Wall Street Is Set to Learn How Tough Biden’s Watchdogs Will Be; Eurex to expand its pioneering Total Return Futures in cooperation with FTSE

Mar 1, 2021

First Read

$29,826/$300,000 (9.9%)


Cannabis to Face Big Policy Issues in 2021
Thom Thompson – John Lothian News

February was a quiet news month for industrial hemp, giving us a little time to think about some of the structural issues facing the industry. Per usual, PanXchange’s monthly Benchmarks & Analysis report provided a good launching pad.

FDA (in)action

In its recent practice, the Food and Drug Administration mostly ignores the flouting of its rules against including a drug in foodstuffs or the medical claims made by certain CBD merchandisers. CBD qualifies for regulation by the FDA because CBD’s first use was in CBD-based Epidiolex, a treatment for certain rare seizure disorders. The FDA approved Epidiolex in June 2018 and has approved no other uses of CBD.

There was widespread disappointment with a report authored by FDA Commissioner Stephen Hahn and published in January titled Use and Safety Profile of Cannabidiol (CBD) Products. After noting how much interest there is in CBD and how prevalent its use has become, the Commissioner admitted, “We still don’t have clear answers to important questions such as what adverse reactions may be associated with CBD products and what risks are associated with the long-term use of CBD products.”

To read the rest of this story, go here.


Hits & Takes
John Lothian & JLN Staff

I have a confession to make. Because of COVID-19 related issues with mail delivery, my NFA registered managed futures company, John J. Lothian Managed Futures, LLC, was deregistered by the State of Illinois Secretary of State. It turns out I am not the only one that this happened to, as the National Futures Association itself had a similar problem with the Illinois Secretary of State. All is resolved, I am assured by an NFA source. And JJL MF LLC is also back in the good graces of the State of Illinois, even if it did cost me a little extra over the regular annual registration update.

Former Sen. Kelly Loeffler, a former executive at the Atlanta-based Intercontinental Exchange, has sold her 49% interest in the Atlanta Dream Women’s National Basketball Team.

The U.S. Securities & Exchange Commission took away the punch bowl from 15 stocks based on social media and trading activity it did not like. It was a mean meme move on the SEC’s part.

Former LME CEO Garry Jones is the guest on an Against the Tide podcast from Anthony Gahan titled “Perfect Channel: B2B Marketplace adoption accelerating.”

Former Crain’s Chicago reporter Lynne Marek has a new gig as a senior editor at Industry Drive. She is leading their newly-launched Payments Dive, covering the payments ecosystem that drives our economy.

Katten partner Daniel Davis gave his thoughts on what’s ahead for the Futures and Derivatives Industry in Bloomberg Law.

Crosstower has produced a cryptocurrency research report titled “Institutional Adoption of Crypto.”

George Vukotich has been hired by the University of Wisconsin at Parkside as the founding director of the Center for Research in Innovation and Smart Cities.

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign over the weekend. 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


The FIA has a new “FIA Speaks” podcast with derivatives executive Larry Thompson, who talks about his long career at DTCC, diversity in finance, and some of the topical issues of the day. You can listen to the podcast here. ~SR


The Spread: A “Good” Bubble?

Boy there’s a lot of talk of bubbles these days. With bitcoin ballooning up past 50 K – and then back down again – it’s no surprise that there’s the usual talk about how it’s “a bubble” or “rat poison squared.”

Watch the video »



FTSE Russell and Eurex partner to launch derivatives contracts; The partnership between the two entities will see three futures contracts and one option list on the 29 March.
Annabel Smith – The Trade
Index provider FTSE Russell and global derivatives exchange Eurex have entered into a partnership that will see them launch three futures contracts and one option on 29 March. The pair said the launch of the new derivatives offering was in response to market demand as investors globally are increasingly looking to dividend and total return-oriented UK stocks as an area of growth.

***** More is better when you are talking FTSE Russell and Eurex.~JJL


Rapid vaccine rollout promises faster economic revival and fewer tax rises; Estimates of fiscal hole are likely to shrink as Covid inoculations pass 20m
Chris Giles, George Parker and Sarah Neville – FT
The UK’s rapid rollout of Covid-19 vaccines will foster a faster economic recovery, requiring fewer tax rises than feared, official Budget forecasts will show this week, as the number of people receiving their first jab passed 20m.

*****If you want the world economy to recover faster and jobs to return, then we must all get the vaccine.~JJL


Paul Fincham to join LSEG as Group Head of Communications
London Stock Exchange Group
LSEG (London Stock Exchange Group) announces that Paul Fincham is joining as Group Head of Communications. In this newly created role, he will lead the Group’s global communications team reporting to Brigitte Trafford, Chief Communications & Marketing Officer and starts his position on 29 March 2021. Paul joins from Liberty Global, where he held a number of senior roles after first joining Virgin Media, the Group’s UK operation, as Executive Director, Communications to lead internal, external and digital communications and sustainability. Following this, he moved to parent company Liberty Global as Managing Director, leading a global communications and creative function.

******I reached out to Mr. Fincham on LinkedIn to congratulate him and connect and he responded within two minutes. That is a good sign for the responsiveness we can expect from LSEG’s communication team.~JJL


Former Georgia Sen. Kelly Loeffler and Partner Sell WNBA’s Atlanta Dream; New ownership group, including real-estate executives and former star player Renee Montgomery, buys Dream. Players had called for Loeffler’s ouster.
Rachel Bachman – WSJ
Former Georgia Sen. Kelly Loeffler and a co-owner have sold the WNBA’s Atlanta Dream, concluding a saga that last year saw the Dream’s players campaigning for one of Loeffler’s election opponents. The buyers are Larry Gottesdiener, founder and chairman of the real-estate firm Northland Investment Corporation; Northland president and COO Suzanne Abair; and former Atlanta Dream star Renee Montgomery.

*****A smart move to buy the Dream. A smart move to sell the Dream before it becomes more of a nightmare.~JJL


Friday’s Top Three
We’re Number One! Our top story Friday was Chicago tops list of most corrupt city [sic] in US, report says from WGN9. But Illinois is only the third most corrupt state, so really we’re not so bad. Speaking of pessimistic stories about cities, our second most read story Friday was a Wall Street Journal opinion piece by Peggy Noonan, The Old New York Won’t Come Back. Third was Business Insider’s ‘I think he’s a rat and a liar’: Watch Dave Portnoy and Vlad Tenev’s heated Robinhood debate.


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Lead Stories

Wall Street Is Set to Learn How Tough Biden’s Watchdogs Will Be
Benjamin Bain, Daniel Avis, and Robert Schmidt – Bloomberg
His SEC and CFPB picks will face senators at Tuesday hearing; GameStop, Robinhood and SPACs are poised to be topics of focus
President Joe Biden’s plans for a new era of tough Wall Street oversight will take center stage this week when two of his top regulator picks face questions from Senate Banking Committee members at a Tuesday hearing. Gary Gensler, whom the White House has tapped to head the Securities and Exchange Commission, and Rohit Chopra, the administration’s choice to lead the Consumer Financial Protection Bureau, are likely to win confirmation, lawmakers and financial executives say. Yet their strong support from progressive Democrats means they’re certain to get pointed questions from Republican senators about their plans to crack down on businesses.

Eurex to expand its pioneering Total Return Futures in cooperation with FTSE
Eurex to partner with leading global index provider FTSE Russell;Launch of new Total Return Futures contract on the FTSE 100 Index; Additional dividend futures to access and hedge UK dividend exposure
Eurex will extend its pioneering Total Return Futures (TRF) segment with a contract on the FTSE 100 Index. By cooperating with FTSE Russell, the derivatives arm of Deutsche Börse Group is further expanding its collaboration with leading index providers in its strategically important index segment. Scheduled for 29 March, the launch once again reflects the goal of supporting the global shift towards regulated on-exchange trading with central clearing, as well as passive investments.

Hong Kong to overhaul Hang Seng to reflect Chinese listing boom; Shake-up to better reflect dominance of Chinese companies in city’s market
Hudson Lockett – FT
Hong Kong is planning to double the number of stocks in its benchmark index, in a shake-up that will better reflect the growing dominance of Chinese listings in the city’s market. Hang Seng Indexes will raise the number of stocks in its eponymous benchmark, tracked by about $28bn in exchange traded and local pension funds, from 52 to 80 by mid-2022. It will ultimately raise the total to 100, the company announced after markets closed in Hong Kong on Monday.

