Why Cboe is seeking growth abroad; Wall Street-Backed Exchange Set to Launch as Rival to NYSE, Nasdaq

Sep 21, 2020

First Read

Newest U.S. Stock Exchange MEMX Debuts, Keeps It Simple
By Suzanne Cosgrove – John Lothian News

After more than a year of preparation, Members Exchange (MEMX) CEO Jonathan Kellner is more than ready for Monday’s launch of the new U.S. stock exchange at 9:30 a.m. ET.

“We’ve had industrywide connectivity tests,” and everything went well, Kellner said in an interview. Only registered broker-dealers can be MEMX members, and close to 50 were connected as of late Friday.

“I am excited about the diversity we see,” he said. “We are not launching with a focus on one type of investor. We want to reach the buy-side, sell-side, retail brokers and institutions,” he said.

Asked if he was nervous about the debut, Kellner acknowledged mild first-day jitters. “I liken it to having your first child go off to school for the first time,” he said.

To read the rest of this story, go here.


Hits & Takes
JLN Staff

The Wall Street Journal has a paid program from TD Ameritrade and the CME Group about futures. What are futures?

Matt Leising of Bloomberg reports that “Crypto Assets of $50 Billion Moved From China in the Past Year.”

Here is a list of the 15 worst cities in the U.S. for breakouts of the coronavirus. Columbia, MO, where my son Robby is in school at Mizzou, comes in at number twelve.

John Lothian Productions today is going to a bar in Chicago to shoot some videos of bands for a virtual ALTSO A Leg to Stand On show for this fall.

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


Update for USA v Vorley and Chanu: Testimony continued on Friday in the Department of Justice’s latest spoofing case. The day began with a brief cross-examination of the prosecution’s graphics expert, who produced a series of animations which seem to have been intended to demonstrate that in the alleged spoofing episodes, the spoof orders flash and disappear rapidly while the defendant’s intended iceberg orders persist in the order book much longer. The exercise fell flat. The prosecution which provided the animations on Thursday did not have much to say about them and the defense did not know what to do with them. The prosecution’s next expert witness, a finance professor, provided some context for the previous data intensive testimonies from the big data expert and convicted co-conspirator David Liew. And then the Vorley’s attorney poked any number of holes in the professor’s testimony by repeatedly pointing out that the professor had not conducted any independent analysis of the data sets, did not know what the general market action had been around the 61 “episodes” that the prosecution had cherry-picked, and could not say what the alleged spoofers may have been watching on their eight trading screens during the episodes. Vorley’s attorney, Matthew Mazur of Dechert, LLP, jumped on every weakness in the professor’s testimony. At one point, Mazur said that after all the professor had portrayed trading as a game of cat and mouse. The professor disagreed that he would characterize trading that way, but Mazur was ready with a tape of the professor saying exactly that to an SEC panel a couple of years ago. The lengthy cross-examination of the professor was persuasive that much of the government’s case, so far, suffers from selective use of data. ~Thom Thompson


The Spread: Reddit On The Internet, So It Must Be True

This week on The Spread – analysts predict more volatility than usual around the U.S. election, institutional traders watch Reddit to predict price movements, and more.

Watch the video »


Leak reveals $2tn of possibly corrupt US financial activity
David Pegg – The Guardian
Thousands of documents detailing $2 trillion (£1.55tn) of potentially corrupt transactions that were washed through the US financial system have been leaked to an international group of investigative journalists. The leak focuses on more than 2,000 suspicious activity reports (SARs) filed with the US government’s Financial Crimes Enforcement Network (FinCEN).

*****That’s a lot of dirty money.~MR


Traders set to don virtual reality headsets in their home offices; UBS looks at recreating busy trading floors with London VR experiment for homeworkers
Owen Walker – FT
Spare bedrooms and living rooms could soon become part of vibrant trading floors as one of the world’s biggest investment banks considers providing staff with augmented reality headsets. UBS has experimented with issuing its London-based traders with Microsoft HoloLenses, which would allow staff to recreate the experience of working in a packed trading floor without leaving their homes.

***** Sometimes I can’t believe the prices I see on the screen. I am not sure which reality I am in.~JJL


How Covid-19 Is Killing Good Manners and What to Do About It; Social distancing is changing the rules of civility.
Stephen L. Carter – Bloomberg
One casualty of the current pandemic is likely to be good manners. True, manners and civility have been dying for ages, but Covid-19 is sure to finish them off. Which is too bad. We often think of manners and civility as the same thing, but the first is only a part of the second. Civility is the sum of all the sacrifices that we make for the sake of living in a workable society. Manners matter to civility not only because they are valuable in themselves (although they may be) but because they have traditionally constituted what the historian Arthur Schlesinger Sr. described as our “letter of introduction” to strangers. At a time when information about people was relatively expensive, Schlesinger saw good manners as signaling what sort of people we were.

*****I studied human behavior in college, and I once did a research project to find out why people are less civil over the Internet. According to the studies I found, it seems that the more aspects of face-to-face interaction that you remove – being able to see someone’s face, hear their voice, or even know their real name – the less participants’ brains recognize each other as human. Basically, human brains treat the sound of a human voice over the phone, or a text message from a human, as an inhuman object or sensation, like an environmental noise or an inanimate object. Some of the data showed that this could be consciously rectified, but both participants had to be on board.~MR


Workers fear humans implanted with microchips will steal their jobs
Matt Egan – CNN Business
Workers worry that in the not-too-distant future they will be sidelined by humans implanted with performance-enhancing microchips. Two-thirds of employees believe that in 2035, humans with chips implanted in their bodies will have an unfair advantage in the labor market, according to a Citrix survey of employees in the United States and Europe that was shared exclusively with CNN Business. Although cyborgs may sound like the stuff of science fiction, they could be here before long.

****** My chip is not for helping me work. It is for if I get lost so my wife can find me. Or is that my dog that has the chip?~JJL


The Science Behind WFH Dressing for Zoom; What you wear while working actually matters; Researchers studying ‘enclothed cognition’ say your clothing choices at home can affect productivity and performance
Ray A. Smith – WSJ
Mina Khan, an information-technology consultant who’s been working from home in Houston since March, tried wearing sweatpants and hoodies instead of the blouses and dress pants she typically wore to the office. It didn’t work. “Eventually I shifted to dressing the way I used to before because I realized it puts me in a better mental space when I’m working,” says the 26-year-old.

*****In college as an upperclassman I would always wear a tie and coat to make it feel more like I was working. It seems to help. So I say, as I sit here in shorts and a t-shirt.~JJL


Friday’s Top Three
Our top story Friday was CNN’s Qantas seven-hour flight to nowhere sells out in 10 minutes. I could swear it was a story from The Onion, but no. Second was the podcast Transforming how Futures are Traded, from Brian Mehta of Trading Technologies, at Orama.tv. Third was the Financial Times’ LSE in exclusive talks with Euronext over Borsa Italiana sale.


