Breaking News

CFTC Official Urges SEC to Clarify Ether’s Status

ethereum

First Read

Notes from Day One at Consensus
Chuck Mackie – JLN

If you had any doubts about the swelling surge of interest in cryptoassets, you only had to try and check in to Coindesk’s Consensus conference in midtown Manhattan around mid-morning on Monday. The line snaked its way back and forth through the 2nd floor lobby, down the escalator and out of the front door of the hotel, and it took up to two-and-a-half hours for the reported 7,700 attendees to check in for the event. Consensus began four years ago with 500 true believers in attendance, grew to 1,500 in 2016, reached 2,800 last year, and was up 275 percent this year. Full crypto craziness may be upon us.

Beyond the numbers, Consensus kicked off with a rousing endorsement from a corporate titan, featured numerous interesting and enlightening new developments, and a bit of a dust-up at the end of the day that helped to keep it all in perspective.

For the rest of the story, click HERE

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Hits & Takes
JLN Staff

A few highlights from the FIA’s Listed Derivatives for the Retail Market event in Chicago yesterday. Andrew Busch, CFTC chief market intelligence officer, provided a macro-economic overview which included the forecast that the US Treasury will add $1.5 trillion in T-bills to the market over the next several years.~JK

TD Ameritrade’s JB Mackenzie said education is key to the growth of its derivatives business. As such, TD Ameritrade provides 9-plus hours of live content per day.~JK

Dan Ryba, vice president, futures brokerage at E*TRADE, said Coinbase traders are the “traders of the future.” He added that new accounts at E*Trade tripled on the first days after bitcoin futures were introduced at Cboe and CME.~JK

John Tornatore, director of business development and head of cryptocurrencies at Cboe, told the audience that bitcoin futures “is the just the beginning” and that this space will “look much different” six months to a year from now.~JK

Here are Walt Lukken’s opening comments from yesterday’s FIA Retail Market Event in Chicago.~JJL

Thank you to the FIA for not ordering cookies for their Retail Futures event yesterday at the Union League Club in Chicago. My waistline clearly does not need cookies, so the absence of cookies was a big help that I appreciate today, even if yesterday I was miserably hungry at the event after missing lunch. The food served during the cocktail hour did take the edge off, thankfully.~JJL

According to a FTSE Russell piece about Poland, when ranked by number of IPOs in 2017, the top five European exchanges were LSEG, Nasdaq Nordic, Warsaw Stock Exchange, BME and Euronext. ~SD

Sports betting looks like it’s now on the national table courtesy of a big Supreme Court ruling on Monday. Elsewhere in the gambling world there are $5 million in bets tied to the Royal Wedding, according to Bloomberg.~SD

Here’s a look at which states are likely to legalize sports betting in the next few years.~JB

NFA will hold compliance regulatory workshops at Summit Chicago in Chicago, IL on June 4, 2018 and the New York Marriott Downtown in New York, NY on June 12, 2018.~JJL

In light of the Consensus crypto conference in New York this week, CME has a video out with Don Wilson regarding the potential of cryptocurrencies.~SD

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Notes from The Trading Show Chicago
Chuck Mackie – JLN

Terrapinn’s Trading Show has established itself as a sure sign of spring in Chicago, and while the past few years have found the event swinging heavily to a focus on the technology side of trading, including chips, servers, databases and connectivity, the 2018 edition of the show had a strong leaning towards…you guessed it: cryptocurrencies. Everywhere you go in financial markets in 2018, bitcoin and other cryptocurrencies are sure to be there.

The exhibitors at the conference still skewed to the hard technology side (let’s face it, all of trading is touched by technology at this point) but the open seminars and VIP panel discussions were weighted heavily towards crypto, with 11 of 19 seminars focusing on blockchain, etc. and a separate track just for crypto panels and presentations. Also, the title sponsor for the Trading Show was Kraken, the large crypto exchange, and their team was everywhere on the trade show floor, leading roundtable discussions, appearing on panels, and even throwing an overcrowded (read: successful) party after the last day of the show.

