Hits & Takes
John Lothian & JLN Staff
The latest donor to the JLN MarketsWiki Education GoFundMe campaign is CME Group Managing Director for Marketing Kevin Comer. Kevin has been with the CME since 2006 in various marketing roles, working his way up the organization. Thank you to Kevin and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.
As you may know, I am a member of the executive committee of the Pathway to Adventure Council of the Boy Scouts of America. I am the vice president of development for the Council. One of my responsibilities is to help identify outstanding Eagle Scouts to be honored with the Outstanding Eagle Scout Award.
The candidate must be an Eagle Scout in good standing with the Boy Scouts of America and must either be registered with or have their primary residence within the boundaries of the Pathway to Adventure Council. If someone you know is an Eagle Scout who you believe is a worthy candidate for this award, please let me know. The award is given for attaining eminence at the local, state or regional level through distinguished service to an Eagle Scout’s profession and community. Email me at email@example.com with any suggestions. Thank you!
As a reminder, the LaSalle Street Trading Tech Awards fundraising event is virtual this year and will be held on December 3. We will have videos for the event and some breakout Zoom rooms for socializing. Please put this event on your calendar, and you can donate here. Also, you don’t have to be in Chicago this year to attend. You can be anywhere as long as you have an internet connection.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
ISDA is offering complimentary registration for its Virtual Conference: Trading Book Capital November 19 from 9:00 AM – 12:00 PM EST. Market participants and regulators from around the world will come together to debate issues relating to the regulatory capital framework. The conference will include expert speakers from the private and public sector on the impacts to implementation timeline from COVID-19, and how firms are preparing for upcoming capital requirements and deadlines. Go here for complimentary registration.~SR
The FIA has announced the keynote speakers for FIA Asia-V. They will be: Loh Boon Chye, Chief Executive Officer of the Singapore Exchange; Charles Li, Chief Executive Officer of Hong Kong Exchanges and Clearing Limited; FIA’s Head of Asia-Pacific Bill Herder; and Dawn DeBerry Stump, Commissioner at the US Commodity Futures Trading Commission. You can register HERE for the virtual conference, which takes place 1-3 December.~SR
Where Biden Can Find $1 Trillion in Tax Revenue
Natasha Sarin – Bloomberg
When President-elect Joe Biden takes office in January, he’ll face a quandary: how to reform the tax system to raise much-needed government revenue. One promising option: Give the Internal Revenue Service the resources needed to ensure the wealthiest are paying the taxes they already owe. As it turns out, Donald Trump isn’t the only affluent American partial to aggressive tax maneuvers. Private equity executive Robert Smith, who made headlines in 2019 by pledging to pay off student loans for Morehouse College graduates, recently admitted to criminal tax evasion of hundreds of millions of dollars over a 15-year period (he will pay back taxes and penalties but avoid prison). The Justice Department has also indicted software executive Robert T. Brockman, claiming he concealed approximately $2 billion in income (with Smith’s help) in an offshoring scheme featuring a computer program aptly named “Evidence Eliminator.”
***** Look in the cushions of Air Force One.~JJL
It’s a great time to be an options trader; Local firms have pocketed profits and expanded operations in a record boom after several tough years.
Lynne Marek – Crain’s Chicago Business
Stock options trading has skyrocketed 31 percent this year to an annual record, lifting the fortunes of the firms in Chicago that specialize in them. Chief among them is Citadel Securities, which handles about a third of all options orders, though other Chicago players like Wolverine Trading, Old Mission, Simplex Investments and Dash Financial Technologies have also benefited.
****YES IT IS!!!~JJL
Monday’s Top Three
Our top story Monday was a repeat of Friday’s top story, This is a massive failure of character among Republicans — with evangelicals out in front, a Washington Post opinion piece. Second was another political story, Charles Koch Says His Partisanship Was a Mistake, from the Wall Street Journal. Third was JLN’s Peter Wind Remembrances, with an additional remembrance from Jim Cone.
192,949,732 pages viewed; 24,580 pages; 226,832 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Vanguard and BlackRock tighten stranglehold on ETF industry; Dominant duo power ahead as allure of active equity managers fades
Chris Flood – FT
Vanguard and BlackRock together grabbed close to two-thirds of net inflows into the exchange traded fund industry during October as the world’s two largest asset managers tightened their grip on ETF inflows ahead of the presidential election.
Tesla to Be Added to S&P 500 Index
Heather Somerville – WSJ
Tesla Inc. Chief Executive Elon Musk has taken another step to turning the Silicon Valley electric-vehicle maker into a mainstream car maker, parking the company in the S&P 500 index. It marks a milestone for the company that over the course of its 17 years has sought to overcome cash flow problems and defy skeptics from Wall Street and Detroit. S&P Dow Jones Indices on Monday said Tesla would join the index on Dec. 21.
Global Financial Stability Watchdog Warns That Markets Remain Vulnerable; The Treasury market seized up in March, and the Financial Stability Board said in a new report that it could happen again.
Jeanna Smialek – NY Times
A financial market meltdown in March highlighted weaknesses that still pose a threat to global financial stability, indicating the need for reform, a global body that monitors financial risks said on Monday.
SEC Pursues Plan Requiring Chinese Firms to Use Auditors Overseen by U.S.; Under proposal, companies would be shut out of U.S. exchanges if they don’t comply
Dave Michaels and Alexander Osipovich – WSJ
Chinese companies with shares traded in America would be required to use auditors overseen by U.S. regulators or face being kicked off exchanges under a plan being drafted by regulators, according to people familiar with the matter.