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Lead Stories

Why Cboe is seeking growth abroad; Its European debut comes amid rising competition at home.
Lynne Marek – Crain’s Chicago Business
With its flagship VIX franchise losing popularity and new rivals crowding into its U.S. strongholds, Cboe Global Markets is turning to Europe for a revenue boost. The Chicago options pioneer next year will start offering U.S.-style listed futures and options contracts tied to European stock indexes. It’s likely to be a multimillion-dollar bet in a region already filled with homegrown derivatives and no evident appetite for Cboe’s new products. With its stock price down 30 percent since earlier this year, Cboe is under pressure to deliver a winner and may be more vulnerable to further decline or even a takeover if the venture fails.

Wall Street-Backed Exchange Set to Launch as Rival to NYSE, Nasdaq; Members Exchange plans aggressive pricing strategy to attract trading activity
Alexander Osipovich – WSJ
A new exchange backed by Wall Street banks, electronic-trading firms and asset-management giant BlackRock Inc. BLK 1.55% is set to launch on Monday, introducing a new, low-cost competitor to the New York Stock Exchange and Nasdaq Inc. NDAQ -1.60% Members Exchange, or MEMX, is expected to execute its first trades after it opens premarket trading at 7 am ET. Initially it will handle trades in seven stocks, including Alphabet Inc. GOOG -2.38% and Exxon Mobil Corp. XOM -1.61% On Sept. 29, MEMX plans to extend trading to all U.S. exchange-listed securities.

London Financial Firms See Long-Term Shift to Working From Home
Suzy Waite, Lucca De Paoli and Annmarie Hordern – Bloomberg
Man CEO sees no more than 70% of employees returning to office; Schroders CEO says we’ve leaped ahead 20 years in how we work
The heads of Man Group Plc and Schroders Plc say the shift to working from home during the pandemic will become the new normal for financial firms. Man Group expects to have about 10% of employees back in the office next week unless the government imposes new restrictions on London, where the majority of its roughly 1,500 staff work, Chief Executive Officer Luke Ellis said at a virtual event on Monday. The world’s biggest publicly traded hedge fund firm won’t even try to get back to having more than about 70% of staff working in the office on any given day.

Banks Moved $2 Trillion Amid Laundering Orders, ICIJ Says
Yueqi Yang, Jennifer Surane, and Yalman Onaran – Bloomberg
ICIJ says bank suspicious activity reports show lapses, delays; JPMorgan moved $1 billion for fugitive 1MDB financier: report
A new investigation by the International Consortium of Investigative Journalists says JPMorgan Chase & Co., Deutsche Bank AG and several global banks “kept profiting from powerful and dangerous players” in the past two decades even after the U.S. imposed penalties on these financial institutions. The report, based on leaked documents obtained by BuzzFeed News and shared with the consortium, said that in some cases the banks kept moving illicit funds after receiving warnings from U.S. officials.

We May Be Surprised Again’: An Unpredictable Pandemic Takes a Terrible Toll; At least 73 countries are seeing surges in newly detected cases, and in regions where cold weather is approaching, worries are mounting.
Simon Romero, Manny Fernandez and Marc Santora – NY Times
It is a staggering toll, almost 200,000 people dead from the coronavirus in the United States, and nearly five times that many — close to one million people — around the world.

Robinhood’s speedy rise is shaking up the brokerage market; New technology is upending everything in finance, from saving to trading to making payments.
John Detrixhe – Quartz
A handful of companies are thriving in the post-Covid world. Apple. Amazon. Zoom. And then there’s Robinhood. If you had asked in 2019 who the winners might be in an economy-shattering pandemic, who would have guessed a retail brokerage app? Welcome to 2020.

Americans Want Homes, but There Have Rarely Been Fewer for Sale; Shortage of homes for sale means prices are being pushed higher, straining buyers’ budgets
Nicole Friedman – WSJ
The pandemic has aggravated the housing market’s longstanding lack of supply, creating a historic shortage of homes for sale. Buyers are accelerating purchase plans or considering homeownership for the first time, rushing to get more living space as many Americans anticipate working from home for a while. Many potential sellers, meanwhile, are keeping their homes off the market for pandemic-related reasons.

What It Would Take for Herd Immunity to Stop the Coronavirus Pandemic; Wider community protection could be closer than we think, some experts say, but there are challenges, even with a vaccine
Brianna Abbott and Jason Douglas – WSJ
The concept of herd immunity is at the heart of global vaccination efforts and discussions about next steps in fighting the Covid-19 pandemic and bringing back economies. For the pandemic to stop, the coronavirus has to run out of susceptible hosts to infect. Herd immunity occurs when enough people in a population develop an immune response, either through previous infection or vaccination, so that the virus can’t spread easily and even those who aren’t immune have protection.

ByteDance adamant it will retain majority ownership of TikTok in US; Chinese company contradicts assertions of Donald Trump, Oracle and Walmart
Yuan Yang and Nian Liu – FT
ByteDance said on Monday that it would maintain majority ownership and control of TikTok Global, contradicting statements by Donald Trump, Oracle and Walmart, after it agreed a deal with the companies to continue operating in the US.

European Banks Consider Mergers for Survival; Lenders are examining options as the pandemic worsens their already fragile state
Patricia Kowsmann and Margot Patrick – WSJ
The coronavirus pandemic has brought a sense of urgency to Europe’s ailing banks to scale up or risk dying. Around the region’s capitals, banks are exploring mergers after a decade of weak returns. They are drawing plans on how they can face a prolonged era of low interest rates, a gloomy economic outlook and souring loans that are expected to rise as borrowers struggle to keep their jobs and businesses. Mergers are a way to combine balance sheets while taking out a large chunk of costs, including by closing duplicate branches and laying off staff.

A New York Clock That Told Time Now Tells the Time Remaining; Metronome’s digital clock in Manhattan has been reprogrammed to illustrate a critical window for action to prevent the effects of global warming from becoming irreversible.
Colin Moynihan – NY Times
For more than 20 years, Metronome, which includes a 62-foot-wide 15-digit electronic clock that faces Union Square in Manhattan, has been one of the city’s most prominent and baffling public art projects.

US Treasury market’s brush with disaster must never be repeated; Fed tamed the chaos in March but must take further action to buttress future solidity
Robin Wigglesworth – FT
The US government bond market is akin to the investment world’s bomb shelter, a safe space where everyone can seek refuge when the rest of the financial system is exploding. In March, the bomb shelter itself started to rumble ominously. Treasuries are easily the biggest and most traded fixed-income securities on earth. Thanks to their safety, liquidity and the American dollar’s status as the global reserve currency, they are the world’s “risk-free” rate, the default haven, and facilitate a vast amount of financial transactions.

A Top Crypto Exchange CEO Explains Why the 2020 Boom Is Different
Joe Weisenthal and Tracy Alloway – Bloomberg
Crypto is hot this year again. In 2020 we’ve not only seen a substantial rally across a lot of different coins, there’s been an emergency of new experiments, categories, and protocols. Is it more sustainable this time around, or is it going to fizzle like it did last time? On this episode, we speak with Catherine Coley, the CEO of Binance US about trends in this market, why she left the traditional finance world to go crypto, and where all of this new activity is actually going.

Crypto Assets of $50 Billion Moved From China in the Past Year
Matthew Leising – Bloomberg
Report suggests digital coins contribute to capital flight; Tether coin is ‘a U.S. dollar replacement’ for some in China
About $50 billion in cryptocurrency assets have left China in the past year, a possible indication that investors are dodging rules that limit how much capital they’re allowed to transfer from the nation, according to new research by blockchain forensics firm Chainalysis.