For the rest of the recap, click HERE

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20 in their 20s Meet the 2018 class
Crain’s Chicago Business
Looking for the next big thing in Chicago business, tech and innovation? Follow these 20 young change-makers to find clues. Among their ranks: social problem-solvers, emerging entrepreneurs and money masters. Some generate big revenues. Others challenge the status quo. Not one is older than 29. Click here to get to know them all.
/jlne.ws/2KmoeQM

**** IMC’s Christine Hansen, head of equity options trading, is one of them.~JJL

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Two Canadian Companies Are Merging in the Biggest Weed Deal Ever
Simon Casey, Eric Pfanner, and Kristine Owram – Bloomberg
Canada’s Aurora Cannabis to buy MedReleaf in all-stock merger; Industry consolidation heats up as Canadian legalization looms
Consolidation in Canada’s nascent marijuana industry is heating up, with two of the largest players agreeing to the biggest merger seen so far in the sector.
/jlne.ws/2KrFaFx

***** I have been encouraged by a couple of people to consider starting a cannabis newsletter and or wiki. Any thoughts on the matter? I asked a question about the cannabis market at the FIA retail event yesterday in Chicago and only got dodges and jokes.~JJL

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At NYC’s Big Crypto Conference, the Lamborghinis Are Rented and Protests Are Staged
Lily Katz – Bloomberg
John Nouri makes a living renting out exotic cars for weddings, birthdays, bachelorette parties, and now … Bitcoin conferences?
/jlne.ws/2KllQte

***** I can’t wait to see Chuck Mackie’s expenses from Consensus. How to you classify a rented Lamborghini? Italian transportation expense? Image enhancement expense?~JJL

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Monday’s Top Three
Our top read story yesterday was Michael Bloomberg Slams ‘Epidemic’ Of Political Lies As Danger To Democracy from Bloomberg news. Second went to Tabb Forum’s Futures Algos: A Class of Their Own. Third went to CME’s announcement CME Group and Crypto Facilities Launch Ether Reference Rate and Ether Real Time Index

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MarketsWiki Stats
125,973,397 pages viewed; 23,105 pages; 213,016 edits
MarketsWiki Statistics

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Lead Stories

CFTC Official Urges SEC to Clarify Ether’s Status; Is the world’s No. 2 cryptocurrency a security or a commodity? Regulators should decide soon, CFTC’s Quintenz says
Gabriel T. Rubin – WSJ
A top U.S. derivatives regulator urged his counterparts at the Securities and Exchange Commission to quickly reach a decision about the status of ether, the world’s second-most-valuable cryptocurrency after bitcoin.
/jlne.ws/2KoorTj

$15 Million in a Few Minutes at Robin Hood, But Who’s Counting?
Amanda L Gordon – Bloomberg
Anti-poverty charity in New York draws Steve Cohen, Blankfein; Jennifer Lopez and Paul Tudor Jones don costumes and sing
Every year, the Robin Hood Foundation concludes its fundraising gala by counting up millions of dollars in donations on big screens at the cavernous Javits Center in New York. On Monday night, auctioneer Jamie Niven counted 15 pledges of $1 million each in a matter of minutes. Then, abruptly, the tally stopped.
/jlne.ws/2KoWCKA

**** That is a lot of big dogs.~JJL

Cryptocurrency Firm Founders Indicted on Federal Fraud Charges
Chris Dolmetsch – Bloomberg
The co-founders of a cryptocurrency firm that raised money on social media with the help of celebrities were indicted Monday on charges they duped investors into committing millions of dollars in digital funds by lying about an initial coin offering.
Sohrab Sharma, Raymond Trapani and Robert Farkas, the founders of Centra Tech Inc., were previously charged with fraud and conspiracy, and their indictment moves the case closer to a trial. Prosecutors say they lied about their product and the relationships they had with financial institutions.
/jlne.ws/2KpatAR

***** Even the feds are getting in on Bitcoin Week.~JJL

EU Sees $23.5 Billion in Revenue From Financial-Transaction Tax
Nikos Chrysoloras – Bloomberg
Derivatives account for more than half of the projected total; Hard Brexit could create a ‘more tricky enforcement issue’
A proposed tax on financial transactions in 10 European Union countries could generate about 19.6 billion euros ($23.5 billion) of annual revenue, though Brexit could make collection more difficult, according to a new estimate.
/jlne.ws/2wHoFTJ

Bitcoin exchange Coinbase opens Chicago office in bid to attract investors, local talent
Samantha Bomkamp – Chicago Tribune
Coinbase, a digital currency exchange based in San Francisco, has opened a Chicago office to be close to burgeoning digital currency markets, big investors and what its leaders say is a vast pool of local talent.
/jlne.ws/2IJFQJ5

