Breaking News

SEC approves vast surveillance system for stock market; Debate intensifies over ETFs’ impact on markets; Energy Traders Said to Be Probed in U.K. Over Spark Spoofing

First Read

Cathy Lyall, Minnamurra Consulting – 30 Years of Change

MarketsWikiEducation.com

Cathy Lyall’s first day in the markets was 1987’s Black Monday. She had planned on going into foreign affairs but snagged a job as a futures broker the Thursday before the crash from her boyfriend, a cash bond broker. She also signed her first mortgage in London the Friday before Lehman Brothers collapsed. Life events when synced with world events yield perspective.

In the period between her first day on the job and her first mortgage, Lyall, currently director of Minnamurra Consulting, noticed a shift in the industry’s mentality.

“The ethics and ethos had changed in the markets — it was flipped completely on its head,” Lyall said. “It was me first, company second, and I’d like to say the client was third, but I think the client was out of the equation altogether. They were the patsies that people were trying to make money from. That meant our markets were broken.”

The good thing about mindset and industry culture is that it can change and Lyall believes that the “my word is my bond” mentality will return to markets — the next generation of market participants will play a key role in swinging the pendulum the other direction.

Watch the video »

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Populism Takes Over the World; America is just the latest country to see a resurgence of this volatile political movement.
David Rovella – Bloomberg
When you first encounter the word “populism,” you might think it’s a close cousin of democracy, with all the positive connotations that go along with it. And for some, it may well seem a purer form of a process by which politicians harness the will of the majority.
/goo.gl/mzZPjU

***** I love hyperbole in the morning.

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CME Group Announces Sir Tim Berners-Lee as the 2016 Melamed-Arditti Innovation Award Recipient
CME Group
CME Group’s Center for Innovation today announced that Sir Tim Berners-Lee, inventor of the World Wide Web and Founding Director, World Wide Web Foundation, is the 12th recipient of the CME Group Melamed-Arditti Innovation Award.
/goo.gl/LeVk8O

***** A successful GFLC in Naples, FL included the Melamed-Arditti Award announcement.

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Our Guide to Trading/Tech Newsletters
3Points Communications
In 2010, 3Points was established to serve clients that operate at the nexus of trading and technology. With the domain expertise we’ve established in this space, we can serve our clients faster and more effectively, since we understand most of the industry jargon and ecosystem.
/goo.gl/7z2cTx

***** We are at the top of 3 PTS’ list, but even we come under scrutiny and could improve our offerings.

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5 Questions with Dr. Brett Steenbarger, Trading Psychologist
Brian Mehta – Trading Technologies
Brett N. Steenbarger, Ph.D. is Clinical Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY, where he specializes in the teaching and practice of brief approaches to counseling and psychotherapy. Brett’s main work is with traders and portfolio managers in the financial markets at hedge funds, proprietary trading firms and other money management organizations.
/goo.gl/BtSiGG

***** An interview by Brian Mehta, CMO of TT.

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Financial Data for FCMs
CFTC
Futures commission merchants (FCMs) and retail foreign exchange dealers (RFEDs) must file monthly financial reports with the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) within 17 business days after the end of the month. Selected financial information from these reports is published below.
/goo.gl/nTbKKH

***** Sixty-eight FCMs listed as of September 31, 2016, down from 72 from the start of the year.

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Humans Aren’t Just Changing the Climate. We’re Changing ‘Life Itself’; It’s not just about us.
Eric Roston – Bloomberg
The earth has warmed barely a single degree Celsius, and yet virtually no place on the planet is unaffected by climate change. That’s the conclusion of both a new study published in the journal Science and a popular-science book out this week, The Unnatural World, by David Biello, the science curator at TED and a Scientific American contributing editor.
/goo.gl/U6dpNm

***** Climate economists are finally growing that third hand they always talked about.

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Tuesday’s Top Three
The top spot in yesterday’s newsletter goes to the story with the catchiest headline: Bloomberg’s The Spy Who Added Me on LinkedIn. Number two was FOW’s RJO to target global mid-market – CEO Corcoran, about what RJO is doing in the face of banks pulling out of derivatives trading. Number three was the big news, as reported by The Financial Times, Adena Friedman to take the helm at Nasdaq, ushering in the first female head of a major US exchange, and saying farewell to Bob Greifeld as CEO.

