Hits & Takes
We have added Jaclyn Bouchard, senior manager, Global ESG Disclosure and Engagement at S&P Global, as a speaker at our MarketsWiki Education World of Opportunity series in New York. She will be speaking on July 9 at Thomson Reuters.~JJL
The lineup for the New York series on July 9 at Thomson Reuters in Times Square is Cboe’s Bryan Christian, Reuters’ John McCrank, Citadel’s Allison Gott, Sullivan & Cromwell LLP’s Ken Raisler, BNP Paribas’ Amanda Rajkumar and S&P Global’s Jaclyn Bouchard
The lineup for the New York series on July 11 at Nasdaq is Rosenblatt’s Vikas Shaw, Tabb Group’s Bruce Morris, Quantitative Brokers’ Ralf Roth, Thesys Technologies’ Mike Beller, Trillium’s Bailey Kessing, consultant and former CFTC staffer Jeff Bandman, Viable Markets David Weisberger, Renovatio PR CEO and former NYMEX CEO Bo Collins, Greenwich Associates’ Kevin McPartland, Nasdaq’s Oliver Albers and Maura Cunningham, founder and executive director of Rock the Street, Wall Street.~JJL
Wall Street Is Awash in Sublease Space. It’s a Bad Sign for Landlords
David M Levitt – Bloomberg
Rate of tenants leasing out offices downtown hits 8-year high; Companies compete with their own landlords, undercutting rents
When the Murdoch media empire abandoned plans to move from midtown Manhattan to the World Trade Center two years ago, developer Larry Silverstein put on a brave face. “Make no mistake,” he said. “Downtown’s momentum is palpable and unstoppable.”
**** Who needs an office now that you can hang out in Starbucks without ordering anything?~JJL
U.S. Charitable Giving Tops $400 Billion
Fang Block – Barron’s
Boosted by a bull market and a strong economy, charitable giving in the United States surpassed the $400 billion mark for the first time in 2017, according to an annual report on philanthropy released Tuesday.
Last year, American individuals, bequests, foundations, and corporations—the four sources of charity giving—donated an estimated $410.02 billion, an increase of 5.2% over the revised total of $389.64 billion in 2016, the report shows.
***** What impact will the tax law change having on charitable giving in 2018?~JJL
Friday’s Top Three
Everyone wants to know who’s got it, so Bloomberg’s piece Five Ways to Become a Wall Street Billionaire in 2018 took the top spot yesterday. Second went to the FT’s Two big UK banks shift some euro clearing from London to Frankfurt. That would be Barclays and HSBC. Third was Bloomberg’s Hiding My Depression Almost Destroyed My Job. If you are depressed, reach out. If you know someone who is depressed, reach out.
127,844,982 pages viewed; 23,161 pages; 213,398 edits
Professor Who Rang VIX Alarm Says Tether Used to Boost Bitcoin
Matt Robinson and Matthew Leising – Bloomberg
Tether, one of the most-traded cryptocurrencies, shows a pattern of being spent on Bitcoin at pivotal moments, helping to drive the world’s first digital asset to a record price in December, according to research by a University of Texas professor known for flagging suspicious activity in the VIX benchmark.
Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say
Nathaniel Popper – NY Times
A concentrated campaign of price manipulation may have accounted for at least half of the increase in the price of Bitcoin and other big cryptocurrencies last year, according to a paper released on Wednesday by an academic with a history of spotting fraud in financial markets.
Paul Tudor Jones, Goldman Sachs launch ETF focused on ESG investing
Robin Wigglesworth – FT
Hedge fund tycoon Paul Tudor Jones and Goldman Sachs have launched an exchange-traded fund designed to invest in companies that are “driving positive change”.
Demolishing Monopoly From Below: How Two Radicals Would Remake Markets; A libertarian-leaning law professor and economist propose new market mechanisms to free up land, tame tech giants, and revitalize democracy
Greg Ip – WSJ
Many of today’s boldest thinkers across the ideological spectrum think the economy’s most serious malady isn’t inequality, populism or big government: it’s monopoly.