Staying private: the booming market for shares in the hottest start-ups; New exchanges aim to boost trade in promising businesses, but more regulation of an opaque sector may be needed
Miles Kruppa – FT
In 2014, an Austrian entrepreneur offered investors a rare chance to purchase shares in Jumio, his fast-growing and profitable payments company. The deal was not a typical venture capital transaction. Instead of purchasing new shares, investors could buy out earlier shareholders, in what are known as private secondary transactions.

Hong Kong’s Hang Seng Index Gets a Facelift; Overhaul will expand number of constituent stocks and increase emphasis on fast-growing technology firms
Joanne Chiu – WSJ
Hong Kong’s flagship stock index is getting a major overhaul that will expand the number of companies it covers and give more sway to fast-growing technology stocks. The changes to the Hang Seng Index, a key gauge of Hong Kong’s $6 trillion-plus stock market, amount to one of the biggest revamps since it was launched in 1969. They also follow a period of underperformance: Despite a recent rally, the index has gained only around 12% in the 12 months ended February, lagging U.S. benchmarks and the Shanghai Composite.

Europe’s cautious savers catch on to share-dealing craze; Many encouraged by rising stock market prices and some are even trading in GameStop
Martin Arnold – FT
Risk-averse Europeans have embraced share trading during the coronavirus pandemic, encouraged by soaring stock markets, rising household savings and the popularity of low-cost trading platforms. The number of people in Germany who own shares directly or via funds rose by 2.2m to 12.4m last year — with the sharpest rise among those aged under 30, according to a recent report by the Deutsches Aktieninstitut, which represents German publicly traded companies.

Banks in Germany Tell Customers to Take Deposits Elsewhere; More customers are having to pay negative rates as savings have surged amid the pandemic
Patricia Kowsmann – WSJ
Interest rates have been negative in Europe for years. But it took the flood of savings unleashed in the pandemic for banks finally to charge depositors in earnest. Germany’s biggest lenders, Deutsche Bank AG DB -3.76% and Commerzbank AG CRZBY -2.46% , have told new customers since last year to pay a 0.5% annual rate to keep large sums of money with them. The banks say they can no longer absorb the negative interest rates the European Central Bank charges them. The more customer deposits banks have, the more they have to park with the central bank.

Behind the Lines of Britain’s Covid War; The government has laid out plans for gradual reopening. But in cramped intensive care wards, teeming with patients and doctors near despair, the battle is unrelenting.
Written by Alan Cowell – NY Times
The numbers may be trending downward, but the battle is no less intense. In the land of Churchill, it is likened sometimes to war, the Covid war. In the latest phase of Britain’s splintered campaign against the coronavirus, Prime Minister Boris Johnson last week laid out a long glide path for England’s gradual reopening from lockdown, from March to June.

China Charges Ahead With a National Digital Currency; The electronic Chinese yuan is now being tested in cities such as Shenzhen, Shanghai and Beijing. No other major power is as far along with a homegrown digital currency.
Nathaniel Popper and Cao Li – NY Times
Annabelle Huang recently won a government lottery to try China’s latest economics experiment: a national digital currency. After joining the lottery through the social media app WeChat, Ms. Huang, 28, a business strategist in Shenzhen, received a digital envelope with 200 electronic Chinese yuan, or eCNY, worth around $30. To spend it, she went to a convenience store near her office and picked out some nuts and yogurt. Then she pulled up a QR code for the digital currency from inside her bank app, which the store scanned for payment.

Gen Z Are Hustling For Their Post-Covid Futures; Teens and young adults are learning valuable life skills, and making some cash, by setting up online shops, freelancing and joining the gig economy.
Lara Williams – Bloomberg
The last year has been hard for everyone, but spare a thought for youngsters. Generation Z are at a very delicate stage of life, many in the crucial exam years of their education or taking those first baby steps into the working world. Either way, they appear to be stuffed.

Return of the bond vigilantes: will inflation fears spoil the post-pandemic party? The sell-off this week in government bonds reflects concerns that an economic boom will reignite inflationary pressures
Robin Wigglesworth, Joe Rennison, Eric Platt and Colby Smith – FT
Many eulogies have been written for the “bond vigilantes” that were once said to prowl global markets for spendthrift countries to bully into fiscal rectitude. But the vigilantes seem to have saddled up again.

SEC Suspends Trading in 15 Stocks That Got Hyped on Social Media
Matt Robinson and Sarah Ponczek – Bloomberg
Wall Street watchdog temporarily halts trading in 15 stocks; Regulator says it’s actively monitoring online message boards
U.S. regulators are engaging in the stock market’s version of whack-a-mole — racing to suspend shares of companies with dubious prospects that have been hyped to the moon on social media.

Bank of Japan Shares May Have Become the Latest Meme Stock
Shoko Oda – Bloomberg
Shares in Japan’s central bank surge most in 15 years; Publicly listed BOJ is being bought by retail investors
GameStop. Nokia. The Bank of Japan? Japan’s central bank joined the ranks of equities with puzzling surges in valuation led by retail investors on Monday, as its shares surged by their daily limit. The stock rose 18%, the most since 2005, to 33,000 yen a share. Even experienced investors are often surprised to learn that as well as being Japan’s lender of last resort and a key pillar supporting the equity market, the BOJ is itself a publicly listed entity on the Tokyo Stock Exchange’s Jasdaq section.

Food Prices Are Soaring Faster Than Inflation and Incomes; As the Covid-19 pandemic wreaks havoc on economic growth, concerns about hunger and malnutrition are rising around the world.
Emily Cadman, Deena Shanker, Leslie Patton, and Charlie Wells – Bloomberg
Global food prices are going up, and the timing couldn’t be worse. In Indonesia, tofu is 30% more expensive than it was in December. In Brazil, the price of local mainstay turtle beans is up 54% compared to last January. In Russia, consumers are paying 61% more for sugar than a year ago.

Pandemic-Induced Credit Losses Could Hit $1 Trillion, BIS Says
Tasos Vossos – Bloomberg
Bankruptcy rates to rise as support for companies expires; Recreation poised for particularly hard blow, researchers find
Waves of bankruptcies triggered by the coronavirus pandemic will wipe as much as $1 trillion from the value of global corporate debt markets, the Bank for International Settlements warned. Company insolvencies “are expected to rise as measures to support credit are wound back, new consumption habits and business practices accelerate the downsizing of specific sectors,” the BIS wrote in a quarterly report published on Monday. “The looming increase in corporate bankruptcies will generate credit losses that will need to be absorbed, either by the financial system or by taxpayers.”

UK plc up for sale as overseas buyers eye bargains; Value of businesses sold to foreign predators continues to break records
Daniel Thomas and Peggy Hollinger – FT
When Boris Johnson last year proclaimed that Britain would make it “easier than ever for the world to benefit from what we have to offer” he would not have expected to be taken quite so literally by overseas corporate raiders.

We must clean up global finance to ‘build back better’; The post-pandemic economic recovery will be healthier if world leaders crack down on illicit flows of money
Martin Sandbu – FT
Political leaders deserve praise for their mantra to “build back better”. The pre-pandemic world suffered from deep flaws. It is good if leaders are determined to improve on the status quo ante, and we should hold them to it. But the range of things we need to rebuild better is so vast that there is a risk of a bandwidth problem, where politicians choose to focus on some to the detriment of others.

The Private Equity Party Might Be Ending. It’s About Time; A recent legal decision may force Wall Street to think twice before saddling struggling companies with debts they can’t handle.
William D. Cohan – Bloomberg
In the early 1980s, William Simon, a former secretary of the Treasury, and Ray Chambers, a former investment banker in New Jersey, made a fortune buying Gibson Greetings Inc. using very little of their own money and then selling it. Each man reaped a windfall of $70 million from an initial investment of $330,000. Ever since, the alchemy of leveraged buyouts has been dazzling. Practitioners of leveraged buyouts, who refer to themselves as part of the “private equity” industry, are among the richest Americans. They use a whole lot of borrowed money and as little equity as possible to buy companies they perceive to be undervalued or poorly managed. They hope to flip them at a big profit a few years later.