**** Two words. Paul Bauerschmidt.~JJL

‘Gigantic Pool’ of Cash Awaits Teams in Dawn of Legal Betting
Eben Novy-Williams and Ira Boudway – Bloomberg
Fan engagement, advertising, media and data rights fees rise; Leonsis: ‘A gigantic pool of revenue moves into the sunshine’
Professional sports team owners, already some of the richest people in the U.S., are about to get richer.
/jlne.ws/2Kr4w6h

U.S. high court paves way for states to legalize sports betting
Lawrence Hurley – Reuters
The U.S. Supreme Court on Monday paved the way for states to legalize sports gambling, striking down a 1992 federal law that barred it in most places and setting off a rush by businesses and states to cash in on an expected multibillion-dollar jackpot.
/jlne.ws/2wKclC0

U.S. Must Move Quickly on Ether Status, CFTC’s Quintenz Says
Benjamin Bain – Bloomberg
Regulators weighing whether cryptocurrency is a security; Decision not imminent, but could be coming in near future. Federal agencies should quickly clarify the legal status of Ether as industry players clamor to list derivatives tied to the world’s second-most traded cryptocurrency, a Republican financial regulator said.
/jlne.ws/2wGCSA6

SwapsInfo First Quarter 2018 Review
International Swaps and Derivatives Association
The ISDA SwapsInfo Quarterly Review provides analysis of interest rate derivatives (IRD) and index credit default swap (CDS) trading activity. The report provides a breakdown of cleared and non-cleared activity and trading volumes executed on swap execution facilities (SEFs) and bilaterally, as well as by product and currency.
/goo.gl/FXP9Ky

Euronext’s FastMatch adds EUR5.2 million to group revenues; Euronext finalised its acquisition of the spot FX market network firm FastMatch in August last year.
Hayley McDowell – The Trade
Euronext’s FastMatch business has contributed EUR5.2 million to the exchange group’s Q1 2018 revenues, less than a year after it acquired the spot FX market firm for EUR153 million.
/jlne.ws/2wHA7OZ

Bankers With Broken English Are Luxembourg’s Brexit Bottleneck
Stephanie Bodoni – Bloomberg
Grand Duchy is a top target in EU for U.K. financial firms; Limited supply of candidates with near-perfect English skills
Luxembourg’s citizens can quickly impress with their language skills, switching with ease between their local tongue and German, French and English.
/jlne.ws/2wK5vws

Exchanges, OTC and Clearing

Exchanges face share price test from lower volatility; Earnings vulnerable to fewer consolidation deals and quieter summer of trading
Philip Stafford – FT
With a few exceptions, it has been a good year to be an investor in the shares of companies at the heart of global markets trading.
/jlne.ws/2KrNtRN

Exchange operator CME is going deeper into cryptocurrencies
Oscar Williams-Grut – Business Insider
Exchange operator CME Group is launching a daily price benchmark for ethereum, a sign of its growing commitment to cryptocurrencies.
/jlne.ws/2KshMr9

Euronext publishes Q1 2018 results
Euronext
Today Euronext, the leading pan-European exchange in the Eurozone with 1,300 listed issuers, announces its results for the first quarter of 2018.
/jlne.ws/2wKz7K6

Client’s view: Sylvain Broyer, Head of Economics at Natixis, on Brexit, monetary policy and market trends
Eurex
The current economic and political situation in Europe raises a number of questions. We talked to Sylvain Broyer, Head of Economics at French investment bank Natixis, about the likelihood of another financial crisis and some key issues investors should keep an eye on.
/jlne.ws/2wKk3fq

Brexit: Support for derivatives trading and clearing
Eurex
With less than one year before Brexit becoming effective, Deutsche Börse Group is closely monitoring Brexit processes, engaging with regulators and governments and will strive to take all necessary measures to mitigate the impact on existing business relations.
/jlne.ws/2KlvxYE

Deutsche Börse is working with leading FinTech companies to create a FinTech Acceleration Platform
Deutsche Börse
Together with the German fintech company figo and the Luxembourg RegTech startup Finologee, Deutsche Börse Group and its post-trade service provider Clearstream are setting up a FinTech Acceleration Platform. The platform is scheduled to go live in the fourth quarter of 2018, subject to regulatory approvals.
/jlne.ws/2KohsK6

Deutsche Börse Partners With Leading FinTechs To Launch FinTech Acceleration Platform
MondoVisione
Deutsche Börse Group and its post-trade services provider Clearstream will partner with Germany-based FinTech figo and Luxembourg-based RegTech start-up Finologee to create a common FinTech Acceleration Platform. The launch is targeted for the fourth quarter of 2018, subject to regulatory approval.
/jlne.ws/2IDKd8B