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Lead Stories

SEC approves vast surveillance system for stock market; System will monitor trading data passing daily across US equity and options trading
Nicole Bullock in New York and Philip Stafford in London – FT
The main US markets regulator on Tuesday approved a plan to introduce a vast surveillance system to monitor trading on the $23tn US stock market, ending six years of delays. The move by the Securities and Exchange Commission sets in motion a timetable to bring to reality its Consolidated Audit Trail, a single data warehouse that collects the millions of orders and quotes that daily pass across US equity and options markets in real-time.
/goo.gl/2XWTcY

Debate intensifies over ETFs’ impact on markets; Massive inflows prompt regulators to examine consequences of passive fund growth
Chris Flood – FT
Few people would be bold enough to call BlackRock a “very dangerous company” when sitting next to Larry Fink, the co-founder and chief executive of the world’s largest asset manager.
/goo.gl/bdcgce

Energy Traders Said to Be Probed in U.K. Over Spark Spoofing
Liam Vaughan, Rachel Morison – Bloomberg
Ofgem’s ‘Project Damson’ focused on 2014 contract manipulation; Authority examining alleged rigging of clean spark spreads
The U.K.’s energy regulator is investigating whether traders manipulated some derivatives prices, according to documents seen by Bloomberg News and a person familiar with the situation. The probe, known as “Project Damson,” is focused on alleged efforts by U.K. traders to push up the price of spark spread contracts, which reflect the profitability of gas-fed power plants, by posting and then canceling orders in short succession, the documents show.
/goo.gl/Xc4Vny

Citadel looking into becoming a Treasury primary dealer
Joe Rennison and Alexandra Scaggs – Financial Times
Citadel Securities, the market making sibling of the well-known hedge fund, is looking into becoming one of the select few institutions trusted by the US government to help sell the country’s debt, as it looks to seize more territory in a market once dominated by big banks. Citadel Securities has capitalised on the pullback of big banks, and a shift towards electronic trading, to establish itself as a major player in the largest government bond market in the world.
on.ft.com/2fSjdRJ

Euronext launches “Best of Book”, delivering superior execution to retail investors
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced the launch of Best of Book, Euronext’s next generation best execution service [1]. Best of Book intends to give access to unrivalled execution quality and to provide retail investors with significant price improvement on Euronext stocks within the secure and transparent environment of the regulated market.
/goo.gl/dLiSUo

I’m afraid of Americans
Posted by Steve Grob – Fidessa
It’s always cool when two different things come together to make you think. That’s exactly what happened on my commute this morning as I listened to David Bowie’s much-underrated album, Earthling. Just as I read another piece about the US election, my ears were treated to the classic track “I’m afraid of Americans”. I will leave you to listen to the song yourself, but it did get me thinking about how the US and Europe may be going in completely different directions in terms of financial regulation. Most pundits seem to think that the Trump victory is a good thing for banks as the language from the Trumpistas is all about cutting regulation and maybe even repealing Dodd-Frank itself. Europe, on the other hand, is full steam ahead with making markets “safer” through regulation.
/goo.gl/Dff382

London Stock Exchange seeks to wrap up French clearing house sale as EU regulatory battle looms for Deutsche Boerse merger
William Turvill – City AM
The London Stock Exchange Group is whittling down the list of candidates for the sale of its Paris-based clearing business and could be in a position to announce a deal before Christmas, City A.M. understands.
/goo.gl/7TSpg1

SEC approves ‘Hubble Telescope’ for securities markets
John McCrank – Reuters
The U.S. Securities and Exchange Commission voted on Tuesday to approve a massive stock and options trading database, prompted by the 2010 “flash crash,” aimed at helping regulators police the increasingly fast, fragmented and complex markets. The creation of a Consolidated Audit Trail establishes a regulatory central database for every trade order, execution, modification and cancellation, as mandated by the SEC in July 2012.
reut.rs/2fVqjr4

