What faster trading cycles will mean for US markets; Wall Street Returns to T+1 Stock Trading After a Century

May 28, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

Today we have another video from our coverage of the Options Conference, an interview with Cboe’s Henry Schwartz. We also have an interview with Pedro Gurrola-Perez, head of research for The World Federation of Exchanges, who talks to us about the recent paper, “The effect of DLT settlement latency on market liquidity.”

Vermiculus has a commentary titled “Insights From the Modern World of Trading, Clearing, and CSD Technology” that talks about nuam’s new clearinghouse and how it is constructing an integrated cloud-agnostic clearing house for its marketplaces in Lima, Santiago, and Bogota.

NinjaTrader announced the addition of four experienced executives to its leadership team. Ryan Pitylak joins as executive vice president of growth. Aditya Nishandar is the new chief technology officer. John O’Neil is the new general manager of evaluation services. Michael Krafft is the new vice president of product. CEO Martin Franchi emphasized that these hires reflect NinjaTrader’s dedication to advancing its position in the retail futures trading space, catering to the evolving needs of its 1.7 million users.

The nonprofit organization “My Block, My Hood, My City” hosted the “Save Streetball” event in Avalon Park, Chicago, on Saturday, providing kids with a rare opportunity to play basketball on a public court, WGN TV reported. The event aimed to make basketball more accessible and challenge the misconception that basketball courts attract violence. Jahmal Cole of the organization emphasized that there is no correlation between basketball and violence, addressing the removal of rims from over 200 parks. By bringing in portable rims, the event ensured that children could play, while also featuring a live DJ, food trucks, and giveaways to engage the community. JLN interviewed Cole in a podcast last year titled “WH Trading Spawned a Social Justice Phenomenon in My Hood, My Block, My City” and Walt Lukken interviewed Cole in a MarketVoice podcast titled “Jahmal Cole – My Block My Hood My City.” I also mentioned last week that Cole spoke to the social justice committee at my church a week ago.

The latest episode of Bloomberg’s Odd Lots podcast is titled “How a Pro Sports Bettor Really Makes Money.” The US gambling industry has rapidly grown, integrating into every aspect of sports. From betting on game outcomes to specific player performance, the options are vast. This episode features Isaac Rose-Berman, a professional sports gambler and author of the “How Gambling Works” newsletter. He discusses his strategies for making money, how sportsbooks profit from users, market structure, societal impacts of the gambling boom, and potential regulations to mitigate harm in the industry.

FINRA‘s latest podcast, “Keeping an Eye on Individuals Posing a Heightened Risk of Misconduct,” discusses the High-Risk Representative Program, featuring insights from senior directors on how they identify and monitor individuals posing a heightened risk of misconduct to protect investors and ensure market integrity.

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

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Our most read stories from our previous edition of JLN Options were:
The FIA’s ETD Volume – April 2024
Crypto.com Aims to Revolutionize Financial Services, Eyes Expansion Beyond Core Customer Base, a JLN video interview
Futures Hall of Famers Moore and Heinz Reflect on Trading Careers in JLN Interview, another JLN video. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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Sponsored Content
Russell 2000 Index Quarterly Chartbook – May 2024 & Russell Reconstitution

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WFE Study Reveals Impact of Blockchain Settlement Latency on Market Liquidity and Costs
JohnLothianNews.com

Elmhurst, IL (JLN) – Pedro Gurrola-Perez, head of research at the World Federation of Exchanges (WFE), discussed the findings of a recent research report on the impact of Distributed Ledger Technology (DLT) settlement latency on market quality during an interview with John Lothian News. The study, titled “The Effect of DLT Settlement Latency on Market Liquidity,” reveals significant implications for the financial industry, particularly in the context of blockchain technology.

Watch the video »

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Cboe’s Henry Schwartz Discusses Options Market Growth and Future Trends at Industry Conference
JohnLothianNews.com

ASHEVILLE, N.C. (JLN) – Henry Schwartz, Vice President and Global Head of Client Engagement, Data & Access Solutions at Cboe Global Markets, provided insights into the current state and future trends of the options market during an interview at the Options Industry Conference in Asheville, NC. The interview was part of the JLN Industry Leader video series sponsored by the Options Clearing Corporation (OCC).

Watch the video »

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If A.I. Can Do Your Job, Maybe It Can Also Replace Your C.E.O.; Chief executives are vulnerable to the same forces buffeting their employees. Leadership is important, but so is efficiency – and cost-cutting.
David Streitfeld – The New York Times
As artificial intelligence programs shake up the office, potentially making millions of jobs obsolete, one group of perpetually stressed workers seems especially vulnerable. These employees analyze new markets and discern trends, both tasks a computer could do more efficiently. They spend much of their time communicating with colleagues, a laborious activity that is being automated with voice and image generators. Sometimes they must make difficult decisions – and who is better at being dispassionate than a machine? Finally, these jobs are very well paid, which means the cost savings of eliminating them is considerable.
/jlne.ws/4bQBYjg

****** AI is making this CEO more productive and my board of directors will never replace me.~JJL

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The Great AI Challenge: We Test Five Top Bots on Useful, Everyday Skills; OpenAI’s ChatGPT competes against Microsoft’s Copilot and Google’s Gemini, along with Perplexity and Anthropic’s Claude. Here’s how they rank.
Dalvin Brown, Kara Dapena and Joanna Stern – The Wall Street Journal
Would you trust an AI chatbot with family planning? Investing $1 million? How about writing your wedding vows? Human-sounding bots barely existed two years ago. Now they’re everywhere. There’s ChatGPT, which kicked off the whole generative-AI craze, and big swings from Google and Microsoft, plus countless other smaller players, all with their own smooth-talking helpers. We put five of the leading bots through a series of blind tests to determine their usefulness. While we hoped to find the Caitlin Clark of chatbots, that wasn’t exactly what happened. They excel in some areas and fail in others. Plus, they’re all evolving rapidly. During our testing, OpenAI released an upgrade to ChatGPT that improved its speed and current-events knowledge.
/jlne.ws/4bBx7CO

***** My favorite for research is Perplexity, but I still use ChatGPT a lot.~JJL

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24/7 Clearing: Issues and Impacts A Recap from the FIA Operations Division Meeting in Chicago
BornTec
Any way you look at it, the seemingly unstoppable march toward round-the-clock trading is going to be a big challenge for the middle and back office in financial markets. Fortunately for the derivatives industry, a history of resourcefulness and resilience are indicators that these challenges will be managed. However, as the “Clearing 24/7” panel presented by FIA Operations last week in Chicago indicates, there is a lot of work to be done.
/jlne.ws/4dYkDa8

***** Thank you to BornTec for this recap.~JJL

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Friday’s Top Three
Our top clicked item Friday was the registration page for the LBMA Global Precious Metals Conference taking place October 13 – 15 in Miami, FL. Second was More effort needed on financial literacy in the UK, an opinion piece from the editorial board of the Financial Times. Third was Kabosu, Shiba Inu Who Helped Define the Doge Meme, Dies at 18, from The New York Times.

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Lead Stories

What faster trading cycles will mean for US markets; This week’s move to ‘T+1’ reduces settlement risk, but causes headaches for overseas investors
Jennifer Hughes and Harriet Clarfelt – Financial Times
This week the US will go live with a sweeping project to modernise its markets, a move that will have repercussions for banks and asset managers around the world trading in the world’s biggest capital market. On Tuesday the country will shorten the time it takes to finalise the millions of securities trades across its markets every day. To make it a continental affair, it will be joined by Canada, Argentina and Mexico.
/jlne.ws/452dwsX

Wall Street Returns to T+1 Stock Trading After a Century
Greg Ritchie – Bloomberg
The US stock market is finally as fast as it was about a hundred years ago. That was the last time share trades in New York settled in a single day, as they will from Tuesday under new Securities and Exchange Commission rules. The change, halving the time it takes to complete every transaction, also occurred in jurisdictions including Canada and Mexico on Monday.
/jlne.ws/4axmOOY

OpenAI sets up safety committee as it starts training new model
Reuters
OpenAI has formed a Safety and Security Committee that will be led by board members, including CEO Sam Altman, as it begins training its next artificial intelligence model, the AI startup said on Tuesday. Directors Bret Taylor, Adam D’Angelo and Nicole Seligman will also lead the committee, OpenAI said on a company blog. Microsoft-backed OpenAI’s chatbots with generative AI capabilities, such as engaging in human-like conversations and creating images based on text prompts, have stirred safety concerns as AI models become powerful.
/jlne.ws/3WZNUv8

An Oil-Patch Brawl Over a $53 Billion Megadeal Entwines the Legacies of Three CEOs
The leaders of Exxon Mobil, Chevron and Hess are duking it out over a generational oil discovery in Guyana
Collin Eaton and Benǫt Morenne РThe Wall Street Journal
Days after striking a $53 billion purchase of Hess, Chevron Chief Executive Mike Wirth called his counterpart at Exxon Mobil to discuss their future partnership in a mega-oil project Chevron would inherit through the deal. Darren Woods told Wirth he looked forward to collaboration in Guyana, where Exxon and Hess own portions of a buried treasure of 11 billion barrels of oil and gas. Chevron and Exxon have a long-established partnership in projects around the world, one they could expand off the coast of the rainforest-covered South American country, Woods indicated in the October phone call.
/jlne.ws/4bZ2ZBj

Inside the Rockefeller Clan’s Intensifying Feud With Exxon; They have suffered reversals in their efforts to hold the energy giant to account for climate change, but the family that owes its fortune to oil isn’t backing down
By Christopher M. Matthews – The Wall Street Journal
A fifth-generation heir to the Rockefeller fortune, Miranda Kaiser was busy raising her children in Florence, Italy, when her older brother presented her with his dying wish almost five years ago. After being diagnosed with terminal brain cancer, David Kaiser asked his only sibling to become the new standard-bearer for the campaign he had started against Exxon Mobil and other oil companies over what he saw as the industry’s deception about climate change and responsibility for its consequences.
/jlne.ws/4bSAO6Y

Cooling for AI is a Hot Stock Market Trade-for Now; Companies like Vertiv that can help artificial-intelligence data centers dissipate heat have had gains of more than 600%
Jacky Wong – The Wall Street Journal
Artificial intelligence is hot. Literally. The explosive growth in AI has generated soaring energy demand in data centers, and lots of unwanted heat. That has cooked up opportunities for companies providing cooling systems for servers. Electricity consumption for data centers in the U.S. is expected to grow around 30% from 2022 to 2026 to 260 terawatt-hours, according to the International Energy Agency. That is around 6% of total electricity demand in the country or enough to power 24 million American homes for a year. And most of that energy will dissipate as heat, which means a higher need for cooling systems.
/jlne.ws/3yFjowj

