First Read

Hits & Takes
JLN Staff

It is a big day for the CME Group. They completed their acquisition of NEX Group, they won the long overdue case brought by Eurex over the CBOT/Eurex US battle, and they announced October 2018 volume was up 38% versus October of 2017. That is what is called a very good day.~JJL

Nearly $1MM was raised at the international charity A Leg To Stand On’s Hedge Fund Rocktoberfest in New York and events in Chicago and London. You can also donate to ALTSO by simply taking a picture, any picture, on the Donate a Photo app from Johnson & Johnson for iOS or Android phones.~JJL

Paul Finnegan, formerly of too many firms to list, is now vice president OIC Education at OCC.~JJL

Any readers who are big fans of motorsports? In remarks to the ASIFMA 2018 Annual Conference, CFTC Commissioner Rostin Behnam closed with a fun comparison between Singapore’s controversial Formula 1 circuit and the challenges posed by regulating new technologies.~SD

Bloomberg reported that China cut soybean imports from the U.S. by more than 80 percent in September. Meanwhile, Brazil boosted its exports by 28 percent. We recently released a video with CME Group Managing Director and Chief Economist Blu Putnam – Near and Midterm (Election) Hurdles: An Economic Outlook – that touched on the change in agricultural commodity flows due to trade tensions.~SD

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What’s Up With the Next Gen of Traders?

JohnLothianNews.com

The old way to learn the trading ropes – via open outcry pits – is nearly nonexistent. So where is the next generation of traders going to come from? What is going to attract interest and enable these newbies to enter the markets?

In this compilation video from FIA Expo, Cboe Global Markets Chairman of the Board and CEO Ed Tilly, YCharts President and CEO Sean Brown, and CQG Senior Vice President of Client Relations Pat Kenny discuss what is going to help attract fresh talent to the trading industry.

Watch the video and read the rest »

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Jacob Wohl, 20, far-right conspiracy theorist, gets a moment in spotlight with Mueller plot
Brandy Zadrozny – NBC News
Jacob Wohl, a former hedge fund manager turned pro-Trump conspiracy peddler, was a small-time but persistent figure on the far-right for the past two years. Then came the revelation of his apparent involvement as a central character in a bizarre plot to smear special counsel Robert Mueller. Now the FBI has been asked to investigate the alleged scheme, and Wohl may achieve the notoriety he’s been chasing for years.
/jlne.ws/2DeFIig

****He already had plenty of time in the spotlight. This NBC story digs into his background, not as an internet troll, but as a managed futures guru (term used sarcastically). Nicknamed the “Wohl of Wall Street,” he started moonlighting as a fund manager at the ripe old age of 17. He used a variety of, let’s call them unconventional methods, to hype his fund, including hiring bikini models. No surprise, he quickly ran into regulatory trouble. The NFA complaint against him and his fund is a really good read. The NFA exam team tried to track him down at the addresses he provided for his fund. At one residential address, nobody answered the door, but “the exam team noticed someone at the second floor window who appeared to be taking photos or a video of the exam team.” It gets weirder from there. Oh, and he once claimed he had a Sharpe ratio north of 7. Here is a comprehensive list of links tracking his “career” over the past three years.~SD

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CME Group Prevails in Antitrust Case Brought by Eurex Subsidiary
CME
CME Group today released the following statement regarding the dismissal of a 15-year old antitrust lawsuit filed by the United States Futures Exchange, the former U.S. subsidiary of Eurex:
/jlne.ws/2PC6qXZ

**CME rubs it in, with extra salt, in this release. And somewhere Rudi Ferscha is swearing after reading it.~JK

**** What is interesting about the CME comments about “offering inferior liquidity on a substandard platform” is that the Eurex US platform was two generations better than the one the CBOT had been using as part of the a/c/e alliance. CBOT had not invested in the upgrades Eurex had made. Of course, CBOT moved to LIFFE Connect after leaving a/c/e and did not migrate to Globex until several years later when the CME Group bought the CBOT.~[[JJL]]

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Bitcoin’s ‘First Felon’ Faces More Legal Trouble; Charlie Shrem went to prison in 2015 after he pleaded guilty to helping people buy drugs online. Now he’s being sued by the Winklevoss twins.
Nathaniel Popper – NY Times
Over the last year, Charlie Shrem, a 28-year-old Bitcoin investor, has bought two Maseratis, two powerboats — one of them 32 feet long — and a $2 million house in Florida, along with smaller pieces of real estate.
/jlne.ws/2qoYtag

***** Shrem has a twin problem. The Winklevoss twins.~JJL

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Thursday’s Top Three
Our top three stories were led by The Trade’s scoop about Rick Beaman, in Nasdaq Futures Exchange confirms CEO departure. Second was CNN’s Movember story Getting hairy could save millions of men. Third was about ICE’s latest push into fixed income, ICE outlines RFQ expansion

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MarketsWiki Stats
134,649,154 pages viewed; 23,299 pages; 215,332 edits
MarketsWiki Statistics

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Lead Stories

CME completes £3.9 billion NEX Group acquisition; US futures exchange has completed its acquisition of NEX Group after receiving approvals from the necessary authorities.
Hayley McDowell – The Trade
CME Group has confirmed that it has completed its £3.9 billion acquisition of London-based NEX Group, forming a combined company for futures, cash and OTC markets.
/jlne.ws/2qra0pK

***** Here is the CME Group press release announcing the completion of the NEX Group acquisition.~JJL

LME plans code of conduct for traders following Playboy party; London Metal Exchange wants to stamp out inappropriate behaviour and prevent further embarrassment
Samuel Agini – Financial News
The London Metal Exchange is to introduce a code of conduct for its members after one of the City’s oldest trading houses hosted a networking event at the Playboy Club during the LME’s annual gathering for commodities traders.
/jlne.ws/2qpUxGj

US regulator fears ‘homogeneity’ of large banks; New York Fed’s supervision chief says growing similarity could be a systemic risk
Patrick Jenkins, Financial Editor – FT
One of the top US financial regulators has signalled a concern that new systemic risks are being created by the growing homogeneity of the country’s big banks.
/jlne.ws/2qmNBd6

NEX Markets connects with Eurex to launch new clearing solution for BrokerTec Europe customers
Eurex
Eurex Clearing has worked with BrokerTec Europe Limited, an anonymous dealer-to-dealer platform for the fixed income markets run by NEX Markets, to launch a new clearing solution for the European repo market.
/jlne.ws/2qr4rHS

SGX launches Single Stock Daily Leverage Certificates with 5x leverage
SGX
Widens investor choice with new DLCs based on individual Singapore and regional stocks; Trading value of DLC product suite has reached over S$3.5 billion since its launch
Come 7 November 2018, SGX will welcome the listing of an initial batch of 10 new Single Stock Daily Leverage Certificates (DLCs), offering 5x leverage on Singapore blue-chip companies and well-known regional stocks.
/jlne.ws/2QgXpAU

The Billionaire Who Bankrolled Brexit Is Now Under Criminal Investigation. Officials Suspect Foreign Money
Billy Perrigo – Time
The billionaire who donated over $10 million to a campaign urging the U.K. to vote to leave the European Union is now the subject of a criminal investigation into the “true source” of the funds, raising questions of whether foreign money could have swayed the Brexit referendum.
/jlne.ws/2DhGf3e

Goldman’s business culture criticised by US officials; Wall Street bank accused of putting deals ahead of proper compliance in 1MDB case
Ben McLannahan in London – FT
The first criminal charges filed by the US government in the sprawling 1MDB scandal represented bad news for the defendants, Malaysian financier Jho Low and two former investment bankers at Goldman Sachs.
/jlne.ws/2qqN2iA

Goldman Sachs Ensnarled in Vast 1MDB Fraud Scandal
Matthew Goldstein, Alexandra Stevenson and Emily Flitter – NY Times
Goldman Sachs is facing one of the most significant scandals in its history, a multibillion-dollar international fraud that investigators say was masterminded by a flamboyant financier with a taste for Hollywood and carried out with help from the Wall Street firm’s bankers.
/jlne.ws/2qmNOwU

TP ICAP says October volatility lifted rates trading, data units; Interdealer broker also confirms deal to buy Axiom Commodity Group
Philip Stafford – FT
TP ICAP, the UK interdealer broker, said full-year results would be in line with its lowered market guidance as October’s market volatility boosted turnover at its interest rates trading and data units.
/jlne.ws/2qneaPn

What Will Banks Do With Cash Freed Up by Rule Changes? No One Knows; Fed proposal to ease short-term cash requirements for big banks heads into uncertain territory
Ryan Tracy and Lalita Clozel – WSJ
Regulators plan to pare back requirements that banks keep billions of dollars of cash on hand to pay short-term bills. No one knows for sure what will happen next.
/jlne.ws/2qx2vOd

Exchanges, OTC and Clearing

OCC Clears Record Monthly Volume in October
OCC
OCC, the world’s largest equity derivatives clearing organization, announced a record 567,833,544 total contracts cleared in October, the highest monthly total since OCC’s founding in 1973.
/jlne.ws/2DhyEkW

CME Group Averaged 20.6 Million Contracts Per Day in October 2018, Up 38% from October 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 20.6 million contracts per day during October 2018, up 38 percent from October 2017. Open interest at the end of October was 128 million contracts, up 6 percent from October 2017 and up 19 percent from year-end 2017.
/jlne.ws/2qnWOSz

Cboe Global Markets Reports Record Trading Activity
Cboe
Cboe VIX futures set new monthly total volume record; Cboe SPX options
set new monthly total volume record
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today reported several new trading records.
/goo.gl/LN1MWv

NEX allows repo clearing in Europe ahead of Brexit
Reuters
London-based NEX Markets said on Thursday users of its BrokerTec Europe platform would be able to clear repo trades on Deutsche Boerse as it prepares for Britain’s exit from the European Union.
/jlne.ws/2DfXAt7

CME Group’s First Multi-Lateral Equity Options Compression Cycle Successfully Reduces Nearly 590,000 Contract Sides
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced four firms participated in its first-ever multi-lateral compression cycle for equity options on futures, which successfully reduced 587,000 contract sides and compressed portfolios submitted for this cycle by 22 percent.
/jlne.ws/2DfKg83

Shanghai Futures Exchange approves first foreign warehouse
Henry Sanderson – Financial Times
The Shanghai Futures Exchange, China’s leading commodity trading venue, has approved its first foreign warehouse company in a further sign of opening to international traders.
Rotterdam-based Steinweg said it had been approved to store metal for the exchange in its newly built warehouse in the Yangshan Free Trade Port in Shanghai.
/jlne.ws/2Dg3ASF

SIX Swiss Stock Exchange
Mondovisione
In October, trading turnover on the Swiss stock exchange was up by 30.3% on the prior month to reach CHF 128.2 billion, equating to an average turnover of CHF 5.5 billion per trading day. There was also a rise in the number of transactions by 50.2% to 6,210,713, compared to September.
/jlne.ws/2DgqnOk

MIAX International Holdings Reports October 2018 Trading Activity; MIAX Exchange Group Sets New Daily and Monthly Records
MIAX
Miami International Holdings Inc today reported the October 2018 trading activity for its two fully electronic options exchanges – MIAX Options and MIAX Pearl. The MIAX Exchange Group collectively executed over 47.3 million contracts in October 2018 for a combined averaged daily volume of 2,057,973 contracts, representing a total of U.S. equity options market share of 9.62%.
/jlne.ws/2DhiB6T

MGEX Achieves an Increase in Total Monthly Exchange Volume
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives
Clearing Organization (DCO), reports that the total exchange volume for October came
in at 160,100 contracts, which is an increase of 33% compared to October 2017.
/jlne.ws/2CUI0Ce

DGCX On Track To Break Annual Volumes Record
DGCX press release
The Dubai Gold and Commodities Exchange (DGCX) has traded 18.8 million contracts year-to-date (Y-T-D), up 35% year-on-year (Y-O-Y), and is on track to break its annual volumes record of 19.67 million contracts. Y-T-D Average Daily Volumes (ADV) are at an all time high, reaching 87,253 lots.
/goo.gl/ebafm5

Focus on Italy: investors utilize robust liquidity in Eurex BTP markets
Eurex
When it comes to investments in Italian government bonds, the recent volume figures clearly speak for themselves: options on Euro BTP Futures nearly tripled with an average daily volume of 20,449 contracts for the month of October compared to the 2018 average of 6,435 contracts per day. The Open Interest peaked at levels beyond 200,000 contracts. What are the facts behind the figures?
/jlne.ws/2qnfphv

Cash markets convert 171.6 billion euros in October; Trading volume 48 percent higher than last year
Deutsche Börse
Deutsche Börse’s cash markets posted sales of EUR 171.6 billion in October (previous year: EUR 115.9 billion). This corresponds to an increase of 48 percent compared to October sales in 2017 of EUR 115.9 billion.
/jlne.ws/2qqykrE

Boerse Stuttgart generates turnover of more than EUR 6.9 billion in October; Significant increase in turnover across all asset classes
Boerse Stuttgart
According to its order book statistics, Boerse Stuttgart generated turnover of more than EUR 6.9 billion in October 2018.
/jlne.ws/2qnY1t5

Nasdaq October 2018 Volumes
GlobeNewswire
Nasdaq (Nasdaq:NDAQ) today reported monthly volumes for October 2018, on its investor relations website.
/jlne.ws/2qoOfa3

SGX-ST Disciplinary Committee Imposes Fine and Education Programme against Seow Jin Yuan, Reymond
SGX
/jlne.ws/2qqLvJg

Fintech

These are the 25 most innovative FinTech startups in the world
Chisato Goya – Business Insider
KPMG, a global network of professional firms providing audit, tax and advisory services, has just published its ranking of the 100 most innovative fintech start-ups.
Several factors were taken into account to establish this ranking, including the amount raised on average over a year or the degree of innovation of their products or services.
/jlne.ws/2EYBw8f

State Regulators Sue to Stop OCC Fintech Charter
Lexology
On October 25, 2018, the Conference of State Bank Supervisors (CSBS) renewed its lawsuit against the Office of the Comptroller of the Currency (OCC) seeking to prevent the OCC from issuing its long awaited special-purpose bank charters to fintech companies. The OCC recently announced that it would begin accepting applications for the special-purpose charter, a move that would allow the OCC to regulate fintech companies similar to their supervision of national banks.
/jlne.ws/2ETiZKi

Refinitiv Launches Quantitative Analytics Platform QA Direct In The Cloud With Microsoft Azure
Mondovisione
Building on its commitment towards consumption of its financial data in the Cloud, Refinitiv, formerly the Financial and Risk business of Thomson Reuters, has launched its quantitative analytics platform QA Direct in the Cloud through Microsoft Azure.
/jlne.ws/2Dg8LCd

Continued strength across major customer segments results in 2.4% increase in
Integral’s October 2018 volumes compared to September 2018; Average daily volumes (ADV) totaled $34.6 billion
Integral
Integral (www.integral.com), the technology partner trusted by leading banks, brokers, and asset managers to help them outperform their competition in the foreign exchange market, reported today average daily volumes (ADV) across Integral platforms totaled $34.6 billion in October 2018. This represents an increase of 2.4% compared to September 2018, and reflects single count trading volumes originating from BankFXTM, MarginFXTM , InvestorFXTM, and Integral MTFTM in all transaction types, including spot, forwards,
and swaps.
/jlne.ws/2OZJLFs

Nutmeg goes from robo to human; Wealth manager introduces financial advisers to give clients phone support
Kate Beioley – FT
Online wealth manager Nutmeg has introduced human financial advisers to its digital-only investment app, in a sign that customers want a more personal approach to investing than online services can offer.
/jlne.ws/2qoKr8R

Your Smartphone’s Location Data Is Worth Big Money to Wall Street; The phone in your pocket is dishing info on where you spend your time and, likely, money
Ryan Dezember – WSJ
When Tesla Inc. TSLA 2.06% Chief Executive Elon Musk said the car maker would work around the clock to boost production of its Model 3 sedan, the number crunchers at Thasos Group decided to watch.
/jlne.ws/2qqvK4W

Cryptocurrencies

Crypto Firm Tether Says It Has $1.8 Billion in Bahamian Bank
Lily Katz – Bloomberg
Tether, the company behind the controversial namesake cryptocurrency, said it has a bank account with Bahamas-based Deltec Bank & Trust Ltd.
/jlne.ws/2OZnfMW

New York regulator grants virtual license to bitcoin ATM operator
Gertrude Chavez-Dreyfuss – Reuters
New Yorkers will be able to use their mobile phones to obtain bitcoin or sell it for cash at kiosks similar to ATMs in and around New York City after the state Department of Financial Services said on Thursday it has approved the virtual currency license of Coinsource Inc
/jlne.ws/2DeMRiA

One of the hottest things in cryptocurrency right now: Stablecoins
Brian Fung – The Washington Post
There’s a new form of cryptocurrency gaining traction among fans of digital cash. Unlike bitcoin, which has seen its price swing wildly from as high as $19,000 last year to its current level hovering around $6,200, this emerging class of cryptocurrency aims to maintain a stable price — one, single U.S. dollar — at all times.
/jlne.ws/2ESkJU6

BlackRock won’t offer a cryptocurrency ETF until the industry is ‘legitimate,’ CEO Larry Fink says
Kate Rooney – CNBC
The world’s largest asset manager is not launching an exchange traded fund for cryptocurrency — at least not until the industry grows up a bit. “I wouldn’t say never, when it’s legitimate, yes,” BlackRock CEO Larry Fink said at the New York Times Dealbook Conference in Manhattan Thursday.
/jlne.ws/2DjXFMH

Cryptocurrency rules unveiled by SFC as Hong Kong aims to become major trading hub
Enoch Yiu and Georgina Lee – South China Morning Post
Hong Kong’s financial watchdog unveiled on Thursday a comprehensive set of regulations governing cryptocurrencies in a move to enhance investor protection which analysts believe could help make the city a major trading centre for virtual assets, analysts said.
/jlne.ws/2yKSbGP

How bitcoin has failed to achieve Satoshi Nakamoto’s original intent, in one chart
Aaron Hankin – MarketWatch
Bitcoin was created as an alternative payment system, one that operated anonymously and peer-to-peer, eliminating the so-called trusted third party. But a decade later and the solution proposed by Satoshi Nakamoto, the pseudonym affiliated with the person or persons who created bitcoin is anything but a solution, according to Morgan Stanley researchers.
/jlne.ws/2SEx6pR

After Becoming The Blockchain Island, Malta Announces It’s Formulating National AI Strategy
Rachel Wolfson – Forbes
Four months ago, the Maltese Parliament passed three laws establishing the regulatory framework for blockchain, cryptocurrency and distributed ledger technology (DLT). Since then, Malta has become known as the “World’s Blockchain Island,” quickly attracting interest from thousands in the crypto community to set up shop on the tiny island that is part of the European Union (EU).
/jlne.ws/2P3Yn6F

HTC has made a blockchain phone that cryptocurrency fans will hate
Gian Volpicelli – WIRED UK
What’s a blockchain smartphone, and do you need one? The release of HTC Exodus 1, the Taiwanese manufacturer’s much-hyped, much-anticipated blockchain-focused handset, has perhaps answered the first of those questions; the jury is still out on the second.
/jlne.ws/2EZQc6Q

Alas, the Blockchain Won’t Save Journalism After All
Jonah Engel Bromwich – The New York Times
Civil Media Company was introduced earlier this year as both a media platform and a network, to be owned and operated by journalists and concerned citizens in tandem. It was an exciting proposal. Its technology (powered by the blockchain!) would churn under dozens of independent newsrooms, its machinery creating a new, utopian model, free from the clutches of miserly businessmen or politically-compromised publishers threatening to gum up the works.
/jlne.ws/2RuQIuV

A Cryptocurrency Millionaire Wants to Build a Utopia in Nevada
Nathaniel Popper – NY Times
An enormous plot of land in the Nevada desert – bigger than nearby Reno – has been the subject of local intrigue since a company with no history, Blockchains L.L.C., bought it for $170 million in cash this year.
/jlne.ws/2DgLekx

Politics

Fed’s Powell Says Reduced Immigration Could Slow U.S. Economy
Craig Torres – Bloomberg
Federal Reserve Chairman Jerome Powell, in written responses to a Democratic senator, said reducing immigration could slow the economy over the longer run by limiting growth in the U.S. labor force.
The comments came in a written response to Senator Catherine Cortez Masto, a Nevada Democrat who asked Powell if he agreed with pro-immigration comments by Minneapolis Fed President Neel Kashkari. Kashkari, whose parents came from India and wife is from the Philippines, called immigration “as close to a free lunch as there is” for the American economy, according to a Wall Street Journal opinion column in January.
/jlne.ws/2DgJ0BK

U.S. House finance chair still hopeful for vote on capital formation bill
Michelle Price – Reuters
The chair of the House Financial Services Committee says he is still hopeful the Senate will vote on a bill that would make it easier for companies to raise capital and go public, despite a growing likelihood the legislation has stalled in the upper chamber.
/jlne.ws/2Dg29nn

What If Maxine Waters Takes the Gavel and Wall Street Loves It?
Felice Maranz – Bloomberg
There are signs banks might gain with Democrats in the House; Investor fears about Waters are now being downplayed by some
For months, bank stock watchers have warned Representative Maxine Waters might call for tougher regulations and hold harsh hearings, target penalty-box bank Wells Fargo & Co. and security-breaching Equifax Inc., and go after President Donald Trump’s lenders, if she were to take control of the House Financial Services Committee.
/jlne.ws/2qoXiaV

Regulation

U.S. charges financier, former Goldman bankers for 1MDB
Brendan Pierson, A. Ananthalakshmi – Reuters
U.S. prosecutors unveiled criminal charges on Thursday against two former Goldman Sachs bankers and Malaysian financier Low Taek Jho tied to the alleged theft of billions from Malaysian sovereign wealth fund 1MDB.
/jlne.ws/2DelW6N

Goldman Ex-Managers Charged Over 1MDB; U.S. Says Others Knew
Greg Farrell , Patricia Hurtado , and Sridhar Natarajan – Bloomberg
Ex-Banker Leissner pleads guilty to bribery, money laundering; Ng, arrested in Malaysia, charged with laundering conspiracy
A former senior Goldman Sachs banker in Asia pleaded guilty to U.S. bribery and money laundering charges and his deputy was arrested in Malaysia, as federal prosecutors in Brooklyn laid out conspiracy allegations related to Goldman Sachs’s lucrative fundraising for Malaysian wealth fund 1MDB.
/jlne.ws/2qnc6Xs

US regulator fears ‘homogeneity’ of large banks
Patrick Jenkins – Financial Times
One of the top US financial regulators has signalled a concern that new systemic risks are being created by the growing homogeneity of the country’s big banks.
Kevin Stiroh, head of supervision at the New York Federal Reserve, said: “If firms expand, diversify and become more similar, each might become safer individually [but] if all firms are effectively the same they could become systemic as a herd and susceptible to the same shocks in a way that leaves the aggregate provision of financial services more volatile.”
/jlne.ws/2DhwL88

U.S. indicts Chinese, Taiwan firms for targeting Micron trade secrets
Sarah N. Lynch – Reuters
The U.S. Justice Department unveiled an indictment against two companies based in China and Taiwan and three individuals on Thursday, saying they conspired to steal trade secrets from U.S. semiconductor company Micron relating to its research and development of memory storage device products.
/jlne.ws/2Dg3Dhr

Ethics and professionalism post Royal Commission—A regulator’s view
ASIC
Keynote address by Cathie Armour, Commissioner, Australian Securities and Investments Commission at the CIMA Society of Australia Annual Conference (Melbourne, Australia), 30 October 2018 and John Price, Commissioner, Australian Securities and Investments Commission (Sydney, Australia), 1 November 2018
/jlne.ws/2qrXXs1

Investing and Trading

What You Need to Know About Values Investing
Nellie S. Huang – Kiplinger
Socially conscious investing has gone mainstream. Many people now factor environmental, social and corporate governance criteria—the triumvirate that define so-called sustainable investing—into their portfolio decisions. And they’re not all millennial tree huggers.
/jlne.ws/2F7qxJM

Stock market investing during earnings: What’s working, what to avoid
Akin Oyedele – Business Insider
Even the good companies are getting punished by Wall Street.
This earnings season, many companies that are beating analyst expectations for profit growth are not being rewarded with gains in their stock price.
Stocks typically rally during earnings season because traders see proof of profit growth and the potential for future earnings. Also, companies resume repurchases of their own stock, which helps boost their earnings.
/jlne.ws/2F0feCW

Itochu books $1.3 billion CITIC charge as Japan’s trade houses warn about Sino-U.S. trade spat
Reuters
Japan’s Itochu Corp on Friday booked a $1.3 billion loss on its investment in China’s CITIC Ltd, blaming trade tensions between China and the United States for the writedown on its biggest corporate transaction.
The announcement came while releasing earnings as Japanese trading houses sounded a warning about the Chinese economy and the impact of Sino-U.S. trade friction.
/jlne.ws/2EY6Zav

S&P Global Platts & Intercontinental Exchange Launch New National and Regional Natural Gas Indices
PR Newswire
S&P Global Platts (“Platts”), the leading independent provider of information, benchmark prices and analytics for the commodities and energy markets, and Intercontinental Exchange, Inc. (ICE) a leading operator of global exchanges and clearing houses and provider of data and listings services, today jointly announced the launch of a new suite of North American natural gas indices to better capture dramatically altered supply and demand flows, regional price differentials and increased spot market volatility in the US and Canada.
/goo.gl/UiTdw5

Institutions

JP Morgan CEO says has no interest in buying Deutsche Bank: Handelsblatt
Reuters
JP Morgan has no interest in buying Deutsche Bank (DBKGn.DE) the U.S. bank’s chief executive told German daily Handelsblatt.
/jlne.ws/2DgLiAN

UBS to ramp up training, set up sexual misconduct hotline
Sinead Cruise – Reuters
Swiss bank UBS (UBSG.S) will expand training for staff investigating sexual misconduct claims, and introduce a confidential hotline to handle such allegations, an internal memo sent to staff seen by Reuters shows.
/jlne.ws/2DhkZug

UBS Starts Hotline for Misconduct Reports After Rape Allegation
Ambereen Choudhury and Stefania Spezzati – Bloomberg
UBS Group AG will set up a confidential hotline for employees to report sexual misconduct and harassment after an allegation that a London-based trainee was raped by a more senior employee.
/jlne.ws/2qp0Aeg

Danske Is ‘Truly Sorry’ But Some Investors Still Won’t Touch It
Frances Schwartzkopff, Love Liman, and Peter Levring – Bloomberg
For the first time in months, a statement published by Danske Bank A/S didn’t contain an awful surprise.
The bank’s pledge to fight financial crime and absorb potential fines for money laundering resulted in its best share performance in more than two years. Analysts cheered management’s words and the interim chief executive officer said Danske is “truly sorry” for its role in one of the worst dirty money scandals in Europe’s history. The stock jumped as much as 6.6 percent.
/goo.gl/XtsNuZ

JPMorgan Alumni Will Be Key Voices in Deutsche Bank Turnaround
Sonali Basak – Bloomberg
Two of Deutsche Bank AG’s most influential shareholders at least know what it’s like to run a nation’s biggest lender.
/jlne.ws/2qncGVj

This Adviser to Hedge Funds Told IRS He Was Financially Disabled
Robert Schmidt – Bloomberg
Joshua Rosner sues U.S. over rejected requests for tax refunds; Wall Street analyst says 9/11 caused post-traumatic stress
Wall Street analyst Joshua Rosner made a name for himself with prophetic warnings that Fannie Mae and Freddie Mac were ticking time bombs and that the U.S. housing market was heading for a collapse.
/jlne.ws/2qx0iCp

Vanguard chairman Bill McNabb to step down, replaced by chief exec
Owen Walker – FT
Vanguard, the world’s second biggest money manager, has announced its chairman, Bill McNabb, will step down at the end of the year.
/jlne.ws/2qoJAoF

Regions

ECB ranks Italy’s Carige as ‘fragile’ in adversity test: report
Francesca Landini – Reuters
Italy’s Banca Carige (CRGI.MI) has been categorized as “fragile” in a European Central Bank test of European lenders, with its capital ratio falling below a level set by regulators in an “adverse” scenario, Il Sole 24 Ore reported on Friday.
Carige’s problems are widely known and the ECB has already taken them into account in asking the Genoa-based bank to come up with a capital conservation plan by the end of this month, the Italian newspaper said.
/jlne.ws/2EWfTW1

Brussels Edition: Banks Under Stress
Nikos Chrysoloras and Patrick Henry – Bloomberg
Results will be published today of the EU’s latest stress test to show how resilient the bloc’s large banks would be in a severe economic downturn. While Deutsche Bank and other German lenders face intense competition at home, and their Italian counterparts are caught up in a standoff between the country’s populist government and EU authorities, we hear all banks are poised to get a more or less clean bill of health and be seen to have requisite capital even in the most adverse scenario.
/jlne.ws/2EVS0hq

Foreigners Splash Out Record $2.5 Billion on China Stocks
Bloomberg
Foreigners didn’t wait long to set a new record for China stock buying.
Overseas investors heartened by optimism China and the U.S. can overcome their trade dispute bought 17.4 billion yuan ($2.5 billion) of China stocks via trading links with Hong Kong on Friday. That was more than double the record set a day earlier and erased all of October’s net selling, according to data compiled by Bloomberg.
/jlne.ws/2EVkKGL

Europe Stocks Head for Best Week Since 2016
Justina Lee – Bloomberg
With European shares headed for their best week since late 2016, the Red October is becoming easier to forget.
At first, much of it looked like just a standard rebound after a period of excessive selling. Then on Thursday, markets got some actual good news, with U.S. President Donald Trump tweeting about talks with China and reportedly preparing a trade agreement with the country. Even the long-suffering auto and mining sectors edged higher. Luxury and chemicals got a boost, as did technology shares that might otherwise be fretting more over Apple Inc.’s disappointing sales forecast.
/jlne.ws/2F0ERnj

Brexit

Brexit deal could accelerate interest rate increases
Ben Morris – BBC
Although the Bank kept rates unchanged at 0.75% this month, its latest forecasts suggest that rates could rise to 1.5% over the next three years.
It said that Brexit uncertainty was preventing some firms from investing.
However, Bank governor Mark Carney said a smooth Brexit could see a rebound in that investment.
/jlne.ws/2EYSdQU

Carney Says No-Deal Brexit Threat to Markets Requires EU Action
Linly Lin and Stuart Biggs -Bloomberg
Bank of England Governor Mark Carney said it’s time for the European Union to put its money where its mouth is when it comes to averting market turmoil in a no-deal Brexit.
/jlne.ws/2qpzR17

The Great Brexit Banker Exodus That Wasn’t
Gavin Finch, Hayley Warren and Tim Coulter – Bloomberg
As the time nears for Britain’s departure from the European Union, the world’s biggest banks are moving far fewer employees abroad than first planned at least for now.
/jlne.ws/2qncqp8

Taxman faces ‘daunting workload’ as Brexit approaches, MPs say
BBC
From preparing for Brexit to tackling an increase in fraud, HMRC faces mounting pressures, according to a Public Accounts Committee (PAC) report.
Staff and resources have been diverted to deal with customs and border demands which has left HMRC facing choices about its other work, the MPs said.
The department has a “daunting task” as it prepares for Brexit, they added.
/jlne.ws/2F7oB3Y

Miscellaneous

Guardian named UK’s most trusted newspaper; Survey suggests Britons under 30 seek out reliable news websites associated with traditional outlets
Jim Waterson Media editor – The Guardian
The Guardian is the most trusted newspaper brand in the UK, a study by a non-partisan media research organisation has found.
/jlne.ws/2qnTmr5

The post CME completes £3.9 billion NEX Group acquisition appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

My musician nephew Andrew Lothian has released a new song to encourage young people to get out and vote. You can watch and listen to the Youtube version HERE.~JJL

I encourage all U.S. citizens who are eligible and registered to vote to do so tomorrow. This is one of the most important elections of my lifetime.~JJL

FIA Asia is coming up soon on November 27 to 29 in Singapore.~JJL

The 10th Annual Conference on Futures and Derivatives at the Chicago-Kent College of Law had over 150 people attend last week and was deemed a success by the positive feedback received.~JJL

The SEC announced it collected nearly $4 billion in fines and disgorgement in fiscal 2018, but said that a “significant amount” came from a single case against PetrÛleo Brasileiro SA, from which the SEC expects to receive only a fraction of the total fine and disgorgement.~SD

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The Spread – A Rising Tide Lifts All Exchanges – 11/2
JohnLothianNews.com

It seems like everybody in the options exchange space is busy setting records, and there were positive developments on the regulatory front. It’s been a good few weeks for the industry.

Watch the video and see the stories referenced here »

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Former Cboe Head of Equity Options Kapil Rathi Joins Global Blockchain Company AlphaPoint
GlobeNewswire
AlphaPoint, a leading blockchain company focused on enabling institutions to launch, scale, and operate digital asset exchanges globally, today announced that capital markets and options industry veteran Kapil Rathi has joined the company as Global Head of Trading Markets and will lead and manage its trading and exchange business.
/jlne.ws/2QfPl3h

***** One of our favorites leaves Cboe for AlphaPoint, the crypto tech firm backed by Mike Novogratz. Here is Rathi’s MarketsWiki Education presentation from 2015.~JJL

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Bridging the Weeks: October 22 to November 2 and November 5, 2018 – UK and HK Regulation of Cryptoassets; EFRPs; Order Routing Disclosures; EU CCP Overreach
Gary DeWaal – Bridging the Week
During the prior two weeks, three financial authorities in the United Kingdom as well as the Hong Kong Securities and Futures Commission issued reports assessing distributed ledger technology and risks associated with the trading of cryptoassets. As part of their studies, the SFC determined to restrict investments in HK funds trading cryptoassets to professional HK investors, while the UK authorities committed to consider whether all derivatives based on cryptocurrencies should be banned for UK retail investors. In the United States, futures exchanges brought a number of disciplinary actions alleging violations of rules related to exchange for related position transactions, spoofing, pre-execution communications, and audit trail requirements for clearing members and clients connecting by direct access to an exchange’s electronic trading system.
/goo.gl/b9st3S

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Simon Schama on the battle for America; Next week’s US midterms are a fight between two very different visions of nationhood
Simon Schama – FT
Ten days before the midterm elections in America, murder came to the Tree of Life. Shouting “all Jews need to die”, a neo-Nazi gunman with an animus against the Hebrew Immigrant Aid Society slaughtered 11 Jews gathered at their synagogue in Squirrel Hill, Pittsburgh. Two days earlier, pipe bombs had been sent to 14 critics of Donald Trump by a man who had turned his van into a rust-bucket shrine to MAGA and its great apostle. One day previously, Gregory Bush, thwarted in his attempt to enter a black church in Louisville, Kentucky, had shot and killed two African-Americans at a local supermarket. Before he was arrested, he shouted “whites don’t kill whites”. All three perpetrators believed they were engaged in saving white America.
/jlne.ws/2QlFjh4

***** Worth the read.~JJL

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Friday’s Top Three
Decisions, decisions. Our top read stories from Friday share the common thread of decisions – personal, professional and strategic – each with some significant downside. Our top read article was FN London’s LME plans code of conduct for traders following Playboy party. Second went to our coverage of Jacob Wohl, a young man who defies description because there are so many titles to be given. But the NFA complaint on him became our second most read piece of the day NFA Before The Business Conduct Committee, so you too can put a label on him. Our third most read item was the CME press release CME Group Prevails in Antitrust Case Brought by Eurex Subsidiary, which unloaded on the unsuccessful move by Eurex to establish a competing exchange to the Chicago Board of Trade and the subsequent failed antitrust lawsuit that was dismissed after a 15-year legal battle.

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MarketsWiki Stats
134,814,280 pages viewed; 23,299 pages; 215,336 edits
MarketsWiki Statistics

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Lead Stories

Shanghai to launch new tech board, potentially competing with HK
Reuters
Chinese President Xi Jinping unveiled plans on Monday to launch a technology board in Shanghai that will adopt a loosely-regulated mechanism for initial public offerings (IPOs), potentially competing with Hong Kong, or even New York.
/jlne.ws/2QilfMo

Index proliferation adds choice but fuels confusion; Investors have never had more choice in the market but some query whether this helps or hinders
Pauline Skypala – FT
How many indices are too many? A recent survey by the Index Industry Association revealed its 14 member companies publish 3.29m indices, of which 3.14m cover stock markets.
/jlne.ws/2Qj4ssH

Investing in good conscience wins more interest; Environmental, social and governance concerns feed into product design
Jennifer Thompson – FT
The combining of smart beta strategies with environmental, social and governance policies is a topic of growing interest to investors.
/jlne.ws/2QkZMT8

Alarm Raised by EU Loyalist Over ‘Cliff Edge’ Facing Banks
Peter Levring – Bloomberg
EU needs to give stronger assurances on clearing, Danes says; Finance industry has long warned of urgency on clearing issue
One of the European Union’s most loyal members is voicing deep unease at the path Brexit negotiations are on.
/jlne.ws/2QjTIKx

Cboe and LSEG see record month for block trading activity; October was a strong month for block trading activity, with Cboe and LSEG reaching new records on their platforms.
Hayley McDowell – The Trade
European exchange operators Cboe and the London Stock Exchange Group (LSEG) both saw a record volume of block trading activity last month, as the industry continues to adapt to MiFID II.
/jlne.ws/2QjQaYJ

Bitcoin trading uses so much power that it could push global temperatures up past a threshold that yields deadly consequences; A new study finds that the bitcoin industry could push global temperatures above 2 degrees Celsius in less than two decades.
Aria Bendix – Business Insider
The cryptocurrency bitcoin has been touted by its proponents as a way to help solve our most pressing problems, from homelessness and human trafficking to cancer and the global financial crisis.
/jlne.ws/2QqcQqw

SEC Busts More RIAs This Year
Barron’s
SEC enforcement actions against RIAs are on the rise. During the 2018 fiscal year, which ended Sept. 30, the agency had 490 standalone enforcement actions, WealthManagement.com reports. Of those, 108, or 22%, involved investment advisors and investment companies, up from 82, or 18%, in the previous fiscal year.
/jlne.ws/2Qj9Zzt

U.S. SEC collects nearly $4 billion in fines, disgorgement in fiscal 2018
Reuters
The Securities and Exchange Commission assessed $3.945 billion in disgorgement and penalties across 821 enforcement actions in fiscal 2018, the agency’s enforcement division said in its annual report on Friday.
/jlne.ws/2Qg2iKe

How Much Have ICOs Raised in 2018? Depends on Who You Ask
Justina Lee – Bloomberg
Lack of rules, transparency leaves issuance amounts murky; More digital tokens are being issued through direct sales
So far this year, initial coin offerings have raised $22 billion, or half of that — depending on where you look. With the cryptocurrency market nearly 80 percent off its peak, a critical question is exactly how much the ICO boom has deflated. That becomes harder to answer when even the most commonly used websites that track the phenomenon disagree on the figures.
/jlne.ws/2QgMiYE

FCA urges firms to prepare for Brexit
Damian Fantato – FT Adviser
The Financial Conduct Authority has reminded firms they need to make sure they are prepared for Britain’s departure from the European Union, regardless of the outcome of the negotiations.
/jlne.ws/2qwQxUp

Exchanges, OTC and Clearing

Intercontinental Exchange Reports October 2018 Statistics ; ICE ADV up 33% y/y led by 15% increase in Energy ADV & 54% increase in interest rates ADV; Open Interest +8% y/y
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported October 2018 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/jlne.ws/2quy5fb

China to establish new high-tech trading platform in Shanghai; The system is intended to ease equity-raising for small tech companies
Gabriel Wildau – FT
The Shanghai stock exchange plans to launch a new trading platform to ease equity-raising for small tech companies, President Xi Jinping said on Monday.
/jlne.ws/2QjYaJm

SGX strengthens partnerships in China with the signing of two MOUs
SGX
Agreements will be signed at a gala dinner in Beijing this evening, as part of SGX Beijing Representative Office’s 10th anniversary celebration; Strengthening ties with China remains a key priority for SGX’s multi-asset, international growth strategy
Singapore Exchange (SGX) will sign Memorandums of Understanding (MOUs) with Zhejiang (S) Entrepreneurs Association (ZJEA) and China Futures Association (CFA), in an effort to further strengthen ties with China as part of its multi-asset, international growth strategy.
/jlne.ws/2qvT4OU

Nasdaq Expects Flurry of Nordic Listings in Final Months of Year
By Hanna Hoikkala – Bloomberg
Nasdaq Inc. expects listings activity on its Nordic stock exchanges to pick up in the final two months of this year, after market volatility led to a significant slowdown in the second half.
/jlne.ws/2qvqBIS

Fintech

Itiviti Wins Waters Buy-side Technology Award for NYFIX Trading Network for Third Consecutive Year
Itiviti Group AB
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, is pleased to announce that its NYFIX global connectivity platform has won the “Best Low-Latency Trading Network” category in Waters Buy-Side Technology Awards 2018 – the third consecutive year that NYFIX has won in this category.
/jlne.ws/2qvE3N6

Follow Berkshire Into FinTech
Matt Hylland – Seeking Alpha
Last week, Berkshire Hathaway (BRK.A) (BRK.B) made headlines when they announced $600 million in investments into 2 fintech companies; StoneCo (STNE) and PayTM – India’s largest mobile payment service.
The investments were noteworthy due to their deviation from Berkshire’s normal investment strategy. Though the investment was from Todd Combs, a portfolio manager at Berkshire and not Warren Buffett, it is still a little bit of a surprise to see Berkshire invest in a company that just had its IPO a week prior.
Obviously, Todd Combs and the Berkshire management see tremendous promise in the future of mobile payments and the fintech industry as a whole.
/jlne.ws/2ySuigl

21 Remarkable Fintech Founders Under 35 in Southeast Asia
Fintech Singapore
Fintech is booming all round the world, including Southeast Asia, where a growing number of fintech-related businesses are emerging to fill the gap left by traditional financial institutions.
With the Internet and smartphones spreading rapidly across the region, these new businesses are utilizing technology to find solutions to the region’s financial problems and serve the large populations of financially excluded individuals and businesses.
/jlne.ws/2yQRVGa

Cryptocurrencies

Ethereum founder Vitalik Buterin says his creation can’t succeed unless he takes a step back
Mike Orcutt – MIT Technology Review
When you ask him about the challenges facing the blockchain system he founded five years ago, Vitalik Buterin often launches into a rapid-fire lecture full of Ethereum-specific jargon. But ask him about his own role in the technology’s future, and he quickly becomes more circumspect.
/jlne.ws/2yMxFVY

Morgan Stanley Report Says Crypto Now An Institutional Asset Class
Nikhilesh De – Coindesk
Institutional investors are increasingly getting involved in bitcoin and other cryptocurrencies – while the number of retail investors in the space is staying stagnant – according to a new report by Morgan Stanley. In an update to “Bitcoin Decrypted: A Brief Teach-In and Implications,” the global banking giant’s research division delved into the last six months of bitcoin and highlighted certain trends it noticed. The report is dated October 31.
/jlne.ws/2PEeW8I

Is There Any Doubt This Man Created Bitcoin?
Jeff John Roberts – Fortune
It’s 10 years to the day since a paper titled “Bitcoin: A Peer-to-Peer Cash System” first turned up on the Internet. The genius who wrote the paper, which describes a digital currency that is now worth over $100 billion, did not identify himself but instead used the pseudonym Satoshi Nakamoto.
/jlne.ws/2zqsM4q

Maybe We Want Financial Intermediation
Jeffrey Tucker – Forbes
In the early days of bitcoin, I was explaining the technology to economist Edward Stringham. This new market-based money allows individuals to exchange peer-to-peer without financial intermediation, I said. All transactions are finally settled, regardless of geographic proximity, with no previous trust relationships, with zero access to financial institutions.
/jlne.ws/2QkLqSC

The Latest Threat to Crypto Prices? The Federal Reserve
Jeff John Roberts – Fortune
Robert Leshner is an interest rates guy. He’s spent years predicting what rate the Federal Reserve will set and, more generally, what the future value of money should be.
/jlne.ws/2Qj4sJ5

The Winklevoss Twins Want $32 Million in Allegedly Stolen Bitcoins Back
Tom McKay – Gizmodo
A former Bitcoin tycoon who served a year in prison for his role facilitating transactions on the Silk Road digital drug bazaar is being sued by none other than the Winklevoss twins, the HarvardConnection creators famous for suing Mark Zuckerberg for allegedly stealing the idea for Facebook from them.
/jlne.ws/2QlaIQP

Politics

Trump Administration Spares Corporate Wrongdoers Billions in Penalties
Ben Protess, Robert Gebeloff and Danielle Ivory – NY Times
In the final months of the Obama administration, Walmart was under pressure from federal officials to pay nearly $1 billion and accept a guilty plea to resolve a foreign bribery investigation.
/jlne.ws/2Qqeto8

‘Full Trumpism’: The president’s apocalyptic attacks reach a new level of falsity
Philip Rucker- Washington Post
President Trump is painting an astonishingly apocalyptic vision of America under Democratic control in the campaign’s final days, unleashing a torrent of falsehoods and portraying his political opponents as desiring crime, squalor and poverty.
/jlne.ws/2QiZfAZ

Donald Trump is Lying 30 Times a Day on Average as the Midterms Approach, Fact-Checker Says
Jason Lemon – Newsweek
President Donald Trump has begun telling even more falsehoods than previously, a fact-checking journalist has alleged, referring to the commander-in-chief as already being a “serial liar.”
/jlne.ws/2QlCVXE

As Election Anxiety Returns, Wall Street Plans to Get Defensive
Austin Weinstein and Vildana Hajric – Bloomberg
Risk of market chaos seen limited, yet firms still cautious; Traders surprised by Trump’s upset win brace for a late night
Kevin Giddis doesn’t expect much in the way of surprises from the U.S. midterm elections. But then again, that’s what he thought two years ago as well.
/jlne.ws/2QgP7c5

Exclusive: Twitter deletes over 10,000 accounts that sought to discourage U.S. voting
Christopher Bing – Reuters
Twitter Inc (TWTR.N) deleted more than 10,000 automated accounts posting messages that discouraged people from voting in Tuesday’s U.S. election and wrongly appeared to be from Democrats, after the party flagged the misleading tweets to the social media company.
/jlne.ws/2QqffBy

Banks to target moderate Democrats, regulators if U.S. House flips
Pete Schroeder, Michelle Price – Reuters
Financial industry lobbyists say they will focus their efforts on moderate Democrats and regulatory agencies if Democrats take control of the House of Representatives after next week’s congressional elections.
/jlne.ws/2QqfEny

Wall Street, Business Donors Bet on Democrats; Reversing a trend, financial-industry and business contributors favor Democratic candidates over GOP in midterm races
Julie Bykowicz – WSJ
Wall Street and the business community, breaking from a yearslong trend, are hedging their political bets by making more contributions to Democrats in the midterm elections, according to fundraising data compiled by the nonpartisan Center for Responsive Politics.
/jlne.ws/2qtczYj

Regulation

SEC Adopts Rules That Increase Information Brokers Must Provide to Investors on Order Handling
SEC
The Securities and Exchange Commission today announced that it has voted to adopt amendments that will require broker-dealers to disclose to investors new and enhanced information about the way they handle investors’ orders.
/jlne.ws/2qvCQFA

SEC Enforcement Division Issues Report on FY 2018 Results
SEC
The Securities and Exchange Commission’s Enforcement Division today issued the annual report of its ongoing efforts to protect investors and market integrity. The report also highlights several significant actions and initiatives that took place in FY 2018. The report presents the activities of the Division from both a qualitative and quantitative perspective.
/jlne.ws/2qrxZoI

SEC Charges Family Friend of Former Investment Banker With Insider Trading
SEC
The Securities and Exchange Commission today charged an IT professional in Texas who allegedly participated in an insider trading scheme perpetrated by a former Wall Street investment banking analyst.
/jlne.ws/2QfgJyk

SEC Charges Investment Adviser With Running $3.9 Million Fraud
SEC
The Securities and Exchange Commission today charged a former registered representative and investment adviser in Altoona, Pennsylvania, with operating a long-running offering fraud.
/jlne.ws/2QgvG3h

U.S. SEC collects nearly $4 billion in fines, disgorgement in fiscal 2018
Pete Schroeder – Reuters
The Securities and Exchange Commission assessed $3.945 billion in disgorgement and penalties across 821 enforcement actions in fiscal 2018, the agency’s enforcement division said in its annual report on Friday.
/jlne.ws/2Qlhshi

ECB shuts Malta’s Pilatus Bank after money laundering allegations
Reuters
The European Central Bank has withdrawn the banking license of Malta’s Pilatus Bank, the island’s financial regulator said on Monday, after the lender was accused of processing corrupt payments for senior Azeri and Maltese figures.
/jlne.ws/2QgPoM9

Why deregulation ahead of a downturn is dumb; The outlook for banks is more worrying than US policymakers intended
Patrick Jenkins – FT
As banks have become more heavily regulated in recent years ó prompting more and more of their edgier business activities to flee to the less regulated non-bank financial system ó bankers have been pretty successful in their “nothing to see here” defence when challenged on their systemic riskiness.
/jlne.ws/2Ql7uwH

Maintaining market confidence: an update on Brexit
UK FCA
Speech delivered by Nausicaa Delfas, Executive Director of International at the City and Financial: 3rd UK Financial Services Brexit Summit
/jlne.ws/2qtNhJu

Investing and Trading

As China soy demand wavers, U.S. farmers turn back to grains
Michael Hirtzer – Bloomberg
Since the mid-2000s, North Dakota farmer Paul Thomas has planted more of his land with soybeans as China’s demand for the oilseed grew. The shift culminated this year when Thomas planted 1,600 of his 5,000 acres with soybeans, the most ever.
/jlne.ws/2QkQRBb