Germany Threatens to Abandon Basel Talks If Demands Not Met
Alexander Weber – Bloomberg
Dombret says Bundesbank won’t accept capital deal at any price; Basel Committee members are racing to meet year-end deadline
Germany’s Bundesbank delivered an ultimatum to other major banking powers including the U.S. that it will walk away from talks on revamping global capital rules unless its key demands are met.
/goo.gl/ZQ1jHg

Colombia’s ‘Blood Gold’ Turns Up in Everything From Smartphones to Cars
Andrew Willis – Bloomberg
Delays for Colombia peace bid prolongs criminal ties to gold; Prostitution and environmental woes linked to illegal mines
Deep in the jungles of Colombia, thousands of small, illegal mining operations, many under the control of Marxist guerrillas or drug traffickers, are working long hours to pull gold out of the ground. Miners are digging in out-of-the-way places such as Timbiquí and Río Quito. From there, the gold is hauled by boat, truck or small airplanes to smelters in Cali and Medellin.
/goo.gl/nDO9mE

Tullett Prebon gets UK regulator’s nod for ICAP deal
Reuters
British interdealer broker Tullett Prebon Plc said on Tuesday Britain’s financial regulator had approved its purchase of bigger rival ICAP Plc’s global hybrid voice broking business.
reut.rs/2fScZS8

SIFMA’s Board of Directors Announces Newly Elected Officers
SIFMA
The Board of Directors of SIFMA announced that it has elected several directors to leadership positions on the Board for 2017.
/goo.gl/7Za37F

Fannie and Freddie’s Status Continues to Provoke Criticisms
Matthew Goldstein – NY Times
The presidential campaign that just ended was notable for a lack of debate about housing — in particular the uneven state of the United States mortgage market nine years since the start of the financial crisis. Neither President-elect Donald J. Trump nor Hillary Clinton spent much time discussing housing policy, even though the financial crisis in the United States began with the collapse of home prices nationally.
nyti.ms/2fVji9L

SEC’s White ‘deeply concerned’ about bond market illiquidity; Agency to publish report on regulation and market liquidity in May 2017
bond-market-dice
Peter Madigan – Risk.net
The outgoing head of the Securities and Exchange Commission (SEC) is “deeply concerned” about liquidity in corporate bonds – but insists there is insufficient evidence to blame post-crisis regulation for the deterioration in trading conditions. “The data does concern me and the overall issue [of bond liquidity] deeply concerns me. I go back quite frequently to our staff to try and drill down on what we are reporting to Congress each quarter on corporate bond liquidity in the primary and secondary…
/goo.gl/m9ic0w

ICAP chief ponders Tullett transaction completion date; Transaction requires other change of control consents before completion.
Hayley McDowell – The Trade
Michael Spencer, chief executive officer at ICAP, has explained the transaction with Tullett Prebon is on track to be completed this year, although it requires other ‘change of control’ consents before completion.
/goo.gl/7cLHf0

Brexit

Brexit could be delayed for two years, Supreme Court judge warns
Faisal Islam – Sky News
Brexit could be delayed by months, even as long as two years, after a Supreme Court Judge suggested that “comprehensive” legislation was required to trigger Article 50. Lady Hale told an audience in Kuala Lumpur that the court must question “whether it would be enough for a simple act of Parliament to authorise the Government to give notice, or whether it would have to be a comprehensive replacement for the 1972 [EEC Accession] Act”.
jlne.ws/2fSgd7R

Exchanges, OTC and Clearing

People: Rudiger Assion leaves Deutsche Borse AG
Deutsche Borse AG
Rudiger Assion (49), Managing Director of Group Communications, will resign from Deutsche Borse AG as of 31 December 2016. After ten years, he leaves the company at his own request and in a friendly manner with the management, in order to devote himself to a new, further-reaching task at Leonteq AG, Zurich.
/goo.gl/YxzBZd