AI Is Driving ‘the Next Industrial Revolution.’ Wall Street Is Cashing In; Old-school stocks in the utilities, energy and materials sectors are outpacing the wider market
Charley Grant – The Wall Street Journal
Demand for artificial intelligence is still booming, a year after the phenomenon first took Wall Street by storm. Far beyond the tech sector, investors are finding winners in old-school pick-and-shovel stocks. Deep-pocketed companies are investing heavily in AI technology, which has meant a windfall for chip makers such as Nvidia and a host of businesses-such as suppliers of power, labor and raw materials-to operate their products.
/jlne.ws/3URgcoM

London Moves to Revive Its Reputation as a Financial Hub; As fears have grown that the city is losing its attractiveness for publicly traded businesses, Britain’s government is making changes to bring them back.
Eshe Nelson and Michael J. de la Merced – The New York Times
Shein, the online retail giant founded in China, had grand ambitions to go public in New York. But as relations between Washington and Beijing soured, the ultrafast fashion company began taking a closer look at a backup plan across the Atlantic. The company is now focusing more on the London Stock Exchange for its initial public offering, according to two people with knowledge of the matter. That may not have been the company’s initial choice – but it would be a big win for Britain, which has been wary of its capital city losing its status as a global financial hub.
/jlne.ws/4bzU0GS

Fabien Oreve: Fixing Europe’s future markets; The TRADE sits down with deputy global head of trading and securities financing at Candriam, Fabien Oreve, to explore the future European trading landscape including solutions for low volumes and increased fragmentation, the role of the central limit order book (CLOB) and the new generation of order and execution management systems (OEMS).
Annabel Smith – The Trade
Where should regulators be focusing their attention to boost volumes in Europe?
The levels of trading volumes in European equities are influenced by a complex interplay of various factors like market fragmentation, economic conditions, monetary policy, investor behaviour and market volatility among other things. Market volatility was low across European stock indices in Q1 2024, compared to the same period last year, partly explains lower volumes across European cash and derivatives equity markets. A couple of other important factors which could help increase volumes in Europe would be to encourage the involvement of retail investors in the EU equity markets and, also the growth of small cap businesses, reducing complexity and costs for listing. However, regulators are not the only ones that could quickly help address these complex structural issues in Europe.
/jlne.ws/3VhtEUc

FalconX goes live with foreign exchange desk; New offering will allow participants to access a broad range of currency pairs, which will mirror the traditional FX market experience.
Wesley Bray – The Trade
Start-up crypto prime brokerage FalconX has launched a dedicated foreign exchange desk, leveraging the firm’s existing crypto connectivity, which it gained a Virtual Financial Assets (VFA) license for in 2021. The new offering will allow crypto trading firms, exchanges and brokers to access a broad range of currency pairs, including major currencies such as USD, EUR, GBP, CAD, MXN and CHF, which FalconX stated will mirror the traditional FX market experience.
/jlne.ws/4aLHxyM

Wall Street is about to see its biggest trading change in years
Krystal Hur – CNN
Buying or selling a stock is about to get a lot snappier starting next Tuesday. But that doesn’t mean it’ll get smoother, at least right away – and some financial firms are preparing to handle any possible bumpiness. The current standard settlement cycle for broker-dealer transactions is “T+2.” That means that it takes two business days from when you buy a stock to when that transaction “settles,” or when the stock is officially transferred to the buyer’s account and cash is delivered to the seller’s account. That’s been the norm since 2017. Starting May 28, that cycle will take just one business day, or “T+1.”
/jlne.ws/3X1TL2P

U.S. Department of the Treasury Releases Joint Policy Statement and Principles on Voluntary Carbon Markets
U.S. Department of the Treasury
Today, U.S. Secretary of the Treasury Janet Yellen, Department of Agriculture Secretary Tom Vilsack, Department of Energy Secretary Jennifer Granholm, Senior Advisor for International Climate Policy John Podesta, National Economic Advisor Lael Brainard, and National Climate Advisor Ali Zaidi announced the publication of a Joint Statement of Policy and new Principles for Responsible Participation in Voluntary Carbon Markets (VCMs), which have the potential to play an important role in channeling private capital to drive decarbonization eï¬EURorts. Since Day One, President Biden has led and delivered on the most ambitious climate agenda in history, including securing the Inflation Reduction Act, the country’s largest-ever investment in climate, and taking executive action to cut emissions across every sector of the economy.
/jlne.ws/3wVPx2b

Carbon Offsets, a Much-Criticized Climate Tool, Get Federal Guidelines; The new principles aim to define ‘high-integrity’ offsets amid concerns that current practices often don’t cut greenhouse gas emissions as claimed.
Brad Plumer – The New York Times
The Biden administration on Tuesday laid out for the first time a set of broad government guidelines around the use of carbon offsets in an attempt to shore up confidence in a method for tackling global warming that has faced growing criticism. Companies and individuals spent $1.7 billion last year voluntarily buying carbon offsets, which are intended to cancel out the climate effects of activities like air travel by funding projects elsewhere, such as the planting of trees, that remove carbon dioxide from the atmosphere, but that wouldn’t have happened without the extra money.
/jlne.ws/3WYeYLa

****** This story from Reuters and from The Hill.

Q&A with Hazem Dawani, Chief Executive Officer, GigaStar
CityBiz
Today we share a Q&A from Hazem Dawani, Chief Executive Officer at GigaStar. GigaStar fuels human creativity by bringing Creators and Investors together. GigaStar provides Creators with an intuitive platform to raise capital from investors who gain exposure to the Creator Economy while joining a Creator’s journey. The company also recently announced plans to launch a $1M YouTube Creator Fund to help accelerate the journey of YouTubers.
/jlne.ws/3yCnjtK

UN climate summit in Baku risks being again co-opted by fossil fuels, US lawmakers say; Organisation urged to update its conflict of interest guidelines to ‘ensure this does not happen again’
Attracta Mooney – Financial Times
The key UN climate summit hosted by Azerbaijan this year risked being “co-opted” by the fossil fuel industry that was the key driver of climate change, a group of leading US Democrats said in a letter to White House officials. The 26 signatories, including senators Jeff Merkley, Bernie Sanders and Elizabeth Warren, as well as congresswomen Alexandria Ocasio-Cortez and Jan Schakowsky, said they were “deeply concerned by the appointment of Mukhtar Babayev” as the president-designate of the UN COP29 summit.
/jlne.ws/45git1L

How to Pick Stocks Like You’re in Congress; The team at Autopilot, an app that lets you copy the trades of Nancy Pelosi’s husband (up forty-five per cent last year) or Dan Crenshaw (up forty-one), choose their newest offering.
Jack Truesdale – The New Yorker
The old adage about investing is that, unless you are, say, Warren Buffett, you can’t beat the market. But that’s not strictly true. Many members of Congress post excellent earnings. Consider Brian Higgins, the former Democratic congressman from New York, who quit in February: his portfolio went up 238.9 per cent in 2023. Three Republicans-Mark Green, Garret Graves, and David Rouzer-more than doubled their money. (Trading individual stocks is legal for Congress members; trading on inside info isn’t, but prosecutions are rare.) Some have demonstrated exquisite timing. Just before the pandemic, Richard Burr, the chairman of the Senate Intelligence Committee at the time, sold off as much as $1.7 million in stocks. Two weeks later, the market tanked.
/jlne.ws/3yygPfr

Escalating emissions: How Red Sea disruptions are driving up carbon emissions
Richa Naidu, Han Huang, Vijdan Mohammad Kawoosa, Sudev Kiyada, Adolfo Arranz, and Simon Scarr – Reuters
A surge of attacks on ships traveling the waters of the Red Sea is forcing shippers to reroute their vessels, sending them on longer journeys that drive up their carbon dioxide emissions. For companies struggling to account for – and lower – the climate-warming emissions associated with their businesses, these rerouted journeys add to the challenge. Many companies had already revamped their supply chains as they navigated COVID-19 disruptions, extreme weather risks, trade protectionism that forced them to change suppliers, and rising freight costs. “Whether it’s the Red Sea, or the war in Ukraine or COVID or Brexit before that, we’ve had so many discontinuities in the last decade,” said Archana Jagannathan, who leads sustainability in Europe for PepsiCo.
/jlne.ws/3R2tdup

New York’s Biggest Produce Market Is at a Breaking Point; The Hunts Point Produce Market supplies about 60% of the city’s fresh groceries, worth about $2 billion a year. It’s also a major polluter past due for an overhaul.
Fola Akinnibi – Bloomberg
On a recent evening in New York, Pedro Saavedra is hunting tomatoes. He turns on his iPhone flashlight and steps into the back of a dark, climate-controlled trailer, where hundreds of boxes are stacked to the top. He slides through a small gap between the crates and plays his light over the goods, opening a few boxes to check out the merchandise. He was lured here by the promise of a good deal. Each 25-pound box of tomatoes has been marked down from $35 to $24. Now he knows why. Even with the dim phone light, he can see a yellow tint, indicating they’re not fully ripe. It’s not a dealbreaker. “Never going to be perfect,” he says with a shrug. He steps back out of the trailer into a warehouse full of fruit and vegetables. Across the way, a salesman is sitting at a booth, waiting for offers. Saavedra buys 80 boxes.
/jlne.ws/3VjItVp

Central banks must assess bond-buying risks, warns ECB’s Isabel Schnabel; Executive’s comments reflect growing scepticism over vast asset purchases as a tool to boost demand
Martin Arnold – Financial Times
Central banks need to reconsider whether bond purchases are the best way to stimulate growth when interest rates are low, especially after recent asset purchases left them nursing heavy losses, a senior European monetary policymaker has said. Isabel Schnabel, who oversees bond-buying at the European Central Bank, said in a speech on Tuesday that central banks “need to carefully assess whether the benefits of asset purchases outweigh the costs”.
/jlne.ws/44YrVqa

