Wall Street Traditionalists Spar With FTX Over Crypto Derivatives; SEC Proposes More Disclosure Requirements for ESG Funds

May 26, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Friends of the late Carl Gilmore, including Chris Hehmeyer and Chuck Bohm, are gathering today at Ceres in the CBOT Building lobby at 4:30 p.m. in an informal tribute to their friend. All are welcome whether you have a Carl story to share or not. Warning, if you have not been to Ceres in a while, the drinks are still the same stiff drinks.

CQG has joined FIA Tech’s Databank Network as its first ISV. Databank Network is FIA Tech’s initiative to bring together independent software vendors (ISVs), exchanges, clearing houses and other data providers into an interoperable global network simplifying the use of reference data, analytics and software solutions from participating firms.

The SEC was very busy yesterday with various proposals, statements and halting a $39 million hedge fund fraud. The SEC proposed to enhance disclosure by certain Investment Advisors and Investment Companies about ESG practices. They also proposed rule changes to prevent misleading or deceptive fund names. Maybe we could get a rule about laws’ names too. Then, the SEC halted an ongoing $29 million fraud by a hedge fund advisor, Detroit-based EIA All Weather Alpha Fund I Partners LLC (EIA) and its sole owner, Andrew M. Middlebrooks. The SEC also charged a firm, RiverSource Distributors, with improper switching of variable annuities.

Somehow amidst all this activity, Gary Gensler lost his creative streak and his statements were simply titled “Statement on Proposed Updates to Names Rule” and “Statement on ESG Disclosures Proposal.” SEC Commissioner Caroline A. Crenshaw‘s statement titles were a mixed bag of creativity with “Statement on Proposed Rule Requiring Enhanced Disclosure by Certain Investment Advisers and Investment Companies on ESG Investment Practices” as rather plain and “A Rose By Any Other Name: Statement on Proposed Amendments to the Names Rule” showing some imagination.

SEC Commissioner Hester Peirce played it straight with titles of “Statement on Environmental, Social, and Governance Disclosures for Investment Advisers and Investment Companies” and “Statement on Investment Company Names.”

SEC Commissioner Alison Herren Lee won the award for creativity with these titles, “What’s in a Name? Aligning Fund Names with Investor Expectations” and “It’s Not Easy Being Green[1] : Bringing Transparency and Accountability to Sustainable Investing.”

Stable today announced a successful $60m Series B led by Vishal Lugani at Acrew, Anthemis, Notion, Greycroft, Continental Grain, Alumni Ventures, Syngenta, Gaingels and many others.

Ed Haravon, co-founder of Get Real XR, and Ian Berget, co-founder & CTO of Launchvox, are back with a second video in the ‘Customizing Your Metaverse’ video series. In this video, Ian and Ed dive deeper into the abilities of Metaverse Avatar customization. It gets better and better.

Eleven girls applied for and were just granted Fearless Girl National Youth Leadership Training scholarships from the Pathway to Adventure Council (PTAC) of the Boy Scouts of America, paid for by the generosity of readers of this newsletter who supported the Trading Tech Awards fundraising in the past. One of the girls is from Michigan, but wanted to do NYLT with PTAC because she does summer camp with PTAC and the girls have been so welcoming.

You can file this one under stupidity and irony. A woman who wrote an essay about “How to Murder your Husband” has been convicted of murdering her husband, NBC reported.

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


Blue Ocean Technologies CEO Bryan Hyndman Sees Clear Sailing for ATS in Overnight Trading

Bryan Hyndman was recently promoted to CEO of Blue Ocean Technologies, which has developed from a broker-dealer that matched buyers and sellers by phone during the overnight market hours to an ATS that allows Asian investors to trade U.S. stocks electronically during overnight market hours. Hyndman was recently interviewed by John Lothian News about Blue Ocean and his new role.

Watch the video »


Tabb Group CEO Bruce Morris On Tabb’s Changes Since Covid, The Development Of Tabbforum, And New In-person Conferences

John Lothian News spoke with Bruce Morris, the CEO of TABB Group, at FIA Boca 2022, about how things have changed since he joined TABB in 2018. TABB had a research content business, did consulting and put on events, and was “rocking…with no worries in the world,” Morris said.

Watch the video »


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Russia Preparing Retaliatory Steps Against ‘Anglo-Saxon’ Media
Bloomberg News
Russia is preparing to take action against English-language media in retaliation for what it calls discriminatory steps against Russian organizations, the Foreign Ministry’s spokeswoman said Wednesday. “We are working on a whole package of measures against media and journalists from Anglo-Saxon countries because of the repressive measures there against Russian media,” Maria Zakharova at a televised briefing from Moscow. Russia brands the US and its English-speaking allies the ‘Anglo-Saxon’ world.

***** Not only am I an Anglo-Saxon journalist, you can throw in white and Protestant too for the whole WASP thing. And to make things worse, I could definitely be defined as “unorthodox” at times.~JJL


As Hedge Funds Stumble, Sorry Is the Hardest Word; Stocks and crypto are crashing. Time for a mea culpa? It depends who you ask.
Chris Bryant – Bloomberg
Say what you like about hedge fund manager Bill Ackman but, after losing around $400 million from an ill-timed bet on Netflix Inc., he was quick to exit the position in April and own up to his mistake. In the wake of Netflix’s disappointing subscriber growth, Ackman said he was no longer able to confidently predict the streaming company’s prospects and “100% ready to admit when I’m wrong.” If only all of the investment community was as willing to disavow dogma when market prices undermine financial theology.

***** Has your investment paradigm shifted?~JJL


The Reasons to Worry Just Keep Piling Up for Davos Executives; Talk of Ukraine ceasefires amid fear of a global food crisis; Businesses leaders have little influence over the situation
Philip Aldrick and Natalia Drozdiak – Bloomberg
War in Ukraine, rampant inflation and now a brewing global food crisis. If attendees at this year’s World Economic Forum came to Davos worried, they left with little to comfort them. As guests of the first in-person WEF conference in two years prepare to head home, they do so increasingly concerned about the economic fallout from Russia’s invasion of its neighbor and signs that the conflict will run longer than they initially imagined.

*****How do I worry for thee? Let me count the ways. I worry for thee to the depth and breadth and height my soul can reach, when feeling out of sight, for the ends of being and ideal grace.~JJL H/T to Elizabeth Barrett Browning.


The Latest Viral TikTok Challenge Is Saving Cash (Liquor Bottles Optional); Stashing cash in creative ways not only makes for entertaining videos, but can help forge good financial habits
Julia Carpenter – WSJ
To liquidate her savings, Bianca Johnson smashed a cognac bottle with a hammer. “There’s the shmoney,” she told her one million-plus followers in a TikTok video titled “Hennessy Money Challenge Bottle Bust!!,” before picking out all the shards of glass from the cash she had stuffed into this 80-proof piggy bank and then sorting the bills into neat piles. “I had all my fans watching like ‘How much do you think is in it?’ and ‘How much did we save?'” said Ms. Johnson, a 32-year-old full-time influencer who posts under the name @iamjaymonique. “It was nothing but $542, but it was $542 I would have spent on random things.”