The Secret Life of a Coronavirus; An oily, 100-nanometer-wide bubble of genes has killed more than two million people and reshaped the world. Scientists don’t quite know what to make of it.
Carl Zimmer – NY Times
Last spring, coyotes strolled down the streets of San Francisco in broad daylight. Pods of rarely seen pink dolphins cavorted in the waters around Hong Kong. In Tel Aviv, jackals wandered a city park, a herd of mountain goats took over a town in Wales, and porcupines ambled through Rome’s ancient ruins. As the canals in Venice turned strangely clear, cormorants started diving for fish, and Canada geese escorted their goslings down the middle of Las Vegas Boulevard, passing empty shops displaying Montblanc pens and Fendi handbags.

Texas electricity firm files for bankruptcy citing $1.8 billion in claims from grid operator
Gary McWilliams – Reuters
Texas’s largest and oldest electric power cooperative on Monday filed for bankruptcy protection in federal court in Houston, citing a disputed $1.8 billion bill from the state’s grid operator.

Did bots help push GameStop and other ‘meme stocks’? A new report says yes.
Matt Binder -Mashable
Were bots behind the GameStop stock surge from less than $20 per share to nearly $350 per share? One cybersecurity firm is saying that may very well be the case. A new report from PiiQ Media, provided to Reuters, found that social media bots on some of the biggest online platforms were “hyping” GameStop and other “meme stocks” such as AMC. The same report also found similar activity behind the sudden increase of popularity in Dogecoin, a meme-based cryptocurrency.

Why India’s central bank has no faith in cryptocurrencies
Prathamesh Mulye – Quartz
While Bitcoin is scaling new heights and is embraced by heavyweights like Elon Musk, India’s central bank doesn’t seem to have faith in cryptocurrencies. In an interview with business news channel CNBC TV-18 last week (Feb. 24), Reserve Bank of India (RBI) governor Shaktikanta Das said that the central bank has “certain major concerns about cryptocurrency” and its impact on financial stability. Das also said that he had conveyed his concerns to the Indian government, which is scheduled to table a bill in the parliament banning private digital currencies.


CDC Recommends Johnson & Johnson’s One-Shot Vaccine
Angelica LaVito and Josh Wingrove -Bloomberg
Panel votes 12-0 in favor of shot’s use in adults 18 and older; U.S. government to begin shipping 3.9 million doses on Sunday
The Biden administration will start shipping almost 4 million doses of Johnson & Johnson’s Covid-19 vaccine on Sunday after the Centers for Disease Control and Prevention formally recommended the shot for adults ages 18 and up.

Employers aim for hybrid working after Covid-19 pandemic; Companies anticipate workers permanently splitting time between home and office
Daniel Thomas – FT
Companies are launching root-and-branch reviews of working practices, in moves that could have far-reaching consequences for UK city centres, after Boris Johnson outlined plans to fully reopen the economy by this summer.

CDC Recommends Johnson & Johnson’s One-Shot Vaccine
Angelica LaVito and Josh Wingrove – Bloomberg
Panel votes 12-0 in favor of shot’s use in adults 18 and older; U.S. government to begin shipping 3.9 million doses on Sunday
The Biden administration will start shipping almost 4 million doses of Johnson & Johnson’s Covid-19 vaccine on Sunday after the Centers for Disease Control and Prevention formally recommended the shot for adults ages 18 and up.

Finland Declares State of Emergency as Pandemic Intensifies
Leo Laikola – Bloomberg
Finland declared a state of emergency, allowing it to close bars and restaurants to curb the spread of the coronavirus. In addition, the government may invoke emergency powers at a later stage, Prime Minister Sanna Marin said on Monday. That could include restricting people’s movements, she said.

Coronavirus variant first identified in Brazil found in the UK; Health authorities say 6 people found to have the strain, with one yet to be traced
Sarah Neville – FT
Six people in the UK have been infected with a strain of coronavirus linked to a surge in cases in Brazil, including one person the British authorities have not yet been able to trace.

Novavax closes in on Covid triumph after 33 years of failure; US company prepares to launch its vaccine but the road to success has been long
Hannah Kuchler – FT
Less than a year before the Covid-19 pandemic ravaged the world, Novavax was facing delisting from the Nasdaq. The pharmaceutical company had poured hundreds of millions of dollars into research and development for vaccines — and yet, at 33 years old, was approaching middle age without a single approved shot.

Covid-19 Virus Studies Yield New Clues on Pandemic’s Origin; Coronaviruses closely related to the pandemic virus have been found in bats and pangolins in Asia
Betsy McKay – WSJ
As a World Health Organization team digs into the origin of the Covid-19 pandemic, other scientists are unearthing tantalizing new clues suggesting that the virus behind it evolved naturally to infect humans. At least four recent studies have identified coronaviruses closely related to the pandemic strain in bats and pangolins in Southeast Asia and Japan, a sign that these pathogens are more widespread than previously known and that there was ample opportunity for the virus to evolve.

Millions of Tenants Fall Further Behind on Rent as They Await Federal Covid-19 Assistance; Many states have yet to distribute $25 billion they received from the Treasury Department to help renters
Andrew Ackerman and Will Parker – WSJ
Tenants who are behind on their rent are still waiting for $25 billion in assistance that Congress appropriated in December, as millions of households and landlords fall deeper into debt. Many states are still determining how to distribute money they have received from the Treasury Department to help an estimated 13 million renters. Meanwhile, Congress is poised to appropriate another $20 billion in rental assistance.

The Era of Vaccine Diplomacy Is Here; The coronavirus threat is global. So is the remedy.
The Editorial Board – NY Times
It is only natural that the American government and the American people have focused on getting coronavirus vaccines to as many of its people as possible, with the most vulnerable first in line. But as the pace of domestic vaccination accelerates, two facts are worth bearing in mind.

Brazil Is Brilliant at Vaccinations. So What Went Wrong This Time? It’s not hard to work out who to blame for the country’s disastrous vaccine rollout.
Vanessa Barbara – NY Times
When it comes to Covid-19 vaccination programs, there are some countries that have exceeded expectations and others that have fallen surprisingly short. And then there is Brazil. Vaccinating over 210 million people may sound daunting, but for Brazil it really shouldn’t be. With one of the largest universal, free-of-charge public health systems in the world, the country has a distinguished track record of vaccinations and disease control. The National Immunization Program, founded in 1973, helped to eradicate polio and rubella in the country and currently offers more than 20 vaccines free in every municipality.

C.D.C. Traces Covid Outbreaks in Gyms, Urging Stricter Precautions; Coronavirus cases at fitness centers in Chicago and Honolulu were linked to carelessness about masks and symptoms, federal health officials found.
Roni Caryn Rabin – NY Times
Public health officials on Wednesday urged gym-goers to wear masks when they work out and to remain six feet apart, as new research described the rapid spread of coronavirus infections during high-intensity exercise classes at gyms in Honolulu and Chicago.

Exchanges, OTC and Clearing

ICE warns Platts of hasty Brent oil market reform
Dmitry Zhdannikov – Reuters
ICE exchange, home of Brent oil futures trading, has put pressure on pricing agency Platts to postpone its physical Brent market reform, saying the market needs more time to consult and adjust the value of derivatives in line with the changes.

Nasdaq Reveals a Surprising Development in Swedish Boardrooms
Kati Pohjanpalo – Bloomberg
Sweden is usually considered a pioneer in sex equality. It turns out its corporations have become a bit complacent of late, and are starting to fall behind on a key metric. Companies in the largest Nordic economy aren’t the trailblazers they once were in ensuring women have equal access to boardroom seats, according to Fredrik Ekstrom, who runs Nasdaq Inc.’s stock exchange in Stockholm.

CME Group SOFR futures skyrocket as market transfers from Libor; The exchange reached a new daily volume record of 265,511 Secured Overnight Financing Rate (SOFR) contracts on 25 February.
Annabel Smith – The Trade
US derivatives exchange CME Group reached a new record daily volume for SOFR contracts on 25 February as the market continues its migration away from the Libor benchmark. The exchange recorded 265,511 SOFR futures contracts on 25 February, marking a significant increase from the previous record of 240,288 set on 19 November last year.

European Commission approves Euronext Borsa Italiana acquisition; The pan-European exchange has subsequently reshuffled the leadership of its Paris business in preparation for the completion of the deal.
Annabel Smith – The Trade
European exchange operator Euronext has received approval from the European Commission to go ahead with its planned purchase of Borsa Italiana. Euronext entered into a definitive agreement to acquire Borsa Italiana from the London Stock Exchange Group (LSEG) in October last year for EUR4.3 billion.

