 18, 2021.
NYSE American Options: *Reminder* Changes to UTP Series and Underlying Index Numbers
As previously announced, on Monday, November 22, 2021, NYSE American Options will modify series and underlying index numbers on the current UTP technology platform in support of the Exchange’s migration to NYSE Pillar in 2022. These updates will ensure that UTP series index numbers are unique from NYSE Pillar assigned index numbers. The changes are currently available for UAT testing on the Exchange’s Enhanced Certification environment and, on Saturday, November 20,2021, will be available for Production testing. Participants are encouraged to test ahead of the Monday Production implementation.
Daily TAQ: Now Available via AWS Cloud and New Access Fees Effective April 1, 2022
NYSE advises Daily TAQ customers that Daily TAQ is now available via AWS, and the Daily TAQ Access Fee will be increased effective April 1, 2022. For details of the changes, click
CME Group Tour Championship Purse to Increase to $7 Million in 2022
Winner of LPGA Tour’s season-ending event to earn $2 million, the largest single prize in women’s golf;Players who compete in the championship guaranteed at least $40,000
In a ground-breaking moment for women’s golf, CME Group and the LPGA Tour announced today that the prize fund for the 2022 CME Group Tour Championship, the Tour’s season-ending event, will grow to $7 million, up from $5 million in 2021. The winner will receive $2 million, the largest single prize in the history of women’s golf, while all players who compete in the championship will receive at least $40,000.
SGX welcomes second ETF by CSOP Asset Management, tracking Singapore’s largest and most liquid S-REITs
Singapore Exchange (SGX) today welcomed the listing of CSOP iEdge S-REIT Leaders Index ETF with assets under management (AuM) of S$116.8 million, providing investors with access to the largest and most liquid real estate investment trusts in Singapore (S-REIT).
— CME Globex Notices: November 15, 2021 — CME
— Termination of Trading of the January 2022 Contract Month of the Dutch TTF Natural Gas Futures-Style Margined Calendar Month Option Contract — CME
— CME STP Notices: November 18, 2021 — CME
— EBS Market Integration Notice: New Content — CME
Solana Raises Stakes for Institutions With Spot on Bloomberg Terminal
Gerelyn Terzo – FX Empire
There are a number of so-called Ethereum killers that have emerged on the blockchain and smart contract scene. And while none of them have knocked the second-biggest cryptocurrency off its perch, a select few have trailblazed their own paths and are doing just fine.
Paytm’s Sharma goes from ‘ineligible’ bachelor to billionaire
Sankalp Phartiyal – Reuters
At 27, Vijay Shekhar Sharma was making 10,000 rupees ($134.30) a month, a modest salary that did not help his marriage prospects. “In 2004-05, my father asked me to shut my company and take up a job even if it was for 30,000 rupees,” Sharma, who went on to found digital payments firm Paytm in 2010, told Reuters.
Paytm shares fall 27% on trading debut after India’s biggest IPO; Fintech group loses $5bn in market value as investors question path to profitability
Benjamin Parkin and Hudson Lockett – FT
Shares in Indian financial technology company Paytm fell by more than a quarter on its stock market debut, wiping $5bn off its valuation in a rout that underscored investor unease about India’s largest ever IPO.
Eventus wins Best Market Conduct Solution at Canadian RegTech Awards 2021
Tenth recognition for this year for Validus platform
Eventus Systems, Inc., a leading global provider of multi-asset class trade surveillance and market risk solutions, announced that the firm this week won the award for Best Market Conduct Solution for 2021 at the inaugural Canadian RegTech Awards. The recognition is the 10th for this year for the firm’s Validus platform.
State-backed venture capital group takes stakes in UK start-ups; British Patient Capital invests in medical tech, data analytics and banking software firms
Daniel Thomas – FT
The venture capital arm of the state-owned British Business Bank has acquired its first direct stakes in a range of UK start-ups, adding to a growing portfolio of investments made by the government to support companies during and after the pandemic.
Goldman Sachs and JP Morgan sign up to new OSTTRA service to mitigate risk and costs in OTC derivatives; OSTTRA’s new TriOptima: triBalance Credit service optimises risk exposures on a multilateral basis for investment banks.
Anita Hawser – The Trade
A new credit optimisation service from OSTTRA, is helping recently signed customers Goldman Sachs and JP Morgan, achieve significant capital efficiencies and reduced funding costs associated with margin requirements for multiple central counterparties (CCPs).