Cryptocurrency Companies to Remain in U.S. Law Enforcement Crosshairs; Officials with the U.S. Justice Department and Commodity Futures Trading Commission say they will continue to home in on crypto
Richard Vanderford – WSJ
Cryptocurrency companies can expect to remain a focus for U.S. financial-crime enforcers, officials with the U.S. Justice Department and Commodity Futures Trading Commission said. The landmark prosecution of cryptocurrency derivatives platform BitMEX, which saw the Justice Department and CFTC bring actions against the company and its founders, is likely the first of many such actions, Gretchen Lowe, acting director of the CFTC’s enforcement division, said Wednesday.

***** Just for the record, CFTC staff don’t have badges or carry guns. Thus, there are no crosshairs. They don’t have radar either. Some of the longtime staffers might have ESP though.~JJL


Wednesday’s Top Three
Our most clicked story Wednesday was the commentary from John P. Davidson, CEO of the OCC, in response to Tuesday’s deadly school shooting in Texas, posted on LinkedIn. Second was How Old Are You Really? Meet Your ‘Biological Age’ from The Wall Street Journal. Third was How to Spot an American Tourist Abroad, from Daily Stuff, which was our No. 1 story Tuesday.


MarketsWiki Stats
26,840 pages; 238,611 edits
MarketsWiki Statistics


Lead Stories

Wall Street Traditionalists Spar With FTX Over Crypto Derivatives; Exchanges push back on crypto proposal at CFTC roundtable; Agency weighing bid to use algorithms to clear margin trades
Allyson Versprille and Katherine Doherty – Bloomberg
Wall Street exchanges and other firms zeroed in on their objection to a proposal US regulators are considering that would allow retail investors to trade crypto derivatives directly on a popular digital asset platform. The plan — from crypto firm FTX — would take banks and other financial intermediaries out of Bitcoin and Ether futures trades that use margin. At a roundtable on Wednesday hosted by the Commodity Futures Trading Commission, which is reviewing the proposal, executives from firms including CME Group Inc. and Intercontinental Exchange Inc. said the change could add risks to the market.

SEC Proposes More Disclosure Requirements for ESG Funds; Agency votes to float plans to give investors more information on environmental, social and corporate-governance vehicles
Paul Kiernan – WSJ
Regulators proposed new disclosure and naming requirements for investment funds that tap into public angst regarding climate change or social justice, in an effort to address concerns about “greenwashing” by asset managers seeking higher fees. The Securities and Exchange Commission voted Wednesday to issue two proposals that aim to give investors more information about mutual funds, exchange-traded funds and similar vehicles that take into account ESG—or environmental, social and corporate-governance—factors. One of the proposed rules, if adopted, would broaden the SEC’s rules governing fund names, while the other would increase disclosure requirements for funds with an ESG focus.

Crypto Needs Urgent EU Rulebook to Protect Investors, Regulator Says; Inflation may push investors into crypto, regulator warns; Patchwork system of national rules is causing “imbalance”
William Shaw and Emily Nicolle – Bloomberg
Europe’s top securities regulator has warned that soaring inflation may drive retail investors into risky cryptoassets and called for a formal legal framework to govern the industry across the bloc. Verena Ross, chair of the European Securities and Markets Authority, said she was waiting “with great impatience” for the EU’s blueprint for regulation of the area to be finalized as a law.

The 15 Central Park West of West Palm Beach Hits the Market; Famed architect Robert A.M. Stern is bringing his New York touch to West Palm Beach with the super-luxury South Flagler House. Prices for the apartments range from $10 million to $75 million.
Jennifer Epstein – Bloomberg
Robert A.M. Stern is bringing his New York touch to West Palm Beach. The architect whose firm designed some of New York’s top residential buildings, including 15 Central Park West and 220 Central Park South, is now working on a similarly upscale apartment project in West Palm Beach, where prices are expected to set records for a city that was once seen as Palm Beach’s less glamorous neighbor. “We really want it to count in the way that, say, 15 Central Park West counted when we designed that 15 years ago in Manhattan,” Stern said in his first interview about the project, South Flagler House. Sales formally began on Wednesday.

UK sets out plans to simplify listing rules to attract more start-ups; Regulator proposes compacting the two-tiered ‘premium’ and ‘standard’ segments of the London stock exchange
Daniel Thomas – FT
The UK markets regulator has set out plans to simplify listing on London’s stock exchange to attract more fast-growing tech groups and start-ups in the face of increased competition from cities in the US and EU. The Financial Conduct Authority (FCA) has proposed crunching the existing two-tiered approach for listings, which splits companies between a “premium” segment that carries the highest levels of regulatory requirements and the “standard” segment which carries a lower bar of corporate governance.

‘Bribery built into the corporate culture’: can Glencore rescue its reputation? Details revealed in trader’s $1bn settlements risk hampering efforts to draw line under corruption probes
Harry Dempsey and David Sheppard – FT
The use of code names for bribes including “newspapers”, “filings” and “chocolates” might seem like the stuff of fiction — but for Glencore’s oil trading unit it was normal business practice for more than a decade, prosecutors revealed this week. Cash payments, sham consulting agreements and inflated invoices were all used by traders at the Swiss-based mining company to bribe government officials in west Africa and Latin America in return for preferential access to oil, according to US court filings.

The story of Stable from a fintech farmer
Rich Counsell via LinkedIn
Today is a thrilling day for Stable as we announce a $60m Series B led by the amazing Vishal Lugani at Acrew, as well as our friends at Anthemis, Notion, Greycroft, Continental Grain, Alumni Ventures, Syngenta, Gaingels and many others. I’m hugely grateful for their unfailing support and belief in our team as we continue our extraordinary journey to help millions of businesses around the world protect themselves from volatile commodity prices. This milestone marks a new chapter in our work to build the ‘Home of Hedging’. We’re a young company, but we’ve already been through a huge amount together as we continue to push hard and try to build something truly extraordinary.

Courts deny Nasdaq’s attempts to halt market data rule changes; US markets watchdog has thrown out claims from the exchange that its proposed new rules around market data put incumbent venues at a disadvantage and harm the markets.
Annabel Smith – The Trade
The US Court of Appeals has denied petitions from Nasdaq to halt the Securities and Exchanges Commission’s (SEC) proposed changes to the level of data publicly available. In an opinion released on 24 May, the Courts denied the exchange’s petitions on the grounds that the SEC has rejected and disproved its claims that the new rules would harm competition, increase information asymmetries, exacerbate market resiliency and encourage order flow off-exchange.

CQG joins FIA Tech’s Databank Network as first ISV
FIA Tech
IA Tech, the leading technology provider to the exchange-traded derivative industry, announced today that CQG, a leading global provider of high-performance technology solutions for traders, brokers, commercial hedgers and exchanges, has joined the FIA Tech Databank Network. Databank Network is FIA Tech’s initiative to bring together independent software vendors (ISVs), exchanges, clearing houses and other data providers into an interoperable global network simplifying the use of reference data, analytics and software solutions from participating firms.

The Terra/Luna hall of shame; Shit splashes
Scott Chipolina and George Steer – FT
A once-stable, “safe and happy” crypto project named terraUSD imploded earlier this month, prompting an “I told you so” chorus from detractors aimed at those unfortunate enough to be duped — and inked — by the latest crypto calamity. It’s hard not to poke fun at a decentralised, trustless, permissionless, hard-money utopian future of finance unsuccessfully turning to quantitative easing (read: Kwontitative easing) for survival. But as is becoming distressingly clear, some investors have lost most of their life savings from the collapse of terra and its twin coin luna.

