Breaking News

Libor to End in 2021 as FCA Says Bank Benchmark Is Untenable; Digital-Coin Companies Shrug Off SEC Scrutiny; Commodities giant Noble Group shrinks down as it warns of $1.8bn loss

First Read

Hits & Takes

Yesterday’s most viewed pages on MarketsWiki included Diane Swonk, LedgerX and FIA Futures Hall of Fame. Among other interesting viewing stats, Sernova Financial, the cloud-based post-trade clearing utility, has been viewed 465 times since we created a page on the firm on July 11. Not bad. ~JK

Just in case you missed our second most read piece yesterday, here is the JLN story: Are we seeing the end of Wall Street and the beginning of a new one?
~JK

Did you know that the CFTC’s Commitments of Traders report traces its roots to 1924? Or that it was released annually until 1962 when it became monthly? Options were first included in the COT report in 1995. All that info is in this Reuters story about the analytical limitations of the report. ~SD

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ICE NYSE Foundation Supports U.S. Veterans Through Syracuse University Institute
ICE
A three-year $500,000 ICE NYSE Foundation grant that started in 2015 demonstrates our company’s support for military families and veterans. The funds were donated to the Institute for Veterans and Military Families at Syracuse University (IVMF), which designated ICE as an IVMF One-Star Corporate Partner
/goo.gl/ayR5dd

***** Kudos to ICE and their executives for making this generous donation to support military families and veterans. ~JJL

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State Street Pushed 400 Companies to Put Women on Boards. Most Shrugged
By Justin Baer and Joann S. Lublin – WSJ
Roughly 400 publicly traded American companies with no women on their board ignored a request to make a bigger effort on gender diversity when approached by one of the largest asset managers in the world.
/goo.gl/JyQVnv

**What year is this? ~JK

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Corn Could Be Major Victim of Climate Change; Researchers say the possibility of drought hitting multiple corn-growing regions hard in the same year is real.
By Deena Shanker- Bloomberg
The weather has always been an unpredictable element of agriculture, but climate change is expected to make matters significantly worse. Determining how much worse has historically been a challenge. A new study, however, says climate-induced drought could hit several of the world’s major corn producing regions all at once.
/goo.gl/51JSR7

***** I have seen this movie. STAY .~JJL

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Wednesday’s Top Three
Our top read story yesterday was from the New York Times, After Trump Injects Politics Into Speech, Boy Scouts Face Blowback. Second went to the JLN piece about the rise of crypto coin offerings in Are we seeing the end of Wall Street and the beginning of a new one?. Third complemented that piece with the SEC release,
SEC Issues Investigative Report Concluding DAO Tokens, a Digital Asset, Were Securities

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MarketsWiki Stats
105,100,051 pages viewed; 22,629 pages; 207,276 edits
MarketsWiki Statistics

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Sponsored Content

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Lead Stories

Libor to End in 2021 as FCA Says Bank Benchmark Is Untenable
By Suzi Ring – Bloomberg
Bank lending no longer ‘sufficiently active’ to sustain Libor; FCA CEO Bailey focused on creating transaction-based benchmark
Libor, the benchmark underpinning more than $350 trillion of financial products, will be phased out by the end of 2021, as U.K. regulators and banks look to replace the scandal-tarred indicator with a more reliable system.
/goo.gl/S2KJim

Digital-Coin Companies Shrug Off SEC Scrutiny; SEC’s guidance on initial coin offerings was expected, and several firms said it wouldn’t affect their plans
By Paul Vigna – WSJ
Some companies planning sales of digital coins said they wouldn’t be deterred by the Securities and Exchange Commission’s plans to restrain the hot, new fundraising method, possibly setting up a showdown with U.S. regulators.
/goo.gl/DY4zTK

Talk Is Cheap: Automation Takes Aim at Financial Advisers—and Their Fees
By Jason Zweig, Anne Tergesen and Andrea Fuller – WSJ
Services that use algorithms to generate investment advice, deliver it online and charge low fees are pressuring the traditional advisory business
on.wsj.com/2tKsfuu

