Breaking News

Deutsche Borse agrees to pay EUR10.5m over CEO insider trading probe

First Read

Hits & Takes
Students who want to learn about the financial services field are invited to join us at our October 16th MarketsWiki Education Intern Recruiting Event Chicago, where financial services professionals will deliver informative presentations about careers, trends and opportunities in our global markets. This event also includes a new job fair for student internships in 2018. ~JB

Overall precious metals volumes at CME Group are up 49 percent through August over last year.~JK

BlockexMarketsMarkets, a “digital asset creation, issuance and trading platform,” is open for trading.~JK

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Intercontinental Exchange Announces Volume Record in MSCI Index Futures
ICE
Intercontinental Exchange announced a daily volume record of 1,100,337 contracts, set on September 11, 2017, for the suite of MSCI Index futures contracts that trade on ICE Futures U.S. The previous record was 867,337 contracts set on June 12, 2017.
jlne.ws/2h18R6F

**ICE posts its own record days after CME did the same in August – see our JLN piece Interest (in) rates: CME’s suite soars

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JPMorgan’s Marko Kolanovic Joins His Boss in Bashing Bitcoin
Bloomberg
Well, it ain’t Jamie Dimon, but there’s another heavy hitter at JPMorgan Chase & Co. who isn’t a fan of cryptocurrencies. Global Head of Quantitative and Derivatives Strategy Marko Kolanovic (also known as “Gandalf” and “Half-Man, Half-God”) echoed many of his boss’ warnings about digital currencies in an assessment of the asset class on Wednesday.
jlne.ws/2h3qWkt

**YOU SHALL NOT PASS…BITCOIN!

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Trump Blocks China-Backed Lattice Bid as Beijing Urges Fairness
Bloomberg News
Fourth presidential block of foreign takeover in last 27 years; China says security checks shouldn’t be a protectionist tool
President Donald Trump blocked a Chinese-backed investor from buying Lattice Semiconductor Corp., casting a cloud over Chinese deals seeking U.S. security clearance and spurring a call for fairness from Beijing.
/goo.gl/xkSXk2

****** Is there a lesson or message in this for CHX’s Chinese plans?~JJL

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Morgan Stanley is using Snapchat to recruit the next generation of bankers
Frank Chaparro – Business Insider
Morgan Stanley is using Snapchat, the popular messaging app, to welcome back college students at 19 universities across the US.
/goo.gl/RXe5C7

***** Or they could just sign up as a sponsor of our October 16 MarketsWiki Education Recruiting event.~JJL

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Wednesday’s Top Three
Yesterday’s top three stories were led – by far – by Bloomberg’s Jamie Dimon Slams Bitcoin as a ‘Fraud’. Second went to the Guardian’s Tributes paid to man who fell to his death at London Stock Exchange. Third went to Reuters’ coverage of CME Group’s Terry Duffy, in CME chief, eyeing Europe, says Dodd-Frank was best thing for markets

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MarketsWiki Page of the Day: Deutsche Boerse Group
MarketsWiki
Deutsche Boerse Group has agreed to pay a penalty totaling 10.5 million euros to settle the investigation into potential insider trading by Carsten Kengeter, its chief executive, in an effort to end the long running case. Kengeter has denied any wrongdoing.
/goo.gl/XyC3dt

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MarketsWiki Stats
107,566,573 pages viewed; 22,780 pages; 209,196 edits
MarketsWiki Statistics

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Lead Stories

Deutsche Borse agrees to pay EUR10.5m over CEO insider trading probe
Philip Stafford – FT
Deutsche Börse has agreed to pay penalties totalling EUR10.5m to settle a Frankfurt prosecutor’s investigation into potential insider trading by Carsten Kengeter, its chief executive, in an effort to end the authorities’ long-running probe.
/goo.gl/b7Cwme

London Stock Exchange Group strengthens grip on LCH clearing house
Philip Stafford – FT
The London Stock Exchange Group is to further strengthen its grip on LCH, the clearing house it has majority control of, with the purchase of a several stakes owned by its minority shareholders.
/goo.gl/Yp5uaP

Canadian Exchange Weighs Risks in Trading U.S. Marijuana Stocks
By David George-Cosh – WSJ
As dozens of cannabis companies have flocked to raise capital on Canada’s stock exchanges in recent years, the country’s regulators are starting to question whether trading in their stock would run afoul of U.S. law.
/goo.gl/3KjjyJ

LCH launches new model for buy-side repo clearing
LCH
LCH announced today that its RepoClear service has introduced a new model to bring the benefits of clearing repos to the buy side. Insight Investment is the first asset manager to clear a trade, acting for a UK pension fund it manages, as a sponsored member, with NatWest Markets supporting Insight’s trade as the agent member. The first trade was executed on Tradeweb Markets
/goo.gl/GYi1ks

