Wall Street Fines Peaked in 2020, Driven by Sums From Big Cases; Ant Group IPO Postponed by Shanghai Stock Exchange

Nov 3, 2020

First Read

$13,791/$300,000 (4.6%)
Tony Drake and Peter Mulmat

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Hits & Takes
JLN Staff

The U.S. Presidential election is today, along with the election of senators and representatives. If you are registered to vote, and have not voted, please be careful and safe and go out and vote. Democracy works best when everyone who is eligible can vote.

It was 100 years ago at the 1920 election that women first had the right to vote in the Presidential election. The number of voters went from 18.5 to 26.8 million votes. Over 100 million people have already voted in this election. Let’s make it a record turnout.

The Chicago Tribune is reporting that my home state of Illinois has set a new record for coronavirus cases three days in a row. So we have that going for us.

A Bloomberg story says working from home makes us less creative. There is a loss of collaboration from not being able to share a conversation at the coffee station, but creativity can happen anywhere. Some of my best creativity happens while I am sleeping, or better put, trying to sleep.

FCLT Global has a podcast with Nasdaq’s Adena Friedman, “Going Long Podcast: Adena Friedman.”

We had two new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. One was from Peter Mulmat, the chief commercial officer of the start-up Small Exchange. The other was from Cargill Investor Services and CME Group alum Tony Drake, who is now with Phillip Capital. Thank you to Peter and Tony, to all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe Campaign.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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Correction: In our most recent Week in Review email, the link to the Staff Pick, “Peter Wind Remembrances” was incorrect. The correct link is HERE.~SR

CME Group reported its October 2020 market statistics today, including average daily volume (ADV) of 15.4 million contracts during the month. Highlights include: Equity Index ADV of 5.4 million contracts; Interest Rate ADV of 5.2 million contracts; Options ADV of 2.5 million contracts; Energy ADV of 2 million contracts; Agricultural ADV of 1.6 million contracts; Foreign Exchange ADV of 704,000 contracts; Metals ADV of 529,000 contracts. See the press release under Exchanges.~SR

The election today is, perhaps unsurprisingly, boosting the cryptocurrency betting markets; the trading volume for the decentralized betting platform Polymarket went from zero to over $3 million in just a few weeks. As of yesterday, a bet called, “Will Trump win the 2020 U.S. presidential election?” had about $2.8 million of bets placed on it – at time of writing, it has over $3.3 million. “No” appears to be the most popular bet. Each bet costs a dollar to make. Another platform called YieldWars opened a similar bet last night – it reportedly has about $50,000 worth of bets at time of writing.~MR

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The Money Says Prepare for a Long Night, and Week; Market-based models suggest the U.S. election is far tighter than polls would indicate.
John Authers – Bloomberg
This is a blissful moment; I am about to write my last ever piece about the U.S. elections of 2020 without the benefit of hindsight. More or less everything seems inevitable once it’s happened. From here, nothing looks inevitable. Any number of strange phenomena may turn out to be important, or may soon be forgotten. So, while the U.S. elections remain like a Whodunnit novel that is missing its last page, let me try to review what is going to happen Tuesday and the rest of the week.
/jlne.ws/3mKFzGb

******Comfort food is a good thing for times like this. We are having Lou Malnati’s pizza tonight.~JJL

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Indians crack coconuts and pray for Kamala Harris in US election; Apprehension is mounting in Chennai, the hometown of the vice-presidential candidate’s mother
Stephanie Findlay and Sreshtha Tiwari – FT
If prayers could win a US election, Indians would give Kamala Harris the edge. To secure victory for Joe Biden, the Democratic presidential nominee and his running mate Ms Harris, the daughter of an Indian mother with roots in the southern state of Tamil Nadu, locals are taking no chances when it comes to the gods.
/jlne.ws/3kX5R7I

******Coconuts are not on my list of comfort foods.~JJL

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How to Dress for the Apocalypse; The characters in end-of-days films like “Children of Men,” “The Road” and “Snowpiercer” dress quite a lot like we do now. That should really make us worry
Jacob Gallagher – WSJ
Most apocalyptic movies play out like this: First humanity falls, then the sweaters get torn. OK, maybe it’s not quite that simple. But in nearly every catastrophic film of the past few decades—from 1997’s corny clunker “The Postman” to 1999’s hallowed chronicle “The Matrix,” to the sorta-schmaltzy, sorta-stirring “Hunger Games” trilogy (2012-2015)—hole-ridden, wholly beaten-up sweaters have served as the foundation for the character’s costumes.
/jlne.ws/3kZT5W4

*****I am not sure why the Wall Street Journal decided to publish this story on the day of the U.S. Presidential election, but I am guessing they had their reasons.~JJL

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Reuters equipping journalists with gas masks, flak jackets for elex coverage
Louis Casiano – Fox News
Reporters for Reuters covering the elections in the U.S. will have protective gear in anticipation of protests after several incidents in which journalists were targeted during summer demonstrations.
/jlne.ws/328IXCC

*****Perhaps the story just above this one is related somehow to this story. This is not something I ever thought I would see in this country. ~JB

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Monday’s Top Three
It’s election day and fittingly our top story Monday was Nate Silver’s I’m Here To Remind You That Trump Can Still Win, at FiveThirtyEight. Second was CNN’s What we can learn from 1918’s deadly second wave. Let’s hope we can learn something. Third was John Lothian’s The Mega-Macro Event That Upsets Everything Everywhere, from JLN.

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Lead Stories

Wall Street Fines Peaked in 2020, Driven by Sums From Big Cases; Case against Telegram Group brought in more than a quarter of total $4.6 billion
Dave Michaels – WSJ
Fines for wrongdoing on Wall Street and other securities-related cases hit a record $4.6 billion this year, despite a pandemic that shuttered courts for months and sent government enforcers home to do their jobs. The feat was driven by the results of a few large cases, including $1.2 billion that a mobile-messaging company, Telegram Group Inc., agreed this year to repay investors to resolve a regulatory lawsuit over its sale of a cryptocurrency. Telegram neither admitted nor denied the claims.
/jlne.ws/3kX9M4q

Ant Group IPO Postponed by Shanghai Stock Exchange
Jing Yang – WSJ
The Shanghai Stock Exchange postponed Ant Group Co.’s blockbuster initial public offering, a day after a quartet of regulatory agencies summoned Jack Ma, the company’s controlling shareholder, and top executives to a closed-door meeting. The meeting with regulators and changing regulatory environment have disqualified Ant from listing this Thursday, the bourse said in a statement on Tuesday. The recent developments are material events that haven’t been properly disclosed to investors, the exchange said.
/jlne.ws/3mPgCte

Chinese Regulators Summon Ant Leaders Ahead of Gigantic IPO; Financial technology giant pledges to embrace regulation and promote economic development and stability in China
Jing Yang – WSJ
China’s central bank and its securities, banking and foreign-exchange regulators met with billionaire Jack Ma and the top two executives of Ant Group Co. on Monday, just days before the financial technology giant’s stock is set to begin trading publicly.
/jlne.ws/2TORtSR

Ken Griffin’s Macro ‘Dream’ Propels Net Worth to $20 Billion
Tom Maloney – Bloomberg
Billionaire investor’s flagship fund has surged since March; His stake in market-making firm jumped to $11.2 billion
Ken Griffin was facing a calamity. As Covid-19 roiled the economy in March, equities tanked and bond markets went haywire. Hedge funds run by Griffin’s Citadel were taking losses as the computer models that guide some of their decisions struggled to comprehend the pandemic.
/jlne.ws/3mL1n4o