HKEX to Enhance its USD/CNH Futures with New Contract and Calendar Spreads
HKEX
Sixth calendar quarter month contract and 19 calendar spreads to be added; Full combo suite of 45 calendar spreads between any two contracts to be offered; Changes take effect from 19 June 2018
Hong Kong Exchanges and Clearing Limited (HKEX) announced today (Tuesday) that it will offer the sixth calendar quarter month contract and 19 additional calendar spreads for its USD/CNH Futures (US dollar/Offshore Renminbi, or RMB, Futures) from the day trading session on 19 June 2018.
/jlne.ws/2wHYxIg

LME Asia Week 2018 Kicks Off in Hong Kong
HKEX
Sixth-annual LME Asia Week set to be biggest ever, with over 800 delegates to main seminar event and around 1,900 guests for LME Asia Dinner; More diverse industry representation this year; new participants from precious metals, electric vehicle sectors, and from African markets
Hong Kong Exchanges and Clearing Limited (HKEX) and the London Metal
Exchange (LME) today (Tuesday) kicked off the sixth-annual LME Asia Week, Asia’s leading metals event, bringing together hundreds of leading metals market participants from around the world to discuss the state of the industry and the opportunities ahead, with a particular focus on Mainland China and the rest of Asia.
/jlne.ws/2wD4PZE

‘1000 Companies to Inspire Britain’ report shows SMEs are vital to economic growth | London Stock Exchange Group
London Stock Exchange Group
‘1000 Companies to Inspire Britain’ report shows SMEs are vital to economic growth; 13 new international companies join ELITE, bringing the total number of companies to over 850; Fifth edition of London Stock Exchange Group’s annual report identifies UK’s fastest-growing and most dynamic SMEs; SMEs in the report growing at 71% on average; One third of businesses in the report come from the Northern Powerhouse and Midlands Engine regions
Top two sectors featured in the report are Engineering & Construction and IT
Today, London Stock Exchange Group launches the fifth annual edition of its ‘1000 Companies to Inspire Britain’ report, identifying the UK’s most dynamic and fastest growing Small and Medium Sized Enterprises (SMEs).
/jlne.ws/2wHRX4J

Fintech

Thomson Reuters to relocate FX MTF to Dublin ahead of Brexit; Thomson Reuters has applied for authorisation to operate its FX MTF in Dublin before the Brexit deadline.
Hayley McDowell – The Trade
Thomson Reuters has confirmed that it is seeking authorisation to relocate its foreign exchange (FX) multilateral trading facility (MTF) from London to Dublin.
/jlne.ws/2wGHlTo

Private Equity’s Plan to Beat the Low-Cost Investing Robots; Under threat from automated rivals, financial advisers are getting bigger, and guess who’s there to profit from it all.
Charles Stein – Bloomberg
Private equity firms smell money in the financial advice business. Last month, Hellman & Friedman LLC paid $3 billion to buy Financial Engines Inc., an online retirement planning service. Thomas H. Lee Partners LP in October took a stake in HighTower, a Chicago-based wealth adviser with $50 billion under management at the time. And in April 2017, private equity giant KKR & Co. and Stone Point Capital LLC bought a majority share of Focus Financial Partners LLC in a deal that valued the wealth manager at $2 billion.
/jlne.ws/2wK59WE

How cloud scalability is seducing the financial sector
Monica Brink – Cloud Tech
The financial sector, while forging ahead in other areas of digital transformation, has been relatively slow to adopt the cloud and there has been good reason for it: banks have to deal with highly sensitive data and sharing data storage and compute resources with others could not even be envisaged, let alone adopted.
bit.ly/2IfiFHg

Metamako Launches Low-Latency Firewall System
John D’Antona Jr. – Traders
Metamako, the acknowledged leader in the low-latency, FPGA-enabled network solutions space, has now entered the security space with the announcement of its MetaProtect™ Firewall solution.
/jlne.ws/2IIlrUF

Cryptocurrencies

Coinbase plans revamp to lure institutional and high-speed traders
Anna Irrera, John McCrank – Reuters
Cryptocurrency exchange Coinbase is planning a revamp of its trading technology and creating a new suite of services to attract more institutional investors, including hedge funds and high-frequency trading firms, it said on Tuesday.
/jlne.ws/2jVCIvA