Nasdaq software failure causes market blackout at ASX; ASX said the market would remain closed until 17 November following an issue with Nasdaq software that created inaccurate market data.
Annabel Smith – The Trade
The Australian Securities Exchange has been forced to shut down completely after a software issue on its refreshed ASX Trade system created inaccurate market data. The technical issue coincided with the launch date for the upgraded ASX Trade system, which is provided by US exchange group Nasdaq.
Australia bourse apologises for shutdown after software glitch; ASX says problem will be resolved in time for trading to resume on Tuesday
Jamie Smyth and Philip Stafford – FT
Australia’s biggest stock exchange has apologised after a software fault in a new trading system left investors unable to trade for most of Monday. ASX Ltd, which runs the market, was forced to halt trading after just 20 minutes because of a glitch that created inaccurate market data, and remained closed for the rest of the day.
Bank regulator calls for dividends to remain on hold; Carolyn Rogers says too early for banks to take a ‘victory lap’ over coronavirus
Stephen Morris and Matthew Vincent – FT
The secretary-general of the Basel committee of regulators has said it is far too early for banks to take a “victory lap” over their response to coronavirus, arguing that shareholder payouts should remain on hold until the long-term impact of the pandemic is clear.
A post-Brexit trade deal is vital to the UK’s future; Boris Johnson should follow the path to an acceptable compromise
The editorial board – FT
Four and a half years after the UK voted to leave the EU, the government faces a moment of truth. The end of the post-Brexit transition period in six weeks will return Britain’s trading arrangements, at best, to where they were in 1992, before the European single market was born. Disruption is inevitable. At worst, however, without a free trade agreement with the EU, critical sectors of the economy will face damaging tariffs on exports to by far the UK’s largest market. With a route to a tolerable compromise already visible, no responsible government would lead the country into a no-deal outcome in the middle of a global pandemic.
FTI Consulting faces client backlash over oil industry work; CDP, Morningstar and MSCI launch reviews after critical report on PR firm’s tactics
Billy Nauman – FT
Some of the largest players in the sustainable investing market are reviewing their relationships with FTI Consulting, a business advisory and public relations firm, after a US media report highlighted controversial work it has done on behalf of the oil industry.
US businesses accused of pandemic profiteering; Authorities pursue thousands of actions over alleged ‘price gouging’ as data show average prices have soared
Alistair Gray – FT
Retailers and suppliers in the US are facing a blizzard of lawsuits and enforcement actions over accusations of profiteering as industry data show average prices of a range of household goods have risen sharply during the pandemic.
Tech War With U.S. Turbocharges China’s Chip-Development Resolve; Nation’s leadership pours money into grooming semiconductor talent and building new facilities, citing need for self-sufficiency
Liza Lin – WSJ
China is investing heavily in computer chips and stepping up efforts to cultivate homegrown talent as it accelerates its quest for technological self-sufficiency amid a tech trade war with the U.S.
‘Someone’s Losing Their Job’: Revlon Lenders Were Surprised at Citi’s $900 Million Mistake; Lenders dispute they knew Citi paid them in error until the bank informed them and demanded repayment
Becky Yerak and Alexander Gladstone. – WSJ
When Citigroup Inc. accidentally used its own funds to repay nearly $900 million owed by Revlon Inc., lenders were surprised at their unexpected payoff, according to internal chat and email messages unearthed in litigation and made public by the bank. One lender couldn’t resist a joke at Citi’s expense.
MSCI veteran joins FactSet to head up business in Australia and New Zealand; Natalia Stansall joins FactSet as regional director of its Australia and New Zealand business after 15 years as head of analytics at MSCI Australia.
Annabel Smith – The Trade
Investment data and technology provider FactSet has appointed a former executive from index provider MSCI Australia to head up its business arm in Australia and New Zealand. Natalia Stansall joins FactSet as regional director for Australia and New Zealand from MSCI Australia where she previously led its analytics business for over 15 years.
Chinese Crackdown Isn’t Chilling Hong Kong’s Hot Financial Core; The city’s enthusiasm for investing survives a purge of lawmakers and a crushed Ant IPO.
Sheridan Prasso – Bloomberg
Hong Kong people love to stir-fry. Not just food—it’s the Chinese term for investing in stocks. And about 1 in 5 residents were ready to fry up a piece of the initial public offering of Ant Group Co., Jack Ma’s fintech company, before its early November listing was scuttled at the last minute by Chinese regulators. It was a crushing blow to what was expected to be the biggest IPO ever. But within days, investors were eyeing other listings on the menu.
How Can Banks Possibly Absorb All These Defaults? The uncertainty as China’s lenders come to realize the size of the risks they’re sitting on will be brutal.
Anjani Trivedi – Bloomberg
Chinese defaults are back and looking messier. Creditors are losing hope, and the banks are getting worried. After a regional state-owned enterprise with a AAA credit rating, Yongcheng Coal & Electricity, failed last week to pay 1 billion yuan ($151 million) on a short-term bond, jitters rippled through the bond and money markets. Share prices of Chinese banks also took a beating. Regulators unexpectedly didn’t intervene, putting investors on edge: Policy makers may be done with their Covid-19 sympathy and forbearance, making state bailouts no longer a fail-safe.