ION appoints former UBS Neo product manager as global head of equities product management; Incoming head will help ION innovate in complex equities trading space.
Wesley Bray – The Trade
Global trading, analytics, and risk management solutions provider, ION, has appointed Robert Cioffi as its new global head of equities product management. Cioffi joins ION from UBS Investment Bank where he most recently served as executive director and product manager. He brings more than 25 years’ product management experience in financial services to ION Markets.
BMLL consolidates cross-asset futures data;New product consolidates full-depth order book data across all major futures asset classes.
Annabel Smith – The Trade
BMLL Technologies has launched a new data product aimed at consolidating futures data from major trading venues CME, Eurex and ICE into asset specific packages. The new product, BMLL Level 3 Futures Data, aims to minimise the time institutions spend gathering and filtering futures data by packaging.
Businesses worried about cyberattacks during the holidays, report finds
Nicole Sganga – CBS News
After a year of headline-grabbing ransomware attacks, businesses say they’re worried about the possibility they’ll face cyber intrusions this holiday season, a time when many of their cybersecurity operations rely on skeleton staffing.
Boston-based cybersecurity firm Cybereason commissioned a survey of 1,206 cybersecurity professionals at organizations that experienced a ransomware attack during a holiday or weekend within the last year. A whopping 89% of the respondents from the U.S., U.K., France, Germany, Italy, Singapore, Spain, South Africa, and UAE indicated that they were concerned about a repeat cyber intrusion ahead of the holiday season. However, 36% said they had no “specific contingency plan in place to mount a response.”
Senators look to defense bill to move cybersecurity measures
Maggie Miller – The Hill
The Senate is eyeing the annual defense bill as a vehicle to attach critical provisions to improve the nation’s cybersecurity following a devastating year in which major attacks left the government flat-footed.
The efforts are markedly bipartisan, a rarity for a Senate that is struggling to accomplish a long legislative to-do list before the holidays.
EPA’s Cybersecurity Oversight of Water Sector Falls Short, Report Says
Catherine Stupp – WSJ
U.S. water facilities are struggling with glaring cybersecurity problems and receive insufficient support from federal regulators, according to cyber and water industry experts.
Many water systems are small, run by local municipalities and have few resources to invest in cybersecurity tools or staff. Federal funding and security standards for the sector are needed to protect drinking water and wastewater operators from a rising number of ransomware attacks, says Mark Montgomery, senior director of the Center on Cyber and Technology Innovation, part of The Foundation for Defense of Democracies, a think tank in Washington.
Lacework lands $1.3B to expand its cloud cybersecurity platform
Kyle Wiggers – VentureBeat
Lacework, a developer of automated containerized workload defense and compliance solutions, today announced that it closed a $1.3 billion funding round, valuing the company at over $8.3 billion post money. Sutter Hill Ventures, Altimeter Capital, D1 Capital Partners, and Tiger Global Management led the round with participation from Franklin Templeton, Counterpoint Global (Morgan Stanley), Durable Capital, General Catalyst, XN, Coatue, Dragoneer, Liberty Global, and Snowflake Ventures. Co-CEOs David Hatfield and Jay Parikh said the funding will support Lacework’s product development efforts as the company expands its engineering and R&D initiatives.
Beware the Chinese Ransomware Attack With No Ransom; A different hacking tactic could be a way to distract victims from the perpetrator’s true motive.
Tim Culpan – Bloomberg
A breach by Chinese hackers of almost a dozen targets in Taiwan looked, on the surface, like just another ransomware attack: infiltrate a network, encrypt a ton of files, lock the owners out of their own systems, and wait to be paid. But this one was different for what it didn’t contain, and portends a type of threat that could stymie attempts by corporate and government leaders to make their computer systems more secure.
State office touts collaborating to aid in cybersecurity threats
Michelle L. Quinn – Chicago Tribune
The state of Indiana wants municipalities’ data — to study, learn and better protect them from nasty bugs and costly hijackings, say the agencies responsible for its technology.
Members of the Indiana Office of Technology and Indiana Information Sharing Analysis Center joined State Rep. Mike Andrade, D-Munster, at the Wicker Park Social Center Wednesday morning to talk to municipal IT professionals about new and ongoing initiatives the state is undertaking to improve its cybersecurity. Twenty IT executives from the public, private and law enforcement sectors discussed the ways in which the parties can collaborate and save each other from harm.