Flyr lands on Euronext Growth Oslo
The low-cost carrier Flyr has today been admitted to trading on Euronext Growth (ticker code: FLYR). Flyr is the first new airline in Europe to be listed following the outbreak of the Covid-19 pandemic. “A listing on Euronext Growth is an exciting and important milestone for Flyr. It enables us to pursue the opportunities we see in a changing market and a recovering airline industry,” says Tonje Wikstrøm Frislid, CEO of Flyr.

Index Total Return Futures: Introduction of Index Total Return Futures on EURO STOXX Banks and EURO STOXX Select Dividend 30
The Management Board of Eurex Deutschland took the following decision with effect from 29 March 2021:

Equity Index Derivatives: Introduction of FTSE 100 Index Total Return Futures, FTSE 100 Declared Dividend Index Futures, FTSE 100 Index Futures and Options
The Management Board of Eurex Deutschland took the following decision with effect from 29 March 2021;Introduction of FTSE 100 Index Total Return Futures; Introduction of FTSE 100 Declared Dividend Index Futures; Introduction of FTSE 100 Index Futures; Introduction of FTSE 100 Index Options

Cash market sales statistics for February
Deutsche Börse Group
A trading volume of EUR 167.6 billion was achieved on Deutsche Börse’s cash markets in February (previous year: EUR 183 billion). Of this, Xetra accounted for 126.7 billion euros (previous year: 153.8 billion euros), bringing the average daily Xetra turnover to 6.3 billion euros. Turnover on the Frankfurt Stock Exchange was EUR 6.1 billion (previous year: EUR 5.6 billion) and on the Tradegate Exchange EUR 34.8 billion (previous year: EUR 23.6 billion).

ICE publishes auction calendar for UK’s new Emissions Trading Scheme; First UK ETS auction will take place on May 19; ICE UK Allowance (UKA) Futures and Daily Futures launching
Intercontinental Exchange, Inc.
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 the publication of the auction calendar for the UK’s new Emissions Trading Scheme (“ETS”) with the first auction due to commence on May 19, 2021, subject to regulatory approval.

Amendments to the Daily Settlement Procedure Document for Eris Swap Futures
CME Group
Effective Sunday, March 14, 2021 for trade date Monday, March 15, 2021, and pending all relevant CFTC regulatory review periods, The Board of Trade of the City of Chicago, Inc. (“CBOT” or “Exchange”) will amend the Daily Settlement Procedure Document relating to the Eris Swap Futures contracts (the “Contracts”) as noted below.

Performance Bond Requirements: Energy, Equity, FX and Interest Rate Margins – Effective March 1, 2021
CME Group
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.

Performance Bond Requirements: Interest Rate Margins – Effective March 01, 2021
CME Group
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

Notice of Summary Action
CME Group
MEMBER FIRM: Ginga Global Markets Pte Ltd.
Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.
PENALTY: On February 10, 2021, pursuant to Rule 512, a fine in the amount of $2,000 was assessed against Ginga Global Markets Pte Ltd for its violation of NYMEX Rule 526.

New Product Summary: Initial Listing of Three (3) LNG Freight (LNG Fuel) (Baltic) Futures Contracts – Effective March 22, 2021
CME Group

Revised Price Limit Offset Levels for Nikkei Stock Average Futures and TOPIX Index Futures – Effective Trade Date March 1, 2021
CME Group

Notice of Disciplinary Action
CME Group
NYMEX RULE VIOLATIONS: Rule 432. General Offenses
It shall be an offense: G. To pre-arrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts. W. It shall be an offense for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange. Rule 576. Identification of Globex Terminal Operators. Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.

Notice of Disciplinary Action
CME Group
CME RULE VIOLATIONS: Rule 534. Wash Trades Prohibited (In part) – No person shall place … buy and sell orders in the same product and expiration month … where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades.
Rule 576. Identification of Globex Terminal Operators – Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.
PENALTY: Based on the record and the Panel’s findings and conclusions, the Panel ordered Li to pay a fine in the amount of $40,000, and suspended Li from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group for two years, beginning on the effective date below and continuing for two years from the date that the ordered fine is paid.

Notice of Disciplinary Action
CME Group
NON-MEMBER: Chunchun Yin
NYMEX RULE VIOLATIONS: Rule 432. General Offenses
It shall be an offense: L.1. To fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.
PENALTY: Based on the record and the Panel’s findings and conclusions, the Panel ordered Yin to pay a fine in the amount of $10,000, and suspended Yin from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group for two years, beginning on the effective date below and continuing for two years from the date that the ordered fine is paid.

Trading Overview in February 2021; Japan Exchange Group released Trading Overview in February 2021.
Cash Equity Market – In February 2021, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 3.3397 trillion; The daily average trading value for the ETF market was JPY 276.2 billion
Derivatives Market – In February 2021, total derivatives trading volume was 25,879,442 contracts.; In February 2021, total derivatives trading value was JPY 234 trillion; Trading volume for the night session was 9,245,709 contracts. The ratio of the night session was 36.3%.


Goldman bankers join Walmart effort to take on Wall Street; Omer Ismail and David Stark sign up to fintech venture by world’s largest retailer
Robert Armstrong – FT
The head of Goldman Sachs’ consumer finance division, Omer Ismail, and one of its top executives, David Stark, are both leaving to join a fintech start-up backed by Walmart and Ribbit Capital. The hires represent a big step in the second big effort by the world’s largest retailer to enter financial services, after it abandoned its plan to start a bank over a decade ago, under pressure from regulators.

China Fintech Curbs That Hit Ant Were No Surprise, Ping An Says
Bloomberg News
China has been discussing fintech rules for years, Tan says; Investors remain worried about regulatory risks in China
China’s curbs on fintech that thwarted a massive stock sale by Ant Group Co. have been under consideration for years and weren’t a surprise to those in the industry, according to an executive at China’s biggest insurer by market value.

With Goldman Hires, McMillon Moves Closer to Bank of Walmart
Jennifer Surane, Sridhar Natarajan, and Matthew Boyle – Bloomberg
Goldman’s Omer Ismail to lead Walmart’s newly created fintech; For banks, ‘alarm bells go off’ with giant’s foray in finance
Walmart Inc. just took one step closer to being JPMorgan Chase & Co.’s biggest nightmare. By luring a pair of senior bankers from Goldman Sachs Group Inc. to run its fledgling financial technology startup, the world’s largest retailer is gaining even more heft as it seeks to become a one-stop shop for consumers’ financial needs. The move struck fear on Wall Street, which has been begging regulators to halt recent efforts by retailers and startups to begin offering core banking products to millions of consumers.

Virtu reduces POSIT Alert Canada routing commissions as Liquidnet ups fees fivefold; In response to Liquidnet Canada raising its fees five-fold, Virtu Financial has reduced its POSIT Alert Canada commissions, The TRADE understands.
Annabel Smith – The Trade
Virtu Financial has reduced the commission rates associated with its block indications network in Canada following a fivefold increase in fees from block venue Liquidnet, according to a memo seen by The TRADE.


Bitcoin’s Long-Term Value Doubted Due to ESG, Tighter Rules
Joanna Ossinger – Bloomberg
Bitcoin is nursing losses after its worst weekly plunge in almost a year and on one view its longer term outlook could be even worse because of environmental concerns and tightening regulations. The sheer amount of energy needed to mine Bitcoin and the prospect that governments will create more obstacles for the largest cryptocurrency point to the token losing “most of its value over time,” BCA Research Inc. said.

Cryptocurrency Millionaires Fuel a Boom in Digital Art Market
Brandon Kochkodin and Olga Kharif – Bloomberg
‘The Innovator’s Dinner’ was listed for $1 Million on OpenSea; Market ‘certainly seems frothy’ says crypto expert Carter
Investing in art is a rite of passage for financial heavyweights, marking their transformation from unrefined market players to modern aristocrats. Billions of dollars made playing stocks and bonds are funneled into a Jasper Johns painting on the wall, Picassos in a bunker at the Geneva Free Port or, famously in the case of Steve Cohen, a 14-foot tiger shark preserved in formaldehyde by Damien Hirst at the center of a penthouse living room.