Elon Musk must find more cash for Twitter deal after scrapping margin loan; Tesla chief says he will need to secure $33.5bn of equity after allowing $6.25bn commitment from banks to lapse
Nikou Asgari, Antoine Gara and Ortenca Aliaj – FT
Elon Musk must raise significantly more cash to finance his $44bn takeover of Twitter after allowing a $6.25bn margin loan commitment backed by his shares of electric carmaker Tesla to lapse.

Treasury to Study How Russians Could Use Hedge Funds, Private Equity to Evade Sanctions; Brian Nelson, the top U.S. counterterrorism finance official, said the expanding list of sanctions against Russia highlights money-laundering risks for investment advisers
Mengqi Sun – WSJ
Russian oligarchs and elites might look to use investment advisers as a low-risk way to evade U.S. sanctions because of the industry’s vulnerability to illicit finance, a top U.S. Treasury Department official said. Brian Nelson, the Treasury’s undersecretary for terrorism and financial intelligence, said Wednesday at a conference hosted by the Securities Industry and Financial Markets Association that his agency is scrutinizing the illicit finance risks facing the investment adviser industry and wants to engage with it to determine whether additional rules are needed to help prevent the sector from being used for nefarious purposes.

CFTC roundtable on FTX proposal highlights barriers in clearing of digital vs physical assets
Kollen Post – The Block
The CFTC has been working on FTX’s proposal to allow a relatively new market structure for its derivatives trading for much of the past year, including several months of open public comment; Today, the agency hosted a roundtable, welcoming dozens of stakeholders from traditional derivatives trading as well as the crypto industry to its offices to voice criticism and support for the
Cotton or oil markets cannot settle like Bitcoin — a fairly obvious point, but the distinction between the two was at the center of a May 25 roundtable hosted by the Commodity Futures Trading Commission.

SocGen’s Combative Trading Boss Takes On Establishment Rival; Slawomir Krupa and Sebastien Proto are potential candidates to replace CEO Oudea. They provide a fascinating snapshot of France’s banking establishment.
Alexandre Rajbhandari – Bloomberg
Slawomir Krupa has been running Societe Generale SA’s investment bank from New York since becoming its boss in January 2021. It’s been a puzzling decision for some of his colleagues: Many of the French firm’s traders are thousands of miles away in Europe. Now he may have a reason to return home. Frederic Oudea is stepping down as SocGen’s chief executive officer after 14 underwhelming years at the helm and Krupa is seen as one of the main internal candidates to take over. Sebastien Proto, who runs SocGen’s domestic retail bank, is his likeliest in-house rival.

Crypto Investing Shows Signs of Life With StarkWare, Babel Deals; Valuation jumped to $8 billion from $2 billion in November; Funding comes as Bloomberg crypto index is down 50% this year
Tanzeel Akhtar – Bloomberg
Blockchain startup StarkWare said its valuation quadrupled to $8 billion in a funding round, adding to tentative signs that venture capitalists are looking past a rout in cryptocurrency markets. The Israeli company, whose technology speeds up blockchain transactions, raised $100 million in the financing, which was led by Greenoaks Capital. Tiger Global and Coatue Management also invested in the round, according to a statement on Wednesday. StarkWare was valued at $2 billion as recently as November.

Luna Token Relaunch Kicks Crypto Hype Machine Back Into Gear; New Luna tokens will be given to previous UST, Luna holders; LUNA 2.0 is already trendy on social media despite controversy
Muyao Shen – Bloomberg
If you need a reminder that memories are short in the world of crypto, look no further than the relaunch of the Luna token that played a key role in the collapse of the Terra blockchain ecosystem that cost investors billions little more than two weeks ago. Hype is already building around the cryptocurrency, which is being reissued as part of a proposal approved Wednesday. The plan seeks to salvage the network after Luna’s affiliated stablecoin, TerraUSD (UST), lost its 1-to-1 peg the dollar and helped trigger a collapse in digital-asset prices.

The Largest Carbon-Offset Registry Cracks Down on Crypto; Millions of carbon credits have been used to back digital tokens in recent months. Verra said it would no longer allow credits to be retired from its database to create new tokens
Dieter Holger – WSJ
A standard-setter in carbon offsets is clamping down on cryptocurrency projects in the sector, saying they add confusion to the fast-growing market that companies tap to compensate for their emissions. Verra, a nonprofit organization that runs a registry of carbon credits, said on Wednesday it would no longer allow credits to be retired from its database to create new crypto tokens. The move, which Verra said takes effect immediately, would restrict the ability of crypto project developers to piggyback on the rapid growth of the voluntary carbon market.

Total Initial Margin Tops $1 Trillion
Shanny Basar – MarketsMedia
Total initial margin across the derivatives industry has risen above $1 trillion for the first time according to analytics provider Clarus Financial Technology as regulatory hearings are taking place on proposed changes to the margin process.
Chris Barnes at Clarus said in a blog that total initial margin increased 18% from $986bn in 2020 to $1,16 trillion in 2021. He added that initial margin requirements across the industry have increased by $725bn since 2016.

Take the Swaps Off the Balance Sheet; Also greenwashing rules, hotel NFTs and Dot Collector.
Matt Levine – Bloomberg
Here is a trade that you could do: Sell a one-year total return swap on $100 million of Stock X to a hedge fund. The idea of the swap is that you give the hedge fund economic exposure to $100 million of Stock X. Simplifying slightly, (1) if Stock X goes up Y% over the year, you pay the hedge fund $Y million at the end of the year; (2) if Stock X goes down Z% over the year, the hedge fund pays you $Z million at the end of the year; and (3) the hedge fund pays you interest — say $4 million, 4% of the $100 million notional amount — during the year.

The Tech Rout Isn’t Just Cyclical—It’s Well-Earned, and Overdue; The market collapse isn’t just the inevitable result of macroeconomic forces like high interest rates and inflation. It’s also the best opportunity in more than a decade to reckon with the tech industry’s excess.
Brad Stone and Lizette Chapman – Bloomberg
Over the past half-century, Silicon Valley has toggled between two similar-sounding pursuits that are often in conflict: wealth creation and moneymaking. Wealth creation is the act of invention and patient, long-term business building. It’s the rising tide that lifts the boats of employees, shareholders, and everyone else. Moneymaking is the baser impulse: the hunt for a quick buck. The technology industry and its risk-happy patrons have learned, time and again, what happens when short-term profiteering takes precedence over the development of stable companies that can create cool stuff. And yet, here we are again. Years of wildly inflated valuations, crypto-flavored pyramid schemes, and all manner of naked opportunism have led us to the Bust of 2022.

Ukraine Invasion

Breaking Russia’s Ukrainian Grain Blockade; A Black Sea mission to escort commercial ships may be needed to prevent a global food shortage.
The Editorial Board – WSJ
Vladimir Putin’s Ukraine war is spreading humanitarian and economic hardship far and wide, and on deck is a global food shortage. The world needs a strategy to break Russia’s blockade of Ukrainian ports so it can export food and other goods, and that probably means a plan to use warships to escort merchant ships out of the Black Sea. Russia’s military is denying Ukrainians use of their own ports. Mariupol on the Sea of Azov has been destroyed and is now in Russian hands. Ukraine still holds Odessa, but Kremlin warships won’t let commercial ships into or out of that Black Sea port.