ByteDance Asserts Control of TikTok and Contests $5 Billion Fee
Zheping Huang – Bloomberg
TikTok’s owner assures users it maintains a tight grip; ByteDance’s Zhang and current directors make up TikTok’s board
ByteDance Ltd. emphasized it will remain in control of a hived-off TikTok Global business, appearing to contradict President Donald Trump’s statements about how the new entity will be directed by Americans and pay an unusual $5 billion fee to the U.S. government.

Report: Deutsche Bank Execs Knew About $10 Billion Trading Scandal in 2015
Patricia Kelly Yeo – Daily Beast
Current executives at Deutsche Bank, which did business with Jeffrey Epstein and has long lent money to President Trump, were aware of systemic failures that allowed the bank to play a starring role in 2015’s $10 billion mirror trading scandal, BuzzFeed News reports. Christian Sewing, the bank’s current CEO, was in charge of the audit division at a time when auditors saw nothing major amiss with the bank’s Moscow trading desk. Deutsche Bank later blamed its Moscow office for the bank’s role in an international money laundering scheme that washed billions of dollars generated from organized crime, drug trafficking, and terrorism. However, an internal report by Deloitte obtained by BuzzFeed found the audit division had “severe shortcomings” indicating systemic failures and specific lack of attention to its Moscow office’s anti-money laundering policies. Deutsche Bank also received warnings from U.K. and U.S. financial regulators, including one comment from 2016 saying that “leadership on financial crime had been lacking for a considerable period of time.”

‘Free money’ for banks as investors pile into fractured gold market
Peter Hobson – Reuters
Banks are making huge profits from gold as investors flood into a market fractured by the coronavirus crisis. The world’s largest 50 investment banks are on track to double their income from precious metals this year to around $2.5 billion, most of it from gold, Coalition, a banking consultancy, told Reuters.

Banks Pile Into Treasurys, Helping to Fund Government Borrowing Spree; Demand from banks and money-market funds helps absorb the flood of new debt
Sam Goldfarb and Paul J. Davies – WSJ
Surging deposits and declining lending are driving banks to dramatically increase their holdings of U.S. Treasurys, offering significant support to the bond market at a time of massive government borrowing.

Global Trade Returns Faster Than Expected; Rebound isn’t being felt evenly across countries, and potential problems like a resurgence of Covid-19 remain
Eun-Young Jeong and Tom Fairless – WSJ
Global trade is rebounding much more quickly this year than it did after the 2008 financial crisis, lifting parts of the world economy and defying predictions the pandemic could send globalization into permanent retreat.

With Gold Rallying, Mining CEOs Say ESG Scrutiny Is Intensifying
Steven Frank, Yvonne Yue Li, and Felix Njini – Bloomberg
Investors add ESG to agenda at Denver Gold’s virtual gathering; ESG is often only topic investors bring up, Newmont CEO says
Skyrocketing gold is providing a welcome windfall to the mining industry, but it’s also attracting a broader base of investors who are demanding greater attention to environmental, social and governance topics.

Goldman Sachs Acquiring Folio Financial, Inc. to Further Enhance Offering to Registered Investment Advisor Clients
Goldman Sachs
Today Goldman Sachs (NYSE:GS) will successfully complete its purchase of Folio Financial, Inc., an execution, clearing and custody platform that serves independent Registered Investment Advisors (“RIAs”) across the wealth spectrum. Folio Financial has developed a differentiated technology offering that provides institutional grade clearing and custody services to RIAs. This will enhance the firm’s own offerings to RIAs while expanding its client base in that segment.


Covid-19 Live Updates: Deaths Near 1 Million Globally and 200,000 in the U.S.; The staggering toll of the pandemic comes as at least 73 countries are seeing surges in newly detected cases.
NY Times
‘What will happen, nobody knows’: Worries grow in parts of the world where cold weather is approaching.
It is a staggering toll, almost 200,000 people dead from the coronavirus in the United States, and close to one million people around the world. And the pandemic, which sent cases spiking skyward in many countries and then trending downward after lockdowns, has reached a precarious point. Will countries like the United States see the virus continue to slow? Or is a new surge on the way?

Fresh Surge in U.S. Coronavirus Cases Is Feared as Death Toll Nears 200,000; Twelve states reported at least 1,000 new confirmed cases on Saturday, led by California and Texas
Adam Martin – WSJ
The U.S. reported 39,844 new coronavirus cases Sunday and was closing in on 200,000 deaths, amid fears that the country was heading for a new wave of infections. So far, 199,511 people in the U.S. have died of the virus and 6.8 million have been infected, according to data compiled by Johns Hopkins University. Some 31 million people have been infected world-wide, according to Johns Hopkins data, which put the global death toll at 960,698.

A new era of hunger has hit the US; After six months of coronavirus chaos, many Americans are hungry for the first time in their lives
Patti Waldmeir – FT
Claire Babineaux-Fontenot grew up with an extraordinary 107 siblings (foster, adoptive and biological). That taught her a lot about the long-term impacts of food shortages on children. Her parents were included in America’s Adoption Hall of Fame for raising so many children, although usually only 16 were at home at any one time, says Ms Babineaux-Fontenot, chief executive of Feeding America, the largest domestic hunger relief organisation in the US.

Matt Hancock warns UK is at Covid tipping point; Health secretary says second national lockdown could be needed if current restrictions are ignored
George Parker – FT
Boris Johnson will on Sunday consider what further steps are needed to fight “a second wave” of coronavirus cases across the UK, as his health secretary Matt Hancock said the country was at a “tipping point”. Hours after the government announced fines of up to £10,000 for those who break self-isolation rules in England, Mr Hancock warned new national Covid-19 restrictions would be introduced “if that’s what’s necessary” to control the virus.

Boris Johnson confronts bleak choice as Covid cases rise; Prime minister under pressure as demands from scientists, MPs and chancellor collide
George Parker – FT
UK prime minister Boris Johnson is facing new political agony in his handling of coronavirus, as Conservative MPs mobilise against “draconian” new restrictions while his scientific advisers press for new national lockdowns.

UK Covid cases on course to hit 50,000 a day without urgent action; Deaths could hit 200 a day if current rate of infection continues, advisers say
Jasmine Cameron-Chileshe, George Parker and Jim Pickard – FT
Britain was on Monday warned to expect new limits on social contact, including in the workplace, as Boris Johnson’s chief scientific advisers warned coronavirus cases could hit almost 50,000 a day within weeks.

U.K. Faces 50,000 Covid Cases Per Day by October Without Action Now
Emily Ashton – Bloomberg
Scientific adviser Vallance sets out virus surge projections; Chief medical officer Whitty sees 6-month virus battle ahead
The U.K. is on course for 50,000 new coronavirus cases a day by mid-October if urgent measures are not taken to prevent the spread of the disease, the government’s chief scientific adviser said. “Cases are increasing, hospitalizations are following. Deaths unfortunately will follow that, and there’s the potential for this to move very fast,” Patrick Vallance warned in a live TV broadcast on Monday.