Bitcoin Whales Are a Mixed Blessing; Institutional investors will help stabilize the price, but also remove the protective benefits of decentralization.
Elaine Ou – Bloomberg
No sooner did Treasury Secretary Janet Yellen warn about Bitcoin’s inefficiency early last week than the cryptocurrency prices tanked. They were already falling, yet, for some, the price movement was a demonstration of the exact volatility Yellen was criticizing. For others, like Square and MicroStrategy Inc., it was an opportunity to buy the dip, with words of encouragement from Ark Investment Fund’s Cathie Wood, a Bitcoin bull. Ultimately, Bitcoin’s corporate investors will improve price stability. 1 At the same time, the rise of concentrated corporate holdings could pose a different kind of risk. First, some context.

Bitcoin Rises After China Region Declares War on Crypto Mining
Alfred Cang – Bloomberg
Inner Mongolia plans to shut all such operations by April; China is home to some of the world’s biggest crypto miners
China’s Inner Mongolia has banned cryptocurrency mining and declared its intention of shutting all such projects by April, spurring fears the world’s No. 2 economy will take more steps this year to eradicate the power-hungry practice. The autonomous region, a favorite among the industry because of its cheap power, also banned new digital coin projects, according to a draft plan posted on the Inner Mongolia Development and Reform Commission’s website Feb. 25. The aim is to constrain growth in energy consumption to about 1.9% in 2021.

Bitcoin cannot replace the banks; Cryptocurrency hopes are based on a misunderstanding of how money is created
Brendan Greeley – FT
For several hours on Wednesday, the digital services the US Federal Reserve uses to clear transfers between banks were offline due to an “operational error”. Bitcoin holders crowed about the reliability of their payments network, distributed among all the computers mining coins. Zac Prince, chief executive of BlockFi, a crypto lending company, showed more restraint, pointing out on Twitter merely that payments over crypto “continue to operate normally”.

Bitcoin is at a ‘tipping point’ between mainstream boom and speculative implosion. Citi says one is more likely
Callum Keown – MarketWatch
U.S. stocks are set for a strong start to the week, as bond yields eased from last week’s highs early on Monday. Two positive developments over the weekend have also buoyed investors: The U.S. House passed the Biden administration’s $1.9 trillion pandemic-relief package on Saturday before the Food and Drug Administration granted emergency authorization to Johnson & Johnson’s JNJ, -2.64% COVID-19 vaccine — the first single-shot dose available to Americans.

Monthly crypto exchange volumes broke $1 trillion for the first time in February
MK Manoylov – The Block
Crypto exchange data collected by The Block Research shows monthly traded volumes surpassing $1 trillion in February, a new record. As of February 27, the monthly volume figure stood at $1.05 trillion. That represents an increase of $143.9 billion — or 15.9% — from January when the previous monthly high was registered. Two-thirds of the trillion-dollar volume comes from Binance, with 10.6% from Coinbase and 5.3% from Kraken.

Inner Mongolia to Shut Down Crypto Mining Industry: Report
Tanzeel Akhtar – Coindesk
Inner Mongolia, an autonomous region of China, is banning cryptocurrency mining, according to a Bloomberg report on Monday. The region plans to force cryptocurrency mining projects to close by April, according to a draft plan posted online by the Inner Mongolia Development and Reform Commission on Feb. 25. Inner Mongolia is known for inexpensive energy supplies and accounts for 8% of the global bitcoin mining hash rate, according to the Cambridge Centre for Alternative Finance, per the report.

FATF says it will release updated guidance for digital assets in June
Aislinn Keely – The Block
The Financial Action Task Force (FATF) will be seeking public comment on updated guidance related to virtual assets. A post-meeting statement from the international regulatory body recapped plans for the coming year, including its dealings with digital asset standards. In June 2019, the FATF released guidance affecting cryptocurrency and digital assets. The most notable portion was the so-called “travel rule” which required virtual asset providers (VASPs) to provide originator and beneficiary information to one another during transactions. The heightened standards are aimed at curbing money laundering and illicit finance.

India’s Central Bank Sees Pros and Cons With National Digital Currency
Omkar Godbole – Coindesk
The Reserve Bank of India sees a central bank digital currency (CBDC) as a double-edged sword that could promote financial inclusion, but also undermine commercial banks’ role in the economy. In a report released Friday, the central bank said, “CBDC can be designed to promote non-anonymity at the individual level, monitor transactions, promote financial inclusion by direct benefit fiscal transfer, pumping central bank ‘helicopter money’ and even direct public consumption to a select basket of goods and services to increase aggregate demand and social welfare.”

Kraken offers refunds to crypto exchange traders hit by ETH price fall
Ryan Weeks – The Block
Crypto giant Kraken has been offering refunds to traders hit with heavy losses as a result of a sharp dip in the price of Ether (ETH) on the exchange earlier this week. The price of ETH on Kraken fell to $700 on February 22, significantly below its low point on other major exchanges. With investors licking their wounds, Kraken investigated the sell-off and found that its trading engine had “processed orders correctly”. Chief executive Jesse Powell took to Twitter to explain that the price move was caused by extreme selling while also calling for customers not to trade with leverage if they don’t understand the risks.


Trump’s Republican Hit List at CPAC Is a Warning Shot to His Party
Jonathan Martin and Maggie Haberman – The New York Times
After days of insisting they could paper over their intraparty divisions, Republican lawmakers were met with a grim reminder of the challenge ahead on Sunday when former President Donald J. Trump stood before a conservative conference and ominously listed the names of Republicans he is targeting for defeat. As Democrats pursue a liberal agenda in Washington, the former president’s grievances over the 2020 election continue to animate much of his party, more than a month after he left office and nearly four months since he lost the election. Many G.O.P. leaders and activists are more focused on litigating false claims about voting fraud in last year’s campaign, assailing the technology companies that deplatformed Mr. Trump and punishing lawmakers who broke with him over his desperate bid to retain power.

How Pro-Trump Forces Pushed a Lie About Antifa at the Capitol Riot
Michael M. Grynbaum, Davey Alba and Reid J. Epstein – The New York Times
At 1:51 p.m. on Jan. 6, a right-wing radio host named Michael D. Brown wrote on Twitter that rioters had breached the United States Capitol — and immediately speculated about who was really to blame. “Antifa or BLM or other insurgents could be doing it disguised as Trump supporters,” Mr. Brown wrote, using shorthand for Black Lives Matter. “Come on, man, have you never heard of psyops?” Only 13,000 people follow Mr. Brown on Twitter, but his tweet caught the attention of another conservative pundit: Todd Herman, who was guest-hosting Rush Limbaugh’s national radio program. Minutes later, he repeated Mr. Brown’s baseless claim to Mr. Limbaugh’s throngs of listeners: “It’s probably not Trump supporters who would do that. Antifa, BLM, that’s what they do. Right?”

Supreme Court to debate voting rights case that advocates worry will limit access to polls
John Fritze – USA Today
Eduardo Sainz was standing at the front door of a home in Tucson, Arizona, encouraging the family inside to vote when the young man and his mom asked for a favor that under the state’s current law would make him a felon. Sainz, state director of the Latino advocacy group Mi Familia Vota, said neither the young man, who was in a wheelchair, nor his mother had a car or the time needed to mail their ballots before Arizona’s gubernatorial election in 2014. They asked Sainz to drop off their ballots on his way home – and he agreed. “It made the difference between participation and their ballot sitting on a shelf and not being counted,” said Sainz, whose group collected thousands of votes in similar encounters before the state banned such handoffs. “It was a connector to democracy.”


FCA first alerted to concerns over Neil Woodford’s business in 2015; UK regulator did not intervene until two years after issues were raised
Owen Walker and Matthew Vincent – FT
The Financial Conduct Authority was warned about problems within Neil Woodford’s investment business less than a year after it opened in 2014 but did not intervene for almost another two years, according to several people briefed on the process. Woodford recently announced plans to relaunch his career at a time when the regulator faces pressure from politicians and campaigners critical of its oversight of the stockpicker’s failed business — and over how long it is taking to investigate his downfall.

Commissioner Stump to Participate in a Fireside Chat at the Institute of International Bankers 2021 Annual Washington Conference

Commissioner Stump to Participate on a Panel at the Third Annual Joint Conference of the Deutsche Bundesbank, European Central Bank and Federal Reserve Bank of Chicago

FINRA Firms Want Inspectors to Work Remotely, Permanently
FINRA-regulated firms say the industry is prepared to conduct proper supervision virtually on a permanent basis after the pandemic ends; state securities regulators and others worry about what could slip through the cracks without physical inspections.