Brexit poll finds record majority of British people think leaving the EU was a mistake
Adam Payne – Business Insider
A record majority of British people believe leaving the European Union was a mistake, a new poll has found, as the UK gets ready to leave European trading rules.
Wells Fargo Quantitative Prime Services Offers HPR Trading Platform to Clients
Wells Fargo Corporate & Investment Banking, a division of Wells Fargo & Company (NYSE: WFC), announced today that its Quantitative Prime Services division has partnered with HPR, a leading financial technology player in electronic trading, to provide an elite next-generation trading platform for clients.
China clamps down on frozen food over coronavirus fears; Beijing focuses on cold chain goods as part of zero-tolerance approach to Covid
Christian Shepherd – FT
China is zeroing in on cold chain goods to prevent any outbreaks of Covid-19 after packaging of frozen Argentine beef, German pork and Indian cuttlefish tested positive for the virus.
Smithfield Foods, subcontractor fined $100,000 for COVID-19 violations in California
Tom Polansek – Reuters
Smithfield Foods, the world’s biggest pork processor, and a subcontractor face fines of more than $100,000 from California’s workplace safety regulator for failing to protect employees from COVID-19 and other violations during the pandemic.
‘More people may die,’ Biden says, if Trump goes on blocking pandemic cooperation
Trevor Hunnicutt, David Shepardson – Reuters
President-elect Joe Biden said on Monday “more people may die” if outgoing President Donald Trump continues blocking a U.S. transition of power as the coronavirus pandemic worsens, and he urged Congress to pass new relief legislation.
Moderna vaccine storage requirements enables distribution in rural America: U.S. official
Manojna Maddipatla – Reuters
Moderna Inc’s MRNA.O COVID-19 vaccine will be easy to distribute, particularly to rural areas, because it can be stored for one month at standard refrigerator temperatures, Matthew Hepburn, head of vaccines for the U.S. Operation Warp Speed program, said on Monday.
Factbox: Moderna COVID-19 vaccine stability eases distribution challenges
Moderna Inc’s MRNA.O experimental COVID-19 vaccine is more stable than expected at temperatures that ordinary refrigerators can provide and can be distributed using existing cold-chain shipping and storage infrastructure.
Iowa joins U.S. states from coasts to heartland acting to curb COVID-19
Maria Caspani, Sharon Bernstein – Reuters
Several U.S. governors, from the coastal states of New Jersey and California to the heartland of Iowa and Ohio, acted on Monday to restrict gatherings and boost face-coverings in confronting a coronavirus surge they warned is out of control.
America Locks Down From Atlantic to Pacific as Covid Rages
David R Baker, Angelica LaVito, and Elise Young – Bloomberg
States slap new limits on indoor businesses, gatherings; California governor considers curfew to stop the spread
In a matter of days, America’s long effort to revive its virus-battered economy has been put on pause — or thrown into reverse — as new infections soar at the fastest pace since the pandemic’s earliest days. California on Monday reinstituted bans on many indoor businesses, and its governor warned he may impose a curfew. Michigan has ordered a three-week partial shutdown, while states including Oregon, Washington and New Jersey tightened curbs. Even the governor of Iowa, long resistant to virus rules, issued a limited mask mandate Monday.
France’s Bars, Restaurants May Stay Closed Until Mid-January
Phil Serafino – Bloomberg
Government’s goal is to allow shops to re-open on Dec. 1; Government spokesman says no calendar set for restaurants
French bars and restaurants will remain closed until mid-January as the government tries to tamp down the resurgent coronavirus outbreak, France Info radio reported, as officials weigh when to allow shops to reopen.
Cuomo calls Trump’s threat to withhold the vaccine from New York ‘hollow’ and says his state testing will not hold up its distribution because it will go alongside FDA process
Gov. Andrew Cuomo has slammed Donald Trump’s threat to withhold a vaccine from New York as ‘hollow’ on MSNBC’s The Reid Out Monday night
Marlene Lenthang – DailyMail.com
Gov. Andrew Cuomo has slammed Donald Trump’s threat to withhold a vaccine from New York as ‘hollow’ and said the American people simply don’t trust the president to announce an effective, safe cure.
Dr Anthony Fauci talks to CNN’s “New Day” about Covid-19 vaccine data and rising US cases; How bad is Russia’s Covid crisis? Packed morgues and excess deaths tell a darker story than official numbers suggest
Matthew Chance, Zahra Ullah and Mary Ilyushina – CNN
Third wave of Covid-19 looms in Japan as country preps for Olympic games
Moscow (CNN)The limbs of a lifeless body hang off a stretcher in a hospital ward as coronavirus patients battle for their lives just a few feet away. An elderly woman gasps for breath, her desperate panting a grim soundtrack to one of many disturbing cell-phone videos emerging from hospitals across Russia.
Exchanges, OTC and Clearing
Russian ecommerce group Ozon files for IPO valued at up to $5.6bn; Company aims to raise up to $1bn from Nasdaq exchange listing amid strong demand
Max Seddon – FT
Russian ecommerce group Ozon will file paperwork on Tuesday to go public in the US at a valuation of $4.6bn to $5.6bn, according to two people familiar with the plans. Ozon is seeking to raise between $750m and $1bn from the initial public offering on the Nasdaq exchange, the people said, up from an originally planned $500m amid strong demand.