China to Halt Key Australian Imports in Sweeping Retaliation
Bloomberg News
Goods including barley, sugar, wine will be barred from Nov. 6; The notice was delivered verbally to importers, people said
China has ordered traders to stop purchasing at least seven categories of Australian commodities, ratcheting up tensions with a key trading partner in its most sweeping retaliation yet. Commodities traders in China won’t be able to import products including coal, barley, copper ore and concentrate, sugar, timber, wine and lobster, according to people familiar with the situation. The government has ordered the halt to begin on Friday, one of the people said, asking not to be identified as the information is sensitive.
/jlne.ws/32713VI

The Global Hub for Trading Natural Gas Moves to the Netherlands
Bloomberg News
Dutch contracts are seen as a global benchmark for gas pricing; U.S. and Asia markets have recently followed TTF moves
The Dutch natural gas market is reinforcing its position as one of the most important trading hubs in the world. Trade on the Dutch Title Transfer Facility, as the market is known, is surging as Europe increased imports from Russia, Norway and further afield via liquefied natural gas tankers. Natural gas futures open interest, a tally of outstanding contracts on the Intercontinental Exchange Inc., are at an all-time high in data going back to 2005.
/jlne.ws/3kVudOT

Hong Kong’s Financial System Has Never Faced a Test Like Ant
John Cheng – Bloomberg
High demand for Ant forced repeated HKMA currency intervention; City’s small capital system makes it vulnerable to large flows
Hong Kong’s newfound position as the market of choice for huge Chinese stock sales is being put to the test by Ant Group Co. While Beijing encourages Chinese firms to reduce their reliance on Wall Street, Hong Kong’s $5.9 trillion stock market is becoming the main beneficiary. But it’s not without cost.
/jlne.ws/34QgHXq

SEC Extends Effort to Help Private Companies Raise Capital; A new rule increases exemptions to federal securities laws on disclosure of financial information
Paul Kiernan – WSJ
The Securities and Exchange Commission adopted a rule Monday to help companies raise capital without going public, the latest in a series of measures likely to further bolster private markets.
/jlne.ws/32bm0yZ

Covid Patients Show Key Immunity Gauge After Six Months in Study
Marthe Fourcade – Bloomberg
All 100 people in study had T-cell responses after half a year; Findings may damp concern about whether vaccines will work
A crucial type of defensive blood cell persists for at least six months in people after Covid-19, even in those who had no symptoms, in a new study that may ease concern about waning immunity and its implications for a vaccine. The research on 100 people shows that all had T-cell responses against a range of the coronavirus’s proteins, including the spike protein used as a marker in many vaccine studies, after half a year. Those who experienced symptoms had levels that were at least 50% higher than those who didn’t.
/jlne.ws/34UIRAG

Treasury Department Warns Art Market Against Sanctions Risks; OFAC encourages art sellers and others to implement a sanctions compliance program
Mengqi Sun – WSJ
The Treasury Department is concerned that vulnerabilities in the art market could be exploited by malign actors to evade U.S. sanctions, and is urging galleries, museums and other participants in the market to implement compliance programs to mitigate such risks
/jlne.ws/364112h

Steel Industry Cries for Help Beyond Trump Tariff ‘Band-Aid’
Joe Deaux – Bloomberg
U.S. needs to work with allies, industry association says; Infrastructure spending, aid to laid-off workers among ideas
Donald Trump claims his tariffs saved U.S. steel companies. But with production still slumping and jobs near an all-time low, the iconic U.S. industry is seeking a long-term solution. The 25% tariffs Trump introduced in March 2018 gave a brief jolt to American steel producers. U.S. Steel’s annual profit more than doubled that year and the domestic steel price hit the highest in a decade. Jobs rose as much as 9% from the all-time low in April 2017, the month Trump launched a national security investigation into steel imports.
/jlne.ws/3kWXSHu

Traders prepare for storm of election-fuelled tumult in China’s currency; Investors step up hedging activity to protect against sharp price swings
Hudson Lockett and Eva Szalay – FT
Investors are bracing themselves for sharp swings in China’s renminbi in the immediate wake of the US election, with a measure of hedging activity soaring to its highest level on record.
/jlne.ws/3kOJgtP

Zoom Gets Drawn Into Debate About Policing Content: ‘A Big Thankless Job’; Videoconferencing app is looking at its handling of politically sensitive public events after recent criticisms
Aaron Tilley – WSJ
Zoom Video Communications Inc.’s ZM -1.72% rise as a lifeline for many businesses and individuals during the pandemic is drawing the company into a fraught area that has caused problems at much larger tech firms: policing its service.
/jlne.ws/326UMcC

China’s Risky Bet on a Lonely Return to Greatness; Its economy and exports have surged back, but this early success conceals worrying structural shifts in the global political environment
Nathaniel Taplin – WSJ
China is opening to the world again, but the world’s hearts and minds are closing to China. Sino-U.S. “decoupling” will be costly for the U.S., requiring expensive investments and imaginative reforms to offset. The same is true for China—only more so. If other advanced economies also pull away, China’s prospects will darken sharply.
/jlne.ws/362uObh

Global markets under Trump: Build the Wall (Street)!… and China
Marc Jones – Reuters
Donald Trump’s campaign slogan in 2016 could have been ‘build the Wall Street’, but a scan across global markets throws up plenty of surprises, especially in the emerging economies that have been in Trump’s cross-hairs.
/jlne.ws/2HQPJ9v

U.S. Fires Up ‘All Government’ War on Cyber Election Threats
Kartikay Mehrotra – Bloomberg
Experts hoping to prevent cyber-attacks that disrupt vote; Nation-states, criminal hackers probing voting networks
Haunted by Russia’s brazen effort to meddle in the last election, federal and state officials have erected what they believe are formidable barriers to thwart cyber-attacks ahead of Tuesday’s presidential vote.
/jlne.ws/363ereP

Coronavirus

Covid Deaths in England and Wales Climb 46% in a Week
David Goodman – Bloomberg
The number of deaths linked to Covid-19 in England and Wales rose 46% to a four-month high in the week ending Oct. 23, showing the acceleration of the disease before the government’s decision to impose a partial lockdown.
/jlne.ws/2GmU4Aj

Sweden’s Health-Care Workers Get $620 Bonus for Covid-19 Work
Love Liman and Niclas Rolander – Bloomberg
Health-care workers on the frontline of Sweden’s coronavirus crisis will this year get a $620 one-off payment for their efforts in fighting the pandemic. The bonus forms part of a four-year agreement struck by employers and the labor union Kommunal. The deal, which also entails annual pay rises of 2% this year and next, covers about 400,000 employees in health care and education, including assistant nurses, care assistants and childminders.
/jlne.ws/2HZyVNe

Emerging markets face lasting financial setback from coronavirus crisis; Governments’ ability to fund debts through growth faces deep uncertainty
Jonathan Wheatley – FT
Like the coronavirus crisis itself, the response of the world’s governments has been on a scale never seen before. The IMF estimates that fiscal spending and tax cuts worldwide add up to more than $11.7tn so far, on top of a monetary policy response in which trillions of dollars have been pumped into the global financial system by the US Federal Reserve and other central banks.
/jlne.ws/3kVab78

As Coronavirus Surges in U.S. and Europe, Other Countries See One Case as Too Many; In Asia-Pacific’s zero-tolerance spots, Covid-19 is treated as a dangerous but beatable enemy that needs to be aggressively suppressed
Niharika Mandhana and Rachel Pannett – WSJ
As the coronavirus surges in the U.S. and Europe, some parts of the world are sticking to a different path: zero cases, or near that. These places are easy to spot.
/jlne.ws/2Gp0Khx