Shareholders push SEC for tougher climate regime for US oil; Activists plan more green resolutions at annual meetings after ‘corporate-friendly’ Trump years
Myles McCormick – FT
Activist groups are calling on the US Securities and Exchange Commission to make it easier for shareholders to table climate resolutions at oil producer annual meetings in another early test of the Biden administration’s efforts to tackle climate change.

ASIC commences civil penalty proceedings against CommSec and AUSIEX for systemic compliance failures
ASIC has commenced civil penalty proceedings in the Federal Court against Commonwealth Securities Limited (CommSec) and Australian Investment Exchange Limited (AUSIEX) for alleged breaches of the Market Integrity Rules, Corporations Act and ASIC Act (CommSec only) relating to systemic compliance failures in the delivery of financial services.

Former Victorian financial adviser charged with deception
On 24 February 2021, Mr Ahmed Saad, of Glenroy, Victoria, appeared in court charged with dishonestly obtaining a financial advantage by deception for another and a further charge of attempting to obtain a financial advantage by deception for another.

ESMA proposes rules for Taxonomy-alignment of non-financial undertakings and asset managers
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its Final Report on advice under Article 8 of the Taxonomy Regulation, which covers the information to be provided by non-financial undertakings and asset managers to comply with their disclosure obligations under the Non-Financial Reporting Directive (NFRD).

ESMA delivers statement on Cum-Ex/Cum-Cum at EP Subcommittee on Tax Matters
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, represented by Mr Fabrizio Planta, Head of Markets and Data Reporting Department, addressed yesterday the Members of the European Parliament Subcommittee on Fiscal Matters regarding the “Cum-Ex/Cum-Cum” tax fraud scandal. He referred to the past and prospective role of ESMA, and the recommendations and conclusions of the Final Report on the inquiry.

FINRA Production Test
As previously announced FINRA plans to replace digital certificates with Multi Factor Authentication (MFA) for access to the TRAQS website in April of 2021. A FINRA production User Acceptance Test (UAT) will occur on Saturday, March 6, 2021. Firms must register with FINRA Market Operations of their intent to participate in the UAT via an email to FINRAOperations@finra.org. Please include the firm name, MPID(s) used, names of testers and web usernames, if applicable, no later than noon on Wednesday, March 3, 2021 to register for the test.

SEC Suspends Trading in Multiple Issuers Based on Social Media and Trading Activity
As part of its continuing effort to respond to potential attempts to exploit investors during the recent market volatility, the Securities and Exchange Commission today suspended trading in the securities of 15 companies because of questionable trading and social media activity.

Google UK & Ireland’s letter to the FCA – 26 February 2021
Google UK & Ireland’s Managing Director, Ronan Harris, wrote a letter on 26 February 2021 to the FCA Chairman and CEO about the work Google have been doing to tackle scam advertisements on their platform.

FCA ‘did not act’ on Woodford concerns
Damian Fantato – FT Adviser
The Financial Conduct Authority was first alerted about Neil Woodford’s investment strategy in 2015, according to reports from the Financial Times. But despite these warnings, the FT has reported the regulator did not intervene for almost another two years.

Former FTC competition director joins Latham & Watkins; Ian Conner is latest government lawyer to depart in wake of US election
Kate Beioley – FT
Law firm Latham & Watkins has hired former Federal Trade Commission bureau director and ex-Kirkland & Ellis partner Ian Conner, marking the latest departure of a government lawyer in the wake of the US election.

Investing and Trading

‘Markets Are Wrong’: $2 Trillion of Pension Funds Skip Bond Rout
Ruth Carson and Matthew Burgess – Bloomberg
‘As interest-rate jitters supercharged a meltdown in the world’s biggest bond market, Sam Sicilia barely blinked. “The markets are wrong” about inflation expectations, said Sicilia, chief investment officer of the A$56 billion ($43 billion) Host-Plus Pty pension fund in Melbourne. “Deflationary forces are bigger. Interest rates are going to stay at effectively zero.”

Yes, Bond ETFs Can Go Haywire. But That’s a Good Thing, Says BIS
Sam Potter – Bloomberg
Research on baskets shows they help absorb shocks in turmoil; ‘ETFs could be a stabilising force during runs,’ paper says
Critics of the passive-investing boom in bonds warn about the risks stemming from the mismatch between highly tradable ETFs and the illiquid securities they hold. Turns out this very discrepancy might help stabilize the market, according to the Bank of International Settlements.

The Looming Test for Central Bank Independence; Imagine “Yellen,” the musical.
Mervyn King – Bloomberg
In the first two columns in this series, I asked what the pandemic meant for short-term fiscal policy and, looking farther ahead, for measures to accommodate structural shifts in our economies. This time I’ll ask what it means for monetary policy — and the starting point is to look back at a key moment in history.

Robinhood Traders Who Got Free GameStop Display 9,000% Gains — or Regret; Some hung onto their freebie shares from an online brokerage, while others sold over the summer well before last month’s surge.
Misyrlena Egkolfopoulou – Bloomberg
The month Nathan Greninger received stock in GameStop Corp. for free from Robinhood Markets, the shares were trading at about $3.70 each. That was last March. Americans were just starting to hunker down at home during the early days of pandemic lockdowns, stocks were tanking, Reddit’s WallStreetBets forum was an obscurity and GameStop was a largely forgotten mall retailer. In short, it was a lifetime ago in the cultural consciousness.

The Tech Stock Rout Is Raising Risks for American Retirement Plans; Diversification in popular 401(k) funds suffered as managers piled into shares of mega-cap technology companies.
Suzanne Woolley – Bloomberg
Many American retirement savers could be in for an unhappy discovery in the wake of Thursday’s tech-led stock market rout. Some of the largest funds in workplace retirement savings plans such as 401(k)s, which investors likely assumed were well-diversified, are not. A handful of mega-cap tech stocks make up around 30% of some of the most popular funds in retirement plans, according to data compiled by Bloomberg.

Buffett’s ‘Tone Deaf’ Annual Letter Skirts Major Controversies
Katherine Chiglinsky – Bloomberg
His silence on pandemic, racial inequality disappointed some; Billionaire has been less willing to make political statements
Warren Buffett’s 15-page annual letter to shareholders on Saturday made mention of the pandemic that ravaged the globe in 2020 exactly once: One of his furniture companies had to close for a time because of the virus, the billionaire noted on page nine. Buffett likewise steered clear of politics, despite the contested presidential election and riots at the U.S. Capitol, and never touched on race or inequality even after protests and unrest broke out in cities across the nation last year. He also avoided delving into the competitive deal-making pressures faced by his conglomerate, Berkshire Hathaway Inc., a topic routinely dissected in past year’s letters.

Warren Buffett warns of ‘bleak future’ for debt investors; ‘Bonds are not the place to be these days’ Berkshire Hathaway chief tells shareholders in his annual letter
Eric Platt – FT
Warren Buffett warned that debt investors faced a “bleak future” days after a sell-off pummelled government bonds and sent reverberations through global stock markets.

Bond Tumult Complicates Life for the Fed; A reduction in unconventional measures is long overdue, but weaning markets off liquidity without volatility will be difficult.
Mohamed A. El-Erian – Bloomberg
The volatility in government bond yields last week compelled several market participants to call on the Federal Reserve to say, or better, do something about it, though such calls have lacked specifics. At the same time, a handful of foreign central bank officials expressed concern that the financial conditions in their own countries are experiencing, to use the words of a European Central Bank official, “undue tightening.” The tumultuousness risks complicating a long overdue evolution in the macroeconomic policy mix pursued by the U.S., including a reduction in what has been excessive reliance on unconventional monetary measures.

Bond turmoil heralds end of the standard portfolio; If fixed-income no longer offers stability, look elsewhere for protection from equity volatility
Merryn Somerset Webb – Ft
Bonds are supposed to be boring. When they are not, you should pay attention. That makes this week a good time to do just that. Bond yields are on the up: on Thursday the 10-year US Treasury yield hit 1.6 per cent.

Why it is usually a mistake for investors to take profits; A tiny number of superstar companies account for returns from equity markets
Lawrence Burns – FT
As valuations for some of the world’s largest tech companies are being questioned as expensive by some sceptics, I am reminded of a conversation from early 2020, when the terms “lockdown” and “social distancing” were largely unheard of.

