First Read

Hits & Takes
JLN Staff

Here is the agenda for today’s CFTC Technology Advisory Committee meeting in Washington, DC. The meeting should be live streamed if you are interested in watching any of it.~JJL

The CFTC and ASIC signed FinTech Cooperation Arrangement at the FinTech Forward conference at the CFTC in Washington, DC yesterday and I got to see it. I will always remember my first FinTech Cooperation Agreement witnessing.~JJL

As the Chicago Tribune reports, the “much-derided corporate moniker of Tronc” is going the way of the dodo. Welcome back, Tribune Publishing! ~SD

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The Tinder for Markets Is Run on Crypto
Krista Gmelich
Data scientists to sell market predictions to hedge funds; New marketplace, known as Erasure, will run on blockchain
Richard Craib built his quant-driven hedge fund Numerai on the idea that if one data scientist is good, 40,000 are better. Now he’s inviting competing funds to draw from the same pool of brains for hire.
/jlne.ws/2Quo6S5

***** On a panel yesterday on AI at the CFTC’s FinTech Forward conference, it was suggested that this new technology was the perfect platform for anonymously trading inside information.~JJL

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ALTSO’s Rocktoberfest: The Financial Industry Rocks to Provide Prosthetic Limbs for Children in the Developing World
PRWeb
Leg To Stand On (ALTSO) has a new slogan: “Mobility is More than Movement.”
This slogan succinctly defines the mission of the non-profit who provides free prosthetic limbs, orthotic devices, appropriately fitted wheelchairs, and rehabilitative care to children in the developing world who live with untreated limb disabilities because they cannot afford treatment.
/jlne.ws/2NkuTM9

****Rocktoberfest is next Thursday, October 11. If you haven’t bought a ticket yet – listen up! Enter the promo code “Lothian” when purchasing tickets and you’ll get three tickets for the price of two. (Scroll to the bottom of the linked page to purchase tickets.) This year’s event will take up the whole of City Winery and feature an acoustic stage in addition to the mainstage – both firsts for Rocktoberfest in Chicago!~SD

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Finance, the media and a catastrophic breakdown in trust
John Authers – Financial Times
Finance is all about trust. JP Morgan, patriarch of the banking dynasty, told Congress in the 1912 hearings that led to the foundation of the US Federal Reserve, that the first thing in credit was “character, before money or anything else. Money cannot buy it.
“A man I do not trust could not get money from me on all the bonds in Christendom,” he added. “I think that is the fundamental basis of business.” He was right. More than a century later, it is ever clearer that, without trust, finance collapses. That is no less true now, when quadrillions change hands in electronic transactions across the globe, than it was when men such as Morgan dominated markets trading face to face.
/jlne.ws/2P8BpY5

**** This is John Authers’ last article for the Financial Times before he starts a new job with Bloomberg. ~JB

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Italian ‘Robin Hood’ banker sentenced over EUR1m pilfered for the poor
BBC
An Italian bank manager who robbed from the rich to give to the poor has narrowly escaped going to prison.
Gilberto Baschiera was the bank manager in the small mountain town of Forni di Sopra, where he stole about EUR1m (£0.9m) over seven years.
He took small amounts from wealthy clients and transferred it to those who couldn’t qualify for credit.
/jlne.ws/2zRdtTV

**** “He steals from the rich; and gives to the poor; Mr. Moore, Mr. Moore, Mr. Moore.” (can’t help myself…I grew up on Monty Python). ~JB

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The Big Hack: Amazon, Apple, Supermicro, and Beijing Respond
Bloomberg
Apple: Over the course of the past year, Bloomberg has contacted us multiple times with claims, sometimes vague and sometimes elaborate, of an alleged security incident at Apple. Each time, we have conducted rigorous internal investigations based on their inquiries and each time we have found absolutely no evidence to support any of them. We have repeatedly and consistently offered factual responses, on the record, refuting virtually every aspect of Bloomberg’s story relating to Apple.
/jlne.ws/2QwLlv3

**** There are more denials in that story, this is just one.~JB

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Thursday’s Top Three
ErisX was the big news Thursday. Our top read story was John Lothian News’ ErisX Enters the Crypto World With New Spot and Futures Platform. Next was Inc.’s American Airlines CEO: More Crowded Planes Are ‘Much More Comfortable’. And tied for third were two more ErisX stories, ErisX Announces New Exchange for Digital Asset Investors and Traders, from BusinessWire, and Bloomberg’s Eris Exchange to Create Crypto Market Backed by DRW, Virtu

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MarketsWiki Stats
133,290,072 pages viewed; 23,291 pages; 215,187 edits
MarketsWiki Statistics

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Lead Stories

Banks Are Getting Squeezed by the Fight Against Dirty Money; As governments make them the front-line defense against financial fraud, banks have to be more cautious. That’s hurting returns.
Paul J. Davies – WSJ
Every few months it seems some bank is nailed in a multi-billion dollar money-laundering scandal. The latest is Danske Bank (DNKEY -4.77%), which may win the prize for sheer audacity, with more than $230 billion of potentially suspicious cash flowing through a tiny branch.
/jlne.ws/2Qwr4Wh

Virtu Is Pursuing Takeover of Investment Technology Group
Nick Baker and Annie Massa – Bloomberg
Companies have been holding recent discussions about a deal; Potential transaction would follow Virtu’s purchase of KCG
High-speed trading firm Virtu Financial Inc. is seeking to acquire independent brokerage Investment Technology Group Inc. as pressure mounts for proprietary traders to branch out.
/jlne.ws/2Qt0n4M

Cryptocurrencies, Trading Scams Draw Increased Federal Enforcement; Derivatives regulator CFTC posts rise in fines in fiscal 2018; SEC to release figures later this year
Gabriel T. Rubin – WSJ
Enforcement actions and fines by the federal derivatives-market regulator ticked up in the last fiscal year, buoyed by cryptocurrency cases, spoofing schemes and settlements dating back to the financial crisis.
/jlne.ws/2Qvg4IC

Danske Is Now Europe’s Worst Bank Stock as Estonia Scandal Grows
Frances Schwartzkopff and Christian Wienberg – Bloomberg
Watchdog doubled extra buffer requirement amid Estonia scandal; Bank’s shares plunged as much as 11 percent on Friday alone
Danske Bank A/S lost a tenth of its market value on Friday as the fallout of its Estonian money laundering scandal turns Denmark’s biggest lender into the year’s worst financial stock in Europe.
/jlne.ws/2QxQy5Q

Danske Bank memo shows how Russians moved money; ‘Highly profitable’ mirror trades were used by clients to shift money out of country
Richard Milne in Oslo and Caroline Binham in London – FT
Danske Bank executed up to EUR8.5bn of controversial “mirror trades” for Russian customers in a single year, according to an internal memo that provides new insight into the scale and tactics behind its EUR200bn money-laundering scandal.
/jlne.ws/2QsShcr

No-deal Brexit has big implications for Europe’s derivatives market; About £38tn of swaps contracts could be forced to move venues in just three months
John Dizard – FT
Britain and the rest of Europe have this week been forced to face the reality of a what a no-deal Brexit would mean for the essential plumbing of the financial world.
/jlne.ws/2QBe9Td

Tesla’s Musk mocks SEC as judge demands they justify fraud settlement
Jonathan Stempel – Reuters
Tesla Inc’s Elon Musk on Thursday mocked the U.S. Securities and Exchange Commission, just hours after a federal judge ordered him and the regulator to justify their securities fraud settlement, which let Musk remain chief executive.
/jlne.ws/2QxQ1Ro

Tesla’s Musk, ordered to defend fraud settlement, takes aim at SEC
Jonathan Stempel, Sonam Rai – Reuters
Tesla Inc Chief Executive Elon Musk on Thursday mocked the U.S. Securities and Exchange Commission, hours after a federal judge ordered him and the regulator to justify their settlement of securities fraud charges.
/jlne.ws/2OGKSJa

****NYT’s take on the “Shortseller Enrichment Commission” tweet can be found here.

Commerzbank employee wins London sex and maternity discrimination case
Jane Croft – Financial Times
A senior bank employee who says she was “marginalised” when she came back from maternity leave has won a sex and maternity discrimination claim against Commerzbank.
Jagruti Rajput, a senior compliance officer at the German bank, took her claim to a London employment tribunal after she found substantial elements of her job had been transferred to another employee when she returned from maternity leave.
/jlne.ws/2OB3ASv

****Financial News with the story here.

Yale Invests in Crypto Fund That Raised $400 Million
Alastair Marsh and Lily Katz – Bloomberg
Paradigm was started by Coinbase’s Ehrsam, Sequoia’s Huang; Ivy League school targets 60% of 2019 assets in alternatives
Yale University, the Ivy League school that has invested in everything from Puerto Rican bonds to timber in New Hampshire, is getting into the market for cryptocurrencies.
/jlne.ws/2QwIMJj

Virtu and brokerage ITG shares jump on report of takeover talks
Nicole Bullock in New York – FT
Shares of Investment Technology Group and Virtu jumped on a report that the high-speed trader wants to buy the agency broker.
/jlne.ws/2Qw461t

Exchanges, OTC and Clearing

Launch of new FTSE ST Singapore Shariah Index
SGX
First index tracking Shariah-compliant companies listed on SGX; Constituents screened against a clear set of Shariah principles to create a robust Shariah-compliant index for the Singapore market; Meets growing investor demand for Shariah-compliant benchmarks
FTSE Russell, the global index, data and analytics provider, has launched a new Shariah-compliant index tracking companies listed on the Singapore Exchange (SGX). The FTSE ST Singapore Shariah Index has been designed to track Shariah-compliant companies listed on SGX and can used as the basis of investment products. Independent screening is carried out by Yasaar Ltd, an organisation with a global network of expert Shariah scholars. The indexes have been certified as Shariah-compliant through the issue of a Fatwa by Yasaar’s principles.
/jlne.ws/2QsVOHJ

Cboe Global Markets Reports September 2018 Trading Volume
Cboe
October 4, 2018 – Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today reported September monthly trading volume and average revenue per contract (RPC)/net revenue capture data
/goo.gl/MmptPX

Euronext Announces Volumes For September 2018
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for September 2018.
/goo.gl/PGJ71W

India INX launches Global Access with connectivity to CME Group of exchanges
Times of India
BSE-owned India International Exchange (India INX) Wednesday announced the launch of a special purpose vehicle which will facilitate hedgers, traders and investors access international exchanges through a single centralised platform.
/jlne.ws/2OzQgxY

Board Of Directors Election Results Announced By MGEX
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announced the results of its annual Board of Directors (Board) election, held on October 4, 2018. Re-elected to the Board were Martin F. Farrell, Christopher T. Matzdorf, and Kerry L. Melius. Newly elected to the Board was Marc L. Gordon who previously served on the Board from 2011-2017. All were elected to serve two-year terms.
/goo.gl/fgWkxB

Dell Set to List on NYSE If Go-Public Plan Via Buyout Succeeds
Alex Barinka – Bloomberg
Dell Technologies Inc. has applied to list its shares on the New York Stock Exchange as part of a plan to take the company public again through a buyout of a tracking stock.
/jlne.ws/2QuxV2s

Tradeweb tops $100 trillion in trading volumes; Year-to-date trading volumes at Tradeweb surpassed the $100 trillion mark in September, topping its overall trading volume last year.
Hayley McDowell – The Trade
Tradeweb’s total trading volumes have hit $100 trillion so far this year, already surpassing its full-year volumes for all of 2017.
/jlne.ws/2QwI52t

TRADEWEB Sets Volume Record In September As Rising Yields Drive Surge In Global Trading
Mondovisione
For the month of September 2018, Tradeweb Markets set a new record for trade volume. Activity was higher year-over-year and month-over-month in nearly all products on the platform. Average daily volume (ADV) for Tradeweb Markets of $592 billion (bn) across rates, credit, money markets and equities in September 2018 increased 27.5 percent (%) compared to the prior year and 19.5% versus August, while average daily trades totaled 42,639. Year-to-date, total volumes have surpassed $100tn as well as full-year volumes for all of 2017.
/jlne.ws/2RtNjNI

Changes in the Liquidity Provider Schemes of selected products
Eurex
The Management Boards of Eurex Frankfurt AG and Eurex Deutschland took, in accordance with Eurex Clearing AG, the following decision with effect from 5 November 2018:
/jlne.ws/2QuB824

Intercontinental Exchange Completes Acquisition of MERS
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced it has acquired the remaining equity of MERSCORP Holding, Inc., owner of Mortgage Electronic Registrations Systems, Inc. (MERS). ICE has owned a majority equity interest in MERS since 2016. Price and terms of the transaction were not disclosed and will not be material to ICE’s earnings or have an impact on capital return plans.
/jlne.ws/2QsV3hR

EGX Launches Its Training Program On “Risk Management” For Brokerage Firms
MondoVisione
The Egyptian Exchange (EGX) has launched a training program on “Risk Management” in cooperation with the Investor Protection Fund. The training aims at developing the competences of the risk management departments’ employees of the brokerage firms to enable them to design effective policies that strengthen their companies’ in this regard for more stability in the securities industry. The Free training program includes two rounds each is four-days. The program started on Monday, July 9 and ends on Thursday, July 12. Approximately 70 brokerage firms attend each round from Cairo and Alexandria.
/jlne.ws/2QuDpu4

LME Proposes Requirements For The Responsible Sourcing Of Metal In Listed Brands
Press release via Mondovisione
LME position paper sets out detailed responsible sourcing requirements for listed brands
All brands required to undertake OECD red flag assessment to determine “higher” or “lower” focus classification – except for “automatic higher-focus metals” which include cobalt and tin
Special transitional provision for cobalt to enable LME to take action against brands where the market already demonstrates responsible sourcing concerns
/goo.gl/8sQP9F

Fintech

KKR, Tencent to invest $175 million for minority stake in Philippine fintech firm
Reuters
Private equity firm KKR & Co Inc and Chinese tech giant Tencent Holdings Ltd are acquiring a minority stake in the financial technology arm of Philippines’ PLDT Inc, the companies said on Thursday.
/jlne.ws/2QtO4Fi

EU Financial Regulator Budgets Over 1 Mln Euro for FinTech and Crypto Supervision
Ana Alexandre – CoinTelegraph
The European Securities and Markets Authority (ESMA) has budgeted over 1 million euro for monitoring fintech and crypto assets, according to a document published Oct. 4.
Founded in 2011 in Paris, the ESMA has an objective to develop a uniform rulebook for European Union (E.U.) financial markets, as well as provide market supervision. The authority has established Technical Committees in various industrial fields, including information technology (IT), and also works in the field of securities legislation and regulation.
/jlne.ws/2pEew3O

CFTC And ASIC Sign FinTech Cooperation Arrangement
Press Release
The U.S. Commodity Futures Trading Commission (CFTC) and the Australian Securities and Investments Commission (ASIC) today signed an arrangement to cooperate and support innovation through each other’s financial technology (FinTech) initiatives – CFTC’s LabCFTC and ASIC’s Innovation Hub.
/jlne.ws/2pCwZhf

Cryptocurrencies

Crypto Exchange Coinbase Says Institutional Platform Head Is Leaving
Julie Verhage – Bloomberg
Coinbase Inc., one of the largest U.S. cryptocurrency exchanges, said Adam White, head of the institutional platform group and its fifth employee, is leaving the company.
/jlne.ws/2Qyf4Ul

U.S. Court Cements Commodity Verdict on Cryptocurrency After Landmark Ruling
Wilma Woo – Bitcoinist
In a press release October 3, Senior Judge Rya W. Zobel of the U.S. District Court for the District of Massachusetts ruled in favor of the Commodity Futures Trading Commission (CFTC) in a case involving now-defunct cryptocurrency My Big Coin. Part of an ongoing legal battle, lawyers for My Big Coin attempted to halt prosecution for misleading claims about its nature by claiming the CFTC had no jurisdiction over virtual currency.
/jlne.ws/2QtRFTS

Yale Is Said to Invest in Crypto Fund That Raised $400 Million
Alastair Marsh and Lily Katz – Bloomberg
Yale University, the Ivy League school that has invested in everything from Puerto Rican bonds to timber in New Hampshire, is getting into the market for cryptocurrencies.
/jlne.ws/2pB81yv

Legendary Artist Soulja Boy Enter Crypto World With “Bitcoin” Rap
Nick Chong – Ethereum World News
“Watch him crank it, watch him roll,” claimed crypto investors, as Soulja Boy, a world-renowned, critically-acclaimed American artist, dropped a track on cryptocurrencies, arguably one of the hottest trends of the past two years. Taking to Twitter on Tuesday night, the Chicago-based artist released “Young Drako”, an album of his that has reportedly been in the works for months, if not years.
/jlne.ws/2NqK0UF

Institutions More Bullish on Bitcoin than Retail Investors: Fundstrat
CCN
There’s a general perception that retail investors are susceptible to rosy-eyed forecasts about the future of bitcoin, while institutions are more clear-headed about the prospects of this nascent asset class. However, a new survey conducted by Wall Street strategy firm Fundstrat suggests that once institutional investors are interested in bitcoin, they become even more bullish than their retail counterparts.
/jlne.ws/2DYp4Vf

Cryptocurrency Regulations Moving Towards Clarity, Says Investment Security Expert
Osato Avan-Nomayo – Bitcoinist
According to the Asia Times, Wood says the steady increase in suspicious activity reports (SARS) emanating from the cryptosphere has US financial regulators concerned. There are a reported 1,500 cryptocurrency-based SARS each month. Recently, the Wall Street Journal ran a piece alleging that cryptocurrency exchange platform ShapeShift was involved aiding and abetting money laundering. Outside of the US, last month UK MPs called for more regulations. Many in parliament see the cryptocurrency industry as maintaining a “Wild West” reputation.
/jlne.ws/2RsXTof

Public Sale of Venezuela’s State Crypto Petro to Commence on November 5
CCN
With the Petro now officially launched, the public sale of the state-backed cryptocurrency will begin early next month. In a televised address on October 1 during Venezuelan president, Nicolas Maduro announced that the public sale of the Petro will kick off on November 5. Though he did not list names, Maduro also indicated that the state-backed cryptocurrency is currently available on six international exchanges. Additionally, the state-backed cryptocurrency can be acquired using other established digital assets as well as popular fiat currencies.
/jlne.ws/2y3xDc0

Alibaba Files Patent for Blockchain System That Allows ‘Administrative Intervention’
Ana Alexandre – Cointelegraph
Chinese e-commerce conglomerate Alibaba has filed a patent application with the U.S. Patent and Trademark Office (USPTO) for a blockchain-based system that allows a third-party administrator to intervene in a smart contract in case of illegal activities. The USPTO published the patent application on Oct. 4.
/jlne.ws/2CsudDo

A $30 Million Manhattan Condo Was Just Tokenized on Public Ethereum Blockchain
CCN
Manhattan’s first major asset to be tokenized on the blockchain is a luxury condo recently valued at $30 million. The East Village building contains 12 condos, each with 1700 square feet of space and each now tokenized on the Ethereum blockchain. The real estate property is now represented with a sum of tokens available for purchase on the blockchain. A token represents a portion of the value of the property, allowing people to invest in luxury condos even with a small investment, something which was previously very difficult if not impossible.
/jlne.ws/2zTrW1J

Seoul Mayor Announces Five-Year Plan for Promoting Blockchain Industry
Helen Partz – Cointelegraph
The mayor of Seoul Park Won-soon has introduced a five-year plan for developing the blockchain industry in the city, Korean news agency Yonhap News reports Thursday, October 4. The project entitled “Blockchain City of Seoul” contains a number of measures for promoting and developing blockchain-related initiatives and education in the city from 2018 – 2022, Park revealed in a speech in the city Zug, Switzerland on Thursday.
/jlne.ws/2QtN6cg

Politics

Chip Hack a Sign of Chinese Cyber Threats to U.S., Officials Say
Toluse Olorunnipa and Billy House – Bloomberg
Attack aimed at about 30 companies including Amazon, Apple; Spies said to compromise components manufactured in China
The White House national security adviser said Chinese cyber attacks on the U.S. validate the Trump administration’s emphasis on offensive cyber operations of its own, after Bloomberg News reported that Beijing had hacked American computer networks using a microchip built by its spies.
/jlne.ws/2QumJmp

GRU revelations shatter spies’ code of silence; West ratchets up pressure amid determination to expose Moscow intelligence agency
David Bond, Security Editor – FT
For decades Russia’s military intelligence agency, the GRU, lived in the shadow of Moscow’s other better-known spy organisations like the KGB and, since the end of the cold war, the FSB.
/jlne.ws/2Qw6wxg

New York Regulators Examine the Trump Family’s Tax Schemes
Russ Buettner, Susanne Craig and David Barstow – NY Times
New York City officials said on Thursday that they had joined state regulators in examining whether President Trump and his family underpaid taxes on his father’s real estate empire over several decades.
/jlne.ws/2Qxl2Vd

Donald Trump and the golden age of America’s oligarchy; The US president shares basic traits with other scions of wealth
Edward Luce – FT
One of Donald Trump’s advantages is the illusion that he comes from a different species to America’s wealthy elites. Once asked by a foreigner what “white trash” meant, he replied: “They are just like me. Only they’re poor.”
/jlne.ws/2Qwa02O

Regulation

BoE & FCA call for urgent report of FI cyber risk
Rebekah Tunstead – bobsguide
British banks, clearing houses, and payments systems have been asked by the UK’s Bank of England (BoE) and Financial Conduct Authority (FCA) to complete reports on their exposure to, and plans to manage, IT outages and cyberattacks by October 5.
/jlne.ws/2OzpN3z

Prominent hairdresser pleads guilty to insider trading charges
Richard Morgan – NY Post
A prominent Manhattan hairstylist busted for insider trading pleaded guilty Wednesday to one count of conspiracy to commit securities fraud.
/jlne.ws/2QwuLeB

ESMA updates AIFMD Q&As
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers on the application Alternative Investment Fund Managers Directive (AIFMD).
/jlne.ws/2QwzHQG

ESMA updates its Q&As on MiFID II and MiFIR market structure and transparency topics
ESMA
MIFID – SECONDARY MARKETSMIFID II: TRANSPARENCY CALCULATIONS AND DVC
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers regarding market structures and transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
/jlne.ws/2Qy9GR6

FINRA Application Programming Interface (API) Center;Quick access to important FINRA insights and analyses
FINRA
The FINRA API Center provides registered brokerage firms and their vendors with access to FINRA data, when you need it and how you need it. The API Center offers access to FINRA APIs in one convenient location, enabling you to receive a broad array of data in an automated, machine-to-machine fashion.
/jlne.ws/2Qw8n51

No 401(k)? No Problem. 5 Ways to Save for Retirement.
Kaitlyn Kiernan – FINRA
Saving for retirement can be daunting, so it’s no surprise that employer-sponsored retirement plans can be a key stepping-stone into the world of investing—and through your investments, to a healthy retirement nest egg.
/jlne.ws/2QsWU6j

SEC Approves Amendment to Require Alternative Trading Systems to Identify Non-FINRA Member Subscribers in TRACE Reports for U.S. Treasury Securities
FINRA
Effective April 1, 2019, large alternative trading systems (ATSs) will be required to identify non-FINRA member subscriber counterparties in TRACE reports for transactions in U.S. Treasury securities using FINRA-assigned market participant identifiers (MPIDs). This information will be used for regulatory purposes, and will not be made public.
/jlne.ws/2QsXAZp

CFA Institute and FINRA Foundation Study Debunks Common Myths about Millennials and Investing; New research finds millennials lack confidence making investment decisions, cite lack of investment knowledge as barrier to investing, and show limited interest in robo-advisors
FINRA
Conventional wisdom paints a picture of millennials as aggressive, knowledgeable, and confident when it comes to investing, but a new research study sponsored by CFA Institute and the FINRA Investor Education Foundation debunks common assumptions about millennial investors. The research, titled “Uncertain Futures: 7 Myths About Millennials and Investing,” explores the attitudes and behaviors of millennials when it comes to finances and investing.
/jlne.ws/2zSMk2T

Information for CPOs and CTAs—Avoiding financial ratio errors on NFA Forms PQR and PR
NFA
NFA Compliance Rule 2-46 and the related Interpretive Notice to NFA Compliance Rule 2-46 require commodity pool operators (CPO) and commodity trading advisors (CTA) to report quarterly two financial ratios regarding a CPO’s or CTA’s financial condition. As described in the Interpretive Notice, NFA Forms PQR and PR contain data fields for the Current Asset/Current Liability (CA/CL) ratio and Total Revenue/Total Expenses (TR/TE) ratio. A number of CPOs and CTAs are incorrectly reporting these financial ratios.
/jlne.ws/2QwxvbT

Investing and Trading

Anxiety Starts to Grow in Junk-Bond Market; Money pulled from high-yield-credit ETF at fastest pace since 2016 as investors hedge with options
Gunjan Banerji – WSJ
Investors are getting antsy about the junk-bond market.
They pulled money out of the biggest exchange-traded fund that bets on high-yield credit during September at the fastest pace in almost 2½ years. And some investors are snapping up protection, buying options contracts that would help them offset losses if junk debt sells off.
/jlne.ws/2OvGT2j

No Long-Term Value From Activist Attacks
Martin Lipton – Harvard
An important new study by Ed deHaan, David Larcker and Charles McClure, Long-Term Economic Consequences of Hedge Fund Activist Interventions, has found that on a value weighted basis, long-term returns are “insignificantly different from zero.” And, nearly all of the positive long-term returns are concentrated in companies that are acquired in the two-year period following the activist attack. Also, the authors found that there is no evidence that activist attacks result in long-term improvements in accounting performance measures including, return on equity, return on net operating assets, profit margin, asset turnover, and spread over borrowing costs. They concluded, “In sum, across a large battery of appropriately-matched tests, we fail to find consistent evidence that activists drive changes in accounting-based operating performance.”
/jlne.ws/2NnIOB2

LME storage not market dynamics driving aluminum stocks lower
Andy Home – Reuters
London Metal Exchange (LME) on-warrant aluminum stocks, metal not earmarked for delivery, are at their lowest since January 2006 at 608,050 tonnes — a far cry from the peaks hit over 2010-14.
/jlne.ws/2OxMEMT

Hedge Fund Criterion Capital to Shut Down After 16 Years
Rachael Levy and Rob Copeland – WSJ
Hedge fund Criterion Capital Management is shutting down after 16 years in business, the second large fund to announce its closure this week.
The San Francisco-based firm focused on picking stocks in the technology, media and telecommunications industries. It manages about $2 billion, according to people familiar with the firm.
/jlne.ws/2OGGA4w

World’s Richest Lose $63 Billion on Trade Tensions, Stock Slide
Sophie Alexander and Devon Pendleton – Bloomberg
The combined net worth of the world’s 500 richest people fell the most in six months on Thursday, according to the Bloomberg Billionaires Index.
/jlne.ws/2QwtynA

Women Investors Don’t Play It Safe; Gender stereotypes about risk tolerance are a myth.
Rebecca Greenfield – Bloomberg
A couple came into Mike Giefer’s Minneapolis office in late September for some financial planning advice. The woman presented herself as the risk-averse one and her husband as the financial maverick. Then Giefer had them take a test. “It turned out the exact opposite,” he says. Giefer, an adviser at the Johnston Group, uses Riskalyze, an online tool that gauges clients’ risk tolerance by walking them through various financial scenarios and then assigning them a “risk number.” The woman scored a 70. Her husband, only a 52.
/jlne.ws/2Qves1w

‘Ethical investing’ needs to find a true meaning; The industry must clearly define the words it increasingly bandies about
Merryn Somerset Webb – FT
Two new launches have summed up the state of the finances of the UK population over the past week or so.
/jlne.ws/2QygNch

Institutions

Blind Trust: With Great Algo Wheels Comes Great Responsibility
Surika Vosloo, TradingScreen – TabbFORUM
Algo wheels. The latest buzzword. The perfect response to MiFID II.
It’s not hard to recognize that having tools to fairly and intelligently distribute flow across electronic brokers is not just a luxury but an absolute necessity. Especially as more buy-side traders are working toward consolidation of their trading technologies and trading desks. We now need more tools to help simplify the workflow and become more systematic. The ability to automate more of the ordinary orders effectively frees up execution traders to focus on the trades where they can and will add the most value.
/jlne.ws/2RpfL3n

Barclays customers experience app outage in latest IT glitch
Reuters
Barclays customers said on Friday that they were unable to access its mobile banking app in the latest outage at a British bank in recent weeks.
/jlne.ws/2Qut9lC

European Banks Are Cheap So Investors Should Pile In, Citi Says
Ksenia Galouchko , Macarena Munoz Montijano , and Jan-Patrick Barnert – Bloomberg
Investors should ignore the uncertainty in European banking in the coming days and weeks and just snap up the shares, according to Citigroup Inc.’s strategist Jonathan Stubbs, who’s been bullish on the industry since early September.
/jlne.ws/2QvdORE

Regions

Tokyo’s legendary Tsukiji fish market closes; Move of ‘Japan’s Kitchen’ prompts introspection in a nation normally quick to embrace the new
Robin Harding in Tokyo, Annalee Mather and Juliet Thomas in London – FT
The rasp of tuna saws, the whirr of electric carts and the patter of the fishmongers — on Saturday they will all fall silent, as Tokyo’s legendary Tsukiji fish market closes for the final time.
/jlne.ws/2QxkcYz

India’s nascent corporate bond market takes big step back; A string of defaults at infrastructure group IL&FS has sparked turbulence
Simon Mundy – FT
Ravi Parthasarathy’s resignation in July from IL&FS, the infrastructure group he had led since its 1987 foundation, attracted almost no attention in the Indian media.
/jlne.ws/2QqqKIs

Canadian Insurers Fight Cattle Farmer’s Investment Strategy, Fearing Stampede; Legal battle could determine whether investors can funnel potentially limitless sums into accounts with high-interest payouts
Jacquie McNish and David Benoit – WSJ
Michael Hawkins, an Ontario consultant and farmer who owns about 50 head of cattle, was looking for extra income when he started buying Canadian life-insurance policies a decade ago. What he got was an unexpected legal battle that could lead to huge losses for some of Canada’s largest financial institutions.
/jlne.ws/2QxSlb4

Brexit

EU Is Working ‘Day and Night’ to Get a November Brexit Deal
Dara Doyle , Boris Groendahl , and Charlie Devereux – Bloomberg
U.K. is expected to present new Irish border proposal in days; Northern Irish party poses threat to getting divorce deal
European and U.K. officials struck an upbeat tone on Friday about the prospect of getting a Brexit deal in the next few weeks, as European Commission President Jean-Claude Juncker said negotiators were working “day and night” to clinch it.
/jlne.ws/2QvXErd

Ultra-rich shift assets as fear of Labour government mounts; Prospect of Jeremy Corbyn in No 10 is seen as a bigger threat than Brexit to wealthy
Alice Ross and Madison Marriage in London – FT
London’s ultra-wealthy are moving assets out of the UK and some are preparing to leave the country as concerns over a leftwing Labour government led by Jeremy Corbyn intensify among the super-rich.
/jlne.ws/2QtQlQQ

Brexit set to hit poorly educated men most, says IFS; Survey finds costs of leaving EU will weigh heavily against those least able to cope
Delphine Strauss – FT
Men with low levels of formal education are most likely to suffer from new barriers to trade with the EU after Brexit, according to research by the Institute for Fiscal Studies.
/jlne.ws/2QyKjP9

Miscellaneous

CEO Tenure Is Getting Shorter. Maybe That’s a Good Thing.
John D. Stoll – WSJ
John Flannery spent 25 years working his way into striking distance of the top job at General Electric Co. Then, he spent the next four winning a succession dance-off with four rivals. His prize was a paltry 14 months as chief executive.
GE’s board dumped Mr. Flannery amid missed financial targets and concerns about the pace of change. Directors, having endured years of meager returns under his predecessor, watched GE shares tumble by half during Mr. Flannery’s brief tenure even as the S&P 500 grew about 18%.
/jlne.ws/2OF10eg

FT journalist’s visa renewal denied by Hong Kong; Decision believed to be first rejection by local authorities of foreign correspondent
Ben Bland in Hong Kong – FT
The Hong Kong government has rejected the visa renewal application of the Financial Times’ Asia news editor, the first time an FT journalist has had such accreditation denied by local authorities.
/jlne.ws/2Qw4tJl

****** Free markets need free press.~JJL

How social media has changed the perception of financial media
Chris Roush – Talking Biz News
John Authers, who is leaving the Financial Times to join Bloomberg News later this month, writes in his last FT article about how social media has changed consumer’s perceptions of financial media.
/jlne.ws/2QsZglF

The post Banks Are Getting Squeezed by the Fight Against Dirty Money appeared first on John Lothian News (JLN).

First Read

POV: Are Publicly Traded Exchanges Sticking It To You?
Jim Kharouf – JLN

There is a recurring criticism of publicly traded exchanges – that they are not serving the needs of their customers, all to satisfy shareholders.

Such was the essence of the argument by James Andrus, an investment manager from CalPERS, the California pension and investment giant. On a panel at the World Federation of Exchanges annual meeting last week in Athens, he said stock exchanges are bending to the desires of listed companies on their exchanges on proxy voting rule changes and other policy changes at the expense of investor firms like his. And the motivation, he said, was that exchanges are “for profit” companies reaching for revenue.

Sandy Frucher, vice chairman of Nasdaq, was having none of it. In a blistering rebuttal he said today’s publicly traded exchanges are more regulated and more transparent than they have ever been. He added that criticisms of today’s exchanges are often misguided, especially as compared to the prior privately-held member run exchanges. He likened those exchanges to a “circus tent” where all the business conducted was aimed at serving the member firms, often to the detriment of the customers.

Read the rest here.

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Hits & Takes
JLN Staff

At Friday’s CFTC Technology Advisory Committee (“TAC”) meeting I shared my concerns about the origin story of Bitcoin and offered an alternative narrative to consider. I offered no proof, just questions to ponder. On the video on YouTube from the meeting, my comments come in about 103.30.~JJL

The full slate of CFTC Commissioners were together at the TAC, or any open meeting for the first time since 2013.~JJL

The MIAX Exchange Group, the youngest of the five options exchange families, handled 9.5 percent of the options market’s volume in September, per its latest monthly report. That’s a 75 percent year-over-year increase.~SD

There are now more than 700 pages on CryptoMarketsWiki covering a wide array of people, terms and companies in the digital asset space.~SD

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Planet has only until 2030 to stem catastrophic climate change, experts warn
Brandon Miller and Jay Croft – CNN
Governments around the world must take “rapid, far-reaching and unprecedented changes in all aspects of society” to avoid disastrous levels of global warming, says a stark new report from the global scientific authority on climate change.
/jlne.ws/2zYuImk

****** Forget long range planning. Survival is now the modus operandi.~JJL

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SIX has licensed the SARON index (Swiss Average Rate Overnight) to Eurex as underlying for Futures contract
Eurex
SIX, the leading index provider for the Swiss Market today, 8 October 2018, announces that it has licensed the SARON (Swiss Average Rate Overnight) to the derivative exchange Eurex as underlying for Futures contract. SARON represents the overnight interest rate of the secured funding market for Swiss franc (CHF). It is based on transactions and quotes made on the regulated trading platform SIX Repo. The Futures contracts, with a maturity of three months, will start trading on October 29, 2018 on Eurex.
/jlne.ws/2zXQmXR

****** Nice deal for Eurex.~JJL

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Friday’s Top Three
Friday’s top stories were led by the Bloomberg piece Virtu Is Pursuing Takeover of Investment Technology Group. Second was Bloomberg’s Numerai’s Craib Targets Hedge Funds With Crypto Marketplace. Third was the Wall Street Journal’s Cryptocurrencies, Trading Scams Draw Increased Federal Enforcement

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MarketsWiki Stats
133,433,412 pages viewed; 23,291 pages; 215,188 edits
MarketsWiki Statistics

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Lead Stories

Exchanges go on offensive in dispute over cost of market data; NYSE and Nasdaq call for recusal of SEC official from lawsuit over fee increases
Nicole Bullock – FT
Rival exchanges New York Stock Exchange and Nasdaq this week went on the offensive in a bitter industry dispute over the cost of market data.
/jlne.ws/2zYDVLG

Bitcoin Turns Boring as Speculative Frenzy Fades Into Apathy
Eric Lam – Bloomberg
The words Bitcoin and boring have rarely been uttered in the same breath.
But after a dizzying rally, a gut-wrenching crash and near-constant ups and downs over the past two years, the cryptocurrency did something strange in recent weeks: it stayed relatively still.
/jlne.ws/2zXS8YU

Banks back Democrats in bid to rebuild bipartisan support
Michelle Price – Reuters
Banks are going to bat for Democrats in the U.S. November midterm congressional elections as part of an ambitious strategy to rebuild the bipartisan support they enjoyed before the 2007-2009 financial crisis.
/jlne.ws/2zY7RHs

“Bitfinex is not insolvent:” Crypto exchange giant Bitfinex responds to recent rumors in new blog post
Frank Chaparro – The Block Crypto
In a Sunday blog post, Bitfinex responded to rumors regarding its possible insolvency; The blog post follows numerous reports about the firm’s banking relationships.
Bitfinex, the cryptocurrency exchange, responded to brutal rumors surrounding its business in a blog post Sunday.
/jlne.ws/2zYXR0W

LME gets boost from US-China trade war; Cutting of fees at exchange helped drive volumes, says chief executive
Henry Sanderson and Neil Hume – FT
The US-China trade war and swingeing sanctions on Russian oligarchs have proved a boon for business at the London Metal Exchange.
/jlne.ws/2zZax7V

Blow To Bitcoin As Coinfloor CEO Makes Worrying Warning
Billy Bambrough – Coindesk
Bitcoin, known for its wild price swings, has hit a period of stagnation in recent months after last year’s massive bull run ó with bitcoin’s volatility rate sinking to a 17-month low as trading volumes slump.
/jlne.ws/2zYh8Q9

Norway Is Plowing Cash Back Into Its Wealth Fund
Mikael Holter and Sveinung Sleire – Bloomberg
Norway lowers base tax rate to 22% and reduces wealth tax; Conservative-led government keeps tax rate on banks at 25%
Cash is once again flowing into the world’s biggest wealth fund. Norway’s government on Monday proposed depositing 24 billion kroner ($2.9 billion) in the fund this year and 53 billion kroner next year, according to budget documents. It took out 64 billion kroner in 2017.
/jlne.ws/2zYrmQ9

Crypto Now the Only Way Isolated Venezuelans Can Buy Passports
Fabiola Zerpa – Bloomberg
New passports to cost four times national monthly mininum wage; U.N. says an estimated 5,000 people per day leave Venezuela
Venezuelans seeking to escape their country’s hardships now face another hurdle: getting their hands on the government’s elusive Petro cryptocurrency to pay for their passports.
/jlne.ws/2C6jspk

Forex scandal comes down to case against the ‘Cartel’; Three British traders deny chatroom banter amounted to price fixing in US trial
Katie Martin, Caroline Binham and Kadhim Shubber – FT
The currencies market goes on trial this week in a process that has whittled down systemic poor behaviour, years of investigations and billions in bank fines to three former London traders. They face a court in New York and a potential sentence of 10 years in jail.
/jlne.ws/2C2S1Nd

Exchanges, OTC and Clearing

Battle lines drawn for London Metal Exchange
Andy Home – Reuters
The great and the good of the global metals industry are descending on London, making their annual pilgrimage to the London Metal Exchange’s LME Week jamboree. They do so because the 141-year-old market sets the world’s reference prices for everything from aluminium to zinc. And away from the many seminars and cocktail parties, metal producers, traders and users will meet behind closed doors to hammer out details of next year’s contracts.
/goo.gl/LPrQ5w

HKEX Monthly Market Highlights
Press Release
The average daily turnover of futures and options for the first nine months of 2018 was 1,197,645 contracts, an increase of 45 per cent when compared with the 823,469 contracts for the same period last year.
/jlne.ws/2OIvYSI

HKEX Implements Nasdaq’s Real-Time Risk Management Technology
GlobeNewswire
Deployed via the Nasdaq Financial Framework, the risk management solution will be applied across all HKEX equity and derivative markets
Nasdaq Inc. (Nasdaq:NDAQ) has announced that Hong Kong Exchanges and Clearing Limited (HKEX) will roll out the Nasdaq Real-Time Risk solution across all of HKEX’s cash and derivatives markets via the Nasdaq Financial Framework.
/jlne.ws/2C2H91Y

Shimon Sebban, OTCex: “Eurex is becoming an Asian exchange”
Eurex Exchange
Eurex runs global markets and is continually enhancing its services. As of December 2018, we will extend our trading hours in the Asian time zones to strengthen the bridge between Asia, Europe and the US. We discussed this subject with Shimon Sebban, Equity Derivatives Broker at OTCex.
/jlne.ws/2NpWg7u

CME initiatives coalesce around spot FX basis spreads
Paul Golden – Euromoney Magazine
At its launch in March, CME FX Link was heralded as the first-ever central limit order book between OTC spot FX and FX futures markets, enabling more efficient access to FX futures as part of a wider trading strategy.
/jlne.ws/2ODQPXo

Exchange Executive Says SEC Trading Experiment Will Cost Investors ‘Millions’
Cboe president weighs in on fight over rebates between market operators and regulator
Dave Michaels – The Wall Street Journal
Stripping stock exchanges of the ability to offer incentives to lure trading will cost investors “millions of dollars,” according to one of the largest U.S. market operators.
The remarks on Thursday by Chris Concannon, president and chief operating officer of Cboe Global Markets Inc., add to the growing fight between stock-market operators and their regulator, the Securities and Exchange Commission. The SEC has proposed a two-year pilot program that exchanges say would undermine a key leg of their strategies: a widely used pricing system in which exchanges pay rebates to attract orders and charge fees to other traders.
/goo.gl/YM6UL4

SGX reports market statistics for September 2018
SGX
Market turnover of ETFs rise 12% y-o-y amid regional equities sell-off; Nikkei 225 Index Futures volume increases 16% m-o-m to six-month high
/goo.gl/wjNbXz

SGX RegCo statement on joint announcement from Mano Sabnani and Stamford Land
SGX
The amicable agreement between Mr Mano Sabnani and Stamford Land Corporation Ltd and its Board of Directors to settle their differences is a positive outcome.
/jlne.ws/2zY20SE

Miami International Holdings Reports September 2018 Trading Activity for MIAX Exchange Group
Miami International Holdings, Inc.
Miami International Holdings, Inc. today reported the September 2018 trading activity for its two fully electronic options exchanges – MIAX Options and MIAX PEARL (together, the MIAX Exchange Group). The MIAX Exchange Group collectively executed over 30.7 million contracts in September 2018 for a combined average daily volume (ADV) of 1,617,423 contracts, representing a total U.S. equity options market share of 9.53%.
/jlne.ws/2zXzpNb

Chi-X Australia Launches Transferable Custody Receipts in Apple
Manesh Samtani – Regulation Asia
Deutsche-issued TraCRs represent a new mechanism for Australian investors to gain exposure to overseas listed companies, starting with Apple Inc.
/jlne.ws/2zXNPwY

NCDEX to launch four new options contracts from tomorrow; SEBI gives nod
The Hindu BusinessLine
The National Commodity and Derivatives Exchange has received SEBI’s approval to launch options trading in guar gum, soyabean, refined soya oil and chana.
/jlne.ws/2C3PFhl

Xetra-Gold exceeds mark of 1,000 deliveries; Volume of 4.9 tonnes / Above all, private investors use option
Deutsche Bˆrse Group
More than 1,000 investors have opted to extradite their physically deposited gold since the introduction of the Xetra-Gold bearer bond (ISIN: DE000A0S9GB0 ) in 2007. The volume amounts to a total of 4.9 tons.
/jlne.ws/2C1RlI4

Fintech

UK court blocks class action suit against Google over iPhone data; Case was aimed at allowing 4.4m iPhone users to make a legal claim
Jane Croft – FT
An attempt to sue Google for gathering the personal data of millions of iPhone users in the UK has been blocked by the High Court from proceeding further.
xhttps://jlne.ws/2C2RkDB

GAIN Capital Deploys Eventus Systems’ Cloud Offering for Market Surveillance in Futures Business
PRNewswire
Eventus Systems, Inc., a provider of innovative regtech software solutions for the capital markets, announced today that GAIN Capital Holdings, Inc. (NYSE: GCAP), a leading global provider of online trading services, has gone live as a client. GAIN has deployed Eventus’ cloud-based version of the Validus platform to manage the market surveillance program for its futures operation.
/goo.gl/1tk9ei

JPMorgan’s requirement for new staff: coding lessons; Hundreds of new investment bankers and asset managers undergo mandatory training
Laura Noonan – FT
JPMorgan Chase is putting hundreds of new investment bankers and asset managers through mandatory coding lessons, in a sign of Wall Street’s heightened need for technology skills.
/jlne.ws/2C2CUDq

Northern Trust invests in front-office data provider; The custodian will also look to deliver new capabilities across data aggregation, data enhancement and data analytics to support trading and execution.
Joe Parsons – The Trade
Northern Trust has made an investment into Parilux Investment Technology, an investment data management provider as it looks to further its front-office capabilities.
/jlne.ws/2C2Ty5V

Cryptocurrencies

Venezuela Mandates Passport Fees Must Be Paid in Controversial Cryptocurrency Petro
William Suberg – Cointelegraph
Venezuelans can only use the state-backed cryptocurrency, the Petro, to pay for passport fees starting next week, the country’s vice president Delcy Rodriguez said in a press conference Friday, Oct. 5.
/jlne.ws/2QDbtV5

Major Crypto Exchange Bitfinex Obtains Banking Partner in HSBC, Will it Last?
CCN
On Oct. 6, Larry Cermak, former editor at Diar and head analyst at The Block, reported that leading crypto exchange Bitfinex obtained a banking partner in HSBC, a $133 billion banking giant based in London.
/jlne.ws/2zXQ2so

Manny Pacquiao’s New Cryptocurrency
Adrian Barkley – Crypto Daily
One of the most famous boxers in the world, Manny Pacquiao is getting ready to promote his own digital currency at an up and coming blockchain event in Asia. Pacquiao is set to be a special guest at the event according to the official website in order to promote his PAC token which is powered by the GCOX (Global Crypto Offering Exchange).
/jlne.ws/2QCbxEC

Petition to make XRP the official cryptocurrency of Tokyo 2020 Olympics garners 7,500 signatures
Osato Avan-Nomayo – Bitcoinist
A petition to get the International Olympic Committee (IOC) to make XRP the official cryptocurrency of the next Summer Olympics has crossed the 7,500 signatures milestone.
/jlne.ws/2y9wNKT

South Korea: Ruling Party Lawmakers Urge Government to Go Ease on ICO Regulation
Williams Mugwagwa – Blokt
According to a report by Business Korea, South Korea’s ruling Democratic Party lawmakers Min Byung-doo and Roh Woong-rae are spearheading an initiative to convince the government to reverse the ban on initial coin offerings (ICOs) enacted in Sept. 2017 and adopt a positive ICO regulation in line with crypto-friendly countries.
/jlne.ws/2Qx9TUz

Seoul Mayor Plans $100 Million Fund to Build Blockchain Smart City
Wolfie Zhao – Coindesk
Park Won-soon, the mayor of Seoul, has revealed a five-year plan to invest $108 million to develop the South Korean capital as a smart city powered by blockchain.
/jlne.ws/2zXOz5e

Total of 7 Crypto Exchanges and 158 Wallets Hacked in South Korea, Police Find
Kevin Helms – Bitcoin.com
The South Korean National Police Agency has produced a report of all hacking incidents of crypto exchanges and wallets in the country during the past three years. According to local media, there were seven hacking cases of crypto exchanges and 158 cases of wallet hacks, 91 of which happened this year. However, only six arrests were made.
/jlne.ws/2zX4YH6

Here are the options for cryptocurrency users after exchange shuts down; Those with funds in the wallet need to wait indefinitely. Cryptocurrencies, however, can still be traded on exchanges
Tinesh Bhasin – Business Standard
Zebpay, one of India’s biggest cryptocurrency exchanges, shut down last week. And if you didn’t withdraw the money from the Zebpay wallet or didn’t convert it into a virtual currency, you will need to wait indefinitely for the funds. However, those who have purchased any form of cryptocurrency with the money have some respite.
/jlne.ws/2zXBkBA

Politics

America First is hurting China’s business
Jonathan Cable – Reuters
The U.S. economy has pulled ahead this year, extending a lengthy expansion with help from President Donald Trump’s “America First” agenda and massive tax cuts, but upcoming data could illuminate the impact of his policies on global peers.
/jlne.ws/2zYjgqV

Trump Is the Best Incentive for a Stronger Europe, France Says
Radoslav Tomek – Bloomberg
Europe needs to bolster its unity to stave off international challenges, according to French Finance Minister Bruno Le Maire. But the biggest reason for the European Union to come together? U.S. President Donald Trump.
/jlne.ws/2zYx5FK

America First Is a Winning Strategy, JPMorgan Says
Joanna Ossinger – Bloomberg
U.S. factors continue to drive asset prices globally; Mean-reversion trades ‘will struggle to deliver this fall’
America is the way to go. Markets continue to be driven by “uniquely American” factors such as strong activity data, a central bank that’s on the path to being restrictive and foreign policy aimed at systemically important countries, JPMorgan Chase & Co. strategists led by John Normand wrote in a note Oct. 5. That’s despite such factors as the long age of the expansion and an “unusually protracted” Federal Reserve rate-hike cycle.
/jlne.ws/2zYt4kN

Homeland Security says it has no reason to doubt spy-chip denials by Apple, Amazon
Mike Murphy – MarketWatch
The U.S. Department of Homeland Security said over the weekend it has “no reason to doubt” statements from Apple Inc., Amazon.com Inc.’s AWS and Super Micro Computer Inc. and others denying that some of their servers were compromised by Chinese spy chips.
/jlne.ws/2zXShvx

Wall Street Is Booming Under Trump. But Many of Its Donors Are Embracing Democrats.
Shane Goldmacher – NY Times
When Charles Myers, the chairman of a financial advisory firm, hosted four relatively unknown Democratic congressional candidates at his Midtown Manhattan home last month, he netted more money than he can remember collecting from an event that wasn’t headlined by a presidential candidate.
/jlne.ws/2C0jwqR

Regulation

Boston Celtics Assistant Coach Pleads Guilty in Money-Laundering Case
Eben Novy-Williams and David Voreacos – Bloomberg
Jerome Allen admits taking money from father of Penn recruit; Allen agrees to forfeit $18,000, pay $202,000 fine after plea
A former University of Pennsylvania basketball coach who is now with the Boston Celtics pleaded guilty to laundering money he took from a businessman who paid him to help his son gain admission to the Ivy League school.
/jlne.ws/2zXrShB

ASIC provides relief and updates guidance on short selling
ASIC
ASIC has issued a new legislative instrument that provides various relief and modifications to the laws in relation to short selling (the Short Selling Instrument).
/jlne.ws/2C0mHih

FCA and SFC sign MoU on United Kingdom-Hong Kong Mutual Recognition of Funds
UK FCA
The Financial Conduct Authority (FCA) and the Securities and Futures Commission (SFC) have entered into a Memorandum of Understanding on Mutual Recognition of Funds (MoU), which will allow eligible Hong Kong public funds and United Kingdom retail funds to be distributed in each other’s market through a streamlined process.
/jlne.ws/2C4lRRp

FCA consults on new rules to improve the approach to open-ended funds investing in illiquid assets
UK FCA
The Financial Conduct Authority (FCA) is consulting on new rules and guidance to reduce the potential for harm to investors in funds that hold illiquid assets, particularly under stressed market conditions. These measures will also support the FCA’s market integrity objective and help address financial stability concerns.
/jlne.ws/2C16s4C

Investing and Trading

What Steve Jobs Might Say to Elon Musk; You’ve got to grow up sometime.
Joe Nocera – Bloomberg
Friday marked the seventh anniversary of Steve Jobs’s death, which has me thinking not only about his remarkable life, but also about the man most often compared to him in terms of charisma, audacity and vision. That, of course, would be Elon Musk.
/jlne.ws/2zY0Uq8

Louis Dreyfus Pays Big Dividend as Billionaire Owner Seeks Cash
Andy Hoffman and Agnieszka de Sousa – Bloomberg
Margarita Louis-Dreyfus faces deadline to buy out family; Financial results follow surprise departures of CEO and CFO
Louis Dreyfus Co. paid a big dividend to its eponymous family owners despite a 38 percent drop in first-half profit, showing how majority owner Margarita Louis-Dreyfus is squeezing the company for cash.
/jlne.ws/2C1Loec

The Price of Financial Advice Is, Finally, Falling; As the rest of Wall Street cuts all kinds of fees in a race to zero, financial advisers have been the exception. That is changing.
Lisa Beilfuss – WSJ
Mutual-fund and index-fund fees keep falling. Trading is free, depending on where you do it. Even hedge funds have started to drop their notoriously high charges.
/jlne.ws/2C4Q6YP

Investment in Infrastructure Is Booming; Private-equity firms are on course to raise a record amount to invest in pipelines, telecom assets and the like
Miriam Gottfried – WSJ
Private-equity firms are on track to raise a record amount for infrastructure investing in 2018, as money managers bet on the growing need to upgrade and expand the world’s railroads, natural-gas pipelines and data centers.
/jlne.ws/2C2VM5l

Institutions

What’s Fidelity Worth? It All Depends on How You Count
Daren Fonda and Alex Eule – Barron’s
Fidelity’s stockpickers spend their lives poring over financial reports to uncover value. But figuring out what Fidelity itself would be worth is much more of a guessing game.
/jlne.ws/2zZLMIR

Schroders Plc and Lloyds Banking Group in talks over wealth management alliance
Reuters
Asset manager Schroders Plc (SDR.L) and Lloyds Banking Group (LLOY.L) said on Sunday they were in discussions over a wealth management alliance.
/jlne.ws/2zY6nx4

UBS Accused of Bond Movie Tactics in Paris Tax-Dodging Trial
Gaspard Sebag and Patrick Winters – Bloomberg
French trial starts Monday; UBS posted 1.1 billion-euro bail; Bank accused of helping wealthy clients evade French taxes
UBS Group AG goes on trial in Paris on Monday accused of encouraging rich clients to stash cash overseas to evade French taxes by deploying tactics “worthy of James Bond.”
/jlne.ws/2C2vgJf

UBS goes on trial in France over alleged tax fraud
Inti Landauro, Emmanuel Jarry – Reuters
Swiss bank UBS Group AG, its French unit and six top executives go on trial on Monday after a long-running investigation into allegations they helped wealthy clients avoid taxes in France.
/jlne.ws/2zYmhHH

Morgan Stanley Redesigns Offices for a ‘Dynamic, Millennial’ Workforce
Sonali Basak – Bloomberg
More get views of Statue of Liberty, but no kombucha on tap; Luring ‘best and brightest’ means knocking down some walls
Morgan Stanley is remodeling. About 1.2 million square feet (111,000 square meters) of office space will get an overhaul in the next 15 months to put technology experts closer to brokers, traders and bankers, the firm’s head of technology, Rob Rooney, said in an interview. After changes to wealth-management operations, trading floors, investment-banking offices and space tied to asset management will all get a remake.
/jlne.ws/2C5Ccpk

Regions

Chips are down for Britons after dry summer hits potato crop; Smaller portions likely as soaring prices serve up memories of 1976
Andy Bounds in Blackpool – FT
A dry summer has shrunk the British potato crop and raised a daunting prospect for Britons: a shortage of chips. Fish and chip shops say they will have to reduce portion sizes and raise prices for the national dish.
/jlne.ws/2zYwROU

Why are investment banks nervous about Australia’s cartel case?
Paulina Duran, Alun John – Reuters
Investment bankers are bracing for the start of a landmark legal case about alleged cartel activity in Australia’s financial sector, nervous the proceedings could lead to increased scrutiny and tougher measures from regulators worldwide.
/jlne.ws/2zXfVIw

Europe is closing a trading loophole that banks were relying to cope with Brexit
Will Martin – Business Insider
The European Central Bank reportedly wants to crack down on a practice that many in the City believe would have helped London retain its European financial crown after Brexit.
/jlne.ws/2zXG0Hs

Brexit

ECB warns banks to curtail booking trades and loans in UK after Brexit; ‘Back-to-back’ arrangement would have helped keep staff and capital in London
Laura Noonan, and Stephen Morris and Martin Arnold – FT
The European Central Bank has warned banks they have a maximum of three years after Brexit to curtail their use of a “back-to-back” booking model that makes it easier to keep staff and capital in the UK.
/jlne.ws/2C4LZvO

The post Exchanges on offensive in market data cost dispute; Bitcoin turns boring appeared first on John Lothian News (JLN).