How To Build A Balanced Cybersecurity Program
Mark Adams – Forbes
In the early cybersecurity days, working as a professional strategist was viewed as a part-time endeavor, with these skills often put on the back burner for other corporate priorities. These skills and roles have evolved to the point where companies are building sub-teams of IT specialists, which lead to larger teams of IT gurus. More recently, security has earned its rightful seat at the table as a key business partner.
Continuously changing cyber threats and more advanced adversaries highlight the need for a comprehensive, balanced security team that can showcase both offensive and defensive efforts.
EU Privacy Enforcement Not Good Enough, Top Official Warns
Stephanie Bodoni – Bloomberg
iCommission vice president Jourova weighs possible intervention; Says changes needed if decentralized GDPR system fails
European Union privacy enforcement still isn’t working according to plan and changes may be needed, according to one of the architects of the bloc’s sweeping General Data Protection Regulation.
EPA’s Cybersecurity Oversight of Water Sector Falls Short, Report Says; Industry experts are pushing for more federal funding and security standards to protect facilities from hackers
Catherine Stupp – WSJ
U.S. water facilities are struggling with glaring cybersecurity problems and receive insufficient support from federal regulators, according to cyber and water industry experts.
Circle pushes financial inclusion as regulators scrutinise stablecoin; US company’s move to become leading regulated stablecoin comes as it expands presence in Asia-Pacific
Siddharth Venkataramakrishnan – FT
Payments company and stablecoin operator Circle announced a range of measures around financial inclusion on Wednesday, as global regulators increasingly debate how to supervise the $130bn industry.
DeFi set to define betting exchanges as start-up BetDEX wins $21m funding; Apple grants right to repair, Imagination IPO moves, wearables get healthier
Chris Nuttall – FT
It is 20 years since the gambling industry was shaken up by the advent of peer-to-peer (P2P) betting exchanges, but the next wave of innovation may finally be about to break. Edinburgh-based BetDEX announced today it had secured the largest ever seed funding round for a UK start-up ($21m), as it aims to become the world’s first decentralised sports betting protocol, with a launch date of the first half of 2022.
Lawyer Says Tarantino Has Right to Sell ‘Pulp Fiction’ NFTs
Andrew Dalton – AP
Quentin Tarantino’s attorney said Wednesday that he has every right to create and sell a series of “Pulp Fiction” NFTs. The statement from lawyer Bryan Freedman comes a day after entertainment company Miramax filed a lawsuit over the director’s plans to create and auction off a series of NFTs based on his scripts for “Pulp Fiction.”
With $31 Million, Could This Crypto Group Buy a Copy of the U.S. Constitution?
Francesca Maglione and Lindsey Rupp – Bloomberg
A loosely-organized group of crypto investors is raising money from people on the internet to buy a copy of the U.S. Constitution when it goes up for auction on Thursday at Sotheby’s.
Japan Crypto Exchange bitFlyer Weighs Acquisition to Boost Firm
Yoolim Lee and Takashi Nakamichi – Bloomberg
CEO says company has applied for a license in Singapore; BitFlyer also plans to enter non-fungible tokens market
Japan’s largest Bitcoin exchange, bitFlyer Inc., is considering acquiring a small domestic or foreign rival to scale up its business, according to Chief Executive Officer Yuzo Kano.
The ECB’s case for central bank digital currencies; Sovereign money must continue to play its anchoring role in the digital era
Fabio Panetta – FT
Just as the postage stamp became less relevant with the arrival of the internet and email, so too could cash lose relevance in a digital economy. The use of cash in payments is declining as people increasingly prefer to pay digitally and shop online. In the euro area, half of consumers now prefer to pay with cashless means of payment. Online sales have doubled since 2015. If these trends continue, cash could lose its pivotal role.
They Love Crypto. They’re Trying to Buy the Constitution; How a “financial flash mob” is trying to raise $20 million for a rare copy of the U.S. Constitution.