Their Soybeans Piling Up, Farmers Hope Trade War Ends Before Beans Rot; North Dakota’s soybean crops are flourishing. But China has stopped buying.
Binyamin Appelbaum – NY Times
This is harvest season in the rich farmlands of the eastern Dakotas, the time of year Kevin Karel checks his computer first thing in the morning to see how many of his soybeans Chinese companies have purchased while he was sleeping.
/jlne.ws/2QkKi1k

Bond Traders Prepare for Week Full of Risk by Dumping Treasuries
Emily Barrett – Bloomberg
Ten-year yield approaches seven-year high before auctions; U.S. midterms, $83 billion of coupon sales precede Fed
Bond traders see a volatile week taking a toll on U.S. government bonds, and the benchmark rate is already on the verge of a seven-year high.
/jlne.ws/2Qlg0LS

Bond funds hit by biggest monthly withdrawals in almost 3 years; Investors take out $36bn during October with fixed-income ETFs succumbing to turbulence
Nicole Bullock, Robin Wigglesworth and Joe Rennison -FT
Investors withdrew $36bn from bond funds in October, the biggest monthly net redemption in almost three years, as even exchange traded fixed-income funds succumbed to the global market turbulence.
/jlne.ws/2QikTFy

Institutions

Cantor Agrees to Sell ETF, Retail Stock-Trading Division to GTS
Nick Baker – Bloomberg
GTS agreed to buy Cantor Fitzgerald LP businesses that handle exchange-traded funds and orders from retail investors, becoming the latest high-frequency trading firm to start directly serving consumers.
/jlne.ws/2QfnUGN

Deutsche edges up in EU stress tests, still among worst 10 banks in Europe
Arno Schuetze, Tom Sims – Reuters
Deutsche Bank (DBKGn.DE) on Friday scored among the ten worst banks in the latest round of European stress tests, yet another sign of weakness at Germany’s largest lender.
/jlne.ws/2Qj4MaL

Goldman Sachs signs 100,000 customers to its new British bank, Marcus, in just over a month – and now plans a cash Isa
Helen Cahill – Daily Mail
Goldman Sachs has signed up 100,000 customers to its new retail bank, Marcus, in just over a month – and now plans to launch a cash Isa and wealth management service.
/jlne.ws/2QlDAbA

Barclays Posts Lowest Capital Ratio in Latest EU Stress Test
Silla Brush, Nicholas Comfort and Stefania Spezzati – Bloomberg
CET1 ratio for Barclays shrank to 6.37% in toughest scenario; Lloyds falls to 6.8% in adverse situation vs 9.9% for RBS
Barclays Plc saw its key measure of financial health sink to the lowest level among 48 banks in a European stress test, which gauged how well lenders could withstand heavy credit losses and other Brexit-related fallout.
/jlne.ws/2QgMMOs

Hedge Fund ‘Hotels’ Burned Managers Who Sought Refuge in October
Suzy Waite and Krista Gmelich – Bloomberg
Rushing into the same stocks turned ugly for several funds; More broadly, long-short and activist strategies saw big drops
Hedge fund hotels are proving to be no respite for money managers.
/jlne.ws/2Ql2SGK

Goldman to Name Fewest New Partners in 20 Years, WSJ Reports
Christine Maurus and Linly Lin – Bloomberg
Promotions expected for fewer than 65, newspaper reports; Class would be smallest since 1998, when firm was private
Goldman Sachs Group Inc. is likely to announce this week that fewer than 65 people will be named partners, the Wall Street Journal said, citing unidentified people familiar with the matter.
/jlne.ws/2Qs4fTS

Italy’s Banco BPM says one-off costs weighed on stress test outcome
Reuters
Italy’s Banco BPM (BAMI.MI), one of the banks that fared the worst in Europe-wide stress tests of the sector, said on Friday one-off costs had weighed on the outcome of the health check.
/jlne.ws/2QqeZm4

Austrian banking supervisors call on lenders to bolster capital after stress test
Reuters
Austria’s banking supervisors on Friday renewed their calls to the country’s biggest lenders to bolster their capital reserves after Erste Group (ERST.VI) was ranked among the 10 worst performers in a Europe-wide stress test.
/jlne.ws/2QgR8oF

Britain’s Barclays, Lloyds shock in EU bank stress test
Huw Jones, Lawrence White – Reuters
Britain’s Barclays (BARC.L) and Lloyds (LLOY.L) were the surprise laggards in a European Union bank health check on Friday, although none of the 48 lenders tested failed a major capital threshold.
/jlne.ws/2QqfaxK

Goldman says 1MDB dealings may still result in penalties: filing
Reuters
Government probes into Goldman Sachs Group Inc’s dealings with the Malaysian sovereign wealth fund 1MDB may still result in “significant fines, penalties and other sanctions,” the Wall Street bank said in a regulatory filing on Friday.
/jlne.ws/2Ql51lJ

New Funds Take Pay Cut If They Can’t Beat the Market; Money managers are offering new fulcrum funds where pay is based on performance
Justin Baer – WSJ
A wave of stock-picking firms are stepping up their fight against cheap exchange-traded and index funds with new offerings that dial back fees if they can’t beat the market.
/jlne.ws/2qsLxjF

Regions

A Penn State Engineer’s Quest to Become the World’s Gas King
Mohammed Sergie – Bloomberg
Saad Sherida Al-Kaabi named Qatar’s minister of energy affairs; Qatar is the world’s biggest exporter of liquefied natural gas
It’s the opposite of a meteoric rise. Saad Sherida Al-Kaabi was a teenager when he joined Qatar Petroleum in 1986, still an engineering student at Pennsylvania State University. He climbed slowly through the ranks, finally becoming chief executive officer in 2014 and managing projects that cemented Qatar’s role as the world’s top exporter of liquefied natural gas.
/jlne.ws/2QfosfI

China’s Xi Jinping hits out at ‘law of the jungle’ trade policies; President’s remarks seen as broadside against Trump ahead of talks at G20 summit
Gabriel Wildau – FT
Xi Jinping has launched an attack on a “law of the jungle” approach to trade, remarks that will be seen as a broadside against Donald Trump ahead of a G20 summit this month where the two are due to discuss their tariff brinkmanship.
/jlne.ws/2Ql7jBt

Uranium price hits 2.5 year high
Neil Hume, Natural Resources Editor – FT
Uranium has hit its highest level in more than two-and-half years as big producers of the nuclear fuel buy material in the market and China prepares to reaffirm its commitment to build new plants.
/jlne.ws/2QiV0p3

‘Tech-tonic’ Shift May Be Taking Shape in China: Taking Stock
By Arie Shapira – Bloomberg
Chinese stocks are doing something they haven’t done in a long time — outperform their counterparts in the U.S.
/jlne.ws/2Qm2Uhp

Brexit

Some of the City of London’s most powerful figures are backing a second Brexit referendum
Costas Pitas – Reuters
More than 70 business figures are calling for a public vote on the final terms of Britain’s exit from the European Union, warning that the country faces “either a blindfold or a destructive hard Brexit”, the Sunday Times reported.
/jlne.ws/2QlgEcg

‘No Russian money’ in Brexit donation, says Arron Banks; Leave.EU founder says funds came from UK businesses but faces fresh scrutiny
Laura Hughes, Caroline Binham and Robert Wright – FT
Arron Banks on Sunday mounted a pugnacious defence of his conduct during the 2016 EU referendum campaign in the face of a series of investigations, including new scrutiny by the Financial Conduct Authority that could hamper the future insurance operations of the pro-Brexit businessman.
/jlne.ws/2Qmal8s

Big Short’s Eisman Is Shorting Two U.K. Banks on Brexit
Matthew Martin – Bloomberg
Fund manager says U.K. is one of the biggest risks globally; Eisman may short other firms if Corbyn becomes prime minister
Steve Eisman, the Neuberger Berman Group money manager who famously predicted the collapse of subprime mortgages before the 2008 financial crisis, is shorting two U.K. banks over expectations the country will leave the European Union without a deal.
/jlne.ws/2QjQVR

Here’s the Price U.K. May Pay for Brexit Customs Deal
Dara Doyle – Bloomberg
Britain is understood to be seeking a U.K.-wide customs deal with the European Union to help avoid the return of a border in Ireland after Brexit. Theresa May is likely to pay a steep price to clinch such an agreement.
/jlne.ws/2QlfXQc

UK business leaders call for ‘people’s vote’ on Brexit deal; Letter signed by 70 corporate figures says country faces ‘blindfold or a destructive hard Brexit’
Laura Hughes – FT
More than 70 business leaders have signed a letter demanding a “people’s vote” on the final Brexit deal negotiated by UK Prime Minister Theresa May.
/jlne.ws/2QkZqvM

Britons living in EU urged to act to guarantee Brexit rights; Citizens without legal permission could face problems proving they have a right to stay
Peter Wise, Kerin Hope and Michael Stothard – FT
Britain is urging hundreds of thousands of UK citizens living in the EU without registration documents to take action to guarantee their post-Brexit residence rights.
/jlne.ws/2QkHuRQ

Unlikely consensus reigns in Brexit financial services talks; Despite Northern Ireland deadlock, issues affecting the City are all but settled
Alex Barker – FT
Britain’s membership of the EU was often characterised by feuding over the City of London. But a remarkable feature about the country’s exit negotiations has been the lack of big battles over financial services ó a sector of outsized economic importance to the UK.
/jlne.ws/2QiVSKl

The post Shanghai to launch new tech board; Index proliferation adds choice but fuels confusion appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

If you are a U.S. citizen registered to vote, GET OUT AND VOTE! If you are not registered to vote and live in Illinois, you can register to vote on Election Day and vote. See this voter registration guide for details on various state’s rules.~JJL

What is the Macquarie 50th Anniversary Award?~JJL

Day two of FinTech Week in Washington, DC continues today. It concludes on Thursday.

LabCFTC will be hosting Office Hours at the Singapore FinTech Festival. Office Hours provide entrepreneurs and FinTech innovators an opportunity to engage with LabCFTC in general conversation, discuss a specific question or issue, or give a presentation.~JJL

Dan M. Berkovitz’s statement “Dissenting Statement of Commissioner Dan M. Berkovitz Regarding Proposed Rulemaking on Swap Execution Facilities and Trade Execution Requirement” is a must read. It is well researched, written and laid out. Nice to see new CFTC Commissioners hit the road running.~JJL

Today is the opening of the Cboe Risk Management Conference in Tel Aviv.~JJL

The robo-advisor service Nutmeg added human advisors. TD teamed up with Amazon’s Alexa for voice-activated trading. So financial advice from humans and voice broking – old ideas wrapped in innovative paper.~SD

I am looking for a copy of a famous Wall Street Journal article about Salomon Brothers hedging bonds with bond futures ahead of the Volcker statement of 1979. Does anyone have it?~JJL

Could bitcoin be the more stable asset? Marketwatch’s Bitcoin futures volatility sets record low notes cryptocurrencies have been diverging from the emerging market index in recent months.~JK

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CME Group to Host 11th Annual Global Financial Leadership Conference
CME Group
CME Group today announced it will host the 11th annual Global Financial Leadership Conference (GFLC) Nov. 12-14, at the Ritz-Carlton Beach Resort in Naples, Fla. The GFLC is an exclusive, invitation-only event that brings together decision-makers from the world’s leading financial institutions to discuss the global investment climate and outlook, debate critical economic issues and share insights and analysis of geopolitical trends and the global financial landscape.
/jlne.ws/2qxo3do

***** There certainly should be a lot to talk about next week in Naples for those attending.~JJL

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Billionaire Boys Club’s Joe Hunt seeks cut in life sentence
Paul Elias – AP via Chicago Tribune
The young Joe Hunt once used his intelligence, a high-energy salesman’s patter and powers of persuasion to get wealthy friends to invest in his Billionaire Boys Club to fuel an opulent lifestyle that abruptly ended with a first-degree murder conviction and a prison sentence of life without the possibility of parole.
/jlne.ws/2qDPm61

***** Joe Hunt’s career in the Chicago futures markets is not mentioned in this story. He was then known as Joe Gansky, a floor trader and member of the Chicago Mercantile Exchange in the 1980s before the CME Board of Governors stripped him of his membership.~JJL

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Making the Trade
John Lothian
I am a bull. I like to buy. I like to be long. I long to see the market go up and my profits roll in. Marked to the markets, my gut churns up and down with the market. Rising markets and Tums make my stomach feel better.
/jlne.ws/2qwHu6g

***** Every once in a while I feel poetic. Unfortunately, this time I could not stifle the urge to put pen to paper and here is the result.~JJL

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Monday’s Top Three
Our top read story of the day was Fortune’s Is There Any Doubt This Man Created Bitcoin? Could it be a guy named Nick Szabo? You be the judge. Second went to a top three story from Friday from FN London, LME plans code of conduct for traders following Playboy party. Third was Business Insider’s piece on the incredible energy demands for global bitcoin mining and trading, in Bitcoin trading could raise global temperatures and CO2 emissions

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MarketsWiki Stats
134,857,010 pages viewed; 23,301 pages; 215,351 edits
MarketsWiki Statistics

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Lead Stories

We are living in an age of unprecedented risks; Business faces political upheaval while politics grapples with disruption
Henry Paulson – FT
Over the course of my 50-year career, with the exception of the 2008 financial crisis, I have never seen the public and private sectors buffeted by so much risk. These new risks are not financial, but they are unprecedented in their character, not just their scope.
/jlne.ws/2qwxREl

***** There are many risks that have nothing to do with buy or sell that can impact your trade, career or industry. That is what we have focused on since starting this newsletter in 2000.~JJL

Supply Crunch Looms in Commodities Markets; Some investors expect dearth of investment to tighten supplies, pushing metal prices to new records
Amrith Ramkumar and David Hodari – WSJ
A prolonged period of underinvestment by commodity producers is setting the stage for large price increases in raw-materials markets, say bullish investors who focus on the metals and energy industries.
/jlne.ws/2qvFomQ

City of London concerns grow about a bad Brexit deal; Financiers fear UK and EU negotiators are closing in on an inadequate agreement
Patrick Jenkins in London – FT
The City of London is stepping up its Brexit lobbying efforts with the UK government because of concern that a proposed future trading and regulatory regime for financial services will be inadequate, according to senior financiers.
/jlne.ws/2qtoGEM

MINDEX, GMEX Group and HYBSE join forces to launch the first blockchain securities exchange in Mauritius
GMEX Group
We are pleased to announce the launch of the HYBSE International Marketplace; a joint venture between MINDEX Holdings Limited (MINDEX), GMEX Group Limited (GMEX) and Hybrid Stock Exchange Corporation Limited (HYBSE); that will bring to market a revolutionary blockchain exchange platform, based in Mauritius.
/jlne.ws/2qDOFtr

CFTC Voted on Open Meeting Agenda Items
CFTC
At an open meeting today, the Commodity Futures Trading Commission (Commission) voted unanimously to approve a final rule to amend the De Minimis Exception to the Swap Dealer Definition. The Commission also voted unanimously on a request for comment regarding the Practice of “Post-Trade Name Give-Up” on Swap Execution Facilities.
/jlne.ws/2QicW3m

****All of the relevant chairman statements regarding both of these rules can be found in our “Regulation” section.~SD

US Treasuries lead bond trading volume surge in Oct on stocks rout- Tradeweb
Reuters
Government bond trading volumes soared last month, led by U.S. Treasuries, as a rout in world stock markets boosted demand for safe-haven debt, trading platform Tradeweb said on Tuesday.
/jlne.ws/2qxo1SO

What a Brexit Deal Can and Can’t Do for the British Economy
David Goodman – Bloomberg
Investment, confidence and the pound could all get a boost; Fundamental challenges such as weak productivity will remain
The “deal dividend” promised to Britain by Chancellor of the Exchequer Philip Hammond might be tantalizingly close amid signs an amicable divorce from the European Union could be within sight.
/jlne.ws/2qvGyyI

Goldman Sachs has serious questions to answer; Allegations about the bank’s dealings with 1MDB have the potential to cut deep
Brooke Masters – FT
Back in 2010, Goldman Sachs faced a near existential threat. Sued by the US Securities and Exchange Commission over allegations it had misled clients about mortgage-backed securities, Goldman appeared in internal emails to personify the arrogant self-interest that had helped cause the global financial crisis. Its executives were lambasted by the US Senate and its rivals scented blood.
/jlne.ws/2qrOtgG

Ex-Wall Street banker gets insider trading conviction overturned; Sean Stewart told his father about deals he worked on at Perella Weinberg and JPMorgan
James Fontanella-Khan – FT
A former Perella Weinberg and JPMorgan Chase banker has had his insider-trading conviction overturned by a US appeal court, which determined evidence that could have influenced the jury’s deliberations was wrongfully omitted from the trail.
/jlne.ws/2qwJc7G

How a 205-Year-Old Grain Dynasty Won Activist Victory Over Bunge
By Javier Blas – Bloomberg
The Fribourgs are the closest to royalty in global agriculture; Bunge starts strategic review that may lead to company’s sale
In the world of agribusiness, the Fribourgs are royalty. Their 205-year-old family business has shaped some of the biggest twists in global food trading, becoming a household name in the 1960s after it led the unprecedented sale of U.S. wheat to the Soviet Union. Now, it’s shaping the business of American farming again, pushing for the shake-up of a storied rival: Bunge Ltd.
/jlne.ws/2QnaPem

Exchanges, OTC and Clearing

Tradeweb volumes continue to surge in record year; The electronic trading platform provider has already topped its annual total from last year following a record month in September.
Jonathan Watkins – The Trade
Tradeweb has posted a 38% year-on-year increase in volumes during October largely due to activity in the US, European and Japanese government bond markets, along with a surge in ETF trading.
/jlne.ws/2qvRrRa

E-trading on the rise for US emerging market bond traders; Research suggests emerging market bond trading will rise next year, with a portion of that volume tipped to be executed electronically.
Hayley McDowell – The Trade
Emerging market bond traders in the US have predicted an increase in trading volumes over the course of the next year, with a growing share due to be executed via electronic protocols.
/jlne.ws/2quIBTV

Instinet adds XTX Markets to SI aggregator in latest liquidity streaming deal; XTX Markets joins Virtu Financial, Sun Trading and SSW Market Making as liquidity providers on Instinet’s SI aggregator platform.
Hayley McDowell – The Trade
Agency broker Instinet has added another market maker to its systematic internaliser (SI) aggregator platform, marking its fourth major liquidity streaming partnership for the tool.
/jlne.ws/2qwefAv

Aditya Babel, Flow Traders: “This extension will help improve transparency and pricing of different financial assets”
Eurex
A Market Maker’s opinion on Eurex’ plan to extend its trading hours into the Asian time zones
/jlne.ws/2qtqgGI

ASX Monthly Activity Report – October 2018
ASX
/jlne.ws/2qxpCbg

Nasdaq Wins Three Waters Technology Buy-side Technology Awards
GlobeNewswire
Nasdaq, Inc. (Nasdaq:NDAQ) was presented with three awards at Waters Technology’s annual Buy-Side Technology Awards ceremony in London. The wins, which focused on the Nasdaq Buy-Side Compliance solution, were for the following categories: best overall buy-side product, best buy-side market surveillance tool/platform and best buy-side artificial intelligence (AI) platform/tool of the year.
/jlne.ws/2qu3MFo

Fintech

Trading systems: the need to take an enterprise testing approach
Vaibhav Shukla – Itiviti Blog
It goes without saying that it’s imperative for trading technologists to thoroughly test their systems before the put them in a production environment. Clearly, building a market-beating trading platform requires a high level of uptime and a propensity for failure that’s as close to zero as possible. And for years technologists have used a range of tools to test the various components of their trading platforms, across all aspects of the order workflow.
/jlne.ws/2DpUMdh

FlexTrade Integrates; Bernstein Cube into FlexTRADER EMS; Enhances Portfolio Trading Functionality with a Global, Pre-Trade Risk Analysis Model
FlexTrade Systems
FlexTrade Systems (@FlexTrade), a global leader in multi-asset execution and order management systems, today announced the integration of the Bernstein Cube into the FlexTRADER EMS, which will provide traders with a comprehensive portfolio construction, risk analysis and pre-trade system right from the blotter.
/jlne.ws/2qvFcUE

Thomson Reuters reports better-than-expected quarterly profit
Matt Scuffham – Reuters
Thomson Reuters Corp (TRI.TO) (TRI.N) on Tuesday reported a smaller-then-expected fall in third-quarter earnings and said it was on track for a solid 2018 and a better performance in 2019.
/jlne.ws/2qxEypW

Banking Veteran Spencer Lake Joins Duco Board; Duco strengthens management team with appointment of Spencer Lake as non-executive director, and new senior hires in sales, marketing, finance and operations.
Duco
Duco, the global provider of enterprise data quality and reconciliation services, today announced that former HSBC and Merrill Lynch veteran Spencer Lake has joined the board of directors as a non-executive director. The company has also significantly bolstered its senior management team with the appointments of Danielle Price as Head of Finance and Operations, Peyton Kay as Vice President of Strategic Marketing, and Scott Glazer as Head of Sales, North America.
/jlne.ws/2qxNFXC

Cryptocurrencies

SEC Official Says ‘Plain English’ Guidance On ICOs Is Coming
Nikhilesh De and Aaron Stanley – Coindesk
The U.S. Securities and Exchange Commission (SEC) plans to clarify when and how cryptocurrencies may be classified as securities, its director of Corporation Finance said Monday. Speaking at the D.C. Fintech Week conference, SEC director William Hinman said the regulatory agency intends to release “plain English” guidance for developers to refer to when planning token offerings.
/jlne.ws/2JH4GHE

Bitstamp selects trading system from Cinnober
Bitstamp
Cinnober, a global independent provider of exchange and clearing technology solutions for the finance industry, today announces that it has been selected by the cryptocurrency exchange Bitstamp to deliver a trading system for cryptocurrencies.
/goo.gl/LnoZcd

A blockchain startup buys a space startup in the weirdest corporate takeover of 2018
Kabit Chibber – Quartz
Blockchain “venture production studio” ConsenSys has announced its acquisition of Planetary Resourcesóa space startup once focused on mining precious materials from asteroidsóin an announcement that could set a record for meaningless buzzwords. (Please email if you have found better.)
/jlne.ws/2QjQIxK

****SD: Anyone for a game of DLT bingo?

Twitter is struggling to curb fake Elon Musk accounts promoting cryptocurrency scams
Sean Wolfe – Business Insider
If you’ve used Twitter at all recently, you’ve probably seen what looks like Elon Musk peddling a cryptocurrency “giveaway” on your timeline. A closer look at the user’s Twitter handle will reveal the account doesn’t belong to Elon Musk, it’s an imposter looking to capitalize on the crypto craze.
/jlne.ws/2qwW5yw

Bitcoin futures volatility sets record low
Aaron Hankin – MarketWatch
Bitcoin was trading marginally lower Monday, but remains in its recent narrow trading range. In Monday trading, a single bitcoin BTCUSD, -0.17% was fetching $6,393.63, down 0.6% since 5 p.m. Eastern Time on Sunday on the Kraken crypto exchange. The No. 1 digital currency has spent the last five trading sessions inside the $6,300 to $6,400 range.
/jlne.ws/2ySBbOU

No, Bitcoin Isn’t Secretly Messing with the Mid-Term Elections
Brian Forde – Coindesk
On the eve of the most important election of our time, we’ve seen what misinformation gets us. Fear of the unknown, fear of change. In these times, we need to be vigilant about how we examine what’s new or different.
/jlne.ws/2qv8h2H

Bitcoin Will Burn the Planet Down. The Question: How Fast?
Adam Rogers – Wired
Max Krause was thinking of buying some bitcoin, as one does. But Krause is an engineerómostly he works on modeling greenhouse gas emissions from landfillsóso his first step was to run the numbers. He looked at price, of course, but also how fast the world’s bitcoin miners create new bitcoins and the ledger that accounts for them. And he looked at how much electricity that would seem to require.
/jlne.ws/2zrRm58

Firm Owned by India’s Richest Man Turns to Blockchain for Trade Finance
Yogita Khatri – Coindesk
Oil and gas conglomerate Reliance Industries – owned by India’s richest person, Mukesh Ambani – has used blockchain to conduct its first trade finance transaction. According to a news release from HSBC India shared with CoinDesk on Sunday, Reliance Industries has recently executed a “live” blockchain-powered trade finance transaction in collaboration with US-based global chemical distributor Tricon Energy.
/jlne.ws/2F2zsvF

From $100 to $1 million, here are the 11 most outrageous bitcoin predictions
Aaron Hankin – MarketWatch
There’s nothing quite like the bitcoin debate. In one corner, crypto evangelists insist that bitcoin will be nothing less than the next reserve currency or digital gold. In the other corner, traditionalists pour scorn on the notion that the technology will present a threat to the existing financial system.
/jlne.ws/2qvKShB

Crypto Exchanges And ICOs Are Evolving Into New Entities
Luke Fitzpatrick – Forbes
Today, the initial coin offering market is in turmoil with some ICOs closing down. Others are prolonging their capital raising with the hope that the market will pick up. However, this is unlikely to happen soon as new patterns are beginning to emerge from the rubble.
/jlne.ws/2qv66Mv

Winklevosses’ Adversary Calls Bitcoin Theft Claim ‘Scandalous’
Bob Van Voris – Bloomberg
The disgraced former chief executive of BitInstant called a lawsuit by Tyler and Cameron Winklevoss’s Winklevoss Capital Fund a “scandalous and fantastical story,” and urged a U.S. judge to throw it out.
/jlne.ws/2qwIAyU

Hublot Offers Swiss Watch for Those Who Have Bitcoins to Burn
Daniela Wei and Benjamin Robertson – Bloomberg
Company’s $25,000 watch is first Bitcoin-only luxury item; Swiss watchmaker plans to extend payment method to all models
Swiss watchmaker Hublot, owned by LVMH, introduced a limited-edition timepiece that’s exclusively available for purchase with Bitcoin, 10 years after the digital currency was first created.
/jlne.ws/2qvBx9D

Crypto Coders Shun ‘Hodl’ in Favor of ‘Buidl’ at Prague Event
Camila Russo – Bloomberg
There was a reckoning at so-called Ethereum Christmas, the biggest conference for the community behind the second-largest cryptocurrency.
/jlne.ws/2qrOoto

Politics

Will US Midterm Elections Unleash Market Mayhem?
Curatia
Today’s US midterm elections loom large in the financial world for their sway over the future direction of financial regulation, fiscal and budgetary policy, and foreign relations in the world’s largest economy. Markets’ growing sensitivity to unknowns including geopolitical intrigues (discussed yesterday) has amplified that significance.
/jlne.ws/2qu3Zsi

Hard Times Test Farm Belt’s Loyalty to Trump; A bumper soybean crop is piling up in grain silos as China purchases stall. It will only get worse if trade tensions persist.
David Fickling – Bloomberg
While most of America is booming, family farms are struggling. The median household income for farm owner-operators will fall for the fourth consecutive year in 2018, according to U.S. Department of Agriculture data. That’s partly a result of weak prices for agricultural commodities: The majority of such farms lose money on their produce and only make it up thanks to income from off-farm work, investments and government benefits. Still, the trade war with China isn’t helping any.
/jlne.ws/2quGn71

Regulation

Statement of Chairman J. Christopher Giancarlo Regarding Notice of Proposed Rulemaking on Swap Execution Facilities and Request for Comment on Post-Trade Name Give-Up
CFTC
/jlne.ws/2Qn0iQC

Public Meeting Opening Statement of Commissioner Rostin Behnam
CFTC
/jlne.ws/2Qm5RPj

****Also from Behnam – Statement of Concurrence of Commissioner Rostin Behnam Regarding Swap Execution Facilities and Trade Execution Requirement

Opening Statement of Commissioner Dawn D. Stump before the CFTC Open Meeting, November 5, 2018
CFTC
/jlne.ws/2Qn1gwe

Opening Statement of Commissioner Brian Quintenz before the Open Commission Meeting on November 5, 2018
CFTC
/jlne.ws/2QmHSze

Statement of Commissioner Dan M. Berkovitz Regarding the De Minimis Exception to the Swap Dealer Definition; Final Rule
CFTC
/jlne.ws/2QlSo9U

****Also from Berkovitz – Dissenting Statement of Commissioner Dan M. Berkovitz Regarding Proposed Rulemaking on Swap Execution Facilities and Trade Execution Requirement

Tom Hayes closes in on 2019 release from prison
Lucy McNulty – Financial News
Convicted Libor rigger Tom Hayes could be out of prison as soon as next year, according to people involved with his case. This means he would serve much less than half of his 11-year sentence.
/jlne.ws/2Qn3xrg

New Proposed Rules Limit the Negative Tax Consequences of Section 956 “Deemed Dividends”
Katten
Certain Foreign Guarantees and Stock Pledges May Be Expanded to Support US Loans
On October 31, the Internal Revenue Service (IRS) released proposed regulations (the “Proposed Regulations”) under Section 9561 that could substantially increase the collateral packages made available by US corporate borrowers with foreign corporate subsidiaries. In most cases, under the Proposed Regulations, foreign corporate subsidiaries may guarantee the obligations of their US corporate parents and will permit the US corporate borrowers to pledge all of the voting and non-voting stock of their foreign corporate subsidiaries without the historical concerns of adverse US federal income tax consequences. For most US corporations, the Proposed Regulations effectively would reduce extensively the applicability of the Section 956 deemed dividend rules that have applied to them and their foreign corporate subsidiaries for more than 50 years.
/jlne.ws/2qwaDyr

SIP Reform Outlook Unclear
Rob Daly – Traders Magazine
Updates to the Securities Information Processor probably will not happen in the near term, according to Cboe Global Market officials.
The SIP is a frequent lightning rod for brokers and institutional investors, who say exchanges purposely keep the baseline data product wanting in order to prop up demand for premium data feeds.
There are only two methods to expand the governance of the SIP as well as incorporating additional data, such as depth-of-book, said Chris Concannon, president and COO of Cboe Global Markets, during the exchange operator’s third-quarter earnings call on November 2.
/goo.gl/RPQcYT

CFTC Commissioner: Code Developers May be Accountable for Smart Contracts
The National Law Review
Recently at a conference in Dubai, Brian Quintenz, who is a Commodity Futures Trading Commission (CFTC) Commissioner, expressed his personal opinion (rather than the views of the CFTC) on the conceptual challenges in applying the CFTC’s regulatory oversight to, and fostering accountability for, smart contracts that reside on decentralized blockchains. In particular, Quintenz conveyed his belief that smart contract developers could potentially be held liable for aiding and abetting activity that violates CFTC regulations through the use of a smart contract that they programmed, if they “could reasonably foresee, at the time they created the code, that it would likely be used by U.S. persons in a manner violative of CFTC regulations.”
/jlne.ws/2QllTZG

Kraft Fights CFTC’s Quick Win Bid In Wheat Futures Case
Christopher Cole – Law360
Kraft Foods Group Inc. on Friday urged an Illinois federal judge not to hand regulators a quick win on claims that it broke wheat futures rules, saying it was told it…
/jlne.ws/2qxyXjq

Melbourne financial services and credit business to pay $9 million for multiple breaches of obligations and consumer protection laws
ASIC
A Melbourne-based financial services and credit business has been ordered by the Federal Court to pay penalties of $8,980,000 in total after it engaged in numerous contraventions of financial services, credit and consumer protection laws.
/jlne.ws/2qxpOY2

TDDS 2.0 User Acceptance Test
FINRA
Beginning Monday, December 3, 2018, FINRA will increase the bandwidth rate for the Trade Data Dissemination Service 2.0 (TDDS 2.0) vendor feed from 800 kilobits per second (kbps) to 2,500 kilobits per second (kbps).
/jlne.ws/2qvyPAN

Amendments to the SEC’s Financial Reporting RequirementsóeFOCUS System Updates and Annual Audit Requirements
FINRA
The Securities and Exchange Commission (SEC) has adopted amendments that simplify and update, among other rules and forms, certain of the FOCUS reporting requirements for brokers and dealers and make changes to the annual audit requirements. FINRA is updating the electronic FOCUS filing system (the eFOCUS System) to incorporate the SEC’s amendments. To facilitate members’ efforts to comply with the new requirements, FINRA is making available on the FINRA website resources that illustrate the eFOCUS System updates.
/jlne.ws/2qu4CSy

FinCEN issues an Advisory on the FATF-identified jurisdictions with AML/CFT deficiencies
NFA
On October 31, 2018, the Financial Crimes Enforcement Network (FinCEN) issued an Advisory announcing that the Financial Action Task Force (FATF) had updated its list of jurisdictions with strategic AML/CFT deficiencies. NFA Member FCMs and IBs should review this Advisory to ensure that their AML programs have the most current information on FATF-identified jurisdictions with AML/CFT deficiencies and revise their AML programs accordingly. A copy of the Advisory is available on FinCEN’s website.
/jlne.ws/2qwfPlV

Fin-TechPrime
UK FCA
We believe this firm has been providing financial services or products in the UK without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers.
/jlne.ws/2quLAvl

Reg Investment Bank
UK FCA
We believe this firm has been providing financial services or products in the UK without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers.
/jlne.ws/2qyum0l

Investing and Trading

The next generation should demand action on sustainability; Finance industry needs to make progress on quantifying the benefits of ESG investing
Paul Smith – FT
As the person who leads the organisation behind the finance industry’s main professional qualification, I am frequently questioned about how the investment profession can more clearly demonstrate its mission of fostering business growth and generating prosperity.
/jlne.ws/2qyHq5D

The Pound Now Moves on a Simple Thumbs Up
Charlotte Ryan – Bloomberg
The responsiveness of the pound to headlines may be well documented, but its sensitivity reached new highs Tuesday as it rallied on a mere hand gesture.
Investors had been waiting for news on progress in the Brexit divorce talks with U.K. Prime Minister Theresa May gathering her Cabinet Tuesday morning. When BBC political editor Laura Kuenssberg tweeted that the Brexit Secretary Dominic Raab had said “thumbs up” on the way out of the meeting, it was enough to send the U.K. currency to the day’s high.
/goo.gl/wbbs1J

The market’s Red October nailed the coffin on one of the most trusted trading strategies of the bull market ó and Morgan Stanley warns it could send stocks tumbling
Akin Oyedele – Business Insider
A trading strategy that has rescued stocks and generated big profits for investors throughout this bull market is no longer working. Strategists at Morgan Stanley outline why we’re witnessing the end of “buy the dip,” and the urgent implications this development has for stock market investors.
/goo.gl/eDDSKn

Institutions

Citigroup names new chairman, keeps post separate from CEO
David Henry – Reuters
The board of Citigroup Inc (C.N) on Monday named one its independent members to be its new chairman, keeping the post separate from Chief Executive Mike Corbat.
John C. Dugan, 63, a former bank regulator and former lawyer to the board who became a Citigroup director last year, will succeed Mike O’Neill on Jan. 1, the company said. O’Neill recently reached the board’s retirement age of 72 and was due to leave in April.
/goo.gl/FhKYJD

UBS rape accuser slams bank’s ‘no errors’ claim
Chris Newlands – Financial News
The woman at the centre of the rape allegation against UBS has hit out at the Swiss bank for its response to her claims that the company mismanaged her allegations of sexual assault.
/jlne.ws/2QjPRx2

Co-Founder Selling Stake in Wall Street Gatekeeper; Cambridge Associates, investment adviser to institutions and wealthy, now over 50% owned by clients
Dawn Lim – WSJ
One of the founders of Cambridge Associates is cashing out as the firm that started as an investment consultant focuses more on managing money for clients. Co-founder Hunter Lewis is fully liquidating his stake in Cambridge to fund his philanthropy, the firm told employees in a recent memo. He has sold most of his ownership in the firm, Cambridge said.
/jlne.ws/2qwto4x

HSBC Gets Owned by Its Former Pupil; Chinese insurance giant Ping An is now HSBC’s top shareholder, turning the two firms’ former relationship on its head
Andrew Peaple – WSJ
Sometimes things come full circle pretty quickly in financial markets. Just six years after HSBC sold its 15.6% stake in Ping An, the Chinese insurer has become the biggest shareholder in the Asia-focused British bank. Ping An’s nearly $12 billion stake, held via its asset-management arm, has risen to just above 7% of HBSC, according to a regulatory filing, taking it past BlackRock Inc. into the top spot on the shareholder register.
/jlne.ws/2qvK64b

Alexander Friedman quits as CEO of GAM as share price and assets drop;l Swiss investment group is under pressure, prompted by a decision to suspend star fund manager Tim Haywood
David Ricketts – Financial News
Alexander Friedman has stepped down as chief executive of GAM. The decision follows a turbulent summer for the Swiss investment group in which both its assets and share price took significant hits.
/jlne.ws/2qvIwPN

GAM rejects Schroders bid for hedge fund arm
Dylan Lobo – Citywireselector.com
Embattled GAM has turned down a Schroders bid for its hedge fund business Cantab Capital Partners, according to to the Financial Times.
/jlne.ws/2qu43s2

Royal Bank of Scotland to launch digital bank for SMEs; New app will provide a current account alongside invoicing and cash flow forecasting
Nicholas Megaw, Retail Banking Correspondent – FT
Royal Bank of Scotland has become the first of the UK’s big high street lenders to open a standalone digital bank, with the launch of a new business-focused current account that will be run independently of its traditional brands.
/jlne.ws/2qyGuOF

Regions

$1.7 Billion Flew Out of Saudi Markets Last Month
Filipe Pacheco – Bloomberg
Foreigners sold $1.4 billion of region’s stock: EFG-Hermes; October marked first month of net outflows in almost a year
Record foreign selling of Saudi Arabian stocks in the wake of last month’s killing of government critic Jamal Khashoggi put the brakes on a 10-month streak of international investments in the Middle East’s five biggest stock markets.
/goo.gl/SV3LN1

China open to trade talks with US, says Wang Qishan; Influential Xi aide appears to walk back Beijing’s swipe at Trump ‘law of jungle’ policy
Stefania Palma and Tom Hancock – Financial Times
Beijing remains ready to talk with Washington to resolve a bitter trade dispute, a top Chinese official has said a day after President Xi Jinping lashed out at a “law of the jungle” policies that was seen as an attack on the approach of Donald Trump. “The Chinese side is ready to have a discussion with the US on issues of mutual concern and work for a solution on trade acceptable to both sides,” said Wang Qishan, vice-president and close confidant of Mr Xi who is one of the country’s top officials responsible for relations with Washington.
/goo.gl/VHmHxS

Chinese Insurer Overtakes BlackRock to Become HSBC’s Biggest Shareholder; Ping An Insurance’s stake in the bank rises to more than 7%
Joanne Chiu – WSJ
A major Chinese insurer has overtaken BlackRock Inc. as the biggest shareholder of U.K.-based HSBC Holdings HSBC, with its nearly $12 billion stake demonstrating China’s growing appetite for offshore equity investments.
/jlne.ws/2qvAPct

Increased electronic execution in Asia-Pacific markets
UBS via FXWeek
Do clients based in Asia-Pacific trade differently from those in other regions? No, says Anthony Hall, head of foreign exchange, rates and credit at UBS for the region. Clients globally are increasingly focused on complex algos, emerging markets and structured products where momentum is building for further electronification.
/jlne.ws/2QnsToQ

Brexit

Bankers worry: ‘We’re spending too much time on Brexit’
Lucy McNulty – Financial News
London’s bankers are finding their time and attention diverted by Brexit when they should be preparing the City for the financial challenges of the future, two of the City’s most senior bankers said today.
/jlne.ws/2QnAgww

Arron Banks and the mystery Brexit campaign funds; UK crime agency probing whether executive was true source of £8m donation to Brexit backers
Robert Wright – FT
There is a considerable distance ó in miles and ambience ó between the London home of the Russian ambassador to the Court of St James’s and the offices in the St Mary’s Centre on Thornbury High Street, near Bristol. The residence overlooks Kensington Palace on the most exclusive street in London’s diplomatic quarter. The Thornbury offices sit above Parsons Bakery in a dull, red-brick postwar shopping centre.
/jlne.ws/2qwG77C

Tory Europhile Dominic Grieve warns of major Brexit ‘trauma’; The Conservative MP tells Financial News how he tried ó and failed ó to stop worrying and learn to love Brexit
Lucy McNulty – Financial News
“I have spent quite a lot of the last two years trying to reconcile myself to Brexit,” said Dominic Grieve. “Trying to see silver linings to the Brexit cloud, trying to say to myself, ‘Well, actually listen to colleagues, it might be better than I think’.”
/jlne.ws/2qvAarv

U.K. ‘Almost Certain’ to End Up With Hard Brexit, Mandelson Says
Reinie Booysen and Haidi Lun – Bloomberg
Government in ‘titanic’ struggle over pace of departure; Britain will be ‘biggest casualty’ if stalemate continues
Veteran Labour politician Peter Mandelson expects the U.K. to end up with only loose ties to the European Union after leaving the bloc.
/jlne.ws/2qwu9dT

Carlyle scales back UK investments over Brexit uncertainty; Investors are pulling back due to lack of clarity, says co-founder Rubenstein
Stefania Palma and Javier Espinoza – FT
US private equity group Carlyle has pared back investment in the UK following the country’s decision to leave the EU because of uncertainty over the terms of Brexit, its co-founder David Rubenstein said.
/jlne.ws/2qvNv2X

Miscellaneous

Montagu Norman: The View from St Clere
Barry Eichengreen – Bank Underground
Last May, the Bank organised an economic history workshop at the St Clere Estate, home of former governor Montagu Norman. In this guest post, one of the speakers, Barry Eichengreen from the University of California Berkeley, looks back at Montagu Norman’s time as governor.
/jlne.ws/2Qhoq6V

The post We live in an age of unprecedented risks; Supply crunch looms in commodities appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

From Trading Technologies: “It is with sadness we share that Louise Moore, a London-based customer success manager at TT for the last five years, lost her 2-year battle with cancer over the weekend. Louise joined TT’s London team 7 years ago as a consultant after working as a manager at MF Global. She touched many people with her outgoing personality, big sense of humor and bravery. She worked in this industry for more than 20 years and made many friends. She will be deeply missed by those who knew her, especially her TT family.” The JLN team offers its deepest sympathy to the family and friends of Ms. Moore.~JJL

The 14th World Exchange Congress is taking place on the 25th to 27th of February 2019 in Beirut, Lebanon. Participants include executives from the Botswana Stock Exchange, Aquis Exchange, South Pacific Stock Exchange, B.S.E. Sofia, Zagreb Stock Exchange, Bucharest Stock Exchange, Bombay Stock Exchange, Namibian Stock Exchange, Montenegro Stock Exchange, Lusaka Securities Exchange Zambia, BRVM.~JJL

Care to see what the crystal ball says? Well, you’re in luck as Preqin has an 81-page report out about what the alternatives industry will look like in 2023.~SD

FOW and Global Investor are hosting the MENA Asset Management and Trading Summit on November 14, 2018 at the Conrad Hotel in Dubai. You can find the agenda, speakers and contact information here.~SR

On November 15, SIFMA’s Listed Options Symposium program will feature the state of the options industry, take a deep dive into key market structure topics, and discuss the path to achieving a more liquid and resilient market. Join SIFMA in NYC or via Webinar. For details, visit www.sifma.org/listed-options.~JJL

The finalists have been announced for the Deutsche Bˆrse Photography Foundation Prize 2019.~JJL

The Girl Scouts of America have decided to sue the Boy Scouts of America because the Boy Scouts are rebranding as Scouts BSA. Such a sad move.~JJL

The father of a victim in the Parkland school shooting put a bulletproof vest on the ‘Fearless Girl’ statue next to the NYSE.~JJL

++++

Cboe’s problems don’t end with the VIX; There’s another fight brewing over market data fees. Clients contend they’re too high, the SEC is mulling a crackdown – and the exchange is pushing back.
Lynne Marek – Crain’s Chicago Business
There’s another fight brewing over market data fees. Clients contend they’re too high, the SEC is mulling a crackdownóand the exchange is pushing back. “Angry Chris” Concannon was on full display at a Securities & Exchange Commission meeting in Washington recently to discuss stock market data fees.
/goo.gl/kr9K9c

***** This story is from several days ago, but I was reminded by a concerned reader/writer that I had not included it in JLN. Sorry, Lynne!~JJL

++++

Even Lobsters Can’t Escape Trump’s Trade War; Crustacean economics was a textbook study in supply and demand until Chinese buyers lost their appetite.
Shawn Donnan – Bloomberg
In his cargo shorts and T-shirt, Mark Barlow looked anything but an international trade warrior. Yet a few weeks ago, when he slid open the door to his low-slung warehouse in a scrappy industrial lot to reveal concrete tanks filled with 375,000 gallons of 40-degree water and a fortune in live Maine lobsters, he might as well have been leading a battlefield tour.
/jlne.ws/2FldPar

****** I studied the lobster market in college and did a Harvard Business School case study on them. One of my favorite memories from a summer spent at Purdue.~JJL

++++

Girl Scouts sue Boy Scouts over trademark as boys welcome girls
Jonathan Stempel – Reuters
The Girl Scouts of the United States of America filed a trademark infringement lawsuit against the Boy Scouts of America on Tuesday, after the Boy Scouts decided to drop “Boy” from its namesake program and start welcoming older girls.
/jlne.ws/2Fbpc4t

***** Seems like an odd move, but sometimes that is the way the cookie crumbles.~JJL

++++

Tuesday’s Top Three
Yesterday’s top story was Billionaire Boys Club’s Joe Hunt seeks cut in life sentence from the AP (via the Chicago Tribune). It did not really delve into Hunt’s time as a futures trader. Second place went to a story dissecting recent developments in grain royalty, How a 205-Year-Old Grain Dynasty Won Activist Victory Over Bunge. Is a sale next for Bunge? The winner of the bronze was Hank Paulson’s piece in the Financial Times, We are living in an age of unprecedented risks

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MarketsWiki Stats
134,910,174 pages viewed; 23,308 pages; 215,392 edits
MarketsWiki Statistics

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Lead Stories

Virtu Financial to Buy Brokerage ITG in Almost $1 Billion Deal; Deal values Investment Technology Group at $30.30 a share
Allison Prang – WSJ
Virtu Financial Inc. is buying brokerage Investment Technology Group Inc. for nearly $1 billion in a deal it said would help stabilize its quarterly earnings results.
/jlne.ws/2Fb2No5

****Financial Times here and Reuters here. Recall Bloomberg reported in early October that Virtu was pursuing ITG.~SD

CME’s Nex to apply for Dutch exchange licence as Brexit hedge
Philip Stafford – FT
Nex, the UK trading and technology group, has applied for an exchange licence with Dutch regulators in a move that could see it shift more trading assets out of London as a hedge against a no-deal Brexit.
/jlne.ws/2Fb0Ish

A $240-Billion-a-Day Market Is Leaving London Ahead of Brexit
Will Hadfield – Bloomberg
Europe’s biggest repo trading venue is moving to Amsterdam; BrokerTec is the first company to relocate an entire market
The City of London is being dealt another Brexit blow. CME Group Inc. is moving its European market for short-term financing, the largest in the region, out of London because the exchange operator wants to guarantee continental firms can continue to use it if there is a no-deal Brexit.
/goo.gl/1USmZD

Former JPMorgan metals trader pleads guilty to spoofing
Kadhim Shubber and Gregory Meyer – FT
A former JPMorgan Chase precious metals trader has pleaded guilty to spoofing charges in the latest action brought by US authorities as they attempt to clean up futures markets.
/jlne.ws/2D8Wb74

****CNBC here and Bloomberg Law here.

DTCC Enters Test Phase on Distributed Ledger Project for Credit Derivatives with MarkitSERV and 15 Leading Global Banks
DTCC
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that it has advanced to the testing phase of its ground-breaking project to re-platform its credit derivatives Trade Information Warehouse (TIW) on distributed ledger technology (DLT) and cloud.
/jlne.ws/2QomFFd

Draghi’s Secret Ballot Turns ECB Bank Watchdog Race Into a Cliffhanger
Piotr Skolimowski and Alessandro Speciale – Bloomberg
Ireland’s Sharon Donnery was clear frontrunner until recently; Italian Andrea Enria has gained momentum on EBA experience
A secret ballot of European Central Bank policy makers on Wednesday has turned the race to become the euro region’s next bank-supervision chief into a cliffhanger.
/jlne.ws/2FldDYL

Shale Boom Changes Way U.S. Gas Traders Buy and Sell
Naureen S Malik – Bloomberg
Volumes climb at Southeastern, Texas hubs, exchange data show; Natural gas production has surged in Permian and Appalachia
North American natural gas bets are moving closer to the nerve centers of the shale boom in the U.S. East.
/jlne.ws/2Qol8PF

Billionaire Novogratz Invests in Cryptocurrency Firm Bitfury
Ruben Munsterman and Ruth David – Bloomberg
Funding round values firm at more than $1 billion, people say; Bloomberg reported in October that Bitfury is mulling an IPO
Cryptocurrency venture Bitfury raised $80 million from investors including the merchant bank founded by billionaire ex-Goldman Sachs Group Inc. partner Mike Novogratz.
/jlne.ws/2FbgAe9

Consolidated tape remains a dream for fixed income traders; Fixed income participants express frustration at the unlikely launch of a consolidated tape in Europe for fixed income trading data.
Hayley McDowell – The Trade
A consolidated tape in fixed income trading remains an unlikely development in Europe in the near future, despite the industry’s continued desire for one to be established.
/jlne.ws/2F9vMs7

Exchanges, OTC and Clearing

Euronext announces volumes for October 2018; Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for October 2018.
Euronext
Cash trading- In October 2018, the average daily transaction value on the Euronext cash order book stood at EUR8,865.9 million, up +20.2% compared to October 2017 and up +6.2% from the previous month.
Derivatives trading- In October 2018, the overall average daily volume on derivatives reached 602,169 contracts, up +21.0% compared to October 2017 and up +4.7% compared to the previous month.
/jlne.ws/2DampWP

