Hits & Takes
Chris White and Viable Markets have invited me to participate in their Crypto Evolved – The Innovator’s Conference. The conference will look at “As Wall Street Meets Silicon Valley, Who Will Dominate the New Crypto Currency Frontier?” The conference will be held on June 27 at the New York Athletic Club.~JJL
A big thank you to Kelly Loeffler for her service to ICE and the industry. I have known her since 2002 and have always been impressed with the way she handled herself and her job. She is in the model of the FIA’s Mary Ann Burns, someone who will need to be replaced by three or more people. Thank you, Kelly!~JJL
Cinnober has promoted Hans Sjöberg, as chief technology officer (CTO) and Taraneh Derayati as head of sales. Sjöberg succeeds one of Cinnober’s founders Peter Lenti and Derayati succeeds Ulf Axman. Veronica Augustsson continues to transform her team and the company.~JK
The STA is holding a symposium in conjunction with the University of Chicago Booth School of Business called “Equity Market Structure: At the heart of our nation’s economy.” SEC Chairman Jay Clayton is the headliner. Other featured guests include Cboe’s Chris Concannon, Virtu’s Doug Cifu, and Robert Cook, president of FINRA. You can register for the April 10 event here.~SD
Bringing Crypto To The In(stitutional) Crowd – Rick Lane, Trading Technologies
Rick Lane, CEO of Trading Technologies, hits the nail on the head when he says that you can’t walk the halls of a conference like FIA Boca and not hear murmurs of “crypto” just about everywhere you go.
In this third video of JLN’s annual series with industry leaders, Lane talks more about TT’s work with GDAX in the cryptocurrency space and the necessity for industry service providers to harness the copious amounts of data they love to talk about.
Goldman computer model warns bear market is near but the firm’s analysts don’t believe it
Fred Imbert – CNBC
Goldman Sachs’ bull/bear indicator is sitting above 70 percent.That level is “normally associated with high risks for equity investors,” Goldman strategists say.
However, the strategists are telling investors not to worry. They note that the indicator’s high level is mainly due to the low unemployment rate and strong economic growth momentum rather than rising rates or strong core inflation.
Tuesday’s Top Three
Our top read stories from Tuesday were led by Crain’s annual survey Chicago’s Best Places to Work finalists in 2018 which included Trading Technologies, TopstepTrader and Belvedere Trading. Second went to JLN’s interview with Julie Winkler, in 2017’s Low Volatility Was Not a Problem – Julie Winkler, CME. And yes, everyone wants to know what the neighbor’s home looks like inside. Taking the number three spot was ABN AMRO Clearing Offices – Chicago
122,609,477 pages viewed; 23,053 pages; 212,176 edits
Intercontinental Exchange Announces Marketing and Communications Leadership as Kelly Loeffler Prepares to Depart at the End of 2018
ICE Press Release
Intercontinental Exchange, Inc., announced today that Kelly Loeffler, the company’s longtime head of communications, marketing and investor relations, will depart at the end of 2018, concluding 16 years with the company. In preparation, ICE has added three senior executives, Warren Gardiner, Josh King and Russ Rubino, to lead the company’s investor relations, communications and marketing functions.
Chicago’s CME eyes pole position in biggest bond market; Deal for UK’s Nex Group would bring together cash and futures trading in US sovereign debt
Philip Stafford – FT
Shake-ups are rare in the world’s largest government bond market. But a successful bid from Chicago’s CME for London’s Nex Group could herald the biggest change in the trading of US government debt in a decade.
Stu Taylor is out as CEO of the bond-trading startup Algomi
Matt Turner – Business Insider
Stu Taylor, the CEO of the hyped bond-trading startup Algomi, has left the firm.
The firm runs the Honeycomb Network, a platform that lets investors see which dealer is best placed to make corporate bond trades happen. The firm told Business Insider last year it had 250 buy-side firms on the platform, along with 20 banks.
