Where Have All The Futures Traders Gone? Ask the Hedge Funds; SEC Commissioner Hester Peirce Proposes 3-Year Safe Harbor Period for Crypto Token Sales

Feb 7, 2020

First Read

Hits & Takes
By JLN Staff

The following tribute to Bryan Durkin was sent by Ray Cahnman:

CME is fortunate that Bryan Durkin will continue as a director and a special advisor after his retirement as CME president. Bryan’s remarkable career began in 1982 as a Chicago Board of Trade audits investigator working out of a sub basement office with no windows. He was involved in numerous rules violation cases. Whenever he could, he focused on reforming rather than punishing bad behavior. To this end he gained great respect from both traders and CBOT staff. Above all, he was able to express the importance of maintaining high ethical standards in an arena that exposed participants to unethical temptations. As Bryan’s career advanced out of the sub basement, he was assigned to work with numerous committees as a staff liaison. He had a remarkable ability to intervene when member disagreements boiled over. He would restore calm and achieve consensus. When CBOT was purchased by CME, Bryan was one of two senior officers to make the cut. Since joining CME, Bryan has held numerous job titles. His detailed work with numerous CME departments is a major CME asset. All CME shareholders and members are indeed fortunate that Bryan will remain actively involved as a board member and advisor.~JJL

I would have worded the headline about Bryan Durkin “stepping down” as president of the CME Group a bit differently. Bryan never put himself on a pedestal and he was as down to earth and as unpretentious as a senior executive could be.~JJL

Head of Equities at Cboe Global Markets Adam Inzirillo has a commentary on the Cboe website titled “What to Know About Cboe Market Close.” The Cboe Market Close (CMC) is an alternative to closing auction in the U.S. stock market and is planned to launch on Friday, March 6, 2020, after receiving SEC approval on January 22, 2020.~JJL

Bloomberg reports that Climate Change Is Coming for Your Oreos because drenched U.S. fields are making wheat more scarce, which “might be bad news for snack fans.” A.) What about plain old, relatively nutritious bread? And B.) Who knew Oreos have wheat in them??~SR

I attended the fourth annual “International Blockchain Congress,” or “Blockress” conference in Chicago yesterday. I didn’t get there until late, but it seemed the highlight of the conference was the talk that SEC Commissioner Hester Peirce gave in which she announced her proposal for a “safe harbor” for digital asset and blockchain token projects – at least, that’s what people kept talking about. I did attend an interesting talk on smart contracts and tokenomics. What stuck out most in my mind was when the moderator Charles Kwon – executive chairman at OmniSparx – asked the panelists for examples of good use cases for blockchain. Robert Consdorf, SEO at EOS Detroit, said, “not financial infrastructure.” He said blockchain’s best applications are consumer products like “closed-loop” digital environments – platforms in which the protocol for paying participants like content creators is built into the platform’s infrastructure. Andrii Zamovsky, Founder of Ambisafe, said censorship resistance and digital property ownership were the best use-cases for the technology. “Not a huge amount of money there,” he said, “but it’s an actual use case.”~MR

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NYSE Owner Abandons Potential eBay Deal
Investors had pushed back strongly against move to acquire e-commerce company
Alexander Osipovich – The Wall Street Journal
Intercontinental Exchange, or ICE, said in a statement released after the markets closed Thursday that it was giving up on its consideration of a deal for eBay based on conversations with investors after a morning earnings call.
/on.wsj.com/2uthAFM

*****The proper term for this move is “UNCLE!”~JJL

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Intercontinental Exchange Statement Regarding Management’s Q4 Conference Call
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, is sharing the following statement: Based on investor conversations following today’s ICE earnings call, ICE has decided to cease exploring strategic opportunities with eBay.
/jlne.ws/39fypTE

*****Anyone want to buy a truckload of ICE Beanie Babies? For sale cheap.~JJL

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China Implores Employees and Clients to Scour World for Masks
Bloomberg News – Bloomberg
As the deadly coronavirus triggers shortages of medical supplies in China, businesses are urging employees and their clients to bring back face masks from overseas.
/jlne.ws/3bfvBrv

***** A nice bandana can work just fine.~JJL

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CryptoMarketsWiki Coin of the Week: Bitcoin (BTC)
Bitcoin has been crawling slowly towards the $10,000 mark for the past few weeks; this week, it passed $9,650. At the time of this writing, it has surpassed $9,775. Bitcoin holders (and HODLers) have been particularly bullish lately with the approach of “The Halvening”, a routine event in bitcoin’s protocol in which the reward for mining bitcoin is cut in half. This event has historically coincided with price spikes for bitcoin, but not all are convinced it will happen this time.
bit.ly/2PwV7QO

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Thursday’s Top Three
Our most-read story Thursday was the big news, CME Group Announces Bryan Durkin to Step Down as President. Second was more CME Group people news, CME Group Inc. Names Slate of Director Nominees. Third was NYSE Owner’s ‘Outside the Box’ EBay Approach Leaves Analysts Bewildered. With today’s ICE news, it seems it was indeed too far outside the box.

