Hits & Takes
Today is the 10th anniversary of the Nasdaq OMX deal that transformed Nasdaq and set the foundation for its timely position as a leading purveyor of financial technology around the world.
The OMX deal gave Nasdaq a global exchange and clearing technology business. It helped Nasdaq put down permanent roots in Stockholm, where Nasdaq before had had difficulty establishing a permanent beachhead in Europe.
For me, it always seems Nasdaq was trying to match the moves of NYSE in a game of catch-up. However, with the OMX deal, that changed. And now with Adena Friedman leading Nasdaq, the company is well positioned for the changes that are happening around the world in established and new markets.
Bob Greifeld has left Nasdaq and Magnus Böcker has left this life, but the legacy they left behind is something they both should be proud of. This was a transformative deal for both firms and made Nasdaq and OM truly global players.~JJL
Here are three stories related to the Nasdaq OMX anniversary:
CFTC Steps Up Enforcement Against Fraud, Market Manipulation; Regulator to file ‘more than 10’ cases in coming weeks, bringing annual tally to a record
Gabriel T. Rubin – WSJ
U.S. derivatives regulators are expected to file “more than 10” fraud and market-manipulation cases in the next weeks as the Commodity Futures Trading Commission chairman implements his back-to-basics approach, according to a person familiar with the CFTC’s enforcement operation.
***** Lots of cases means lots of easy pickings.~JJL
Crypto’s Hottest Hires Aren’t Millennials. They’re Banking Cops.
Annie Massa – Bloomberg
Recent appointments of notable regulators are just the start; Ventures also have recruited prosecutors and other authorities
Veteran Wall Street enforcers are landing new roles on a wild frontier: virtual currencies. A growing number of crypto startups are adding former regulators and other government authorities to their payrolls, a practice that could help them head off or prepare for stricter rules. Ventures have snapped up ex-prosecutors, national security officials and at least one former senior diplomat — all of whom may prove handy as nations decide whether to embrace or outlaw digital money.
***** See above. Good idea!~JJL
Monday’s Top Three
Today’s top three were led by the JLN piece on the damages caused by the February 5 market drop on FCMs in FCMs Big And Small Suffer Major Losses On Latest Black Monday – the second day it was the top read piece. (The link within the story to RBC’s daily financial statements was a notable fourth). The second most read piece was Chris Skinner’s blog in The Finanser 9 out of 10 blockchain trials go nowhere, based on a Deloitte report. And third was Bloomberg’s Bitcoin Bulls and Bears: Who’s Hot, Who’s Not on Crypto
|MarketsWiki Statistics Sponsored by Level Trading Field|
Self-Proclaimed Bitcoin Inventor Accused of Swindling $5 Billion of Cryptocurrency
Jef Feeley – Bloomberg
Self-proclaimed Bitcoin inventor accused of fraud in scheme; Computer-security expert’s family lays claim to assets
Craig Wright, the self-proclaimed inventor of bitcoin, is accused of swindling more than $5 billion worth of the cryptocurrency and other assets from the estate of a computer-security expert.
Mark Phelps to Become Group CEO of G. H. Financials, Succeeding Mark Ibbotson Who Becomes Non-Executive Chairman
G. H. Financials, a leading independent clearing firm for exchange-traded derivatives, announces the promotion of Mark Phelps to Group Chief Executive Officer, effective 2nd April 2018.
EU says stands ready to regulate crypto-currencies
Huw Jones – Reuters
The European Union stands ready to regulate crypto-currencies if risks from the sector are not tackled at the global level, the bloc’s financial services chief said on Monday.
Meet the crisis expert who is saving Libor; Timothy Bowler has fought for crisis-hit homeowners and Puerto Rico, but the real test is his new job leading ICE Benchmark Administration
Samuel Agini – Financial News
Timothy Bowler is used to high-profile jobs that come under the glare of public scrutiny. Even after overseeing the unwind of the US federal government’s post-financial-crisis bailout programme and advising on Puerto Rico’s fiscal woes, however, the new president of ICE Benchmark Administration could be forgiven for flinching at first sight of his latest $350tn problem.
CFETS and NEX announce the launch of ‘CFETS FX2017’; a next-generation trading platform for the Chinese FX market
NEX announces that it has partnered with China Foreign Exchange Trade System (CFETS), China’s interbank market trading platform and infrastructure provider, to launch ‘CFETS FX2017’ (“FX2017”), a next-generation trading platform for the Chinese foreign exchange (FX) market.