Birx Warns White House of New ‘Deadly Phase’ of Pandemic; Dr. Deborah Birx, the White House coronavirus coordinator, bluntly urged officials in a private memo to pursue a more aggressive approach, directly contradicting President Trump.
The New York Times
Dr. Deborah L. Birx, who has carefully straddled the line between science and politics as she helps lead the Trump administration’s coronavirus response, delivered a stark private warning on Monday, telling White House officials that the pandemic is entering a new and “deadly phase” that demands a more aggressive approach.
/jlne.ws/3kVA86z

Investors Should Keep Vaccine Hopes in Check; Late-stage vaccine data from Pfizer is coming soon, but Wall Street shouldn’t bank on a conclusive result
Charley Grant – WSJ
Some answers are coming soon on whether the Covid-19 vaccines in development are safe and effective. Investors shouldn’t be too hopeful for an entirely conclusive answer just yet, however. Pfizer Chief Executive Albert Bourla said last week the company has nearly completed enrollment for its late-stage Covid vaccine trial. Once there are 32 confirmed cases in the trial, an independent data monitoring committee will conduct an interim data analysis, the first of four scheduled during the trial.
/jlne.ws/2TNmBC6

U.S. Cases Tick Upward
Adam Martin – WSJ
Newly reported Covid-19 cases in the U.S. edged upward a day before Election Day, following a week in which the country logged its highest daily tally to date. The more than 84,000 cases reported on Monday, according to data compiled by Johns Hopkins University, represent an increase from 73,594 on Sunday, following Friday’s all-time high of 99,321.

Can Vitamin D Help Fight Covid-19? Studies under way around the world are examining whether the ‘sunshine vitamin’ can help prevent or treat the new coronavirus
Stephen Fidler – WSJ
Researchers around the globe are investigating whether vitamin D, known as the sunshine vitamin, can help reduce people’s risk of catching the new coronavirus and even aid in treating patients with Covid-19.
/jlne.ws/2HQPlrz

Europe Considers Testing Everyone for Covid-19—’You Have Nothing to Lose’; Slovakia’s test of its entire population has fueled a debate over whether testing should be far more sweeping
Drew Hinshaw – WSJ
European governments beset by an autumn wave of Covid-19 are turning to mass testing, in some cases screening swaths of their population at once, in a bid to contain a pandemic that has forced nations into lockdowns they can’t sustain. Starting Friday, the U.K. is asking every resident of Liverpool to get a Covid-19 test, the government said Tuesday. The military will provide logistics, and if the testing proves useful, the government will expand it into other major cities.
/jlne.ws/3892pmS

If This Is the Covid Recovery, Then Steel Yourself; Australia’s central bank is keeping its foot to the pedal, a sign that the economy’s return to growth is still far from robust.
Daniel Moss – Bloomberg
The Reserve Bank of Australia just placed a bet on a long and arduous climb back from the coronavirus pandemic. The rest of the world should take note. Rather than greeting a return to growth by pulling back on easy money or laying the ground for doing so, the central bank is loosening some more. The RBA lowered its benchmark interest rate on Tuesday to 0.1% from 0.25%, and made a cut of the same magnitude to its target for the three-year government bond yield. The bank also launched a six-month $70 billion bond-buying program aimed at debt with maturities of around five to 10 years.
/jlne.ws/3oS1dKh

Ten ways coronavirus crisis will shape world in long term; Much remains uncertain for business, the economy, domestic politics and international relations
Martin Wolf – FT
Covid-19 has had an immediate and massive impact. But how will it affect the longer term? That is far harder to tell. What do we already know, after 10 months of Covid-19? We know that the world was ill-equipped to cope with a pandemic. It has caused about 1.1m deaths worldwide, mostly among the elderly. Moreover, some countries have suppressed the disease far more successfully than others.
/jlne.ws/35XVBWp

Exchanges, OTC and Clearing

CME Group Reports October 2020 Monthly Market Statistics
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today reported October 2020 market statistics, including average daily volume (ADV) of 15.4 million contracts during the month. Market statistics are available in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
/tinyurl.com/CMEOctoberVolumes

OCC October 2020 Total Volume Up 41.1 Percent from a Year Ago
OCC
Chicago – OCC, the world’s largest equity derivatives clearing organization, announced today that October 2020 total cleared contract volume was 636,709,236 contracts, up 41.1 percent from October 2019. This marks the highest October ever and the fourth-highest month on record. Year-to-date average daily cleared contract volume through October was 28,862,569 contracts, up 46.3 percent from October 2019.
/jlne.ws/387hRQj

Eurex Clearing expands incentives to switch OTC swap portfolios into the EU
Eurex
CCP Switch Incentive Program extended until June 2021;100% waiver of booking fees for portfolio transfers; New “voucher” rebate model applicable until June 2022
Eurex Clearing has strengthened its CCP Switch Incentive Program and extended it until June 2021. A complete waiver of booking fees for OTC interest rate swaps (IRS) and overnight index swaps (OIS) applies for banks and institutional investors for portfolios transferred to Eurex Clearing. Additionally, Clearing Members receive on the back of such portfolio transfers a substantial fee rebate voucher on future transactions in OTC interest rate derivatives. By switching a swaps portfolio of 250 billion EUR, a Clearing Member would realize an economic benefit of up to 1.5 million EUR.
/jlne.ws/2TRe5SG

‘1000 Companies to Inspire Britain’ 2020 report recognises the UK’s most dynamic SMEs
London Stock Exchange Group
More than a quarter of businesses in the report come from across North England and Scotland
London Stock Exchange Group is pleased to publish the seventh edition of its ‘1000 Companies to Inspire Britain’ report, which identifies the UK’s most dynamic and fastest-growing small and medium sized enterprises (SMEs)*. The businesses featured in this year’s report highlight the regional and sector diversity of UK SMEs and the innovation shown by these companies.
/jlne.ws/34U6Dg1

November 2020 Stock, ETF, and Corporate Bond Update – Effective November 02, 2020
CME Group
The November 2020 Stock, ETF, and Corporate Bond update can be found at www.cmegroup.com/clearing/financial-and-collateral-management.html or datamine.cmegroup.com.
/jlne.ws/360ogdl

Accrued Funding Data for CME AIR Futures to be added to CME’s Reference Data API – Effective November 23, 2020
CME Group
CME’s new Adjusted Interest Rate (AIR) Future on the S&P 500 Total Return Index provides total return exposure with an overnight floating rate built in. The enhanced contract design provides similar economics to an equity index total return swap with the margin efficiency of listed futures. The value of each AIR Total Return futures contract has three key components – the equity index value, the accrued funding value, and the financing spread adjustment.
/jlne.ws/32atVMW

ICE and ICIS to enhance European gas benchmark offerings
PR Newswire
EPS of $1.03 beats by $0.04 Revenue of $1.41B (5.61% Y/Y) beats by $30.19M
LONDON, Nov. 2, 2020 /PRNewswire/ — ICIS, a global source of Independent Commodity Intelligence Services, and Intercontinental Exchange, Inc. (ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, are offering market participants the ability to trade on ICIS European Gas Benchmarks.
/bit.ly/2TRBKCF

Bursa Malaysia And Shenzhen Stock Exchange Furthers Collaboration On Joint Market Promotion And Information Sharing
Mondovisione
Bursa Malaysia Berhad (“Bursa Malaysia”) together with Shenzhen Stock Exchange (“SZSE”) and Stock Exchange of Thailand, hosted the “ASEAN Capital Market Cooperation Seminar (Manufacturing Session)” on 30 October 2020 with the objective of creating awareness of joint market promotions, information sharing, business development and investment opportunities. Speakers of this virtual seminar comprised leading manufacturing companies and industry experts from the three respective exchanges, targeting Chinese and ASEAN investors and corporations.
/jlne.ws/3oVwQmf