New York’s Top Court Limits Time Frame for Martin Act Lawsuits
Matthew Goldstein – NY Times
A powerful law used by New York’s top prosecutor to bring fraud charges against Wall Street firms was reined in by the state’s highest court on Tuesday, a decision that could imperil an $11 billion lawsuit against Credit Suisse and blunt a favored tool for pursuing wrongdoing by banks and their executives.
New Goldman Sachs Fund Will Track Paul Tudor Jones’s Feel-Good Companies
Andrew Ross Sorkin – WSJ
The spiritual guru Deepak Chopra had just finished teaching a class about ethics in business at Columbia Business School when he called the billionaire investor Paul Tudor Jones II in the fall of 2012.
‘Capitalism may need modernizing,’ says billionaire hedge fund manager Paul Tudor Jones; Today’s definition of capitalism needs an overhaul because of income inequality, billionaire hedge fund manager Paul Tudor Jones tells CNBC.
Kate Rooney – CNBC
The 50-year-old definition of capitalism in the U.S. is due for an update because of income inequality, according to billionaire hedge fund manager and philanthropist Paul Tudor Jones.
The Big Interview: Richard Parsons
Hayley McDowell – The Trade
Instinet’s European CEO, Richard Parsons, discusses the firm’s liquidity agreements with Virtu and Sun Trading, the debate around SIs and periodic auctions, and potential consolidation on the sell-side over the next few years.
London’s gold market demands green credentials for producers; Investors and banks face scrutiny over the environmental impact of their portfolios
Henry Sanderson – FT
The world’s biggest producers of gold will have to prove their green credentials if they want their metal to be traded on London’s $5.5tn-a-year bullion market. Under the new standards being introduced by London Bullion Market Association, refiners and miners will have to provide data on a range of environmental benchmarks including energy usage, pollution, water usage, carbon emissions as well as health and safety.
Women Are Losing Out at ‘Alpha Male’ U.K. Banks, Panel Says
Lucy Meakin -Bloomberg
Treasury Committee recommends more formulaic payout criteria; Report into women in finance says culture damaging diversity
U.K. lawmakers are calling for an overhaul of the way bankers’ bonuses are awarded to help women gain greater representation within the industry.
Exchanges, OTC and Clearing
Hong Kong bourse raises CEO’s annual salary to HK$9.3 million, before bonus and stock options
Enoch Yiu – South China Morning Post
Hong Kong Exchanges and Clearing Limited (HKEX) has raised the salary of its chief executive by 3.5 per cent as it renews his contract for three more years, rewarding him for leading the 2017 overhaul in listing rules that could return the world’s fourth-largest equity bourse to pole position in the global race for fundraising.
New Product Summary: Initial Listing of Three (3) (Platts) Freight Route Futures Contracts – Effective: July 2, 2018
Renewal of Contract of Chief Executive
Hong Kong Exchanges and Clearing Limited (“HKEX”) announces that the Board of Directors of HKEX (the “Board”) has approved the renewal of the employment contract of Mr Li Xiaojia, Charles (“Mr Li”) as the Chief Executive of HKEX for a further 3-year term from 16 October 2018 to 15 October 2021, inclusive.
Strongest supporters of Partnership Program join Eurex Clearing governance
Eurex Clearing continues to gain broad market support for its Partnership Program. So far, 28 market participants from the U.S., the U.K., Asia and Continental Europe have joined the program to support the joint objective of building a liquid alternative to clear Euro denominated OTC interest rate derivatives in the EU27.
DGCX posts record volume of transactions in May
The Dubai Gold and Commodities Exchange (DGCX) witnessed its best month ever in May, recording volume of 2,163,598 lots valued at over $46.11 billion.
Barchart Announces Complete Coverage of Canadian Securities with the Addition of CSE and Aequitas NEO to its Data Offering
Today, Barchart, a leading provider of financial market data and technology, is pleased to announce complete streaming coverage of Canadian-listed equity securities with the addition of CSE and Aequitas NEO to its data inventory. Barchart also now covers trading on Aequitas Lit which is a second venue managed by Aequitas. With the addition of these exchanges, Barchart now provides streaming data coverage for all primary listing venues in Canada.