Palestine securities exchange profits grew 82% in the 9 months of 2018
FEAS.org
Palestine Securities Exchange (PSE) announced its financial results for the nine months of the year ending September 30, 2018, which showed a net profit of USD 669,120 an increase of 82% compared to USD 367,401 in the same period of 2017.
/jlne.ws/2DaoDp9

Cboe Global Markets Reports October 2018 Trading Volume
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today reported October monthly trading volume and average revenue per contract (RPC)/net revenue capture data at www.cboe.com/monthlyvolrpc.
/goo.gl/t1WNkV

Intercontinental Exchange Announces Record Trading for Dutch TTF Gas Futures
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that the Dutch TTF Gas futures contract achieved record volume in futures for October, and hit a new record for Open Interest (OI).
/jlne.ws/2F89K98

Liquidnet adds emerging market bonds to fixed income platform; Emerging market bonds from local markets including Mexico, South Africa, Hungary and Poland, are available to trade on Liquidnet’s platform.
Hayley McDowell – The Trade
Liquidnet has expanded its institutional fixed income trading platform through the addition of emerging market bonds, amid growing investor demand for the instrument to diversify portfolios outside of Europe and the US.
/jlne.ws/2FioNNw

Eurex KOSPI derivatives: Changed trading hours on 15 November 2018
Eurex
Due to the South Korean Exam Day, continuous trading of the Eurex KOSPI derivatives (FMK2, OKS2) will start on 15 November 2018 at 11:00 CET (regular: 10:00 CET).
/jlne.ws/2F97NJR

Single Stock Futures: Introduction of six SSFs; Single Stock Dividend Futures: Introduction of three SSDFs
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 12 November 2018, due to previous corporate actions:
/jlne.ws/2Fc6Osb

MSCI index futures: A Adjustment of tick sizes; B. Fee waiver for ex-index futures
during all trading hours, as well as for selected products during Asian trading hours
Eurex
The Management Board of Eurex Deutschland took the following decisions with respect to MSCI futures:
/jlne.ws/2F7NbBB

MSCI index futures: Fee waiver for ex-index futures during all trading hours, as well as for selected products during Asian trading hours
Eurex
Eurex Clearing has taken the following measures:
/jlne.ws/2F64UJu

TMX Group Consolidated Trading Statistics – October 2018
TMX
TMX Group Limited today announced October 2018 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha) and MontrÈal Exchange (MX).
/jlne.ws/2F5y0bV

HKEX 2018 Third Quarter Results
HKEX
/jlne.ws/2F8as6i

Ag producer sentiment rebounds; producers react favorably to U.S.-Mexico-Canada Agreement
CME Group
Agricultural producer sentiment rebounded in October, according to the Purdue University/CME Group Ag Economy Barometer. The October barometer reading of 136 was 22 points higher than September, which was the lowest reading for the survey since 2016. The barometer is based on a survey of 400 agricultural producers from across the country.
/jlne.ws/2FhSaQq

Fintech

Barchart Partners with FreightWaves to Deliver Freight News and Data on Barchart.com
Barchart
Barchart, a leading provider of financial market data and technology, has announced a new partnership with freight news and data leader FreightWaves. The partnership covers the creation of a new Freight Market Center on Barchart.com; providing users with the latest data, content, and news for global freight markets. Additionally, FreightWaves will integrate Barchart’s cmdtyStatsSM database for global economic data and commodity statistics, into their SONAR data platform.
/jlne.ws/2D4iElz

Thomson Reuters eyes ‘substantive’ purchases after Blackstone deal
Matt Scuffham – Reuters
Thomson Reuters Corp (TRI.TO) (TRI.N) is looking to make “substantive” acquisitions to boost its legal and tax units after selling a majority stake in its financial terminal business, Chief Executive Jim Smith said on Tuesday.
/jlne.ws/2QohpS9

Predata Named as Winner of TABB Group’s 2018 Innovation Award
Predata
Selected as the most exciting startup innovating workflows within capital markets
Predata, the predictive analytics company for anticipating geopolitical risk, was named the winner of TABB Group’s 2018 SuperNova Award, recognizing the most exciting FinTech startup helping to innovate business models within capital markets.
(NO LINK)

Banking veteran Spencer Lake joins Duco board
Emily Horton – Financial News
Spencer Lake, the banking veteran and fintech advocate, has taken a board seat at Duco, a fintech outfit backed by Michael Spencer’s NEX Group.
Lake, a former vice-chairman of global markets at HSBC, has in the past year reinvented himself as a go-to man for City fintech firms keen to sell their services to big banks. Duco’s is the seventh such board position he has taken up since 2017.
/jlne.ws/2QmP6mT

****Press release here.

Lloyds invests in fintech Thought Machine; Company has developed cloud-based core banking platform
Nicholas Megaw – FT
Lloyds Banking Group has taken a stake in a fintech company that is developing a new core banking platform, as part of a “strategic partnership” designed to speed up its ambitious digitisation plans.
/jlne.ws/2F9qjl5

Buy-side must adapt to rise of fixed income automation to flourish, says panel; Heads of trading from Pictet Asset Management and BlueBay Asset Management underline the importance of adaptability as trading technologies become more automated.
John Brazier – The Trade
The increasing emergence of automated processes in fixed income trading means buy-side desks must adapt to evolve alongside these developments, according to buy-side speakers at the Fixed Income Leaders Summit 2018.
/jlne.ws/2Fc65qX

KRM22 Collaborates With Vector Risk To Develop Global Risk Platform
Morningstar
KRM22 PLC on Tuesday said it partnered with Vector Risk to further enhance its Global Risk platform.
/jlne.ws/2Pdu3XF

Cryptocurrencies

DTCC begins testing DLT platform for credit derivatives
Finextra
The Depository Trust & Clearing Corporation (DTCC) is ploughing ahead with its project to re-platform its credit derivatives Trade Information Warehouse (TIW) on distributed ledger technology and cloud, enlisting 15 of the world’s largest banks for a testing phase.
/jlne.ws/2qzI8jg

Northern Trust processes first DLT live capital call
Asset Servicing Times
Northern Trust has processed the first live capital call using distributed ledger technology (DLT) for Emerald Cleantech Fund III LP, a venture capital fund focused on technology companies.
/jlne.ws/2QnHtwx

Hublot Offers Swiss Watch for Those Who Have Bitcoins to Burn
Daniela Wei and Benjamin Robertson – Bloomberg
Swiss watchmaker Hublot, owned by LVMH, introduced a limited-edition timepiece that’s exclusively available for purchase with Bitcoin, 10 years after the digital currency was first created. The watch, made for Hublot’s Big Bang line, costs about $25,000, Chief Executive Officer Ricardo Guadalupe said at an event in Hong Kong. It’s the world’s first major luxury brand to offer a product that can only be bought with Bitcoin.
/jlne.ws/2AONlcL

‘Blue Crypts’ Are The Future
Clem Chambers – Forbes
When you look at a table of cryptocurrencies on a website, unlike in the world of stocks, they are listed by market cap. This in a way is an example of the newness of the market. There are no sectors, indexes or ETFs–the market is judged by size alone.
/jlne.ws/2qvC3nU

Blockchain Announces $125 Million ‘Airdrop’ of Stellar Cryptocurrency
Jeff John Roberts – Fortune
The crypto wallet provider Blockchain on Tuesday said it will distribute cryptocurrency to millions of its users in what appears to be the largest such giveaway of its kind. The giveawayóknown in crypto parlance as an “airdrop”ówill see recipients each get about $25 worth of the cryptocurrency commonly known as Stellar as part of an overall distribution worth $125 million.
/jlne.ws/2qxU6tz

Posing as Elon Musk nets hacker about $180,000 worth of bitcoin so far
Shawn Langlois – MarketWatch
A fool and his bitcoin are soon parted. Knowing that, enterprising hackers in recent days took over several “verified” accounts, tweaking their profiles to look like Elon Musk’s account. They then urged users to send a small amount of bitcoin in exchange for the promise of more bitcoin to be sent back.
/jlne.ws/2qxbDCj

Capitalising crypto
Thomas Hale – Financial Times
The Swiss Financial Market Supervisory Authority (FINMA) is, according to this story from swissinfo.ch, advising banks and dealers that crypto-assets should be assigned a flat risk-weighting of 800 per cent.
/jlne.ws/2Flf0Xp

From $50M bitcoin deals to almost selling for $50M at the market bottom: The story of B2C2
Frank Chaparro – The Block Crypto
The crypto bear market had one trading firm searching for a buyer in recent months
B2C2 in 2017 was taking calls for $50 million bitcoin deals; But the bear market forced the firm to search for new opportunities, CEO Max Boonen told The Block
B2C2, a UK-based cryptocurrency market-making firm, was doing multi-million dollar bitcoin deals in 2017 but the crypto bear market almost brought it to the chopping block in 2018.
/jlne.ws/2qABdGB

Politics

Once an Optimist on U.S.-China Relations, Henry Paulson Delivers a Sobering Message; The former Treasury secretary warns that Chinese behavior and U.S. miscalculation could bring down an ‘economic Iron Curtain’ between the two global superpowers
Greg Ip – WSJ
Few people have championed U.S. engagement with China as forcefully or successfully as Henry Paulson, first at Goldman Sachs Group Inc., later as Treasury Secretary, and now as elder statesman.
/jlne.ws/2Finf6a

No Significant Foreign Interference Seen on Midterm Vote; U.S. security officials and social media firms said Tuesday they spotted a limited amount of deliberate disinformation
Dustin Volz – WSJ
U.S. security officials and social media firms said Tuesday they spotted a limited amount of deliberate disinformation targeting the midterm election, but that they hadn’t observed any significant efforts to directly breach election infrastructure with cyberattacks.
/jlne.ws/2FlfnRN

Congressional gridlock? Financial markets are fine with it; Traders can get back to focusing on what really worries them – the Fed and China
Michael Mackenzie – FT
So we have congressional gridlock, the consensus result from the US midterm elections. With that out of the way, financial markets can get back to focusing on what really worries them: Federal Reserve policy and US-China trade tension.
/jlne.ws/2F60EKk

Billionaire Democrat Pritzker Wins Illinois Governor Race
Elizabeth Campbell – Bloomberg
Democrat J.B. Pritzker, a billionaire and heir to the Hyatt hotel empire, won the Illinois governor’s race, beating incumbent Republican Bruce Rauner, according to projections from FOX and NBC.
/jlne.ws/2Fa4KRq

New York’s Next Attorney General Vows to Investigate Trump’s Dealings
Erik Larson – Bloomberg
James promises to ‘shine a light’ on Trump real estate deals; Immigrants, minorities under attack by Trump, James contends
Letitia James, the newly elected Democratic attorney general of New York, promised during her acceptance speech Tuesday to investigate Donald Trump’s real estate dealings.
/jlne.ws/2FbfwqF

Regulation

BlackRock Munich offices raided in German tax fraud probe; Asset manager co-operating with investigators and has not been accused of wrongdoing
Olaf Storbeck in Frankfurt – FT
A far-reaching criminal investigation into tax fraud in Germany has spread to BlackRock, with the group’s Munich offices raided by criminal prosecutors on Tuesday.
/jlne.ws/2F7JaNx

****Reuters has Chairman of BlackRock’s German arm orders investigation cooperation and German prosecutors search BlackRock in dividend-stripping inquiry: source

ESMA provides overview of NCAs’ declared compliance status with Guidelines
ESMA
The European Securities and Markets Authority (ESMA) has published an overview of the compliance status declared by national competent authorities (NCAs) as regards the application of ESMA guidelines in their respective jurisdictions.
/jlne.ws/2F65HdK

ESMA publishes official translations of Guidelines on MiFID II suitability requirements
ESMA
The European Securities and Markets Authority (ESMA) has issued today the official translations of its Guidelines on certain aspects of the MiFID II suitability requirements.
/jlne.ws/2FblF6d

The Small Firm Report; Tuesday, November 27, 2018
FINFA
Small firms represent a critical portion of FINRA’s membership and often face regulatory challenges that are unique from their large firm counterparts. In an effort to provide additional compliance education, FINRA launched The Small Firm Report last April, a free conference call series hosted by senior FINRA leaders who discuss trending topics, new rules and regulatory guidance and best practices.
/jlne.ws/2F5z0gb

Member Supervision: Introducing Bari Havlik and the Exam Program Transformation
FINRA
When Bari Havlik joined FINRA as Executive Vice President of the newly named Member Supervision team, she did so with big plans for the examination and risk monitoring programs.
/jlne.ws/2F94QZI

FCA statement on the launch of the Cost Transparency Initiative (CTI)
UK FCA
The FCA is pleased to note today’s announcement which launches a new body to deliver a template for the disclosure of costs and charges to institutional investors. This will lead to improvements in the ability of institutional investors to access and assess critical information on costs.
/jlne.ws/2F9wMN7

Securities Commission Malaysia Committed To Strengthening Trust And Confidence Of Investors
MondoVisione
The Securities Commission Malaysia (SC) today hosted over 100 regulators, academics, representatives from global and regional institutions at the annual Asian Roundtable on Corporate Governance (ARCG), organised jointly by the SC and the Organisation for Economic Cooperation and Development (OECD).
/jlne.ws/2Flj8GT

HKFE Obtains U.S. Commodity Futures Trading Commission Approval For Hang Seng Index Total Return Index Futures And Hang Seng China Enterprises Index Total Return Index Futures
MondoVisione
Hong Kong Futures Exchange Limited (“HKFE”) is pleased to announce the U.S. Commodity Futures Trading Commission (“CFTC”) has certified the following contracts to be offered and sold to persons in the United States (“U.S.”). U.S. investors can now directly trade the contract within the U.S.
/jlne.ws/2F7OG2H

Investing and Trading

U.S. Mortgage Applications Hit Lowest Since 2014 as Rates Rise
Scott Lanman – Bloomberg
A gauge of U.S. mortgage applications fell last week to the lowest level in almost four years as borrowing costs hit the highest since 2010, adding to challenges for the housing market.
/jlne.ws/2F6NJYv

Where to Find Treasury Buyers? Not Asia; The erosion of demand in emerging Asian markets reflects their maturation into more stable economies
Daniel Kruger – WSJ
Asian investors are proving less and less eager to buy U.S. government bonds, even as the Treasury Department prepares to sell $1.3 trillion of new debt in the new fiscal year.
/jlne.ws/2qyEkP7

The Treasury Market Has a Big Chicken-and-Egg Problem; Which came first: record demand for long duration or bond yields at multiyear highs?
Brian Chappatta – Bloomberg
The world’s biggest bond market faces a conundrum. Figuring out the answer could guide traders for the rest of the year and into 2019.
/jlne.ws/2qyG8HV

ETFs Practice Passive Aggression; October’s market gyrations can be partly traced to changes in the membership of popular indexes. Also, when insiders admit mistakes.
John Authers – Bloomberg
Passive investing has conquered the financial markets. This is in many ways a good thing, not the least of which is that it dramatically reduces the cost of investing and therefore improves results. But at a certain point it becomes very hard to observe something passively without having an effect on it. This is a well-understood principle from quantum physics, and it is undeniably true in the world of stocks, where flows in and out of exchange-traded funds often set prices at the margin.
/jlne.ws/2qG7wEd

Institutions

Hedge Funds Revive the Junk Bond CDO; Hedge funds are using financial engineering common before the financial crisis to borrow money and buy high-yield bonds
Matt Wirz and Cezary Podkul – WSJ
Wall Street financiers are reviving a complex transaction seldom seen since the financial crisis: collateralized debt obligations.
/jlne.ws/2F7OQXL

Interactive Investor scraps exit fees; Chief executive slams the ‘shoddy practice’ of charging to withdraw money
Kate Beioley – FT
Interactive Investor, the second-largest investment platform in the UK, has scrapped the exit fees it charges to customers who move their money elsewhere ahead of a potential ban on such fees proposed by the UK financial regulator earlier this year.
/jlne.ws/2F7OfW1

Goldman chief: 1MDB accusations against former staff ‘distressing’; Two former bankers have been charged in connection with 1MDB scandal
Don Weinland – FT
Goldman Sachs’ new chief executive David Solomon has said the blatant manner in which two former employees allegedly broke the law in their work with Malaysian fund 1MDB was “very distressing.”
/jlne.ws/2F7J5td

Bank of America plans hiring spree to revive investment bank; Move comes after leadership overhaul and slide in fees from M&A advisory work
Stephen Morris and Arash Massoudi – FT
Bank of America plans to hire as many as 50 senior dealmakers to revitalise its stuttering investment bank only weeks after overhauling the unit’s leadership in response to a slide in fees.
/jlne.ws/2F5ZEpe

Goldman’s Solomon Says He Feels ‘Horrible’ About 1MDB Breaches
Sridhar Natarajan and Erik Schatzker – Bloomberg
Malaysian fund scandal has implicated at least three bankers; U.S. firm is working with the authorities, Solomon says
Goldman Sachs Group Inc. Chief Executive Officer David Solomon said he felt “horrible” about the role former bank employees played in the scandal surrounding Malaysia’s 1MDB fund.
/jlne.ws/2F9DdzG

UBS Trader Accused in Insider Case Bought 3-Liter Bottles of Cristal
Franz Wild – Bloomberg
Walid Choucair is on trial in London for insider trading; Ex-UBS compliance officer accused of giving him tips on deals
Day trader Walid Choucair often spent thousands of pounds on oversized bottles of champagne at Tramp, a private members club in London’s tony Mayfair area. But he also came to play electric guitar with his band.
/jlne.ws/2Fa5Nky

ITG agrees to billion dollar Virtu takeover deal; ITG agrees to be acquired by high speed trading firm Virtu for $30.30 a share.
Joe Parsons – The Trade
Independent brokerage ITG has agreed to be acquired by high speed trading firm Virtu for $30.30 a share, in a near-$1 billion deal showing increasing consolidation between institutional brokerages.
/jlne.ws/2F96nz1

Credit Agricole Q3 profits rise, buoyed by retail and investment banks
Reuters
French bank Credit Agricole reported higher third quarter net profits, due to a good performance at its retail and investment banking units.
/jlne.ws/2qG7jkp

Regions

China to limit length of stock trading halts
Gabriel Wildau – FT
China’s securities regulator will limit the duration of share suspensions on mainland stock exchanges, a response to complaints from investors and index providers that companies use trading halts to prevent declines in their stock price.
/jlne.ws/2F3PipY

Norway wealth fund should not add new equity markets to index amid review -ministry
Reuters
Norway’s sovereign wealth fund should not add new markets to its benchmark equity index until a review of its composition has been concluded, the Finance Ministry said in a letter to the central bank, which manages the fund.
/jlne.ws/2qwlIPQ

China’s IPO Drought Features 35 Exhausted Regulators; Companies trying to go public face onerous layers of scrutiny from an understaffed watchdog.
Shuli Ren – Bloomberg
A stock market devoid of IPOs is a stagnant pool. China is in another listing drought, two years after the IPO floodgates were reopened. So far this year, just 80 companies got the nod from the securities regulator, raising a paltry 15 billion yuan ($2.2 billion).
/jlne.ws/2qxe7Az

Mozambique to hand over gas revenues to fix ‘tuna bond’ dispute; Resolution of debt scandal extracts heavy cost from one of world’s poorest countries
Joseph Cotterill – FT
Mozambique will hand up to half a billion dollars of its future offshore gas bounty to bondholders to resolve a dispute over controversial debts that triggered a financial crisis.
/jlne.ws/2qACjCd

Brexit

Arron Banks and Leave.EU accused of data misuse; Brexit backer and insurance company face £135,000 in fines for sharing customer details
Robert Wright – FT
Arron Banks’ insurance operations allowed customer information to be illegally used for political purposes, UK regulators said on Tuesday, exposing the millionaire’s businesses and the pro-Brexit campaign group he funded to fines totalling £135,000.
/jlne.ws/2F9rUrj

Miscellaneous

How will algorithms change the art market?; ‘Things are moving relatively fast for an industry bound by tradition’
Alice Hancock – FT
Debate over the role of technology in the art market has exploded this year. Portion, an auction house that accepts only cryptocurrency, was launched last month. Before that there was the emergence of Codex Protocol, a new registry for fine art, wine and collectibles based on blockchain technology. Even the 252-year-old auction house Christie’s has got in on the act. At its inaugural “Art and Tech” summit this summer, it explored questions that had more to do with new technologies than Old Masters. “What is blockchain, really?” was the title of one event.
/jlne.ws/2F9riSj

The post Virtu to Buy ITG in Almost $1 Billion Deal; CME’s Nex to apply for Dutch exchange licence appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

I have been authorized to share with you that Jim Oliff has recently been diagnosed with squamous carcinoma, a cancer at the base of his tongue. The good news is that his prognosis is excellent. He will begin a treatment of chemotherapy and radiation therapy on November 14. It is expected his course of treatment will last six months.~JJL

I know all his friends around the industry wish Jim Oliff well and a speedy and successful recovery. We at JLN send our love and prayers of healing for this beloved industry leader and friend.~JJL

After watching the movie The Post Tuesday night rather than election results, I decided to share this quote from Supreme Court Justice Hugo Black referenced towards the end of the movie.~JJL

“In the First Amendment the Founding Fathers gave the free press the protection it must have to fulfill its essential role in our democracy. The press was to serve the governed, not the governors. The Government’s power to censor the press was abolished so that the press would remain forever free to censure the Government. The press was protected so that it could bare the secrets of government and inform the people. Only a free and unrestrained press can effectively expose deception in government.” ~ Hugo Black on the Pentagon Papers case, concurring in New York Times Co. v. United States, 403 U.S. 713 (1971).

MSFE Illinois, Master of Science in Financial Engineering, is holding the 6th Annual Financial Engineering Colloquium on Friday, November 16 at the Illini Center at 200 South Wacker Drive from 10:30 AM to 2 PM. The subject is “Artificial Intelligence in Finance.” Confirmed speakers include Inderdeep Singh (AI in Derivative Markets), Dr. Matthew Dixon (Equity Factor Modelling with ML), Dr. Satya Dharanipragada (Algo Trading using DA & AI- a personal viewpoint) and Dr. Mao Ye (Big Data in Finance). The event is complimentary but registration is required using this LINK.~JJL

NYSE FANG+ Index Futures averaged 1,473 contracts a day in 2018 and achieved record volumes in October with average daily volume at 3,100, November 8 marks the one year anniversary for the NYSE FANG+ Index futures contract.~JJL

This quote from CFTC Chairman Giancarlo’s address at Georgetown University yesterday stuck with me: “If data is King, and automation is the work of the King’s Court, then machine learning and AI may be the tools to build an enlightened Kingdom.” He also dropped a Spidey reference: “With quantitative regulatory capabilities comes great responsibility.”~SD

Goldman Sachs released a factsheet on its new class of partners. A few random data points: 29 percent were millennials, 26 percent were women (a new high), and the securities division gained the most new partners with 28.~SD

The Options Industry Council celebrated its 25 years of existence by hosting an “Options Jeopardy” tournament. See if you know the “question” to this “answer.” In the category “BEEP! BEEP! Option Strategy BEP’s (Break-Even Points)” the answer is “This strategy’s BEP calculations involve the short put strike minus credit received and the short call strike plus credit received.” Scroll down to our “Miscellaneous” section for the question.~SD

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Global Cyber Security Initiative Addresses $1.5 Trillion Issue
JohnLothianNews.com

The Global Cyber Security Initiative will be holding a conference on November 9, 2019 at the Kent School of Law at IIT in Chicago. Leaders from across the industry will come together to address the threats facing the financial community. In this video, Mike Phillips, founding partner of VSEC LLC, and Stelios Valavanis, CEO of onShore Security, tell you why you should attend and what to expect at this conference.

Watch the video and read the rest »

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In a Technology War, It Helps to Be the Arms Dealer; Geopolitical, economic and corporate rivalries are playing into the hands of ASML.
Tim Culpan – Bloomberg
In case you haven’t heard, there’s a trade war going on. Despite all the talk about protectionism and trade balances, what’s really driving the angst between the U.S. and China is a rivalry over geopolitical power and technology.
/bloom.bg/2Fbf4ZA

***** Better to sell the shovels during the gold rush.~JJL

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NFA announces nominations made by the 2018 Nominating Committee
NFA
In accordance with NFA Bylaw 406, the Office of the Secretary has received from the 2018 Nominating Committee a list of its nominees for positions on NFA’s Board of Directors and 2019 Nominating Committee. The list of nominees included with this notice shall serve as notification to NFA Members of the candidates proposed by the 2018 Nominating Committee.
bit.ly/2qIvdvD

***** The official slate. Will we see others nominated by the membership by petition?~JJL

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Wednesday’s Top Three
No surprise here – yesterday’s top story was The Wall Street Journal’s Virtu Financial to Buy Brokerage ITG in Almost $1 Billion Deal. What three letter firm will be Virtu’s next target with KCG and ITG out of the way? Second went to Crain’s Cboe’s problems don’t end with the VIX. In third was a tale about the ripple effects of tariffs from Bloomberg – Even Lobsters Can’t Escape Trump’s Trade War.

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MarketsWiki Stats
134,968,367 pages viewed; 23,310 pages; 215,413 edits
MarketsWiki Statistics

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Lead Stories

Big investors sue 16 banks in U.S. over currency market rigging
Jonathan Stempel – Reuters
A group of large institutional investors including BlackRock Inc and Allianz SE’s Pacific Investment Management Co has sued 16 major banks, accusing them of rigging prices in the roughly $5.1 trillion-a-day foreign exchange market.
/reut.rs/2FbgDXu

Market cops step up fight against spoofing; After a slow start, regulators and exchanges take more action against market abuse
Gregory Meyer, Fan Fei and Kadhim Shubber – FT
Criminal charges unveiled against a former JPMorgan Chase metals trader this week signalled that authorities are catching up with spoofing, a form of abuse that accelerated along with hyperfast markets.
/on.ft.com/2FaotQZ

Securities lending boom sparks concerns on returns and voting
Tim McLaughlin, Ross Kerber – Reuters
Securities lending by investment funds has reached its highest level in a decade, as demand for corporate bonds surged more than 30 percent over the past 18 months and short selling of Tesla(TSLA.O) and Alibaba (BABA.N) shares reaches a frenzy.
/reut.rs/2Fapt7H

IHS Markit Transforms Derivatives Post Trade Processing with New Cloud-Based Platform; MarkitSERV extends 20-year history of bringing innovative technology solutions to OTC derivatives markets with new TradeServ platform for FX derivatives
Business Wire
IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today announced that MarkitSERV has introduced new, cloud-based technology for post trade processing of OTC derivatives trades. Called TradeServ, the new platform launched in September for matching, confirming and clearing trades of non-deliverable forwards (NDFs).
bit.ly/2FbCOwJ

‘Red October’ proves to be a gift for brokers and exchanges
Market volatility pumps up trading volumes after quiet spell
Philip Stafford – FT
Brokers and exchanges have emerged as the big winners in October’s market turmoil, and the futures market suggests investors are braced for further volatility.
/on.ft.com/2qCd3LY

October was worst month for hedge funds in 7 years
Lindsay Fortado – Financial Times
Hedge funds suffered their worst month in October in seven years as equity strategies were hit by a sell-off in technology stocks.
Hedge Fund Research’s index that tracks all strategies was down about 3 per cent, its worst monthly decline since September 2011, the data provider said. That brings the index’s performance to negative 1 per cent for the year.
/jlne.ws/2Ds7F6p

SA-CCR for US Banks
Chris Barnes – Clarus Financial Technologies
The Federal Reserve, OCC and FDIC have launched a joint consultation on SA-CCR, the Standardised Approach to Counterparty Credit Risk.
The three agencies are proposing to introduce SA-CCR for the purposes of “calculating the exposure amount of derivative contracts under the agencies’ regulatory capital rule”.
/jlne.ws/2QqN2dP

CFTC Chair Says Distributed Ledger Tech Can Aid Market Watchdogs
Nikhilesh De – Coindesk
Advances in financial technology may be useful for improving the regulation of derivatives markets, Commodity Futures Trading Commission (CFTC) chairman J. Christopher Giancarlo said Wednesday.
/goo.gl/gdk1Xn

Martin Taylor: ‘Almost everything has changed in banking since the financial crisis’;
Ben Chu – Independent
Martin Taylor presses his fingertips together, leans back in his chair and stares into the distance in contemplation. I’ve just suggested to him that if he’d fired Bob Diamond two decades ago the whole history of the global financial crisis might have been different. After a microsecond of thought, Taylor breaks into a smile.
/ind.pn/2F7Xtl1

Husband and Wife Both Promoted in Goldman’s New Partner Class
Donal Griffin – Bloomberg
Among the dozens of bankers and traders elevated to the sought-after position of Goldman Sachs Group Inc. partner are a husband and wife.
/bloom.bg/2qA8rFS

UBS Will Fight Expected U.S. Lawsuit Over Mortgage Securities; The Swiss banking giant has been informed that the Justice Department plans to file a complaint as soon as Thursday
Pietro Lombardi and Brian Blackstone – WSJ
UBS Group AG will fight an expected civil complaint from the U.S. Department of Justice over its issuance, underwriting and sale of residential mortgage-backed securities before the financial crisis, the Swiss banking giant said Thursday.
/on.wsj.com/2qAacD2

Wall Street Analysts Are Now Selling More Data, Less Analysis
Telis Demos – WSJ
Wall Street analysts are doing data differently. Banks for years have crunched data on company earnings, price targets and other mundane metrics for clients who might use the information to make investing and trading decisions. Now they are pulling data from social-media sentiment, geospatial mapping and other unorthodox sources. They are also increasingly making their data feeds available directly to clients, without the surrounding research notes that often go unread.
/goo.gl/pfikUF

How the mafia got to our food; Italy’s organised crime families have infiltrated the country’s food chain, from field to fork
Hannah Roberts – FT
Giuseppe Antoci had been warned more than once. “You will end with your throat cut,” read one note, composed entirely of individual letters clipped from newspapers in ransom-note style.
/on.ft.com/2F8DDpW

Drought Tests Australia’s Model Water Market; Some small farmers are priced out by investors as supply dwindles
Rob Taylor – WSJ
The world’s driest inhabited continent is struggling to sustain its pioneering effort to put water supply in the hands of market forces, as authorities contend with a drought and complaints by farmers who say the system is putting them out of business.
/on.wsj.com/2qC4JvC

Brexit will drive regulatory changes within MiFID II review, says MEP Swinburne; Political factors taking centre stage for future regulatory reviews or introduction of MiFID II according to MEP.
John Brazier – The Trade
Brexit and other European political factors will be the main driver of any European regulatory change in the near future, including any changes to MiFID II or the introduction of MiFID III, according MEP Kay Swinburne.
bit.ly/2qCcGRy

Exchanges, OTC and Clearing

CME Group Announces Launch of Total Return Index Futures on Nasdaq-100, Russell 1000, Russell 2000, and Dow Jones Indexes
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will introduce Total Return Index Futures based on the Nasdaq-100, Russell 1000, Russell 2000 and Dow Jones Industrial Average (DJIA) indexes on Dec. 3, pending regulatory review. These new products will adhere to a quarterly listing cycle and will trade alongside CME Group’s existing S&P 500 Total Return Index Futures and Carry Adjusted Total Return Index futures.
/jlne.ws/2DseG7s

Byron Baldwin: “The spread between Italian and Spanish government debt has reached an all-time high”
Eurex Exchange
Political uncertainty in Italy continues. We at Eurex provide the right tools to navigate this environment. We talked to Byron Baldwin, Deputy Global Head, Fixed Income Trading & Clearing Sales at Eurex, who gave us an update on recent developments.
/jlne.ws/2QswaU2

FX volumes rise 5.8 pct year-on-year in October – CLS
Reuters
Daily currency trading volumes rose 5.8 percent in October versus the same month last year, totalling $1.71 trillion, CLS data showed on Thursday, as volatility in foreign exchange markets picked up.
/reut.rs/2FcVCvs

JCCH volume report for October 2018 (Japanese commodity market)
JCCH
/www.jcch.co.jp/uploads/volume_open_interest/2018/October_2018.pdf

HKFE Obtains U.S. Commodity Futures Trading Commission Approval For Hang Seng Index Total Return Index Futures And Hang Seng China Enterprises Index Total Return Index Futures
Mondovisione
Hong Kong Futures Exchange Limited (“HKFE”) is pleased to announce the U.S. Commodity Futures Trading Commission (“CFTC”) has certified the following contracts to be offered and sold to persons in the United States (“U.S.”). U.S. investors can now directly trade the contract within the U.S.
bit.ly/2F6gCE2

Carbon Fund lists on NZX in New Zealand first
NZX
In a New Zealand first, NZX welcomes the inaugural Carbon Fund (CO2) to be listed on the Main Board today by Salt Funds Management.
bit.ly/2FnPReH

TMX Group Equity Financing Statistics – October 2018
TMX
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for October 2018.
bit.ly/2qCiaM2

Moscow Exchange opens annual Russia investment forum in London
MOEX
On 8-9 November 2018, Moscow Exchange hosts the annual Moscow Exchange Forum: London Session. The event brings together over 300 representatives of the investment and business community.
bit.ly/2qyNjzU

SGX to exit swaps clearing business; Decision will leave some contracts without a CCP from next April
Narayanan Somasundaram – Risk.net
Singapore Exchange (SGX) will stop clearing over-the-counter interest rate swaps from April 2019, leaving users without a home for some of their cleared contracts – thought to be an unprecedented event for an OTC product.
bit.ly/2qAcn9G

Fintech

Cinnober Interim Financial Report – Third quarter highlights
Cinnober
Net revenue amounted to SEK 89.8 million in Q3/18, a year-on-year increase of 4.9% and a quarter-on-quarter increase of 2.5%. A majority of the revenue growth in the quarter is explained by a positive foreign exchange impact. The underlying cost base amounted to SEK 101.8 million, a 10.0% reduction year-on-year and a 20.6% reduction quarter-on-quarter.
bit.ly/2zC9jOy

JPMorgan Backs Fintech Seeking to Disrupt Trillion-Dollar Market
Viren Vaghela – BloombergQuint
One of the world’s biggest banks wants to boost profits by cutting out voice brokers acting as middlemen in the largest derivatives market.
JPMorgan Chase & Co. signed startup Wematch Interest Rates to its in-house fintech program, which helps new firms build products for use across the banking industry. New York-based JPMorgan and other dealers will eventually be able to use Wematch’s platform to negotiate trades in interest-rate markets.
bit.ly/2yXNrxs

Top Financial Regulator Says Fintech Plans Unfazed Over States’ Lawsuit
C. Ryan Barber – Legaltech News
A top regulator predicted Wednesday that financial technology firms would begin to apply as early as the next month or two for specialty national banking licenses, saying the industry has largely been undeterred by a pending legal challenge to the federal government’s plan to provide a pathway for online lenders and payment companies to more directly compete with traditional banks.
bit.ly/2yZxzL4

Fintech Appoints Trey Williams as Chief Operating Officer
Press Release
Financial Information Technologies, LLC (Fintech) announced today that they have selected Trey Williams for the position of Chief Operating Officer (COO). As COO, Trey brings 30+ years of technology and hospitality experience, and will work alongside Fintech’s executive team to grow operational strategies, and maximize performance functionality to drive sustainable long-term growth for all Fintech stakeholders. Aligned with the company mission, Trey’s contributions will further solidify Fintech’s position as the leader in data, analytics, and technology for the beverage alcohol industry.
/prn.to/2yXUfvg

Fintech Lenders Could Get National Bank Charter By Early 2019 (1)
Bloomberg Law
Fintech lenders are likely to be the first type of companies to receive a special national bank-like charter and blockchain companies that support securities or asset tracking could follow later as charter applicants, Comptroller of the Currency Joseph Otting said Nov. 7.
bit.ly/2z0IEva

Ping An Technology CEO expects ‘exponential’ growth in fintech
Saheli Roy Choudhury – CNBC
Financial technology has reached a tipping point for China’s Ping An Technology and future growth in that area is set to be exponential, according to CEO Ericson Chan.
Years of investment and research into fintech is paying off, Chan told CNBC’s “Squawk Box” on Thursday.
/cnb.cx/2yXBbwO

Cryptocurrencies

Crypto 2.0 May Be Digital Cash You Can Actually Use to Buy Stuff
Alastair Marsh and Olga Kharif – Bloomberg
Dozens of stable coin projects in development, researcher says; Market seen coalescing around a small number of stable tokens
The London clubhouse built for activists who helped redesign Britain’s electoral system nearly two centuries ago offered a fitting setting for the crowd of technology entrepreneurs hoping to reinvent money.
/bloom.bg/2F8tKbG

Why Centralized Cryptocurrency Exchanges Make Terrible Custodians For Crypto Assets
Rachel Wolfson – Forbes
“Today there are over 300 centralized cryptocurrency exchanges in the world. Almost all of these centralized exchanges also act as custodians,” Alex Mashinsky, CEO of Celsius Network and one of the inventors of VoIP (Voice Over Internet Protocol), told me.
/jlne.ws/2RFrwC8

US Election Sees Crypto-Friendly Politicians Win Governor Races
Nikhilesh De – Coindesk
The U.S. 2018 midterm elections saw crypto-friendly lawmakers securing governorships in three states, while maintaining two others. Three new governors and two incumbent are ranked as very crypto-friendly, according to data compiled by the Digital Asset Trade Association (DATA), a blockchain advocacy group. The organization sent surveys to most gubernatorial candidates, rating their blockchain-friendliness based on their responses.
bit.ly/2RNxz7Z

Revolutions and Counter Revolutions: Andreas Antonopoulos Reflects on 10 Years of Bitcoin
Bitcoin Magazine
As Bitcoin approaches its 10th anniversary, its community, old and new, has begun taking stock of how a decade has come to alter or define the cryptocurrency – and what Bitcoin has done to alter or define the decade.
bit.ly/2PgcrKt

Time to Ditch the Word ‘Blockchain’, Report Says
Jeff John Roberts – Fortune
A new report from Forrester Research says the buzz around blockchain, a technology that creates tamper-proof records across multiple computers, is so over-hyped that some companies are dropping the word altogether.
/for.tn/2OvZlDV

How Blockchain Is Transforming Health Care
Rena Christina Tabata – Forbes
Originally developed for cryptocurrency in 2008, blockchain allows a distributed network of computers to keep a tamper-proof digital ledger. The technology, however, is useful whenever collaborating parties have competing interests that require a third-party guarantor. Large health care organizations have been remarkably quick to adopt blockchain.
bit.ly/2D9tirh

A cryptocurrency millionaire is buying up land in Nevada’s desert to build a utopian village run on Ethereum – here are the design plans
Paige Leskin – Business Insider
A cryptocurrency millionaire has revealed his designs for an utopian community in the Nevada desert run completely on blockchain. The New York Times reports that the man behind the project, Jeffrey Berns, is planning a city that would run entirely on blockchain, a decentralized infrastructure which could theoretically provide the foundation for a community that’s independent from the capitalistic world we live in.
/read.bi/2JNfCDu

Blockchain tech is taking on renewable energy trading in Singapore
Melissa Goh – CNBC
Blockchain, the technology underpinning cryptocurrency bitcoin, has been recommended and theorized for uses across a broad spectrum of sectors and countries. Now, one Southeast Asian city-state is putting the tech to work in reshaping its energy industry.
/cnb.cx/2RKzmKX

Politics

Debt markets let us know what they think about Republicans last night
Colby Smith and Brendan Greeley – FT Alphaville
Alphaville woke up at 2am in London last night, grabbed for our phones and discovered a string a tweets suggesting that Democrats reach for their wine. Around 1:30am GMT, several Republican-leaning districts in Florida had gone Republican. A Democratic-leaning district in Indiana had swung right, hard. A race in suburban Virginia was too tight.
/jlne.ws/2DuGsjJ

Washington unnerved by China’s ‘military-civil fusion’; The US is trying to prevent the transfer of AI-powered dual-use technologies that can be adapted for weapons
Kathrin Hille and Richard Waters – FT
The two men posing for photographs in a Nanjing conference room could not have more different backgrounds. On one side was Mao Yongqing, head of the 28th Research Institute of China Electronics Technology Group, which develops electronic warfare technology for the People’s Liberation Army. On the other was Yin Shiming, vice-president of cloud computing at Baidu, one of China’s privately owned internet groups.
/on.ft.com/2FkNF7k

Deutsche Bank’s Trump Ties Will Get Scrutiny, Maxine Waters Says
Jesse Westbrook – Bloomberg
She says Democrats want to know more about loans to president; California lawmaker also promises examination of Wells Fargo
Deutsche Bank AG’s lending to President Donald Trump is likely to be a focus of scrutiny for Democrats now that they’ve taken control of the House and have more power to launch investigations, Representative Maxine Waters pledged Wednesday.
/bloom.bg/2FkPlh8

Sessions Is Forced Out After Months of Trump Abuse Over Mueller
Chris Strohm – Bloomberg
Whitaker, a Mueller critic, is placed in charge of probe; Pelosi, Schumer demand Whitaker recusal from investigation
Attorney General Jeff Sessions has resigned at the request of President Donald Trump, according to a letter delivered to the White House, after becoming a target of the president’s open contempt for ceding control of the Russia investigation.
/bloom.bg/2FcrgsU

Agribusiness giant shows there’s money to be made in trade war
Chicago Tribune
Archer-Daniels-Midland Co., the 116-year-old agribusiness giant, is shaping up as one of the few crop-trading houses to benefit from President Donald Trump’s trade war with China.
/trib.in/2FaE5E2

Watch out for an even more erratic Donald Trump abroad; Setback at home will intensify US president’s ‘America First’ foreign policy stance
Edward Luce – FT
The term “lame duck” is too passive to capture what is about to happen to Donald Trump. At home, Democrats are hoping to make a duck confit of his presidency. That is ominous news for America’s allies. Hobbled presidents tend to embrace the allure of the global stage. Richard Nixon pulled off some of his biggest foreign policy moves during the Watergate crisis. But Mr Trump is no Nixon. Nor is he served by a Henry Kissinger. There is not so much a Trump doctrine as a stock of Trumpian instincts. These were best captured by the phrase: “We’re America, bitch” from a senior White House official this year.
/on.ft.com/2qzacDt

Regulation

Keynote Address of Chairman J. Christopher Giancarlo at FinTech Week, Georgetown University Law School
CFTC
This year, we celebrate an important, though somewhat forgotten, anniversary. We are now seventy years from the creation in 1948 of the world’s initial stored program computer, the “Manchester Baby”. The “Baby” was designed as a test platform for the first true random-access computer memory. It was constructed in a separate building at the University of Manchester and housed in a room that was smaller than the one in which we meet today.
/jlne.ws/2DsbsRb

Citibank to Pay More Than $38 Million for Improper Handling of ADRs
SEC
The Securities and Exchange Commission today announced that Citibank N.A. has agreed to pay $38.7 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs).
/jlne.ws/2DvZYfw

ITG, subsidiary settle with SEC over dark pool charges
Rick Baert – Pensions and Investments
Investment Technology Group and subsidiary AlterNet Securities will pay a combined $12 million to the SEC to settle charges that the firms disclosed their clients’ confidential dark pool trading information without their knowledge, the regulatory agency announced Wednesday.
/jlne.ws/2DsXP4b

Investor Testing of the Proposed Relationship Summary for Investment Advisers and Broker-Dealers
SEC
In connection with our ongoing efforts to help address investor confusion about the nature of their relationships with investment advisers and broker-dealers, the SEC’s Office of the Investor Advocate today made available a report on investor testing conducted by the RAND Corporation. The investor testing gathered feedback on a sample Relationship Summary issued in April 2018 as part of a package of proposed rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers.
/jlne.ws/2DrVyGq

CFTC Commissioner Dawn D. Stump Announces Staff Appointments
CFTC
U.S. Commodity Futures Trading Commission (CFTC) Commissioner Dawn D. Stump announced that Dan Bucsa will serve as Chief of Staff and Senior Policy Advisor and Elizabeth Mastrogiacomo will serve as Senior Counsel.
/jlne.ws/2DsjHwK

SEC Director Hints at Conciliatory Approach to ‘Eliminating’ Conflicts
Jed Horowitz – AdivsorHub
Retail brokers and firms worried about how to interpret a proposed conflict-of-interest standard requiring them to “mitigate or eliminate material conflicts of interest” involving financial sales incentives got some conciliatory signals this week from a senior Securities and Exchange Commission official.
/jlne.ws/2Qq0u1n

Independent providers struggle in post-Mifid II research landscape
Louise Bowman – Euromoney Magazine
More than six months after the updated directive was implemented, its effects on research provision are becoming clearer. The good news is that buy-side research budgets seem to have stabilized; the bad news is that if you aren’t big, you probably aren’t on the receiving end of them.
/jlne.ws/2QsfEDm

Australia’s banking regulator flags higher capital requirements
Paulina Duran, Tom Westbrook – Reuters
Australia’s bank regulator said on Thursday it wants to raise the amount of spare capital banks must carry, its third such request in three years, heaping pressure on companies already bracing for tightened regulation.
/reut.rs/2Fak0xN

UBS expects to be sued by U.S. Justice Department over crisis-era mortgage securities
Karen Freifeld – Reuters
UBS Group AG, Switzerland’s largest bank, said it expects to be sued by the U.S. Department of Justice as early as Thursday on civil charges related to the sale of mortgage-backed securities in the run-up to the 2008 global financial crisis, according to a company statement.
/reut.rs/2FbEw17

Europe’s Securitization Rule May Hinder Markets It Aims to Boost
Sarah Husband – Bloomberg
Claims that new reporting requirements may overburden market; Industry requests delay to rollout to allow time to adjust
Proposed rules for European asset-backed bonds have provoked fears it may become impractical to sell some types of securities.
/bloom.bg/2qz9eqP

Citi to pay nearly $40m to settle charges over mishandling of ADRs
Kadhim Shubber – FT
Citibank will pay almost $40m to settle civil charges it mishandled US securities that represent foreign shares in overseas companies, the Securities and Exchange Commission announced on Wednesday.
/on.ft.com/2qA0xfL

China’s IPO Drought Features 35 Exhausted Regulators
Shuli Ren – Bloomberg
Companies trying to go public face onerous layers of scrutiny from an understaffed watchdog.
/goo.gl/BFhG35

Citibank to Pay More Than $38 Million for Improper Handling of ADRs
SEC
The Securities and Exchange Commission today announced that Citibank N.A. has agreed to pay $38.7 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs).
bit.ly/2qzi0Vx

Investor Testing of the Proposed Relationship Summary for Investment Advisers and Broker-Dealers
SEC
In connection with our ongoing efforts to help address investor confusion about the nature of their relationships with investment advisers and broker-dealers, the SEC’s Office of the Investor Advocate today made available a report on investor testing conducted by the RAND Corporation. The investor testing gathered feedback on a sample Relationship Summary issued in April 2018 as part of a package of proposed rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers. The report is available for review and comment on the SEC’s website.
bit.ly/2qD0rnL

CFTC Commissioner Dawn D. Stump Announces Staff Appointments
CFTC
U.S. Commodity Futures Trading Commission (CFTC) Commissioner Dawn D. Stump announced that Dan Bucsa will serve as Chief of Staff and Senior Policy Advisor and Elizabeth Mastrogiacomo will serve as Senior Counsel.
bit.ly/2qAdN3W

15 million Brits suffer in silence as they lack confidence to complain
UK FCA
Three quarters of consumers avoid making complaints; Younger generation stew on issues rather than speaking up; Poor travel etiquette and unhelpful shop assistants among top unspoken gripes; Gok Wan and restaurateur and TV presenter Fred Sirieix enlisted to help people complain with confidence, ahead of the FCA’s PPI complaints deadline on 29 August 2019
More than 15 million people in the UK* routinely miss out on refunds, replacement products and getting problems sorted because they don’t know how to complain with confidence, new research reveals.
bit.ly/2qC645C

Investing and Trading

Treasury Bond Auction Draws Weakest Demand in Nearly a Decade; Market is absorbing a lot of debt from both the Treasury and Fed
Daniel Kruger – WSJ
The Treasury’s auction Wednesday of $19 billion of 30-year bonds met the weakest demand since 2009, a sign the flood of new U.S. government debt requires higher yields to attract investors.
/on.wsj.com/2F7VWeL

The Asset Class No One Knows They Own
Julie Segal – Institutional Investor
A massive public pension is warning investors to rethink the status quo when managing securities litigation – a status quo that is enriching lawyers and litigation funders.
/jlne.ws/2Qp5MKv

Louis Dreyfus buyout to be funded via bank loan
Neil Hume – FT
Margarita Louis-Dreyfus is funding the buyout of remaining family shareholders in the trading house that bears her name through a bank loan.
/on.ft.com/2F6gpAK

Margarita Louis-Dreyfus Secures Financing to Buy Out Family
Andy Hoffman and Javier Blas – Bloomberg
Russian heiress Says LDC will consider strategic partnerships; Louis-Dreyfus has been squeezing the trading house for cash
Margarita Louis-Dreyfus, the Russian-born heiress who controls the eponymous agricultural commodities trading house, secured financing to buy out remaining family members and will consider strategic partnerships.
/bloom.bg/2FkPRM6

The Land of Alts Opportunities
Christine Idzelis – Institutional Investor
The U.S. is losing its title as the world’s best hunting ground for alternative investing, according to a recent report by data provider Preqin.
/goo.gl/66ApmY

Wall Street’s New Risk Machine; Investors are searching high and low for better returns, and that’s led them into markets beyond familiar stocks and bonds.
Sally Bakewell – Bloomberg
Yield has been hard to find. The Federal Reserve’s benchmark interest rate was near zero for years after the financial crisis, and even now, with rates rising, the payouts on safe assets such as Treasuries are historically low. Investors looking for serious returnsóthe kind that fund retirements or maintain college endowmentsóhave been willing to take more chances. And they’ve increasingly turned to debt and alternative assets.
/bloom.bg/2qxSnEI

Alternative Investing for the Masses; YieldStreet wants to make exotic bets available to individual investors online.
Josh Saul, Claire Boston – Bloomberg
Milind Mehere keeps plenty of copies of Hillbilly Elegy, J.D. Vance’s best-selling memoir about poverty in the Rust Belt, on hand for visitors to his Midtown Manhattan office. Mehere talks about how ordinary people are shut out of opportunities to build wealth. “If we don’t change fundamentally how we save, invest, and actually make money as a society, there will be anarchy in 20 or 30 years,” he says.
/bloom.bg/2qBRA5u

Institutions

The foreign bank that’s become a happy home to U.S. bankers and traders
Beecher Tuttle – eFinancialCareers
Known mostly for its presence in its home country, Australian investment bank Macquarie is quietly taking market share away from Wall Street rivals in areas in which they historically dominate: investment banking and trading, particularly in commodities.
/jlne.ws/2QqCdYW

Tom Barrack Returns to CEO Role at Colony Capital After Shares Fall
Shahien Nasiripour – Bloomberg
Founder of predecessor company had been CEO until 2014; Colony Capital’s shares have plummeted 49% this year
Tom Barrack, who founded a Colony Capital Inc. predecessor and stepped down as chief executive officer in 2014, is returning to the role following a stock rout that’s cut the investment firm’s market value in half this year.
/bloom.bg/2FbTe87

These 69 New Goldman Sachs Partners Are the Happiest People on Wall Street Today; The Wall Street firm promotes only 69 new partners as it aims to keep its upper ranks exclusive
Liz Hoffman – WSJ
Goldman Sachs Group Inc. GS 1.35% named 69 new partners, its smallest class in two decades, as the Wall Street firm aims to maintain the allure of its upper ranks.
/on.wsj.com/2FcqKes

Former Goldman Sachs executive to join Moore Capital; Konstantinos Pantazopoulos will help run Moore’s global macro strategy
Lindsay Fortado – FT
A former Goldman Sachs global head of rates trading Konstantinos Pantazopoulos has joined the hedge fund Moore Capital, six months after he left the Wall Street bank.
/on.ft.com/2qBTOBY

Former Cowen prime brokerage executives set up new US business at INTL FCStone
Joe Parsons – The Trade
Three of Cowen Group’s most senior prime brokerage executive have joined INTL FCStone Financial to establish a new US prime services business.
bit.ly/2qBa7ip

Regions

Watch Out – Cash Is Deserting China Again; Political numbers in the U.S. have dominated headlines this week. Another important set of figures has received far less attention.
Nathaniel Taplin – WSJ
The Trump administration has spent much of the past year arguing that capital leaving China was a sign of flagging confidence, which would enhance the U.S.’s leverage in trade talks. Until recently, there wasn’t much evidence that was true. Now there is: investors should sit up and take notice.
/on.wsj.com/2F7WgtZ

Italy’s Banks Face a New Sheriff in Town; Andrea Enria is a good pick as Europe’s banking supervisor-in-chief. Should he be approved, don’t expect him to go easy on his home country.
Ferdinando Giugliano – Bloomberg
There’s an irony in the nomination of Andrea Enria as the head of Europe’s banking supervisory body. The Italian, who currently leads the European Banking Authority, is expected to take over from Daniele Nouy at the start of next year provided the European Parliament and European Union’s council approve.
/bloom.bg/2F8tZU8

Julius Baer to Lure Wealthy South Africans With New Office
Roxanne Henderson – Bloomberg
It’s the second Swiss bank to enter country in recent weeks; The investment is part of a long-term strategy, the bank says
Julius Baer Group Ltd. opened an office in Johannebsurg as Switzerland’s third-largest wealth manager seeks to profit from a growing pool of high-net worth individuals in the country.
/bloom.bg/2FewIvp

Toshiba to pay ENN more than $800 million to exit U.S. LNG business
Osamu Tsukimori, Jessica Jaganathan – Reuters
Japan’s Toshiba Corp will exit its U.S. liquefied natural gas (LNG) business by paying China’s ENN Ecological Holdings Co more than $800 million to take over the unit as part of a plan to shed money-losing assets.
/reut.rs/2FbltnF

Australian wealth giant AMP, under pressure, says tougher laws would ‘distract’
Byron Kaye, Paulina Duran – Reuters
Struggling Australian wealth manager AMP Ltd (AMP.AX) fears any new regulation of the finance sector would “distract” participants from acting ethically, it said on Thursday, striking a defiant tone after months of damaging allegations.
/reut.rs/2F8tdXe

She Lost a Golf Club and Police Seized $183,000 of Jewelry. Now a Banker’s Wife Faces Extradition
Franz Wild – Bloomberg
After a turbulent few months where she lost control of a multi-million pound house and golf club and then had jewelry worth as much as 140,000 pounds ($183,000) seized by U.K. police, a wealthy banker’s wife now faces extradition to Azerbaijan.
/bloom.bg/2qxTLXW

Brexit

Billionaire American Families Seek to Profit From Brexit Chaos
Sophie Alexander – Bloomberg
Foreign investors are buying more office real estate in London; ‘Volatility causes opportunity,’ says FirethornTrust’s Mather
Quay House in London’s Canary Wharf is a two-story glass box nestled among some of the tallest buildings in Europe. Its latest owners have grand plans, potentially transforming it into a hotel closer in height to its 600-foot neighbors.
/bloom.bg/2FkqSca

Brexit May Risk No-Deal Bond Market as Uncertainty Lingers On
Emma Haslett – Bloomberg
Unclear trade ties deter corporate investments and debt sales; U.K. leaving EU without agreement may cause financial turmoil
Europe’s bond market may face an early year-end shutdown as Brexit risks cloud the outlook for borrowers and investors.
/bloom.bg/2FewWCL

Theresa May steps up preparations for a Brexit deal; Cabinet ministers given sight of the bulk of draft withdrawal treaty
George Parker, Laura Hughes and Alex Barker – FT
Prime minister Theresa May on Wednesday stepped up preparations for a Brexit deal by giving cabinet colleagues their first sight of the “95 per cent completed” withdrawal treaty that will take Britain out of the EU next March.
/on.ft.com/2FapMiN

Brexit Equivalence Deal Is Not Good Enough for London’s LCH
Will Hadfield – Bloomberg
Even if Theresa May gets a Brexit deal on financial services, it won’t be enough for the London firm that sits at the center of the world’s biggest derivatives market.
/bloom.bg/2FbhRC2

Miscellaneous

Options Jeopardy “Question”
OCC/OIC
What is an Iron Condor?