Moscow Exchange To Add ETFs And Russian-Law ETFs To After-Hours Trading Session
Mondovisione
Beginning 9 November 2020, ETFs and Russian-law ETFs will be admitted to after-hours equity trading on Moscow Exchange to supplement currently available Russian and foreign stocks.
/jlne.ws/35Xmdqs

MGEX Reports Best October in History
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), finished October 2020 as the 11th best month for total monthly volume in history of the Exchange with a total of 268,611 contracts. This past month became the new record for the best October in history, decimating the previous record, October 2007, by 68,163 contracts.
/jlne.ws/385yZWr

Fintech

Jack Ma summons reminds investors that Beijing is still boss; Tough new rules for China’s online finance groups come ahead of world’s biggest IPO
Tom Mitchell, Henny Sender and Ryan McMorrow – FT
When Jack Ma last week chose to speak truth to power about the failings of China’s financial system, he was aiming very high — perhaps too high. The founder of ecommerce business Alibaba, already China’s wealthiest man, is set to become substantially richer when his online finance spin-off Ant Group debuts on the Hong Kong and Shanghai stock exchanges on Thursday. At $37bn, it is the world’s largest ever initial public offering.
/jlne.ws/3kSmqBu

Fintechs take on banks at their own game; Some digital start-ups in the US are beginning to accept customer deposits
Miles Kruppa and Robert Armstrong – FT
Last month, a Silicon Valley start-up called Varo Money achieved something it had worked three years to accomplish: it started accepting federally insured customer deposits.
/jlne.ws/2TMGXLN

Credit Suisse goes live with Torstone platform to automate post-trade equities processes; With Torstone Technology’s platform, Credit Suisse will consolidate and automate the post-trade operations of its equity trading business in Canada.
Annabel Smith – The Trade
Credit Suisse has automated the post-trade operations of its institutional equities trading business in Canada after going live on Torstone Technology’s platform.
/jlne.ws/3ej9mCQ

Lombard Odier expands Bloomberg partnership with adoption of PORT Enterprise; Already a client of Bloomberg, Lombard Odier will expand its use of PORT Enterprise to unify portfolio and order management across its equity and fixed income trading.
Annabel Smith – The Trade
London-based asset manager Lombard Odier Investment Managers has extended its long-standing relationship with Bloomberg and has implemented its PORT Enterprise solution.
jlne.ws/2TQL35C

BGC electronic and hybrid markets head departs for global head of trading role at Refinitiv; Dean Berry joins Refinitiv as global head of trading after four years with BGC Partners where he was global head of electronic and hybrid markets.
Annabel Smith – The Trade
The global head of electronic and hybrid markets at interdealer broker BGC Partners has departed to become global head of trading at Refinitiv.
/jlne.ws/3kXc6sa

Analysis: Fin or tech? China’s Ant, biggest-ever IPO, says it’s a tech firm not a bank
Yingzhi Yang, Cheng Leng, Julie Zhu- Reuters
China’s Ant Group, about to make the biggest public sale of shares ever, poses a basic conundrum: what kind of company is it – a financial colossus or a tech giant?
/jlne.ws/327OIAJ

China’s Ant expected to double on debut amid pent-up retail demand: fund managers
Samuel Shen, Julie Zhu – Reuters
China’s Ant Group is expected to double its market value on debut, as unmet demand from mom-and-pop investors and an impending inclusion in major global indexes could offset worries about tighter regulations, fund managers said.
/jlne.ws/38djSKZ

Microsoft to invest in Ant Group-backed Indonesian startup Bukalapak
Reuters Staff
Microsoft Corp said on Tuesday it has linked up with Ant Group-backed Indonesian startup Bukalapak and will invest in the e-commerce platform.
/jlne.ws/2I1rFk3

Hong Kong FinTech Week 2020 Hong Kong Securities And Futures Commission Keynote : Hong Kong New Virtual Assets Regulatory Framework
Mondovisione
On Day 2 of Hong Kong Fintech Week 2020, the Securities and Futures Commission of HKSAR Government announced that it is going to propose a new regime on licensing for virtual assets this year. The new licensing approach requires all platforms that trade any types of crypto assets, including both operating in Hong Kong and targeting Hong Kong investors, to apply an SFC license. SFC can then ensure compliance, monitor operations, investigate irregularity and enforce rules. The consultation paper will be published later today.
/jlne.ws/328GRmq

Cryptocurrencies

PayPal plans a much wider embrace of cryptocurrency, including Venmo use
Jeff John Roberts – Fortune
PayPal CEO Dan Schulman provided new details about the company’s recent embrace of Bitcoin and other cryptocurrencies on Monday, describing plans for shopping tools as well as potential partnerships with central banks. Schulman’s remarks, which came during an earnings call after PayPal posted record third quarter revenues, follows the company’s announcement last month that it will soon allow users to buy cryptocurrency within its app.
/jlne.ws/3mRt8sf

The Crypto Industry Remains Mostly Unengaged in Election 2020
Nikhilesh De – Coindesk
The crypto industry appears largely uninvolved in this year’s election, beyond their normal, ongoing efforts to seek friendly regulations and laws in Washington D.C. According to Federal Election Commission (FEC) data, employees at 10 significant firms to the cryptocurrency space – including Coinbase, Ripple, Andreessen Horowitz, Uniswap, Compound, BitGo, Gemini, Chaincode Labs, Digital Currency Group and subsidiaries (disclosure: CoinDesk is a DCG subsidiary) and Kraken – donated a cumulative total around $100,000.
/jlne.ws/327LVYh

Hong Kong’s SFC will require all crypto exchanges to be regulated
Wolfie Zhao – The Block
Hong Kong’s Securities and Futures Commission (SFC) will require all cryptocurrency exchanges operating in the city to be regulated. Ashley Alder, chief executive officer of the Hong Kong securities watchdog, said in the Fintech Week event on Tuesday that the requirement will apply to all platforms even if they do not trade security tokens, according to a Reuters report.
/jlne.ws/387lZjp

Hong Kong’s Securities Watchdog May Soon Regulate All Crypto Trading Platforms
Sebastian Sinclair – Coindesk
Hong Kong’s government is seeking to change the rules for cryptocurrency trading firms operating or offering services within the city jurisdiction.
/jlne.ws/3oUmcMM

SEC Finalizes Rule Change That Could (One Day) Juice Token Sales
Danny Nelson – Coindesk
The U.S. Securities and Exchange Commission (SEC) has increased limits dictating how much capital companies can raise before registering in a move that could be a boon for security token offerings (STOs). Companies can now raise $5 million in total under Regulation Crowdfunding provisions (previously: $1.07 million), $75 million under Regulation A+ (previously: $50 million) and $10 million under Rule 504 of Regulation D (previously: $5 million), the SEC said.
/jlne.ws/3821kx4