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MarketsWiki Stats
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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

Where Have All The Futures Traders Gone? Ask the Hedge Funds
Katherine Greifeld Cameron Crise – Bloomberg
The slow death of hedge funds is taking down a once-popular derivatives contract with it. That’s one of the theories for why aggregate positions in S&P 500 futures have fallen steadily as a percentage of the index’s market cap
/jlne.ws/2UtbbFo

SEC Commissioner Hester Peirce Proposes 3-Year Safe Harbor Period for Crypto Token Sales
Nikhilesh De – Coindesk
SEC Commissioner Hester Peirce Proposes 3-Year Safe Harbor Period for Crypto Token Sales
SEC Commissioner Hester Peirce wants to give legitimate crypto projects a shot at success without running afoul of U.S. securities laws.
/jlne.ws/3bjHcWw

Credit Suisse CDS jump after CEO Thiam quits
Reuters
The cost of insuring exposure to debt issued by Credit Suisse jumped by 3 basis points (bps) on Friday after Chief Executive Tidjane Thiam quit amid a power struggle at Switzerland’s second-biggest bank.
/jlne.ws/2UA8sKi

Derivatives are a precious commodity in UK-EU trade; Disruption to the trading relationship between neighbours could harm both sides
Philip Stafford – FT
A regulatory spat over Europe’s commodity derivatives market offers a vivid example of the dilemma the City of London faces in the trade talks between the UK and the EU. Mifid II regulations, which came into force in early 2018, required the UK to implement new rules around the commodity trades that can be made off-exchange. The aim, as with most of the regime, was to increase transparency.
/jlne.ws/2GWZbnH

Death of a Hero Doctor Sparks Crisis of Confidence in Xi’s China
Bloomberg News
Outrage prompts calls for free speech to trend on social media; ‘Flaws in the entire system of governance have been exposed’
Chinese President Xi Jinping’s government has worked hard to channel public anxiety over the new coronavirus into patriotic fervor. But the death of a 34-year-old doctor on Friday has unleashed a wave of fury that is sparking a rare crisis of confidence in the Communist Party.
/jlne.ws/3721zE1

The Death of Value Has Been (Slightly) Exaggerated; A historic period of underperformance suggests it’s a broken tool for stock selection. It can be fixed.
John Authers – Bloomberg
It seems a fact of life in the post-crisis era. Value isn’t as valuable a tool for investors as it used to be. Why? And will it finally recover? The debate among investors and financial academics is growing intense.
/jlne.ws/2Ovavvp

Intercontinental Says It Has Ended Pursuit of EBay
Andrew Pollack – Bloomberg
Intercontinental Exchange Inc., the owner of the New York Stock Exchange, said it stopped trying to make a deal for EBay Inc. The potential acquisition left analysts questioning Intercontinental’s rationale in seeking to own the consumer online marketplace.
/jlne.ws/39bSxFW

China Traders Seek Cover Far and Wide After Volatility Shock
Bloomberg News
Investors look for various assets to ease virus outbreak hit; Impact of virus may last for six months: fund manager
As the dust settles on China’s record $720 billion stock sell-off, traders are navigating the surging volatility to figure out new strategies.
/jlne.ws/39gUDEy

Pope Francis Isn’t Infallible on Economics; Debt restructuring for the poorest countries has been tried before, with limited results. It needs to be combined with fixing national institutions.
Ferdinando Giugliano – Bloomberg
According to the Catholic Church, the Pope is infallible when he teaches on matters of faith or morals. When he talks about economics, however, he appears to make mistakes — just like the rest of us.
/jlne.ws/2Uw5tm8

France’s Richest Man Gets a Free Lunch From the ECB; LVMH’s bond issue to pay for Tiffany was cheaper than Bernard Arnault’s wildest hopes. Euro credit sales are so hot right now.
Marcus Ashworth – Bloomberg
Bernard Arnault, the boss of LVMH Moet Hennessy Louis Vuitton SE, exceeded even his own incredibly low yield expectations in his company’s giant bond sale this week — which included the biggest corporate issue in euros since 2016. The luxury giant raised 7.5 billion euros ($8.3 billion) and 1.55 billion pounds ($2 billion), over a range of maturities from two to 11 years, to help finance its $16 billion purchase of Tiffany & Co.
/jlne.ws/2UEjpe1

Why Central Bank Digital Currencies Are The Killer App For Blockchain In 2020
Biser Dimitrov – Forbes
With the global mobile payment market currently estimated at US$816.50B and projections that it will reach over US$5.5T by 2025, the way we pay and transact money is about to change drastically. Judging by the buzz around central bank digital currencies (CBDCs), the likelihood that we will soon be spending and exchanging on a blockchain ledger are pretty high. Just this last month at the World Economic Forum annual meeting at Davos, one of the most discussed topics centered around CBDCs and how individual countries can issue, manage, govern and use digital currencies. We even had the former Commodity Futures Trading Commission chairman J. Christopher Giancarlo announcing a new version of a digital dollar.
/jlne.ws/39hbR4R

Fearless Fund Launches $5 Million Dollar VC Fund For Women Of Color Entrepreneurs
Pauleanna Reid – Forbes
Fearless Fund Founders, Arian Simone and Keshia Knight Pulliam
There is a glaring inequality in the world of venture capital that too often leaves black women at the short end in comparison to their white and male counterparts. Businesses with women of color CEOs get less than 1 percent of all VC funding every year which is the smallest sliver of a multi-billion-dollar pie. Yet despite the severe funding gap, women of color are not showing any hesitation in entering the business arena. Minority women account for 89% of new businesses opened every day.
/jlne.ws/39a1bou