The post Big investors sue 16 banks over FX rigging; Market cops step up fight against spoofing appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Thank you to the reader who reached out to Jim Oliff with his story of being a cancer survivor for six years with the same type of cancer. The readers of this newsletter never cease to amaze me with their kindness, generosity and sharing.~JJL

Benchmark Mineral Intelligence forecasts there will be a 399 percent jump in lithium-ion battery production by 2028. Here is an infographic from Visual Capitalist on the explosion of battery “megafactories.” For a more comprehensive look at the lithium ion battery space, see this blog. For some more trading specific context, check out this article from Reuters yesterday – Lithium price tensions highlight need for an LME contract.~SD

The Institute For Financial Markets, International Monetary Fund and Georgetown University Law completed the FinTech Week on the Hill conference yesterday in Washington, DC with a look at FinTech regulation. The recurring theme for regulatory sandboxes, state, federal and international regulatory agencies and tech firms themselves, was the need for regulatory harmony on some basic quality standards and guidelines for firms in the blockchain, crypto and payments space. While that looks unlikely anytime soon, the G20 may want to forge the next set of goals in the fintech space.~JK

John Lothian Productions is producing a special report on the FinTech event for the Institute For Financial Markets in the coming weeks, focused on fintech regulation.~JK

++++

Bringing Nasdaq’s Derivatives Franchises Together
Spencer Doar – JLN
Kevin Kennedy now has two jobs. Formerly just the head of U.S. options for Nasdaq, he’s now also the head of the Nasdaq Futures Exchange (NFX), a post left open by the departure of Rick Beaman.
Kennedy inherits a still nascent endeavor – it was formed in 2015 – that is largely focused on energy products. Despite its youth, NFX has hit some home runs. NFX’s natural gas options have plenty of traction and the exchange’s open interest in energy products represents 11.5 percent of overall U.S. energy product open interest.
The challenge now is to grow NFX’s participatory pool.
/goo.gl/QhQMWm

++++

A Comprehensive Crypto Outlook: Pain, Progress and Metaphors
JohnLothianNews.com

It’s been 10 years and crypto – despite all of the debates and naysaying – is still here.

In this video, Bcause Founder and Chief Marketing Officer Thomas Flake, Coinigy CFO and Director of Business Development Derek Urben, and Hehmeyer Trading + Investments CEO Chris Hehmeyer, talk about culling the crypto herd, mining hardware, scary practices, and institutional money in the space.

Watch the video »

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Why a SIFMU Must Always Manage Liquidity Risk
John Fennell, OCC Executive Vice President and Chief Risk Officer
Before the 2008 financial crisis, the emphasis of risk management leaned more toward credit risk, with liquidity being a secondary concern. However, during the crisis it became clear that liquidity, and the velocity with which it can evaporate, could render an entity unable to meet its contractual obligations. The events surrounding the crisis, in other words, pointed to liquidity risk as being an accelerant toward the ultimate default of a market participant.
bit.ly/2DqZE1L

****Anybody that has gone on a road trip through the U.S.’s plethora of open country knows about liquidity risk.~SD

++++

Trump Proves Again He’s Not Fit for Office; Wednesday’s news conference made little sense and was full of denials, lies and deflections. We should stop expecting anything else.
Jonathan Bernstein – Bloomberg
Even with everything going on, I still can’t let Donald Trump’s Wednesday news conference go. It was … something. I will give credit to Trump for holding a post-election news conference. He’s now doing these events regularly, and that’s a good thing. The downside is that he used the occasion to demonstrate once again that he’s simply not fit for the office he holds
/bloom.bg/2RHDlb1

***** Jonathan Bernstein bears reading.~JJL

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Thursday’s Top Three
The top story on Thursday was Reuters’ take on a big lawsuit – Big investors sue 16 banks in U.S. over currency market rigging. The remainder of the top clicks go to Goldman Sachs. First, Bloomberg’s tale of a Husband and Wife Duo Promoted in Goldman’s New Partner Class and then, in third, the Goldman Sachs Partner Class of 2018 Factsheet.

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MarketsWiki Stats
135,038,105 pages viewed; 23,311 pages; 215,438 edits
MarketsWiki Statistics

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Lead Stories

SEC, EtherDelta founder settle charges over operating unregistered exchange
Reuters
The U.S. Securities and Exchange Commission (SEC) said on Thursday it settled charges against Zachary Coburn, the founder of cryptocurrency token trading platform EtherDelta, over operating an unregistered securities exchange.
/reut.rs/2RFkm0O

Wall Street Says Fed Is in Denial About $4 Trillion Dilemma
Liz McCormick, Vivien Lou Chen, and Alex Harris – Bloomberg
Wall Street sees risk of reserves growing scarce on Fed unwind; Demand for short-term cash could wreak havoc on rate policy
Fixed-income traders are telling the Federal Reserve that it might end up making a big policy mistake. And it’s not just rising interest rates they’re talking about.
/bloom.bg/2RLu0iq

Brexit Is Pushing More Settlement Business Toward Brussels
Dara Doyle and Will Hadfield – Bloomberg
Euronext has preference for Belgian solution, briefings show; U.K.’s Crest likely to lose passporting rights after Brexit
Euronext NV, the owner of Ireland’s stock exchange, favors moving the settlement of Irish shares to Brussels after Brexit, according to briefings to industry.
/bloom.bg/2RF2GSM

Goldman’s Blankfein Said to Have Attended 2009 1MDB Meeting
Sridhar Natarajan and Elffie Chew – Bloomberg
Gathering laid the groundwork for lucrative Malaysia deals; Meeting involved former Malaysian prime minister Najib Razak
Years before Goldman Sachs Group Inc. arranged bond deals now at the heart of globe-spanning corruption probes, the firm’s then-CEO Lloyd Blankfein personally helped forge ties with Malaysia and its new sovereign wealth fund, according to people with knowledge of the matter.
/bloom.bg/2Dur46z

A Fifth of China’s Homes Are Empty. That’s 50 Million Apartments
Bloomberg News
Risk is potential for flood of sales during any property slump; Xi has said homes are for living in, not for speculation
Chinese President Xi Jinping’s mantra that homes should be for living in is falling on deaf ears, with tens of millions of apartments and houses standing empty across the country.
/bloom.bg/2RLMkrL

Exclusive: Russian state bank secretly financed Rosneft sale after foreign buyers baulked
Tatiana Voronova, Oksana Kobzeva, Dmitry Zhdannikov – Reuters
It was billed as the deal that proved Russia remained open for business.
“I want to congratulate you”, Russian President Vladimir Putin told his trusted ally Igor Sechin, after greeting him with a warm handshake in the Kremlin in December, 2016.
/goo.gl/i5aZFG

Bank of England to test financial system resilience to cyber attacks
Reuters
The Bank of England said it will carry out a test on Friday to gauge the financial sector’s ability to withstand a major cyber attack.
/reut.rs/2RLNzqV

EU plans reprieve to derivatives deals to avoid Brexit chaos; Regulators will allow temporary exemptions to prevent disruption to thousands of uncleared derivatives contracts
Philip Stafford – FT
European markets regulators are planning to grant temporary exemptions to prevent disruption to thousands of uncleared derivatives contracts if the UK leaves the EU without a political agreement.
/on.ft.com/2RJp79o

Now That $4.3 Trillion Wipeout in Asian Stocks Is Getting Deeper
Moxy Ying – Bloomberg
U.S. dollar resumes its strengthening after Fed meeting; China data on consumption also throws cold water on market
It was looking like a week of wound-licking for Asian stocks. Then crude oil entered a bear market and alarm bells rang on China’s slowdown as tech stocks plunged.
/bloom.bg/2RLoJar

Exchanges, OTC and Clearing

FX Futures – Welcome to the New Normal
David Holcombe, 360T – Profit and Loss (PDF)
Many FX participants are already reviewing their FX operating model, building support for FX clearing and Futures in addition to their OTC FX. This is not in the belief that the entire FX market will move to a cleared model, but it is evident that pioneering firms are already staking their claim as well as exploiting the values that hybrid OTC and Cleared products can bring; blurring the historic lines that have previously separated bilateral FX models, PB’d access to markets, OTC clearing, and FX Futures.
/goo.gl/Mu18Vf

B3 announces results for the third quarter of 2018
B3
Brasil, Bolsa, Balcao reported today its third-quarter earnings for the period ending on September 30, 2018 (3Q18). Total revenues reached R$1,272.5 million, an 8.7% increase over the third quarter of 2017 (3Q17), while recurring EBITDA amounted R$776,2 million, growth of 16.2%, showing the Company’s operational leverage. The Company’s recurring net income in 3Q18 was R$613.4 million.
/goo.gl/tu8GWn

Lithium price tensions highlight need for an LME contract
Andy Home – Reuters
What’s the price of lithium, the “hot metal” at the heart of the electric vehicle (EV) revolution? The spot price in China has collapsed over the course of 2018 as the market absorbs a wave of supply, much of it from the new hard-rock mines that have come on stream in Australia.
/reut.rs/2Dv1pLm

Iran’s plan to sell oil on local energy exchange could boost economy
Bijan Khajehpour – Al-Monitor
In order to develop alternative channels for monetizing Iran’s oil, Iranian authorities have activated an old plan to market some of their export potential through the Iran Energy Exchange (IRENEX) which was established in 2012 as a regulated exchange for trading of energy-related products and securities. Up until last week, IRENEX had mainly been an exchange for the trading of petroleum and petrochemical products (not crude oil), gas liquids and electricity. The initial plan to market crude oil through IRENEX had emerged during the last phase of harsh external sanctions on Iran from 2011 to 2013, but it did not materialize due to the controversies related to such deals being a channel to offer rent to selected networks and a platform for corruption.
/goo.gl/PfMja1

Emerging Markets Exchanges Embrace New Tech
Hamad Ali – WatersTechnology
While economic measures might place markets in Kenya, Tanzania, Palestine and elsewhere firmly in the “emerging” bracket, their use of technology is anything but.
/goo.gl/LgrHRL

Technical glitch briefly halts trading on Chicago Stock Exchange
Matt Egan – CNN
Trading briefly ground to a halt at the Chicago Stock Exchange on Thursday because of a technical glitch at the 136-year-old venue.
/cnn.it/2RN3ZiQ

SGX reports market statistics for October 2018; Growth in market turnover value of ETFs, structured warrants and DLCs, amid market volatility; Derivatives volume reaches all-time high
Securities
SGX
Total Securities market turnover value was at S$24.3 billion, up 25% month-on-month (m-o-m) and up 1% year-on-year (y-o-y), over 23 trading days. There were 20 trading days in September 2018 and 21 in October 2017.
Total Derivatives volume was 22 million, up 19% month-on-month (m-o-m) and up 47% year-on-year (y-o-y).
bit.ly/2RIC6IA

SGX RegCo proposes changes to delisting rules
SGX
Singapore Exchange Regulation (SGX RegCo) is consulting the market on rule changes to two aspects of voluntary delistings, namely the voluntary delisting resolution and the exit offer.
bit.ly/2FmmGsq

Options on Exchange Traded Funds (ETF options): Change of term for contract
expiration dates and exercise price intervals for Options on Fixed Income ETFs
Eurex
The Management Board of Eurex Deutschland took the following decision effective
5 November 2018:
bit.ly/2RNVJPH

David Holcombe: “Use of FX Futures and clearing will become part of the new normal”
Eurex
Read about the new Deutsche Bˆrse Group FX Futures proposition and why liquidity and clearing are so important. An article by David Holcombe, Product lead for FX ETD & Clearing, 360T Deutsche Bˆrse Group, published in P&L Q4 2018.
bit.ly/2RNHpGT

London Stock Exchange Group launches reports on African capital markets
London Stock Exchange Group
Today, London Stock Exchange Group (LSEG) launches its series of reports on African capital markets, which were developed as part of its London Africa Advisory Group (LAAG). The reports will be launched at the African Investment Forum in Johannesburg. The five reports put forward recommendations on how African capital markets could be further developed to increase global investment flows. The reports were commissioned by LAAG following its series of meetings over two years with its members, Africa’s business leaders, policymakers and investors. The reports have been produced in conjunction with stakeholders in London and across Africa.
bit.ly/2RNQ8J7

Fintech

JPMorgan, Carlyle Are Latest Wall Street Firms to Back iCapital
Simone Foxman – Bloomberg
iCapital Network is adding two more firms to its stable of Wall Street backers.
/bloom.bg/2RKO5oW

CloudMargin Named Collateral Platform Provider of the Year in Custody Risk Global Awards; Marks Third Custody Risk Award Win in Four Years
CloudMargin
CloudMargin, creator of the world’s first and only collateral and margin management solution native to the cloud, has been named Collateral Platform Provider of the Year in the Custody Risk Global Awards 2018. The awards ceremony took place last night in London following decisions by a judging panel of industry experts assembled by Custody Risk.
/prn.to/2FgALHB

Singapore’s Central Bank Chief Is a Fintech Champion – Bloomberg
Bloomberg (VIDEO)
Monetary Authority of Singapore Managing Director Ravi Menon explains how the central bank regulates and nurtures fintech in the city state. He speaks with Bloomberg’s Haslinda Amin ahead of the Singapore FinTech Festival next week.
/bloom.bg/2yZ6Wps

U.S. FinTech FinCrime Exchange Established by FINTRAIL Solutions
Press Release
FINTRAIL Solutions LLC, a world-class financial crime consultancy company serving the North American FinTech and RegTech markets, is proud to announce the launch of the United States chapter of the FinTech FinCrime Exchange (FFE). The FFE, a free members forum already operating in Europe, brings together a network of FinTechs to collaborate on the best practices in financial crime risk management, creating a globally connected community in the fight against financial crime.
bit.ly/2yYJ7hG

Pentagon Bolstering Cybersecurity Demands for Future Contracts
Anthony Capaccio – Bloomberg
Chief weapons buyer Ellen Lord discusses new initiative; Lord says Pentagon is studying retroactive application too
The Pentagon’s top weapons buyer has issued new language applying to future contracts that’s intended to put companies on notice that they must elevate cybersecurity protection.
/bloom.bg/2RLuBRc

Millennial mobile-payment users tend to make worse financial decisions
John Detrixhe – Quartz
One of the wonders of the modern life is all of the whizzy technology available to help us manage our money. But does it mean we make better financial decisions? Maybe not.
A study of mobile-payment using millennials (ages 18-34) in the US found they were less likely to be financially literate than others of the same age who didn’t pay for things with their phones. They were also more likely to make other bad financial decisions, like overdrawing checking accounts, racking up credit card fees, borrowing from payday lenders, or dipping into their retirement accounts early, according to research by the Global Financial Literacy Excellence Center at the George Washington School of Business.
bit.ly/2yVOaiI

People who use mobile fintech apps tend to make worse financial decisions
John Detrixhe- Quartz
One of the wonders of the modern life is all of the whizzy technology available to help us manage our money. But does it mean we make better financial decisions? Maybe not.
bit.ly/2yVOaiI

Cryptocurrencies

Wall Street’s Crypto March Slowed by Appetite of Large Investors
Alastair Marsh – Bloomberg
The biggest roadblock to Wall Street behemoths rolling out cryptocurrency businesses could come from their own clients, rather than from regulators.
/bloom.bg/2RQuGDp

How Institutional Investors Are Changing The Cryptocurrency Market
Andrew Arnold – Forbes
It’s official: institutional players have entered the crypto race. Bloomberg reported that large buyers such as hedge and endowments funds have been consistently purchasing over $100,000,000 worth of digital coins through private transactions.
bit.ly/2RF0jiQ

Bitcoin Pioneer Who Gave Away Over $100 Million Has No Regrets
Olga Kharif – Bloomberg
Jeff Garzik distributed thousands of coins to developers; Speculates that the late Dave Kleiman was Satoshi Nakamoto
Jeff Garzik started writing software code for Bitcoin after reading a blog post about the digital currency in July 2010. At the time, he was working remotely for open-source powerhouse Red Hat Inc. from an RV parked in an empty lot in Raleigh, North Carolina.
/bloom.bg/2RMsWLo

Winklevosses’ Foe Wins End to Asset Freeze in Bitcoin Battle
Chris Dolmetsch – Bloomberg
Twins allege Shrem stole part of investment in exchange; Shrem has called suit a ‘scandalous and fantastical story’
The Winklevoss brothers lost a round in a court against the disgraced former head of a New York cryptocurrency exchange.
/bloom.bg/2RLvdX0

Why Blockchain’s Salad Days Aren’t Here Quite Yet
Olga Kharif – Bloomberg
There’s been no shortage of excited pronouncements about how blockchain, the digital-ledger technology that makes Bitcoin work, will revolutionize everything from how stocks are traded to how Walmart Inc. keeps track of where that particular head of lettuce came from. Well, that lettuce-tracking blockchain is coming. But most of the other blockchain projects announced with enthusiasm in recent years aren’t, despite an estimated $2 billion invested by venture capitalists in the first half of 2018 alone.
/bloom.bg/2RIly3x

The Calm Crypto Market? Bitcoin Volatility Drops Despite Turmoil Elsewhere
Steven Russolillo – WSJ
Cryptocurrencies, among the most volatile of financial assets, have fallen quiet even as turmoil has gripped stocks, bonds, commodities and traditional currencies.
Bitcoin has mostly traded around $6,500 in recent weeks, in contrast to last year’s manic rally and the steep plunge that followed this year. Enthusiasts hope muted swings could help cryptocurrencies, of which bitcoin is the largest, gain traction as a means of transaction.
/on.wsj.com/2z0PQaF

Canadian Bank Opens Deposit Box for Cryptocurrency Firms
Zack Seward – Coindesk
A Canadian bank says its digital safety deposit box is ready for prime time. VersaBank announced Thursday that its new VersaVault project had successfully completed beta testing. The digital-only bank plans to offer the virtual lockbox to cryptocurrency exchanges and crypto investment funds to store digital assets.
bit.ly/2Oza9kE

Will ICOs Prevail? Give Them Five Years
Aaron Brown – Bloomberg
Ernst & Young recently published a damning analysis of 2017’s initial coin offerings. The odd thing is it concentrates on the financial performance of the cryptocurrency market’s equivalent to an initial public offering in the mainstream investment world since the end of 2017. That does not reflect on the competence and sincerity of their promoters, nor the viability of the business and technical enterprises.

Side Marketing: Blockchain Companies And Enterprises Are Using One Business To Grow Two
Luke Fitzpatrick – Forbes
Brian Halligan and Dharmesh Shah were studying at the Massachusetts Institute of Technology (MIT) and decided to enter a business contest, a moment that would forever change their lives. The two ended up becoming the semi-finalists in the competitionóafter graduating, the pair then went on to found Hubspot in 2006.
bit.ly/2zITTrY

Three challenges facing blockchain technology
Jonathan Johnson – TechCrunch
Nearly five years ago, Overstock.com became the first major retailer to accept bitcoin as a form of payment. It now accepts many top cryptocurrencies. As a member of the senior executive team and board of directors at Overstock.com, I had a front-row seat to those decisions.
/tcrn.ch/2Qxq0lq

Politics

U.S. Ambassador Haley: Russia wants to lift bank restrictions on North Korea
Reuters
The U.S. Ambassador to the United Nations Nikki Haley said on Thursday that Russia wants to lift banking restrictions on North Korea put in place to try to curb Pyongyang’s nuclear program, but the United States would not let that happen.
/goo.gl/h9gCjY

U.S. Farmers Aren’t Checking Trump On Trade; The midterm results shouldn’t reassure investors on a deal with China
Nathaniel Taplin – WSJ
Beijing thought it had the American heartland figured out. Tuesday’s midterm result shows it may have overestimated its leverage.
/on.wsj.com/2RNDkT5

Right on the Election, Dead Wrong on the Market Reaction; Three possible reasons for why stocks soared
James Mackintosh – WSJ
I had a well-worked-out forecast for what would happen to stocks after the midterm elections. It was smart, logical, and 100% wrong. Quite why is an interesting question, and shows how hard it is to predict markets even when events go exactly as predicted.
/on.wsj.com/2RIE77C

After a stressful election, experts warn blockchain is not the answer
Jasmin Boyce – NBC News
Experts this week warned against entertaining the idea that blockchain could fix the voting system despite growing frustration with the long lines and malfunctioning machines that caused problems during the midterm election.
/nbcnews.to/2zGbCjG

Federal Judge Blocks Keystone XL Pipeline Permit; Ruling bars construction on long-delayed project until further environmental review
Miguel Bustillo – WSJ
A federal judge in Montana on Thursday blocked the Trump administration’s permit allowing the Keystone XL pipeline and barred any construction of the long-delayed project until completion of a supplemental environmental review.
/on.wsj.com/2RLroRE

Key Democratic lawmaker may invite bank CEOs to testify before U.S. Congress
Pete Schroeder, Michelle Price – Reuters
Democrat Maxine Waters, poised to become chair of the U.S. House banking committee, told Reuters on Thursday she would like the heads of the country’s biggest banks to testify before the panel as she seeks to ramp up regulatory oversight.
/reut.rs/2RHE1x5

Regulation

CFTC Orders Commerzbank AG to Pay $12 Million for Swap Dealing Violations and for Misleading Statements to the CFTC
CFTC
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Commerzbank AG (Commerzbank) for numerous violations of the Commodity Exchange Act (CEA) and CFTC Regulations, including failing to supervise its Swap Dealer’s activities for more than 5 years and making misleading statements and material omissions to the CFTC concerning its Swap Dealer’s operations and compliance with the CEA and CFTC Regulations. Commerzbank AG is a global banking and financial services company based in Frankfurt, Germany, that has been provisionally registered with the CFTC as a Swap Dealer since December 31, 2012.
bit.ly/2RN3Pbe

CFTC Charges Former Deutsche Bank Trader with Fraudulently Mismarking Swaps; Division of Enforcement also Issues Declination Letter to Deutsche Bank in Recognition of its Self-Reporting, Full Cooperation and Remediation
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that it filed and settled charges against Jacob Bourne, a former managing director of Deutsche Bank Securities Inc., for fraudulently mismarking swap valuations to conceal significant trading losses. The CFTC Order requires Bourne to pay a $350,000 civil penalty and permanently bans Bourne from trading on exchange and seeking registration with the CFTC, among other prohibitions.
bit.ly/2RJloZG

Clearing standoff: US able to stand on its own in defence of trading ambition
Rebekah Tunstead – bobsguide
The EU’s softening in relation to clearing is typical brinksmanship of the commission, following its usual run book of international negotiations, says Mark Woolfenden, managing director of Euromoney TRADEDATA. “The clear facts of exchange trade analysis of the top five US exchanges, showed a significant amount of trade volume emanates from the EU economic area, so both sides of the pond would have been materially affected by any trade sanctions, the US from valuable trade flow, and the EU from vastly reduced choices to place risk mitigation trades,” says Woolfenden.
/goo.gl/2xXSw3

Westpac Fined A$3.3 Million Over Australia Rate Rigging Case
Emily Cadman – Bloomberg
Westpac Banking Corp. has been fined A$3.3 million ($2.4 million) for engaging in “unconscionable conduct” in attempting to manipulate a key Australian money market rate.
/bloom.bg/2RJmyV2

EU regulator seeks further evidence on concerns auction systems evade MiFID II rules; Controversial auction systems face regulatory intervention in Europe if ESMA finds the mechanism does not operate in the spirit of MiFID II.
Hayley McDowell – The Trae
Periodic auction systems are under further scrutiny from the EU markets watchdog after a call for evidence was published on concerns that the mechanism is being used to circumvent rules under MiFID II.
bit.ly/2RN5Owc

Former Deutsche Bank swaps trader fined $350,000 for trying to hide trading losses; Jacob Bourne, a swaps trader and managing director at Deutsche Bank, mismarked swaps valuations to try and conceal losses.
Hayley McDowell – The Trade
A former managing director and swaps trader at Deutsche Bank has been handed a fine of $350,00 by the US derivatives regulator, after being caught out trying to conceal significant trading losses.
bit.ly/2RFB3Jo

Court orders penalties and other relief against Westpac for BBSW conduct
ASIC
The Federal Court of Australia today ordered Westpac Banking Corporation (Westpac) pay a pecuniary penalty of $3.3 million for contravening s12CC of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) through its involvement in setting BBSW in 2010.
bit.ly/2RIOw37

ASIC cancels AGM Markets licence for unconscionable conduct and unmanaged conflicts of interest
ASIC
ASIC has cancelled the Australian financial services (AFS) licence of the retail OTC derivative issuer, AGM Markets. An ASIC investigation found AGM’s financial services business involved core elements of unconscionability and unmanaged conflicts of interest and followed a business model that disregarded key conduct requirements.
bit.ly/2RNQWh7

ESMA asks clients of credit rating agencies and trade repositories to prepare for a no-deal Brexit
ESMA
The European Securities and Markets Authority (ESMA) has issued today a public statement in order to raise market participants’ awareness on the readiness of credit rating agencies (CRAs) and trade repositories (TRs) for the possibility of no agreement being reached in the context of the United Kingdom (UK) withdrawing from the European Union (EU).
bit.ly/2RQzusr

ESMA launches call for evidence on periodic auctions for equity instruments
ESMA
The European Securities and Markets Authority (ESMA) has published today a call for evidence on periodic auctions for equity instruments. Following the introduction of MiFID II/MiFIR on 3 January, a new type of periodic auction trading system for equity instruments consisting of auctions of a very short duration during the trading day triggered by market participants has been rapidly gaining market share – frequent batch auctions.
bit.ly/2RQAlcD

ESMA updates Questions and Answers on ESMA’s temporary product intervention measures
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers on ESMA’s temporary product intervention measures on the marketing, distribution or sale of CFDs and binary options to retail clients based on Article 40 of Regulation (EU) No 600/2014 (the Markets in Financial Instruments Regulation, MiFIR).
bit.ly/2RMzARQ

Know What Triggers a Margin Call
FINRA Staff
Volatility is back, and market swings can sometimes bring an uncomfortable surprise to investorsóa margin call.
bit.ly/2RF5jnC

SEC Announces Agenda, Panelists for Staff Roundtable on the Proxy Process
SEC
The Securities and Exchange Commission today announced the agenda and panelists for the staff roundtable on the proxy process on November 15, 2018.
bit.ly/2RKh0cL

SEC Charges EtherDelta Founder With Operating an Unregistered Exchange
SEC
The Securities and Exchange Commission today announced settled charges against Zachary Coburn, the founder of EtherDelta, a digital “token” trading platform. This is the SEC’s first enforcement action based on findings that such a platform operated as an unregistered national securities exchange.
bit.ly/2RF5rn6

Investing and Trading

Quants Are Facing a Crisis of Confidence
Dani Burger – Bloomberg
October compounded miserable year for many quant strategies; Signs of retail cash leaving funds as institutions stand pat
Wall Street’s quant wizards often argue that many of their math-driven strategies are designed for the long-term. But they’ve rarely had to shout this loud.
/goo.gl/JE2YG4

Forget Black Swan, Just Look to the Mandarin Duck: Taking Stock
Arie Shapira – Bloomberg
So how’s everyone feeling about their tech holdings? The most common answer to this question from your everyday trader probably wavers between “better, but not great” and “pretty nervous” — and probably the latter right now with S&P 500 futures peeling back by ~15 handles this morning — I mean, who’s to blame them after the roller coaster that we’ve all been through over the past month and change?
/bloom.bg/2RNTlsd

Oil Teeters Near Record Losing Streak After Entering Bear Market
Sharon Cho and Alex Longley
OPEC, allies will meet Sunday to discuss possible output curbs; WTI crude trades below $60 a barrel, Brent dips below $70
Oil extended a run of declines after falling into a bear market, heading for its longest losing streak on record. Futures in New York fell for a 10th day, extending a dramatic plunge that’s dragged prices down more than 20 percent from a four-year high reached in early October. In London, Brent sank to a seven-month low below $70 a barrel.
/goo.gl/Eseze2

The World’s Largest Pension Fund Engages in Carbon Disclosure
Reid Steadman – S&P Dow Jones Indices Blog
On Sept. 25, 2018, Japan’s Government Pension Investment Fund (GPIF) – the world’s largest pension fund – announced its selection of two new low-carbon indices, the S&P/JPX Carbon Efficient Index and the S&P Global Ex-Japan LargeMid Carbon Efficient Index, with an allocation of JPY 1.2 trillion (approximately USD 10.6 billion).
/goo.gl/k6utfk

Institutions

Compensation soars for hedge-fund managers
Carleton English – NY Post
The wallets of hedge-fund managers are looking fatter this year.
/nyp.st/2REZRRG

GAM scraps managed futures fund after ending mandate
Chris Sloley – CityWire
GAM has opted to liquidate a managed futures fund after mutually agreeing to end the mandate, which had been overseen by Wadhwani Asset Management, Citywire Selector has learned.
/goo.gl/fB2FQ5

Hedge Funds Brace for Worst After a Terrible October
Saijel Kishan – Bloomberg
Investors face Nov. 15 deadline to ask for their money back; Clients already pulled $11 billion from funds this year
After beleaguered hedge fund managers had their worst month in seven years, many are bracing for an industry D-Day: Nov. 15.
/bloom.bg/2RKVPHv

What Bond Carnage? Pimco Boosts Allianz With $11 Billion Inflow
Christian Baumgaertel – Bloomberg
Smaller sibling Allianz Global Investors also wins new money; Inflows, market gains lift Allianz assets to 2 trillion euros
Pacific Investment Management Co. is shrugging off the bloodbath in bond markets, at least for now.
/bloom.bg/2RKebIN

UBS Confronts U.S., French Lawsuits and Huge Potential Fines
Patrick Winters, Gaspard Sebag and Fabio Benedetti Valentini – Bloomberg
U.S. starts lawsuit related to mortgage-backed securities; French financial prosecutor fine demand could be biggest ever
UBS Group AG’s two biggest legal cases in years are entering the final stretch in a test of Chief Executive Officer Sergio Ermotti’s strategy of taking on French and U.S. authorities.
/bloom.bg/2RMwTzI

Wells Fargo Ends Investigation Over Bias Against Women; The bank examined allegations in the wealth management unit; ‘there is unequivocally no gender bias,’ a senior executive says
Emily Glazer – WSJ
Wells Fargo & Co. has ended its investigation into alleged gender bias in its wealth management division, people familiar with the matter said.
/on.wsj.com/2RJnxoc

Regions

In China, response to pledged share meltdown stirs concern
Samuel Shen, John Ruwitch – Reuters
Scores of Chinese brokers and banks are struggling under the weight of hundreds of billions of dollars worth of loans to companies using their own plummeting shares as collateral.
/reut.rs/2RMtZuO

South Korea’s Moon shakes up economy team, vows to keep policies
Choonsik Yoo – Reuters
South Korean President Moon Jae-in has replaced his two top economic policymakers with current members of the government, his office announced on Friday, saying the changes were made to strengthen efforts to achieve a more equitable economy.
/goo.gl/nqcTeR

Confidence Is a Commodity in Short Supply in China; The word ‘uncertainties’ characterized Jacky Wong – WSJ
One thing is certain in China these days: Businesses are feeling uncertain.
/on.wsj.com/2RIDafy

For China’s Bad Banks, the Future’s Worse; State-owned managers of distressed debt are being forced to shrink after overseas adventures.
Nisha Gopalan – Bloomberg
Remember we told you China’s stock-market rescuers needed rescuing? Now it looks as if the nation’s bad banks could use a bad bank.
/bloom.bg/2RJksVa

5.8m Britons excluded from mainstream finance; Lack of data results in ‘invisibles’ being denied services
Lucy Warwick-Ching – FT
Almost 6m people in the UK are “invisible” to the financial system, causing them to be excluded from mainstream financial products and services, a new report has found.
/on.ft.com/2RNFOkn

Brexit

UBS’s Brexit Dog Whistle Is Loud and Clear; In the race to succeed London as Europe’s financial capital, banks aren’t above throwing their weight around.
Lionel Laurent – Bloomberg
Paris, Frankfurt and other European cities are rolling out the red carpet to welcome financiers quitting London as Brexit puts the U.K. capital’s free access to business on the continent in jeopardy.
/bloom.bg/2RKOeZw

Brexit scam warning issued by UK regulator
Caroline Binham – FT
The UK’s financial watchdog has warned consumers to be on the look-out for scams as fraudsters take advantage of confusion stemming from Brexit.
/on.ft.com/2FcHToi

Brexit Enters Its Most Dangerous Phase; Getting any deal through parliament will be far harder for Theresa May than reaching an agreement with Brussels.
Therese Raphael – Bloomberg
If the European Commission’s chief negotiator, Michel Barnier, utters the words “decisive progress” sometime in the next few days, take notice. It would be the signal that the U.K. and the European Union have agreed the terms of their divorce. A summit can be held and the white smoke sent up.
/bloom.bg/2RKcECr

The post SEC, EtherDelta founder settle charges over unregistered exchange; Wall Street says Fed is in denial appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

On Sunday I commemorated the end of World War I and Veterans Day in the US by attending a program at Elmhurst College put on by a local VFW group. The Elmhurst College band played, local Boy Scouts participated in the flag ceremony and veterans spoke of their experience. It was a moving program. I enjoyed the historic music played the most. During the ceremony I reflected on the fact that my grandfather, for whom I am named, celebrated his 18th birthday in a trench in France. And last week, my wife’s stepfather, Robert Bergstrom, would have turned 100 years old. He was in the US Navy during World War II, on Admiral Nimitz’s staff, and was present on the battleship the USS Missouri for the signing of the surrender of Japan. Lots of emotions yesterday.~JJL

Jeff Bergstrom of JLN attended the 2018 Global Cyber Security Initiative meeting on Friday. See his recap below.~JJL

You know you’ve made a mark when CFTC Chairman Chris Giancarlo quotes your work from nearly 50 years ago. The chairman referred to Richard Sandor‘s white paper “Preliminary Design for an Electronic Market,” which is included in his newest book Electronic Trading and Blockchain: Yesterday, Today and Tomorrow. Well done Chris. We stand on the shoulders…~JK

Congratulations to Innovate Finance CEO Charlotte Crosswell, who received the Freedom of the City by the Lord Mayor of London last week. Great pic, but what exactly is the Lord Mayor wearing?~JK

B3 posted its Q3 earnings last week, a 16.2 percent jump in earnings to R$776.2 million ($209 million). The company also mentioned it will launch more than 40 products and services by the end of 2019.~JK

The FT has a whole section about Transformation, with many of the stories included in today’s Fintech section.~JJL

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Cyber Security: If You Are Not Compliant, You Are Not Secure
Jeff Bergstrom – John Lothian News
If there is one phrase dreaded by all types of businesses in the US, it has to be “government regulation.” So it was surprising to hear nearly all the speakers at the 2018 Global Cyber Security Initiative meeting last Friday agree that what their industry really needs is more regulation. That almost unbelievable claim does come with a number of caveats, however.
The afternoon session began with Dr. Sujeet Shenoi, F.P. Walter Professor of Computer Science at the University of Tulsa, who scared the crowd with stories of just how vulnerable our cyber-infrastructure is. This point has been made to us before, but it has more weight coming from someone who has personally cracked numerous computer-based systems over the years and telling you how easy it was to do. Not because he is a black hat (aka a cyber bad guy) – rather, he is a white hat who has learned that the best way to protect a system is to learn how to crack that system to understand its vulnerabilities.
/goo.gl/Y6iSQ3

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Why Chicago’s two major dailies are still hungover; The search for new direction, new leadership—and new revenue—rolls on.
Lynne Marek – Crain’s Chicago Business
It’s been 25 years since the digital media revolution began upending the newspaper industry and more than a decade since advertising income started to slump, and yet the two remaining daily newspapers in Chicago’s once-mighty media landscape remain in flux, in search of leadership, direction and revenue.
bit.ly/2qGJGrT

***** Edwin Eisendrath is out at the SunTimes. This and other news about Chicago’s struggling newspapers.~JJL

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Crypto Origin Stories: How’d You Hear About It?

JohnLothianNews.com

No one has been in the cryptocurrency field for all that long, as Satoshi’s famous white paper is only 10 years old.

In this video, Bcause Founder and Chief Marketing Officer Thomas Flake, Coinigy CFO and Director of Business Development Derek Urben, and Hehmeyer Trading + Investments CEO Chris Hehmeyer talk about their first memories of cryptocurrencies.

Watch the video »

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Protect the Rule of Law; The special counsel investigation must not be subverted. Congress and the Department of Justice must act.
Editorial Board – Bloomberg
President Donald Trump’s firing of Attorney General Jeff Sessions has pushed the capital into new and more perilous terrain. What the president desires — protection from the special counsel’s investigation and its consequences — seems clear enough. What’s unknown is whether Congress and the Department of Justice, two pillars of American democracy, will bend to Trump’s will.
/bloom.bg/2qDu8Fg

****** Bloomberg editorial board laying down the line.~JJL

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Journalistic associations from seven Latin American countries form alliance to monitor freedom of expression in the region
Paola Nalvarte – Knight Center
United not only by cultural and geographical similarities, but also by the type of problems that their countries face politically, economically and socially, seven journalistic organizations have formed the Voces del Sur alliance to systematize the monitoring freedom of expression in their countries.
bit.ly/2qJ8FuE

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

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To Tell the Truth; Smart Contracts; Swaps Trade Execution Requirements
Gary DeWaal – Bridging the Week
A swap dealer was fined US $12 million by the Commodity Futures Trading Commission for a host of purported noncompliance issues. It was also sanctioned for allegedly not disclosing in two annual chief compliance officer annual reports potential regulatory problems of which it was aware. Separately, the Securities and Exchange Commission penalized the founder and developer of an online platform that offered trading in ether and ERC20 digital tokens through an autonomous smart contract that interfaced with the Ethereum blockchain. The SEC claimed that the platform impermissibly operated as a national securities exchange when it did not have the requisite registration or did not transact in accordance with the terms of a valid exemption. Moreover, the SEC said that the founder of the trading platform should have foreseen the likely violation.
bit.ly/2z7kkry

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Friday’s Top Three
Our top read story from Friday illustrates the times we live in – the Bloomberg op/ed piece Trump Press Conference Proves Again He’s Not Fit for Office. Second was Bloomberg’s ‘Fed Is in Denial’: How a $4 Trillion Dilemma Could Get Ugly about the Fed’s reduced holdings in Treasuries and mortgage-backed securities. Third was the JLN piece about Kevin Kennedy Bringing Nasdaq’s Derivatives Franchises Together and taking the reins at the Nasdaq Futures Exchange.