Russian Forces Expand Donbas Assault, Take Heavy Losses; The situation for Ukrainian troops in one eastern city is described as dire, and Moscow is also losing many men in the fighting
Ian Lovett – WSJ
Russian forces were pushing to encircle two cities in eastern Ukraine on Wednesday, part of an all-out assault to take control of the Donbas area, which is making progress but at a cost for Moscow. Fighting was centered around two cities on either side of the Siverskyi Donets River, Severodonetsk and Lysychansk. The two cities are among the easternmost parts of Donbas that Ukrainian forces still control. Speaking on Ukrainian television Wednesday morning, Serhiy Haidai, governor of Luhansk province, where both cities are located, said the situation for Ukrainian forces in Severodonetsk was dire.

Putin’s Powerful Orthodox Church Ally Helps Cement Russian Support for War; As cracks begin to show in the state media narrative about the invasion of Ukraine, Patriarch Kirill has been unwavering in support, portraying it for millions of faithful as a holy struggle against the West
Matthew Luxmoore – WSJ
On a Sunday in early April, the leader of the Russian Orthodox Church stood inside the Cathedral of the Russian Armed Forces outside Moscow and delivered a sermon endorsing President Vladimir Putin’s war. It was the same day Western leaders decried reports of a massacre of Ukrainian civilians in Bucha by Russian forces. “It was we who broke the back of fascism, which would have conquered the world if not for Russia,” said Patriarch Kirill, flanked by uniformed Russian troops inside the grand building commemorating Russia’s victory over invading Nazi forces in World War II. “God will help us today, too.”

Dutch May Join Naval Escorts for Ukraine Wheat If Russia Commits
Natalia Drozdiak – Bloomberg
The Netherlands would consider joining an alliance to send warships to escort grain supplies stuck in Ukrainian ports but would need assurances from Russia and, ideally, involvement from Turkey, according to the Dutch defense minister.

The Best Outcome for Ukraine in This Conflict; A look at possible endings as Putin’s Shock Without Awe turns into a war of attrition.
Andreas Kluth – Bloomberg
Three months after Russia’s unprovoked attack on Ukraine, the war is entering a new phase. This change requires all involved — the Kremlin as well as Kyiv and its supporters in the West — to rethink scenarios, goals and strategies. For the aggressor, it appears, all possible outcomes are shades of terrible — a sign of just how colossally Moscow miscalculated. For the defenders, most scenarios are also dire. But one offers a glimmer of hope.

Exchanges, OTC and Clearing

Cboe Global Markets to Present at Deutsche Bank’s 12th Annual Global Financial Services Conference on Wednesday, June 1
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, announced today that Brian Schell, Executive Vice President, Chief Financial Officer and Treasurer, will present at Deutsche Bank’s 12th Annual Global Financial Services Conference on Wednesday, June 1, from 1:00pm to 1:45pm Eastern Time.

EBS Market on CME Globex Notice
CME Group
Topics in this issue include: Critical Information; Product Changes; Announcements and Additional Resources

HKEX names co-head of asset accumulation
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Thursday) the appointment of Robert Cheeseman as Managing Director and Co-Head of Asset Accumulation in the Sales and Marketing Department.

Amendments to the General Rules of CCASS (the “Rules”) and the CCASS
Operational Procedures (the “Procedures”) of Hong Kong Securities Clearing
Company Limited (“HKSCC”)
CCASS Participants are requested to note that the Securities and Futures Commission has
approved amendments to the Rules and the Procedures of HKSCC for the purpose of
implementing the VaR Platform, which is a risk engine adopting a new value-at-risk model for
calculating the initial margin and a scenario-based approach for calculating default fund
contributions for Clearing Participants and, where applicable, Clearing Agency Participants.

Service Withdrawal Notice – LMEprecious
Following the notification to the market of the intention of the LME Group to withdraw the LMEprecious Service (LME Notice 22/124 and LME Clear Circular 22-025 dated 22 April 2022), this Notice addresses the intended timeline for, and operational arrangements to facilitate, the withdrawal of the LMEprecious Service.

Fabian Somerville-Cotton
With great regret, this notice informs LME members and the broader metals community of the death of Fabian Somerville-Cotton, Chairman of the LME Warehousing Committee and former LME Board director.

List of deliverable Canadian government bond issues for the
LGB, CGB, CGF and CGZ futures contracts
For your information, please find enclosed the list of deliverable Canadian Government Bond
issues with respect to the LGB, CGB, CGF and CGZ futures contracts delivery months. This list
is produced in accordance with the Rules of Bourse de Montréal Inc. and Canadian Derivatives
Clearing Corporation (CDCC) relating to delivery standards. This list replaces the one that was
distributed on May 6, 2022 (circular no. 055-22).

Nasdaq Executives to Present at Upcoming Investor Conferences
Nasdaq (Nasdaq: NDAQ) will be presenting at the following conferences in June with webcasts available at Nasdaq’s Investor Relations Website: ir.nasdaq.com/events.cfm.

NSE Indices
Change in the Fixed Income Indices w.e.f. June 01, 2022

NYSE Pillar Gateway Validation and Proprietary Market Data Enhancements: Update
The previously announced changes to the NYSE Pillar Platform will be implemented on NYSE on June 6, 2022.

NYSE Pays Respects to Victims of the Robb Elementary School Shooting With Moment of Silence
The NYSE extends its deepest sympathies to those affected by the devastating events in Uvalde, Texas. In remembrance of the lives lost and families impacted by the event, we will hold a moment of silence at 9.20 a.m. ET.

SGX RegCo to further extend suspension of entry into issuers’ watch-list
Further to our announcement on 21 May 2021, Singapore Exchange Regulation (“SGX RegCo”) in consultation with the Monetary Authority of Singapore (“MAS”) will continue to suspend its half-yearly review to place issuers on the Financial Watch-List until 1 June 2023.

SGX Group welcomes CN First International Futures Limited as Derivatives Trading Member
SGX Group is pleased to welcome CN First International Futures Limited as a Trading Member of its derivatives market.

TMX Group CFO David Arnold to Present at the Deutsche Bank Global Financial Services Conference
TMX Group CFO David Arnold will present at the Deutsche Bank Global Financial Services Conference on Wednesday, June 1, 2022 at 4:00 p.m. – 4:45 p.m. ET at the Deutsche Bank Center in New York.


Elon Musk Plans to Rely More Heavily on Equity for Twitter Deal; Funding plan now includes $33.5 billion in equity, up from $27.25 billion
Rebecca Elliott and Meghan Bobrowsky – WSJ
Elon Musk is committing more of his wealth to finance his $44 billion deal for Twitter Inc. and seeking additional financial backers amid a sharp decline in Tesla Inc. stock in recent weeks. Mr. Musk’s funding plan now includes $33.5 billion in equity, up from $27.25 billion, according to a Wednesday regulatory filing. The billionaire Tesla chief executive no longer plans to rely on a margin loan backed by shares of his electric-vehicle company, which are down by about a third since Twitter accepted his bid in late April.