Incoming Nasdaq CEO says Trump policies may benefit Wall Street
John McCrank – Reuters
Nasdaq Inc’s (NDAQ.O) incoming chief executive officer, Adena Friedman, said on Tuesday that President-elect Donald Trump’s economic policies may boost trading and allow banks to take more risks, including lending more to businesses.
jlne.ws/2fSftzL

Bitcoin Futures Might Be Coming Soon
Alexander Osipovich – WSJ
Bitcoin has moved one step closer to mainstream credibility after the world’s largest futures exchange operator launched a pair of indexes designed to track the virtual currency’s price. The gauges from CME Group Inc. could be used as building blocks for futures contracts that would make it easier for both professional and individual investors to trade bitcoin.
on.wsj.com/2fShsEm

London Stock Exchange Group’s Elite Signs Agreement with Budapest Stock Exchange; ELITE and BSE to launch tailored ELITE programme in Hungary
London Stock Exchange Group
ELITE is LSEG’s international business support programme for ambitious and fast growing companies; Demonstrates LSEG’s Open Access philosophy
London Stock Exchange Group (LSEG) today announces that its successful business development programme, ELITE, has signed an agreement with Budapest Stock Exchange (BSE) to launch a tailored ELITE programme in Hungary. BSE becomes ELITE’s first stock exchange partner in Europe.
/goo.gl/p2kGM7

LCH sees buy-side boost in inflation swaps clearing; Buy-side cleared inflation swaps volumes have rocketed since 1 September with dealers offering cheaper prices.
Joe Parsons – The Trade
LCH has seen a huge increase in asset managers and hedge funds voluntarily clearing their inflation swaps, following the onset of stricter collateral rules on bilateral derivatives.
/goo.gl/2KQpw5

London Stock Exchange Conference Connects Universities with Investors
London Stock Exchange
London Stock Exchange’s University IP Commercialisation Forum, in partnership with Numis, today brings together Government representatives, university tech-transfer offices, chief executives of many of the UK’s university spin-outs and UK and international investors. They will discuss the UK’s success to date in supporting university IP commercialisation and the continued need for a wider set of investors to engage in the sector.
/goo.gl/M9AH2y

Total Return Derivatives: Can Repo Emerge as a New Asset Class?
Eurex
Interview with Antoine Porcheret, Senior Equity & Derivative Strategist at BNP Paribas
/goo.gl/nWHanz

Politics

What did Steve Mnuchin do at Goldman Sachs?
Sarah Butcher – eFinancialCareers
It’s starting to look like former Goldman Sachs banker Steven Mnuchin will indeed be Treasury Secretary under Donald Trump. Bloomberg reports that Mnuchin has been ‘recommended by Donald Trump’s transition team’, and that his promotion awaits the president elect’s endorsement (or not). Having been Trump’s finance chairman during the campaign, Mnuchin is already closely allied to President-elect Trump but this would take things to a whole new level. It would also suggest that the revolving door between Goldman Sachs and government is back in play, and that Trump’s anti-elitism doesn’t extend to former Goldman bankers, second generation.
/goo.gl/Mc8TMm

France, U.N. tell Trump action on climate change unstoppable
Aziz El Yaakoubi and Nina Chestney – Reuters
France and the United Nations on Tuesday stepped up warnings to U.S. President-elect Donald Trump about the risks of quitting a 2015 global plan to combat climate change, saying a historic shift from fossil fuels is unstoppable. French President Francois Hollande, addressing almost 200 nations meeting in Morocco on ways to slow global warming, said that inaction would be “disastrous for future generations and it would be dangerous for peace”.
jlne.ws/2fSbWBj

Elizabeth Warren Sends Donald Trump Letter Criticizing Transition Team’s Wall Street Ties; Senator takes aim at David Malpass, Paul Atkins and Steve Mnuchin
Gabriel T. Rubin – WSJ
Sen. Elizabeth Warren warned President-elect Donald Trump against choosing “Wall Street insiders” for top financial posts, likely previewing the confirmation battles to come in the Senate.
/goo.gl/AzVJuL