Ukraine Invasion

G7 Finance Ministers Close Ranks as Tensions with Russia and China Fester; Western economic officials projected a united front, and braced for retaliation, as they prepped tougher sanctions and tariffs.
Alan Rappeport – NY Times
Top finance officials from the world’s advanced economies moved toward an agreement on Saturday over how to use Russia’s frozen central bank assets to aid Ukraine and warned against China’s dumping of cheap exports into their markets, aiming to marshal their economic might to tackle twin crises. The embrace of more ambitious sanctions and protectionism came as finance ministers from the Group of 7 nations gathered for three days of meetings in Stresa, Italy. The proposals under consideration could deepen the divide between the alliance of wealthy Western economies and Russia, China and their allies, worsening a global fragmentation that has worried economists.
/jlne.ws/3WZONUq

Poland should not rule out sending troops to Ukraine, says foreign minister
Reuters
Poland should not rule out sending troops to Ukraine, Foreign Minister Radoslaw Sikorski said in comments published on Tuesday, as Kyiv struggles to repel Russian advances, but Sikorski did not specify what role Polish troops would play. While Ukraine’s NATO allies have vowed to supply the war-torn nation with money and weapons for as long as it takes to repel a Russian invasion, they have generally ruled out the possibility of sending soldiers to the country.
/jlne.ws/3X4mt3j

EU Nations Mull Letting Ukraine Use Their Weapons to Hit Russia; Ukraine struggles to defend attacks launched from Russia; Belgium pledges to send 30 F-16 jets to Ukraine by 2028
Andrea Palasciano and Natalia Drozdiak – Bloomberg
European Union defense ministers on Tuesday are debating whether to allow Ukraine to strike targets deeper inside Russian territory with weapons that have been sent by member states. “I truly hope that all the countries that have these assets will also give permission to Ukraine,” Estonian Minister of Defense Hanno Pevkur told reporters, adding that Ukraine was already striking targets in Russian territory with its own drones. “It cannot be normal that Russians are attacking from very deep into Ukrainian territory and Ukrainians are fighting with one hand behind their back.”
/jlne.ws/3WXTkXc

Israel/Palestine Conflict

Israeli attack on Rafah tent camp kills 45, prompts international outcry
Nidal Al-Mughrabi and Dan Williams – Reuters
An Israeli airstrike triggered a fire that killed 45 people in a tent camp in the Gazan city of Rafah, officials said on Monday, prompting an outcry from global leaders who urged the implementation of a World Court order to halt Israel’s assault. Palestinian families rushed to hospitals to prepare their dead for burial after a strike late on Sunday night set tents and rickety metal shelters ablaze. Israel’s military, which is trying to eliminate Hamas in Gaza, said it was investigating reports that a strike it carried out against commanders of the Islamist militant group in Rafah had caused the fire.
/jlne.ws/3VilP0L

Exchanges, OTC and Clearing

A decade of progress: The World Federation of Exchanges publishes its 10th annual Sustainability Survey
The WFE Communications Team – WFE
The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, has today published its 10th annual Sustainability Survey revealing a decade of progress within the exchange industry, and capturing the dramatic change in the wider attitude of market participants towards sustainability, since our first survey. A reduction in concerns amongst exchanges about a lack of resources, as well as business and economic concerns for developing sustainability capabilities, demonstrates the attention and investment the industry has been channelling into this area. This investment mirrors the significant rise in demand for ESG products from investors, showing that over the past decade exchanges have been investing to meet a need.
/jlne.ws/3WZJ8Oe

On the passing of Rolf-E. Breuer
Deutsche Boerse
Rolf-E. Breuer passed away on 22 May 2024 at the age of 86. He was one of the founding fathers of Deutsche Terminboerse (DTB) and played a significant role in the development of Deutsche Boerse AG, where he served as Chairman of the Supervisory Board for many years. His distinctive personality and his commitment to Frankfurt as a financial centre will remain a source of inspiration. We owe him a debt of gratitude. Our deepest sympathy goes to his family.
/jlne.ws/3yCTeKE

Stephanie Eckermann appointed as member of the Executive Board of Deutsche Boerse AG
Deutsche Boerse
The Supervisory Board of Deutsche Boerse AG appointed Stephanie Eckermann (47) as a new member of the Executive Board. As of 1 June, she will be leading the newly formed Post-Trading division, which comprises the Securities Services and Fund Services businesses with the post-trading service provider Clearstream. Stephanie Eckermann has been Managing Director at Deutsche Boerse Group since 2020. She is currently responsible for Strategy & Controls Post-Trading in the division of the designated CEO Stephan Leithner. In addition, Stephanie Eckermann has been a member of the Executive Board of Clearstream Holding AG since 2020 and CEO of the Executive Board of Clearstream Banking AG since 2023. Prior to joining Deutsche Boerse Group, she was a partner at McKinsey & Company and a member of the global leadership team in Corporate and Investment Banking.
/jlne.ws/4aEQI3G

Post-Libor Transition, There Remain Refinements to Be Made and Risks to Be Aware of
AFX
In a report last November, the Alternative Reference Rates Committee declared success as it closed the book on supplanting the Libor benchmark in the U.S. with the Secured Overnight Financing Rate (SOFR). But it did not say that all work is complete. ARRC’s website remained open though deactivated, as the committee said that its closing report highlighted “key areas that the ARRC believes firms should focus on going forward to preserve the robust system of reference rates achieved through the decade-long transition effort.”
/jlne.ws/3IZWQIo

FTSE Russell Begins 36th Annual Russell US Indexes Reconstitution
London Stock Exchange Group
Total US equity market capitalization of the broad market Russell 3000 Index up 20% to $53 trillion as of April 30th rank day. Market cap breakpoint separating small caps (Russell 2000 Index) and large caps (Russell 1000 Index) increased 9.5% to $4.6 billion. Microsoft retakes the top spot from Apple, which had been the largest company from 2021-2023. “Magnificent Seven” companies increased their total market capitalization 43.5% from $9.2 trillion to $13.2 trillion, and all seven companies remain 100% Growth. Technology, Consumer Discretionary and Energy industries lead companies moving up to the Russell 1000 Index, while Health Care companies replenish the Russell 2000 Index, including seven of the 11 Russell 2000 initial public offering (IPO) additions.
/jlne.ws/4aToCSJ

BME brings together 105 companies and 150 investors in the 20th edition of the Medcap Forum starting tomorrow
BME
Jos Dijsselhof, Chairman of BME and CEO of SIX, and Javier Hernani, CEO of BME, will participate in the opening of the event together with Paula Conthe, Secretary General of the Treasury. Investors, 25% of whom are international, have requested more than 1,100 meetings with the companies present. Panels will address topics such as the competitiveness of strategic sectors, the momentum of IPOs, macroeconomic analysis, fixed income and sustainability. The Madrid Stock Exchange Palace will host the 20th edition of the Medcap Forum from tomorrow, May 28, until May 30. The meeting of reference for small and medium-sized companies will bring together 105 companies with 150 investors, 25% of which are international. The latter come from Germany, Finland, France, United Kingdom, Ireland, Switzerland, Italy, Hong Kong, USA, Andorra, India and Portugal.
/jlne.ws/451vOeb

CME Group Adjusted Interest Rate Total Return Futures Reach Record Open Interest, Volume
CME Group
CME Group, the world’s leading derivatives marketplace, today announced that its suite of Adjusted Interest Rate (AIR) Total Return futures reached an open interest (OI) record of 503,000 contracts on May 22. In addition, AIR Total Return futures average daily volume stands at 8,200 contracts for 2024, up a record 78% year over year.
/jlne.ws/4aGcMuV

EEX HYDRIX anniversary: index established as reference for green hydrogen pricing
European Energy Exchange
One year after the launch, the first-of-its-kind green hydrogen index by the European Energy Exchange (EEX), HYDRIX, is considered as an important price signal for the green hydrogen industry. More than 40 companies already subscribed for receiving HYDRIX data. At the same time, the number of contributors who provide data for the calculation of the index, including utilities, trading houses, engineering firms and industrial consumers is increasing.
/jlne.ws/3yKouXY

JSE Investment Challenge Announces April Winners
Johannesburg Stock Exchange
The Johannesburg Stock Exchange (JSE) is pleased to announce the winners of the April round of the 51st annual JSE Investment Challenge, a flagship financial literacy initiative promoting investment skills among South Africa’s youth. The JSE Investment Challenge is an interactive, online trading game that introduces South African high school learners and university students to investing on the JSE. Participants are exposed to practical experience and insights into financial markets, making financial literacy more accessible and engaging. Kingfisher Private School from Limpopo emerged as the new champions in the schools monthly Income Portfolio category, marking the first change in the leaderboard since July 2022 which was occupied by Mpumelelo Secondary School for two successive years.
/jlne.ws/3Vjorv2

Amendments To The Rules Of Bourse De Montreal Inc. In Order To Introduce The Guaranteed Cross Auction Functionality And Automate Contingent Option Trades
Bourse De Montreal
On October 26, 2023, the Rules and Policies Committee of Bourse de Montréal Inc. (the “Bourse”) approved proposed amendments to the Rules of Bourse de Montreal Inc. in order to introduce the Guaranteed Cross Auction functionality and automate contingent option trades. These amendments were self-certified in accordance with the self-certification process as established in the Derivatives Act (CQLR, Chapter I-14.01). The amendments attached hereto will become effective on May 31, 2024, after market close. Please note that the revised articles will also be available on the Bourse’s website (www.m-x.ca).
/jlne.ws/4aFrP8e

Nasdaq and FIA Tech Partner to Reduce Complexity and Increase Resiliency of Post Trade Infrastructure
Nasdaq
Nasdaq and FIA Tech will catapult efficient data sharing across the global post-trade industry. Nasdaq (Nasdaq: NDAQ) and FIA Tech today announced they will partner to help reduce the complexity of post trade data processing across the exchange traded derivative market. Nasdaq will integrate its strategic clearing platform, Nasdaq Real-Time Clearing, into FIA Tech’s Trade Data Network.
/jlne.ws/451j5Ij

Taiwan Futures Exchange Margins
The Taiwan Futures Exchange
The Taiwan Futures Exchange (TAIFEX) has announced the temporarily increased margin levels of GLF due to its underlying securities being subject to disposition measures imposed by the securities market. The margins will be effective after the close of the regular trading session on 2024/05/29 and will be restored to the current levels after the close of the regular trading session on 2024/06/11. (Margin levels will be increased from 2024/05/29 to 2024/06/11 and will be extended accordingly if the securities market is closed on any of the days.)
/jlne.ws/3Vh791E