Kevin Roose – NY Times
In September 1787, a group of delegates gathered in Philadelphia to sign the U.S. Constitution. This week, a hastily organized crypto-collective is trying to buy it. The group, called ConstitutionDAO, is a seat-of-the-pants experiment by thousands of cryptocurrency fans who have pooled their money to make a bid on a rare original printing of the Constitution. The document, one of only 13 surviving copies, is being auctioned on Thursday by Sotheby’s, which estimates it will sell for $15 million to $20 million.
Biden’s infrastructure bill hands crypto industry to US Treasury
Teuta Franjkovic – Coin Rivet
US President Joe Biden has signed a landmark $1.2 trillion infrastructure bill into law which includes tax reporting provisions that apply to cryptocurrency. The bill is expected to tackle nearly every facet of American infrastructure, including public transportation, roads, bridges, ports, railways, power grids, broadband internet, as well as water and sewage systems.
China Must Realize Taiwan Isn’t Hong Kong, Tony Blair Says
Iain Marlow and Francine Lacqua – Bloomberg
China needs to realize that Western countries don’t view the self-ruled island of Taiwan in a similar way to the semi-autonomous city of Hong Kong, former U.K. Prime Minister Tony Blair said. “It’s important that we understand what China’s position is in relation to Taiwan, how deep this ‘One China’ policy is,” Blair said in an interview on Thursday with Bloomberg Television in Singapore. “They have to understand that Taiwan is not the same as Hong Kong. And there are very strong views on this in the West.”
How Taxing Crypto Got Changed by Biden’s Infrastructure Law
Laura Davison – Bloomberg
Embedded in the infrastructure spending package signed into law by U.S. President Joe Biden was language increasing the tax reporting requirements for cryptocurrency transactions. That change was heavily opposed by the digital currency industry, which has in its corner a bipartisan group of senators that still hopes to amend the law. Regardless, more struggles are ahead as Washington grapples with how Bitcoin and other cryptocurrencies should be regulated and taxed.
Crypto Brokers Face Redefinition Under Proposed U.S. House Bill
Colin Wilhelm – Bloomberg
A bipartisan group of House lawmakers wants to alter how the government defines who counts as brokers of crypto assets, less than a week after the current designation became law. Cryptocurrency transactions totaling $10,000 or more would no longer be treated as similar to cash for tax reporting purposes, though sales would continue to be taxed as capital gains.
Federal Court Orders Florida Man and Foreign Defendants to Pay $7 Million for Role in Fraudulent Binary Options and Digital Asset Scheme
The Commodity Futures Trading Commission today announced that Judge Darrin P. Gayles of the U.S. District Court for the Southern District of Florida issued orders granting permanent injunctions against Daniel Fingerhut, a resident of Miami, Florida, and Itay Barak, Tal Valariola and Digital Platinum Limited (DPL), residents of Israel, and requiring them to pay a combined $7 million in disgorgement and civil monetary penalties for violations of the Commodity Exchange Act (CEA) and CFTC regulations. The orders also impose permanent trading and registration bans on Fingerhut, Barak and Valariola, among other injunctive relief.
Commissioner Stump to Participate in D.C. Bar Fireside Chat
Commissioner Dawn D. Stump will participate in a fireside chat sponsored by the Derivatives and Futures Law Committee and the FinTech Regulation and Enforcement Committee of the D.C. Bar Corporation, Finance and Securities Law Community
CFTC Issues Request for Information and Comment on Swap Clearing Requirement to Address IBOR Transition
The Commodity Futures Trading Commission today issued a request for information and comment related to the swap clearing requirement under Part 50 of the CFTC’s regulations. The comment period will be open for 60 days after publication in the Federal Register.
France’s Biggest Insider-Trading Probe Hangs by a Thread
Gaspard Sebag and Stephanie Bodoni – Bloomberg
Adviser to EU judges says two traders’ privacy was breached; Duo were charged over $23 million in suspicious gains
The two main suspects in France’s biggest insider-trading probe are edging closer to nixing the entire case after an adviser to European Union judges suggested that their privacy rights were violated by investigators to obtain key evidence.
Joe Biden demands probe of ‘potentially illegal conduct’ in oil sector; President singles out ExxonMobil and Chevron in letter to FTC as US gasoline prices soar
Lauren Fedor and Derek Brower – FT
US President Joe Biden has called on the Federal Trade Commission to investigate whether the country’s biggest oil companies including ExxonMobil and Chevron are engaged in “potentially illegal conduct” that is resulting in higher gasoline prices for Americans.