MiFID II: Why Research is in the News
Amir Khwaja – Clarus Financial Technology
There have been many recent articles on Banks have to charge for Research as required under MiFiD II, see here, here and here, so I thought I would look into the detail.
/goo.gl/CUXAmX

North Korea’s hackers are reportedly targeting bitcoin exchanges
Jon Russell – TechCrunch
North Korea’s hackers have been linked with many attacks, including the 2014 Sony hack, but it looks like the totalitarian state is now targeting bitcoin, and crypto coin exchanges in particular, with its hacking teams.
/goo.gl/ZFKLzV

Equifax says security flaw was known before hacking
Ben McLannahan in New York and David J Lynch in Washington – FT
Equifax, the US credit-reporting group at the centre of a huge data breach, has said that it was hacked via a weakness widely discussed in cyber security circles six months ago. The admission is likely to amplify criticism of its lax defences.
/goo.gl/MYLGb8

Exchanges, OTC and Clearing

Deutsche Börse AG paves the way for the termination of the investigations
Deutsche Börse
The Management Board and the Supervisory Board of Deutsche Börse AG have decided to reach an agreement with the prosecution office in Frankfurt. The company will notify the public prosecutor that it will accept the proposed fines in connection with allegations of an alleged infringement of the bribery clause in December 2015 and an alleged omission of an ad hoc announcement in January 2016.
/goo.gl/MGMifi

London Stock Exchange Group to increase its majority shareholding in LCH Group
London Stock Exchange Group
London Stock Exchange Group plc (“LSEG”) announces that it has entered into agreements with certain minority shareholders of LCH Group Holdings Limited (“LCH”) to acquire further shares in LCH up to a maximum of 6.8% of LCH’s share capital. All shareholders in LCH have today been notified of the share sale. Confirmation of LSEG’s total shareholding in LCH as a result of the acquisition will be announced in due course.
/goo.gl/vh4QmP

Bats Welcomes New Global X Fund to the Bats ETF Marketplace
CBOE
Bats, a CBOE Holdings, Inc. company, and a leading market for exchange-traded product (ETP) trading globally, today welcomed a new Global X fund to the Bats ETF Marketplace, with the launch of one fund.
jlne.ws/2h3q9Af

Equity Index Highlights – September Edition
Eurex
“Despite August coming narrowly close to being the first down month this year, the MSCI AC World continued its upward trajectory. Over the past year other strong performing global benchmarks where Eurex offers derivatives include MSCI Emerging Markets and MSCI EAFE indexes. This remarkable run of monthly gains over the first eight months of the year is a first for the MSCI AC World since inception 30 years ago. Volatility has taken a significant uptick in August as measured by the VSTOXX®, this coincided with rising tensions on the Korean peninsula, which resulted in a jump in trading activity over KOSPI 200 Options listed on Eurex.
/goo.gl/5vJ73D

Securities Lending Times: Eurex Clearing secures PGGM as first buy-side Lending CCP direct member
Eurex
Dutch cooperative pension fund PGGM is set to be the first buy-side client to become a direct participant of Eurex Clearing’s Securities Lending central counterparty (CCP).
/goo.gl/gTLwq8

MSCI starts calculating indices using the prices of the closing auction of the Moscow Stock Exchange
MOEX
The global provider of MSCI indexes will start calculating index values ??on October 30, 2017 with the participation of Russian stock exchange on the basis of prices formed during the closing auction on the Moscow Stock Exchange.
/goo.gl/DND3iX

Amendments were made to the maximum number of securities accepted as means of guarantee security in the futures market
MOEX
The bank of the NCC (JSC) made changes to the maximum number of securities accepted as means of guarantee provision in the futures market from one Settlement Company:
/goo.gl/krXf9o

Publication of JPX Working Paper, Vol.20 “The Trend of Exploring the Use of Distributed Ledger Technology in the Capital Market”
JPX
Japan Exchange Group, Inc. (JPX) today published JPX Working Paper, Vol.20 “The Trend of Exploring the Use of Distributed Ledger Technology in the Capital Market”.
/goo.gl/iE3vLa

Fintech

U.S. Bans All Federal Agencies From Using Kaspersky Software
By Toluse Olorunnipa – Bloomberg
Homeland Security cites ‘information security risks’; Moscow-based company denies any ‘inappropriate ties’
The U.S. government banned all use of Kaspersky Lab Inc. software in federal information systems, citing concerns about the Moscow-based security firm’s links to the Russian government and espionage efforts.
/goo.gl/q6Je5h

McKay Adds LME Metals Data to QED
Data Feeds & Handlers – WatersTechnology

McKay Adds LME Metals Data to QED
The metals data will be available over the QED service at datacenters in the UK, Europe, and the US.
jlne.ws/2h4dtJw