Libor’s Rise Accelerates, Squeezing Short-Term Borrowers
Ben Eisen and Chelsey Dulaney – WSJ
Companies are paying the most in nearly a decade for some types of short-term borrowing, the latest threat to a long-running U.S. economic expansion and increasingly volatile markets.
The three-month London interbank offered rate climbed to 2.29% in the U.S. on Monday, its highest since November 2008. Libor measures the cost for banks to lend to one another and is used to set interest rates on roughly $200 trillion in dollar-based financial contracts globally, from corporate loans to home mortgages.
Brussels to propose EUR56bn raid on ECB profits
Mehreen Khan and Jim Brunsden – Financial Times
Brussels is considering a EUR56bn raid on European Central Bank profits to plug a hole in the EU’s long-term budget after Brexit.
The European Commission will discuss the plan at its weekly meeting on Wednesday, where it is due to consider a range of new revenue sources as it tries to maintain its financial firepower once the EU’s second-biggest net budget contributor leaves the bloc in 2019.
City investment banks reveal gender pay gap data
Laura Noonan – Financial Times
Four of the City’s top investment banks on Tuesday revealed that they pay women median salaries of 28.9 per cent to 35.2 per cent less than their male colleagues, while women’s median bonuses are between 55.6 per cent and 67.1 per cent lower. The disclosures by Bank of America Merrill Lynch, Citigroup, Morgan Stanley and Credit Suisse complete the reports by the top 10 investment banks under a requirement for UK companies with more than 250 staff to publish the data.
****From Reuters – Thomson Reuters reports UK gender pay gap of 16.95 percent, big bonus gap
US Futures Self-Regulator Reminds Members to Report Crypto Activities
Wolfie Zhao – Coindesk
A U.S. futures industry self-regulatory organization (SRO) said Tuesday that members working with cryptocurrencies or related derivatives products need to register that activity.
The U.S. National Futures Association (NFA) issued the reminder to commodity pool operators (CPOs), commodity trading advisors (CTAs) and introducing brokers (IBs) after sending twin notices on the subject late last year. Those notices came as several companies in the U.S. moved to launch bitcoin futures trading in December.
Fed’s Bostic sympathetic to adopting price-level targeting
Ann Saphir – Reuters
The head of the Federal Reserve Bank of Atlanta, Raphael Bostic, waded into a potentially contentious debate at the U.S. central bank on Tuesday over whether to replace its 2 percent inflation target, saying he favors a new and nearly untested monetary policy strategy known as price-level targeting.
IG Group lashes out at ‘disproportionate’ new rules while shares sink
Hannah Murphy – Financial Times
Shares in IG Group, have taken a heavy blow after Europe’s largest online derivatives trading platform downgraded its outlook on the back of tough new European restrictions on the sector.
The European Securities and Markets Authority laid out new rules on Tuesday to limit the extent to which retail punters can pump up their bets on financial markets using so-called “contracts for difference” products.
Whistle-Blower Says Brexit Vote Could Have Gone Other Way
Nate Lanxon – Bloomberg
Whistle-blower Christopher Wylie told lawmakers that the Brexit referendum could have gone the other way if rules hadn’t been broken during the campaign.
“I think it is completely reasonable to say that there could’ve been a different outcome in the referendum if there hadn’t been, in my view, cheating,” said Wylie, a former contractor at Cambridge Analytica who is now at the heart of the Facebook scandal.
Exchanges, OTC and Clearing
Fixed Income Highlights – March 2018 edition
It has been a relatively robust period for European fixed income markets and the wider markets in general. Eurex has seen a pickup in volatility across the board and volumes in our benchmark products remain strong, together with good performance in our Italian BTP futures and options. There have been further dislocations in correlation across rates, commodities, FX and equities, which have helped to underpin momentum in volumes.
Editorial changes in the rulebooks of Eurex Deutschland, effective 2 April 2018
In agreement with the Swiss supervisory authority FINMA, Eurex Zürich AG will discontinue the operation of its derivatives trading venue Eurex Zürich by 31 March 2018. Trading at Eurex Deutschland will continue unchanged according to the existing rulebook. It will have no effect on the admission of Trading Participants at Eurex Deutschland.