BoE governor warns of rising tensions as EU derivatives clearing power struggle continues; Andrew Bailey says the UK must “resist very firmly” the EU’s attempts to force all euro-derivatives clearing into the bloc.
Annabel Smith – The Trade
The governor of the Bank of England, Andrew Bailey, has warned that tensions between the UK and the EU will escalate quickly if the EU forces euro-derivatives clearing out of the UK.

Environmental, Social and Corporate Governance

Big Oil’s Net-Zero Plans Show the Hard Limits of Carbon Offsets; As more companies turn to offsets to lower their environmental impact, the total volume they need will quickly exceed the planet’s ability to provide them.
Kate Mackenzie – Bloomberg
If you can’t pay the interest on your debts, an IOU isn’t going to be enough to save you from bankruptcy. That’s the problem with the succession of net zero commitments emerging from companies and governments. The carbon emissions generated by our current industrial and agricultural systems are going to lead to a disaster far worse than insolvency without vigorous efforts to reduce them. If promises to offset them with carbon-absorbing activities are to be worth anything, they’re going to need to be more than aspirational words on paper.

Cargill Lays Out Plan to Cut Farmed-Salmon Emissions by 30%
Isis Almeida – Bloomberg
Top crop trader wants to reduce salmon’s footprint by 2030; Company eyes entry into fish production, processing business
The world’s largest agricultural commodities trader has set a path to cut emissions from salmon farming. Cargill Inc., a top provider of feed to the seafood industry, will work with customers to reduce the footprint of farmed salmon by 30% by 2030, the company said in a statement. A large part of the effort will target feed, which accounts for as much as 90% of salmon’s environmental impact.

Europe’s Biggest Banks Face New Green Asset Ratio Disclosure
Silla Brush – Bloomberg
Europe’s biggest banks face new rules to disclose how much of their business contributes to climate change. The “Green Asset Ratio,” announced by the European Banking Authority on Monday, would be a key metric to show if a firm is shifting away from financing fossil fuels and toward renewable energy. The proposal to the European Commission would apply to big investment firms and banks including Deutsche Bank AG and BNP Paribas SA.

Gillian Tett explains ESG’s importance
FT Video
Companies and investors are no longer able to ignore the impact of environmental and social governance issues. The FT’s Gillian Tett explains why boardrooms are now reacting rapidly to changing popular opinion in this arena

UK to launch first green savings bond to boost climate credentials; Move to issue bonds to back clean energy projects comes ahead of UN summit
Camilla Hodgson and Joshua Oliver – FT
The UK will launch its first sovereign green savings bonds, offering retail investors the chance to buy into projects dedicated to greening the economy, such as renewable energy schemes, in its budget this week.

Dubai On Track To Become Leading Sustainable Financial Hub
The Dubai Sustainable Finance Working Group has published two comprehensive guides as part of Dubai’s efforts to accelerate its leading position and expansion of Environmental, Social and Governance (ESG) and sustainable finance in the UAE and wider region. The guides inform issuers and investors about best practices in the rapidly expanding ESG sector and the commercial opportunities it offers.


Cathie Wood’s Power in Some Stocks Is Even Bigger Than It Seems
Claire Ballentine and Sarah Ponczek -Bloomberg
Ark, Nikko Asset Management own at least 25% of three firms; Outflows could ripple through heavily concentrated securities
A rough week for Cathie Wood is reminding Wall Street that Ark Investment Management has a lot of cash in not that many companies. In fact, the firm’s dominance in some stocks may be even greater than it seems. Ark now owns more than 10% of at least 29 companies via its exchange-traded funds, up from 24 just two weeks ago, according to data compiled by Bloomberg.

Credit Suisse Suspends Supply Chain Finance Funds Over Valuation
Christian Baumgaertel – Bloomberg
Credit Suisse Group AG suspended redemptions from and subscriptions to a group of supply chain finance funds that invests in products sourced by financier Lex Greensill, citing “considerable uncertainties” over the valuation of some of the funds’ assets.

Deutsche Bank under pressure over derivatives sales in Spain; Potential mis-selling of currency contracts to small companies scrutinised in probe and lawsuits
Stephen Morris and Olaf Storbeck – FT
Deutsche Bank is under pressure over its sale of complex currency products in Spain as regulators await the results of an internal probe into contracts that pushed some small companies into financial distress and led to a series of out-of-court settlements.

Credit Suisse suspends two Greensill-linked funds; Bank halts redemptions on supply-chain funds whose investments are chosen by SoftBank-backed group
Robert Smith and Stephen Morris – FT
Credit Suisse has halted redemptions on two funds in its $10bn range of investment vehicles linked to Greensill Capital, a controversial finance company backed by SoftBank’s Vision Fund.

Northern Trust enters fast-growing European ETF market; Manager joins other heavyweight US competitors drawn by shift to low-cost trackers in Europe
Chris Flood – FT
Interested in ETFs?
Visit the FT’s ETF Hub for news and analysis, investor education and tools to help you select the right ETFs. Northern Trust plans to break into Europe’s fast expanding $1.3tn exchange traded fund market, marking the latest move by a big US competitor to tap into the growing shift among European investors into passively managed index trackers.

Jane Fraser Is Hitting Refresh at Citigroup; The new CEO takes over Monday with two major goals: simplify the bank and make regulators happy
David Benoit – WSJ
Jane Fraser wants to simplify Citigroup Inc., C 3.69% the original megabank. That won’t be easy. On Monday, Ms. Fraser takes over as chief executive of the third-biggest bank in the U.S. Once the industry’s problem child, the bank has stabilized and built up its defenses, proving sturdy and profitable even during the pandemic. Unlike her predecessors, she comes to the job at a time when Citigroup is relatively under the radar.


EU must prepare for ‘era of pandemics’, von der Leyen says; Commission president seeks to mirror US with health ‘authority’ to speed up reaction to medical crises
Sam Fleming – FT
Europe must prepare its medical sector to cope with an “era of pandemics”, the European Commission president said, as she warned the bloc was still in its most difficult period for Covid-19 vaccine deliveries.

Swiss Need Financial Diplomacy in Future, Hildebrand Says
Corinne Gretler – Bloomberg
Switzerland needs to consider financial diplomacy to regain political influence around the world, and may want to look to Singapore for inspiration, according to BlackRock Inc.’s Philipp Hildebrand.

If London Can’t Beat SPACs, It Should Join Them; The U.K.’s existing regime for blank-check companies serves no one well. It’s overprotective and deprives investors of choice.
Chris Hughes – Bloomberg
London’s regime for special purpose acquisition companies serves no one well. Its approach to investor protection is so crude as to have prevented the SPAC market from taking off at all. As the U.K. scrambles to bolster its post-Brexit finance industry, it should not dismiss the U.S. model unless it can devise something better.

London Lures First European IPO This Year With Trustpilot
Swetha Gopinath – Bloomberg
Danish company is said to seek 1 billion-pound valuation; Deal shows London can still draw European IPOs after Brexit
Trustpilot, a Denmark-based online platform for consumer reviews, plans an initial public offering in London, boosting the city’s image as a hotspot for listings in Europe.

Troublesome Trio in Emerging Markets Face Yield Spike Scare
Farah Elbahrawy, Lilian Karunungan, and Sydney Maki – Bloomberg
Lira, real, rand brace for more volatility from U.S. yields; Emerging markets may remain under pressure: Standard Chartered
Eight years ago, when the taper tantrum roiled emerging markets, the so-called Fragile Five of Turkey, Brazil, South Africa, India and Indonesia suffered the most. Another spike in U.S. Treasury yields is threatening to wreak havoc on at least three of those nations. The Turkish lira, Brazilian real and South African rand led major global declines last week in the worst developing-nation currency selloff since late September. Those exchange rates have the highest one-week implied volatility in the world, with some analysts warning of more pain ahead.

Wealth Fund Newbie Comes Into Focus in $1 Trillion Sovereign Hub
Nicolas Parasie – Bloomberg
Global SWF says ADQ amassed $110 billion since setup in 2018; Role is to help diversify Abu Dhabi’s oil-dependent economy
For all the buzz around Abu Dhabi’s newest wealth fund, the size of ADQ has been harder to pin down. A new report from Global SWF has put a number for the first time on how much the sovereign investor has amassed. Through the transfer of government holdings including the domestic stock exchange, alongside a series of investments, ADQ now oversees $110 billion in assets, according to estimates by the New York-based data firm and adviser.