Conversation.one is Amazon Alexa-Certified for Financial Institutions; The platform offers banks and credit unions a No-Coding, 4-Step Wizard to Launch their Alexa Skills in less than 5 minutes.
Alexa skills, Google Home actions, FB messenger bots, intelligent assistants – the world of conversational interfaces is booming. In parallel, banks and credit unions seek to improve customer service while reducing their high call center personnel costs. However, a lack of skills and knowledge in this new, dynamic market makes it almost impossible for businesses to embrace these trends.
AI post-trade derivatives platform launches after first buy-side transaction; Trades by JP Morgan and Citadel processed by ‘no-touch’ platform designed to remove post-trade manual processes.
John Brazier – The Trade
A ‘no-touch’ trade processing system for derivatives has launched after it processed its first buy-side transaction involving JP Morgan and hedge fund giant Citadel.
How Treasury could come down on fintech regulation
Rachel Witkowski – American Banker
The Treasury Department is expected to strike a middle path in upcoming recommendations on regulating the fintech sector, laying out how fintech oversight could be incorporated in existing rules without creation of an entirely new regulatory framework, according to sources familiar with the matter. Treasury is planning to release its report on regulating nonbanks, including fintech firms, as early as this month, these sources said.
Dutch payments group Adyen more than doubles on debut
Aliya Ram – Financial Times
Adyen shares more than doubled on the Dutch fintech group’s trading debut on Wednesday, with its market capitalisation almost hitting EUR15bn — far higher than that of established European financial companies such as Commerzbank.
Adyen IPO: Everything you need to know about the $8 billion fintech company
Arjun Kharpal – CNBC
Adyen shares will begin trading on Wednesday in what will be one of Europe’s largest technology initial public offerings (IPOs). But you’d be forgiven for not knowing much about the Dutch financial technology or fintech firm as it has flown under the radar for many years. So here’s a rundown of what Adyen does and how it makes money.
Fidessa Named Best Buy-Side OMS At The 2018 Intelligent Trading Technology Awards
Fidessa group plc (LSE: FDSA) today announced that its Investment Management Solution (IMS) has been named Best Buy-side OMS at the Intelligent Trading Technology Awards. Now in their second year, these awards acknowledge excellence in trading technology within capital markets with the winners selected by the Intelligent Trading Technology readership and the Intelligent Trading Summit Advisory Board.
truePTS Launches ‘No-touch’ Trade Processing for the Buy-side
truePTS, the automated trade processing platform for derivatives, has processed its first buy-side trades with J.P. Morgan and Citadel, as demand grows across the industry for a fully-integrated allocation and validation platform. While addressing immediate buy-side regulatory compliance requirements, truePTS is also driving down operational costs with a lower-cost, digital alternative to legacy ‘confirmation’ providers.
Bitcoin was just the beginning of the imminent blockchain era
Cliff Fluet – City AM
Mention “blockchain”, and most people still immediately think of bitcoin – or ethereum, or ripple, or other cryptocurrencies.
Apple bans cryptocurrency mining on its devices as updated developer guidelines take effect
Torjus Roberg – City AM
Apple has tightened its developer guidelines and banned cryptocurrency mining apps from being used on the company’s devices.
Trio of crooks busted in $1.8M cryptocurrency heist
Rebecca Rosenberg – NY Post
Three cyber crooks — including a church worker and a city Education Department staffer — were busted Tuesday for an elaborate $1.8 million cryptocurrency heist, authorities said.
Financial Services Industry Spends $1.7 Billion on Blockchain
Janine Wolf – Bloomberg
Greenwich Associates releases report on annual spending; Three-quarters of projects expected to go live within 2 years
Here’s proof financial services companies are taking blockchain technology seriously.