First Read

Women In Listed Derivatives Tackle Sexual Harassment at Work
Sarah Rudolph – John Lothian News

Women In Listed Derivatives, aka WILD, held a workshop on “Sexual Harassment at Work in the #MeToo Era” on Thursday at Chicago’s Union League Club. The good news is that it was well attended and very participatory; the audience listened avidly to Jennifer Gilbert, an attorney with the employment discrimination firm Stowell & Friedman, and asked a great many questions and follow up questions.

The bad news is that even though the raucous, anything goes atmosphere of the old trading floors is all but gone, sexual harassment is not. The types of sexual harassment Gilbert outlined were familiar to the women in the audience in one way or another from both long past and recent events, including the Brett Kavanaugh hearing that was then taking place (the WILD event was scheduled well before the hearing).

Title VII prohibits sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that is “unwelcome and intolerable,” Gilbert said.

But proving harassment is problematic partly because it’s on a case by case basis, requiring a fact-specific analysis, and rarely is there a witness or “smoking gun” evidence.

To read the rest of this story, go here.

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Blockchain tokenization: a simplified explanation
By Matt Raebel – John Lothian News

436 & 442 East 13th Street, Manhattan, New York: that’s the address of Manhattan’s first tokenized real estate asset, a 12-unit luxury condo building valued at $30 million. Forbes posted a story last week about the building, which turned its shares into tokenized securities in order to “remove the unruly pressure of traditional bank financing.”

The blockchain space is full of both technical jargon and empty, flashy buzzwords. It is sometimes hard to tell which is which – this can make trying to learn anything about the space a vexing task.
One of the most important terms to know is “tokenization.” If you’ve given blockchain literature or news articles even a cursory glance, you’ve probably come across this phrase at some point.
To read the rest of this commentary, go here

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Hits & Takes
JLN Staff

LabCFTC is hitting the road with office hours in Chicago at 525 West Monroe, Suite 1100 on October 16 and in Austin, TX at the McCombs School of Business, Robert B. Rowling Hall, Board Room 1.350 on October 23 & 24. FinTech innovators are welcome to engage the CFTC in general conversation, discuss a specific question or give a presentation. For more information, email labcftc@cftc.gov.~JJL

Buy your tickets today to the FIA Cares Great Chicago Steak Out 2018.~JJL

The Tokyo Commodity Exchange, Inc. (TOCOM) announced the first trades for Technically Specified Rubber (TSR) futures, launched today. A total of 2,088 contracts were traded the first day.~SR

ALTSO’s Rocktoberfest event in Chicago is Thursday night. You can get an idea of the charity’s impact for yourself here.~SD

On November 1, Georgetown University is holding its annual Financial Markets Quality Conference in Washington, DC. SEC Chair Jay Clayton and NYSE President Stacey Cunningham and CME Group’s Julie Winkler are some of the speakers.~JJL

The Montreal Exchange is now live with extended trading hours. Learn more here.~SD

Jessica Darmoni has hired a communications associate at The Title Connection. Her name is Melissa Souto and she is the first employee at the firm besides Jessica.~JJL

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Nasdaq: Q&A with Oliver Albers – Data Is Revolutionizing Markets; Three Changes to Enhance Fairness, Transparency and Competition
Editor’s note: Nasdaq shared with John Lothian News an internally produced question and answer interview with Oliver Albers, SVP and Head of Strategic Partnerships for Nasdaq’s Global Information Services.

Note from Nasdaq: Here at Nasdaq, we often say, “information is the lifeblood of markets.” That’s especially true in today’s digital era, and it’s not hyperbole. Market data is far more than simply a collection of buy and sell orders communicated on stock-trading platforms. It’s the collection and curation of billions of individual data points that are the essential fuel for the entire market in real time. Competition and innovation have given individual investors access to state-of-the-art analytical tools and market data at little to no cost.

As technology revolutionizes market dataóhow it’s collected, how it’s consumed, the value it generates and how much it costsóthe Securities and Exchange Commission is convening a two-day conference to consider the impact on equity market access and market data. To advance shared goals, Nasdaq recently proposed three reforms. Oliver Albers, Global Head of Strategic Partnerships for Nasdaq’s Global Information Services, discusses enhancements for making the U.S. equity markets fairer, more transparent and more competitive.

For the Q&A click HERE

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Google Exposed User Data, Feared Repercussions of Disclosing to Public
Douglas MacMillan and Robert McMillan – WSJ
Google exposed the private data of hundreds of thousands of users of the Google+ social network and then opted not to disclose the issue this past spring, in part because of fears that doing so would draw regulatory scrutiny and cause reputational damage, according to people briefed on the incident and documents reviewed by The Wall Street Journal.
/goo.gl/H1M2wr

***** Google+ never quite lived up to its potential.~JJL

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Monday’s Top Three
Our top read stories were led by two pieces talking about exchanges and their customers. Our top read piece of the day was the FT’s Exchanges go on offensive in dispute over cost of market data. Second was Jim Kharouf’s JLN column POV: Are Publicly Traded Exchanges Sticking It To You?. Third was Theblockcrypto.com’s piece ‘Bitfinex is not insolvent:’ Crypto exchange giant Bitfinex responds to recent rumors in new blog post

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MarketsWiki Stats
133,478,429 pages viewed; 23,292 pages; 215,193 edits
MarketsWiki Statistics

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Lead Stories

BoE warns EU that £41tn of derivatives at risk after Brexit; UK central bank predicts Europe will bear cost of disruption to clearing if no action taken
Caroline Binham in London – FT
The Bank of England has issued its starkest warning to date that as much as £41tn of derivatives contracts maturing after Brexit are at risk unless European officials address regulatory uncertainty.
/jlne.ws/2IOJq2k

**This follows last week’s JLN story Brexit Has Industry Participants Prepping For “Worst Case Scenario”

European banks worry about clearing in no-deal Brexit; Lenders are putting pressure on regulators to work out a transition period
Philip Stafford in London – FT
European banks are growing fearful of losing access to clearing for critical derivatives markets such as Brent oil futures and commodities in a no-deal Brexit, putting pressure on regulators to work out a transition period.
/jlne.ws/2INMlYI

IMF Issues Stark Warning Over Bitcoin And Crypto ‘Rapid’ Growth
Billy Bambrough – Forbes
The International Monetary Fund (IMF) has warned the “rapid growth” of bitcoin and cryptocurrency assets could create “new vulnerabilities in the international financial system,” as the world’s banks adjust to the recent bitcoin and blockchain boom.
/jlne.ws/2IKcacp

Crypto ICO Funding Dropped in September to Lowest in 17 Months
Olga Kharif – Bloomberg
Autonomous Research says less than $300 million was raised; Monthly ICO activity is down 90 percent since January peak
The initial coin offering boom is slowing to a whimper. Startups raised less than $300 million in September, the smallest amount since May 2017, according to data compiled by Autonomous Research. That’s down 90 percent from the peak amount of about $3 billion accumulated through digital-token sales in January.
/jlne.ws/2ILvBSe

Fifth Bond Sale Pulled as Cracks Grow in Europe’s Primary Market
Tasos Vossos and Emma Haslett – Bloomberg
Van Lanschot Kempen scraps sale of riskiest form of bank debt; Italy and Brexit have undermined demand for high-yield notes
Europe’s primary bond market suffered another blow as Dutch lender Van Lanschot Kempen NV became the fifth issuer to pull a euro-note sale in little more than a week.
/jlne.ws/2IKPSqQ

The Next Financial Crisis Is Staring Us in the Face; All it takes to see it is a long look in the mirror.
Barry Ritholtz – Bloomberg
The financial crisis ripped through Wall Street 10 years ago, pushing the global economy to the edge of the abyss. One might think those searing experiences would have created a learning opportunity ó for managing risk better, understanding structural imbalances in the financial markets, even learning a bit about how our own cognitive processes malfunction.
/jlne.ws/2IINkcK

Exchanges, OTC and Clearing

Tokyo Stock Exchange hit by system malfunction
Leo Lewis in Tokyo – FT
The Tokyo Stock Exchange on Monday said that from 7:30am it had encountered a technical problem with one of the four gateways that brokerages use to access equity trading through the TSE, with several companies reporting transaction delays.
/jlne.ws/2IKItb7

HKEX implements Nasdaq’s risk management tech for cash and derivatives; Latest technology deal extends partnership between HKEX and Nasdaq with addition of real-time risk management.
Hayley McDowell – The Trade
Hong Kong Exchanges and Clearing (HKEX) will implement real-time risk management technology from Nasdaq across all of its cash and derivatives markets.
/jlne.ws/2IM58no

ITG rolls out conditionals for POSIT Alert block trading in Asia; POSIT Alert conditional orders are already available in Europe, the Middle East and Africa, and the US.
Hayley McDowell – The Trade
Equities broker ITG is set to launch conditional order functionality for its POSIT Alert block trading platform in Asia-Pacific, the first of its kind in the region.
/jlne.ws/2pKzj5y

Netanyahu Looks Into Exempting Investments on the Stock Exchange From Tax
Meirav Arlosoroff – Haaretz
Wealthy Israelis and an Aussie fund that owns 20% of TASE would gain the most from a proposed exemption
/goo.gl/ok9P53

LME proposes requirements for the responsible sourcing of metal in listed brands
London Metal Exchange
The London Metal Exchange (LME) today published a position paper detailing new proposed requirements for listed brands regarding the responsible sourcing of metals, which align with the principles set out by the Organisation for Economic Co-operation and Development’s (OECD) “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas” (Guidance).
/jlne.ws/2pJuslb

London Stock Exchange continues expansion in Bucharest
Romania Insider
London Stock Exchange Group (LSEG), which operates the London Stock Exchange, has become the most active recruiter in Bucharest in recent months.
/goo.gl/6H2YPM

Fintech

RIP Google+. We Hardly Knew Ye; End of Google+ for consumers formalizes the failure of Google’s efforts to compete in social media
Georgia Wells – WSJ
Few tears were shed Monday over the death of Google+, the search giant’s oft-derided effort at challenging Facebook Inc. in social media. It is easy to forget now that there was a time when Google+ represented an exclusive club, with millions of internet users clamoring to get in. At its ballyhooed launch in 2011, Google doled out private invitations, leaving the masses eager to gain accessóa strategy that worked to great success with the company’s rollout of Gmail.
/jlne.ws/2IKd5JT

AccessFintech’s exception pairing network drives activity across all major segments of the financial sector
AccessFintech
AccessFintech, the financial technology firm that solves operational problems in financial services, announced today that its global exception pairing network has now achieved live participation across all major market segments – tier one banks, buyside institutions, custodians, fund administrators and outsourcers.
/jlne.ws/2IPYk8x

China’s Tencent invests $180 million in Brazil fintech Nubank
Carolina Mandl – Reuters
Chinese gaming and social media firm Tencent Holdings Ltd (0700.HK) paid $180 million for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.
/reut.rs/2QD5vDp

Gore’s Generation, Caisse Buy FNZ in $2.2 Billion Fintech Deal
Aaron Kirchfeld and Alastair Marsh – Bloomberg
Al Gore’s Generation Investment Management LLP and Canadian pension fund Caisse de Depot et Placement du Quebec teamed up to acquire control of wealth-management services provider FNZ in one of the year’s largest fintech deals.
The acquisition of a two-thirds stake held by the private equity firms General Atlantic and HIG Capital values FNZ at about 1.65 billion pounds ($2.2 billion), according to a statement from the companies Tuesday that confirmed an earlier report by Bloomberg News.
/bloom.bg/2QBMUb6

Schroders makes investment in FinTech programme member Qwil Messenger; Asset manager takes minority stake in first start-up to join Cobalt in-residence programme.
John Brazier – The Trade
Schroders has taken a minority stake in Qwil Messenger, the first start-up to join its FinTech in-residence programme, Cobalt.
/jlne.ws/2IJSy85

Duco Delivers Global Enterprise Reconciliation and Control Solution to Societe Generale; Innovative Duco platform to help support Societe Generale’s focus on reinventing its operations functions to provide better insights, enhance customer service and improve data governance.
Duco
Duco, the enterprise software as a service (SaaS) company today announced an agreement with Societe Generale, the French bank and global provider of financial services to deploy Duco’s platform across the group as one of its primary reconciliation and data control systems.
/jlne.ws/2pKio3p

4 Female Leaders Pioneering Fintech And Crypto
Kitty Knowles – Forbes
Women have secured some of the top European posts in traditional banking: Christine Lagarde heads the International monetary fund, Ana Botin is Executive Chair of Santander Group. Now Europe’s leading women in tech are pioneering startups focused on the future of finance too.
bit.ly/2QDXCxE

Itiviti Introduces Packaged FX Trading Solution 
Itiviti
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, today introduced Itiviti FX, a comprehensive foreign exchange trading solution built for today’s dynamic FX market landscape and designed for compliance with the latest regulatory requirements including MiFID II. 
https://prn.to/2QBy5oJ

Cryptocurrencies

China: Man Gets 3.5 Years in Jail for Stealing Train Power to Mine Bitcoin, Local Media
Marie Huillet – Cointelegraph
A man in China has been been sentenced to three and a half years in jail for stealing power from a train station to fuel his Bitcoin (BTC) mining operations, local media outlet The Paper reports October 8.
/jlne.ws/2CwoJI0

How Binance Conquered The Cryptocurrency World With Help Of A Utility Token
Darryn Pollock – Forbes
Cryptocurrency exchanges have become key points of access to the entire ecosystem. They are the initial point of entry for most investors and users of these digital assets, and as such, they are big business, and also fiercely competitive.
/jlne.ws/2yovCGS

UK Telecoms Regulator Receives Grant to Deploy Blockchain for Telephone Number Management
Ana Alexandre – Cointelegraph
The United Kingdom (U.K.) Office of Communications (Ofcom) has received a £700,000 ($916,00) grant from the Department of Business, Energy and Industrial Strategy (BEIS) to explore blockchain technology, according to an announcement published Oct. 8.
/jlne.ws/2yrWmX8

IBM’s Food Blockchain Is Going Live With a Supermarket Giant on Board
Ian Allison – Coindesk
IBM is taking its food-tracking blockchain into production, making it one of the largest enterprise projects to achieve that milestone, and has signed European supermarket giant Carrefour to use it. Announced Monday, the commercial launch of IBM Food Trust means that large players, as well as small and medium-size enterprises (SMEs) in the food industry supply chain, can now join the network for a subscription fee ranging from $100 to $10,000 a month.
/jlne.ws/2PlI6pP

Dubai to Launch Blockchain Payments with State Digital Currency ’emCash’
CCN
Dubai residents will soon have the means to make payments for school fees, bills and other retail purchases with emCash, a state-developed blockchain-based digital currency. The UAE’s first official credit bureau – emCredit – under the Dubai Department of Economic Development is pushing its official blockchain-encrypted state digital currency emCash for wider adoption by rolling out point-of-sale (PoS) devices at government storefronts across Dubai.
/jlne.ws/2OKJNjG

Hosting a blockchain conference is now a “major coup”
Jemima Kelly – FT
We thought Ireland might be a bit sick of the idea of the blockchain, following Chancellor Philip Hammond’s fantastical suggestion last week that the amorphous hype-nology might be an answer to one of the most complex problems in the Brexit mess: the Irish border.
/jlne.ws/2IKEtY9

Ex-Bitmain Chip Designer Takes on Crypto’s Mining Goliath
Blake Schmidt – Bloomberg
Yang Zuoxing left Bitmain to start his own mining gear company; MicroBT wants to join an IPO rush that includes Canaan, Ebang
At Yang Zuoxing’s modest office a short drive from the prestigious Tsinghua University in Beijing, desks are strewn with cryptocurrency mining equipment and cots stand ready for engineers too exhausted to go home after marathon days at work.
/jlne.ws/2ILZAJA

Blockchain, Artificial Intelligence Not Ready For Primetime, Financial Leaders Told
Ted Knutson – Forbes
Blockchain and artificial intelligence aren’t ready for primetime, financial leaders were told in Washington last week. At conferences for SIFMA, the securities industry trade group, and the Commodity Futures Trading Commission, speakers were pretty much in agreement that fintech’s promises will take years to become everyday realities.
/jlne.ws/2IJR65D

Switzerland Embraces Crypto With Fund License for Startup Firm
Jan-Henrik Foerster – Bloomberg
Crypto Finance gets same licence as professional fund managers; Regulator earlier this year issued guidelines on digital coins
Crypto Finance AG has obtained the same license as professional fund managers from Switzerland’s financial regulator as the country pushes to become a leader in the growing virtual-currency industry.
/jlne.ws/2IOJmzC

Politics

The US republic’s moment of acute danger; Kavanaugh’s Supreme Court confirmation will test constitutional guardrails
Editorial Board – FT
Sceptics who feared last week’s FBI investigation would be a hollow exercise to secure the votes of two or three wavering Republicans will now feel vindicated. Agents did not talk to Brett Kavanaugh, the Supreme Court nominee who was alleged by three women to have committed acts of sexual misconduct, or to Christine Blasey Ford, his main accuser. Donald Trump, the US president, said the agents could talk to whomever they wished. That assurance turned out to be false.
/jlne.ws/2IJGYtB

Trump Moves to Allow More Ethanol in Gasoline; President trying to balance a promise to agriculture interests with oil-industry opposition
Alex Leary – WSJ
President Trump is moving to allow year-round sale of gasoline containing a higher percentage of ethanol, satisfying campaign promises he made to the Farm Belt, while likely provoking a battle with the oil industry.
/jlne.ws/2IKN4dv

Coal Is Killing the Planet. Trump Loves It; Scientists issued a new alarm on the devastating impacts of continued burning of fossil fuels. But the Trump E.P.A. keeps propping up coal.
The Editorial Board – NY Times
If we keep burning coal and petroleum to power our society, we’re cooked ó and a lot faster than we thought. The United Nations scientific panel on climate change issued a terrifying new warning on Monday that continued emissions of greenhouse gases from power plants and vehicles will bring dire and irreversible changes by 2040, years earlier than previously forecast. The cost will be measured in trillions of dollars and in sweeping societal and environmental damage, including mass die-off of coral reefs and animal species, flooded coastlines, intensified droughts, food shortages, mass migrations and deeper poverty.
/jlne.ws/2ILTzwz

Regulation

Competition and Markets Authority launches investigation into audit sector; UK regulator responds to widespread concerns over conflicts of interest
Barney Thompson – FT
The Competition and Markets Authority has launched an investigation into the UK’s audit market in response to widespread concerns over conflict of interest and calls for a sweeping review of the sector.
/jlne.ws/2IJFQ9u

Goldman Sachs, Liquidnet and Bloomberg called out in first MiFID II data indicators from ESMA; First data completeness indicators for double volume caps from ESMA reveal Goldman Sachs, Liquidnet and Bloomberg had highest amount of incomplete data submissions.
Hayley McDowell – The Trade
The EU markets watchdog has published its first MiFID II data performance indicators, with Goldman Sachs, Liquidnet and Bloomberg among those firms called out for a high number of incomplete data submissions.
/jlne.ws/2IJxMW8

Initial Coin Offerings and Cryptocurrencies
FINRA
Digital assets like cryptocurrencies and ICOs continue to evolve and spark interest from Main Street investors. With billions of dollars raised in ICO financings and over a thousand different cryptocurrencies currently available, these rapidly changing markets are tempting for investors. It is also difficult for most individual investors to make sense of these complex investment products and to determine the risk levels associated with them.
/jlne.ws/2pH9LX0

The importance of international co-operation
UK FCA
Speech by Megan Butler, Executive Director of Supervision – Investment, Wholesale and Specialists at the FCA, delivered at The Pan Asian Regulatory Summit 2018, Hong Kong.
/jlne.ws/2pJ6x5q

Sebi allows foreign entities in commodity derivatives segment, with a rider; Minimum networth for such entities has been fixed at $0.5 million; these will not be allowed in sensitive commodities
Dilip Kumar Jha – Business Standard
Nearly five months after issuing a consultation paper on this, market regulator Securities and Exchange Board of India (Sebi) on Tuesday allowed eligible foreign entities (EFEs) to trade in commodity futures.
/jlne.ws/2pLqYyM

Investing and Trading

Lawyers set to work on the laws of nature; Green bonds and loans are opening a new and fulfilling avenue for the profession
Madison Darbyshire – FT
The first thing a lawyer will tell you about their work in sustainable finance is that it is not so different from the conventional financial ser≠vices work they did before. Yes, there may be contracts about the productivity of natural forests, training sessions on erosion or establishing what the return on investment of a forest root system will be over the next 10 years. But, fundamentally, it is the same.
/jlne.ws/2IM3e6e

What a Trade War With China Means for Gold
Scott Bauer – CME Group OpenMarkets
A trade war has been the looming specter in the marketplace for months now. The United States has flirted with trade disputes with just about every one of our trade partners; Mexico, Canada and even the European Union.
/jlne.ws/2OHvRXP

Traders Bet on Return of $100 Oil; Narrowing supplies from Iran and robust global growth drive market’s bullish sentiment
Gunjan Banerji – WSJ
A hot streak in the oil market is setting off a wave of bets on how high prices can go.With crude prices rallying for four straight weeks, trading of oil optionsócontracts that give the right but not the obligation to buy or sellóhas surged.
/jlne.ws/2IJr1Ug

That Hedge Fund Manager’s Fancy Car Might Be a Red Flag for Your Money
Mary Childs – Barron’s
Sugata Ray conducts the most fun research. From his post teaching and researching at the University of Alabama, he studies disparate influences on asset management and market microstructure. He has looked at the effect of personal real estate transactions and “marital events” on the productivity and risk tolerance of hedge fund managers.
/jlne.ws/2IKJ5O5

Bond Market Freaking You Out? It May Spark a Healthy Rotation; The market overall might be fine, but trouble lies with the FANGs and other acronym stocks that have been leading the market higher
James Mackintosh – WSJ
Rising bond yields sound like a stock-market killer. The good news for shareholders is that the market overall might be fine. The trouble lies with the FANGs and other acronym stocks that have been leading indexes higher.
/jlne.ws/2IIYwGl

Bonds in $916 Billion Wipeout Spark Fear of Worst Run Since 1976
Sid Verma – Bloomberg
Rate lift-off clobbers global index in echo of Trump election; Duration risk hits high-grade debt; ETF investors flee junk
BofA Sees `Modest’ Equities Pullback Until Bond Yields Stop Rising
Global bonds are hitting fresh milestones of misery. Strong U.S. data, a tighter-than-expected monetary trajectory, rising commodity prices and brewing wage pressures are conspiring to push Treasury yields to cycle-highs, hitting money managers of all stripes.
/jlne.ws/2IINH78

The Lack Of Institutional Trading In Tesla Bonds Is Curious
Peter Tchir – Forbes
On Monday, October 1, Tesla shares soared from $265 to $311 after it was announced that Tesla, Elon Musk and the SEC had reached a settlement.
/jlne.ws/2IKekZz

Is the Reign of Glencore’s Billionaire Copper King Near Its End?; Aristotelis Mistakidis, the head of copper trading, is under the spotlight for Glencore’s dealings in Congo.
Jack Farchy – Bloomberg
Aristotelis Mistakidis is one of the world’s most powerful commodity traders. For nearly 20 years, the brash, hyperactive Greek known to everyone simply as “Telis” has ruled over the global copper market, buying and selling enough of the red metal to supply every factory in the U.S. twice over.
/jlne.ws/2ILg8Bj

Natural gas here to stay beyond energy transition, Big Oil says
Ron Bousso, Shadia Nasralla – Reuters
Energy companies are betting demand for natural gas will rise at break-neck pace for decades, undermining warnings that tackling climate change would require a rapid switch to renewable energy.
/jlne.ws/2pG6vvg

Institutions

RBS could change name to repair battered image; Corporate identity under review, reveals chairman
Katherine Griffiths, Banking Editor – The Times
Royal Bank of Scotland is considering ditching its corporate name after suffering severe reputational damage from the financial crisis and ten years of painful restructuring, according to the bank’s chairman.
/jlne.ws/2C5ZGKZ

Jason Karp to shut hedge fund Tourbillon, focus on health and wellness
Svea Herbst-Bayliss – Reuters
Hedge fund Tourbillon Capital Partners is shutting down after several years of poor returns, making it the third well-known fund to announce plans to close its doors within a week.
/jlne.ws/2IMyAtF

Regions

Will New Technologies Help or Harm Developing Countries? by Dani Rodrik
Dani Rodrik – Project Syndicate
New technologies reduce the prices of goods and services to which they are applied. They also lead to the creation of new products. Consumers benefit from these improvements, regardless of whether they live in rich or poor countries.
/jlne.ws/2C3QiHt

Trafigura sells 50% stake in Impala unit
Neil Hume, Henry Sanderson and David Sheppard – FT
Trafigura, one of the world’s biggest commodity houses, has struck a deal to sell a 50 per cent in stake in the majority of its oil ports, warehouses and bulk terminals to an Australian infrastructure group.
/jlne.ws/2IPYNHP

Investors Flee China Stocks as Foreigners Dump $1.4 Billion
Sofia Horta e Costa and Jeanny Yu – Bloomberg
CSI 300 has worst day following October holiday since 2008; Yuan nears lowest since 2017 as support level fails to hold
Chinese stocks’ worst October start in a decade is scaring off the last remaining bulls.
/jlne.ws/2IIRtxk

In Search of Contagion: Spotting Italian Stress as Markets Boil
Samuel Potter, Sid Verma and Todd White – Bloomberg
Itraxx CDS indexes, bund yields and euro moves hint at alarm; Pressure from Italian woes cloaked by global bond selloff
Italian populists are playing chicken with the European Union over government spending just as a global bond selloff forces up borrowing costs. That’s handed investors a problem: Seeing through the market maelstrom to gauge Rome’s mounting political risk.
/jlne.ws/2ILPbxB

Rock star of French finance struggles to stay in tune; …douard Carmignac needs all his charisma after investors pull out of his funds
Harriet Agnew – FT
In January this year, …douard Carmignac hosted one of his legendary annual concerts in Paris. The fund manager’s clients, friends and employees enjoyed a private performance by rock star Eric Clapton.
/jlne.ws/2IKg4SB

Brexit

German Industry Warns of `Massive Crisis’ From No-Deal Brexit
Iain Rogers – Bloomberg
Exports to U.K. could tumble 57% in ‘horror scenario’: IW; Firms have spent 100 million euros on preparing for Brexit
German industry warned that Europe risks sinking into chaos and trade will collapse if U.K. and European Union leaders fail to resolve their differences on the future of Britain’s relationship with the bloc, stepping up pressure amid a final push for a deal.
/jlne.ws/2IJugeo

The post BoE warns £41tn of derivatives at risk after Brexit; European banks worry about clearing appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The LaSalle Street Trading Tech Awards, in support of Pathway to Adventure Council of Boy Scouts of America, will be on November 15 in the Chicago Board of Trade Building. Become a sponsor or buy a ticket to attend HERE.~JJL

Trader and world class sailor Brian Porter won the Melges 24 fall championship last weekend on Geneva Lake in Wisconsin. Another trader, Thomas Freitag, took fourth place.~JJL

Have you paid for your 2018 JLN subscription yet? We can send you an invoice. You can pay with a credit card online, or send us a check. Easy peasy.~JJL

I was rejected from an EXPO week event on cryptomarkets, after being invited by a friendly FCM, because I am a journalist. My standing as a CTA seems to have lost its luster to some entities.~JJL

A Leg To Stand On (ALTSO )is hosting its annual Rocktoberfest charity event tomorrow in Chicago and there are a few tickets still remaining. You can buy them HERE. Also, JLN received a couple of free pairs of tickets. We’ll select two readers randomly from those who click on Matt Raebel’s JLN story Blockchain tokenization: a simplified explanation. (Yes we can track who clicked on what, and we’ll contact you for the tickets.)~JK

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Canada Says There Will Be Enough Marijuana to Meet Demand
Jen Skerritt – Bloomberg
Health Canada says nation ‘well positioned’ to supply product; Government allowed time for orderly transition to legal market
The Canadian government is confident there will be enough marijuana to pass around despite concerns of a looming supply shortage as the nation rolls out legal sales next week.
/jlne.ws/2ytMdZX

***** They have, however, completely run out of brownie mix.~JJL

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Tuesday’s Top Three
Our top read stories on Tuesday were led by JLN’s Women In Listed Derivatives Tackle Sexual Harassment at Work and Bloomberg’s The Next Financial Crisis Is Staring Us in the Face, which tied for first. A close second was another JLN piece, Blockchain tokenization: a simplified explanation

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MarketsWiki Stats
133,517,054 pages viewed; 23,292 pages; 215,196 edits
MarketsWiki Statistics

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Lead Stories

Bank and City urge EU to tackle Brexit derivatives uncertainty; Timely action called for as threat of no deal risks rendering void £41tn of derivatives
Caroline Binham, Philip Stafford and Jim Brunsden – FT
The Bank of England and the financial services industry on Tuesday pressed the EU to urgently tackle legal uncertainty surrounding vast amounts of derivatives because of Brexit.
/jlne.ws/2yCFBIT

The CEO of Nasdaq says there’s a marked difference between being a C-suite exec and a CEO
Myelle Lansat and Richard Feloni – Business Insider
When Adena Friedman was named CEO of Nasdaq in 2017, she became the first female leader of a global stock exchangeó but Friedman was a consistent c-suite executive for Nasdaq prior to becoming CEO.
/jlne.ws/2ystyOc

Blockchain Tech Coming to Commodity Markets, Blythe Masters Says
Eddie van der Walt – Bloomberg
Tech will help deal with complex, inefficient supply chains; ‘Tens if not hundreds’ of commodity-blockchain projects coming. The blockchain is coming to commodity markets, Blythe Masters told guests at the London Metal Exchange annual dinner during LME Week.
/jlne.ws/2ysfZhz

Guggenheim Securities: Wall Street and the risk of huge incentives; The dealmaker has become a force in US M&A but it offers big commissions to its bankers
Sujeet Indap and James Fontanella-Khan – FT
During the financial crisis a decade ago, big banks were brought to their knees by reckless traders who made outsized bets on complex mortgage securities. For the dealmakers in other parts of these financial groups, who specialised in advising companies on mergers and acquisitions, this created an additional problem. They were trapped ó first by the crippling debts accumulated by their colleagues and, over time, by tighter regulation of compensation.
/jlne.ws/2yupVY0

HSBC to pay $765 million to settle U.S. mortgage securities mis-selling claim
Reuters
HSBC on Tuesday said it would pay $765 million to the United States Justice Department to settle claims it mis-sold mortgage-backed securities between 2005 and 2007.
/reut.rs/2yu7xOM

Storm shuts nearly 40 percent of U.S. Gulf of Mexico oil output
Reuters
Nearly 40 percent of daily crude oil production was lost from offshore U.S. Gulf of Mexico wells on Tuesday due to platform evacuations and shut-ins ahead of Hurricane Michael.
/reut.rs/2pLOv2G

D.E. Shaw Joins Continental Grain in Pushing for Change at Bunge
Dana Mattioli and Cara Lombardo – WSJ
D.E. Shaw & Co. has boosted its stake in Bunge Ltd. BG -0.68% and is pushing the grain trader to make operational improvements and add board members, according to people familiar with the matter.
/on.wsj.com/2ymhEFe

Cliff Edge Effects under EU Law in a No Deal Brexit Scenario
ISDA
There has been increasing concern that the UK may withdraw from the EU without concluding a withdrawal agreement under Article 50 of the Treaty on European Union and without any transition (or implementation) period to allow market participants time to adjust.
bit.ly/2yrSVzH

Scrapping Libor leaves $500bn of bond contracts in limbo; The documentation for billions of bonds will need rewriting as benchmark ends
Katie Martin – FT
Over $500bn in bonds may need to have their documentation rewritten as a result of the shift away from the Libor benchmark, according to law firm Linklaters.
/jlne.ws/2ysimRv

FCA sets out plans for hard Brexit
Damian Fantato – FT Adviser
The Financial Conduct Authority has published plans for a hard Brexit, with proposals to convert European law into British rules from next year.
/jlne.ws/2yssKZG

Exchanges, OTC and Clearing

Morgan Stanley, Credit Suisse and JP Morgan clear first OTC SOFR swaps with CME; Five major market participants have cleared $200 million in notional of OTC SOFR swaps since CME launched the product in May this year.
Hayley McDowell – The Trade
Five major market participants have cleared the first over-the-counter (OTC) Secured Overnight Financing Rate (SOFR) interest rate swaps with CME Group.
/jlne.ws/2yrnXrp

CME Group Announces First OTC SOFR Swaps Cleared
CME Group
CME Group announced five market participants have cleared trades worth more than $200 million in notional value of over-the-counter (OTC) Secured Overnight Financing Rate (SOFR) interest rate swaps since launching the service on Oct. 1. This builds on the growing liquidity of SOFR futures, which during August and September averaged more than 5,400 contracts per day and traded the equivalent of nearly $1 trillion in notional value since their launch in May 2018.
/jlne.ws/2yu3Fxr

Haitong International (USA) Becomes the First Chinese Market Maker on NASDAQ
PRNewswire
Haitong International Securities (USA) Inc. based in Hong Kong, today launched its market-making business in the United States, becoming the first Chinese market maker on NASDAQ. This move is not only another milestone in the company’s global business, but it also serves as a major breakthrough in filling the gap of the absence of a Chinese market maker on NASDAQ.
/prn.to/2yqD6cq

OCC adds to stock loan data set
Andrew Neil – Global Investor Group (SUBSCRIPTION)
Chicago-based clearing house OCC has added to its stock loan data offering. The firm, which operates two stock loan programs for clearing members, now publishes loan volumes and stock loan balances by securities online on a daily basis.
/goo.gl/J87oD9

LME’s Copper Dominance Tested as Rivals’ Options Trading Jumps
Mark Burton and Jack Farchy – Bloomberg
Options trading volumes are surging in New York and Shanghai; LME to invest more to develop options business next year: CEO
Metals bourses trying to muscle into a copper market dominated by the LME are getting a helping hand from options.
/goo.gl/KJk774

MGEX Board Appoints Public Directors, Officers, Committee Assignments
MGEX
As its October 9, 2018, Organizational Meeting, the MGEX Boards of Directors names 2018-2019 public directors, names Board officers and
approved committee assignments
/goo.gl/YqAvQH

Eurex Exchange’s Fixed Income Highlights October 2018
Eurex
/jlne.ws/2ysuVME

MontrÈal Exchange Launches Trading on London Time; Canada’s Derivatives Exchange Extends Trading Hours to Expand Global Reach
TMX
MontrÈal Exchange (MX), Canada’s derivatives exchange, opened for trading at 2:00 a.m. EDT this morning, or 7:00 a.m. London time.
/jlne.ws/2ysnMfj

London Stock Exchange Group appoints General Manager for Romania
London Stock Exchange Group
London Stock Exchange Group Board Appointments; Andreea Stanescu appointment General Manager, Romania; Andreea will oversee new Business Services Centre in Bucharest, Romania; Bucharest selected as location for one of Group’s operational hubs
London Stock Exchange Group (LSEG) today announces that Andreea Stanescu has been appointed General Manager, Romania. Andreea will be reporting to Dee Liyanwela, Head of Business Services Ltd (BSL) Sri Lanka and Romania. In her new role, Andreea will oversee the Group’ new Business Services centre in Bucharest.
/jlne.ws/2ysvKFe

Moscow Exchange launches gold futures with physical delivery
MOEX
On 11 October 2018, Moscow Exchange will begin trading of deliverable gold futures on its Derivatives Market.
/jlne.ws/2yta9N0

Fintech

Hanweck Enhances Borrow Intensity Indicators; Extended Data History Supports Development of Alpha Generation Strategies
Hanweck
Hanweck, a leading provider of real-time risk analytics on global derivatives markets, has enhanced its Borrow Intensity Indicators with the addition of five years of historical data and new real-time liquidity metrics. Launched earlier this year, the Borrow Intensity Indicators apply machine learning to mine data from the equity options market to generate stock borrow rates and term curves in real time. Indicator data is available for all securities that have listed options.
/goo.gl/rU174B

R.J. O’Brien Completes Its Middle-Office Migration To Lisa Clearing Engine From ATEO Finance
PRNewswire
ATEO Finance, a leading provider of Post-Trade solutions for the Listed Derivatives space, is pleased to announce that R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, and its UK affiliate R.J. O’Brien Limited (RJO Limited), have completed their migration from a legacy middle-office solution to ATEO’s LISA Clearing Engine platform.
/prn.to/2yqCS54

Global Payment Firms Hold First Cyber War Game
Yalman Onaran – Bloomberg
Results show variation in defining crisis, engaging government; Firms look for systemic way to share future threat information
Global payment companies held their first joint cybersecurity war games to test their systems’ readiness for simultaneous attacks, uncovering differences in their defenses including even how to define a crisis.
/bloom.bg/2ypz4Rp

New Evidence of Hacked Supermicro Hardware Found in U.S. Telecom; The discovery shows that China continues to sabotage critical technology components bound for America.
Jordan Robertson and Michael Riley – Bloomberg
A major U.S. telecommunications company discovered manipulated hardware from Super Micro Computer Inc. in its network and removed it in August, fresh evidence of tampering in China of critical technology components bound for the U.S., according to a security expert working for the telecom company.
/jlne.ws/2ysbUtW

CQG Partners with ErisX for Trading Technology
CQG
CQG, a leading global provider of high-performance trading, market data, and technical analysis tools, announced today it has collaborated with ErisX, a new exchange for digital asset investors and traders.
/jlne.ws/2yuRmkj

Societe Generale deploys reconciliation and data control system from Duco; Investment bank to automate reconciliation processes across all business areas through new reconciliation and data control systems.
Hayley McDowell – The Trade
French investment bank Societe Generale has reached an agreement with data engineering specialist Duco to implement its reconciliation and data control systems.
/jlne.ws/2ysuCkY

Cryptocurrencies

Crypto Industry on ‘Brink of an Implosion,’ Researcher Says
Olga Kharif – Bloomberg
Declining daily transaction volume, values seen as negative; Quarter-over-quarter transactions are seen plummeting again
Echoing sentiments of mainstream economists, Juniper Research is warning that many of the metrics in the cryptocurrency world are pointing to a market implosion.
/jlne.ws/2yCtbRh

All Hail Satoshi; Bitcoin looks like the way forward in a Ukraine battered by revolution and corruption.
Linda KInstler – Bloomberg
The spot where a statue of Lenin once presided over Kyiv’s downtown is now in a state of mild decrepitude. The plinth remains, but it’s covered with graffiti, its steps painted the blue and gold of the Ukrainian flag. After protesters triumphantly toppled the statue in December 2013, the vacant pedestal served as a memorial to Ukraine’s violent rejection of its Soviet past.
/jlne.ws/2ysW8yS

Tiberius halts sales of metals-backed cryptocurrency
Reuters
Tiberius Technology Ventures has called a temporary halt to sales of its metals-backed digital currency and will refund $1 million to investors, it said on Tuesday, citing high credit card fees that it said made the project unworkable.
/reut.rs/2pLu6KM

‘Bitcoin Jesus’ Mulls Plans to Launch his Own Cryptocurrency Exchange
Aziz Abdel-Qader – Finance Magnates
Bitcoin.com CEO Roger Ver, who is sometimes called “Bitcoin Jesus” because he was one of the first investors of No.1 virtual coin, is gearing up to launch his own cryptocurrency exchange.
bit.ly/2OOBrYp

Swiss Financial Watchdog Issues Country’s First Crypto Asset Management License
Marie Huillet – Cointelegraph
The Swiss Financial Market Supervisory Authority (FINMA) has issued the country’s first cryptocurrency asset management license to a crypto investment fund, Swiss-centered media outlet Swissinfo reports today, Oct. 9.
bit.ly/2CBlBuD

Taiwan Lawmaker Pitches AML Rules Update to Cover Crypto
Nikhilesh De – Coindesk
A Taiwanese legislator wants cryptocurrency transactions to abide by the same money laundering laws that govern traditional financial instruments.
bit.ly/2ysCnHP

IBM, Intel Help Fund San Diego Blockchain Lab
Brittany Meiling – Government Technology
(TNS) ó Tech giants are funding the launch of a research lab at UC San Diego to unravel the mysteries around blockchain, a new way of writing software that’s sweeping industries around the globe.
bit.ly/2ycEGiL

Next Steps In The Integration Of Artificial Intelligence And The Blockchain
Rohan Pinto – Forbes
Having worked in the cryptography space for over two decades, and having been an active participant in the cryptocurrency evolution since its inception, I take a deep interest in the subject. In particular, I believe that the intersection of artificial intelligence (AI) and blockchain is an exciting but challenging new development.
bit.ly/2CACd5x

Beyond CryptoKitties: Is There A Place For Blockchain In The B2C Market?
Andrew Arnold – Forbes
CryptoKitties, for anyone who is not familiar, is a virtual game in which players buy, collect, breed, and even sell virtual cats. But the uniqueness of the game is that it is built on the blockchain technology developed by Ethereum. Sales and ownership of each unique pet is validated through this network and no transactions can occur without the participants’ permission. It was launched in in October, 2017 and went viral by December, jamming the Ethereum network.
bit.ly/2OhWeUy

I Can’t Believe This Blockchain Is Free
Michael J. Casey – Coindesk
As anger has grown over the power wielded by internet gatekeepers such as Facebook and Twitter, many blockchain advocates argue we could fix social media if it were built on decentralized, consensus-based networks instead of corporate-centralized platforms.
bit.ly/2INOVhA

Blockbid Partner with Whale Tech and TMA Solutions to Create Blockchain Development Centre; Project to help upskill and educate developers in Blockchain principles, theory and development languages
Blockbid
Cryptocurrency Exchange Blockbid has teamed up with Whale Tech and TMA Solutions to offer end-to-end Blockchain development solutions to external companies.
/jlne.ws/2ysBi2w

Politics

Trump renews Fed criticism, says raising rates too fast
Reuters
U.S. President Donald Trump on Tuesday again criticized the Federal Reserve, telling reporters the central bank is going too fast in raising rates when inflation is minimal and government data points to a strong economy.
/reut.rs/2pRQgLP

Michael Bloomberg Registering as Democrat as He Weighs 2020 Bid
Mark Niquette – Bloomberg
Former New York mayor spending millions on midterm election; Bloomberg has been vocal critic of Trump, Republican leaders
Former New York City Mayor Michael Bloomberg announced that he is formally changing his voter registration to Democrat, a possible step toward running for president in 2020.
/jlne.ws/2ysSC7E

Ford Prepares for Mass Layoffs After Losing $1 Billion to Trump’s Trade Tariffs, Report Says
Kevin Kelleher – Fortune
Ford is having a bad year in 2018. Its stock is down 29%, and the tariffs imposed by President Trump have reportedly cost the company $1 billion, as the company is in the midst of a reorganization. Now, the company is announcing layoffs.
/jlne.ws/2yvVsZk

Glock’s Gun Sales Plummet in First Year of Trump Presidency; In a rare look at its corporate finances, the maker of some of America’s favorite handguns reported a 35% plunge in revenue.
Boris Groendahl – Bloomberg
Before Donald Trump and the Republicans won the 2016 elections, Americans stockpiled guns like there was no tomorrow. Turns out the end of that panic-buying weighed heavily on the sales of Glock GmbH, the Austrian maker of some of America’s most popular handguns.
/jlne.ws/2ytKt2P

Mnuchin warns China on currency devaluations; US Treasury secretary says in interview he wants issue raised in trade talks
Sam Fleming – FT
The US Treasury secretary has warned China not to engage in competitive devaluations of the renminbi as the two countries spar over their economic relations and engage in an escalating trade war.
/jlne.ws/2ywavlS

Regulation

CFTC Proposes to Streamline Regulations for Commodity Pool Operators and Commodity Trading Advisors
CFTC
The Commodity Futures Trading Commission (CFTC) unanimously approved proposed rules as a part of CFTC’s KISS Initiative to simplify regulations for commodity pool operators (CPOs) and commodity trading advisors (CTAs).
/goo.gl/Wh37QJ

Statement of CFTC Chairman J. Christopher Giancarlo on Proposed Amendments to Registration and Compliance Requirements for Commodity Pool Operators and Commodity Trading Advisors
CFTC
In response to the Request for Information issued as part of Project KISS, the Commission received a number of letters from members of the asset management industry suggesting areas of potential rulemaking that, in their view, would make the Commission’s regulations more efficient and less burdensome. I believe that today’s notice of proposed rulemaking furthers both of those interests.
/jlne.ws/2ytUPQf

At least two U.S. attorneys general investigating Google glitch
Angela Moon, Arjun Panchadar – Reuters
At least two U.S. states are investigating a breach at Alphabet Inc’s Google that may have exposed private profile data of at least 500,000 users to hundreds of external developers.
/reut.rs/2yrSaqf

Currency `Cartel’ Traders on Trial for Chats That Cost Billions
Lananh Nguyen and David McLaughlin – Bloomberg
Three accused of rigging euro-dollar trades against customers; Banks have paid $14 billion but few people facing prison time
The three British currency traders who were part of an exclusive online chat group referred to by members as “the cartel” go on trial this week for alleged market manipulation that’s already cost global banks $14 billion in penalties.
/bloom.bg/2yu99rO

CFTC seeks civil monetary penalty of over $1 million for commodity futures trader
Maria Nikolova – FinanceFeeds
The United States Commodity Futures Trading Commission (CFTC) is seeking the imposition of a civil monetary penalty of $1,083,038 on self-proclaimed commodity futures trader William H. Powderly IV, who lost more than $1 million of investors’ money before the collapse of the fraudulent scheme he operated.
/goo.gl/DyfmY3

Securities Regulation Daily’s top 10 developments for September 2018
Lene Powell – Wolters Kluwer: Jim Hamilton’s World of Securities Regulation
In a major caution for companies to take a close look at their social media policies, the SEC decisively reined in Elon Musk, the famously glib chief of Tesla, Inc., in the wake of his August tweet that he had secured a deal to take Tesla private. In late September, the SEC charged Musk with securities fraud and Tesla with having inadequate disclosure controls. When the dust settled two days later, Musk and Tesla each agreed to pay a $20 million penalty, and Musk agreed to be removed as Tesla chairman. The settlements are subject to court approval.
/goo.gl/b7ZEjj

The United Nations Climate Change Report Could Give Green Companies a Lift
Daren Fonda – Barron’s
Climate change may not be a driving factor in the stock market on a day-to-day basis. But news out Monday adds to growing evidence that it’s becoming a long-risk factor that investors shouldn’t ignore.
/jlne.ws/2ysU0XU

FCA steps up UK plans to prepare for hard ‘no-deal’ Brexit
Caroline Binham in London – FT
The UK’s financial regulator has stepped up its plans for a hard Brexit where the UK crashes out of the EU next year with no deal and no transition period.
/jlne.ws/2ysj1m8

SPMW’s CRA registration withdrawn
ESMA
The European Securities and Markets Authority (ESMA) has today withdrawn the credit rating agency (CRA) registration of the Polish SPMW Rating Sp z.o.o. (SPMW).
/jlne.ws/2yuyl1y

The FCA consults on its approach ahead of the UK’s exit from the EU
UK FCA
The Financial Conduct Authority (FCA) today published two consultation papers, setting out its proposals in the event the UK leaves the European Union on 29 March 2019 without an implementation period. It also set out its approach to the regulation of Credit Rating Agencies, Trade Repositories and Data Reporting Services Providers.
/jlne.ws/2ywamie

