Why Free Trading Will Never Be Free

Sep 17, 2021

First Read

$53,406/$300,000 (17.8%)


Hits & Takes
John Lothian & JLN Staff

A gentle reminder. The NFA and NIBA announced a joint webinar about navigating regulatory requirements in a hybrid environment. The webinar is scheduled the day of my 31st wedding anniversary, September 23, at 3:30 p.m. CT/4:30 p.m. ET. The NFA and NIBA will discuss recent regulatory developments (i.e. landmines) in relation to the current hybrid and remote work environments. Specifically discussed will be preparing for a virtual NFA examination (no rubber gloves!), supervising employees in a hybrid or remote work environment and changes to the definition of a branch office. The NFA and NIBA representatives will also answer questions. This webinar is free to attend, but you must register. For those of you who can’t make it, an archived version of the webinar and a transcript will be available on the NFA’s website in September, though you can forget about asking questions. You can register HERE.

Today in JLN we finally have the video of our interview with Options Solutions. It was held up by review by compliance professionals to make sure no landmines were stepped upon. Here is a quick clip of our “Options Veterans Forge New Path With Tried-And-True Strategy” interview.

The CME Group reported that SOFR futures open interest set a new record on September 15 of 1,004,882 contracts, its seventh consecutive record open interest day. By comparison, Eurodollar futures have an open interest of 12,050,864 contracts. Eurodollar options have an open interest of 14,844,632 contracts. — CME

This is from people who don’t understand the concept of anonymity. In Hungary, a statue honoring Satoshi Nakamoto was erected in a business park near the Danube River in Budapest. The “bust sits atop a stone plinth engraved with the name of Satoshi Nakamoto, the pseudonym of the mysterious developer of Bitcoin whose true identity is unknown,” Bloomberg reported. — Bloomberg

The rich, famous and powerful will get together in person again next year in Switzerland. The World Economic Forum plans to return to Davos next year, the FT reported. The event was last held in person in Davos two years ago. — FT

The University of St. Andrews, Scotland’s oldest university, overtook Cambridge and Oxford as the U.K.’s top university in a ranking by The Times of London newspaper. There are many notable alumni, but here are three I will mention: discoverer of logarithms John Napier (1563), founder of the world’s first commercial savings bank Henry Duncan (1823), and pioneer of the smallpox vaccine Edward Jenner (1792 MD). St. Andrews University is in the Fife Region, an eastern coastal area north of Edinburgh and the Lothian Region of Scotland. — Bloomberg

Owen Rehling announced this week he is leaving John J. Lothian & Company, Inc. and has accepted a job with Tyndale Publishing House. I hired Owen, a former Scout of mine and an Eagle Scout, to help him transition from college to the working world. He worked 10 hours and then up to 20 hours a week for John Lothian News.

Well, it worked and he is off with a full-time job at Tyndale, hoping to work his way to a career in the book publishing field. I am grateful for the work Owen did with JLN and wish him the best. He is a terrific young man with a bright future ahead of him.

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

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


The LME Metals Seminar will take place on Monday, October 11, 2021 at the QEII Centre, London and online. Early bird tickets are available now. You can go here for more information and to register. ~SR

STA’s next Open Call on Tuesday, September 21 features a presentation on the Greenwood Project by Bevon Joseph, the Chicago-based project’s co-founder. The call will also include updates on STA’s 88th Annual Market Structure Conference, an in-person event to be held at the JW Marriott in Washington, D.C., on October 6-8. Registration information for Tuesday’s call is available here. ~SC


Options Veterans Forge New Path With Tried-And-True Strategy

As its name suggests, Options Solutions is an options-centric asset-management firm, launched amid the heart of the COVID-19 pandemic, that aims to increase the returns of investors’ portfolios with customized options strategies.

JLN’s John Lothian and Suzanne Cosgrove recently interviewed the founders of the new enterprise, described by CEO Michael Brodsky as an early-stage, high-growth company. Team members are led by former CBOE Chairman and CEO Bill Brodsky, as well as Michael, his son, and options industry strategist Steve Sears.

Watch the video »


Boosting Equity Financing for High-Growth Enterprises
Singapore announced a package of initiatives to support high-growth enterprises to raise capital in Singapore’s public equity market and broaden Singapore’s proposition as a financing hub. 2. Speaking at the Singapore Exchange’s Securities Market Open event today, Minister for Trade and Industry Gan Kim Yong will announce the following initiatives: a. Establishment of a co-investment fund named Anchor Fund @ 65 that will help promising high-growth enterprises raise capital through public listings in Singapore; b. Establishment of the Growth IPO Fund that will help late-stage private enterprises at about two or more funding rounds away from a public listing to grow and prepare for an eventual public listing in Singapore; c. Enhancements to the Grant for Equity Market Singapore (GEMS) scheme to support enterprises seeking to list in Singapore, and to help develop Singapore’s equity research ecosystem; and d. Singapore Exchange’s Strategic Partnership Model, which will develop bespoke solutions ranging from private market fundraising to liquidity building and global investor outreach for high-growth companies.

***** This is a good example of “getting by with a little help from my friends.” H/T to the Beatles and Joe Cocker. ~JJL


Did Occupy Wall Street mean anything at all? A look at the legacy of the movement that swept the world, ten years on
Darren Loucaides – FT
Around noon on September 24, 2011, a young black man named Robert Stephens fell to his knees in the middle of the road outside Chase Bank headquarters on Liberty Street, New York City. Wearing a white fleece and black-rimmed glasses, Stephens pointed at the Chase building and wailed: “That’s the bank that took my parents’ home.”

*****Yes, it did. ~JJL


Ethereum cofounder Vitalik Buterin joins Joe Biden and Billie Eilish on Time’s 100 most influential people list
Harry Robertson – Business Insider
Ethereum cofounder Vitalik Buterin has been named on Time magazine’s prestigious list of the world’s 100 most influential people, six years after founding the booming blockchain and cryptocurrency.