While Hong Kong Waits in Line, Singapore Distributes 5 Million Masks
Fion Li and Philip Heijmans – Bloomberg
Thousands line up to buy masks in Hong Kong amid shortages; Singapore taps its army to help distribute 5 million masks
With no sign the coronavirus outbreak will be under control any time soon, surgical masks — the three-ply, pleated rectangles that typically sell for a few cents each — have become a political flash point across Asia.
/jlne.ws/2Ov93Jt

In College Admissions Scandal, Prosecutors Say One Parent Stood Out; Most parents were accused of crimes to help one child, maybe two, get into an elite college. Douglas Hodge, the former C.E.O. of Pimco, pushed to get at least four children in, prosecutors say.
Kate Taylor – WSJ
Of all the wealthy parents charged in the sprawling college admissions scandal, prosecutors have described Douglas Hodge, the retired chief executive of the bond giant Pimco, as one of the most active and prolific people involved.
/jlne.ws/37650tp

BlackRock and SLA back cuts in stock exchange trading hours; Leading fund groups say improvements are needed in work-life balance for employees
Chris Flood – FT
Plans to improve the work-life balance of financial sector employees by shortening trading hours at the London Stock Exchange and other European bourses have won support from Standard Life Aberdeen (SLA) and BlackRock.
/jlne.ws/2S6j6qv

Exchanges, OTC and Clearing

Intercontinental Exchange chief defends eBay approach; NYSE owner did not ‘lose its mind’, says Jeffrey Sprecher
Philip Stafford – FT
Intercontinental Exchange has given up its pursuit of eBay, the struggling auction website, after it failed to persuade investors it was not overreaching itself in search of growth. Shareholders reacted with confusion this week following confirmation that ICE had approached eBay over a possible combination of the two companies.
/jlne.ws/2vcm7MW

Nasdaq Private Market Sets New Annual Transaction Record in 2019; 87 private company-led transactions and $4.8 billion in transaction value completed; Facilitated single-largest transaction activity by number of eligible sellers
Nasdaq
The Nasdaq Private Market, LLC, a leading provider of liquidity solutions for today’s private securities, has published its 2019 Year-End Private Company Report, which summarizes private company liquidity activity on the Nasdaq Private Market platform. Nasdaq Private Market facilitated 87 private company-sponsored secondary transactions – a new annual record high – with total transaction value of $4.8 billion.
/jlne.ws/2OzRecc

Euronext follows London with talks over shorter trading day; Momentum is quickening behind an initiative companies hope will relieve stress, improve diversity and help ease the buying and selling of shares
Samuel Agini – Financial News
Euronext, which operates stock exchanges across Europe, plans to ask the market whether it should cut daily trading hours, following a similar consultation by the London Stock Exchange.
/jlne.ws/2UAafyP

NY Court orders Nasdaq to produce data about HFT firms
Maria Nikolova – Finance Feeds
Nasdaq will have to produce documents relating to the identity of high frequency trading firms trading on the defendants’ exchanges.
/jlne.ws/2vQX56i

Cboe Global Markets Reports 2019 Fourth Quarter and Full Year Results
Press Release
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the 2019 fourth quarter and full year. “Our fourth quarter results reflect lower year-over-year trading volumes industrywide as lower volatility dampened trading, particularly in our suite of proprietary products, which experienced exceptionally strong trading in 2018’s fourth quarter,” said Edward T. Tilly, Cboe Global Markets Chairman, President and Chief Executive Officer.
/bit.ly/2H1Sj8i

LMAX Exchange Unveils Record Results
Colin Lambert – Profit & Loss
LMAX Group has unveiled record profitability and financial performance for the year ended 31 December 2019, reporting that 2019 EBITDA grew by 30% to $26.2 million. With an EBITDA margin of 47%, the firm claims it is one of the most profitable operators of global venues for electronic FX trading.
/jlne.ws/3blYrpR

SGX RegCo gives issuers up to 30 June 2020 to hold AGMs to approve FY Dec 2019 results amid 2019-nCoV situation
SGX
Singapore Exchange Regulation (“SGX RegCo”) will grant a time extension of up to 2 months (i.e. till 30 June 2020) (“Waiver”) to issuers holding annual general meetings (“AGMs”) to approve their 31 December 2019 (“FY Dec 2019”) financial results[1]. Issuers must issue their annual reports to shareholders and the Exchange at least 14 days before the date of its AGM.
/jlne.ws/2ur0Wqr

CME Group Expands Ferrous Metals Product Suite with New North European Hot-Rolled Coil Steel (Argus) Futures Contract
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of North European Hot-Rolled Coil Steel (Argus) Futures, to begin trading on March 9, 2020, pending all relevant regulatory review periods.
/jlne.ws/2S4C9Sg

TMX Group Consolidated Trading Statistics – January 2020
TMX
TMX Group Limited today announced January 2020 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange.
/jlne.ws/3bjqwhA

Fintech

AcadiaSoft Partners with Clarus Financial Technology to Provide Joint Initial Margin Analytics Service
The service will be available through AcadiaSoft’s AcadiaPlus, a collateral, margin and risk mitigation platform
Press Release
Norwell, MA, February 4, 2020 – AcadiaSoft Inc., the leading industry provider of risk and collateral management services for the non-cleared derivatives community, today announced it will launch a joint initial margin analytics service with Clarus Financial Technology (FT). The service, enabled by AcadiaSoft’s Access application (part of AcadiaPlus), allows Clarus FT to provide clients with margin analytics, calculations and modeling for non-cleared Initial Margin (IM).
/bit.ly/2OyPyj2

