World-Dominating Superstar Firms Get Bigger; Vela and Exegy merge to expand market data and execution platform offering

May 21, 2021

First Read

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Hits & Takes
John Lothian & JLN Staff

Immediately after JLN was published yesterday, the FIA sent an announcement for its first in-person conferences since the pandemic hit. IDX will be held in the fall in a new venue, and EXPO will be held in Chicago at the Hilton Chicago. IDX will be September 27 and 28 and registration will start on June 21, when the first step in the final roadmap out of the lockdown has been reached.

The FIA’s EXPO will be held on November 2 through 4 and they are reconfiguring the trade show and the sessions to provide an entirely new experience.

If you prefer Paris for your virtual conferences, the 2021 Paris Europlace International Financial Forum is slated for June 29. The theme is “New Roads for the European Finance” for the conference from Paris EUROPLACE, the Paris financial services-led body in charge of developing and promoting Paris as an international financial center. In order to register you must be invited, then go online and use the login/password mentioned in the invitation. — Paris Europlace

Welcome to Alejandro Nicolas Aguzin, the new chief executive of Hong Kong Exchanges and Clearing Limited (HKEX), who will start his new job on Monday. He was previously the CEO of the international private bank business of JPMorgan Chase & Co. and its Asia Pacific chairman and CEO. — Xinhua

The London Stock Exchange Group and Thomson Reuters are in a dispute over Reuters’ new website paywall. LSE bought Refinitiv from Reuters and is Reuters’ biggest customer, with about half of Reuters revenues coming from $325 million in payments from LSE. Thomson Reuters also holds a minority stake in LSE, which distributes the Reuters terminals. It will be interesting to see how this plays out. — Reuters

If you are a woman and like to hack, there is a “Her Hackathon” from June 24 to 27 to test your hacking skills. It is a hackathon for women by women. — The Hackathon Company

The CME Group Foundation announced awards of nearly $3 Million in grants to support kindergarten readiness and K-12 programming in Chicago and Illinois today. The grants included $20,000 for the Pathway to Adventure Council of the Boy Scouts of America in support of STEM education. That money went directly to help 200 students in Chicago learn about STEM. Thank you to the CME Group for its generous support for all these grants. — CME Group

The FINRA Foundation also announced they were giving away money for 2021. They announced the 2021 Research Award Recipients, who are “early-career researchers who are advancing the understanding of consumer financial wellness and the complex relationships among financial literacy, financial capability and financial well-being.” — FINRA

Yesterday I interviewed Donald MacKenzie, a professor of sociology at University of Edinburgh, about his new book, “Trading at the Speed of Light.” Princeton University Press, which published the book, called it “A remarkable look at how the growth, technology, and politics of high-frequency trading have altered global financial markets.” — Princeton

We had no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday.

Today we will publish the first of a two-part interview with Bradley Rotter for the Open Outcry Traders History Project video series. Rotter has gotten a lot right over the years. He was a pioneer in financial futures at the CBOT, was an early investor in hedge funds and managed futures, including with famed trader Richard Dennis. And he was an early investor in crypto, something that continues to this day. Watch for it on

I am very big on the power of smiles. When we smile at each other, we smile back. And when we do, it releases endorphins that are the equivalent of a shot of dopamine and serotonin. And the endorphins act as a mild pain reliever, whereas serotonin is an antidepressant. Every day I go to and on their front page is a picture of a smiling Alex Jenkins, head of trading at Polar Capital. Every day her cheery smile brightens my day and gives me a little endorphin boost. I thanked her yesterday for this. When I was a Scoutmaster in the Boy Scouts of America I used to tell my Scouts that the best way to live up to the part of the Scout Oath where it asks you to “help other people at all times” is to simply smile at them. It is nice that those who are fully vaccinated can dispose of wearing masks in many situations. I look forward to the dopamine and serotonin boost.

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


CME Group announced today that it was selected by the Alternative Reference Rates Committee (ARRC) to publish its recommended forward-looking Secured Overnight Financing Rate (SOFR) term rates. CME SOFR Term Reference Rates for 1-month, 3-month and 6-month tenors became available for licensing on April 21. The rates are available on the CME Group website and from various data vendors.~SC


Register for the virtual Asset Management Derivatives Forum

FIA and SIFMA AMG are bringing you a virtual take on the Asset Management Derivatives Forum in 2021. Join us for virtual programming on June 8 and 9, during which market participants from all sides of a trade and leading regulators will examine the latest developments impacting the use of derivatives by asset managers. This year’s keynote speakers are Dan Berkovitz, commissioner at the Commodity Futures Trade Commission, Catherine McGuinness, chair of the policy and resources committee for the City of London, and Allison Herren Lee, commissioner at the U.S. Securities and Exchange Commission. Learn more and register!

Sign Up Here »


MIAX Mixes It Up; Looks at Futures Expansion

MIAX Futures President Joseph Ferraro talks about the May 24 launch of MIAX corporate tax futures. He also details the planned expansion of MIAX futures offerings, the role of the exchange operator’s broad geographic base and where cryptocurrency trading fits into the MIAX mix.

Listen to this podcast »


New chief executive of HKEX to take office on Monday
Alejandro Nicolas Aguzin, the new chief executive of Hong Kong Exchanges and Clearing Limited (HKEX), will start his three-year term next Monday, HKEX said in a statement on Friday. Aguzin used to serve as the chief executive officer (CEO) of the international private bank business of JPMorgan Chase & Co. and its Asia Pacific chairman and CEO.

*****Welcome to Alejandro Nicolas Aguzin.~JJL


The High-Tech NYSE That Nobody Ever Sees
Farrell Kramer – NYSE
It’s shortly after midnight and the New York Stock Exchange is waking up. Miles away from its famed trading floor in lower Manhattan, the NYSE’s massive array of servers begins whirring to life. Serge Sheynkman’s system operations team monitors closely as the applications that power the NYSE begin their startup actions, preparing for a trading day that is still more than nine hours away.