Commodities giant Noble Group shrinks down as it warns of $1.8bn loss
Jon Yeomans – The Telegraph
Commodities giant Noble Group has outlined a sweeping restructuring plan as it warned investors to brace for a $1.8bn (£1.38bn) loss in its second quarter.
Singapore-listed Noble, which ships raw materials such as oil, gas, metals and minerals to high-growth markets in Asia and the Middle East, will sell off its US gas and power business to its rival, Swiss trading house Mercuria, for $248m. It will also team up with Mercuria to “explore strategic alliances in Asia”.
/goo.gl/uNKmDT

FINRA Promotes Susan Schroeder to Head of Enforcement; Announces Plan to Consolidate Existing Enforcement Functions into a Single Department
FINRA
The Financial Industry Regulatory Authority (FINRA) announced today that it has promoted Susan Schroeder to Executive Vice President and Head of Enforcement. In addition, FINRA plans to consolidate its existing enforcement functions into a new, unified enforcement group led by Schroeder. This consolidation is a result of FINRA360, the organization’s ongoing comprehensive self-evaluation and improvement initiative.
/goo.gl/HGxSqH

Nasdaq chief says no ‘magic bullet’ for ailing Treasury arm
Joe Rennison and Nicole Bullock – Financial Times
The chief executive of Nasdaq said no “magic bullet” will turn round its ailing Treasury trading business, days after the decision to integrate it with the rest of its electronic trading operations.
Adena Friedman’s comments come following the departure of John Shay after just 10 months running Nasdaq’s fixed income business. Tom Wittman, formerly head of equities and options, will now head up the new consolidated group. Mr Shay declined to comment.
on.ft.com/2tKI4RG

What Is Libor and Why It Will Soon Be History: QuickTake Q&A
By Grant Clark and Suzi Ring – Bloomberg
After years of scandal, the London interbank offered rate, or Libor, is heading for the financial grave. By 2021, the benchmark that underpins more than $350 trillion of financial products will be phased out. Its demise, announced by a U.K. regulator, wasn’t so much a result of the corruption cases that generated some $9 billion of banking fines. Rather, it was something more mundane: the data used to calculate it just ain’t there. Now, financial authorities must scurry to find a replacement.
/goo.gl/zpFi5D

SEC’s Clayton touts populist shift at regulator
David J Lynch in Washington – Financial Times
Jay Clayton, the chairman of the Securities and Exchange Commission, on Wednesday touted a populist approach to the market watchdog’s regulatory and enforcement efforts, saying they would be designed to protect average Americans.
on.ft.com/2tKWNfC

Five years of Super Mario: The euro’s obituaries were premature
The Economist
Five years ago, Mario Draghi, head of the European Central Bank, pledged to do “whatever it takes” to save the euro. At the time, many people were predicting that the euro zone would break up. But Mr Draghi pulled off the trick; no countries have left the single currency. Borrowing costs have come down and even Greece has been able to tap the markets.
econ.st/2w1qoxQ

Your Bank Is Moving to Frankfurt? Ask for a Raise
By Kaye Wiggins – Bloomberg
Recruitment CEO says there are skills shortages outside London; Frankfurt is the biggest winner in the fight for U.K. jobs
Banks planning to shift parts of their operations from London to other European cities because of Brexit will have to increase salaries because of a skills shortage, according to the head of a recruitment company.
/goo.gl/48zdGU

NEX Data launches the EBS FX Benchmarks
NEX
New benchmarks ensure regular, accurate and reliable price information for all major currency pairs
NEX Data, a NEX Group, announced today the launch of the ‘EBS FX Benchmarks’, a series of 30-minute FX fixings.The new fixings went live on 26 July 2017 and enhance the variety of global benchmarks available, bringing increased transparency to all FX market participants.
bit.ly/2eQgf3C