Registering as a credit rating agency
UK FCA
When the UK leaves the EU, the FCA will become the UK regulator of credit rating agencies.
/jlne.ws/2ywShR9

Registering as a trade repository
UK FCA
When the UK leaves the EU, the FCA will become the UK regulator of trade repositories.
/jlne.ws/2yrpIF1

Investing and Trading

Big Oil’s Bet on Natural Gas Is a Slow Burn
Sarah Kent and Sarah McFarlane – WSJ
Big Oil is betting on natural gas as the fuel of the future, but companies face a challenge to show they can make as much money producing and selling cargoes of gas as they could from tankers of crude.
/on.wsj.com/2yu6sqc

The New Economics of Natural Gas
Neil Somma – CME Group OpenMarkets
Historically, weather patterns have been the major driver behind price movement in the natural gas market. But with U.S. natural gas now being exported globally in the form LNG, there is a new variable adding potential volatility to the market.
/goo.gl/81khLp

How High Does Carbon Need to Be? Somewhere From $20-$27,000
Mathew Carr – Bloomberg
Scientists say market forces could help rein in global warming; World is on track to warm 3 degrees Celsisus, double UN’s goal
The idea that carbon markets can help rein in greenhouse gas emissions got fresh momentum this week from a panel of scientists convened by the United Nations.
/jlne.ws/2yrdkov

Ackman’s Pershing Square unveils new position in Starbucks -sources
Svea Herbst-Bayliss – Reuters
William Ackman’s activist hedge fund Pershing Square Capital Management has taken a new position in Starbucks Corp, according to attendees at a conference where the billionaire investor spoke on Tuesday.
/reut.rs/2yviFLg

Self-Indexing: Not as easy as it looks
Susan Quintin – FTSE Russell Blog
As passive investing has captured significant assets and mind share among investors, indexes have become firmly embedded in the investment process. So it should come as no surprise that as investors have grown more comfortable with index-based investing, the complexity of developing and managing indexes remains underappreciated in some pockets of the industry. In turn, the industry sees more asset managers considering self-indexing as a means to lower cost despite the fact that index costs are typically a small portion of a fund’s expenses.
bit.ly/2yAAfOj

Soaring Pot Stock of the Moment Went by Different Name Weeks Ago
Arie Shapira – Bloomberg
The latest company to join the pot stock craze is Pyxus International Inc., a newcomer to the marijuana market that went by a different name for the past 145 years up until a month ago.
/bloom.bg/2yr9OdI

Two-Decade Rupture in Stock-Bond Link Flashes Global Market Pain
Sid Verma, Emily Barrett and Sarah Ponczek – Bloomberg
U.S. equity and Treasury co-movement is at weakest in years; Inflation fears make stocks more sensitive to yield: Leuthold
The biggest post-crisis shift in the investment landscape may be looming, threatening more pain for investors besieged by an uptick in real interest rates and cross-asset volatility.
/jlne.ws/2yp1Z8i

Thousands of Southerners Planted Trees for Retirement. It Didn’t Work; Too much pine and not enough saw mills spell years of depressed prices for plantations
Ryan Dezember – WSJ
Over the past hundred years, the George family’s farm has been sharecropped, grazed by cattle and planted with cotton. By the late 1980s, Clayton George was growing soybeans and struggling to make ends meet.
/jlne.ws/2yoPcm8

Institutions

Julius Baer ‘Whistleblower’ to Learn Fate in War Over Bank Data Leak
Hugo Miller – Bloomberg
Swiss Supreme Court upholds acquittal by vote of 3 to 2; Verdict may hold implications for Swiss banks’ foreign units
A former Julius Baer banker who leaked documents from a Cayman Islands subsidiary was cleared of breaking Swiss banking secrecy by Switzerland’s top court, creating possible problems for how the Alpine nation’s banks manage their foreign units.
/jlne.ws/2ysltJa

Ex-Assistant Accused of Stealing $1.2 Million of Wine From Goldman Sachs CEO Jumps to His Death; Nicolas De-Meyer, who previously worked for David Solomon, had been expected to plead guilty in federal court in Manhattan
Corinne Ramey – WSJ
A former personal assistant to Goldman Sachs Group Inc.’s chief executive killed himself by jumping from the 33rd floor of a hotel Tuesday, at the same time he had been scheduled to plead guilty for what prosecutors had said was stealing more than $1.2 million worth of his boss’s wine.
/jlne.ws/2yqR9i9

Bank Earnings: Expect Big Profits, But Buyer Beware; Big U.S. banks are set to report record postcrisis profits for the third quarter, but underneath the blockbuster numbers are reasons for caution
Telis Demos – WSJ
Big U.S. banks are set to report their most profitable third quarter since the financial crisis. But underneath the blockbuster numbers are reasons for caution.
/jlne.ws/2yrXv0z

Regions

Exclusive: EU supervisors monitoring Italian banks’ liquidity, no cause for alarm – source
Francesco Guarascio – Reuters
European banking supervisors have stepped up their monitoring of liquidity levels at Italian banks after a sharp increase in the country’s government bond yields, although there is no cause for alarm, a senior EU source said on Tuesday.
/reut.rs/2pIgNLi

Turkey Reveals Plans to Tame Inflation
Yeliz Candemir – WSJ
The Turkish government unveiled measures aimed at reining in double-digit inflation that has helped erode investor confidence in the country and contributed to a sharp depreciation of the currency this year.
/on.wsj.com/2pLvPzK

Swiss top court knocks down bid to extend banking secrecy
Stephanie Nebehay – Reuters
Switzerland’s highest court ruled on Wednesday that prosecutors cannot extend Swiss banking secrecy rules to all corners of the globe to pursue whistleblowers.
/jlne.ws/2yuf6Fm

IEA Urges OPEC to Open the Taps as Oil Market Enters ‘Red Zone’
Javier Blas, Grant Smith and Francine Lacqua – Bloomberg
Venezuelan output is in free-fall, Iran sinking: Fatih Birol; ‘Expensive energy’ is back when global economy already shaky
The International Energy Agency made a direct appeal to OPEC and other major oil producers to boost output, warning that high prices are inflicting damage on the global economy.
/jlne.ws/2ysqnWt

China’s About to Sell Dollar Bonds in Middle of a Trade War
Carrie Hong and Lianting Tu – Bloomberg
Ministry of Finance prepares $3 billion issuance on Thursday; Investors seen pressing for bigger premiums than last year
A year after its first sovereign sale of dollar bonds in well over a decade, China’s about to tap that well again. This time around, the reception isn’t likely to be quite as enthusiastic.
/jlne.ws/2yttRbj

Banning Rupees Didn’t Work. This Might; How a low-key government effort is making mobile payments easier and could bring more Indians into the financial system.
Saritha Rai, Antony Antony – Bloomberg
Venkatesh Munivenkatappa runs his roadside stall in the Koramangala neighborhood of Bengaluru, formerly known as Bangalore, with help from a mobile phone loaded with digital payment apps. Customers can buy his colorful sandals and handcrafted shoes and belts using Google Pay, WhatsApp Pay, Paytm, PhonePe, and an app promoted by India’s central bank called Bharat Interface for Money, or BHIM.
/jlne.ws/2yscpEk

Brexit

German firms would face billions in extra tariffs in hard Brexit: study
Michelle Martin – Reuters
German firms would face extra tariffs of more than 3 billion euros ($3.4 billion) a year if Britain quits the European Union without a trade deal, and their exports to Britain might drop by up to 57 percent, Germany’s IW institute said on Tuesday.
/reut.rs/2pLvk8X

Will Brexit Make The Digital Skills Gap Worse For British Banks?
Vishal Marria – Forbes
Britain already has a sizeable digital skills gap. As a technologically-advanced country, we have a lot of different cutting-edge technologies in both development and implementation. The problem is that we don’t have the labor capacity to maintain and operate these technologies and, as such, our innovation sector is at risk of stagnation. As our finance sector becomes increasingly technological, the demand for digital skills grows further still – so, how will Brexit affect this?
/jlne.ws/2ysUnlg

The post EU urged to tackle Brexit derivatives uncertainty; Adena Friedman comments on the C-suite appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

John J. Conheeney has passed away. See the NFA statement below.~JJL

CQG is hosting their 7th annual charity softball game next week before the start of FIA EXPO in Chicago. Players and audience are welcome to show up at the Grant Park Softball Field #1 at 2 p.m. on October 16. Try your hand (no gloves needed) at playing beside the Most Interesting Man in the World, Pat Kenny, against the cricket players from overseas.~JJL

Speaking of the Most Interesting Man in the World, he is moderating a panel discussion for EXPO on Wednesday at 3:45 PM on “Reinventing Futures For a New Generation.” How lucky am I to be leading a discussion on “Enabling the Next Generation of Traders” at 3 PM, ending at 4 PM the same day. Head to head, sort of, with the Most Interesting Man in the World.~JJL

AARP defines bitcoin as “a bunch of computer code that a bunch of criminals, idealists and speculators agree is worth ‘real’ money. Sadly, its real-money value swings widely, making it impractical except for criminals, idealists and speculators.”~JJL

I would like to remind people it is October and the stock market does interesting things during the month. I would also remind people you can buy candy 40 percent off or more during November.~JJL

Looking for last minute tickets for ALTSO’s Rocktoberfest? You can find them http://bit.ly/2A1F0lC.~JK

Women in Listed Derivatives (WILD) announced the launch of a new website which aims to be more compatible and user friendly. You can find more information about the organization and how to join here. WILD is also seeking nominations for its 2019 board of directors. If you have someone you would like to nominate, please send an email to Leslie Sutphen (sutphen@finmarkets.com) by October 19. Self-nominations are encouraged, as well.~SR

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In Memoriam: NFA Remembers John J. Conheeney
NFA
NFA remembers John J. Conheeney who passed away earlier this week. In the late 1970s and early 1980s, he served on NFA’s Organizing Committee that developed the framework that would become National Futures Association. John also was an NFA founding Board member and served as Chairman of NFA’s Board from 1990 to 1994.
/jlne.ws/2pNszE5

***** Such a legendary participant of our markets. Condolences to his family and friends.~JJL

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When Killing the Messenger Becomes the Norm
Amy Mackinnon – Foreign Policy
Viktoria Marinova was not a war correspondent.
She was a Bulgarian TV journalist who covered an alleged corruption scandal on her show before she was murdered last week in the northern town of Ruse, near the Danube River, in the latest incident of deadly violence against journalists around the world.
bit.ly/2pMxd5f

**** Some disturbing context in light of Jamal Khashoggi’s disappearance at the Saudi embassy in Turkey – “Out of 1,322 journalists whose deaths have been linked to their work since 1992, 848 were murdered, while 298 were killed in crossfire.”~SD

++++

Trump and the fear of fascism in America; US president’s invective has leaned towards the authoritarian end of the spectrum
Edward Luce – FT
It was President Donald Trump who framed the question. “In one case they say, ‘He’s [Trump is] a fascist. He’s taking over government?.?.?.?we can’t stop him,'” Mr Trump recently said in mockery of his critics. “That didn’t work. The next week, they said, ‘He’s incompetent.’ I said, ‘Well, wait a minute.’ In one case, I’m taking over the world, and the other case, he’s incompetent.” Fascist or joker: which is the better description?
/jlne.ws/2IPKxi2

***** I am guessing, but right about now non-U.S. participants of FIA EXPO are being briefed to not talk about politics while in the U.S. That is the wrong answer. We need the dialogue from our foreign friends near and far.~JJL

++++

Building a World-Class Marketplace and Client Services Team
Cameron Winklevoss – Gemini
As we continue to scale Gemini and build the future of money, it is important that we build both a world-class marketplace and Client Services Team to help service our institutional customers and complement the efforts of our existing Customer Support Team. To that end, we are happy to welcome Jeanine Hightower-Sellitto to the Gemini team as a Managing Director of Operations. Jeanine will help us continue to build the Gemini Marketplace and our new Client Services Team so that we can continue to deliver the best platform experience possible.
/jlne.ws/2yx6HRm

***** I am going to have to agree with Cameron, hiring Jeanine Hightower-Selito was a world class move.~JJL

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Wednesday’s Top Three
Our top read stories of the day were led by Business Insider’s Nasdaq CEO explains difference between being C-suite exec and CEO. Second was Bloomberg’s Blythe Masters Says Blockchain Tech Is Coming to Commodities. And third went to a top 3 finisher from Tuesday, Bloomberg’s The Next Financial Crisis Is Staring Us in the Face

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MarketsWiki Stats
133,557,946 pages viewed; 23,293 pages; 215,198 edits
MarketsWiki Statistics

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Lead Stories

A $1 Trillion Powder Keg Threatens the Corporate Bond Market
Molly Smith and Christopher Cannon – Bloomberg
They were once models of financial strengthócorporate giants like AT&T Inc., Bayer AG and British American Tobacco Plc.
/jlne.ws/2IO27CZ

New Crypto Consortium Seeks to Alleviate Liquidity Problems
Vildana Hajric – Bloomberg
Platform promises speedier settlements, more efficient trading; Volume on crypto exchanges is down about 80% this year
Cryptocurrency trades are notoriously difficult to settle. Could a new platform help fix that? San Francisco-based startup Blockstream Corp. launched the Liquid Network today, a trading platform that promises faster and more secure settlements of digital tokens. The platform connects cryptocurrency exchanges, brokers and financial institutions around the world. So far, more than 20 companies have signed up, including Bitfinex, Bitmex and OKCoin.
/jlne.ws/2IQxpJo

Accused UK traders were only kidding, US jury told; Prosecutors allege executives in London fixed prices in global foreign exchange market
Robert Armstrong – FT
Three UK-based bank traders accused of fixing foreign exchange markets through a private chatroom were engaging in a comic back-and-forth to blow off steam and broke no laws, their attorneys said in opening arguments at their trial in New York.
/jlne.ws/2pUXbUx

Trump says the Federal Reserve has ‘gone crazy’ by continuing to raise interest rates
Thomas Franck – CNBC
President Donald Trump knocked the Federal Reserve for continuing to raise interest rates despite some recent market turbulence.
“I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy,” the president said after walking off Air Force One in Erie, Pennsylvania for a rally.
/goo.gl/pGRhHa

GAM Is Said to Be in Early Stage Talks With Potential Buyers
Bloomberg via Pensions & Investments
GAM Holding AG has held informal talks with potential buyers for all or part of the business as it explores options to stabilize the firm after the suspension of a star fund manager, according to people familiar with the discussions.
/goo.gl/wEqrhK

ESTER Gets Some Competition in the IBOR Replacement Race
George Bollenbacher – TABB Forum
As we pointed out in some earlier work on the IBOR replacements, the leading candidate for replacing Euribor, as decreed by the working Group on euro risk-free rates, was ESTER, the European Short-Term Rate. Because this rate, like SONIA, is an unsecured bank borrowing rate, it is not technically risk free and not a money-market rate. In addition, the European Central Bank indicated that ESTER “will complement existing benchmark rates produced by the private sector and will serve as a backstop reference rate.”
bit.ly/2yyjF1c

Cryptocurrency enthusiasts aren’t going to like how AARP defines bitcoin; ‘Imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin’
Shawn Langlois- MarketWatch
Think of it as the crypto equivalent of the “get off my lawn” meme.
/jlne.ws/2IQsoke

Automating the Wall Street Rainmaker; Investment banking skills like negotiation and relationship building aren’t easily replicated, but banks are finding ways technology can help.
Sonali Basak – Bloomberg
Wall Street pours billions of dollars into technology every year, looking for ways to replace many of its money managers, research analysts, and traders with machines. But there’s one job that few believe can be automatedóthat of the investment banker. Investment bankers weave together complicated mergers and acquisitions, pitch initial public offerings to investors, and serve as confidants and counselors to chief executives. They’re also rainmakers, cultivating relationships that bring in business.
/jlne.ws/2pOUu6Q

Exchanges, OTC and Clearing

ICE Benchmark Administration Launches the ICE Term RFR Portal and Publishes a Paper on Potential Term Structures for Alternative Risk Free Rates
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has launched the ICE Term RFR Portal and published a paper on potential term structures for alternative Risk Free Rates (RFRs).
/jlne.ws/2Oj9OqI

Demand Derivatives Partners with GMEX Group to Launch a Revolutionary Futures
Exchange and Reduced-Risk Blockchain Clearing House
Press Release
Demand Derivatives Corp., a creator of novel derivative instruments, and GMEX Group (GMEX), a leading provider of exchange and post-trade business technology solutions, will combine forces to launch a U.S.-regulated futures exchange, RealDemand Board of Trade (“RealBOT”), and clearing house, RealDemand Clearing (“RealClear”).
To further align interests and share in the success of the project, GMEX will take a minority equity stake in Demand Derivatives.
/goo.gl/5gVvpZ

SGX to launch new high-grade iron ore derivative
SGX
SGX today announced plans to launch a new high-grade iron ore derivative to meet the needs of the industry as the physical market evolves along different grade specifications.
/jlne.ws/2IPqYpX

LSE Falls to Six-Month Low on Brexit Fears Amid Broader Slump
Viren Vaghela – Bloomberg
London Stock Exchange Group Plc fell to its lowest level in over six months on concerns that the company will lose revenue from banks moving business to the European Union after Brexit.
/jlne.ws/2pLI4wm

Deutsche Bˆrse Photography Foundation shows “To be continued”; Exhibition on the phenomenon of seriality in photography from October 12, 2018 to January 11, 2019 in The Cube, Eschborn
Deutsche Bˆrse
From October 12, 2018 to January 11, 2019, the Deutsche Bˆrse Photography Foundation will be showing the exhibition “To be continued”. With more than 120 works by 20 international artists from the Art Collection Deutsche Bˆrse, it is dedicated to the phenomenon of seriality and its different applications in photography. The exhibition can be seen in the headquarters of Deutsche Bˆrse, The Cube, in Eschborn.
/jlne.ws/2pPwkZT

Deutsche Bˆrse welcomes HANetf as new ETF issuer
Deutsche Bˆrse
Since Thursday, three ETFs of the new issuer HANetf have been tradable for the first time via Xetra and the Frankfurt Stock Exchange. HANetf has had Europe’s first ETF listed on its white label platform and two additional own products.
/jlne.ws/2pMmeJ9

LCH SA EquityClear to further extend its clearing services to include Euronext stocks traded on Turquoise
LCH
LCH SA, a leading global clearing house, today announced that it is to extend its clearing services offering for Turquoise, the pan-European MTF. As a result of the agreement, Euronext stocks traded on the Turquoise platform will be available for clearing through LCH SA. The clearing arrangements will be based on a “Preferred CCP” or “User Choice” model, whereby each trading firm is able to specify LCH SA as its preferred CCP. If a trade is executed between two trading members that have both elected LCH SA as their preferred CCP, then the trade will be sent to LCH SA for clearing. As a result of the move, members opting for LCH SA as their preferred CCP for Euronext stocks will be able to consolidate their clearing activity through one clearing house, enabling them to benefit from operational and cost efficiencies. The service, which is expected to begin in Q1 2019, is part of LCH SA’s broader strategy to connect with trading venues on a Preferred Clearing basis.
/jlne.ws/2pPcJJ8

ICE BENCHMARK ADMINISTRATION LAUNCHES THE ICE TERM RFR PORTAL AND PUBLISHES A PAPER ON POTENTIAL TERM STRUCTURES FOR ALTERNATIVE RISK FREE RATES
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has launched the ICE Term RFR Portal and published a paper on potential term structures for alternative Risk Free Rates (RFRs).
/jlne.ws/2Oj9OqI

ICR and Nasdaq Present an Event for Advancing Women Leaders in the Boardroom
By Business Wire
ICR, a leading strategic communications and advisory firm, hosted an event in partnership with Nasdaq titled “Advancing Women Leaders in the Boardroom” on Tuesday, October 9, at the Nasdaq MarketSite in New York City. The event featured important discussions on the topic of gender diversity in the boardroom from many highly accomplished women leaders who have made huge contributions in this area as well as to the business community overall.
/jlne.ws/2pLjmw8

Directorate Change | London Stock Exchange Group
London Stock Exchange Group
Following the announcement of her appointment at Bloomberg L.P., Mary Schapiro has resigned from the Board of London Stock Exchange Group plc with immediate effect.
/jlne.ws/2pOgaA4

MTS enhances BondVision platform with new automation tools
London Stock Exchange Group
MTS Markets, part of London Stock Exchange Group (LSEG), has launched new automation tools for its enhanced MTS BondVision dealer-to-client electronic bond trading platform.
/jlne.ws/2pPtzaY

Handling of Tick Sizes from October 31 onward
JPX
As previously announced, TSE have applied a separate set of narrower tick sizes to TOPIX100 constituents from January 14, 2014 onward (as prescribed in Rule 14, Paragraph 3, Item 1-b of the Business Regulations; hereinafter referred to as “narrow tick sizes”). The handling of the application from October 31 onward shall be as follows.
/jlne.ws/2pOAtNq

Fintech

FINCAD Launches Pioneering Python Toolkit for Valuation and Risk Analytics
FINCAD
FINCAD today announced innovative enhancements to FINCAD F3, an advanced valuation and risk analytics solution. A comprehensive Python toolkit has been added to F3, enabling traders, quants, portfolio managers and risk managers to rapidly generate custom analytics, applications and reports to drive better investment and risk decisions.
/goo.gl/d1kvq7

International Monetary Fund, World Bank launch Bali Fintech Agenda
Yen Nee Lee – CNBC
The International Monetary Fund and the World Bank jointly released a paper that will guide policymakers around the world in their handling of the rise of financial technology ó commonly known as fintech.
The paper, called the Bali Fintech Agenda, was launched on Thursday on the Indonesian island where the IMF and the World Bank are holding their annual meetings.
/cnb.cx/2ygbEyH

IMF-World Bank annual meetings: Regulators at Bali Fintech Agenda
Yen Nee Lee – CNBC
The rise of financial technology ó more commonly known as fintech ó won’t threaten the existence of banks and it’s the responsibility of authorities to make sure that traditional lenders are prepared for changes in their industry, policymakers and regulators said in a CNBC-moderated panel Thursday.
/cnb.cx/2ydwQ8o

IHS Markit Creates First One-Stop Data Solution for Syndicated Loan Market; New portal consolidates data from 150 agent banks and other sources to provide unified view of positions, servicing events and reference data
IHS Markit
IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions today announced the launch of a portal that consolidates critical data for participants in the $1 trillion syndicated loan market.
/goo.gl/YPgE5G

Hackers Are Using Stolen Apple IDs to Swipe Cash in China
Bloomberg News
China’s top digital wallet didn’t say how much was stolen; Ant Financial and Tencent are working with Apple on the case
Ant Financial’s Alipay and Tencent Holdings Ltd. warned that cyber-attackers employed stolen Apple IDs to break into customers’ accounts and made off with an unknown amount of cash, in a rare security breach for China’s top digital payments providers.
/jlne.ws/2pLfXgQ

Cryptocurrencies

European bitcoin exchange in “final stages”
Luke Jeffs – FOW
A former Merrill Lynch quant has said his crypto-currency start-up is close to receiving regulatory approval to launch a Europe-based bitcoin future and options, a possible breakthrough for the nascent European market.
bit.ly/2C82Qh9

Plan to Fix Journalism With Cryptocurrency Draws Skepticism
Benjamin Mullin – Wall Street Journal
The Civil Media Co. bills itself as a solution to some pressing problems in modern journalism, pitching a new cryptocurrency that would help news consumers support quality information and weed out bad actors.
/on.wsj.com/2CD3G6z

****CNN – Civil Media’s token sale is not going well

Bitcoin needs a blessing from the SEC, says analyst
Aaron Hankin – MarketWatch
Seasonal patterns had many crypto proponents geared up for a fruitful final quarter, but to-date gains have been lacking and analyst Naeem Aslam said it may take an endorsement from lawmakers to get a year-end rally under way. “Bitcoin needs some sort of a blessing and only that can revitalize the rally for the currency,” wrote Aslam, chief market analyst at Think Markets U.K.
/on.mktw.net/2ORS0Th

FSB Concludes that Cryptocurrency is a Developing Threat
Simon Golstein – Finance Magnates
The Financial Stability Board, an advisory body to the G20 organisation, has published a report on the implications of cryptocurrency. The report is considerably more pessimistic than the one that it published a few months ago.
bit.ly/2EflE0K

Google Ad Reveals Search Giant’s Feelings On Bitcoin And Crypto
Billy Bambrough – Forbes
Google’s past relationship with bitcoin and cryptocurrency has been fraught, to say the least ó last month the search giant partially rolled back its ban on advertisements for cryptocurrencies, allowing regulated cryptocurrency exchanges to buy ads in the U.S. and Japan.
bit.ly/2pPN7M9

Here’s how blockchain will fit into your life in 10 years
Darla Mercado – CNBC
You may not likely become a blockchain billionaire anytime soon, but this technology will probably be part of how you invest in the next decade.
/cnb.cx/2ycwWx0

GMO Internet Plans to Launch Price-Stable, Yen-Pegged Cryptocurrency
Aziz Abdel-Qader – Finance Magnates
Japanese internet conglomerate GMO Internet has announced plans to launch a yen-pegged ‘stablecoin,’ whose value will not be fully affected by crypto market volatility. The Tokyo-based company will, most likely, collaborate with a bank from Japan to develop the price-stable cryptocurrency, which should be issued in early 2019.
bit.ly/2ITeA8N

‘Bitcoin and Guns, That’s the Only Way to Save This Country’; Cryptocurrency looks like the way forward in a Ukraine battered by revolution and corruption.
Linda Kinstler – Bloomberg
The spot where a statue of Lenin once presided over Kyiv’s downtown is now in a state of mild decrepitude. The plinth remains, but it’s covered with graffiti, its steps painted the blue and gold of the Ukrainian flag. After protesters triumphantly toppled the statue in December 2013, the vacant pedestal served as a memorial to Ukraine’s violent rejection of its Soviet past.
/jlne.ws/2IQsEQe

Politics

Opinion: Trump’s tariffs take direct aim at Chinese stocks; Yardeni: U.S. market is prepared for a trade fight with China
Ed Yardeni – MarketWatch
President Donald Trump is implementing policies aimed at either slowing or halting China’s drive to become a superpower. He wants to reduce America’s huge trade deficit with China by forcing U.S. and other manufacturers to move out of that country. In the process, the U.S. would no longer be financing China’s ascent with our trade deficit and providing technological knowhow that has been either stolen or extorted.
/jlne.ws/2IN5V7z

JPMorgan Earnings Could Put the Cost of Trump’s Trade War in Focus
Ben Walsh – Barron’s
After JPMorgan Chase (JPM) reported a strong second quarter, America’s largest bank by assets has a big question hanging over its third-quarter results: Will JPMorgan’s money-spinning ability be dented by rising interest rates, and a trade war between the world’s two largest economies?
/jlne.ws/2INItXJ

Central Bankers Defend Fed After Trump Accuses It of ‘Going Loco’
Yuko Takeo – Bloomberg
Central bankers from around the world jumped to the U.S. Federal Reserve’s defense after President Donald Trump accused the central bank of going “loco.”
/jlne.ws/2IOsIA2

U.S. Needs a Global Alliance Against Russia’s Cyberattacks; Washington can coordinate with Europe, the UN, Interpol and nongovernmental groups.
James Stavridis – Bloomberg
While Russian hacking has been a persistent threat for several years now, the past few days shed new light on the vast scale of Moscow’s cybercrimes directed against the U.S., NATO and nongovernmental organizations around the world.
/jlne.ws/2IOboLx

Inside Trump’s Market Blame Game
Kathleen Hunter – Bloomberg
Want to receive this post in your inbox every day? Sign up for the Balance of Power newsletter, and follow Bloomberg Politics on Twitter and Facebook for more. Donald Trump knows who’s to blame for the worst U.S. stock market selloff since February, and it’s definitely not Donald Trump.
/jlne.ws/2IObd2P

Michael Bloomberg weighs odds for run against Donald Trump; Billionaire eyes last chance to lead Democratic bid for White House in 2020
Joshua Chaffin in New York – FT
Americans opposed to the New York billionaire occupying the White House may soon have the choice of another one: Michael Bloomberg.
/jlne.ws/2pOYhkC

Regulation

Spanish foreign minister sanctioned by securities regulator
Michael Stothard – FT
Spain’s foreign minister Josep Borrell has been sanctioned by the country’s securities regulator over a share sale in 2015, in another blow to the Socialist government of Pedro Sanchez.
/jlne.ws/2IT9IjW

Law Firm’s Fee Settlement Could Shake Up Securities Class Actions
By Matthew Goldstein – NY Times
A deal that was reached this week in a long-running fee dispute has the potential to reshape the way law firms that represent plaintiffs bill for their work and pay other lawyers for referring clients to them.
/jlne.ws/2pMCfij

FINRA-Bloomberg Indices to be Discontinued
FINRA
Beginning Thursday, November 1, 2018, FINRA will discontinue processing the FINRA-Bloomberg Active U.S. Corporate Bond Indices.
/jlne.ws/2pOAyAI

SEC Monitoring Impact of Hurricane Michael on Capital Markets
SEC
The Securities and Exchange Commission is closely monitoring the impact of Hurricane Michael on investors and capital markets.
/jlne.ws/2pP2KUq

Investing and Trading

How FOMO Plays Into Millennial Investing
Benjamin Stupples – Bloomberg
Millennials’ use of social media is helping to drive their investment decisions, according to Fabrizio Campelli, Deutsche Bank AG’s global head of wealth management.
/jlne.ws/2IPlb42

A Frenzy of New Market Bets Is Fading
Justin Baer and Dawn Lim – WSJ
One sign that investors’ doubts are growing despite a buoyant market for U.S. stocks: the slowdown of new money into the investment world’s most popular products.
Net inflows into U.S. mutual funds and exchange-traded funds are down 46% through the first three quarters of the year, according to new data tracked by Morningstar. They totaled $281.7 billion this year through September, compared with $517.2 billion during the same period in 2017, Morningstar said.
/on.wsj.com/2yvlTP6

Markets’ Scary Divergence Is Worrisome; The bond market is failing its haven role and that could spell trouble for the long bull market in stocks
Spencer Jakab – WSJ
Is this the big one? Not even close, but there is something unusual and unsettling afoot in financial markets.
/jlne.ws/2IOlJah

ETFs begin to reshape bond trading; Asset managers are using exchange traded funds to gain or cut exposure to corporate bonds
Robin Wigglesworth and Joe Rennison – FT
Around midday on October 25 2017, bond traders noticed a vast deal suddenly hitting their screens. Someone had just executed a $500m trade in nearly 50 different corporate bonds at the same time ó a huge amount of debt to change hands in one go.
/jlne.ws/2pP9ly2

Institutions

BGC Partners to Relocate UK based Headquarters to 5 Churchill Place, Canary Wharf, E14
BGC Partners, Inc.
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners,” “BGC” or “the Company”), a leading global brokerage and financial technology company, signed leases on approximately 130,000 sq ft at 5 Churchill Place, London, E14. This will see the leading brokerage firm relocate its UK based headquarters in 2019.
/jlne.ws/2yq1CKG

Wells Fargo touts good deeds to get back in lawmakers’ good graces
Imani Moise, Pete Schroeder – Reuters
Tired of being cast as the poster child for big banks behaving badly, Wells Fargo & Co has been expanding its presence in the nation’s capital to convince lawmakers it has changed and talking up its charitable work in their districts.
/jlne.ws/2IOtkWm

Chairman and CEO together or separate? Citigroup has to decide
David Henry – Reuters
JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) have placed the jobs of chairman and chief executive in the hands of one person, and now No. 3 Citigroup Inc (C.N) must decide whether to follow suit.
/jlne.ws/2IRHVA4

Bad timing as Vanguard service glitches start before market drop
Ross Kerber – Reuters
If plunging markets during Wednesday’s U.S. trading session proved unlucky for investors, the timing was especially bad for Vanguard Group Inc.
/jlne.ws/2IQiKhy

Billionaire Lau Plans Redevelopment of Goldman London HQ
Jack Sidders – Bloomberg
Chinese Estates has invited developers to pitch, people say; Project could be among London’s biggest office developments
Joseph Lau’s Chinese Estates Holdings Ltd. has invited companies to pitch to redevelop Goldman Sachs Group Inc.’s London headquarters after the bank vacates the building next year, people with knowledge of the plan said.
/jlne.ws/2pPqLus

BGC Partners to relocate London HQ; Interdealer broker will bring its two existing offices in London under one roof at new Canary Wharf location.
By Hayley McDowell – The Trade
BGC Partners has announced plans to relocate its UK-based headquarters in London which will bring together two of its current offices in the city.
/jlne.ws/2pNEmm5

Regions

Apple Watch, hired jet, mystery vehicle figure in search for missing Saudi dissident
Orhan Coskun, Sarah Dadouch, Stephen Kalin – Reuters
Jamal Khashoggi believed he was safe in Turkey.
Khashoggi, a veteran Saudi journalist and newspaper editor, had lived in exile in Washington for more than a year, writing a column for the Washington Post in which he regularly criticized his country’s crackdown on dissent, its war in Yemen and sanctions imposed on Qatar.
/reut.rs/2yqiQHG

Singapore’s UOB Reviewing Insurance Deal With Prudential
Manuel Baigorri and Joyce Koh – Bloomberg
Lender has been soliciting ideas from potential advisers; UOB seeking ways to get more value out of insurance operations
Singapore lender United Overseas Bank Ltd. is reviewing its insurance business, including an existing partnership with Prudential Plc, after Southeast Asia witnessed a wave of lucrative distribution deals, people familiar with the matter said.
/jlne.ws/2IUbpxD

China finance: why ‘accidental banks’ face a crackdown; Asset managers were big lenders to Chinese buyers of overseas assets but capital is drying up
Don Weinland in Hong Kong – FT
When Huarong Asset Management employees arrived at their Hong Kong headquarters on April 18, they found it had undergone a radical transformation. The walls of the company’s offices, which had been covered with images of the chairman Lai Xiaomin , now stood bare. Stacks of glossy books authored by Mr Lai had vanished. It was as if he had never existed, says one employee present that day.
/jlne.ws/2pOUNP2

Brazil’s big soyabean win turns painful; China demand sends price up more than 30% but leaves domestic supplies perilously low
Emiko Terazono – FT
Brazil is discovering that winning big in trade wars comes at a cost. Since Beijing imposed a 25 percentage point tariff increase from 3 per cent on imports of US soyabeans in June, Brazilian farmers have reaped a windfall as China has turned to the South American country for the crop that is turned into animal feed and oil.
/jlne.ws/2pN6dmd

The EU should heed plea for sanity on derivatives; Hedging is too systemic an issue to be caught up in political brinkmanship
The Editorial Board – FT
One of the biggest risks to financial stability if the UK crashes out of the EU next year without a deal is what happens to trillions of dollars of derivatives contracts. The Bank of England turned up the volume on an already rowdy debate on the issue this week when it warned that £41tn of outstanding contracts ó used to hedge oil prices, interest rates and other financial risks at companies across the EU27 ó could be forcibly voided next March.
/jlne.ws/2pLJtD8

Oligarchs Beware: U.K. Demands to Know How Jailed Banker Can Afford Mansion; Orders mark a warning shot toward Russian oligarchs and other ‘politically exposed persons’ who hold U.K. assets
By Margot Patrick – WSJ
The wife of a jailed Azerbaijani banker has been ordered to explain how she and her husband could afford their multimillion-pound London mansion or face having it seized, in the first case using new U.K. investigative powers.
/jlne.ws/2pLkiR0

Brexit

London Housing Is Taking a Beating From Brexit Uncertainty
Lucy Meakin – Bloomberg
Market is also feeling weight of rate increases, affordability; U.K. capital posted biggest slide as southeast deteriorated
London’s house price slump left U.K. values stagnating for a fifth month in September as Brexit concerns and interest rate rises discouraged buyers.
/jlne.ws/2IORFv2

What May’s Brexit Fudge Means for Business: More Uncertainty
Emma Ross-Thomas , Suzi Ring , and Alex Morales – Bloomberg
Plan would see whole U.K. stay in EU customs regime for now; Proposal undermines May’s pledge business will only adapt once
As Brexit talks edge toward a compromise, the fudged deal that’s taking shape risks bringing years of uncertainty to business.
/jlne.ws/2IOOPGt

Tony Blair says there is a 50-50 chance of another Brexit referendum
Reuters
Former British Prime Minister Tony Blair said there was a 50-50 chance of getting another Brexit referendum as Prime Minister Theresa May will be unlikely to secure a majority for any divorce deal in parliament.
/jlne.ws/2ISBCg0

The post Powder Keg Threatens Corporate Bond Market; New Crypto Consortium Seeks to Alleviate Liquidity Problems appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

A total of 37,989,245 options contracts traded yesterday and cleared at the OCC. That makes it the fourth best day by volume in OCC’s history.~JJL

Bob Zagotta is now serving cryptocurrency exchange Kraken in a strategic leadership role. He also plays a mean guitar and is the frontman for The Simpletones, which rocked the house last night at the ALTSO Rocktoberfest.~JK

Nouriel Roubini testified to the US. Senate Banking Committee yesterday and his testimony was titled “Crypto is the Mother of All Scams and (Now Busted) Bubbles, While Blockchain Is The Most Over-Hyped Technology Ever, No Better than a Spreadsheet/Database.~JJL

If you want to donate to the Fearless Girl National Youth Leadership Training Fund to support leadership development in girls coming into Scouts BSA in February, you can do so via Facebook using this LINK. There are no fees taken out when you donate through Facebook.~JJL

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FIA Expo Preview with Walt Lukken

JohnLothianNews.com

FIA Expo is October 16-18. In this video, FIA President and CEO Walt Lukken discusses what to expect from this year’s gathering of more than 4,500 attendees representing 1,250 companies.
Watch the video »

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John Lothian News Sits Down With FIS

JohnLothianNews.com

John Lothian sat down with John Omahen of FIS Global in the office of John Lothian News to discuss new initiatives at FIS and Omahen’s take on industry issues. During this discussion, Omahen comments on a new FIS margin product and even interest in cryptocurrency products.

Watch the video »

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The Complex Realities of a Cybersecurity Program
Mark Morrison, OCC Chief Information Security Officer
As October is Cybersecurity Awareness Month, I’d like to share what I believe are some significant cybersecurity issues that don’t always make it into today’s headlines.
/jlne.ws/2IRgV3T

***** I thought every month was Cybersecurity Awareness Month.~JJL

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Football clubs dive into wild world of cryptocurrencies; Sponsorship deals to promote initial coin offerings take off just as regulators crack down
Hannah Murphy and Murad Ahmed – FT
Cryptocurrency may not seem like an obvious next step for Brazilian footballer Ronaldinho Ga˙cho. But the former Barcelona star, who retired at the start of the year, has been busy promoting his own “digital gold”, the Ronaldinho Soccer Coin, to his 18m followers on Twitter.
/jlne.ws/2IWEY1z

*****I have the feeling this will merely end up as a footnote on a Wikipedia page.~SD

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The Bikinis Are Gone, But Change Is Slow for London’s Metal Boys
Lynn Thomasson and Lucca De Paoli – Bloomberg
Some traders kept their risque corporate parties at LME Week; In the year after #MeToo, there’s more focus on gender issues
Strip clubs, lap dances in limousines, and waitresses in bikinis. For decades, there’s been a very seamy side to the nightlife at London’s annual get-together for the metal-trading world. The sexist entertainment at LME Week parties has been chronicled by British tabloids for years, but it’s starting to change — slowly. At this year’s LME Week, some companies kept the risque corporate events. Others have given it up.
/jlne.ws/2IR8Qw0

****** Progress is slow, but it is progress.~JJL

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Thursday’s Top Three
Our top story of the day yesterday was Bloomberg’s A $1 Trillion Powder Keg Threatens the Corporate Bond Market. Second went the NFA obituary In Memoriam: NFA Remembers John J. Conheeney. Third was Bloomberg’s piece on Liquid Network, New Crypto Consortium Seeks to Alleviate Liquidity Problems. Have a great weekend everybody.

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MarketsWiki Stats
121,366,036 pages viewed; 23,294 pages; 215,219 edits
MarketsWiki Statistics

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Lead Stories

This Texas Finance Professor Sifts Data for Signs of Rigged Markets; John Griffin, who discovered the Bitcoin-Tether connection, seeks to expose “the fruitless deeds of darkness.”
Matt Robinson, Nick Baker – Bloomberg
At the height of Bitcoin mania in December, when the price of the digital currency was climbing toward $20,000, finance professor John Griffin started digging into 2 terabytes of trading data – equal to a tenth of all the text housed by the Library of Congress.
/jlne.ws/2pRr0oQ

SEC’s New Strategic Plan Puts Investors, Innovation, and Performance at Top
SEC
The Securities and Exchange Commission today announced a new strategic plan to guide the agency’s work over the next four years with a primary focus on investors, innovation, and performance. The plan’s goals reflect the agency’s commitment to its longstanding mission while leveraging the opportunities and addressing the challenges that come from fast-evolving markets, products and services.
/jlne.ws/2pRsAXO

Let’s innovate our way out of climate change disaster; Economic growth does not have to destroy the planet
Tim Harford – FT
What are the limits to economic growth ó and have we already recklessly exceeded them? Such questions were raised (again) this week by (another) alarming report about climate change. Many of my environmentalist friends are convinced that economic growth itself is the fundamental problem.
/jlne.ws/2pR5i4q

British PM May briefed inner cabinet on Thursday evening that Brexit deal close
Reuters
British Prime Minister Theresa May briefed her inner cabinet on Thursday evening that a historic Brexit deal was close, the Financial Times reported on Thursday.
/reut.rs/2pVJCUR

As markets swoon, finance chiefs urge US, China to cool it
Elaine Kurtenbach – Associated Press
The heads of the World Bank and IMF appealed Thursday to the U.S. and China to cool their dispute over technology policy and play by world trade rules, as tumbling share prices drove home potential perils from a clash between the world’s two biggest economies.
/goo.gl/T13YNb

Coinbase’s Adam White is joining Bakkt as its COO
Frank Chaparro – The Block Crypto
Adam White, Coinbase’s fifth employee and the person who led the development of its institutional-aimed businesses, is joining Bakkt, the cryptocurrency venture at ICE, the parent company of the New York Stock Exchange, people familiar with the hire tell The Block.
/jlne.ws/2IQr5BH

Trump says the Federal Reserve caused the stock market correction, but he won’t fire Chair Powell
Michael Sheetz and Thomas Franck – CNBC
President Donald Trump continued to attack the Federal Reserve on Thursday, saying Chairman Jerome Powell is being too stringent with monetary policy and is making a mistake.
/cnb.cx/2pMQbZt

Supreme Court denies exchanges’ request to take up high-frequency trading case
Declan Harty – S&P Global Market Intelligence
The U.S. Supreme Court has rejected a request from the largest U.S. stock exchanges to hear a case over whether they systematically favor high-frequency traders.
Brought in 2014 by a group of pension and retirement funds along with the city of Providence, R.I., the case has raised questions over whether exchanges owned by Intercontinental Exchange Inc., Nasdaq Inc. and Cboe Global Markets Inc. sell and offer products that illegally favor Wall Street’s fastest traders over larger, slower-moving institutional investors.
/goo.gl/fbhzmx

World’s Biggest ETF Bleeds Assets But No Liquidity Crunch
Yakob Peterseil and Sid Verma – Bloomberg
SPY loses $6.6 billion in 17th-biggest daily withdrawal; ‘Orderly selloff’ seen as bid-ask spread tight vs February
ETF investors finally got out their white flags Thursday, but what followed was an orderly surrender in the benchmark S&P 500 fund.
/jlne.ws/2pN8L3O

Exchanges, OTC and Clearing

Shanghai oil exchange invites applications for market maker role
Reuters
The Shanghai International Energy Exchange (INE) on Thursday invited companies to apply for a market maker role on its flagship crude oil futures contract, launched in March.
bit.ly/2yxAE3V

TMX Explores Important Market Linkages with China; Senior TMX Group leaders meet with Chinese officials to advance efforts to establish global access hub to Chinese bond market
TMX
TMX Group senior executives were in China this week to meet with Chinese government officials and business leaders to further relationships in the region and TMX Group’s client-focused global growth strategy.
/jlne.ws/2pQ4vAL

Former SEC head resigns from LSEG board to join Bloomberg; Mary Schapiro was chair of the SEC from 2009 to 2012 and joined LSEG as a non-executive director in 2015.
Hayley McDowell – The Trade
The former head of the US financial regulator Mary Schapiro has resigned from her position as a non-executive director at the London Stock Exchange Group (LSEG) and has joined Bloomberg
/jlne.ws/2pQ3UPx

LCH SA to clear Euronext stocks traded on Turquoise; LSEG announced plans to adds Euronext Growth stocks to its Turquoise MTF last month.
Hayley McDowell – The Trade
LCH SA is extending its clearing services for multilateral trading facility (MTF) Turquoise to include Euronext stocks that are traded on the platform.
/jlne.ws/2pNhpPE

Fintech

Blog: Now is the Time for Real-Time Risk Analytics
Hanweck Blog
With the 3.1% decline in the DJIA and 44% spike in the VIX yesterday, we wanted to dust off our bullhorn and re-emphasize why real-time risk analytics are critical in successfully managing trading risk in a volatile market.
bit.ly/2Ohq0ca

Thomson Reuters unit rebrand lauded in rap; Employee of Blackstone-acquired Refinitiv tries to lift morale with choice lyrics
Eric Platt – Financial Times
The rebranding of Thomson Reuters’ financial and risk businesses to “Refinitiv” has been widely lampooned. But even as newly minted Refinitiv employees gird for a stinging round of cost cuts after its $17bn leveraged buyout by Blackstone, the company has found one fan pledging allegiance to the new corporate brand.
/goo.gl/3k7LjJ

New York State Department of Financial Services challenges OCC authority on fintech charters
International Law Office
On 31 July 2018 the Office of the Comptroller of the Currency (OCC) announced its decision (the Fintech Charter Decision) to begin accepting applications from fintech companies for special purpose national bank charters.(1) The OCC has indicated that it will not grant a charter to a fintech company that wishes to accept deposits or engage in fiduciary activities (for business plans that involve purely fiduciary activities, a limited purpose trust charter may provide an alternative vehicle) (for further details see “OCC to issue fintech charters”).
/goo.gl/q6FPDc

Rocky Mountain fintech: How Denver is evolving as a hub for financial innovation
Monica Vendituoli – Denver Business Journal
Fintech-related deals in the Denver metro and Boulder metro are booming. But can the area keep up with competition on both coasts?
/goo.gl/k6X7x2

Cryptocurrencies

Ex-Donald Trump adviser Gary Cohn joins blockchain start-up; Former Goldman Sachs president calls Spring Labs project a ‘unique opportunity’
Hannah Murphy in London – FT
Gary Cohn, Donald Trump’s former top economic aide, is now an adviser to a blockchain start-up that hopes to use the nascent technology to overhaul the way banks share credit data.
/jlne.ws/2pPzI77

Seeking Sanctions Resistance Through Blockchain Technology
Yaya Fanusie – Forbes
“Digital currencies could provide a way for both Iran and Russia to avoid U.S. dollar transactions, as well as a possible replacement of the SWIFT interbank payment system.”
–A senior Iranian economic official during a May 2018 meeting in Moscow.
bit.ly/2ydImku

Report: SEC Expands Crackdown on ICOs, Regulatory Ambiguity Remains
Helen Partz – Coin Telegraph
The U.S. Securities and Exchange Commission (SEC) has expanded its crackdown on Initial Coin Offerings (ICOs), putting “hundreds” of projects at risk, according to a recent joint investigation by Yahoo Finance and Decrypt Media published, Oct. 10.
/jlne.ws/2IWGCAh

Coinbase is shutting down its fund aimed at big investors as it pivots to a new retail product
Frank Chaparro – The Block
Coinbase, the cryptocurrency exchange operator, is shutting down its index-fund as it shifts attention to a new retail offering, a person familiar with the situation told The Block.
The poster-child of the cryptocurrency market in the U.S., Coinbase in March announced its aspirations to launch a market-value-weighted index fund to offer accredited investors and institutions exposure to the digital currencies trading on its exchange.
/goo.gl/sN5QfJ

Ether Creator Claims He’s No Billionaire in Twitter Crypto Fight
Olga Kharif – Bloomberg
Vitalik Buterin lists holdings of 2nd-biggest digital coin; Revelation comes amid dispute with critic Nouriel Roubini
Vitalik Buterin, one of the most influential people in crypto, says he’s not a digital-currency billionaire.
/bloom.bg/2pQ4Tiq

Bitcoin is the ‘mother of all scams’ and blockchain is most hyped tech ever, Roubini tells Congress
Kate Rooney – CNBC
Global economist Nouriel Roubini, one of the few who predicted the 2008 financial crisis, is making sure U.S. senators don’t miss his warning on cryptocurrency.
/cnb.cx/2yyTAiM

Disrupting The Auto Industry: How A New Blockchain Is Breaking Traditional Boundaries
Dr. Pragya Agarwal – Forbes
The auto industry is 15% of the global retail economy. It is massive, fragmented and rife with problems. Data shows that 81% of people do not enjoy the car buying process, and only 8% considered car salespeople as trustworthy. However, the digital economy is transforming the car buying process. Already, 97% of the total customers purchasing research online beforehand, and 72% of these would buy online if they could.
bit.ly/2EhhRjz

Cryptocurrency theft hits nearly $1 billion in first nine months: report
Gertrude Chavez-Dreyfuss – Reuters
Theft of cryptocurrencies through hacking of exchanges and trading platforms soared to $927 million in the first nine months of the year, up nearly 250 percent from the level seen in 2017, according to a report from U.S.-based cyber security firm CipherTrace released on Wednesday.
/reut.rs/2OhOJx7

New Open-Sourced Innovation Aims To Reduce The Risk Of 51% Attacks
Roger Huang – Forbes
Since the very beginning, 51% attacks and the threat of double spending have been an existential issue for proof-of-work blockchains (which constitute the majority of blockchains, including bitcoin). The 51% attack, skewered in HBO’s Silicon Valley and noted as early as 2014 by mainstream media outlets like the Guardian, refers to the problem of having concentrated computing power dedicated to mining a blockchain turn malicious in an attempt to defraud the blockchain.
bit.ly/2ISaoG7

Sorry Civil, ‘crypto-economics’ and ‘constitutions’ won’t save journalism
Jemima Kelly – FT
On Tuesday, Forbes put out a release boasting that it was the first “major media brand” to experiment with Civil, a project that is trying to build a “decentralised marketplace for sustainable journalism” on ó you’ll never guess ó the blockchain.
/jlne.ws/2pOkyPl

Politics

The Gloom Encroaching on Trump’s Stock Boom
Peter Eavis – NY Times
The good times President Trump brought to the stock market may be ending. The Standard & Poor’s 500-stock index is down nearly 7 percent from its peak in late September, and the Nasdaq index, which includes many hot technology stocks, has fallen nearly 10 percent from its high. Doubts appear to be overwhelming investors’ bullishness. They are concerned that Mr. Trump’s bellicose trade policy will disrupt corporate America’s supply chains and push up costs. Mr. Trump’s tax cuts have contributed to a ballooning fiscal deficit. Borrowing costs have also risen this year, which could dampen investment.
/jlne.ws/2pNhdzU

Trump Gives Investors Good Reason to Be Scared; Fiscal recklessness, impending trade war ó no wonder markets are getting jittery.
Editorial Board – Bloomberg
This week’s fall in stock prices was about as unsurprising as President Trump’s explanation for the setback ó “The Fed has gone crazy,” he said. Expect more of the same over the coming weeks and months, as the U.S. economy adjusts to the withdrawal of the Federal Reserve’s post-crash monetary stimulus, and a reckless administration persists in testing investors’ nerve.
/jlne.ws/2IR7JMQ

Trump Attacks the Fed as Stocks Fall and the Midterms Loom
Binyamin Appelbaum – NY Times
President Trump responded to falling stock prices on Thursday by continuing to throw rocks at the Federal Reserve, which he has described as “crazy,” “loco,” “going wild” and “out of control” for slowly raising interest rates against the backdrop of a booming economy.
/jlne.ws/2pPbolD