*****Farrell Kramer is the head of communications for the NYSE and a former national reporter with the Associated Press.~JJL


Exegy and Vela Join Forces to Become Global Leader in Low Latency Market Data, Trading Platforms, and Predictive Signals
Exegy Incorporated
Exegy Incorporated, the market leader in low-latency solutions for global market data, predictive trading signals, and hardware-acceleration technology, and Vela Trading Systems LLC (Vela), a leading provider of data and execution technology for global multi-asset electronic trading, announced today that they have merged business operations in an agreement backed by Marlin Equity Partners, a global investment firm with over $7.5 billion of capital commitments under management. Operating as Exegy Incorporated, the combined company creates a dominant provider of premier data and execution platforms, managed services for electronic trading powered by proprietary hardware-acceleration, Artificial Intelligence (AI), and service automation technologies.
*****I would love to see the chart of all the companies that fed into this new merger. Vela alone is quite the story.~JJL


CME Group Foundation Awards Nearly $3 Million in Grants to Support Kindergarten Readiness and K-12 Programming in Chicago and Illinois
CME Group
CME Group Foundation today announced that it has awarded nearly $3 million in grants to further support kindergarten readiness and K-12 programming across Chicago and Illinois.

*****You can’t even begin to know the amount of impact these grants will make. It is huge in many ways.~JJL


FINRA Foundation Announces 2021 Research Award Recipients; Studies Advance Understanding of Financial Capability in the United States
The FINRA Investor Education Foundation (FINRA Foundation), in partnership with the American Council on Consumer Interests (ACCI), announced today the recipients of its higher-education awards to recognize early-career researchers who are advancing the understanding of consumer financial wellness and the complex relationships among financial literacy, financial capability and financial well-being.

*****You really don’t want to understand the financial capability in the U.S. You really don’t.~JJL


Thursday’s Top Three
Our top story Thursday was Crain’s Chicago Business’ Kenilworth mansion with ties to World’s Fair takes 9 years to sell, about the house of former Archipelago CEO Gerald Putnam. Second was Bloomberg’s UBS, Nomura Hit Hardest as EU Fines Crisis-Era Bond Cartel. Third was World’s Largest Iceberg Breaks Off in Antarctica as Glaciers Retreat, from Bloomberg Green.


CryptoMarketsWiki Coin of the Week: Bitcoin (BTC)
Bitcoin’s price hit a 3-month low this week, falling 30 percent from its high on May 7. This has been one of the most devastating weeks for bitcoin investors – and, as a result, for investors throughout the cryptocurrency market. The sell-off was likely due to a number of factors, including Tesla’s announcement that it would no longer accept bitcoin, the central bank of China’s announcement of a ban on all financial services firms from participating in transactions involving cryptocurrencies, and activity in the bitcoin options market.


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Lead Stories

World-Dominating Superstar Firms Get Bigger, Techier, and More Chinese;
A trawl through 30 years of data traces the evolution of superstar firms, a difficult-to-tame species.
Tom Orlik, Justin Jimenez and Cedric Sam – Bloomberg
The world’s biggest businesses were doing fine until Covid-19 arrived. Now they’re doing even better. The top 50 companies by value added $4.5 trillion of stock market capitalization in 2020, taking their combined worth to about 28% of global gross domestic product. Three decades ago the equivalent figure was less than 5%.

Vela and Exegy merge to expand market data and execution platform offering; The merger between Vela and Exegy was supported by Marlin Equity Partners and will combine multi-asset execution technology with market data solutions.
Annabel Smith – The Trade
Vela Trading Systems and Exegy Incorporated have merged their businesses to expand their combined data and execution platform services as demand for better market insights rises. The merger between the two entities was supported by $7.5 billion investment firm Marlin Equity Partners with the transaction taking place on 17 May. Further terms were not disclosed.

SPACs Bolster the U.S.’s Global Lead in IPOs; Europe is losing market share as firms bypass local exchanges to list in New York through blank-check company deals
Ben Dummett – WSJ
The boom in blank-check companies earlier this year has lured companies to list in New York and has cut into Europe’s share of the global market for initial public offerings.

Robinhood seeks to democratize IPOs ahead of its own stock debut
Lydia Moynihan – NY Post
Robinhood wants to give amateur investors access to initial public offering shares ahead of its own planned IPO. The popular no-fee trading app that’s become synonymous with the Reddit rally unveiled IPO Access on Thursday, giving users the ability to buy shares at their listing price before they begin trading on stock exchanges. IPO shares are normally only offered to large investors of Wall Street brokerage firms.

Morgan Stanley Reorders Executive Ranks, Setting Up CEO Race; Bank names Ted Pick and Andy Saperstein as co-presidents, making them potential candidates to succeed CEO James Gorman along with two others
Peter Rudegeair – WSJ
Morgan Stanley MS 0.49% on Thursday set up a four-way race to one day succeed Chief Executive James Gorman, elevating a number of senior executives into new roles as part of a broader management reshuffle. Ted Pick, 52 years old, who leads the firm’s investment-banking and trading businesses, and Andy Saperstein, 54, the head of wealth management, were named co-presidents of the bank.

Soaring Prices Herald Boom Time for Steel Makers; A rebounding economy and Trump-era tariffs have helped drive the price of domestic steel to record highs.
Matt Phillips – NY Times
For decades, the story of American steel had been one of job losses, mill closures and the bruising effects of foreign competition. But now, the industry is experiencing a comeback that few would have predicted even months ago.

Let Customers Choose Where to Clear Euro Derivatives, Banks Tell EU
Huw Jones – Reuters
It should be for clients to decide where they clear euro derivatives, though customers are ready to move business from London to Frankfurt if forced to by the European Union, bankers said on Wednesday. The London Stock Exchange’s LCH unit clears more than 90% of euro-denominated interest rates swaps, a market that helps companies guard against unexpected moves in borrowing costs.