CoinDesk Releases Q1 2018 State of Blockchain Report
Peter Ryan – Coindesk
After reaching historic highs in 2017, cryptocurrencies languished across multiple fundamental metrics in this year’s first quarter.
Unease permeated the industry, mostly from regulatory uncertainty and pull-back after a year of parabolic growth.
To shed light on a tumultuous Q1, CoinDesk’s latest State of Blockchain report provides a 90-plus slide analysis of some of the most significant data points.
bit.ly/2jZdLiO

Winklevoss Brothers Bitcoin Exchange Adds Zcash, Litecoin, Bitcoin Cash
Michael del Castillo – Forbes
The Gemini bitcoin exchange founded by Tyler and Cameron Winklevoss is adding support for Zcash, a privacy-focused cryptocurrency with a market valuation of over $1 billion.
bit.ly/2IiBs4g

****Press release here.

The World’s First Trade Finance Transaction on the Blockchain Involves Soybeans
Polina Marinova – Fortune
HSBC said it has performed the world’s first trade finance transaction using blockchain technology.
goo.gl/gQ8KhU

NASDAQ-Powered Crypto Exchange DX Set to Launch Next Month
Finance Magnates
There’s a new crypto exchange in town. But if you feel that the town is getting too crowded, this resident is quite different.
Learn how to buy Bitcoin and Ethereum safely with our simple guide!
dx.exchange, which is set to launch next month, is the first crypto exchange powered by NASDAQ. “The advantage of this cooperation is threefold: the brand name, the technology and the regulations,” said DX Exchange CEO Daniel Skowronski, commenting on the topic exclusively to Finance Magnates.
bit.ly/2IJWBnw

Bitcoin Mining Rig Maker Canaan Files for $1 Billion IPO
Crystal Tse and Blake Schmidt – Bloomberg
China’s Canaan Creative aims to start trading as soon as July; Firm seeks first Hong Kong IPO from cryptocurrency industry
Canaan Creative, the world’s second-biggest maker of bitcoin mining hardware, has submitted an application for a Hong Kong initial public offering that could raise about $1 billion, people with knowledge of the matter said.
/jlne.ws/2wKqQ90

Forex Platform Serving Goldman Sachs and Morgan Stanley Adds Crypto Trading
Helen Partz – Cointelegraph
Software developer Kx Systems has launched cryptocurrency trading on its white label forex (FX) trading platform Kx for Flow, the company reported in a blog post May 14. Starting today, Kx for Flow customers are able to conduct spot trading of Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), and Ripple (XRP).
bit.ly/2IJzY2m

Wyoming Aims to Be America’s Cryptocurrency Capital – The state is passing laws to attract the country’s digital-money business.
Benjamin Bain – Bloomberg
Wyoming is about 1,000 miles from Silicon Valley and even farther from wealthy East Coast investors. But the Cowboy State is hitching its wagon to the virtual currency craze, bidding to reinvent itself as the most crypto-friendly state in the U.S.
/jlne.ws/2Kqmciy

REX Shares to Launch Blockchain ETF, Managed by CNBC’s ‘Fast Money’ Brian Kelly
Ricardo Esteves – NewsBTC
The U.S. Securities and Exchange Commission (SEC) has blocked the filings of Bitcoin exchange-traded-funds (ETFs) even after the launch of Bitcoin futures contracts in December 2017. The regulator now seems closer to accept this financial instrument, but some investment firms chose not to wait and get creative. REX Shares is about to launch BKC, its Blockchain ETF.
bit.ly/2GeLZrz

****REX Shares CEO Greg King had a hand in developing a number of the first VIX-linked ETPs to hit the market.~SD

30+ Real Examples Of Blockchain Technology In Practice
Bernard Marr – Forbes
While Bitcoin and cryptocurrency may have been the first widely known uses of blockchain technology, today, it’s far from the only one. In fact, blockchain is revolutionizing most every industry. Here are just a few of the practical examples of blockchain technology.
bit.ly/2IfYE3l

FedEx CEO: Adopt New Tech Like Blockchain or Be Disrupted
Wolfie Zhao – Coindesk
“Blockchain has the potential to completely revolutionize what’s across the border.”
goo.gl/aLmLnC

Ethereum Founder Acknowledges Promising Solution To Blockchains’ Scalability Problem
Andrew Rossow – Forbes
Vitalik Buterin, the cofounder of Ethereum, holds some serious clout in the blockchain space. So when he tweeted last week about a new project that he’s looking forward to going live, peoples’ heads started to turn. You know when Buterin endorses a project, it must be good.
goo.gl/fVfRhY