Bitcoin’s Implied Volatility Rises Ahead of US Election
Omkar Godbole – Coindesk
Both bitcoin and traditional market investors look to be predicting a pick-up in volatility following the U.S. elections. The cryptocurrency’s one-month implied volatility – investors’ expectation of how turbulent prices will be over the next four weeks – has risen to a two-week high of 59% in the past three days, according to data source Skew.
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KuCoin hacker switches mixer approach and opts for Wasabi Wallet: Elliptic
MK Manoylov – The Block
Bitcoin from the September hack of KuCoin is once again on the move, according to the blockchain analytics firm Elliptic. Previously, the hacker elected to use a service known as ChipMixer, The Block reported. Now they’re using Wasabi Wallet, a mixer through which multiple participants combine coins into one large transaction with numerous inputs and outputs.
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Bitcoin mining difficulty posts biggest drop since ASIC era
Wolfie Zhao – The Block
Bitcoin’s mining difficulty, a measure of the competitiveness for winning block rewards, has just posted the largest percentage drop since October 2011. The network adjusted its mining difficulty at 8:28 UTC time on Tuesday, which dropped by 16.05% from the previous level of 20 Trillion to right now 16.7 Trillion, according to BTC.com. Data compiled by The Block shows that has reset the record of the second-largest mining difficulty drop in bitcoin’s history, which was previously seen on March 26 after the crypto market’s mega sell-off on March 12.
/jlne.ws/3mLoTyg

HSBC Carries Out Bangladesh’s First Blockchain Letter-of-Credit Transaction
Sebastian Sinclair – Coindesk
The Bangladesh arm of HSBC, one of the world’s largest banks, has completed the country’s first cross-border blockchain trade finance transaction. According to a press release on Tuesday, the digitized letter of credit (LC) transaction brought a notable reduction in the processing time compared with traditional methods – down from the average of five to 10 days to under 24 hours. The move signifies an important step for Bangladeshi companies in the digitalization of trade, the bank said.
/jlne.ws/3kUrN3c

Lightning Labs launches liquidity marketplace on the Lightning network
Mike Orcutt – The Block
Lightning Labs, a startup focused on developing the Lightning Network, a Layer 2 payment channel network for Bitcoin, has launched a new marketplace for liquidity on the network. According to an announcement, the new non-custodial, peer-to-peer marketplace “transforms” Lightning liquidity into a tradable asset on Lightning Pool, allowing users to “buy or sell access to liquidity.” Lightning Pool opens the door to new Lightning financial products, or “LiFi,” the startup said in a statement.
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Data shows increased Huobi exchange outflows as firm denies executive arrest rumors
Michael McSweeney – The Block
Data from CryptoQuant, a crypto information provider, indicates a significant increase in bitcoin funds outflows from Huobi Global in the past day — a development that comes as the firm has issued a public denial about rumors of an arrest of one of its executives. In a tweet thread posted November 2, Huobi said that rumors about “the arrest of a Huobi senior executive by local officials” are “false.” “All of Huobi’s management team members have been accounted for and have not been detained or arrested,” the firm said. “We understand that the spread of false information can lead to concerns about the safety of user assets, but please rest assured your assets are safe.”
/jlne.ws/2I0FgZ1

Politics

Disinformation Threatens Other Elections After U.S. Voting Ends; Facebook, Twitter, and other social platforms need to do much more to stop the spread of radicalizing propaganda.
Alex Webb – Bloomberg
The closing of polls in the U.S. will inevitably herald the start of postmortem investigations into the roles Facebook, Twitter, and Alphabet’s YouTube played in the vote. The problem with a postmortem is that, by definition, it suggests the issue is dead. But while the U.S. presidential election might be over for another four years, a dozen other national elections—from Belize to Myanmar to Nigeria to Romania—will take place this year.
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The Mighty Money ($3 Billion) Fueling Campaign 2020
Bill Allison – Bloomberg
The 2020 presidential campaign might well be remembered as when the dam truly broke on money in U.S. politics. Twelve years after the first presidential election in which candidate fundraising eclipsed $1 billion, the 2020 race was approaching the $4 billion mark, thanks largely — but not solely — to the presence of billionaires on the ballots.
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Trump’s Presidency Has Brought America Low; If he wins a second term, there’s further to fall.
Editorial Board – Bloomberg
Every presidential election seems momentous, but it would be hard to exaggerate what’s at stake in this one. The voters who’ve already cast ballots in record numbers, and the tens of millions more who’ll do so today, might be making the most fateful political choice of their lives. It isn’t just about choosing the better candidate. Also in the balance is a more fundamental question: What, if anything, does the United States expect of its system of government?
/jlne.ws/3jPq2mF

Business worried about ‘bunker’ mentality in 10 Downing Street; Executives increasingly worried about disconnect between Boris Johnson and industry as coronavirus lockdown looms
Daniel Thomas, Jim Pickard and Alice Hancock – FT
Boris Johnson’s eleventh-hour withdrawal from the CBI annual conference on Monday felt fitting to many in the business world, reflecting both the confusion and disconnect between the prime minister and UK industry.
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Boris Johnson’s mistakes in the pandemic are depressingly familiar; From Brexit to Covid, the UK prime minister has insisted on only seeing what he wants to see
Henry Mance – FT
It always seems to be too soon. It was too soon for the UK to lock down in early March, when other European countries had already done so. It was too soon for Boris Johnson to reimpose national restrictions in September, when scientific advisers privately called for them.
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How to trade the US election; Not investment advice.
Jamie Powell – FT
While we were wearily sipping our black coffee Monday morning, a WhatsApp landed on our personal phone with the following question:
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‘Our Democracy as We Know It Is at Stake’; The Trump-Biden matchup has ramifications far beyond those of an ordinary presidential election.
Thomas B. Edsall – NY Times
How will the winning candidate piece together a victory in 2020? David Byler, a data analyst for The Washington Post who anticipates a Biden victory, sees the presidential election as the first true affirmation in this century of the “The Emerging Democratic Majority,” an argument developed by John Judis and Ruy Teixeira in a prescient 2002 book.
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Fact-Checking Trump’s Claim That He ‘Prepaid Millions’ in Income Taxes; The president’s assertion, misleading at best, distracts from the reality that he has paid little or no income tax most years, largely because his business losses far outweighed his profits.
Susanne Craig and Mike McIntire – NY Times
As the Biden campaign has sought to make an issue of the $750 income tax bill President Trump had in 2016 and again in 2017, he has shot back by saying he has “prepaid millions of dollars” in federal income taxes.
/jlne.ws/2TR3t6y

Factbox: What a Joe Biden win could mean for financial policy
Pete Schroeder, Katanga Johnson – Reuters
While Democratic presidential nominee Joe Biden is unlikely to prioritize a financial industry crackdown if he wins on Tuesday, he is expected to take a much tougher line than Trump and his former boss President Barack Obama.
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Democrats favored to take control of U.S. Senate, but results could be delayed
David Morgan – Reuters
Democrats are favored to emerge from 14 hotly contested U.S. Senate races with full control of Congress in Tuesday’s election, but final results from at least five of those contests may not be available for days, and in some cases, months.
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Analysis: Progressive or moderate? How a Biden cabinet could affect U.S. stocks
David Randall – Reuters
Should Democratic challenger Joe Biden prevail, as polls suggest, some on Wall Street are looking ahead to his cabinet picks to gauge whether he will govern as a business-friendly moderate or promote progressive legislation that could weigh on sectors such as financials and oil but bolster clean energy.
/jlne.ws/2HTwqfM

California voters to decide fate of gig economy workers
Tina Bellon, Lisa Baertlein – Reuters
Trend-setting California votes on the future of the gig economy on Tuesday, deciding whether to back a ballot proposal by Uber and its allies that would cement app-based food delivery and ride-hail drivers’ status as independent contractors, not employees.
/jlne.ws/2HQjEyD

Exclusive: Tired of Trump, Deutsche Bank games ways to sever ties with the president – sources
Matt Scuffham, Tom Sims, John O’Donnell – Reuters
Deutsche Bank AG is looking for ways to end its relationship with President Donald Trump after the U.S. elections, as it tires of the negative publicity stemming from the ties, according to three senior bank officials with direct knowledge of the matter.
/jlne.ws/3mOXPxY