LSE, Reuters in talks following dispute over news website paywall
Huw Jones, Kenneth Li – Reuters
London Stock Exchange Group Plc (LSEG.L) said on Thursday it was in talks with Thomson Reuters Corp (TRI.TO) over their agreement to distribute news content, following a dispute over whether Reuters News could put up a paywall on its website.

Crypto’s Savage Swings May Deter Big Investors From Jumping In
Joanna Ossinger – Bloomberg
Volatility may be too great for corporates and pension funds; Some companies have made long-term commitments to crypto
Cryptocurrency investors argue that institutional buying is one more reason to be bullish. After Wednesday’s tumble, that’s becoming more and more implausible. The problem is that mutual funds, insurers and pension funds are often seeking a particular level of volatility — or really, lack thereof — for their investments. If you have a pile of corporate cash, is it going to be OK to put some of it into an asset that can rise or fall 30% in a single day as Bitcoin did this week? Tesla Inc. and MicroStrategy Inc. have bought into Bitcoin, but few have followed them, even after Tesla’s $1.5 billion buy-in ignited a debate about corporate crypto purchases.

Powell advances Fed work on possible ‘digital dollar’; Promise of public consultation comes as other countries move forward with CBDC experiments
Colby Smith – FT
Jay Powell on Thursday accelerated the Federal Reserve’s consideration of a possible digital version of the dollar that would be controlled by the US central bank. The Fed chair said it would seek public comment on the idea, amid pressure from some US lawmakers and growing interest in so-called central bank digital currencies (CBDCs) around the world.

Institutional Bitcoin Buying Spiked Around Wednesday’s Crash
Omkar Godbole – Coindesk
Blockchain data shows large investors remain confident of bitcoin (BTC, -2.08%)’s long-term prospects and continue to accumulate coins on dips, shrugging off concerns about the negative environmental impacts of cryptocurrency mining. Wallets linked with over-the-counter (OTC) desks registered an outflow of 10,292 BTC on Wednesday, when bitcoin tanked from $43,000 to nearly $30,000. That was the largest single-day outflow from OTC addresses in 3.5 months, according to data tracked by Glassnode.

How the Pandemic Has Changed Attitudes Toward Wealth; Americans found that money cannot buy everything, and they used their wealth to build relationships and help others, according to two recent surveys.
Paul Sullivan – NY Times
In the early days of the pandemic, Jason Norton was enjoying the comfortable life he had built for himself. A father of three, he manages about $220 million for clients around his community in Carrollton, Ga., about an hour west of Atlanta.

Woodford: Tell us what you think; FT Money invites views from investors with money trapped in Neil Woodford’s former fund
FT Money
Nearly two years on from the collapse of Neil Woodford’s flagship fund, more than 300,000 investors are still waiting to recoup their money — and FT Money would like to hear from readers affected by the fallout.

China Hones Control Over Manganese, a Rising Star in Battery Metals; Chinese firms join a cartel-like group to tighten output in key products, spurring prices and rival projects world-wide
Chuin-Wei Yap – WSJ
China is tightening its grip on the global supply of processed manganese, rattling a range of companies world-wide that depend on the versatile metal—including the planet’s biggest electric-vehicle makers. China produces more than 90% of the world’s manganese products, ranging from steel-strengthening additives to battery-grade compounds. Since October, dozens of Chinese manganese processors accounting for most of global capacity have joined a state-backed campaign to establish a “manganese innovation alliance,” setting out in planning documents goals and moves that others in the industry say are akin to a production cartel. They include centralizing control over supply of key products, coordinating prices, stockpiling and networks for mutual financial assistance.

Wellness Exchange

EU Backs Vaccine Certificates, Opening Beaches for Summer
Nikos Chrysoloras – Bloomberg
Negotiators agree on rules to ease travel for those vaccinated; New system of interoperable passes will be running by June
European Union negotiators agreed on the introduction of mutually recognizable certificates that will allow quarantine-free travel within the bloc, offering the region’s battered tourist industry a chance to salvage the summer season. The EU’s Covid-19 certificates, which will be issued free of charge in digital or paper format, will offer proof their holders have been inoculated against the coronavirus, have recovered from the illness or have a recent negative test. All EU member states will accept visitors who hold the passes, without asking them to quarantine.

Delayed Second Dose Turns Into a Win for Vaccine-Starved Places
Michelle Fay Cortez – Bloomberg
More time between shot boosts efficacy, delays full immunity; Singapore leads Asia with focus on one shot for all in August
Faced with a limited supply of shots and anxious populations waiting their turn, more countries are turning to an initially controversial strategy that’s now been vindicated by scientific studies: doubling or tripling the intervals between the first and second Covid vaccine dose.

Scotland Keeps Tighter Virus Rules in Glasgow for Another Week
Rodney Jefferson – Bloomberg
Scotland’s largest city will remain in a higher level of virus restrictions for at least another week because of a surge in cases of the Indian variant, Scottish First Minister Nicola Sturgeon said. “We don’t think we have turned the corner in Glasgow, but we are confident the interventions will get the virus back under control,” she said at a news briefing. That means people from different households are still unable to meet inside different homes or visit pubs indoors, while those limits were lifted for much of the rest of Scotland this week.

G-20 Leaders to Vow to Unite Against Pandemics, Despite Tensions
Alessandro Speciale and John Follain – Bloomberg
Italy’s Draghi says international cooperation is vital; EU to donate 100 million vaccines to poorer countries in 2021
Leaders of the Group of 20 nations will pledge to prioritize multilateralism in the battle against the coronavirus pandemic and to prevent future outbreaks, a bid to turn the page on damaging tensions over how to tackle the disease.

Getting More People Vaccinated Against Covid-19 Means Wasting Doses; CDC says vaccinating people should take precedence over ensuring every dose in an open vial is used
Julie Wernau and Brianna Abbott – WSJ
When Covid-19 vaccines first arrived at health departments around the country, officials took to calling the shots liquid gold in a plea to prevent doses from going unused or being wasted. Now that supplies are ample and the eager are dwindling, the U.S. Centers for Disease Control and Prevention has issued new guidance. Sites should not miss an opportunity to vaccinate an individual, even if it means remaining doses in a vial will go to waste, the CDC said late Thursday.