Politics

Meet the 11 politicians holding the City to account
fnlondon.com
The UK parliament’s influential Treasury Select Committee met today for the first time since Nicky Morgan’s appointment as the City’s new interrogator-in-chief.
jlne.ws/2h4VkLF

Treasury Secretary Mnuchin requested government jet for European honeymoon
By JUSTIN FISHEL, BRIAN ROSS, JORDYN PHELPS – ABC News
Secretary Steven Mnuchin requested use of a government jet to take him and his wife on their honeymoon in Scotland, France and Italy earlier this summer, sparking an “inquiry” by the Treasury Department’s Office of Inspector General, sources tell ABC News.
/goo.gl/zZzZC7

Mueller Probe Has ‘Red-Hot’ Focus on Social Media, Officials Say
By Chris Strohm – Bloomberg
Facebook officials likely to face Congress, key lawmaker says; Russia still ramping up cyber espionage: intelligence chief
Russia’s effort to influence U.S. voters through Facebook and other social media is a “red-hot” focus of special counsel Robert Mueller’s investigation into the 2016 election and possible links to President Donald Trump’s associates, according to U.S. officials familiar with the matter.
/goo.gl/e122qk

Le Maire calls for eurozone to seize moment and see off populists; French finance minister says bloc must seize moment for reform to boost ‘stability’
Anne-Sylvaine Chassany in Paris – FT
France’s finance minister has called for new tools to bolster the “prosperity” and “stability” of the eurozone to prevent it being swept away in a populist backlash.
/goo.gl/UQ9GSr

GOP to Release Tax Overhaul as Trump Says Rich Won’t Benefit; Republicans prepare for legislative sprint on a plan they expect would cut taxes for the wealthy
By Richard Rubin – WSJ
President Donald Trump said Wednesday the emerging Republican tax proposal won’t cut taxes for the wealthy, and they may go up, an assurance that appeared to contradict the plan that his administration and GOP leaders are drafting.
/goo.gl/VzvSor

Regulation

ESMA warns against unauthorised use of its identity and logo
ESMA
The European Securities and Markets Authority (ESMA) has been informed that its identity and logo have been used by individuals in scam emails targeting investors. These individuals attempted to steal personal data and convince the potential victims to transfer money to them, for example by fraudulently presenting themselves as employees of ESMA conducting ESMA investigations.
/goo.gl/tFmDzw

Beware of Stock Fraud in the Wake of Hurricanes Harvey and Irma
FINRA STAFF
It may not be possible to predict when the next natural disaster will take place. What you can count on is that when it happens, scammers will try to take advantage of the situation. The tips below will help you protect yourself at any time.
/goo.gl/UKm5e4

FINRA Foundation Awards Inaugural Ketchum Prize to Dr. J. Michael Collins; University of Wisconsin-Madison Professor Recognized for Outstanding Service and Research to Advance Investor Protection and Financial Capability in the U.S.
FINRA
The FINRA Investor Education Foundation (FINRA Foundation) today announced that it has awarded Dr. J. Michael Collins the inaugural Ketchum Prize for outstanding service and research to advance investor protection and financial capability in the U.S.
/goo.gl/WF6VaG

FCA makes Market Investigation Reference for investment consultancy services
FCA UK
The Financial Conduct Authority (FCA) has today confirmed its final decision to make a Market Investigation Reference (MIR) to the Competition and Markets Authority (CMA) in relation to investment consultancy and fiduciary management services. This is the first time that the FCA has made such a reference to the CMA.
/goo.gl/zE8pNo

FCA refers investment consultants for competition probe over ‘serious concerns’
Attracta Mooney – FT
The UK’s anti-trust body will carry out a full-blown competition probe into investment consultants after the financial watchdog found far-reaching problems in the powerful industry that advises on £1.6tn of pension and insurance assets.
/goo.gl/vPDVTd

UK investment consultants to face full competition probe
Reuters Staff
Britain’s markets watchdog said it has asked the UK competition authorities to conduct a study into investment consultants, saying it has serious concerns about the sector.
/goo.gl/6Ccet1

Sebi asks exchanges to frame new outsourcing policy; Sebi directed market infrastructure institutions to not outsource core and critical operations
Business Standard
The Securities and Exchange Board of India (Sebi) has asked stock exchanges and clearing corporations to prepare a framework for appointing of third-party vendors. The market regulator has directed the so-called market infrastructure institutions to not outsource core and critical operations such as trading information, infrastructure and surveillance.
/goo.gl/jMYrZ1