Blockchains Talking to Each Other Gives Hope to Crypto Diehards
Olga Kharif – Bloomberg
Interoperability features could compete with coin exchanges; Cosmos, Metronome, others are racing to offer capabilities
Hopes are running high for the next wave of innovation in blockchains — the decentralized computer-based distributed ledgers that are being touted as the solution for everything from routine financial transactions to alleviating world hunger.
Cryptocurrency Ethereum Classic Soars on Coinbase Listing Plan
Janine Wolf – Bloomberg
Digital exchange expects to begin trading in a few months; Virtual token’s price jump as much as 22% on announcement
Ethereum Classic, an offshoot of the second-biggest cryptocurrency, soared as much as 22 percent after the digital exchange Coinbase Inc. said it will begin trading the virtual token in the next few months.
Palmex: The UAE’s First Sandbox-Regulated Crypto Exchange
Ollie Leech – Cryptovest.com
Palmex has become the first digital asset exchange in the Middle East and North Africa region (MENA) to receive a regulatory sandbox license, as part of an ongoing fintech development programme.
In a press release following this announcement CEO and founder of Arabian Chain, Mohammed Alsehli, hailed this achievement as a breakthrough for the MENA region.
The Top 10 Chinese-Backed Crypto Hedge Funds
Crypto Investor Asia
The cryptocurrency markets may be in a bit of turmoil right now with investors searching for direction as Bitcoin trades well below US$7,000 and Ethereum well below US$600. At 6.30 a.m. Eastern Time, the price of Bitcoin was approximately US$6,800 and the price of Ethereum was US$580. But despite the lackluster cryptocurrency markets, some Chinese initial coin offering (ICO) funds have turned in spectacular results for the past year. Even though ICOs and cryptocurrency exchanges have been banned by Beijing, that hasn’t stopped Chinese investors and fund managers from investing in overseas ICOs and their results have been nothing short of phenomenal, beating the traditional equity and bond markets by a long shot.
CFTC calls for crypto exchanges to share trading data
Lea Nonninger – Business Insider
The US Commodity Futures Trading Commission (CFTC) has demanded that several cryptocurrency exchanges — Bitstamp, Coinbase, itBit, and Kraken — share data about trading activity to determine whether any manipulation is affecting the crypto market, according to The Wall Street Journal.
Hehmeyer Gets Sneak Peak Of Coinifide Education And Exchange Platform For Cryptocurrencies
Jessica Darmoni – Hehmeyer
“This is still the very early days and there are no full blown experts in this space yet,” said Yuri Zamostin, CEO of Coinifide, an educational platform and peer-to-peer decentralized exchange for cryptocurrencies that will launch this summer. Hehmeyer Trading + Investments sat down with Mr. Zamostin to learn more about Coinifide’s goals to educate the market, certify experts via a third party accreditation company and provide a way for market participants to trade hard-to-find cryptocurrencies.
Here’s why Apple is banning cryptocurrency mining on iPhones and iPads; Apple has joined Google, Facebook and many other tech giants in banning stealthy cryptojackers from secretly using your device.
Jonathan Greig – Tech Republic
Despite its continued popularity, cryptocurrency continues to have a rough 2018, with multiple websites and platforms banning ads and apps that secretly use your device to mine for a variety of cryptocurrencies.
Trump has turned words into weapons. And he’s winning the linguistic war; From ‘spygate’ to ‘fake news’, Trump is using language to frame – and win – debates. And the press operate like his marketing agency
George P Lakoff and Gil Duran – The Guardian
Donald Trump has been a salesman for nearly half a century. He is now selling himself, his worldview and his self-serving views of the law and the truth. His principal tools are language and the media. By faithfully transmitting Trump’s words and ideas, the press helps him to attack, and thereby control, the press itself.
Trump says he’ll punish ‘the people of Canada’ because of Trudeau’s news conference
Daniel Dale and Alex Ballingall – The Start
Escalating his attack on Prime Minister Justin Trudeau, U.S. President Donald Trump is now pledging to punish “the people of Canada” economically because of the post-G7 news conference in which Trudeau criticized Trump’s tariffs.