Exchanges, OTC and Clearing

CME Group Selected to Administer ARRC’s Forward-Looking SOFR Term Rates
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today was selected by the Alternative Reference Rates Committee (ARRC) to publish its recommended forward-looking Secured Overnight Financing Rate (SOFR) term rates, following a robust request for proposals (RFP) process.

Building the SIP Autobahn; There is the persistent narrative that the Securities Information Processor (SIP) is a dysfunctional public road, costing investors much more than the proprietary autobahns fast traders get to use. For most investors, that’s not true.
Phil Mackintosh – Nasdaq
Last weekend, with the weather just starting to warm up, my daughter and I rode our bikes across a bridge over the Hudson River. Beside us were cars and trucks, traveling 65 (or more) miles an hour, having paid a hefty toll for the slick multilane expressway with industrial strength barriers.

Intercontinental Exchange Chairman & CEO Jeffrey C. Sprecher to Present at the Bernstein 37th Annual Strategic Decisions Conference on June 3
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, announced today that Jeffrey C. Sprecher, Chairman and CEO, will present at the Bernstein 37th Annual Strategic Decisions Conference. The presentation will take place on Thursday, June 3 at 10:00 a.m. ET. The presentation will be available live and in replay via webcast and can be accessed in the investor relations and media section of ICE’s website at

Despite client concerns, LSE’s new Sedol fees take hold; Under the new fee policy, some of the largest users of the LSE’s identifier codes could see their Sedol spend more than double, though the exchange says the “vast majority” of clients will see no increase.
Max Bowie – Waters Technology
Five months into the rollout of a new pricing policy for its Sedol global identifier code, some of the London Stock Exchange’s data clients have not yet signed a declaration acknowledging the new fees. And while LSE officials say the number of holdouts is dwindling, some client firms—and the industry associations that represent them—continue to voice objections to the new policy.

Nasdaq CEO Adena Friedman just highlighted the need to innovate post-trade tech and shorten the settlement cycle for US stocks
Carter Johnson – Insider
Of the many issues to come out of the retail trading frenzy in stocks like GameStop earlier this year, one was a focus on the time it takes to settle equity trades. At the time, Robinhood CEO Vlad Tenev even took to his company’s website to decry the current structure of stock settlement. The online brokerage said it was forced to curtail trading in certain shares when its clearinghouse raised deposit requirements as a result of market volatility in the securities. Tenev also called for a push towards real-time settlement.

ICE Announces That Morgan Stanley Becomes New Clearing Member of ICE Futures Abu Dhabi; Record Open Interest of 53,515 contracts across Murban futures; 282,692 contracts have traded on IFAD since launch
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that Morgan Stanley & Co. LLC has become the latest Exchange and Clearing Member for ICE’s newest exchange, ICE Futures Abu Dhabi (“IFAD”).

New global Singapore carbon exchange and marketplace announced to help firms go greener
Sue-Ann Tan – The Straits Times
A new global carbon exchange and marketplace will be up and running later in the year to help firms go greener and boost efforts to establish Singapore as a carbon services and trading hub. Climate Impact X (CIX) – to be a joint venture funded by DBS Bank, Temasek, Standard Chartered and the Singapore Exchange (SGX) – was announced on Thursday (May 20). More partners will be added as it is scaled up. Carbon trading essentially treats carbon as a commodity that can be bought and sold between less and more pollutive firms. CIX will offer platforms and products that cater to the needs of different buyers and sellers of carbon credits.

Shanghai and South Korea exchanges agree to cross-list ETFs; Link will allow providers to sell products directly to investors in the other market
John Sedgwick and Selena Li – FT
Stock exchanges in Shanghai and South Korea have agreed to establish a cross-border exchange traded fund link that will allow ETF providers to sell their products directly to investors in the other market.

Aker Horizons lists on Oslo Børs
Euronext today congratulates Aker Horizons on its transfer from Euronext Growth to Oslo Børs (ticker code: AKH). Aker Horizons is an investment company dedicated to developing companies within renewable energy and other technologies that reduce emissions or promote sustainable living. The company was listed on Euronext Growth Oslo in February 2021.

hGears AG new in the Prime Standard of the Frankfurt Stock Exchange
Deutsche Börse Group
HGears AG (ISIN: DE000A3CMGN3 ) has been listed in the Prime Standard of the Frankfurt Stock Exchange since today . The initial price of the share was EUR 27.50, the issue price EUR 26.00. The IPO was accompanied by Hauck & Aufhäuser and ABN AMRO. Hauck & Aufhäuser also acts as a designated sponsor in Xetra trading. Wolfgang Steubing AG is the specialist at the Frankfurt Stock Exchange.

Appointment of Members to the Consultative Panels
The Panel Member Selection Committee of Hong Kong Exchanges and Clearing Limited (HKEX) today (Friday) approved appointments to the Cash Market Consultative Panel, the Clearing Consultative Panel and the Derivatives Market Consultative Panel since the service terms of certain members are due to expire. HKEX wishes to take this opportunity to thank all the retiring members for their dedicated service to the panels.

Change in Chief Executive and Directorate
Reference is made to the announcements of Hong Kong Exchanges and Clearing Limited (“HKEX”) dated 9 February and 2 March 2021 in relation to the appointment of Mr Alejandro Nicolas AGUZIN (“Mr Aguzin”) as the Chief Executive of HKEX, effective 24 May 2021, for a term of three years until 23 May 2024.
Appointment of Mr Aguzin as Chief Executive
Mr Aguzin has been appointed as Chief Executive of HKEX and an ex-officio member of the Board of HKEX (“Board”) with effect from 24 May 2021. As the Chief Executive, Mr Aguzin also takes up the following positions, and will be appointed as a director of certain subsidiaries of HKEX.

REVISED – June 2021 Delivery Date Memo
CME Group
Revised Important dates and events through the month relevant to delivery and clearing procedures.