STOXX launches new multi-dimensional product offering; State-of-the-art technology for white label indices for the broader market
Deutsche Boerse Group
STOXX Ltd., operator of the index business of Deutsche Börse Group and global provider of innovative and tradable index concepts, launches a new multi-dimensional product offering for high-speed solutions. First, the proven index calculation service will be opened to the wider market to meet growing demand. In addition, the new index brand Omnient – www.omnient.com – offers tailor-made indices based on the existing index universe.
Adjustment of PICC P&C Structured Products, Futures and Options
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to PICC Property and Casualty Company Limited (PICC P&C) structured products, futures and options to account for PICC P&C’s proposed capitalisation issue.
Nasdaq Announces 16% Increase in Quarterly Dividend to $0.44 Per Share
The Board of Directors of Nasdaq, Inc. (Nasdaq:NDAQ) has declared a regular quarterly dividend of $0.44 per share on the company’s outstanding common stock, an increase of 16% from the $0.38 per share quarterly dividend.
SGX consults public on proposed safeguards for dual class share listings
Singapore Exchange (SGX) is seeking market feedback on proposed safeguards to address expropriation and entrenchment risks of dual class shares (DCS) following broad support for the structure in an earlier public consultation.
SGX welcomes Sasseur REIT to Mainboard
Singapore Exchange (SGX) today welcomed Sasseur REIT to its Mainboard under the stock code “CRPU”.
Exchanges to introduce shared co-location facilities to reduce cost: Tyagi
Sebi to reduce additional expenses charged on mutual funds; Sebi plans to amend takeover regulations, permit additional time for entities to increase open offer price
Wall Street rethinks blockchain projects as euphoria meets reality
Anna Irrera, John McCrank – Reuters
Wall Street has been much more excited about the system underpinning bitcoin than the cryptocurrency itself, but the global financial industry has not yet been able to do much with the technology known as blockchain.
Redline Trading Solutions Enables Low-Latency FX Trading on Cboe FX and Cboe SEF
Redline Trading Solutions, the premier provider of high-performance market data and order execution systems for automated trading, today announced support for outright deliverable foreign exchange (FX) forwards traded on Cboe FX Markets and non-deliverable FX forwards (NDFs) executed on Cboe SEF, the foreign exchange venues owned and operated by Cboe Global Markets.
INDATA to Offer Post-trade Capabilities with ULLINK
Embedded ULLINK technology will optimise post-trade workflows for INDATA iPM OMS clients.
ULLINK, a global provider of electronic trading and connectivity solutions to the financial community, and INDATA, a leading provider software technology and services for buy-side firms including trade order management, compliance and portfolio accounting software and front-to-back office services, today announced the extension of their partnership to cover post-trade services for INDATA’s clients.
Options Offers Real-Time Multicast Gap Detection For All US Market Data Feeds
Options, the leading provider of global market data and colocation services for trading firms, has today announced the deployment of real-time multicast gap detection as part of its Managed Colocation offering.
Trading software threatens to become next Mifid II cost battle; Now that research costs have been unbundled from trading commissions, some are warily eyeing trading software as the next potential inducement to be regulated
By Samuel Agini – Financial News
After driving a sea change in how brokers charge for their investment research, the next target for regulators seeking to stamp out potential inducements could be the sophisticated technology that powers fund managers’ share trading desks.
Cryptocurrency Market Falls Below $300 Billion, as Bitcoin Declines
Over the past week, the cryptocurrency market and bitcoin have consistently been volatile in the $300 billion region, moving up and down within the range of $280 billion and $350 billion. The market has operated within this boundary throughout March.
This 11-year-old knows way more about cryptocurrency than you
Aaron Hankin – MarketWatch
Call him the crypto kid. George Weiksner, an 11-year-old, just launched his own ICO, in between doing his homework, regular kid stuff and bedtime.