Exchanges, OTC and Clearing

After an Abrupt Exit, Nasdaq Grasps for Refresh in Bond Business
Annie Massa – Bloomberg
Nasdaq Inc.’s $750 million bet on bond trading is flailing. The exchange hopes lessons learned in the stock market might help turn the business around.
The executive who ran the division for less than a year,John Shay, abruptly resigned this week. In an interview Wednesday, Chief Executive Officer Adena Friedman said Nasdaq wants to win back turf it has lost in bonds. That task falls on equities executive Tom Wittman, who now oversees global trading in all assets at the exchange.
No link

New tradeable European indices go live at Euronext
Hedgeweek
Two new European indices for blue chips – the Morningstar Eurozone 50 Index and Morningstar Developed Markets Europe 100 Index – are now live on Euronext.
The indices developed by Euronext and Morningstar aim to provide different investor profiles (asset managers, brokers, ETF issuers, banks and trading desks) with equity beta indices that can be used as benchmarks and for investable product creation.
/goo.gl/YWwaaE

Nasdaq Reports Second Quarter 2017 Results; Achieves Record Quarterly Net Revenues
Mondovisione
Nasdaq, Inc. today reported financial results for the second quarter of 2017. Second quarter 2017 net revenues were $602 million, up $43 million or 8% from $559 million in the prior year period. The second quarter increase in net revenues included a $34 million positive impact from acquisitions and $15 million, or 3%, organic growth, partially offset by a $6 million unfavorable impact due to changes in foreign exchange rates.
/goo.gl/aqnEjs

Deutsche Börse Increases Revenue And Earnings In Q2/2017 – Q2/2017: Net Revenue Amounted To EUR623.6 Million (+4%), Adjusted EBITDA To EUR379.5 Million (+7%), And Adjusted Net Income To EUR232.8 Million (+7%) / H1/2017: Net Revenue Of EUR1,247.0 Million (+3%)
Mondovisione
/goo.gl/CpXBGM

Nasdaq Elects New Board Member
Mondovisione
Nasdaq today announced the addition of John D. Rainey to the Nasdaq Board of Directors following his election by the board on July 25, 2017.
/goo.gl/k8YE1n

MGEX Announces Top 25 Daily Volume Record
Mondovisione
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announces Tuesday was the 24th -highest volume day in the history of the Exchange with 20,375 contracts trading.
/goo.gl/BqQ7Ub

MarketAxess defends its corporate bond trading status;CEO McVey says claims by rival Tradeweb are ‘not up to industry standard’
Joe Rennison in New York
MarketAxess, the largest corporate bond trading venue in the US, has hit back at accusations that it is losing market share to Tradeweb, saying its smaller rival is putting out numbers that are “confusing” the market.
/goo.gl/bqfQz8

Nigerian Stock Exchange Takes Smarts for Surveillance; The African exchange has deployed Nasdaq technology to introduce the first surveillance platform in the country.
Aggelos Andreou – Waters Technology
The Nigerian Stock Exchange (NSE) has unveiled the country’s first market surveillance platform, using Nasdaq’s flagship surveillance solution, in an effort to reduce fraud in the Nigerian market, one of the largest in Africa.
/goo.gl/1SXcFk

CCP Disclosures 1Q 2017 – What the Data Shows
Amir Khwaja – Clarus Financial Technology
Central Counterparties recently published their latest CPMI-IOSCO Quantitative Disclosures and in this article I will highlight what the data shows, similar to my article on 4Q 2016 trends.
/goo.gl/XeNm1o

Fintech

LiquidityBook Names Andy Carroll Chief Architect
www.msnewsnow.com
Technology veteran and Twitter alum becomes third senior hire in as many months
LiquidityBook, a leading Software-as-a-Service (SaaS)-based provider of buy- and sell-side trading solutions, today announced the appointment of industry veteran Andrew Carroll as Chief Architect.
bit.ly/2eQlctj