SGX RegCo to continue to suspend entry into issuers’ watch-list
Singapore Exchange Regulation (“SGX RegCo”) in consultation with the Monetary Authority of Singapore (“MAS”) will on 21 May 2021 continue to suspend the entry of listed companies into the watch-list.


Taurus TDX goes live with GMEX matching engine Providing banks, issuers and investors trading access to regulated digital assets
GMEX Technologies
GMEX Technologies (“GMEX”), a subsidiary of GMEX Group, a leader in digital business and technology solutions for exchanges, today announced that Taurus SA (“Taurus”), a leading digital asset infrastructure provider in Europe, has adopted GMEX trading technology to support the Taurus Digital eXchange (“TDX”), its newly launched independent regulated marketplace for digital assets.

Quantitative Brokers Launches Agency Execution Algo Suite for Bursa Malaysia Derivatives in the Latest Step in QB’s APAC Expansion; Focus on Crude Palm Oil, KCLI Futures
Quantitative Brokers
Quantitative Brokers (QB), a leading provider of advanced execution algorithms and data-driven analytics for global futures and options markets, today launched their suite of award-winning execution algorithms on Bursa Malaysia Derivatives Berhad (BMD) , part of publicly traded Bursa Malaysia Berhad.

EY audit failings on Wirecard laid bare in ‘dynamite’ report; German parliamentary investigator found the accountancy firm missed opportunities to identify fraud
Olaf Storbeck – FT
EY auditors failed to scrutinise Wirecard’s operations in Asia that lay at the heart of the payment group’s fraud, according to a confidential report from the German parliament. The classified report into EY’s audit of Wirecard’s 2018 results — filed to parliament earlier this week and seen by the Financial Times — also concluded that Wirecard potentially violated international reporting standards as it disclosed so little information about the size and nature of the Asian business.

Jefferies teams up with Trumid on emerging markets credit trading; Through the collaboration, Jefferies will use the attributed trading protocol from Trumid to provide liquidity to its institutional clients.
Annabel Smith – The Trade
Jefferies is set to collaborate with fixed income e-platform provider Trumid to deploy its trading protocol for emerging markets credit trading and workflows. The investment bank will use Trumid’s attributed trading protocol, its electronic dealer-to-client workflow, to expand access to liquidity for its institutional clients.


Pipeline ransom attack exposes risk of digitising US infrastructure; Vulnerabilities in office IT systems open doors to hackers targeting vital controls
Myles McCormick and Hannah Murphy – FT
Motorists on the US east coast have learnt to bear up when problems hit their most important fuel artery, the Colonial pipeline. A hurricane shut it down in 2017. An explosion halted volumes the year before.

U.S. has almost 500,000 job openings in cybersecurity
Khristopher J. Brooks – CBS News
Help wanted: thousands and thousands of people interested in a career in cybersecurity. There are about 465,000 open positions in cybersecurity nationwide as of May 2021, according to Cyber Seek — a tech job-tracking database from the U.S. Commerce Department — and the trade group CompTIA. The need for more web watchmen spans from private businesses to government agencies, experts say, and most of the job openings are in California, Florida, Texas and Virginia. That means for anyone looking to switch careers and considering a job in cybersecurity, there’s no greater time than now to find work, the job trackers said.

Go read this feature on the 2011 RSA hack that redefined cybersecurity
Jon Porter – The Verge
Wired has published an in-depth feature on the 2011 hack of security company RSA, in which hackers stole the so-called “crown jewels of cybersecurity,” the secret keys forming a “crucial ingredient” of its SecurID two-factor authentication devices. It would go on to “redefine the cybersecurity landscape” with huge implications for not just RSA, but also the organizations that relied on its devices for their own security.

New survey finds that password hygiene amongst cybersecurity leaders is lacking; Constella Intelligence research reveals that one in four cybersecurity leaders use the same passwords for both work and personal use; more than half experience account takeover first-hand
Security Magazine
Constella Intelligence (“Constella”), Digital Risk Protection leader, released the results of “Cyber Risk in Today’s Hyperconnected World,” a survey that unlocks the behaviors and tendencies that characterize how vigilant organizations’ leaders are when it comes to reducing cyber vulnerability, allowing the industry to better understand how social media is leveraged as an attack vector and how leaders are responding to this challenge.


Deutsche Bank: ‘The value of bitcoin is entirely based on wishful thinking’
Ethan Wolff-Mann – Yahoo Finance
Bitcoin’s (BTC-USD) price plunged 28% this week, this most recent meltdown spurred by an announcement from China and an Elon Musk tweet. The controversial crypto is now losing even more love on Wall Street a day after UBS’s CIO Mark Haefele questioned the need to own bitcoin in a portfolio.

All-Art Blockchain Protocol on Solana Brings Credibility to NFT Art Market; The Art Exhibition Platform VR-All-Art Brings Liquidity and Regulation to the NFT Art Market Through a Faster and Safer Blockchain Protocol
All-Art Protocol
The All-Art Protocol, a new standard for NFTs, today announced an integration with the Solana blockchain. Behind the development of the protocol is VR-All-Art, one of the leading platforms for exhibiting and acquiring art in virtual reality. By adopting a blockchain infrastructure for virtual exhibitions, VR-All-Art aims to ease art trade in virtual reality while bringing liquidity and regulation to the growing NFT art market.

tZERO Partners With EnergyFunders to Digitize & Trade $25 Million of Securities in Its New Yield Fund I
tZERO, a leader in blockchain innovation and liquidity for digital assets, announced today it has signed an agreement with EnergyFunders, an energy projects funding platform, to digitize approximately $25 million of equity interest in EnergyFunders’ Yield Fund I, the company’s largest fund to-date that will invest in oil and gas assets throughout the U.S. This partnership represents EnergyFunders’ first digital security project, with plans to conduct more digital securities offerings in the future. Based in the energy capital of Houston, Texas, EnergyFunders is the first-of-its-kind platform providing direct access to cash flow returns at the wellhead of oil and gas projects, successfully launching nearly 40 oil and gas investment funds since its inception in 2013.