Philippines Expects to Approve Covid Vaccine Second Quarter 2021
Andreo Calonzo and Claire Jiao – Bloomberg
The Philippines’ purchase and distribution of Covid-19 vaccines can only be made starting the second quarter of 2021 as delays hit the review of possible candidates, an official said. This is a “practical and realistic timeline” as vaccines will go through registration then clinical trials for a number of months, Health Undersecretary Maria Rosario Vergeire says in a virtual briefing. The nation’s Food and Drug Administration has committed to cut the approval process by almost two weeks, she said.

Landlords Might Wipe Out a New Wave of Small Businesses; For many business owners, a break on rent could mean the difference between survival and failure.
Nick Leiber – Bloomberg
What might extinguish a significant chunk of America’s struggling small businesses in the coming months? Their inability to pay rent. Or really, their inability to get landlords to negotiate on rent. The situation has been under the radar for the general public for since day one of the pandemic but remains an “enormous problem” for local business owners, says Mary Alice Scott, executive director of the Portland Independent Business and Community Alliance in Maine. When businesses closed temporarily, the fell behind on paying rent—most by at least three or four months, says Rolando Gonzalez, a senior staff attorney at the Legal Aid Society’s Community Development Project in New York. “The problem is, even after they opened back up, their revenues are down.” The rent problem is “only going to get worse,” he says.

Startups Race to Develop Tech That Can Clear Workplaces of Covid; Companies are desperate for ways to sanitize offices, factories and stores. But surfaces are one thing—air is another.
Larissa Zimberoff – Bloomberg
Smithfield Foods Inc. thought it was doing great. In the first quarter of this year, the pork giant’s earnings were up 190% over the same period in 2019. Then the pandemic hit, and the close quarters of meatpacking plants made them ideal places for the coronavirus to spread.

Coronavirus: Boris Johnson ‘feeling the weight of responsibility acutely’ over COVID-19; The PM, say a couple of colleagues who know him well, is being pulled between his scientific team and economic one.
Beth Rigby – Sky News
It was but three weeks ago that Boris Johnson gathered his cabinet together to set the government’s agenda for the autumn after the summer break.

Andrew Cuomo and Bill de Blasio sure seem bent on pushing you to flee New York
Bob McManus – NY Post
Most New Yorkers love New York, but does New York love most New Yorkers? It doesn’t seem so. Gov. Cuomo treats them like children, and Mayor de Blasio like idiots. That’s why you could roll a bowling ball down many Midtown sidewalks these days, in broad daylight, and not hit more than an overflowing trash basket or a nodding-out junkie.

Top U.S. Health Officials Tiptoe Around Trump’s Vaccine Timeline; The administration’s experts tried to find a way to support both the president and the reality of scientific and medical constraints he doesn’t always recognize.
James Gorman – NY Times
As the nation’s coronavirus death toll neared 200,000, top administration health officials on Sunday delicately sidestepped President Trump’s ambitious declaration last week that a coronavirus vaccine would be available for every American by April.

Jakarta Readies More Beds as Virus Overwhelms Health System
Arys Aditya and Harry Suhartono – Bloomberg
Capital to increase Covid-19 hospital capacity to 10,000 beds; Indonesia had another record increase in virus cases on Monday
Indonesia’s capital is adding thousands of beds to house Covid-19 patients as its health system struggles with record increases in virus cases. The system is “already overwhelmed,” said Jossep William, coordinator of volunteer department at the task force for handling the pandemic, adding that ambulances haven’t stopped running for days to transport patients. “We can still contain the patient flow for now but if it continues like this, our health system will collapse.”

Exchanges, OTC and Clearing

Intercontinental Exchange Launches Three New MSCI Index Futures Contracts
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listing services, today announced the launch of three new MSCI Index futures contracts. The new contracts, which began trading today, are listed on ICE Futures U.S. and five expiry months have been listed for each contract: December 2020, March 2021, June 2021, September 2021 and December 2021.

Canada’s Wheaton Precious Metals plans London listing; Streaming company seeks to tap pent-up investor demand for exposure to gold and silver
Henry Sanderson and Neil Hume – FT
Canada’s Wheaton Precious Metals, one of the world’s largest companies involved in buying gold and silver, is planning to list on the London Stock Exchange as it looks to tap pent-up demand for precious metals from investors.

OTC IRS New Release – SOFR Discounting Transition Processing Completed
CME Group
Please be advised that CME has successfully completed the SOFR Discounting Transition and Price Alignment processing for USD products. As part of this transition, CME conducted a standard end-of-day valuation cycle under Fed Funds discounting. CME then generated an IRS Discounting Transition Report (IRSDIS) providing the NPV of all trades under SOFR discounting and the corresponding cash adjustment amounts needed to account for the change in discounting rate. The IRSDIS report was posted to each firm’s secure FTP site.

Notice of Disciplinary Action; # CME 20-1344-BC
CME Group
CME RULE VIOLATIONS: Rule 562 (“Position Limit Violations”) (in part), Any positions, including positions established intraday, in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.
FINDINGS: Pursuant to an offer of settlement in which Sukarne neither admitted nor denied the rule violations upon which the penalty is based, on September 3, 2020, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that entering into and at the close of trading on June 23, 2020, Sukarne S.A. de C.V. and Sukarne Agroindustrial S.A. de C.V. accounts, which were aggregated and controlled under the Sukarne name, combined held a short position of 500 June 2020 Live Cattle futures contracts. This position was 200 (66.67%) contracts over the second step-down spot month position limit, which went into effect on the close of trading on June 23, 2020. On the morning of June 24, 2020, after realizing it was over the position limit, Sukarne liquidated the overage to bring its accounts’ position into compliance and did not profit from doing so. The Panel concluded that Sukarne thereby violated CME Rule 562.
PENALTY: In accordance with the settlement offer, the Panel ordered Sukarne to pay a fine in the amount of $25,000.

Vienna Stock Exchange: AGRANA To Join The ATX Global Players Index
Effective today, AGRANA Beteiligungs-AG will be included in the ATX Global Players Index. The yearly review showed that more than 20% of the company’s revenues are generated outside Europe. The sugar, starch and fruit group will thus become the 15th index member with immediate effect. In addition, the new composition of the ATX five (inclusion of Wienerberger, deletion of BAWAG) and the new free float factors enter into force today.


Europe’s tech sector pulls away from banks; Technology index is up 11% this year, while falling lenders face ‘gloomy’ outlook
Camilla Hodgson – FT
The equity value of European banks, hit by loan losses and historically low interest rates, has slipped below the region’s technology groups for the first time.

Quantum computing: randomness as a service; A new commercial launch promises to deliver progress in this fiendishly complex field
John Thornhill – FT
There was much excitement in Japan this summer when Fujitsu’s $1bn Fugaku supercomputer was officially declared the world’s fastest, able to perform a staggering 416 quadrillion calculations per second.

How China’s digital currency could impact the country’s fintech start-ups
Hugh Harsono – South China Morning Post
The digital payments market in China helped revolutionise the global e-payments industry, with China playing a significant role in the initial adoption and implementation of e-payments as a whole.
The presence of Chinese-based virtual payment systems throughout the world points to the success that Chinese organisations have had in the areas of customer education, acquisition, and usage.