Bank of America Is First Authorized Participant to Leverage ICE’s FIX API for Creations and Redemptions
ICE press release
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced that Bank of America became the first authorized participant to leverage ICE ETF Hub’s FIX API to communicate ETF share creations and redemptions. This is an important milestone in the ETF industry’s adoption of ICE ETF Hub, which was designed as an industry-wide, open architecture, technology solution, offering a more standardized and simplified process for the creation and redemption of ETF shares.
Amendment to the GTC to the Provider Connection Agreement: Implementation of mandatory direct debit for EU-based Multi-Member System Providers
Eurex Circular 090/20 Amendment to the GTC to the Provider Connection Agreement: Implementation of mandatory direct debit for EU-based Multi-Member System Providers
Nasdaq Launches Nordic Gross Return Futures for Single Stock Futures to Help Investors Manage Dividend Risk; New suite of listed dividend neutral stock futures covers single stocks in Sweden, Norway, Denmark and Finland
Nasdaq (Nasdaq: NDAQ) today announced the launch of Gross Return Futures contracts adjusted for dividends paid out during the lifetime of the contract. The new contracts allow investors to manage the risk of single stock futures by only reflecting the actual performance of the stock, excluding dividends.
Trading on ASX equities market today
This morning at 11:03am ASX Limited (ASX) provided a system status update indicating that it had become aware of data issues with the ASX Centre Point matching system. At 11:17, ASX further advised that ‘[u]ntil further notice ASX Centre Point execution prices will be based on the ASX-lit best bid and offer only.’ That is, Chi-X bids and offers would not be used.
Performance Bond Requirements: Agriculture & Metal Margins – Effective November 17, 2020
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below. Please email any questions to Clearing.RiskManagement@cmegroup.com.
Application for Spot Call Nonfat Dry Milk and Spot Call Dry Whey Regularity
From Registrar’s Office
Pursuant to Regulation 1203.C. notice hereby is given that Sprinter Services, Inc. DBA Columbian Logistics Network has applied to the Exchange for a declaration of regularity in Spot Call Nonfat Dry Milk and Spot Call Dry Whey at the following location:
Application for Spot Call Butter Regularity
Pursuant to Regulation 1203.C. notice hereby is given that Cedar Grove Warehouse, Inc. has applied to the Exchange for a declaration of regularity in Spot Call Butter at the following location:
SPAN 2(TM) Margin Framework Production Parallel Margin Reporting – Effective: November 17, 2020
CME Clearing is pleased to announce that production parallel testing of the new SPAN 2 margin framework is now underway for select energy futures and options on futures contracts. A new SPAN 2 Margin Breakdown Report will be available to Clearing Members to begin testing SPAN 2 margin requirements.
ICE Mortgage Technology Announces Encompass 20.2 Major Release
Ellie Mae, the leading cloud-based platform provider for the mortgage finance industry, and now ICE Mortgage Technology, a division of Intercontinental Exchange, Inc. (ICE), today announced the Encompass 20.2 Major Release will include enhancements for lenders to boost productivity across lending and investing workflows.
Santander buys Wirecard’s core European business for EUR100m; Spanish bank beats UK’s Lycamobile for continental payment-processing operations
Olaf Storbeck and Daniel Dombey – FT
Spanish lender Banco Santander is paying about EUR100m for Wirecard’s core business in Europe in a transaction that marks an important step towards the dismantling of the disgraced German payments provider, which collapsed into insolvency this summer.
Wells Fargo to provide quant hedge funds with revamped trading platform; In partnership with HPR, Wells Fargo is upgrading its trading platform in the latest enhancement to its prime services business.
Joe Parsons – The Trade
Wells Fargo has partnered with FinTech firm HPR to provide a new-look electronic trading platform for quantitative hedge funds clients.
BNY Mellon goes live with buy-side collateral messaging service; The new service from BNY Mellon enables investment managers to retain control over the collateralisation of their non-cleared derivatives activities.
Joe Parsons – The Trade
BNY Mellon has gone live with an automated margin workflow for non-cleared derivatives, allowing buy-side clients to better handle their collateral management processes.
Fintech works to elevate minority leaders as users diversify
Keith Lewis – Roll Call
Data is beginning to show that communities historically cut off from banking and investing are using financial technology to increase access. Now, industry leaders are calling for more diverse perspectives in top leadership roles to help drive that progress. Companies say they’re working on ways to make it happen. Change Machine, a New York-based nonprofit that helps social services professionals recommend fintech products to their underbanked clients, committed this year to a target that 40 percent of its recommendation list will be products developed by minority-led fintechs.
Is Your Fintech A Fraud?
David G.W. Birch – Forbes
Five Red Flags From Inside Wirecard
Wirecard has gone down as one of the biggest corporate frauds in history. The German fintech “unicorn” (I hate this word, because Wirecard was actually real, while unicorns are not merely rare, they are mythical) that was once worth nearly $30 billion went bust after a $2 billion hole in its accounts that had been missed by the auditors was finally uncovered.
Bitcoin’s Gunning for a Record and No One’s Talking About It
Vildana Hajric and Claire Ballentine – Bloomberg
Largest cryptocurrency is approaching highs set in late 2017; Digital asset mania dominated holiday discussions not long ago
Three years ago, Bitcoin’s historic surge dominated Thanksgiving dinner conversations. This year, the cryptocurrency is in the midst of another notable rally and yet almost no one’s talking about it.