Federal Aid Mostly Goes to Bigger Farms; Much aid money gets distributed based on production; some favor other approaches
Jesse Newman – WSJ
As federal aid to the U.S. Farm Belt surges, a fraction of farmers are reaping a big portion of the government largess. The Trump administration is expected to pay farmers more than $37 billion this year, a historic sum largely intended to help those hit by trade wars and the coronavirus pandemic. Of the first nearly $5 billion paid out under a pandemic-relief program, just over 1% of recipients received at least one-quarter of the funds, or $1.2 billion, according to a Wall Street Journal analysis of federal data.
/jlne.ws/387F2Ko

Regulation

Germany’s regulators were ‘deficient’ in Wirecard scandal, says Esma; ‘More attention should have been paid to the FT reporting during the first half of 2019,’ watchdog writes
Olaf Storbeck – FT
The European Securities and Markets Authority has criticised Germany’s financial regulator BaFin and the country’s accounting watchdog FREP for their “deficient” handling of the Wirecard accounting scandal.
/jlne.ws/2TMElgX

ESMA/Wirecard: pass the buck; In the land of the blind the one-eyed man is king.
Jamie Powell – FT
News this morning from the European Securities and Marketing Authority (ESMA): The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published the results of its Fast Track Peer Review (Peer Review) which assessed the events leading to the collapse of Wirecard AG and the supervisory response by BaFin (Bundesanstalt für Finanzdienstleistungaufsicht) and the Financial Reporting Enforcement Panel (FREP)?.?.?.?
/jlne.ws/2U2ivXf

Former Trader Tom Hayes, Convicted of Rigging Libor, to Be Released Early; The 40-year old Briton is set to be released from prison in January after serving less than half of his 11-year sentence
Jem Bartholomew – WSJ
Tom Hayes, the former bank trader convicted of global interest-rate rigging, will be released from prison on Jan. 29 after serving five years out of an 11-year prison sentence. Karen Todner, his attorney, said Monday that Mr. Hayes had been moved to Ford Open Prison, close to the South Coast of England from the higher-security Erlestoke Prison last year in preparation for release. U.K. prisoners tend to serve around half their sentence.
/jlne.ws/34Rs4y5

ESMA identifies deficiencies in German supervision of Wirecard’s financial reporting
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published the results of its Fast Track Peer Review (Peer Review) which assessed the events leading to the collapse of Wirecard AG and the supervisory response by BaFin (Bundesanstalt für Finanzdienstleistungaufsicht) and the Financial Reporting Enforcement Panel (FREP).
/jlne.ws/3mLmiV2

SEC Division of Enforcement Publishes Annual Report for Fiscal Year 2020
SEC
The Securities and Exchange Commission’s Division of Enforcement issued its annual report for fiscal year 2020 today. The report provides a comprehensive view of the Division’s accomplishments over the past year, discusses significant actions and key areas of strategic change, and details the Division’s COVID-19-related enforcement efforts.
/jlne.ws/2HZu6DS

SEC Harmonizes and Improves “Patchwork” Exempt Offering Framework; Rule amendments harmonize registration exemptions, eliminating complexity and facilitating access to capital and investment while preserving or enhancing important investor protections
SEC
The Securities and Exchange Commission today voted to amend its rules in order to harmonize, simplify, and improve the multilayer and overly complex exempt offering framework. These amendments will promote capital formation and expand investment opportunities while preserving or improving important investor protections.
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CFTC Exempts Additional Singapore Recognized Market Operators from SEF Registration Requirements
CFTC
The Commodity Futures Trading Commission today announced that it unanimously approved an amended order that exempts eight Recognized Market Operators (RMOs) authorized within Singapore from CFTC swap execution facility (SEF) registration requirements. The exempted RMOs are BGC Partners (Singapore) Ltd., Euronext Markets Singapore Pte Ltd., GFI Group Pte Ltd., ICAP (Singapore) Pte Ltd., Nittan Capital Singapore Pte Ltd., Refinitiv Transaction Services Pte Ltd., TFS Currencies Pte Ltd., and Tullett Prebon (Singapore) Limited.
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CFTC Expands its Part 30 Exemptive Program to Improve Global Market Access for U.S. Customers
CFTC
The Commodity Futures Trading Commission today issued multiple orders as part of its longstanding Part 30 exemptive program of international cooperation and regulatory deference. Orders have been issued to the Bombay Stock Exchange (BSE), the National Stock Exchange International Financial Service Centre Limited (NSE IFC), the Montreal Exchange (MX), NZX Limited (NZX), and UBS AG (UBS).
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CFTC Approves Amendments to Swap Clearing Requirement Exemptions
CFTC
The Commodity Futures Trading Commission at its open meeting today approved final rules exempting swaps entered into by certain financial institutions from the Commission’s swap clearing requirement under the Commodity Exchange Act (CEA).
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Statement of Chairman Heath P. Tarbert in Support of Final Amendments to the Part 50 Clearing Requirements
CFTC
I am pleased to support today’s final rule amending the CFTC’s Part 50 rules, which implement the swap clearing requirement of section 2(h)(1) of the Commodity Exchange Act (the Clearing Requirement). The final rule concurrently achieves two ends—it demonstrates the CFTC’s evolving philosophy on comity and deference towards our international counterparts while alleviating unnecessary regulatory burdens on small domestic institutions that look nothing like Wall Street banks.
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Supporting Statement of Commissioner Brian D. Quintenz Regarding Swap Clearing Requirement Exemptions
CFTC
I am pleased to support this final rule, which codifies existing relief from the Commission’s requirement that certain commonly traded interest rate swaps and credit default swaps be cleared following their execution.[1] The new exemptions may be elected by several classes of counterparties that may enter into these swaps, namely: sovereign nations; central banks; “international financial institutions” of which sovereign nations are members; bank holding companies, and savings and loan holding companies, whose assets total no more than $10 billion; and community development financial institutions recognized by the U.S. Treasury Department. T
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Statement of Commissioner Dan M. Berkovitz Regarding Swap Clearing Requirement Exemptions: Final Rule Amendments
CFTC
I am voting for the final rule codifying certain limited exemptions from the swap clearing requirement that currently exist through Commission guidance or staff no action relief. The exemptions are consistent with longstanding Commission policies. Analysis of available historical data shows that the number and notional amount of swaps that would be exempted are relatively limited and not likely to materially impact systemic risk. Furthermore, the swaps exempted from clearing will be subject to uncleared swap margin requirements, if applicable, thereby mitigating the risks of not clearing these swaps.
/jlne.ws/3oRHcUj

FCA announces changes to open banking identification requirements; The FCA has announced changes to limit the risk of disruption to open banking services after Brexit.
UK FCA
The FCA’s changes will permit UK-based third-party providers (TPPs) to use an alternative to eIDAS certificates to access customer account information from account providers, or initiate payments, after Brexit. Firms must act to ensure they can continue to provide open banking services.
/jlne.ws/3mIMD5W

Ontario Securities Commission Announces Education And Outreach Activities To Advance Financial Literacy During COVID-19
Mondovisione
The Ontario Securities Commission (OSC) today announced its plans for Financial Literacy Month in November to improve Canadians’ financial knowledge, skills, confidence and behaviours during the COVID-19 pandemic.
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Investing and Trading

What Stock Market Investors Should and Shouldn’t Do on Election Night; While we can’t tell you what will happen, we can help you prepare.
Emily Cadman and Eric Lam – Bloomberg
If you’ve got money invested in markets anywhere in the world, you’d be forgiven for being nervous about what will happen over the next few hours — or even days — after the polls close in the U.S. presidential race.
/jlne.ws/2GmUC9l