TMX Group CFO David Arnold to Present at the TD Financial Services & Fintech Summit
TMX Group
TMX Group CFO David Arnold will present at the TD Financial Services & Fintech Summit on Thursday, June 6, 2024 at 4:10 – 4:40 p.m. ET. A link to the webcast will be available and archived in TMX’s shareholder events section.
/jlne.ws/4bW8TTO

Fintech

Worldline Belgium-Based Study Confirms Digital Transactions Are Greener Than Cash
Fintech Finance News
Worldline, a global leader in payment services, has today published a landmark life cycle analysis study conducted in Belgium which shows the huge potential of digital payments to decarbonise payment systems. The report confirms that compared with cash payments, in-store digital payments produce significantly lower levels of CO2-equivalent (CO2e) emissions. The report also identifies industry-wide levers to further decarbonise digital payments, starting with reducing emissions to under 1g of CO2e per transaction.
/jlne.ws/4aIV7m9

MoneyGram Misses Deadline on $398 Million Leveraged Loan Deal; Company seeking to cut interest rate margin on the debt; Repricings, refinancings have dominated the market in 2024
Reshmi Basu, Jeannine Amodeo, and Maria Clara Cobo – Bloomberg
MoneyGram International Inc. failed to convince lenders to slash its borrowing costs on a leveraged loan before a deadline Thursday, according to people with knowledge of the matter. A group of banks led by Goldman Sachs Group Inc. is attempting to lower the interest rate margin on the company’s $398 million loan maturing in 2030 to as low as 400 basis points over the benchmark rate, a different person with knowledge of the matter said last week. They also asked not to be identified discussing a private matter. The new loan is offered at 99.75 cents on the dollar.
/jlne.ws/3wTUDfq

Insights From the Modern World of Trading, Clearing, and CSD Technology
Vermiculus
Building the future of clearing: nuam’s new clearing house
As nuam exchange embarks on constructing an integrated cloud-agnostic clearing house for its marketplaces in Lima, Santiago, and Bogotá, we sit down with Jonas Nordström, business analyst and part of the project team from Vermiculus, that will deliver the clearing solution.
/jlne.ws/3X59o9A

Commerzbank streamlines cross-asset trading with migration to Murex platform; The bank has migrated its foreign exchange, commodities, derivatives, and equities onto MurexâEUR™s MX.3 platform.
Editors – The Trade
Commerzbank has moved to simplify and streamline its cross-asset trading with a migration onto MurexâEUR™s MX.3 platform. The bank has migrated its foreign exchange, commodities, derivatives, and equities onto the platform in a bid to simplify risk and trading. Now completed, the pair said the migration would help Commerzbank achieve business âEURœexpansion, consolidation, modernisation, and digitalisationâEUR by improving speed to market and optimising efficiencies.
/jlne.ws/4549MHt

Women in AI: Miriam Vogel stresses the need for responsible AI
Kyle Wiggers – TechCrunch
To give AI-focused women academics and others their well-deserved – and overdue – time in the spotlight, TechCrunch has been publishing a series of interviews focused on remarkable women who’ve contributed to the AI revolution. We’re publishing these pieces throughout the year as the AI boom continues, highlighting key work that often goes unrecognized. Read more profiles here.
/jlne.ws/3wSIEPe

Fintech N26 says regulatory action cost it ‘billions’ in lost growth; German digital bank has been fined and forced to limit client sign-ups over poor anti-money laundering controls
Olaf Storbeck – Financial Times
Years of regulatory action against German fintech N26 for its poor anti-money laundering controls may have cost the business billions of euros, co-founder Valentin Stalf told the Financial Times, as authorities finally remove a cap on its growth. Financial regulator BaFin in 2021 ordered the online-only bank to limit its new client sign-ups to 50,000 a month, compared with the monthly average of 170,000 it was taking on at the time. The cap was increased to 60,000 last year and it will be removed from June, according to N26. BaFin declined to comment.
/jlne.ws/3WZbs2Z

OpenAI Says It Has Begun Training a New Flagship A.I. Model; The advanced A.I. system would succeed GPT-4, which powers ChatGPT. The company has also created a new safety committee to address A.I.’s risks.
Cade Metz – The New York Times
OpenAI said on Tuesday that it has begun training a new flagship artificial intelligence model that would succeed the GPT-4 technology that drives its popular online chatbot, ChatGPT. The San Francisco start-up, which is one of the world’s leading A.I. companies, said in a blog post that it expects the new model to bring “the next level of capabilities” as it strives to build “artificial general intelligence,” or A.G.I., a machine that can do anything the human brain can do. The new model would be an engine for A.I. products including chatbots, digital assistants akin to Apple’s Siri, search engines and image generators.
/jlne.ws/4bCHQNq

OpenAI begins training next AI model as it battles safety concerns; Executive appears to backtrack on start-up’s vision of building ‘superintelligence’ after exits from ‘superalignment’ team
Cristina Criddle – Financial Times
OpenAI said it had begun training its next-generation artificial intelligence software, even as the start-up backtracked on earlier claims that it wanted to build “superintelligent” systems that were smarter than humans. The San Francisco-based company said on Tuesday that it had started producing a new AI system “to bring us to the next level of capabilities” and that its development would be overseen by a new safety and security committee.
/jlne.ws/3yvvibW

Elon Musk closes $6bn financing for OpenAI challenger xAI; Latest round puts it in top tier of artificial intelligence start-ups after barely a year
Tim Bradshaw – Financial Times
Elon Musk’s artificial intelligence start-up xAI has closed a $6bn funding round at a valuation of $18bn, as investor fervour for new challengers to OpenAI continues unabated. Despite being little more than a year old, xAI’s financing vaults it into the richest tier of potential rivals to Microsoft-backed OpenAI, which has secured more than $13bn in funding. Measured by capital raised, xAI now ranks alongside Anthropic, which has raised more than $8bn since it was established in 2021.
/jlne.ws/3R3I9Zc

Google’s AI Keeps Hallucinating. Does Anyone Care? Complacency over AI errors will make search an even worse experience. Google should shut its new feature down.
Parmy Olson – Bloomberg
For years, to “google” meant to tap the web’s prodigious data. Today it means wading through ads, spam and, most recently, wildly inaccurate AI answers. The new AI Overview feature rolled out by Google over the last week has led to a flurry of errors that must have Alphabet Inc. Chief Executive Officer Sundar Pichai cringing. When asked about cheese sliding off pizza, it recommended a user apply glue. It suggested to another that a python was a mammal.
/jlne.ws/3wRwdTH

The Student Who Was Suspended for a Prizewinning AI Tool Fights Back; ‘I was pretty shocked,’ says Eightball co-creator Benjamin Craver, who is suing Emory University over the suspension
Joseph Pisani – The Wall Street Journal
College student Benjamin Craver was flying high. It was March 2023 and the artificial intelligence tool he helped launch won a $10,000 first-place prize at his university’s startup competition. Six months later, Emory University suspended him and his co-founder for that same AI tool.
/jlne.ws/3wRveCZ

Google’s new AI summaries tool causes concern after producing misleading responses
AP & Euronews
Experts are concerned about bias and misinformation after Google’s new AI overviews produced some misleading responses. Google unveiled a new feature this month in the US that includes artificial intelligence (AI) generated summaries at the top of its search engine. But already, some have pointed out errors in the information included in the new “AI Overviews”. “Yes, astronauts have met cats on the moon, played with them, and provided care,” said Google’s search engine in response to a query by an AP reporter.
/jlne.ws/3yCejVs

Cybersecurity

Human error still perceived as the Achilles’ heel of cybersecurity
Help Net Security
While fears of cyber attacks continue to rise, CISOs demonstrate increasing confidence in their ability to defend against these threats, reflecting a significant shift in the cybersecurity landscape, according to Proofpoint. CISOs’ confidence is growing despite fear of cyber attacks. 70% of surveyed CISOs feel at risk of a material cyber attack over the next 12 months, compared to 68% the year before, and 48% in 2022. CISOs today clearly remain on high alert, but confidence among them is growing: just 43% feel unprepared to cope with a targeted cyber attack, showing a marked decrease over last year’s 61% and 50% in 2022.
/jlne.ws/4aBH3es

Central banks turn to generative AI for enhanced cybersecurity: BIS; Central banks are increasingly adopting generative AI for cybersecurity, with a BIS report indicating that 71% are already using it and more planning to follow.
Arijit Sarkar – CoinTelegraph
The Bank for International Settlements (BIS) believes in the potential for widespread adoption of generative artificial intelligence (AI), an area in which many central banks have developed a strong interest. The BIS, an international financial institution comprising 63 central banks and monetary authorities, surveyed 32 of its central bank members to assess their interest in adopting generative AI tools for cybersecurity. The report found:
/jlne.ws/4aBGX6A

Ransomware Group Claims Responsibility for Christie’s Hack; The hacking group RansomHub is threatening to release “sensitive personal information” about the auction house’s clients.
Zachary Small – The New York Times
A hacker group called RansomHub said it was behind the cyberattack that hit the Christie’s website just days before its marquee spring sales began, forcing the auction house to resort to alternatives to online bidding. In a post on the dark web on Monday, the group claimed that it had gained access to sensitive information about the world’s wealthiest art collectors, posting only a few examples of names and birthdays. It was not immediately possible to verify RansomHub’s claims, but several cybersecurity experts said they were a known ransomware operation and that the claim was plausible. Nor was it clear if the hackers had gained access to more sensitive information, including financial data and client addresses. The group said it would release the data, posting a countdown timer that would reach zero by the end of May.
/jlne.ws/3Kj9PWl

Cryptocurrencies

No, SEC Chair Gary Gensler and the agency’s commissioners did not vote on approving spot Ethereum ETFs
Sarah Wynn – The Block
The Securities and Exchange Commission’s Trading and Markets Division, not the agency’s commissioners, made the decision to approve forms for a slew of spot Ethereum exchange-traded funds. In an order approving 19b-4 forms for ETFs from BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy and Franklin Templeton, there was a line at the end that sheds light on how the decision went down. “For the Commission, by the Division of Trading and Markets, pursuant to delegated authority,” the order read.
/jlne.ws/4bPCWfy