Decentralized exchange Uniswap’s liquidity mining rewards program ends
Michael McSweeney – The Block
The liquidity mining reward program for decentralized exchange Uniswap has come to an end. Uniswap had originally said in September — when its UNI token first launched — that its liquidity program would last through November 17 at 12am UTC. A full breakdown of the token’s elements can be found here. “After 30 days, governance will reach its vesting cliff and Uniswap governance will control all UNI vested to the Uniswap treasury,” the blog post explained at the time. “At this point, governance can vote to allocate UNI towards grants, strategic partnerships, governance initiatives, additional liquidity mining pools, and other programs.”
Coinbase Goes Down as Bitcoin Nears $17K
Kevin Reynolds – Coinbase
The website and mobile app of U.S. cryptocurrency exchange Coinbase are down as bitcoin is nearing $17,000, within striking distance of its all-time high of $19,665 set in 2017. According to a company update, a fix has been implemented and the company is “investigating this issue.” Coinbase has suffered a number of outages during busy trading periods this year including most recently on Oct. 27. The outage comes at a time when bitcoin has been fast approaching new highs not seen since Jan 7, 2018. At press time, bitcoin was at $16,834, up 6.27% over the last 24 hours.
Twitter Hires Noted Hacker as Head of Security Months After Bitcoin Scam
Sebastian Sinclair – Coindesk
Twitter has hired a new head of security four months after suffering one of the worst breaches in its 14-year history. As reported by Reuters on Monday, Peiter Zatko, a prominent white-hat hacker going by the handle “Mudge,” said he will take charge of security, site integrity and engineering on behalf of the social media giant. “Looks like the cat is out of the bag,” said Zatko in a tweet on Monday. “I’m very excited to be joining the executive team at Twitter! I truly believe in the mission of (equitably) serving the public conversation.”
IBM Scores Patent on Proposed Blockchain Consensus for Transactions in Multiplayer Games
Jaspreet Kalra – Coindesk
Tech giant IBM has been granted a patent on a blockchain-based consensus model envisioned for use in handling transactions within multiplayer games with a large user base. The U.S. patent, titled “Gaming consensus protocol for blockchain,” was awarded last week and proposes the model of electing a subset of any game’s users to verify transactions, and then from within that subset choosing a leader to generate a block and broadcast it to the blockchain network.
Scaramucci’s SkyBridge Capital opens door to investing in firms with bitcoin exposure
Michael McSweeney – The Block
A pair of filings for SkyBridge Capital — the investment firm founded by Anthony Scaramucci — indicates that the company is eyeing investments that give it some exposure to digital assets. SkyBridge Capital is a so-called fund of funds, meaning it invests in other funds. As the filings note: “The Company may seek exposure to digital assets (as defined herein) by investing in Investment Funds that provide exposure to digital assets. Investments by the Company and/or Investment Funds may also be made in companies providing technologies related to digital assets or other emerging technologies.”
Galaxy Digital Gets Initial Approval for New Bitcoin Fund in Canada
Daniel Palmer – Coindesk
Galaxy Digital, the digital asset manager founded by Mike Novogratz, is to launch a bitcoin fund in Canada. Announced on Monday in a press release, the CI Galaxy Bitcoin (BTC, +4.17%) Fund is a collaboration with CI Global Asset Management and has had a preliminary prospectus approved by securities regulators for an initial public offering, the firms said. A closed-end investment fund, it will invest directly in bitcoin and will be priced using the Bloomberg Galaxy Bitcoin Index.
The SEC says it has brought 56 court cases on crypto since 2017’s DAO report
Michael McSweeney – The Block
The U.S. Securities and Exchange Commission (SEC) has brought 56 court cases related to cryptocurrencies and ICOs since 2017, according to a new statement. A list of “Select SEC Accomplishments” covering May 2017 to the present time includes a short section on crypto-related issues, highlighting the founding of the SEC Cyber Unit, which is focused on digital issues.
Crypto Execs Need Liability Insurance
Matthew Burgoyne – Coindesk
When it comes to regulation and necessities like banking, crypto entrepreneurs haven’t always had the easiest time. Recently, I’ve discovered some of my crypto clients are having trouble obtaining an important business planning tool: directors and officers (D&O) liability insurance. In my opinion, as I’ll explain, a combination of COVID-19 “event-driven” litigation, crypto regulatory uncertainty and a misunderstanding of crypto on the part of some in the insurance industry, is making it difficult for crypto entrepreneurs to secure an important service.
Bitcoin Tops $17,000 for First Time in Almost Three Years
Vildana Hajric and Elena Popina – Bloomberg
Wider Wall Street acceptance catapults coin up 135% this year; Investors now have their eyes on $20,000 level: Oanda’s Moya
Bitcoin reached $17,000 for the first time since just after the burst of the cryptocurrency bubble almost three years ago. The largest digital coin, which has more than doubled this year, rose as much as 2.4% to $17,099 on Tuesday in New York trading. From an all-time high in December 2017 of nearly $20,000, Bitcoin tumbled to as low as $3,136 within a year.
Fear is the new normal for Hong Kong democrats; Critics of government crackdown wonder whether to stay or leave
Nicolle Liu – FT
The last time I saw many of my social media friends online was June 30, the day Beijing passed a national security law for Hong Kong. My friend list was shortened and some reappeared with names that I did not recognise. Many removed their accounts out of fear that they might be pursued for even the smallest slight against the government.