Spiking Volatility in China Shows Global Markets Are Nervous
Sofia Horta e Costa and Joanna Ossinger – Bloomberg
Metric tracking implied yuan swings surges before U.S. vote; Measures of expected volatility elevated in stocks, bonds
China’s currency markets are on edge like never before, a sign of the anxiety afflicting investors globally as they gird for election day in the U.S. and its potentially contentious aftermath.
/jlne.ws/3ek5Jg1

A terrible, horrible, no-good year for quants; Many popular quant strategies are struggling but to varying degrees we are all quants now
Robin Wigglesworth – FT
The omnishambles in value investing has naturally stirred a lively debate in financial circles. The investment strategy is now on its worst run since the death of Thomas Jefferson. Yet the length and depth of its woes obscure the fact that it is far from the only casualty of the Covid-19 market environment.
/jlne.ws/2GnENiK

Natural-Gas Drillers Outshine Oil Peers as Covid-19 Surges; Coronavirus worries hold down crude prices, helping to reverse fortunes among fracking companies
Collin Eaton and Rebecca Elliott – WSJ
A split reality is emerging for U.S. shale drillers: Those that primarily pump oil are still struggling to survive, while those that produce natural gas are slowly seeing signs of recovery. Oil-focused fracking companies are under extreme financial strain, as renewed concerns about the coronavirus pandemic are weighing down crude prices. But gas-focused drillers are getting a long-awaited reprieve. Natural-gas prices are climbing ahead of winter, and are less sensitive to lockdowns that erode demand for transportation fuels.
/jlne.ws/2HTGR2p

Oil Giant Aramco Keeps Dividend Despite 45% Slump in Profit
Matthew Martin and Anthony Di Paola – Bloomberg
Saudi firm to pay shareholders $18.75 billion for the quarter; The government needs the money to help cover budget deficit
Saudi Aramco left its third-quarter dividend unchanged at $18.75 billion even as it failed to generate enough cash to cover the payout and reported a 45% drop in profit.
/jlne.ws/2I08Sps

The Tiger 21 Club of Multimillionaire Investors Are Election-Proofing Their Assets; They are investing in gold miners, Bitcoin and silver while racing to reconfigure their estate plans in the event of a Democratic victory.
Suzanne Woolley – Bloomberg
As the members of Tiger 21, a club of multimillionaire investors, await results from this year’s presidential election, they are bracing for change. In addition to seeking out investment opportunities in a landscape reconfigured this year by political and pandemic uncertainties, they are also highly focused on hedging against the tax policies of a potential Democratic administration through careful estate planning.
/jlne.ws/3oScjiC

How Stock Traders Are Racing to Protect Gains Against Market Threats; We spoke with individual investors about the best strategies to cope with uncertainty around Covid, the health of the economy, and U.S. elections.
Edward Robinson – Bloomberg
Bitcoin, the fear index, and cold cash. Those are just a few of the assets retail investors are piling into as they confront the triple threat of the Covid-19 pandemic, global recession, and a rumbustious presidential election in the U.S. After a gravity-defying period that saw major indexes hit all-time highs, jitters are setting in — last week global equities posted the worst weekly decline since March.
/jlne.ws/2HUJy40

ECB Six-Week Countdown to Stimulus Action Has Banks Guessing
Paul Gordon – Bloomberg
President Lagarde says nothing ruled out for December meeting; Bond-buying, bank loans and surprises likely, rate cut less so
The European Central Bank’s exceptionally clear pledge to come up with a new package of monetary stimulus at its next policy meeting has given markets plenty to think about.
/jlne.ws/329kzRq

Tech Startups Drop Stay-Private Mantra as Wall Street Beckons; SPACs, strong IPO market change calculus for venture-backed companies on when to go public
Yuliya Chernova – WSJ
Frothy public markets have been chipping away at the long-held view that venture-backed tech companies should stay private as long as possible. Over the past decade, many tech entrepreneurs couldn’t be bothered to go public, a step accompanied by extra cost, regulatory oversight and the stock market’s stress. They had an ever-expanding availability of private capital for their funding needs.
/jlne.ws/2I3CTVp

Corporate Insiders Want No Part of the Pre-Election Stock Market
Lu Wang – Bloomberg
Absence seen as a lack of confidence in their own business; Caution contrasts with conviction that the correction is over
Large speculators and other heavyweight investors have been eager to buy the dip during the stock market’s stormy October. One group that hasn’t: executives in charge of U.S. companies.
/jlne.ws/3mM3oNM

Environmental, Social and Corporate Governance

Climate change: China’s coal addiction clashes with Xi’s bold promise; The president has set a deadline of 2060 to be ‘net-zero’ for emissions but new coal-fired power plants keep springing up
Christian Shepherd, Emma Zhou and Katrina Manson – FT
Cranes and diggers busily prepare land beneath the red and white-striped chimneys of the Mengtai Group coal-fired power plant at the northern city limits of Ordos, in northern China’s Inner Mongolia.
/jlne.ws/3ej3xFu

More capital needs to flow to greener activities; Asset managers have a role to play in mobilising investment
The editorial board – FT
First China, then Japan, now South Korea. The three big east Asian economies have all recently introduced new climate change targets. Japan and South Korea pledged to become carbon neutral by 2050; China, by far the world’s biggest carbon emitter, has said it will achieve that goal by 2060. The moves follow last year’s EU plan to cut greenhouse gases to net zero by 2050. Those deadlines may sound too distant to be meaningful, but they mark an important shift.
/jlne.ws/3etYaU4

Failure on Fiscal Relief Will Widen Racial Inequality; No matter which party is in power next year, Washington should focus on full employment for Black Americans.
Claudia Sahm – Bloomberg
The prospects for another round of U.S. fiscal relief anytime soon have all but disappeared. This lack of action will hurt most all Americans, but minority groups in particular. And if nothing is done, the damage may not be reversed for generations. Consider that White Americans have, on average, seven times as much wealth as Black Americans. This gap widens with age, leaving Black families with fewer resources to buy homes, start businesses, invest in their children’s college education and leave an inheritance.
/jlne.ws/3oUdiyz

Corn Rally Sparks Green Fuel Rethink by Chinese Energy Giant
Alfred Cang – Bloomberg
Ethanol shortage forces Sinopec to cut E10 gasoline supplies; Feed demand boosts corn prices, threatening ethanol margins
Millions of hungry pigs in China are setting off a chain reaction in the fuel market, causing the biggest oil refiner to rethink its sales strategy. A hog herd boom amid a push to revive supplies of the nation’s favorite meat has driven up corn prices as demand for animal feed soars. That’s sent biofuel costs flying for oil titan Sinopec Group, which is now being forced to scale back its plans to sell E10, a mix of 10% corn-derived ethanol and gasoline.
/jlne.ws/386iF80

Institutions

Hedge fund GSA moves low-cost fund into high-fee markets; Move poses challenge to rivals after GSA helped push down industry fees
Laurence Fletcher – FT
GSA Capital has shifted some of its low-cost Trend Fund into products that trade off exchanges, a more opaque area of financial markets where hedge fund rivals have typically commanded much higher fees. The Mayfair-based firm, one of London’s biggest computer-driven hedge funds, shook up the quantitative trading sector when it launched its $1.7bn Trend Fund in 2013 with a 0.5 per cent flat fee — a challenge to the industry norm at the time of charging 2 per cent management fees and 20 per cent of returns.
/jlne.ws/34U7DR6