Bitcoin flash crash amplified by leverage and ‘systemic issues’; Technical hiccups at exchanges and some traders’ use of borrowing contribute to market volatility
Eva Szalay and Philip Stafford – FT
The bitcoin flash crash has exposed how “systemic issues” under the surface of the cryptocurrency market, combined with leverage offered by many leading exchanges, exacerbate episodes of volatility. Bitcoin prices plunged $10,000 in less than an hour on Wednesday from $40,000 in one of the most severe drops since the world’s most actively traded digital coin began its meteoric ascent to record peaks last autumn. It rebounded almost as spectacularly as it fell later in the day, and continued its rebound on Thursday, climbing above $42,300.

Canadian Bitcoin ETFs rattled by crypto tumult;Funds issued ‘market disruption’ alerts as US weighs several bitcoin ETF applications
Joshua Oliver – FT
Two Canadian bitcoin ETFs issued “market disruption” warnings during this week’s crypto turmoil, highlighting the risks faced by the vehicles that are increasingly popular with retail traders.

Apifiny Hires Former Goldman Sachs Financial Architect Jason Jiang As CTO As Company Prepares For Planned Public Offering
Apifiny (press release)
Apifiny, a global digital asset trading and mining network, today announced it has hired Jason Jiang as chief technology officer in preparation for the company’s anticipated, planned public offering. With over 22 years of experience designing and building professional trading solutions for financial services professionals, Mr. Jiang’s background includes significant experience in building ultra-low latency trading and risk management systems and co-location, exposure to the full technology stack from hardware, networking and full software development life cycle (SDLC) to automated trading controls.

Bitcoin Miners Are Giving New Life to Old Fossil-Fuel Power Plants; The lofty prices of cryptocurrencies have investors sinking money into electricity generation, risking a backlash
Brian Spegele and Caitlin Ostroff – WSJ
Across America, older fossil-fuel power plants are shutting down in favor of renewable energy. But some are getting a new lease on life—to mine bitcoin. In upstate New York, an idled coal plant has been restarted, fueled by natural gas, to mine cryptocurrency. A once-struggling Montana coal plant is now scaling up to do the same.

Crypto Derivatives Exchange BitMEX Pledges to Become Carbon Neutral
Daniel Palmer – Coindesk
After Elon Musk recently stirred up the debate about fossil fuel use in bitcoin mining, BitMEX has committed to becoming carbon neutral. In a blog post on Friday, the cryptocurrency derivatives exchange acknowledged the scrutiny of energy consumption in the cryptocurrency industry, citing “wildly divergent views and accuracy of information.” The firm said it had a responsibility to take positive action and pledged to become carbon neutral.

U.S. Federal Reserve plans to publish discussion paper on the potential issuance of a CBDC
Tim Copeland – The Block
The U.S. Federal Reserve plans to publish a discussion paper this summer that will have a “particular focus on the possibility of issuing a U.S. central bank digital currency,” according to a press release today. The press release added that the paper will complement research that the Federal Reserve is already undertaking. Federal Reserve chairman Jerome Powell highlighted the agency’s goals of promoting financial stability and ensuring the payments system is efficient. “In pursuit of these core functions we have been carefully monitoring and adapting to the technological innovations now transforming the world of payments, finance, and banking,” he said.

Google search volume for cryptocurrency topics breaks all-time high
MK Manoylov – The Block
Weekly search volume on Google for the topic “cryptocurrency” has reached its highest level yet both in the U.S. and worldwide, according to data from GoogleTrends. The search volume peaked during the week of May 9 – 15, when the price of bitcoin was mostly still above $50,000. A topic on GoogleTrends includes related search terms, meaning this volume is more indicative of a wider interest in the crypto space than just the specific word. In fact, search volume for the word “cryptocurrency” is actually lower than it was in 2017.


Washington wakes up to Covid-fueled investment risks as crypto, SPACs tank; A wave of pandemic-era speculation in Bitcoin and new shell corporations known as SPACs is crashing. Washington policymakers are now scrambling to come to the rescue of investors.
Kellie Mejdrich – Washington Post
A wave of pandemic-era speculation in Bitcoin and new shell corporations known as SPACs is crashing, and Washington policymakers are scrambling to come to the rescue of investors.

Biden administration targets crypto transfers in tax crackdown plan; Proposal to close ‘tax gap’ would require cryptocurrency transfers over $10,000 be reported to IRS
Lauren Fedor and Eva Szalay – FT
Cryptocurrency transfers of more than $10,000 will have to be reported to US tax authorities under new Biden administration proposals that come amid a tightening of the regulatory environment for digital coins. The US proposal, unveiled a day after China signalled a regulatory crackdown of digital currencies, is part of a broad set of proposals aimed at curbing tax evasion.


FCA consults on use of new powers to support orderly wind down of critical benchmarks
Today the FCA has published a consultation on its proposed policy framework for exercising two of its new powers under the Benchmarks Regulation (BMR), which will be introduced by the Financial Services Act 2021. These powers relate to the use of critical benchmarks that are being wound down. The consultation is another important step in the wind down of LIBOR.

NFA orders Plymouth, Minn. introducing broker Roy E. Abbott Futures, Inc. to pay a $75,000 fine and approximately $198,000 in restitution to customers
NFA has ordered Plymouth, Minn. introducing broker Roy E. Abbott Futures, Inc. (Abbott Futures) to pay a $75,000 fine and approximately $198,000 in restitution to customers who incurred net losses resulting from improper trading activity by a former employee of the firm.

NFA orders former associated person Peter Chris Georgantones never to reapply for NFA membership
NFA has ordered Peter Chris Georgantones, a former associated person of an NFA Member introducing broker located in Plymouth, Minn., never to reapply for NFA membership or act as a principal of an NFA Member.