An ICO, or initial coin offering, is a method of fundraising that seeks to garner capital by selling tokens, or virtual coins, in exchange for a particular cryptocurrency.
Hyperledger Tech Heats Up Ahead of Blockchain Software Debuts
Just six minutes.
That’s how long Hyperledger executive director Brian Behlendorf had to get former Chilean president Michelle Bachelet up to speed on blockchain. Spurred by a special request from the nation’s lawmakers, Behlendorf was one of multiple blockchain experts called to the country to talk about the merits of the technology and the ways in which it could modernize the copper-rich nation’s mining supply chain.
Blockchain Tops 2017 Fintech Enquiries, Says Swiss Finance Regulator
In its annual report for 2017, published Tuesday, the Swiss Financial Market Supervisory Authority (FINMA) said that, out of the 453 fintech enquiries it received last year, 60 percent of them (271 cases) were focused on blockchain, cryptocurrency, ICOs and smart contract applications.
Companies clamp down on crypto ads as regulators play catch-up
Tommy Wilkes, Fanny Potkin – Reuters
A growing number of internet companies are banning cryptocurrency advertising, fearing reputational damage if their users are duped or left penniless, even as regulators struggle to get to grips with the fast-emerging industry.
Blockchain Funding Center Scrapped Over China Regulation Concerns
The Investment Association of China (IAC) has scrapped a previously reported plan to launch a funding center to boost blockchain development in the country. In an announcement Tuesday, the IAC, a government-led social organization that facilities major domestic investment projects, explained that the administrative structure of the new initiative may be in conflict with code currently enforced by China’s Ministry of Civil Affairs.
Trump’s Tariffs Trigger Global Chain Reaction to Halt Imports
Ana Swanson, Alan Rappeport and Ian Austen – NY Times
The Trump administration’s steel and aluminum tariffs are provoking a chain reaction around the globe, as governments from Europe to Canada prepare to erect barriers to prevent cheap metal once bound for the United States from entering their markets.
Russia and the west’s moral bankruptcy; Vladimir Putin’s wealth extraction machine could not operate without our connivance
Edward Luce – FT
It is often said that Russia is a competitor to western democracy. But that is misleading. The country is run for the benefit of Vladimir Putin and his oligarchic circle. Its regime is a model only to other budding kleptocrats.
SEC Charges Recidivist Broker-Dealer In Employee’s Long-Running Pump-And-Dump Fraud
The Securities and Exchange Commission announced charges against Wedbush Securities Inc. for failing to supervise employee Timary Delorme after the broker-dealer ignored numerous red flags indicating that Delorme was involved in a long-running pump-and-dump scheme targeting retail investors. Delorme agreed to settle fraud charges stemming from the same scheme. This is the second SEC action against Wedbush this year and the third since 2014.
Chinese ex-fund manager must face U.S. SEC’s insider trading claims: judge
Brendan Pierson – Reuters
A former Chinese investment fund manager has lost a bid to dismiss charges by the U.S. Securities and Exchange Commission that he made $36 million from insider trading after being tipped about DreamWorks Animation SKG Inc’s acquisition by Comcast Corp and Lattice Semiconductor Corp’s planned acquisition by a private equity fund.
India markets regulator to take steps to make algo trading cheaper
Zeba Siddiqui, Abhirup Roy – Reuters
India’s market regulator said on Wednesday it will take steps to make algorithmic trading cheaper for investors, even as it called for stricter monitoring of such trades amid concern about fair access to markets.
Europe regulators back tough rules for spread-betters
Hannah Murphy – Financial Times
Europe’s markets watchdog has firmed up tough new rules to restrict online trading platforms that offer risky speculative products to retail investors. The rules come despite frantic lobbying from the industry, in a blow that is set to knock its profitability.
FCA examines whether Aviva shares plan broke market abuse rules; Insurer dropped scheme to cancel £450m of preference shares after outcry from investors
Oliver Ralph, Insurance Correspondent – FT
The Financial Conduct Authority is looking into whether Aviva’s controversial plan to cancel £450m of preference shares broke market abuse rules.