***** Creating a popular medium for smart contract digital assets and money laundering is just as important as leading the free world or writing and singing dark pop music.


Can Governments Shut Down Bitcoin With Quantum Computers? The battle of the century is coming to the blockchain cyberspace.
Zhiyuan Sun – The Motley Fool
Recent ransomware attacks, where hackers targeted vulnerable infrastructure such as gas pipelines and demanded ransom in the form of Bitcoin, add yet more scrutiny of the cryptocurrency. What’s more, the energy use of Bitcoin mining has spiraled out of control in recent years and poses a direct threat to climate change initiatives. The rise of quantum computing may soon give governments a means to crack down on Bitcoin and other types of cryptocurrencies.

***** Huh?


If Your CEO Talks Like Kant, Think Twice Before Investing; Quantitative research by Nomura shows companies whose executives use the most complex language on earnings calls produce lower returns.
John Authers – Bloomberg
Gunning for Verbal Fog
We’re used to crunching numbers in investments. With the improvement in technology to analyze language, Big Data now allows us to start crunching words as well, and it turns out to be very useful. If you want to get someone to invest, make your case in clear language. And for those thinking of investing, if someone pitching to you can’t explain their offer in plain speech, that is a sign not to invest.

*****Just for fun, here are five great Immanuel Kant quotes: 1. “We are not rich by what we possess but by what we can do without.” 2. “One who makes himself a worm cannot complain afterwards if people step on him.” 3. “An action, to have moral worth, must be done from duty.” 4. “Morality is not properly the doctrine of how we may make ourselves happy, but how we may make ourselves worthy of happiness.” 5. “Seek not the favor of the multitude; it is seldom got by honest and lawful means. But seek the testimony of few; and number not voices, but weigh them.” — Goalcast


Thursday’s Top Three
Our most read story Thursday was Here’s Why Your Grocery Prices Keep Going Up, from the Washington Post. Second was Coinbase Applies to Trade Crypto Futures In Derivatives Push, from Bloomberg. Third was Even the Rich Think It Will Take a ‘Miracle’ to Retire, also from Bloomberg.


MarketsWiki Stats
26,620 pages; 235,863 edits
MarketsWiki Statistics


Lead Stories

Why Free Trading Will Never Be Free; Some brokerage customers aren’t happy that Robinhood and its rivals sell their orders. Even if regulators ban that practice, there are other ways no-commission brokerages can make money from your trades.
Telis Demos – WSJ
The payment-for-order-flow revenue model of brokerages like Robinhood Markets HOOD 0.19% is in the crosshairs. But for many investors, the bigger question is what trading might look like without it. As retail trading has boomed during the pandemic, more attention has focused on a major way that some zero-commission brokers make money: By sending customer orders to outside trading firms, and collecting payments from those firms in return.

Critics fear SEC’s Gensler is seeking ‘unlimited powers’ in crypto regulation
Chris Matthews – MarketWatch
Securities and Exchange Commission Chairman Gary Gensler ruffled feathers in the cryptocurrency community when he declined to rule out regulating stablecoins as securities during a hearing before the Senate Banking Committee on Tuesday. But stablecoin issuers will have larger regulatory headaches than the SEC, if reformers get their way.

Financial industry urges Brussels to extend access to UK clearing houses; Banks and asset managers warn of ‘major’ market disruption when licence expires next year
Philip Stafford – FT
US and European banks and asset managers have urged Brussels to extend the permit granting EU banks access to UK clearing houses to prevent a “major” market disruption when the licence expires next year.

Trade associations implore EU regulators to extend UK CCP equivalence as deadline looms; Lobbyists highlight concerns around the market impact of simultaneous close-out of positions at UK CCPs, market fragmentation and lack of liquidity at EU CCPs, and increased costs.
Annabel Smith – The Trade
In an open letter to the European Commission several trade associations have implored the EU regulator to extend its temporary equivalence decision for UK CCPs. In the build-up to the Brexit deadline, Brussels granted UK CCPs an 18-month temporary equivalence to EU regulation in September last year, due to expire next June, with the intention of allowing participants to reduce their exposure to them.

Banks beware, outsiders are cracking the code for finance
Anna Irrera and Iain Withers – Reuters
Anyone can be a banker these days, you just need the right code. Global brands from Mercedes and Amazon to IKEA and Walmart are cutting out the traditional financial middleman and plugging in software from tech startups to offer customers everything from banking and credit to insurance.

China, Wall Street Meeting Focused on Transparency, Stability
Jonas Bergman – Bloomberg
Chinese financial regulators and Wall Street executives discussed pursuing transparency and long-term stability at a top-level virtual meeting amid rising market turmoil and political tension. The three-hour meeting of the China-U.S. Financial Roundtable on Thursday included the head of the People’s Bank of China, and executives from Goldman Sachs Group Inc., Citadel and other Wall Street powerhouses, according to people familiar with the talks, who asked not be named because the meeting was private.

Wall Street trading groups step up incursion into crypto markets; Jane Street and Jump Trading among financial companies that are boosting their digital asset units
Philip Stafford and Eva Szalay – FT
Several of Wall Street’s biggest trading companies have unveiled plans to stake out territory in cryptocurrency markets, opening a new front in their battle to win lucrative business from institutional investors.

CME Group SOFR Futures Open Interest Sets New Record, Surpasses One Million Contracts
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that its SOFR futures contracts reached a new record, surpassing one million contracts of open interest on September 15. SOFR futures open interest reached 1,004,882 contracts yesterday, marking its seventh-consecutive record open interest day:

Hong Kong Considers Allowing SPAC Listings; Exchange touts stringent framework as it launches public consultation
Ben Otto – WSJ
Hong Kong is considering whether to allow listings of blank-check companies, potentially opening the doors to a wave of Chinese-focused deals involving special-purpose acquisition companies.