Nomura, UBS and UniCredit fined EUR371 million for bond trading cartel; Despite its involvement, NatWest was not fined as it revealed the cartel, while Bank of America, Natixis and Portigon also evaded penalties.
Annabel Smith – The Trade
Nomura, UBS, and UniCredit have been fined EUR371 million by the European Commission for their roles in a bond trading cartel that involved several banks between 2007 and 2011. NatWest was not fined for its involvement as it revealed the cartel to the European Commission while Bank of America and Natixis were not fined as their infringement fell outside of the limitation period for imposing a fine.

Insider trading charges against both the former Project Manager and the former Competent Person of ASX-listed gold explorer
Mr Alexander McCulloch, a former project manager at Beacon Minerals Limited (Beacon Minerals) and Mr Darryl Brian Mapleson, who provided geological services to the company, have both appeared in the Perth Magistrates’ Court today charged with insider trading.

Former executive of Healthe Care Australia pleads guilty to insider trading
Mr Gregory Campbell of Surfers Paradise, Queensland, today appeared in the County Court of Victoria and pleaded guilty to one count of insider trading. Mr Campbell was the National Development and Construction Manager at Healthe Care Australia Pty Limited (Healthe Care) and a member of the company’s executive team in 2016.

Former managing director Holly Grofski charged
On 21 May 2021, former managing director of Global Merces Funds Management Ltd (in liquidation) (Global Merces), Ms Holly Marie Grofski, of Cranley, Queensland, appeared in Brisbane Magistrates Court on criminal charges.

ASIC consults on updates to the ePayments Code
ASIC has today released a consultation paper (CP 341) seeking feedback on proposed updates to the ePayments Code. The updates are designed to ensure the Code continues to be effective and relevant to consumers and subscribers. ASIC’s proposed updates primarily relate to the following areas of the Code:

Remarks at 2021 FINRA Annual Conference
Chair Gary Gensler – SEC
Good afternoon. I want to thank the Financial Industry Regulatory Authority and Robert [Cook] for hosting me as part of this week’s conference.[1] I’ve known Robert since he joined the SEC to lead the Trading and Markets Division and I was at the CFTC, when we first worked together on what was called the “Flash Crash” in May of 2010.

ESMA appoints Derville Rowland to chair the Investment Management Standing Committee
The Board of Supervisors of the European Securities and Markets Authority (ESMA) has published today a statement on the appointment of Derville Rowland, Director General (Financial Conduct) of the Central Bank of Ireland (CBI), as the new chair of its Investment Management Standing Committee (IMSC).

Financial Reports and Policies
As a not-for-profit, self-regulatory organization whose operations are funded by member firm fees—without the support of any taxpayer dollars—FINRA must prudently manage its finances to ensure it can appropriately fund its mission to protect investors and promote market integrity in a manner that facilitates vibrant capital markets.

Deadline extension for Strong Customer Authentication
We have extended our deadline for implementing Strong Customer Authentication (SCA) for e-commerce transactions to 14 March 2022.

Investing and Trading

Bundesbank Sees Temporary German Inflation Surge Toward 4%
Carolynn Look – Bloomberg
One-off effects at end of 2021 will push up headline rate; ECB officials say it’s too early to withdraw monetary support
German inflation could climb as high as 4% this year, according to the Bundesbank, a rate not seen since the euro was introduced more than two decades ago. “In the coming months, the rate of inflation is likely to continue on a slow upward trajectory,” the central bank said in its monthly report. A series of one-off effects toward the end of the year is set to intensify price pressures in Europe’s largest economy, so that “as a result, the inflation rate could temporarily rise to 4%.”

The hypocritical attack on CEO pay; Institutional investors should focus on making their clients richer, not chief executives poorer
Tom Braithwaite – FT
Institutional investors are busy protesting against executive pay. In the US, pay packages at public companies have received their lowest approval levels since votes became mandatory 10 years ago. In the UK, the average proportion of No votes has reached its highest level in at least seven years.

Active vs passive: what my ‘moonshot’ research actually shows; A concentrated stock portfolio can deliver outsized gains if the investor is skilled or fortunate enough
Hendrik Bessembinder – FT
In 2017, I disseminated a research report assessing whether stocks outperform Treasury bills. It seems the report presented something of a Rorschach test, as observers drew starkly diverging interpretations from the same empirical facts.

Unhedged: Stock prices and the velocity of money; Also bitcoin replies and housing prices
Robert Armstrong – FT
QE and stock prices (part two)
Here are two lines that mostly go up and to the right:
The two lines are the M2 money supply (cash, deposits, money market accounts) and the S&P 500. M2 is rising fast because of quantitative easing: the Fed is buying securities for cash, thereby putting new money out there. Why the S&P is rising fast is less clear. The fact that the two lines have moved together lately encourages a popular causal story: “the Fed is printing money, and it has to go somewhere, and it is going into the stock market.” A couple of days ago I noted that these causal stories are wrong, because cash is not transformed into stock. When I buy shares, the seller gets the cash. It is not “in the stock market”.

Environmental, Social and Corporate Governance

U.S. Can Learn From Others on Managing Climate Finance Risks; Being late to the game means the U.S. can now draw lessons from others, particularly the European Union
Kate Mackenzie – Bloomberg
The U.S. is a latecomer to climate finance regulation, but the White House seems determined to move fast On Thursday it issued a new executive order on climate-related financial risk that requires a swathe of agencies and regulators, from the Federal Reserve to the Federal Retirement Thrift Assessment Board, to consider climate risk in their oversight work. Some departments, like Veterans Affairs, must also consider it in procurement decisions.

Bank of England Will Green Its Corporate Bond-Buying Program
Reed Landberg – Bloomberg
Central bank will take account of net-zero target in purchases; Move aimed at prodding investors to back climate goals
The Bank of England signaled it will take account of the government’s environmental goals in buying assets in financial markets, saying it will shift purchases toward companies doing the most to fight climate change.

US banks to face climate risk disclosure under Biden order; White House pledges ‘concrete and rapid’ action to align with other countries’ plans
Billy Nauman – FT
The Biden administration on Thursday took the first step toward forcing a broad range of US banks and companies to disclose the risks they face from climate change.