The rise and fall of the Chinese ‘Bitcoin queen’: How takeaway worker drove an E-Class Mercedes-Benz, splashed cash in Harrods and enrolled her son at a £6,000-a-term prep school before her jet-set lifestyle came crumbling down
Rebecca Camber – Daily Mail
Jian Wen came to Britain to ‘enjoy the better things in life’. The 42-year-old drove a E-Class Mercedes-Benz, indulged in £30,000 Harrods shopping sprees and enrolled her son at prestigious £6,000-a-term Heathside Preparatory School near her £5 million home. It was only when she embarked on building a global property empire, attempting to buy a £23m Hampstead mansion, a £10million Tuscan villa and apartments in Dubai that alarm bells started to ring about the single mother who barely had £5,000 to her name when she arrived in the UK to work in a Chinese takeaway.
/jlne.ws/3R4aE9r

Is Wall Street Killing Cryptocurrency?
Joe Liebkind – Investopedia
Cryptocurrency hopefuls want to believe that Wall Street is just another eager investor, ready to pump money into the growing crypto market and enjoy the same returns that retail traders have seen every time the value of cryptocurrency has skyrocketed. However, that projection misses the mark in two ways: first, Wall Street is already neck-deep in the cryptocurrency market; and second, the last thing Wall Street intends to do is pump the precarious market with its own capital.
/jlne.ws/3wIK271

Bitcoin Spot ETFs Now Control Over 1 Million BTC; Grayscale and BlackRock collectively hold more than half of the $70.5 billion in BTC ETFs funds.
Andrew Throuvalas – Decrypt
Over 1 million BTC are now held in custody by Bitcoin exchange-traded funds (ETFs) designed to track the asset’s price performance. More than 30 Bitcoin ETFs collectively owned 1,002,343 BTC as of May 24, according to a chart posted to Twitter on Monday by MicroStrategy executive chairman Michael Saylor. The data was verified by Decrypt based on public reports and corroborated by Coinglass’s Bitcoin ETF dashboard.
/jlne.ws/4bRMqXR

Politics

How Joe Biden’s climate push fell flat with Gen Z voters; President’s clean energy reforms and pollution crackdown still leave some of his base cold
Aime Williams – Financial Times
Anderson Clayton, the 26-year-old chair of North Carolina’s Democratic party, is a rising star in centre-left politics and a key link between Joe Biden and the young voters he needs to win re-election in November. She fears Biden is not getting enough credit on climate change with Generation Z voters in the southern battleground state. “I know that for a lot of young people right now, they’re saying he hasn’t done enough,” said Clayton. “And I’m like, well, do you know what other presidents have done? I mean, genuinely, do you know what other people’s records have looked like?”
/jlne.ws/3VhgPJy

Trump steams as people bet millions against him
Matt Arco – NJ.com
Donald Trump’s social media company took a nose dive once it went public last month. Now, its CEO, Devin Nunes, reportedly wants Wall Street to get involved to try and stanch the bleeding. According to a new report from Forbes: “… Nunes, former Republican congressman and CEO of Trump Media and Technology Group, has recently gone on the offensive, blaming Wall Street short sellers engaged in ‘potential market manipulation.’ According to Nunes, they’re not only hurting Trump and his inner circle but everyday shareholders. Now, he’s looking for someone to step in and come to the company’s rescue, asking everyone from Nasdaq to Congress to his own retail shareholders to take action against these short sellers.”
/jlne.ws/3Ko63uI

‘A Slow And Painful Death’-Donald Trump Accuses Joe Biden Of Trying To Kill Bitcoin And Crypto
Billy Bambrough – Forbes
Trump, who has recently begun accepting crypto campaign donations after making millions of dollars selling crypto-based digital trading cards, said Biden wants bitcoin and crypto in the U.S. “to die a slow and painful death.” “I am very positive and open minded to cryptocurrency companies, and all things related to this new and burgeoning industry,” Trump posted to Truth Social, the social media clone of X, formerly known as Twitter, that he launched in 2022.
/jlne.ws/3QYc19G

‘Let’s punish predatory short selling to the moon’: RFK Jr. invests $24K in GameStop, calls for ‘Ape retail rebellion’ and promises Wall Street reforms
Jing Pan – Moneywise
What do independent presidential candidate Robert F. Kennedy Jr. and Keith Gill, a.k.a. Roaring Kitty, have in common? A passion for GameStop (GME) stock. The latter was a pivotal figure in the meme stock frenzy in early 2021. Through his YouTube videos and social media posts, Gill advocated for the potential of GameStop’s undervalued shares, attracting a massive following of retail investors. This movement culminated in a dramatic short squeeze, where the stock price skyrocketed and short sellers betting against the stock were forced to buy it, sending it even higher.
/jlne.ws/3VfC9zi

Texas Republicans Vote on Call for Independence Referendum
James Bickerton – Newsweek
Texas Republicans voted on Saturday on a motion over whether the state party should back a referendum on the Lone Star State seceding from the United States and becoming an independent country. Under the title of “state sovereignty,” the proposed motion said “Texas retains the right to secede from the United States, and the Texas Legislature should be called upon to pass a referendum consistent thereto.” It was one of a large number of motions voted on at the Republican Party of Texas annual convention in San Antonio, which took place from May 23 to 25. Once the votes have been tallied up, the party is expected to finalize its policy platform this week.
/jlne.ws/3R1NKzi

Bill Gross says Trump would be worse for bond markets than Biden; Famed fixed-income investor warns that Republican’s proposed tax cuts would exacerbate rising US deficits
Brooke Masters and Lauren Fedor – Financial Times
A Donald Trump victory in the US presidential election would be “more bearish” and “disruptive” for the bond markets than the re-election of Joe Biden, according to Bill Gross, the longtime fixed-income investor. Trump’s return to the White House would exacerbate the burgeoning US deficits that had soured Gross on the market that earned him the “bond king” sobriquet when he was running asset manager Pimco, he told the Financial Times.
/jlne.ws/4bwSWDy

The Bank of England is accruing too much political interest; Having the decisions of the MPC define fiscal space directly cannot be right
Toby Nangle – Financial Times
When choices made a decade ago stir up a political storm you know you’re in a bad place. For close to ten years the Bank of England sent quarterly payments to the Treasury – fiscal dividends of quantitative easing. Cumulatively these amounted to almost £125bn. Few hackles were raised. But since October 2022 the flow has reversed. Last year the Treasury sent the BoE £44bn to cover both the financing gap on its QE portfolio and losses realised on its bond sales. This was more than the UK government spent on long-term care. The BoE estimates that the QE programme’s lifetime draw on public sector accounts is likely to eclipse £100bn.
/jlne.ws/3V0YG1f

Ex-Spy Chief to Take Over as Dutch Premier After Months of Talks
Sarah Jacob and Diederik Baazil – Bloomberg
Dick Schoof, a top official in the Dutch Ministry of Justice and Security, is set to be nominated as the prime ministerial candidate by the four parties seeking to form a coalition in the Netherlands, according to state broadcaster NOS. Dutch election winner Geert Wilders’ Freedom Party, the liberal VVD of outgoing Prime Minister Mark Rutte, the center-right NSC and the populist Farmer-Citizen Movement are expected to make an announcement at 5 p.m. local time on Tuesday. If approved, he will replace Rutte, who is the country’s longest-serving premier.
/jlne.ws/4bxm5i3

Regulation

Delegation Dilemma: CFTC Rule Allows Staff to Circumvent Notice and Comment Rulemaking; The Commodity Futures Trading Commission (“CFTC”) published a final rule on April 30, 2024, altering how covered entities fulfill their large trader reporting obligations (“the LTR Rule”) and granting CFTC staff significant authority to change the new reporting standards, potentially violating the Administrative Procedure Act’s notice and comment requirement.
Jones Day
The CFTC’s regulations require covered entities to report daily information regarding certain large derivatives positions. The CFTC uses this information for surveillance and reporting purposes. To facilitate this reporting, the CFTC established an 80-character submission standard in the 1980s. The CFTC adopted the LTR Rule because these requirements became outdated, error-prone, and inconsistent with other CFTC data-submission standards.
/jlne.ws/4aIa9su

Hedge fund lobby group asks UK to keep short position disclosures to regulator
Nell Mackenzie – Reuters
The global hedge fund industry trade body, the Managed Funds Association (MFA), on Thursday suggested in a letter to Britain’s HM Treasury that it should dispense with how firms must disclose their short positions to the public. Britain is currently reviewing its short selling regulations. The MFA letter, shared with Reuters, suggests that when hedge funds short a company, it is disclosed to regulators and not the public. This would prevent a herd-like mentality when a short position of one firm comes out and others then jump onto the position to copy-cat it, the letter said.
/jlne.ws/4bwARWr

A prescription to curb corporate failures; The UK needs more sceptical auditors and a tougher regulator
The editorial board – Financial Times
“Professional judgment is a critical feature of any audit,” according to the UK watchdog, the Financial Reporting Council, which in 2022 urged auditors to sharpen their scepticism. An independent mindset is particularly important when it comes to assessing whether a business is a “going concern”. Alongside internal controls and the potential for fraud, deciding whether a company risks going bankrupt is a critical focus for auditors. It is here, according to new research, that UK firms are falling short.
/jlne.ws/44VQMep

ASIC to launch new Professional Registers Search
ASIC
ASIC’s new Professional Registers Search (PRS) will launch in late June 2024. The register provides an improved search functionality, now allowing users to search for a licence or registration across multiple register databases using just one search. The new site enables users with the ability to filter search results to see more specific information, such as finding a licence or registration in their home state or territory.
/jlne.ws/4dPMI3c

Former Queensland financial adviser Brett Gordon banned following fraud conviction
Published 28 May 2024
ASIC
ASIC has permanently banned former Sunshine Coast financial adviser Brett Andrew Gordon from providing financial services and engaging in credit activities after he was convicted of fraud offences. Mr Gordon was a financial adviser and director of Refocus Financial Group Pty Ltd. Between 2015 and 2018, he dishonestly used funds deposited by clients for property development purposes to pay personal debts and expenses and Refocus business expenses.
/jlne.ws/4bRUIPt

DanFX Trade former director Daniel Ali jailed for fraud
ASIC
Daniel Farook Ali, former director of DanFX Trade Pty Ltd, has been sentenced in the Brisbane District Court to seven years and three months imprisonment for fraud, following an ASIC investigation. On 23 May 2024, Mr Ali pleaded guilty to five counts of fraud totalling $771,303 relating to his misappropriation of funds invested for trading and investment purposes.
/jlne.ws/3VgT2cP