Biden Says Delayed Transition Could Affect Coronavirus Response; President-elect says if incoming administration has to wait until Jan. 20 to start planning for vaccine distribution, ‘it puts us behind’
Ken Thomas and Sabrina Siddiqui – WSJ
President-elect Joe Biden warned Monday that delays to his presidential transition could hinder the federal government response to the coronavirus pandemic as he sought to coordinate with business and labor leaders ahead of his new administration.
Biden’s IRS could finally give Trump’s tax returns to Democrats;Democrats intent on springing the long-sought documents aren’t likely to give up.
Brian Faler – Politico
President Donald Trump’s defeat will make it a lot easier for Democrats to finally get his tax returns, and some prominent lawmakers plan to keep the heat on the incoming Biden administration and House leaders to deliver.
SEC chair Jay Clayton to step down by end of year; Veteran Wall Street lawyer has overseen deregulatory push at agency under Trump
Kadhim Shubber – FT
Jay Clayton, the chairman of the Securities and Exchange Commission, said on Monday he would depart the US securities regulator at the end of the year.
Former BitConnect promoter John Bigatton charged; Former BitConnect Australian national promoter, John Louis Anthony Bigatton, of Carss Park, New South Wales, has been charged following an ASIC investigation.
Mr Bigatton promoted the online cryptocurrency platform, BitConnect, before its collapse in early 2018. It is estimated that BitConnect had a market capitalisation of over US$2.5 billion in December 2017.
Sydney financial adviser pleads guilty to misappropriating $2.9 million
On 17 November 2020, Mr Ross Andrew Hopkins of Seaforth, NSW, appeared at the Downing Centre Local Court, where he pleaded guilty to 15 offences under the Corporations Act and was committed to the Sydney District Court for sentence.
ASIC consults on promoting access to affordable advice for consumers
ASIC has today issued Consultation Paper 332 Promoting access to affordable advice for consumers (CP 332). CP 332 seeks input from industry participants and relevant stakeholders to help ASIC understand: the issues and impediments relating to the supply of good quality affordable personal advice; and the practical steps that can be taken by ASIC and industry to improve consumer access to good quality affordable advice.
Statement from Robert W. Cook, FINRA President and CEO Regarding SEC Chairman Jay Clayton
Throughout his tenure as Chairman of the SEC, Jay Clayton has been a strong advocate for investors and for fairness and integrity in our securities markets, and we have valued his partnership and support in overseeing the securities industry. Chairman Clayton has put forward an array of initiatives that promote the interests of retail investors, strengthen the effective regulation of securities markets and firms, enhance opportunities for companies and investors in the capital-raising process and expand the inclusiveness of the SEC and the industry it oversees. We congratulate him on his outstanding leadership of the SEC, and wish him well in his future endeavors.
Proposed Rule Change to Address Firms with a Significant History of Misconduct
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to: (1) adopt FINRA Rule 4111 (Restricted Firm Obligations) to require member firms that are identified as “Restricted Firms” to maintain a deposit in a segregated account from which withdrawals would be restricted, adhere to specified conditions or restrictions, or comply with a combination of such obligations; and (2) adopt a new FINRA Rule 9561 (Procedures for Regulating Activities Under Rule 4111), and amend FINRA Rule 9559 (Hearing Procedures for Expedited Proceedings Under the Rule 9550 Series), to create a new expedited proceeding to implement proposed Rule 4111. In addition, FINRA proposes to adopt Capital Acquisition Broker (“CAB”) Rule 412 (Restricted Firm Obligations), to clarify that member firms that have elected to be treated as CABs would be subject to proposed FINRA Rule 4111, and to amend Funding Portal Rule 900(a) (Application of FINRA Rule 9000 Series (Code of Procedure) to Funding Portals), to clarify that funding portals would not be subject to proposed FINRA Rule 9561.
Statement of Chairman Heath P. Tarbert on SEC Chairman Jay Clayton
Commodity Futures Trading Commission Chairman Heath P. Tarbert released the following statement regarding SEC Chairman Jay Clayton’s announcement of his future plans:
CFTC Grants iSwap Euro B.V. Registration as a Swap Execution Facility
The Commodity Futures Trading Commission today announced it has issued an Order of Registration to iSwap Euro B.V. granting it registration as a swap execution facility (SEF). iSwap is a private, limited liability company based in the Netherlands.
FCA confirms support for mortgage borrowers impacted by coronavirus
On 2 November, the Financial Conduct Authority (FCA) announced proposals to enhance support for borrowers affected by coronavirus (Covid-19).
IRS to Resume House Visits to Suspected Tax Cheats Post-Pandemic
Laura Davison – Bloomberg
Tax agents will contact non-filers who earn at least $100,000; Agency is increasing new investigations after years of decline
Internal Revenue Service agents will resume knocking on doors of suspected high-income tax avoiders after the coronavirus pandemic passes, two agency officials said Monday.
Investing and Trading
Fear of Biden Chill Adds to Motives for Eurobond Flurry
Farah Elbahrawy and Adrian Krajewski – Bloomberg
Some nations quick to sell before Biden ‘stress’: Dergachev; EM countries and companies tap markets after risk-on rally
There’s a pattern emerging in the latest Eurobond sales from the world’s developing economies — they’re mostly from countries that may not fare so well when Joe Biden enters the White House. In the past week, Russia, China, Hungary and several companies from the Middle East have tapped international capital markets, ostensibly to lock in borrowing costs before yields and price swings increase next year. The average yield on emerging-market dollar bonds fell to a record low this week, according to Bloomberg Barclays indexes.