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MarketsWiki Stats
135,229,298 pages viewed; 23,311 pages; 215,452 edits
MarketsWiki Statistics

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Lead Stories

Meet the Robot Who Knows How to Trade Bonds Better Than You Do
Katie Linsell – Bloomberg
Abbie 2.0 now suggests trades to fixed-income fund managers; AllianceBernstein’s bot will learn to spot human errors
The robots have just got a step closer to managing your money. AllianceBernstein Holding LP upgraded its virtual assistant Abbie so she can now suggest the best bonds to buy and sell based on pricing, ease-of-trading and risk. Unlike any human, she can scan millions of data points to filter the universe of outstanding bonds in seconds and identify potential trades to portfolio managers using other electronic tools the firm has built.
/bloom.bg/2qHNhGb

D.E. Shaw Is a Quant King. Its Humans Are Losing Money; Old-fashioned investment strategies, relying on balance-sheet analysis and interviews, took a beating in an October rout
Rachael Levy – WSJ
D.E. Shaw Group is known as one of the most successful quantitative investment funds, using computers to make trading decisions. This year, it is facing challenges replicating its success using human beings.
/on.wsj.com/2qIcxw0

Alternatives to scandal-ridden Libor are slow to catch on; Regulators want traders to switch to new benchmarks like Sonia by 2021
Philip Stafford – FT
Alternatives to Libor underpinned less than 5 per cent of interest-rate derivatives traded last quarter, revealing the size of the challenge facing regulators trying to wean financial markets off the scandal-tainted benchmark.
/on.ft.com/2qKaE1v

SGX and national regulator develop tokenised asset settlement; The Monetary Authority of Singapore and Singapore Exchange developed two Delivery versus Payment capabilities for the settlement of tokenised assets across different blockchain platforms.
Jon Watkins – The Trade
Singapore’s markets regulator and national exchange said they have successfully leveraged blockchain technology for settlement of tokenised assets.
bit.ly/2qDwtA2

Do not assume the EU will give the UK time to rerun Brexit vote; The bloc has good reasons not to extend the March 29 deadline for withdrawal
Wolfgang Münchau – FT
Throughout the Brexit talks, the UK has been plagued by misjudgments over the EU’s negotiating position. Nowhere is the misjudgment bigger — and, potentially, with more tragic consequences — than over whether the EU would extend the Brexit deadline of March 29, a prerequisite for a second referendum. There is no simple yes or no answer. There are specific circumstances in which the EU might choose to extend, but there are many more when it might not.
/on.ft.com/2qIexo0

How’s China’s Opening to the Financial Sector Going?Germany Targets ‘Thousands’ of Brexit Bankers for Frankfurt
Steven Arons and Nicholas Comfort – Bloomberg
Germany will lure thousands of finance jobs to Frankfurt from London after Britain exits the European Union — if the country’s Finance Ministry gets its way.
/bloom.bg/2qH2JCc

How’s China’s Opening to the Financial Sector Going?
Bloomberg News
Last year, China pledged to allow overseas financial firms greater access to the world’s second-largest economy. Then came the trade war with the U.S., raising concerns that President Xi Jinping could retaliate by going back on his vow. Xi now says the opening is steadily widening. But the take-up by foreign companies has been slow.
/bloom.bg/2qJ8WgQ

Germany Targets ‘Thousands’ of Brexit Bankers for Frankfurt
Steven Arons and Nicholas Comfort – Bloomberg
Germany will lure thousands of finance jobs to Frankfurt from London after Britain exits the European Union — if the country’s Finance Ministry gets its way.
/bloom.bg/2qH2JCc

Entrepreneurship Boosts Well-Being By Meeting Key Psychological Needs – Study
Dinah Wisenberg Brin – Forbes
It’s no secret that launching a business can generate stress. A new study suggests, however, that entrepreneurship also enhances well-being by meeting vital psychological needs.
bit.ly/2qGHQY1

Why ‘Free Trading’ on Robinhood Isn’t Really Free; Brokerage takes sizable rebates for directing clients’ orders, offsetting for some investors the benefit of zero commissions
Alexander Osipovich and Lisa Beilfuss – WSJ
In the 1990s, online brokerages like E*Trade Financial Corp. were the hot new way to play the stock market.
/on.wsj.com/2qJeGaI

Wall Street equity traders to get biggest bonuses in 2018: study
Reuters
Equity traders on Wall Street are expected to take home the biggest bonuses this year as a surge in volatility boosted client activity, but 2019 may not be as rosy, compensation firm Johnson Associates Inc said on Monday.
/reut.rs/2FfWrne

Exchanges, OTC and Clearing

MAS and SGX successfully leverage blockchain technology for settlement of tokenised assets
SGX
The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) have successfully developed Delivery versus Payment (DvP) capabilities for the settlement of tokenised assets across different blockchain platforms. This will help simplify post-trade processes and further shorten settlement cycles.
bit.ly/2qKbcEB

Steep increase in the Eurex-LCH basis – what’s going on? Opportunity for fixed receiver swap clients!
Eurex Clearing Board Member Matthias Graulich
In my last blog on euro clearing, I wrote about buy-side execution costs and that execution prices both in terms of bid-offer spread as well as the basis reached the same level as execution prices for LCH cleared euro swaps. While the bid-offer spreads are still extremely competitive (same spread and size quoted for Eurex and LCH euro swaps) we observed a steep increase in the basis for euro swaps between LCH and Eurex Clearing during the last few weeks. But let me point out: I cannot see a fundamental reason for this development. I think the development is encouraging for fixed receiver clients to take advantage of a significantly better price at Eurex.
bit.ly/2qJoT6Y

Euronext publishes Q3 2018 results; Strong Performance Across All Businesses And First Achievements Of 2019 Targets
Euronext
Euronext, the leading pan-European exchange in the Eurozone with 1,300 listed issuers, today announces its results for the third quarter of 2018.
bit.ly/2qIxkPN

Pioneering CCP transparency to maintain safer markets (part 6)
CCP transparency series
Eurex
Eurex Clearing is committed to transparency and the reproducibility of margin figures. New technologies and the expectations of market participants are rapidly changing, and meeting these goals is a continuous process.
bit.ly/2qJkpgC

Fixed Income Highlights – November 2018 edition
Eurex
Volumes in core European rate futures and options increased substantially in light of the recent equity market downturn and continued geopolitical risks. Yields for 10-year German government bond debt moved between 35 and 55 basis points over the past month. While this has led to an increase in implied and realized volatility, we have failed to break out of the 4-6% corridor for any meaningful length of time. Volatility spikes have largely remained short-lived with program sellers fading the move higher in bund volatility.
bit.ly/2qPNPKd

New green bond segment on the Frankfurt Stock Exchange
Deutsche Börse Group
Deutsche Börse has launched a new green bond segment on the Frankfurt Stock Exchange. The fund contains 150 bonds that comply with the International Bond Markets Association’s Green Bond Principles .
bit.ly/2qHr8HV

Inaugural Cboe Risk Management Conference (RMC) Tel Aviv Features Packed Program, Strong Attendance
Matt Moran – Cboe
More than 150 financial professionals, including top traders, strategists and researchers attended the inaugural Cboe Risk Management Conference (RMC) in Tel Aviv, Israel on November 6. A variety of topics related to the management of risk and return in investment portfolios were discussed by 17 speakers at RMC Israel, including the three speakers pictured below: Sheldon Natenberg (left), Andy Lowenthal (center), and David Blitzer (right).
bit.ly/2FiBDLY

Fintech

Dash Financial Technologies Adds James Doherty As Head Of Equity Product
Dash
Dash Financial Technologies, the industry’s leading capital markets technology and execution provider, today announced the addition of James Doherty as Managing Director, Head of Equity Product, the latest demonstration of the firm’s deepening commitment to performance and innovation in the highly-demanded equity vertical.
bit.ly/2PWg6wA

Banks find a use for blockchain: cross border payments; The JPMorgan-led Interbank Information Network is starting to work at scale
Laura Noonan – FT
Finally banks may have found a problem that blockchain is able to solve now and at scale: cross border currency transfers.
/on.ft.com/2qHoWAb

Arizona sandbox gives fintech start-ups a regulatory path to US; Fragmented US rules landscape has put off many early-stage companies
Jemima Kelly – FT
Arizona, often associated with golf-playing pensioners and selfie-taking Grand Canyon visitors, might not seem the most obvious place to look for cutting-edge financial technology.
/on.ft.com/2qH4QG8

Online lending: US fintechs gain from behaving more like banks; Platforms once out to change ‘the entire system’ move away from ‘tech’ — and risk
Ben McLannahan – FT
When Noah Breslow rang the opening bell at the New York Stock Exchange in the week before Christmas 2014, it was a high point — perhaps the high point — for the fledgling online lending industry.
/on.ft.com/2qJfRH4

Fintech: Regulation trips Canada’s stock exchange blockchain test; The legal side, rather than technology, proves the problem for central bank pilot
Joshua Oliver – FT
Stock exchange operators from Shanghai to New York are looking at distributed ledger technology (DLT) in hopes that it can make their computer systems more efficient, reliable, and secure.
/on.ft.com/2qJazLO

Five ways banks are responding to the fintech threat; Acquisitions, partnerships and ‘digital attacker’ approach are among the defences
Martin Arnold – FT
Online banking customers are a third more profitable than traditional bank-based clients, Piyush Gupta, chief executive of Singapore’s biggest bank, DBS, told investors a year ago during a presentation of the bank’s digital strategy. The remark sent DBS shares sharply upwards.
/on.ft.com/2qJauru

Goldman Sachs just bought a one-person startup, and it’s betting it could change the day-to-day lives of its bankers
Dakin Campbell – Business Insider
Goldman Sachs has been searching for years for an investment-banking equivalent to the vaunted risk-management system its traders use. It may have just found it.
/read.bi/2qHhViE

SIX FinTech Ventures Invests In FinTech Companies Vestr And Shift Cryptosecurity
MondoVisione
SIX FinTech Ventures, the CHF 50 million corporate venture fund of SIX, has invested in its first two early stage startups, both of which aim to revolutionize the Swiss Financial Centre.
bit.ly/2FfHLV2

Keith Todd joins Horizon as advisory board member
Horizon Software
Horizon Software (Horizon), the world’s leading provider of electronic trading solutions and algorithmic technology, has announced today the appointment of Keith Todd CBE as a member on its advisory board.
bit.ly/2FrM2EW

Cryptocurrencies

The unholiest of holy wars: “Satoshi” vs “Bitcoin Jesus”; “I AM Satoshi. Have a nice life.”
Jemima Kelly – FT
What is bitcoin? Bitcoin is, in theory, a peer-to-peer digital “currency” invented just over ten years ago by someone — or some group — calling themselves Satoshi Nakamoto. It’s currently trading at around $6,400, and goes by the ticker “BTC”. We can all agree on those basics, right?
bit.ly/2qHMhlp

Winklevoss lawsuit against Charlie Shrem peeled out in top gear, but now may be stuck in neutral
Stephen D. Palley – The Block Crypto
The Winklevoss lawsuit against Charlie Shrem provides some gossipy insights about early bitcoin adopters set against a backdrop of dry Dickensian procedural minutiae and sharp elbows. It’s also a lesson in tactics — if your first salvo in litigation is to shoot your heavy artillery, you better think ahead to what will happen if you miss your target.
bit.ly/2qDtHL8

Execs are fleeing Mike Novogratz’s Galaxy Digital as the firm makes a big pivot towards Wall Street
Frank Chaparro – The Block Crypto
Mike Novogratz’s Galaxy Digital is pivoting to address more institutional business;As part of those efforts, the firm has seen three major execs leave and it is shutting an office
The good ol’ Friday news dump.Galaxy Digital, the merchant bank run by famed trader Mike Novogratz, announced on Friday evening that two major executives are stepping down from their positions as the firm shifts its focus to larger institutions from small ICOs. But no one noticed. “The Company is adapting to the regulatory framework and the opportunities it is currently seeing, and therefore repositioning its Advisory business from focusing on small ICO advisory and blockchain consulting to instead serve larger, more institutional clients in the space,” the firm said. Notably, the firm was known to operate an advisory business as well as one in trading and venture capital. As part of the shift, the firm is shutting its Vancouver office.
bit.ly/2qPGYjX

CFTC Fines Bitcoin Trader $1.1 Million for Crypto Fraud
Yogita Khatri – Coindesk
The U.S. Commodity Futures Trading Commission (CFTC) has jailed a bitcoin trader and fined him over $1 million for running a fraudulent bitcoin and litecoin scheme.
According to a press release issued Friday by the CFTC, the trader, Arizona resident Joseph Kim, admitted to defrauding investors of hundreds of thousands of dollars after misappropriating more than $600,000 of his previous employer’s funds.
bit.ly/2z7lN12

Crypto Token Airdrops Are a Marketing Ploy (and That’s OK)
Michael J Casey – Coindesk
In February 2014, when growing interest in bitcoin spawned the first wave of “altcoins,” the tiny country of Iceland played host to a new idea for achieving mass adoption.
A developer using the pseudonym Baldur Friggjar Odinsson, vowing to help his 330,000 countrymen escape six years of post-crisis capital controls, created auroracoin and promised to distribute 31.8 of them to each person on Iceland’s national registry of citizens.
The idea of the “airdrop” was born.
It was a success. Briefly. Then it was a flop.
bit.ly/2z8Dsp4

Crypto-Friendly Robinhood under the Hood: Payments for Order Flow
CCN
Robinhood is no doubt quite a revolutionary start-up. They have managed to completely rewrite the rulebook when it comes to retail brokerage and trading.
bit.ly/2FfNNoR

Cryptocurrencies Have Failed, And Blockchain Still Has Yet To Be Proven Useful
Yuwa Hedrick-Wong – Forbes
There are two common patterns in technological invention and its subsequent commercialization. The first is a technological breakthrough that sparks interests in commercializing it. The invention of the transistor in the legendary Bell Lab in the 1940s (which later gained the three inventors the Nobel Prize in Physics) fits this pattern. It took a while to work out the commercial applications of the transistor, beginning with the radio, then, in a powerfully transformative way, in computers.
bit.ly/2JXRgH8

Millennials are sticking with cryptocurrency
Gregory Bresiger – NY Post
Millennials have their own thoughts on investing, and a large part of the cohort are still interested in bitcoin. These young people, many of whom have soured on conventional investing, are becoming increasingly interested in cryptocurrency, according to a new study.
/nyp.st/2z6hZgt

He Was a Blockchain Believer. Now He’s a Heretic. But He’s Still Bullish on Bitcoin
Avi Salzman – Barron’s
Bitcoin’s wild price swings have turned off much of Wall Street. But the blockchain technology behind it has caught the eye of major financial companies, which have invested millions in figuring out how it could streamline their operations.
bit.ly/2TbIKc2

Swiss cryptocurrency firm X8 obtains Islamic finance certification
Bernardo Vizcaino – Reuters
Nov 12 (Reuters) – Switzerland-based financial technology firm X8 AG has obtained certification from Islamic scholars for its digital currency, with plans to expand its business in the Middle East, a senior executive said on Monday. Several fintech firms are integrating their technology into the field of Sharia-compliant finance, with regulators and financial exchanges in the Middle East region keen to attract new business and encourage innovation in the sector.
/reut.rs/2FkmCtb

Stellar Lumens (XLM) Rises Significantly Thanks To The Ongoing Massive Airdrop
Uma Johnson – Smartereum
A while ago, the largest airdrop in the history of cryptocurrencies started and XLM was the chosen coin. Blockchain, a cryptocurrency-based wallet provider announced that it is going to host an airdrop for all its customers in partnership with the Stellar Development Foundation. The airdrop, which is going to last for six months, is referred to as the largest airdrop in cryptocurrency history as it will involve XLM tokens worth $125 million.
bit.ly/2Dy7AhJ

Politics

Republican Tolerance for Despotism Keeps Rising; A party of enablers, sycophants, cowards and sellouts.
Albert R. Hunt – Bloomberg
Any other Republican president — Richard Nixon, Ronald Reagan, George Bush — would have campaigned in the final week of the midterm elections on the booming economy, unemployment under 4 percent, rising real wages and a stock market up 25 percent. Donald Trump instead chose to close with racist rants about hordes of terrorists and brown people about to invade the Rio Grande. A man of dark instincts and impulses, he is incapable of uplift and hope; he traffics in fear and hate.
/bloom.bg/2qJl3uy

U.S. on a Course to Spend More on Debt Than Defense; Rising interest costs could crowd out other government spending priorities and rattle markets
Kate Davidson and Daniel Kruger – WSJ
In the past decade, U.S. debt held by the public has risen to $15.9 trillion from $5.1 trillion, but financing all of that debt hasn’t been a problem. Low inflation and strong global demand for safe U.S. Treasury bonds held the government’s interest costs down.
/on.wsj.com/2qJfUCS

Navarro Warns Wall Street to Stay Out of China Trade Talks
Andrew Mayeda and Shawn Donnan – Bloomberg
White House aide calls out Goldman Sachs as Xi meeting nears; China says it’s open to talks but won’t be bullied by the U.S.
White House trade adviser Peter Navarro warned Wall Street bankers and hedge-fund managers to back down from their push for President Donald Trump to strike a quick trade deal with China’s Xi Jinping.
/bloom.bg/2qPIse1

I’m not under political pressure to merge, Deutsche Bank’s CEO says
Reuters
Deutsche Bank’s (DBKGn.DE) Chief Executive Christian Sewing said he was not experiencing pressure from the German government to merge with smaller rival Commerzbank (CBKG.DE), adding that he was comfortable with the progress the troubled lender was making on cost-pruning.
/reut.rs/2Fklu8V

Regulation

Andrew Bailey must pay the price for FCA failures; The financial regulator’s culture and governance do not come up to standard
Alan Miller – FT
It is ironic that the Financial Conduct Authority this year said that “culture and governance is a priority” for the UK regulator. Based on my examples, below, I believe that the FCA’s own culture and governance fails the test on consumer protection, integrity and competition — all statutory objectives.
/on.ft.com/2qJ7X08

ECB’s Guindos Calls for Tighter Oversight of Asset Managers
Piotr Skolimowski – Bloomberg
Regulators need tools to tackle rising risks in shadow banking; Vice president also targeted ETF sector in speech in Frankfurt
The European Central Bank’s vice president warned asset managers that they’ll face tighter scrutiny as regulators try to steer against future financial crises.
/bloom.bg/2qGW233

U.S. Fed to reconsider ‘stress capital buffer’ plan: official
Pete Schroeder, Michelle Price – Reuters
Randal Quarles, head of supervision at the Federal Reserve, said on Friday the central bank would re-propose aspects of a bank capital rule known as the “stress capital buffer” due to industry concerns.
/reut.rs/2qGJXep

U.S. regulator told AIG to improve reinsurance disclosures
Suzanne Barlyn – Reuters
The U.S. Securities and Exchange Commission told American International Group Inc (AIG.N) to improve disclosures about its use of reinsurance to mitigate losses in its property and casualty unit, according to correspondence made public on Friday.
/reut.rs/2qIWLke

A new commissioner at America’s main securities regulator causes a buzz; Hester Peirce has given a series of speeches about the downsides of government intervention
Economist
For all the talk about deregulation under President Donald Trump, when it comes to the financial industry the word used by many is “tailoring”—meaning trimming the loose threads of tangled rules, rather than unpicking them. An exception is Hester Peirce, who in January became one of the five commissioners at the Securities and Exchange Commission (sec), America’s most important financial regulator. Since her appointment she has given a series of speeches with a polite tone and blunt message about the downsides of government intervention.
/econ.st/2qJci3M

ESMA updates its CSDR Q&As
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding the implementation of the Central Securities Depository Regulation (CSDR).
bit.ly/2FklhCF

ESMA Updates Market Abuse Q&A
ESMA
The European Securities and Markets Authority (ESMA) has updated its Questions and Answers (Q&As) document regarding the implementation of the Market Abuse Regulation (MAR).
bit.ly/2FhVOcK

CFTC Orders Former Virtual Currency Trader to Pay More than $1.1 Million for Fraudulent Bitcoin and Litecoin Scheme
CFTC
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Joseph Kim (Kim), of Phoenix, Arizona, requiring Kim to pay more than $1.1 million for a fraudulent Bitcoin and Litecoin scheme. In the order, Kim admits to orchestrating a fraudulent Bitcoin and Litecoin scheme that led to more than $1 million in losses, of which Kim misappropriated more than $600,000. Also today, Kim was sentenced to 15 months on related criminal charges filed in the United States District Court for the Northern District of Illinois.
bit.ly/2FklmpX

Britain’s financial regulator is slapping down the City’s “bad apples” and won’t let up any time soon
Callum Burroughs – CTPost.com
The Financial Conduct Authority has banned 23 so-called “bad apples” from working in the industry in the past 12 months.
bit.ly/2FfNElj

Investing and Trading

How an Intelligence Expert Helps Wall Street Mavens Think Smarter
Landon Thomas Jr. – NY Times
Shane Parrish was a cybersecurity expert at Canada’s top intelligence agency and an occasional blogger when he noticed something curious about his modest readership six years ago: 80 percent of his followers worked on Wall Street.
/nyti.ms/2qH5pQg

Companies need to reduce the noise for investors; The trend towards more frequent and detailed corporate reporting may have gone too far
Robin Wigglesworth – FT
In 1903 US Steel released the country’s first annual report, a slim and delightfully direct volume where the only padding was 21 pages of photos of smoky factories and sturdy railway cars owned by the corporate giant — which went on to become the first $1bn company in history.
/on.ft.com/2qGWOwZ

Now is the time for stock and credit pickers to shine; Bruised long-short strategies face stern test as investors wean off easy money
Michael Mackenzie – FT
Plenty of investors are still licking their wounds after a grim October, none more so than the hedge fund industry, which has suffered its worst monthly performance in seven years.
/on.ft.com/2qH4gIs

Exclusive: Agribusiness giant ADM made buyout approach to Argentina’s Molinos – sources
Hugh Bronstein, Jonathan Saul – Reuters
Top U.S. grain merchant Archer Daniels Midland Co (ADM.N) has approached Argentine soy crusher Molinos Agro (MOLA.BA) about buying the company’s livestock feed and soyoil manufacturing plant, and talks may continue, three sources said.
/reut.rs/2qFIWDc

An investing strategy that’s withstood the worst stock market crashes since the 1920s is on the verge of a comeback — here’s how you can profit from it
Akin Oyedele – Business Insider
Long-suffering value investors could soon get the resurgence they have been waiting for.
/read.bi/2qIW4Ya

Viola: We’re In A Post-peak Demand Period For Oil
Evan Peterson – Open Markets
When Vincent Viola began his career as a trader in 1982 at the New York Mercantile Exchange, news swirled around a global “supply glut” that might destabilize crude oil prices. When we talked with him late last year, there was news of another oil glut. In both scenarios, U.S. production played a key role. Today’s version, however, is different for the U.S.
bit.ly/2qGrDBZ

Institutions

Banks Have a Solution for Their Identity-Fraud Woes: The DMV; Identity verification, a perennial problem for banks, has taken on greater importance in the digital age
Telis Demos and Emily Glazer – WSJ
Big banks are enlisting the local DMV in their fight against identity fraud. Lenders including JPMorgan Chase & Co., Bank of America Corp. , Wells Fargo & Co. and Citigroup Inc. are looking for ways to link up with databases at state departments of motor vehicles and other government offices to make sure potential customers are who they say they are.
/on.wsj.com/2qGYkPH

HSBC plots return to Brazil as new chief targets growth; Rebuilding plans come three years after bank sold most of its operations in the country
Stephen Morris and David Crow in London – FT
HSBC is planning to rebuild its presence in Brazil three years after selling most operations in the country, as new chief executive John Flint works towards his target of putting Europe’s largest bank back into “growth mode”.
/on.ft.com/2qJlaGw

Avoiding compliance was part of Goldman culture, ex-banker claims; Leissner, after guilty plea over 1MDB, told court he acted to benefit the bank
Kadhim Shubber in Washington – FT
Tim Leissner, the former Goldman Sachs partner who pleaded guilty to crimes in connection to the 1MDB scandal, claimed concealing facts from internal compliance officials was “very much in line” with the culture at the bank.
/on.ft.com/2qKcLCt

Only a Third of Hedge Funds Charge ‘2 and 20’ Fees, Says Expert
Tom Teodorczuk, Financial News
The standard “2 and 20” hedge fund fee model is now used by only 30% of hedge funds, according to an industry expert.
bit.ly/2qJdAM2

Anthony Scaramucci is looking to raise as much as $3 billion for a new fund that invests in low-income neighborhoods
Meghan Morris- Business Insider
SkyBridge cofounder Anthony Scaramucci said in an interview with Business Insider that he’s seeking to raise $2 billion to $3 billion through a nontraded real-estate investment trust.
Anthony Scaramucci’s alternative investment firm, SkyBridge Capital, is creating a new product focused on economically depressed areas, he told Business Insider in an interview on Friday.
/read.bi/2qEOaiA

Credit Suisse escapes criminal action over $2bn Mozambique scandal; UK’s financial watchdog drops probe into loans arranged to fund fishing fleet
Caroline Binham and Patrick Jenkins in London – FT
Credit Suisse has escaped criminal prosecution by the UK’s financial watchdog over the $2bn “tuna bond” scandal in Mozambique, where loans to set up a state fishing fleet vanished.
/on.ft.com/2qIao3q

Regions

China Signals Tougher Yuan Management at Expense of Market Role
Bloomberg News
PBOC drops phrase from monetary report it had used since 2013; Officials no longer comfortable with yuan’s drop, Xia Le says
China signaled tougher management of the yuan, dropping a phrase underlining the importance of market forces from a key policy report for the first time in five years.
/bloom.bg/2qJ7jzK

India’s Volume Of Monthly Digital Transactions Rise Three Fold Since Demonetisation
Shreya Ganguly – Inc42.com
India’s Volume Of Monthly Digital Transactions Rise Three Fold Since Demonetisation
The number of digital payment transactions that took place in August was recorded at 244.81 Cr, a three-fold increase from October 2016, a Ministry of Electronics and Information Technology (MeitY) release showed.
bit.ly/2qGTzWl

Ping An’s hedge against future risks; The world’s largest insurer, carved out of Chinese state entities, has bet on fintech and AI as the way for it to continue to grow. But will it work?
Oliver Ralph and Don Weinland in Shenzhen – FT
Micro-facial recognition for bank loans, AI-powered health clinics and algorithms to assess seaside traffic flows. Given some of the things that it now does it would be easy to mistake Ping An for a tech company. Yet as global technology groups such as Amazon and Facebook, as well as China’s Tencent and Alibaba, push from social media and ecommerce into banking and insurance, Ping An is moving in the opposite direction.
/on.ft.com/2qJiQPO

Peru hopes to join crowded lithium market; Investors are worried about an oversupply of key electric vehicle battery ingredient
Gideon Long in Lima – FT
It has long been known that Latin America’s “lithium triangle” of northern Chile, northern Argentina and southern Bolivia contains some of the biggest deposits of the key electric vehicle battery ingredient on the planet, in the salt flats of the Andes and the Atacama Desert.
/on.ft.com/2qIsty3

India’s shadow banks risk repeating crisis-era mistakes; Non-bank financial companies have become a crucial part of the country’s economy
Patrick Jenkins – FT
Much is sometimes made of the similarities between Indian prime minister Narendra Modi and US president Donald Trump. Both men exhibit populist anti-establishment appeal. Their attitudes to finance bear comparison, too. The attempted interference in central bank independence in the run-up to elections. The rapid expansion of a fragile shadow banking market. The blithe disregard that they are probably fuelling another financial crash.
/on.ft.com/2qDsMdE

Brexit

German minister tries to calm row over post-Brexit derivatives trading
Olaf Storbeck – FT
Germany’s deputy finance minister Jörg Kukies has attempted to placate an EU-US row over Europe’s post-Brexit derivatives trading regulation.
/on.ft.com/2qJ7zyI

Citigroup scouts bigger Paris office as Brexit plans ramp up; Traders sway bank’s decision, lobbying for France partly for its proximity to London
Laura Noonan in New York, Stephen Morris in London and David Keohane in Paris – FT
Citigroup is looking for a bigger office in Paris after boosting the number of trading jobs it plans to relocate to the city as the US bank steps up preparations for Brexit.
/on.ft.com/2qFjLkd

Only ‘preliminary’ analysis done on post-Brexit US trade deal; Trade department turns down information request saying research is not complete
Save to myFT
Jim Pickard in London – FT
Britain’s Department for International Trade has admitted that it has only carried out “preliminary” modelling into a potential US-UK post-brexit trade deal — and has refused to make the information public.
/on.ft.com/2qJl4i8

Nomura’s Ashley Laments Brexit Danger as He Faces European Slump
Donal Griffin , Manus Cranny , and Anna Edwards – Bloomberg
Ashley cites concern about splitting up European finance; Says ‘seperate pools’ for capital, liquidity ‘very dangerous’
Steve Ashley, charged with turning around a slump at Nomura Holdings Inc.’s investment bank, faces one of his biggest challenges thousands of miles away from Japan.
/bloom.bg/2qGbfkP

Brexit Transition Period Is Most Crucial for BOE, Broadbent Says
David Goodman and Lucy Meakin – Bloomberg
BOE deputy governor speaks in interview on CNBC television; Productivity and investment already hit by Brexit, he says
A post-Brexit transition period is the most important part of negotiations for the Bank of England’s outlook, according to Deputy Governor Ben Broadbent.
/bloom.bg/2qJYNRj

JPMorgan Leads $283 Billion Brexit Shift to Frankfurt
Steven Arons – Bloomberg
The major U.S. investment banks are planning to shift about 250 billion euros ($283 billion) of balance-sheet assets to Frankfurt because of Brexit, several people briefed on the matter said.
/bloom.bg/2qKcTSt

Brexit negotiators say draft treaty is close; Two sides aiming for political approval next week
November 9, 2018 8:51 pm by Mehreen Khan in Madrid, Alex Barker and Jim Brunsden in Brussels – FT
EU and UK negotiators are close to a breakthrough on the draft of a Brexit deal but are still struggling with disputes over fishing rights and the how to end “backstop” arrangements for the Irish border, according to EU diplomats.
bit.ly/2qJdSCC

Paris property benefits from Brexit bounce; Relocations from London as well as oil money from the Middle East are driving demand
Hugo Cox – FT
As the UK’s exit from the EU approaches, and many of London’s leading financial institutions look to Paris for their relocation plans, agents in the city are enjoying a Brexit bounce. Currently, 14 major financial services firms — most of them investment banks — have confirmed staff moves to Paris or plans to open a subsidiary, meaning that 2,000 jobs are set to move from London to Paris or be newly created in Paris, according to PwC.
/on.ft.com/2qDtWG2

Theresa May fails to block court case that could allow the UK to reverse Brexit
Thomas Colson – Business Insider
Theresa May could be handed the power to unilaterally reverse Brexit after a court refused an appeal by her government to block a landmark case on the issue being referred to European courts.
/read.bi/2qFwSlg

Brexit stymies inflows into UK-domiciled funds; British investors switch into offshore vehicles amid uncertainty over negotiations
Chris Flood – FT
Uncertainty over the outcome of Brexit negotiations is knocking British investor confidence, with inflows into UK-domiciled funds in the second half of 2018 running at less than half the pace of the same period last year.
/on.ft.com/2qDspjg

Miscellaneous

Fortune Magazine to Be Sold to Thai Businessman for $150 Million; The sale to Chatchaval Jiaravanon gives the business publication a new owner for the second time this year
Jeffrey A. Trachtenberg – WSJ
Meredith Corp. MDP -0.45% said Thai businessman Chatchaval Jiaravanon has agreed to purchase Fortune magazine for $150 million in cash, a sale that gives the storied business publication a new owner for the second time this year.
/on.wsj.com/2FlDPlN

The post Meet the Robot Who Knows How to Trade Bonds Better Than You Do appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Yesterday’s Cult Wines seminar in Chicago brought the business of wine investment to the city. This unregulated $5 billion market offers some interesting alternative investment tidbits, including: the wine index LIV 1000 data shared at the event showed lower volatility than benchmark indexes such as MSCI over the past 3-, 5- and 10-year periods. Burgundy was the fastest growing region from Cult Wines’ investors, accounting for 22 percent of investments.~JK

At the Cult Wine seminar in Chicago, a late fact disclosed was a 15 percent upfront management fee for the services of the company to invest in a wine portfolio. That Bordeaux on excessive.~JJL

ErisX is hiring. Find out about career opportunities here.~JJL

Thursday is the LaSalle Street Trading Tech Awards event at the Chicago Board of Trade Building. Besides honoring those firms who participated in the Trading Tech 300 program during 2018, we are also looking for other firms who wish to participate in the future. If you think your firm might be interested in holding a merit badge workshop for the Scouts, which in February will include both boys and girls, then contact me and come to the event on Thursday.~JJL

Thanksgiving is next week. We will not be publishing on Thursday, but will publish JLN on Friday. However, expect a slow news day. There will be no JLN Options on the Friday after Thanksgiving.~JJL

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A Predictable Regulatory Framework
ISDA Chief Executive Officer Scott O’Malia
Over the past 10 years, a remarkable event has occurred in the world’s political and financial capitals. Policy-makers embarked on a largely consistent agenda of regulatory reform to make derivatives markets more robust and resilient. That global reform initiative is now mostly in place, but there are a number of challenges on the horizon, including Brexit, which must be overcome before all the pieces fall into place.
bit.ly/2PXy2Hd

*****Are you ready for more changes?~JJL

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Brussels prepares to adopt delayed no deal Brexit contingency plan
Mehreen Khan and Alex Barker in Brussels – FT
Brussels is preparing to adopt tough no deal contingency plans for Brexit, ramping up pressure on the UK as negotiations enter a highly sensitive final phase.
/on.ft.com/2Dj1sc5

***** Too many what ifs.~JJL

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Monday’s Top Three
As crazy as people are about crypto, they are equally worried about robots, AI and machines taking your jobs. The top story of the day was the Wall Street Journal’s D.E. Shaw Is a Quant King. Its Humans Are Losing Money. Second was the picture of Charlotte Crosswell with the Lord Mayor of London, and his fur coat. Third was Bloomberg’s Meet the Robot Who Knows How to Trade Bonds Better Than You Do

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MarketsWiki Stats
135,292,657 pages viewed; 23,312 pages; 215,466 edits
MarketsWiki Statistics

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Lead Stories

SGX launches new securities settlement and depository system, T+2 securities settlement cycle from 10 December
SGX
Singapore Exchange (SGX) will be launching a new securities settlement and depository framework and system on 10 December 2018, enabling a shorter securities settlement cycle of two days (T+2) and simultaneous settlement of money and securities.
bit.ly/2PSeYKw

European energy groups call for post-Brexit continuity
Myles McCormick – FT
European energy industry groups have joined together to call on London and Brussels to maintain co-operation on energy and climate change after Brexit.
/on.ft.com/2PPYP8v

Poland Probes Bank Regulator After Report of a $10 Million Bribe
Konrad Krasuski and Marek Strzelecki – Bloomberg
Troubled lender Getin Noble is at center of allegations; Government and central bank both want control of the authority
Poland’s prime minister ordered an investigation into the regulator of the country’s financial industry after a newspaper reported that its chairman made an improper offer to the owner of a troubled bank.
/bloom.bg/2PTHM5b

Malaysia’s Mahathir says US has promised to return 1MDB money; PM looks to recoup billions and warns Goldman Sachs it will be punished if found guilty
Stefania Palma in Singapore, Hudson Lockett in Hong Kong – FT
The US Department of Justice has promised to return billions of dollars that were siphoned out of Malaysia’s 1MDB state investment fund, according to prime minister Mahathir Mohamad.
/on.ft.com/2PXHWJ0

Wall Street Drags Main Street Into a Fee Dispute; Its concern for retail investors is touching, but the quarrel about the cost of market data is about profit.
Nir Kaissar – Bloomberg
A battle is brewing between Wall Street and stock exchanges. Wall Street says it’s fighting for ordinary investors, but don’t be fooled. Like everything else on Wall Street, this dispute is about the bottom line.
/bloom.bg/2PXOGGw

Carrie Schwab-Pomerantz on Owning Your Financial Future; Financial literacy and hard work go hand-in-hand in this installment of ‘The Secrets of Wealthy Women’ podcast
WSJ
Carrie Schwab-Pomerantz may have a famous father but she says she wasn’t born with a silver spoon in her mouth.
/on.wsj.com/2PSyR46

The world’s biggest maker of Bitcoin mining hardware wants to go public, but there are doubts over its profits
Sam Jacobs – Business Insider
Bitmain Technologies, the Beijing-based company which makes machines used to mine Bitcoin, wants to go public.
bit.ly/2PUv2v5

Goldman Sachs ‘cheated’ Malaysia over 1MDB – PM Mahathir
Reuters
Goldman Sachs Group Inc “cheated” Malaysia over its dealings with state fund 1MDB which is the subject of corruption and money-laundering investigations, Prime Minister Mahathir Mohamad told CNBC in an interview aired on Tuesday.
/reut.rs/2PQxQcT

Bank of Japan’s balance sheet now larger than country’s GDP
Hideyuki Sano, Tomo Uetake – Reuters
Japan’s central bank has become the first among G7 nations to own assets collectively worth more than the country’s entire economy, following a half-decade spending spree designed to accelerate weak price growth.
/reut.rs/2Q2SLcV

Greece May Free Its Banks From $47 Billion of Bad Debt
Christos Ziotis, Sotiris Nikas and Nikos Chrysoloras – Bloomberg
Central bank plan sees banks’ tax claim assets moving to SPV; Special vehicle will issue bonds, use proceeds to buy bad debt
Greece’s central bank is working on a plan to help banks cut their bad debts in half, the latest effort to restore trust in the country’s financial system, two people familiar with the matter said.
/bloom.bg/2PRHIDf

The Man Who Brought Down a Commodity Giant Says He Acted Alone
Ben Sharples – Bloomberg
Arnaud Vagner says no co-conspirators in Noble Group attacks; Judge awards Vagner HK$519,520 ($66,357) in indemnity costs
Did it take one person to bring down Noble Group Ltd., or was it a group effort? The answer could lie in the identity of three men called Steve, David and Jonas.
/bloom.bg/2PUsvkz

Why Now Is a Great Time To Launch US Environmental Contracts
Jim Kharouf – Theincubex.com
In today’s markets, there may not be a better time to get into carbon and renewable energy certificate (REC) contacts. This may surprise some but there is good reason these markets are ripe for growth.
bit.ly/2DyWIzX

Exchanges, OTC and Clearing

Euro Fixed Income Futures: Definition of reporting and position limits for December 2018
Eurex
The reporting and position limits for the December 2018 contracts in the
Euro Fixed Income Futures were set as follows:
bit.ly/2PSAIG6

EurexOTC Clear: Production launch announcement of EurexOTC Clear Release 9.0 and service introductions
Eurex
With this circular, Eurex Clearing would like to inform about the following introductions and changes:
bit.ly/2PTlFMl

Moscow Exchange expands analytics offering for algorithmic and HFT firms
MOEX
From 13 November 2018, Moscow Exchange is expanding its offering of analytics products for funds, algorithmic and high frequency traders. The products leverage MOEX’s market data and have been designed to help investors make existing trading strategies more efficient and create new ones.
bit.ly/2PSFeVc

New Deal Between CISI And Nigerian Stock Exchange Heralds Boost For Africa Based Finance Professionals
Mondovisione
The Chartered Institute for Securities & Investment (CISI) is delighted to announce a new partnership with The Nigerian Stock Exchange (NSE) to provide trainings for CISI’s qualifications in Nigeria, under the auspices of X-Academy, the knowledge platform of NSE.
bit.ly/2PXTuf2

Fintech

A Whirlwind Fintech Romance Heads for Divorce
Lionel Laurent – Bloomberg
BPCE’s purchase of mobile bank Fidor in 2016 seemed like a 21st-century fintech love story. Two years later, the relationship is on the rocks. It’s a cautionary tale for banks looking to tap startups’ digital expertise and a warning for other fintech firms hoping to achieve stellar valuations. The risk of culture clash when banks assimilate tech startups is all too easily overlooked.
/bloom.bg/2z7lP9b

Ripple Is Aiming to Overtake Swift Banking Network, CEO Says
Eric Lam and Haslinda Amin – Bloomberg
Ripple Labs Inc., the blockchain startup whose digital money is often used as a proxy for other cryptocurrency payments, is gaining new customers because financial firms are seeking faster, more up-to-date technology than the Swift banking network, Chief Executive Officer Brad Garlinghouse said.
/bloom.bg/2PZcMRi

Google Internet Traffic Is Briefly Misdirected Through Russia, China; Internet giant says issue has been resolved and it will conduct an investigation
Drew FitzGerald and Robert McMillan – WSJ
Google services were temporarily unreachable for some users after some traffic intended to reach the web giant was rerouted through other networks.
/on.wsj.com/2PTHkUx

Itiviti Receives Global Information Security Certification
PRNewswire
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, today announced that it has received the ISO 27001 certification mark for its information security program. Itiviti has been certified for the provisioning of products and services related to its UL Platform, Xilix Execution Management System, NYFIX Marketplace, and corporate information systems.
bit.ly/2PU9qip

CQG And Matador Prime Team Up To Provide FX Liquidity On CQG Products
PR Newswire
CQG, a leading global provider of high-performance trading, market data, and technical analysis tools, announced today that the firm has collaborated with Matador Prime, a market-leading, global institutional broker. Matador’s unique liquidity offering includes pricing and execution services for spot foreign exchange (FX) and contracts for difference (CFD) indices. Through the partnership, CQG’s customers can access Matador’s liquidity and trade directly with Matador Prime.
/prn.to/2PQD4p1

The Death of Exchange 1.0 and advent of Digital Exchange 2.0: more than just the matching engine
Hirander Misra, Chairman and CEO of GMEX Group and MINDEX
In order to generate development and innovative change, we must question and challenge what is already before us. It is not as simple as taking the next step up the ladder or adding to what you already have, it is about stripping a business model back to the basics, clarifying what you want to achieve and doing so by taking a completely different path.
bit.ly/2PRMVuN

Cryptocurrencies

WSJCoin: The Cryptocurrency That Never Was
Steven Russolillo and Clément Bürge – The Wall Street Journal
Earlier this year we had a brilliant idea—OK, maybe just an idea. We cornered a pack of Wall Street Journal editors in a room and pitched an editorial project that could help our readers understand how the crypto industry is reshaping modern finance: We wanted to create The Wall Street Journal’s very own cryptocurrency, and document the endeavor.
/on.wsj.com/2OCxB0k

Combined Class-Action Lawsuit Against Ripple Moves to Federal Court
Nikhilesh De – Coindesk
An ongoing legal battle between XRP investors and payments startup Ripple is entering its next phase.
Attorneys for Ripple Labs and its affiliated defendants filed to move a consolidated class-action lawsuit from its previous venue at the San Mateo Superior Court to the U.S. District Court, Northern District of California, according to court documents published Wednesday.
bit.ly/2PTBQcp

Three Minutes With Andrew Steinwold, Managing Partner At Polynexus Capital; The Financial Industry’s ‘Internet Moment’
Jessica Darmoni – Hehmeyer
“If one’s able to see beyond the speculative mania, the underlying technology here is groundbreaking. Distributed ledger technology (DLT) enables ‘cheap’ trust,” said Andrew Steinwold, Managing Partner at Polynexus Capital. “In traditional finance, every action incurs cascading costs in the forms of internal frictions, human effort and technological capacity. Blockchain has leveraged the power of software to codify many of these processes and judgement decisions, streamlining and lowering the cost of certain functions. The financial industry may finally have its ‘internet moment.'”
bit.ly/2PPZarN

Questions raised over Bitmain profits after IPO filing; Discrepancies in profit figures cited by world’s largest crypto mining hardware maker
Louise Lucas, Hudson Lockett and Henny Sender in Hong Kong – FT
Bitmain Technologies, the world’s largest maker of cryptocurrency mining hardware, has stated significantly smaller profits in its initial public offering prospectus than in documents related to earlier funding rounds.
/on.ft.com/2PXP6wA

IMF Vows to Continue ‘Devoting Attention’ to Blockchain, Cryptocurrency in Fintech Drive
William Suberg – Cointelegraph
The International Monetary Fund (IMF) said it plans to use its ongoing research and experimentation with blockchain as an “anchor” for its future policy on the technology in comments Nov. 12.
Speaking on a panel with Ripple CEO Brad Garlinghouse during the Singapore Fintech Festival 2018, IMF Deputy General Counsel Ross Leckow highlighted three areas the organization has been “active” in regarding blockchain, cryptocurrency and more.
bit.ly/2z71YXY

5 cryptocurrency attacks that investors have no control over
Jason Glassberg – Yahoo Finance
It’s no secret that cryptocurrency investing comes with a lot of risks. After all, price swings can be wild in the crypto markets. In the stock market, a 1.5-2% swing in the Dow leaves investors freaking out. In the crypto markets, this doesn’t even count as volatility. When price swings happen here, they tend to be in the double digits, with dramatic ups or downs in specific coin prices seen as normal.
/yhoo.it/2JYS2nl

To Blockchain Or Not To Blockchain
Dante Disparte – Forbes
Many would argue that the enthusiasm for blockchain and cryptocurrency is waning. Indeed, according to Gartner’s hype cycle, blockchain is tumbling into the trough of disillusionment where the fleet of Lamborghini’s belonging to early crypto speculators have all but run out of fuel as cryptocurrency prices stabilize and regulators tighten their scrutiny of security-issues masking as initial coin offerings (ICOs) or newfangled ways of getting rich quick.
bit.ly/2PSGNSV

Banks find a use for blockchain: cross border payments
Laura Noonan – Financial Times
Finally banks may have found a problem that blockchain is able to solve now and at scale: cross border currency transfers. The banking sector has seen years of overhype and experimentation surrounding distributed ledger technology, but one project led by JPMorgan Chase, the Interbank Information Network (IIN), is quietly producing results at scale.
/on.ft.com/2qHoWAb

Japanese Insurance Giant Looks Toward Blockchain Technology To Revolutionize Cross-Border Payments
Rachel Wolfson – Forbes
One of the top three insurers in Japan, Sompo Holdings, Inc. has announced a business alliance with the leading digital foreign exchange platform and treasury solution based in Africa, BitPesa.
bit.ly/2JZh31E

B2BX Exchange Gets Licence Approval from Estonian Regulator
Celeste Skinner – Finance Magnates
B2BX Exchange, a professional digital asset trading platform, has received approval for a regulatory license from the Estonian Financial Intelligence Unit (FIU), the company announced on Monday. B2BX Exchange, part of the B2Broker Group, provides access to institutional level liquidity. It is a spot trading platform that gives its customers the ability to trade major cryptocurrencies such as Bitcoin, Ethereum, NEM, Litecoin, Ripple, NEO, Monero and Dash.
bit.ly/2ODRgNv

Can blockchain help soccer fan Jason Sze democratise ‘the beautiful game’?
Peter Sabine – South China Morning Post
The world of blockchain throws up some interesting life journeys. For Jason Sze, co-founder and CEO of 433 Token – an initiative to democratise soccer – a promising career began as an inspector with the Hong Kong Police Force.
bit.ly/2PpPODx

Politics

Tech Firms Should Face ‘Thoughtful’ Regulation, Lawmakers Say; Rep. Khanna says one area where rules are needed is window of time companies can wait to disclose a breach
Greg Bensinger and Douglas MacMillan
While Silicon Valley companies face increased scrutiny over the role they play in elections and the propagation of false or biased news, politicians and industry insiders at a Wall Street Journal conference said there should be limited regulation of the industry.
/on.wsj.com/2PVzx8V

America’s Struggle for Moral Coherence; The problem of how to reconcile irreconcilable values is what led to the Civil War. It hasn’t gone away.
Andrew Delbanco – The Atlantic
With the united states starkly divided and with many Americans asking what kind of nation we are, it seems a good moment to look back to November 1863 in Gettysburg, Pennsylvania, when Abraham Lincoln tried to answer the same question. Consecrating a Civil War battlefield where thousands of young men and boys had died four months before, he spoke of a nation “conceived in liberty, and dedicated to the proposition that all men are created equal.” For most Americans since, and for much of the world, those words have at­tained the status of scripture. We draw our sense of collective identity from them. They were, however, not strictly true, and Lincoln knew it.
bit.ly/2PRJmVr

Don’t Put Trump’s Fox Into Financial Regulation Henhouse; The U.S. choice to head the Financial Stability Board wouldn’t have the independence needed to press banks on reforms.
Melvyn Krauss – Bloomberg
It seemed like good news for the global economy when Randall Quarles, the Federal Reserve’s vice chair for supervision, was put up by the U.S. to chair the Financial Stability Board, the watchdog that insures that international financial institutions keep to the reforms they promised after the 2008 financial crisis.
/bloom.bg/2Q0WqIc

In ‘Ironic’ Twist, Trump Rethinks Duty That Angry Soy Farmers Liked
Mario Parker – Bloomberg
Commerce Department will review duties on Argentine biodiesel; If fees are repealed, U.S. domestic soy demand could wane
The Trump administration, which has already caught the backlash of farmers suffering through the U.S.-China trade war, just made another move that could be seen as the latest hit against soybeans.
/bloom.bg/2PSxbaO

Frozen Out of China, American Farmers Refuse to Sell Their Soy
Shruti Singh , Isis Almeida , and Mario Parker – Bloomberg
Growers are storing the crop in hopes prices will increase; Oilseeds are typically sold at harvest to pay bills, avoid rot
Caught smack in the middle of the U.S.-China trade war, America’s soybean farmers are taking a huge gamble.
/bloom.bg/2PSbk3i

U.S. on a Course to Spend More on Debt Than Defense; Rising interest costs could crowd out other government spending priorities and rattle markets
Kate Davidson and Daniel Kruger – WSJ
In the past decade, U.S. debt held by the public has risen to $15.9 trillion from $5.1 trillion, but financing all of that debt hasn’t been a problem. Low inflation and strong global demand for safe U.S. Treasury bonds held the government’s interest costs down.
/on.wsj.com/2PSwHl0

Stung by trade wars, U.S. farmers hope for quick progress on Farm Bill
Humeyra Pamuk – Reuters
Iowa soybean farmer Mike Schlosser does not expect President Donald Trump’s trade war with China, the single biggest headwind to his business, to end any time soon. But he is among many in farm country who expect at least some good news this year – in the form of a new Farm Bill.
/reut.rs/2PZ82es

Regulation

CFTC Fines Bitcoin Trader $1.1 Million for Crypto Fraud
Yogita Khatri – Coindesk
The U.S. Commodity Futures Trading Commission (CFTC) has jailed a bitcoin trader and fined him over $1 million for running a fraudulent bitcoin and litecoin scheme.
bit.ly/2PTrfOM

ESMA consults on future guidelines for money market funds’ disclosure
ESMA
Starting from the end of the first quarter of 2020, European money market funds will have to disclose certain information under the Money Market Fund Regulation (MMFR) to their National Competent Authorities (NCAs).
bit.ly/2PSBF18

SEBI tightens disclosure, review norms for credit rating agencies; SEBI ordered CRAs to analyse deterioration in the liquidity conditions of an issuer, while monitoring its repayment schedules and taking into account any asset-liability mismatches
Reuters
The Securities and Exchange Board of India (SEBI) tightened disclosure and review norms for credit rating agencies (CRAs) on Tuesday, following concerns this year after firms failed to raise timely red flags ahead of the collapse of one of India’s top shadow banks.
bit.ly/2PTtodi

CQG And Matador Prime Team Up To Provide FX Liquidity On CQG Products
MondoVisione
CQG, a leading global provider of high-performance trading, market data, and technical analysis tools, announced today that the firm has collaborated with Matador Prime, a market-leading, global institutional broker. Matador’s unique liquidity offering includes pricing and execution services for spot foreign exchange (FX) and contracts for difference (CFD) indices. Through the partnership, CQG’s customers can access Matador’s liquidity and trade directly with Matador Prime.
bit.ly/2PZUmzQ

Investing and Trading

How accurate are sell-side analysts?
Colby Smith – Bloomberg
With more than 90 per cent of S&P 500 companies having reported their financial results for the third quarter, earnings season is finally drawing to a close.
/on.ft.com/2Q2U8Z7

Commodity trader Noble reports another loss
Neil Hume – FT
Commodity trader Noble Group reported another loss on Tuesday as it prepared to push through a $3.5bn debt-for-equity swap.
/on.ft.com/2PTrBoA

Institutions

Dash Financial hires former Credit Suisse algo trading executive;James Doherty, who co-founded the Advanced Execution Services business at Credit Suisse, joins Dash as head of equity product.
Hayley McDowell – The Trade
Dash Financial Technologies has expanded its team with the addition of a twenty-year Credit Suisse veteran to lead its equity products.
bit.ly/2PRKd8B

Jefferies links up to oneZero’s liquidity network; oneZero adds Jefferies to network of brokers, prime brokers and hedge funds providing liquidity through its EcoSystem.
Hayley McDowell – The Trade
Broker-dealer trading technology provider oneZero Financial has partnered with the FX team at Jefferies to expand its liquidity EcoSystem network.
bit.ly/2PTSsRl

Goldman must stiffen its response to bad conduct; After recent banking scandals, a box-ticking approach is not enough
The editorial board – FT
Goldman Sachs last week unveiled its biennial list of the senior staff it is promoting to the rank of partner. Chief executive David Solomon was applauded for elevating more women (26 per cent of the total) and securing the loyalty of the trading side of the business, as well as his own tribe of advisory bankers, by granting them more partnership roles.
/on.ft.com/2PQA5wP

Sushil Wadhwani hedge fund sold to Prudential Financial; Acquisition comes amid a land grab to acquire quantitative investment managers
Laurence Fletcher – FT
US insurer Prudential Financial’s funds arm is to buy former Bank of England policymaker Sushil Wadhwani’s computer-driven hedge fund, the latest move in a land grab within so-called quantitative investing in recent years.
/on.ft.com/2Q10dVW

Why Goldman Sachs Stock Is Tanking
Fortune
Goldman Sachs Group Inc.’s reputation is facing one of its biggest crises of the decade—and now its shares are, too. Since prosecutors implicated a trio of Goldman Sachs bankers in a multibillion-dollar Malaysian fraud early this month, investors have endured an almost daily drip of news on the firm’s ties to the scandal. The barrage culminated Monday as the country’s finance minister demanded a “full refund,” tipping Goldman’s shares into their biggest drop since 2011.
/for.tn/2PTQ119

Regions

Californian power companies under scrutiny as wildfires spread; Electrical equipment among possible causes of blazes that have killed at least 31
Matthew Rocco in New York and Oliver Ralph in London – FT
Shares in California utilities PG&E and Edison International plunged on Monday as concerns rose that deadly wildfires ravaging the state could cost them billions of dollars.
/on.ft.com/2PXPj2W

Bundesbanker not worried by German banks’ low stress test scores: paper
Reuters
A top Bundesbank official said he is not worried by poor results in the latest round of European Union stress tests and said tough reforms instituted after the global financial crisis have made German banks more resilient.
/reut.rs/2PXOyXy

India’s market regulator tightens disclosure, review norms for rating agencies
Reuters
India’s market regulator tightened disclosure and review norms for credit rating agencies (CRAs) on Tuesday, following concerns this year after the firms after they failed to raise timely red flags ahead of the collapse of one of India’s top shadow banks.
/reut.rs/2PTr46c

Brexit

How Much Might Irish Passport Be Worth After Brexit? $80,000
Dara Doyle and Rodney Edwards – Bloomberg
EU citizens can access lower university fees, healthcare; Northern Irish fret as fight goes on over rights after Brexit
With Brexit drawing closer, Noeleen Hayes decided it was time to get her two sons Irish passports.
/bloom.bg/2PW8wSL

A bad Brexit will not be as terrible as the Suez crisis. It will be far worse
Andrew Rawnsley – The Guardian
In the statement that accompanied his resignation as transport minister, Jo Johnson accused his own government of a “failure of British statecraft on a scale unseen since the Suez crisis”. He is wrong. Brexit is many multiples more serious than the Suez debacle of 1956 and the consequences of a bad Brexit will be felt for far longer than was Sir Anthony Eden’s misadventure in the Middle East. That cost him the premiership, but the humbling retreat from the desert taught his country and his successors at Number 10 a valuable and necessarily brutal lesson about the limits of Britain’s post-imperial power. Suez did no lasting damage to Britain; arguably, that fiasco did this country a favour by burning away illusions about its place in the world. Nor was there enduring harm to the Conservative party. The Tories quickly ditched Eden and went on, under Harold Macmillan, to win a landslide election victory less than three years later.
bit.ly/2PQyas7

Boris Johnson says Brexit deal will make Britain an EU colony
Reuters
Britain’s Prime Minister Theresa May and the European Union are stage managing a Brexit deal that will doom the United Kingdom to the status of a colony, former British Foreign Secretary Boris Johnson said on Tuesday.
/reut.rs/2PUuZ2n

U.K. Says Deal ‘Almost Within Touching Distance’: Brexit Update
Robert Hutton , Peter Flanagan , Nikos Chrysoloras , and Tim Ross – Bloomberg
Prime Minister Theresa May says talks are in the “endgame,” but she’s not yet ready to force her Cabinet to get behind her.
/bloom.bg/2PZbvK0

EU executive to recommend exempting Britons from visas after Brexit – sources
Reuters
The European Union’s executive is due to propose on Tuesday that Britons be allowed to visit the bloc without visas after Brexit, diplomatic sources and officials in Brussels said.
/reut.rs/2PRGWpP

Miscellaneous

David Smith: We won the Great War but lost the economy
David Smith – The Times
This is a moment of history. The Great War itself went slowly, painfully so, but the time since we marked the centenary of the start of hostilities to today’s 100th anniversary of the armistice seems to have flashed by. Those four years, of course, have included events that will also change the course of history.
bit.ly/2PsiBHP

Fewer foreign students coming to United States for second year in row: survey
Yeganeh Torbati – Reuters
he number of international students entering U.S. colleges and universities has fallen for the second year in a row, a nonprofit group said on Tuesday, amid efforts by the Trump administration to tighten restrictions on foreigners studying in the United States.
/reut.rs/2PTQnVx

The post SGX launches new securities settlement and depository system appeared first on John Lothian News (JLN).