The era of big M&A is over for Big Tech; But will regulators spot which smaller deals define the next phase of competition?
Richard Waters – FT
Big Tech is still in the M&A business — but only just. Blocking the use of acquisitions by the largest US technology companies to consolidate their power has become an overt goal of many regulators and politicians. So it is telling to note that, in aggregate, the amount the leading tech companies spent on buying up other businesses tailed off last year.
/jlne.ws/2Ut504a

Free trading app Robinhood takes aim at the UK; What Britain can expect from the US start-up that has shaken up retail investment
Richard Henderson – FT
Fresh from sparking a price war in US retail investment, Robinhood is crossing the Atlantic. The investment app shook up its home market by eliminating commissions on stock trades, and now it is planning to bring its carefully marketed, millennial-friendly brand of disruption to the UK.
/jlne.ws/2v9J8jE

Will Facebook’s Libra Launch this Year – Or Even at All?
Rachel McIntosh – Finance Magnates
In June of 2019, Facebook announced the launch of Libra, a global financial network that it described as “a simple global currency and financial infrastructure that empowers billions of people.” The network – which was originally slated to be launched within the first half of 2020 – was to be supported by the Libra Association, an organization comprised of at least one hundred corporate backers who would act as the network’s nodes.
bit.ly/2v9gY8z

Cryptocurrencies

Open Positions in Bakkt’s Bitcoin Futures Jump to Record Highs
Yahoo Finance
While bitcoin hit fresh three-month highs on Wednesday, open interest in monthly bitcoin futures on the Intercontinental Exchange’s (ICE) Bakkt platform jumped to record highs.
Open interest, or the number of open futures contracts, rose to $13 million, surpassing the previous record high of $12 million reached on Feb. 3, according to data analytics firm Skew.
/yhoo.it/2ve4FYE

Fearing ‘Currency Struggle,’ Japanese Politicians Want G7 Response to China’s Digital Yuan
Paddy Baker – Coindesk
Japanese politicians are calling on G7 members to respond to China’s digital yuan by collaborating on digital currency research. Senior politicians from the ruling Liberal Democratic Party (LDP), led by former economy minister Akira Amari, told reporters Friday that Japan should share information and technical studies with the U.S. and other G7 members in order to respond to China’s digital yuan initiative, which could pose a serious challenge to the greenback’s global supremacy, Reuters reports.
bit.ly/375tUcH

Open Positions in Bakkt’s Bitcoin Futures Jump to Record Highs
Omkar Godbole – Coindesk
While bitcoin hit fresh three-month highs on Wednesday, open interest in monthly bitcoin futures on the Intercontinental Exchange’s (ICE) Bakkt platform jumped to record highs.
/yhoo.it/2w1dvcF

Australian government issues national blockchain roadmap to help drive adoption
Yogita Khatri – The Block
The government of Australia has today released a national blockchain roadmap to help drive the adoption of the technology in the country. The 52-page roadmap, issued by the government’s Department of Industry, has noted that blockchain has the potential to create jobs, save companies money and improve Australia’s economic growth. The five-year roadmap hopes to bring regulatory frameworks, help people develop blockchain skills and increase global investment and collaboration opportunities.
bit.ly/39frCcr

Fed Reserve Is Researching DLT-Based Digital Dollar, Says Governor
Paddy Baker – Coindesk
The Federal Reserve is looking at whether launching its own digital currency could be an effective counter to private initiatives such as Libra.
/jlne.ws/387htyv

Japan lawmakers push government for G7 talks on digital yen
Tetsushi Kajimoto, Yoshifumi Takemoto – Reuters
Japan should prepare to issue digital currencies and propose bringing up the topic at this year’s G7 meetings to counter China’s move toward issuing a digital yuan, a group of ruling party lawmakers said on Friday.
/jlne.ws/2uqRRxT

Blockchain payments startup Paystand raises $20M Series B to scale operations
Yogita Khatri – The Block
California-based blockchain payments startup Paystand, which claims to provide PayPal’s Venmo-like payments for enterprises, has raised $20 million in a Series B funding round.
/jlne.ws/397Z30C

Consumer adoption will be key focus for Bakkt in 2020, according to ICE CEO
Frank Chaparro – The Block
Intercontinental Exchange, the parent company of the New York Stock Exchange and crypto venture Bakkt, boasted a record 2019 during its fourth quarter earnings call.
/jlne.ws/2UxJUS1

Platform Allowing Trading of Crypto in Custody Completes First $100K Transaction
Paddy Baker – Coindesk
A new institutional settlement solution that allows clients to trade directly from their custodial accounts has completed its first transaction. Digital asset trading infrastructure provider SettleBit announced this week that it had successfully transferred $100,000 in bitcoin from Prycto Digital to CMT Digital in roughly 10 minutes using a claimed first-of-its-kind settlement layer to facilitate a transfer that kept digital assets in BitGo’s cold storage.
bit.ly/2SpiMC5

SEC’s ‘Crypto Mom’ Has Long-Shot Plan to Free Coins From Rules
Benjamin Bain – Bloomberg
Commissioner Peirce wants grace period from most regulations; Plan unlikely to win backing of SEC Chairman Jay Clayton
The U.S. Securities and Exchange Commission’s loudest crypto advocate wants to let firms sell digital tokens without facing tough rules, a plan that’s unlikely to gain traction under the regulator’s current leadership.
/jlne.ws/3bg5m3X