This Paris-Based Hedge Fund Has Thrived in Market Rout
Blaise Robinson – Bloomberg
Siver Time funds are up YTD while the Stoxx 600 has dropped; Market selloff is ‘reality check’ for passive investors
It looks like the revenge of long-short equity strategies has begun. While global equity markets tumbled in February as a rapid rally in government bond yields fueled panic among investors and sparked a jump in volatility, Silver Time Partners was thriving.
Investors Chasing Stable Returns Should Buy Firms Run by Women
Frances Schwartzkopff – Bloomberg
Return on capital is more stable, Nordea researchers find; Diversity helps companies adapt to changing circumstances
When it comes to gender diversity, it’s hard to compete with the Nordics. The region is home to the world’s three most gender-equal nations: Iceland, Norway and Finland, according to the World Economic Forum. (Sweden places 5th out of 144 while the U.S. ranks 49th.) So Nordic findings in how gender equality affects areas such as corporate life and investing may offer a glimpse of things to come for other corners of the globe.
Europe’s top 4 investment banks hire staff for busier times; Recruitment spree signals end to cutbacks following years of restructuring
Laura Noonan, Investment Banking Correspondent – FT
Europe’s top four investment banks have begun to increase staff numbers for the first time since 2015 to capitalise on improving market conditions after years of restructuring.
$1 Trillion Fund Committed to U.K. No Matter What Brexit Outcome
Sveinung Sleire, Mikael Holter – Bloomberg
Norway wealth fund delivered its best return on record in 2017; The fund’s exposure to stocks buoyed its performance last year
The world’s biggest sovereign wealth fund will continue to invest in the U.K. no matter what the outcome of Brexit talks.
China’s Crypto Exchanges Didn’t Just Survive – They’re Thriving
Wolfie Zhao – Coindesk
It began like this: officials from the People’s Bank of China stepped into the offices of the largest crypto exchanges in the country and sat down with their executives.
China to Crack Down on Cryptocurrency Trading Loophole
New measures are aimed at blocking access to offshore venues; Country has already banned domestic digital-currency exchanges
China is opening a new front in its battle against cryptocurrencies, targeting platforms that allow the nation’s investors to trade digital assets on overseas exchanges, people familiar with the matter said.
China’s Derivatives Guru Seeks Commodity-Benchmark Dream Abroad
Alfred Cang, Andrea Tan – Bloomberg
Asia Pacific Exchange will start in May in Singapore: CEO Zhu; Refined palm oil futures will be venue’s first contract
One of the founders of China’s derivatives market is going offshore to move closer to his dream of developing global commodity benchmarks in Asia.
Exchanges, OTC and Clearing
India’s BSE waives transaction fees for stocks in benchmark index
India’s second-biggest stock exchange, BSE Ltd, said it would waive transaction fees on stocks in its flagship S&P BSE Sensex 30 index in an effort to encourage retail investors to participate in “financially sound companies”.
Hong Kong’s bourse to report best year since 2015 as listing, trading increase; The operator of Hong Kong stock exchange is likely to report a profit of HK$7.34b
Enoch Yiu – South China Morning Post
Hong Kong Exchanges and Clearing is likely to report its best financial year since 2015 as more investors poured into the city’s bourse in the past year, while more companies flocked to raise capital through initial public offerings.
NSE sees IPO pipeline by start-ups, e-tailers; Bourse expects to help firms raise $50 billion as investors exit
Karan Choudhury & Ajay Modi – Business Standard
The country’s technology start-ups and e-commerce players may soon be the new entrants on the National Stock Exchange (NSE).
NEX Group launches Chinese FX trading platform with CFETS; CFETS chose NEX Group in June 2016 to deliver underlying technology for new spot, forwards and swaps FX trading platform.
Hayley McDowell – The Trade
NEX Group has partnered with China Foreign Exchange Trade System (CFETS) to launch a trading platform for the Chinese FX market.
FX Futures, FX Rolling Spot Futures and FX Options: Fee holiday for transaction fees from 1 March 2018 until 30 April 2018
As of 1 March 2018, Eurex Clearing decided to introduce a fee waiver for transaction fees for FX Futures, FX Rolling Spot Futures and FX Options from 1 March 2018 until 30 April 2018.
Deutsche Börse welcomes JP Morgan Asset Management as new ETF issuer; Two bond index and three active ETFs listed for launch on Xetra
Exchange-traded funds of the issuer JP Morgan Asset Management have been tradable for the first time since Tuesday via Xetra and the Frankfurt Stock Exchange. The product offering includes two bond index ETFs as well as three active ETFs that enable investors to invest in selected alternative beta strategies.