First Read

Coinigy Joins with Merkle Data to Provide Enhanced Data
Thom Thompson – John Lothian News

Coinigy, the Milwaukee-based cryptocurrency trading front-end and data service, announced an
agreement Tuesday in which Merkle Data would provide its three cryptocurrency indexes to Coinigy’s customers. Merkle Data provides analytics and risk solutions to crypto institutions in part by analyzing the publicly available data that are a hallmark of the blockchain economy.

Coinigy offers its customers a trading interface that is connected to 15 different cryptocurrency platforms. Customers can use the Coinigy interface to access their own accounts at the cryptocurrency platforms, providing what Derek Urben, the Coinigy CFO and director of business development, calls “remote control of their accounts.” Urben notes that many cryptocurrency traders have positions in a variety of currencies on many different trading platforms, and Coinigy users can manage them all from a single platform.

Read more here

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Hits & Takes
JLN Staff

The LaSalle Street Trading Tech Awards event Thursday night will have to go on without me. Instead, on Thursday afternoon I will be having surgery to clean up an infection that has developed in my right hip, the one I had replaced on August 2.~JJL

The good news is that the LaSalle event is already a success, as the fundraising for Scouting in Chicago has surpassed last year’s numbers on the strength of fundraising led by Joanne Moffic-Silver and Amy Shelly. Both women’s personal donations put us over the top, and Joanne’s donation designated for the Fearless Girl National Youth Leadership Training Fund put us within $1000 of the $25K goal I set.~JJL

I can’t thank OCC’s Amy Shelly and Joanne Moffic-Silver of Cedar Street Asset Management LLC and formerly of the Cboe enough for their leadership, tenacity and generosity.~JJL

As for me, I will be in the hospital for a couple of days. I will be undergoing IV therapy for six weeks to finish off any remnants of the infection left after the surgery. The success rate for this procedure is about 90%, I was told by my doctor.~JJL

EMX Derivatives Exchange has named Jim Falvey as Chief Regulatory Officer.~JJL

Have an idea about the best way to get the UK’s growth rate up? The Institute for Public Policy Research wants to know. The winning entry gets GBP 100,000. Here is how to enter.~SD

On September 25, Bloomberg ran the story Oil Options Traders Buy Into Talk of Crude Topping $100 a Barrel. Looks like “sell the news” wins again as we went from four-year highs at the beginning of October to a bear market some six weeks later.~SD

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An Open Letter to the Financial Industry
RCM Alternatives Blog
The Financial Trading Industry is facing a significant and far-reaching challenge, in that it has lost its long-standing training ground for future industry leaders. The move away from the trading floors to trading via computers and automated trading technologies has eliminated the most common chain of knowledge transfer that occurred between industry veterans and newcomers. The result has been to place even more demand on academia to produce work-ready future employees for the Financial Trading Industry.
/goo.gl/FaC47S

****This has been a topic of conversation (and concern) around the office. We put out a video compilation filmed at FIA that covered the next generation of traders.~SD

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Rethinking Risk Management

JohnLothianNews.com

In times of ever changing catalysts, technologies and threats, how ought we to think about risk management?

In this video, Alex Lamb, head of marketing and business development with The Technancial Company, and Keith Todd, executive chairman and CEO of KRM22, discuss how industry participants are grappling with new risk frameworks.

Watch the video »

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Wells Fargo: Shareholders can’t sue us because they should have known we were lying
Ryan Smith – Mortgage Professional America
Wells Fargo is adopting an unusual defense against a shareholder lawsuit: claiming, essentially, that shareholders can’t hold the bank accountable for CEO Tim Sloan’s statements that it was “working to restore trust” and be “more transparent” about its scandals – because it should have been obvious that Sloan was lying.
The defense, which Wells Fargo put forth in a legal filing aimed at getting a shareholder lawsuit dismissed, relies on the legal concept of “puffery,” according to a Los Angeles Times report.
bit.ly/2z8gCOi

***** Some stories you can’t make up.~JJL

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EMX Derivatives Exchange Expands Management Team; Former BitMEX Head of Support to open Hong Kong Office
EMX
EMX, a derivatives exchange that intends to list both traditional and cryptocurrency futures, announced the addition of two key hires; Shehzad Hassam as Head of Asia Operations, and Jim Falvey as Chief Regulatory Officer and General Counsel. Hassam is the first employee in Hong Kong, the firm’s Asian headquarters.
/prn.to/2FnJHuM

***** Jim Falvey was named as chief regulatory officer. Congrats Jim, and thanks for all the help!~JJL

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BMO and 1871 Reveal the Winners of the Second Annual Innovation Mentorship Program
BMO Harris Bank
BMO and 1871 have announced the three winners for the BMO Harris / 1871 Innovation Program. This second edition of the mentorship program launched in the spring for Chicagoland and Wisconsin startups with solutions in lending, financial planning, digital tools and data analytics. This year’s program also received support from Wisconsin-based gener8tor and Kinnektor organizations.
/prn.to/2FmxzKI

***** This Chicago-Wisconsin collaboration thing has to stop before the Bears-Packers rivalry turns into a friendship.~JJL

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Tuesday’s Top Three
Our top three stories from Tuesday were led by our note about Eris Exchange’s job openings. The company is looking for talent and has several open positions. The second most read item was Bloomberg’s The Man Who Brought Down a Commodity Giant Says He Acted Alone about Arnaud Vagner who brought down Noble Group. Third was Jim Kharouf’s piece for IncubEx called Why Now Is a Great Time To Launch US Environmental Contracts

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MarketsWiki Stats
135,353,696 pages viewed; 23,313 pages; 215,471 edits
MarketsWiki Statistics

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Lead Stories

Look at issuing digital currency, IMF head tells central banks; Christine Lagarde says state-backed e-money could underpin market
Delphine Strauss – FT
Central banks should look seriously at issuing digital currency in order to “fill the void left by the decline of cash”, according to the head of the IMF.
/on.ft.com/2qKjSuH

SEC Ends Suit Against Former Jefferies Trader Cleared of Fraud
Chris Dolmetsch – Bloomberg
The U.S. Securities and Exchange Commission agreed to drop a lawsuit against former Jefferies Group LLC trader Jesse Litvak, who was cleared in August of criminal charges that he lied to customers about bond prices in trades of mortgage-backed securities following a five-year legal odyssey.
/bloom.bg/2FjDmQY

A Market Guide to a Brexit Deal, If and When It Finally Happens
Justina Lee and Charlotte Ryan – Bloomberg
Any agreement likely to boost the pound, U.K. domestic stocks; A fudged deal would extend the uncertainty for markets
U.K. negotiators have secured a deal with the European Union to exit the bloc, and on Wednesday Prime Minister Theresa May will try to win over her Cabinet and later, Parliament. For investors, a done deal would remove one of the biggest overhangs in European markets since the 2016 vote.
/bloom.bg/2FjdCUP

The winners and losers in the Brexit deal; EU appears to have achieved more of its original goals than the UK
Tony Barber – FT
It is anyone’s guess whether the draft Brexit deal agreed on Tuesday will survive the political stress tests to which it will be subjected in Theresa May’s government, her ruling Conservative party and the House of Commons.
/on.ft.com/2FjGzju

Satoshi vs. Bitcoin Jesus: Bitcoin Cash Battle Turns Personal
Olga Kharif – Bloomberg
Cryptocurrency risks splitting in two versions after tomorrow; The fight ‘seems to be a personality conflict,’ Sokolin says
Private Company
Craig Wright, the self-proclaimed inventor of Bitcoin under the pseudonym Satoshi Nakamoto, is poised to win a fight that will likely lead to the creation of another version of Bitcoin Cash, the original offshoot of the biggest cryptocurrency.
/bloom.bg/2FvATTA

The scandal of Goldman Sachs’s secret agent; Banks and consultants are tarnished by doing deals for foreign governments they should avoid
John Gapper – FT
Goldman Sachs has faced many crises in its time but none more shocking than the case of Tim Leissner, its former senior partner in south-east Asia. Wall Street is supposed to bring transparency to emerging markets, not to make corruption easier.
/on.ft.com/2qJGgV0

Britain agrees Brexit divorce deal with EU, May’s opponents vow to thwart it
TheStar
Britain struck a draft divorce deal with the European Union after more than a year of talks, thrusting Prime Minister Theresa May into a perilous battle over Brexit that could shape her country’s prosperity for generations to come.
bit.ly/2Flak3B

LCH receives licence to clear FX NDFs in Japan
LCH
Japanese Financial Services Agency approves LCH Ltd to clear FX Non-Deliverable Forwards for Japanese banks and clients; Builds on existing LCH licence to clear non-Yen OTC interest rate derivatives; Underlines LCH’s continued commitment to the Japanese market
LCH, a leading global clearing house, today announced that it has received approval for an extension to its clearing licence from the Japanese Financial Services Agency (FSA). The licence extension was granted on 31 October 2018 and enables LCH’s ForexClear service to clear FX non-deliverable forwards (NDFs) on behalf of banks and clients based in Japan.
bit.ly/2FmJxE9

A Fugitive Financier’s Charm Offensive Has P.R. Firms Proceeding With Caution
Matthew Goldstein and Kenneth P. Vogel – NY Times
A flamboyant Malaysian financier who once hosted Hollywood parties and lavished gifts on models is on a new kind of charm offensive. The financier, Jho Low, is facing charges in a multibillion-dollar scandal that has rocked politics in Asia and shaken a premier Wall Street bank. And the legal team supporting him has spent more than $1.1 million over the past seven months to help improve his reputation, according to government filings. These sophisticated services include round-the-clock crisis P.R. response, efforts to shape internet search results, and a website with international reports and legal filings intended to bolster his side of story.
/nyti.ms/2Fkak3O

Will Derivatives Bring Liquidity Back to the Bond Market?
George Bollenbacher – TABB Forum
There probably has been no subject more discussed at fixed income conferences or in the market press than the perceived lack of liquidity in the corporate bond markets worldwide. In addition, a 2016 rule promulgated by the SEC, Rule 22e-4, or the Investment Company Liquidity Risk Management Programs, has added urgency to the definition of, and the search for, liquidity in the corporate bond markets.
/goo.gl/SFvPqr

The Art Of Risk Management: A Tale Of Errors And Successes
Andre d’Almeida Monteiro, Chief Risk Officer, B3
Risk management appeared as a new area of knowledge 25 years ago, causing profound changes around the world. Nowadays, universities have professors and courses specialized to risk, companies have risk management areas and risk is regularly discussed by boards of directors. Central banks and securities and exchange commissions have risk areas and a slew of recent regulation is based on risk. The purpose of risk management is to deal with future uncertainties in order to minimize severe potential losses. How did the art of risk management reach this status?
bit.ly/2QFxfrH

The Oil-Price Collapse Is Being Driven by Cars; In emerging markets, spending less at the pump hasn’t gotten more consumers on the road.
David Fickling – Bloomberg
If you’re asking which fraction of the oil barrel is responsible for the collapse in crude prices over the past month, look no further than the world’s drivers.
/bloom.bg/2qNf1sY

Italy’s Banks Leap Aboard a Burning Ship; The lifeline thrown to Carige brings to mind the ill-fated Atlante rescue of two Venetian lenders. Is this a voyage that’s really worth repeating?
Ferdinando Giugliano – Bloomberg
You can’t say Italy isn’t creative when it comes to rescuing its banks. Banca Carige SpA, a mid-sized lender based in Genoa, has been under pressure from the European Central Bank to strengthen its capital base. Investors were reluctant to meet these demands, leaving the bank at the risk of resolution (an orderly failure, in other words.)
/bloom.bg/2qJIML4

Lloyds pays compensation to HBOS whistleblower; Banking group apologises in second settlement with former employee
Jonathan Ford in London – FT
Lloyds Banking Group has apologised and paid compensation to a whistleblower whose internal report heavily criticised the bank’s handling of a fraud that destroyed scores of small business customers.
/on.ft.com/2qNmI2m

Pressure cranked up on big commodity traders’ dealmaking; Campaigners call for more oversight of use of middlemen in energy deals
Neil Hume and David Sheppard – FT
Campaign groups have cranked up the pressure on the world’s biggest commodity traders, asking regulators to investigate the use of middlemen and well-connected individuals to secure lucrative oil deals in resource-rich countries.
/on.ft.com/2qLdeEH

Banks find a use for blockchain: cross border payments; The JPMorgan-led Interbank Information Network is starting to work at scale
Laura Noonan – FT
Finally banks may have found a problem that blockchain is able to solve now and at scale: cross border currency transfers.
/on.ft.com/2qHoWAb

Exchanges, OTC and Clearing

TMX Eyes China Bond Market
Rob Daly – MarketsMedia
North American access to China’s secondary bond market has come a little closer as the TMX Group has started testing linkages between the Shanghai Clearing House and itself, according to exchange officials.
“We are hopeful that sometime next year that we could actually start doing transactions,” said Lou Eccleston, CEO of the TMX Group, during the company’s third-quarter earnings call on November 12.
bit.ly/2DC6zFl

The LME’s $10m question: how to spend the swear jar?
Samuel Agini – Financial News
The London Metal Exchange is consulting its members on how to spend $10m in fines it has gathered from rule breakers, including from traders that have been caught swearing and chewing gum.
bit.ly/2DCvHMc

B3 and Shanghai Stock Exchange officially launch market data cooperation
B3
Brasil, Bolsa, Balcao (B3) and Shanghai Stock Exchange officially launch market data cooperation. SSE InfoNet Co., Ltd. (InfoNet), the wholly owned subsidiary of Shanghai Stock Exchange, together with its subsidiary in Hong Kong-China Investment Information Services Limited (CIIS) will act as the administer and official distributor of B3 market data in mainland China.
/goo.gl/fWzm5N

LSEG Appoints Chief Data Officer For Its Information Services Division
London Stock Exchange Group
Tom Dunlap joins the Group as Chief Data Officer for Information Services; Newly created role will develop and lead global data strategy for rapidly growing business; Position underscores LSEG’s commitment to quality, integrity and speed of global data services
London Stock Exchange Group (LSEG) today announced that Thomas K. (Tom) Dunlap has joined as Chief Data Officer (CDO) for its Information Services Division, which includes leading global index provider FTSE Russell.
bit.ly/2FkhLrR

BOC, CFETS and SGX sign strategic cooperation agreement on CFETS-BOC Bond Indices SGX
SGX will be the first exchange to distribute the Bond Indices outside of China; The three parties will explore the feasibility of disseminating the Bond Indices via SGX’s market data distribution network and developing tradable products based on the Indices
Bank of China Limited (BOC), China Foreign Exchange Trade System & National Interbank Funding Center (CFETS) and Singapore Exchange (SGX) today announced that they have signed a strategic cooperation agreement to jointly promote CFETS-BOC Traded Bond Index and its sub-indices outside of China to international investors, as well as to explore the feasibility of developing products based on the Bond Indices.
bit.ly/2qMtN2X

LCH gains regulatory approval to clear FX NDFs in Japan; Japan’s FSA grants approval for LSEG’s LCH to clear FX non-deliverable forwards in the country.
Hayley McDowell – The Trade
The London Stock Exchange Group’s clearinghouse LCH has received approval to extend its clearing license in Japan.
bit.ly/2FvwWyC

Former BATS operation in Lenexa continues growing under CBOE
James Dornbrook – Staff Writer, Kansas City Business Journal
The onetime BATS Global Markets office in Lenexa remains hugely important to its new parent company, which has added 60 employees to the area since acquiring the company.
bit.ly/2FjJCYY

Fintech

The Week in FinTech and Blockchain Law
Robert Kim – Bloomberg Law
The founder of cryptocurrency trading platform EtherDelta settled with the SEC for operating an unregistered national securities exchange in the agency’s first case of this kind.
Zachary Coburn will pay $313,000 in disgorgement and interest and a civil fine of $75,000 to settle Securities and Exchange Commission allegations his crypto site acted as an unregistered securities exchange, the agency said.
bit.ly/2zcC198

The UK’s top 100 black and minority ethnic leaders in technology; The FT and its partner Inclusive Boards present their first rankings of top BAME executives who are driving progress in the sector
FT
This is the first time the FT and Inclusive Boards, a recruitment agency that helps organisations to diversify, have published a Top 100 list of black and minority ethnic leaders in technology.
/on.ft.com/2FoUS6x

OptionMetrics Adopts Financial Instrument Global Identifier (FIGI) for Options Data Products in US, Europe, Asia, and Canada
BusinessWire
OptionMetrics, an options database and analytics provider for institutional and retail investors and academic researchers, has added the open-source global identification framework, the Financial Instrument Global Identifier (FIGI) to its IvyDB US, Europe, Asia, and Canada options data products. These identifiers provide comprehensive global coverage of financial markets, providing a contextual view of an instrument as users move through functional aspects of trading, settlement, portfolio management, asset servicing, risk management, and regulatory reporting.
/goo.gl/x5xdis

Once-Worthless Radio Waves Get New Life in Spectrum Auction; FCC to sell licenses in upper reaches of wireless world, but how useful they are remains to be seen
Drew FitzGerald – WSJ
Cellphone carriers often call their most valuable radio-wave licenses “beachfront” property—as with real estate, it pays to be in a prime location.
/on.wsj.com/2qTCWXP

AllianceBernstein revamps bond trading robot
Robin Wigglesworth in New York – FT
AllianceBernstein has launched a new version of its virtual bond trading assistant “Abbie” that will now be able to suggest junk bond trades to the investment group’s fund managers, highlighting how asset managers and banks are trying to modernise the fixed income universe.
/on.ft.com/2qM9p2c

Fintech Finance’s Power Players
Jeffrey Kutler – Institutional Investor
There is seemingly no end to the phenomenon that is fintech. At $57.9 billion in the first half of 2018, global venture capital, private equity, and mergers and acquisitions investments in the financial technology sector exceeded the full-year 2017 total by more than $10 billion, according to KPMG.
Simply put, this spells opportunity for the financiers and other transaction facilitators in Institutional Investor’s fourth annual Fintech Finance 40 ranking.
bit.ly/2z7BVzS

Cryptocurrencies

The seven deadly paradoxes of cryptocurrency
John Lewis – Bank of England Blog: Bank Underground
Will people in 2030 buy goods, get mortgages or hold their pension pots in bitcoin, ethereum or ripple rather than central bank issued currencies? I doubt it. Existing private cryptocurrencies do not seriously threaten traditional monies because they are afflicted by multiple internal contradictions. They are hard to scale, are expensive to store, cumbersome to maintain, tricky for holders to liquidate, almost worthless in theory, and boxed in by their anonymity. And if newer cryptocurrencies ever emerge to solve these problems, that’s additional downside news for the value of existing ones.
/goo.gl/TXkbyD

This chart shows how cryptocurrency mining on your own is no longer profitable
Kate Rooney – CNBC
Cryptocurrency mining isn’t what it used to be. Last year, the “mining” process of earning new cryptocurrencies using high-powered computers, then selling those digital assets, became a profitable side business for savvy entrepreneurs who set up the mining rigs in their basements and dorm rooms.
/cnb.cx/2qMAUIQ

How blockchain could save musicians billions
Richard Gray – BBC News
In the bowels of a former nuclear research bunker, Imogen Heap sits at a piano. As she beings to sing, the small audience for this rare acoustic performance cheer her on. But this crowd is not just simply enjoying the show. They stand to benefit from it too.
/bbc.in/2FgHfpU

What you need to know about the Bitcoin Cash ‘hard fork’
Aaron Hankin – MarketWatch
On Thursday, Bitcoin Cash, perhaps, the most famous hard fork of bitcoin and the fourth-largest cryptocurrency, will split in two, creating a second cryptocurrency. The two digital currencies will go by the names Bitcoin ABC (core Bitcoin Cash) and Bitcoin SV (Satoshi’s Vision). A hard fork is when developers and miners no longer agree on a proposed change to the software, despite operating on the same blockchain.
/on.mktw.net/2RSKbud

Bitcoin Cash’s ‘Mining War’ Escalates as Blockchain Hard Fork Approaches
Nikhilesh De – Coindesk
The global network of computer operators who today help power the bitcoin cash cryptocurrency are beginning to signal that they may take differing paths ahead of a technical update scheduled for Thursday. Data from Coin Dance indicates that bitcoin cash mining pools, collectives of individuals and companies providing computer power to the cryptocurrency, the world’s fourth most valuable, are indicating they will run a version of the software called Bitcoin SV, an alternative to the Bitcoin ABC software most widely used by the network today.
bit.ly/2K678HW

Marshall Island’s Plan for a National Cryptocurrency Survives Crucial Vote
Anthony Cuthbertson – The Independent
Plans to launch a national cryptocurrency for the Republic of the Marshall Islands are still in motion after President Hilda Heine survived a vote of no confidence. The Pacific Island nation intends to issue a local cryptocurrency called the sovereign (SOV) as a second legal tender, alongside the US dollar, despite concerns being raised about the economic risks involved with such an endeavour.
/ind.pn/2qJBtTN

The Latest In Blockchain In Healthcare: Top Takeaways From Distributed Health
Bill Frist – Forbes
Last week I had the honor of kicking off the third annual Distributed Health conference in Nashville, which brought together leaders in healthcare as well as blockchain innovators from across the nation. All were united by the shared belief that blockchain has transformative potential for health and healthcare, with changes already underway.
bit.ly/2OIyrIM

New Hedge Fund Is Betting On Bitcoin Adoption–And Has The Data To Back It Up
Billy Bambrough – Forbes
Bitcoin and cryptocurrency prices have stagnated so far this year, despite repeated predictions a bitcoin “bull run” could be just around the corner, but declining prices are obscuring an underlying growth in adoption and institutional infrastructure, according to new San Francisco and Singapore-based hedge fund Circuit Capital.
bit.ly/2qNnJYe

Novogratz’s Crypto Firm Turns to Tokenization of Real Estate
Doug Alexander and Olga Kharif – Bloomberg
Billionaire investor Michael Novogratz is getting on the bandwagon for the “tokenization” of assets such as real estate while prices in the cryptocurrency market languish.
/bloom.bg/2FkgFML

Politics

Hedge fund billionaire Ken Griffin slams Trump for Fed criticism
Joe Rennison and Robin Wigglesworth – Financial Times
Ken Griffin, the billionaire head of one of the world’s biggest hedge funds, has slammed Donald Trump’s criticism of the Federal Reserve, calling it “completely inappropriate for the president of the United States” and warning it could undermine confidence in the dollar.
/on.ft.com/2QN1nBa

China, the U.S. and the Oil Blame Game
Nathaniel Taplin – WSJ
Investors in the black stuff found themselves with a big black eye Tuesday. U.S. oil prices dropped by more than 7%, the worst one-day fall since 2015 following a bearish report from the Organization of the Petroleum Exporting Countries (OPEC) and more Twitter bluster on oil supply from President Trump.
/on.wsj.com/2qNpQLw

Trump Takes Aim at French Winemakers in Latest EU Trade Target
Nikos Chrysoloras – Bloomberg
French winemakers are the latest European industry to suffer threats from U.S. President Donald Trump, who is seeking to repair what he views as an unfair trade relationship between the two regions.
/goo.gl/fjcTn7

U.S. Panel Warns China Tech Prowess Threatens U.S. Security; Report finds China’s dominance of networking-equipment manufacturing threatens 5G wireless infrastructure
Kate O’Keeffe – WSJ
A commission of security and economic experts convened by Congress warned that China’s technology-manufacturing strength threatens U.S. national security and advised U.S. government agencies to be mindful of Chinese attempts to compromise government systems.
/on.wsj.com/2qIGKLe

Bloomberg likely to decide on 2020 bid by early next year
Steve Peoples, Associated Press
Having spent a fortune to help elect Democrats this fall, former New York City Mayor Michael Bloomberg declared lifetime allegiance to the Democratic Party and outlined an aggressive timeline for deciding whether to run for president.
/read.bi/2qOkShn

Trump Trade War Fallout Could Haunt U.S. Soy Farmers for Years
Isis Almeida – Bloomberg
Nixon embargo, Carter ban had lasting impact on crop markets; China turns to new suppliers, may not fully return to U.S.
If history is any guide, the trade war with China will have lasting affects for U.S. farmers and their soybean crops that the president won’t be boasting about.
/bloom.bg/2FjeVmH

Regulation

SEC Settles Insider Trading Claims Against Former Chairman and CEO of Advanced Medical Optics
SEC
The Securities and Exchange Commission today announced that it has agreed to resolve its insider trading claims against James V. Mazzo, the former Chairman and Chief Executive Officer of Advanced Medical Optics, Inc. (AMO) for allegedly tipping information about his company’s acquisition to his close personal friend, former professional baseball player Douglas V. DeCinces.
/goo.gl/j3g4Au

Who Ultimately Regulates Blockchain and Cryptocurrencies Does Matter
Ike Brannon – Forbes
While no one can be certain how the market will shake out, it does appear that blockchain technology–and the myriad cryptocurrencies that have developed concomitantly–are likely to endure. Their advent has the potential of reducing the cost of undertaking various financial transactions, which would be a boon for investors as well as the U.S. economy, as its financial markets would become more competitive against overseas competitors.
bit.ly/2Q1zh8a

More than half of firms are not producing MiFID II RTS 27 best ex reports; Research from Cappitech revealed that many firms are not producing RTS 27 reports, and 60% have no intentions to use the reports on execution quality internally.
Hayley McDowell – The Trade
More than half of capital markets firms have stated that they are not currently producing RTS 27 reports in compliance with MiFID II best execution requirements despite having a legal obligation to do so, according to new figures.
bit.ly/2Fn5EKA

Financial regulation in a digital world
ASIC
A speech by John Price, Commissioner, Australian Securities and Investments Commission at the Monash Centre For Commercial Law and Regulatory Studies Symposium, (Melbourne, Australia) 12 November 2018
bit.ly/2FnGVG6

ESMA updates its Q&As on MiFID II and MiFIR market structure and transparency topics
ESMA
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).
bit.ly/2FnH1NY

ESMA Updates Q&A on Short-selling Regulation
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) on the Short-Selling Regulation (SSR).
bit.ly/2FppqVJ

Investing and Trading

Why oil prices tumbled from four-year highs to a bear market in just six weeks
Tom DiChristopher – CNBC
The oil market is undergoing a stunning reversal as crude futures wipe out this year’s gains after hitting their highest levels since 2014 just six weeks ago.
/cnb.cx/2QDkIVu

US-China trade war: Tariffs spur record dollar-yuan currency trading
Huileng Tan – CNBC
Market uncertainty tied to the ongoing U.S.-China trade war has spurred more transactions than ever before between the American dollar and the Chinese yuan in recent months.
Much of that volume comes as businesses and investors with exposure to the Chinese market are looking to hedge their foreign exchange risk. Many of them are looking to buy into the strengthening dollar, and that’s stoked speculation that Chinese authorities are intervening in the market to defend their currency, boosting trading volumes to new highs in the process.
/cnb.cx/2zcExw6

How millennials are changing the way the we invest
Jean Chatzky – NBC News
When you think about making an impact with your money, what comes to mind?
There are always philanthropic efforts you can support, but what about investing your money in a way that makes a social or environmental impact, while also making you a profit? Often called “ESG investing” (environmental, social and governance), “SRI” (socially responsible investing), “CSR investing” (corporate social responsibility) or simply “impact investing,” the concept has been around for years, but millennials are charting new territory when it comes to doing good with their money.
/nbcnews.to/2z8ixTc

Mega-Family Offices Strike Transatlantic Alliance to Woo Wealthy
Simone Foxman – Bloomberg
Two of the world’s biggest multifamily offices are forming an alliance. Glenmede, based in Philadelphia, and London-based Stonehage Fleming struck a deal to offer investment, trust and family office services to each other’s clients on their respective sides of the Atlantic. The tie-up will allow them to better cater to customers outside of their home markets by sharing tax, investment and trust company services, the companies said in a statement.
/bloom.bg/2FmI14V

Institutions

Goldman’s Stock Decline Has Wall Street Wondering When It Ends
Claire Ballentine and Felice Maranz – Bloomberg
Goldman Sachs Group Inc.’s shares fell for a third day as analysts speculated on how long the pain will continue. The stock dropped 0.5 percent more on Tuesday as investors grappled with the potential fallout from the firm’s involvement in raising money for Malaysia’s scandal-plagued state investment company 1MDB earlier this decade. The shares’ three-day plunge was the worst since August 2011.
/bloom.bg/2FmGrA1

Hedge Funds Seek ICO-Like Returns With Equity-Charged Tokens
Olga Kharif and Alastair Marsh – Bloomberg
‘It could be like getting in on Bitcoin at the beginning’; Regulators have yet to address how the coins should be treated
Hedge funds aren’t giving up on cryptocurrencies just yet. Even with the 70 percent plunge in the value of the digit-asset market from its record highs in December, many still have visions of the triple-digit returns that were often realized from being early participants in initial-coin offerings during the peak of last year’s frenzy.
/bloom.bg/2Fn1S3S

Vanguard Tumbles in Customer Satisfaction After Digital Snafus
Suzanne Woolley – Bloomberg
Bank scores rising and now equal credit unions, report finds; Wells Fargo is lowest-ranked national bank, Chase is highest
Vanguard Group, famed for its low-cost investment products, just broke out of the pack in a consumer satisfaction survey. But not in a good way.
/bloom.bg/2FjbCvN

Former UBS trader who lost £1.4bn faces deportation from Scotland after judicial review failure
Martin Williams – Herald Scotland
Mr Adoboli, who served four years of a seven-year sentence for a £1.4bn fraud at Swiss bank UBS, is to apply directly to the Court of Appeal to contest the decision, even though his legal team were denied leave to appeal.
bit.ly/2qN0b5w

HSBC Has a Playbook for Traders Hunkering for Growth Slowdown
Cecile Gutscher – Bloomberg
HSBC Holdings Plc is growing bearish on the global economy and bullish on the safest bonds, the latest investment bank to offer a playbook for a downturn.
/bloom.bg/2qMZp8C

Steve Cohen raises $5bn from outside investors; Hedge fund investor raises profile as he recovers from ex-firm’s insider trading scandal
Lindsay Fortado in New York – FT
Steve Cohen, the hedge fund investor, says he has raised about $5bn from investors since opening his family office to outside money earlier this year.
/on.ft.com/2qMuHwn

As Lloyds settles with HBoS fraud whistleblower it’s time to reopen debate about paying people like her; Regulators need whistleblowers to come forward but it’s only too clear that doing so exposes them to great risk. They need to be compensated for that
James Moore – Independent
The HBOS fraudsters living it up on their ill gotten gains ( Thames Valley Police )
Whistleblowing at a bank can be a very risky business, as former HBOS and Lloyds risk officer Susan Masterton can surely testify.
/ind.pn/2qKjIDR

Deutsche Bank Says More Cost Cuts Won’t Be at Expense of Revenue
Steven Arons – Bloomberg
Deutsche Bank AG’s future cost cuts won’t come at the expense of generating revenue, Chief Financial Officer James von Moltke said at a conference in London on Wednesday.
/bloom.bg/2FvABfs

Ray Dalio’s Faith in Gold Is Unshaken
Luzi-Ann Javier – Bloomberg
Bridgewater Associates maintained stake in SPDR, iShares Gold; Dalio stayed loyal to gold even amid investor sell-off
Not even gold’s second quarterly straight decline was enough to shake billionaire hedge-fund manager Ray Dalio’s confidence in gold.
/bloom.bg/2FjFKHq

Which Hedge Funds Got ‘Whale Rocked’ in October?: Taking Stock
Arie Shapira – Bloomberg
Today is the deadline for 13Fs, where funds of all kinds will disclose what stocks they bought and which ones they sold in the third quarter.
/bloom.bg/2FjdVPt

RBS’s Alison Rose, Chief in Waiting, Given Additional Role
Stefania Spezzati – Bloomberg
Royal Bank of Scotland Group Plc’s most senior female banker, Alison Rose, will become deputy chief executive officer of its ring-fenced holding company as she adds to her growing responsibilities.
/bloom.bg/2FvuQie

Regions

Fund managers place bets in Asia’s oversold assets, such as high-yield bonds
Daniel Leussink – Reuters
As contagion from worries over global growth and trade friction pushes Asian equity, bond and currency markets deeper into bear territory, fund managers are hunting for bargains in Chinese and Indian equities and high-yielding Asian dollar bonds.
/reut.rs/2qJJ3O6

Record U.S., Russia and Saudi oil production means supply well outstrips global demand: IEA; IEA says oil output from the world’s three biggest oil producers is holding global supply steady
Rachel Koning Beals – MarketWatch
The U.S., Russia and Saudi Arabia are pumping crude at record levels, causing global supply to significantly outrun demand, a monthly update from the International Energy Agency showed Wednesday.
/on.mktw.net/2qLdCD9

German central bank warns of risks to growth and banks
Reuters
Vulnerabilities in the German financial system are building up and risks to growth have increased substantially, the country’s central bank said on Wednesday, warning that banks may have insufficient buffers.
/reut.rs/2qKg0tN

China’s top pig farming firm to comply with new lower protein feed standards -exec
Reuters
China’s top pig farming company Wens Foodstuffs Group Co Ltd will comply with new government-backed guidelines on lower protein in animal feed, a company executive said.
/reut.rs/2qKg2lp

Got Dividend Jitters? Take a Look at Emerging Markets; The income play is shifting to Asia after U.S. companies stoked a record rally with debt-fueled generosity.
Shuli Ren – Bloomberg
Now that your dollars finally provide a real yield, it’s time to take a hard look at dividends.
/bloom.bg/2qL3om8

Iran Hangs Gold Coin ‘Sultan’ in Crackdown After U.S. Sanctions
Ladane Nasseri – Bloomberg
Iran executed a gold dealer known as the “Sultan of Coins,” in a warning to merchants not to exploit the country’s financial troubles as U.S. sanctions squeeze the economy.
/bloom.bg/2FpnqwH

Brexit

Confused About Brexit? Here’s a Guide as the Endgame Begins
Emma Ross-Thomas – Bloomberg News
The U.K. and European Union negotiators have reached a draft Brexit deal, according to a person familiar with the situation. But it’s far from over yet.
Here are the four things to know as we head into the home stretch.
1. What’s the deal?
It will be the most important international agreement in Britain’s postwar history.
/goo.gl/8BxJPP

Demand for new offices in London to progress even as Brexit weighs: survey
Reuters
Demand for new office space in London will continue even with the imminent exit of UK from the European Union, a closely-watched industry survey showed on Tuesday, with technology, media and telecom companies taking up most spaces in the city.
/reut.rs/2FnEgfm

May’s Brexit compromise comes with high price; Proposed solution to vexed issue of Irish border forces concessions from PM
Alex Barker and Mehreen Khan in Brussels – FT
The text is provisional and the political battle has only just begun. But a draft Brexit agreement has taken shape that could guide Britain out of the EU and shape relations for years to come.
/on.ft.com/2qJ97ZL

Miscellaneous

FT headquarters fetches £115m for Pearson; Building on Thames’s south bank to be sold to M&G Real Estate
Judith Evans – FT
The Financial Times headquarters is to be sold to M&G Real Estate for £115m, a price 28 per cent above the asking price set when Pearson, the former owner of the newspaper, put the building up for sale.
/on.ft.com/2qNmAzU

The post Look at issuing digital currency, IMF head tells central banks appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Matthew Kelly of the CME Group is participating in Movember and growing an awesome beard and mustache. You can donate to Matthew’s campaign to support men’s health HERE.~JJL

BrokerTec is now available in CME DataMine, offering market data across the range of U.S. Treasury products.~JJL

CME Group announced Wednesday that Apple co-founder Steve Wozniak is the 14th recipient of the CME Group Melamed-Arditti Innovation Award. CME Group presented the award on Nov. 13 at the 11th annual Global Financial Leadership Conference in Naples, Fla.~SR

Are you a Prime member? Not that one. Eurex launched the Eurex Prime ISV program, for firms that support new products and functionality on its T7 platform. Eurex will list its Prime ISVs on its website, enable early access to the platform for new initiatives and provide quick responses on questions. No word on free shipping or movies.~JK

The Fintech Exchange is now accepting speaker submissions for its 5th annual event.~JJL

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May’s Brexit Deal Is Not the Answer; The U.K. needs to admit that Brexit has failed.
Editorial Board – Bloomberg
U.K. Prime Minister Theresa May announced Wednesday that she has secured her cabinet’s support for her plan to leave the European Union. The choice now, she said, is her deal, “or leave with no deal, or no Brexit at all.” Put that way, the right choice — the only sane choice — is more obvious than she perhaps intended: no Brexit at all.
/bloom.bg/2Fpp3KL

****** Bloomberg goes right to the point. No Brexit.

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How to Build a Financial First-Aid Kit for Disasters
Carlo Versano – Cheddar
The wildfires in California have demonstrated, among other things, just how quickly a natural disaster can upend your life. Unlike most hurricanes, which are relatively predictable and slow-moving enough for days of preparation, wildfires can ignite out of nowhere ? and they’re no longer confined to “fire season” in the parched west. Residents of Paradise, Calif., a town destroyed by the Camp Fire last week, did not even receive evacuation orders until they smelled the smoke. For dozens of them, it was too late.
bit.ly/2FlxtD3

****** Do you have a go-bag? Maybe you need one.~JJL

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Deutsche Börse Photography Foundation presents program for the 20th anniversary of Art Collection Deutsche Börse
Deutsche Börse
The Deutsche Börse Photography Foundation presented its program on the occasion of the 20th anniversary of the Art Collection Deutsche Börse on Wednesday together with the British artist Martin Parr. In the coming year, this will be honored with a series of special events and projects as well as an international exhibition program. The Art Collection Deutsche Börse is considered one of the most important collections of contemporary photography and today comprises more than 1,800 works by around 120 international artists.
bit.ly/2FnnsFf

****** No translation required to see the meaning of these pictures.~JJL

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Big Upgrades Coming to the LPGA’s Race to the CME Globe in 2019; Purse will double to $5M at the season-ending CME Group Tour Championship; Elite field of 60 players to compete for $1.5 million winner’s check, the largest in women’s golf; Score 1 for St. Jude Children’s Research Hospital® charity program to debut in 2019
CME Group
Today, LPGA Commissioner Mike Whan and CME Group Chairman and CEO Terry Duffy announced that the Race to the CME Globe is evolving in 2019 to bring an even bigger payout and purse to the Tour’s season-ending CME Group Tour Championship.
bit.ly/2Fp35aU

****** A bigger purse for the CME Group Tour Championship? I hope the purse goes with their shoes.~JJL

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Wednesday’s Top Three
The loose theme of the day for Wednesday’s top three was knowledge. RCM Alternative’s Joe Signorelli took the industry and academics to task with his piece about the need for better financial education in An Open Letter to the Financial Industry. Second went to Wells Fargo: Shareholders can’t sue us because they should have known we were lying, arguing that shareholders and analysts should have known its CEO Tim Sloan was using “puffery” when he told them he was “not aware” of any undisclosed scandals. One wonders, what does the legal team smell like? Bloomberg’s piece about Arnaud Vagner stayed for a second straight day in the top three, in The Man Who Brought Down a Commodity Giant Says He Acted Alone

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MarketsWiki Stats
135,416,121 pages viewed; 23,313 pages; 215,482 edits
MarketsWiki Statistics

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Lead Stories

Stock Traders Say Brexit Deal ‘Dead in the Water’ as Raab Leaves
Lisa Pham, Justina Lee, and Kit Rees – Bloomberg
Homebuilders, retailers lead decline in domestic U.K. stocks; Pound’s fall helps lift multinational companies in FTSE 100
European stocks erased gains and turned negative on Thursday after a number of U.K. ministers including Brexit Secretary Dominic Raab resigned amid a growing revolt against U.K. Prime Minister Theresa May’s Brexit deal. The FTSE 100 was little changed as a sharp drop in the pound lifted multinational companies while domestically focused U.K. sectors including banks, home builders and retailers tumbled.
/bloom.bg/2FxzX1o

Brexit accord leaves British finance out in the cold
Sinead Cruise, Huw Jones, Andrew MacAskill – Reuters
Britain’s financial services greeted the news of a draft Brexit agreement with weariness and worry on Thursday, citing multiple hurdles the government must overcome before they can Brexit-proof their industry.
/reut.rs/2Fjjwp4

Passive boom sees number of market indices hit 3.7m; Increasing use of benchmarks in ethical and fixed-income investing drives the growth
Robin Wigglesworth, US markets editor – FT
Indices measuring markets have ballooned in number by another 438,000 to more than 3.7m in the past year, as providers produce a blizzard of bond market, environment, social and governance benchmarks.
/on.ft.com/2Fm73kD

Theresa May Is on the Brink as Tories Plot to Kill Her Brexit Deal
Tim Ross, Alex Morales, Kitty Donaldson, and Robert Hutton – Bloomberg
Tusk calls Nov. 25 EU summit for leaders to sign off accord; Junior minister Vara quits May’s team in protest at her plan
Prime Minister Theresa May is fighting for her political life as a growing revolt from within her own party threatens to derail her Brexit plans and force the U.K. out of the European Union with no deal.
/bloom.bg/2FpTQqW

Four Weeks That Will Determine Fate of the ECB’s Bond Buying
Piotr Skolimowski and Alessandro Speciale – Bloomberg
European Central Bank officials have four weeks left to make up their minds whether to freeze euro-area stimulus at current levels or pump yet more cash into the economy.
The Governing Council will hold its final policy meeting of the year on Dec. 13, when it will review the plan to cap its 2.6 trillion-euro ($2.9 trillion) bond-buying program. While that decision was initially taken in June, it’s always been dependent on incoming economic data — which have recently been weaker than expected
/bloom.bg/2zcKnxI

German Stock Exchange boss targets larger acquisitions; Theodor Weimer gives his first big interview as CEO of Deutsche Börse. He talks about the gap to the US competition, acquisition plans, the job cuts and Friedrich Merz.
Handelsblatt
When Theodor Weimer took over the management of the Deutsche Börse at the beginning of the year, he first had to provide stability. Because the uncertainty was great .
bit.ly/2FlgBft

Britain’s Brexit secretary resigns over Theresa May’s plan to exit European Union
William Booth, Karla Adam – Washington Post
The minister in charge of helping Britain leave the European Union, Brexit Secretary Dominic Raab, abruptly resigned from Prime Minister Theresa May’s government on Thursday morning, saying he could not support the withdrawal agreement approved by her cabinet the night before.
/wapo.st/2Fnikkx

US natural gas price rises 18% on supply fears; Forecast of cold December raises concerns shale production can keep up with demand
Gregory Meyer in New York – FT
US natural gas prices rose 18 per cent — their biggest one-day gain in eight years — as the onset of winter tests the ability of shale production to supply the country.
/on.ft.com/2FpTYqq

Swaps data: cleared vs non-cleared margin
Amir Khwaja, Clarus Financial Technology via Risk.net
Initial margin numbers are growing for the over-the-counter derivatives market – a result of rules that require some products to be centrally cleared, as well as separate requirements compelling a growing band of firms to collect margin for non-cleared trades.
But the two regulatory edifices function in different ways and also interact, it is likely that, as the non-cleared rules steadily expand, they will encourage more firms to clear voluntarily and create incentives for the scope of cleared products to be widened as well.
/goo.gl/UnG3mx

Wall Street is worried that a $1 billion acquisition will allow Virtu to spy on clients, but the firm has a big plan to quell those anxieties
Frank Chaparro – Business Insider
Virtu Financial got its start in the secretive world of high-frequency trading. But in recent years it has been trying to break into a business dominated by Wall Street’s bulge bracket banks: buying stock on behalf of large asset-management clients such as hedge funds and pension firms. The acquisition of New York broker dealer ITG for $1 billion, which Virtu announced last week, could position the firm for success in those businesses. It’s not its first large deal. In 2017, the firm acquired KCG which opened Virtu up to global quant strategies in equities and futures.
/read.bi/2FnOSLc

HSBC joins $36 million funding round in blockchain specialist Axoni
Hayley McDowell – The Trade
Blockchain technology provider Axoni has added HSBC to its list of investors, which includes other major institutions such as JP Morgan, Goldman Sachs and Citi, after closing a $36 million Series B funding round.
bit.ly/2QH8OtL

Global regulators hold off designating ‘too big to fail’ insurers
Huw Jones – Reuters
Global insurance regulators will put off singling out insurers deemed so important to the financial system that they are required to hold extra capital, in a victory for companies such as American International Group (AIG.N) and Prudential (PRU.L).
/reut.rs/2Fqisjv

Sun Trading chief leaves in wake of Hudson River takeover; Kevin Cuttica helped the two groups to integrate their businesses
Samuel Agini – Financial News
The chief executive of Sun Trading has left the market-maker following its takeover by Hudson River Trading, the high-frequency trader, earlier this year.
bit.ly/2Fnpqp7

Tradeweb chief takes stock of electronic bond trading revolution
Samuel Agini – Financial News
Lee Olesky’s kids wish he had picked a business more easily explained to their friends.
bit.ly/2FnOqwu

Exchanges, OTC and Clearing

CME Group Announces Henry Hub Natural Gas Futures All-Time Daily Volume Record, Surpassing 1.2 Million Contracts
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it reached a daily trading volume record of 1,232,635 contracts for Henry Hub Natural Gas futures on Tuesday, Nov. 13, 2018, surpassing the previous record of 1,022,858 contracts set on Jan. 12, 2018.
/goo.gl/xYnEA2

CME Group Announces Steve Wozniak as the 2018 Melamed-Arditti Innovation Award Recipient
CME Group
CME Group’s Center for Innovation today announced that Apple co-founder Steve Wozniak is the 14th recipient of the CME Group Melamed-Arditti Innovation Award. CME Group presented the award at the 11th annual Global Financial Leadership Conference in Naples, Fla., on Tuesday, Nov. 13.
bit.ly/2FxpeDM

Public Quantitative Disclosure Global Statistical Bulletin Newsletter
CCP12
The Global Association of Central Counterparties (CCP12) publishes the quarterly Public Quantitative Disclosure (PQD) Global Statistical Bulletin Newsletter to present a panorama of the CCP industry to market participants, relevant authorities and the broader public. The analysis is based on PQD reports published by central counterparties (CCPs) globally under the Principles for Financial Market Infrastructures (PFMI) requirements set by Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions (CPMI-IOSCO).
/goo.gl/1Z8CZK