LiquidityBook Hires Jonathan Cross to Spearhead EMEA Business Operations
Globe Newswire
LiquidityBook, a leading provider of cloud-native buy- and sell-side trading solutions, today announced the hire of Jonathan Cross as General Manager, EMEA. He will be based in the firm’s London office and report directly to CEO Kevin Samuel. Mr. Cross will manage all aspects of LiquidityBook’s EMEA business operations, including the continued development of the firm’s European buy- and sell-side client base. He will play a key role in securing long-term growth opportunities internationally as LiquidityBook carries out its global expansion strategy. Mr. Cross will also oversee daily operations in the EMEA region.

Jack Ma’s Ant Ekes Out Profit Rise as Fintech Overhaul Advances
Jane Zhang and Lulu Yilun Chen – Bloomberg
Billionaire Jack Ma’s Ant Group Co. saw profit inch up in the three months to December, despite setbacks from regulatory overhauls taming the country’s fintech industry. The Hangzhou-based company contributed 7.28 billion yuan ($1.1 billion) to Alibaba Group Holding Ltd.’s earnings, a filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to an estimated 22.05 billion yuan in profit for Ant’s December quarter, or an 1.3% increase from a year earlier. Ant’s earnings lag a quarter behind Alibaba’s. Ant declined to comment.

Klarna CEO says fintech will focus less on growth and more on ‘short-term profitability’; Buy now, pay later pioneer faces one of the biggest challenges in its 17-year history
Richard Milne – FT
Klarna is shifting its business away from growth and towards short-term profitability as the Swedish fintech tries to raise capital and cuts 10 per cent of jobs due to fears of a looming recession.

CQG joins FIA Tech’s Databank Network as first ISV
CQG press release via Finextra
FIA Tech, the leading technology provider to the exchange-traded derivative industry, announced today that CQG, a leading global provider of high-performance technology solutions for traders, brokers, commercial hedgers and exchanges, has joined the FIA Tech Databank Network.
Databank Network is FIA Tech’s initiative to bring together independent software vendors (ISVs), exchanges, clearing houses and other data providers into an interoperable global network simplifying the use of reference data, analytics and software solutions from participating firms.

Twitter shareholders vote against Silver Lake’s Egon Durban in board role; Private equity co-chief offers resignation after investors issue rare rebuke amid Elon Musk takeover saga
Hannah Murphy and Patrick Temple-West – FT
Silver Lake co-chief executive Egon Durban tendered his resignation from the board of Twitter after the social media company’s shareholders on Wednesday issued a rare rebuke at a tense investor meeting.

Jefferies extends relationship with AWS to enhance technological innovation; New agreement looks to help Jefferies improve development, operational efficiencies and reduce costs by migrating IT infrastructure to the cloud.
Wesley Bray – The Trade
Jefferies has entered a four-year agreement with Amazon Web Services (AWS) to modernise its information technology (IT) infrastructure by migrating it to the cloud. AWS will be used by Jefferies as its primary cloud infrastructure provider and its core business systems, internal and customer-facing applications, IT resources and companywide data will be moved to AWS.

Embattled Payments Startup Bolt Is Cutting One-Third of Staff; CEO Maju Kuruvilla told workers that the company needs to restructure.
Lizette Chapman – Bloomberg
Payments startup Bolt Financial Inc. is eliminating about 250 employees, according to a person familiar with the company. That number is equivalent to about one-third of Bolt’s workforce, the person said. In a message to staff on Wednesday, Bolt Chief Executive Officer Maju Kuruvilla wrote that the company was making cuts as part of a broader restructuring. “It’s no secret that the market conditions across our industry and the tech sector are changing,” Kuruvilla wrote in the message, which was also posted to the company’s blog. “In an effort to ensure Bolt owns its own destiny, the leadership team and I have made the decision to secure our financial position.” The company began holding meetings with employees Wednesday morning.


U.S. Cybersecurity Agency ‘Strongly Urges’ You Patch These 75 Actively Exploited Flaws
Davey Winder, Senior Contributor – Forbes
The U.S. Cybersecurity & Infrastructure Security Agency (CISA) has added a total of 75 security vulnerabilities, all known to be actively exploited, to its ‘significant risk’ listing in just three days this week. So serious is the risk of attack exposure by these exploited vulnerabilities, some of which reach back many years, CISA warns that federal civilian executive branch (FCEB) agencies must ensure they are patched by the middle of June.

US, Australia, India and Japan announce cybersecurity initiatives on software, supply chains
The Record
The United States and three allies announced a partnership on Tuesday that will see the countries work together on several cybersecurity initiatives centered around fortifying software, supply chains and user data.
U.S. President Joe Biden is currently making his first trip across Asia as president and met in Tokyo with newly-elected Australian Prime Minister Anthony Albanese, Prime Minister Narendra Modi of India and Prime Minister Fumio Kishida of Japan to discuss a range of issues.

Verizon Publishes Annual Report on Cybersecurity Trends; Hans Vestberg Quoted
Charles Lyons-Burt – ExecutiveGov
Verizon has released its annual report analyzing cybersecurity crimes and patterns in system vulnerabilities across the world.
The 2022 edition of the Data Breach Investigations Report found that ransomware intrusions grew by 13 percent in one year, which amounts to more than the increases in the statistic in the prior five years combined, the telecommunications company said Tuesday.


Guggenheim’s Minerd Sees Bitcoin Sinking to $8,000 With Crypto Now ‘Suspect’; Says crypto hasn’t become credible institutional investment; Minerd said in 2020 that Bitcoin would reach $400,000
Alex Wittenberg – Bloomberg
Guggenheim Partners Chief Investment Officer Scott Minerd said he expects Bitcoin to fall to $8,000 and that cryptocurrency has become a market of “a bunch of yahoos.” “Bitcoin and any cryptocurrency at this point has not really established itself as a credible institutional investment,” Minerd said Wednesday during a Bloomberg Television interview from the World Economic Forum in Davos, Switzerland. “Everything is suspect.” Minerd said his firm bought Bitcoin at $20,000 and sold when it reached $40,000. Guggenheim no longer holds Bitcoin. If the firm were to take a position it would be to short the digital token, he said.

The supposed method in El Salvador’s crypto madness; The perspective on bitcoin looks different from an emerging market vantage
Gillian Tett – FT
Millions of investors holding crypto assets are reeling. After a brutal six months in which more than $1tn in value has been wiped out, some of the losers are big names, such as Vitalik Buterin, creator of ethereum, and Mike Novogratz, the hedge fund luminary who backed the now-collapsed luna digital coin. Others are tiddlers. But one of the most interesting is the government of El Salvador. About a year ago, Nayib Bukele, the country’s populist president, announced plans to become the first nation to adopt bitcoin as legal tender, alongside the US dollar. IMF officials and western central bankers decried the idea as something only a president with a wobbly grasp of economics could embrace. Bukele did not help his cause when he tweeted: “#Bitcoin has a market cap of $680 billion dollars. If 1% of it is invested in El Salvador, that would increase our GDP by 25%”, which seemed to fundamentally misunderstand how bitcoin and GDP work.