Vela Continues to Expand Technology Portfolio, Acquires Object Trading
Finance Magnates
New York-based Vela Trading Technologies today confirmed that it has completed the acquisition of Direct Market Access (DMA) platform Object Trading, according to an official statement. The financial terms of the sale were not disclosed.
bit.ly/2v0Rt7p

After raising $70M, Betterment expands financial advice to all users
Ryan Lawler – TechCrunch
Online wealth management startup Betterment might have launched as a robo-advisor, but increasingly the company is turning to humans to answer its customers’ most pressing questions.
On the heels of announcing a fresh $70 million in funding led by Swedish investment firm Kinnevik AB, Betterment is launching a new messaging feature that will allow users to ask questions and get answers from its team of financial advisors.
tcrn.ch/2tKknce

Politics

If Trump Eliminates This Part Of Dodd-Frank, He Will Make Recessions Great Again; Bank Deregulation All Over Again
By Jan D. Weir – Apple New
The next economic downturn is coming. Economies go up and down. It’s a question of whether we can lessen the downturn and avoid a crash. Who wants another Great Depression? Or another Great Recession like the one in 2008? Intrepid investor Warren Buffett warned the shareholders of his Berkshire Hathaway, as early as 2014, that one is coming and it would be a major financial discontinuity?—?which sci-fi buffs will understand as an ELE (Extinction Level Event).
/goo.gl/3FstMC

Trump Pick for Fed’s Wall Street Watchdog Plans to Ease Rules
By Elizabeth Dexheimer and Jesse Hamilton – Bloomberg
Randal Quarles says refinements ‘undoubtedly in order’; OCC pick Joseph Otting defends his tenure running OneWest
President Donald Trump’s pick to be the Federal Reserve’s top Wall Street watchdog said it’s time to reconsider the restrictions imposed on banks in recent years, even as he credited regulations with helping stabilize the financial system after the 2008 crisis.
/goo.gl/9Umwq5

Scaramucci Says He’ll Contact FBI Over ‘Leak’ of Financial Data
By Michael Shepard – Bloomberg
White House communications chief echoes Trump concern on leaks; Scaramucci tweet comes after news report on his finances
Incoming White House Communications Director Anthony Scaramucci says he was the victim of a leak of his financial information and is vowing to bring the matter to the Federal Bureau of Investigation.
/goo.gl/HFVwmS

Regulation

SNB Eyes New Rate Benchmark as Libor’s 2021 End Date Is Set
By Catherine Bosley – Bloomberg
U.K. regulator says Libor no longer tenable as benchmark
SNB says end of Libor won’t effect monetary policy orientation
The Swiss National Bank faces the prospect of adjusting its monetary-policy toolkit because the interest-rate benchmark it targets will be discontinued in 2021.
/goo.gl/e6vnRk

ABLE Accounts Can Help Americans with Disabilities Save
PETE CHANDLER – FINRA
Saving is a foundation of financial stability. But until recently, if you were blind or disabled, or the parent of a blind or disabled child, it was extremely difficult to save for expenses such as housing, education—or even disability-related services and technologies—without losing other benefits.
/goo.gl/uUnqnd

Trump’s nominee for Fed says banking rules need ‘refinements’
Pete Schroeder and Patrick Rucker – Reuters
U.S. banking rules must protect the financial system but they need “some refinement,” President Donald Trump’s nominee for the Federal Reserve’s top regulatory post told lawmakers on Wednesday.
reut.rs/2tKIJCE

FINRA Promotes Susan Schroeder To Head Of Enforcement; Announces Plan To Consolidate Existing Enforcement Functions Into A Single Department
Mondovisione
The Financial Industry Regulatory Authority (FINRA) announced today that it has promoted Susan Schroeder to Executive Vice President and Head of Enforcement. In addition, FINRA plans to consolidate its existing enforcement functions into a new, unified enforcement group led by Schroeder. This consolidation is a result of FINRA360, the organization’s ongoing comprehensive self-evaluation and improvement initiative.
/goo.gl/1WUz8s