Deutsche Bank and Nomura execute first swaption trades with LCH SwapAgent; LCH SwapAgent processed the first swaption trades with Deutsche Bank and Nomura.
Hayley McDowell – The Trade
UK clearinghouse LCH has processed its first swaption trades executed by Deutsche Bank and Nomura via its non-cleared derivatives clearing service SwapAgent.
bit.ly/2FxnA54

LCH SwapAgent completes its first swaption trade
LCH
Deutsche Bank and Nomura are counterparties to the first swaptions trades processed through LCH SwapAgent; Trades were brokered by ICAP as interdealer broker; LCH SwapAgent offers standardised infrastructure and efficiencies to the non-cleared derivatives market
LCH SwapAgent, a service for the non-cleared derivatives market, today announced that it has processed its first swaption trade. Two swaptions trades were completed between Nomura and Deutsche Bank, one denominated in Euro and the other in US Dollars. The trades were brokered by ICAP, part of TP ICAP group, and processed by MarkitSERV.
bit.ly/2FlkNMA

This week’s topic: Prime time for Eurex ISVs
Eurex
Eurex has just recently started a new annual initiative to recognize Independent Software Vendors (ISVs) that support non-mandatory release items, e.g. new products or new functionality. We spoke to Randolf Roth, Member of the Executive Board of Eurex, about the background of the Eurex PRIME ISV Program and the benefits for the participants.
bit.ly/2FrlqnF

First TSE Listing of ETF Focused on UK-listed ETF
JPX
Japan Exchange Group, Inc. (JPX) and London Stock Exchange Group plc (LSEG) agreed in July 2018 to collaborate on financial market infrastructure initiatives designed to promote global sustainable investment and on product marketing initiatives. Today, an ETF that invests mainly in an ETF listed on London Stock Exchange (LSE) was listed on Tokyo Stock Exchange (TSE) for the first time.
bit.ly/2FAHU5Z

Fintech

DriveWealth and Trading Central Announce Strategic Partnership
NBC – KNDO
DriveWealth, LLC, a leader in global digital trading technology, today announced a strategic partnership with Trading Central, a global leader of financial market research and investment analytics. The new relationship will allow the two companies to leverage the complementary elements of their businesses: seamless, digital, mobile-first transaction capabilities and sophisticated, accessible and actionable financial content.
bit.ly/2PXSDer

HPR Launches Omnibot – the Capital Markets’ First Application-Aware Network Switch – Setting a New Standard in High Performance Electronic Trading
Globenewswire
HPR (Hyannis Port Research), provider of advanced capital markets infrastructure (CMI) technologies, today announced the launch of Omnibot, a first-of-its-kind networking device that integrates market access, risk management, data and latency capture functionality into a multi-application switch. Through the combination of FPGA-based risk hardware and a network switch within a single device, HPR has introduced a “net-zero” latency solution by performing risk checks in parallel with switching.
/goo.gl/r1qZY1

****I was unaware that the Kennedy Compound was stocked with computer engineers.~SD

Singapore, China to collaborate on fintech initiatives
Eileen Yu – ZDNet
The central banks of Singapore and China have inked an agreement to work on fintech initiatives as well as research, whilst two other organisations from both countries will collaborate on cross-border services.
The Monetary Authority of Singapore (MAS) and People’s Bank of China would work on joint innovation projects that focused on key technologies, such as digital and mobile payments, blockchain and distributed ledgers, big data, and application programming interface (API) platforms.
/zd.net/2zdwuza

Cryptocurrencies

Bitcoin futures tumble 13%, trigger trading limit
Aaron Hankin – MarketWatch
Bitcoin futures on the CME Group exchange reached the 13% limit down level on Wednesday after the price of the world’s largest digital currency tumbled to a fresh 2018 low. According to a spokesperson from the CME, the pause came just before 2 p.m. Eastern Time where a two-minute observation was initiated. Should futures BTCX8, +0.09% fall 20%, a hard limit is enforced, meaning contracts cannot trade below this level. After a subdued two months of trading, spot bitcoin BTCUSD, -2.84% prices fell as much as 15% on Wednesday as traders bailed on their long bets once a key psychological level was breached. “From a technical analysis standpoint, as bitcoin’s price falls below $6,000 we’re seeing liquidation: stop-loss orders automatically going into effect and/or people trying to play the breakout,” wrote Mati Greenspan, senior market analyst at eToro.
/on.mktw.net/2Fm1SRC

Cryptocurrency miner Canaan lets Hong Kong IPO application lapse
Julia Fioretti, Julie Zhu – Reuters
Canaan Inc, one of the world’s leading cryptocurrency mining equipment makers, has let its application for a Hong Kong IPO of at least $400 million lapse, casting doubt on the prospects for other Chinese makers of bitcoin mining gear.
/reut.rs/2FqhEet

‘Crypto civil war’ slams bitcoin, but it won’t last, says BKCM’s Brian Kelly
Tyler Clifford – CNBC
Bitcoin had been coasting in recent months on fairly low volatility until “things exploded” Wednesday and prices tanked more than 10 percent, BKCM founder and CEO Brian Kelly told CNBC. Kelly, a cryptocurrency fund manager, said the sharp downturn had to do with bitcoin cash, which splintered off in August 2017 from regular bitcoin with the goal of being able to process more transactions.
/cnb.cx/2za5EI6

New York Regulators Have Granted Their 14th Crypto License
Nikhilesh De – Coindesk
The New York State Department of Financial Services (DFS) has just issued a new BitLicense to the New York Digital Investment Group (NYDIG), allowing it to offer crypto-related services in the Empire State. According to a press release Wednesday, DFS has granted its virtual currency license to the company, allowing NYDIG to offer liquidity and asset management services to New York residents.
bit.ly/2DETWsW

No More Hype: Time To Separate Crypto From Blockchain Technology
Yoav Vilner – Forbes
Many people argue that cryptocurrencies are the revolution, not to mention, the technology. How can you blame them? They have only started hearing about Blockchain and crypto during the bitcoin boom last year. I say, it’s time we know how to separate the technology from its application.
bit.ly/2DFhq18

How to Watch the Bitcoin Cash Fork As It Happens
Christine Kim – Coindesk
The most contentious hard fork in bitcoin cash’s one-year history is happening Thursday. So contentious, in fact, that this one holds the potential to split the blockchain into two separate iterations of the bitcoin cash protocol – one led by developer group Bitcoin ABC and the other, Bitcoin SV, led by blockchain research company nChain.
bit.ly/2FoGOKp

Why — And How — To Accept Bitcoin At Your Business With Minimal Risk
Joel Comm – Forbes Coaches Council
(Disclaimer: Author owns bitcoin and shares of Overstock.) “I’ll pay 10,000 bitcoins for a couple of pizzas.” That was the request made by Laszlo Hanyecz on the Bitcointalk forum back in 2010. He wasn’t too particular about what kind of pizza he wanted. For those 10,000 bitcoins, he expected two large ones so that he would have leftovers and he didn’t want any “weird” toppings, like fish. But apart from those requests, anything would do.
bit.ly/2zk58HZ

Ripple (XRP) Overtakes Ethereum As Bitcoin’s $15 Billion Bloodbath Continues
Billy Bambrough – Forbes
Bitcoin, ripple (XRP), and ethereum continued to fall today following yesterday’s bloodbath, with bitcoin down almost 3% on the last 12 hours, adding to the 12% rout yesterday that wiped more than $15 billion from bitcoin’s market capitalization in a matter of minutes.
bit.ly/2QL3Qw0

Politics

White House limits Peter Navarro’s role amid China trade clash with Larry Kudlow
Jacob Pramuk and Eamon Javers – CNBC
The Trump administration has deliberately curtailed trade advisor Peter Navarro’s public role amid tensions with top economic advisor Larry Kudlow, a source said.
Kudlow criticized Navarro’s comments on ongoing trade negotiations with China.
President Donald Trump plans to meet with Chinese President Xi Jinping this month amid a trade war.
/cnb.cx/2QHacMZ

Mueller Working on ‘Several’ Probes, McConnell Denies Him Cover
David Voreacos and Steven T. Dennis – Bloomberg
Senators fail to get traction on bill to protect Mueller; Special Counsel defers Gates sentencing, citing ‘ongoing’ work
Senate Majority Leader Mitch McConnell blocked two senators from bringing up legislation to protect Special Counsel Robert Mueller’s investigation from any interference by President Donald Trump, as Mueller provided a rare look into work that he said is continuing on several fronts.
/bloom.bg/2FoDTBr

Trump’s Confusion Is a Threat to Europe; Where were the “adults in the room” who could have reined in the U.S. president before he assailed Macron over a misunderstanding?
Leonid Bershidsky – Bloomberg
President Donald Trump’s continued misguided tweets on the subject of a pan-European army suggest Europe really does face a threat from the U.S.: in particular, the ignorance at the very top of America’s political and military hierarchy.
/bloom.bg/2FpCF94

Trump Administration Claims Wide Leeway to Control Media Access; Judge hears two hours of arguments on an emergency motion to restore the press credential of CNN reporter Jim Acosta
Byron Tau – WSJ
Attorneys representing the Trump administration laid out an expansive view of a president’s power to control media access, saying in a court hearing that the president has the right to exclude reporters from government property for the content or tenor of their reporting.
/on.wsj.com/2Fm1G4Q

Greenspan Calls Trump Tariff Policies ‘Insane’
Ivan Levingston – Bloomberg
Former Federal Reserve Chairman Alan Greenspan called President Donald Trump’s tariff policies “insane” and said “why we’re doing it probably is very deep in the psyche of somebody.”
/bloom.bg/2FpBWom

Senator Warren presses regulators on leveraged lending
Kristen Haunss – Reuters
US Senator Elizabeth Warren sent a letter to regulators Wednesday expressing concerns about underwriting standards in the leveraged loan market, which she says could pose serious risks to the economy.
/reut.rs/2FoCrPv

Facebook accused of smearing George Soros; Social media group also rebuked for allegedly adopting underhanded tactics against rivals
Hannah Kuchler in New York – FT
Facebook has been accused by the Open Society Foundations of threatening the values of democracy, after a report said the social media company was involved in a smear campaign against the non-profit group’s founder George Soros.
/on.ft.com/2Fm3xqk

Regulation

Canadian Stock Market Could Get Its Own ‘Top Cop’
John D’Antona Jr. – Traders News
The Supreme Court of Canada last week gave its consent to the creation of a single and top Canadian Securities market regulator – its own version of the U.S.’ Securities and Exchange Commission.
/goo.gl/usQkSn

Technology investors fear regulators’ net
Trevor Hunnicutt – Reuters
Increased regulation of U.S. technology companies is one of the biggest risks to a sector that has led stocks higher, potentially derailing the market’s near-decade-long bull run if it suffers a sustained selloff.
/reut.rs/2FlxmY9

Speech of Enforcement Director James M. McDonald Regarding Enforcement trends at the CFTC, NYU School of Law: Program on Corporate Compliance & Enforcement
CFTC
Thank you for that introduction. I’m happy to be back here at NYU as part of the Program on Corporate Compliance & Enforcement (PCCE). Over the years, the PCCE has brought together some of the best thinking in the enforcement, business, and academic community to develop a richer and deeper understanding of the causes of corporate misconduct, and how enforcement and compliance programs can most effectively deter it. The result is that the work here at the PCCE has been a driver of some of the most significant developments in Enforcement and Compliance.
bit.ly/2Fm6NCb

EU watchdog says shortcomings in bank stress test need fixing
Huw Jones – Reuters
Shortcomings in the European Union’s stress test for banks could be fixed by including elements from the Federal Reserve’s health check of lenders’ resilience to shocks, a top EU regulator said on Thursday.
/reut.rs/2qMkP5Z

SEC on the lookout for a new home near Wall Street
Steve Cuozzo – NY Post
The Securities and Exchange Commission is on the prowl — not for inside traders, but for a new home near Wall Street. The SEC’s regional-headquarters lease at 200 Vesey St. in Brookfield Place — the former 3 World Financial Center — is up at the end of March 2021. The fraud-busters are aggressively kicking the tires nearby to find a location in which to downsize from its current 250,000 square feet into a more efficient, 175,000 square-foot space, sources said.
/nyp.st/2FljZr2

An ASIC update by John Price, Commissioner
ASIC
A speech by John Price, Commissioner, Australian Securities and Investments Commission at the FINSIA ‘the Regulators’ panel event, (Melbourne, Australia) 15 November 2018
bit.ly/2FoIq6V

ESMA reports on NCAs’ use of sanctions and administrative measures under MAR
ESMA
The European Securities and Markets Authority (ESMA) has published today its first annual report concerning administrative and criminal sanctions as well as other administrative measures issued by National Competent Authorities (NCAs) under the Market Abuse Regulation (MAR).
bit.ly/2FnbV95

Investing and Trading

Mark Cuban Exits the High-Frequency Trading Game He Hated Anyway
Nick Baker – Bloomberg
Mark Cuban has gotten out of high-frequency trading. The Dallas Mavericks owner recently sold his stake in Virtu Financial Inc., he wrote in an email to Bloomberg News.
/bloom.bg/2Fm6mrx

Big-name investors favor U.S. equities over rest of world
David Randall, Lewis Krauskopf – Reuters
U.S. equities will outshine their international counterparts over the coming year, despite slowing corporate profit growth and increased stock market volatility, several big-name investors said.
/reut.rs/2FlwRNL

Global food prices face triple threat, warns Rabobank
Extreme weather, trade war and virulent pig disease risk disrupting markets
Emiko Terazono – FT
Extreme weather, the US-China trade war, and livestock disease are threats to global food prices next year, according to a leading lender to agribusinesses.
/on.ft.com/2FxmlTs

Oil Giants Start to Dominate U.S. Shale Boom; Chevron, Exxon and other big firms, once slow to see fracking’s potential, now outpace smaller drillers
Bradley Olson and Rebecca Elliott – WSJ
Smaller, nimbler companies pioneered the U.S. shale boom. But as American production scales up, those frackers are losing ground to Big Oil.
/on.wsj.com/2Fm4Mpu

Institutions

E*TRADE Financial Corporation Reports Monthly Activity for October 2018
MarketWatch
E*TRADE Financial Corporation ETFC, -2.67% today released its Monthly Activity Report for October 2018.
/on.mktw.net/2DEfDJU

Warren Buffett Is Betting Big on JPMorgan and Other Banks
Ben Walsh – Barron’s
Warren Buffett’s Berkshire Hathaway ( BRKb ) added a new $4 billion position in JPMorgan Chase (JPM) stock, according to a Securities and Exchange Commission filing. News of the more than 35 million share position pushed the bank’s stock up about 1.5% in after hour trading.
bit.ly/2FnIKCG

Major Discount Broker Stocks Could Be Worth a Look
David Marino-Nachison – Barron’s
It’s time to look at shares of discount brokers.That’s the take from the analysts at Morgan Stanley, who on Wednesday upgraded TD Ameritrade (AMTD) while calling it—along with E*Trade Financial (ETFC) and Charles Schwab (SCHW)—a “top pick” among asset managers and brokers. (Meanwhile, they downgraded Apollo Global Management (APO) and Carlyle Group (CG).)
bit.ly/2FoCyup

Credit Suisse Weighs Hundreds of Job Cuts to Reduce Costs
Jan-Henrik Foerster , Patrick Winters , and Matthew Martin – Bloomberg
Swiss bank is said to be considering cuts as soon as this year; CEO Tidjane Thiam has pledged to further drive down expenses
Credit Suisse Group AG is considering hundreds of job cuts as Chief Executive Officer Tidjane Thiam’s drive to reduce expenses extends into a fourth year, according to people with knowledge of the matter.
/bloom.bg/2FnlyV7

Ex-Frankfurt Bankers Build $1.7 Billion Portfolio for 30 Clients
Stephan Kahl – Bloomberg
Sometimes it pays off handsomely to become self-employed. Around two and a half years after its start, Frankfurt-based family office Segura & Jesberger — which was founded by two ex-bankers — looks after assets worth 1.5 billion euros ($1.7 billion) belonging to 30 clients, CEO Thomas Segura told Bloomberg in an interview
/bloom.bg/2FqjbkJ

Greg Coffey hedge fund heads to NY as London fades; Trader looks to move closer to trading flows in larger financial market
Laurence Fletcher – FT
Greg Coffey, one of London’s best-known hedge fund traders, is planning to relocate his company to New York next year citing concerns about London’s role as a global financial centre.
/on.ft.com/2FnKsnA

Regions

UBS rogue trader Kweku Adoboli deported from UK; The 38-year-old had fought to avoid being sent to Ghana after serving sentence
Lindsay Fortado in New York – FT
Kweku Adoboli, the former UBS trader convicted of fraud over a £1.4bn unauthorised trading loss, has been deported from the UK to his native Ghana after losing a legal fight with the Home Office.
/on.ft.com/2Fm3DOI

Brexit

City of London Is Far From Finishing Brexit Obstacle Course
Edward Robinson , Gavin Finch , and Silla Brush – Bloomberg
Defining ‘equivalence’ is the next hurdle for finance pros; Banks likely to keep working on worst-case contingency plans
The City of London averted one disaster with the draft Brexit deal announced Wednesday. But the resignation of Brexit Minister Dominic Raab showed the obstacle course is far from over.
/bloom.bg/2Fqi7xf

Draft Brexit deal ends Britain’s easy access to EU financial markets
Andrew MacAskill, Huw Jones – Reuters
The United Kingdom and the European Union have agreed a deal that will give London’s vast financial centre only a basic level of access to the bloc’s markets after Brexit.
/reut.rs/2FqReJn

UK regulators call banks after Brexit woes hammer pound, financial stocks
Reuters
British financial regulators held a conference call with major banks on Thursday asking for feedback on market conditions after the pound and financial stocks sank following the resignation of Britain’s chief Brexit negotiator, sources said.
/reut.rs/2FjjL3s

Amazon Is Bigger Problem Than Brexit for U.K. Property; Shops are in turmoil, but London offices have proved surprisingly resilient in the wake of the U.K.’s Brexit vote
Stephen Wilmot – WSJ
When the British people voted for Brexit, investors worried about London skyscrapers. With a draft Brexit deal finally on the table, it is regional shops that are actually taking the strain.
/on.wsj.com/2FlalV1

Explainer: What is equivalence? Britain’s banks face patchy EU access
Huw Jones – Reuters
Britain and the European Union have agreed a deal that will give London’s financial center the same basic level of access to the bloc’s markets after Brexit that is already offered to countries including the United States, Japan and Singapore.
/reut.rs/2Fn7pYb

French bank SocGen ready in case of a hard Brexit scenario
Reuters
Societe Generale, one of Europe’s biggest banks, is ready in case of a hard Brexit scenario, said SocGen chief executive Frederic Oudea on Thursday.
/reut.rs/2FoCpqR

Miscellaneous

We’ve known for 85 years that forecasters can’t forecast
Robin Powell – The Evidence-Based Investor
I’ve noticed a tendency in the financial media to talk about the failure of active funds to outperform the market net of costs as if it’s something we’ve only recently discovered. In fact, for those who were prepared to look for it, the evidence behind evidence-baed investing has been around for a very long time.
You could argue that it was the French mathematician Louis Bachelier who started it. In his 1900 PHD thesis, The Theory of Speculation, Bachelier demonstrated that security prices move in such a random fashion that “the mathematical expectation of a speculator is zero”.
bit.ly/2QGARJV

The post Stock Traders Say Brexit Deal ‘Dead in the Water’ as Raab Leaves appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Yesterday’s LaSalle Street Trading Tech Awards program was good fun for a good cause, despite the absence of one John Lothian. (His surgery went well – you can tell because he’s tweeting again.) Over $150k was raised to help Scouts from underserved areas of the city get exposure to finance, witness corporate life and develop leadership skills. How often do you get to see industry leaders in campaign hats?~SD

Nodal Exchange and IncubEx launched their first tranche of North American Environmental contracts today. The new contracts, which mark the expansion of Nodal Exchange’s products into the environmental markets sector, include futures and options on: California Carbon Allowances, Regional Greenhouse Gas Initiative Allowances (RGGI), New Jersey Solar Renewable Energy Certificates, PJM Tri-Qualified Renewable Energy Certificates and 11 other emissions and renewable contracts.~JK

The market in 2018 might feel a bit crazy, but how crazy is crazy? Susquehanna’s Stacey Gilbert, head of derivative strategy, said during a panel at SIFMA’s Listed Options Symposium that there have been seven days in 2018 that saw a three standard deviation move – that should happen only two or three times a year. In the last 30 years, there was only one other year that happened: 2008.~SD

FIA and SIFMA AMG announced that their keynote speaker for the 2019 Asset Management Derivatives Forum will be Dalia Blass, U.S. Securities and Exchange Commission’s director of the Division of Investment Management. The conference will take place from February 13-15, 2019, at the Montage Laguna Beach in Laguna Beach, CA. ~SR

Yesterday’s JLN Options was chock full of content – negative gamma, pound volatility, CAT concerns – we had a ton. Check it out here. ~SD

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Spoofing: The Need for Regulatory Clarity

JohnLothianNews.com

“You don’t want to get caught doing something that you thought was legal, but somehow it has wandered into the grey zone, somebody’s taken a dislike to you, and then they throw the book at you three years afterwards.”

In this video, Alex Lamb, The Technancial Company’s head of marketing and business development Americas, discusses the problems with identifying and preventing manipulative trading practices.

Watch the video and read the rest »

****Lamb provides some hypotheticals – don’t get any ideas, guys!~SD

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Box Office Bomb: The Short Life of Popcorn Prediction Markets
Shaun Raviv – The Ringer
Once upon a time, box office futures could have changed Hollywood. And for two short days, they sort of did. But – in the midst of the financial crisis of 2008 – lawmakers in Washington, D.C., had other ideas.
/goo.gl/t1QZcG

****When this first happened, I bet Vincent Kosuga was chuckling to himself somewhere, muttering, “At least onions aren’t the only thing now.” It’s only fitting that today Bloomberg has Box Office Records Beckon, But Challenges Loom for Theater Chains.~SD

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‘Get Me Out’: Investors Sour on Market Strewn by Tape Bombs
Lu Wang, Elena Popina and Vildana Hajric – Bloomberg
Anxiety is an occupational hazard, a fact of life, for professional traders. After all, even on good days, something is always going wrong, somewhere.
But when everything starts to go wrong at once, imaginations can run wild. Like now, when everywhere you look, something’s blowing up. In commodities, it’s the record plunge in oil. In equities, it’s six weeks of turbulence in the S&P 500. Debt markets have been rattled by the turmoil engulfing General Electric and PG&E. Bitcoin just plunged 13 percent. And Goldman Sachs, the storied investment bank, is having the worst week since 2016.
/bloom.bg/2FnGIlZ

****Remember the immortal words of Douglas Adams, “Don’t Panic!”

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Thursday’s Top Three
Our top three stories from Thursday were led by Bloomberg’s Theresa May’s Brexit Deal Is Not the Answer. Second was FN London’s Sun Trading chief leaves in wake of Hudson River takeover. Third was Bloomberg’s Mark Cuban Exits the High-Frequency Trading Game He Hated Anyway. Have a great weekend everyone.

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MarketsWiki Stats
135,471,857 pages viewed; 23,313 pages; 215,492 edits
MarketsWiki Statistics

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Lead Stories

Opposition mounts as CME looks to slim down its board
Lynne Marek – Crain’s Chicago Business
Futures exchange operator CME Group postponed a November shareholder vote aimed at eliminating board members, as opposition to the proposal mounted, though voter apathy might have something to do with the decision, too.
Chicago-based CME, which operates the biggest futures market in the world, had planned to tally the vote at a Nov. 5 special meeting, but postponed the poll to Nov. 29. A spokeswoman for the company didn’t have any comment regarding the delay.
/goo.gl/wg1Dou

Theresa May appeals for EU deal support as Brexit battle rages; Environment secretary Michael Gove stays put as prime minister fights on
Laura Hughes, George Parker and Michael Hunter – Financial Times
Theresa May took to the airwaves on Friday to appeal directly to the British public to support the draft Brexit deal after a series of cabinet resignations and the threat of a Eurosceptic coup left the Conservative party on the brink of civil war.
/goo.gl/PLPkz7

****In a properly British move, Theresa May ended her Brexit press conference yesterday by referencing her favorite cricket player, Geoffrey Boycott. For live Brexit updates, see the BBC or The Guardian. For another take, see the FT’s Jo Johnson: the inside story of Brexit and where it all went wrong.~SD

Supercomputer to Launch With Glitches; Giant stock orders database conceived after 2010 ‘flash crash’ to have limited functionality
Dave Michaels – WSJ
A data warehouse created to track all U.S. stock and options orders is expected to launch on Thursday with less functionality than previously anticipated including limits on how many users can search it, according to people familiar with the matter.
/goo.gl/6RFdV1

****Also see S&P’s Wall Street still worries SEC’s massive trading database could be hacked.~SD

Star Trader Who Blew the Nordic Fuse Gets to Keep House
Mikael Holter and Jesper Starn – Bloomberg
Sells art, shares and properties in deal with power utilities; Nasdaq says he’s done trading in market where he made millions
Norwegian power trader Einar Aas, widely regarded as the biggest in the market, will keep his house and a few other assets in a deal with creditors after his spectacular default on Nasdaq Inc.’s Nordic power exchange this year.
/goo.gl/5msyqK

****Says he’s done trading in power markets? Does that mean done done or that he’ll move along to a different esoteric product/market? ~SD

Ex-Deutsche Bank traders hit back at US prosecutors
Caroline Binham and Kadhim Shubber – Financial Times
Two former Deutsche Bank traders have accused US prosecutors of a “cynical” attempt to reframe spoofing charges against them as a way to avoid evidence helpful to their case.
The claims are at the centre of an effort by James Vorley and Cedric Chanu – who both worked as London-based traders of precious-metal futures at Deutsche – to have wire-fraud charges against them dismissed, according to arguments filed in a Chicago court on Wednesday.
/on.ft.com/2DFOQg1

Shape of EU carbon market unclear after UK axes auctions; Any 2019 allowances sold by Britain would be worthless in the event of a hard Brexit
David Sheppard and Philip Stafford – Financial Times
Europe’s carbon market faces an uncertain few weeks over whether the UK, one of its biggest participants, will continue in its flagship system to curb pollution on the continent. Because of uncertainty over its exit from the EU, Britain has declined to schedule any of its twice-monthly auctions for new emissions permits beyond December, fearing allowances for 2019 may become invalid.
/goo.gl/q9WGcq

Two Words that Sent the Oil Market Plunging: Negative Gamma
Alex Longley – BloombergQuint
Price slump was exacerbated as options traders sold futures; Wall Street banks do deals locking in oil prices for producers
As oil suffered its biggest one-day slump in three years, it wasn’t OPEC or President Donald Trump that was shaking the market. Instead, trading desks were abuzz with chatter of “negative gamma.”
goo.gl/oRVdN6

Pound Plunge Was Mere Prelude to What May Happen With No Deal
Paul Dobson – Bloomberg
Thursday’s market rebuke a taste of potential turmoil to come; Financial pressure may ultimately force lawmakers into accord
U.K. politicians got a first view Thursday of the financial market turmoil that may be triggered if they fail to approve the Brexit deal struck with the European Union.
/goo.gl/8PLcgF

Major Exchanges Are Already Distributing New Bitcoin Cash Tokens
Yogita Khatri – Coindesk
After yesterday’s split of the bitcoin cash blockchain, several top exchanges have already accommodated the resulting two tokens.
While the scheduled hard fork was originally intended as an upgrade to the network, the long-standard Bitcoin ABC version found itself with a rival network and token, Bitcoin SV, after it managed to garner enough support from miners.
/goo.gl/VXb4Xs

As ETFs Get Cheaper, Wall Street Looks for Ways to Charge More; Complex strategies come with higher fees.
Rachel Evans – Bloomberg
Investors love exchange-traded funds because they’re simple and cheap. With some index funds now charging zero fees, it’s getting harder for asset managers to make money selling investors the basics. Watch ETFs get more complicated.
/goo.gl/e2gcbP

Fed set for a broad review on how it conducts policy in 2019
Jeff Cox – CNBC
The Federal Reserve in 2019 will launch a broad look at how it conducts policy and conveys what is doing to the public.
/cnb.cx/2DGSRRI

Exchanges, OTC and Clearing

Despite Low Volatility, Options-On-Futures on Track for Record Year
Russell Rhoads – TABB Forum
The third quarter of 2018 took on the look of 2017, with volatility across most markets returning to lower levels. The average VIX close in the third quarter was 12.85, down from 17.35 in the first quarter and 15.34 in the second. Despite the slowing growth, options-on-futures volume in the US remains on track to top 1 billion contract changing hands in 2018, up about 8% from 2017’s record volumes.
bit.ly/2QS0l6Y

CME Group Energy Futures and Options Volume Reaches Record 5.1 Million Contracts
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced its suite of energy futures and options reached a daily trading volume record of 5,103,881 contracts on Wednesday, Nov. 14, 2018, surpassing the previous record of 5,067,833 contracts set on Dec. 1, 2016.
/goo.gl/nHmakR

Heating Oil Futures: A Key Cog in Energy Markets Turns 40
Owain Johnson – CME Group OpenMarkets
CME Group’s New York Harbor Ultra-Low Sulfur Diesel (ULSD) contract hit the big 4-0 on November 14, 2018. As it hits middle age, ULSD shows no sign of slowing down. So far this year, the contract has set open interest and volume records while international participation is booming.
/goo.gl/wHg2qc

CME introduces incentives for suite of Eris contracts
Louisa Chender – Global Investor Group
CME Group expects to launch ten Eris USD swap futures for trading on December 3
/goo.gl/Tc6Bkq

First TSE Listing of ETF Focused on UK-listed ETF
Japan Exchange Group
Japan Exchange Group, Inc. (JPX) and London Stock Exchange Group plc (LSEG) agreed in July 2018 to collaborate on financial market infrastructure initiatives designed to promote global sustainable investment and on product marketing initiatives. Today, an ETF that invests mainly in an ETF listed on London Stock Exchange (LSE) was listed on Tokyo Stock Exchange (TSE) for the first time.
/goo.gl/gCMtdC

Fintech

Anova Technologies Rebrands to Anova Financial Networks
Celeste Skinner – Finance Magnates
Anova Technologies, a market data provider across all asset classes, announced on Wednesday that it has rebranded its operations to Anova Financial Networks, including a new logo and a redesigned website which is currently under development.
/goo.gl/AJZqa5

Firm behind the two best-performing ETFs adds a new fund for fintech
Rachel Evans and Vildana Hajric – The Seattle Times
Ark Investment Management, which runs the two best-performing exchange-traded funds over the last three years, is planning a new thematic ETF focused on technology for finance firms.
The product, the ARK Fintech Innovation ETF, will invest in companies working to change the way the financial sector operates, according to a regulatory filing.
Ark already manages a similar strategy in Japan, where the firm acts as a sub-adviser to several Nikko Asset Management mutual funds.
bit.ly/2FpkrEz

CreditEase CEO Says China’s P2P Lending Cleanup to Benefit Industry Leaders – Bloomberg
Bloomberg (VIDEO)
Ning Tang, chief executive officer of CreditEase, a fintech company with peer-to-peer lending business in China, talks about the prospects for the industry. He speaks with Stephen Engle on “Bloomberg Markets: Asia.”
/bloom.bg/2Fr18Lb

Fintech startup tries to help consumers fix credit report errors
Penny Crosman – American Banker
A fintech startup called Upturn, launching Thursday, is attempting to solve a critical problem in the modern financial age: inaccuracies in credit reports. Upturn was incubated by and is currently owned by BBVA’s New Digital Business unit, the bank’s fintech lab and part of its mission to fend off competition by innovating from within. (Simple and Propel Venture Partners are also in its portfolio.)
bit.ly/2RW2Q8q

PayPal Stock Rated A Top Investing Pick Among Fintech Companies
Reinhardt Krause – Investor’s Business Daily
PayPal Holdings (PYPL) can deliver 20%-plus annual revenue growth mostly from digital payment channels, says Barclays. It ranked PayPal stock as a top pick while initiating coverage of 20 fintech companies.
bit.ly/2K83mhb

The Future Of E-Commerce And Retail Will Be Written In China
Justin Leverenz – Forbes
China’s experiments in shopping are moving into high gear. The world needs to pay attention. Consider Alibaba, the Chinese Internet giant whose wide-ranging businesses span e-commerce, offline retail, fintech, online video, maps and browsers, and artificial intelligence. By the third quarter of 2017, Alibaba’s business model appeared to have reached peak fruition, as the company took pole position as the world’s largest e-commerce platform (by a factor of at least 2x Amazon), but was also third in digital advertising, just behind Google and Facebook. What could possibly change?
bit.ly/2FssxMR

Cryptocurrencies

‘Crypto hangover’ hammers Nvidia’s outlook, shares drop 17 percent
Munsif Vengattil, Stephen Nellis – Reuters
Chip designer Nvidia Corp (NVDA.O) on Thursday forecast disappointing sales for the holiday quarter, pinning the blame on unsold chips piling up with distributors and retailers after the evaporation of the cryptocurrency mining boom.
/goo.gl/4X6FQg

Stablecoins are crypto sector’s next big bet; ‘Hybrid’ cryptocurrencies are often pegged to real assets, including fiat currencies
Hannah Murphy – Financial Times
When Elizabeth White set up a company in early 2017 to help new-found bitcoin millionaires buy luxury goods such as Lamborghinis and yachts, she quickly encountered a major problem: crypto price volatility.
/goo.gl/UYnYWa

Parent Co. of World’s Largest Crypto Exchange OKEx Launches Trading in Argentina
Ana Berman – Cointelegraph
OKCoin, the parent company for world’s largest cryptocurrency exchange OKEx, has launched fiat-crypto trading services in Argentina, the company revealed in a tweet Thursday, Nov. 15.
According to the company’s blog post about the move, customers can already deposit Argentine pesos (ARS) in exchange for major cryptocurrencies, including Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), Ripple (XRP), Cardano (ADA), Stellar (XLM), Zcash (ZEC), and 0x (ZRX) “and more.”
bit.ly/2FzVrL4

Binance Warns Iranian Traders to Withdraw Crypto Amid Sanctions
Leigh Cuen – Coindesk
Binance is advising its remaining users in Iran to withdraw their money as the cryptocurrency exchange seeks to comply with international sanctions.
“If you have an account with Binance and fall into that [sanctions] category, please withdraw your assets from Binance as soon as possible,” reads an email received in recent days by Iranian users, according to several local sources.
Sepehr Mohamadi, chairman of the board of the Blockchain Association of Iran, said emails like this have been trickling in for months, but their numbers recently increased following renewed U.S. sanctions, which activated on November 5.
bit.ly/2FCSOYX

Coinmine rolls out at-home crypto mining device
Madeline Shi – Business Insider
For $799, you can mine cryptocurrency at home.
Launched this week, a new gadget called Coinmine One gets rid of the traditionally cumbersome mining process.
Instead of manually assembling multiple computer graphic processors, downloading the software, and setting up a crypto wallet, all you need to do is power up the device, connect it to WIFI, and tap your phone to choose which coin you want to mine.
/read.bi/2FpXpxc

Crypto Not A Current Threat To Financial Stability, Says Office Of Financial Research
Ted Knutson – Forbes
The narrow market for cryptocurrencies doesn’t pose a current threat to financial stability, the Office of Financial Research said in its annual report released today.
“The market is small enough that it is unlikely to affect household wealth or gross domestic product in a way that would pose much risk to the U.S. economy,” said the report from OFR, an independent bureau of the Treasury Department.
bit.ly/2FrE52D

France hopes to lure crypto-issuers with Gallic stamp of approval
Inti Landauro – Reuters
With hundreds of cryptocurrencies being issued every month, countries face a choice: ban them, leave them unregulated, or come up with rules to tame them.
France is pursuing the third option, which might be regarded as a Gallic middle ground. It wants cryptocurrencies to be issued in France as long as those backing them agree to be regulated. In doing so, it would be one of the first major countries to regulate so-called initial coin offerings (ICOs).
/reut.rs/2FpYvJk

‘First’ Collectible on Two Blockchains: ‘The Cutest Crypto Game’ Now Available on EOS
Maria Yavuz – Cointelegraph
Blockchain Cuties, a decentralized crypto collectible game operating on the Ethereum (ETH) blockchain, has announced that it is now available on EOS. The developer company says the new step makes Blockchain Cuties “the first game which officially supports two blockchains simultaneously.” This is supposed to make transactions faster and the players can now breed both ETH and EOS-based cuties.
bit.ly/2FtGoST

Politics

Maxine Waters: Days of easing bank regulations ‘will come to an end’
Jeff Cox – CNBC
Rep. Maxine Waters, poised to take over the powerful House Financial Services Committee when the new Congress convenes in January, laid down the law Wednesday about the future of banking regulation.
/cnb.cx/2DFl8b1

Trump and Xi Likely to Get Only Framework Trade Deal, Ross Says
Rachel Adams-Heard and Shawn Donnan – Bloomberg
The U.S. still plans to raise tariffs on Chinese imports in January with President Donald Trump and China’s Xi Jinping likely at best to agree to a “framework” for further talks to resolve trade tensions at an upcoming meeting, Commerce Secretary Wilbur Ross said.
/goo.gl/thoxKF

Trump Tax Cut to Be Eroded Next Year by Inflation Switch
Richard Rubin – WSJ
Last year’s big tax cut is about to start shrinking.
The Internal Revenue Service on Thursday announced the tax code’s parameters for 2019, implementing a new method for making inflation adjustments that will result in higher tax payments—and government revenue—over time.
The shift will cost Americans $133.5 billion over a decade, according to Congress’s Joint Committee on Taxation.
/goo.gl/a7o7Ke

Charts: Democrats represent modern economy, Republicans left behind
John Harwood – CNBC
Among other results, this year’s midterm elections affirmed this much: in Washington, the two parties now speak for dramatically different segments of the American economy.
/cnb.cx/2DGKmGb

Who will challenge Trump in 2020? Senators, billionaires and governors among those weighing White House runs
Courtney Weaver and Demetri Sevastopulo – Financial Times
17 Seven senators. Four billionaires. Three former presidential candidates. And the made-for-TV lawyer for a porn star suing Donald Trump. The November midterm vote has just ended, and already a wide field of potential Democratic presidential contenders is coming into focus.
/goo.gl/sN9DMB

Regulation

In CFTC Action, Federal Court Orders Hedge Fund and Its Principals To Pay More Than $1 Million for Fraud and Registration Violations
CFTC
A federal court in New York has entered orders against Kevin P. Whylie of Ozone Park, New York, Matthew James Zecchini of East Islip, New York, and the New York hedge fund they co-founded, Algointeractive Inc (together, Defendants), to pay more than $1 million in civil monetary penalties and restitution. The Court’s Orders resolve the Commodity Futures Trading Commission’s (CFTC) enforcement action against the Defendants, filed on April 11, 2018, which charged them with fraudulent solicitation and misappropriation of funds, among other charges (see CFTC Complaint and Press Release 7710-18).
bit.ly/2DFYhw8

Podcast: CFTC Talks EP072: CFTC Jamie McDonald
CFTC
This week on CFTC Talks, we speak with CFTC Director of Enforcement Jamie McDonald
/goo.gl/baX3Wj

CFTC Division of Enforcement Issues Report on FY 2018 Results
CFTC
The Division of Enforcement (DOE) of the Commodity Futures Trading Commission (CFTC) today issued its report outlining its major priorities and initiatives during the past Fiscal Year 2018 (FY 2018). Enforcement Director James McDonald announced the release of the report at a speech given at NYU as part of the Program on Corporate Compliance & Enforcement.
/goo.gl/Fi8e6V

Rogue UBS trader Kweku Adoboli deported from UK; Adoboli’s supporters vow to fight to bring him home
Lucy McNulty – Financial News
Convicted rogue trader Kweku Adoboli was deported from the UK on November 14, according to a statement from his supporters.
/goo.gl/F2AH4P

Investing and Trading

Goldman Says Investor Bearishness Concentrated in a Few Sectors
Joanna Ossinger – Bloomberg
Investors are pricing a lot more fear into individual stock options than they are into the S&P 500 Index, showing concern is concentrated in a few industries including health care and materials.
/bloom.bg/2DFQNsR

Tradeweb chief takes stock of electronic bond trading revolution
Financial News (paywalled)
Lee Olesky and his rivals have helped move fixed income trading away from the phone but there is ample room for growth
/goo.gl/ZZDHDi

Don’t Take Your Eyes Off the Yield Curve; Years of ultralow interest rates have complicated the recession warning.
Liz McCormick and Jeanna Smialek – Bloomberg
Historically, the $15.4 trillion U.S. Treasury market has offered one of the most reliable barometers for the health of the American economy. Investors are particularly fixated on what’s known as the yield curve, which depicts the yields on government debt of different maturities at a given point in time.
/goo.gl/TmabCb

****But please, still look both ways before crossing the street.~SD

Tudor Jones sees peril in corporate credit ‘bubble’
Lindsay Fortado, Joe Rennison and Robin Wigglesworth – Financial Times
Paul Tudor Jones, the veteran hedge fund manager, has warned that “some really scary moments” in the swelling corporate debt market could precipitate another financial crisis.
/on.ft.com/2DHhy0b

Market turbulence poses Wall Street dealmakers a tricky question; Volatility in stocks has hit the ambitions of public companies but helped private equity firms
James Fontanella-Khan – Financial Times
Wall Street dealmakers are the ultimate optimists. Ask them how mergers and acquisitions activity is going, and they’ll cheerily say they’ve never been busier. But now that answer comes with a crucial caveat: it’s tough getting my deals closed. “I have a couple of gigantic deals in the pipeline but I’m struggling to make them land,” complained a top banker at one of the boutique investment banks. Another adviser lamented how five of his transactions collapsed days before they were due to be announced.
/goo.gl/35gKwH

Credit boom: Private equity bounces back on cheap debt bubble; Buyout deals are being financed with debt levels not seen since the last crisis
Eric Platt and Mark Vandevelde – Financial Times
Private equity dealmakers are riding high on a wave of cheap debt, pushing buyout values to levels not seen since the financial crisis. The deals may not yet be quite as large as those in the last buyout bubble that blew up spectacularly a decade ago, such as the $44bn buyout of energy company TXU that ended in one of the biggest bankruptcies on record.
/goo.gl/Dzn7n3

World’s Biggest Dollar Bull Doubles Down on Euro Pain for 2019
Todd White – Bloomberg
U.S. growth, rate hikes to fuel dollar over euro: HSBC’s Bloom; Greenback may benefit from haven flow if risk appetite wanes
The world’s biggest dollar bull is sticking to his guns as the U.S. economy powers ahead and dangles some of the highest interest rates versus Europe in history. Wall Street’s “America First” playbook in 2019 will pack more punch, boosting the greenback along the way, according to David Bloom at HSBC Holdings Plc.
/goo.gl/741uRv

Institutions

Deutsche Bank, BofA, JPM Are Drawn Into Danske Probe
Christian Berthelsen, Tom Schoenberg, and Jonathan Browning – Bloomberg
Danske Bank admits handling $230 billion in suspicious funds
Deutsche Bank AG and Bank of America Corp. have been contacted by U.S. criminal investigators for information about transactions they handled for a small bank branch in Estonia that’s at the center of one of the biggest money-laundering investigations in history, according to two people familiar with the matter.
/goo.gl/nE2Pha

JPMorgan Chase launches new assault on Silicon Valley; Bank focuses on tech dealmaking ahead of expectations of bumper year for IPOs
Elaine Moore and James Fontanella-Khan – Financial Times
As the US heads into a bumper year for tech IPOs, JPMorgan Chase is betting that it can shrug off the loss of two of its most senior tech bankers and break the duopoly of Goldman Sachs and Morgan Stanley on big deals. After its recent work on IBM’s $34bn purchase of Red Hat, JPMorgan has edged into second place in US tech M&A for the year to date, according to data from Dealogic.
/goo.gl/6HMLLQ

Oil hedge fund giant Andurand hammered in crude’s slide
Rachael Levy, Georgi Kantchev and Gregory Zuckerman – Financial News
One of the last oil hedge funds standing has become a high-profile victim of the recent rout in crude prices.
/goo.gl/RgxQ1z

Goldman CEO’s message to staff on 1MDB scandal
Fareed Sahloul – Financial News
Goldman Sachs chief executive David Solomon has spoken to the bank’s staff about the deepening investigation into its links with the scandal-hit Malaysian investment fund 1MDB
/goo.gl/BzHdBn

JPMorgan’s co-head of metals to leave around end of the year
Reuters
Sid Tipples, joint head of JPMorgan’s metals business, will leave the bank around the end of the year, four sources familiar with the matter said.
/reut.rs/2DFIjC6

****Sid Tipples sounds like the moniker for the nicer brother of the infamous British punk bassist.~SD

Deutsche Bank CEO calls for European digital and banking integration
Reuters
Deutsche Bank’s (DBKGn.DE) chief executive on Friday urged Europe to renew efforts to cooperate, calling on politicians to create a program for digital innovation with the aim of fostering European platforms that would compete against those in the U.S. and China.
/goo.gl/QWvFbo

Regions

Chip Stock Carnage Seeps Into Asia With $11 Billion Lost
Min Jeong Lee – Bloomberg
Softbank Group slides as Vision Fund has stake in Nvidia; Tokyo Electron, Advantest Corp bore brunt of losses in Japan
The chipmaking sector saw another bout of selling in Asia, wiping at least $11.2 billion in market value, as weak forecasts from Nvidia Corp. and Applied Materials Inc. added to the latest signals that demand for servers, personal computers and mobile is falling.
/goo.gl/WraAKw

Weak credit growth raises odds of first China rate cut in years
Winni Zhou, Kevin Yao – Reuters
SHANGHAI/BEIJING (Reuters) – China’s stubbornly weak credit growth has spurred talk of its first cut in benchmark lending rates in three years, but economists and policy insiders say concerns about a potential knock to its currency will likely give the central bank pause.
/goo.gl/eTCzpe

Brexit

Companies Start to Sweat Prospect of No-Deal Brexit as Deadline Looms; While some firms in U.K. and elsewhere fail to set plans for potential EU roadblocks, others stockpile goods like car parts, medicine – and oatmeal
Max Colchester and Daphne Zhang – WSJ.com
With Prime Minister Theresa May’s government in turmoil over the terms of a Brexit agreement, the prospect of “no deal” is getting real—spooking companies big and small, including some far from Britain’s shores.
/goo.gl/3nFGJk

Brexit agreement prolongs uncertainty for the City; Any short-term relief that a cliff-edge divorce can be avoided due will be outweighed by the fact the UK faces years of further talks
Pierre Briancon – Financial News
It was supposed to provide the certainty they were seeking, but neither London’s financial services executives nor their European competitors will find much to rejoice about in the UK’s withdrawal agreement from the European Union. Rather than ending uncertainty, the City has been presented with a permanent fudge.
/goo.gl/2xon1n

The Brutal Reality Of Brexit
Frances Coppola – Forbes
Theresa May’s chickens are coming home to roost. The deal she agreed with Brussels is unravelling fast, and her premiership along with it. So far, seven of her ministers have resigned. Letters calling for her replacement are pouring in to the powerful chairman of the Conservative Party’s 1922 Committee: once he receives 48 letters, there could be a vote of confidence in her leadership, and perhaps a leadership challenge. Other Tories are calling for a second referendum. Meanwhile, the Labour party is slavering at the possibility of an early General Election. The political crisis that has been simmering since 2016 has erupted with a vengeance.
bit.ly/2FnC2Ni

The post Opposition mounts as CME looks to slim down its board appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

There is an episode of “The Spread” to be released later this morning. Stay tuned. ~SD

Nodal Exchange listed its first North American environmental contracts on Friday with its partner IncubEx. Day one volumes totaled 950 contracts in carbon and renewable energy credit futures.~SD

Who likes the polyester market? Zhengzhou Commodity Exchange announced that overseas investors will be able to trade purified terephthalic acid (PTA) futures starting November 30. PTA is the chemical needed to make the stuff we see every day in clothes and plastic bottles.~SD

Trend followers have had a rough go. Cantab Capital Partners is apparently down 30 percent on the year, adding to the pressure on Cantab’s owner, GAM Holdings. GAM already made news for all the wrong reasons when it suspended a star bond fund manager, had to liquidate a huge fund and then its CEO departed.~SD

The New York Times has an article about an AI project Google (for one) is working on. It’s titled, “Finally, a Machine That Can Finish Your Sentence.” Just what we need. No wonder Google got rid of its slogan, “Don’t Be Evil.” ~SR

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New Evidence Emerges of Steve Bannon and Cambridge Analytica’s Role in Brexit
Jane Mayer – The New Yorker
For two years, observers have speculated that the June, 2016, Brexit campaign in the U.K. served as a petri dish for Donald Trump’s Presidential campaign in the United States. Now there is new evidence that it did. Newly surfaced e-mails show that the former Trump adviser Steve Bannon, and Cambridge Analytica, the Big Data company that he worked for at the time, were simultaneously incubating both nationalist political movements in 2015.
bit.ly/2zeDUCs

**”Anyone, anyone, Mueller, Mueller, Mueller – Bannon.”~JK

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Market turmoil will not save the Brexit deal (Opinion)
Wolfgang Munchau – The Financial Times
Sometimes financial markets change the course of political events. More often they do not. A market panic persuaded the US Congress to legislate in favour of the troubled asset relief programme during the financial crisis in 2008. Four years later, turmoil on the trading screens extracted a commitment by Mario Draghi to do “whatever it takes” to safeguard the bond markets of eurozone countries. But these were the grand exceptions.
Brexit is not one of those.
/goo.gl/ncrjwE

***Just who will save the Brexit deal? Name one person.~JK

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Illinois Now Second Largest Producer of Computer Science Graduates In the U.S.
Katherine Davis – Americaninno.com
As Chicago’s innovation scene continues to grow, tech employers should have plenty of fresh talent to choose from, according to a new report, which shows the number of local STEM graduates, and computer science grads specifically, is skyrocketing.
bit.ly/2FuGDNs

****I’m sticking my tongue out in the direction of either coast. Nana nana boo boo!~SD

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Trump’s attack on retired admiral who led bin Laden raid escalates a war of words
Paul Sonne, Philip Rucker – Washington Post
President Trump has long put the American military at the center of his presidential brand, tapping retired officers to serve as advisers, touting increases in defense spending, and citing support from troops and veterans as a sign of his success.
/wapo.st/2Fsk2B5

****Generally, taking on Navy SEALs isn’t a great move.~SD

++++

Bridging the Week: November 12 – 16 and November 19, 2018 (New Employee Orientation; Whistleblowing; ICOs and SEC Path Forward)
Gary DeWaal – Bridging the Week
The Commodity Futures Trading Commission’s Division of Enforcement issued its annual report last week; it said the purpose of its enforcement program was to engender a “true culture of compliance.” The Division suggested the measure of success for such culture would be evidenced by a company’s chief executive officer threatening new employees during orientation that the company itself would advise law enforcement authorities if they ever violated the company’s internal control requirements. Not exactly the warmest and fuzziest welcome aboard message! Separately, the SEC fined two companies for engaging in initial coin offerings without registration. The SEC also obligated the companies – and they agreed – to pay back initial investors, upon request, the amount of their ICO purchases as well as to file registration statements for their digital tokens. In contemporaneously issued guidance, the SEC said these settlements offered a path forward for other companies previously involved in ICOs.
/goo.gl/Zxt2LR

++++

Friday’s Top Three
Our top story of the day on Friday by far was Crain’s Chicago Business’ CME effort to jettison directors faces opposition among Class B. Second was Bloomberg’s Einar Aas: Trader Who Blew the Nordic Fuse Gets to Keep House. Third was Bloomberg’s Two Words That Sent the Oil Market Plunging: Negative Gamma. Do you know your negative gamma?