FINRA’s High-Risk Representative Program: Keeping an Eye on Individuals Posing a Heightened Risk of Misconduct
FINRA
Protecting investors from harm is a top FINRA priority. And when it comes to specific individuals who may pose a risk, FINRA’s High Risk Representative (HRR) Program is on the case. On this episode, Brooks Brown, Senior Director, and Eric Hebert and John Salerno, Investigative Directors, from the HRR unit join us to explain how they identify and monitor individuals who pose an elevated risk of misconduct to protect investors and maintain the integrity of the market.
/jlne.ws/3V1rRkL

New Q&As available
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has updated the following Questions and Answers:Alternative Investment Fund Managers Directive (AIFMD), European crowdfunding service providers for business (ECSPR), European Market Infrastructure Regulation (EMIR), Markets in Crypto-Assets Regulation (MiCA), Markets in Financial Instruments Regulation (MiFIR) and Undertakings for Collective Investment in Transferable Securities Directive (UCITS).
/jlne.ws/4bFugJ9

ESMA reports on the application of MiFID II marketing requirements
ESMA
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today published a combined report on its 2023 Common Supervisory Action (CSA) and the accompanying Mystery Shopping Exercise (MSE) on marketing disclosure rules under MiFID II. ESMA, together with the National Competent Authorities (NCAs), finds that globally, marketing communications (including advertisements) comply with MiFID II requirements, and investment firms generally have procedures in place to ensure compliance with MiFID II of marketing materials, including during their development. Some concerns were raised by NCAs regarding sustainability claims in marketing communications, including advertisements.
/jlne.ws/3V2jJk2

Matthew Hill to pay $100,000 penalty for breaching financial markets legislation
FMA – New Zealand
The High Court has imposed a pecuniary penalty of $100,000 against Matthew Geoffrey Hill, the former Chief Executive Officer of NZX-listed New Talisman Gold Mines Limited, for making false and misleading representations in breach of the Financial Markets Conduct Act 2013 (FMC Act).
/jlne.ws/3wSetaI

Updated : Speeches (Vice Minister for International Affairs)
FSA Japan
/jlne.ws/3URdQ9q

IOSCO advances Global Sustainability Disclosures Agenda with enhanced Capacity Building Initiatives; Meeting the challenges of consistent sustainability disclosures was a key topic at IOSCO’s Presidents Committee Meeting, attended by representatives from all 130 member-jurisdictions.
IOSCO
Jean-Paul Servais, Chair of IOSCO’s Board, commented: “It is encouraging that over
the past year, we have seen several jurisdictions take regulatory initiatives in line with IOSCO’s endorsement of the ISSB Standards. Yet, we recognise that this journey may be challenging, particularly for many emerging markets who will require the most
assistance as they consider implementing sustainability reporting standards. To build
awareness and understanding, IOSCO has strengthened its collaboration with the ISSB
and initiated a new partnership with the World Bank to assist jurisdictions as they
consider their pathways to adoption.”
/jlne.ws/3VgOSS9

IOSCO Board Elects Jean-Paul Servais As Chair For A Further Term; Shigeru Ariizumi and Rostin Behnam re-appointed as Vice Chairs; Mohamed Farid Saleh re-elected Chair of IOSCO Growth & Emerging Market (GEM) Committee and remains ex-officio Vice-Chair of the Board
IOSCO
The Board of IOSCO is pleased to announce the re-election of Jean-Paul Servais as its Chair for a further two-year term. Jean-Paul Servais also serves as Chair of IOSCO’s European Regional Committee (ERC) and of Belgium’s Financial Services and Markets Authority. Shigeru Ariizumi, Vice Minister for International Affairs, Financial Services Agency, Japan, and Rostin Behnam, Chair of the U.S. Commodity Futures Trading Commission, were also re-elected as Vice-Chairs of IOSCO’s Board.
/jlne.ws/3yuoNWP

SFC statement on the end of non-contravention period for virtual asset trading platforms
SFC – Hong Kong
The Securities and Futures Commission (SFC) wishes to remind the public that the non-contravention period for virtual asset trading platforms (VATPs) operating in Hong Kong under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap 615) (AMLO) will come to an end on 1 June 2024. All VATPs operating in Hong Kong must be either licensed by the SFC, or “deemed-to-be-licensed” VATP applicants (Note 1) under the AMLO. It is a criminal offence to operate a VATP in Hong Kong in breach of the AMLO, and the SFC will take all appropriate actions against any breaches of the law.
/jlne.ws/3UWZYdH

Sales statistics of foreign-currency denominated products by life insurance industry as of the end of March 2024
FSC – Taiwan
The sales statistics of foreign-currency denominated products by life insurance industry as of the end of March 2024 were as follows: premium revenues from new foreign-currency denominated policies amounted to around NT$74.037 billion, up by 6% from NT$69.672 billion year-on-year. Within these figures, investment-linked insurance products accounted for NT$9.302 billion (around 13% of the total), down by 38% from NT$15.081 billion year-on-year, and the sales of traditional insurance products totaled NT$64.735 billion (around 87% of the total), up by 19% from NT$54.591 billion year-on-year.
/jlne.ws/3R0OXXy

Profit/loss, net value and exchange gains/losses of the insurance industry in April 2024
FSC – Taiwan
The pre-tax profit of insurance enterprises at the end of April 2024 was NT$153.9 billion; the pre-tax profit of life insurance enterprises was NT$143.2 billion, increasing by NT$151.5 billion, or 1,825.3% compared to last year, while the pre-tax profit of non-life insurance enterprises was NT$10.7 billion, increasing by NT$11.2 billion or 2,240%.
/jlne.ws/4bWnEG8

Investing and Trading

Investors Hedging Record Stocks Struggle as Options ‘Just Die’; Beaten-down sectors have also rallied, hurting short-sellers; Hedgers are turning to shorting stock futures and ETFs
Jan-Patrick Barnert – Bloomberg
In a bull market with no crashes, no sudden spikes in volatility and no lasting correction, cautious investors are struggling to find effective ways to hedge their positions. Buying put options, a traditional choice for protecting against downturns, has failed to pay off for investors wary of the rally that pushed stocks around the globe to new all-time highs. Volatility sellers pushed the VIX Index down to the lowest level since 2019 this month and the S&P 500 Index has gone more than 300 days without a dropping 2% in a single session.
/jlne.ws/3yz8at8

Investors Cast Wider Net for AI Winners After Nvidia Delivers; Utility and grid companies may benefit from AI’s energy needs; Hedge funds have been trimming exposure to Mag 7: Goldman
Ryan Vlastelica and Carmen Reinicke – Bloomberg
While the reaction to Nvidia Corp.’s results showed that Wall Street remains laser-focused on artificial intelligence, investors are increasingly looking beyond the usual suspects to find the next AI winners. There is growing recognition that expanding AI infrastructure won’t simply benefit chipmakers like Nvidia or server companies like Super Micro Computers Inc., but will have implications for a variety of sectors.
/jlne.ws/44XqND4

A 50-year-old man used an obscure IRS rule to withdraw $20K a year from his retirement savings – without any penalty. Here’s how
Chris Clark – Moneywise
When Eric Cooper, a 50-year-old early retiree, needed to tap his retirement savings before the age of 59 and a half, he faced the possibility of steep penalties. But he found a way around it using an obscure IRS rule known as Section 72(t). By leveraging this rule, Cooper successfully withdrew $20,000 annually from his IRA without incurring the 10% early-withdrawal penalty.
/jlne.ws/4bVywnK

He Was Ridiculed in 1999 for Predicting Dow 40000. Look Who’s Laughing Now; David Elias forecast in a book that the index would cross the milestone by 2016
Hardika Singh – The Wall Street Journal
David Elias received a surprise in the mail earlier this month: a dozen baseball caps with Dow 40000 printed on the front and Elias on the back. The caps were a gift for a celebration that was 25 years in the making. Elias, who is 79 years old and lives in Williamsville, N.Y., predicted in his 1999 book, “Dow 40,000: Strategies for Profiting from the Greatest Bull Market in History,” that the index would cross the milestone by 2016. He missed the mark by eight years, but the forecast was better late than never, he said in an interview.
/jlne.ws/44Wbw5D

How an Ex-Teacher Turned a Tiny Pension Into a Giant-Killer; A bold bet on rising rates lifted a small Massachusetts fund near the top of the performance rankings
Matt Wirz – The Wall Street Journal
Plymouth County is known for Pilgrims, cranberries-and a top-performing pension fund run by a 65-year-old former schoolteacher. After a decade of mostly ho-hum performance, the $1.4 billion Plymouth County Retirement Association ranked in the top 10% of U.S. pensions over the past three years. Key to that success was an early-and prescient-bet that interest rates would rise. That buoyed the fund through big chunks of the past two years, when climbing rates hammered both stocks and bonds.
/jlne.ws/3wTSfVU

Stock trades must now settle in just one day. Here’s why Wall Street should move even faster.
Gordon Gottsegen – MarketWatch
For decades, Wall Street has been processing trades faster and faster, and on May 28 the industry will hit a new benchmark when it moves from the T+2 to T+1 settlement cycle. This means whenever an investor buys or sells a stock, corporate bond, ETF or municipal security, their transaction will be processed in one business day instead of two. But with this structural change, a new question arises: can markets move even faster?
/jlne.ws/3wTS90u

The AI Money Flow: Why You Can’t Afford to Miss Stocks Like Nvidia and Snowflake
Anders Bylund – The Motley Fool
The artificial intelligence (AI) revolution is well underway. Kickstarted by OpenAI’s ChatGPT introduction near the end of 2022, surging interest in generative AI and machine learning systems has rebalanced the stock market. Microsoft (NASDAQ: MSFT) and Nvidia (NASDAQ: NVDA) carry two of the three largest market caps these days, largely thanks to their direct involvement in OpenAI’s generative AI innovation. In the long run, the same ideas could reshape the global economy, too.
/jlne.ws/3WXrmed

Fund abandons ASX mandate to jump on US tech rally
Joshua Peach – AFR
As the US tech sector keeps resetting record highs, some Australian fund managers frustrated by the lack of viable alternatives on the ASX are changing their mandates to allow them to allocate more money offshore. Nathan Bell, a portfolio manager at InvestSMART, told investors this month that he was changing the fund’s mandate to increase its holdings in US stocks. The changes will come into effect in July and allow Mr Bell’s ESG fund to invest as much as 30 per cent in global equities, which he said would focus chiefly on upping its exposure to the US.
/jlne.ws/4cd8DQv