China’s R&D Spending Rises 10% to Record $378 Billion in 2020
Bloomberg News
China’s spending on research and development hit a record high 2.4% of gross domestic product in 2020, according to preliminary data from the National Bureau of Statistics. China’s total expenditure on R&D rose 10.3% from a year ago to 2.44 trillion yuan ($377.8 billion), the bureau said in a release Sunday. It’s the slowest incremental growth in five years and down from 12.5% in 2019.

Australian central bank boosts bond purchases after borrowing costs soar; RBA’s move will have broad implications, say analysts
Joshua Oliver – FT
Australia’s central bank doubled the size of its regular bond purchases on Monday in a move that analysts say will have broad implications as policymakers consider their response to a global jump in borrowing costs.

China’s Seniors, Seeking Retirement Homes, Find Scams Instead; Rooms and beds for retirees are in short supply as the population ages, leaving many vulnerable to companies pitching risky investments.
Alexandra Stevenson and Cao Li – NY Times
The saleswoman waited for Yang Jinzhong at the bus stop. She took Ms. Yang for a tour in her car. With every call and meeting, the saleswoman made the same pitch: By investing just a little bit of money, Ms. Yang could secure a spot in a retirement home at a great price and make some extra cash to boot.


Fintech offers UK a way out of the Brexit bind; Ministers should endorse proposals for a ‘digital big bang’
The editorial board – FT
Britain’s departure from the EU has so far thrown up more challenges than opportunities for the country’s finance industry. Boris Johnson’s government failed to ensure that financial services were an integral part of Brexit talks and the ensuing trade deal. The result has been a trickle of business away from the City of London, with the fear that it will become a steady stream. With hopes fading for a free-trade deal in financial services with Brussels, the Square Mile urgently needs to think of new ways to retain its pre-eminence as a financial centre.

‘I shouldn’t be out there in gales’: Brixham fishers take Brexit hit
Steven Morris – The Guardian
Luke Selvey manoeuvred the beam trawler Emilia Jayne into Brixham harbour with a hold packed with fish after three and a half days at sea. He gave a toothy grin. “We’ve got cuttlefish, Dover sole, brill, turbot, monks … all sorts,” the skipper said. “The fishing is the best we’ve seen for years.” But Selvey stopped smiling when he considered how much he and his crew would make out of their trip. “The problem we’ve got is that the price of the fish is terrible. It’s making things really, really difficult for us. We’re having to work much harder to try to make a buck.”

Brexit: DUP agriculture minister orders Brexit check construction halt
John Campbell – BBC
Northern Ireland’s Democratic Unionist Party (DUP) agriculture minister has ordered officials to stop work on new permanent border control posts (BCPs). These are used to check food products from GB. Existing temporary BCPs are continuing to operate. The minister, Gordon Lyons, said he had also asked officials to stop recruiting BCP staff. Three Stormont ministers have formally requested an emergency meeting of the NI Executive over the move. It is understood officials are seeking legal advice on whether they can follow Mr Lyons’ orders.

Brexit: Why Irish freight trade is avoiding Britain
Chris Morris – BBC News
Nearly two months after Great Britain (GB) left the EU single market and customs union, the volume of freight being shipped across the Irish Sea from the Republic of Ireland to GB is still down significantly, raising further questions about government claims that trading volumes are returning to normal. Companies trying to avoid red tape and potential delays associated with Brexit are sending freight on much longer sea routes directly to the continent, rather than using the traditional ‘land bridge’ route across Britain.

Brexit: Minister lacks ‘authority’ to halt work at NI border posts
BBC News
Northern Ireland’s Agriculture Minister Gordon Lyons does not have the authority to halt work on new permanent border control posts (BCPs), according to Sinn Féin MP Chris Hazzard. Mr Lyons said his action on Friday was responding to “practical difficulties” caused by the NI Protocol. He added there was a risk NI “would not be able to cope” when grace periods end. Mr Hazzard said the decision represented a “very foolish solo run”.

LSE Sets Stocks Deal With Frankfurt Amid Brexit Fight Over Swaps
Silla Brush – Bloomberg
The London Stock Exchange Group Plc and Deutsche Boerse AG, rivals for post-Brexit derivatives business, have decided to work together on trading tied to U.K. equities. The companies announced an agreement on Monday for Deutsche Boerse’s Eurex exchange to list futures and options contracts tied to the FTSE 100 benchmark index of Britain’s biggest publicly traded companies. The LSE, which owns FTSE Russell indexes, said the contracts will start March 29. “Our collaboration with Eurex reflects LSEG’s commitment to supporting clients across the markets and communities that we serve,” Waqas Samad, chief executive officer of FTSE Russell, said in a statement.

Chancellor spots break in clouds after Brexit, Covid and battered finances
George Parker, Chris Giles and Daniel Thomas – FT
Rishi Sunak will next week deliver a Budget in the shadow of a pandemic, in the aftermath of Britain’s painful divorce from its biggest trading partner and with its public finances, on his own account, under “enormous strains”. But the chancellor, in an interview with the Financial Times, insisted he could see a brighter future and that his second Budget since being appointed last February would help to build a “future economy” characterised by nimble vaccine and fintech entrepreneurs. Sunak supported Brexit and now has to show it can work. He knows he cannot expect much help from the EU, which has shown no appetite for opening its markets to the City of London, but still insisted Brexit was an opportunity.


The scourge of work email is far worse than you think; The hours we devote to our inboxes reflect a disturbing shift in work patterns that needs to change
Pilita Clark – FT
Whenever I check my emails, a number appears in the top right-hand corner of my computer screen that used to fill me with a horrible sense of despair. It shows how many emails are in my inbox and as I type, I can see there are many thousands of them. Another number on the top left-hand side shows something that once caused even more misery: the emails that are unread. There are thousands of them too.

The True Costs of Working From Home; Remote workers spend more on rent and housing costs than those who stay in the office — a gap that might add up to $15 billion or more if commuters don’t return.
Sarah Holder – Bloomberg
A Craigslist search for one-bedroom apartments in San Francisco pulls up a post for a work-from-home special: a NoPa flat for $1,200 a month. But the sunny studio unit is “day-use only” — the target tenant is someone doing remote jobs from home who wants a whole other apartment dedicated to teleworking. And who’s willing to pay for it. As some employers consider remote-forever policies, there have been a few attempts to quantify the economic impacts of this digital turn away from the office. The focus tends to be on what the move might cost (or save) employers, in terms of productivity or salaries. Other research has delved into the savings, in gas, time and carbon emissions, from Covid-altered commuting regimes.

How to Decode Office Body Language While Working From Home; Learn the tricks to reading the nonverbal cues of your bosses and co-workers, from expressions in tiny Zoom windows to email punctuation
Rachel Feintzeig – WSJ
A sideways glance in a video chat. An email that drifts off into ellipses. And why did your boss even add you to this calendar invite anyway? What does it all mean? We were once fluent in the nonverbal cues of the physical office. Slumped shoulders or a downcast look were enough to know when the boss was disappointed or a colleague stressed. A cryptic email often only necessitated rotating our chairs 180 degrees to get clarification from the sender.

Pay Cuts, Taxes, Child Care: What Another Year of Remote Work Will Look Like; Facebook considered tracking its employees. Lyft is making some workers move before April. Here’s how big companies are wrestling with thorny work-from-home issues.
Chip Cutter and Emily Glazer – WSJ
Companies are anticipating another largely remote work year, and new questions about compensation and benefits are weighing on managers. Discussions about the future of work, such as whether to reduce the salaries of employees who have left high-cost cities, are priority items in board meetings and senior executive sessions across industries, according to chief executives, board members and corporate advisers.

The first girls have become Eagle Scouts. It’s taken more than 100 years.
Lateshia Beachum – Washington Post
Rebecca Wright was on a Zoom call when she found out she’d be part of the inaugural class of young women to become Eagle Scouts. While she sat at her computer in Wisconsin, her parents and older brother were in a virtual waiting room in Nebraska. They were all pulled in to celebrate the accomplishment, one that’s been given to only a small percentage of Boy Scouts since 1912, when the first Eagle Scout was named.

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