Biden Asks FTC to Examine Oil, Gas Companies’ Role in High Gasoline Prices; President cites ‘mounting evidence of anti-consumer behavior’ by oil-and-gas companies
Andrew Restuccia, Katy Stech Ferek and Christopher M. Matthews – WSJ
President Biden called on the Federal Trade Commission to investigate whether oil-and-gas companies are participating in illegal conduct aimed at keeping gasoline prices high, in the latest effort by the White House to respond to public concerns about costs for everything from fuel to groceries.
SEC Proposes Rule Amendments to Proxy Rules Governing Proxy Voting Advice; Proposed Rules Would Address Concerns by Investors and Others that the Current Rules May Impede and Impair the Timeliness and Independence of Proxy Voting Advice
The Securities and Exchange Commission today voted to propose amendments to its rules governing proxy voting advice. The proposed amendments aim to address concerns expressed by investors and others that the current rules may impede and impair the timeliness and independence of proxy voting advice and subject proxy voting advice businesses to undue litigation risks and compliance costs. “Proxy advice voting businesses play an important role in the proxy process. Their clients deserve to receive independent proxy voting advice in a timely manner,” said Chair Gary Gensler. “I am pleased to release these proposals to the public and encourage the public to share their feedback at sec.gov.”
Prepared Remarks at U.S. Treasury Market Conference
Chair Gary Gensler – SEC
Thank you for that kind introduction. It’s good to be here for the seventh annual U.S. Treasury Market Conference. Thank you to the conference organizers and my colleagues across the Inter-agency Working Group on Treasury Market Surveillance (IAWG) for putting together this event. As is customary, I’d like to note that I’m not speaking on behalf of my fellow Commissioners or the SEC staff.
Dissenting Statement on Proxy Voting Advice Proposal
Commissioner Hester Peirce – SEC
I cannot support today’s proposal. The Commission lacks a sound basis for seeking to amend a brand new rule. Nothing has changed since we adopted the rule, and we have not learned anything new. The release takes a stab at justifying the rewrite, but we might as well simply acknowledge that the political winds have shifted.
Too Important to Regulate? Rolling Back Investor Protections on Proxy Voting Advice
Commissioner Elad L. Roisman – SEC
Over the past several years, much has been said about what the rise in fund ownership throughout our equity markets might mean for our economy. But one outcome of increasing fund growth is clear: as funds come to own an ever larger percentage of U.S. corporate equities, they can influence the outcome of a variety of matters that companies submit to a shareholder vote. As recently as a month ago, the Commission acknowledged this fact and pursued policies designed to ensure that those who manage funds approach voting in a manner that serves the best interest of their clients.
Statement on Proposed Amendments Related to Proxy Voting Advice
Commissioner Allison Lee – SEC
Proxy advisors play a unique and important role in helping shareholders vote to protect their investments and ensure their interests are being served. It is therefore important that our rules do not interfere with the independence of proxy voting advice, introduce unnecessary cost and complexity into an already compressed proxy voting process, or otherwise burden the free and full exercise of shareholder voting rights. For this reason, I’m pleased that we are revisiting certain aspects of the amendments governing proxy voting advice adopted last year so that our rules are appropriately tailored to the needs of investors and other market participants.
Statement on Proxy Voting Advice
Commission Caroline A. Crenshaw – SEC
Thank you to the staff in the Division of Corporation Finance, Division of Economic and Risk Analysis, and the Office of the General Counsel for their exceptional and thoughtful work in advance of today’s meeting.
Dissenting Statement on Universal Proxy
Commissioner Hester Peirce – SEC
I support universal proxy, but not today’s version of universal proxy. Shareholders voting by proxy should be able to split their vote among company and dissident nominees. Allowing shareholders a straightforward way of choosing a mixed slate through a universal proxy card can facilitate sensible changes to board composition. Universal proxy makes sense for both operating companies and investment companies. This particular universal proxy rule, however, may facilitate changes to the company that advance special interests rather than enhancing corporate value by serving as a tool for frivolous, as well as serious, activists. I might have been able to support the rule if I felt we had explored thoroughly the potential that the rule could afford activists without a demonstrated commitment to the company an opportunity to meddle in the company’s affairs. I do not believe we have done this work so I cannot support the rule.