Fed’s Bullard: Cryptocurrencies creating ‘non-uniform’ currency in US
Mamta Badkar – FT
Cryptocurrencies are creating a “drift toward non-uniform currency in the US”, St Louis Federal Reserve president James Bullard said on Monday, cautioning that historically these have been “disliked and eventually replaced”.
/jlne.ws/2KmpHXi

Bitcoin cash is expanding into the void
Jemima Kelly – FT
I like big blocks and I cannot lie.
That was the opening line from nChain CEO Jimmy Nguyen — whose company wants to make bitcoin spin-off bitcoin cash (BCH) the cryptocurrency of the future — on a panel (or more precisely, a man-el) last week at Exeter University. He was referencing Sir Mix-A-Lot’s early 90s classic Baby Got Back (NSFW music video here).
/jlne.ws/2wJnm6N

Kx Systems launches support for cryptocurrency trading
Finextra
Kx SystemsKx Systems, a division of First Derivatives plc (AIM:FDP.L, ESM:FDP.I), announces that its Kx for Flow electronic trading platform has been extended to support the trading of cryptocurrencies.
/jlne.ws/2IJJYbU

Politics

U.S., China Discussing Deal on ZTE, Agricultural Tariffs; Agreement would also ease roadblocks in China for U.S. semiconductor firm Qualcomm
Lingling Wei and Bob Davis – WSJ
The U.S. and China are closing in on a deal that would give China’s ZTE Corp. a reprieve from potentially crippling U.S. sanctions in exchange for Beijing removing tariffs on billions of dollars of U.S. agricultural products, said people in both countries briefed on the deal.
/on.wsj.com/2IfWUaj

Cohen revelations put spotlight on Washington’s ‘shadow lobbyists’; Unregistered consultants play growing role in business of accessing the powerful
Barney Jopson in Washington and Andrew Edgecliffe-Johnson in New York – FT
After news broke last week that AT&T and Novartis had respectively paid $600,000 and $1.2m to Michael Cohen, both companies’ chief executives told their employees that hiring Donald Trump’s personal lawyer had been a “mistake” that they now regretted.
/jlne.ws/2wEqxwt

Soros foundation office to pull out of Hungary; Operations moved to Berlin in face of ‘increasingly repressive political environment’
Neil Buckley – FT
Billionaire George Soros’s philanthropic foundation is closing its Budapest office and shifting operations to Berlin as it faces what it called an “increasingly repressive political and legal environment” in Hungary.
/jlne.ws/2wR7NKr

Michael Bloomberg launches China-linked rival to Davos gathering; New Economy Forum focuses on emerging world order in challenge to WEF
Andrew Edgecliffe-Johnson in New York – FT
Michael Bloomberg, the former New York mayor, is launching a rival to the World Economic Forum’s annual gatherings in Davos, aimed at addressing a changed global order in which China’s rise challenges the primacy of the US.
/jlne.ws/2Ko7U1K

Regulation

Compliance staff enjoy pay boom as demand for expertise rockets
Owen Walker – Financial Times
Down the corridor from the chief executive’s office and away from the banks of star portfolio managers sits the most in-demand worker in asset management: the humble compliance officer.
/on.ft.com/2Ih0MHZ

RBS Is Set to Overtake Deutsche Bank as Europe’s Most Penalized
Nicholas Comfort – Bloomberg
Royal Bank of Scotland Group Plc may overtake Deutsche Bank AG as the European lender with the highest disclosed legal bills since the financial crisis.
/bloom.bg/2IgDkuu

Fed Nominee Michelle Bowman Says Bank Rules Should Be Tailored for Size, Complexity; Federal Reserve Board of Governors nominee plans to criticize postcrisis regulations at her Senate confirmation hearing
Paul Kiernan – WSJ
Michelle Bowman, one of President Donald Trump’s nominees to join the Federal Reserve Board of Governors, plans to criticize postcrisis banking regulations at her Senate confirmation hearing Tuesday.
/jlne.ws/2KopsL7

Thieves suck millions out of Mexican banks in transfer heist
Michael O’Boyle – Reuters
Thieves siphoned hundreds of millions of pesos out of Mexican banks, including No. 2 Banorte, by creating phantom orders that wired funds to fake accounts and promptly withdrew the money, two sources close to the government’s investigation said.
/reut.rs/2IfTEf3