Jadestone Energy vows to be ‘last man standing’ in oil and gas production; Independent producer sees opportunity to expand as majors pivot to renewables
David Sheppard – FT
Jadestone Energy might pump just a fraction of the oil and gas of the energy majors, but its chief executive believes the Asia-Pacific focused producer will outlast bigger rivals when it comes to making money from hydrocarbons.
Elon Musk’s Wealth Soars $12 Billion on Tesla Index Addition
Sophie Alexander – Bloomberg
Musk’s fortune has surged more than anyone else’s this year; The Tesla founder’s net worth has risen to about $114 billion
It’s been an eventful few days for Elon Musk. The billionaire tested positive for Covid-19, his rocket company launched four astronauts into space, and on Monday his electric carmaker Tesla Inc. was named for inclusion in the S&P 500 Index.
BP files notices of possible worker layoffs in Chicago area
BP Plc BP.L notified officials in Chicago and the state of Illinois of possible layoffs affecting more than 250 salaried employees at the company’s offices, BP said in a statement.
Fund Managers Are Incubating a Future Bond Market Crash; Asset managers need their regulators to help them resolve a liquidity mismatch.
Mark Gilbert – Bloomberg
As the pandemic started to shake the global economy in March, liquidity rapidly dried up in the world’s fixed-income markets. Regulators have identified fund managers as the key protagonists in the petrification. To limit the repercussions of similar future dislocations, they should focus on the practice of allowing clients to withdraw their money on a daily basis as ripe for a fix.
Environmental, Social and Corporate Governance
Putin Told to Clean Up on Climate or Risk Losing Investors
Natasha Doff and Aine Quinn – Bloomberg
Veteran manager with Russia-focused funds appeals to leader; Swedbank aims to align portfolio with goals of Paris Agreement
Backed into a catch-22 situation on green investing, veteran emerging-market money manager Elena Loven made a public plea to the one man who could help: Vladimir Putin.
UK prepares to make ‘big bet’ on hydrogen power; Boris Johnson set to lay out plans for a ‘green industrial revolution’ to tackle climate change
Nathalie Thomas – FT
On a secluded RAF base five miles north of Hadrian’s wall in Cumbria, three ordinary looking brick terrace houses are at the centre of an experiment that could radically slash emissions from one of the dirtiest parts of the UK economy.
The U.K.’s Experiment With Climate Reporting Is Worth Watching; The country’s companies and money managers face new environmental-reporting requirements that could bring write-downs but also much-needed clarity on complex risks
Rochelle Toplensky – WSJ
The U.K. is making its big corporate and financial sectors think more rigorously about climate change. There could be write-downs, but also reassurance for investors that problems aren’t building up out of sight.
ESG Investing Takes Off, But Classification Confusion Remains
Simon Moore – Forbes
Investors increasingly want the money they invest to reflect their values. Hence ESG (Environmental, Social and Governance) focused investing has taken-off in recent years. For example, this means that rather than simply tracking the S&P 500 with your money, you own a fund that owns the companies within the S&P 500 that have a more positive ESG impact. However, as academics dig into the criteria, they find that the ESG provider chosen can lead to very different investment choices.
Most Funds Ignore Racial Diversity in Staff, Study Says
Suzy Waite – Reuters
Some 56% of firms surveyed said they do not assess race; By contrast over three-quarters measure gender of their teams
The majority of fund managers around the world are not measuring racial diversity within their staff, risking capital flows from socially-focused investors, research by pension consultancy Redington showed. Some 56% of firms surveyed said they do not collect data on race among their employees, according to a poll of more than 100 asset managers with $1 trillion in total assets. Of the managers that do, 52% have no Black investment team members, the survey said.
Billionaire Chris Rokos Sues Two Firms for $72 Million Over Tax Advice
Tony Aarons – Bloomberg
Rokos sues Deloitte, McDermott, Will & Emery over 2009 deal; Hedge fund founder hoped to save 39.4 million pounds in taxes
Billionaire Chris Rokos, who runs the hedge fund that bears his name, sued Deloitte and a U.S. law firm after 39.4 million pounds ($52 million) in tax relief was thrown out by U.K. authorities.
Three ways the banks will be winners from Covid recovery; Business cycle and interest rates look to be lining up to lift the sector’s fortunes
Robert Armstrong – FT
Banks are regarded with a certain awe for both their role as gatekeepers of the economy and the bonuses bankers pull in at year-end. But there is an irony here: more than any other industry, banks and bankers are hostages to fortune. Their profits are bound to the business cycle and interest rates.
Goldman’s Top Deal Maker Is Leaving to Run Michael Dell’s Investment Firm; Gregg Lemkau will be CEO of MSD Partners, which manages about $15 billion including some of Mr. Dell’s fortune
Liz Hoffman – WSJ
Gregg Lemkau, one of Goldman Sachs Group Inc.’s GS 1.51% top deal makers, is leaving to run the investment firm started by technology tycoon Michael Dell. The move, first reported by The Wall Street Journal, turned heads inside the firm and across the industry. Mr. Lemkau ran one of Goldman’s most profitable divisions after a long career putting together technology, media and health-care mergers, and was seen as a potential contender to be chief executive of the firm.