Vela Named Best Low-Latency Data/Technology Provider; WatersTechnology recognises SuperFeed in the Inside Market Data Awards
Business Wire
Vela, a leading independent provider of data and execution technology for global multi-asset electronic trading, has won the Inside Market Data award for Best Low-Latency Data/Technology Provider. This category honours the trading technology firm that delivers trading advantages through the provision, facilitation, and transportation of low-latency market data.

Neo Launches Multi-Currency Account For SMEs
Neo, the treasury management, payments and FX fintech, is launching a new international multi-currency account service for small and medium-sized enterprises (SMEs).


Philippine Central Bank Warms Up to Digital Money to Aid Fintech
Siegfrid Alegado – Bloomberg
Philippine central bank Governor Benjamin Diokno said the technology behind digital tokens could improve delivery of financial services, as the regulator proceeds to study the feasibility of its own digital currency. Digital tokens expand reach and lessen costs of financial services, Diokno said in an emailed reply to Bloomberg late Thursday. It could also help the central bank eventually reduce the use of fiat money, he said.

New EU crypto assets rules to be released by 2024: report
Momina Khan – The Block
The European Union (EU) will release a new set of rules by 2024 — with the aim to streamline cross-border payments — by leveraging blockchain and crypto-assets such as stablecoins. This approach by the EU is part of a broader effort to encourage a shift towards digital finance, especially at a time when the pandemic has driven more people to go cashless as a preferred way to carry out transactions, according to a report by Reuters.

Meet in the Middle: Crypto Companies and Banks Are Evolving Together
Noelle Acheson – Coindesk
Some say that meaningful change happens gradually. Others insist it erupts unexpectedly. This week, we saw that both are true. Earlier this week, the Wyoming Banking Board voted to approve the application from San Francisco-based crypto exchange Kraken for a Special Purpose Depositary Institution (SPDI) banking charter. Yes, one of the crypto industry’s oldest exchanges has become a bank.

Crypto exchange bitFlyer Europe links up with PayPal, enabling account deposits with euros
Yogita Khatri – The Block
Crypto exchange bitFlyer Europe has announced an integration with PayPal. The move means bitFlyer users can now deposit euros using their PayPal accounts to buy cryptocurrencies. “What we have done is that we have integrated PayPal in the same way e-commerce websites would,” Jacek Bastin, business strategy manager at bitFlyer Europe, told The Block. “The integration is all about removing barriers to entry.”

EU research unit: a regulated crypto-asset sector could improve the bloc’s economic outlook
Saniya More – The Block
A study by the European Parliamentary Research Service published Friday contended that the digitalization of assets could benefit the European Union’s overall economy as digital finance continues to play an increasingly bigger role in the bloc’s financial services. The study focused on why the EU should hop on the crypto assets train, highlighting how the ongoing expansion of the crypto ecosystem is changing the preferences and usages amongst investors and consumers.

FinCEN Files: BNY Mellon Processed $137M for Entities Linked to OneCoin
Paddy Baker – Coindesk
One of America’s oldest banks wired over a hundred million dollars in funds linked to the crypto Ponzi scheme OneCoin, according to a trove of documents leaked from the U.S.’ financial crimes watchdog. In February 2017, the Bank of New York Mellon (BNY Mellon) flagged a number of transactions with the Financial Crimes Enforcement Network (FinCEN) it deemed suspicious as they appeared to be “layered” – a money-laundering technique that hides the source of funds through sending multiple transactions.

Over 140,000 addresses have claimed their 400 UNI token airdrops
Michael McSweeney – The Block
Roughly 74% of claimable UNI tokens have been obtained thus far, according to the latest data from Dune Analytics. As reported at the time of its launch, UNI — tied to Uniswap, the top decentralized exchange by trade volumes — has a total initial supply of 1 billion, with 150 million being made immediately available to a range of users including liquidity providers, exchange users, and SOCKS token holders.

Binance creates ‘Innovation Zone’ to let only select users trade new DeFi tokens
Yogita Khatri – The Block
Crypto exchange Binance has created the so-called “Innovation Zone” to allow only select users to trade new decentralized finance (DeFi) tokens. This way, Binance aims to filter out users based on their risk appetite. The exchange will ask two “very explicit” questions before letting a user enter the innovation zone. First, whether a user is ready to take 50% or more loss of their principal capital, and second, whether the user is ready to take responsibility for that loss. If answers to these questions are a no, then the user won’t be allowed to trade new DeFi tokens that Binance would list in the near future.

Money Reimagined: Climate-Friendlier Crypto
Michael J. Casey – Coindesk
Haunting red skies, a mounting death toll and a giant swath of smoldering devastation across 12 western U.S. states compels us to talk this week about climate change and what it means for the cryptocurrency industry. Because, whether you like it or not, both of those things are not going away.

Ethereum onboarding solution provider UniLogin is shutting down due to high gas fees
Yogita Khatri – The Block
UniLogin, which provides a user onboarding solution for Ethereum apps, is shutting down due to high gas fees. “UniLogin is out of gas,” co-founder Alex Van de Sande said in a blog post on Friday. “Not necessarily out of money, but the current Ethereum gas market, the rise of DeFi [decentralized finance], … have changed the game significantly enough that we don’t see a way forward with the project.”

How China’s digital currency could impact the country’s fintech start-ups; Beijing’s push for a sovereign digital currency was originally driven by the rapid digitisation of the economy and the rise of cryptocurrencies.
Hugh Harsono – South China Morning Post
The digital payments market in China helped revolutionise the global e-payments industry, with China playing a significant role in the initial adoption and implementation of e-payments as a whole.

Meet in the Middle: Crypto Companies and Banks Are Evolving Together
Noelle Acheson – CoinDesk
Some say that meaningful change happens gradually. Others insist it erupts unexpectedly. This week, we saw that both are true. Earlier this week, the Wyoming Banking Board voted to approve the application from San Francisco-based crypto exchange Kraken for a Special Purpose Depositary Institution (SPDI) banking charter. Yes, one of the crypto industry’s oldest exchanges has become a bank.

Exberry Expands Advisory Board With Appointment Of Exchange Modernizer Tony Mackay – Experienced CEO And Founder Of Global Chi-X Alternative Exchanges Takes Key Strategic Role To Accelerate Exberry’s Ambition To Target Global Exchanges And Markets
Exberry, the exchange technology pioneer, has today announced that leading-edge financial markets’ visionary, Tony Mackay, has joined its Advisory Board. Tony will play a key role in advising the direction of the company and support Exberry in delivering its plans to introduce cloud based multi-asset class exchange infrastructure technology to the wider global market, enabling traditional, alternative and digital asset exchanges to launch, pivot and scale effectively.


‘There’s No There There’: What the TikTok Deal Achieved; The agreement for the social media app falls short of President Trump’s promises.
Erin Griffith and David McCabe – NY Times
The saga of TikTok had everything: Ominous threats of surveillance. A forced fire sale. Threats of retaliation. Head-spinning deal terms that morphed by the hour. Dark horse bidders and a looming deadline.