ECB Details Approach To Implement Foreign Exchange Global Code Of Conduct
Mondovisione
The European Central Bank (ECB) invites foreign exchange trading counterparties to publicly commit to the principles set out in the FX Global Code by endorsing the Statement of Commitment annexed to that code of conduct by the end of May 2018. Counterparties are also encouraged to reaffirm their commitment to those principles after any substantial future update of the FX Global Code.
/goo.gl/vAEpk9

MIFID II: What Should Transparency Look Like?
Chris Barnes – Clarus Financial Technology
We replicate the transparency calculations published by ESMA, using SDR data on EUR Swaps.
/goo.gl/aZouPW

CFTC Orders New York Trader Simon Posen To Pay A $635,000 Civil Monetary Penalty And Permanently Bans Him From Trading In CFTC-Regulated Markets For Spoofing In The Gold, Silver, Copper, And Crude Oil Futures Markets
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Simon Posen of New York, New York for engaging in thousands of incidents of “spoofing” — bidding or offering with the intent to cancel the bid or offer before execution — in gold, silver, and copper futures contracts traded on the Commodity Exchange, Inc., and crude oil futures contracts traded on the New York Mercantile Exchange over a period spanning more than three years. Posen traded from home for his own account and was not employed by any corporate entity, according to the Order.
/goo.gl/vLf7y4

Founder of Oil-and-Gas Related Business Caught Misappropriating Investor Funds For Himself and Family Members
SEC
The Securities and Exchange Commission today announced fraud charges against the founder of a collection of businesses known as Citadel Energy, which provided fluid management solutions to the oil and gas industry in North Dakota.
/goo.gl/iFViw5

SEC Charges Two Las Vegas-based Individuals and Their Company with Participation in a “Prime Bank” Fraud Scheme
SEC
The Securities and Exchange Commission today announced fraud charges against two Las Vegas-based individuals and their company for operating a prime bank investment scheme that promised investors sky-high returns.
/goo.gl/rwRtHf

****SD: You would think being promised “outsized rates of return, including 84% per year on a note and 90% every two weeks on for 40 weeks on another investment” would raise some red flags.

Investing and Trading

Dan Loeb’s Third Point on BlackRock, hedge fund is up 11% this year
Rachael Levy – Business Insider
Dan Loeb’s Third Point hedge fund is betting big on BlackRock, the world’s largest asset manager.
read.bi/2w12cvp

FTSE Russell to exclude Snap from stock indexes over voting rights
Ross Kerber – Reuters
reut.rs/2tKYERu

Lithium
The Reformed Broker
I’ve been thinking about lithium a lot lately. You can’t make an electric car without it. Lithium is the lightest metal on the periodic table. In fact, it’s the lightest solid element period and the lightest element than can conduct electricity. I’m insanely bullish about electric cars and trucks. But I’m not terribly interested in buying Tesla stock, given the valuations and Elon’s spinning plate routine with the company’s finances, which makes me nervous.
/goo.gl/DEukMD

Mnuchin Says Treasury’s Effort to Conserve Cash Is Costing Taxpayers; Treasury secretary urges Congress to raise debt limit before August recess
By Kate Davidson – WSJ
Treasury Secretary Steven Mnuchin said Wednesday his agency’s efforts to conserve cash until Congress raises the federal borrowing limit impose a “significant” cost on taxpayers.
/goo.gl/TZGzkr

Your Robo-Adviser May Have a Conflict of Interest; Some of the big banks’ new algorithmic programs may favor funds from companies that pay the banks millions of dollars for access to their wealthy clients.
By Hugh Son
Robo-advisers offer the promise of impartial investment guidance, but the newest ones may not be totally immune from Wall Street’s ways. Wealth management units at big U.S. banks including Morgan Stanley and Bank of America Corp. have rushed to build so-called robo-adviser services. The products, which were pioneered by online upstarts Wealthfront Inc. and Betterment LLC, use algorithms to pick investments tailored to a customer’s appetite for risk. They cut out a lot of the costs of working with flesh-and-blood financial advisers, and, it would seem, some of their biases.
/goo.gl/eBpFxf