Taiwan, Hong Kong Activists Alarmed Over China Watch List
Authorities compiling names of ‘separatists,’ newspapers say; Beijing could pursue overseas using variety of laws: reports
Taiwanese and Hong Kong activists expressed alarm over reports that China was compiling a global watch list of those who have voiced views deemed separatist, a move that would mark a major escalation in Beijing’s pursuit of its critics.
China Gives Long Explanation for Pummeling Australia on Trade
Says Australia made ‘mistakes’ on Hong Kong, Xinjiang, Taiwan; China says some in Australia adhere to a ‘Cold War mentality’
China gave one of its most detailed explanations yet for souring ties with Australia, calling on the nation to stop trying to impose its will on others. “Looking back on China-Australia relations in the past few years, we see some people in Australia adhere to a Cold War mentality and harbor ideological prejudice, regard China’s development as a threat, and have then made a series of wrong moves related to China,” Chinese Foreign Ministry spokesman Zhao Lijian told reporters at a daily briefing in Beijing on Tuesday. “This is the root cause for China-Australia relations worsening to the current difficult situation.”
Bankers in Denmark See Surge in Threats From Angry Clients
Frances Schwartzkopff – Bloomberg
The financial employees union in Denmark says there’s been a worrying increase in the level of harassment experienced by its members. According to the union, staff at Danish banks have reported a significant rise in verbal abuse. The harassment has in some cases taken the form of outright threats, said Michael Budolfsen, vice president of the Financial Services union.
China SOEs nervousness derails $2.4bn in planned bond sales; World’s second-largest bond market rattled by string of high-profile defaults by state-owned groups
Sun Yu and Tom Mitchell – FT
At least 20 Chinese companies have suspended planned bond sales worth Rmb15.5bn ($2.4bn) over the past week, as the high-profile defaults of three state-owned enterprises and questions about the solvency of a fourth unnerved investors in the world’s second-largest bond market.
Major Chinese Chip Company Defaults on Debt; Ratings firm downgrades Tsinghua Unigroup after failure to repay maturing bond
Xie Yu – WSJ
Tsinghua Unigroup Co., a key player in China’s push for self-reliance in semiconductors, has defaulted on a bond, adding to a recent spate of trouble in the country’s corporate debt markets. China Chengxin Credit Rating Group said late Monday that Unigroup was in default on the privately placed domestic bond, worth 1.3 billion yuan, equivalent to $197 million. The ratings company said Unigroup had failed to reach agreement with creditors to extend the repayment deadline.
SFC Hong Kong Signs Fintech Cooperation Agreement with ISA
Bilal Jafar – Finance Magnates
The Securities and Futures Commission of Hong Kong (SFC), announced today that the regulatory authority has signed an agreement with the Israeli Securities Authority (ISA) to cooperate on financial technology solutions. According to the official press release, the new agreement will enable SFC and ISA to share knowledge regarding the innovative fintech market. The release added that both regulatory authorities will refer fintech firms interested to enter one another’s markets. The new deal provides an opportunity for innovative financial technology companies from both sides to establish joint-ventures. The signed agreement is available on the website of SFC from today.
China Wants a Made-in-China Copper Price; The country’s latest international futures contract has timing and structure on its side.
Clara Ferreira Marques – Bloomberg
China’s next move to open up its commodities markets may be a step change. As of Thursday, overseas investors will be able to trade copper futures on the Shanghai International Energy Exchange. It’s not the first such product: A yuan-denominated crude oil contract, launched in March 2018, has been modestly successful. A subsequent push to let foreigners trade iron ore in Dalian established a global benchmark. Copper could outshine these efforts, thanks to fortuitous timing, global appetite for an economic bellwether and the sheer clout of the world’s largest consumer.
Brexit Negotiators Zero In on a Deal as Soon as Next Week
Ian Wishart – Bloomberg
U.K. and EU make progress on longstanding sticking points; But officials warn that talks could break down before then
The U.K. and European Union could strike a deal on their future trading and security relationship early next week as the two sides edge closer to agreement on the biggest sticking points.
EU vote on Brexit deal could be delayed until 28 December
Daniel Boffey – The Guardian
A European parliament vote to seal a Brexit trade deal could be delayed until 28 December, three days before the end of the transition period, under an emergency EU plan.
With less than seven weeks to go before the UK leaves the single market and customs union, the negotiations remain troubled, with the talks on fishing rights in UK waters not progressing significantly since the summer.
With Brexit Talks in Final Stretch, Boris Johnson Has Reasons to Deal
Pierre Briançon – Barron’s
Under the deluge of organized leaks, martial statements and solemn promises to hold firm on big principles, it is still hard to clearly see whether the European Union-U.K. trade talks, after eight months of public drama, will conclude within a few days with a deal or a divorce. Both parties’ interest would be to find an agreement.
Brexit Deal Landing Zones Becoming Clear, Irish PM Says
Peter Flanagan – Bloomberg
The contours of a Brexit deal between the U.K. and European Union are clear to both sides, Ireland’s prime minister said, as the two sides struggle to reach a trade agreement.
Negotiating teams understand “the landing zones” around an accord, Micheal Martin said at the Bloomberg New Economy Forum, warning it’s not yet fully clear if his U.K. counterpart, Boris Johnson, truly wants an accord.