MassMutual fined $4 million for failing to monitor GameStop booster Kevin Gill
Associated Press
Massachusetts regulators are fining MassMutual $4 million and ordering it to overhaul its social-media policies after accusing the company of failing to supervise an employee whose online cheerleading of GameStop’s stock helped launch the frenzy that shook Wall Street earlier this year. RThe settlement announced Thursday by Secretary of the Commonwealth William Galvin centers on the actions of Keith Gill, who was an employee at a MassMutual subsidiary from April 2019 until January 2021. His tenure ended as GameStop’s stock price suddenly soared nearly 800% in a week, as hordes of smaller-pocketed and novice investors piled in, to the shock and awe of professionals.

Private Equity Is Smashing Records with Multi-Billion M&A Deals
Benjamin Robertson and Beata Wijeratne – Bloomberg
Blackstone, Apollo, KKR push deal flow close to all-time highs; Both U.S. and U.K. are witnessing huge PE-backed buyouts
The private equity industry is on a spending spree like never before. Buyout barons Blackstone Group Inc., Apollo Global Management Inc., KKR & Co. and others account for a record 30% of global transactions this year, with deal flow and fundraising close to all-time highs.

Energy Crisis Spurs Talk of Sweden Inflation Shock at 2008 High
Lars Paulsson and Ott Ummelas – Bloomberg
Global gas crunch is spreading to Nordic electricity market; Inflation may spur Riksbank to exit pandemic stimulus sooner
Swedish inflation could reach the highest level since the financial crisis as the natural gas crunch sends ripples through the global economy.

Wall Street Influencers Are Making $500,000, Topping Even Bankers; Finance firms have long struggled to reach young and new customers — until now.
Misyrlena Egkolfopoulou – Bloomberg
At first no one could explain why business was picking up at Betterment, a robo adviser aimed at newbie investors. There were about 10,000 signups in one day. Then came the answer: A 25-year-old TikToker from Tennessee was posting videos describing how to retire a millionaire by using the platform.

World Economic Forum plans return to Davos next year; Klaus Schwab’s group hopes to finally resume in-person gatherings after being upended by the pandemic
Andrew Edgecliffe-Johnson – FT
The World Economic Forum has confirmed plans to bring world leaders, corporate chiefs and activists back to Davos next January, two years after it last held its annual meeting at its usual base in the Swiss Alps.

Covid-19 Lockdowns in Asia Deepen Commodity Supply-Chain Pain; Palm-oil plantations and coffee farms struggle with labor shortages and transportation curbs as cases surge
Jon Emont – WSJ
The recent surge in Covid-19 cases in Southeast Asia has throttled ports and locked down plantations and processors, sparking extended disruptions of raw materials such as palm oil, coffee and tin.

The dangers of digital assets and tokenisation
The Trade Blog
In general, I am in favour of the move to a more digitally-enabled capital markets setup, but there are important risk considerations to factor into the creation of digital assets or tokens that I feel current discourse doesn’t always mention.


China Halts Vietnam’s $1 Billion Dragon Fruit Trade Over Covid
Mai Ngoc Chau – Bloomberg
China has suspended imports of dragon fruit from Vietnam saying it found traces of the coronavirus, temporarily halting a $1 billion market as Beijing continues its vigorous testing of inbound food shipments for evidence of the pathogen.

Singapore Makes Home Recovery Key for More Covid Patients
Philip Heijmans – Bloomberg
Country so far refrained from reimposing sweeping lockdowns; Government wants patients below 69 years recovering at home
Singapore has made home recovery the default for certain Covid-19 patients this week and plans to include more age groups, the government said on Friday, in a further sign the country was looking to transition to living with the virus.

Covid Cover Up? Trial Starts Over Austria’s Pandemic Party Town
Hugo Miller and Marton Eder – Bloomberg
Ski resort’s virus outbreak may have infected 11,000 people; State downplayed situation at Ischgl, consumer group alleges
A massive Covid-19 outbreak at the hard-partying ski resort of Ischgl was covered up and then downplayed by Austrian officials to save last year’s lucrative spring season, a Vienna court will be told on Friday.

Italy set to make Covid ‘green pass’ compulsory for all workers; Requirement would be strictest measure in Europe so far to curtail movement based on vaccination status
Miles Johnson – FT
Italy is to make Covid-19 “green passes” compulsory for most public and private sector workers in some of the strictest measures imposed so far in Europe to curtail movement based on vaccination status.

FDA Panel to Weigh Covid-19 Booster Shots as Health Officials Debate Need; Biden administration had hoped to offer extra shots as early as next week
Jared S. Hopkins and Felicia Schwartz – WSJ
The Biden administration’s push to introduce widespread Covid-19 vaccine boosters faces a test as a Food and Drug Administration advisory panel meets to weigh evidence on the extra shots, a topic that has divided federal health officials.

Exchanges, OTC and Clearing

Singapore unveils $1.1bn fund to lure listings to floundering exchange; Government and Temasek offer financing in bid to boost SGX following spate of delistings
Mercedes Ruehl – FT
Singapore is intensifying its campaign to lure innovative technology companies to its stock market, announcing a $1.1bn fund and other financial incentives in hopes of breaking its listings drought. Singapore Exchange, which has for years suffered more delistings than new joiners, as well as low liquidity and valuations, is the weakest link in the city-state’s bid to present itself as the leading Asian financial centre.

CME to launch E-mini Russell 2000 Monday and Wednesday options; New weekly options contracts will increase precision, adding more granularity to trading strategies, allowing Russell 2000 Index exposure to be more fine-tuned, said the exchange.
Wesley Bray – The Trade
Chicago-based derivatives marketplace CME Group will be launching E-mini Russell 2000 Monday and Wednesday options on 4 October, subject to regulatory approval. The new options contracts will accompany existing options on Russell 2000 futures including Friday Weekly, End-of-Month and Quarterly options.