Terra Is Back From Bankruptcy; Also Glencore bribes and stolen celebrity apes.
Matt Levine – Bloomberg
A proposal by the founder of the troubled Terra ecosystem to salvage the project was approved, averting a total collapse of one of the most-watched experiments in decentralized finance. Under Do Kwon’s newly approved structure, the original blockchain will be known as Terra Classic, while its native token Luna, which plunged close to zero this month, will be renamed Luna Classic with the ticker LUNC. The new Terra blockchain will start running a coin under the existing Luna name and ticker, and won’t include the TerraUSD stablecoin


Crypto Implosion Juices Senate Odd Couple’s Push to Clamp Down; Wyoming rancher and New York lawyer push new regulations; Market implosion steels resolve of Lummis and Gillibrand
Michael Smith and Allyson Versprille – Bloomberg
As a popular digital currency crumbled this month, two unlikely allies in the US Senate stepped up their campaign to bring regulation to the $1.3 trillion crypto market. Cynthia Lummis, a conservative Republican from a Wyoming ranching family, and Kirsten Gillibrand, a moderate Democrat from Albany, New York, aren’t supposed to get along — let alone work together. But with Washington riven by deep partisan division, they have bonded over one thing: crypto needing new rules.

UK Slaps 25% Windfall Tax on Profits of Oil and Gas Firms; Johnson’s government under pressure to help struggling Britons; The tax will fund aid for families battling with inflation
Joe Mayes – Bloomberg
Boris Johnson’s government will impose a so-called windfall tax on the profits of oil and gas companies to help fund support for Britons facing a cost-of-living crisis. The 25% levy on energy firms will raise about £5 billion ($6.3 billion) which will finance one-off grants of £650 to more than 8 million of the poorest households in the UK, Chancellor of the Exchequer Rishi Sunak said in the House of Commons on Thursday. Sunak did not rule out also applying the windfall tax to power generators, though he said more work needs to be done on the idea.

Germany’s Scholz Urges Solidarity to Counter Putin: Davos Update
WATCH: Fidelity International CEO Anne Richards says “the risk of a recession has unquestionably gone up.” Source: Bloomberg
Bloomberg News
German Chancellor Olaf Scholz called for a broader international effort to isolate Russia and thwart President Vladimir Putin’s efforts to undermine the global order. “This is an attempt to bomb us back to a time when war was a common political tool, when our continent and the world lacked a stable order of peace,” he said Thursday in a speech at the World Economic Forum in Davos, Switzerland.


CFTC Staff Renews Temporary No-Action Relief for Entities Submitting Swaps for Clearing with DCOs Acting Under Exemptive Orders or No-Action Relief
The Commodity Futures Trading Commission’s Division of Data today announced it will renew temporary no-action relief to entities submitting swaps for clearing by derivatives clearing organizations (DCOs) operating under CFTC exemptive orders or CFTC staff no-action relief (Relief DCOs). [See CFTC Press Release No. 8385-21)]

Statement of Commissioner Kristin Johnson Regarding the CFTC’s Order Imposing $1.186 billion in Penalties and Required Disgorgement Against Glencore for Manipulation of Oil Benchmarks
The Commodity Futures Trading Commission (CFTC) issued an Order filing and settling claims against Glencore International AG, Glencore Ltd., and Chemoil Corporation (Glencore) for violations of the anti-manipulation provisions of the Commodity Exchange Act (Act). The order requires Glencore to pay $1.186 billion, which includes a civil monetary penalty of $865,630,784 and disgorgement amount of $320,715,066, each being the highest paid in any CFTC case.

SEC Proposes to Enhance Disclosures by Certain Investment Advisers and Investment Companies About ESG Investment Practices
The Securities and Exchange Commission today proposed amendments to rules and reporting forms to promote consistent, comparable, and reliable information for investors concerning funds’ and advisers’ incorporation of environmental, social, and governance (ESG) factors. The proposed changes would apply to certain registered investment advisers, advisers exempt from registration, registered investment companies, and business development companies.

SEC Proposes Rule Changes to Prevent Misleading or Deceptive Fund Names
The Securities and Exchange Commission today proposed amendments to enhance and modernize the Investment Company Act “Names Rule” to address changes in the fund industry and compliance practices that have developed in the approximately 20 years since the rule was adopted. A fund’s name is an important marketing tool and can have a significant impact on investors’ decisions when selecting investments, and the Names Rule addresses fund names that are likely to mislead investors about a fund’s investments and risks. The proposal follows a request for comment the SEC issued to gather public feedback on potential reforms to the rule in March 2020.

SEC Halts Alleged Ongoing $39 Million Fraud by Hedge Fund Adviser
The Securities and Exchange Commission today announced fraud charges against Detroit-based EIA All Weather Alpha Fund I Partners LLC (EIA) and its sole owner, Andrew M. Middlebrooks, for allegedly engaging in a multi-year scheme that included the misappropriation and misuse of investors’ funds. To halt this alleged ongoing fraud, the SEC sought, and on May 19, 2022 obtained, emergency relief from the U.S. District Court in the Eastern District of Michigan, including a temporary restraining order against EIA and Middlebrooks and an asset freeze against the defendants and named relief defendants.

SEC Charges RiverSource Distributors with Improper Switching of Variable Annuities
The Securities and Exchange Commission today announced settled charges against RiverSource Distributors Inc. for improper switching or replacing of variable annuities. This is the SEC’s first-ever enforcement proceeding under Section 11 of the Investment Company Act of 1940.

Statement on Proposed Rule Requiring Enhanced Disclosure by Certain Investment Advisers and Investment Companies on ESG Investment Practices
Commission Caroline A. Crenshaw – SEC
The role of Environmental, Social, and Governance issues – or “ESG” – in investing has undeniably changed over time.[1] Investor demand for products and strategies that take into account ESG factors has increased dramatically over the past decade.[2] And, the asset management industry has responded to meet that demand.[3]

A Rose By Any Other Name: Statement on Proposed Amendments to the Names Rule
Commissioner Caroline A. Crenshaw – SEC
As the saying goes – you should mean what you say, and say what you mean. In some ways, this simple refrain summarizes the backbone of our disclosure regime and the impetus behind the Names Rule and today’s proposed amendments to that rule. As the adopting release notes: “A fund’s name is often the first piece of fund information investors see and, while investors should go beyond the name itself and look closely at the fund’s underlying disclosures, a fund’s name can have a significant impact on their investment decisions.”[1]

Statement on Environmental, Social, and Governance Disclosures for Investment Advisers and Investment Companies
Commissioner Hester Peirce – SEC
Thank you, Mr. Chair. A key impetus for today’s rulemaking[1] is a legitimate concern about the practice of greenwashing by investment advisers and investment companies. This concern is real because advisers can mint money by calling their products and services “green” without doing anything special to justify that label. Only days ago, we settled an enforcement proceeding in which we alleged that an adviser said one thing about ESG and did another.[2] Yet while enforcement proceedings of this sort illustrate the problem, they also show that we already have a solution: when we see advisers that do not accurately characterize their ESG practices, we can enforce the laws and rules that already apply.[3] A new rule to address greenwashing, therefore, should not be a high priority.