Is the Stock Market Rooting for Trump or Biden? Neither. Wall Street is not as partisan as you think.
Ruchir Sharma – NY Times
Credit…Illustration by Emily Haasch; Photographs by Ruth Fremson and Erin Schaff/The New York Times
For months the S&P 500 rose this year — despite a deadly pandemic, the resulting economic devastation and the rise of a Democratic Party increasingly sympathetic to democratic socialism. Then, this month, with Joe Biden doing well in the polls, stock prices finally stumbled.

Biden’s $466 Million Bankroll Tops Trump by $141 Million
Bill Allison – Bloomberg
Democratic nominee has reversed Republican financial edge; Democratic donations soared after Ruth Bader Ginsburg’s death
Democratic presidential nominee Joe Biden started September with a $466 million mountain of cash to take on President Donald Trump and the Republicans, completely reversing the GOP’s financial advantage in just four months. In April, Biden, the Democratic nominee, had about $98 million in the bank compared to $255 million for the incumbent. Yet Democratic donor enthusiasm, driven by opposition to Trump and further energized by the selection of Senator Kamala Harris as Biden’s running mate, has given the former vice president an unprecedented financial edge for a challenger.

India Opposition Lawmakers Suspended Amid Row Over Farmers’ Bill
Bibhudatta Pradhan – Bloomberg
Eight opposition lawmakers in India’s upper house of parliament were suspended for a week for “unruly behavior” that allegedly took place while the house passed two controversial agriculture-related bills on Sunday.

Trump’s WeChat Curbs Halted by Judge on Free Speech Concerns
Edvard Pettersson – Bloomberg
California judge rules that app is a ‘virtual public square’; WeChat ruling comes after TikTok ban is delayed by sale
The Trump administration’s curbs on WeChat were put on hold by a judge, upending an effort to halt use of the Chinese-owned app in the U.S. U.S. Magistrate Judge Laurel Beeler in San Francisco issued a preliminary injunction at the request of a group of U.S. WeChat users, who argued the prohibitions would violate the free-speech rights of millions of Chinese-speaking Americans who rely on it. The app, which was supposed to disappear from U.S. app stores on Sunday, has 19 million regular users in the U.S. and 1 billion worldwide.

Justice Dept. brands NYC an ‘anarchist jurisdiction,’ targets federal funds
Steven Nelson – NY Post
New York City was among three cities labeled “anarchist jurisdictions” by the Justice Department on Sunday and targeted to lose federal money for failing to control protesters and defunding cops, The Post has learned. Portland, Ore., and Seattle, Wash., were the other two cities on the list, which was approved by US Attorney General William Barr.


Buyout groups blasted at SEC meeting for ‘misleading numbers’; US regulator urged to create level playing field for performance reporting standards
Chris Flood – FT
Private equity managers make highly exaggerated performance claims, which should be banned, according to a leading academic who urged US regulators to take swift action to protect investors. During a Securities and Exchange Commission online event last week private equity managers were accused of using “misleading numbers” to create performance records and treating investors as “idiots”.

German Regulator Looks to Open Probe Into Grenke’s Accounting
Nicholas Comfort and Steven Arons – Bloomberg
BaFin is under pressure to investigate fraud allegations; Regulator is expected to mandate auditing firm for inquiry
Germany’s financial regulator is considering opening a probe into Grenke AG’s accounting practices, wading deeper into the controversy after criticism of its failure to unearth fraud at Wirecard AG. BaFin is expected to mandate an auditing firm to carry out the investigation of Grenke’s accounts, according to people familiar with the matter. The German regulator has so far limited its involvement into looking at whether Grenke or other parties manipulated the price of the leasing company’s securities.

Steven Maijoor delivers keynote speech at City Week 2020
Today, ESMA Chair Steven Maijoor addresses the international financial services community, at the City Week 2020 conference online. The event brings together industry leaders and policy makers from around the globe to discuss the most pressing matters affecting the international financial services industry and the future of global financial markets.

ESAS Launch Survey on Environmental And/Or Social Financial Product Templates
The European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published today a survey seeking public feedback on presentational aspects of product templates, pursuant to Article 8(3), Article 9(5) and Article 11(4) of the Regulation on sustainability-related disclosures in the financial services (SFDR). The survey is open for comments until 16 October 2020.

CFTC Grants Nasdaq Futures, Inc. Request to Vacate DCM Designation
The Commodity Futures Trading Commission announced today that it issued an order vacating the designation of Nasdaq Futures, Inc. (NFX) as a designated contract market (DCM). The order was issued at the request of NFX. The CFTC had granted NFX designation as a contract market on November 21, 2014.

ICYMI: Chairman Tarbert in WSJ: A New Pact Will Help Derivatives Markets
Excerpts from Chairman Tarbert’s Op-ed with the EU’s Valdis Dombrovskis in the Wall Street Journal
“As leaders of the commissions that regulate derivatives markets in the EU and U.S., we are both committed to establishing a harmonious relationship that achieves shared regulatory objectives while affording appropriate deference to home-country authorities.

Mexican Meat Processor to Pay Fine for Violating Cattle Futures Speculative Position Limits
The Commodity Futures Trading Commission today issued an order filing and settling charges against Sukarne SA de CV, a Mexico-based meat processor, for violating live cattle futures speculative position limits. The order requires Sukarne to pay a $35,000 civil monetary penalty. This case is brought in connection with the CFTC’s Livestock Markets Task Force.

Concurring Statement of Commissioner Dan M. Berkovitz Regarding In re Sukarne SA de CV, CFTC No. 20-60
I support the Commission’s Order sanctioning Sukarne for exceeding the Chicago Mercantile Exchange’s spot month position limit in the June 2020 live cattle futures contact (Order). This action reflects the CFTC’s commitment to monitoring derivatives trading, particularly in markets such as livestock futures that are experiencing historic volatility. Where appropriate, the Commission will enforce federal and exchange-set position limits, which are critical to prevent unwarranted price volatility and market manipulation.

Commission Statement on the Passing of Justice Ruth Bader Ginsburg

Investing and Trading

$2.50 a Year in Interest? That’s What $5,000 in Savings Gets; With the Federal Reserve keeping rates low, home buyers are benefiting. But savers? Their average interest rate is just 0.05 percent.
Credit…Till Lauer – NY Times
Historically low interest rates are a boon for home buyers. But for savers? Not so much. nLow rates for borrowers typically also mean lower rates for savers. Because banks are earning less on loans, they typically pay out less on savings to make money.

Leveraged ETP popularity raises gambling risk, experts warn; Inflows have surged to $20.6bn, sparking concerns investors will suffer amplified losses
Steve Johnson – FT
A surge of interest in leveraged and inverse exchange traded products could be luring inexperienced investors into gambling with all its attendant risks, experts warn. Globally, leveraged and inverse ETPs saw net inflows of $20.6bn in the seven months to the end of July, according to data from ETFGI, a consultancy, compared to net outflows of $3.4bn in the same period last year and $4.1bn during the whole of 2019. This took their assets to a record $89.7bn.

Investors need to lift the lid on private equity; Level of secrecy within the industry helps no one but the insiders
Jonathan Ford – FT
Imagine you are a US state pension fund trustee, wondering where to put that 25 per cent of your fund’s resources you have earmarked for so-called alternative assets.