Southbound trading under Bond Connect to go live in one week’s time; Regulators give the green light to a Southbound Bond Connect channel, connecting Mainland China investors to the Hong Kong bond market to encourage outbound investment.
Jon Watkins – The Trade
The Hong Kong Monetary Authority (HKMA) and the People’s Bank of China’s (PBoC) announcement that Southbound trading under its Bond Connect will launch on 24 September has been described as landmark move between the Hong Kong and Mainland capital markets.

Fixed Income derivatives: Introduction of Liquidity Provider Schemes for Fixed Income ESG Index Futures
The Executive Boards of Eurex Frankfurt AG and Eurex Clearing AG took the following decisions, with effect from 27 September 2021:
Introduction of a Liquidity Provider Scheme for Bloomberg MSCI Euro Corporate SRI Index Futures,
Introduction of a Liquidity Provider Scheme for Bloomberg MSCI Global Green Bond Index Futures.

Intercontinental Exchange Announces Full Redemption of Floating Rate Senior Notes due 2023
Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE), a leading global provider of data, technology and market infrastructure, announced today that it has given notice of its intention to redeem in full the $1.25 billion outstanding aggregate principal amount of its Floating Rate Senior Notes due 2023 (the “Floating Rate Notes”) to Wells Fargo Bank, National Association, as trustee under the indenture governing the Floating Rate Notes (the “Trustee”). ICE has instructed the Trustee to distribute a notice of redemption to holders of the Floating Rate Notes on September 17, 2021. The Floating Rate Notes will be redeemed on September 27, 2021 in accordance with the terms of the indenture governing the Floating Rate Notes at a redemption price of 100% of the principal amount of the Floating Rate Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

FINRA/NYSE TRF Reporting Nanosecond Timestamp Granularity Saturday Test Date
FINRA/NYSE TRF will begin supporting timestamps with up to nanosecond granularity on November 15, 2021. FINRA/NYSE TRF will support a Saturday test on November 6, 2021. https://bit.ly/3ziPngt

Welcome speech by Tan Boon Gin, CEO of SGX RegCo, at the sharing session on the SGX Credit Management Guide
Good morning everyone. We are really pleased to have our Members, MAS, FIA, and SAS join us today for our presentation of the newly published Credit Risk Management Guide. You will recall that last year, in response to heightened volatility and surging volumes during COVID, we issued the Algorithmic Trading Guide to share best practices on governance and risk controls that SGX members should have when using algorithms in trading.

Speech by Loh Boon Chye, Chief Executive Officer, SGX for Securities Market Opening
1. Thank you, Minister Gan. A very good morning to all and welcome to SGX for the securities market opening ceremony. It is my honour and pleasure to have with us today, our partners at MTI, EDBI, MAS, Temasek and 65 Equity Partners. 2. I am excited that we are all here to witness such a momentous occasion, as Minister Gan said, to blow new wind into the sails of our public equity market, and make SGX not just a viable but a compelling option for innovative growth companies seeking a public listing.

Reference Prices on the J-GATE 3.0 Launch Day
Osaka Exchange and Tokyo Commodity Exchange are scheduled to launch the next generation derivatives trading system (J-GATE3.0) on September 21, 2021. The reference prices and price limit ranges (SCB Range) for futures trading on the launch date shall be set as in the attachment.

Handling of Trading on Today’s Night Session (September 17, 2021)
Trading on today’s night session in Osaka Exchange, Inc. and Tokyo Commodity Exchange, Inc. will not be conducted due to the preparation for migration of derivatives trading system(“J-GATE”).

— October 2021 Delivery Date Memo — CME
— Performance Bond Requirements: Agriculture, Energy, FX, Interest Rate, and Metal Margins – Effective September 17, 2021 — CME
— Amendments to the Special Price Fluctuation Limits and Daily Price Limits Table for all Energy Contracts Subject to NYMEX Rule 589. (“Daily Price Fluctuation Limits”) — CME


Causality Link Launches Third Generation of its AI-Driven Financial Research Platform
Newly added customizable alerts, KPI Navigator tool and an expanded scope of system detection advance the platform’s ground-breaking technology and ability to deliver actionable causal links.
Causality Link
Causality Link, an advanced, AI-driven financial information technology provider, today announced the third generation of its platform. The technology now includes automated hourly alert queries, the Key Performance Indicator (KPI) Navigator Tool, an expanded scope of system detection and more.

Barchart Partners with SovEcon on Black Sea Grain Pricing and Research
Barchart, a leading provider of data, tools, and software to agribusinesses around the world, has announced a new distribution partnership with SovEcon, a leading research firm focused on assessing stocks, consumption, crops and exports forecasting, and key price drivers of the Black Sea agricultural markets. SovEcon will join the cmdty Pricing Network (CPN), making their Black Sea grain prices available to users through cmdtyView Pro, Barchart’s leading trading and analytics platform for global grain markets.

Tickeron’s AI Marketplace Releases New Set of Robots for Day Traders
Tickeron, Inc.
Tickeron, the quant-sourced marketplace for AI stock trading tools, adds a new set of AI Robots to be used by active traders. “AI Robots” are automated bots generating buy and sell signals developed by both Tickeron and independent trading experts and quants. Tickeron has a set of neural networks which can be customized to create AI Robots specializing in particular trading algorithms.

Emotional AI and other ‘moonshot’ technologies could grow to $6 trillion market by 2030, says Bank of America
Barbara Kollmeyer – MarketWatch
Imagine being an early investor to Apple, or Amazon.com, and sitting on a fortune. Ahhh. But a failure to identify future technology right now could mean missing out on the next big thing, says our call of the day from a team of Bank of America strategists led by Haim Israel, which highlights 14 potentially lucrative new technologies that represent a $330 billion market now that could be worth $6 trillion by the next decade.