BNP Paribas Profit Steady as Trading Booms; Income from French lender’s markets unit soars
Simon Clark – WSJ
BNP Paribas SA’s BNPQY 2.64% net profit held steady in the third quarter as income from trading securities offset a decline in retail banking earnings. France’s biggest bank said net profit for the three months to Sept. 30 was EUR1.89 billion, equivalent to $2.2 billion, slightly down from the same period in 2019. Pretax profit from the Paris-based bank’s global markets unit soared 67% to EUR648 million. BNP Paribas’s shares rose more than 5%.
/jlne.ws/3jTnVhB

Citigroup Names New Consumer Banking Head; Incoming CEO Jane Fraser is tapping one of her top lieutenants, Anand Selva, to replace her as head of consumer bank
David Benoit – WSJ
Citigroup Inc. C 1.91% on Monday named a new leader for its global consumer bank and said its chief risk officer will leave, two changes that highlight how the incoming chief executive, Jane Fraser, can start making her mark on the bank.
/jlne.ws/3ekTSOy

Billionaire Has No Regrets About Pulling His Money Out of Banks
Benjamin Stupples – Bloomberg
Mohamed Mansour prefers to invest through his family office; Man Capital was early investor in Facebook, Airbnb, Snowflake
Mohamed Mansour enjoys the challenge of managing his own fortune. The 72-year-old billionaire set up an investment firm a decade ago to oversee his family’s wealth the same way he and his brothers built their closely held business into a global firm with operations including McDonald’s Corp. restaurants and a General Motors Co. dealership. Mansour Group’s proceeds have allowed the Egyptian dynasty behind it to invest through their family office in firms such as Airbnb Inc., Twitter Inc. and Snowflake Inc., the maker of cloud-data software that popped 104% on its first day of trading this year. With those sort of results, Mansour isn’t missing someone else managing his money.
/jlne.ws/32bsvl8

Regions

BP Nears Sale of London Headquarters to Hong Kong Investor
Jack Sidders – Bloomberg
Lifestyle International has offered $305 million for property; Thomas Lau is Hong Kong firm’s chairman, largest shareholder
BP Plc is nearing a deal to sell its London headquarters to a Hong Kong investor as it cuts jobs and makes shifts toward more flexible working. The oil giant is in advanced talks to sell the office building in historic St. James’s Square to a company backed by Lifestyle International Holdings Ltd., according to people with knowledge of the matter. The Hong Kong department store operator has offered about 235 million pounds ($305 million) for the property, said the people, who asked not to be identified because the process is private.
/jlne.ws/3jRp2OL

New Yorkers and Londoners Are Ditching Cities for Suburbs
Jack Sidders and Olivia Konotey-Ahulu – Bloomberg
Office provider and homebuilder see structural shift in demand; But it’s the silver lining in a challenging year for industry
Real-estate companies are seeing clear evidence of New Yorkers and Londoners ditching city centers for suburbs as the pandemic changes the way people live and work.
/jlne.ws/2TLIimc

Imagining a Second Life for Midtown Manhattan’s Empty Offices; As workers stay home and office buildings sit vacant, some see a new role for New York City’s business district — as a site for affordable housing.
Patrick Sisson – Bloomberg
Midtown Manhattan, a dense grid of office towers normally pulsing with activity, has been called a “ghost town” so many times that you’d expect to see tumbleweeds rolling through Bryant Park. Back in July, the New York Times declared that the commercial district was in a “purgatorial phase zero” of reopening, painting an evocative scene of a food cart vendor scanning empty streets for signs of life. Months later, things have not improved much. Occupancy rates on city hotels, like those in Midtown South tied to tourism and corporate travel, have plunged below 10%. And most significantly, the workers who once crowded sidewalks on their way to the office have stayed away. Commercial broker CBRE found that just 10% of Manhattan workers have returned as of Sept. 18.
/jlne.ws/2GmosL8

Covid-Battered Brazil Faces Two Familiar Scourges; President Jair Bolsonaro’s dissonant policies open a door to the return of inflation and fiscal disarray.
Mac Margolis – Bloomberg
Brazil needs to flatten the curve. No, not that curve. Latin America’s most afflicted country (160,000 dead and the health minister hospitalized for Covid-19) is bracing for a second wave of infection without ever having vanquished the first. Now, however, another more familiar scourge is cresting: inflation.
/jlne.ws/385EtR4

China Envisions a New Hong Kong, Firmly Under Its Control; The government hopes to turn Hainan Island into a financial and shopping destination. Matching the former British colony won’t be easy.
Keith Bradsher – NY Times
Low taxes. Duty-free shopping. Sandy beaches. The Communist Party even wants to put people on yachts. China wants to turn Hainan Province, an island the size of Maryland in the South China Sea, into a free-trade port and international commercial hub. The island, with 9.5 million full-time residents, is offering new incentives to transform the snowbird haven into a destination for global companies, jet-setting financiers and sophisticated shoppers alike.
/jlne.ws/3oPuANs

Brexit

Brexit costs likely to build slowly as UK enters end game; The possibility of a rupture with parts of Europe adds another dimension to uncertain times
Chris Giles – FT
Brexit talks are going to the wire. The UK left the EU in January and entered a transition period under which trading conditions remained the same until the end of 2020. As November began and with two months left, differences between the two sides on the terms of a free trade agreement were still substantial, but both sides also thought it made sense to keep talking “intensively” in a last-ditch effort to bridge the gap.
/jlne.ws/34PDBOx

Brexit talks fail to agree on fisheries, two other issues
Gabriela Baczynska, Elizabeth Piper – Reuters
EU-UK trade negotiations have so far failed to reach agreement on their three most persistent sticking points – the level playing field, fisheries and settling disputes – the bloc’s executive and sources from both sides said on Tuesday.
/jlne.ws/2TRHMDj

UK will struggle to deal with Brexit alongside Covid, says thinktank
Lisa O’Carroll – The Guardian
Devolved administrations, local authorities and businesses risk being overwhelmed by Brexit implementation on 1 January, unable to deal with it alongside the urgent demands of the second wave of Covid-19, an influential thinktank has said. Local councils, trading standards officers and port health authorities are all part of the Brexit operation but may find themselves stretched because of the resurgence of the virus, the Institute for Government said.
/jlne.ws/3jNCNhq

EU Considering Next Move Over U.K.’s Lawbreaking Brexit Bill
Ian Wishart – Bloomberg
The European Union held off launching legal action immediately against the U.K. over Boris Johnson’s plan to rewrite parts of the Brexit divorce deal, saying it is still considering its next move. The bloc had given the U.K. until Oct. 31 to respond to its demand to withdraw parts of the Internal Market Bill that breach the Brexit Withdrawal Agreement Johnson struck with the EU last year. A Downing Street spokesman said on Tuesday the U.K. hadn’t replied to the request.
/jlne.ws/3kTkSXT

Post-Brexit migration rules risk staff crisis in social care, warns study
Delphine Strauss and Peter Foster – FT
The UK faces a staffing crisis in social care and other key sectors of the economy when new post-Brexit immigration rules take effect next year, according to a report published on Tuesday. Almost two-thirds of the EU citizens employed in the UK — about 1.3m out of a total of 2.1m — would not have qualified for a skilled worker visa under Britain’s new points-based regime that comes into force in January because they would not meet the required skill and salary thresholds, the study by the IPPR think-tank found.
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Miscellaneous

Fake news is as old as news itself; From the 15th century on, governments and scientists have spread falsehoods too
Michael Peel – FT
The 15th-century treatise Hammer of Witches was a manual for the persecution, torture and murder of those accused of devilry in renaissance Europe. It also shows how the recently-invented printing press that led to mass literacy was an instrument of injustice, cruelty and division.
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