Statement on Universal Proxy Rules
Commissioner Elad L. Roisman – SEC
Thank you to the staff who worked on this rulemaking. I support adopting this rule. I see no compelling reason to prevent shareholders from mixing and matching their votes between a management and dissident slate, given that shareholders who attend meetings are already able to vote in this way. I would have preferred, however, that today’s rule include certain additional changes and believe we should continue to consider those going forward. First, I believe we should have given greater consideration to having this rule apply to funds. I have heard no clear argument for why they should be treated differently than operating companies for these purposes. I hope that the Commission will take up this issue again in the near future and, if appropriate, expand the rule to include funds or explain why such an approach is unsuitable.
Statement on Universal Proxy Ballots
Commissioner Allison Lee – SEC
Electing corporate directors is perhaps the most critical function of shareholders in our system of corporate democracy. Corporations are owned by shareholders, but managed and overseen by boards of directors. Thus, it is the shareholders – the owners – that decide whom to entrust to oversee their capital. This is the integral construct of American corporations. The amendments the Commission is voting on today will help ensure that shareholders voting by proxy can freely choose between and among all qualified candidates for the board – and are not limited to choosing the entire slate put forth by one side or the other.
Statement on Universal Proxy
Commission Caroline A. Crenshaw – SEC
Congratulations to the rulemaking team from the Division of Corporation Finance, as well as the staff within the Division of Economic and Risk Analysis and the Office of the General Counsel. This rulemaking has been several years in the making, and I am glad that we are here today to finalize it.
ESMA and EBA consult on framework for the supervisory review and evaluation process of investment firms
The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) launched today a public consultation on their Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP).
ESMA seeks investor protection and intermediaries experts for stakeholder panel
The European Securities and Markets Authority (ESMA) has issued today a call for candidates to renew the composition of its Consultative Working Group (CWG) which advises its Investor Protection and Intermediaries Standing Committee (IPISC).
ESMA proposes changes to the scope of the clearing and derivative trading obligations for the benchmark transition
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published today its final report on the clearing (CO) and derivative trading (DTO) obligations to accompany the benchmark transition.
FINRA/NYSE TRF Technical Issue
As previously reported, the FINRA/NYSE TRF experienced a processing issue that resulted in a subset of SIP trade reports being reported with an incorrect ‘Sold’ modifier. The FINRA/NYSE TRF has identified the cause of the issue and installed a fix last night to prevent the application of incorrect ‘Sold’ modifiers to trade reports beginning on November 18, 2021. Refer to the FINRA/NYSE TRF system status alert.
Jane Street ADF Participation Notice
As of 11/16/2021, Jane Street (MPIDs: JSCA and JSEB) is no longer a registered ADF Trade Reporting Only (TRO) participant on the FINRA Alternative Display Facility (ADF). For any questions, please contact FINRA Business Services at (212) 858-4342.
FINRA Amends Rules 1210 and 1240 to Enhance the Continuing Education Program for Securities Industry Professionals
Effective Dates: March 15, 2022 (MQP (paragraph (c) of Rule 1240) and FSAWP (Rule 1210.09)); January 1, 2023 (all other rule changes)
Investing and Trading
Regulators confront signs of stress in Treasury market
Kate Marino – Axios
A who’s who of financial regulatory agencies are convening Wednesday to talk about how to ensure the $22 trillion Treasury market functions properly. At issue: Fixing liquidity problems that have, at times, exacerbated price swings.
An Oil Company Went Up in Flames, Burning Lenders and the Planet
Rachel Adams-Heard and Zachary Mider – Bloomberg
Mark Siffin’s love affair with the Permian era started when he was a teenager on a surfboard in Hawaii. He was bobbing off the coast of Oahu when Diamond Head, the state’s most recognizable landmark, caught his eye. Its formation, the product of a volcanic eruption many millennia ago, fascinated him. So when Siffin got the chance some 50 years later to tap an even older rock, he dove right in.
Champagne-Popping Returns May Let the Froth Out of the Markets
Ven Ram – Bloomberg
S&P 500 Index has risen almost a stunning 25% so far this year; Investors are counting on earnings growth to stand out in 2022
If fund managers had bought a basket of stocks closely resembling the S&P 500 and had played chess all through 2021 — if only to resist the temptation to churn their portfolios incessantly — they would perhaps have won bragging rights in their board rooms. Next year, we are told, they would like to rinse and repeat.