Statement on Investment Company Names
Commissioner Hester Peirce – SEC
Thank you, Mr. Chair, and thank you to the staff in the Divisions of Investment Management and Economic and Risk Analysis, and the Office of the General Counsel, and to others at the Commission who worked on this proposal. Thank you for meeting demanding deadlines under considerable pressure and for fielding my many questions with unwavering professionalism. Despite my admiration for the effort that went into this initiative and my appreciation for some of the motivating concerns, I cannot support today’s proposed amendments to the Names Rule.

What’s in a Name? Aligning Fund Names with Investor Expectations
Commissioner Allison Lee – SEC
Today, the Commission draws on more than two decades of experience analyzing fund names and considering how certain names may mislead investors about a fund’s investment focus, potentially resulting in misallocations of capital. Today’s proposal would modernize the existing “Names Rule” in light of current fund practices, enhance consistency of the rule’s application across funds, and provide key safeguards for investors.[1] Fund names, as with any type of branding, provide a critical means by which sponsors market their funds and convey information to investors, and today’s proposal recognizes that investors may often rely on fund names in deciding where to invest their savings. I’m pleased to support today’s proposal which would bring meaningful improvements in aligning investor expectations and understanding with a fund’s actual focus and the strategies it pursues.

It’s Not Easy Being Green[1] : Bringing Transparency and Accountability to Sustainable Investing
Commissioner Allison Lee – SEC
I am pleased to support today’s proposal to bring greater transparency and accountability to sustainable investing. There has been explosive growth in investor interest and demand around such investments, both domestically and internationally.[2] With that increasing demand comes increasing need for consistent, comparable, and reliable information – information to help protect investors from “greenwashing,” or exaggerated or false claims about ESG practices. Greenwashing can mislead investors as to the true risks, rewards, and pricing of investment assets.[3]

Statement on ESG Disclosures Proposal
Chair Gary Gensler – SEC
Today, the Commission is considering a proposal to improve disclosures by certain investment advisers and funds that purport to take Environmental, Social, and Governance (ESG) factors into consideration when making investing decisions. I am pleased to support this proposal because, if adopted, it would establish disclosure requirements for funds and advisers that market themselves as having an ESG focus. It is important that investors have consistent and comparable disclosures about asset managers’ ESG strategies so they can understand what data underlies funds’ claims and choose the right investments for them.

Statement on Proposed Updates to Names Rule
Chair Gary Gensler – SEC
Today, the Commission is considering a proposal to update the Names Rule. I am pleased to support this proposal because, if adopted, it would modernize this key rule for today’s markets and enhance the transparency of the asset management field. A fund’s name is often one of the most important pieces of information that investors use in selecting a fund. Thus, when first enacting the Investment Company Act of 1940, Congress included provisions about fund naming conventions. These provisions were amended in 1996 to authorize the Commission to define registered investment company names as “materially deceptive or misleading.”[1]

ASIC proposes extending its binary options product intervention order
ASIC has today released Consultation Paper 362 Extension of the binary options product intervention order (CP 362), seeking feedback on a proposal to extend its product intervention order banning the issue and distribution of binary options to retail clients, until it is revoked or sunsets on 1 October 2031.

FMA releases record keeping information sheet for financial advice providers
Financial Markets Authority – New Zealand
The Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko has published an information sheet for financial advice providers (FAPs) about how they can demonstrate compliance with record keeping obligations.

FCA planning reform of the listing regime to boost growth and competitiveness
The FCA has today set out an ambitious vision for potential reform to the way companies list in the UK that aims to attract more high quality, growth companies and give investors greater opportunities.

MAS Imposes Additional Capital Requirement on OCBC Bank for Deficiencies in Response to Spoofed SMS Phishing Scams
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) has imposed an additional capital requirement, of approximately S$330 million, on OCBC Bank (OCBC), given deficiencies in the bank’s response to a wave of spoofed SMS phishing scams in December 2021. OCBC is required to apply a multiplier of 1.3 times to its risk-weighted assets for operational risk. This translates to an additional amount of approximately S$330 million in regulatory capital (based on reported financial statements as at 31 March 2022).

9th Asian Monetary Policy Forum to Address the Conduct of Monetary Policy in the Current Challenging Environment
Monetary Authority of Singapore
The 9th Asian Monetary Policy Forum (AMPF) will take place in Singapore today and tomorrow, bringing together leading policymakers and academics to focus on issues confronting the conduct of monetary policy in today’s complex environment. After two years of meeting virtually, the hosts are delighted to welcome many attendees in person, while the event’s hybrid format will continue to allow remote participation

New speech by Ashley Alder: Keynote speech at ASIFMA China Capital Markets Conference
Securities and Futures Commission – Hong Kong
A speech entitled “A regulatory perspective on expanding market access” delivered by Mr Ashley Alder at the ASIFMA China Capital Markets Conference was posted on the SFC website.

Sales statistics of foreign-currency denominated products by life insurance industry as of the end of March 2022
The sales statistics of foreign-currency denominated products by life insurance industry as of the end of March 2022 were as follows: premium revenues from new foreign-currency denominated policies amounted to around NT$168.251 billion, up by 1% from NT$166.176 billion year-on-year. Within these figures, investment-linked insurance products accounted for NT$62.005 billion (around 37% of the total), down by 23% from NT$81.005 billion year-on-year, and the sales of traditional insurance products totaled NT$106.246 billion (around 63% of the total), up by 25% from NT$85.171 billion year-on-year.

Investing and Trading

As the Stock Market Tumbles, so Does a YouTuber’s Influence
Kevin Paffrath – The Journal.
Kevin Paffrath is a social media influencer who dishes out financial advice on multiple platforms. He cashed in on young people’s hunger for investment tips from non-traditional sources. But as WSJ’s Robbie Whelan explains, Paffrath’s followers became fickle when his advice turned cautious.

How the Market Is Severely Punishing Growth Traps; The great expectations laid on companies at the outset of the pandemic have turned into pitiless correction over any weakness.
John Authers – Bloomberg
It’s a Growth Trap, and You’re Already Caught
Stock-pickers are used to the concept of “value traps.” Many a stock that looks cheap turns out to be cheap for good reason. Fewer column inches have been devoted to “growth traps” — companies whose growth entices you in, only to disappoint. But that is changing in the month of May.

Environmental, Social and Corporate Governance

Vanguard refuses to end new fossil fuel investments; World’s second-largest asset manager cites its duty to maximise returns for clients
Chris Flood – FT
The world’s second-largest asset manager Vanguard has refused to stop new investments in fossil fuel projects and end its support for coal, oil and gas production. Chief executive Tim Buckley said the group, which manages $8.1tn for more than 30mn investors and is the largest investor in coal companies globally, was determined to safeguard its clients from climate risks but this would not require it to end new commitments to fossil fuel industries. “Vanguard does not seek to direct company strategy. We engage with companies on climate change, ask them to set goals and to report how they are mitigating climate risks. That transparency will ensure that climate risks are priced appropriately by the market,” Buckley said in an interview with the Financial Times.