What a Trump-Branded Federal Reserve Might Look Like; An Austrian (economist) in the White House.
Timothy A Duy – Bloomberg
President-elect Donald Trump has the opportunity to remake the Federal Reserve. Or does he? And if he does, what would it look like?
/goo.gl/l0DUPJ

Investing and Trading

Oil Options Traders Buy Record Bullish Contracts Amid OPEC Moves
Javier Blas, John Deane, Brian Wingfield – Bloomberg
More than 300 million barrels of call options traded Tuesday; Investors seen positioning for higher prices early next year
Oil investors traded a record number of bullish options contracts for benchmark U.S. crude, a signal that the market is positioning for a potential OPEC deal to limit production and boost prices.
/goo.gl/SfFjVe

The Trump factor: have markets got carried away?
Nicole Bullock and Robin Wigglesworth – Financial Times
“Phase one is the hope phase,” Stephen Cucchiaro, chief investment officer at 3 Edge Asset Management, says of the reaction in financial markets to president-elect Donald Trump. “As it is a while until he’s president, you can hope for fiscal stimulus getting growth going and reawakening animal spirits.”
on.ft.com/2fSkEjb

How Donald Trump Could Exacerbate a Global Dollar Shortage; De-globalization in money markets.
Tracy Alloway – Bloomberg
Donald Trump has pledged to not “take even one dollar” of salary in his role as U.S. president. That’s good because a host of entities — from foreign banks to emerging-market companies and governments — might need the cash.
/goo.gl/rPcS9W

Janus’ Gross says Trump will be one-termer, in failure for populism
By Jonathan Stempe – Reuters
President-elect Donald Trump will last no more than four years in the White House, a period when corporations and Wall Street will retain the upper hand over the struggling workers who helped elect him in a populist wave, bond manager Bill Gross of Janus Capital Group Inc (JNS.N) said on Wednesday.
/goo.gl/AeJkY9

The Next Generation of Hedge Fund Stars: Data-Crunching Computers
By ALEXANDRA STEVENSON – NY Times
Every five minutes a satellite captures images of China’s biggest cities from space. Thousands of miles away in California, a computer looks at the shadows of the buildings in the images and draws a conclusion: China’s real estate boom is slowing.
/goo.gl/uZUm6Z

Speech — Is There a Liquidity Problem Post-Crisis?
Stanley Fischer – Federal Reserve
Market liquidity is the ability to rapidly execute sizable securities transactions at a low cost and with a limited price impact. The high degree of liquidity in U.S. capital markets historically has contributed to the efficient allocation of capital through lower costs and a mix of bank- and market-based finance that supports the flexibility of these markets. Regulatory changes may have altered financial institutions’ incentive to provide liquidity, raising concerns brought into sharp relief by several “flash events” over the past few years. At the same time, any changes in observed liquidity are also likely accompanied by other related changes–such as in technology–and a more complete assessment of these shifts is important when we think about the effects on liquidity of changes in financial regulations that were induced by the global financial crisis.
jlne.ws/2fShXxZ

A Radical New Thought: Banks Are Growth Stocks
Rachel Louise Ensign – WSJ
Investors have sent bank stocks soaring as interest rates have risen and expectations have grown that regulation and taxes won’t weigh as heavily. That has given rise to something new: a belief that banks, which investors had come to view as akin to utilities, will once again be able to go for growth. If so, some investors reckon, bank stocks may deserve valuations more in line with those of the overall stock market, rather than trading at a discount to it.
on.wsj.com/2fSilfY

Italy’s 50-year bond burnt in global sell-off; A month after it was sold, paper shunned as referendum on reform looms
by: Elaine Moore in London and James Politi in Rome – FT
Italy’s 50-year government bond is emerging as one of the biggest casualties of the global sell-off in debt markets, as fears rise that a year of political upheavals will extend to the country’s forthcoming referendum on constitutional reform.
/goo.gl/Hsye4S