Warren Buffett Finally Sits Down for $4.6 Million Charity Meal
Steven Russolillo – Wall Street Journal
Billionaire investor Warren Buffett and cryptocurrency entrepreneur Justin Sun finally dined together recently, six months later than originally planned. Mr. Sun, a Chinese citizen, paid a record $4.6 million in a charity auction last year to have lunch with Mr. Buffett. After winning the bidding fight, he used social media as a way to frequently hype the opportunity, promote his businesses and invite fellow crypto entrepreneurs to the meal. But just 24 hours before the lunch was supposed to take place in San Francisco, Mr. Sun postponed.
/on.wsj.com/2OAhZNs

Prime Trust to Arrange Banking for Customers of BlockQuake Crypto Exchange
Nathan DiCamillo – Coindesk
BlockQuake, a New York digital asset exchange launched in beta, has partnered with Nevada-based trust company Prime Trust, the firm announced Wednesday. Prime Trust began offering custody services for the crypto industry in late 2018, serving crypto firms like Binance, OKCoin and Bittrex to name a few. Prime Trust will perform know-your-customer (KYC) and anti-money-laundering (AML) checks for the exchange, as well as provide FDIC-insured bank accounts for the exchange’s customers. The custodian will also provide custody for customer fiat and cold storage for crypto.
bit.ly/2OCHIFb

Value locked into DeFi protocols has crossed $1 billion
Yogita Khatri – The Block
The total amount of money locked into decentralized finance (DeFi) applications and protocols has crossed a milestone of $1 billion. There has been a growth of nearly 100% since the start of this year as the amount locked was $670.77 million as of Dec. 31, 2019, according to DeFi Pulse. The current locked value stands at around $1.01 billion. Maker, the Ethereum-based lending protocol, remains the leader in the space with nearly 60% dominance. The amount of funds locked in Maker is now worth over $597 million.
bit.ly/382LbEJ

Politics

Bloomberg Pursues Wealthy Donors, but Not Their Checkbooks; Michael Bloomberg has sworn off taking money from other people for his presidential campaign. But in private, he is courting rich Democrats, potentially posing a challenge for his moderate rivals.
Alexander Burns and Nick Corasaniti – NY Times
In the middle of January, most Democratic presidential candidates were scrambling to raise money to keep their campaigns afloat. But at an airy gallery in downtown San Francisco, Michael R. Bloomberg gathered a group of several dozen local political donors to make a different kind of appeal.
/jlne.ws/3982Bjs

Jamie Dimon Sees a President Bernie Sanders as Unlikely But Survivable
Jonathan Levin – Bloomberg
Bernie Sanders may have performed well in this week’s Iowa caucuses, but it’s still unlikely he’ll be the next U.S. president — at least according to Jamie Dimon.
/yhoo.it/2SsMA0G

Fake-News Arrests Jump Across Asia to Stem Virus ‘Infodemic’
Blake Schmidt – Bloomberg
Six governments detain people for rumors, causing panic; Wuhan doctor’s punishment shows risks of censoring information
Governments across Asia are bringing out the handcuffs to counter a scourge of misinformation that appears to be picking up steam as the coronavirus spreads.
/jlne.ws/387keQn

Michael Bloomberg makes his money count in Democratic race; Billionaire’s wealth allows him to run a very different campaign to his rivals
Joshua Chaffin – FT
With the Iowa Democratic party in chaos when, a day after its first-in-the-nation caucuses, it was still unable to tabulate results, Michael Bloomberg seized the initiative. The former New York City mayor announced that his campaign would double advertising spending, already estimated at more than a quarter of a billion dollars.
/jlne.ws/3biSKcu

Regulation

Carney Bequeaths Bailey a Mystery to Solve on U.K. Inflation
David Goodman and Craig Stirling – Bloomberg
Central bank is investigating U.K.’s weak price gains; BOE joins peers around the world in grappling with the issue
Outgoing Bank of England chief Mark Carney is leaving his successor with a mystery to puzzle over.
/jlne.ws/375zWdx

FINRA Hits Virtu Americas with $250,000 Regulatory Fine; Wall Street’s watchdog found that the firm failed to avoid displaying, locking or crossing quotations in OTC Equity Securities.
Aziz Abdel-Qader – Finance Magnates
Virtu Americas LLC (formerly KCG Americas LLC) has agreed to pay $250,000 to settle a handful of violations and failures related to order execution, which were brought by the US Financial Industry Regulatory Authority (FINRA).
/jlne.ws/3bjKkle

City watchdog warns investment firms over Best Buy lists after Woodford £10bn fund collapse
Roger Baird – Larrnbonds.com
The City’s watchdog has warned retail investment firms that there Best Buy lists must be “impartial”, in the wake of the continuing fallout out following the collapse of Neil Woodford’s (pictured) £10bn fund.
/jlne.ws/2Sp9MwV

NY Court invites CFTC to voice its stance in proceedings against Telegram
Maria Nikolova – Finance Feeds
The CFTC is invited to express its views on matters concerning the SEC’s action against Telegram and TON Issuer.
/jlne.ws/3bmvcTV

Swiss regulator acknowledges heightened money-laundering risks in cryptocurrency area
Maria Nikolova – Finance Feeds
FINMA seeks to lower client identification threshold values in its Anti-Money Laundering Ordinance from CHF 5,000 to CHF 1,000 for transactions in cryptocurrencies.
/jlne.ws/3biFl4b