Facebook Takes Down Hundreds of U.S. Pages It Said Spread Misinformation; The social network said the accounts broke rules against ‘coordinated inauthentic behavior’
Nick Kostov – WSJ
Facebook Inc. has taken down hundreds of U.S. pages and accounts that were spreading false or misleading political content ahead of the midterm elections, in one of the social network’s most aggressive efforts to stop misinformation spread primarily by Americans.
/jlne.ws/2pPaRQF

If the Treasury names China a currency manipulator, it’s purely political
Colby Smith – FT
On Wednesday, Treasury Secretary Steven Mnuchin warned China against “doing competitive devaluations.” A week earlier, at an event sponsored by the conservative-leaning Hudson Institute, Vice President Mike Pence accused China of using “an arsenal of policies inconsistent with free and fair trade” to get ahead. Currency manipulation made the list, as did intellectual property theft and industrial subsides “doled out like candy.”
/jlne.ws/2pR5sZA

Elizabeth Warren Lays Into Crypto
Ted Knutson – Forbes
Potential 2020 Democratic presidential contender Elizabeth Warren took two major swipes at cryptocurrency today.
/jlne.ws/2IRXOGP

Regulation

SEC Revives Push to Finish Long-Awaited Swaps Rules; Commission votes 4-1 to reconsider proposal on capital and margin for security-based swaps
Gabriel T. Rubin – WSJ
The Securities and Exchange Commission took a step toward completing long stalled rules for brokers selling securities-based swaps required by the 2010 Dodd-Frank financial law.
/goo.gl/bYmj6n

SEC Chair Jay Clayton Says Quarterly Reporting Won’t Change ‘Anytime Soon’
Dave Michaels – WSJ
Public companies won’t get a break from quarterly earnings reporting in the near term, an idea that President Trump asked U.S. regulators to study.
The Securities and Exchange Commission may weigh the idea of moving to six-month reporting for smaller firms, but “I don’t think quarterly reporting is going to change for our top names anytime soon,” SEC Chairman Jay Clayton said Thursday.
/on.wsj.com/2pOqubf

SEC Reopens Comment Period for Capital, Margin, and Segregation Requirements for Security-Based Swap Dealers and Major Security-Based Swap Participants
SEC
The Securities and Exchange Commission today voted to reopen the comment period and request additional comment (including potential modifications to proposed rule language) on the proposed rules and amendments for capital, margin, and segregation requirements for security-based swap dealers and major security-based swap participants and capital requirements for broker-dealers.
/jlne.ws/2pPAYHn

SEC Stops Fraudulent ICO That Falsely Claimed SEC Approval
SEC
The Securities and Exchange Commission today announced that it has obtained an emergency court order halting a planned initial coin offering (ICO), which backers falsely claimed was approved by the SEC. The order also halts ongoing pre-ICO sales by the company, Blockvest LLC and its founder, Reginald Buddy Ringgold, III.
/jlne.ws/2pOBHbJ

Podcast: CFTC Talks EP067: FIA CEO Walt Lukken
CFTC
This week on CFTC Talks podcast, we review the state of the futures and options industry with FIA CEO Walt Lukken…
/jlne.ws/2IRyNvj

Effective date of amendments to NFA Bylaw 1303óDefault and deemed request to withdraw membership
NFA
NFA Bylaw 1303 gives NFA the authority to deem a Member’s failure to pay certain fees as a request to withdraw from NFA membership. The CFTC recently approved amendments to NFA Bylaw 1303, which will become effective on October 31, 2018.
/jlne.ws/2IRzlBn

Investing and Trading

A Crash Course for Investors on the Lingo of (Legal) Weed
Jacqueline Thorpe – Bloomberg
With Canada set to legalize recreational use of marijuana on Oct. 17, the world appears on the cusp of a cannabis boom. Spending on recreational pot will surge to $32 billion globally by 2022, triple its current size, U.S. research firms Arcview Market Research and BDS Analytics say. At least three Canadian pot companies have stock market values of more than $10 billion each, and new companies are popping up by the day. Investors looking to break into the marijuana market may need to hit the books first. Just don’t call it “high” school.
/jlne.ws/2pLMm74

A Guide to Cannabis Investing; From pot stocks to ETFs, these are the marijuana companies to know.
Mark Glassman, Silvia Killingsworth – Bloomberg
In the past year, cannabis stocks outperformed gold, Bitcoin, and the broader market. As investors buy into the frenzy, the biggest pot companies are seeing their valuations soar. And the largest among them, as tracked by Bloomberg Intelligence’s Global Cannabis Competitive Peers Index, have price-to-sales ratios in the triple digits. Canopy Growth, which is valued at $11.4 billion, currently trades at a price-to-sales ratio of 132, and Aurora Cannabis, valued at $9.2 billion, trades at 106. GW Pharmaceuticals is at 231. For comparison, Apple and Amazon.com have p-s ratios of about 4.
/jlne.ws/2IQHKFt

100 Million Barrels: The World Hit a Daily Oil and Liquids Record
Dan Murtaugh – Bloomberg
3Q production rises to 100.3 million barrels a day, IEA says; OPEC, Americas and biofuels lead increases in global output
The world is pumping out more oil and other petroleum liquids than ever before.
/jlne.ws/2pQ24y8

Institutions

Robinhood launches its own trade-clearing system as customer growth surges
Kate Rooney – CNBC
Robinhood spent two years quietly building its own clearing system so it wouldn’t have to rely on an external firm to clear and settle transactions or take custody of assets.
The move positions the online brokerage to be able to scale faster and expand into more areas of financial services, its CEO says.
The Menlo Park-based start-up also announces it has 6 million customers, up from 5 million in August, and 4 million in May.
/cnb.cx/2yzYCv8

JPMorgan Reports Higher Profits Despite Trading Dip; The banking giant said third-quarter profit rose as consumer businesses helped overcome weaker trading
Peter Rudegeair and Emily Glazer – WSJ
JPMorgan Chase & Co. JPM -3.00% said Friday that third-quarter profit rose as the bank’s consumer business helped it overcome weaker trading.
/jlne.ws/2pOkHST

Man Group Starts Jersey Unit to Join Biggest Money Managers
Nishant Kumar – Bloomberg
Man Group Plc, whose assets have soared to a record after posting better-than-expected inflows, said it plans to incorporate a new holding company in Jersey in a move that aligns its corporate structure with some of the world’s largest money managers.
/jlne.ws/2IPqjoy

Lloyd’s Scottish Widows awards £30b asset management job to BlackRock
The Star
Lloyd’s Banking Group owned Scottish Widows has appointed BlackRock to manage £30bil of assets in index strategies while it is also seeking a strategic tie-up with the world’s largest asset manager.
/jlne.ws/2ISotmW

Man Group shares perk up on record assets under management
Federica Cocco – FT
Shares in Man Group on Friday rose as much as 5 per cent, one of the largest opening increases on London’s mid-cap index, after the biggest listed hedge fund reported record funds under management.
/jlne.ws/2IVNLRi

Regions

China Swoops in on Canadian Oil That’s $50 Below U.S. Crude
Bloomberg News
Heavy oil grades sought to replace shrinking Venezuelan supply; Use of bitumen seen rising as China focuses on infrastructure
Chinese oil buyers are making a beeline for a bargain across the Pacific. With Canadian oil over 60 percent cheaper than U.S. benchmark West Texas Intermediate and global marker Brent, China’s refiners are being lured to the heavy, sludgy crude. That’s because — apart from being a source of fuel — it’s rich in bitumen, a black residue used to build everything from roads to runways and roofs.
/jlne.ws/2pSfOIl

IHS Markit launches Chinese bond market indices
Finextra
Business information provider IHS Markit (Nasdaq: INFO) today announced the launch of new onshore Chinese bond market indices in alliance with ChinaBond Pricing Center Co., Ltd. (CBPC), a subsidiary of China Central Depository and Clearing Co., Ltd. (CCDC), the leading pricing provider for the world’s third largest fixed income market.
/goo.gl/jnjLKd

Brexit

Police still not investigating Leave campaigns, citing ‘political sensitivities’
Adam Ramsay and James Cusick – OpenDemocracy UK
Months after Scotland Yard received ‘substantial’ evidence of potential criminality by pro-Leave groups, nothing has happened. Is the police probe destined for the political long-grass?
/goo.gl/sia7Kd

A Cautionary Tale for How Brexit Summit Can Collapse; Britain and the EU seem closer than ever to a deal, but Salzburg showed the mood music can quickly change.
Ian Wishart – Bloomberg
A summit next week is being heralded as Brexit’s defining moment. The U.K. wants a deal. The European Union expects a deal. But in private, both sides warn it could be a disaster – at least on the face of it.
/jlne.ws/2pNfYAK

The post Texas Finance Professor Sifts Data for Signs of Rigged Markets; SEC’s New Strategic Plan appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Welcome to FIA EXPO Week in Chicago. Over 120 companies are represented in the FIA EXPO hall and people come from all over the world. If you missed our FIA EXPO preview interview with FIA CEO Walt Lukken, you can find it HERE.~JJL

John Lothian News will again be present in the Cinnober booth on the EXPO hall. You can find us shooting video there.~JJL

If you want to know where the next generation of traders is coming from, please show up for my FIA EXPO session at 3 PM on Wednesday in the EXPO Learning Lab.~JJL

Don’t miss the speech by CFTC Chairman J. Christopher Giancarlo on Wednesday at 9 AM.~JJL

The lunch speaker on Wednesday is Jeremy Heimans, the co-founder and CEO of Purpose, an organization headquartered in New York that builds and supports social movements for a more open, just, and habitable world.~JJL

For information on Thursday’s Great Chicago Steakout, click HERE.~JJL

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Nasdaq CEO is on a mission — for the little guy
Thomas Heath – Washington Post
Nasdaq chief executive Adena Friedman is wrapped in a woody Washington steakhouse on a steamy August afternoon, slamming her fist on a table over frustration that a vibrant corner of the economy is not available to average investors.
/jlne.ws/2pT9aSg

****** Somehow I feel left out.~JJL

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Upstart Exchange Looks to Profit From Wall Street Fear; MIAX to launch options on index for volatility traders, competing with Cboe’s VIX
Gunjan Banerji – WSJ
Just after the stormiest week for U.S. markets in months, investors may get a new way to bet on Wall Street fear. Miami International Holdings Inc., a small but rapidly growing exchange operator, won regulatory approval on Friday for options on an index that tracks expectations for U.S. stock volatility. The measure, called SPIKES, competes head-to-head with the already established Cboe Volatility Index, known as the VIX.
/jlne.ws/2NJtUpj

***** SPIKES, the solution for fear of trading while golfing.~JJL

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Deepfake Videos Are Ruining Lives. Is Democracy Next?; Moving Upstream explores the dark side of sophisticated video fakery
Hilke Schellmann – WSJ
Seeing isn’t believing anymore. Deep-learning computer applications can now generate fake video and audio recordings that look strikingly real.
/jlne.ws/2NHv1pt

****** I hope the fake me is more interesting.~JJL

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Self-Reporting Pays; Costly Cyber-Attack; No Systemic Threat by Crypto-Assets
Gary DeWaal – Bridging the Week
An international bank settled an enforcement action brought by the Commodity Futures Trading Commission for spoofing. However, in the process, the CFTC went out of its way to laud the bank for self-reporting the incident, as well as its cooperation in the CFTC’s investigation and voluntary efforts to enhance its internal processes to detect spoofing and train staff going forward. Separately, a UK-based financial institution was assessed a fine of the equivalent of approximately US $21.5 million by the Financial Conduct Authority for a cyber breach that detrimentally impacted some customers. Although the FCA acknowledged that the bank’s cybercrime framework was “appropriate,” it said that employees did not follow it.
bit.ly/2QPDKaU

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Friday’s Top Three
Our top two stories from Friday were all about bitcoin and blockchain, led by Bloomberg’s profile on John Griffen, in This Texas Finance Professor Sifts Data for Signs of Rigged Markets. Second went to Nouriel Roubini’s testimony before the US Senate Banking Committee in Exploring the Cryptocurrency and Blockchain Ecosystem. Let’s just say he is not impressed with crypto. Third went to Bloomberg’s The Bikinis Are Gone, But Change Is Slow for London’s Metal Boys – probably because the word bikini was in the headline. It is a good story about how the industry is slowly changing.

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MarketsWiki Stats
133,722,095 pages viewed; 23,294 pages; 215,228 edits
MarketsWiki Statistics

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Lead Stories

Saudi Arabia’s Economic Dreams Falter; JP Morgan’s Dimon joins host of executives pulling out of Riyadh’s premier business conference
Rory Jones in Dubai and Benoit Faucon in London – WSJ
Saudi Arabia’s dream of becoming an investment hub in the desert is unraveling. JPMorgan Chase & Co. Chief Executive James Dimon, Sunday became the latest prominent executive to back out of the kingdom’s premier business conference amid questions about the disappearance of journalist Jamal Khashoggi. Mr. Dimon had been a featured speaker, and his bank has longstanding ties to Saudi Arabia and is advising it on deals.
/jlne.ws/2pSLzkA

Why Crypto Traders Are So Worried About Tether
Andrea Tan, Benjamin Robertson, and Matthew Leising – Bloomberg
It’s one of the most hotly debated questions in the world of virtual currencies: Is Tether telling the truth when it says that each of its digital coins is backed by one U.S. dollar? The answer could have big ramifications, given that Tether’s coin (also called Tether or USDT) is among the most actively traded cryptocurrencies — treated by many as a substitute for the greenback on crypto markets around the world.
/jlne.ws/2NHKHsC

TP ICAP looks to overhaul management incentive scheme
Philip Stafford in London – FT
Disagreements over bonus plan at interdealer broker led to ousting of chief
TP ICAP, the interdealer broker, is assessing whether to overhaul its controversial incentive scheme for senior executives following the sacking of former chief John Phizackerley.
/jlne.ws/2NI7PHA

Brussels gives UK 24-hour Brexit deadline; EU waiting to see if May can muster support for exit deal
Mehreen Khan and Alex Barker in Brussels and George Parker in London – FT
Brussels is giving Britain a day to settle its position on Brexit before deciding how to respond to Theresa May’s dramatic move to “disengage” from talks on an EU exit agreement.
/jlne.ws/2NHPPwS

FCA opens a discussion on the impact of climate change and green finance on financial services; The Financial Conduct Authority (FCA) has today published a Discussion Paper on climate change and green finance.
UK FCA
The effects of climate change and the associated transition to a low carbon economy may have a major impact on financial markets and on products that serve those markets. The Discussion Paper sets out how the impacts of climate change are relevant to the FCA’s statutory objectives of protecting consumers, protecting market integrity and promoting competition.
/jlne.ws/2NIdu0i

Saudi Arabia hits back at Trump’s ‘punishment’ warning; Kingdom vows to use its economic muscle to counter Khashoggi backlash
Andrew England in London and Demetri Sevastopulo in Washington – FT
Saudi Arabia has threatened to use its economic muscle to respond to any punitive measure taken against the kingdom in the wake of the disappearance of a prominent journalist.
/jlne.ws/2NJppee

Stephen Schwarzman and Larry Fink pull out of Saudi conference; BlackRock and Blackstone chiefs join growing exodus amid clash over missing journalist
FT Reporters – FT
Two of the world’s most high-profile financiers have joined a growing list of senior business executives to pull out of Saudi Arabia’s “Davos in the Desert” conference in the wake of the suspected killing of a prominent Saudi journalist.
/jlne.ws/2NI35BH

Saudi stocks plunge on fear of sanctions over Khashoggi
Zahraa Alkhalisi – CNN
Shares in Saudi Arabia plunged as the fallout over the disappearance of journalist Jamal Khashoggi got worse over the weekend.
The main stock market index in Riyadh fell as much as 7% on Sunday and billions of dollars were wiped off the value of leading Saudi companies. The index recovered some ground later to close 3.5% down.
/cnn.it/2A9J3wg

World’s central bankers feel the heat as populists demand easy fix
Francesco Canepa, Balazs Koranyi – Reuters
Central bankers from the United States to Europe are coming under pressure from their governments to loosen their purse strings again as a decade of accelerating economic growth and booming markets fueled by cheap cash comes to an end.
/jlne.ws/2NHzHvi

Crypto Markets Roiled as Traders Question Tether’s Dollar Peg
Andrea Tan, Eric Lam, and Benjamin Robertson – Bloomberg
Tether slides below $1 amid fresh concern over dollar backing; Bitfinex dismisses rumours, says withdrawals working as normal
A sudden exodus from the most popular dollar-linked cryptocurrency rippled through digital asset markets on Monday, saddling some investors with losses while propelling Bitcoin to its biggest gain in more than three weeks.
/jlne.ws/2NCmRyx

NEX’s acquisition by CME receives DOJ’s approval
Maria Nikolova – Finance Feeds
The proposed deal has received clearance under the Hart-Scott-Rodino Act from the United States Department of Justice – Antitrust Division.
/goo.gl/CTKQrX

U.S. Alleges Futures-Spoofing by Three Commodities Traders
Tom Schoenberg – Bloomberg
Two to plead guilty to market manipulation in Houston; U.S. has been cracking down in deceptive trading tactics
Three commodities traders were charged by the U.S. Justice Department with orchestrating a $60 million fraud that involved spoofing and conspiring to manipulate futures contracts, according to prosecutors and court filings in Houston.
/bloom.bg/2yzE1r4

Barclays halts work on cryptocurrency trading project; The initiative has been put ‘on ice’, according to people familiar with the situation
Paul Clarke – Financial News
Barclays has halted work on a cryptocurrency trading project, according to two people familiar with the situation, in the latest twist for banks hoping to tap into the burgeoning sector.
/jlne.ws/2pPq9VI

Anger grows over Vanguard’s technical malfunctions; Users take to forums to question if the money manager has grown too big too fast
Owen Walker – FT
Vanguard faces pressure from its army of devoted customers to deal with its frequent technical difficulties after disruption to its website and phone lines during Wednesday’s market tremors.
/jlne.ws/2NEnVC0

Get Out of Equities Before It’s Too Late, Says Fund Manager
Gabriella Lovas – Bloomberg
The tumble in equities may go deeper than the correction earlier this year and investors should get ready to sell, according to a Budapest-based fund manager. “Investors have to start looking for a way out from equities now,” Attila Dzsubak, investment director at MKB-Pannonia Fund Manager, who helps oversee 670 billion forint ($2.4 billion) in assets, said in Budapest. “Past experience shows that exits can quickly become too narrow.”
/jlne.ws/2NI3dRH

Exchanges, OTC and Clearing

Nasdaq Launches ESG futures in the Nordics
GlobeNewswire
Nasdaq (Nasdaq:NDAQ) today announced the launch of futures based on the recently launched OMXS30 ESG Responsible index (OMXS30ESG). The product is the first exchange listed and ESG compliant index future in the world.
/jlne.ws/2NI9fBP

CME Group Announces E-Mini Nasdaq-100 Futures All-Time Daily Trading Volume Record
CME
CME Group, the world’s leading and most diverse derivatives marketplace, today announced E-mini Nasdaq-100 futures reached an all-time daily volume record of 1,150,475 contracts traded on Thursday, Oct. 11, 2018. This surpasses the previous single-day volume record of 1,149,387 contracts reached on Sept. 18, 2008.
/goo.gl/srwFzH

CME Group Receives DOJ Clearance for Proposed NEX Acquisition
CME
CME Group today announced that it has received clearance under the Hart-Scott-Rodino Act from the United States Department of Justice – Antitrust Division for its proposed acquisition of NEX Group plc (NXG.L).
bit.ly/2yDijCj

NSE enters commodity derivatives trading biz with gold and silver contracts; Introduces two contracts in gold – 1 kg and 100 gm – to enable even smaller players to hedge their positions on NSE
Dilip Kumar Jha – Business Standard
India’s largest stock exchange the National Stock Exchange (NSE) has entered the commodity derivatives trading business with the launch of gold (1 kg and 100 grams) and silver contracts (30 kg).
/jlne.ws/2NCpRLj

Deutsche Börse stock market open delayed by ‘technical issue’
Adam Samson in London – FT
The opening of trade in Deutsche Börse’s stock market, the primary trading venue for German equities, was delayed on Monday by “technical problems”.
/jlne.ws/2NJot9I

Deutsche Börse forced to delay Xetra opening due to technical issue; Deutsche Börse Xetra and Eurex trading systems suffered technical glitch this morning, forcing the exchange group to delay start of trading.
Hayley McDowell – The Trade
A technical glitch has forced Deutsche Börse to delay the start of trading this morning on its Xetra market in Frankfurt.
/jlne.ws/2NG9Vrp

Nasdaq to implement CQG trading platform for US Treasuries; Nasdaq’s fixed income business will implement CQG’s front-end trading platform for US Treasuries.
Hayley McDowell – The Trad
US exchange operator Nasdaq has teamed up with CQG to implement its front-end trading platform for fixed income, specifically US Treasuries.
/jlne.ws/2NG9JZd

Block trading in Europe sees EUR8.1billion value traded record; Value traded of block trading in Europe saw record highs last week, led by Liquidnet, ITG POSIT, Cboe LIS and Turquoise Plato.
Hayley McDowell – The Trade
Europe saw a record amount of block trading activity last week as restrictions on dark pool trading under MiFID II continue to drive large-in-scale (LIS) trading.
/jlne.ws/2NIEVH4

Harold de Boer, Transtrend: “This will improve the price discovery process and general stability of markets”; A commodity trading advisor’s opinion on Eurex’ plan to extend its trading hours into the Asian time zones
Eurex
Eurex runs global markets and continues to enhance its services. As of December 2018, we will extend our trading hours into the Asian time zones to strengthen the bridge between Asia, Europe and the U.S. We discussed this subject with Harold de Boer, Managing Director at Rotterdam-based Transtrend.
/jlne.ws/2NJtaQS

Fintech

Does Big #FinTech Innovate? Introducing Alphacution’s #BigFinTech Index
Paul Rowady – Alphacution Research Conservatory
One of the most fascinating aspects of innovation is its resistance to scaling. At least this is one observer’s interpretation. Those trying to innovate at increasing scale – like, inside a large enterprise – might prefer to describe it as frustrating, to say the least.
The rabid interest in startups – small groups of visionaries and entrepreneurs that are able to deliver radical levels of change to the provision of solutions for unmet market needs – is a reaction to this resistance. During the post-global financial crisis (GFC) hangover, it became vogue for large banks to establish externalized “innovation laboratories” to protect relevant and critical innovations from the harsh bureaucracies and incumbent politics inherent to large enterprises. Best case, they keep the proximity of innovation close; worst case, the messaging serves as a marketing tool.
/goo.gl/Jk68pc

CQG Desktop Selected By Nasdaq Fixed Income As Official Front-End For U.S. Treasury Trading
Mondovisione
CQG, a leading global provider of high-performance trading, market data, and technical analysis tools, announced today a new partnership with Nasdaq Fixed Income (NFI). Under the agreement, NFI will provide the web-based CQG Desktop platform to NFI customers as the official front-end for trading NFI’s U.S. Treasury Benchmark products.
/jlne.ws/2pUatAD

Which Fintech Startup Holds The Key To Argentina’s Future?
Jonathan Moed – Forbes
Argentina’s financial system is broken, and the nation’s Fintech startups are building technology solutions to challenge the status quo. These companies, many of which focus their efforts on devising solutions for the 50% of the population lacking a bank account, are accomplishing what the government and traditional banks have failed to achieve: offering real and impactful solutions to put Argentina’s 45 million people in control of their finances.
bit.ly/2QRyrI2

How Fintech Companies Are Helping The Failing Credit Card Sector
Madhvi Mavadiya – Forbes
A 2016 Bankrate study revealed that 67% of people under the age of 30 do not have a credit card, which is an interesting statistic in light of the fintech boom and amid the lack of trust that banks have following the financial crisis.
bit.ly/2QT1QBK

Sila Provides FinTech Companies With An On-Ramp To Payments
Tom Groenfeldt – Forbes
Shamir Karkal a co-founder of Simple and then head of open APIs at BBVA, is now launching a tool to help fintech developers with one of their greatest challenges — getting access to the payments system.
“Despite extensive efforts to innovate, the current financial system is controlled by a long chain of middlemen engaged in moving money between a buyer and a seller, Karkal said in a blog announcing Sila.
bit.ly/2QPEBs8

Hong Kong is Rocking Fintech
JD Alois – Crowdfund Insider
Later this month, Hong Kong will host their annual Fintech Week. This year’s event is being billed as the “world’s first” cross-border Fintech event. The multi-faceted conference will straddle Honk Kong and Shenzen – the relatively new metropolis that links Hong Kong to China’s mainland. Macao is being rolled into the event as well, according to organizers.
Hong Kong has always been an important financial center in Asia. Additionally, the country fares well in some external global rankings.
bit.ly/2QOIugU

First Dubai-based member joins CurveGlobal
London Stock Exchange Group
CurveGlobal, the interest rate derivatives platform, today announces that ED&F Man Capital Markets MENA Limited has joined as a member of London Stock Exchange Derivatives Market (LSEDM) member to trade CurveGlobal products. They are the first Middle-Eastern member on the platform following London Stock Exchange plc’s approval as a Recognised Body by the Dubai Financial Services Authority (DFSA) in July 2018. This allows participants based in the Dubai International Finance Centre (DIFC) to trade CurveGlobal products directly. ED&F Man Capital Markets is a global financial brokerage business offering direct access to global capital markets.
/jlne.ws/2NJtFdI

Cryptocurrencies

Gemini Latest Exchange To Offer Litecoin
Charles Bovaird – Forbes
New York-based Gemini is the latest exchange to offer trading of litecoin, the alternative protocol asset (altcoin) that many consider to be bitcoin’s little brother.
bit.ly/2Ps93sc

Microsoft Is Pushing New Blockchain ID Products (But There’s Pushback, Too)
Anna Baydakova and Marc Hochstein – Coindesk
Microsoft is moving to turn blockchain-based decentralized identity from a lofty aspiration into a business line. In a white paper posted this week, the software giant says it intends to develop two products designed to give consumers greater control of their personal data – long the Holy Grail of many technologists in the blockchain space and adjacent industries.
bit.ly/2PwUnI6

Constantinople Nears: Ethereum’s Next Hard Fork Is On Track for 2018
Christine Kim – Coindesk
Open-source coders backing the ethereum project now say its next system-wide upgrade, Constantinople, is on track for November release.
bit.ly/2ND9H4o

How The Netherlands Is Blazing A Trail Through The Blockchain Scene
Yoav Vilner – Forbes
The world is abuzz about blockchain, but not all are equally up to speed when it comes to their embrace and support of this important emerging technology.
bit.ly/2NHqIu9

Hong Kong’s securities regulator mulling over new rules for city’s cryptocurrency exchanges
Enoch Yiu, Georgina Lee – South China Morning Post
Hong Kong’s Securities and Futures Commission (SFC) is exploring ways to regulate the various cryptocurrency trading platforms already operating in the city and thus tighten investor protection, says its outgoing chairman Carlson Tong Ka-shing.
bit.ly/2yjvHMV

Cryptocurrency Thieves On Track To Steal Over $1 Billion In 2018
Nermeen Abbas – Forbes Middle East
The total value of stolen cryptocurrency is expected to hit over $1 billion by the end of this year, which represents a 350% increase over the amount that was stolen in all of 2017, according to a new research from CipherTrace.
bit.ly/2Ekbvjh

Barclays halts work on cryptocurrency trading project
Paul Clarke – Financial News
Barclays has halted work on a cryptocurrency trading project, according to two people familiar with the situation, in the latest twist for banks hoping to tap into the burgeoning sector.
bit.ly/2QQQNJk

Why Mastercard’s Multi-Blockchain Might Be a New Step in the Patent Race
Stephen O’Neal – Cointelegraph
On October 9, American financial services giant Mastercard was granted a patent for a method to partition a blockchain so that it can store multiple transaction types and formats. The filing published by the U.S. Patent and Trademark Office (USPTO) reveals the details of the new system — not the first of the kind for Mastercard.
bit.ly/2yGtTwu

The Howard Test: The 4 Rules For Success For Blockchain Music Entrepreneurs (Part 1)
George Howard – Forbes
We are at an inflection point in the trajectory of Blockchain tech and music product development. In this space, and, now compiled — with a new introduction by yours truly — in book form, I have been chronicling the development of Blockchain tech being applied to the music industry since the beginning. I’ve pulled back a bit from writing about this topic of late, and have focused on building/working/advising in the space. But, I return now to sound an alarm.
bit.ly/2AaJiY3

SEC Halts ICO Touting OK From Fake ‘Blockchain Commission’
Lydia Beyoud – Bloomberg Law
The SEC filed a lawsuit to stop a planned ICO launch by a company that falsely claimed it had already obtained approval from regulators, including the fictitious “Blockchain Exchange Commission.”
/jlne.ws/2NHoxqg

Crypto Exchange Sues Former Employee Over Seizure of Platform
Erik Larson – Bloomberg
Bibox co-founder Wang accuses ex-worker of extortion attempt; Chinese national claims ownership of Investre Network
A newly created management platform at the 10th-biggest global cryptocurrency exchange has become the focus of a fight over who owns the potentially lucrative venture in a booming industry.
/jlne.ws/2NHv58H

Coinfloor licensed under Gibraltar’s flagship blockchain rules
Hannah Murphy – FT
UK cryptocurrency exchange Coinfloor has become the first company to gain a licence to operate under Gibraltar’s new blockchain-specific legislation, flagship rules in Europe.
/jlne.ws/2NFUdMU

It’s really happening… Woz joins Baroness Mone’s blockchain company
Jemima Kelly – FT
Yes. That’s Apple co-founder Steve Wozniak. He’s sitting alongside a beaming Baroness Michelle Mone, OBE — lifetime Tory peer and former lingerie company boss — and her partner, entrepreneur Doug Barrowman. Woz is explaining why he has decided to become a co-founder of their rebranded blockchain company, EQUI Global.
/jlne.ws/2NEprnG

Politics

Trump Says He Doesn’t Want to Fire the Fed Chair. It Isn’t Clear If He Could
Nick Timiraos – WSJ
President Trump stepped up his attacks on the Federal Reserve this week, but said he wouldn’t fire central bank Chairman Jerome Powell, leaving some observers wondering whether that is even an option.
/on.wsj.com/2yAoRBL

Companies donate millions to political causes to have a say in the government — here are 10 that have given the most in 2018
Laura McCamy – Business Insider
Before 2010, companies weren’t able to independently spend money on politics to influence federal elections, according to the Daily News.
/jlne.ws/2NCp8K5

Mnuchin Says He’s Not Worried China Would Unload Treasuries
Saleha Mohsin – Bloomberg
‘We have plenty of buyers for Treasuries,’ Mnuchin Says; Treasury chief speaks to reporters at IMF talks in Indonesia
Treasury Secretary Steven Mnuchin isn’t worried that China would use its $1.2 trillion pile of Treasuries holdings as a bargaining chip for a better trade deal.
/jlne.ws/2NFQLSs

China Won’t Use Yuan as Tool to Deal With Trade War, Yi Says
Bloomberg News
Governor says China won’t engage in ‘competitive devaluation’; Domestic slowdown, trade tensions to continue to pressure yuan
China won’t use its currency as a tool to deal with trade conflicts, central bank Governor Yi Gang said, as a tariff war between the U.S. and the world’s No. 2 economy intensifies.
/jlne.ws/2NHLqKm

Playboy party for metal traders condemned by MPs
Samuel Agini and Lucy McNulty – Financial News
Politicians have hit out at one of the City’s oldest trading houses for hosting a networking event at the Playboy Club in London, calling the move “inappropriate” and a “spectacularly bad choice”. Gerald Group, a commodities trading firm, hosted the cocktail party at the exclusive club in Mayfair on Monday October 8. The gathering comes just months after public outcry over the scandal-hit Presidents Club dinner in which the women working at the men-only event were sexually harassed by guests.
bit.ly/2yAPJSp

Trade war won’t trigger Asian credit ratings downgrades, for now: Fitch
Reuters
Fitch Ratings has maintained its stable credit outlook for all Asian countries, except Pakistan, despite expecting some “dampening effect” in the region due to the U.S.-China trade tensions, senior ratings analysts said on Saturday.
/jlne.ws/2NHvSqb

Bundesbank chief sees reducing chance that U.S.-China will escalate trade conflict
Reuters
There is a diminishing chance for the escalation of the trade conflict between the world’s two biggest economies, China and the United States, the president of Germany’s central bank said on Saturday.
/jlne.ws/2NIdkWw

Trump Is Risking an Even Greater Chicken War; A trade spat over poultry between the U.S. and European nations in the 1960s left lasting damage. The fight with China could do greater harm.
Stephen Mihm – Bloomberg
The staggering tariffs being levied on China will almost certainly test President Donald Trump’s claim that “trade wars are easy to win.” He might be right, but the president doesn’t seem to have contemplated a different question: What happens when trade wars come to an end?
/jlne.ws/2NHob2U

Trump: ‘I don’t trust everybody in the White House’
Emily Birnbaum – The Hill
President Trump during an interview with CBS’s “60 Minutes” on Sunday said he doesn’t “trust everybody” in the White House.
/jlne.ws/2NIzfNg

Regulation

In CFTC Action, Former Trader Kamaldeep Gandhi Admits to Engaging in Spoofing and Manipulative Schemes at Proprietary Trading Firms
CFTC
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Kamaldeep Gandhi, in which Gandhi admits to engaging in manipulative and deceptive schemes, along with other individuals, which involved thousands of acts of spoofing (bidding or offering with the intent to cancel the bid or offer before execution) with respect to a variety of futures products traded on the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and the Commodity Exchange, Inc. The Order finds that Gandhi engaged in this unlawful activity while placing orders for, and trading futures contracts through, accounts owned by his former employers, two proprietary trading firms named as Firm A and Firm B in the Order
bit.ly/2yAskjR

The Danske Bank Scandal Is the Tip of the Iceberg; Financial institutions and the governments that regulate them aren’t doing nearly enough to prevent money laundering.
Gabriella Gricius – ForeignPolicy.com
Last month, the CEO of Danske Bank, Thomas Borgen, stepped down, and both Denmark’s Financial Services Authority and the European Banking Authority opened investigations into the bank’s illegal activities at its Estonian branch. On Sept. 19, Bruun & Hjejle, general practice attorneys hired by Danske Bank, released a chilling report revealing how over 200 billion euros, about $230 billion, were illegally laundered through its branch in Estonia over a nine-year period. Despite this negligence, the report cleared Borgen and the board of directors of any kind of legal responsibility. While it is by no means the first money laundering exposé in recent years, it may be the largest one.
/jlne.ws/2NHq7bG

Gloomy City stockbrokers struggle with Mifid II fallout; Sector is braced for more pain after profit warnings and a spate of departures
Hannah Murphy – FT
As City stockbrokers gathered on Thursday for the glitzy annual Aim awards, a celebration of London’s junior stock market, one prize that had always been handed out in the ceremony’s 20-year history was notably absent: the best research award.
/jlne.ws/2NHzKas

U.S. to seek currency chapters in trade talks with Japan, others: Mnuchin
David Lawder, Leika Kihara – Reuters
U.S. Treasury Secretary Steven Mnuchin said on Saturday that Washington wants to include a provision to deter currency manipulation in future trade deals, including with Japan, based on the currency chapter in the new deal to revamp NAFTA.
/jlne.ws/2NHp6jS

Richest Clients Are Being Penalized by MiFID, Nordea Bankers Say
Frances Schwartzkopff – Bloomberg
High net-worth customers may be losing access to the best investment offers because of revised European market rules, according to the people running debt and market sales at Nordea Bank Abp.
/jlne.ws/2NHUGOO

The Fed Isn’t Worried About the Stock Market Drop – Yet
Nicholas Jasinski – Barron’s
Despite captivating the financial world, October’s stock market declines and a spike in bond yields aren’t bothering anybody over at the Federal Reserve. Multiple officials who have spoken recently downplayed the impact of October’s volatility on the broader economy and their monetary policy intentions.
/jlne.ws/2NHv2tx

ESMA sees 1.9% increase in prospectus approvals across the EEA
ESMA
The European Securities and Markets Authority (ESMA), in its annual report on prospectus activity, has found that in 2017 the number of prospectus approvals across the European Economic Area (EEA) increased by around 1.9% compared to 2016 (from 3499 to 3567). The growth in prospectus approvals puts an end to a decade-long decline observed since the start of the financial crisis.
/jlne.ws/2NErE2s

Investing and Trading

With risky bets back in play, stock selloff revives ‘Volmageddon’ memories
Trevor Hunnicutt – Reuters
Months after he lost millions when an esoteric corner of financial markets cratered in February, former Target Corp store manager Seth Golden is betting against volatility again.
/reut.rs/2yDdA3x

Hedge Fund Bets on Beaten-Up New York Taxi Business; Marblegate has scooped up about 300 medallions for more than $50 million
Paul Berger and Miriam Gottfried – WSJ
Vulture investors are circling the beleaguered New York City taxi-cab industry. Hedge funds that specialize in distressed investing have been kicking the tires of the New York taxi market after prices for medallions plummeted in the face of competition from ride-hailing upstarts.
/goo.gl/jHcKwW

How Five Copper Mines Determine Global Supply
Andrew Capon – CME Group OpenMarkets
On June 7, copper prices hit a four-and-half-year high of more than $7,300 a tonne. Just ten weeks later, on August 15, the price of copper languished at below $6,000 a tonne, down 19 percent from June and the lowest level since July 2017.
/goo.gl/mpcra6

Climate change is becoming so real that it’s gaining converts for a carbon price
Akshat Rathi – Quartz
By any standard, this has been a remarkable week for conversations about climate change. It started with a grim report from the International Panel on Climate Change, which warned that anything short of dramatic action could cause irreversible harm to the planet, lead to food shortages, and cost the world economy tens of trillions of dollars in damages in as few as 20 years.
/jlne.ws/2NCozQt

The financial challenges sports stars face after the game; For many, retirement is a shock as income dries up but good planning can keep the cash rolling in
Murad Ahmed – FT
It was November 2016. Nico Rosberg had reached the top of his sport. The German driver for Mercedes was the new Formula One world champion, beating teammate Lewis Hamilton to win the title he had coveted since he was a boy. Yet, just a few days later, he unexpectedly announced his retirement at the age of 31.
/jlne.ws/2NIBRe2

How millennials and savings apps are making asset managers wake up and smell the coffee; Tools such as ’round-ups’ are posing a significant threat to the traditional sales strategies
Owen Walker- FT
Michael Katchen first tasted investing at age 12 when he won a stockpicking contest. Since then, the 30-year-old Canadian technology entrepreneur who runs WealthSimple has taken a keen interest in managing his personal portfolio of stocks, mutual funds and exchange traded funds.
/jlne.ws/2NHpGhy

Sears files for bankruptcy protection as it buckles under debt; Billionaire chair unable to win backers for revival plan ahead of $134m loan repayment
Alistair Gray in New York – FT
Sears, the department store chain that once dominated the US retail landscape, filed for bankruptcy protection on Monday as it finally succumbed to a crushing debt burden and failure over several years to adapt to upheaval in the industry.
/jlne.ws/2NI7WTl

A World of Hurt Awaits If Traders Start to Panic: Taking Stock
Arie Shapira – Bloomberg
Stocks are back to their declining ways, after Friday’s breather, as tensions are bubbling up between the U.S. and Saudi Arabia over the disappearance of a prominent journalist while Trump threatens another round of tariffs on China — note the WSJ had an ominous story over the weekend about a “new cold-war era” between the two sides.
/jlne.ws/2NGiy5d

Battle to recruit ESG specialists intensifies; Applications are up but the right skills are hard for funds to find
Jennifer Thompson – FT
Specialists in responsible investing are hot property. “Competition is quite intense,” says Helen Pradas-Page, an executive recruitment consultant at Acre, which helps employers recruit for environmental, social and governance roles. “There has been a distinct growth in ESG headcount.”
/jlne.ws/2NMvNl6

ETF industry’s record-breaking growth streak in danger of ending; Leading providers of exchange traded funds are on track for a disappointing year
Chris Flood – FT
New business growth has slowed markedly for most of the leading providers of exchange traded funds this year even before the sell-off across global equity markets gathered pace last week.
/jlne.ws/2NEpT5m

Companies With Newly Flush Pensions See Chance to Unload the Risk; Some firms with highly funded pension plans are transferring retiree obligations to insurers
Tatyana Shumsky – WSJ
U.S. corporate pensions are at the highest funded level since the financial crisis, which could lead more companies to turn over to insurers the responsibility for paying retirees, pension consultants say.
/jlne.ws/2NIbbKG

Institutions

Leon Cooperman leaves hedge fund business, but he isn’t going quietly
Lydia Moynihan and Charles Gasparino – Fox Business
Leon Cooperman is leaving the hedge fund business, but he isn’t going quietly.
The famously hot-headed hedge fund legend did not mince words Monday night during a retirement party attended by some of Wall Street’s biggest names, National Enquirer publisher David Pecker, and a comedian known for his impersonations of former President Obama, taking some parting shots at the Securities and Exchange Commission (SEC), which people close to him say he blames for forcing him out of the investment business after a 50-year run, the Fox Business Network has learned.
/fxn.ws/2yx4LbG

Banks Need to Protect Themselves Much Better Against Risks From Italy to Trade
Stefania Spezzati and Sonali Basak – Bloomberg
Executives at IIF meeting debate threats to financial system; Finance has been strengthened, not fixed, Saccomanni says
The global banking industry needs to do more to protect itself against looming threats such as market turmoil, trade tensions, rising leverage and the implications of Italy’s rule-busting budget, according to executives gathered in Bali for the Institute of International Finance annual meetings.
/jlne.ws/2NHWMhE

JPMorgan Chase profits bolstered by strength at consumer bank; Rising rates a boon to retail bank, but lender faces fall in bond trading revenue
Laura Noonan in New York – FT
A strong performance in US consumer banking and lower bad loan charges helped JPMorgan Chase to beat analysts’ expectations comfortably for the third quarter, even as revenues from fixed income trading fell 10 per cent year-on-year.
/jlne.ws/2NHVovs

Barclays to challenge Goldman’s Marcus in US retail banking; Lender to draw on UK experience to target consumers wanting a digital-only service
Laura Noonan in New York – FT
Barclays is launching a US current account that will put the British bank in competition with Goldman Sachs’ Marcus for customers who want the low costs of a digital-only bank and the security of dealing with a major financial institution.
/jlne.ws/2NG4zwj

Bank of America’s misfiring investment bankers braced for shake-up; Executives at US lender ‘hunker down’ after missing out on booming M&A market
Stephen Morris and Arash Massoudi in London and Laura Noonan in New York – FT
When 20 of Bank of America’s top executives met in the US last month to discuss the company’s strategy, the burning issue high on the agenda was how to turn round its stuttering investment banking operation.
/jlne.ws/2NJqNO

Bank of England tells institutions to prepare for climate change; Banks and insurers put on notice to appoint top executives to oversee environmental risks
Leslie Hook and Caroline Binham in London – FT
The Bank of England will put banks and insurers on notice to vastly improve their planning for the long-term risks of climate change, placing senior executives in the line of fire if their institutions take insufficient action.
/jlne.ws/2NIdygk

LaSalle Street stares down major changes as big banks exit
Danny Ecker – Crain’s Chicago Business
A century after the Central Loop thoroughfare was established as Chicago’s financial district, three of its largest financial tenants are planning to leave, forcing landlords to reinvent several grand but outdated buildings.
/goo.gl/aRG6be

Mizuho Seeks Flight Attendants, TV Producers for MiFID Era
Takahiko Hyuga – Bloomberg
Japanese brokerage is hiring for its corporate access business; Sees hospitality and media veterans as suited to liaison role
Flight attendants and television producers seeking a career change might want to look up Japan’s third-biggest bank. Mizuho Financial Group Inc. wants the hospitality and media veterans to woo investors and company executives with their strong communication and social skills, said Yuki Maeda, head of corporate access across Asia. It will recruit three people by March who will put institutional clients in touch with Japanese business leaders through conference calls and face-to-face meetings, she said.
/jlne.ws/2NEnnMs

Bank of America profit and revenue top estimates
Rachel Louise Ensign – MarketWatch
Bank of America Corp. said Monday that third-quarter profit rose. Quarterly profit at the Charlotte, N.C.-based bank, the second largest in the U.S. by assets, was $7.2 billion, compared with $5.4 billion a year ago. Per share, earnings were 66 cents. Analysts polled by Refinitiv had expected 62 cents per share.
/jlne.ws/2NIzwjg

Angry management: The dark side of Santander’s new boss; Some of Andrea Orcel’s former UBS colleagues say the star banker is a bully and a bad choice to be Santander’s chief executive
Duncan Mavin, David Wighton and Francesco Guererra – Financial News
When Andrea Orcel was named as CEO-in-waiting at Santander last month, it was the crowning moment of a stellar six-year spell running UBS’s investment bank. Orcel, renowned as a consummate dealmaker, proved he was also a skilled operator with a knack for streamlining the business. His elevation to the top of the Spanish bank, Europe’s second largest lender, was just reward for a job well done.
/jlne.ws/2pSK1r1

RBS chief Ross McEwan: restoring a damaged reputation; Bank is recovering after a decade of blows. Now it is looking to a digital future
Martin Arnold in London – FT
When Ross McEwan dropped in for a surprise visit to a Royal Bank of Scotland branch in London last month, he was appalled by how scruffy it looked. “It needs a bloody good clean,” the New Zealand-born banker said, with his customary bluntness.
/jlne.ws/2NI77dj

Regions

Saudi Stocks Sink as Tension With U.S. Escalates Over Khashoggi
Filipe Pacheco and Ben Bartenstein – Bloomberg
Tadawul’s main index retreats to lowest level since January; Kingdom says it will retaliate against any punitive measures
Saudi Arabian equities slumped on concern the nation’s relationship with the U.S. may sour over the disappearance of Washington Post columnist Jamal Khashoggi.
/goo.gl/cCR5ys

EU to offer billions of funding for electric battery plants; Four groups planning to build European rival to Tesla’s ‘gigafactory’
Rochelle Toplensky in Brussels – FT
The EU is planning to allow state aid for electric battery research and will offer billions of euros of co-funding to companies willing to build giant battery factories.
/jlne.ws/2NGeX7d

Head of Powerful Chinese Lender Swept Up in Corruption Inquiry
Alexandra Stevenson – NY Times
China’s sweeping anti-corruption campaign has claimed another target: the head of a powerful state lender. Lai Xiaomin, a former Communist Party secretary and the former chairman of Huarong Asset Management, was kicked out of the party on Monday for “serious violations” of party law and regulations, including trading his power and influence for sex with several women, the government said.
/jlne.ws/2pV1Sh4

China Is the Climate-Change Battleground; The U.S. and other developed nations must pitch in and help clean up the world’s dirtiest economy.
Noah Smith – Bloomberg
Climate change is a menace. The Intergovernmental Panel on Climate Change just issued a report showing how serious the situation is. If warming continues on its current trajectory, the report warns, then by the end of this century average temperatures will be 4 degrees Celsius (7.2 degrees Fahrenheit) higher than at the start of the Industrial Revolution.
/jlne.ws/2q0Y7qt

Saudi summit in crisis as top finance names dropped; Some banks and corporate chiefs are still planning on attending, but most will not say, as conference organisers scrub names from site
Pierre Briançon and Emily Horton – Financial News
Saudi Arabia’s flagship investment summit was plunged into crisis over the weekend, after JPMorgan CEO Jamie Dimon pulled out and other top bankers declined to confirm their participation, in the wake of the disappearance of dissident journalist Jamal Khashoggi.
/jlne.ws/2pV0ACK

China’s Stocks Extend $3 Trillion Rout
Bloomberg News
Shanghai benchmark closes at lowest level since November 2014; Government encouraging insurers to invest in firms: report
Supportive words from China’s securities regulator failed to slow the $3 trillion rout in the the nation’s stock market, as evidence of weakening domestic demand added to concern about the trade war with the U.S.
/jlne.ws/2NG7Cof

Venezuela’s Meltdown Creates a Nation of Desperate Capitalists; Entrepreneurship is thriving in the heart of the economically ravaged socialist country.
Patricia Laya – Bloomberg
“The lightbulb lady is here!” Yessica Vaamonde spends weekends climbing the narrow stairs of Caracas’s biggest slum, Petare, calling out for damaged light bulbs. She offers 30 bolivars each—in cash—which she collects by selling avocados on one of the Venezuelan city’s busiest avenues.
/jlne.ws/2NHPyKm

Brexit

Finance chiefs warn on disruption of a no-deal Brexit; RBS boss McEwan criticises government infighting as banks struggle to make plans
Nicholas Megaw and Martin Arnold – FT
Finance chiefs including the boss of state-backed lender Royal Bank of Scotland have warned that government infighting has left the UK “sleepwalking” towards a no-deal Brexit that would severely disrupt the financial services sector.
/jlne.ws/2NHpQFG

Brexit talks at impasse over Irish backstop, say No 10 sources
Dan Sabbagh Peter Walker Daniel Boffey and Jennifer Rankin – The Guardian
The Brexit talks have reached a significant impasse over the issue of the Irish border, UK government sources have said, prompting Theresa May to update MPs in the House of Commons on the state of the negotiations.
No 10 indicated that a deal was being held up by renewed differences on the backstop arrangement insisted upon by the EU to prevent a hard border, after discussions came to a halt following a visit to Brussels by the Brexit secretary, Dominic Raab.
bit.ly/2QPIywV

The post Saudi Arabia’s Economic Dreams Falter appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Welcome to all our readers and friends who have descended upon Chicago for the FIA’s EXPO. We look forward to saying hello and catching up.~JJL

CME Group is holding a press lunch today in Chicago for FIA EXPO. Cboe is holding a press event this evening, and ICE is holding one Wednesday evening. The ICE event is just one of two events all year where their senior leadership is all together to meet the press.~JJL

Check out CQG’s landing page for FIA, which features new solutions from the long-time fintech provider.~JJL

JLN is sharing the Cinnober booth in the FIA EXPO exhibit hall. Cinnober is featuring its Minium subsidiary, a key brand they are promoting at EXPO 2018 in Chicago from 16-18 October. Look for stand 314 to find out more about how Minium is “applying real-time technology to transform risk and post-trade processing.”~JJL

RCM Alternatives is presenting an event called “Crypto Currency & ICOs: Trading Access & Market Structure” on Wednesday, Oct. 24 from 5:00pm to 7:30pm CDT. The keynote speaker will be Eric Gravengaard of Athena Bitcoin. The event is free. For more information you can go here. ~SR

Last weeks’ A Leg To Stand On charity event raised almost $160,000, a record for Chicago’s Rocktoberfest. Next up is Rocktoberfest in New York on October 25. Thanks to all who supported the Chicago event.~JK

++++

LaSalle Street stares down major changes as big banks exit; A century after the Central Loop thoroughfare was established as Chicago’s financial district, three of its largest financial tenants are planning to leave, forcing landlords to reinvent several grand but outdated buildings.
Danny Ecker – Crain’s Chicago Business
LaSalle Street is facing an identity crisis. A century after the Central Loop thoroughfare was established as Chicago’s financial district, three of its largest financial tenants are planning to leave, punctuating a shift from its image as a hub of traders and banking giants and forcing landlords to reinvent several grand but outdated buildings.
/jlne.ws/2NM42ZE

****** The location is still great, but the buildings are old and times change.~JJL

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ErisX Announces Expansion of Leadership to Pioneer Regulated Digital Asset Platform
ErisX
ErisX, a regulated, transparent and secure venue for the digital asset market, today announced the addition of three key hires to the firm; Kelly Brown as Chief Commercial Officer, Liz James as Head of Clearing and Michael Piracci as Senior Counsel.
/jlne.ws/2NGsBaw