First IPO in Scale 2018: STEMMER IMAGING AG new at the Frankfurt Stock Exchange
With STEMMER IMAGING AG (ISIN: DE000A2G9MZ9 ), the first company this year has gone public in the SME segment Scale on the Frankfurt Stock Exchange. The shares of STEMMER IMAGING were trading at EUR 36.00. The issue price was 34.00 euros.
CC&G and CCP Austria sign landmark CCP clearing agreement
London Stock Exchange Group
MTS BondsPro bridges global markets with launch of 22-hour trading day; CC&G will provide CCP Austria with Clearing System services across different asset classes
No concentration risk: each entity remains fully responsible for its own CCP activity
CC&G, part of London Stock Exchange Group, and CCP Austria have today entered into a partnership agreement whereby CC&G will provide technology – driven CCP Clearing and Risk Management services to CCP Austria. The five-year agreement is customer-focused and each legal entity will remain fully responsible for its own distinct CCP activity. This agreement adds a new dimension to CCP cooperation by allowing CCP Austria to focus on its core commercial activities while utilizing CC&G’s trusted and reliable IT architecture.
MTS LAUNCHES GOVERNMENT BOND TRADING VENUE FOR SLOVAKIA
London Stock Exchange Group
MTS, part of London Stock Exchange Group (LSEG), today announces that it has launched an electronic interdealer trading venue for Slovak government bonds on MTS Cash.
Natwest to launch new fintech accelerator in London in April
Jasper Jolly – City AM
Natwest bank will launch new fintech accelerators in four cities across the UK in April, including one in the capital, it announced today.
Chartis Research Recognizes Hanweck as a RiskTech Quadrant® “Best-of-Breed” Provider for Hedge Fund Risk Management Technology
NEW YORK, Feb. 26, 2018 (GLOBE NEWSWIRE) — Chartis Research has named Hanweck as a RiskTech Quadrant® “Best-of-breed” solution for Hedge Fund Risk Management Technology. Chartis is an independent research and advisory firm that provides technology and business advice to the global financial risk management industry.
Bitcoin miners turn Quebec’s cheap energy into cold cash
Steve Dent – Engadget
Bitcoin mining is a weird industry. Vast banks of dedicated computers solve complex equations to generate hashes worth a fraction of a coin, consuming huge amounts of power in the process. For such operations to be economically feasible nowadays, miners need the cheapest electricity possible.
The Man Who Claimed to Invent Bitcoin Is Being Sued for $10 Billion; Craig Wright is being sued Ira Kleiman, brother of deceased coder Dave Kleiman and representative of his estate.
Jordan Pearson – Motherboard
Bitcoin’s origins are shrouded in mystery, but two people have lurked at the edges of its mythology for years: A paralyzed coder named Dave Kleiman who died in 2013 as a result of complications from an illness, and Australian Craig Wright, who claimed to be Bitcoin’s anonymous creator in 2016.
Crypto Legend Who Bought Pizza With 10,000 Bitcoin Is Back At It
Camila Russo – Bloomberg
It’s one of the best-known cryptocurrency legends: The guy who bought two pizzas with 10,000 Bitcoin back in 2010 to prove the digital currency worked. Now he’s at it again.
BlackRock’s Turnill Sees ‘Promising’ Potential for Blockchain
Eric Lam – Bloomberg
BlackRock Inc. still sees cryptocurrencies as too volatile for all but the most adventurous of investors, though the investment company is warming to the long-term potential of the underlying blockchain technology.
Draghi urges lawmakers to finalise rules for euro clearers ahead of Brexit
Claire Jones – FT
Mario Draghi has called on lawmakers to finalise new rules on central clearing of financial transactions denominated in euros ahead of Brexit.
Prosecutor to examine RBS’s scandal-hit division
Michael Glackin – The Times
Detectives investigating complaints against Royal Bank of Scotland’s controversial Global Restructuring Group have handed a file to the Crown Office.
Remarks of Commissioner Brian Quintenz before the Structured Finance Industry Group Vegas Conference
Good morning. Thank you for that very kind introduction.
How my bitcoin frustration led to a cryptocurrency conversion; Britain should grasp the opportunity to become a leader in blockchain regulation
Pierre Lagrange – FT
A few months ago, when bitcoin mania was at its height, I decided to teach my teenaged children an investment lesson via a cryptocurrency game. I would buy each of them a bitcoin for Christmas; they would have to hold on to it for a year and then they could keep it or sell it. After, say, five years, we would see which of them had been the most canny in playing this financial game.