William Ackman’s 2016 Fortune: Down, but Far From Out
By ALEXANDRA STEVENSON and MATTHEW GOLDSTEIN – NY Times
William A. Ackman is a big-moneyed, swaggering hedge fund manager with a long list of accomplishments.
/goo.gl/bwCqaV

Institutions

Sweden’s Riksbank eyes digital currency
Richard Milne – Financial Times
Sweden’s Riksbank is debating whether to become the first significant central bank to issue a digital currency as it responds to an increasing move away from cash in the Scandinavian country. The world’s oldest central bank — it was the first to issue paper banknotes in the 1660s — is launching a project to examine what a central bank-backed digital currency would look like and what challenges it would pose. It hopes to take a decision on whether to start issuing what it calls an ekrona in the next two years.
on.ft.com/2fVmqmh

ICAP plc Half Year results to 30 September 2016; Resilient performance despite ongoing market headwinds
ICAP
ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces today its results for the six months ended 30 September 2016.
/goo.gl/s3mt3i

ICAP boosted by market volatility caused by Brexit and Trump; Interdealer broker reports 11% revenues growth in first half
by: Philip Stafford – FT
ICAP, the world’s largest interdealer broker, has hailed the election of Donald Trump as US president as “good for our business”, with rising market volatility boosting its last set of interim profits.
/goo.gl/ZQiOvb

Tullett Prebon deal for ICAP assets receives nod from UK regulator
by: Philip Stafford – FT
Tullett Prebon’s hopes of completing its purchase of the global broking assets of rival ICAP before the end of the year received a boost after the UK regulator approved the deal.
/goo.gl/WR9r1J

The Next Great Debate at the Fed Will Be All About the ‘Monetary Offset’
Luke Kawa, Sid Verma and Jeanna Smialek – Bloomberg
The checks and balances imposed on President-Elect Donald Trump’s new economic agenda won’t just come from Capitol Hill, but also from the Marriner S. Eccles Federal Reserve Board Buildings farther west on Constitution Avenue.
jlne.ws/2fSgLLa

Bank of America Trading Benefits From Trump’s Election Surprise
Christina Rexrode – WSJ
The surprise election of Donald Trump has been a boon for Wall Street’s trading desks. Tom Montag, who runs Bank of America Corp.’s global banking and markets units, said Tuesday that the bank had clocked its biggest day ever by volume on both the New York Stock Exchange and Japan’s Nikkei on Wed., Nov. 9, the day after Mr. Trump’s election.
on.wsj.com/2fSgsQr

All Steve Cohen Does is Win, President Trump Edition
Bess Levin – Vanity Fair
In the last few years, hedge-fund manager Steve Cohen has seen eight people who’ve worked for him be convicted of or plead guilty to insider trading (with a new definition of insider trading helping one go free), written a check to the government for $1.8 billion, returned outside investor money, and taken his initials off the company letterhead, swapping out SAC Capital Advisors for the decidedly less “This is my house” Point72 Asset Management.
/goo.gl/iX90UL

UBS won’t change London presence any time soon, chairman says
Reuters
Swiss bank UBS will not make any changes to its London operations any time soon in the wake of Britain’s vote to leave the European Union, the bank’s chair of its board of directors, Axel Weber, said on Wednesday.
/goo.gl/LKz72J

British Land Signs New Lease With Credit Agricole for London HQ
Jack Sidders – Bloomberg
Credit Agricole SA has extended the lease for its London headquarters at the Broadgate office complex, the building’s joint owner British Land Co. said in a statement.
/goo.gl/osj0pq

Fintech

London Stock Exchange Welcomes Edinburgh FinTech FrreeAgenst’s IPO; Accounting software provider raises £10.7 million on AIM; First ever UK IPO of an equity crowdfunded company; Reinforces London’s status as leading venue for technology company fundraising
London Stock Exchange today welcomes the AIM flotation of FreeAgent, a provider of cloud-based Software-as-a-Service accounting software and mobile applications designed specifically for UK micro-businesses. The Edinburgh-based company raised £10.7 million at IPO, with a market capitalisation of £34 million.
/goo.gl/URuLae