***** Kelly Brown has landed!~JJL

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The Big Blockchain Lie
Nouriel Roubini – Project-Syndicate.org
Now that cryptocurrencies such as Bitcoin have plummeted from last year’s absurdly high valuations, the techno-utopian mystique of so-called distributed-ledger technologies should be next. The promise to cure the world’s ills through “decentralization” was just a ruse to separate retail investors from their hard-earned real money.
/jlne.ws/2Op3MoK

****** Nouriel Roubini is on a roll since he testified to the Senate Banking Committee.~JJL

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Paul Allen, software pioneer, 1953-2018; Microsoft co-founder who helped set the world of ubiquitous personal computing in motion
Richard Waters in San Francisco – FT
If history gives you only one shot at making a real difference, then Paul Allen seized his with both hands.
/jlne.ws/2NJPqdw

****** No word on whether he saw a blue screen before he passed.~JJL

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Monday’s Top Three
Our top read story on Monday was about Adena Friedman in The Washington Post’s Nasdaq CEO is on a mission — for the little guy, about bringing smaller companies onto exchanges. Second was Bloomberg’s Why Crypto Traders Are So Worried About Tether. And third was Bloomberg’s U.S. Alleges Futures-Spoofing by Three Commodities Traders

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MarketsWiki Stats
133,777,817 pages viewed; 23,294 pages; 215,242 edits
MarketsWiki Statistics

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Lead Stories

Saudi Arabia Breaks 45-Year Taboo With Veiled Threat to Use Oil as a Weapon
Javier Blas – Bloomberg
Riyadh vows to retaliate to any measures using economic clout; Market is skeptical Saudis would actually use oil as weapon
For 45 years, it’s been considered out of bounds for Saudi Arabia. But all of a sudden, Riyadh made what many read as a veiled threat to use the kingdom’s oil wealth as a political weapon — something unheard of since the 1973 Arab embargo that triggered the first oil crisis.
/jlne.ws/2NKb696

U.K. Cyber Security Center Says Most Attacks Are From Hostile States
Kitty Donaldson – Bloomberg
Report reveals how operational code names are computer-made; Companies need to stop hanging up on ‘prankster’ NCSC agents
The U.K.’s National Cyber Security Centre blamed hostile foreign states for the majority of the 1,167 attacks it has handled in the two years it’s been running, equivalent to 10 assaults a week.
/jlne.ws/2NElNKx

Trading Technologies Introduces TT® OMS, a Full-Service Order Management System for FCMs and Brokers
TT
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, today announced the launch of its new full-service order management system, TT OMS. TT OMS is a unique end-to-end solution that seamlessly integrates sophisticated order management capabilities with best-of-breed execution tools. It will be deployed via software-as-a-service (SaaS) through TT’s global, high-speed network on an open platform designed with redundancy, failover and disaster recovery.
bit.ly/2PyuKXv

DTCC Announces Study Results Demonstrating That Distributed Ledger Technology Can Support Trading Volumes In The Us Equity Markets
DTCC
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced the results of a benchmark study which demonstrated for the first time ever that distributed ledger technology (DLT) is capable of supporting average daily trading volumes in the US equity market of more than 100 million trades per day.
bit.ly/2PJuUv2

Fidelity launches trade execution and custody for cryptocurrencies
Kate Rooney – CNBC
Financial services giant Fidelity is taking a huge step into cryptocurrency.
The 72-year-old firm announced the launch of a separate company, Fidelity Digital Asset Services, on Monday that will handle cryptocurrency custody and trade execution for institutional investors.
/cnb.cx/2CKxIFr

Blockchain isn’t about democracy and decentralisation – it’s about greed; Cryptocurrencies such as bitcoin result in the concentration of wealth, not greater equality
Nouriel Roubini – The Guardian
With the value of bitcoin having fallen by about 70% since its peak late last year, the mother of all bubbles has now gone bust. More generally, cryptocurrencies have entered a not-so-cryptic apocalypse. The value of leading coins such as Ether, EOS, Litecoin and XRP have all fallen by over 80%, thousands of other digital currencies have plummeted by 90%-99%, and the rest have been exposed as outright frauds. No one should be surprised by this: four out of five initial coin offerings (ICOs) were scams to begin with.
/jlne.ws/2Orl3h2

Fidelity, the $2.5 trillion Wall Street giant, is launching a brand new institutional brokerage and custody business for crypto
Frank Chaparro – The Block Crypto
The Block sat down with Jessop to get the inside look before the announcement.
Fidelity, the $2.5 trillion asset manager, is diving into the world of crypto with a brand new digital assets business.
/jlne.ws/2NJCjcj

Insider Trading Isn’t So Simple; Also Sears, Deciem, Teslaquila, bond market liquidity and an art blockchain.
Matt Levine – Bloomberg
Insider trading. I have quoted it before, but the Justice Department’s brief asking the Supreme Court to review the Newman insider trading decision is really one of the most interesting documents in insider trading law. Here is how it describes the work of stock analysts:
/jlne.ws/2NKhRb7

Most Tokens From ICOs Are Securities, Former CFTC Head Says
Dave Liedtka – Bloomberg
Gary Gensler, former chairman of the U.S. Commodity Futures Trading Commission, said that most cryptocurrencies sold through initial coin offerings should be considered securities.
/jlne.ws/2NIloqn

QuantHouse adds Quantitative Brokers best ex algos to API initiative; Quantitative Brokers’ best execution algorithms for US cash treasury markets and global futures will be available via QuantHouse’s API ecosystem.
Hayley McDowell – The Trade
Quantitative Brokers’ (QB) best execution algorithms for futures and fixed income is set to become available to QuantHouse clients via its API Ecosystem.
/jlne.ws/2NJVFxY

Exchanges, OTC and Clearing

CME Group Achieves Asia Pacific Average Daily Volume of 726,000 Contracts in Q3 2018, Up 4 Percent from Q3 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved Asia Pacific quarterly average daily volume (ADV) of 726,000 contracts in the third quarter of the year, up 4 percent from the corresponding period last year. This was driven largely by a strong performance in Equity and FX products, up 41 percent and 36 percent respectively.
/jlne.ws/2NJ9w7n

DTCC to Launch MF Info Xchange to Transform Communications for Mutual Fund Industry
DTCC
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced it will launch a new, on demand, real time, centralized communications service for the mutual fund industry by the end of 2018, the first service of its kind from DTCC’s Wealth Management Services (WMS) division.
/goo.gl/hLdTLQ

B3 Announces New Cash Equities Market Maker Program
B3
Starting today, B3’s Cash Equities market will feature new market makers to help boost liquidity and asset performance. The program will comprise 54 stocks and 2 ETFs.
/goo.gl/vZAnVy

Shurgard Self Storage makes debut on Euronext Brussels; Pioneer of self-storage in Europe raises EUR575 million, making it the second largest newly-listed company to join Euronext Brussels over the last decade
Euronext
Shurgard Self Storage SA (“Shurgard”, ticker symbol: SHUR) today began trading on Euronext Brussels (Compartment A) with an initial market capitalisation of EUR2.04 billion.
/jlne.ws/2OqTKDn

Extension of trading hours and enhanced risk functionality – further information
Eurex
As announced in Eurex circular 023/18, Eurex Deutschland will extend its trading hours for selected equity index futures, including all MSCI futures, and selected fixed income futures into the Asian time zone.
/jlne.ws/2NInwyn

ASX mFund service surpasses 200 funds
ASX
The ASX mFund Settlement Service continues to grow, with more than 200 funds now available to investors and financial advisers.
/jlne.ws/2NIo9bd

MIAX Options Exchange Gets Green Light on New Volatility Product; MIAX Options to List and Trade Options on SPIKES Index, Emerging as New Competitor in Volatility Market
MIAX Options
MIAX Options® today announced that it has received approval from the U.S. Securities and Exchange Commission (SEC) to list and trade cash-settled options on the SPIKES Index (Ticker: SPIKE), transforming the competitive landscape of the volatility trading market dominated by a single player for the last 15 years.
/jlne.ws/2NHzs3n

The Unique Market Model of The New York Stock Exchange: Enduring stability during times of stress in the markets
John Tuttle – Chief Operating Officer at NYSE
The U.S. equity market has been riding a bull since March 2009, rising more than 300 percent over that period without experiencing a decline of 20 percent. With yields on 10-year Treasuries rising above 3 percent, their highest level since 2011, the S&P 500 slipped 3.3 percent on Wednesday, its biggest decline since February.
/jlne.ws/2NJYrTF

Fintech

The World Federation Of Exchanges Responds To Global Financial Network (GFIN) Consultation
Press Release
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today responded to the Global Financial Innovation Network (GFIN) Consultation Document. On 7 August 2018, the Financial Conduct Authority (FCA) announced the internationalisation of its regulatory sandbox via the GFIN – a collaboration with 11 financial regulators and related organisations.
bit.ly/2PCVyFY

Quantitative Brokers’ best execution algorithms for futures and fixed income now available to the QuantHouse community; Addressing quantitative traders’ need for access to high quality algo execution solutions
QuantHouse
QuantHouse, the leading independent global provider of end-to-end systematic trading solutions including innovative market data services, algo trading platform and infrastructure solutions, today announced access to Quantitative Brokers’ (“QB”) best execution algorithms for futures and fixed income.
/jlne.ws/2NM2E9o

Rival Systems to offer fully-hosted solution for enterprise trading and risk management on European exchanges
Rival Systems
Rival Systems (Rival) today announced it is expanding its infrastructure to offer a fully-hosted solution for enterprise trading and risk management on European exchanges. The expansion provides clients across the globe with a single cost-effective and latency-sensitive ecosystem of software, hardware, and connectivity to trade across the U.S. and Europe.
bit.ly/2NJNamz

Capital Crux joins Itiviti’s Global Alliance Programme
Itiviti
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, today announced a new partnership with Capital Crux, a Hong Kong based digital consulting firm with its headquarter in Shanghai. Capital Crux has joined the Itiviti Global Alliance Programme (GAP) as a Business Introducing Partner (BIP), supporting Itiviti’s business development efforts in mainland China.
bit.ly/2NKzsj0

Refinitiv and Microsoft team up for market data deal; Refinitiv market data will be integrated with Microsoft products including Excel, MSN Money and Bing.
Hayley McDowell – The Trade
Refinitiv, the recently rebranded Financial & Risk business of Thomson Reuters, has teamed up with Microsoft to integrate its financial and markets data.
/jlne.ws/2NGOhTL

M.I.T. Plans College for Artificial Intelligence, Backed by $1 Billion
Steve Lohr – NY Times
Every major university is wrestling with how to adapt to the technology wave of artificial intelligence — how to prepare students not only to harness the powerful tools of A.I., but also to thoughtfully weigh its ethical and social implications. A.I. courses, conferences and joint majors have proliferated in the last few years.
/jlne.ws/2OpSiRP

Schwarzman Gives $350 Million for MIT College of Computing
Amanda L Gordon – Bloomberg
It’s the largest personal gift made by Blackstone CEO; School to be named after him set for 2022 completion
Stephen Schwarzman, head of Blackstone Group LP, has given $350 million — his largest personal gift — to help establish a college of computing at the Massachusetts Institute of Technology.
/jlne.ws/2NKNCAH

“Monitoring of Fast-Paced Markets” – some thoughts from the BIS paper
James Sinclair – Market Factory
The Bank for International Settlements (BIS) published a new paper “Monitoring of fast-paced electronic markets” in September 2018. Whilst oriented to central banks’ own needs, it contains fascinating nuggets for us all. Among them are some of their observations on the role of “primary venues”, principally EBS and Thomson Reuters Matching (now a service of Refinitiv), and on fragmentation.
/jlne.ws/2OplVTx

Cryptocurrencies

One Key Point Goes Overlooked Following Roubini’s Contentious Senate Testimony
Steven Ehrlich – Forbes
In a rancorous U.S. Senate hearing last week on crypto regulation that was akin to the verbal sparring typically found in a press conference preceding a boxing match, noted NYU professor Nouriel Roubini, famous for predicting the 2008-2009 global financial crisis, faced off with Coin Center’s director of research Peter Van Valkenburgh.
/jlne.ws/2NJSjLk

Cryptocurrency exchange Coinbase sets up Brexit contingency plan; US digital start-up to scale up EU operations with new Dublin branch
Hannah Murphy in London – FT
Coinbase, the US cryptocurrency exchange, is opening an office in Dublin as part of its contingency planning before the UK leaves the EU next year.
/jlne.ws/2NKbwfG

Cryptocurrency A Coinbase Veteran Is Changing Teams
Shawn Tully – Fortune
A prime architect of America’s largest trading platform for digital currencies is changing teams. Adam White, who helped build Coinbase into a crypto-colossus with 25 million customers, is joining Bakkt, the venture launched in August by a consortium led by Intercontinental Exchange (market cap: $42 billion), parent of the New York Stock Exchange, as chief operating officer.
/for.tn/2IXkB48

Our team, launch and advocacy; Expanding Bakkt’s founding team with Adam White
Kelly Loeffler -via Medium
Building a talented team at Bakkt is central to delivering on our vision to create a transformational digital asset ecosystem. That’s why I’m thrilled to announce that we will welcome Adam White as Chief Operating Officer in November.
/jlne.ws/2OuT9AH

Hong Kong’s securities regulator mulling over new rules for city’s cryptocurrency exchanges; Outgoing chairman Carlson Tong Ka-shing says Hong Kong is leading the world is developing measures required to keep the fast-growing sector in check
Enoch Yiu, Georgina Lee – South China Morning Post
Hong Kong’s Securities and Futures Commission (SFC) is exploring ways to regulate the various cryptocurrency trading platforms already operating in the city and thus tighten investor protection, says its outgoing chairman Carlson Tong Ka-shing.
/jlne.ws/2NJDuZh

LINE’s Crypto Exchange Is Now Listing Its Own Token Against Bitcoin, Ether
Wolfie Zhao – Coindesk
Bitbox, the cryptocurrency exchange launched by Japanese messaging giant LINE, has announced it is now listing its own token for trading against several major crypto assets.
/jlne.ws/2NJPvhk

Colleges Are Baffled by Bitcoin Donations; A crypto entrepreneur had to teach his alma mater how to accept his $10,000 gift.
Janet Lorin – Bloomberg
The University of Puget Sound got an offer it wasn’t sure how to accept. A recent graduate had hit the jackpot and wanted to make a donation to the school. In Bitcoin.
/jlne.ws/2NGNB0V

Fidelity launches company to facilitate crypto trading; Finance industry establishment splits between lovers and haters of digital currencies
Robin Wigglesworth, US markets editor – FT
Fidelity has launched a company to facilitate cryptocurrency trading for hedge funds, endowments and family offices, underscoring how some establishment players in the finance industry are attempting to profit from the wild west frontier of digital assets.
/jlne.ws/2NKPQA3

Politics

Decline of rural US businesses contrasts with prospering cities; Research reveals geographic divide in economy that has become major force in politics
Sam Fleming in Washington – FT
A stark geographic divide in the US economy has been revealed by research that shows four-fifths of rural counties in the US have fewer businesses than they did before the financial crisis, even as big cities prosper.
/jlne.ws/2NITAlS

US budget deficit hits $779bn in Trump’s first full fiscal year; New OMB data show $113bn increase after tax cuts and spending measures
Sam Fleming in Washington – FT
The US budget deficit widened to a six-year high of $779bn during Donald Trump’s first full fiscal year in the White House as borrowing swelled despite surging economic growth.
/jlne.ws/2NJqsuA

China’s Bitcoin Dominance Is Worrying Trump’s White House — And Pushing It Toward Ripple
Billy Bambrough – Forbes
China is, by some distance, the undisputed world leader in bitcoin mining — with Chinese mining pools controlling more than 70% of the bitcoin network’s collective hash rate (a higher hash rate is better when mining cryptocurrencies as it increases your chance of finding the next block on the chain and receiving the bitcoin reward)
/jlne.ws/2NHGyF6

Yellen Says Trump’s Criticism of Fed Policy Is Damaging and Unwise
Sarah Foster – Bloomberg
Former Fed chair says ‘terrific’ U.S. growth hard to sustain; Says Fed should raise rates to neutral to prevent overheating
Janet Yellen cautioned that Donald Trump’s criticism of Federal Reserve policy threatens the institution she ran for four years, adding that it’s “not a desirable thing for a president to comment so explicitly on Fed policy.”
/jlne.ws/2NIlqP1

Exclusive: Facebook to ban misinformation on voting in upcoming U.S. elections
Joseph Menn – Reuters
Facebook Inc (FB.O) will ban false information about voting requirements and fake reports of violence or long lines at polling stations in the run-up to and during next month’s U.S. midterm elections, company executives told Reuters, the latest effort to reduce voter manipulation on its service.
/reut.rs/2J0xri3

The Fed’s 1 Million Lost Jobs; The Federal Reserve’s insistence on raising interest rates is preventing more Americans from working.
Karl W. Smith – Bloomberg
Over the past two and half years, the Federal Reserve has consistently underestimated how low unemployment could fall before sparking an increase in inflation. As a result, the Fed began raising interest rates sooner than was necessary — leading to slower economic growth and fewer jobs.
/jlne.ws/2OubP3J

Regulation

Federal Court in New York Orders Kevin Antonovich to Pay $554,375 Judgment for Commodity Pool Fraud
CFTC
The Commodity Futures Trading Commission (CFTC) announced that Judge I. Leo Glasser of the U.S. District Court for the Eastern District of New York issued a Consent Order on October 3, 2018, against Kevin Scott Antonovich, a resident of Cherry Grove, New York, requiring him to pay $554,375 in restitution and a civil monetary penalty for violations of the Commodity Exchange Act and CFTC Regulations. The Order also imposes permanent trading and registration bans on Antonovich, among other injunctive relief.
/jlne.ws/2Os7WfE

Monthly Disciplinary Actions October 2018
FINRA
/jlne.ws/2NGQG0Z

Beware of Stock Fraud in the Wake of Hurricane Michael
FINRA Staff
It may not be possible to predict when the next natural disaster will take place. What you can count on is that when it happens, scammers will try to take advantage of the situation. The tips below will help you protect yourself at any time.
/jlne.ws/2NKkbil

TRACE trade reporting issues
FINRA
On Monday, October 15, 2018, FINRA clients experienced intermittent problems attempting to report TRACE transactions via CTCI, FIX, and the TRAQS website. While most issues have been resolved, a limited set of clients continue to experieince problems with TRACE for Treasuries trade reporting. Clients impacted by the Treasuries issue will be contacted individually with instructions on how to proceed.
/jlne.ws/2NKkAkR

FCA confirms greater access for SMEs to the Financial Ombudsman Service
UK FCA
The Financial Conduct Authority (FCA) has today confirmed plans to extend access to the Financial Ombudsman Service (‘the ombudsman service’) to more small and medium-sized enterprises (SMEs).
/jlne.ws/2NJYKhs

Investing and Trading

Why to avoid alpha, and how – part 1
Harold de Boer – Transtrend
The only source of (positive) returns is beta. Harder-to-capture types of beta require more skill than easily-captured types of beta.
Calculated alpha is no more than the outcome of a linear regression. Most of this alpha can be attributed to model misspecification.
The only true alpha is a negative one. It results from inefficiencies in capturing beta.
/goo.gl/y2uJhM

It’s Not Just You. The Stock Market Really Is Crashing More Often
Ben Levisohn – Barron’s
Last week’s selloff didn’t come out of nowhere—technicals were already suggesting a potential pullback, as was Barron’s Randall W. Forsyth—but the speed and scope took all but the most pessimistic by surprise.
/jlne.ws/2NGIiON

Don’t Blame the Fed for Jittery Markets; Monetary policy in Europe remains easy, yet European stocks have suffered more than U.S.
Jon Sindreu – WSJ
Investors shouldn’t blame the Federal Reserve too much for this month’s equity rout. In time, they may even feel grateful for the new pattern of monetary policy.
/jlne.ws/2NJphLG

Investors Flee Largest Financials ETF as Bank Earnings Kick In
Vildana Hajric and Carolina Wilson – Bloomberg
SPDR’s XLF had $1.1 billion pulled Friday, most in a decade; Rising rates, loan growth among concerns for finance firms
Bank bears are back. Investors yanked more than $1 billion from the $29 billion Financial Select Sector SPDR Fund, ticker XLF, on Friday, the largest outflow in more than a decade. In addition, trading in the fund hit $3.6 billion, more than double its average daily volume for the past year, after reaching $4.8 billion on Thursday.
/jlne.ws/2NKsieC

Institutions

Robinhood Gets Almost Half Its Revenue in Controversial Bargain With High-Speed Traders
Simone Foxman, Julie Verhage and Suzanne Woolley – Bloomberg
Robinhood Markets Inc. has built a reputation on its origins in finance counterculture and a steal-from-the-rich ethos. But the firm, which offers no-fee stock trading, is making almost half its revenue from one of the most controversial practices on Wall Street.
/bloom.bg/2IXLmWf

HSBC, Credit Suisse CEOs Follow Dimon and Ditch Saudi Conference
Donal Griffin and Jan-Henrik Foerster – Bloomberg
Flint, Thiam and StanChart’s Winters all withdraw from event; HSBC and Credit Suisse are strategic partners of conference; Saudi Debates Khashoggi Narrative as Pompeo Visits
The chief executive officers of HSBC Holdings Plc and Credit Suisse Group AG became the latest top bankers to abandon an investment conference in Saudi Arabia as pressure grows on the kingdom amid allegations it killed a dissident journalist.
xhttps://jlne.ws/2NKODJ1

This Bank Halved Clients While Doubling Assets Under Management
Stephan Kahl – Bloomberg
Germany’s DZ Privatbank shifts focus to much larger mandates; Cooperative lender is struggling to turn its Swiss unit around
Less is sometimes more. The private banking arm of Germany’s cooperative lenders, a group of around 900 local banks with total assets of 891 billion euros ($1 trillion), has almost halved the number of customers while also nearly doubling assets under management within a few years. DZ Privatbank now takes care of more than 18 billion euros for the first time ever, CEO Stefan Schwab told Bloomberg in an interview.
/jlne.ws/2NKimC1

Morgan Stanley Profit Rises 20%; Wall Street firm reports revenue gains across its major business units
Liz Hoffman – WSJ
Morgan Stanley MS 0.09% said Tuesday its third-quarter profit rose 20%, as the Wall Street firm started the final day of a big-bank earnings season that reflected the strength of the economy in the face of geopolitical turmoil.
/jlne.ws/2NKQiyf

Fixed income slump takes shine off strong Goldman earnings
Laura Noonan in New York – FT
The fixed income slump has resumed at Goldman Sachs with revenues falling 10 per cent year-on-year during the firm’s final quarter under the stewardship of Lloyd Blankfein.
/jlne.ws/2NJXtXM

Goldman Sachs profit rises 20.5 percent
Reuters
Goldman Sachs reported a 20.5 percent increase in quarterly profit on Tuesday as growth in its equities trading and underwriting businesses made up for a fall in fixed income trading.
/jlne.ws/2NJZu6e

Goldman Bankers Deliver Surprise Gain for Solomon
Sridhar Natarajan – Bloomberg
Goldman Sachs Group Inc.’s dealmakers celebrated one of their own rising to the top of the firm by delivering an unexpected boost to his first month.
Wall Street’s top advisory franchise delivered in a quarter where most of its competitors were beset by a halt in the pace of completed merger transactions and underwhelming debt-underwriting activity. The investment-banking group posted a 10 percent gain last quarter, vaulting past analysts’ estimates for a drop.
/bloom.bg/2NKgrgE

Regions

Iran says to launch oil futures to offset U.S. sanctions
Xinhua
National Iranian Oil Company (NIOC) has announced to launch crude oil futures by Oct. 22, with 1 million barrels of crude oil offered to potential private sectors’ customers, Eghtesadonline news website reported on Saturday.
/goo.gl/ck9zpM

China May Have $5.8 Trillion in Hidden Debt With ‘Titanic’ Risks
Eric Lam – Bloomberg
Local governments relying on LGFVs to fund projects, S&P Says; Citigroup analysts agree markets right to worry over debt risk
China’s local governments may have accumulated 40 trillion yuan ($5.8 trillion) of off-balance sheet debt, or even more, suggesting further defaults are in store, according to S&P Global Ratings.
/jlne.ws/2NOqphm

The Permian Oil Boom Is Showing Signs of Overheating; Shortages of sand, pipelines, and manpower could jeopardize America’s future as an energy superpower.
Kevin Crowley – Bloomberg
At 10:30 p.m. on an 85F August night in Penwell, West Texas, a 69-year-old repairman is hammering away at the frame of an 18-wheeler in the forecourt of an abandoned truck stop. The song Free Bird by Lynyrd Skynrd blares from the radio. “I’m making more money than I ever did,” says Don Suggs, who spends nights inside a vacant, graffiti-covered shop nearby, where he sleeps in a hammock. Just six weeks earlier he was retired, living near Dallas. He’s here now, he says, “for one last hoo-rah.”
/jlne.ws/2NGLoSV

Brexit

Coinbase Opens Office in Dublin as Brexit Contingency Plan
Nour Al Ali – Bloomberg
London to remain European headquarters, U.K. CEO says; Crypto exchange seeks to fill positions in Dublin office
Coinbase Inc., one of the biggest U.S. cryptocurrency exchange operators, is expanding its European presence with a Dublin office as Brexit uncertainty continues to push companies to create contingency plans.
/jlne.ws/2NJV2Ey

Wells Fargo applies for licence in France as part of Brexit strategy
David Keohane in Paris – FT
Wells Fargo has asked French regulators for an investment firm license, in the latest boost for Paris as it looks to become Europe’s pre-eminent banking centre after Brexit.
/jlne.ws/2NIpteb

Miscellaneous

Big brands crowdfund new products
Adrianne Pasquarelli – Ad Age
Executives at Lego had an idea for a product, but they weren’t sure it would resonate with customers. They were leery of spending a lot of money on the idea – toys aimed at adults – without testing it first in the market.
/goo.gl/5ACHnQ

The post Saudi Arabia Breaks 45-Year Taboo With Veiled Threat to Use Oil as a Weapon appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

John Lothian News is working on a documentary video series on the history of financial futures. We are looking for people with stories to tell about the development of the early financial futures contracts in Chicago, New York, London, Frankfurt, Tokyo and elsewhere. If you see one of us at the FIA EXPO, feel free to stop us and share your stories. We need your help to tell the history of financial futures as completely, fairly and effectively as possible.~JJL

John F. Notorangelo, 52, passed away suddenly recently. He was a former futures specialist, professional and trader who worked for JP Morgan and Fimat/Soc Gen. He was an independent market marker in the T-notes at the CBOT. He is brother to Nick Notorangelo. I knew John because he had moved on to a career with Northwestern Mutual and tried to get me to buy insurance from him. My condolences to his family and friends.~JJL

Some vocal B-share members of the CME Group have sent a letter to the CME Group board of directors about the vote on November 5 for B-share members to give up voting rights in return for $10 million. The letter indicates these members want an independent third party analyst to determine the value of the B-Shares and that the CME and the B-Share holders then move forward with the vote. Until then, they say vote no to the November 5 vote. Never a dull moment with the B-Share crowd.~JJL

Here is the SEC’s statement on market data fees from yesterday.~JJL

ISDA published a new white paper on their website titled “Clearing Incentives, Systemic Risk and Margin Requirements for Non-cleared Derivatives.”~JJL

CME Group Executive Chairman and CEO Terry Duffy was not at the CME Group’s EXPO press lunch yesterday, which is an event he recently has hosted and seemed to relish the spotlight and opportunity to share his thoughts with the assembled press corps. Duffy also missed the FIA Boca Raton conference CME Group press lunch last March, though he was working on the NEX Group deal at the time. Bryan Durkin was the senior CME Group executive at yesterday’s event, which did not feature any formal presentation.~JJL

I remember when the FIA EXPO was filled with firms giving out free t-shirts. My wife still wears a shirt that is from the Board of Trading Clearing Corporation, or BOTCC. Recently, Advantage Futures had the softest t-shirts given away at EXPO.~JJL

Would your firm like to become a sponsor of the LaSalle Street Trading Tech Awards event on November 15 in support of Boy Scouts of America in the Chicago area? Or would you like to attend the event and learn more about how you and your firm can hold a Trading Tech 300 merit badge clinic? Click HERE for details.~JJL

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Why I left a quarter-century career on Wall Street to raise ‘social capital’ for underserved youth
Kevin Davis, Chairman and Founder of NYC nonprofit First Workings
For much of my career, certainly for the eight years I was the CEO of Man Financial and MF Global, I was in a position to hire interns. Most of the interns we hired came via the usual pathways of customers and colleagues’ relatives. Since the vast majority of long-term recruits ended up coming from that pool of individuals, diversity in our management structure became structurally prohibitive.
/jlne.ws/2Ow3ah9

***** Former MF Global CEO Kevin Davis gave up Wall Street to work for good.~JJL

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YouTube went down for over an hour during an abrupt worldwide outage
David Choi – Business Insider
You were not alone — YouTube was down from approximately 6 p.m. to around 7:20 p.m on Tuesday.
“Thanks for your reports about YouTube, YouTube TV and YouTube Music access issues,” a YouTube statement said. “We’re working on resolving this and will let you know once fixed. We apologize for any inconvenience this may cause and will keep you updated.”
/read.bi/2NLVZfs

**** I was trying to view a video on YouTube when this happened. It was such an unusual occurrence I was sure something was wrong with my computer and spent five minutes trying to troubleshoot my own PC before learning it was a widespread issue.~JB

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Tuesday’s Top Three
Our top read story yesterday was Crain’s Chicago financial district poised for big change as banks exit. Everyone in the industry has a story about LaSalle Street. Second went to the announcement ErisX Announces Expansion of Leadership to Pioneer Regulated Digital Asset Platform, hiring Kelly Brown as chief commercial officer among others. Third went to Bloomberg’s Saudi Arabia Breaks 45-Year Taboo With Veiled Threat to Use Oil as a Weapon

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MarketsWiki Stats
133,818,283 pages viewed; 23,294 pages; 215,243 edits
MarketsWiki Statistics

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Lead Stories

SEC Rules NYSE, Nasdaq Didn’t Justify Market Data Fee Increases
Dave Michaels and Alexander Osipovich – The Wall Street Journal
The Securities and Exchange Commission on Tuesday ruled the country’s biggest exchanges didn’t justify increases in fees they charge for certain market-data products that brokers and traders consider essential to their business.
/goo.gl/obLZrm

Could a ruling in CFTC v. DRW finally be in the offing?; A five-year-old market manipulation case against one of the biggest U.S. trading firms may have just gotten a new reason to move ahead.
Lynne Marek – Crain’s Chicago Business
A five-year-old market manipulation case against one of the biggest U.S. trading firms may have just gotten a new reason to move ahead. U.S. District Judge Richard Sullivan in the Southern District of New York, who has been overseeing the case, was confirmed last week by the U.S. Senate for a promotion to the U.S. Court of Appeals for the 2nd Circuit. That means his long vetting process for the appellate court is over, and he’ll soon decide which of his current cases to keep and which to hand off to colleagues.
/jlne.ws/2OurMGR

Money Managers Are Losing Faith in Money Managers; The value destruction being inflicted on Britain’s funds industry is getting spectacular.
Mark Gilbert – Bloomberg
A bad year for Britain’s fund managers has taken a turn for the worse, with lackluster asset growth prompting investors to look askance at the outlook for money management. And it’s getting increasingly hard to see what, if anything, could stop the rot.
/jlne.ws/2OrOLT4

Global Fintech Warning To Traditional Banks — The Threat Is ‘Real And Growing’
Billy Bambrough – Forbes
Financial technology (often shortened to fintech) startups and other new businesses have been working to break the hold traditional banks have on the financial services industry for more than a decade — and now it appears to be finally paying off, according to a new report from consultancy Accenture.
/jlne.ws/2OvDPUC

Bond Traders Are Paid Big to Dump U.S. Treasuries and Go Abroad
Katherine Greifeld – Bloomberg
Low-yield bunds, JGBs earn higher returns on FX hedging profit; Foreigners staying home as effective U.S. yields turn negative
There’s never been a more profitable time for U.S. investors to ditch Treasuries and go abroad. By now, everyone knows Treasuries have been a lousy bet. But because of a quirk in the way currency markets work, there’s even less reason for investors to park their money in U.S. government bonds. Those with dollars to spare can lock in historically high returns in Europe and Japan, even though yields in the two markets are among the lowest in the developed world.
/jlne.ws/2OsyRru

Goldman Alumni Still Think They Can Fix Wall Street With Crypto
Max Abelson and Lily Katz – Bloomberg
Accrete aims to launch investment fund and issue its own coins; But the ambitious crypto plan ‘isn’t as simple as we thought’
Inside Manhattan’s Harvard Club, across the room from a mounted elephant head, sitting beneath a chandelier, with lions on his tie, Arya Bolurfrushan was giddy about his plan for a new digital-coin fund.
/jlne.ws/2OyDDUr

Hong Kong plans to suspend trading in groups with shaky accounts; Exchange operator’s move aimed at protecting investors after string of scandals
Emma Dunkley in Hong Kong – FT
The Hong Kong stock exchange plans to suspend share trading in companies with questionable financial results and accounting standards after a string of scandals, as part of a broader crackdown to protect investors.
/jlne.ws/2OrVexr

In China, Plunge Protection Goes Local in Latest Market Slump
Bloomberg News
Local authorities setting up funds to help listed companies; The move is shift from stock purchases done by ‘national team’
China’s efforts to arrest destabilizing declines in domestic stocks in recent years have become so well recognized that market players coined the term “the national team” to describe buying by state-owned funds. In the latest bout of turmoil, there’s been a twist.
/jlne.ws/2Oy2PL3

The Student Loan Debt Crisis Is About to Get Worse; The next generation of graduates will include more borrowers who may never be able to repay.
Riley Griffin , Suborna Panja , and Kristina D’Alessio – Bloomberg
While Wall Street and U.S. President Donald Trump tout news of a booming stock market and low unemployment, college students may be quick to roll their eyes. The improved economy has yet to mean higher wages for graduates already struggling to pay down massive debt, let alone ease the minds of students staring down the barrel of six-digit loan obligations yet to come.
/jlne.ws/2Oy2rMB

Ariane de Rothschild on why she wants to shake up private banking; Head of Edmond de Rothschild on the future of wealth and the family feud
Alice Ross in Paris – FT
“It’s very exhilarating!” It has just been suggested that I take a moto-taxi (a motorcycle) to catch my train after our interview — and Ariane de Rothschild is tickled at the thought. “Everybody does it. I said I’ll do it too, but my girls said, ‘Oh no you can’t’,” she says.
/jlne.ws/2OteKJL

Broken Pecan Trees, Ruined Cotton Harvest: Georgia Counts Michael’s Cost; Amid widespread crop destruction, farmers confront potentially devastating financial rout
Cameron McWhirter – WSJ
Standing in a ruined field, Dan Simmons did some quick math as he surveyed row after row of bent stalks with lumps of white cotton scattered on the grayish-brown dirt.
/jlne.ws/2OxuThu

America Is Drowning in Milk Nobody Wants; Dairy farmers are under siege thanks to low prices and changing tastes. Even a one-week July 4 shutdown by yogurt giant Chobani inflicted pain.
Deena Shanker and Lydia Mulvany – Bloomberg
A decade ago, Greek yogurt was ascendant in America. In New York state, the hope among farmers and politicians was that their fortunes would benefit as well.
/jlne.ws/2OuE4za

Exchanges, OTC and Clearing

SEC rules NYSE and Nasdaq did not justify data fee increases; Landmark decision puts pressure on exchanges over cost of trading data
Kadhim Shubber in Washington and Nicole Bullock in New York – FT
The Securities and Exchange Commission ruled on Tuesday that the New York Stock Exchange and Nasdaq did not justify previous market data fee increases, in a landmark decision that adds pressure on stock exchanges over the cost of trading data.
/jlne.ws/2OteH0x

SEC Ruling Takes Aim at Stock-Exchange Profits; The Securities and Exchange Commission decision blocking higher fees for certain stock-market data casts doubt on a crucial and growing source of revenue that has helped exchanges make up for the declining income from trading
Alexander Osipovich, Dave Michaels and Gretchen Morgenson – WSJ
In recent years, U.S. stock exchanges thought they had a guaranteed profit machine that could revive their sagging businesses: selling market data at ever-higher prices to a captive audience of Wall Street banks and traders.
/jlne.ws/2OxwlAv

LSEG’s Turquoise cuts rebates as maker-taker debate in the US rages on; Turquoise will remove its negative fee structure as of 1 November, as LSEG says buy-side support of transaction fee pilot in the US influenced the move.
Hayley McDowell – The Trade
The London Stock Exchange Group’s (LSEG) multilateral trading facility (MTF) Turquoise is set to cut rebates on its lit order book, while maker-taker pricing on exchanges in the US continues to be the subject of critical debate.
/jlne.ws/2OwQaaY

French renewable energy unicorn Neoen lists on Euronext; EUR628 million raised; market capitalisation EUR1.4 billion
Euronext
Euronext today welcomed Neoen, France’s leading independent producer of exclusively renewable energy and one of the sector’s most dynamic businesses worldwide, to Compartment A of its regulated market in Paris. This was the largest IPO in Paris in 16 months, and the largest clean-tech IPO in Europe this year.
/jlne.ws/2OrShNn

Euronext Lisbon welcomes Farminveste
Euronext
Euronext today welcomed Farminveste SGPA, SA (“Farminveste”) on Euronext Access in Lisbon.
/jlne.ws/2OxBnwT

A. Equity derivatives: Introduction of one SSF, one SSDF, one equity option and eleven equity options with weekly expiration; B. Amendment of the Product Specific Supplements to the Liquidity Provider Schemes for SSDFs and equity options
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 22 October 2018:
/jlne.ws/2OsmQT4

Introduction of equity derivatives – Liquidity Provider schemes
Eurex
Effective 22 October 2018, Eurex Clearing AG will include the following equity derivatives introduced at Eurex Deutschland into the existing Liquidity Provider schemes, respectively, with unchanged parameters:
/jlne.ws/2OwEFAe

Symposium on Responsible Business Conduct and ESG Investment
JPX
On September 4, 2018, Japan Exchange Group, Inc. and Arabesque Asset Management hosted a symposium at Tokyo Stock Exchange entitled “Responsible Business Conduct and ESG Investment through the Lens of the UN Guiding Principles on Business and Human Rights by Professor John G. Ruggie” on the occasion of his visit to Japan.
/jlne.ws/2OrLSBL

Fintech

Fintech making inroads, but U.S. bank revenues little changed: report
Anna Irrera – Reuters
Financial technology startups and other new entrants are making inroads in the U.S. banking market, but have yet to capture a threatening share of bank revenues, according to research published by Accenture Plc on Wednesday.
Around 19 percent of financial institutions in the U.S. are new entrants, such as challenger banks, non-bank payments institutions and big tech companies, according to the report. Yet they have amassed only 3.5 percent of the total $1.04 trillion in banking and payment revenues so-far, Accenture found.
/reut.rs/2NITbj7

Trading Technologies rolls out order management system; OMS will initially service FCMs and brokers, with plans to potentially roll out the service to the buy-side in the future.
Hayley McDowell – The Trade
Derivatives trading software specialist Trading Technologies (TT) has unveiled its new full-service order management system (OMS) which will be rolled out early next year.
/jlne.ws/2OwEepA

ADM Investor Services, Inc. joins oneZero Financial; Systems’ EcoSystem as FX clearing and liquidity provider
ADMIS
ADM Investor Services, Inc. (ADMIS) today announced that it will be providing FX prime brokerage, execution, and settlement services through oneZero Financial Systems’ EcoSystem.
/jlne.ws/2OrL4g5

Born Re-born
BornTec
In the years since our launch, we have helped our clients efficiently scale their business, quickly access markets and ensure integrity of trading. After 15 years of operational efficiencies, growth and knowledge; not only has the company evolved but our technology has too. It was time for our brand to reflect this advancement from a financial institution to a progressive fintech firm.
/jlne.ws/2OrWW1H

INTL FCStone Selects TEO Derivatives And LISA Clearing Engine From ATEO Finance As Its Future Middle-Office Platform
ATEO Finance
ATEO Finance, a leading provider of Post-Trade solutions for the Listed Derivatives space, is extremely pleased to announce that INTL FCStone Inc., one of the oldest and largest independent futures brokerage and clearing firms in the United States, has selected ATEO’s suite of products, TEO Derivatives and LISA Clearing Engine, as its future middle-office platform for its U.S. and London-based FCM operations.
/jlne.ws/2Ot8ORg

Execution moving beyond compliance in post-MiFID II world; The TRADE’s 2018 Execution Management Systems survey shows that for buy-side firms, trading efficiency will always come first.
John Brazier – The Trade
Buy-side firms are now looking beyond the compliance requirements of MiFID II and resuming their focus on execution quality, according to the results of The TRADE’s Execution Management Systems (EMS) Survey 2018.
/jlne.ws/2OtdjLE

Global Fintech Warning To Traditional Banks — The Threat Is ‘Real And Growing’
Billy Bambrough – Forbes
Financial technology (often shortened to fintech) startups and other new businesses have been working to break the hold traditional banks have on the financial services industry for more than a decade — and now it appears to be finally paying off, according to a new report from consultancy Accenture.
New entrants to the banking market — including challenger banks, non-bank payments institutions, and big tech companies — have captured around one-third of new revenue, Accenture said.
bit.ly/2NK6PTh

LiquidityBook Taps Ryan Canfield to Lead Client-Driven Solutions Team
LiquidityBook
LiquidityBook, a leading Software-as-a-Service (SaaS)-based provider of buy- and sell-side trading solutions, today announced the addition of Ryan Canfield as Lead Product Analyst.
/jlne.ws/2OxCKf1

Fintech VCs Talk Investing – Bloomberg
Bloomberg (VIDEO)
Vanessa Colella, Citi Venture Capital chief innovation officer, Rishi Garg, partner at Mayfield Fund, and Matt Harris, managing director at Bain Capital Ventures, talk with Bloomberg’s Julie Verhage about the state and future of fintech investing at the Bloomberg Sooner Than You Think technology summit in Brooklyn.
/bloom.bg/2NISmXP

BSO adds new Latin American route as traders get a taste for Mexican stocks
BSO
Global network provider BSO has announced a new direct connectivity link between the Mexican stock exchange (BMV) and some of the largest exchanges across North America.
/jlne.ws/2Oybihj

Jin Investment Management Adopts TORA Rebalancing to Reduce Risk and
Improve Workflow Efficiency; New solution offers enhanced features and tight integration with TORA’s compliance, risk and trading capabilities
TORA
TORA, provider of the industry’s most-advanced cloud-based order and execution management system (OEMS), today announced the launch of TORA Rebalancing. This new solution is natively integrated within the TORA platform and helps asset managers reduce risk and improve workflow efficiencies around the portfolio rebalance process.
/jlne.ws/2OrO38p

Barchart Launches cmdtyView to Revolutionize Physical Grain Trading
Barchart
Barchart, a leading provider of market data and technology, is pleased to announce the launch of cmdtyView®, a market leading research, analysis and trading platform for agricultural commodity professionals. Sitting within Barchart’s cmdty product line, cmdtyView includes global exchange and reference data; and is the only platform to access streaming news from cmdtyNewswiresSM, best-in-class fundamental and economic data from cmdtyStatsSM, and Barchart’s broad proprietary cash grain commodity data.
/jlne.ws/2OyTH8Y

Cryptocurrencies

Will Fidelity Be The Catalyst That Brings Crypto Trading To The Masses?
Donna Fuscaldo – Forbes
Cryptocurrencies have had a rough go of it this year, with the prices of the leading digital tokens including bitcoin and ethereum plummeting. The knock on virtual currency: it has failed to take off with the masses as regulators have increased scrutiny and retailers haven’t embraced it as a payment method.
Fidelity Investments, however, could play a role in changing all that.
bit.ly/2NIRoLb

DTCC Study: Tech Inspired By Bitcoin Could Work For U.S. Equity Markets
Sarah Hansen – Forbes
The Depository Trust & Clearing Corporation (DTCC), which provides infrastructure services to financial markets across the globe, has released the results of a new study indicating that the distributed ledger technology (DLT) first popularized by bitcoin is capable of supporting the average daily trading volumes in the U.S. equity market: more than 100 million trades per day.
/jlne.ws/2Or2Xf0

Bakkt and ErisX staff up as institutional crypto gets ready to hit Wall Street
Frank Chaparro – The Block Crypto
ErisX and Bakkt are both looking to get crypto marketplaces off the ground; To that end, they have made some big hires as they build out their teams; Powerful backers seem to be giving Wall Street talent confidence to move into these new ventures
Two of the hottest projects working on institutional crypto trading platforms have been building out their teams, The Block has learned.
/jlne.ws/2Or2SYK

Winklevoss-Backed Stablecoin Soars Above $1 as Tether’s Market Cap Plunges
Nikhilesh De – Coindesk
A second stablecoin has broken its peg with the U.S. dollar – except this one’s soaring well above a buck, not tanking below it.
/jlne.ws/2OuxKrq

AI-Driven Platform ‘Outperformed Stock Markets’ – And Now, It Is Focusing on Crypto
Connor Blenkinsop – Cointelegraph
What if the volatility of cryptocurrencies could be eliminated, making crypto more of a feasible, mainstream investment?
An established fintech company is working to achieve just that. Rise, which was founded in 2012, is planning to adapt its artificial intelligence (AI) trading technology to the cryptocurrency markets – enabling users to manage their investments and trade across dozens of exchanges.
bit.ly/2NLUCNQ

The Most Expensive Private Lawsuit In Crypto Is Settled
Muyao Shen – Forbes
A lawsuit over Augur, a decentralized platform for prediction markets on real-world events, has come to an end as court records show that the case was dismissed on Oct. 12.
Matthew Liston, the former CEO of Augur, filed the lawsuit back in April, alleging that three other founding members of Augur, Jack Peterson, Joseph Charles Krug, and Jeremy Gardner committed acts of fraud, oppression, and malice along with investor Joseph Ball Costello. According to Liston, the alleged “fraud” resulted in his forced removal from the project and the company in 2014.
bit.ly/2NKn96r

Crypto Stability: Institutions On the Horizon?
Joe Liebkind – Investopedia
Cryptocurrency volatility has long been one of the industry’s biggest talking points, and for good reason. Since its launch and the subsequent explosion in popularity, bitcoin—and the market it spawned—has been characterized by unpredictable swings and price booms that lead to major collapses. Even so, the major price crash that started 2018 has led to a relative stabilization of the crypto sector, and with it, the potential for real growth and adoption.
bit.ly/2NMunGW

Politics

Trump’s Attacks on the Press Are Illegal. We’re Suing; A coalition of free-press advocates is taking on the president.
Suzanne Noseel – Politico
President Donald J. Trump’s frequent threats and hostile acts directed toward journalists and the media are not only offensive and unbecoming of a democratic leader; they are also illegal. In the Trump era, nasty rhetoric, insults and even threats of violence have become an occupational hazard for political reporters and commentators. To be sure, a good portion of President Trump’s verbal attacks on journalists and news organizations might be considered fair game in this bare-knuckled political moment. The president has free-speech rights just like the rest of us, and deeming the news media “the enemy of the American people” and dismissing accurate reports as “fake news” are permissible under the First Amendment.
/jlne.ws/2OyM5mU

New York Attorney General’s Probe Into Fake FCC Comments Deepens; Advocacy groups subpoenaed over comments posted to FCC from people who deny they made them
James V. Grimaldi – WSJ
The New York attorney general’s office has subpoenaed more than a dozen advocacy groups, lobbying firms and consultants as part of an investigation of fake comments filed with the Federal Communications Commission over its proposal to scale back its regulation of the internet.
/jlne.ws/2OuFSYX

Mueller Ready to Deliver Key Findings in His Trump Probe, Sources Say
Chris Strohm , Greg Farrell , and Shannon Pettypiece – Bloomberg
Rosenstein is pressing Mueller to wrap it up, official says; Next steps expected to occur after November midterm elections
Special Counsel Robert Mueller is expected to issue findings on core aspects of his Russia probe soon after the November midterm elections as he faces intensifying pressure to produce more indictments or shut down his investigation, according to two U.S. officials.
/jlne.ws/2OwAJ2q

Trump Complains About Rising Interest Rates, Calling the Fed ‘My Biggest Threat’; The president says he is not happy with Fed Chairman Jerome Powell
Kate Davidson – WSJ
President Trump reiterated his complaints that the Federal Reserve is raising short-term interest rates too fast, calling the U.S. central bank “my biggest threat.”
/jlne.ws/2OuHMZB

Regulation

Investigators contend she used voodoo spells, ran $20 million Ponzi scheme in case jury is weighing
Lynh Bui – Washington Post
In Dawn Bennett’s world, the American Dream is one in which people adorn themselves in $502 fishing boots, shred the slopes in $690 ski hats and hit the back nine toting $13,500 golf bags.
/jlne.ws/2Ov4u3X

Danish regulator blocks Danske Bank’s CEO pick; Rare intervention increases pressure on bank’s board as it reels from money laundering scandal
Richard Milne, Nordic Correspondent – FT
Denmark’s financial regulator has blocked the unanimous choice of Danske Bank’s board to become chief executive in a rare and embarrassing intervention for the lender reeling from a EUR200bn money laundering scandal.
/jlne.ws/2OuyIE4

What rise and fall of the fiduciary rule means for US advisers; Retirement savers will need to educate themselves and take greater ownership of their fate
Rita Raagas De Ramos – FT
Does the demise of the US Department of Labor’s fiduciary rule — expanding the requirement for retirement advisers to act in their client’s best interest — mean savers are again vulnerable to deceit? The answer depends on the respondent.
/jlne.ws/2OyDT5R

SEC overturns Nasdaq and NYSE data fee hike; US regulator rules in favour of SIFMA’s challenge of its support in market data fee increases at Nasdaq and NYSE.
Hayley McDowell – The Trade
The US financial regulator has overturned its decision supporting an increase in market data fees at the New York Stock Exchange (NYSE) and Nasdaq.
/jlne.ws/2OuCmOg

Notice of Election and Ballots for FINRA Small Firm NAC Member Seat
FINRA
The purpose of this Election Notice is to: (1) notify small firms of a contested election for a small firm member seat on the National Adjudicatory Council (NAC); and (2) distribute ballots to eligible FINRA small firm members.
/jlne.ws/2OvJ7PY

Notice of FINRA Regional Committee Elections and Ballots; Ballot Due Date: November 15, 2018
FINRA
The purpose of this Election Notice is to notify firms of: (1) the upcoming elections to fill vacancies on the FINRA Regional Committees (formerly known as District Committees); and (2) the distribution of ballots to eligible firms.
/jlne.ws/2Or8mmi

SEC Provides Regulatory Relief and Assistance for Hurricane Victims
SEC
The Securities and Exchange Commission today announced that it is providing regulatory relief to publicly traded companies, investment companies, accountants, transfer agents, municipal advisors, and others affected by Hurricane Michael. The loss of property, power, transportation, and mail delivery due to the hurricane poses challenges for some individuals and entities that are required to provide information to the SEC and shareholders.
/jlne.ws/2OyRudG

Statement on Market Data Fees and Market Structure; Chairman Jay Clayton
SEC
Today, the Commission took two actions with respect to the regulation of market data fees – i.e., the fees our regulated exchanges charge market participants for market data.[2] These matters involve issues of law and fact, and by their very nature – challenges to fee amounts – are contentious. Fee disputes of this type also can be complex, including because today’s trading activity is itself complex and data driven.
/jlne.ws/2OwS2R2

SEC Investigative Report: Public Companies Should Consider Cyber Threats When Implementing Internal Accounting Controls
SEC
The Securities and Exchange Commission today issued an investigative report cautioning that public companies should consider cyber threats when implementing internal accounting controls. The report is based on the SEC Enforcement Division’s investigations of nine public companies that fell victim to cyber fraud, losing millions of dollars in the process.
/jlne.ws/2OrTBjj