ASIC consults on code of ethics compliance schemes for financial advisers
ASIC
The Australian Securities and Investments Commission has released a consultation paper outlining its proposed approach to approving and overseeing compliance schemes for financial advisers.
/jlne.ws/2wKiluE

Investing and Trading

18 Chart Crimes and Misdemeanors
Sloane Ortel – CFA Institute Enterprising Investor
Truth is relative, falsehoods are seductive, and shortcuts are commonplace.
Chart crimes are a clear manifestation of this. These badly built graphics are blunders at best.
Most commonly, they are financial fake news.
/cfa.is/2IeCIoZ

Shell Spreads Its Bets Around as It Prepares for a Greener Future
Stanley Reed – NY Times
There seems to be little about the scrappy energy company in central England that would appeal to Royal Dutch Shell, the button-down oil giant.
/jlne.ws/2KslkJZ

IPO Slowdown Leads Silicon Valley Venture Giant NEA to Sell $1 Billion Worth of Startup Stakes; New Enterprise Associates seeks to create new venture-capital firm that would buy its stakes in about 20 companies
By Rolfe Winkler and Eliot Brown – WSJ
New Enterprise Associates, one of Silicon Valley’s largest venture-capital firms, plans to sell off a big chunk of its startup investments in response to a dearth of initial public offerings, according to people familiar with the discussions.
/jlne.ws/2wFMFXf

Institutions

Striking an NAV: Fund Managers’ Contingency Options
Chris Kentouris – FinOps
We need a backup plan — yesterday.
That is what fund management operations directors are quickly realizing when it comes to striking a net asset value. They can’t blindly rely on their administrators’ results because mathematical errors or, even worse, technological outages can happen. Then what? Potential regulatory fines, investor lawsuits and reputational risk can occur.
bit.ly/2KlPZc6

Two Goldman Sachs securities co-heads to step down; Exits highlight pressure as younger traders compete for shrunken profit pool
Ben McLannahan in New York – FT
Two of Goldman Sachs’ three securities division heads are to stand down, capping a period of turmoil for a division that was once the bank’s biggest and most powerful growth engine.
/jlne.ws/2wHxKvz

Goldman Sachs Shakes Up Leadership in Trading Unit
Liz Hoffman – WSJ
Goldman Sachs Group Inc. is shaking up the leadership of its powerful trading arm, which was once the envy of Wall Street but has struggled in recent years.
/on.wsj.com/2IfAhCI

****Bloomberg on the moves here.

Steve Cohen’s Point72 Hires Macro Team From Balyasny
Hema Parmar – Bloomberg
Steve Cohen’s Point72 Asset Management is beefing up macro investing by poaching a five-person team from Balyasny Asset Management.
/bloom.bg/2IhhE1h

Chief Investment Officer Ted Eliopoulos To Leave CalPERS – Search Begins For New CIO
Mondovisione
The California Public Employees’ Retirement System today announced that Ted Eliopoulos, CalPERS’ chief investment officer (CIO), is leaving the pension fund in order to relocate to the East Coast to be closer to family. A search for his permanent replacement will begin immediately.
bit.ly/2IeVGvH

MSCI to add 234 Chinese A-shares to flagship index; List of companies spans banking, real estate and consumer sectors
Emma Dunkley in Hong Kong – FT
Index provider MSCI has unveiled a list of 234 Chinese mainland-listed stocks to be added to its flagship emerging markets index, an inclusion that represents a key development in the opening of the country’s markets to overseas investors.
/jlne.ws/2Kqpd2e

Goldman Loses Its ‘Queen of Commodities’ Marking End of an Era
Javier Blas and Jack Farchy – Bloomberg
Isabelle Ealet was last of a generation of commodities bankers; Departure follows worst year for unit since Goldman’s IPO
Isabelle Ealet, the departing co-head of the securities unit at Goldman Sachs Group Inc., is the last of a generation of bankers who battled for supremacy in a golden era of commodity profits for Wall Street.
/jlne.ws/2KsgoEX

Regions

The Future of Fake News in India: 1,000 WhatsApp Messages a Day; In election season, campaigners are using the messaging service more to target voters, but its opaque nature makes it hard to hunt down sources of false content
Newley Purnell, Samarth Bansal, Krishna Pokharel, and Bill Spindle – WSJ
For Gurupad Kolli, a 40-year-old lawyer who lives in a remote Indian village, the torrent of WhatsApp messages surging to his phone a few weeks ago meant one thing: election day was near.
/jlne.ws/2KoEZdP