Coming Attractions: Trump Showed Kim a Faux Movie Trailer About a Transformed North Korea
Peter Baker – NY Times
President Trump once told advisers to think of every day of his tenure as another episode in a television series. But with his landmark meeting with North Korea’s leader, Kim Jong-un, he seems to be eyeing a move up to the big screen.
Spoofing, Surveillance and Supervision
We begin with a summary of applicable spoofing and supervisory laws and then analyze the pertinent CFTC enforcement cases. Section 4c(a)(5)(C) of the Commodity Exchange Act (CEA) makes it unlawful for “[a]ny person to engage in any trading, practice, or conduct on or subject to the rules of a registered entity that…is, is of the character of, or is commonly known to the trade as, ‘spoofing’ (bidding or offering with the intent to cancel the bid or offer before execution).”
Remarks of CFTC Chairman J. Christopher Giancarlo before the Women in Derivatives Forum, Washington D.C.
Good afternoon, everyone. It is a pleasure to speak to Women in Derivatives.
Thank you to Petal Walker, my former CFTC colleague, for hosting this event. Petal is one of the most well informed lawyers in America on the impact of blockchain technology on derivatives markets.
CFTC Charges Florida-Based Mark Olsen Mining Company and Betty Lea Grimes with Engaging in Illegal, Off-Exchange Precious Metals Transactions
The Commodity Futures Trading Commission (CFTC) today filed a civil enforcement action charging Florida-based Defendants Mark Olsen Mining Company (MOMC) and Betty Lea Grimes with engaging in illegal, off-exchange transactions in precious metals with retail customers on both a fully paid as well as a leveraged, margined, or financed basis. Grimes is MOMC’s president, controlling person, and managing member. Grimes has used the following names, and/or combinations of these names, in various legal documents: Betty Grimes, Lea Grimes, Lea Lauren, Betty Nehme, and Lea Nehme. Neither MOMC nor Grimes has ever been registered with the CFTC.
Reminder: Testing of FINRA Data Feed Test IP Addresses
Beginning Monday, July 9, 2018, FINRA will introduce dedicated test broadcast IP multicast channels for evening format testing for its data feeds—BTDS, ATDS, 144A, SPDS, SPDS-144A, TDDS 2.0 and BBDS. FINRA will discontinue disseminating test data via the production data feed channels when the dedicated test broadcast IP multicast channels are implemented. FINRA reminds firms that the second production User Acceptance Test (UAT) will occur on Saturday, June 16, 2018.
SEC Charges Merrill Lynch for Failure to Supervise RMBS Traders; Merrill Ordered to Return More than $10.5 Million to Harmed Customers
The Securities and Exchange Commission today announced that Merrill Lynch, Pierce, Fenner & Smith Inc. will pay more than $15 million to settle charges that its employees misled customers into overpaying for Residential Mortgage Backed Securities (RMBS). Merrill Lynch agreed to repay more than $10.5 million to its customers and to pay penalties of approximately $5.2 million.
ESMA reports on penalties and supervisory measures under EMIR
The European Securities and Markets Authority (ESMA) has issued today its first annual report regarding supervisory measures carried out and penalties imposed by national competent authorities (NCAs) under the European Market Infrastructure Regulation (EMIR).
Foreign banks push US Federal Reserve to relax capital rules; Executives complain they are forced to hold significantly higher buffer than US banks
Ben McLannahan in New York – FT
Foreign banks in the US are stepping up a fight for regulatory relief, complaining they have been unfairly hit by supercharged standards on capital developed under the Obama administration.
New York top court narrows Martin Act in $11 billion Credit Suisse case
Jonathan Stempel – Reuters
New York’s highest court on Tuesday curbed the state attorney general’s ability to fight fraud on Wall Street, awarding a victory to Credit Suisse Group AG (CSGN.S) as it tries to end an $11 billion lawsuit over risky mortgage securities.
Bank of America to Pay $15 Million to Settle Claims that Traders Cheated Customers; Sanction by the SEC includes $10.5 million that must be returned to customers and a $5.2 million civil penalty
Dave Michaels – WSJ
Bank of America BAC -0.53% Merrill Lynch will pay over $15 million to settle claims that its traders lied about how much they paid to acquire mortgage bonds, allowing the bank to charge a higher price to clients buying securities.