Keynote Remarks of CFTC Commissioner Rostin Behnam at the Federal Reserve Bank of Chicago’s Fifth Annual Conference on CCP Risk Management, Chicago, Illinois; A Decade After The Financial Crisis: Remaining Challenges and New Approaches for the Next Ten Years and Beyond
October 16, 2018
CFTC
Thank you for the kind introduction President Evans; it is a pleasure to be here with all of you today, and an honor to kick off day two of this great conference. I wish to thank the Federal Reserve Bank of Chicago, particularly Bob Cox and Robert Steigerwald, for the invitation to speak with you and for organizing this event. Before I begin my remarks, please allow me to remind you that the views I express today are my own and do not represent the views of the Commodity Futures Trading Commission (the CFTC or Commission) or my fellow Commissioners.
/jlne.ws/2OtcodX

Remarks of Commissioner Brian Quintenz at the 38th Annual GITEX Technology Week Conference
CFTC
Good morning. Thank you very much Matteo for that kind introduction. Before I begin, let me quickly say that the views I express today are my own and do not represent the views of the Commission. For those of you not familiar with the Commission’s mission, the CFTC is responsible for regulating the derivatives markets in the United States. As such, we have oversight authority over the futures and swaps market, including derivatives on commodity cryptocurrencies.
/jlne.ws/2OyHgd1

Investing and Trading

Webinar: Managing Risk With Listed Options; Thursday, October 18, 2018; 3:30 – 4:30 PM CST
OIC
The versatility of listed options is well-documented. While they can be used for generating income or as a way to acquire stock, there’s another important role options can perform for investors – risk management. On Oct. 18, join OIC for an engaging webinar focusing on risk management techniques that can only be found with listed options. Register now, and get ready to learn about strategies, time frames, volatility and much more.
/jlne.ws/2OqwYM5

Why Hedge Funds Will Stick With Ever-Risky Short Volatility Trades
Yakob Peterseil – Bloomberg
Assets in short VIX exchange-traded products lowest since 2013; Technicals, monetary forces anchor bets against price swings
It’s a familiar spectacle on Wall Street: the short-volatility complex takes a beating — and prophets of doom warn money managers the strategy is running out of steam.
/jlne.ws/2OvEaqm

Momentum Investors Need to Experience Some Pain; Betting on stocks that are leading the market higher is a winning strategy that feels like it has gotten ahead of itself.
John Authers – Bloomberg
The Reflex, as 1980s new wave and synth-pop band Duran Duran sang, is a door to finding treasure in the dark. Anyone who was long the market, or particularly momentum stocks, would have profited hugely from this dictum on Tuesday.
/jlne.ws/2OrP1S2

Hedge Funds at the ‘Core’ of Stock Slump May Be Done Offloading
Dani Burger – Bloomberg
JPMorgan reckons hedge-fund deleveraging helped fuel selloff; U.S. bank also singles out risk parity, balanced mutual funds
One quantum of solace for bruised stock bulls: Some of the usual suspects behind last week’s rout may be done frightening markets.
/jlne.ws/2OwgwK4

Investors Look Toward Diversification During Volatility; Many investors say market turbulence reflects the early stages of a rotation
Akane Otani and Michael Wursthorn – WSJ
The volatility racking markets this month is the latest chapter in investors’ struggle to adapt to a world of reduced central-bank stimulus.
/jlne.ws/2OrQNTc

Private-Equity Firm Abraaj Raised Billions Pledging to Do Good—Then It Fell Apart; Western investors poured money into the Dubai-based group, now the world’s largest insolvent private-equity firm
Simon Clark, Nicolas Parasie and William Louch – WSJ
In January, the Abraaj Group had $14 billion of assets under management and was trying to raise $6 billion for what would be the world’s largest emerging-markets private-equity fund.
/jlne.ws/2OwPsKQ

Institutions

HSBC UK hit with another IT glitch
Reuters
HSBC UK (HSBA.L) said on Tuesday some of its customers were struggling to access online banking, the second outage of the lender’s digital services in weeks.
/jlne.ws/2OvEXHQ

Regions

Russia’s Treasury Holdings Continue to Drop; It’s curious why the country would reduce its exposure to the world’s biggest and most-liquid bond market.
Brian Chappatta – Bloomberg
Russia’s U.S. Treasuries holdings have found a new bottom. That’s one of the more interesting revelations from the Treasury Department’s monthly report on foreign holders of U.S. government securities. It’s not so much that it’s surprising — after all, Russia slashed its American debt pile by $81.2 billion in the two months through May 31, one of the most aggressive cutbacks from any country in recent memory.
/jlne.ws/2Ov4SPX

Danske Bank ditches CEO candidate after regulator rejection
Stine Jacobsen – Reuters
Danske Bank (DANSKE.CO), reeling from a money laundering scandal, suffered another setback on Wednesday when the Danish financial regulator rejected its candidate for chief executive on the grounds that he lacked sufficient experience.
/jlne.ws/2OrFHxz

Vedanta’s London exit fails to stem scrutiny of Indian miner; The group has quit the LSE but faces growing domestic pressure over its environmental record
Simon Mundy in Mumbai – FT
When Anil Agarwal listed his Vedanta Resources group on the London Stock Exchange, it was a crowning moment in one of modern India’s most astonishing personal success stories.
/jlne.ws/2OwAyUO

Currency sting sparks Taiwanese bond clampdown; Booming ‘Formosa bonds’ head for tough restrictions
Edward White in Taipei and Christian Pfrang in Hong Kong – FT
In July 2017 an analyst at Wells Fargo described Taiwan’s booming foreign currency bonds as a “match made in heaven”, representing a “meeting of the minds for issuers, investors and regulators”.
/jlne.ws/2OsQtDV

China Cuts U.S. Treasury Holdings for Third Straight Month
Randy Woods and Katherine Greifeld – Bloomberg
The Asian nation reduced ownership by $5.9 bln to $1.165 tln; Saudi Arabia increased its holdings to a record $170 bln
China’s holdings of U.S. Treasuries fell for a third consecutive month in August as the Asian nation struggles to prevent the yuan from weakening amid trade tensions with America.
/jlne.ws/2OsAd5y

Brexit

The Sticking Points to a Brexit Deal; As the clock ticks toward the deadline, here’s what is dividing the two sides
Stephen Fidler and Mark Kelly – WSJ
The U.K. is set to leave the European Union in March 2019. But as the clock ticks down to that deadline, the two sides still can’t agree on the terms of their separation.
/jlne.ws/2Ot722l

Brexit Provides Early Proof of Deglobalization’s Costs; A study comparing Britain to peer economies finds its output is 2.1% below what it would be without Brexit
Greg Ip – WSJ
For outsiders, Brexit has the feel of a long-running soap opera: a mash-up of plot twists and tragic characters loaded with entertainment value but not much significance if you’re not British.
/jlne.ws/2Oy3L21

Citi Says Good News Is That U.K. Banks Priced In No-Deal Brexit
Ksenia Galouchko – Bloomberg
While the world watches Brussels tonight to see if there will be a deal or no-deal in Brexit talks, investors in U.K. bank stocks aren’t waiting around. They’re already hedging their bets by partially pricing in a worst-case scenario, according to Citigroup Inc.
/bloom.bg/2NIU4Zf

Former U.K. Prime Minister John Major Rips Into Brexit Hardliners
Robert Hutton – Bloomberg
Former prime minister aims his attack at Boris Johnson; He says those who campaigned to leave EU won’t be forgiven
Former U.K. Prime Minister John Major is back on the warpath, laying into Brexiters in his own Conservative Party and warning them that voters won’t forgive them for making promises “that will never be delivered” about life outside the European Union.
/jlne.ws/2OyDzEb

Barnier open to extending Brexit transition by one year to 2021; In return, Theresa May must accept ‘two-tier’ backstop to avoid a hard Irish border
Mehreen Khan in Brussels, Arthur Beesley in Dublin and George Parker in London – FT
Michel Barnier has said he is open to a one-year extension to Britain’s Brexit transition if UK prime minister Theresa May accepts a “two-tier” backstop to avoid a hard border in Northern Ireland, in a move welcomed by Dublin.
/jlne.ws/2OuBnO4

Miscellaneous

Wall Street research firm Autonomous is embroiled in a lawsuit over claims of gender-pay discrimination and retaliation — and it’s getting uglier
Alex Morrell – Business Insider
Another Wall Street firm has found itself in a heated court battle over allegations of sexism.
/jlne.ws/2OvKvlE

The Titanic’s Legacy Is Likely to Belong to Hedge Funds Soon; Salvaged artifacts have been the focus of a tussle over who gets to own a part of the ocean liner’s history. They’re worth $19.5 million, at least.
By Amie Tsang – NY Times
Some of the richest people in the world lost everything when the Titanic sank. Now a consortium of new-money risk takers is poised to profit from turn-of-the-20th-century artifacts that curators had hoped to claim.
/jlne.ws/2OyJoBx

The post SEC Rules NYSE, Nasdaq Didn’t Justify Market Data Fee Increases appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

FIA Expo, which began Wednesday, is an international conference, with participants coming to Chicago from all over the world, so of course Brexit and reconciliation of EU and US rules were big topics.

CFTC Chairman Christopher Giancarlo woke up the crowd when he criticized the EU’s planned EMIR amendments, calling them “unprecedented and wholly unacceptable.” He said he hoped to be able to negotiate changes, but held out the threat – if that doesn’t work – of stopping EU banks from using US exchanges. ~SR

The Exchange Leaders panel was lively, with Nasdaq CEO Adena Friedman giving a solid and transparent explanation of the 107 million-euro ($125 million) loss on the exchange’s Nordic power market. Hong Kong Exchanges and Clearing Limited CEO Charles Li received audience applause for his extended metaphor calling the relationship between China and the US “an unnecessary divorce.” He said, “There are ways to sort this out; let’s sleep in different bedrooms, and don’t slap people in the face because it can lead to something nobody wanted.”~SR

At the Meet The Innovators Panel, six judges from the financial and technology industries reviewed presentations by five innovators culled from a larger group of 40. First up was Drawbridge Lending, which plans to offer cash loans secured by digital assets, with the loans hedged using futures and options products. FreightWaves, started by a former trucker, has created a “market dashboard” providing fundamental transportation data that will allow companies to hedge their transportation costs in what he believes is an incredibly fragmented market. iComply offers a crypto solution to know your customer problems for companies who want to launch a token, and MSR Indices plans to bring transparency, liquidity and lowered costs to investable indexes with a library of algorithms from which people can create custom indices. Finally, Tookitaki, which means “hide and seek” offers a solution to “huge inefficiencies” in reconciliation and anti-money laundering issues using both supervised and unsupervised self-learning. It promises a 50 percent improvement in reconciliation matching and 99 percent accuracy in detecting breaks in reconciliation. The winner will be decided later today.~SR

FIA CEO Walt Lukken in his opening comments said “our markets are not defined by borders—they are defined by the ingenuity and determination of buyers and sellers—no matter their location.”~JJL

FIA CEO Walt Lukken had his required Pat Kenny reference in his first 5 minutes in opening comments at FIA EXPO, maybe in the 3rd sentence.~JJL

Here is a picture of the hardy softball players who participate in the CQG charity softball game in support of FIA Cares.~JJL

Modern Trader Magazine, formerly Futures Magazine, has not published a new issue since June of this year.~JJL

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FIA Statement on Basel Committee’s Consultation on Capital
FIA
FIA President and CEO Walt Lukken today made the following statement regarding the Basel Committee on Banking Supervision’s announcement of a consultation on the leverage ratio treatment of client cleared derivatives:
/jlne.ws/2J2uUUr

***** Written with a straight face~JJL

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The Onion’s Guide To Blockchain Technology
The Onion
Blockchain technology forms the foundation for cryptocurrencies such as Bitcoin, Dogecoin, and Ethereum, but it can be difficult to understand how it actually works. The Onion answers common questions about blockchain technology.
/jlne.ws/2OAJPeU

***** Not written with a straight face.~JJL

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Wednesday’s Top Three
The top read story yesterday was about the curious case of Don Wilson v. the CFTC, which is now five years old. Crain’s Chicago Business’ Could a ruling in CFTC v. DRW finally be in the offing? was our top story of the day. Second was the The Wall Street Journal’s SEC Ruling Takes Aim at Stock-Exchange Profits. This might make some traders happy and some exchanges mad. The third most read piece was Crain’s observation that the banking street in Chicago is losing its banks in Chicago financial district poised for big change as banks exit

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MarketsWiki Stats
133,871,324 pages viewed; 23,294 pages; 215,245 edits
MarketsWiki Statistics

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Lead Stories

US threatens to bar EU banks from exchanges; CFTC escalates dispute over Brussels’ attempt to impose oversight of clearing houses
Philip Stafford in London – FT
One of the US’s top regulators has threatened to stop European banks from using US futures markets if the EU refuses to water down post-Brexit plans to oversee clearing houses.
/jlne.ws/2OACTy7

Libor-Rigging Guilty Verdicts Bolster U.S. Bid to Punish Traders
Chris Dolmetsch – Bloomberg
Two ex-Deutsche Bank traders face prison after jury convicts; Duo tried to manipulate key benchmark to aid trading positions
A U.S. crackdown on the people who rigged key financial-market benchmarks suffered a stinging setback last year when an appeals court tossed out the conviction of two former Rabobank Groep traders.
/jlne.ws/2OxpNBF

Bank of America Is Missing Out on Wall Street’s Boom; A decade after its Merrill Lynch purchase, the bank struggles with investment banking unit
Rachel Louise Ensign and Liz Hoffman – WSJ
Bank of America Corp.’s BAC 1.30% purchase of Merrill Lynch & Co., struck on the panic-filled 2008 weekend that Lehman Brothers failed, was supposed to make the lender a top-flight global investment bank.
/jlne.ws/2Ovfyhf

Bitcoin Trades at $300 Premium on Controversial Crypto Exchange
Olga Kharif and Matthew Leising – Bloomberg
Bitfinex suffers from lack of transparency surrounding Tether; Exchange temporarily paused fiat currency deposits last week
Bitcoin continues to trade at nearly a $300 premium on the Bitfinex cryptocurrency exchange compared with rival platforms on speculation traders are dumping the so-called stable coin Tether in favor of the world’s largest cryptocurrency.
/jlne.ws/2J43u0w

Lessons from two commodity defaults; Regulators and exchanges need to learn from the Greenhat/PJM and Norwegian Nasdaq defaults
Vincent Kaminski – Risk.net
The energy markets on both sides of the Atlantic have been recently roiled by two cases of default related to large size trading positions taken by relatively small firms. The two events took place in markets of different design and operating under different regulatory regimes, but they share many commonalities and offer useful lessons to commodity traders and risk managers.
/jlne.ws/2OwxtnS

Goldman Wades Deeper in Crypto, Betting on BitGo With Billionaire Mike Novogratz
Lily Katz – Bloomberg
Startup guards digital currencies for institutional investors; Bank calls custody a ‘logical precursor’ to market making
Goldman Sachs Group Inc. and a venture founded by one of its former partners, billionaire Mike Novogratz, are investing in cryptocurrency custodian BitGo Holdings Inc., as the bank’s deep-pocketed clients keep asking about secure ways to hold those assets.
/jlne.ws/2OuyY5S

Invesco to Buy OppenheimerFunds from MassMutual; Asset manager also reports increase in profit, stock buyback
Nick Kostov – WSJ
Invesco Ltd. said Thursday it has agreed to buy rival money manager OppenheimerFunds Inc. for roughly $5.7 billion in stock from Massachusetts Mutual Life Insurance Co.
/jlne.ws/2J87368

EU derivatives market valued at EUR660 trillion; Steven Maijoor says EMIR clearing obligation is working as data shows derivatives clearing rates are increasing significantly.
Hayley McDowell – The Trade
The derivatives market in the European Union has been valued at EUR660 trillion, with interest rate derivatives dominating the market
/jlne.ws/2J8bwWo

Exchanges, OTC and Clearing

“We made the industry much safer” – FIA Expo wrap-up (part I)
Eurex
Lately, clearing is the center of everything. No wonder, as it is only a few weeks ago that we as an industry remembered the tenth anniversary of the Lehman default. Central counterparties (CCP) have been making headlines ever since. During the first day of the 34th Annual Futures & Options Expo in Chicago, clearing even accounted for the major part of the exchange leaders panel that our CEO Thomas Book spoke at.
/jlne.ws/2J37Q8c

Eurex Clearing CloudPME – increased margin transparency, no entry barriers, free-of-charge
Eurex
Just imagine you could use a free-of-charge open access, margin estimation service. Good news is, you can! Eurex now enables clients and prospective clients to calculate their portfolios under the Prisma margin methodology. We spoke to Andreas Franke, Head of Unit, Risk Methodology OTC, about this new service offer.
/jlne.ws/2J385jC

New Liquidity Provider scheme for Three-Month SARON® Futures
Eurex
Effective 29 October 2018, the following measures of Eurex Clearing will come into effect:
/jlne.ws/2J5bWwE

Money market derivatives: New Liquidity Provider scheme for Three-Month SARON® Futures
Eurex
This circular announces a new Liquidity Provider (LP) scheme for Three-Month SARON® Futures. The new scheme will run from 29 October 2018 until 31 December 2020.
/jlne.ws/2J4TofR

STOXX® licenses Global Fintech Index to Sumitomo Mitsui Asset Management
Deutsche Börse Group
STOXX Ltd., operator of the index business of Deutsche Börse Group and a global provider of innovative and tradable index concepts, has licensed the STOXX Global Fintech Index as the basis for an investment fund to Sumitomo Mitsui Asset Management.
/jlne.ws/2J3sJA1

LSEG’s Turquoise cuts rebates as maker-taker debate in the US rages on
Hayley McDowell – The Trade
The London Stock Exchange Group’s (LSEG) multilateral trading facility (MTF) Turquoise is set to cut rebates on its lit order book, while maker-taker pricing on exchanges in the US continues to be the subject of critical debate.
/jlne.ws/2OwQaaY

CME Group saw a 41% increase in average daily volume for bitcoin futures in Q3 2018
Steven Zheng – The Block Crypto
The financial derivatives marketplaces announced that the average daily volume for bitcoin futures grew from 3,577 in Q2 2018 to 5,053 in Q3 2018, a 41% increase. CME Group also saw a 19% increase in open interest for its bitcoin futures from 2,405 in Q2 2018 to 2,873 in Q3 2018. (Source: CME Group)
/jlne.ws/2J3vjWX

Shares of US exchanges slip as data fees battle intensifies; Rebuke from regulator signals tougher line on bourses and backing for banks
Philip Stafford in London, Nicole Bullock in New York and Kadhim Shubber in Washington – FT
Shares of US stock exchanges fell after regulators sided with banks and took aim at the fees the exchanges charge for valuable data on the world’s biggest equity market.
/jlne.ws/2Ovd3Ma

NYSE Responds to SEC Decision on Certain Market Data Fees
ICE
Following the SEC decision regarding market data fees relating to NYSE Arca book, as published on October 16, the NYSE has put forward its official statement on the matter:
/jlne.ws/2OtHVMS

PanXchange Celebrates Anniversary of Frac Sand Launch; October 2018 Marks Many Milestones for the Company
PanXchange via Medium
?This month, PanXchange (PX), a Denver-based OTC physical commodity exchange and a market structure solutions provider, marks its one year anniversary since going live in the physical frac sand market.
/jlne.ws/2J58phC

SIX completes shut down of SLS block trading platform; SIX Swiss Exchange decommissioned its SLS dark pool for block liquidity launched in partnership with Liquidnet on 15 October.
Hayley McDowell -The Trade
SIX Swiss Exchange Group has decommissioned its dark pool for block liquidity launched in partnership with Liquidnet for the buy-side in 2011.
/jlne.ws/2J4BeuW

Fintech

Can This Blockchain-Based Fintech Disrupt International Payments After $30M Exchange IPO?
Roger Aitken – Forbes
Australian fintech company Identitii that enables the secure overlay of “transaction-level” detail on top of financial messages using a private blockchain, commenced trading on the Australian Stock Exchange (ASX) today in an initial public offering (IPO) that put a market capitalization of A$41 million (c$29.23 million) on the business.
bit.ly/2NJXcE8

What The IoT Can Learn From Fintech
Michael Babushkin – Forbes
We are still only scraping the surface of what we have to learn and gain from the internet of things (IoT). Conversely, the IoT also has much to learn from other industries to make its vast task simpler. Collecting, processing, compressing, storing and retrieving data is an intrinsic part of the IoT, yet some industries, such as the financial technology (fintech) industry, have been in the business of carrying out those functions for years, even decades. I believe it is time for the IoT people to talk to and learn from the experience of those other industries.
bit.ly/2NQ2mOO

Challenges in fintech regulation
Teresa Donnellan – SmartBrief
The changing regulatory needs of the financial services industry and the potential of regulatory sandboxes were discussed by regulators and fintech representatives alike at the Fintech Ideas Festival Policy Series in Washington, D.C., last week.
bit.ly/2NNJHmL

No need to fight over the OCC’s fintech charter
Brian Knight – American Banker
The Office of the Comptroller of the Currency’s decision to move forward with a new banking charter to benefit certain lenders and money transmitters that utilize innovative technology and do not accept federally insured deposits (the so-called “fintech charter”) has been controversial to say the least. Both sides’ arguments have merit and acknowledging each of them points toward a way to resolve the bank wars that have bedeviled efforts to modernize regulation.
bit.ly/2NKOV2B

Bank Regulator Sees Action on Fintech Charters in Mid-2019
Bloomberg
The Office of the Comptroller of the Currency should be ready to approve or deny bank charters for fintech companies by the middle of next year, agency chief Joseph Otting said Oct. 17.
bit.ly/2NKPIAB

Fintech bolsters Bahrain’s bid to revive finance hub status; The kingdom is trying to carve out a niche amid tough competition from regional rivals
Simeon Kerr – FT
Bahrain rose to prominence as a financial centre during Lebanon’s civil war more than 30 years ago, usurping Beirut as regional hub by positioning itself as a global offshore banking centre with easy access to Saudi Arabia. But Dubai wrested this position from the kingdom a decade ago. “Dubai stole the services sector away from Bahrain,” in the words of one banker.
/jlne.ws/2P9cK5R

Goldman Sachs, Two Sigma and Citi invest further $20 million in data science startup; Crux Informatics closes second funding round raising $20 million from Goldman Sachs, Two Sigma and Citi.
Hayley McDowell – The Trade A data science and engineering startup has secured a further $20 million investment from Goldman Sachs, Two Sigma and Citi in a second funding round.
/jlne.ws/2J3RDQ9

Cryptocurrencies

DTCC Test Shows Blockchain Can Support 100m Trades Per Day
David Kimberley – Finance Magnates
The Depository Trust & Clearing Corporation (DTCC), a post-trade market infrastructure provider for the financial services industry, announced the results of a benchmark study on Wednesday which demonstrated for the first time ever that distributed ledger technology (DLT) is capable of supporting average daily trading volumes in the US equity market of more than 100 million trades per day.
bit.ly/2NLXXg0

Blockchain media startup Civil is issuing full refunds to all buyers of its cryptocurrency
Kate Clark – TechCrunch
Many doubted The Civil Media Company’s ambitious plan to sell $8 million worth of its cryptocurrency, called CVL. The skeptics, as it turns out, were right. Civil’s initial coin offering, meant to fund the company’s effort to create a new economy for journalism using the blockchain, failed to attract sufficient interest. The company announced today that it would provide refunds to all CVL token buyers by October 29.
/tcrn.ch/2yrzUxX

No one knows what Civil’s failed token sale means
Russell Brandom – The Verge
Yesterday, the world’s most ambitious media blockchain company had a very public embarrassment. It was the last day of a public token sale for the Civil Foundation, a media project using blockchain to launch a new generation of ad-free media startups. But when it came time to sell the token at the center of it all, the project came up short.
bit.ly/2P8G6EA

Prestigious Accounting Association Takes On Blockchain Technology
Andrea Tinianow – Forbes
There is global interest in what a shared distributed ledger means for the accounting industry. With more than 7,000 members worldwide, one need look no further than the American Accounting Association — the premier organization of accounting academics—for proof.
bit.ly/2NN9lbs

Can This Blockchain-Based Fintech Disrupt International Payments After $30M Exchange IPO?
Roger Aitken – Forbes
Australian fintech company Identitii that enables the secure overlay of “transaction-level” detail on top of financial messages using a private blockchain, commenced trading on the Australian Stock Exchange (ASX) today in an initial public offering (IPO) that put a market capitalization of A$41 million (c$29.23 million) on the business.
bit.ly/2QXTVmv

Essential Advice for Businesses Considering the Blockchain
Robert Hackett – Fortune
Blockchain technology began with Bitcoin, but it has since been coopted by businesses as the preferred brand name for all sorts of cryptographically spruced up databases. Just about every corporate innovation program is experimenting with, or at least eyeing, the trend—look, boss, we’re innovative! But how should companies really approach the technology, if at all?
/for.tn/2QX5r1x

How Savvy Crypto Traders Gamed Coinbase’s Latest Listing for a 35% Payday
Sam Ouimet – Coindesk
If there’s money to be made in the crypto markets, you can bet traders will be the first on the scene. Such was the case at least last week, when Coinbase Pro, the cryptocurrency trading platform operated by San Francisco startup Coinbase, announced it would list the cryptocurrency 0x (ZRX), a move that put the “Coinbase effect” on display when ZRX surged nearly 40 percent on the news.
bit.ly/2AfRztH

Politics

There’s a Lot of Gasoline, But Not Enough for Trump; Pump prices are stubbornly high just ahead of the midterms, despite a surge of fuel in storage.
Liam Denning – Bloomberg
Some good news for President Donald Trump ahead of the midterm elections: There is plenty of gasoline sitting around. Some bad news: Average pump prices are still almost $3 a gallon. Some worse news: Pump prices have more to do with Middle East intrigue than Midwest inventory.
/jlne.ws/2OzyX0L

Trump’s Crackdown on Leaks Snares Senior Treasury Official
Saleha Mohsin , David Voreacos , and Tom Schoenberg – Bloomberg
Manafort, Rick Gates, Russian Embassy files given to reporter; Most recent article tied to leak was published Monday
President Donald Trump’s hunt for leakers in his administration snared a senior Treasury Department employee who was charged with giving a journalist bank records about suspicious transactions involving Paul Manafort, Rick Gates, and accused Russian agent Maria Butina.
/jlne.ws/2OzyNGH

Donald Trump is destroying the American brand
Matt Bai – National Political Columnist,Yahoo News
Before he was treasury secretary, Steve Mnuchin was a movie producer, so maybe he’d appreciate that when I think about him showing up at this “Davos in the Desert” confab in Saudi Arabia next week, my mind goes to “Lost in Translation,” the film with Bill Murray and Scarlett Johansson.
/jlne.ws/2J5fOOb

Twitter releases 10m tweets from fake news probe; Social media group publishes cache to allow independent analysis by researchers
Camilla Hodgson in London – FT
Twitter announced on Wednesday it had released a data cache of more than 10m tweets from accounts suspected of being involved in disinformation campaigns, to allow it to be independently investigated.
/jlne.ws/2OtJ334

Saudi Arabia is putting money in Trump’s pocket. Is that shaping U.S. policy?
Paul Waldman – The Washington Post
As hard as it is to resist writing about the fact that on Tuesday the president of the United States called the adult film actress to whom he paid hush money “Horseface,” I want to focus on a different aspect of this presidency that we’re seeing play out right now.
/jlne.ws/2OtFXfv

Trump Attacks the Weak Link Powell Can’t Ignore in Fed Rate Plan
Rich Miller – Bloomberg
President questions why rates are rising when inflation is low; Fed chair says inflation may not be best signal of overheating
Donald Trump has attacked the soft underbelly of the Federal Reserve’s campaign to raise interest rates, exposing what Jerome Powell himself probably recognizes is a potential vulnerability.
/jlne.ws/2OuXZOD

Bank Push for Benchmark-Rate Delay Makes Headway in Brussels
Alexander Weber and Silla Brush – Bloomberg
EU parliament, member states consider extending life of Eonia; Rider on extension may be attached to carbon benchmarks bill
Banks are finding allies in Brussels with their call for extra time to adopt a new euro benchmark lending rate as Europe tries to put a spate of rigging scandals behind it.
/jlne.ws/2Oyp96U

Regulation

U.S. watchdog threatens retaliation over EU clearing rules
Michelle Price and Huw Jones – Reuters
U.S. banks and securities houses could be barred from trading on exchanges in the European Union if the bloc refuses to water down “irresponsible” proposals for regulating foreign clearing houses, a top U.S. regulator said on Wednesday.
/jlne.ws/2OvgLVP

Stamford hedge fund co-founder charged with defrauding investors of $19.6M
Kevin Zimmerman – WestFairOnline.com
Jason Rhodes, co-founder of Stamford hedge fund Sentinel Growth Fund Management, was arrested on Oct. 16 on conspiracy, securities fraud, wire fraud and investment adviser fraud charges.
/jlne.ws/2OtF1I1

Investment Fund Co-Founder From Area Charged In Multi-Million Dollar Fraud
Zak Failla, Joe Lombari – DailyVoice.com
The former co-founder of a multi-million dollar hedge fund is facing charges claiming that he lied to his investors and misappropriated nearly $20 million as part of a Ponzi scheme.
/jlne.ws/2Oxlw1m

SEC mulls consultation on easing quarterly reporting rules
Katanga Johnson – Reuters
The U.S. Securities and Exchange Commission (SEC) said in a notice that it will consider seeking public comment on ways to ease the quarterly reporting burden on publicly listed companies.
/jlne.ws/2OxqhHZ

The Treasury’s currency report was all about China.
Colby Smith
For the fourth time, the Treasury department has denied President Trump what he wants: to label China as a currency manipulator.
/jlne.ws/2J5hfvY

Former Deutsche Bank traders found guilty in Libor rigging case; New York jury convicts pair in victory for US justice department
Kadhim Shubber in Washington – FT
Two former Deutsche Bank traders were found guilty on Wednesday for their role in rigging the Libor benchmark rate.
/jlne.ws/2J2oNQ2

Risk of Bank-Like Regulation Fades for Big Financial Firms; The federal council overseeing financial stability rescinded oversight of Prudential Financial
Ryan Tracy – WSJ
U.S. regulators released Prudential Financial Inc. PRU 1.91% from federal oversight Wednesday, the strongest signal yet that the risk of heightened post-financial-crisis supervision is fading for firms outside the banking sector.
/jlne.ws/2J8b6zi

ASIC cancels AFS licence of retail OTC derivative issuer Direct FX Trading Pty Ltd* for serious compliance failures
ASIC
ASIC has cancelled the Australian financial services (AFS) licence of Direct FX Trading Pty Ltd (AFS licence 305539) (Direct FX) following serious and continued compliance failures.
/jlne.ws/2J6nf7M

ASIC updates guidance as crowd-sourced funding regime extends to proprietary companies
ASiC
ASIC has released updated regulatory guides to coincide with the extension of the crowd-sourced funding (CSF) framework to eligible proprietary companies. This starts on 19 October 2018.
/jlne.ws/2J5RDiq

ESMA data analysis values EU derivatives market at EUR660 trillion with central clearing increasing significantly
ESMA
The European Securities and Markets Authority (ESMA) today publishes its first Annual Statistical Report (Report) on the European Union’s (EU) derivatives markets. The Report, based on data submitted under the European Markets and Infrastructure Regulation (EMIR), provides the first comprehensive market-level view of the EU’s derivatives markets, which in 4Q17 amounted to EUR660tn of gross notional outstanding transactions.
/jlne.ws/2J4BR7M

SEC Announces 2018 Government-Business Forum to Be Held at The Ohio State University
SEC
The Securities and Exchange Commission today announced it is partnering with the National Center for the Middle Market at The Ohio State University Max M. Fisher College of Business to host the SEC’s annual Government-Business Forum on Small Business Capital Formation on Dec. 12. This annual forum provides a platform to highlight additional measures to improve small business capital formation.
/jlne.ws/2J7crpK

Remarks of Chairman J. Christopher Giancarlo at FIA Expo Chicago, Illinois; “A Week in the Life of the CFTC”
CFTC
Thank you. I especially want to thank the organizing committee, Walt Lukken, and the rest of the speakers. Thank you for the invitation to speak here. This expo is advertised as the “hub” of the derivatives and swaps universe. Indeed, it is, and I am pleased to have this time with you.
/jlne.ws/2J9Tx1T

CFTC Chairman Giancarlo Announces Sponsors for Advisory Committees
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo announced today that Commissioner Dawn Stump will sponsor the Global Markets Advisory Committee and Commissioner Dan Berkovitz will sponsor the Energy and Environmental Markets Advisory Committee.
/jlne.ws/2J4BWIC

Investing and Trading

Are Jumpy U.S. Equities Hiding a Nasty Surprise?; Investors have started to take notice of rising interest rates.
Peter Coy – Bloomberg
It was quiet out there in the markets—spooky quiet. All five of the calmest quarters for U.S. stocks in the past 20 years have occurred since the start of 2017. Then came Oct. 10-11, when markets were hit by a storm that came out of the clear blue sky. The S&P 500 fell 5.2 percent over two days. That represented the fifth-biggest increase in volatility in the almost 90-year history of the index and its predecessors, according to Rocky Fishman, a Goldman Sachs Group Inc. equity derivatives strategist.
/jlne.ws/2OtGvlz

Investors Are Digging Gold Again; The ascent of companies like Barrick Gold, AngloGold Ashanti and Acacia Mining marks a turnaround from recent episodes of jittery markets
Riva Gold – WSJ
In times of market turmoil, investors often embrace gold. And when that happens, gold-mining stocks tend to do even better.
/jlne.ws/2J2pKrA

Institutions

Is Your Bank Ready For The Next Crisis?
William Baldwin – Forbes
Equity makes banks stable. Maybe we should go all out with 100% equity. The campaign for financial deregulation should have you worried. Is bank supervision tight enough to prevent another meltdown? Is it loose enough to let the economy grow? The Trump Administration will tell you that it is scoring on both counts, but you may harbor doubts.
/jlne.ws/2OyEMLK

Danske Bank forced to resume CEO search after regulator’s rejection
Stine Jacobsen – Reuters
Danske Bank (DANSKE.CO), reeling from a money laundering scandal, will resume its search for a new chief executive after a Danish regulator rejected its internal candidate for the job, and analysts said it would be forced to look outside the bank.
/jlne.ws/2OuX14X

Prudential Financial taken off US ‘too big to fail’ list; Ending of extra-close supervision further undermines Obama-era post-crisis regulation
Alistair Gray in New York – FT
Washington is ending its “too big to fail” supervision of Prudential Financial, further undermining the post-crisis financial regulatory regime introduced by former President Barack Obama.
/jlne.ws/2OAErbp

HSBC Gears Up for China Listing Through Shanghai-London Link
Benjamin Robertson , Alfred Liu , and Viren Vaghela – Bloomberg
Bank is first U.K. firm to confirm interest in program; Trading link will let companies cross-list in each market
HSBC Holdings Plc is examining plans for the upcoming Shanghai-London trading link, a move that could see Europe’s largest bank list shares in China.
/jlne.ws/2OypyWY

Goldman and Morgan Stanley Want to Lend the Ultra-Rich More Money
Sonali Basak – Bloomberg
Banks multiplied the size of their private-bank loan books; Goldman says it’s hiring for international lending push
For Goldman Sachs Group Inc.’s millionaire clients, it can take the firm 5 minutes to underwrite a loan to start a new business or pay down taxes. At Morgan Stanley, bankers are keen to give you bridge financing so you can bid for your mansion in cash.
/jlne.ws/2Ox44Kp

Edward Lampert, the Hedge-Fund Star Who Bet on Sears, Is Unrepentant; He made billions for investors in his ESL Investments fund by bucking naysayers. At the storied American retailer, his instincts proved wrong.
Suzanne Kapner, Rachael Levy and Juliet Chung – WSJ
A day after Sears Holdings Corp. filed for bankruptcy protection, the hedge-fund manager who bet his career on the retailer addressed nearly 1,000 employees gathered at its somber headquarters.
/jlne.ws/2J8aVE8

Regions

The Table Is Rigged Against Macau Stocks; Shares in major casino operators in the world’s largest gambling market have been tumbling, but it isn’t time for investors to up their bets
Jacky Wong – WSJ
Investors have been folding their Macau bets: It’s too early to return to the table. Shares of casino operators in the world’s largest gambling market have lost more than a third of their value, or $52 billion, since May. Their valuations, in terms of enterprise value to expected earnings before interest, taxes, depreciation and amortization, are close to levels last seen during the previous trough, when China’s anticorruption campaign drove high rollers away from the city: Macau’s gambling revenue dropped for 26 consecutive months from 2014 to 2016.
/jlne.ws/2OyElRC

What Sanctions? Russia’s Richest Are Biggest Winners This Year
Alexander Sazonov and Jack Witzig – Bloomberg
The country’s wealthiest have expanded their fortunes by 10.8%; U.S. top 10 are second, as Chinese billionaires slump
The mood among the average Russian may be souring with inflation eating into their purchasing power, but the country’s richest are world beaters when it comes to making money.
/jlne.ws/2J6jkI6

China Stock Market Rocked by Forced Sellers; Yuan Hits Fresh Low
Bloomberg News
‘Extreme pessimism’ is pervading the market, fund manager says; Shanghai Composite Index has dropped about 30% since January
Chinese shares extended the world’s deepest slump and the yuan touched its weakest level in almost two years, testing the government’s ability to maintain market calm as risks mount for Asia’s largest economy.
/jlne.ws/2J5VRa7

U.S. to Triple Emergency Swap Line for Mexico to $9 Billion
Andrew Mayeda and Eric Martin – Bloomberg
Swap line can be used as loan if Mexico faces financial stress; Mexico has had $3 billion swap line with Treasury since 1994
The U.S. Treasury plans to triple the size of an emergency swap line for Mexico to $9 billion, giving the Latin American nation more of a financial cushion as emerging markets come under pressure from rising U.S. interest rates. The peso pared its losses.
/jlne.ws/2Ovi86V

Brexit

Brexit Has 4 Possible Endgames. They All Carry Costs
Robert Skidelsky – Barron’s
The United Kingdom’s “Remainers,” who still hope to reverse Britain’s decision to leave the European Union, have placarded British cities with a simple question: “Brexit—Is It Worth It?” Well, is it?
/jlne.ws/2J3MOGx

Brexit Talks Stall At ‘Moment Of Truth’ Summit : NPR
Merrit Kennedy – NPR
As U.K. Prime Minister Theresa May meets with EU leaders in Brussels, a deal for her country’s imminent departure from the trade bloc appears far out of reach.
“We need much time, much more time and we continue to work in the next weeks,” EU Brexit negotiator Michel Barnier said Wednesday, according to The Associated Press.
/n.pr/2NMdgVR

‘Brextra time’: what the papers say about PM’s Brussels cameo
Kate Lyons – The Guardian
News that Theresa May might be prepared to delay Britain’s departure from the EU until the end of 2021 has caused fury on the front pages of several newspapers today.
The Daily Mail is scathing: “Another year in Brexit limbo?”, asks the paper’s shrill headline, reporting that the “PM ‘could make UK wait even longer’ to avoid no-deal cliff edge (but we’d have to keep paying EU billions)”. The Mail says delaying leaving the bloc until the end of 2021 means it won’t happen until “five and a half years after the vote to leave”.
bit.ly/2NOgE2m

How Brexit killed tolerance; ‘Once you become truly obsessed, you cannot accept that a dissenting view might have been rationally reached’
Robert Shrimsley – FT
We have, it seems, reached the final circle of Brexit hell. After years of living with extreme Brexiters, we now face the depressing phenomenon of masses of rabid Remainers. Brexit has taken us to a place where the moderates have become militant, the liberals illiberal and the sensible rendered senseless by rage.
/jlne.ws/2OtNriF

The post US threatens to bar EU banks from exchanges appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The winner of the Innovator of the Year Award at FIA Expo 2018 was FreightWaves, the company that is creating the first Trucking Freight Futures contracts to help bring hedging to transportation costs, primarily for agricultural companies. Congratulations to the company and to its founder, Craig Fuller. Interestingly, this is the second year in a row that the winner was an “agtech” company (last year’s winner was Tellus Labs). It’s also the third year in a row that Chuck Mackie has correctly predicted the winner.~SR

Speaking of Chuck Mackie, here is his writeup of Day 1 of FIA Expo, for Maven Wave. He did a great job of covering Wednesday’s conference lineup.~SR

An Expo panel on swaps reform Thursday asked the question, “Has the CFTC achieved its stated goal with the rules laid down in the 2010-2014 period?” Answers from the panelists were mixed, but in general they agreed with the audience poll that answered, “Partially, but there are still some regulatory changes needed.”

Michael O’Brien of Eaton Vance said that in execution, nothing has really changed. “Execution was already becoming more electronic even before SEFs [were mandated].” He also said that the industry in the US has achieved much on the clearing side, but less on the trading side.
Citadel’s Stephen Berger said we have mostly achieved the goal – the rules could just use a little fine tuning. The changes have made markets more stable and resilient, and “the price-discovery process has been completely revolutionized for the buy side,” he said.

Optiver’s Sebastiaan Koeling said transparency is not fully where we’d like it to be, especially in the FX space, but risk has gone down somewhat with the move into clearing houses.

The cross-border aspect of how to execute trades has been complex and difficult. There is also much work to do on the reporting side and in achieving better post trade dissemination of data. And for some firms, dealing with swap registration rules is a challenge. O’Brien said we haven’t seen as much innovation in SEFs as we have in other fixed income areas, such as Treasuries and FX.~SR

JLN intern Matt Raebel attended several crypto-related sessions at Expo on Thursday and here are a few of his takeaways:

• Tom Jessop of Fidelity Investments said that the company started seriously considering getting into crypto after “holders of a lot of bitcoin” (AKA “bitcoin whales”) began approaching them asking for investment services during “Digital Assets: The Institutional Investor Perspective.”
• The second and final full day of the FIA expo was the one with all the talks on digital assets. It was also the one with lower attendance.
• JB Mackenzie of TD Ameritrade said during the FIA presentation, “Digital Assets: The Big Picture” that he wants to improve user interfaces for digital asset training so that they’re as intuitive as Facebook. Anything involving crypto trading designed to be as addictive as my newsfeed seems like a terrifying concept.
• Thanks to pot stocks, this year was the first expo I’ve been to where a booth was giving out lighters as swag.
• Someone (Jump Trading’s Dave Olsen) finally asked Bakkt CEO Kelly Loeffler the crucial question: will you finally be able to buy pumpkin spice lattes with bitcoin? Loeffler said yes, and Bakkt will even help you figure out how to pay taxes on bitcoin. You could probably make a whole business just out of that last part.

A few digital takeaways from Jim Kharouf:

• Do you know what BATs are? Answer: Basic Attention Tokens, which reward users for looking at a product, information or service. And here you thought it was Better Alternative Trading System.
• Don Wilson, CEO of DRW, took aim at old narratives about cryptocurrencies, noting the idea that: “‘The only people who use these are criminals’ – that is a fringe view today.”
• Josh Stein, CEO of Harbor, said his firm is working on digital asset tokens for the REIT market, allowing for much easier buying and selling of private real estate assets.
• Tim Grant, CEO of DrumG, noted that his firm is working with large banks on blockchain projects that involve market data. “You will see real utilities used at your institutions,” he said.

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Japan’s Financial Services Agency Appoints Mr. Leo Melamed, Chairman Emeritus Of The CME Group, As The FSA Advisor
Mondovisione
The FSA has appointed Mr. Leo Melamed, Chairman Emeritus of the Chicago Mercantile Exchange (CME Group), as the FSA advisor.
bit.ly/2NPVWiE

***** Exiting the CME Group board has given Leo Melamed more time to pursue other opportunities.~JJL

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SEC Launches New Strategic Hub for Innovation and Financial Technology
SEC
The U.S. Securities and Exchange Commission today announced the launch of the agency’s Strategic Hub for Innovation and Financial Technology (FinHub).
bit.ly/2NPIaNc

***** The folks at the CFTC’s LabCFTC say welcome.~JJL

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The heyday of the ugly American; Not only is the US going in the wrong direction, it’s becoming a danger to global order
Edward Luce – FT
Criticisms of the US always have a slightly edgier quality when they come from a Brit. From time to time an American reader emails me to point out that there are more than enough problems in my own country. To which I wholeheartedly agree. But I live in America not Britain. Occasionally, an uncharitable reader misreads a post-colonial hauteur in my writing. More likely I haven’t expressed myself clearly enough. So let me declare this before I make my larger point (for fear it’ll be misinterpreted as anti-American): I fervently want America to succeed; I don’t think any other country has the same ability, or legitimacy, to uphold a global system of rules. Indeed, I doubt that any desirable international order will be possible if the US goes Awol. While I’m on a roll let me also fantasise that had I been a resident of one of the 13 colonies in 1776, I would’ve fought the redcoats. At least, I like to think so. Perhaps I have seen too many movies. At any rate, I’ve spent more of my adult life in the US than Britain so I’ve established some standing.
/on.ft.com/2pZCHtJ

***** Edward Luce is always a good read.~JJL

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Thursday’s Top Three
Readers had some fun with our top story Thursday, The Onion’s Guide To Blockchain Technology. Second was the Financial Times piece, US threatens to bar EU banks from exchanges. Third was a picture of the CQG charity softball game in support of FIA Cares. Organizer Pat Kenny noted that there weren’t quite enough non-US participants, so they mixed and matched this year.

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MarketsWiki Stats
133,924,572 pages viewed; 23,294 pages; 215,245 edits
MarketsWiki Statistics

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Lead Stories

U.S. Banks Make Hay of European Trading Rules; Goldman Sachs and Morgan Stanley gain from consolidation in equities trading
Paul J. Davies – WSJ
No banker likes new regulations, but European investment bank chiefs will feel more aggrieved than normal this year. The reason? A set of rules for securities trading that came into force in January appears to be handing U.S. banks a big competitive advantage.
/on.wsj.com/2q1f5F9

NYSE, Nasdaq Take It on the Chin in Washington; SEC’s move to block fee increases is latest setback in exchanges’ growing list of disputes with regulators
Dave Michaels – WSJ
The country’s biggest stock exchanges are on a losing streak in Washington. The Securities and Exchange Commission’s decision this week to block the exchanges from raising fees on some data products is the latest example. The three main exchange operators also are fighting to kill off a two-year SEC initiative to test lower trading fees. Separately, the SEC has rebuffed their requests to delay and pare back a surveillance database that exchanges are nearly a year late in delivering.
/on.wsj.com/2q0KyqJ

Khashoggi case shows bankers have become our morality police; Big recipients of Saudi money and the regime’s armourers warrant more scrutiny
Tom Braithwaite – FT
Banks have long been tools of law enforcement, forced to snitch on their clients. But expecting bank chief executives to be morality police is different.
/on.ft.com/2NPdhs4

The rise and fall of Ethereum; Cult cryptocurrency is down 70% this year but still loved by enthusiasts
Hannah Murphy in London – FT
For much of last year, many cryptocurrency enthusiasts believed that Ether would steal the crown from rival bitcoin to become the world’s most valuable cryptocurrency by market capitalisation, a moment they dubbed “the flippening”. But this year, both currencies flopped.
/on.ft.com/2pWuzKu

London Stock Exchange to lift stake in LCH clearing house; Group has forged pact to acquire additional 15% of LCH
Philip Stafford – FT
The London Stock Exchange Group unveiled plans to buy another 15.1 per cent of LCH, strengthening its grip on the clearing house at the centre of arguments between regulators of the global derivatives market.
/on.ft.com/2NPx4HR

LSEG ups majority stake in LCH; Several shareholders will sell their entire stakes in LCH, including Deutsche Bank, Nasdaq and Nomura.
Hayley McDowell – The Trade
The London Stock Exchange Group (LSEG) has confirmed it is in the process of increasing its majority shareholding in central clearing counterparty (CCP), LCH.
bit.ly/2pYfjMW

London gold association plans to approve blockchain trackers
Peter Hobson – Reuters
The London Bullion Market Association (LBMA) is planning to help modernise and improve transparency in the industry with an approval process for companies using blockchain technology to track the movement of gold.
/reut.rs/2NMJm3H

China regulators try to reassure investors as stock market wobbles; Concerns over economic growth and trade prompt rare statements from agency heads
Emma Dunkley in Hong Kong – FT
Chinese regulators made a rare move on Friday to reassure investors amid the sharpest fall in equities since the rout in 2015, ahead of data that revealed China’s economy grew at its slowest pace in almost a decade over the past three months.
/on.ft.com/2q1h8ZS

Wall Street Loves These Three Letters. The Rest of Us Should Be Wary; The C.L.O., a cousin of the mortgage-related product that malfunctioned a decade ago, has become one of the hottest investments on Wall Street.
Matt Phillips – WSJ
A financial assembly line that went haywire a decade ago and contributed to an economic crisis is gearing up again on Wall Street.
/nyti.ms/2q2gMC6

Contagion Creeps Back Into Europe’s Bond Markets
Investors dumped the bonds of Italy, Spain, Portugal and Greece, sending their yields higher for a fourth consecutive day
Christopher Whittall and Marcus Walker – WSJ
Concerns over Italy’s finances are spreading to other European bond markets, in a worrying sign for investors who till recently hoped that market jitters would be contained.