ISDA to Try Again on Pre-Cessation Fallbacks
Colin Lambert – Profit & Loss
Following a consultation that failed to come to a consensus last year, The International Swaps and Derivatives Association (ISDA) has announced that it will re-consult on how to implement pre-cessation fallbacks. Based on the results of that consultation, ISDA says it will move quickly to deliver the appropriate, industry endorsed fallback solution later this year.
/jlne.ws/2UBDC3V

FCA, ICO and FSCS publish joint statement to insolvency practitioners and authorised firms
UK FCA
Joint statement from the Financial Conduct Authority (FCA), the Information Commissioner’s Office (ICO) and the Financial Services Compensation Scheme (FSCS), warning insolvency practitioners and FCA-authorised firms to be responsible when dealing with personal data.
/jlne.ws/2SsH2Do

CFTC’s Technology Advisory Committee to Meet on February 26
CFTC
The Commodity Futures Trading Commission’s Technology Advisory Committee (TAC) today announced that it will hold a public meeting on Wednesday, February 26, 2020, at the CFTC’s Washington, D.C. headquarters.
/jlne.ws/2OA3MA6

Keynote Address of Commissioner Dawn D. Stump at FIA-SIFMA AMG Asset Management Derivatives Forum; Decades – The Yesterday, Today, and Tomorrow of Derivatives Regulation
CFTC
Thank you for the kind introduction. Before I begin, please allow me to remind you that the views I express today in these remarks are my own and do not represent the views of the Commodity Futures Trading Commission (the “CFTC” or “Commission”) or my fellow Commissioners. I see many familiar faces out there. Some of you have known me for a long time, including Walt, whom I have known for more than 20 years. That makes us seem really old, Walt. We are the generation that had only just started our careers in public policy when, at the turn of the century, Congress – with bipartisan support – explicitly instructed the CFTC not to regulate over-the-counter (“OTC”) derivatives because, at the time, many such products were considered bespoke and lacking the standardized elements befitting a market infrastructure like that supporting the futures markets.
/jlne.ws/3bmsQ7x

SEC Issues Agenda for February 10 Meeting of the Fixed Income Market Structure Advisory Committee
SEC
The Securities and Exchange Commission today released the agenda for the Feb. 10 meeting of the Fixed Income Market Structure Advisory Committee (FIMSAC). The Commission established the FIMSAC to provide a formal mechanism through which the Commission can receive advice and recommendations on fixed income market structure issues
/jlne.ws/2vQhQiv

ABN AMRO Clearing Chicago Charged With Improper Handling of ADRs
ABN AMRO
The Securities and Exchange Commission today announced that ABN AMRO Clearing Chicago LLC will pay more than $586,000 to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs).
/jlne.ws/2OBTEqH

ESMA Publishes the Final Report on MIFIR Alignments Following the Introduction of EMIR Refit
ESMA
The European Securities and Markets Authority (ESMA) has today published a final report suggesting amendments to the trading obligation under MiFIR following the introduction of EMIR Refit.
/jlne.ws/2w16lFj

ASIC succeeds in binary options case against One Tech Media Ltd, Allianz Metro Pty Ltd, Eustace Senese and Yoav Ida
ASIC
The Federal Court has found that One Tech Media Limited (OTML), Allianz Metro Pty Ltd, Eustace Senese and Yoav Ida breached the Corporations Act in relation to the pressure sale of binary options to Australian consumers.
/jlne.ws/2UunRfa

ASIC review of 30 June 2019 financial reports
ASIC
ASIC today announced the results from its review of the 30 June 2019 full-year financial reports of 200 entities. Arising from the review, ASIC has made inquiries of 47 entities on 80 matters. The largest number of inquiries continue to relate to impairment of non-financial assets and inappropriate accounting treatments. Directors and auditors should continue to focus on values of assets and accounting policy choices in 31 December 2019 financial reports.
/jlne.ws/2OwG480

Two More Bankers Arrested in Germany Over Tax Scandal Investigation
Karin Matussek – Bloomberg
Ex-North Channel Bank executives focus of laundering probe; Prosecutors target seven over links to Danish Cum-Ex scandal
Two former managers of a German bank were arrested in a money-laundering probe linked to Denmark’s $2 billion Cum-Ex tax scandal.The two North Channel Bank managers were taken into custody on Feb. 4, prosecutors in the German city of Koblenz said Thursday in a statement. It’s part of a probe into the actions of the pair and five other former and current bank employees on allegations they have helped U.S. pension funds doing Cum-Ex deals at the expense of the Danish tax coffers.
/jlne.ws/31AFY4o

Investing and Trading

Quebec Green Bond Offers Snapshot of Canadian Market Potential
Esteban Duarte – Bloomberg
Investors’ potential orders cover issue more than 5.5 times; Province to price C$500 million of 7-year green debt today
Province of Quebec’s C$500 million ($376 million) green bonds to be priced later today received indications of interest to cover the deal almost six times, according to people familiar with the transaction.
/jlne.ws/387JXIh

High-Tax States’ Bonds Are So in Demand That Ratings Don’t Matter
Danielle Moran – Bloomberg
‘To boil it down, it’s 99.999% because of the SALT cap’; California, New York yields holding below the AAA benchmark
There’s so much money chasing after the bonds sold by America’s high-tax states that buyers don’t seem to care too much about what credit-rating companies think.
/jlne.ws/3biX6jN