Code-generating software can spur a cognitive revolution; AI can enhance creativity as well as productivity — so long as humans remain vigilant for harm
John Thornhill – FT
The English writer Percy Bysshe Shelley used to bang on about poets being “the unacknowledged legislators of the world.” More recently, and more prosaically, the Harvard scholar Lawrence Lessig has argued that computer code is the new law.


Telegram emerges as new dark web for cyber criminals; New research shows growing network of hackers sharing data leaks on encrypted messaging app
Hannah Murphy – FT
Telegram has exploded as a hub for cybercriminals looking to buy, sell and share stolen data and hacking tools, new research shows, as the messaging app emerges as an alternative to the dark web.

Critical Infrastructure Providers Need To Shape Up And Focus On Cybersecurity
Haim Glickman – Forbes
The Colonial Pipeline and JBS Foods are the most recent examples of how out of control and damaging ransomware attacks have become. The disruptions caused gas price spikes and meat shortages, affecting millions of consumers across multiple states.
It’s become so bad that President Biden issued a directive to the Cybersecurity and Infrastructure Security Agency (CISA) and National Institute of Standards and Technology (NIST) to develop cybersecurity standards for companies that operate critical infrastructure.

Despite Huge Budgets, Cyber-Rich Banks Are Not Paying It Forward In Cybersecurity
Sounil Yu – Forbes
For those near or below the cybersecurity poverty line, the recent announcement that Bank of America increased its annual cybersecurity budget to an eye-popping amount of over $1 billion probably made many envious of the vast riches being thrown at this important problem. The trouble is, most of the money that banks spend on cybersecurity is on talent, and the more that they gobble up available talent, the harder it gets for everyone else to find qualified cybersecurity practitioners.

How CISOs and CIOs should share cybersecurity ownership
Michael Hill – CSO Online
In most organizations, it is common for both the CISO and CIO to have responsibilities around cybersecurity—an issue increasingly pivotal to the effective running of any modern business. Clear, defined cybersecurity ownership can prove integral to successful organizational security positioning.
A recent ISACA survey of almost 3,700 global cybersecurity professionals found that while almost half (48%) of cybersecurity teams report directly into a CISO, one in four reports to the CIO. Despite the variation in reporting relationships, the survey revealed no significant differences regarding security function ownership between the CISO or CIO relating to views on increased or decreased cyberattacks, the ability to detect and respond to cyberthreats, and cybercrime reporting.

How To Write a Good Cybersecurity Resume
David Bisson – SecurityIntelligence
A lot of cybersecurity jobs await out there for the qualified job seeker. According to Cyberseek, the United States had 464,200 cybersecurity job openings as of July 30, 2021. And with the skills gap, there are even more openings every day. But that doesn’t mean you’re guaranteed a job offer. So, how do you make a good cybersecurity resume that gets you the job?

The Battle for Digital Privacy Is Reshaping the Internet; As Apple and Google enact privacy changes, businesses are grappling with the fallout, Madison Avenue is fighting back and Facebook has cried foul.
Brian X. Chen – NY Times
Apple introduced a pop-up window for iPhones in April that asks people for their permission to be tracked by different apps. Google recently outlined plans to disable a tracking technology in its Chrome web browser.

WeChat begins to open its ‘walled garden’ to rivals by allowing links in one-to-one chats, heeding Beijing’s order;WeChat users can now access external links in the one-to-one chat channels after they upgrade the app to the latest version; The crackdown on link-blocking is part of a six-month internet clean-up campaign by MIIT which began in July
Jane Zhang – South China Morning Post
WeChat, the ubiquitous social media platform operated by Chinese internet giant Tencent Holdings, on Friday started to allow links to its rivals to be shared in one-to-one chats to comply with Beijing’s new requirements on Big Tech to unblock links.


Coinbase Adds Support for Shiba Inu, Meme Coin Soars
Gerelyn Terzo – FX Empire
Leading cryptocurrency exchange Coinbase announced it supports meme coin Shiba Inu for users. Coinbase customers can now trade Shiba Inu on Coinbase.com as well as the company’s mobile apps on iOS and Android.

Reddit gleeful as MassMutual takes the heat for RoaringKitty’s actions
Thornton McEnery – MarketWatch
It’s not every day that an insurance company gets fined $4 million for failing to properly manage a RoaringKitty, providing schaden-fodder for retail traders on social media. But with summer almost over, the news cycle clearly wants to live a little.

What Was Coinbase Thinking When It Dissed the SEC?
Michelle Leder – Bloomberg
The developing battle between Coinbase, one of the biggest U.S. cryptocurrency trading platforms, and the Securities and Exchange Commission has me wondering what exactly the crypto people are hoping to achieve. If anything, their brazen approach seems likely to get them more of the regulation they’ve been seeking to avoid.

Ex-Goldman, Morgan Stanley Execs Join Crypto Unicorn Amber
Zheping Huang – Bloobmerg
A group of former Goldman Sachs Group Inc. and Morgan Stanley executives have joined a crypto-trading platform started by their peers, part of a growing cohort of Wall Street veterans betting on the volatile world of digital assets.

Crypto wealth management startup Abra raises $55 million in heat of digital asset boom
Declan Harty – Fortune
Crypto wealth management startup Abra has raised $55 million to help fund a global expansion of its business. Led by Ignia and Blockchain Capital, the new funding will enable Abra to grow its business internationally, create new products, and add to its sales and marketing teams, according to the company. Other investors who participated in the round include Kingsway Capital, AmEx Ventures, and CMT Digital Ventures. Abra did not disclose its valuation, but said in total it has raised more than $85 million since 2014.

Statue Honoring Mysterious Bitcoin Founder Unveiled in Hungary
Justin Spike – Associated Press
An imposing bronze statue was unveiled in Hungary’s capital on Thursday which its creators say is the first in the world to pay homage to the anonymous creator of the Bitcoin digital currency. Erected in a business park near the Danube River in Budapest, the bust sits atop a stone plinth engraved with the name of Satoshi Nakamoto, the pseudonym of the mysterious developer of Bitcoin whose true identity is unknown.