Fintech: Coaching for asset managers
Peter Lee – Euromoney Magazine
A lot of excitement over the potential for fintech to transform the capital markets focuses on its adoption by banks and the sell side. Rather fewer fintech firms are selling to the buy side, even though much of what asset managers do relates to the capture, structuring and analysis of data, and this is what next-generation financial technology is supposed to be particularly good at.
/goo.gl/GYzho2

Eze Software Names Jeffrey Shoreman Chief Executive Officer
GlobeNewswire
Eze Software Group, a premier provider of global investment technology, has appointed Jeffrey Shoreman President and CEO, effective Jan. 1, 2017. He succeeds Pete Sinisgalli, who will be assuming the newly-created Executive Chairman role. In the new leadership structure, Shoreman will be responsible for day-to-day operations, driving growth and customer satisfaction, while Sinisgalli will focus on strategic initiatives and support Shoreman
/goo.gl/jbNHZB

Google announces artificial intelligence group for Google Cloud
Reuters
Alphabet’s Google announced the formation of an artificial intelligence group for Google Cloud, the tech company’s latest gambit to increase its market share in the lucrative cloud computing business.
reut.rs/2fVgppw

McKay Brothers Expands Into Asia With Tokyo-Singapore Route
Joanne Faulkner – Waters Technology
A hybrid of undersea fiber and microwave connectivity is enabling McKay to deliver the lowest-know latency between Tokyo and Singapore.
/goo.gl/tDAqyQ

Regulation

Fines Alone Won’t Deter Corporate Crime
Editorial Board – Bloomberg
How should you punish companies that break the law? Granted, it’s a difficult question — but U.S. prosecutors need a better answer. When the U.S. Justice Department said it wanted $14 billion from Deutsche Bank AG for mortgage-related transgressions — an amount that has threatened to do grievous harm to one of the world’s largest financial institutions, deprive people around the world of important financial services, and cost thousands of jobs — markets tumbled and German politicians cried foul. Some central bankers are worried that fines amounting to more than $175 billion since 2010 for financial institutions alone could be holding back an already weak global economy.
bloom.bg/2fSm1OU

Dodd-Frank Rollback to Spare SEC Whistleblower Program, Experts Say
By SAMUEL RUBENFELD – WSJ
The whistleblower office at the U.S. Securities and Exchange Commission is likely to survive the Trump administration’s push to roll back the law that created it, experts told Risk & Compliance Journal.
/goo.gl/RaOS7S

ISDA Announces New Head of Non-cleared Margin Initiative
ISDA
The International Swaps and Derivatives Association, Inc. (ISDA) today announced the appointment of Tara Kruse as head of ISDA’s margin for non-cleared derivatives implementation effort. She replaces Mary Johannes, who is leaving the Association to pursue other interests.
/goo.gl/gHUakk

ESMA Chair Speaks on Improving Outcomes for Investors in Investment Funds
ESMA
The European Securities and Markets Authority (ESMA) Chair, Steven Maijoor, today spoke at the European Fund and Asset Management Association’s (EFAMA) Investment Management Forum on how to improve outcomes for investors in investment funds.
/goo.gl/zv1K2n

ESMA Responds to Commission’s Consultation on Potential EU Person Pension Framework
ESMA
The European Securities and Markets Authority (ESMA) has published its response to the European Commission’s consultation on a potential EU personal pension framework as part of ESMA’s ongoing work in relation to the Capital Markets Union initiative.
/goo.gl/05Oc3a

ESMA Publishes Updated AIFMD Q&A
ESMA
The European Securities and Markets Authority (ESMA) has published an updated questions and answers document (Q&A) on the application of the Alternative Investment Fund Managers Directive (AIFMD).
/goo.gl/29iCz7