The easy money fuelling the market’s fever; Low interest rates by central banks have helped to sustain the rally in equities
The editorial board – FT
Irrational exuberance or the new reality? The US stock market rally that has shrugged off the pain in the real economy in the wake of Covid-19 shows little sign of running out of steam. Despite markets falling back since the August peak amid fears of a resurgence of the virus, investor appetite for equities remains undimmed. Wall Street just witnessed its biggest week for initial public offerings since May last year, when Uber came to market. Shares in Snowflake, a cloud-computing business, doubled on their first day of trading on Wednesday, valuing the lossmaking company at more than $70bn.

Will BoE’s Bailey give more hints on negative rates? Market Questions is the FT’s guide to the week ahead
FT reporters
“This week: central banks trying to make up their minds,” analysts at Bank of America wrote last week, pointing out that the Bank of England and European Central Bank were struggling to make their intentions clear at recent meetings.

Bank and travel stocks lead sharp European market declines; Gloomy start to week with persistent coronavirus worries
Camilla Hodgson and Hudson Lockett – Ft
European markets tumbled after sharp rises in coronavirus cases across the continent prompted concerns about new lockdowns, dealing a heavy blow to bank and travel shares.

Trying to Change Financial Habits in the Land of Payday Lenders; Under Darrin Williams, Southern Bancorp is pitching traditional banking to the untrusting and the unbanked.
Jeff Green, Peter Robison – Bloomberg
Darrin Williams thinks it was probably a Fox News interview he did in early April that caught the eye of the White House and got him invited later that month to a videoconference with President Trump, his daughter Ivanka, and other top advisers. The pandemic was raging, and Trump had convened a lineup of financial luminaries to discuss how to save the economy. Treasury Secretary Steven Mnuchin took notes as Brian Moynihan, chief executive officer of Bank of America Corp., and Goldman Sachs Group Inc. CEO David Solomon opened the conversation. Then came Williams, who runs Southern Bancorp Inc. in Little Rock.

Bonds Tied to Hotels, Retail Properties Struggle to Recover; Pandemic’s pounding lingers for some sectors of the commercial mortgage-backed-securities market
Sebastian Pellejero – WSJ
Bundles of lower-rated mortgages tied to hotels, offices and retail properties across the U.S. have lagged behind the debt markets’ rebound, a sign of the pandemic’s lingering blow to commercial real estate. An index tracking commercial mortgage-backed securities with a triple-B rating—the lowest broad investment-grade tier—remains below pre-pandemic levels, despite a broad recovery in credit markets. Indexes tracking mortgage-backed bonds with higher concentrations of hotel and retail properties are struggling even more.

Environmental, Social and Corporate Governance

U.S. and European Oil Giants Go Different Ways on Climate Change; While BP and other European companies invest billions in renewable energy, Exxon and Chevron are committed to fossil fuels and betting on moonshots.
Clifford Krauss – NY Times
As oil prices plunge and concerns about climate change grow, BP, Royal Dutch Shell and other European energy companies are selling off oil fields, planning a sharp reduction in emissions and investing billions in renewable energy.

Amazon Tries to Make the Climate Its Prime Directive; The company just gave itself two decades to reach zero emissions. Can it put both customers and the climate first?
Matt Day – Bloomberg
The vast Illinois factory floor that will produce electric delivery vans for Amazon.com Inc. is starting to fill up. Battery and chassis assembly here. Tire storage there. A titanic, three-story metal press. Sometime next year, the plant’s workers will complete the first van. A decade later, if all goes according to plan, van No.?100,000 will roll off the line, completing the biggest electric vehicle purchase in history. By the time Amazon has all these zero-emission vehicles on the road, around 2030, it will eliminate an estimated 4 million metric tons of CO2 now belched out each year by gasoline-powered vans and trucks.

With Gold Rallying, Mining CEOs Say ESG Scrutiny Is Intensifying
Steven Frank, Yvonne Yue Li and Felix Njini – Yahoo Finance
Skyrocketing gold is providing a welcome windfall to the mining industry, but it’s also attracting a broader base of investors who are demanding greater attention to environmental, social and governance topics.
Interest in ESG issues has moved to the forefront in conversations with stakeholders in the past year, top executives said in the run-up to the Denver Gold Group’s Americas conference, a key annual event in the precious-metals world. Such talks come as investors snap up billions of dollars in stock offerings from once-shunned gold miners.

London’s financial district governing body calls on MPs to back green recovery
Lucy Harley-McKeown – Yahoo Finance
Calls for a green recovery post-coronavirus have intensified, with The City of London Corporation urging the Labour party to push for measures to protect the environment. The Corporation and think tank IPPR are due to hold a roundtable at this year’s digital Labour Party Conference, discussing the ways London can lead by example on climate action.


Banks Suspected Illegal Activity, but Processed Big Transactions Anyway; A leak of thousands of “suspicious activity reports” that banks filed with regulators shows the widespread nature of illicit money flows.
Noam ScheiberEmily Flitter – NY Times
A cache of thousands of reports that major banks filed with federal regulators shows that they helped suspected terrorists, drug dealers and corrupt foreign officials move trillions of dollars around the world, despite the banks’ concerns about the suspicious nature of the transactions.

HSBC Stock Hits 25-Year Low; Drop comes after news articles detailed suspicious activity reports and amid concern over China’s ‘unreliable entity’ list
Frances Yoon – WSJ
Shares in HSBC Holdings PLC hit a 25-year low after news articles detailed “suspicious activity reports” filed by it and other major banks to U.S. authorities, putting fresh pressure on a stock that has already dropped sharply this year. BuzzFeed News, the International Consortium of Investigative Journalists, and partner media organizations published reports Sunday citing documents leaked to BuzzFeed that included more than 2,100 reports filed by financial institutions with the U.S. Treasury Department’s Financial Crimes Enforcement Network.

Goldman’s Veteran Deal Makers Pass the Torch to New Leaders; The Wall Street firm has tapped Stephan Feldgoise and Mark Sorrell to run its M&A businesstransactions so far in 2020.
Liz Hoffman – WSJ
Goldman Sachs GS 0.02% Group Inc.’s three merger heads are stepping aside as the firm looks to pass a key business to the next generation. Stephan Feldgoise, based in New York, and Mark Sorrell, in London, will take over the group, which is Wall Street’s biggest by revenue and central to Goldman’s reputation as a financial powerhouse.

Goldman Sachs did not misprice Snowflake’s Buffett-backed IPO; It is wrong to assume the cloud computing company was hoodwinked by Wall Street just because of its share price pop
Tom Braithwaite – FT
At Goldman Sachs, they are back in the office and playing drunken games of pin the tail on the donkey. At least, that is one explanation for the apparent mispricing of the world’s biggest ever software IPO this week. Snowflake, backed by Warren Buffett and whose lead underwriter was Goldman, was priced at $120 a share before surging to close the first day at $253.93, 111.6 per cent higher.

HSBC fund chief on re-energising a business in the Covid era; Nicolas Moreau faces multiple challenges in transforming the asset manager while the parent bank undertakes restructuring
Chris Flood – FT
Nicolas Moreau has barely said hello when his minder interrupts to rule out any discussion of HSBC’s support for Beijing’s repressive new security law for Hong Kong, a stance that has drawn criticism from political leaders and investment groups.