Treasury to Flag Stablecoin Perils as U.S. Readies Clampdown
Jesse Hamilton – Bloomberg
Tether and its peers get scrutiny ahead of oversight talks; Recommendations from Treasury officials may steer future rules
Treasury officials have identified what they believe are the most urgent risks posed by Tether and other stablecoins as they ready recommendations for stricter oversight of cryptocurrencies.

Hedge funders are chasing crypto despite warnings of a possible crash
Lydia Moynihan – NY Post
If you’re looking for proof that cryptocurrencies are no longer just for basement day traders, look no further than this year’s SALT conference. The annual gathering of Wall Street titans organized by SkyBridge Capital — whose founder is Trump’s short-lived communications chief Anthony “Mooch” Scaramucci — went crypto-crazy as a surprisingly large crowd flocked to the Javits Center in Midtown Manhattan earlier this week.


Analysis-Powell, juggling policy and renomination, now faces an ethics blowup
Howard Schneider – Reuters
It is perhaps as predictable as it is problematic: Within days of news that two Federal Reserve bank presidents had engaged in controversial stock trades, one of the fiercest critics of the U.S. central bank’s financial system oversight demands new ethics rules that would bar such dealings in the future.

Fed’s Powell orders ethics review after officials move to offload shares; Move to reassess guidelines comes as two regional presidents dump stocks to avoid conflicts of interest
Colby Smith – FT
The Federal Reserve said on Thursday it was reviewing its ethics guidelines for how senior officials can participate in financial markets, after conflict-of-interest questions were raised over the investment activities of two regional presidents.

Global debt is soaring — and we need to talk about it; Sky-high borrowing levels could have profound consequences for the global economy
Gillian Tett – FT
This month the thorny topic of debt is creeping back, belatedly, on to the political radar in Washington. Last week Janet Yellen, Treasury secretary, warned that the US government will run out of money in October unless Congress raises the debt ceiling (or borrowing limit).


U.S. SEC sues company that markets beverages to women
Jonathan Stempel – Reuters
A southern California company that sells beer, wine and bottled water targeting female customers has been sued by the U.S. Securities and Exchange Commission for allegedly defrauding investors out of millions of dollars.

NFA orders London, U.K. swap dealer ED&F Man Capital Markets Limited to pay a $150,000 fine
NFA has ordered London, U.K. swap dealer ED&F Man Capital Markets Limited (ED&F Man) to pay a $150,000 fine. The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint issued by the BCC and a settlement offer submitted by ED&F Man, in which it neither admitted nor denied the allegations. The Committee found that ED&F Man failed to comply with the qualification testing requirement as to certain associated persons by the compliance date.

Effective date for amendments to NFA’s Interpretive Notice regarding branch office registration requirements
NFA’s Interpretive Notice entitled Registration Requirements: Branch Offices requires each commodity pool operator (CPO), commodity trading advisor (CTA), futures commission merchant (FCM), retail foreign exchange dealer (RFED) and introducing broker (IB) Member to list its branch offices, as defined in the Interpretive Notice, on its Form 7-R. In March 2020, due to the COVID-19 pandemic, NFA issued Notice to Members I-20-12, which provided relief from certain branch office requirements for Members that permitted their registered associated persons (AP) to work remotely from locations that had not been listed as branch offices. That relief remains in effect.

CFTC Charges Former Hawaii Resident in Forex and Futures Ponzi Scheme
The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the District of Hawaii against Gregory Demetrius Bryant, Jr., formerly of Hawaii, for fraudulent solicitation, misappropriation, operation of an unlawful commodity pool, and failure to register with the CFTC.

If you’ve bought chicken in the last 10 years, you may be eligible for payment
Ronnie Koenig – USA Today
If you’ve bought chicken in the last 10 years, it just might be payback time! As part of a class action settlement for $181 million dollars, consumers may be eligible to receive cash back due to a scheme among some poultry companies that was really for the birds. NBC News Chicago reported that prosecutors in the Broiler Chicken Antitrust Litigation lawsuit alleged that several companies conspired to stabilize the price and supply of chicken in violation of state and federal consumer antitrust laws.

MassMutual fined $4m over meme-stock trading by ‘Roaring Kitty’; Insurer employed Keith Gill as he posted videos spurring on the GameStop market frenzy
Eric Platt – FT
The US insurer MassMutual has been fined $4m by the securities regulator in its home state of Massachusetts for failing to properly supervise Keith Gill, a former employee whose videos under aliases including “Roaring Kitty” encouraged millions of new day traders to pump shares of GameStop higher.

ASIC permanently bans former Sydney financial adviser
ASIC has permanently banned former financial adviser Ross Andrew Hopkins from providing financial services or from controlling an entity carrying on a financial services business. Mr Hopkins was a financial adviser and sole director of QWL Pty Ltd (QWL) in Sydney. QWL and Mr Hopkins provided clients with financial advice including dealing in securities and advising on self-managed superannuation funds. In May 2021, Mr Hopkins was convicted of 15 dishonesty offences and sentenced to six years’ imprisonment with a non-parole period of four years (21-114MR).

RBC Charged With Failing to Give Priority to Retail and Institutional Investors in Municipal Offerings
The Securities and Exchange Commission today announced that RBC Capital Markets LLC has agreed to pay more than $800,000 to resolve charges that it engaged in unfair dealing in municipal bond offerings. The SEC also announced settled charges against Kenneth G. Friedrich, RBC’s former head of Municipal Sales, Trading and Syndication, and Jaime L. Durando, the head of RBC’s municipal syndicate desk.

SEC Charges School District and Former Executive with Misleading Investors in Bond Offering
The Securities and Exchange Commission today charged a San Diego County school district, Sweetwater Union High School District, and its former Chief Financial Officer, Karen Michel, with misleading investors who purchased $28 million in municipal bonds.