Sebi proposals to make decision-making easier for mutual fund industry
Clear-cut definition of mutual fund schemes will help investors significantly
Sanjay Kumar Singh – Business Standard
The Securities and Exchange Board India (Sebi) is likely to usher another round of far-reaching reforms for the Rs 20 trillion mutual fund industry soon. Senior officials of the market regulator have given indications that the thrust of these will be on reducing the number of schemes available to investors in each category and introducing clearer definitions, so that investors find it easy to choose the right schemes for themselves. More schemes may be merged: Currently, around 2,000 schemes are available to investors. Many fund houses have multiple schemes in the same …
/goo.gl/ij7EjM

Investing and Trading

‘False Peace’ for Markets? A Trader Is Betting Millions on It
By LANDON THOMAS Jr. – NY Times
Last Wednesday was another good day to make money on Wall Street: Stocks pushed up, interest rates were at rock bottom and the VIX gauge of investor unease was again trending downward.
/goo.gl/Ks2tn4

Investors including Aviva, Jupiter and Royal London and demands banks release more information on climate change
Lucy White – City AM
Investors with assets totalling nearly $2 trillion (£1.5 trillion) have today called on the world’s larg
/goo.gl/WE88SH

‘Davos for ETFs’ to convene in San Sebastián; Gathering in October will discuss how to nurture the explosive growth in passive investing
Robin Wigglesworth, US markets editor – FT
An informal club of exchange-traded fund industry insiders will gather at San Sebastián in Spain in early October for a “Davos for ETFs” to discuss how the rapidly swelling market can nurture its explosive growth and counter rising concerns over its influence.
/goo.gl/n1DdaR

Global accounting body steps up attack on ‘data dump’ company statements
Reuters Staff
Companies should produce more concise and crisper financial statements and annual reports, cutting out unnecessary “boilerplate” and “data dump” material, a global accounting body said on Thursday.
/goo.gl/iggEjw

Institutions

A Decade After the Crash, British Banks Are Smaller and Poorer
By Stephen Morris – Bloomberg
Northern Rock asked for emergency support on Sept. 14, 2007; Barclays, RBS have together slashed $4 trillion of assets
Ten years ago today, a lender called Northern Rock, bloated with billions of pounds of risky mortgages, received emergency support from the Bank of England after the short-term funding it relied on dried up. Depositors lined up outside branches to get their money back, the first run on a British bank in 150 years. It was the start of a crisis the country still hasn’t recovered from.
/goo.gl/wQyQoQ

Regions

Asia’s World-Beating Equity Rally Is Just Beginning, SocGen Says
By Colin Simpson – Bloomberg
Earnings, valuations, liquidity are driving outperformance; Dollar rebound, North Korea, China congress seen as key risks
Global stocks have been climbing to all-time highs but they still trail behind Asian equities this year. Societe Generale says the outperformance has only just begun.
/goo.gl/24M2KC

North Korea Threatens to Use Nuclear Weapon to ‘Sink’ Japan
By Andy Sharp – Bloomberg
Seeks to turn U.S. into ‘ashes and darkness’ over sanctions; Japan government calls latest threat ‘extremely provocative’
Jefferies’ Darby Sees Road to Negotiation on N. KoreaNorth Korea threatened to use a nuclear weapon against Japan and turn the U.S. into “ashes and darkness” for passing fresh United Nations sanctions earlier this week — fiery rhetoric that is likely to exacerbate tensions in North Asia.
/goo.gl/E9oE4E

China exploits the vulnerability of open democracy; Soft targets like New Zealand are testing grounds for Chinese global espionage
Jamil Anderlini – FT
Openness, diversity and tolerance are the greatest strengths of the world’s liberal democracies. But to autocratic regimes like China, these same attributes are vulnerabilities ripe for exploitation.
/goo.gl/QyidpL

Chocolate industry drives rainforest disaster in Ivory Coast; Exclusive: As global demand for chocolate booms, ‘dirty’ beans from deforested national parks have entered big business supply chains
Ruth Maclean in Marahoué national park, Ivory Coast – The Guardian
The world’s chocolate industry is driving deforestation on a devastating scale in West Africa, the Guardian can reveal.
/goo.gl/xP9YAh

Saudis may delay Aramco’s estimated US$100 billion initial public offer to 2019
Bloomberg
Saudi Arabia is preparing contingency plans for a possible delay to the initial public offering of its state-owned oil company by a few months into 2019, according to people familiar with the matter.
/goo.gl/vvncm2

Brexit

Brexit is a great British bore. Europe has moved on, and the UK should be worried
Guntram Wolff – The Guardian
It is official: Brexit is boring – at least on the continent. As the European commission president, Jean-Claude Juncker, delivered his “state of the union” address on Wednesday, setting the tone for the new political year, Brexit was relegated to a brief mention at the end. And even there, it was framed as a moment of sadness and regret, not horror. In last week’s TV encounter between the German chancellor, Angela Merkel, and her challenger, Martin Schulz, Brexit was totally absent.
/goo.gl/3K5dMQ

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About Author

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