ESMA finalises guidelines on how to report internalised settlement
The European Securities and Markets Authority (ESMA) has published today its final guidelines on how to report internalised settlement under the Central Securities Depositories Regulation (CSDR).
ESMA adds new Q&A on profit forecasts
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers document on prospectus related issues to include a new Q&A on profit forecasts.
ESMA updates its MiFID II Q&As on market structures and transparency topics
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers regarding transparency and market structures issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
Don’t Get Fooled by Fraud This April Fool’s Day
What’s your favorite April Fool’s Day prank? Sneaking a whoopie cushion on someone’s seat? Dropping a fake spider on your co-worker’s sandwich? With Easter and Passover in the mix this year, perhaps engaging in some sort of holiday hijinks?
Reminder to update annual questionnaire regarding virtual currencies
On December 14, 2017, NFA issued Notices I-17-28 and I-17-29 requiring commodity pool operators (CPO) and commodity trading advisors (CTA) that execute transactions involving virtual currencies or virtual currency derivatives and introducing brokers (IB) that solicit or accept orders in virtual currency derivatives to immediately notify NFA by amending the firm-level section of the annual questionnaire. NFA reminds CPOs, CTAs and IBs that this is an ongoing obligation.
Investing and Trading
FANG Stocks Tumble 6% in Unprecedented Selloff
Lu Wang and Sarah Ponczek – Bloomberg
About $180 billion erased from combined market value; Slew of bad news hit stocks whose gain looked like bubble
The market’s darlings just suffered their worst day in at least three years.
We All Love Wind Power, Unless You Want to Make Money; Why are turbine manufacturers doing so badly?
Chris Bryant – Bloomberg
Climate change will have some very unpleasant consequences, unless we cut our dependence on fossil power. Generating electricity from the wind is clean and increasingly cheap. So it’s ascent looks assured, whatever ornithologists and President Donald Trump might think.
An Opaque $3.5 Billion Business Gives Wall Street a Hangover
Donal Griffin – Bloomberg
Banks scrutinize equity derivatives units after surprise loss; ‘Equity financing is not a riskless business,’ says one banker
The implosion of a company with ties to South Africa’s wine country has caused a hangover for one of Wall Street’s most opaque businesses.
Libor’s Ascent Is New Culprit for Hedged Treasury Yields Near 0%
Brian Chappatta – Bloomberg
For euro-, yen-based buyers, cost to shield FX swings rises; But one big change: the cross-currency basis is not to blame
A phenomenon rippling through global funding markets is poised to keep overseas investors wary of Treasuries just as the U.S. needs them most.
What Actively Managed Funds Can Learn From Vacuum Cleaners; Janus Henderson Group Co-Chief Executive Andrew Formica, with blue tie in the front
Mike Cherney – WSJ
As investors increasingly turn to low-fee, so-called passive funds that track an index, one leader of a global fund company says actively managed funds should learn from a company that makes vacuum cleaners.
MiFID II tick size regime sees increase in certain transaction costs; The French financial regulator has found MiFID II’s tick size regime has widened the spread on certain transactions and impacted HFT market makers.
Hayley McDowell – The Trade
The cost of small transactions on some of the most liquid securities has slightly increased following the implementation of MiFID II’s tick size regime, according the French financial regulator.
Major banks and Goldman Sachs Asset Management adopt MiFID II compliance engine; GSAM, BNP Paribas, Credit Agricole and UBS among firms to adopt regulatory digitisation platform.
Hayley McDowell – The Trade
Six major global banks have signed up to a digitised MiFID II trade compliance engine alongside Goldman Sachs Asset Management (GSAM), the platform’s first buy-side user.
The Disarray at the Top of Deutsche Bank
Steven Arons – Bloomberg
The silence all day spoke volumes about the disarray at the top of Deutsche Bank AG, say insiders and shareholders.