New U.S. Gas-Export Plant Gets Green Light as Europe Thirsts for LNG; U.S. shale gas exporter Venture Global has approved second project in Louisiana to export liquefied natural gas, the first new U.S. plant commissioned in three years
Collin Eaton – WSJ
Natural-gas exporter Venture Global LNG Inc. said it would build a new, multibillion-dollar liquefied natural-gas export facility in Louisiana, as demand for U.S. gas exports surges in Europe following Russia’s invasion of Ukraine. The company said Wednesday it had secured $13.2 billion in financing and gave final approval for the Plaquemines project near New Orleans—the first new U.S. plant to get a green light in three years. It is also the first American LNG project to officially go forward since the Biden administration said the U.S. would increase shipments of gas to Europe following moves by Russia—which typically provides more than 30% of Europe’s supply—to cut supplies to parts of the region. The European Union has said it will phase out purchases of Russian gas following Russia’s attack on Ukraine.

Natural Gas Tops $9 in US as Supply Crunch Concerns Mount
Stephen Stapczynski and Gerson Freitas Jr. – Bloomberg
Natural gas briefly surged above $9 per million British thermal units in the US for the first time since 2008, extending a breakneck rally as fears of a supply crunch intensified, before paring gains into close. Stockpiles of the heating and power-plant fuel are below normal for this time of year as exports are booming, and output from shale basins is muted. Traders anticipate higher-than-usual gas needs this summer to fuel US power plants as consumers and businesses crank up air conditioners to combat hotter weather. Meanwhile, hydro-power generation and coal supplies are severely constrained, leaving limited alternatives to gas.

Gas prices: U.S. hasn’t built a major refinery ‘in 60 years,’ expert points out
Ines Ferré – Yahoo Finance
Gas for cars is priced as though crude oil is much higher than $110 per barrel, says one energy expert. “The prices for gasoline and diesel — even when you’re looking at $110 crude, is just sky-high. Basically it’s pricing as though crude oil is $200 a barrel,” Daniel Dicker, founder of The Energy Word, told Yahoo Finance. A big component of the energy puzzle has to do with refineries, which operate on margins. The refining business, says Dicker, is far behind and “they really can’t catch up at this moment.” “We haven’t had a major refinery build in this country in 60 years,” he said. “In bad times, refineries are just terrible. I can recall Valero (VLO) trading in the teens. Now it’s trading at $125 a share.”

Fund managers call for disclaimers on ‘climate-friendly’ products; Clients should be warned that explicitly ‘green’ investments can have lower returns
Brooke Masters – FT
Muddled marketing of climate-friendly products threatens to undermine confidence in investing based on environmental, social and governance factors, according to big fund managers who say clearer regulatory standards are needed.

Investing’s cults of personality
FT Podcast
A rundown of the most important global business stories you need to know for the coming day, from the newsroom of the Financial Times. Available every weekday morning. See acast.com/privacy for privacy and opt-out information.


Global mutual funds investors could sell $350 bln worth equities this year -Barclays
Barclays said on Wednesday global mutual funds investors could sell equities worth a further $350 billion this year, unless fears of recession diminish, due to an uncertain macro backdrop and monetary policy tightening. Investors have been selling equities in the wake of rising inflation, prompting economies to hike interest rates. Russia’s invasion of Ukraine added to the inflationary pressures amid a surge in energy and commodity prices, increasing costs to companies as it hurt their valuations along with volatility in global financial markets. Barclays said equity outflows amounted to an average of 2.6% of mutual funds’ assets under management (AUM) in previous periods of major stock sell offs, such as the Great Financial Crisis of 2008-09, compared to 0.3% this year, which implies another $350 billion of equity sell-off is forthcoming this year unless recession fears diminish.

Hot Money Managers Like the ‘Tiger Cubs’ Got Walloped When the Market Mood Changed; Concentrated bets on tech darlings worked until they didn’t.
Hema Parmar – Bloomberg
Markets are going through what may be the biggest mood shift we’ve seen since the financial crisis. This year the S&P 500 has tumbled 16%. Meanwhile the tech-focused Nasdaq-100 has plunged almost 27%. And unlike the short, sharp market decline in the early days of the pandemic, this one isn’t a response to an economic shock. Investors seem to be seriously rethinking what they want to pay for assets.

State Street launches ETF portal in Singapore; Group’s Fund Connect platform also has green light to go live in Australia
Sandra Heistruvers – FT
State Street Corporation has launched its Fund Connect online exchange traded fund portal in Singapore and has also received official approval to roll out the platform in Australia. The US-based financial services group describes Fund Connect as a “leading global, primary market ETF portal” that provides access to more than 960 ETFs from 43 issuers.

RBC appoints new head of European futures and listed options sales and execution; Incoming head has previously served at ED&F Man Capital Markets, Nomura and RBS Markets and International Banking.
Wesley Bray – The Trade
RBC Capital Markets has named Michael Chesterton as its new head of European futures and listed options sales and execution. Chesterton joins RBC from ED&F Man Capital Markets, where he served as head of futures and options multi asset sales and execution.

Wellness Exchange

New Study Shows Vaccination Reduces Long Covid Risk, But Modestly; New research shows that long Covid health problems are somewhat less common among vaccinated people who experience breakthrough infections than among unvaccinated people who become infected
Sumathi Reddy – WSJ
Vaccination reduces your risk of developing long Covid, but not by much on average, new research suggests. A Veterans Affairs study out Wednesday found that vaccinated people with breakthrough Covid-19 infections had a 15% reduction in experiencing persistent or new symptoms and health conditions up to six months after infection compared with those who were unvaccinated and got Covid. Most of the vaccinated people had received two doses of the Pfizer or Moderna vaccine, while 8% received one dose of the Johnson & Johnson vaccine. The study didn’t look at people who had received boosters.

Covid-19 Deaths Hover Near Lows, but Older Americans Still at Risk; Nearly 300 deaths reported daily are again more concentrated among seniors
Jon Kamp and Brianna Abbott – WSJ
Covid-19 deaths in the U.S. are hovering near the lowest levels since the pandemic hit, showing how a population with built-up immune protection is less at risk of severe outcomes even as another wave of infections flows through the country. The nearly 300 deaths reported daily are again more concentrated among older people, underscoring hazards for the more vulnerable while the overall population appears less at risk.


Russia will start a pilot project for ‘digital’ rouble from April – cbank
Russia will start a pilot project using its “digital” rouble with real customers and real transactions from April 2023, its central bank said on Wednesday, adding that the project would run ahead of the initial schedule. With Western sanctions cutting off Russia from large parts of the global financial system, Moscow is looking for alternative ways to make key payments both at home and abroad. In April, Moscow planned to have the “digital” rouble capable of making international payments ready by next year.

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The Spread

Bears Picked Right Stocks to Short With Declines Twice the S&P’s

Observations & Insight Editor's Note: The JLN Options Newsletter will not be published on Monday, July 4 in observation of the Independence Day holiday. Have a great weekend! Lead Stories Bears Picked Right Stocks to Short With Declines Twice the S&P's Lu Wang...

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Crypto: ‘Blockchain is hype’ – MPs warned

Crypto: ‘Blockchain is hype’ – MPs warned

First Read Hits & Takes John Lothian & JLN Staff Today we have two videos from my coverage of FIA's IDX in London, which I conducted in the Eurex branded lounge area outside The Brewery's doors. The first is with FIA Europe Head Bruce Savage, whom I literally...

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