Big UK life insurers triple use of controversial reinsurance deals; Bank of England warns of significant risks and consults on tighter rules
Ian Smith and Josephine Cumbo – Financial Times
Big UK life insurers tripled the amount of assets they offloaded to global reinsurers last year, underlining their increasing reliance on a risk-sharing practice that has drawn scrutiny from the Bank of England and pension trustees. Most large insurers in the booming market for corporate pension scheme transfers pass on a slice of the pension assets and liabilities they assume from company balance sheets to reinsurers, typically overseas.
/jlne.ws/451z0Gl

Environmental, Social and Corporate Governance

Steven Chu: ‘Wall Street analysts are totally amoral’ on climate; Barack Obama’s former energy secretary discusses the forces and technologies slowing the energy transition
Henry Mance – Financial Times
When Steven Chu was US energy secretary, he addressed a small group of senators about climate change. “I said, ‘Imagine you’re on your deathbed, you’re surrounded by your family, and one of your grandchildren says, ‘Grandpa, you were in a position to do something about this, and you did nothing. Didn’t you love us?’ I was told [by the White House chief of staff] I can’t say that anymore. Why not? Because it makes them feel very uncomfortable.” Chu broke a mould in US politics: a Nobel-prizewinning physicist, he was, when appointed in 2009, the first practising scientist to become energy secretary. “Chu’s the right guyâEUR‰.âEUR‰.âEUR‰.âEUR‰He actually deserved his Nobel Prize,” joked his boss, Barack Obama, himself a Nobel laureate. Chu became a key voice for alternative energy, overseeing a $465mn loan that kept Tesla afloat and pushing new nuclear plants.
/jlne.ws/3V2bG6O

Majority of US voters support climate litigation against big oil, poll shows; And almost half of respondents back the filing of criminal charges against oil companies that have contributed to the climate crisis
Dharna Noor – The Guardian
As US communities take big oil to court for allegedly deceiving the public about the climate crisis, polling shared with the Guardian shows that a majority of voters support the litigation, while almost half would back an even more aggressive legal strategy of filing criminal charges. The poll, which comes as the world’s first-ever criminal climate lawsuit was brought in France last week, could shed light on how, if filed, similar US cases might be viewed by a jury.
/jlne.ws/3UVlT5b

Europe’s Biggest Pension Fund Sells euro 10 Billion in Fossil Fuels; ABP has sold equity, bonds, oil futures linked to fossil fuels; Plans to phase out remaining euro 4.8 billion in illiquid assets
Sarah Jacob and Cagan Koc – Bloomberg
Europe’s biggest pension fund, Stichting Pensioenfonds ABP, has exited all liquid assets in oil, gas and coal worth about euro 10 billion ($10.8 billion), in an effort to be greener. The last shares and bonds owned by the fund were sold in the first quarter of this year, Harmen van Wijnen, chairman of ABP’s board of trustees, said in an interview at the fund’s headquarters in Amsterdam. ABP, which had pledged to sell down a majority of the investments by early last year, no longer holds any “liquid assets” in fossil energy producers, he said.
/jlne.ws/3x3J05o

Singapore Widens its Pool of Carbon Credits to Offset Emissions
Heesu Lee – Bloomberg
Companies can offset up to 5% of emissions with Ghana credits; City-state has another such agreement with Papua New Guinea. Companies in Singapore can tap a larger pool of carbon credits to offset up to 5% of their taxable emissions after the city-state signed a bilateral agreement with Ghana. Ghana is the second country after Papua New Guinea to strike a partnership with Singapore on carbon credits cooperation, according to a statement from the Prime Minister’s Office. Starting this year, firms in Singapore are subject to a carbon tax, set at S$25 ($18.56) per ton of carbon dioxide-equivalent. Access to carbon credits generated abroad will help firms in the city-state offset taxable emissions and meet their climate goals.
/jlne.ws/3R4C7b3

Millions More Trees Isn’t the Climate Fix New Zealand Thought; Government watchdogs and international agencies are calling on the country to dial back its aggressive afforestation efforts.
Ainsley Thomson and Tracy Withers – Bloomberg
Of all the solutions for a warming world, “plant more trees” seems pretty obvious. But in New Zealand, which tested that premise by linking incentives for forestry development with its emissions trading scheme, the results have been more controversial and less effective than climate advocates hoped. Now, after four years of frenetic planting, a prominent government watchdog has joined international agencies, industry groups and environmental advocates in calling for a radical overhaul, one that threatens a reversal of fortunes for investors in the recent forestry boom.
/jlne.ws/3wOQGbP

Climate Change Added a Month’s Worth of Extra-Hot Days in Past Year; Since last May, the average person experienced 26 more days of abnormal warmth than they would have without global warming, a new analysis found.
Raymond Zhong – The New York Times
Over the past year of record-shattering warmth, the average person on Earth experienced 26 more days of abnormally high temperatures than they otherwise would have, were it not for human-induced climate change, scientists said Tuesday. The past 12 months have been the planet’s hottest ever measured, and the burning of fossil fuels, which has added huge amounts of heat-trapping gases to the atmosphere, is a major reason. Nearly 80 percent of the world’s population experienced at least 31 days of atypical warmth since last May as a result of human-caused warming, the researchers’ analysis found.
/jlne.ws/3yAte2p

Mozambique Pioneers Cyclone Warning Network To Protect Millions; The coastal city of Beira is using faster weather data and community mobilization to better prepare for deadly, climate-fueled cyclones
/jlne.ws/3VeMYS2

Exxon Investor Sued for Climate Proposal Promises to Back Off
Kevin Crowley and Doug Alexander – Bloomberg
/jlne.ws/3UXyLrh

ExxonMobil chief says Calpers is neglecting members’ interests in AGM vote; Pension fund accuses oil major of ‘anti-speech effort’ in suing climate-focused shareholders
Jamie Smyth – Financial Times
/jlne.ws/3Ve8ial

Energy Transfer to Buy Permian Operator WTG for $3.3 Billion
Joe Ryan and Elizabeth Elkin – Bloomberg
/jlne.ws/3VgfsuN

War in Ukraine Might Just Kickstart a Nuclear Energy Renaissance; The dollar-and-cents argument for revitalizing the industry doesn’t stand up, but cutting a dependence on Russian imports is compelling.
Liam Denning – Bloomberg
/jlne.ws/4bWi5re

Institutions

NinjaTrader Announces Strategic Expansion Of Executive Team; Futures Brokerage Leader Adds Four New Executive Leaders, As Retail Traders Usher Into Asset Class
NinjaTrader
NinjaTrader, the leading fintech platform for retail futures trading, announced today the addition of four experienced executives to its leadership team. This strategic expansion highlights the company’s commitment to enhancing its platform amid the increasing interest in futures trading by retail traders.
/jlne.ws/4aBLR3w

Goldman Sachs moves to new office in Amsterdam, the Netherlands
Goldman Sachs
Goldman Sachs has moved to a new office space in the World Trade Centre (WTC), Amsterdam, expanding its presence in the city to accommodate a growing footprint across its Global Banking & Markets and Asset & Wealth Management businesses. The new space will complement Goldman Sachs’ office in The Hague, which is a hub for the firm’s Asset Management business in Europe and features significant investment, client service and sustainable investing expertise. The Amsterdam office will have space for up to 50 employees allowing for the ongoing expansion of Goldman Sachs’ activities in the Netherlands.
/jlne.ws/3KfSAp0

Stifel and Marex unveil outsourced trading partnership under new broker referral scheme; The partnership will give Stifel’s institutional client base access to Marex’s multi-asset class custody, financing, securities lending, and capital introduction offerings.
Claudia Preece – The Trade3
Stifel and Marex have unveiled a new prime brokerage referral partnership which will allow Stifel’s clients to access Marex’s trading and execution services. Specifically, the arrangement will see Stifel’s institutional sales and trading group offer its institutional client base access to Marex’s multi-asset class custody, financing, securities lending, and capital introduction.
/jlne.ws/4e0LuCy

China’s Fosun to sell German private bank to ABN Amro for $730m; Once-acquisitive conglomerate unloads assets to reduce debt
Echo Wong and Kenji Kawase – Nikkei Asia
Fosun International has reached a deal to sell German private bank Hauck Aufhauser Lampe to Dutch government-backed ABN Amro Bank for 672 million euros ($730.4 million). Fosun-controlled entity Bridge Fortune is the major shareholder in HAL, which became part of the Chinese conglomerate in 2016. At the time, Fosun was seeking to expand its global footprint through multiple high-profile acquisitions across the private wealth, insurance, travel and health sectors.
/jlne.ws/3x0jIFh

ABN Amro agrees EUR672mn deal with China’s Fosun for German private bank; Dutch lender acquires Hauck Aufhäuser Lampe in move to expand its wealth management business
Olaf Storbeck – Financial Times
ABN Amro has agreed to buy German private lender Hauck Aufhäuser Lampe for EUR672mn from Chinese conglomerate Fosun, as the Dutch bank bets on rising demand for financial advice from wealthy families in Europe’s largest economy. The acquisition will turn ABN Amro, which already owns German private lender Bethmann Bank, into the country’s third-largest wealth manager, the Dutch bank said on Tuesday.
/jlne.ws/3Vi2Ovg

UBS AM was Europe’s worst-selling fund house in April; Passive funds dominated for best-selling managers
Chloe Leung – Financial Times
UBS Asset Management was Europe’s worst-selling fund house in April, in a sign that the firm faces an uneven recovery as it seeks to turn around its fortunes following the acquisition of Credit Suisse. Switzerland’s largest asset manager suffered net outflows of EUR3.6bn in April, having had redemptions of EUR430mn in March, according to Morningstar data that excludes money market and funds of funds.
/jlne.ws/4bxVa5O

Ex-DeepMind Trio Bring Algos, AI Poker Prowess to Tower Research
Justina Lee – Bloomberg
A systematic-trading startup founded by three alumni from Google DeepMind is bringing its algorithms to Tower Research Capital – including a little AI poker-playing prowess. EquiLibre Technologies agreed a deal late last year to contribute exclusively to the New York proprietary trading firm, Tower’s Chief Investment Officer John Cogman said in an interview.
/jlne.ws/3yCFkbl