Upcoming Retirement of the OTC Bulletin Board (OTCBB)
As announced in Regulatory Notice 21-28, FINRA is deleting the Rule 6500 Series and other rules related to the OTC Bulletin Board (OTCBB) – a FINRA-operated inter-dealer quotation system – and is planning to cease its operation. The OTCBB closure will not occur until the steps specified in Regulatory Notice 21-28 have been completed. Although the closure date has not yet been finalized and will not occur prior to October 1, 2021 (consistent with the Regulatory Notice), it may occur as soon as the fourth quarter of 2021 and members and vendors should be taking steps to prepare for its closure.

Social Media Influencers, Customer Acquisition, and Related Information Protection
FINRA is conducting a review of firm practices related to the acquisition of customers through social media channels and how firms manage their obligations related to information collected from those customers and other individuals that may provide data to firms. Please note that each item requested is specific to the subsection header.

FCA bans Jon Frensham from working in financial services
The FCA has banned director Jon Frensham (formerly known as Jonathan James Hunt) from performing any regulated activity.

FCA’s proposals for a new listing regime
Speech by Clare Cole, Director of Market Oversight, FCA to City & Financial’s ‘The Modernisation of the Listing Regime’ event.

Investing and Trading

Do Alternative Investments Belong In Your Retirement Portfolio?
Kevin Vandenboss – Benzinga
Most people’s retirement portfolios probably look pretty similar — a conservative mix of mutual funds, index funds and bonds. While many 401(k)s and IRAs provide a few options for how aggressively someone’s money will be invested, the ability to choose which assets will fund their retirement is pretty limited.

Why are steel prices so high when iron ore prices have crashed? Because: China
Samanth Subramanian – Quartz
Why are steel prices so high when iron ore prices have crashed? Because: China
China, which makes 57% of the world’s steel, plans to shrink its output this year—which means that chronic shortages of new cars and other products are likely to continue into the near future.

Stagflation Fears Cast Longer Shadow on Markets as Energy Surges
Joanna Ossinger – Bloomberg
Rallying energy prices are stoking concerns about a challenging stagflation-like environment for markets, where elevated price pressures combine with a slowing economic recovery.

BROS, BETZ and DNA: The Race to Claim a Good Ticker and Attract Investors; For newly public companies and funds, a cute or memorable ticker can be key to attracting buyers
Bailey Lipschultz and Claire Ballentine – Bloomberg
One of the most buzz-worthy tickers in biotech will make its return after a decade-long hiatus. Ginkgo Bioworks Inc. is set to begin trading under the ticker DNA on Sept. 17 after completing a reverse merger with Soaring Eagle Acquisition Corp. That will mark the first time any company has traded under DNA since 2009, when Roche Holding AG bought Genentech Inc., one of the world’s first biotech firms and the original holder of the ticker.

The Hottest Tax Break for the Rich Is a Middle-Class Retirement Account; More than $279 billion sits in IRAs with at least $5 million each. They allow the wealthy to avoid taxes and pass on their fortune.
Ben Steverman – Bloomberg
Most Americans rely on retirement accounts as a way to eventually stop working without falling into poverty. For the rich, they’ve become something more — a powerful tool to avoid taxes and pass on wealth to heirs.

The Great Lakes Region Is Not a ‘Climate Haven’; The water-rich U.S. region may have cooler temperatures and sit high above sea level. But it can’t be a refuge for anyone if it doesn’t take action now to adapt to its own changing climate.
Joel Brammeier – Bloomberg
I feel conflicted when I think about climate change and the Great Lakes. As the leader of an organization focused on protecting the lakes, I often hear about how our region is a “climate refuge,” and that when people from rapidly warming parts of the U.S. seek shelter further north, they’ll also bring their dollars and innovation. But this assessment doesn’t acknowledge what climate change has already wrought and the unpredictable reality we’re facing.

Rich Nations All But Stall on $100 Billion Climate Fund Goal
Jess Shankleman – Bloomberg
Climate funding was $79.6 billion last year, the OECD says; It’s just 2% more than 2018, threatening Paris climate target
Developed countries made almost no progress toward their goal of providing $100 billion a year to help poor countries tackle climate change, figures from the OECD showed on Friday.

Stocks Get ‘Monster’ Inflows as Traders Exit Cash on Fed Relief
Ksenia Galouchko – Bloomberg
Cash funds lose $62 billion, most since July 2020, BofA says; Optimism over Fed’s policy, taxes drives inflows into stocks
Market participants spurned cash this week in the biggest exit in more than a year and piled into equities on bets that the Federal Reserve will remain investor-friendly, according to Bank of America Corp. Money-market funds saw an outflow of about $62 billion in the week through Wednesday, the most since July 2020, BofA said in a note, citing EPFR Global data. Investors put $51 billion into stocks, the largest addition since March, and $16 billion into bonds.

Big Tech’s buyback bonanza demands closer attention; Some companies chose the wrong priority in diverting cash away from bets on new markets
Richard Waters – FT
When Microsoft earmarked $60bn this week to buy back its own stock, it barely warranted a mention in the financial media. Such gargantuan amounts seem almost routine these days.

Energy Price Crunch Pushes Investors in Europe to Bet on Inflation; Short-term market gauges of inflation expectations signal consumer prices to keep climbing
Anna Hirtenstein – WSJ
Record-breaking energy prices are driving bond investors to bet on a jump in eurozone inflation in the coming months, turning the trade bloc’s narrative of superlow price growth on its head, at least temporarily.

Environmental, Social and Corporate Governance

ECB to Scrutinize Banks’ Trading Books to Expose Climate Risk
Nicholas Comfort – Bloomberg
ECB climate tests to look at market risk as well as loan books; Euro-zone banks face more detailed examination than peers
The European Central Bank will look at the trading operations of major lenders as part of climate stress tests next year, after judging that an assessment of loan books alone won’t give enough insight into the fallout they face from global warming.