What is an ETF? Why exchange traded funds are important and why you should know what you are buying
Emma Boyde – FT
What is an ETF? An exchange traded fund, or ETF, is a basket of different securities that are pooled together into one fund which is traded on a stock exchange. Most ETFs track an index, or benchmark, and try to replicate its performance.

BlackRock ‘intrudes’ on office romances
Charles Gasparino – NY Post
If you work for Larry Fink, he ­really wants to know who you’re hooking up with. Fink, the voluble chief executive of BlackRock — the world’s largest money manager — recently “updated” his company’s dating policy. In the past, employees were on notice to tell HR anytime they had a romantic relationship with another employee, an understandable but intrusive part of corporate life in the era of ­#MeToo.

Inside GSET; Goldman Sachs Electronic Trading (GSET) executives Daniel Mallinson, David Cornish, and Alex Harman, tell Hayley McDowell about how the GSET platform performed during the market volatility following years of intense investment from the bank, and the bets they are taking on future execution trends.
Hayley McDowell – The Trade
At the peak of the market volatility in March and April, Goldman Sachs Electronic Trading (GSET) saw volumes 135% higher than the average trading day, with market data volumes processed by the platform almost tripling overnight.

BTIG expands fixed income credit operation in London with two senior hires; Imran Khan and Andrew Chappell join BTIG as managing directors focused on EMEA loan and claims trading and loan sourcing and sales on the fixed income credit desk in London.
Annabel Smith – The Trade
US-based agency broker BTIG has moved to expand its European fixed income credit trading desk based in London and has hired two veteran loan trading managing directors.


Europe’s Sluggish IPO Market Shows Signs of Life; Hopes rise that tech offerings could spark a wider revival following strong debut by online retailer THG Holdings
Jem Bartholomew and Ben Dummett – WSJ
The market for initial public offerings in Europe showed signs of life last week as shares in online retailer THG Holdings THG -2.15% PLC soared on their stock market debut, raising hopes among growth-hungry investors that other tech companies could soon follow suit.

China’s pork reserves running out as prices soar, analysts say; Beijing sells down frozen meat after African swine fever causes supply shortfall
Hudson Lockett and Emiko Terazono – FT
China has nearly exhausted its reserves of frozen pork, according to new estimates that underscore the supply shortfall in the world’s top protein market two years after the arrival of African swine fever. The level of reserves is a state secret in China, the world’s number one producer, consumer and importer of pork. But Enodo Economics, a London-based consultancy focused on China, estimates that reserves fell by about 452,000 tonnes between September 2019 and August this year.

Don’t Overthink China’s Strengthening Yuan; Its economy is recovering and policy makers have avoided open-slather stimulus. This all makes sense, for now.
Daniel Moss – Bloomberg
China may be the only major economy to notch growth at all in 2020, quite the reversal after the onset of Covid-19 triggered a historic collapse early in the year. This revival has been reflected in the yuan, Asia’s best performing currency this quarter. There’s good reason to think it isn’t a fluke.

The ECB Walks a Tightrope on Banks; The supervisor was right to ease rules on lenders during the crisis. Now the challenge is determining when (and whether) to get tougher.
Ferdinando Giugliano – Bloomberg
The pandemic has forced European governments to prop up their economies. They’ve rolled out furlough schemes, allowing millions of workers to keep their jobs, as well as “moratoria” suspending loan repayments for families and businesses. Now these countries face a dilemma over when to terminate such programs. Forcing companies to pay back debts too soon will put some promising ones out of business; postponing the inevitable for too long risks keeping zombie companies alive.

Thailand to Be Southeast Asia’s IPO Star This Year
Julia Fioretti -Bloomberg
Thailand is shaping up to be the biggest Southeast Asian initial public offering market this year, with the country’s biggest packaging company kicking off a $1.27 billion offering on Monday.

Saudi Stock Index Set to Be First in Gulf to Erase 2020 Drop
Filipe Pacheco and Farah Elbahrawy – Bloomberg
Tadawul index climbs as local retail investors turn to stocks; Riyadh benchmark catching up with emerging-market peers
Saudi Arabia’s main equity index is poised to be the first in the Gulf to erase losses accumulated in 2020 as local investors shrug off low oil prices and boost their exposure to stocks.

Sweden Heavily Redacts BlackRock Report on Credit Market Woes
Love Liman – Bloomberg
Earlier this year, Sweden’s credit market cheered as the world’s oldest central bank brought in consultants from BlackRock to help it move ahead with a controversial corporate bond purchase program. Now, the cheering has turned to disbelief as it becomes clear Sweden’s Riksbank won’t share any of the findings BlackRock made with the very market the program is intended to help.


Fund managers alarmed over EU push to lure London jobs; Regulatory proposals viewed as fresh attempt to capture more of UK’s £9tn asset management sector
Siobhan Riding – FT
City of London asset managers have hit back against “radical” EU regulatory proposals that are perceived as a renewed attempt to lure investment jobs to European financial centres after Brexit. Fund managers are alarmed by a recommendation by Europe’s top markets regulator to overhaul the outsourcing model that is relied upon by global investment groups.

Northern Ireland back in centre of Brexit storm; Political and business leaders unite in opposition to Boris Johnson’s plan to breach Ireland protocol
Arthur Beesley – FT
If Boris Johnson hoped that unpicking his Brexit treaty would appease pro-British unionists in Northern Ireland who oppose the UK’s divorce deal with Brussels, he is wrong.

Migrants responsible for UK’s growth of top incomes and taxes; Study suggests highest paid roles in economy have been created for specialist foreign workers
Chris Giles – FT
The vast majority of growth in top incomes and taxes in the UK over the past 20 years has come from migrants, according to research based on HM Revenue & Customs tax records. The study undertaken by an academic group organised by the University of Warwick suggests that rather than low-skilled migrants taking British jobs, companies create jobs in the UK for high-income foreign workers paying UK taxes.

Coronavirus: SME’s worried as loans dry up and no-deal Brexit looms
Oscar Williams-Grut – Yahoo Finance
Small and medium sized enterprises (SMEs) in the UK are left worried as cash from the government’s Bounce Back Loans Scheme (BBLS) is running low and the deadline for the Coronavirus Business Interruption Loan Scheme (CBILS) is at the end of September.
According to research by Market Finance, over 1.2 million (39%) SMEs took on a BBLS to pay their suppliers, with 29% of firms bolstering their business by setting up e-commerce and online shopping channels.

No-deal Brexit ‘final nail in the coffin’ for UK manufacturers
Oscar Williams-Grut – Yahoo Finance UK
Britain’s manufacturers remain under acute pressure, according to the industry’s leading trade body, which has urged the government to urgently seek a trade deal with the EU to avert widespread job losses in the sector.

JPMorgan to Relocate 200 London Bankers as No-Deal Brexit Looms
Viren Vaghela – Bloomberg
Bank sees little chance of financial services deal with EU; Some staff may initially commute between U.K. and Europe
JPMorgan Chase & Co. told about 200 staff Friday to plan to move out of London because it sees little prospect of the U.K. winning a deal on financial services as the nation prepares to exit the European Union.

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