No one at the bank — from spokespeople to the highest-ranking executives — commented publicly on a string of media reports and investor speculation on Tuesday that either Chairman Paul Achleitner or Chief Executive Officer John Cryan, or both, was on his way out.
Deutsche Bank, in search of new CEO, asked Goldman’s Gnodde
Deutsche Bank approached Goldman Sachs international chief Richard Gnodde to ask if he would be interested in taking the helm of the German lender, but the executive turned it down, according to a source close to him.
Free Brokerage Robinhood Is Now Available On The Web
Karl Kaufman – Forbes
Robinhood, one of my top investing apps for 2018, has gotten even better.
The formerly mobile-only trading platform has now expanded, opening Robinhood Web to the public after first announcing it in November.
The web interface adds more robust statistics and research than the mobile app, but is still skimpy compared to traditional online discount brokerages like e*Trade or Fidelity. The price to make a trade, however, hasn’t budged — commission-free trades remain in place.
Cyberattacks Hit Debt-Market Pricing at the Biggest Nordic Bank
Frances Schwatzkopff – Bloomberg
Nordea is designing corporate products to reflect cyber risks; Development comes as data protection dominates world headlines
Nordea Bank AB will start pricing debt products to reflect threats to data as the scandal engulfing Facebook Inc. redefines corporate risk.
Investors in Japan need pinpoint accuracy
Geoffrey Post – Financial Times
Japan was one of the standout performers of 2017, ending the year up by nearly a fifth. This surprised many investors, some of whom have avoided the country for years, thinking it something of a basket case.
Today, though, particularly in the light of global market volatility, many wonder whether this impressive run was a one-off or sustainable in the medium to long term.
Goldman hikes yuan exchange rate forecasts, cites U.S. trade ties
Goldman Sachs has upped its 12-month yuan/dollar exchange rate forecast to 6.20 yuan from 6.45 previously, predicting that trade relations with the United States would limit China’s ability to weaken its currency.
Governance concerns mount over exchange plans to win listings
Emma Dunkley – Financial Times
Governance experts are raising concerns over the quality of companies poised to list in Asia as stock exchanges push ahead with major reforms to attract blockbuster listings and boost their businesses.
Hong Kong Exchanges and Clearing and mainland China’s Shenzhen and Shanghai exchanges are pursuing efforts to entice a wider array of companies, such as technology and biotech firms, to list on their markets.
EU Plans Fairer Currency Conversions for Consumers
Alexander Weber – Bloomberg
The European Commission proposes to bring down costs for cross-border euro payments within the EU and to make currency conversions fairer for consumers.
Kazakhstan’s central bank launches securities trading app
Kazakhstan’s central bank has launched a blockchain-based mobile securities trading application which it hopes will allow locals to become more involved in the capital markets by simplifying access to it.
China Says Anbang’s Founder Defrauded Investors of $10 Billion
Sui-Lee Wee – NY Times
China accused the deal maker who bought the Waldorf Astoria hotel in New York of bilking investors of more than $10 billion, prompting him to issue a rare denial of guilt on Wednesday in a country where the courts almost always convict.
Portrait of Brexit Britain: A Divided Nation; Makes a Journey Into the Unknown
A year before Britain is supposed to formally break away from its nearest neighbors in continental Europe, divisions have only hardened over going it alone.
Frankfurt Is the Big Winner in Battle for Brexit Bankers
Gavin Finch, Hayley Warren and Tim Coulter – Bloomberg
Frankfurt has emerged as the biggest winner in the fight for thousands of London-based jobs that will have to be relocated to new hubs inside the European Union after Brexit.
Brexit Transition Means Business as Usual for Banks, BOE Says
Silla Brush – Bloomberg
U.K. authorization only needed by end of transition: regulator; BOE statement follows EU summit agreement on 21-month bridge
The Bank of England sought to reassure banks and insurers that they can rely on a transition period to ease their adjustment to Brexit, even though the 21-month bridge deal with the European Union isn’t final.