Asian Americans in Finance Say Racism Leads to ‘Bamboo Ceiling’
Akayla Gardner – Bloomberg
Bias limits advancement for Asian investment professionals; Industry survey shows struggle to gain senior and C-suite jobs
Asian Americans and Pacific Islanders in finance face structural racism that stymies career advancement, a recent survey found.

U.S. Parents Are at Breaking Point Over Child Care, Survey Shows
Catarina Saraiva – Bloomberg
Over 18 months into the pandemic, U.S. working parents are more worried than ever about securing child care and the impact that inevitable school disruptions will have on their jobs, a survey shows.

Total walks carbon tightrope with $27bn Iraq energy deal; French group funds renewables push with fossil fuel projects in complex jurisdictions
Tom Wilson and Anna Gross – FT
Iraq’s announcement this month of a $27bn deal with TotalEnergies garnered little public attention outside Baghdad. That may be what the recently rebranded French oil major wanted.

Opinion: Why 401(k) plans should offer ESG options
Andy Levin and Lisa Woll – MarketWatch
Forty years ago, the IRS started allowing tax-deferred salary deductions, marking the birth of 401(k) retirement plans. This was the same year the first millennial babies were born. It’s time we fixed the retirement plan rules to recognize this generational shift.


Deutsche Bank’s CEO Says Sorry After Critical Analyst Report
Steven Arons, Robert Schmidt, and Nicholas Comfort – Bloomberg
Bank CEO contacts regulator, finance ministry after criticism; Analyst Schildbach this week had hit out at failed policies
Deutsche Bank AG Chief Executive Officer Christian Sewing apologized to the German Finance Ministry and the country’s top regulator for sharply-worded criticism by one of the firm’s research analysts, seeking to avoid tensions with two of its most important stakeholders ahead of elections this month.

Nomura’s Wealth Push Pays Off as Fee Income Balances Risks
Takashi Nakamichi and Takako Taniguchi – Bloomberg
Retail head expects firm’s wealth business to keep on growing; Brokerage faces rising competition to serve affluent Japanese
Nomura Holdings Inc.’s decades-long efforts to build a wealth management business in Japan are paying off. The nation’s biggest brokerage has been gradually diversifying away from trading stocks for retail clients toward managing money for well-to-do customers. That has helped to generate more stable fee income, with recurring revenue from investment and other services climbing to a record last quarter and likely to keep rising, according to retail business head Satoshi Arai.

AQR hedge fund suffers $10bn in outflows; Client withdrawals knock assets despite a recovery across other portfolios
Laurence Fletcher – FT
Assets in a hedge fund run by AQR have tumbled more than $10bn over the past four years, as a lengthy period of poor returns has persuaded many clients to pull out their cash.

Goldman arm offers latest route into private equity investing; Petershill Partners announces plans for initial public offering
Joshua Oliver – FT
When the pioneers of modern private equity, Kohlberg, Kravis and Roberts, raised $30m for their first buyout fund in 1978, the money came from a tight circle of backers.

JPMorgan to open digital retail bank in UK; UK lender Chase will be its first overseas retail operation in 222-year history
Nicholas Megaw and Stephen Morris – FT
JPMorgan Chase will next week open the first overseas retail bank in its 222-year history, with the launch of a digital-only lender that aims to upend the UK banking market.

Invesco in Talks to Merge With State Street’s Asset-Management Business; State Street’s asset-management unit manages nearly $4 trillion in assets
Justin Baer and Cara Lombardo – WSJ
Invesco Ltd. IVZ -2.58% is in talks to merge with State Street Corp.’s STT -0.99% asset-management business, people familiar with the matter said. A deal isn’t imminent, and the discussions might not result in an agreement, the people said. It isn’t clear what the terms of a potential deal would look like, but it would likely be one of the industry’s biggest in recent memory, given State Street’s asset-management unit manages nearly $4 trillion in assets.

Citi expands new Paris trading floor with Europe markets head appointment; Markets head for Citigroup Global Markets Europe (CGME) will be Paris-based in line with Citi’s plans to make the new floor its main trading hub for Europe, the TRADE can reveal.
Annabel Smith – The Trade
Citi has expanded its newly launched Paris trading floor with the appointment of a new head of markets for its Frankfurt-based European investment unit. According to an internal memo seen by The TRADE, Sylvie Renaud-Calmel has been appointed head of markets for Citigroup Global Markets Europe (CGME) effective from 16 September.


Germany Needs to Get Over Its Fake Tech-Shame; Even the country’s leaders think it’s a tech laggard. But they’re wrong.
Leonid Bershidsky – Bloomberg
Germany’s reputation as a digital backwater is so established that Germans themselves, including their leaders, have come to believe it. The very mention of Digitalisierung prompts German politicians to put on pained expressions and start discussing vacuous plans for making Germany more digital.

‘Mortal Combat’ Faces Standard Bank in Pursuit of Rich Africans
Roxanne Henderson and Ray Ndlovu – Bloomberg
Biggest lender in Africa is seeking 10 million new customers; African consumer spending likely to exceed $5 trillion by 2030
Standard Bank Group Ltd.’s goal of adding at least 10 million customers ahead of a 2025 deadline has set the stage for a tug-of-war over Africa’s wealthiest clients.

Thailand to offer 10-year visas to ‘wealthy global citizens’; Scheme targets affluent pensioners and digital nomads who invest in the country
John Reed – FT
Thailand aims to lure up to 1m wealthy residents and cash in on remote-working professionals uprooted by Covid-19 by offering long-term visas to foreigners who invest $250,000-$500,000 in property or government bonds.


My biggest financial mistake: FT writers confess; As part of our FT Financial Literacy & Inclusion Campaign, some of our experts explain how they learnt the hard way . . .
Pilita Clark – FT
I made one of my first and worst financial blunders when I landed a job on a big city newspaper in my early twenties. In the excitement of being hired, it never occurred to me that I should join the company pension plan.

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