Institutions

Deutsche Bank asset management listing seen in first half 2018 at earliest: sources
Arno Schuetze and Simon Jessop – Reuters
Deutsche Bank’s planned listing of its asset management arm is unlikely before the first half of next year and could be later, as it wants more time to refine and sell the business’s strategy to potential investors, people close to the matter said.
reut.rs/2w117Ef

Passive Migration: Denver Wins Big as Financial Firms Relocate to Cut Costs; High real estate costs in coastal hubs and a soft investment market are driving workers to more affordable cities inland
By Asjylyn Loder – WSJ
Wedged into a rent-controlled two-bedroom apartment near San Francisco’s famed Haight-Ashbury neighborhood and already overrun by their son’s toys, Kari Droller and her husband weighed having a second child against the skyrocketing costs of a larger home nearby.
/goo.gl/syr7bW

Deutsche Bank Warns on Outlook as Cryan’s Turnaround Slows
By Steven Arons and Matthew Miller – Bloomberg
Revenue falls 10 percent, missing estimates, on lower trading; Bank sees lower revenue for full year as clients ‘muted’
Just four months into his latest turnaround plan, John Cryan is already dialing back ambitions.
/goo.gl/mniNB7

Regions

China’s top three economic ‘grey rhinos’ to watch
Sidney Leng – South China Morning Post
China’s economic prospects looked rosy on the surface after the country reported a “stronger than expected” 6.9 per cent growth rate for the first half of 2017.
/goo.gl/pHk5Gr

Behind an $18 Billion Donation to a New York Charity, a Shadowy Chinese Conglomerate
By MICHAEL FORSYTHE and ALEXANDRA STEVENSON – NY Times
At first glance, it appears to be one of the most generous donations in the history of philanthropic giving in America.
/goo.gl/cKq8V4

Brexit

Exclusive: Banks dealing EU sovereign debt may be dragged out of London
Abhinav Ramnarayan and Anjuli Davies – Reuters
Banks at the heart of EU government borrowing could be forced to move some operations out of London if they want to hold on to that business after Brexit, according to three senior bankers with knowledge of the matter.
/goo.gl/tH92s2

Why EU Court of Justice Is a Key Brexit Battleground
By Stephanie Bodoni – Bloomberg
The European Union’s highest court, the Court of Justice of the EU, is one of Brexit’s hottest topics. The question over what future role it might play in the U.K. has made negotiators on both sides dig in their heels, and talks are now almost at an impasse. The EU insists the court has a crucial role to play in protecting the rights of European citizens living and working in Britain after the U.K.’s withdrawal. Brexit’s champions say regaining sovereignty means removing the U.K. from meddling by EU judges.
/goo.gl/BKWNp9

European Criminals May Benefit From Cliff-Edge Brexit
By Charlotte Ryan – Bloomberg
Treaty has secured the return of 1,000 individuals to the U.K.; Report cites difficulty of side deals for Norway, Iceland
The lapse of an agreement providing for the extradition of criminals between the U.K. and the European Union it plans to exit is an “unacceptable risk,” according to a report from the House of Lords that raises questions about how a transitional or post-Brexit arrangement can be struck.
/goo.gl/exzzSA

Miscellaneous

The Career Risk Traders Are Unaware Of
Sean McLaughlin – Medium
“Tell your story…”
That’s the line that greets you as you open up a blank page on this medium platform to begin writing a blog post. Three simple words that instantly evoked dread in me as I contemplate the significance of what I might write next. I don’t have a plan for what I’m about to write. I’m just spilling onto this page…
/goo.gl/52d2ok

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About Author

Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.