Argentine Peso Tumbles as Central Bank Changes Strategy
Ignacio Olivera Doll and Carolina Millan – Bloomberg
The Argentine peso fell to a record low as the central bank changed its strategy to protect the currency and the International Monetary Fund said it won’t set any exchange-rate targets for a stand-by arrangement.
/bloom.bg/2Ikl4Aw

Index IDEA: Charting Poland’s journey toward FTSE Developed Market status
FTSE Russell
In its new research report, entitled Poland: The journey to Developed Market status, FTSE Russell examines key market statistics for Poland linking back to the FTSE Country Classification System, introduced in 2004 as a structured, objective and transparent global framework for determining equity markets’ development status.
bit.ly/2GeVQ0u

Erdogan vows to take greater control of Turkey’s monetary policy; Lira hits record low as president restates commitment to lower interest rates
Laura Pitel in Istanbul and Jonathan Wheatley in London – FT
The Turkish lira hit a record low on Tuesday after Recep Tayyip Erdogan vowed to take greater control of monetary policy if he wins elections next month.
/jlne.ws/2KrNNzZ

Spying fears prompt Russian software company move to Zurich; Kaspersky Labs opens Swiss data centre to ease worries on Kremlin intelligence activity
David Bond, Security and Defence Editor – FT
Russian cyber security company Kaspersky Labs is to open a new data centre in Switzerland to address concerns that its antivirus software can be used as an intelligence-gathering tool by the Kremlin.
/jlne.ws/2wG0aX5

Thomson Reuters to move forex derivatives out of London after Brexit; Group will shift business that trades more than $300bn a day to Dublin next year
Philip Stafford in London – FT
Thomson Reuters is planning to transfer its widely used foreign exchange derivatives trading from London to Dublin to be ready for the UK’s departure from the EU next year.
/jlne.ws/2Kqcv3z

Norway Eases Off Dipping Into World’s Biggest Piggy Bank
Sveinung Sleire and Mikael Holter – Bloomberg
Withdrawal seen at $2.6 billion, 71% below earlier estimate; Revised budget based on $65/barrel oil price assumption
Norway expects to withdraw less from its giant sovereign wealth fund this year as a recovery in oil prices is boosting the country’s coffers.
/jlne.ws/2KpajcJ

Chinese Stocks Aren’t Normal—Whatever MSCI Thinks; Mainland-listed shares will enter MSCI’s key benchmarks, but that won’t resolve the problems with China’s markets
By Jacky Wong – WSJ
Global investors are about to get a larger dose of Chinese stocks in their portfolios. But as Big Bangs go, this one has a pretty low decibel count.
/jlne.ws/2IHYWiE

What’s Polarizing China’s Bond Market?; A government campaign to curtail financial risk is making it tough for weaker, mostly private firms to raise cash, and people are worried
By Shen Hong – WSJ
Investors are demanding the highest premiums in two years for buying lower-grade Chinese corporate bonds, now that Beijing’s campaign to rein in financial risk has made it harder for the country’s weaker, mostly private firms to raise cash.
jlne.ws/2takvBv

Brexit

Brexit Britain Wasting Time on Pay Gap, Billionaire Spencer Says
Will Hadfield – Bloomberg
ICAP founder urges priority financial-services deal, tax cuts; Shareholders of Spencer’s NEX meet Friday to vote on CME offer
British business is “wasting time” reviewing the gender pay gap when it should be focused on limiting the fallout from Brexit, according to Michael Spencer, the billionaire founder of electronic markets operator NEX Group Plc.
/jlne.ws/2wHNkY3

Miscellaneous

It’s A Good Time To Be A Reporter Covering Trump If You Like Money And Going On TV
Steven Perlberg – BuzzFeed News
A whirlwind Washington era has vaulted White House reporters into a charmed, somewhat awkward, but characteristically Trumpian reality: fame and fortune.
/bzfd.it/2IiUWpH

An Ice Core Reveals the Economic Health of the Roman Empire
Nicholas Wade – NY Times
A year by year economic history of the Roman Empire might seem as impossible to reconstruct as the lost 107 books of Livy’s history of Rome. Yet something close to such a record has now been retrieved from the unlikeliest of places — a glacier in central Greenland.
/jlne.ws/2Kqvcnw

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About Author

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