Regions

China, Manipulation, Day One, the 1988 Trade Act, and the Bennet Amendment
Brad Setser – Council on Foreign Relations
President-elect Trump has said that he plans to declare China a currency manipulator on day one. I am among those who think this is a bad idea. This isn’t the right time to signal that China’s long-standing exchange rate management has crossed over the line and become manipulation. If China responded by ending all exchange rate management—no daily fix, no band, no intervention, a true float—the renminbi would certainly fall, and potentially fall by a lot.
/goo.gl/u6Lfqt

India: Market Update for Q3 2016
Mahavir Kaswa – S&P Dow Jones Indexology Blog
Buoyed by a good monsoon season, an increased inflow of funds by foreign portfolio investors (FPIs), the passage of a goods and services tax (GST) bill in the upper as well as lower house, and the possibility of an interest rate cut due to low to moderate inflation, the Indian capital market posted its second-best quarterly return of the last eight quarters. However, industrial production, as measured by the Index of Industrial Production, contracted by 2.4% in July 2016, and India’s GDP growth fell to 7.1% for the quarter ending in June 2016—its lowest level in six quarters.
/goo.gl/UA5evh

Miscellaneous

Business Booms at N.Y. Times, WSJ as Showdown With Trump Looms
Gerry Smith – Bloomberg
The nonprofit news organization ProPublica typically receives about 10 donations a day. On Monday, its website was deluged with about three every minute. ProPublica is one of several outlets, including the New York Times and Wall Street Journal, witnessing a swell in donations or subscriptions since Donald Trump’s victory in the Nov. 8 election. ProPublica, the Times and the Washington Post got a boost Sunday from HBO comic John Oliver, who lamented “fake facts” that circulated on social media during the campaign and urged viewers to “support actual journalism.”
jlne.ws/2fSaSgV

Social-Media Companies Forced to Confront Misinformation and Harassment
Deepa Seetharaman, Jack Nicas and Nathan Olivarez-Giles – WSJ
Ongoing complaints about misinformation and hate speech on the internet are forcing social-media companies to confront whether they need to take more responsibility for the content on their sites. Twitter Inc. on Tuesday said it would let users block notifications of tweets that include specific words, among other moves, in an effort to combat harassment on the short-messaging service.
on.wsj.com/2fSiYGn

Crain’s Chicago Business announces leadership changes
Crain’s Chicago Business
The two top executives of Crain’s Chicago Business—Publisher David Snyder and Associate Publisher Lisa Emerick—are leaving over a split with the owners of the parent company on the publication’s growth strategy. Snyder and Emerick, both longtime employees of Crain’s, will stay on through year-end to help KC Crain, executive vice president and director of operations at Crain Communications, with the transition to new leadership. Editorial operations of Crain’s Chicago Business will continue to be run by Editor Michael Arndt.
/goo.gl/8M6Xj1

Leaders in Trading Awards and Rising Stars Tonight; Star-studded awards ceremony will see Leaders in Trading and Rising stars recognised.
By Editors – The Trade
The TRADE is looking forward to welcoming attendees to our 2016 Leaders in Trading Awards and Rising Stars Gala Dinner held at London’s Savoy Hotel today.
/goo.gl/kX9MQ9

Investing in wine — a taster in how to get started; Trade in fine Bordeaux vintages has been brisk since the Brexit vote
Alan Livsey – FT
WC Fields claimed to cook regularly with wine, even occasionally adding it to the food.
/goo.gl/uKYMQi

Chocolate lovers face smaller bars as ‘shrinkflation’ takes hold; Toblerone tweak shows how manufacturers are responding to jump in cocoa butter price
by: Emiko Terazono – FT
Honey, I’ve shrunk the chocolate. The redesign of Toblerone bars sold in the UK is the latest example of the chocolate industry embracing “shrinkflation” — where the price of the product remains the same but the portion size gets smaller.
/goo.gl/d7IUSC

Joe Weisenthal takes new role as Bloomberg Digital’s Executive Editor of News
Bloomberg
Bloomberg Digital Senior Executive Editor Jared Sandberg sent the following memo to staff today:
/goo.gl/Yr13ne

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Graduate of University of Minnesota School of Journalism and Mass Communication