Bitcoin Ponzi Schemer Must Pay $2.5 Million, Federal Court Rules; Case marked the first use of anti-fraud authority related to bitcoin
Gabriel T. Rubin – WSJ
A federal court ordered a New York trading firm to pay $2.5 million in fines and restitution for orchestrating a Ponzi scheme that defrauded at least 80 customers who thought they were investing in bitcoin.
/on.wsj.com/2q35E7P

China Urges Investor Calm While Stopping Short of Market Rescue
Bloomberg News
Senior regulators seek to reassure investors after stock rout; Shanghai index gains 2.6%, with some state buying suspected
China’s top financial officials moved to shore up confidence in the country’s tumbling stock market, marshaling a rare show of coordinated verbal intervention as the government tries to prevent a $3 trillion equity rout from infecting the world’s second-largest economy.
/bloom.bg/2NPxG07

Exchanges, OTC and Clearing

London Stock Exchange Group to increase its majority shareholding in LCH Group
London Stock Exchange Group
London Stock Exchange Group plc (“LSEG”) announces that it is in the process of acquiring further shares in LCH Group Holdings Limited (“LCH”), which will increase its majority ownership of this valuable strategic business.
bit.ly/2NPabnW

“CCPs have a sound framework” – FIA Expo wrap-up (part II)
Eurex
Clearing continues to be a major topic for the financial sector. On the second day of the 34th Annual Futures & Options Expo in Chicago, the futures and options industry still wrapped its collective mind around default fund contributions, margin breaches and auction formats. The CEO of Eurex Clearing, Erik Müller, spoke at the clearing house leaders panel.
bit.ly/2NQaGOF

Hong Kong sweeteners fail to lure Chinese tech listings; Start-ups put off by HKEX’s lengthy IPO vetting procedures and stricter scrutiny
Louise Lucas and Emma Dunkley in Hong Kong – FT
Chinese technology start-ups still favour listing in New York, despite Hong Kong’s efforts to woo entrepreneurs.
/on.ft.com/2q1gTxW

Nasdaq CEO, Facing Questioning, Says Nordic Loss Under Scrutiny
Matthew Leising – Bloomberg
Firm hired Oliver Wyman to assess its rules and risk practices; Citi, other banks and brokers had to repay $125 million loss
The head of Nasdaq Inc., facing sharp questioning about the exchange’s role in a 107 million-euro ($125 million) loss on its Nordic power market, said steps are being taken to prevent a repeat.
/bloom.bg/2NMWdDf

SGX reports 1Q FY2019 net profit of S$91 million
SGX
Singapore Exchange (SGX) today reported 1Q FY2019 net profit of S$91.1 million (S$90.7 million), on the back of revenues of S$208.9 million (S$204.5 million). Operating profit was S$106.4 million (S$106.0 million), with earnings per share at 8.5 cents (8.5 cents). The Board of Directors has declared an interim dividend of 7.5 cents (5 cents) per share, payable on 5 November 2018.
bit.ly/2NLZeUg

Euronext announces 2019 Holiday Calendar for its Cash and Derivatives markets
Euronext
Euronext today announced the 2019 trading days for its markets in Amsterdam, Brussels, Dublin, Lisbon, London and Paris.
bit.ly/2NPJaRk

Quantile Completes First NDF Optimisation Cycle With Cme Group
Quantile Technologies
Quantile Technologies (Quantile), the provider of multilateral compression and optimisation services for Financial Markets, today announced the successful completion of its initial NDF Margin Optimisation cycles with CME Group.
bit.ly/2NO2gY3

Trading Statement Including Revenues And KPIs For The Three Months Ended 30 September 2018 (Q3)
London Stock Exchange Group
Good Q3 results – growth across the Group including strong performances from LCH OTC clearing and FTSE Russell; Q3 reported revenue up 5% and total income up 8% to £522 million; on a like-for-like basis, excluding a £9 million year-to-date accounting change impact on adoption of IFRS15 in Capital Markets, revenue would have been up 7% and total income up 9%
bit.ly/2NO6Q8H

Amendments to the FCM Regulations and FCM Default Rules of Eurex Clearing AG
Eurex
On 24 August 2018, Eurex Clearing published Eurex Clearing circular 072/18, which announced Eurex Clearing’s plan to launch a refined Legally Segregated Operationally Commingled (LSOC) framework as soon as final CFTC approval is received, as well as corresponding amendments, including renewed Futures Commission Merchant (FCM) Regulations exclusively for the LSOC framework and FCM Default Rules.
bit.ly/2NLY0s8

Fintech

SEC Launches Fintech Hub To Engage With Cryptocurrency Startups And More
Michael del Castillo – Forbes
The U.S. Securities and Exchange Commission is launching a portal for engaging with companies using blockchain, artificial intelligence and more.
Available today, the new fintech hub, or FinHub for short, is designed to bring the SEC’s existing services to a single access point and provide an easier way for companies to communicate with the public.
bit.ly/2AjPiOe

Fintech firm Hearsay launches a productivity tool for advisors.
Ross Snel – Barron’s
Advisors, feel threatened by robo advice? Hearsay says it has a technological remedy to help you maximize your efficiency.
The San Francisco-based company this week announced the launch of its Advisor Actions mobile solution.
The system connects mobile phone communications to advisors’ core systems such as those that manage business intelligence and customer relationships.
bit.ly/2AiJ7Kv

Lessons Learned: The Path From Fintech Startup To $1B In Business Loans
Brock Blake – Forbes
The startup puzzle is different for every business. Regardless of your industry, there are a few pieces every company must put in place to survive and thrive. It’s taken more than a few years for us to get Lendio on a path to success, and the puzzle is certainly nowhere near complete (candidly, I feel like we’re just getting started). Still, from humble beginnings as a fintech startup, Lendio has grown into the nation’s largest marketplace for small business loans. To date, Lendio has facilitated over $1 billion in business loans, which in turn have generated $3.8 million in gross economic output and created over 25,000 jobs. While there were bumps along the road—more than we care to admit sometimes—in the end, my co-founder and I managed to put the most critical pieces of the puzzle in place to shape a company that’s making a nationwide impact.
bit.ly/2AiyNlt

Banks Face Off With Fintech Rivals in $250 Billion Payments War
Alastair Marsh – Bloomberg
The humdrum business of helping companies pay suppliers and collect funds from customers has turned into a battleground between banks and technology upstarts, with $250 billion of revenue at stake, according to Oliver Wyman.
/bloom.bg/2Ait0wo

83% of Brits unsure about fintech, says TopLine study
Aaron Hurst – InformationAge
The study, which saw 2,000 UK consumers take part, was conducted during what could be seen as a prosperous period for fintech in the UK, with the country attracting more investment than China and the US in the first half of 2018.
But according to the TopLine Comms report, many choose not to trust the sector for a few reasons; just under a third (27%) cited a lack of understanding of it in comparison to traditional banks, while 22% referred to the lack of physical locations within which consumers can seek assistance if needed.
bit.ly/2Akrdad

Cryptocurrencies

Novogratz Says Tether’s Lack of Transparency Hurts It
Eyk Henning – Bloomberg
He favors custody-supported stable coins such as Gemini Dollar; Pushing back on Roubini criticism, he says sector must mature
Billionaire investor Mike Novogratz, one of the best-known advocates of cryptocurrencies, blamed controversial “stable coin” Tether for its own recent woes.

Wooing investors, Rwanda hosts first tantalum-tracking blockchain
Clement Uwiringiyimana, Barbara Lewis – Reuters
Rwanda’s mining boss announced on Tuesday the world’s first blockchain project to track tantalum from the pit-face to the refinery, part of a push to woo investors seeking a conflict-free source of minerals.
/reut.rs/2J6rwYU

No one is killing it in crypto (not even Woz)
Jemima Kelly – FT
What does this chart tell you? It shows the amount of money raised via initial coin offerings (ICOs) since the start of 2017 (we assume with an extra 6 zeros at the end of those numbers). But does this chart give you the sense that all is well in the Divine Brodom of Cryptoland? Does it give you any sense of crypto à la Européene?
/on.ft.com/2NMW6HP

Bitcoin And Blockchain Jobs In The U.S. Are Surging
Billy Bambrough – Forbes
The U.S. jobs boom, which saw a record 7.14 million unfilled positions in August — coupled with last year’s bitcoin mania — has resulted in a 300% increase in the number of jobs related to bitcoin, cryptocurrencies, and blockchain over the last 12 months, according to new research from jobs site Glassdoor.
bit.ly/2AiUSRb

More Skepticism About Blockchains, Bitcoins, and What Not
Adam Lashinsky – Fortune
On the concluding morning of the Fortune Global Forum in Toronto Wednesday, Fortune’s Jeff John Roberts began a panel on blockchain technology by asking who in the audience was skeptical about blockchain. I raised my hand. Fortune’s Alan Murray, who was sitting next to me, guffawed: “You’re skeptical about everything!”
/for.tn/2yqYf75

Binance, TRON And Others Gather In Malta To Support Blockchain For Social Good Movement
Rachel Wolfson – Forbes
DELTA Summit, Malta’s blockchain conference held earlier this month, attracted more than 3,500 industry experts and government officials. At the conference, Changpeng Zhao, CEO of the cryptocurrency exchange Binance, spoke on the impact of blockchain technology for driving economic growth.
bit.ly/2S0CaEr

Ticketmaster acquires blockchain technology company
Sarah Toy – MarketWatch
Live Nation Entertainment Inc’s LYV, -1.65% Ticketmaster has acquired a blockchain technology company, the ticketing software company announced Thursday. The company, called UPGRADED, provides tech that converts traditional tickets into digital assets protected by blockchain.
/on.mktw.net/2EungDO

How the Electric Vehicle Industry Provides a Roadmap for Bitcoin and Cryptocurrency Startups
Marissa Peretz – Forbes
Startups focused on cryptocurrency and blockchain – which are different kinds of digital cash and the platform that allows this cash to be exchanged — are enormously hot right now. Investments in these companies nearly doubled in 2017 compared to the previous year and have only been increasing in 2018. In late May, Binance, the world’s largest cryptocurrency exchange, announced it was launching a $1 billion venture fund for blockchain and cryptocurrency startups.
bit.ly/2NQC6Eh

How a Bitcoin Exchange Is Surviving the Central Bank Crackdown in India
Leigh Cuen – Coindesk
Indian regulators’ clampdown on cryptocurrency businesses is forcing the exchange startup Unocoin to experiment with stablecoins and ATMs to continue receiving fiat deposits from customers.
bit.ly/2EvJcyr

Digital Asset blockchain platform processed 27,000 trades per second in latest test; The DA platform processed more than four times the amount of trades per second than the latest DLT prototype developed by DTCC.
Joe Parsons – The Trade
A new test of the Digital Asset (DA) blockchain platform showed it processed upwards of 27,000 trades per second, far exceeding the latest prototype developed by market infrastructure DTCC.
bit.ly/2pYfXdk

Politics

Politicians say nothing, but US farmers are increasingly terrified by it – climate change
Art Cullen – The Guardian
Research forecasts Iowa corn yields could drop in half within the next half-century thanks to extreme weather – yet it’s not part of the political conversation
bit.ly/2q1PGef

A President Who Believes He Is Entitled to His Own Facts
Maggie Haberman – NY Times
He accepts less-than-credible denials from autocratic heads of state about nefarious acts. He disputes the existence of man-made climate change and insists that photographic evidence of the crowd at his inauguration is fake, part of a media plot to harm him.
/nyti.ms/2pWy2su

Mercurial US president poses particular investment challenges; Investors can use cryptocurrencies, derivatives or other means to minimise policies’ potentially disruptive impact
Laura Noonan – FT
The Trump presidency is arguably the ultimate investment challenge. Its potential sphere of influence is vast, spanning everything from individual company share prices to foreign exchange rates. Its policies can be unpredictable and its musings are often blasted out with zero warning via micromessaging platform Twitter.
/on.ft.com/2q04OJ7

Trump’s home tax changes costing votes in the suburbs; Trump’s cap on state and local deductions causes anguish on campaign trail
Gregory Meyer in Westfield, New Jersey – FT
Standing beside two frisky dogs at her front door, Anne FitzPatrick rattles off healthcare and immigration as two reasons she will vote Democrat in next month’s US midterm elections. Then there is the value of her home, a sturdy American Foursquare in Westfield, New Jersey.
/on.ft.com/2pZJx2f

Regulation

ESAs write to EFRAG on the endorsement process of IFRS 17 insurance contracts
ESMA
The three European Supervisory Authorities (ESA – ESMA, EBA and EIOPA) have today written a letter to the European Financial Reporting Advisory Group (EFRAG) regarding the endorsement process of the International Financial Reporting Standard (IFRS) 17.
bit.ly/2NPSKUr

Speech by ESMA Chair Maijoor on IFRS 9 at Banco de Espana Conference
ESMA
ESMA Chair, Steven MAijoor, delivered today a keynote speech at the Banco de Espana – CEMFI – FSI High-Level Conference in Madrid, Spain.
bit.ly/2NQtbSW

5 Tips to Stay Safe Online This National Cybersecurity Awareness Month
Kaitlyn Kiernan – FINRA
These days, so much of our lives happen online. Email is more common than snail mail. Americans are just about as likely to shop online as at a brick-and-mortar store. And more than half of all bills are paid online.
bit.ly/2NPKS5c

Podcast: CFTC Talks EP068: Dallas Federal Reserve President Rob Kaplan
CFTC
This week on CFTC Talks, we have on special guest Dallas Federal Reserve President and CEO Rob Kaplan. We had a…
bit.ly/2NN4UNT

Investing and Trading

Tech Startups Stoke Market For IPOs; A number of highly valued Silicon Valley companies are gearing up to go public, including Uber, Lyft and Palantir Technologies
Maureen Farrell, Rob Copeland and Corrie Driebusch – WSJ
After years of remaining on the stock market’s sidelines, a number of highly valued Silicon Valley technology companies are now gearing up to go public as soon as next year.
/on.wsj.com/2q0PbkR

Institutions

Goldman Sachs wants to weed out women in class-action suit
Kevin Dugan – NY Post
Goldman Sachs is trying to weed out women who are participating in a class-action lawsuit against the Wall Street bank alleging that it’s a “boys club” ridden with sexual discrimination.
/nyp.st/2pXSrxf

Pimco Revs Up Private-Fund Playbook to Profit in Next Recession
John Gittelsohn – Bloomberg
Firm is said to be floating private variation of Income Fund; CEO Roman, CIO Ivascyn bolster staff for higher-fee products
Pacific Investment Management Co. is prepping for the next downturn, betting high-fee private funds can turbocharge its growth.
/bloom.bg/2q2iR0Y

Regions

Suddenly Toxic, Saudi Prince Is Shunned by Investors He Courted
Glen Carey – Bloomberg
Crown prince under pressure to provide answers about Khashoggi; He may become threat to his own project of attracting business
He was the man who sold the world on his vision of a Saudi economy no longer dependent on oil. Now Crown Prince Mohammed bin Salman could become the biggest risk to his own project. Everything changed when Jamal Khashoggi walked into the Saudi consulate in Istanbul on Oct. 2 and didn’t come out. Allegations rapidly spread that the Washington-based journalist was murdered by a hit team sent from Riyadh. And suspicion naturally fell on the oil-rich kingdom’s de facto ruler, the 33-year-old heir to the throne.
/bloom.bg/2NRAc6a

Khashoggi affair unlikely to derail Saudi Arabia index inclusion; Many investors have been put off by issues surrounding transparency and governance
Jonathan Wheatley – FT
Does alleged extrajudicial death by dismemberment have any bearing on investment decisions? It’s not a question you hear every day, but it is one investors will have to address in the approach to Saudi Arabia’s inclusion in emerging market equity indices next year.
/on.ft.com/2pYFVNY

India’s Richest Brothers and How they Grew $41 Billion Apart
Bhuma Shrivastava – Bloomberg
Mukesh Ambani’s wealth has soared, while Anil’s worth declined; The two siblings split the family business empire in 2005
Over the past year, the fortunes of the two brothers at the helm of India’s wealthiest dynasty have grown apart — to about $40 billion apart.
/bloom.bg/2pZC835Norway’s Wealth Fund Is Now Twice the Size of Its Economy

Norway’s Wealth Fund Is Now Twice the Size of Its Economy
Sveinung Sleire and Mikael Holter – Bloomberg
Government wants to keep $1 trillion fund under central bank; Proposes new monetary policy committee to free up board
Norway’s government proposed improving oversight of its sovereign wealth fund after it has swelled to more than twice the size of the economy since it was set up two decades ago.
/bloom.bg/2q1eWBC

$50 Billion Hole Grows as Carnage Strikes European Stock Funds
Ksenia Galouchko – Bloomberg
Region’s equity funds lose $4.8 billion, most in 27 weeks; Sentiment ‘very slushy’ on Europe stocks, Barclays’ Hobbs says
The U.S. market led last week’s equities turmoil, but unloved European stocks still managed to stand out — in a bad way.
/bloom.bg/2pYyarm

China’s One-Time Richest Woman Becomes Biggest Loser in Wealth Rout
Blake Schmidt and Venus Feng – Bloomberg
Lens Technology’s Zhou Qunfei loses 66% of fortune this year; Zhou’s company supplies touchscreens for IPhones, Tesla cars
IPhone and Tesla touchscreens once made her China’s richest woman. The U.S.-China trade war has made her the biggest loser in 2018 among Chinese billionaires.
/bloom.bg/2NOZotP

Swiss Banking Secrecy Rule Dealt Setback in Month to Forget
Hugo Miller – Bloomberg
Overseas bank units not subject to Swiss secrecy laws: court; Information on 2 million accounts just shared under new rules
Two events this month may have finally brought the curtain down on secrecy rules that were the key to Geneva and Zurich’s private banking heyday, when foreign clients could come armed with suitcases of cash and their bankers would look the other way.
/bloom.bg/2NRfDHb

Brexit

Can Theresa May Be Forced to Hold a Second Brexit Vote?
Kitty Donaldson, Alex Morales and Robert Hutton – Bloomberg
There are those in the Conservative Party so against Brexit that they are willing to gang up with the opposition to vote down Theresa May’s deal in order to secure a second referendum.
/bloom.bg/2AiSl9r

Brexit: Five things that happened at the EU Brussels summit
BBC
With five months until Britain leaves the EU, both sides want an exit agreement. But they still can’t settle on one key point: how to keep the border free and open between Northern Ireland (which will be non-EU) and Ireland (still in the EU). They have not found a solution.
/bbc.in/2AiSnOB

No-deal Brexit must be avoided at all costs, says Toyota president
Justin McCurry – The Guardian
The president of Toyota has said a no-deal Brexit should be avoided “at all costs”, in the latest intervention by a major Japanese investor in the UK economy.
bit.ly/2AjkUnk

UK investment trust discounts widen since Brexit vote; Some analysts think now is a good time to buy back into the sector
Kate Beioley – FT
Half of UK equity investment trusts are trading at discounts wider than their 10-year average after a spell of poor performance and uncertainty triggered by the Brexit vote.
/on.ft.com/2pWvaMe

Why a No-Deal Brexit Risks Freezing London’s Diamond Trade
Thomas Biesheuvel and Lyubov Pronina – Bloomberg
U.K. is a member of key Kimberley Process through the EU; Britain warns no-deal Brexit could temporarily halt shipments
The U.K. has warned that a no-deal Brexit risks London being frozen out of the global diamond trade.
/bloom.bg/2NS2mhg

The post U.S. Banks Make Hay of European Trading Rules appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

EXPO week has come and gone. It was largely successful from JLN’s perspective. We conducted over 15 interviews in the booth we shared with Cinnober. Thank you to Cinnober for this kind collaboration. Our staff attended several of the panels and we saw lots of our readers, sponsors and industry friends. Congratulations to FIA and their staff for pulling this off again so well.~JJL

One of the realities of EXPO week was I don’t currently have the stamina to attend a trade show and then go out partying afterwards. I passed on the CME Group sponsored party on Wednesday and the Great Steakout on Thursday, despite wanting to attend both.~JJL

CME Group’s Terry Duffy had a memorable reply at the exchange leader panel at the FIA EXPO conference last week. When commenting on diversity and race, he said the only race he knows is the human race.~JJL

Based on social media metrics, four of the top five global banks are based in India, according to data collated by The Financial Brand.~SD

Professor James Angel has written a paper titled “Retail investors get a sweet deal: The cost of a SIP of stock market data.”~JJL

Friday I took the day off to visit one of my scouts who had been in the hospital for five weeks and had surgery last week. He finally came home Friday afternoon and Saturday he visited our campout, which was nearby. There is nothing like Scout spirit.~JJL

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FIA 2018 charts the rise of institutional crypto investors
Matt Raebel, John Lothian News
Like most people, I tend to pay more attention when someone directly addresses me or people like me. As a millennial, I tend to exercise this principle a lot, as we’ve been inundated by the word “millennials” over the past 10 years or so. We’re a hot topic. At the FIA Expo this year, the talks focusing on Digital Assets mentioned millennials frequently. This ranged from comments explicitly mentioning my demographic’s greater activity in crypto trading and investment compared with other generations, to jokes about using Bakkt to buy pumpkin spice lattes – a stereotypical seasonal favorite for younger consumers – with bitcoin.
/goo.gl/gTgo9r

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Bridging the Week: October 15 – 19 and October 22, 2018 (Bitcoin Fraud; Smart Contracts; Actual Delivery; Reg AT)
Gary DeWaal – Bridging the Week
The Commodity Futures Trading Commission obtained orders from a federal court in New York concluding its first-filed enforcement action against persons for bitcoin fraud. However, the outcome of an unrelated action having nothing to do with cryptocurrencies and pending in a federal court of appeals in California may have greater implications for the CFTC’s cryptocurrency enforcement efforts going forward. Separately, CFTC Chairman J. Christopher Giancarlo announced before an industry gathering last week that Reg AT – a 2015 Commission proposal to augment regulations regarding algorithmic trading purportedly to mitigate risks – was officially dead. Likely, no algorithmic traders mourned.
/goo.gl/ajE9PM

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Quants Now Trade Exotic Stuff. But Can They Handle Illiquidity?
Nishant Kumar – Bloomberg
Computer models seek to profit from trends in niche markets; Some critics warn investors may get stuck during selloffs
The search for elusive alpha is sending a handful of computer-driven hedge funds trawling the remotest corners of financial markets. They’re a subset of the trend-following strategies known as commodity trading advisers, or CTAs, that were popular when central banks pushed up stocks and bonds over the past decade. Now a few of them are seeking uncorrelated returns and a little extra alpha in anything from cheese and Turkish scrap steel to obscure chemicals or eggs in China.
/bloom.bg/2R9ba4F

***** Look up the definition of “Roach Motel” before trading “exotic stuff.”~JJL

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Friday’s Top Three
Our top read piece from Friday was Chuck Mackie’s coverage of FIA Expo from day one. Second went to the FT’s The heyday of the ugly American. And third went to the Wall Street Journal’s U.S. Banks Make Hay of European Trading Rules

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MarketsWiki Stats
134,089,723 pages viewed; 23,294 pages; 215,245 edits
MarketsWiki Statistics

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Lead Stories

Intercontinental Exchange Announces Launch of Permian WTI Crude Oil Futures Deliverable in Houston
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced the launch today of physically delivered Permian WTI (Contract code: HOU) crude oil futures, deliverable in Houston, Texas. Houston has become the pricing center for U.S. crude oil production and exports, and the new Permian WTI futures contract is designed to serve hedging and trading opportunities in this growing market.
bit.ly/2R7jphh

Nasa says quantum computing is the future for funds; Study co-written with Standard Chartered points to benefits of faster processing
Owen Walker – FT
Embracing quantum computing may be a small step for asset managers but it would be a giant leap for investment decision-making, says a forthcoming report co-written by the US space agency.
/on.ft.com/2R4QMkV

The Real Currency Manipulators Get Off the Hook; Despite all the bluster, China isn’t the worst perpetrator. Strategic U.S. allies like Taiwan, Malaysia and South Korea get a lot more leeway.
David Fickling – Bloomberg
When is a currency manipulator not a currency manipulator? When it’s your friend
That’s the best conclusion to draw from the U.S. Treasury Department’s latest report on the macroeconomic and foreign-exchange policies of major trading partners, handed up to Congress Wednesday.
/bloom.bg/2R55cBs

Wall Street enjoys trading bonanza from market turmoil; Big banks have best summer for equities revenues since 2009
Laura Noonan and Robert Armstrong – FT
Wall Street firms are on track for their best year in equities trading for a decade – a silver lining to the market turmoil that has created misery for big bank shareholders over the past few months.
/on.ft.com/2R96rQt

China Health Checkmate Commits to Initial Series B Funding for Bcause LLC
Bcause
China Health Checkmate (CHC) and Bcause LLC, creator of what is believed to be the world’s first full-stack cryptocurrency ecosystem, announced today that CHC has committed to serve as the initial investor in the Bcause Series B capital raise*. In this equity round, CHC has agreed to acquire an undisclosed but substantial amount of the equity shares of Bcause LLC, which will enable Bcause to open its spot cryptocurrency exchange in the near term and to jointly shape a project to launch exchange-related cryptocurrency initiatives to be co-located in Asia.
/prn.to/2CxIMF9

Nobel winner Muhammad Yunus wants two financial systems – one for the rich and one for the poor
Eshe Nelson – Quartz
For more than 40 years, Muhammad Yunus has been building a financial system for people who lack sufficient access to the one that already exists. In 2006, the now 78-year old won the Nobel Peace Prize for his work as “banker to the poor.”
bit.ly/2R4Rmz7

UBS warns staff over China travel after banker held in Beijing: source
Reuters
Swiss bank UBS Group AG. (UBSG.S) has asked its China wealth management staff to reconsider their travel plans to the country after authorities there asked one of its bankers to delay her departure from Beijing to meet with local officials, a person familiar with the matter said.
/reut.rs/2R6gqWr

Global banks curb China travel after UBS banker stopped from leaving
Sumeet Chatterjee, Clare Jim – Reuters
Global banks including Citigroup (C.N) and Standard Chartered (STAN.L) have asked their private banking staff to postpone or reconsider travel to China after authorities there prevented a UBS (UBSG.S) banker from leaving the country, sources said.
/reut.rs/2R5es8U

Suddenly Toxic, Saudi Prince Is Shunned by Investors He Courted
Glen Carey – Bloomberg
Crown prince under pressure to provide answers about Khashoggi; He may become threat to his own project of attracting business
He was the man who sold the world on his vision of a Saudi economy no longer dependent on oil. Now Crown Prince Mohammed bin Salman could become the biggest risk to his own project. Everything changed when Jamal Khashoggi walked into the Saudi consulate in Istanbul on Oct. 2 and didn’t come out. Allegations rapidly spread that the Washington-based journalist was murdered by a hit team sent from Riyadh. And suspicion naturally fell on the oil-rich kingdom’s de facto ruler, the 33-year-old heir to the throne.
/bloom.bg/2R56Vqq

What the Permian Oil Boom Looks Like; RV parks, 24-hour laundromats, a brand-new Bennigan’s and other signs of a world-changing oil rush.
Justin Fox – Bloomberg
The first clear indication that I had entered an area experiencing an oil boom was the Halliburton Co. office with a “Now Hiring” sign out front on the north side of Artesia, New Mexico. Next came a couple of equipment rental places with some unfamiliar-looking equipment on their lots, then the first of what were to be many billboards advertising personal injury lawyers specializing in oilfield injuries and truck accidents (“$5.2 Million: Oilfield Explosion, Burn Injury” read one that I saw a little later from the Albuquerque law firm of Glasheen, Valles & Inderman). Tanker car after tanker car after tanker car sat on the railroad tracks to the left of the road, followed by what I eventually realized were lots of cars for hauling sand. Behind the railcars, I began to see the outlines of what appeared to be a giant refinery complex.
/bloom.bg/2R6Jeyi

Saudi Arabia: how the Khashoggi killing threatens to overturn the prince’s project; The role of the Public Investment Fund was to reshape the kingdom’s economy and attract overseas money, its mission is now much harder
Andrew England and Simeon Kerr – FT
Just months after King Salman ascended to the throne, he presided over a cabinet meeting that would have a profound effect on the future of Saudi Arabia and the way the world’s top bankers view the conservative kingdom.
/on.ft.com/2R9t9b7

UBS moves back into battle for rich Americans; Swiss bank to pursue ‘ultra high net worth’ US clients 9 years after $780m fine
Stephen Morris, Ralph Atkins and Alice Ross – FT
UBS is putting super-rich Americans at the centre of its new strategy to boost growth, nine years after it was fined $780m by the US Department of Justice for helping thousands of clients evade taxes.
/on.ft.com/2R5belO

What Jamal Khashoggi’s death could mean for oil markets; While the Saudis have US support, the kingdom will boost production
Nick Butler – FT
The disappearance and death of Saudi journalist Jamal Khashoggi continues to produce unexpected consequences and to reshape relationships in the Middle East and beyond. Turkey has been surprisingly tough in its response, while US president Donald Trump has said that the affair will have “very serious consequences” for Saudi Arabia.
/on.ft.com/2R6igqj

Tradeweb IPO being considered, says owner; Future of bond trading venue has been a topic of debate since
Samuel Agini – Financial News
The chief executive of Blackstone-owned Refinitiv has given the clearest indication yet that a multi-billion-dollar initial public offering of one of the world’s largest bond trading platforms is under consideration.
/goo.gl/AaGpjN

Beijing finds unlikely anti-Trump weapon in global indices; Inclusion of Chinese shares in major EM index has helped steady inflows
James Kynge – FT
A trade war is raging between the US and China, but somebody forgot to tell foreign portfolio investors. Surging inflows of foreign capital have headed to the Chinese bond and stock markets and helped to stem the depreciation of the renminbi against the US dollar.
/on.ft.com/2R3qobd

Hedge Funds In A Time of Wear and Tear
AllAboutAlpha
The latest report from Eurekahedge tells us that Asia-focused strategies in the hedge fund universe are showing the wear and tear of the US/China trade dispute. The Eurekahedge Greater China Hedge Fund Index shows losses of 8.16% through the first nine months of the year. The Eurekahedge commentary observes that the People’s Bank of China decided to reduce its reserve requirements in early October in a bid to improve liquidity.
/goo.gl/1JeXoq

Exchanges, OTC and Clearing

ICE’s new Houston crude futures contract begins trading
Reuters
Intercontinental Exchange Inc said its new Permian West Texas Intermediate (WTI) crude oil futures contract deliverable in Houston, Texas, will begin trading on Monday.
/reut.rs/2R401lx

Maker-Taker Malaise: LSE’s Turquoise Bins Broker Rebates
Tim Cave – TABB Forum
The focus on exchange rebates moved from the US to Europe this month, as equity venue Turquoise announced plans to abolish certain rebates on its lit book. TABB’s Tim Cave examines the maker-taker controversy as efforts to re-tilt the market structure playing field back in favour of investors gather steam globally and breaks down the drivers and implications of Turquoise’s decision.
/goo.gl/sSPVss

Amendments to the FCM Regulations and FCM Default Rules of Eurex Clearing AG
Eurex
On 24 August 2018, Eurex Clearing published Eurex Clearing circular 072/18, which announced Eurex Clearing’s plan to launch a refined Legally Segregated Operationally Commingled (LSOC) framework as soon as final CFTC approval is received, as well as corresponding amendments, including renewed Futures Commission Merchant (FCM) Regulations exclusively for the LSOC framework and FCM Default Rules.
bit.ly/2NLY0s8

Amendment of the Clearing Conditions related to Reporting Requirements in accordance with Part 45 of the Rules by the U.S. Commodity Futures Trading Commission (CFTC)
Eurex
With this circular, Eurex Clearing AG (Eurex Clearing) announces the amendment of the Clearing Conditions of Eurex Clearing in relation to trade submissions from an Approved Trade Source (ATS) which is not a Swaps Execution Facility (SEF) to EurexOTC Clear in order to ensure compliance with Swap Data Reporting (SDR) Requirements under Part 45 of the CFTC rules. The changes will be effective on 12 November 2018.
bit.ly/2R7GKzD

Amendments to the Clearing Conditions and to the Price List of Eurex Clearing AG regarding the generalisation of Repo transactions
Eurex
This circular contains information with respect to Eurex Clearing’s service offering and corresponding amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) regarding the following topics:
bit.ly/2R1SUKe

Clearing fees for transactions concluded on the Frankfurt Stock Exchange and OTC transactions as part of the T7 Entry Service
Eurex
Starting 5 December 2018, the entry of transactions concluded on the Frankfurt Stock Exchange (Frankfurter Wertpapierborse, FWB) and OTC transactions in the Xetra T7 trading system will be enabled via a new T7 Entry Service.
bit.ly/2R9UoCr

DTCC Unveils New Data Offering For Institutional Investors Seeking Insights Into U.S. Equity Markets – DTCC Equity Kinetics Offers An Aggregated View Of All U.S. Equity Trade Volumes Over Time, In The Context Of Broader Market Activity
MondoVisione
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced the release of its latest Data Services product, DTCC Equity Kinetics, providing institutional investors with a comprehensive depth of market view of activity across all U.S. equity trading venues. The data is therefore ideal for quantitative market participants seeking insights to enhance their understanding of the U.S. equities markets.
bit.ly/2R4DV2o

Fintech

John Mack, Old-School Financier, Coaches Fintech Wannabes; Former Morgan Stanley CEO is among former Wall Street executives now reinventing themselves in fintech
Liz Hoffman – WSJ
A decade after the financial crisis, The Wall Street Journal has checked in on dozens of the bankers, government officials chief executives, hedge-fund managers and others who left a mark on that period to find out what they are doing now. Today, we spotlight former Morgan Stanley CEO John Mack.
/on.wsj.com/2R97ksh

Broadridge launches new global asset servicing solution
Hedgeweek
Broadridge Financial Solutions has launched a new solution aimed at addressing key industry, business and operational challenges with global asset servicing.
/goo.gl/F5DP8b

Global Network Management: Artificial Intelligence the Charm?
Chris Kentouris – FinOps
For global custody network managers, analyzing the tsunami of data on dozens of local agent banks and markets to ensure the safety of client assets remains a sore spot. The use of artificial intelligence appears to be an elusive ideal, acknowledge panelists and attendees at a recent global custody event in New York hosted by The Network Forum, a London-headquartered networking group for custody specialist worldwide. Instead, the drudgery of creating and sending local agent banks dozens if not hundreds of questions and manually reviewing all of the answers is the accepted norm.
/goo.gl/URuSFh

FCA: Regtechs must be realistic about their capabilities
Rebekah Tunstead – bobsguide
Regtech organisations need to be honest about their capabilities, according to Nick Cook, head of regtech and advanced analytics at the UK’s Financial Conduct Authority (FCA), during a panel discussion at this year’s Money20/20.
/goo.gl/Ui7vRg

Goldman-backed fintech startup Marqeta launches in Europe
Anna Irrera – Reuters
Marqeta, a U.S. financial technology startup that helps young companies including digital-only banks issue payment cards, has expanded into Europe, the company said on Sunday.
/read.bi/2R8rLpa

FlexTrade Integrates ipushpull Real-Time Interoperability Platform Into FlexNOW EMS – Provides Real-Time Data Sharing & Improved Workflow Automation
MondoVisione
FlexTrade Systems (@FlexTrade) today announced the integration of ipushpull (iPP), a real-time interoperability platform, with its FlexNOW execution management system to provide users with access to iPP’s live data sharing and workflow automation between desktop applications, messaging platforms, in-house systems and cloud services.
bit.ly/2R3ubFt

Cryptocurrencies

Is Coinbase Listing Tezos or Is CEO Brian Armstrong Really Tweeting About Weight Loss
Krystle M – Bitconinexchangeguide.com
Suggestions of Baking from Coinbase’s CEO Leaves Investors Wondering If It’s a Hint that Tezos is their New Altcoin
bit.ly/2R72Mm2

Deribit Ranks as Fastest Crypto Exchange, Based on Its Own Order Speed Analysis
Bitcoin Exchange Guide News Team
Speed is one of the most important factors when it comes to trading cryptocurrencies, more so for those who’re engaged in high-frequency trading. When executing orders, every millisecond counts. Actually a fraction of a second can make a big difference between loss and profit.
bit.ly/2R9NQUn

Checkbooks Ready! US Marshals to Hold $4 Million Bitcoin Auction
CCN
The US Marshals Service has announced an upcoming auction for over $4 million worth of bitcoin seized during various legal proceedings. The sealed bid auction, which is scheduled to take place in November, will offer approximately 660 BTC seized during about 31 federal criminal, civil and administrative cases under the asset forfeiture framework of the Department of Justice.
bit.ly/2R54Evo

How the Dollar-Backed Crypto Tether Might Be Influencing the Price of Bitcoin; Should crypto investors be concerned about the drop below $1 in the stablecoin, as cryptos that are tied to the value of other assets are known?
Tanzeel Akhtar – The Street
There are many red flags surrounding the cryptocurrency Tether (USDT). The first is the lack of transparency surrounding the cryptocurrency.
bit.ly/2R7A2tr

Monero Fees Fall to Almost Zero After ‘Bulletproofs’ Upgrade
Rachel Rose O’Leary – Coindesk
Transaction fees on the monero network have fallen sharply after last Thursday’s system-wide update. The reduction comes in the wake of the activation of a highly-anticipated form of cryptography named “bulletproofs” on the privacy-centric cryptocurrency Thursday.
bit.ly/2R18juc

Bitcoin’s White Paper Gave Us Liberty – Let’s Not Give It Back
Charlie Shrem – Coindesk
Ten years after Satoshi published the white paper that gave us bitcoin – and the explosion of innovation it launched – I continue to be astounded at its transformative power.
bit.ly/2R6Rnm5

Politics

Hedge fund billionaire Ken Griffin gives $6M to top state Republican leaders
Mike Riopell – Chicago Tribune
Hedge fund founder and Illinois’ richest person, Ken Griffin, gave $6 million to the state’s Republican legislative leaders as they fight for seats in Springfield, campaign records showed.
bit.ly/2R59jO8

Mnuchin dismisses risk of contagion from China’s economic slowdown
Lesley Wroughton – Reuters
U.S. Treasury Secretary Steven Mnuchin dismissed concerns that China’s weakest economic growth since the global financial crisis could spill into other emerging markets and destabilize U.S. financial markets.
/reut.rs/2R6OBNH

“Nobody Loves Daddy Warbucks”: Michael Bloomberg’s Cash-Bombs Will Elect Democrats in 2018 – But Will They Help Him In 2020?
Chris Smith – Vanity Fair
For months the polling has shown basically a dead heat between California Republican Congressman Steve Knight and Democratic challenger Katie Hill. Third-party spending in the race has been pretty even, too.
bit.ly/2R6nClo

Trump Hasn’t Killed Foreign Investment in China; Cutting off Chinese supply chains’ oxygen without Europe and Asia on board will be difficult
Nathaniel Taplin – WSJ
China isóallegedlyóa large-scale pilferer of intellectual property, runs roughshod over foreign companies’ rights and is bracing for a drawn-out trade war with the U.S.
/on.wsj.com/2Rc6F9x

Mnuchin’s $100 Billion Market Gets Boost With Rules on Tax Break
Laura Davison and Noah Buhayar – Bloomberg
IRS proposal provides flexibility on opportunity zone projects; More detailed regulations for funds expected later this year=
The Internal Revenue Service unveiled proposed regulations Friday for what Treasury Secretary Steven Mnuchin says could be a $100 billion investment opportunity for real estate and businesses in distressed areas.
/bloom.bg/2R9s3w1

U.S. Charges Russian for Conspiracy to Interfere in 2016 and 2018 Elections
Chris Strohm and Greg Farrell – Bloomberg
Accusations are first related to impending midterm vote
Operation had a proposed budget of $35 million, U.S. alleges; U.S. Charges Russian for Conspiracy to Interfere in Elections
The U.S. charged a Russian woman with conspiring to interfere in both the 2016 and 2018 elections, marking the first criminal charges related to next month’s congressional midterm vote.
/bloom.bg/2R4AloY

Trump Resists Saudi-Crisis Pressure, Citing $450 Billion at Risk
Justin Sink – Bloomberg
Sanctions against kingdom “could be considered” Trump says; Saudis have promised to explain Khashoggi’s fate in days
President Donald Trump said $450 billion in investments are at stake as Congress raises pressure on him to punish Saudi Arabia for the presumed death of journalist Jamal Khashoggi, and he promised to involve lawmakers in any U.S. response.
/bloom.bg/2R3X3gT

Regulation

SEC investigates Honeywell for asbestos-related accounting
Reuters
Honeywell International Inc (HON.N) said on Friday the U.S. Securities and Exchange Commission had opened an investigation into its accounting for asbestos-related liabilities.
/reut.rs/2R6QSbH

Sef reforms could distort new, sounder benchmark rates; Tradition’s Fitzpatrick warns that more ways of trading swaps could dent progress made on fixings
Robert Mackenzie Smith – Risk.net
The head of Tradition’s swap execution facility (Sef) has warned regulators that any new proposals on the way interest rate derivatives trade might slant the setting of important financial benchmarks.
bit.ly/2R4z94Y

Ticked Off About Spoofing? Consider This
Craig Pirrong – Streetwise Professor
An email from a legal academic in response to yesterday’s post spurred a few additional thoughts re spoofing. One of my theories of spoofing is that is a way to improve one’s position in the queue at the best bid or offer. Why does one stand in a queue? Why does one want to be closer to the front? Simple: because there is a rent there to capture. Where does the rent come from? When what you are queuing for is underpriced, likely due to some price control. Think of gas lines, or queues for sausage in the USSR.
/goo.gl/voSeRq

Esma slammed as whistleblowing hotline runs cold; Five cases in nearly two years ‘speaks for itself’, says MEP Sven Giegold, as scrutiny of whistleblowing procedures rises
David Ricketts – Financial News
Europe’s main securities regulator has fielded just five claims from whistleblowers since it set up a dedicated hotline nearly two years ago, prompting calls from a prominent German MEP for the system to be overhauled.
/goo.gl/5DDMsv

Stamford hedge fund co-founder charged with defrauding investors of $19.6M
Kevin Zimmerman – Westfaironline.com
Jason Rhodes, co-founder of Stamford hedge fund Sentinel Growth Fund Management, was arrested on Oct. 16 on conspiracy, securities fraud, wire fraud and investment adviser fraud charges.
bit.ly/2R7fIIr

CFTC to Hold an Open Commission Meeting on November 5
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo announced today that the CFTC will hold an open meeting on Monday, November 5, 2018 at 10:00 a.m. to consider the following:
bit.ly/2R3X4kX

Ex-UBS compliance officer to begin trial for insider trading; Prolific day trader also to face jury on charges he used inside information
Caroline Binham in London – FT
A former compliance officer at UBS, Fabiana Abdel-Malek, will stand trial this week in London on 10 counts of insider trading.
/on.ft.com/2R40u76

Former South Australia grain trader pleads guilty
ASIC
Mr Brenton Jeffrey Strauss of Murray Bridge, South Australia has pleaded guilty to acting as an officer of a company while it was under external administration.
bit.ly/2R5bcds

UPDATE: FINRA’s Cloud Strategy Shone amid Recent Volatility
Steve Randich – FINRA
UPDATE 10/19/2018: During the week of Oct. 8, 2018, exceptional market volatility again produced record numbers of electronic messages processed by FINRA, including the three highest-volume days in history:
bit.ly/2R1Twj0

Investing and Trading

How To Invest Your $1.6 Billion Mega Millions Winnings
Garth Friesen – Forbes
One in 300 million. The odds aren’t great, but your chances of winning the massive Mega Millions lottery are as good as the next person. The current jackpot is estimated to be more than $1.6 billion. That is 1,600 million for those who are used to seeing smaller prizes. According to the USA Mega lottery website, the lucky winner will take home approximately $687 million after taxes if he or she opts for the cash option — life-changing wealth by any standard. It’s fun just dreaming how would you spend or invest the money if you won. The opportunities would be endless. Well, almost.
bit.ly/2R6cJjx

Low-Carbon Macro
Carsten Jung, Theresa Lober, Anina Thiel and Thomas Viegas – Bank Underground Blog
Governments have pledged to meet the Paris Target of restricting global temperature rises to ‘well below’ 2∞C. But reducing CO2 emissions and other greenhouse gases means reallocating resources away from high-carbon towards low-carbon activities. That reallocation could be considerable: fossil fuels account for more than 10% of world trade and around 10% of global investment. In this post, we consider the macroeconomic effects of the transition to a low-carbon economy and how it might vary across countries. While much of the discussion has focussed on the hit to economic activity and the potential for job losses in higher-carbon sectors, we highlight that the transition also offers opportunities. And the overall impact depends crucially on when and how the transition takes place.
/goo.gl/EkUd5p

Are financial literacy programs a waste of time?
Allison Schrager – Quartz
Ten years ago, I volunteered to teach financial literacy skills to a group of homeless women. All of us volunteers, mostly working in finance, came in excited to teach the women about the wonders of compound interest and the benefits of saving. Our knowledge was totally useless to them. The women led complex financial lives, mostly negotiating intricate rules and charges they faced from government benefits. They could understand why compound interest was great, but long-term saving was not a priorityóor even possibleófor them.
bit.ly/2R8gnd0

Why aren’t most Americans rich? These theories may help explain it; A recent social-media hashtag, #ReasonsImNotRich, attempted to answer that complex question
Elisabeth Buchwald – MarketWatch
What does it take to become wealthy? Most Americans believe it takes $2.4 million in personal net worth, or nearly 30 times the actual median net worth of U.S. households to be considered wealthy, according to The Modern Wealth Index, a May 2018 study by Charles Schwab and Koski Research, a market research company in San Francisco.
/on.mktw.net/2R3USdd

The Student Loan Debt Crisis Is About to Get Worse; The next generation of graduates will include more borrowers who may never be able to repay.
Riley Griffin – Bloomberg
While Wall Street and U.S. President Donald Trump tout news of a booming stock market and low unemployment, college students may be quick to roll their eyes. The improved economy has yet to mean higher wages for graduates already struggling to pay down massive debt, let alone ease the minds of students staring down the barrel of six-digit loan obligations yet to come.
/bloom.bg/2R1aVbu

The Stock Market Has a Profit Problem
Elena Popina – Bloomberg
Industrials stocks are heading for the worst month since 2012; Higher rates and labor costs, trade war woes crimp margins
Package maker Sealed Air Corp. fell the most in six months Thursday after saying higher raw material costs would crimp the bottom line. A few days earlier it was rising freight outlays at Fastenal Co., where $1.1 billion of market value was erased. On Oct. 9, paint maker PPG Industries Inc. mentioned rising expenses. The shares cratered.
/bloom.bg/2R3ZsYM

Investors dump listed asset managers as sentiment sours; Shrivelling inflows and falling profit margins put sector under intense pressure
Attracta Mooney and Chris Flood – FT
The outlook for the asset management industry is the worst it has been since the financial crisis as the share prices of listed fund houses plummet, profits come under pressure and fears rise that some big investment companies will be wiped out.
/on.ft.com/2R4VtLz

Halliburton notes slowdown in North American oil and gas business
Ed Crooks – FT
Halliburton, one of the world’s largest oilfield services groups, has reported a slowdown in its North American oil and gas operations, reflecting wider difficulties that have emerged in the industry this year.
/on.ft.com/2R5bX6i

Institutions

JPMorgan to build Silicon Valley fintech office
David Henry – Reuters
JPMorgan Chase & Co (JPM.N) said on Friday that it was building a new “fintech campus” in Silicon Valley for more than 1,000 employees, as it pushes to keep abreast of changes in digital payments.
/reut.rs/2R6f2mH

Goldman Sachs changes Asia investment banking leadership: memo
Sumeet Chatterjee – Reuters
Goldman Sachs Group Inc (GS.N) has named veteran banker Todd Leland as its investment banking head for Asia Pacific excluding Japan, according to an internal memo seen by Reuters, adding to leadership changes at the bank with CEO David Solomon taking over this month.
/reut.rs/2R4wLv2

Standard Chartered plans job cuts as shareholder gloom deepens; Investors become frustrated over bank’s turnround strategy
David Crow and Stephen Morris – FT
Standard Chartered is preparing a fresh round of job cuts to reduce costs in response to rising pressure from investors who are frustrated over the emerging market bank’s flagging performance.
/on.ft.com/2R4Rui5

\Vanguard to set up ETF research centre in London; Asset manager aims to boost adoption of exchange traded funds outside the US
Chris Flood – FT
Vanguard will establish a London research centre focused on exchange traded funds as part of a push by the world’s second-largest asset manager to boost the adoption of the investment products outside the US.
/on.ft.com/2R75Puu

Regions

Italy vows to stay in euro but stick with spending plan; European Commission had accused coalition government of breaching budgetary rules
Miles Johnson in Rome – FT
The leaders of Italy’s populist coalition government said they had no intention of leaving the euro but will stick with spending plans that have triggered both a credit rating downgrade and sharp criticism from Brussels.
/on.ft.com/2R9QnxR

State of the nation: What the China opportunity looks like now
Sandrine Soubeyran – FTSE Russell Blog
Since the introduction of economic reforms some 40 years ago, China’s economy has transformed into a formidable driver of global growth. As the country continues to open its equity market to international investors, they will find a market with a broader set of industries. And alsoóperhaps surprisingly to someóthey will see an increase in focus on the green economy.
/goo.gl/y6FtRK

Fentanyl smuggled from China is killing thousands of Americans
Del Quentin Wilber – LA Times
The Zheng drug trafficking organization was hardly clandestine. The Shanghai-based network sold synthetic narcotics, including deadly fentanyl, on websites posted in 35 languages, from Arabic and English to Icelandic and Uzbek.
/lat.ms/2R8sg2w

The $600 billion reason why China’s stock market crash might get a whole lot worse
Will Martin – Business Insider
Perhaps the biggest financial market story in 2018 so far is the colossal fall from grace of the Chinese stock market, which has witnessed losses in excess of 30% since the start of the year.
/read.bi/2Rc80x5

MUFG says bank’s CEO will not attend Saudi conference
Reuters
The CEO of Mitsubishi UFJ Financial Group’s banking arm will not attend the Future Investment Initiative conference in Saudi Arabia, the group said on Sunday, joining a growing list of business executives to withdraw over concern about the death of journalist Jamal Khashoggi.
/reut.rs/2R15TMm

Saudis have ‘no intention’ of using oil as leverage in Khashoggi case; Energy minister says crude production is ‘isolated’ from politics
David Sheppard in London – FT
Saudi Arabia’s energy minister said the country is likely to raise oil production close to 11m barrels a day, signalling it has “no intention” of using its status as the world’s largest crude exporter to respond to the international political pressure it faces over the death of journalist Jamal Khashoggi.
/on.ft.com/2R3XCr1

Brexit

London marchers call for new Brexit vote; Organisers say protest is biggest yet in support of a rethink on leaving EU
Robert Wright in London – FT
Hundreds of thousands of people marched through central London on Saturday to demand a new referendum on the UK’s membership of the EU, in the biggest demonstration so far in support for a rethink of the historic 2016 vote.
/on.ft.com/2R8t73e

Miscellaneous

Bordeaux Heading for `Great’ Vintage After Unusually Dry Summer
Guy Collins – Bloomberg
Harvest conditions in September were exceptionally favorable; Wet weather in the spring gave some growers issues with mildew
Bordeaux wine-makers are heading for a “great” vintage this year after an unusually warm growing season and exceptionally dry summer and harvest, according to Olivier Bernard, whose family owns Domaine de Chevalier in Pessac-Leognan south of the city.
/bloom.bg/2R52xaW

Yann Couellan: The path of the curious; Curiosity is the key to survival in the world of FICC (Fixed Income, Currency and Commodities) trading, and Yann Couellan, head of FICC trading at BNP Paribas Asset Management, knows this better than most. Couellan speaks to David Whitehouse about his career so far and what still excites him about the future.
By David Whitehouse – The Trade
Yann Couellan’s day starts early. He sets off from his home in a village near Versailles to the south of Paris at around 6.30 am, arriving between 7 and 7.30 at the headquarters of BNP Paribas Asset Management, on rue BergËre, near the Grands Boulevards metro station.
bit.ly/2R4W1kB

The post ICE Announces Houston Crude Oil Futures Launch; Quantum computing is funds’ future – NASA appeared first on John Lothian News (JLN).

First Read

World’s Largest Bitcoin Mining Manufacturer Earned $742.7 Million in Six Months
Thom Thompson – JLN

This article is a follow-up to Thompson’s earlier article, “Introducing Bitmain,” which you can find here

BitMain Technologies Holding Company, the world’s largest provider of bitcoin mining equipment, filed its draft prospectus for an IPO on the Stock Exchange of Hong Kong in late September. The document indicated that the company had generated more than $742.7 of net profit (about $1 billion EBITDA – earnings before interest, taxes, depreciation and amortization) on sales of $2.8 billion in just the first half of 2018.