SEC Commissioner Criticizes Idea of Curbing Shareholder Lawsuits; Regulator shouldn’t give public companies a shortcut to impose mandatory arbitration, says Democrat Robert Jackson Jr.
By Dave Michaels – WSJ
Public companies hoping that regulators will show them a shortcut to stifling shareholder lawsuits should instead have to go through a long slog, a Democratic member of the Securities and Exchange Commission said Monday.
FINRA Requests Comment on Proposed New Rule Governing Outside Business Activities and Private Securities Transactions
FINRA seeks comment on a proposed new rule to address the outside business activities of registered persons. The proposal is the result of FINRA’s recent retrospective review of FINRA’s rules governing outside business activities and private securities transactions, FINRA Rule 3270 (Outside Business Activities of Registered Persons) and FINRA Rule 3280 (Private Securities Transactions of an Associated Person), respectively. The proposed rule would replace FINRA Rules 3270 and 3280 and is intended to reduce unnecessary burdens while strengthening investor protections relating to outside activities.
Cybersecurity Experts Gather for FINRA Conference
Cybersecurity experts and regulators gathered in New York City on February 22, 2018 to focus on key ways the financial services industry can maintain cybersecurity. Check out some of the things discussed in this recap of FINRA’s Cybersecurity Conference.
Hong Kong’s Securities And Futures Commission Obtains Disqualification And Compensation Orders Against Former Chairman And Directors Of Starlight
The Court of First Instance has ordered Starlight Culture Entertainment Group Limited’s (Starlight) former chairman Mr Tong Shek Lun and two former executive directors, Ms Kinny Ko Lai King and Ms Regina Chung Wai Yu, to pay a sum of US$890,241.37 as compensation to Starlight following findings of misconduct in connection with their handling of the company’s disposal of subsidiaries in September 2008 (Notes 1, 2, 3 & 4).
UK financial regulator defends role after pressure to widen remit; Treasury Select Committee has pushed for more focus on promoting competition from PRA
Oliver Ralph – FT
The head of the UK’s financial regulator has launched a staunch defence of its priorities after MPs demanded it should have a wider remit.
Investing and Trading
World’s largest asset manager says get ready to ‘stomach complete losses’ in cryptocurrencies
Evelyn Cheng – CNBC
Investors should only consider cryptocurrencies such as bitcoin if they are prepared to lose everything, BlackRock Investment Institute said in its weekly report Monday.
Marxism Has Cornered the Junk-Bond Market
Passive investing doesn’t discriminate between individual winners and losers.
Jim Blanco – Bloomberg
He’s still around. Photographer: Johannes Eisele/AFP/Getty Images
In 2016, analysts at Sanford C. Bernstein & Co. offered a powerful critique of passive investing.
Provident Soars the Most in 29 Years as It Settles With FCA
Stefania Spezzati – Bloomberg
Lender reaches agreement with FCA on probe linked to Vanquis; Company seeks to raise about $419 million in a rights issue
Provident Financial Plc settled of one of the regulatory probes that has hobbled the U.K. subprime lender since last summer, driving the shares up the most in almost 29 years.
King Cash Threatens the Reign of Credit Markets From U.S. to Europe
Sid Verma, Luke Kawa – Bloomberg
Higher rates on U.S. risk-free curb appeal of high grade: Citi; Euro credit sensitive to real yield outlook in dollars
Investors reaching for yield are now finding it’s less of a stretch. Global credit markets are on the cusp of a post-crisis regime shift as higher rates on short-dated U.S. Treasuries challenge the investment case for high-grade corporate bonds — on both sides of the Atlantic.
ProShares Slashes Leverage on Surviving Volatility Products
Luke Kawa – Bloomberg
Options owners likely to face large losses on SVXY, UVXY moves; ProShares’ changes are subject to regulatory approval
After this month’s volatility earthquake caused the blow-up of a number of exchange-traded products linked to Wall Street’s fear gauge, an issuer of similar surviving funds is trying to prevent any aftershocks.
Fundamentals don’t matter to new breed of oil speculator; Emergence of investors who look for signals in the price action, as well as currency and bond markets
Gregory Meyer in New York – FT
Investors have built a billion-barrel bet on higher oil prices. But they are a different breed of bull than years past.
Dividends Pick Up Steam; Payouts are rising, but higher bond yields threaten to diminish the allure of high-dividend stocks
Michael Wursthorn – WSJ
Dividends are on the rise when investors have fewer reasons to buy the stocks that pay them out.