Turn green or lose ‘licence to operate’, says Deutsche Bank chief; Germany’s largest lender raises sustainability targets one year after announcing them
Olaf Storbeck – FT
Deutsche Bank chief executive Christian Sewing has warned that lenders “risk losing their licence to operate” if they fail to make green finance a priority, as the group raised its own targets.

Millennials spurred growth in sustainable investing for years. Now, all generations are interested in ESG options
Alicia Adamczyk – CNBC
As millennials begin to turn 40 in 2021, CNBC Make It has launched Middle-Aged Millennials, a series exploring how the oldest members of this generation have grown into adulthood amid the backdrop of the Great Recession and the Covid-19 pandemic, student loans, stagnant wages and rising costs of living. Millennials have a reputation for being values-driven in their approach to their money and their careers. That includes their investing habits: Millennials spurred the growth of sustainable investing throughout the 2010s — investors contributed $51.1 billion to sustainable funds in 2020, compared with less than $5 billion five years ago — according to industry reports. Now, every generation wants in.

Bill seeks to clarify ESG responsibilities under ERISA
Brian Croce – Pensions & Investments
Democrats in the Senate and House introduced a bill Thursday that would amend ERISA to make clear that retirement plans may consider ESG factors in their investment decisions and that ESG investments are permitted as qualified default investment alternatives in ERISA-covered plans. Under the bill — the Financial Factors in Selecting Retirement Plan Investment Act, sponsored by Sens. Tina Smith, D-Minn., and Patty Murray, D-Wash., and Rep. Suzan DelBene, D-Wash. — plans would have to consider ESG factors in a prudent manner consistent with their fiduciary obligations, the same legal standard that ERISA already applies to non-ESG investment factors.

New tool allows investors to measure, compare impact investments
Hazel Bradford – Pensions & Investments
A newly available methodology allows investors to compare and assess impact investments. Released Wednesday by the Global Impact Investing Network, the Compass methodology offers investors insight into three critical impact performance figures: scale, pace and efficiency. It also makes it possible to compare impact results. The idea is to standardize the components and process of impact performance analysis at the aggregate investment, fund or portfolio level.

ESG Skills Are a Hot Item on Today’s Resumes
Lyubov Pronina and Priscila Azevedo Rocha – Bloomberg
Banks are on a hiring spree to compete for market share in sustainable debt, one of the fastest-growing parts of finance. Firms including Citigroup Inc., HSBC Holdings Plc, and Barclays Plc have snapped up people for bond sales, research or global sustainability roles this year as they build teams. Aside from poaching talent, they are tapping expertise among scientists, politicians and think tanks.


Morgan Stanley Didn’t Get the Diversity Memo; The executive shake-up to succeed James Gorman looks all too familiar.
Elisa Martinuzzi – Bloomberg
The largest U.S. financial institutions are sending a clear message: The pandemic has shifted into their rearview mirrors. After JPMorgan Chase & Co.’s management appointments earlier this week, it was Morgan Stanley’s turn on Thursday to assign fresh roles to a lineup of potential successors to the chief executive officer.

Credit Suisse Weighs Retention Bonuses to Stem Flight of Talent
Ambereen Choudhury and Marion Halftermeyer – Bloomberg
Bank is looking at range of options for junior staff as well; Competitors keen to poach talent in investment bank, wealth
Credit Suisse Group AG is considering special retention bonuses for top performers after the Greensill Capital and Archegos Capital Management scandals rocked the Swiss lender and set off a wave of departures.

The slow-motion succession battle at JPMorgan; Jamie Dimon and James Gorman elevate potential replacements, but both will stay on for years
Joshua Franklin and Stephen Morris – FT
Jamie Dimon was once touted as a potential US presidential candidate. When the long-serving JPMorgan Chase chief executive decided against a run for the White House in 2020, one turn-off might have been the two-term limit.


China Will More Than Double Millionaires by 2025, HSBC Says
Bloomberg News
China will more than double the number of millionaires in the next five years and boost the size of the middle class by almost half, spurring consumption in the economy, according to HSBC Holdings Plc. The number of high-net-worth individuals — those with the equivalent of at least 10 million yuan ($1.55 million) in investable assets — will likely increase to 5 million by 2025 from more than 2 million currently, the bank estimated. The middle class, which numbers about 340 million now based on the narrowest definition, will grow by more than 45% to over 500 million in the period, it said.

Brexit can boost London as financial centre, says Klarna boss; Chief of Europe’s most valuable start-up believes split from EU is chance for UK to rewrite regulations
Richard Milne and Nicholas Megaw – FT
Brexit gives London the chance to steal a march on the EU and strengthen its position as a global financial centre by attracting more fintechs and banks, according to the boss of Europe’s most valuable unlisted start-up.

Drought Imperils Economy in California’s Farm Country; Growers are paying four times normal prices for water and letting almond trees die as federal government cuts or ends water allocations
Jim Carlton – WSJ
Sitting in a pickup truck on his almond farm 100 miles north of San Francisco, Tom Butler pointed to a withered grove he has been planning to bulldoze in order to save his little remaining water for younger trees. “It’s not a decision any farmer wants to make,” the 42-year-old said last week. “We’re in survival mode.”


Sale of Tribune Newspaper Chain to Hedge Fund Faces One Last Challenge; Shareholders of Tribune Publishing will vote on the company’s sale to Alden Global Capital. Dr. Patrick Soon-Shiong, a billionaire who owns The Los Angeles Times, could determine the outcome.
Katie Robertson – NY Times
The hedge fund that wants to buy Tribune Publishing, the owner of some of the nation’s major metropolitan newspapers, has one final hurdle to cross. Shareholders of the newspaper company, whose titles include The Chicago Tribune, The Baltimore Sun and The New York Daily News, will vote on Friday on whether to approve the company’s sale to Alden Global Capital, an investor with a reputation for slashing costs and cutting jobs at the approximately 200 newspapers it already owns.

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