You can read the rest of this article here

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Hits & Takes
JLN Staff

Julie Armstrong has left the CME Group and is now V.P. Strategic Market Development at Uptake, according to LinkedIn.~JJL

Chuck Mackie wrote about day two (the final day) of FIA Expo, which focused on digital assets, for MavenWave. You can read his analysis here. ~SR

Take a look at Piper Jaffray’s survey of teens’ tastes to see how out of touch you are. ~SD

Some small exchanges are making big strides. Take the American Financial Exchange, for example. Led by Founder, Chairman and CEO Richard Sandor, AFX posted record transaction volumes last month totalling $21.6 billion, a record week that month of $6.6 billion and record day of $1.7 billion transacted on September 19. That’s some nice progress for an exchange launched in December 2015. Sandor was featured on TD Ameritrade’s network with JJ Kinahan parts one and two. He was also featured in a recent Economist piece A scramble to replace LIBOR is under way. In the wake of LIBOR, AFX is finding its stride.~JK

Robert Paul has joined the board of directors of Seed CX, which is reinventing itself as a crypto firm.~JJL

The fourth Wall Street Rides FAR raised over $350,000 for the Autism Science Foundation.~JJL

Turkish President Recep Tayyip Erdogan spoke about the investigation into the murder of journalist Jamal Khashoggi today. Check out a recap of what he said here. ~SD

If you are interested in making a donation to “Fearless Girl National Youth Leadership Training Fund,” the easiest way is to send a check made payable to: Pathway to Adventure Council. Send the check to me, John Lothian, at my offices at the Chicago Board of Trade. If you need the address or other details, email me at mailto:johnlothian@johnlothian.com. Your donation will help train girls in leadership and scouting skills as they enter Scouts BSA in February.~JJL

A suspected bomb was found at the home of conspiracy theorists’ favorite Hungarian punching bag, George Soros. He was not at home at the time.~SD

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Crain’s names Kirk publisher, executive editor; Chicago media veteran Jim Kirk returns to Crain’s Chicago Business to lead business operations as well as the newsroom.
Crain’s Chicago Business
Jim Kirk, a veteran of Chicago journalism and publishing circles, has been named to the newly created position of publisher and executive editor of Crain’s Chicago Business. http://bit.ly/2R3s5VW
***** Jim Kirk has jumped around lately while working for Chicago Tribune Publishing, but now he is home in Chicago and at Crain’s, where he previously worked.~JJL

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Humbled Crypto-ers Want Lawmen to Legitimize Their Wild Market
Alastair Marsh – Bloomberg
After the crypto crash, the industry wants governments to confer legitimacy on digital currencies whose enthusiasts originally boasted of being outside the system. For some operators, the alternative could be bleak.
/bloom.bg/2R7pn1E

***** When all else fails, ask for help.~JJL

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Monday’s Top Three
Our top story of the day on Monday was Matt Raebel’s piece for JLN FIA 2018 charts the rise of institutional crypto investors. Second was the ICE announcement Intercontinental Exchange Announces Launch of Permian WTI Crude Oil Futures Deliverable in Houston. Third was the FT’s Nasa says quantum computing is the future for funds

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MarketsWiki Stats
134,136,616 pages viewed; 23,294 pages; 215,248 edits
MarketsWiki Statistics

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Lead Stories

Japan’s dying shareholders signal sombre outlook for its stocks; Trend to liquidate inherited portfolios will mean decades of selling pressure, says Nomura
Leo Lewis – FT
Investors should expect decades of selling pressure on Japanese stocks from the most implacable bears in the market: the recently deceased, according to investment bank Nomura.
/on.ft.com/2R6SNNK

****For a different look at the generational issues facing Japan, read this sad Reuters story from over the weekend – Aging Japan: Unclaimed burial urns pile up in Japan amid fraying social ties.~SD

The High Financial Price of Our Short Attention Spans; Information overload is giving us little time to focus on any of it – and leading us to make bad choices about our money
Shlomo Benartzi – WSJ
Digital devices are potentially damaging your walletóbut not in the way you might think. Smartphones and other gadgets allow us to follow our friends, read the news, watch a football game and even track our investments anytime, and nearly anywhere. We’re always multitasking, or moving from one bit of information to the next, and rarely looking at one piece of information long enough to fully digest it.
/on.wsj.com/2R9ouWy

Michael Spencer Takes on Oil Exec, Wife in Insider-Trading Spat
Jonathan Browning – Bloomberg
Billionaire Spencer’s FCFM pursuing private prosecution; FCFM sees insider-trading attempt in U.K. oil firm’s shares
An investment firm controlled by British billionaire Michael Spencer is turning private prosecutor, and has accused an oil executive and his wife of attempting insider trading.
/bloom.bg/2R61zeP

What Happens When Banks Smear Their Exiting Brokers
Neil Weinberg – Bloomberg
Finra finds dozens of records falsely tarnished by brokerages; ‘Marking up a U-5 is the latest weapon’ in brokerages’ arsenal
Dale Cebert was managing over $400 million for Morgan Stanley Smith Barney when the bank fired him. That wasn’t the only blow. The bank also claimed he had drawn multiple customer complaints and run a side business without approval — allegations it put on his online employment record for anyone to see.
/bloom.bg/2R8J9Ke

Saudi sees deals worth $50 billion at investment conference despite boycotts
Andrew Torchia, Rania El Gamal, Marwa Rashad – Reuters
Saudi Arabia was set to sign deals worth $50 billion on Tuesday at the opening of an investment conference despite being overshadowed by the killing of journalist Jamal Khashoggi which prompted a boycott by Western politicians, top world bankers and company executives.
/reut.rs/2R9s6HV

Blockchain technology poised to enter European settlement system; Licence approval for UK’s Setl represents a further coup for proponents
Philip Stafford – FT
One of Europe’s biggest securities settlement systems is set to welcome a blockchain-based depository after Setl, a UK fintech group, received a licence from French regulators.
/on.ft.com/2R66V9V

Trading platform Plus500 targets Japan after European clampdown
Muvija M – Reuters
Online trading platform Plus500 said it will look to expand into regulated markets such as Japan to offset the impact of a crackdown in Europe on high-risk financial betting.
/reut.rs/2RaVT3e

CAUTION: Criticizing the Fed Will Have Consequences
Steven Friedman – Traders Magazine Online News
It’s not the job of market participants to tell elected officials what to say or not to say, but it is our job to consider the consequences of their remarks. And thinking through President Trump’s recent criticism of monetary policy, there are reasons to be concerned. The criticism is remarkable not for its pointedness but rather for the break with precedent.
bit.ly/2R98gwt

Digital Assets Dominated Conversations At 34th Annual FIA Expo; Safety and Security, Comfort and Familiarity May Be Key In Bringing In Institutional Investors
Jessica Darmoni – Hehmeyer
“Ten years after Satoshi Nakamoto publishes his white paper and we have TD Ameritrade and Fidelity talking about bringing crypto to their customers,” said Tim Grant, CEO of DrumG, a fintech company focused on distributed ledger-based applications, at the Futures Industry Association’s (FIA) 34th Annual Expo in Chicago. “Crypto used to be a dirty word but we are all breathing a sigh of relief now that we can talk about it.”
bit.ly/2RbWgdV

A Chicago crypto exchange has assembled a slate of new directors to help prepare for a November launch
The Block Crypto
Seed CX got its start as a little-known hemp marketplace but has since made a pivot to another arena that often exists in a regulatory grey area: cryptocurrency. To help build expertise in the digital-asset field it now operates in, Seed CX has brought on a slew of financial-services pros to advise the firm.
bit.ly/2R3BJrC

SEC Deputy Director of Trading and Markets Gary Goldsholle Joins Steptoe
Steptoe & Johnson LLP
Steptoe & Johnson LLP is pleased to announce that Gary Goldsholle, who served nearly four years as deputy director and senior adviser of the Securities and Exchange Commission’s (SEC) Division of Trading and Markets, has joined the firm as a partner. Based in Steptoe’s Washington office, Goldsholle will work with Steptoe’s Financial Services, Public Policy, and Blockchain and Cryptocurrency practices.
bit.ly/2q8csBc

Exchanges, OTC and Clearing

One of the largest cannabis companies is going public on the New York Stock Exchange
Jeremy Berke – Business Insider
Aurora Cannabis, one of the largest Canadian marijuana producers, is going public on the New York Stock Exchange. When Aurora’s shares start trading on Tuesday morning, it will join a select list of cannabis producers that are listing on US-based exchanges.
/read.bi/2RbdDeV

SIX outperforms ICSD rivals for fourth straight year
SIX
SIX – which owns and operates Switzerland’s CSD – has been recognised by the financial services industry as the best provider of international CSD services for the fourth consecutive year, in a recent industry benchmark survey. It is also the third year in a row that the organisation outperformed its competitors for CSD services in Switzerland.
bit.ly/2R6ar3W

Bond drawing of paragon GmbH & Co. KGaA started; Trading start in the segment Scale on the Frankfurt Stock Exchange planned for October 31 / DirectPlace supports in the placement
Deutsche Bˆrse Group
The paragon GmbH & Co. KGaA (ISIN: DE000A2NBZK1) issued a bond via the Frankfurt Stock Exchange today and is expected to last until 25 October. The bond is scheduled to be listed on October 31 in the Corporate Bond Scale segment of the Frankfurt Stock Exchange.
bit.ly/2R8gHZ1

New Report from Payments Canada, the Bank of Canada, TMX Group, Accenture and R3 Proves that Distributed Ledger Technology Can Enable Equity Settlement
OCTOBER 22, 2018
TMX
Payments Canada, the Bank of Canada, TMX Group, Accenture (NYSE: ACN) and R3 have published a report demonstrating the feasibility of clearing and settlement of securities using distributed ledger technology (DLT).
bit.ly/2R6liec

JPX Concluded NDA with TOCOM
JPX
In connection with advancing research and discussion of the comprehensive exchange initiative as set out in its Medium-Term Management Plan, JPX has today concluded a non-disclosure agreement (NDA) with Tokyo Commodity Exchange, Inc. (TOCOM) as a prerequisite for entering into concrete discussions.
bit.ly/2R7cSmR

Temasek-backed Vertex invests in cryptocurrency exchange Binance
Reuters
Vertex Ventures, backed by Singapore state fund Temasek [TEM.UL], has invested in Binance, one of the world’s biggest cryptocurrency exchanges, as it prepares to expand operations into the city-state, the firms said on Tuesday.
/goo.gl/i8QRWS

Fintech

Itiviti announces connectivity to Hudson River Trading SI
Itiviti
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, today announced the addition of the Hudson River Trading Systematic Internaliser (HRSI) venue to its expanding connectivity offering. The connection, which is now live, provides Itiviti clients with access to liquidity sourcing from Hudson River Trading, one of the largest Electronic Liquidity Provision (ELP) Systematic Internalisers, covering more than 1,000 European stocks. HRSI was previously operating as Sun Trading International SI (STSI) before its migration on October 1st, 2018.
/read.bi/2R8GQXA

Launch Of Robowise
Mondovisione
UK corporate bond market pioneer offers robo-manager for retail investors; Goldman Sachs bond veteran Tom Macura joins as COO
WiseAlpha, the online market offering retail investors access to corporate bonds, has launched an automated service for risk setting and sector selection.
bit.ly/2RaaX0Z

FlexTrade Integrates ipushpull Real-Time Interoperability Platform Into FlexNOW EMS – Provides Real-Time Data Sharing & Improved Workflow Automation
Mondovisione
FlexTrade Systems (@FlexTrade) today announced the integration of ipushpull (iPP), a real-time interoperability platform, with its FlexNOW execution management system to provide users with access to iPP’s live data sharing and workflow automation between desktop applications, messaging platforms, in-house systems and cloud services.
bit.ly/2R3ubFt

Refinitiv bolsters fixed income trading with iQbonds; iQbonds provides pricing and electronic trading in fixed income with connections to markets, exchanges and information platforms.
Hayley McDowell – The Trade
Refinitiv has added pricing and market making technology for fixed income trading from valantic’s iQbonds to its Eikon desktop.
bit.ly/2R94q6O

Deutsche Bank hires cloud-specialist from BoE
Olaf Storbeck – FT
Deutsche Bank has hired a top IT executive from the Bank of England as part of a wider plan to cut costs by ramping up the use of cloud technology.
/on.ft.com/2R3B3CA

Americans can’t quit cash
Colby Smith – FT
We’ve been hearing for years that the world is going “cashless.” This reality does not appear remote. For instance, Sweden has seen a 50 per cent of decrease in the use of cash over the past decade. But America is not Sweden ó stateside cash is still king, at least for now.
/on.ft.com/2R8Jmx7

Cryptocurrencies

Blockchain Used to Settle Stocks in Bank of Canada Experiment
Doug Alexander – Bloomberg
Project Jasper shows ability to an integrated DLT system; Findings offer ‘critical insight’ for technology, TMX says
Blockchain can be used to clear and settle stocks, an experiment involving the Bank of Canada has shown.
/bloom.bg/2Radh8d

BOJ Can’t Scrap Cash for Digital Currency Now, Says Amamiya
Toru Fujioka and Masahiro Hidaka – Bloomberg
Cash still too widely used in Japan to be phased out now; Replacement of cash deposits would affect credit creation
The Bank of Japan can’t scrap cash and issue a digital currency for transactions and deposits at this point in time, said Deputy Governor Masayoshi Amamiya on Saturday, flagging the need for caution in any consideration by the central bank of launching a digital asset.
/bloom.bg/2R9nUYS

The ties that bind? Coinbase’s listing of 0x draws scrutiny given the exchange’s connections to a VC firm promising ‘asymmetric info’
Frank Chaparro – The Block Crypto
Coinbase, the digital asset exchange, has stood out among a crowded field of cryptocurrency marketplaces. It even calls itself “the most-trusted brand in the space” in its marketing materials.
bit.ly/2R6RU7S

Elon Musk Mocks Bitcoin Security And Scams With Tongue-In-Cheek Tweet
Billy Bambrough – Forbes
Bitcoin is often mocked by the wider cryptocurrency sector for its older technology compared to some of its newer peers and now Elon Musk, a serial entrepreneur who’s no stranger to controversy, has lampooned the bitcoin scams that plague Twitter and other social networks.
bit.ly/2R3reoc

Blockchain engineers raking in the big bucks even as cryptos struggle
The Block
While cryptocurrencies have been in an extended bear market this year, engineers with the skills to build blockchain applications have little to growl about. CNBC reports that they are making $150-175K on average. Working with tech recruiter Hired, CNBC learned that blockchain salaries are $15K-40K above typical software-engineering pay and match those given to artificial-intelligence wizards — who were alone among the highest paid until recently.
bit.ly/2RbWOjZ

Fidelity’s Blockchain Incubator Lead Just Went Full Crypto
Anna Baydakova – Coindesk
Hadley Stern, the executive who led Fidelity Investments’ blockchain research and development for the last three years, is joining a well-known startup in the field.
bit.ly/2R8HVi6

Kenyan crypto-currency pioneer: ‘I make my money from Bitcoin and tasty roast meat’
Vumani Mkhize – BBC
The towering vista of Mount Kenya provides an unlikely backdrop to a tech-savvy Kenyan restaurant that has embraced crypto-currencies as a form of payment.
/bbc.in/2CyyDYX

Cryptocurrency Researchers Discover That Blockchain Technology Will Make Internet Voting Worse Instead Of Better
Uma Johnson – Smartereum
Before now, many experts believed that blockchain technology will be highly beneficial if it applied to internet voting. However, the research from three IC3 researchers has proven otherwise. The research was published by Business Insider and it showed an argument that proved that the blockchain technology will not be beneficial in the internet voting system. In fact, it will make things worse.
bit.ly/2yWNAAi

The Delicate Psychology of Stablecoins
Michael J. Casey – Coindesk
There’s an early scene in “It’s a Wonderful Life,” that stalwart of holiday season TV viewing, that provides one of the most insightful on-screen depictions of the core challenge of banking: maintaining trust.
bit.ly/2J9WyiB

NewCity Digital Partners with Forbes Media, NewCity Capital and trade.io To Launch Forbes CryptoMarkets
Forbes Staff
bit.ly/2OJijfd

Can Bitcoin Become a Dominant Currency?
Wall Street Journal
Bitcoin turns 10 at the end of the month. And over the past decade, there has been no shortage of headlines about the inevitable riseóor the inevitable fallóof it and other cryptocurrencies.
/on.wsj.com/2yvZX79

Blockchain specialist SETL names new CEO; Co-founder and CEO Peter Randall will step down from his role and become president of the firm, helping Philippe Morel lead the company.
Hayley McDowell – The Trade
Blockchain technology specialist SETL has appointed a new chief executive, as co-founder and former CEO Peter Randall steps down from his position.
bit.ly/2R6Xo2g

Politics

Donald Trump Is Lyin’ Up a Storm; Is there an election coming up, or something?
The Editorial Board – NY Times
There he goes again. With Republicans struggling to keep their grip on Congress, President Trump is dialing up the demagogy. At campaign rallies and on social media, he’s spewing dark warnings about a Democratic mob clamoring to usher in an era of open borders, rampant crime, social chaos and economic radicalism.
/nyti.ms/2R8Mitw

Trump’s Lies Are Becoming Exponentially More Brazen; Holding court on the White House lawn Monday, Trump revealed new depths of contempt for objective reality – and offered a master class in how the most obvious lies destroy the very notion of truth, itself.
Tina Nguyen – Vanity Fair
In the middle of an interview last week with 60 Minutes, Donald Trump seemed to take a perverse joy in baiting anchor Lesley Stahl as she attempted to wrangle him into submission. “Lesley, it’s O.K.,” he said, as they clashed over the narrative surrounding his administration’s migrant-family separation policy. “I’m presidentóand you’re not.” A week later, still riding high on the confirmation of Brett Kavanaugh and, perhaps, taking inspiration from the Saudis, Trump sounded less concerned than ever with trivialities like objective truth. Holding court before a gaggle of reporters outside the White House as Marine One idled on the South Lawn, Trump unleashed a dizzying sequence of half-truths and fairy tales, because he is the president, and the reporters in front of him were not.
bit.ly/2R8AHdZ

Trump Is Giving Xi Someone to Blame for China’s Slowing Economy
Bloomberg News
Trade war offers cover for one of Beijing’s biggest worries; ‘Trump’s maximum pressure will not corner Xi,’ analyst says
U.S. President Donald Trump sought to pressure Beijing to open its markets by undermining its economy. Instead, he may be providing Chinese counterpart Xi Jinping with the perfect cover story if things get worse.
/bloom.bg/2RaDjs6

Trump Vows to Outspend Russia, China on Nuclear Arsenal Buildup
David Tweed – Bloomberg
‘We have more money than anybody else, by far,’ Trump says; President plans to pull out of Russia arms control treaty
The U.S. will outspend any other nation in building up its nuclear arsenal, President Donald Trump said, in a fresh challenge to Russia and China.
/bloom.bg/2R9pvhk

Regulation

Keynote Address: ISDA Annual Australia Conference
ASIC
A speech by Cathie Armour, Commissioner, Australian Securities and Investments Commission at the ISDA Annual Australia Conference, (Sydney, Australia), 23 October 2018
bit.ly/2RbiGvT

SEC Suspends Trading in Company for Making False Cryptocurrency-Related Claims about SEC Regulation and Registration
SEC
The Securities and Exchange Commission today suspended trading in the securities of a company amid questions surrounding its statements about partnering with a claimed SEC-qualified custodian for use with cryptocurrency transactions and a purportedly registered public offering of preferred stock.
bit.ly/2EMsQBs

****Reuters on the action here.~SD

Lawsuit names CNBC star Lemonis in alleged financial fraud; CEO Marcus Lemonis and officials at Lincolnshire-based Camping World are accused of misrepresenting financials while selling more than $530 million in the company’s shares.
Brianna Kelly – Crain’s Chicago Business
A lawsuit seeking class-action status accuses Camping World Holdings and certain company officials, including Chairman and CEO Marcus Lemonis, of misrepresenting the company’s financials while they sold more than $530 million in Camping World shares.
bit.ly/2R6TdU8

Reminder: FINRA-Bloomberg Indices to be Discontinued; OCTOBER 22, 2018
FINRA
Beginning Thursday, November 1, 2018, FINRA will discontinue processing the FINRA-Bloomberg Active U.S. Corporate Bond Indices.
bit.ly/2R8FwUD

Sebi mulls standardisation for PMS schemes by setting up industry body; Sebi is doing its bit to ensure the PMS providers adhere to data sanctity, said a source
Ashley Coutinho – Business Standard
The Securities and Exchange Board of India (Sebi) is deliberating on setting up an industry body to draw up best practices for portfolio managers and introducing a standard template to bring uniformity in the way they market their schemes. The discussions are preliminary.
bit.ly/2R7veUG

Investing and Trading

Wall Street’s Hottest Debt Is a Haven for Investors
Adam Tempkin – Bloomberg
Floating-rate CLOs, leveraged loans generate biggest gains; Investment-grade fixed-rate debt suffering negative returns
Investors are finding shelter from Treasury volatility in two of Wall Street’s hottest markets.
/bloom.bg/2R8Bmft

Goldilocks Has Abandoned Stock Markets; Recent data suggest the robust corporate earnings growth that has supported elevated equity prices may be coming to an end.
Komal Sri-Kumar – Bloomberg
Strong U.S. economic growth has encouraged the Trump administration to escalate the trade war with China, putting increasing pressure on that nation’s economy and financial markets. At the same time, the Federal Reserve raised interest rates last month for the eighth time since December 2015, and a majority of policy makers even see the need to boost rates above the long-run neutral rate.
/bloom.bg/2R88fcf

BlackRock stakes claim on ‘sustainable investing’ revolution; Fink forecasts such ETF assets will rise from $25bn to over $400bn in a decade
Peter Smith in London – FT
BlackRock intends to become a global leader in “sustainable investing”, says Larry Fink, as the world’s largest asset manager launched a range of exchange traded funds in the US and Europe that incorporate environmental, social and governance criteria.
/on.ft.com/2Rafdxv

Institutions

Goldman, advisor to the ultra-rich, plans wealth management for all
Hugh Son – CNBC
For decades, you had to have at least $10 million for Goldman Sachs to manage your money. Now, the bank is preparing digital wealth management for the little guy.
/cnb.cx/2EGI7nt

Goldman Moves Digital Bank Marcus to Wealth Unit
Sridhar Natarajan – Bloomberg
Bank shuts consumer banking division as it shifts Marcus unit; Move shows potential for more wealth offerings through Marcus
Goldman Sachs Group Inc. is shifting a heavily touted business line into its wealth-management unit as the bank eyes expansion through products that can be pitched to the division’s customers.
/bloom.bg/2R976B7

Goldman Sachs strengthens its pitch for Main Street money; Wall Street group reorganises to offer investment management services to the masses
Laura Noonan in New York – FT
Goldman Sachs is planning to offer investment management services to the masses, throwing down the gauntlet to big US brokerage houses like Charles Schwab by taking the venerable Wall Street institution further into Main Street.
/on.ft.com/2ReoIMj

Could knowledge about Central banks impact households’ expectations?
Emma Rockall – Bank Underground Blog
Should central banks care if people understand them? Whereas once Alan Greenspan famously declared: “If I seem unduly clear to you, you must have misunderstood what I said”, central bankers now dedicate considerable time and thought to transparency and communications. While transparency initiatives have value in their own right in improving accountability, results from the Bank’s Inflation Attitudes Survey suggest that they could have potentially far-reaching effects on the economy through their impact on households’ expectations. If they improve households’ knowledge of central banks, they may produce inflation expectations that are more stable and closer to the inflation target in the medium term – that is, ‘better-anchored’ expectations.
bit.ly/2EEsM73

Julius Baer Is Shutting Down Its Panama and Peru Operations
Jan-Henrik Foerster and Patrick Winters – Bloomberg
Review of client portfolios is said to focus on Latin America; Closure follows arrest of ex-banker who had worked in Panama
Julius Baer Group Ltd. is shutting down its Panama and Peru operations as part of the Swiss private bank’s strategic review of its Latin American business, according to people with knowledge of the matter.
/bloom.bg/2R7ynEc

Danske Bank was behind large share of Estonian cross-border payments in 2008-2015: central bank
Jacob Gronholt-Pedersen – Reuters
Danske Bank, which is involved in a 200 billion euro ($230 billion) money laundering scandal in Estonia, processed a large share of the country’s cross-border payments between 2008 and 2015, its central bank said on Monday.
/reut.rs/2R7BThS

Time Is Running Out for Deutsche Bank to Stand Alone; Germany wants a strong bank that its major companies can rely on in a world increasingly dominated by American banks
Paul Davies – WSJ
As Deutsche Bank DB -1.83% has been quietly busy with its latest restructuring, chatter about a potential merger between Germany’s largest lender and its smaller rival Commerzbank CRZBY -1.79% has grown louder.
/on.wsj.com/2Rc15Uz

Regions

Vancouver: The City That Had Too Much Money; Vancouver was the first place to experience the tidal wave of Chinese cash. Now the city is leading efforts to stop it.
Matthew Campbell, Natalie Obiko Pearson – Bloomberg
The black coupe pulled up outside the Starlight Casino in a suburb of Vancouver. The driver got out, greeted a man in a red shirt, and pulled two bulging white plastic bags from the trunk. He led the way into an empty noodle shop next door, where he handed over the bags before returning to the car. The man in the red shirt took the bags into the casino, through a cavernous glass lobby with signs in English and Mandarin. At a cashier’s desk, he opened one of the bags to present his cargo: thousands of green Canadian $20 bills, bound into loose bricks with yellow plastic bands.
/bloom.bg/2RaEW9c

Citigroup Seeks to Curb China Travel as UBS Ends Restriction
Cathy Chan, Alfred Liu and Chanyaporn Chanjaroen – Bloomberg
U.S. bank said to follow Julius Baer in imposing restrictions; UBS said it has lifted curbs, all staff can move freely
Citigroup Inc. and JPMorgan Chase & Co. were among international firms that asked their wealth managers to reconsider travel to China, according to people familiar with the matter, as UBS Group AG removed its curbs.
/bloom.bg/2R3bBgK

UBS says it allows staff to travel ‘freely’ to China after banker’s departure delayed
Reuters
UBS (UBSG.S) allows all its staff to travel “freely in and out” of China and it is business as usual there, the Swiss bank said, after local authorities last week asked one of its bankers to delay her departure from Beijing to meet with officials.
/reut.rs/2R45IzM

One of China’s Biggest Funds Is Getting Ready to Dump Stocks
Bloomberg News
State-backed China Everbright cautions against new investments; Private equity fundraising in China ‘very difficult,’ CEO says
China Everbright Ltd., the state-backed manager of about HK$139 billion ($18 billion) in assets, said the company is preparing to sell shares in as many as 30 stocks on concern that valuations worldwide have peaked.
/bloom.bg/2Racnsl

Scope and quality of audits needs reform, say City chiefs; FT City Network concerned that auditors have their ‘heads in the sand’
Patrick Jenkins – FT
Auditors have had their “heads in the sand” and must provide a far more rounded view of companies’ health than the current statutory “truth and fairness” opinions if they are to win back public trust, according to some of the City of London’s most senior financiers.
/on.ft.com/2R7o6Yq

India Has Already Hit Record Number of $1 Billion Startups This Year; The country’s latest generation of $1 billion apps have focused on local issues in education, logistics, and lodging.
Saritha Ria – Bloomberg
You get a clear sense of Policybazaar’s target audience the first time you watch Yama, the Hindu god of death, drag a bedridden man to hell for failing to buy insurance. In a series of melodramatic TV spots, the fearsome deity, played by movie star Akshay Kumar, isn’t shy to quote rates, either. After the hospitalized accident victim he’s tormenting laments that his sister’s wedding and his daughter’s schooling had to come first, Yama scoffs in Hindi, “A 10 million rupee insurance policy comes at just 680 rupees a month!” (That’s a wager of about $9 a month for a possible payout of roughly $130,000.)
/bloom.bg/2R8FYlT

Brexit

Brexit Raises Concern U.K. Will Lose Key Scientists, Funds
James Paton – Bloomberg
Nobel Prize winners say top talent may give up on Britain; Crick Institute’s Nurse doesn’t see ‘any upside whatsoever’
Prominent scientists are sounding the alarm on Brexit. Researchers in Britain worry that a sharp break in ties with the European Union or failure to work out a deal could lead to an exodus of highly skilled specialists, curtail funding and hinder collaboration. The concerns extend beyond the U.K. with scientists warning that Brexit could hurt Europe after decades of gains fueled by the flow of ideas and people across borders.
/bloom.bg/2R760G5

RBS sets aside £2bn to help small businesses deal with Brexit; Money will help provide services such as trade finance and increased liquidity
Nicholas Megaw – FT
Royal Bank of Scotland has set aside £2bn in funding to help small businesses deal with Brexit as uncertainty around the terms of the UK’s departure creates concerns about supply chains and financial risks for many businesses.
/on.ft.com/2RbF8F7

EU ready to break Brexit impasse by tweak to backstop; Talks deadlocked despite scrapped reference to customs territory for Northern Ireland
Alex Barker, Mehreen Khan and Laura Hughes – FT
Brussels is offering to remove the most contentious phrase from its Brexit plans for Northern Ireland in a bid to break the deadlock in negotiations with London.
/on.ft.com/2R8wUgL

The post Japan’s dying shareholders; The high price of short attention spans appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The mother of all of ALTSO’s Rocktoberfest events is the Hedge Fund Rocktoberfest in New York. Now in its 15th year, the New York event is at the Hard Rock Cafe off Times Square and brings together more than 40 corporate sponsors and 2,000 industry pros. Great cause, great people, great time. What’s not to like?~SD

On Thursday, November 1, 2018, Chicago-Kent College of Law hosts the “10th Annual Conference on Futures and Derivatives.” This is a full day program covering important topics for compliance officers, in house counsel, regulators, accountants and attorneys who work within the Futures industry. Attorneys will receive 6 hours of CLE credit including an hour of ethics. Accountants will receive 7 hours of CPE including an hour of ethics.

A cocktail and networking reception will follow the program.

Registration can be completed by calling the Office of Continuing Legal & Professional Education at (312) 906-5090 or registering online at 10th Annual Kent Conference
~JJL

Join FIA in Singapore from 27-29 November for the 14th Annual Asia Derivatives Conference. Save $100 USD or more on Asia 2018 registration! Sign up for the full conference pass by Friday, 26 October to save.~JJL

Yesterday the Chicago Board of Trade Building had a fire drill for the 16th floor, where our offices are. We were evacuated to the 13th floor in the old building. The entire 13th floor was gutted, with no internal walls showing. There were only columns and elevators to separate the space. There was a great view of LaSalle Street and one of the 12th floor atrium in this office. The entire space is available for a company to come in and utilize. It was quite spectacular to see.~JJL

Yesterday’s cleared volume at the OCC was 25,969,313 contracts. The total would need to be 34+ million contracts to crack the top 10 best days list, something that has happened quite a few times this year. (Four of the top 10 days ever came from this past February.)~SD

Would you like a custom video for marketing purposes for your firm? John Lothian Productions can help you, whether you need 90 seconds or 30 minutes of video. We also have a deal that when you become a Friend Level sponsor of MarketsWiki, you can get a discounted 90-second video as part of the deal. Price is $2500. Normal Friend Level sponsorship is $2000. Contact us for more details.~JJL

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Trading Technologies Partners with TradeStation to Offer Its Options-on-Futures Technology to TradeStation Customers
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, today announced that the company has entered into a long-term agreement with TradeStation Securities, Inc. (TradeStation Securities) to provide TT’s advanced options-on-futures trading functionality to TradeStation customers via the TT trading platform.
/goo.gl/Co6w8s

***** TradeStation’s move is significant. It used to be all about the TradeStation platform.~JJL

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New Memorial Monument Unveiled at the Site of Dojima Rice Exchange
JPX
Osaka Exchange, Inc. (OSE) today held the unveiling ceremony for a new memorial monument, “A GRAIN OF LIGHT”, at the historical site of Dojima Rice Exchange. Achieved with the cooperation of various entities, the construction of the new memorial monument and renewal of the site of Dojima Rice Exchange are aimed at commemorating the 30th anniversary of the launch of the equity index futures market in Japan, and drawing attention to its history as the forerunner to organized futures exchanges in the world.
bit.ly/2q6jXbW

***** Adding this to my bucket list to visit and see.~JJL

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Fraud costs telecoms industry $17bn a year; GLF report aims to improve industry co-ordination in the ‘internet of things’ age
Nic Filde – FT
Serious fraud in the telecoms sector costs the industry $17bn in revenue a year, with the proceeds frequently used by organised crime and terrorist networks to raise and distribute funds, according to a new report compiled by chief executives working in the industry.
/on.ft.com/2q8jqpS

****** Growing up, fraud against the phone company was a game played by many in order to get free phone calls. Pay phones were fair game for such hijinx, but $17 billion is a lot of fraud.~JJL

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Capital One Bank fined $100 million over money-laundering controls
Patrick Rucker, Katanga Johnson – Reuters
A leading bank regulator on Tuesday fined Capital One Bank [COFCO.UL] $100 million for failing to enforce anti-money laundering controls that have been in place for years.
/reut.rs/2q5X34t

***** It prompts the question, what’s in your wallet?~JJL

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Tuesday’s Top Three
Our top read items were all about people yesterday, led by The Block Crypto’s announcement about Seed CX in A Chicago crypto exchange has assembled a slate of new directors to help prepare for a November launch. Second went to LinkedIn’s Julie (Menacho) Armstrong, who left CME and moved to Uptake. Third was about teens and what they like in PiperJaffray’s Taking Stock With Teens report. Yes, teens are people too, and apparently they like Chick-fil-A and Starbucks the best.

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MarketsWiki Stats
134,191,283 pages viewed; 23,295 pages; 215,257 edits
MarketsWiki Statistics

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Lead Stories

How One Stubborn Banker Exposed a $200 Billion Russian Money-Laundering Scandal; A British employee of Danske Bank dug into the details and tried to alert his superiors
Bradley Hope, Drew Hinshaw and Patricia Kowsmann – WSJ
It took a £1 payment to uncover one of the world’s biggest money-laundering scandals. Howard Wilkinson, a British trader at a Danish bank’s branch in Estonia, noticed that a London business, which moved more than $1 million through the branch almost daily, had filed a report with the U.K. government claiming it had no income or assets. Downloading the report cost Mr. Wilkinson one pound.
/on.wsj.com/2q85oVl

Japan Exchange Group to start merger talks with Tokyo Commodity Exchange
Reuters
Japan Exchange Group Inc (JPX), owner of Tokyo Stock Exchange, will start merger talks with smaller rival Tokyo Commodity Exchange Inc, the companies said on Tuesday, as Japan pushes to create an all-in-one bourse to attract global money.
/reut.rs/2EDLN9F

Trump Steps Up Attacks on Fed Chairman Jerome Powell; President says central banker ‘almost looks like he’s happy raising interest rates’
Michael C. Bender, Rebecca Ballhaus, Peter Nicholas and Alex Leary – WSJ
President Trump escalated his attacks on Federal Reserve Chairman Jerome Powell, saying the head of the nation’s central bank threatened U.S. economic growth and appeared to enjoy raising interest rates.
/on.wsj.com/2q837cH

Forex traders wrap up defence in price fixing trial; Government’s star witness testified they did not think they were cheating anyone
Lindsay Fortado in New York – FT
Three traders on trial in New York over allegations they fixed prices in the global foreign exchange market were on Tuesday wrapping up their defence, which their lawyers kept short after deciding the government’s star witness had done most of their job for them.
/on.ft.com/2q82n7t

There is a fight over data brewing on Wall Street; Nasdaq and the New York Stock Exchange have long profited as aggregators
Brooke Masters – FT
The big beasts of Wall Street are duking it out over data. Last week, the US Securities and Exchange Commission issued a landmark decision in a decade-long fight over the cost of market data between the New York Stock Exchange and Nasdaq on the one hand, and the country’s biggest brokers on the other.
/on.ft.com/2EGSGqG

Italian banks’ fate tied to ‘lords of the spread’; Each basis point rise in sovereign yields heaps more pressure on domestic lenders
Robert Smith – FT
Matteo Salvini, the leader of Italy’s hard-right League party, has borrowed bond market language to create an ingenious new spin on the classic “enemies of the people” trope: the “lords of the spread”.
/on.ft.com/2q6oKKq

Deutsche Bank chief appeals for patience on revenue decline; Corporate and investment banking units suffer falling revenues in third quarter
Olaf Storbeck – FT
Deutsche Bank’s chief executive has asked investors for more patience on his efforts to reverse the slide in revenues after Germany’s largest lender lost further ground on its main investment banking rivals in the third quarter.
/on.ft.com/2q8kr1a

Barclays ‘100% prepared’ for hard Brexit but profits slip; Bank expands Irish subsidiary to become its main European hub outside London
Mark Sweney – The Guardian
Barclays reported a slide in pre-tax profits to £3.1bn for the nine months to the end of September. Photograph: Joe Giddens/PA The chief executive of Barclays said the bank is “100% prepared” for a hard Brexit, expanding its Irish subsidiary to become its main European hub outside London.
/goo.gl/CFHNpm

Wall Street’s Diversity Push Will Be Tested by Next Bear Market
Jordyn Holman and Lananh Nguyen – Bloomberg
‘Intensity’ plunges when job cuts hit: Morgan Stanley’s Harris; Industry leaders meet at Center for Financial Planning summit
Financial companies are all too happy to support diversity programs during good times — but what happens in a bear market? That’s the question posed by Carla Harris, vice chairman of wealth management at Morgan Stanley, who spoke Tuesday at the Center for Financial Planning’s inaugural Diversity Summit in New York. Firms need to foster diversity as a commercial priority or their pipeline of candidates will run dry every few years, she said.
/bloom.bg/2qaRJwN

The Story of Markets Told Through Semiconductors; What appeared to be a selloff in cyclical stocks prompted by fears over the economy may actually be more benign.
John Authers – Bloomberg
Tuesday saw an alarming sell-off in the U.S. equities markets, followed by a plucky comeback. I think the story is best told through the Philadelphia Stock Exchange Semiconductor Index, known by its ticker symbol of SOX. Semiconductors are notoriously cyclical. If there are worries about the economy, they will surely show up in the performance of the SOX. But this was a day when the SOX fought back.
/bloom.bg/2q82AYj

Exchanges, OTC and Clearing

Nasdaq profits weighed down by Nordic trader default
Nicole Bullock in New York – FT
Nasdaq, the exchanges operator, reported a 4.1 per cent drop in net income for the third quarter, which included an $8m loss related to the default of Einar Aas, a private Norwegian trader whose bets in the European power market collapsed last month.
/on.ft.com/2q926kP

Nasdaq Reports Third Quarter 2018 Results; Delivers Solid Organic Revenue Growth
GlobeNewswire
Nasdaq, Inc. (Nasdaq:NDAQ) today reported financial results for the third quarter of 2018. Third quarter 2018 net revenues were $600 million, including 5% organic revenue growth.
bit.ly/2q60bNL

Nasdaq Announces Quarterly Dividend of $0.44 Per Share
GlobeNewswire
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. The dividend is payable on December 28, 2018 to shareowners of record at the close of business on December 14, 2018. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.
bit.ly/2q908AX

Qingdao Haier new on the Frankfurt Stock Exchange; Chinese manufacturer of household appliances listed in Prime Standard
Eurex
Qingdao Haier Co., Ltd. (ISIN: CNE1000031C1) was listed in the Prime Standard on the Frankfurt Stock Exchange today. The shares of the Chinese household appliance manufacturer were quoted at EUR1.06 at the start of trading. The issue price was EUR1.05.
bit.ly/2q8dld3

TS expands ITG partnership with addition of POSIT Alert; TradingScreen will integrate ITG POSIT Alert with its OEMS to provide clients with additional block liquidity.
Hayley McDowell – The Trade
TradingScreen (TS) has extended its agreement with equities broker ITG to provides its customers with access to block liquidity from POSIT Alert.
bit.ly/2q6DGIm

Regarding the Equity Trading System Glitch Occurring on October 9, 2018
JPX
We sincerely apologize for the inconvenience experienced by investors and many other market participants caused by the glitch that occurred in the equity trading system “arrowhead” on October 9, 2018.
bit.ly/2q614WB

BSE gets Sebi’s approval to launch Oman crude oil futures contract; The BSE will launch the monthly future contract for Oman Oil from Friday, with settlement on the last working day of the next month
Nidhi Verma -Reuters
India’s stock market regulator the Securities and Exchange Board of India (Sebi) on Wednesday approved the Bombay Stock Exchange (BSE) to launch an Oman oil futures contract, the BSE said in a statement.
bit.ly/2q63hBn

SET Unveils Extra Exhibition To Promote DCA Investment
MondoVisione
The Stock Exchange of Thailand (SET)’s INVESTORY, the first investment discovery museum in Thailand, has launched an extra exhibition to promote Dollar-Cost Averaging (DCA) investment on October 24.
bit.ly/2q85vQH

Fintech

Buy-side throws doubt on RFQ for equities as “last chance saloon” for liquidity; Ahead of the anticipated launch of RFQ for equities from two major trading venues, Hayley McDowell speaks to senior buy-siders and finds out that most are very sceptical of the idea.
Hayley McDowell – The Trade
Two major trading venues are set to launch a request for quote (RFQ) functionality for cash equities trading later this year, but some senior buy-siders are sceptical of the idea and have questioned the need for such a tool in a liquid market.
bit.ly/2q9QFZV

Post-trade providers stepping up as passive shift ‘jeopardises entire intermediary infrastructure’; Discussions around data helping illiquid instruments trade more effectively conjure up worries about what the future of passive investing and what it means for post-trade providers.
Jonathan Watkins – The Trade
One of DTCC’s top data experts has issued a stark warning about the potential threat of passive investing on the entire intermediary ecosystem unless custodians and market infrastructures overcome data challenges and show sentiment and liquidity in the markets.
bit.ly/2q85UTh

A Robo-Advisor at Goldman Sachs?
Barron’s
Goldman Sachs is known for serving the very wealthy, but a restructuring at the firm indicates it’s looking to expand its wealth management products to a broader clientele.
bit.ly/2q8aSiN

How will AI change the face of banking?
By Dr Giles Nelson, CTO Financial Services, MarkLogic
Research firm IDC is predicting banks worldwide will spend more than $4bn on Artificial Intelligence (AI) in 2018. If we factor in PwC’s Sizing the Prize report to understand the broader trend for global business, it seems AI could add a further $15.7 trillion to the global economy by 2030.
bit.ly/2q6rnMi

Blockchain could increase global trade volumes by $1.1 trillion by 2026, off the current base of $16 trillion
Bain & Company via AP
Solutions could provide a $2 billion annual revenue lift in documentary trade financing by 2026 for the global banking industry
bit.ly/2q63y7n

Cryptocurrencies

The Dollar Is The New VIX, And The Bitcoin Connection
Brian Kelly – Forbes
Over the last few months I have been hammering on the idea that the U.S. Dollar is a better gauge of risk in the global financial system than the so-called “Fear Gauge” – the CBOE Volatility Index (VIX). When on CNBC I have prefaced most of my equity market commentary with the view that as long the U.S. Dollar remains stable then the financial markets should remain calm. But if the U.S. Dollar rises, it creates risks to the global economy that are not captured by the VIX index.
bit.ly/2q814p1

Crypto Exchange Coinbase to List Stable Coin Backed by Circle
Julie Verhage – Bloomberg
Coinbase Inc., one of the biggest U.S. cryptocurrency trading platforms, said it’s joining a consortium, which includes Circle Internet Financial Ltd., that is offering a digital token pegged to the value of the U.S. dollar.
/bloom.bg/2q9wxXK

Coinbase Adds Its First Stablecoin Tied to the US Dollar
Nikhilesh De – Coindesk
Crypto exchange Coinbase announced support for the Circle-issued stablecoin Tuesday.In a blog post, the exchange said U.S. customers outside the state of New York can now buy, sell, send and receive the USD//Coin (USDC) through the company’s iOS and Android apps, as well as coinbase.com, which was first announced last month. It intends to offer the coin to customers in different regions going forward.
bit.ly/2qagfOE

Coinbase snags license to operate as a qualified custodian
The Block Crypto
Coinbase, the cryptocurrency exchange, announced Tuesday that it secured the necessary qualification to operate as a qualified custodian.
bit.ly/2q89BZ3

Japanese Crypto Exchange Group Gets Legal Status to Self-Regulate Industry
Wolfie Zhao – Coindesk
The Financial Services Agency (FSA), Japan’s finance regulator, has formally approved a cryptocurrency exchange association as a self-regulatory industry body.
bit.ly/2q6e928

Politics

Fear of Trump Helps Bring Rivals China and Japan Closer Together
Isabel Reynolds, Peter Martin and Emi Nobuhiro – Bloomberg
Abe heading to Beijing in landmark trip as relations warm; Underlying disputes over territory and history unresolved
When Shinzo Abe took office six years ago, it would’ve been unthinkable for China’s leaders to roll out the red carpet for him. The Japanese prime minister can thank U.S. President Donald Trump for the turnaround.
/bloom.bg/2q8bbdr

Trump Says He ‘Maybe’ Regrets Picking Fed’s Powell
Mike Dorning – Bloomberg
Demurs on what circumstances would cause him to fire Powell; Says Fed chair looks ‘happy’ increasing interest rates
President Donald Trump stepped up his attacks on Federal Reserve Chairman Jerome Powell, saying he “maybe” regrets appointing him and demurring when asked under what circumstances he would fire the central bank chief.
/bloom.bg/2q8SKoV

Polls Could Be Missing a GOP Surge. Here’s Why; It certainly looks like Democrats will do well in the midterms. But this cycle presents some unusual risks for pollsters.
Jonathan Bernstein – Bloomberg
If the polls are correct, we’re heading for either a good year for Democrats or a very good year for Democrats. They’ll do well in House contests, probably getting the 23 seats they need for a majority and possibly a lot more. They’ll win a bunch of races for governor, and regain up to half the state legislature seats they’ve lost since 2008. They’ll likely fall short of a Senate majority, but only because the playing field is tilted against them: Democrats will win more than half the Senate elections this year, and the vast majority of votes cast, but that probably won’t be enough to make up for the Republican lead in seats that aren’t up for election.
/bloom.bg/2qbs3Qp

Soros foundation condemns Campbell Soup executive tweet; Government affairs chief spread conspiracy theory on day bomb found at billionaire’s home
Lindsay Fortado and Alistair Gray – FT
George Soros’s foundation has demanded Campbell Soup take action after one of its executives promoted a rightwing conspiracy theory about the organisation on social media.
/on.ft.com/2qbqUIB

Opinion: The Fed could be wrong about inflation and rate hikes
Ed Yardeni – MarketWatch
Some Fed officials have signaled in the weeks since the September FOMC meeting that the economy may be so strong that they might have to raise the federal funds rate higher than they had mentioned doing. That would be unfortunate, given how well they’ve prepared the financial markets for a federal funds rate raised to 3.0% by the end of 2019.
/on.mktw.net/2q8jgig

Regulation

Ex-Goldman programmer sentenced to time served in theft case
Kevin Dugan – NY Post
A judge on Tuesday sentenced ex-Goldman Sachs programmer Sergey Aleynikov to time served for stealing secret computer codes that the bank had used for its trading programs.
/nyp.st/2q6DCbA

CFTC Commissioner Behnam to Keynote and Participate in a Panel Discussion at ASIFMA 2018 Annual Conference: Developing Asia’s Capital Markets
CFTC
bit.ly/2O06vjh

An Open Letter From EMA to the SEC and Stakeholders
Equity Markets Association
The U.S. Securities and Exchange Commission’s Roundtable this week on Market Data and Market Access is timely and welcome. We can all agree that, not unexpectedly, data and technology play a bigger role in the equity markets than they did when the foundational rules of market structure were established because all systems evolve over time, and it is appropriate for the SEC to periodically consider whether public policy is as well-tuned as possible to support our flourishing capital markets and protect investors. The Equity Markets Association appreciates the Commission’s sincere consideration of stakeholder input and advice, as evidenced by this two-day public meeting.
bit.ly/2OKi83d

DoJ probing AmEx’s foreign exchange international payments unit
Reuters
American Express Co (AXP.N) has received subpoenas from the U.S. Department of Justice and inquiries from other federal agencies related to its foreign exchange international payments business, the credit card issuer said on Tuesday.
/reut.rs/2qgkQPr

Video: Flipping the Boiler Room to Fight Fraud
FINRA
Learn how the FINRA Foundation works with partners to fight fraud, like the National Telemarketing Victim Call Center and a farmer.
bit.ly/2q7r583

Cybersecurity Awareness Month: Stay Connected and Protected
FINRA
In an era when much of our lives happen online, from banking to social media, cybersecurity is more important than ever. And we all have a role to playónot just in keeping ourselves safe, but also our employers and customers.
bit.ly/2q8X2wx

FCA publishes PPI complaints deadline Progress Report
UK FCA
The Financial Conduct Authority (FCA) has today published an update on the progress of its payment protection insurance (PPI) consumer communications campaign and supporting supervisory work.
bit.ly/2q8XyKZ

Alleged FX fraudster Jason Amada wants to stay CFTC action against him
Finance Feeds
Jason Amada and Amada Capital Management LLC want to stay the CFTC action pending resolution in related criminal proceedings.
bit.ly/2q9TrhN

Investing and Trading

Trading platform Plus500 targets Japan after European clampdown
Muvija M – Reuters
Online trading platform Plus500 said it will look to expand into regulated markets such as Japan to offset the impact of a crackdown in Europe on high-risk financial betting.
/reut.rs/2EHO3wJ

Drowning in Cash, Big Oil’s Biggest Challenge Is How to Spend It
Kevin Crowley and Kelly Gilblom – Bloomberg
Industry to make more cash in 2018 than previous half decade; Executives have history of bad investments in good times
Big Oil’s big payday has finally arrived. The question now is how to spend the extra cash.
/bloom.bg/2q9T478

Crude Tumbles 5% as Saudis Pledge to Produce as Much as They Can
Samuel Robinson and Jessica Summers – Bloomberg
Saudi oil chief says OPEC in ‘produce as much as you can’ mode; U.S. crude stocks rose 9.88 million barrels last week: API
Oil in New York slid more than 5 percent in Tuesday’s session as Saudi Arabia pledged to meet any supply shortfalls and as a risk-off sentiment spread throughout global markets.
/bloom.bg/2q7mZwH

It’s Too Late Now for Central Banks to Start Raising Rates; This economic cycle seems to have peaked. Nations that have kept rates low won’t have much room to cut when the downturn starts to hurt.
Daniel Moss – Bloomberg
If you haven’t started raising interest rates in earnest already, forget it. Central banks that have dawdled have missed the cycle. Growth seems to have peaked, and markets are signaling potential trouble. For those outside the U.S. who tightened consistently, this is a prudent time to look around and reassess.
/bloom.bg/2q82z6H

The Coming Market Freakout; This year’s sell-off may not yet be fully justified by facts on the ground, but the risks are becoming clearer.
Mark Gongloff – Bloomberg
One of these days, one of these market freakouts will be the real thing. Today was at least a preview of coming attractions.
/bloom.bg/2q6mJxQ

Mounting macro risks stall rally
Alec Young – FTSE Russell Blog
Markets have grown more turbulent as investors come to grips with the Federal Reserve’s rate-hiking resolve in the face of a robust US economy and slackening growth elsewhere. Rising US rates, slowing Chinese growth and simmering trade tensions also loom on investors’ risk radar.
/goo.gl/dmPoJu

Institutions

BNP Paribas Asset Management expands its ESG commitment through appointment of Head of Stewardship for the Americas
BNP Paribas Asset Management
BNP Paribas Asset Management (‘BNPP AM’) announces the appointment of Adam Kanzer as Head of Stewardship, Americas, within its Sustainability Centre. Based in New York, Adam joined on 19 October and reports to Helena ViÒes Fiestas, BNPP AM’s Global Head of Sustainability Research and Policy.
bit.ly/2O1dSHp

Barclays Trading Surge Bolsters CEO Staley in Activist Clash
Stefania Spezzati and Donal Griffin – Bloomberg
FICC revenue outshines American peers, rising almos 10 percent; Equities unit outperforms with derivatives, equity financing
Barclays Plc’s Jes Staley has a stronger case to fend off the British lender’s activist shareholder as he delivers on a promise to grow its securities trading business.
/bloom.bg/2q9TdHI

Deutsche Bank Seeks to Break Vicious Circle as Growth Eludes
Steven Arons – Bloomberg
Revenue shrinks more than expected as trading disappoints; Costs cuts put bank on track for first profit in four years
Just six months into the job, Deutsche Bank AG Chief Executive Officer Christian Sewing is conceding that the growth he promised remains elusive.
/bloom.bg/2q6hMoM

BNP Paribas Asset Management Expands ESG Commitment Through Appointment Of Head Of Stewardship For The Americas
Mondovisione
BNP Paribas Asset Management (‘BNPP AM’) announces the appointment of Adam Kanzer as Head of Stewardship, Americas, within its Sustainability Centre. Based in New York, Adam joined on 19 October and reports to Helena ViÒes Fiestas, BNPP AM’s Global Head of Sustainability Research and Policy.
bit.ly/2O1dSHp

JPMorgan U.S. Private Banking Chief Coffey to Leave Company
Michelle Davis and Sridhar Natarajan – Bloomberg
Coffey has ranked among the industry’s most powerful women; She’s leaving to pursue another opportunity, according to memo
JPMorgan Chase & Co.’s Kelly Coffey, one of Wall Street’s most prominent women, is stepping down as head of the firm’s U.S. private bank.
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Shares of Germany’s biggest lender, Deutsche Bank, flirt with lowest closing price ever
Mark December – MarketWatch
Frankfurt-listed shares of Deutsche Bank AG were on the verge of closing at an all-time low on Wednesday, surpassing a previous nadir hit back in June. Shares of Germany’s largest lender were down more than 3% at EUR9.026, amid a continued slump in third-quarter trading revenue that eroded its quarterly profit. If the embattled lender’s shares close at its current level, it would notch a fresh low since it ended at EUR9.052 on June 27, according to FactSet data.
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