Investing and Trading
Trafigura profits drop 50% on sting from oil markets; Trafigura and others have struggled to make money from buying and storing cheap crude
Neil Hume and David Sheppard – FT
Profits at commodity trader Trafigura plunged by 50 per cent in the first half of its financial year, as it struggled with tough conditions in the oil market, one of its two core businesses.
Paul Tudor Jones says the stock market could go ‘crazy’ to the upside to end the year; Paul Tudor Jones predicts a big stock market rally after the November midterm elections; The billionaire investor says the move higher will not be sustainable. He predicts higher interest rates will lead to an eventual recession.
Tae Kim – CNBC
Paul Tudor Jones, the legendary hedge fund manager who called the October 1987 crash, believes the stock market will rally near the end of this year.
Cantor Fitzgerald bolsters prime brokerage expansion with new global cap intro head; Emma Sugarman joins from Serafima Investments as Cantor Fitzgerald continues to build out primer brokerage business.
John Brazier – The Trade
Cantor Fitzgerald has bolstered its expanding prime brokerage business with the appointment of a new global head of capital introduction.
LBO Volume Surges as KKR, Others Put $1 Trillion Cash Pile to Work; Leveraged buyout deals are on a pace for best year since 2007
Miriam Gottfried – WSJ
The animal spirits are returning to the leveraged-buyout business.
Big banks slip into bear market territory as rates rise; Sixteen global financial companies are down more than 20 per cent from peaks
Ben McLannahan and Robin Wigglesworth in New York – FT
More than a dozen of the world’s biggest banks have slipped into a bear market, highlighting risks to the global economy even as equity indices reach new highs and the Federal Reserve prepares to raise interest rates.
Can Lloyd’s of London survive as the home of global insurance?; Historic insurance market faces challenge from overseas rivals and digital disrupters
Oliver Ralph, Insurance Correspondent – FT
Change comes slowly at Lloyd’s of London, the 332-year-old insurance market. Recently its bosses relaxed a rule saying that men must wear ties. Last year, they took action against the lunchtime pints that had been a centuries-spanning staple for many who work in the market.
Brazil’s central bank in firepower test with currency speculators; The real once more comes under assault from foreign exchange traders
Joe Leahy and Andres Schipani in São Paulo – FT
Brazil’s central bank president Ilan Goldfajn is facing the test of his career as the country’s currency has once more come under assault from foreign exchange traders.
China’s current account at risk of deficit on trade shock; Country’s dwindling surplus reflects greater tourism abroad
James Kynge – FT
A moderate shock, perhaps caused by mounting trade frictions, could send China’s current account into deficit this year for the first time since 1993, according to Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered.
Market tension pushes Italian borrowing costs to 4-year high; Bond auctions see country pay up for fresh debt-raising
Kate Allen – FT
Bond investors demanded significantly higher returns from Italian debt at auctions on Wednesday, highlighting the lasting scar left by last month’s market ructions.
Brexit Is Turning Into the Road Trip From Hell; But at least Parliament just created an off-ramp to prevent a no-deal exit.
Therese Raphael – Bloomberg
Theresa May survived a key Brexit showdown with rebels in her own Conservative Party in parliament Tuesday. The apparent compromise frees the prime minister to negotiate a divorce agreement with the European Union. But her threat of walking away without a deal is no longer credible. If she fails in the negotiations, there’s now every chance parliament will force her back to the table.
AT&T Cleared to Buy Time Warner in Blow to Trump Administration
David McLaughlin, Andrew M Harris, Scott Moritz, and Erik Larson – Bloomberg
Judge Leon rejects Justice Department request to block merger; AT&T on brink of buying CNN owner after almost two years
AT&T Inc. was cleared by a judge to take over Time Warner Inc. in an $85 billion deal that will fuel the mobile-phone giant’s evolution into a media powerhouse and could spark a wave of new mergers.