Cathie Wood’s Ark Invest has destroyed $14 billion in wealth over the past decade, Morningstar says
Matthew Fox – Business Insider
Cathie Wood’s Ark Invest has destroyed an estimated $14.3 billion in wealth over the past decade, according to a recent Morningstar analysis. Ark Invest was all the rage in 2020 and 2021, when its concentrated bets on highly speculative technology companies paid off in a big way thanks to low interest rates and a boom in risk appetite among retail investors. Ark’s flagship innovation ETF, ARKK, soared nearly 150% in 2020, and that massive outperformance helped drive a surge of inflows into its funds right near its peak.
/jlne.ws/4521Ruh

Nick Train apologises for poor investment performance; UK fund manager blames lack of exposure to tech and fossil fuel stocks as well as broader ‘malaise’ in UK market
Emma Dunkley – Financial Times
UK fund manager Nick Train has apologised for his investment performance over the past few years, blaming the lack of exposure to technology and fossil fuel stocks and pointing to the broader “malaise” of the domestic equity market. Train, who manages the Finsbury Growth and Income trust, said as it released half-year results on Tuesday that this “was yet another six-month period” underperforming its benchmark.
/jlne.ws/3R2HF5Y

Work & Management

The Loneliness of the American Worker; More meetings and faceless chats. Fewer work friends. How the modern workday is fueling an epidemic of isolation.
Te-Ping Chen – The Wall Street Journal
More Americans are profoundly lonely, and the way they work-more digitally linked but less personally connected-is deepening that sense of isolation. Nick Skarda, 29 years old, works two jobs in logistics and office administration in San Diego to keep up with his bills. After a couple of years at the logistics job, he has one friend there. He says hi to co-workers at his office job but doesn’t really know any. “I feel sort of an emptiness or lack of belonging,” he says. Employers and researchers are just beginning to understand how workplace shifts over the past four years are contributing to what the U.S. surgeon general declared a loneliness health epidemic last year. The alienation affects remote and in-person workers alike.
/jlne.ws/45gjbvX

The Colleges Where You’re Most Likely to Have a Positive Return on Your Investment; Hitting a certain income threshold after graduation makes in-state tuition worth it, even when students take on loans
Alyssa Lukpat – The Wall Street Journal
Young professionals graduating from public universities charging in-state tuition often receive a degree that is worth the money-with one caveat. New graduates need to earn at least $50,000 a year, on average, in their first decade off campus for the degree to pay off, according to new research from Strada Education Foundation, a nonprofit that analyzed federal education and earnings data. If they can land that salary, or make $500,000 before taxes over 10 years, state school graduates across sectors will find the investment worth it and should be able to pay off their loans, Strada says.
/jlne.ws/3QXq7Yz

For Private Credit’s Top Talent, $1 Million a Year Is Not Enough; The fight between Barings and a gang of senior defectors is a rude awakening for a private market that sells itself on trust, discretion and stability. Many investors are furious.
Silas Brown, Paula Seligson, and Esteban Duarte – Bloomberg
Antoine Gosselin-Mercury may not have expected to hit the corporate heights quite so quickly when he moved to Barings LLC in 2021. But over a single mad March weekend this year, the mid-level staffer found himself one of the most senior people left on his team at its ritzy London office. For any financier wanting to make a mark in the booming $1.7 trillion private credit market, Barings was a good place to be. The firm’s Global Private Finance division has long been part of the elite, especially in Europe. It boasts a pedigree in company loans going back to 1992, a lofty position in deal rankings and a parent company that manages half a trillion dollars of assets.
/jlne.ws/4bxSlle

Persuading Europeans to work more hours misses the point; Shrinking workforce would be better tackled by helping those who don’t want a job to work a little, research suggests
Delphine Strauss – Financial Times
Europeans are spending less time at work, and governments would like them to get back to the grindstone. That is the thrust of measures German, Dutch and British ministers have been examining to persuade part-timers to take on more hours, and full-timers to embrace overtime. But the evidence suggests it will be an uphill battle – and that authorities worrying about a shrinking workforce would do better to help people who might otherwise not want a job at all to work a little.
/jlne.ws/4bCNLC8

Wellness Exchange

7 Habits That Will Drastically Improve Your Energy Levels According To These Experts;
Feeling tired or hitting an afternoon slump? These simple lifestyle shifts can make a big difference.
Kyli Rodriguez-Cayro – BuzzFeed
Waking up already feeling worn out? Unable to overcome the afternoon slump? These may be signs that various lifestyle factors are taking a toll on your energy levels, leading to brain fog and straight-up exhaustion.
/jlne.ws/3UWnNCp

World Health Organization overturns dogma on airborne diseases, but the CDC may not act on it
Amy Maxmen – Daily Montanan
The World Health Organization has issued a report that transforms how the world understands respiratory infections like COVID-19, influenza and measles. Motivated by grave missteps in the pandemic, the WHO convened about 50 experts in virology, epidemiology, aerosol science, and bioengineering, among other specialties, who spent two years poring through the evidence on how airborne viruses and bacteria spread. However, the WHO report stops short of prescribing actions that governments, hospitals, and the public should take in response. It remains to be seen how the Centers for Disease Control and Prevention will act on this information in its own guidance for infection control in health care settings. The WHO concluded that airborne transmission occurs as sick people exhale pathogens that remain suspended in the air, contained in tiny particles of saliva and mucus that are inhaled by others.
/jlne.ws/4bvlE7Q

Why in-person friendships are better for health than virtual pals
Marta Zaraska – The Washington Post
María Branyas, who, at 117, is the oldest known living person on Earth, believes that one of the secrets to a long and healthy life lies in having “a good connection with friends and family.” A growing body of research shows the “supercentenarian” might be onto something. It’s long been known that people who enjoy high-quality friendships have better health – the effect is so strong it’s comparable to the longevity benefit of eating a Mediterranean diet. But simply having good friends and feeling connected isn’t enough. Research suggests that for our health to truly thrive, we need to physically meet with our friends on a regular basis.
/jlne.ws/3wQDvXS

Regions

The mounting strains on global shipping; Pirate attacks, Middle East instability and drought are causing disruption and congestion at the world’s ports
Robert Wright – Financial Times
There is no mistaking, on entering the port of Algeciras, at the southernmost tip of Spain, how busy the facility is. The cranes that tower above the port’s two container terminals are nearly all at work, shuttling containers on and off ships. The piles of boxes in the terminals’ yards are mainly stacked the maximum five high. Alonso Luque, chief executive of TTI Algeciras, operator of one terminal, says that this year he has turned away far more requests to handle extra cargo than he has been able to accommodate. “You can see that the capacity is quite limited,” he says, gesturing at the stacked containers.
/jlne.ws/451gluv

Asia needs better education and social safety nets to grow rich as aging and AI threaten livelihoods, UN says
Elaine Kurtenbach and the Associated Press via Fortune
As economies in Asia and the Pacific slow and grow older, countries need to do more to ensure that workers get the education, training and social safety nets needed to raise incomes and ensure social equity, a United Nations report said Tuesday.
/jlne.ws/3Vls2sU

New generation of entrepreneurs fuels boom in Australian family offices; These small firms are often the hidden hands that have quietly transformed the country with a wide range of investments
Nic Fildes – Financial Times
The Australian family office market has traditionally been relatively small, low profile and limited in its ambition. To manage intergenerational wealth, rich families, often Europeans who emigrated after the second world war, set up offices that mostly invested in blue-chip stocks for dividend growth, alongside real estate assets. However, there has been a revolution in Australia’s investment market over the past decade as the number of family offices has boomed and their investment strategies have shifted towards active investment.
/jlne.ws/3WY5fEo

Opec+ switches to online meeting as market expects cuts to continue; Oil cartel cancels in-person ministerial gathering as prices hover around three-month lows
Malcolm Moore and Tom Wilson – Financial Times
Opec+ has cancelled its formal meeting in Vienna next week in favour of a video conference, in a sign that there may already be broad agreement for members to roll over existing oil production cuts. Members of the extended oil cartel will now meet online, rather than in person, on June 2 to decide production policy for the second half of the year.
/jlne.ws/44XQRxW

Saudi Arabia to Raise $10 Billion to $20 Billion in Fresh Aramco Stock Sale; Long-awaited offering, if it proceeds, would alleviate near-term pressure on the kingdom to fund a slew of mega projects
Ben Dummett – The Wall Street Journal
Saudi Arabia is likely to announce as soon as this week plans to sell $10 billion to $20 billion worth of stock in Aramco, its crown jewel and the world’s most valuable oil company, according to people familiar with the matter. The long-awaited offering, if it proceeds, would alleviate near-term pressure on the kingdom to raise funds. Saudi Arabia has a slew of mega projects including a new city and a global airline, all aimed at diversifying the economy beyond oil. The country supersized a $12 billion debt sale earlier this year and has transferred billions from its foreign-currency reserves to its sovereign-wealth fund.
/jlne.ws/3yC7Fi5

The Other Border Dispute Is Over an 80-Year-Old Water Treaty; With another hot summer looming, Mexico is behind on its water deliveries to the United States, leading to water cutbacks in South Texas. A little-known federal agency has hit a roadblock in its efforts to get Mexico to comply.
Martha Pskowski – Inside Climate News
Elena Giner faced a room full of farmers, irrigation managers and residents in the Rio Grande Valley of Texas on April 2. The local agricultural community was reeling. Reservoirs on the Rio Grande were near record lows and the state had already warned that water cutbacks would be necessary. The last sugar mill in the region closed in February, citing the lack of water.
But Mexico still wasn’t sending water to the U.S. from its Rio Grande tributaries, as a 1944 treaty requires the country to do in five-year intervals.
/jlne.ws/3V0s2wR

Miscellaneous

Vivek Ramaswamy urges culture shift at BuzzFeed after building stake; Former US Republican presidential candidate urges media group to hire from ‘across the political spectrum’
Alex Rogers – Financial Times
Former US Republican presidential candidate Vivek Ramaswamy has called for BuzzFeed to axe staff, focus on video and hire new voices such as former Fox News host Tucker Carlson after raising his stake in the media company to 8.3 per cent. In a letter to its board of directors on Tuesday, Ramaswamy criticised BuzzFeed for decisions that he claimed had contributed to the public’s “distrust of the media”, including publishing in 2017 a dossier by the former British spy Christopher Steele.
/jlne.ws/3R2tcqA

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The Spread

The Stock Market Has Rarely Been This Sleepy

Lead Stories The Stock Market Has Rarely Been This Sleepy Gunjan Banerji - The Wall Street Journal It's eerily calm out there in the stock market. The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices...

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