How the valuation chasm in markets can be bridged; Value investors and those bullish on growth companies need to look at what they have in common
Aswath Damodaran – FT
In the past few weeks, Tesla, a company with less than $50bn in revenues that only recently became profitable, joined the rarefied list of groups with trillion-dollar market capitalisations. Rivian, a company with no revenues and big losses, went public with a market cap exceeding $100bn.
Environmental, Social and Corporate Governance
Sovereign Wealth Funds Dramatically Step Up Their Focus on ESG; Some of the world’s most influential investors have turned a corner in sustainable finance, survey shows.
Alastair Marsh – Bloomberg
Sovereign wealth funds are starting to take environmental, social and corporate governance issues a lot more seriously, in a sign that some of the world’s most influential investors may be ready to reallocate their vast fortunes in more planet-friendly ways.
JPMorgan selects BNP’s chief sustainable product officer to lead new green unit; The investment bank’s new appointment will lead the ESG agenda for JP Morgan across sales, trading, research and banking.
Annabel Smith – The Trade
JP Morgan has appointed the former chief sustainability product officer at BNP Paribas (BNP) to head up its new Global Markets Sustainability Centre, according to an internal memo seen by The TRADE.
Alternative and multi-asset managers are behind the curve on diversity engagement, study finds; Many managers consider gender diversity as part of their investment due diligence, but on average investment teams contained almost 80% men.
Anita Hawser – The Trade
Credit and equity managers are leading the charge on diversity metrics when researching potential investments, research from Redington has found.
Goldman Sachs Boosts Bet on London to Target World’s Super-Rich
Benjamin Stupples – Bloomberg
Bank has hired at least nine advisors in the city this year; Wall Street firm is trying to boost wealth-management business
Goldman Sachs Group Inc. has stepped up the expansion of its private-banking team in London as it builds out its operations targeting the world’s ultra-wealthy.
Thiel-Backed Bank N26 to Close 500,000 Accounts in U.S. Exit
Stephan Kahl – Bloomberg
N26 to focus on European markets with more products ahead; Setback follows departure from the U.K., regulatory headwinds
N26 GmbH will discontinue its U.S. operations in the latest setback to the expansion plans for the German digital bank, which was recently valued at more than $9 billion.
Lack of consolidation among challenger banks is a problem; Impact of digital upstarts in UK remains underwhelming at market level
Helen Thomas – FT
What’s remarkable about UK retail banking is that a market with so much in the way of innovation and activity can result in so little genuine upheaval. A decade after post-crisis angst about competition in banking, mid-market challenger banks have proliferated, with overseas entrants also braving the UK market. The regulator has authorised almost 30 new banks since 2013, from digital upstarts such as Monzo and Starling to this year’s wannabe northern champions GB Bank and Bank North.
Shell’s Dutch exit leaves investors with a dilemma; Buybacks prompted by restructuring may encourage shareholders to stay
The editorial board – FT
Disentangling the corporate web of Royal Dutch Shell should have happened sooner. A hangover from its 2005 Anglo-Dutch merger, the company is currently incorporated in the UK but has Dutch tax residency, and a dual-class share structure that trades in London, Amsterdam and New York. Several factors have combined to push the company to now want to simplify itself by moving its tax base and chief executive to the UK. While elements of the move are not an unalloyed good, if overall the restructuring means the company can move faster towards a greener future with sustainable earnings, it should be welcomed.
Italy Mulls $4 Billion Capital Raise to Prop Up Monte Paschi
Chiara Albanese, Alessandra Migliaccio, and Sonia Sirletti – Bloomberg
Government expects to keep stake in lender through next year; Treasury stuck with bank it couldn’t convince UniCredit to buy
Italy is weighing a capital increase of as much as 3.5 billion euros ($4 billion) to prop up Banca Monte dei Paschi di Siena SpA after rescue talks with UniCredit SpA fell apart, people with knowledge of the matter said.
Apollo billionaire Leon Black buys £21m luxury home in London; Eaton Square deal comes as private equity tycoon’s star dims in New York after scrutiny of Epstein links
Arash Massoudi, George Hammond, Robert Smith and Mark Vandevelde – FT
Leon Black, the New York billionaire who quit his investment group Apollo Global Management this year, has agreed to buy a £21m home in the lavish London neighbourhood of Belgravia.