Choppy Markets Grant Hedge Funds Their Wish; Caxton, Graham Capital and other funds post gains this year after losses in 2017
Laurence Fletcher – WSJ
For years, hedge funds have been able to blame their lackluster performance on central bank interference in markets. As expansionary monetary policy programs wind down, a turbulent start to 2018 has provided the kind of conditions some of these funds have been craving.
JPMorgan Buys Rights for HQ From Michael Dell Partnership
David M Levitt – Bloomberg
JPMorgan Chase & Co. has acquired the bulk of the air rights it needs to build its new headquarters tower at 270 Park Ave. in midtown Manhattan from a partnership that controls Grand Central Terminal’s unused space, a person with knowledge of the transaction said.
Goldman May Sell Its $1.4 Billion New European HQ in London
Jack Sidders – Bloomberg
Bank is considering a sale of the building before it moves in; London building has enough space for about 9,600 workers
Goldman Sachs Group Inc. is considering a sale-and-leaseback of its new European headquarters in London and the building could sell for more than 1 billion pounds ($1.4 billion), people with knowledge of the plan said.
William Blair accuses four former employees of theft
Lynne Marek – Crain’s Chicago Business
Chicago financial firm William Blair sued one of its former top financial advisers and a team of other employees who quit with him this month to form a new firm.
Deutsche Bank Plans Saudi, Dubai Hires as Sovereigns Drive Deals
Matthew Martin – Bloomberg
Lender sees good pipeline of bond sales, IPOs, privatizations; Also targeting Middle East as priority for wealth management
Deutsche Bank AG is expanding in Saudi Arabia and the United Arab Emirates as the lender expects sovereign bond sales and initial public offerings to drive deals this year.
Rothschild’s chairman to hand bank’s dynastic reins to son; Change coincides with effort to help ride out lean periods in European M&A market
Hannah Murphy in London – FT
David de Rothschild is stepping aside as chairman of Rothschild this summer to pass the reins to his son Alexandre in a long-awaited changing of the guard at the Franco-British investment bank.
Woodford’s flagship fund nears limit on unquoted securities; The £7.2bn fund had unquoted securities accounting for 9.69% of portfolio in January
Peter Smith in London – FT
Neil Woodford’s flagship fund is close to hitting a 10 per cent regulatory ceiling on the proportion of his fund that can be invested in unquoted securities, the latest concern for the British investment manager who has endured more than £1.2bn of redemptions since May as a string of investments soured.
Russian millions laundered via UK firms, leaked report says; Denmark’s biggest bank believes cash was funnelled through British companies by people linked to Vladimir Putin’s family and the FSB spy agency
Luke Harding – The Guardian
A Danish bank accused of money laundering shut down Russian accounts after concluding that they were being used to funnel cash through British companies by members of Vladimir Putin’s family and the FSB spy agency, according to leaked reports.
Rome Blanketed By Snow as Arctic Storm Sets Seasonal Records
The Arctic storm dubbed the “Beast from the East” saw temperatures across much of Europe fall Monday to their lowest level this winter and even brought a rare snowstorm to Rome, paralyzing the city and giving its residents the chance to ski, sled and build snowmen in its famous parks and piazzas.
German Court Ruling Puts Millions of Diesel Cars at Risk of Ban
Karin Matussek – Bloomberg
Stuttgart, Dusseldorf told to develop plans to cut pollution; Judges let stand court rulings that may lead to diesel-car ban
Germany’s top administrative judges put millions of diesel cars at risk of being banned from city centers, a ruling that sent the shares of the country’s carmakers lower.
Jeweler Files for Bankruptcy as PNB Fraud Rises to $2 Billion
Jeanette Rodrigues, Dawn McCarty – Bloomberg
Firestar, affiliates file for bankruptcy in New York; Punjab National Bank shares plunge most since 2004 in Mumbai
The international jewelry business that’s part of the empire controlled by Nirav Modi, a billionaire accused of masterminding India’s biggest bank fraud, has filed for bankruptcy in the U.S. just as the Indian lender at the heart of the scam revised up its fraud estimate.
Credit Suisse to Move 250 Investment Bankers in First Brexit Shift
Jan-Henrik Foerster – Bloomberg
Swiss Bank said to sour on Paris as possible Brexit location; Lender is said to be focused on cities of Madrid and Frankfurt
Credit Suisse Group AG plans to move about 250 investment banker positions under the first phase of its Brexit planning, according to two people with knowledge of the matter.