Red Flags Emerge in U.S. Stocks With Insiders Rushing to Sell
Lu Wang – Bloomberg
Sell-buy ratio is poised for highest since early 2017; Retreat comes as S&P 500 valuations stay stretched amid bounce
The list of warning signs for the rally that pushed U.S. stocks to another record is growing longer.
/jlne.ws/2UwTHYL

Burberry Says Viral Epidemic Devastates China Sales
Eric Pfanner – Bloomberg
Sales at China stores that remain open down 70%-80%, CFO says; Burberry says it has closed 24 of its 64 stores on mainland
Burberry Group Plc scrapped its financial guidance for the year, warning that the coronavirus epidemic is cutting sales by three-quarters or more at stores in China.
/jlne.ws/2urFr90

Investors seek model to forecast effects of coronavirus; Market analysts turn to science and complex methods to forecast epidemic’s path
Hudson Lockett – FT
Traders are resorting to unorthodox methods as they seek to navigate the market impact from the coronavirus epidemic, from bringing in disease specialists to developing complex statistical models.
/jlne.ws/2OA6m9v

How passive investment dulls the green wave; Passive index trackers help to keep money flowing to high-carbon industries
Billy Nauman – FT
Environmental activists have a big passive problem. Despite chalking up a string of victories, campaigners trying to save the planet by convincing investors to ditch fossil fuel stocks are at risk of seeing their efforts crushed by the relentless growth of index funds.
/jlne.ws/2UA1WmO

Elon Musk pits an army of Tesla fans against Wall Street; The electric car maker’s chief stokes retail investors’ ardour and levitates share price
Richard Henderson – FT
On Sunday, the day before Tesla’s stock would rocket to a new high, Elon Musk, the company’s chief executive, announced an event at his house for computer programmers on Twitter and invited Vivien Hantusch, a student in Germany, to attend.
nything yet” about the event.
/jlne.ws/2H1T5ST

Institutions

Ken Griffin Says Markets Are Unprepared for Inflation
Hema Parmar and Lananh Nguyen – Bloomberg
Fund manager says handful of companies to use direct listings; Coronavirus most concrete short-term risk to market globally
U.S. markets are “utterly and completely unprepared” for the possibility that inflation might pick up after years of subdued price gains, hedge fund manager Ken Griffin said.
/bloom.bg/2OAArpA

A $1.4 Trillion Asset Manager Is Zeroing In on Methane Leaks
Emily Chasan – Bloomberg
Investor introduces metrics to standardize emissions tracking; Energy companies pledged to curb but couldn’t prove they were
Methane leaks are making the climate crisis worse faster, but companies and investors still find them hard to trace.
/jlne.ws/2vT8LW9

Credit Suisse CEO Tidjane Thiam Resigns Amid Spying Scandal; Tidjane Thiam oversaw huge restructuring at the Swiss lender
Margot Patrick and Ben Dummett – WSJ
Credit Suisse Group AG Chief Executive Tidjane Thiam has left the Swiss bank, succumbing to months of pressure over a spying scandal that has engulfed the Swiss lender in recent months.
/jlne.ws/2Sa27DT

Tidjane Thiam ousted as Credit Suisse chief executive; Thomas Gottstein to take over as head of Swiss bank after high-stakes power struggle
Stephen Morris in London and Sam Jones – FT
Credit Suisse chief executive Tidjane Thiam has lost a high-stakes power struggle to keep his job, as the bank’s board faced down pressure from UK and US investors lobbying for chairman Urs Rohner to quit instead.In a statement on Friday morning, the board announced it had “unanimously accepted” Mr Thiam’s resignation. Thomas Gottstein, the head of Credit Suisse’s domestic business, will take over as chief executive and be the first Swiss national to head the bank since Lukas Mühlemann stepped down in 2002.
/jlne.ws/2v98n5M

Credit Suisse CEO Thiam Ousted After Losing Boardroom Battle
Patrick Winters, Nicholas Comfort, and Marion Halftermeyer – Bloomberg
CEO will be replaced by 20-year veteran Thomas Gottstein; Board unanimously backs chairman Rohner until end of term
Tidjane Thiam was ousted as chief executive officer of Credit Suisse Group AG, losing a boardroom showdown with the chairman in the wake of a tabloid scandal that unnerved the Swiss establishment.
/jlne.ws/37cyLJm

Regions

Turkey Stiffens Manipulation Penalties in Banking Overhaul
Firat Kozok – Bloomberg
Turkey is planning to stiffen punishments for insider trading and market manipulation as part of a broad overhaul of laws regulating its banking industry and capital markets.
/jlne.ws/31DHZwT

Virus Hits Copper Trade as China Asks Chile to Defer Cargoes
Maria Elena Vizcaino – Bloomberg
Chilean miners asked to reschedule shipments on port closures; Suppliers haven’t reported any contract breaches yet: Cochilco
China’s copper buyers are asking Chilean miners to delay shipments due to port shutdowns, adding to tumult in global commodity trade in the wake of the coronavirus outbreak.
/jlne.ws/2OAzDB4

Thailand Hit by Worst Drought in 40 Years
Randy Thanthong-Knight – Bloomberg
Thailand has been hit with what may be its worst drought in 40 years, pummeling sugar production in one of the world’s biggest exporters of the sweetener.
/jlne.ws/2UzdKpi

Shell to Build First Big Solar Plant in Move to Power Production
James Thornhill – Bloomberg
Co. to build and operate 120 megawatt facility in Queensland; Shell plans to become world’s top power company by 2030
Royal Dutch Shell Plc will build its first large-scale solar farm as part of its plan to expand into power generation.
/jlne.ws/2UzkfbU

France’s Top Female CEO Becomes a Stranded Asset; The downfall of Engie’s Isabelle Kocher shows how hard it is to make the green transition. But politics and personality played a big part too in her ousting.
Lionel Laurent – Bloomberg
Wanted: Knowledgeable and experienced CEO, preferably female, to take over the running of a $42 billion utility from a knowledgeable and experienced CEO, also female. No strategic shift necessary — the last CEO got things broadly right. Close ties with Emmanuel Macron a plus.
/jlne.ws/2OB7Dxb

Copper Integrates with DV Chain
Colin Lambert – Profit & Loss
London-based custody and prime brokerage firm Copper has announces its integration with cryptocurrency liquidity provider, DV Chain.
/jlne.ws/39fexQn

Lifeblood of Amazon merchants threatened as coronavirus infects Chinese workers
Lisa Baertlein – Reuters
Amazon.com Inc (AMZN.O) sellers are bracing for product shortages as Chinese workers – worried about the fast-spreading coronavirus – may be unable or unwilling to return to idled factories.
/jlne.ws/2vQVo8W

Aga Khan among victims of audacious French ‘scam of the century’; Paris court hears details of elaborate sting that netted $85m for alleged fraudsters
Victor Mallet – FT
When the Aga Khan took a call from a man claiming to be the French defence minister requesting millions of euros for a top-secret government operation, he quickly agreed. But the person contacting him was not Jean-Yves Le Drian, now France’s foreign minister. He was a member of a gang that scammed tens of millions of euros from the rich and famous in a case that was heard this week in a Paris courtroom.
/jlne.ws/2S8IXOB

Chinese copper traders declare force majeure over coronavirus; Buyers of commodity have cancelled or delayed shipments due to deadly outbreak
Sun Yu – FT
Copper traders in China, the world’s largest buyer of the metal, have asked miners from Chile to Nigeria to cancel or delay shipments as the deadly coronavirus outbreak hits demand.
/jlne.ws/2UxCaiV

China LNG Force Majeure Rejected as Virus Chaos Sparks Dispute
Stephen Stapczynski – Bloomberg
Shell, Total didn’t accept legal grounds for CNOOC declaration; Suppliers likely to seek compensation if cargoes are canceled
Two of Europe’s biggest energy companies rejected a Chinese force majeure on liquefied natural gas contracts in the latest twist to a drama that’s gripping global commodities markets.
/jlne.ws/2uj5WNY

Turkey Stiffens Manipulation Penalties in Banking Overhaul
Firat Kozok – Bloomberg
Turkey is planning to stiffen punishments for insider trading and market manipulation as part of a broad overhaul of laws regulating its banking industry and capital markets.
/jlne.ws/31DHZwT

Brexit

London market passes first post-Brexit test with £1.3bn listing; Smart meter group’s IPO boosts hopes of fundraising uptick after lacklustre 2019
Bryce Elder – FT
Britain has passed its first big test of post-Brexit investor sentiment, with Calisen Group successfully listing on the main London market at a £1.3bn valuation in the biggest European flotation of the year so far.
/jlne.ws/3biU9zM

Young Britons fear for their post-Brexit future
Bethan Staton – FT
Emily Dobson had planned her life around the EU. After moving to France with her parents as a child, the 21-year-old completed a degree in international business in the Netherlands and hoped to spend her career working across the continent. “I’ve always seen myself as an EU citizen and the rights that came with that meant I could go anywhere,” she said.
/on.ft.com/2SuIUM9

London market passes first post-Brexit test with £1.3bn listing
Bryce Elder – FT
Britain has passed its first big test of post-Brexit investor sentiment, with Calisen Group successfully listing on the main London market at a £1.3bn valuation in the biggest European flotation of the year so far. The smart meter company, backed by US buyout group KKR, raised £328.8m by listing on the London Stock Exchange with a share issue at 240p apiece — just below the midpoint of its initial range of 225p to 265p. Shares moved higher in early trading. It was the largest UK domestic float since Trainline’s £1.1bn share sale last June.
/on.ft.com/387gIpb

Miscellaneous

Hedge-Fund Billionaire’s Deal for Mets Collapses; ‘Disappointed’ Cohen gives up on talks as team says it will pursue new buyer
Jared Diamond and Gregory Zuckerman – WSJ
A deal for billionaire Steven A. Cohen to purchase a majority stake in the New York Mets has collapsed and the team is in search of a new buyer, the latest setback for a franchise beleaguered on and off the baseball field in recent years.
/jlne.ws/3blUIIU

Antarctica hits hottest temperature on record at 18.3C; Scientists warn of devastating effects of global warming on ice sheets in the Arctic and Antarctic
Camilla Hodgson – FT
A new record temperature of 18.3C has been recorded in Antarctica, surpassing the previous high set in 2015. Researchers at the Esperanza Base, in the north of the continent off the coast of Argentina, announced the new record that beat 2015’s high by 0.8C. Temperatures in the nearby Marambio Base also rose to their highest February level, 14.1C, since 1971.
/jlne.ws/2H8HuRT

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