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MarketsWiki Stats
135,708,413 pages viewed; 23,313 pages; 215,499 edits
MarketsWiki Statistics

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Lead Stories

The Oil Price Is Now Controlled By Just Three Men; Bin Salman, Trump and Putin are calling the market shots. The prince may struggle to defend output cuts against a hostile Trump and indifferent Putin.
Julian Lee – Bloomberg
OPEC has lost what control of the oil market it ever had. The actions (or tweets) of three men ó Presidents Donald Trump and Vladimir Putin and Crown Prince Mohammed Bin Salman ó will determine the course of oil prices in 2019 and beyond. But of course they each want different things.
/bloom.bg/2FsPaQY

The Environment and Economy Have Become Great-Power Pawns; The new Cold War has spread far from the geopolitical arena.
Hal Brands – Bloomberg
In recent years, we have seen the renewal of a phenomenon that seemed to have passed into history with the end of the Cold War: fierce and potentially violent competition between the most powerful countries on the globe. Yet as dangerous as that competition is in its own right, it is also worsening prospects for solving many of the world’s other problems, from migration to economic crises to climate change.
/bloom.bg/2FwiJ4q

City firms step up Brexodus plans amid political turmoil
Financial News
The City’s biggest institutions have accelerated plans to decouple from London after a week of political turmoil over Brexit that has left UK Prime Minister Theresa May fighting for her job. – Banks and asset managers across the capital are preparing for the harshest possible exit from the European Union after May’s cabinet ministers approved a controversial 585-page Brexit agreement that triggered a flurry of ministerial resignations and prompted sharp falls in the value of the pound.
bit.ly/2Qd2vkU

US stock market surveillance system goes live; Long-awaited ‘CAT’ system to track orders and trades launched despite ‘bugs’
Nicole Bullock – FT
A long-awaited surveillance system for the US stock market launched on Thursday even as “bugs” remained to be ironed out. Known as CAT, the consolidated audit trail is designed to compile detailed information of orders and trades for the US equity and options markets. It has been dubbed by one regulator as a “Hubble Telescope for securities markets”.
/on.ft.com/2FwAMqY

Furious Traders Slam Crypto Exchange for Fiddling With Contracts
Benjamin Robertson – Bloomberg
‘OKEx is losing credibility’: trader who took a $700,000 hit; Exchange says it acted to protect clients from volatility
An unorthodox move by one of the world’s biggest cryptocurrency platforms to change the terms on $135 million of derivative contracts has infuriated some traders and saddled several with losses, underscoring the risks of using unregulated virtual currency exchanges.
/bloom.bg/2FwCUyY

LSE Group looks to shift debt trade to Italy in Brexit hedge; A fifth of EUR13bn-a-day sovereign bond business could leave London
Philip Stafford – FT
London will no longer be the first stop for European governments selling bonds, as the bulk of business on a key platform switches to Milan ahead of the deadline for the UK’s departure from the EU next year.
/on.ft.com/2FwFF3o

As the climate changes, ESG investing powers into the mainstream; BlackRock’s Larry Fink says sustainability will become core but doubts persist
Attracta Mooney and Peter Smith – FT
When Larry Fink, BlackRock chief executive, outlined plans for the $6tn fund house to become a leader in sustainable investing, he was outspoken about the prospects for funds that use environmental, social and governance criteria.
/on.ft.com/2FuUvHN

Bond Traders Have a Bad Case of Wishful Thinking; Fed officials aren’t dovish; they’re just stating facts. Also, Theresa May suffered a Brexit setback, but she probably isn’t going anywhere.
John Authers – Bloomberg
The bond market can be a bit like a dog. You can have long and detailed conversations with it, but in the end all it will hear is its name. And if you fail to get your message across, you’re prone to getting bit, or at least have mud shaken all over the kitchen floor.
/bloom.bg/2FulXoR

Former LSE boss Rolet close to joining CQS as co-CEO – report
Samuel Agini – Financial News
Xavier Rolet, the former chief executive of the London Stock Exchange, is edging closer to joining Sir Michael Hintze’s $17bn hedge fund, CQS.
/goo.gl/en2o7w

Will Machines Run The World? Steve Wozniak Gives His Thoughts
Blu Putnam – CME Group OpenMarkets
Not to worry, according to Steve Wozniak, co-founder of Apple. Machines guided by artificial intelligence (AI) do not wake in the morning and ask: “What should I do today?” That is what humans do. AI will allow for amazing advances in how machines can handle specific tasks, including very complex and inter-related tasks.
/goo.gl/Y7mHfR

Global bond and equity markets shrink $5tn in 2018; Rare parallel declines in capital markets could result in biggest contraction post financial crisis
Robin Wigglesworth in New York – FT
Financial markets are headed for an unusually bad year, with the overall global bond and equity universe shrinking by a cumulative $5tn since the start of 2018 ó the biggest contraction of capital markets since the financial crisis.
/on.ft.com/2FwzFaM

No Experience? No Problem. Private Equity Lures Newbie Bankers With $300,000 Offers; Annual recruitment drive starts earlier this year as firms try to get a jump on preferred candidates
Liz Hoffman and Miriam Gottfried – WSJ
Private-equity titans are used to competing for billion-dollar buyouts. Now they are squaring off for 22-year-old spreadsheet crunchers. An industrywide scramble is under way this week to hire young investment bankers.
/on.wsj.com/2FwzzQy

Switzerland gives green light to first cryptocurrency ETP; Launch comes as bitcoin drops to lowest level for more than a year
Chris Flood – Financial Times
Switzerland’s main stock exchange has given a green light to the world’s first exchange traded product tracking multiple cryptocurrencies, just as the price of bitcoin, the most popular digital coin, has dropped to its lowest level for more than a year. The Amun Crypto Basket ETP, which will start trading next week on the Six exchange in Zurich, has been designed to track an index based on the movements of five leading cryptocurrencies.
/goo.gl/6S7cT5

****International Business Times with the story here.

Goldman Sachs Star Dismissed 15-Year Veteran on Maternity Leave
Sabrina Willmer – Bloomberg
Dispute illustrates broader job worries around pregnancy bias; Elite companies offer paid leave. Some women fear taking it
Two years ago, Tania Mirchandani, a Goldman Sachs Group Inc. vice president in Los Angeles, told her boss she was pregnant with her third child. He was skeptical she could balance a large family with her demanding job, she recalled. That’s “a lot of mouths to feed,” she quoted him as saying.
/goo.gl/VHQ2CK

A Hedge Fund’s Marriage of Convenience; The world of fund management is changing, and that creates an opportunity for smaller, specialist companies.
Mark Gilbert – Bloomberg
The appetite for low-cost passive funds is driving evolution at both ends of the scale in the asset management business. The biggest firms need to add more exotic products which can still command higher fees than their vanilla funds. And that means there’s an opportunity for smaller specialist managers to sell themselves to their larger brethren.
/bloom.bg/2Fsdy5y

Deutsche Bank Is Said to Be Drawn Deeper Into Danske Scandal
Steven Arons and Christian Wienberg – Bloomberg
Whistleblower gives testimony on European bank in Danish case; Deutsche Bank is lender named in testimony: person familiar
Deutsche Bank is being drawn deeper into the money-laundering scandal surrounding Danske Bank.
/bloom.bg/2FuJOom

When Stocks Crash, China Turns to Its ‘National Team’
Moxy Ying – Bloomberg
It rose to prominence when China’s stock market imploded in 2015, spending billions of dollar on equities as the authorities scrambled to stem the losses. Media and market watchers regularly refer to it, but it’s rarely mentioned by Chinese officialdom. There were even questions this year about the desire to keep it going. But worry not, Chinese stockholders, the “national team” is here to (try to) save the day.
/bloom.bg/2FsU804

Exchanges, OTC and Clearing

Wild gas price swings spur CME ’emergency action’
Gregory Meyer and Robin Wigglesworth – Financial Times
The largest US futures exchange took “emergency action” to maintain orderly trading in natural gas contracts as wild price swings gave rise to fears of forced selling.
/on.ft.com/2DIgOrt

Nodal breaks into environmental markets sector
Global Investor Group
Nodal Exchange has made its first move into the environmental markets sector with the launch of more than 250 North American environmental contracts on Friday. The European Energy Exchange (EEX) Group’s US-based exchange, which until now had primarily focused on the energy markets, has introduced futures and options on a suite of emission and renewable contracts.
bit.ly/2QaWGEg

MCX sets up gold delivery centres in Kolkata, Bengaluru, 3 other cities
Business Standard News
Leading commodity bourse MCX Friday said it has set up five additional delivery centres, one each at Chennai, Hyderabad, Kochi, Bengaluru and Kolkata, for Gold and Gold Mini contracts traded on the bourse.
bit.ly/2DJujHo

BSE to cut ties with S&P Dow Jones; develop own in-house indices; The deal with BSE came after the expiry of the licensing arrangement between India Index Services & Products (IISL), a joint venture of NSE and S&P-owned Crisil
Press Trust of India
Asia’s oldest bourse BSE has decided to snap ties with S&P Dow Jones, which manages and operates benchmark Sensex, and plans to develop indices through its own in-house development team, exchange’s officials said.
bit.ly/2FwhXEy

The Egyptian Exchange (EGX) Monthly Statistical Report October 2018
Mondovisione
Total number of listed companies on the main market amounted to 222 at the end of October 2018. Meanwhile, the number of listed companies on Nilex reached 32 at the end of the month.
bit.ly/2Fx0Y53

Why FX is Still “Under-Futurised”; Deutsche Boerse 360T Futures Derivatives credit
Profit-Loss.com
The FX market is still “completely under-futurised” right now, according to Carlo Koelzer, CEO of 360T and global head of FX at Deutsche Boerse Group. Deutsche Boerse announced plans to buy 360T in 2015 and this deal can subsequently be viewed as part of a broader trend of large exchange groups buying OTC FX platforms.
bit.ly/2FwhPVA

SARON Futures: Transitioning the Swiss-denominated market smoothly to the new risk-free rate
Eurex
Following the introduction of the Three-Month SARONÆ Futures to help the Swiss market transition to a new risk-free rate, Eurex spoke with Martin Bardenhewer, Head of Financial Institutions & Multinationals, Z¸rcher Kantonalbank and Co-chair of the Swiss National Working Group on Reference Rates (NWG), Pascal Anderegg, Interest Rate Derivatives Trader, Z¸rcher Kantonalbank, and Michel Erni, Head of Market Rates & Director at Basler Kantonalbank.
bit.ly/2FuMWR8

Fintech

Startup Acorns Is Said to Seek Funding at $700 Million Valuation
Julie Verhage – Bloomberg
The fintech company has more than $1 billion under management; Existing investors include BlackRock, PayPal and Kevin Durant
Acorns Grow Inc. is in talks with investors for a new funding round that would give it a valuation north of $700 million, according to people familiar with the matter.
Acorns, which is part of a growing list of startups offering digital wealth management services, is looking to raise more than $100 million in the new round, though that number could change, said one of the people, who all asked not to be identified because the deal is private.
You’ve reached your free
/bloom.bg/2DIdTPx

Refinitiv unveils MiFID II bond data aggregator
Hayley McDowell – The Trade News
Refinitiv has launched a data aggregator for fixed income trade data available due to MiFID II requirements in a bid to remove the complexity of consuming data feeds from individual reporting and trading venues.
/goo.gl/p3uJrg

Nordic fund manager employs Refinitiv for buy-side workflow overhaul
Hayley McDowell – The Trade
A Nordic fund manager has turned to Refinitiv to deploy an end-to-end buy-side workflow solution for its investment management business.
The agreement will see E. ÷hman J: or Fonder (÷hman) implement Refinitiv’s desktop, trading, data and analytics, and will cover everything from pre- to post-trade workflow across the firm.
bit.ly/2DFSnek

Billionaire-Backed Hong Kong Fintech Firm Plans U.S. IPO
Alfred Liu, Manuel Baigorri, and Crystal Tse
TNG FinTech Group Inc., a Hong Kong-based digital wallet operator, plans to seek as much as $300 million in a U.S. initial public offering, according to people familiar with the matter.
/goo.gl/p4AcbH

Duco opens new office in Singapore
InstitutionalInvestor.co.uk
Duco, a provider of enterprise data quality and reconciliation services, has opened a new office in Singapore to cater to customers across Asia Pacific.
bit.ly/2FyhhOP

BlackBerry to buy cybersecurity firm Cylance for $1.4 billion
Reuters
BlackBerry Ltd raised its bets on artificial intelligence and cybersecurity on Friday with the $1.4 billion purchase of California-based machine-learning specialists Cylance.
/reut.rs/2Fsleo3

Billionaire-Backed Hong Kong Fintech Firm Plans U.S. IPO
Alfred Liu, Manuel Baigorri and Crystal Tse – Bloomberg
Digital wallet operator TNG aims to start trading next year; TNG is profitable, has valuation close to $1 billion
TNG FinTech Group Inc., a Hong Kong-based digital wallet operator, plans to seek as much as $300 million in a U.S. initial public offering, according to people familiar with the matter.
/bloom.bg/2Fu0nAX

Japan and France sign fintech pact
FSA
Japan’s Financial Services Agency (FSA) has signed two cooperation frameworks, respectively with the AutoritÈ des MarchÈs Financiers (AMF) and the AutoritÈ de ContrÙle Prudentiel et de RÈsolution (ACPR) of France to promote innovation in their respective markets.
bit.ly/2Fu0cFN

Cryptocurrencies

Nvidia’s Crypto Burn Will Take Time to Heal; Chip maker has shed 43% of its market value in just six weeks
Dan Gallagher – WSJ
For Nvidia, cleaning out months worth of inventory may prove to be the easy part. The hard part for the once-highflying chip maker will be winning back the trust of investors. That trust took what was once a niche PC-gaming company and turned it into one of the world’s most-valuable semiconductor names. At its peak just six weeks ago, Nvidia was worth about $176 billionónearly five times its value from just two years earlier. Thanks to last month’s marketwide selloff and a disappointing forecast from Nvidia for its current quarter, the company is worth just under $100 billion now.
/on.wsj.com/2Fu2BjN

****Also from the WSJ – Nvidia Grapples With Cryptocurrency Miners’ Exit

France hopes to lure crypto-issuers with Gallic stamp of approval
Inti Landauro – Reuters
With hundreds of cryptocurrencies being issued every month, countries face a choice: ban them, leave them unregulated, or come up with rules to tame them.
/reut.rs/2FwzUTk

Banks employ more chefs than cryptocurrency experts
Yolanda Bobeldijk and Becky Pritchard – Financial News
Banks employ fewer cryptocurrency experts than they do chefs, according to Financial News research that exposes a deep reluctance to enter the fast-growing sector. Only 29 UK executives working at the world’s top 10 banks have the term ‘crypto’, ‘bitcoin’ or ‘digital assets’ in their job titles or within a description of their job, an analysis of LinkedIn profiles has found. This compares with 40 chefs, 78 people who work on “diversity and inclusion” and 85 who manage social media accounts for the same institutions.
bit.ly/2zjFQcI

Bank of Thailand Governor: We’re Still Far Away From Central Bank Crypto
David Kimberley – Finance Magnates
Cryptocurrencies are unlikely to be widely adopted by central banks in the near future. That’s according to the Governor of Thailand’s central bank – the Bank of Thailand – Veerathai Santiprabhob. A report by local outlet, the Chiang Rai Times, indicates that Santiprabhob made the claims on Monday. The report says he was responding to comments made by Christine Lagarde, the head of the International Monetary Fund, last week.
bit.ly/2qWeQeV

A Former Blockchain Believer Explains Why It Will Never Benefit Corporations
Joe Weisenthal and Tracy Alloway – Bloomberg
Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so-random walk through hot topics in markets, finance and economics.
/bloom.bg/2FvikPE

Bitcoin’s repeated splits undermine its long-term value; More than $600bn in cryptocurrency ‘market capitalisation’ has evaporated this year
Jemima Kelly – FT
Cryptocurrencies have been crashing again. Bitcoin has slumped to its lowest price in more than a year. More than $600bn in claimed “market capitalisation” has vanished from the universe of pse
/on.ft.com/2Fsq6tl

Bitcoin sinks to new 13-month low
Tom Wilson and Helen Reid – Reuters
Bitcoin slumped to a new 13-month low on Monday, with the biggest cryptocurrency touching $5173.23 on the Bitstamp platform BTC=BTSP. Bitcoin was last down 5.2 percent at $5270. The cryptocurrency, and other lesser coins including ethereum and XRP, endured a sell-off last week, with some blaming fears that a “hard fork” in bitcoin cash, where the smaller coin that split into two separate currencies, could destabilize others.
/reut.rs/2QaWmp2

Stablecoins are crypto sector’s next big bet; ‘Hybrid’ cryptocurrencies are often pegged to real assets, including fiat currencies
Hannah Murphy in London – FT
When Elizabeth White set up a company in early 2017 to help new-found bitcoin millionaires buy luxury goods such as Lamborghinis and yachts, she quickly encountered a major problem: crypto price volatility.
/on.ft.com/2FsBoxX

Traders Claim Losses After OKEx Suddenly Settles Bitcoin Cash Contracts
Yogita Khatri – Coindesk
Traders have reportedly incurred losses after Hong Kong-based cryptocurrency exchange OKEx settled bitcoin cash futures contracts almost without warning ahead of last week’s hard fork. According to a Bloomberg report Monday, the decision by OKEx resulted in significant losses for some investors, including Qiao Changhe, founder of a firm called Consensus Technologies, who said his fund was down $700,000 because the exchange closed the contracts at a level that did not reflect market prices at the time.
bit.ly/2TtY43Z

Leap in the Blockchain Development: What Will be in Demand on the Decentralized Market in 2019?
Gerald French – Forbes
2017 had the most robust crypto market ever seen. In comparison, 2018 has had quite an unimpressive run within the crypto space with almost all coins careening down by at least 80% from their all-time highs. We closed last year with both November and December seeing the highest in crypto market growth rate; Bitcoin alone made a staggering $600 billion in Market Capitalization. Consequently, its price shot up to $20,000.
bit.ly/2FuwsZj

Deloitte Blockchain Chief: Bad Crypto Headlines Making Clients ‘Nervous’
Anna Baydakova – Coindesk
“Can we stop talking about my bad brother?” That’s how Linda Pawczuk, leader of Deloitte Consulting’s financial services industry blockchain group, describes the conversations she often has these days with executives and board members of client companies.
bit.ly/2A9X6ke

Politics

Pence’s Sharp China Attacks Fuel Fears of New Cold War
Jason Scott, Dandan Li, and Isabel Reynolds – Bloomberg
Since the Soviet Union fell in the early 1990s, Southeast Asia has sought to avoid getting caught in a fight between major powers. The Trump administration is making that position look increasingly untenable.
Vice President Mike Pence sharpened U.S. attacks on China during a week of summits that ended Sunday, most notably with a call for nations to avoid loans that would leave them indebted to Beijing. He said the U.S. wasn’t in a rush to end the trade war and would “not change course until China changes its ways” — a worrying prospect for a region heavily reliant on exports.
/goo.gl/QJNgU4

Grassley to Lead Senate Finance Panel; Veteran Iowa senator to switch from Judiciary Committee next year
Richard Rubin – WSJ
Sen. Chuck Grassley is expected to lead the Finance Committee next year, giving the veteran Iowa Republican more sway over tax, trade and health policy.
/on.wsj.com/2Fu3XLp

‘Trump Effect’ or No, Tourists Are Coming Back; The president’s words and policies may have scared some students and visitors away from the U.S., but this country still exerts great attractive force.
Justin Fox – Bloomberg
The story line goes something like this: Dislike and/or fear of President Donald Trump, tougher visa rules and border enforcement, and reports of hostility to foreigners are discouraging people with brains and money from coming to the U.S.
/bloom.bg/2FET5uq

Soros Discusses Relocating Embattled College With Austria’s Kurz
Boris Groendahl – Bloomberg
Austrian Chancellor Sebastian Kurz met George Soros in Vienna to discuss the billionaire’s plans to move parts of Central European University to the Austrian capital from Budapest, where the government has targeted the institution for closure.
/bloom.bg/2Fwy1G8

Cheap Power Matters More to Australians Than Climate Change, Poll Shows
James Thornhill – Bloomberg
A new poll shows Australian Prime Minister Scott Morrison’s focus on getting power bills down may be starting to pay dividends. But it also suggests his failure to establish a coherent narrative on tackling climate change could hurt his government at the ballot box.
/goo.gl/v2RfKG

A Haven for Money in the Middle East, Dubai Is Losing Its Shine
Zainab Fattah – Bloomberg
Switzerland model is undercut as U.A.E. enters regional fray; With oil spenders retrenching, who’ll fill all the new malls?
Ever since the first gleaming towers sprang out of the desert, Dubai has gotten used to rapid change. It’s no stranger to boom-and-bust. What’s happening now is different: a slow bleed.
/bloom.bg/2FvLPkp

Regulation

U.S. regulator settles with tech startups over token sale violations
Katanga Johnson – Reuters
The U.S. Securities and Exchange Commission settled charges on Friday with two technology companies for improperly offering digital tokens, mandating that they register their offerings as securities and reimburse investors.
/reut.rs/2DJrZAa

CFTC and State of Utah Charge Salt Lake City Precious Metals Dealer and His Company with Engaging in $170 Million Precious Metals Ponzi Scheme
CFTC
The Commodity Futures Trading Commission (CFTC) and the Utah Department of Commerce, Division of Securities, through its Attorney General, jointly filed a civil enforcement action in the U.S. District Court for the District of Utah, Central Division, against Defendants Gaylen Dean Rust (Rust) and Rust Rare Coin, Inc. (RRC) of Layton, Utah and Salt Lake City, Utah, respectively. The Complaint charges Rust and his company RRC with defrauding at least 200 individuals – from Utah and at least 16 other states – and fraudulently obtaining more than $170 million from investors since May 2013 in a precious metals Ponzi scheme.
bit.ly/2DIWHJZ

A Call for SEC to Lead in Proxy Vote Overhaul
Vito J. Racanelli – Barron’s
The Securities and Exchange Commission must take the lead in proposingóif not compellingócooperation and new approaches to improve the accuracy and reliability of the U.S.’s outdated and expensive proxy voting system. That was the consensus of a roundtable held at the SEC’s Washington D.C. headquarters on Thursday. Without the agency’s active involvement, improvements will take much longer to implement, given that business interests may be threatened by change.
bit.ly/2FHzgmf

The SEC Hands Out MiFID II Lifelines, But US Firms Are on the Clock
Shaun Lin, Smartkarma – TABB Forum
A trio of no-action relief notices from the SEC temporarily saved US financial markets from MiFID II’s research unbundling provisions. But those exemptions won’t be in place forever. How long is too long for a temporary fix? The industry now stands at the crossroads. Market participants either can capitalize on the opportunity to plan an appropriate competitive response to MiFID II or use the temporary measures as an excuse to prolong inaction.
/goo.gl/PbPZkY

FIA offers recommendations for CFTC and SEC harmonization
FIA
The Futures Industry Association (“we” or “FIA”) is submitting this letter to the Securities and Exchange Commission (the “SEC”) and the Commodity Futures Trading Commission (the “CFTC” and, together with the SEC, the “Commissions”) to propose several areas in which the Commissions could coordinate and harmonize their regulatory programs. We believe that the proposals support the goals of the CFTC, SEC and U.S. Department of the Treasury to promote coordination, harmonization and efficient regulations.1 We also believe that these proposals will provide clarity to regulated markets and reduce unnecessary costs for regulators and market participants.
/goo.gl/uH1yFd

SIFMA Comments On Uniform Mortgage-Backed Security Proposed Rule
SIFMA
In a comment letter filed today with the Federal Housing Finance Agency on potential rulemaking on the implementation of the Uniform Mortgage-Backed Security (UMBS), SIFMA offers suggestions to strengthen three aspects of the proposed rulemaking for the benefit of investors and mortgage borrowers.
/goo.gl/YXHHmk

U.S. regulators ease banking rules in light of California fires
Reuters
Banks that operate in fire-blasted regions of California will not be punished if they ease loan terms or miss some federal reporting requirements, federal banking regulators said on Thursday.
/reut.rs/2FsRTdp

Nissan Moves to Oust Iconic Chairman Ghosn After Shock Arrest
Jie Ma – Bloomberg
Carmaker says Ghosn under-reported income, misused its assets; Renault, also led by Ghosn, plunges as much as 15% in Paris
The arrest of Nissan Motor Co. Chairman Carlos Ghosn has thrown the auto industry’s largest global alliance into turmoil, with the Japanese carmaker saying it will seek to remove him. Ghosn, a towering figure who saved Nissan from collapse and brought it together with Renault SA and Mitsubishi Motors Corp., was detained Monday in Tokyo over a suspected breach of Japanese financial laws, according to NHK. He and Director Greg Kelly have been under investigation at Nissan for several months, and the company said that it’s seeking to oust them both. Nissan is set to a hold a media conference in Tokyo this evening.
/goo.gl/hcbd9H

Investing and Trading

Tech Rout Puts Silicon Valley on Edge
Sarah Ponczek and Jeran Wittenstein – Bloomberg
Signs start to emerge that it’s no longer business as usual; Investors get pickier, startups get anxious, home prices drop
Steve Hoffman grabs the mic and, at once, beams Silicon Valley optimism. Decked out in his trademark purple-and-blue plaid shirt, his high-pitched voice echoing off the concrete walls, he touts his start-up incubator’s track record and rattles off the names he helped propel: Instagram, Etsy, Change.org, Foursquare.
/goo.gl/SLtaYc

‘Go anywhere’ bond funds spark debate around liquidity risk; Investors’ race for the exit added to GAM’s absolute return fund crisis
Robert Smith – Financial Times
At the end of July, Zurich-based asset manager GAM shocked the staid world of Swiss asset management when it suspended a star bond fund manager. This came after an internal investigation found flaws with risk management and record-keeping. The outflows that followed led GAM to bar investors from making withdrawals from its flagship absolute return bond funds. The company then liquidated the SFr7.3bn ($7.2bn) fund range.
/goo.gl/CHCjLt

S&P 500 Range This Year Belies Index’s Recent Volatility – Chart
David Wilson – Bloomberg
This year has been less volatile for U.S. stocks than the ups and downs of the past few weeks would suggest. The gap between the S&P 500 Index’s Sept. 20 high and Feb. 8 low is 13.6 percent, according to data compiled by Bloomberg.
/goo.gl/sbJDfi

Invesco: The state of fixed income ETFs in Europe (Video)
The Trade News
Tom Digby, Head of EMEA ETF Client Trading, Invesco, talks to TRADE TV at the Fixed Income Leaders Summit 2018 about the trends around trading fixed income ETFs in Europe.
/goo.gl/VUCju4

Foreign investors shed EUR 1.5bn of Italian government debt; Latest sell-off takes total drop in overseas holdings to EUR 68bn since May
Kate Allen – Financial Times
Foreign investors in Italy’s bond market shed a net EUR1.5bn of government debt in September, in the latest evidence that the market jitters of the past six months have eroded their willingness to hold Italian paper.
/goo.gl/cbp4of

Energy Stocks Try to Shed Reputation as the ‘Fifth Beatle’
Jessica Menton – WSJ.com
Investors have been quietly moving into shares of energy companies, lured by the firms’ strong earnings growth and cheap valuations, as they aim to diversify beyond some of the big technology stocks that led the recent stock-market rout.
/goo.gl/HETXix

Green bonds’ newer shades help investors meet social aims; After the first ever ‘blue bond’, the next evolution is sustainability across capital markets
Heike Reichelt – Financial Times
Investors who once thought little about what their portfolios were supporting have elevated purpose and impact towards the top of their agendas in recent years.
/goo.gl/4x599U

A $75 Billion Wipeout Should Scare Momentum Bulls
Arie Shapira – Bloomberg
It’s no surprise that tech stocks haven’t recovered as much as others ever since the market recovered in late October.
/goo.gl/e74qqf

Institutions

RBS drops off list of world’s most important banks
Stephen Morris and Nicholas Megaw – The Financial Times
Royal Bank of Scotland has been removed from a list of the world’s most important banks, meaning it will no longer have to hold additional capital to offset the systemic danger it used to present to the global financial system.
The decision by the international Financial Stability Board means RBS escapes the requirement to maintain capital equivalent to an extra 1 per cent of its risk-weighted assets. This could boost the amount of cash the majority government-owned bank will be able to return to UK taxpayers and institutional shareholders.
/goo.gl/TDg4VJ

Voting advice on CEO pay is usually ignored by big asset managers; Data show that recommendations from proxy advisers ISS and Glass Lewis are rarely followed
Attracta Mooney – FT
Many of the US’s biggest asset managers rarely take heed of recommendations to vote against CEO pay in the US, despite accusations that investors blindly follow the advice of Institutional Shareholder Services and Glass Lewis.
/on.ft.com/2FsRJ5G

Fast-food chains among winners of Wall St’s securitisation machine; Taco Bell latest to have found way to lower debt costs and ease investor access
Joe Rennison and Alistair Gray – FT
It is not just ingredients being cut up by restaurant companies. Franchise chains serving everything from burgers to burritos are also offering sliced-and-diced debt to investors, as appetite for restaurant securitisations reaches record levels.
/on.ft.com/2FuovTX

Big Issue works with fund managers on impact investing push; Standard Life Aberdeen and Columbia Threadneedle products sold on blockchain-powered platform
Jennifer Thompson – FT
Standard Life Aberdeen, Columbia Threadneedle and AllianceBernstein have teamed up with the Big Issue, the magazine sold by homeless people, to create a blockchain-powered platform that offers impact funds to retail investors.
/on.ft.com/2Fq512O

ABN Amro says cannot verify authenticity of ‘rebellious managers’ letter
Reuters
ABN Amro (ABNd.AS) said on Monday it could not verify the authenticity of a letter sent to its chairman by people claiming to be a group of 40 managers at the Dutch bank dissatisfied with its current leadership and direction.
/reut.rs/2FsdN0s

As ETFs Get Cheaper, Wall Street Looks for Ways to Charge More; Complex strategies come with higher fees.
Rachel Evans – Bloomberg
Investors love exchange-traded funds because they’re simple and cheap. With some index funds now charging zero fees, it’s getting harder for asset managers to make money selling investors the basics. Watch ETFs get more complicated.
/bloom.bg/2Fu63ef

Regions

Glencore’s Misadventure in the Congo Threatens Its Cobalt Dreams
Franz Wild, Vernon Silver and William Clowes – Bloomberg
A dozen years ago the future of technology bounced out of a remote corner of Africa on the back of a truck, along with a world of potential trouble. Both, embodied in the same load of rock, landed in the hands of Ivan Glasenberg, chief executive officer of Glencore Plc, the world’s largest middleman for the raw materials that fuel, feed, and underpin civilization. Glasenberg’s obsession was copper, because China’s appetite for it was insatiable, with copper wire electrifying the nation’s rising cities and running through the appliances its factories sold to the West. The metal’s price had quadrupled in less than three years, triggering a global frenzy. Miners blasted it from Chilean mountaintops and dug it from the African earth as fast as they could.
/bloom.bg/2DILU2w

Danske Bank whistleblower talking to US enforcement agencies; DoJ investigates biggest money-laundering scheme ever uncovered
Caroline Binham and Richard Milne – FT
The former Danske Bank manager who blew the whistle on a EUR200bn money-laundering scandal centred on the bank’s tiny Estonian branch has talked to a multitude of US law-enforcement agencies, raising the stakes for Denmark’s biggest lender as it faces investigations around the world.
/on.ft.com/2FvigiU

El NiÒo gives warm relief to China’s soyabean importers; Switch to favouring Brazilian crops follows eruption of trade war with the US this year
Emiko Terazono – FT
Ahead of this month’s G20 talks that could cool the Sino-US trade war, another issue on soyabean traders minds’ is El NiÒo, the weather phenomenon that is poised to help Chinese importers.
/on.ft.com/2Fq5a6m

China Plows Ahead With Modern Farming as American Tariffs Drive Up Crop Costs; The trade fight gives Beijing fresh incentive to beef up a sector dominated by small farms with low crop yields
Dominique Fong – WSJ
To keep bugs from spoiling her wheat and corn, Wei Junxia walks her plot of land spraying pesticide from a container on her back.
/on.wsj.com/2FEEpeq

Hong Kong ‘Occupy’ protest leaders deny public nuisance charges
James Pomfret – Reuters
Three leaders of Hong Kong’s 2014 pro-democracy “Occupy” movement, which paralyzed parts of the Chinese-ruled city for nearly three months, denied public nuisance charges on Monday as international criticism of the erosion of civil liberties grows.
/reut.rs/2Fq3REu

‘No more apologies’: barrister tells Australian bank chiefs
Byron Kaye, Paulina Duran – Reuters
The CEO of Commonwealth Bank of Australia (CBA.AX) told a public inquiry into financial-sector misconduct on Monday that senior staff had felt powerless to stop wrongdoing including thousands of breaches of anti-money laundering laws.
/reut.rs/2FERchk

RBI board meets amid row with government, Indian markets on guard
Suvashree Choudhury – Reuters
A Reserve Bank of India board meeting began on Monday with investors waiting to see if central bank and government policymakers could bridge differences over several key issues.
/reut.rs/2FvdamK

China investors dump once-acquisitive firms on write-down fears
Reuters
Chinese investors dumped stocks in acquisitive sectors such as entertainment, media and IT on Monday on concerns new regulatory demands and a slowing economy could force heavy write-downs for firms that overpaid for assets during the boom years.
/reut.rs/2FER5lU

Poland Vows Liquidity for Troubled Banks as Stocks Extend Losses
Adrian Krajewski, Maciej Martewicz and Konrad Krasuski – Bloomberg
Central bank is ready to help Getin Noble Bank and Idea Bank; Government struggles to contain bribery scandal behind selloff
Poland’s finance minister and central bank chief pledged to provide liquidity for two lenders at the center of a corruption scandal as investors again sold battered bank stocks.
/bloom.bg/2FyjCt5

China Market Rescue Unleashes Hot Money Seeking Risky Stocks
Bloomberg News
Companies labelled as high risk have surged in recent weeks; Shift in regulatory tone seen to have encouraged speculation
China’s drive to support its beleaguered stock market is helping pave a high-risk road for speculators chasing unlikely targets.
/bloom.bg/2Fu6qp9

Venezuela’s exiled justice department calls for Interpol arrest of Maduro and 18 years for corruption
Alexandra Ma – Business Insider
Venezuela’s justice department in exile requested an international arrest warrant, also known as a red notice, for its own president Nicol·s Maduro. The Supreme Tribunal of Justice (TSJ) in exile accused Maduro of corruption in a letter to J¸rgen Stock, the secretary-general of Interpol, dated on Monday. The exiled department, which calls itself the Legitimate TSJ, was established in 2017 amid a constitutional change.
bit.ly/2KgxLtE

Brexit

You Do the Math: Can May Get Her Brexit Deal Through Parliament?
Robert Hutton – Bloomberg
U.K. Prime Minister Theresa May has got a Brexit deal, but now she needs to get it through Parliament. If we take politicians at their word, it will be impossible for her to get it passed.
/bloom.bg/2FsRGqD

Market pressure will not save the Brexit deal; There is a striking gap between analysis of investors and that of political commentators
Wolfgang M¸nchau – FT
Sometimes financial markets change the course of political events. More often they do not. A market panic persuaded the US Congress to legislate in favour of the troubled asset relief programme during the financial crisis in 2008. Four years later, turmoil on the trading screens extracted a commitment by Mario Draghi to do “whatever it takes” to safeguard the bond markets of eurozone countries. But these were the grand exceptions.
/on.ft.com/2FvJq9n

Michel Barnier proposes extending Brexit transition to 2022; Prolonging free movement and EU payments would fuel Eurosceptic ire
Mehreen Khan in Brussels and Sylvia Pfeifer and Laura Hughes in London – FT
Greg Clark, UK business secretary, has suggested that Britain would be open to a “maximum” extension of the Brexit transition period until 2022, to ensure a smoother path for business.
/on.ft.com/2FsR7Nq

Embattled May Asks Business Leaders to Back Her Brexit Deal
Robert Hutton and Nikos Chrysoloras – Bloomberg
Prime minister says Tories haven’t triggered confidence vote; EU proposes any extension to transition should end in 2022
Theresa May will appeal to business leaders to help deliver her Brexit deal, as she fights implacable opposition in Parliament and a possible leadership challenge.
/bloom.bg/2FsPVcM

Miscellaneous

Wall Street bankers are throwing excessive parties to dodge taxes
John Aidan Byrne – NY Post
Bankers and traders will be celebrating the prospect of massive, multimillion dollar payouts ó and they’ll use the mega-expenses of year-end blowouts as write-offs for their inflated tax bills, according to industry sources.
/nyp.st/2Fw98uk

The post The Oil Price Is Now Controlled By Just Three Men; Environment and Economy Have Become Pawns appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

I am home from the hospital. I actually came home on Saturday. I will be working from home for the next week, which works out nicely with Thanksgiving and the kids being home from college. I am thankful for the tremendous care I received from the doctors and staff at Elmhurst Hospital. I am in and continue to be in good hands.~JJL

Thank you to the JLN staff for their hard work in my absence.~JJL

Thank you to all who offered me prayers and wishes of good health and quick recovery. I greatly appreciate it all. It means a lot. Thank you!~JJL

The main subject of yesterday’s JLN Options newsletter was the plight of OptionSellers.com. The firm fell victim to the wild energy sector gyrations last week. In sum, don’t go naked short calls into the wintery nat gas wilderness. The head of the firm put out a 10-minute long mea culpa video. It’s an odd viewing experience.~SD

Registration for FIA Boca 2019 is officially open! The FIA’s 44th Annual International Futures Industry Conference will take place March 12-14, 2019 at the familiar pink-tinged Boca Raton Resort & Club. You can register and learn more here. ~SR

CME Group updated its website.~SD

To my knowledge, Eurex’s new SARON futures product is not inspired by, nor has any relation to, Middle-earth’s Dark Lord of Mordor.~SD

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The Spread – College Football Edition – 11/16
JohnLothianNews.com

A chance to talk sports?! And derivatives trading?! This past week offered up a glorious opportunity for “The Spread” and we pounced.

Watch the video and see the stories referenced here »

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Free Vacations, $100,000 Discounts: Homebuilders Get Desperate
Prashant Gopal – Bloomberg
Ram Konara, a real estate broker in suburban Dallas, is raking in freebies this year: trips to Lake Tahoe and Santa Barbara in California, Cabo San Lucas in Mexico, and a dude ranch in Wyoming. The homebuyers he represents are cashing in, too. They’re winning price cuts of more than $100,000, on top of free upgrades such as media rooms, cabinets, and blinds.
/goo.gl/5vReKz

****Oh boy, I bet this’ll turn out well… If you want some fun homebuilding context check out this historical tidbit – “Fewer than 12,000 homes per month were built in 1943, equivalent to less than one new home per American city” via Morgan Housel’s blog. ~SD

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The Poker Aces Playing a Key Hand in the $5 Trillion ETF Market; Harnessing poker prowess and game theory, Susquehanna International has become a key ETF player.
Annie Massa – Bloomberg
On City Avenue in the Philadelphia suburb of Bala Cynwyd, Pa., across the street from a TGI Fridays and California Pizza Kitchen, sits a bland building that looks like any other corporate office. The only notable feature is in the parking lot: a large oak labeled a “significant tree” because it survived the American Revolution.
/bloom.bg/2qWwnDS

**Never, ever, smile at SIG.~JK

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Monday’s Top Three
Our top three was led by the Washington Post’s piece Trump’s attack on McRaven, who led bin Laden raid, escalates a war of words. It’s tough to say anything positive about this, so let’s move on to our second story, Bloomberg’s Goldman Executive Dismissed 15-Year Veteran on Maternity Leave. It’s hard to say anything positive about that, so let’s move on to our third top story, Bloomberg’s Bin Salman, Trump and Putin Control the Oil Price Now. Um… let’s keep it positive today, shall we?

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MarketsWiki Stats
135,782,104 pages viewed; 23,314 pages; 215,501 edits
MarketsWiki Statistics

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Lead Stories

SEC Crypto Settlements Spur Expectations of Wider ICO Crackdown
Vildana Hajric – Bloomberg
Airfox, Paragon must register tokens, compensate investors; Crypto market drops to 13-month low on liquidation concern
The cryptocurrency market is reeling after the SEC fined two companies that didn’t register initial coin offerings as securities and allowed investors to reclaim their money.
/bloom.bg/2qY317Y

Options trading firm blows up amid natural gas volatility; Optionsellers.com is first known casualty of last week’s price spike
Gregory Meyer – FT
The first casualty has publicly surfaced from last week’s mayhem in energy markets, when a sharp decline in crude oil futures was followed by an explosive rise in US natural gas. Accounts managed by Optionsellers.com “had to be liquidated as a result of these moves,” said INTL FCStone, the company’s futures broker. As its name made plain, Optionsellers.com specialised in selling options contracts to earn income for its investors.
/on.ft.com/2qVBK5W

****As I mentioned up top, yesterday’s JLN Options newsletter took a look at this blowup. The WSJ had a story, too.~SD

US futures exchange weighs launch of Brazil soyabean contracts; CME Group considers move as Sino-US trade spat unsettles oilseed prices
Joe Rennison and Gregory Meyer – FT
CME Group, the largest futures exchange operator, is considering launching new contracts on Brazilian soyabeans as US-China trade tensions unsettle prices for the oilseed, its chief executive said.
/on.ft.com/2qV3fgd

Cboe Tries To Keep Lid On Discovery In VIX Manipulation MDL
Law360
Cboe Global Markets Inc. is urging an Illinois federal court to deny Chicago Board Options Exchange investors a head start on discovery in multidistrict litigation over alleged manipulation of its volatility.
bit.ly/2DvVYed

How Brexit will redraw Europe’s financial infrastructure; London’s central position means a messy divorce would be complicated and costly
Philip Stafford – FT
Brexit is already weakening the UK’s grip on Europe’s capital markets, denting London’s status as a hub for millions of deals each day. Key parts of the trading infrastructure for equities, sovereign debt and repo markets are setting up in the Netherlands and Italy. Banks are moving jobs to Paris and Frankfurt.
/on.ft.com/2qURUfR

London Gold Market Comes Clean: It’s Not as Big as Thought
Eddie van der Walt, Rupert Rowling and Anna Edwards – Bloomberg
London’s gold market owned up to the biggest secret in bullion: it’s not as big as some thought and, for last week at least, smaller than New York’s. An average of $36.9 billion of gold and $5.2 billion of silver changed hands each day in the city’s over-the-counter market, including metal for delivery in Zurich, according to figures released for the first time on Tuesday by the London Bullion Market Association. Previous World Gold Council estimates, based on 2016 data, were between three and six times higher.
/goo.gl/xAsttZ

MAS & SGX on How Project Ubin is the Way of the Future for Blockchain Interoperability
Nasdaq.com
In addition to all the goings on, Nasdaq was part of an announcement by the Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) around an exciting blockchain collaboration called Project Ubin.
bit.ly/2DxRgfX

The rise of ‘quantamental’ investing: where man and machine meet; Asset managers adopt new approach in era defined by automation, algorithms and big data
Robin Wigglesworth – FT
As soon as the financial crisis started to recede, Jordi Visser knew something had to change. Algorithms were starting to rule markets, and hedge funds like the one he managed were confronting a tougher era.
/on.ft.com/2qRTRtI

Pressure builds on regulators over crypto irregularities; Push for more oversight following $15bn crash in bitcoin and trading platform problems
Don Weinland, Emma Dunkley and Federica Cocco – FT
Pressure is building on regulators to increase their oversight of cryptocurrencies following a $15bn crash in bitcoin and irregularities at one of the world’s largest virtual trading platforms.
/on.ft.com/2qWFG6v

Societe Generale to pay $1.4 billion to settle cases in the U.S.
Katanga Johnson, Karen Freifeld, Inti Landauro – Reuters
French banking giant Societe Generale on Monday agreed to pay U.S. federal and state authorities $1.4 billion to resolve pending legal disputes.
/reut.rs/2QWwOZY

Bitcoin plunges 16% to $4,200, a new low for the year
Kate Rooney – CNBC
The digital currency hit its lowest point since September 2017, and it is now down roughly 30 percent for the week. Bitcoin had been trading in a relatively narrow range for most of October, around $6,400, as the rest of global markets sold off. “Markets around the world are fragile, and panic and sentiment are playing a disproportionate role right now,” Fundstrat’s Tom Lee says. “Does this mean bitcoin is broken? No. The use case is still there, but in the short term, panics are panics.”
/goo.gl/dAeFSG

****Bloomberg on the plunge here.

Danske whistleblower says big European bank handled $150 billion in payments
Teis Jensen, Jacob Gronholt-Pedersen – Reuters
The whistleblower who revealed alleged money laundering involving Danske Bank said on Monday that a major European bank helped process up to $150 billion in suspicious payments, or nearly two-thirds of the transactions under scrutiny.
/goo.gl/3J4fYi

CFTC Approves a Final Rule to Amend Uncleared Swap Margin Requirements
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that it has approved a final rule to amend its uncleared swap margin requirements (CFTC Margin Rule) to better align with certain rules (QFC Rules) adopted by the Board of Governors of the Federal Reserve System (FRS), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) that impose restrictions on certain qualified financial contracts.
/goo.gl/nwN85e

****For CFTC Chairman Giancarlo’s statement go here.

Cyborg supervision – the application of advanced analytics in prudential supervision
James Proudman, UK Deposit Takers Supervision – Bank of England
Recognising faces comes instinctively to humans. Until fairly recently, however, it proved beyond the ability of computers. Advances in artificial intelligence (AI) – the use of a machine to simulate human behaviour – and its subset, machine learning (ML) – in which a machine teaches itself to perform tasks – are now making facial recognition software much more widely available. You might even use it to access your bank account.
bit.ly/2QRYrDz

Measuring uncertainty helps investors navigate risk; Researchers are developing new ways to gauge volatility far beyond financial markets
Howard R. Gold – Chicago Booth Review
When the United States and Mexico reached a new understanding about trade matters this past summer, renegotiating parts of the North American Free Trade Agreement, President Donald Trump cheered. Others had questions: How would the deal affect the US auto industry? How would it affect consumers? What would it mean for recent tariff hikes on steel and aluminum imports? You could almost hear executives across the continent reaching for antacids.
/goo.gl/HwV3Xj

May’s Brexit Deal Has a Fatal Defect; The agreement makes Britain a perpetual subordinate.
Clive Crook – Bloomberg
Last week Theresa May unveiled her draft agreement with the European Union on the terms of Britain’s exit. The reaction was exactly as expected. Remainers despaired because the deal is so much worse than staying in the union ó which is true, of course. Leavers despaired because the deal is Brexit in name only ó which is also true. But that was bound to happen, right? Whatever variant of the earlier much-derided Chequers plan May had brought the EU to accept, the response from both sides would have been exactly the same.
/bloom.bg/2qUPRsb

Exchanges, OTC and Clearing

Singapore Exchange to launch new iron ore swaps, futures Dec 3
S&P Global Platts
Singapore Exchange will launch new high grade iron ore swaps and futures contracts on December 3, SGX confirmed Tuesday, referencing Fastmarkets MB.
bit.ly/2Dyuu7N

MW18: Freight Futures will launch on the Nodal Exchange March 29
FreightWaves
During the conversation, Fuller announced that the Freight Futures Exchangeóin partnership with Nodal Exchange and DATówould open on March 29, 2019.
bit.ly/2DysZX4

Indonesia May Soon Have a Blockchain-based Futures Exchange
LIivebitcoinnews.com
Indonesia is the latest country that looks set to benefit from blockchain technology. Its Jakarta Futures Exchange is partnering with two Australian platforms to develop a more secure and efficient financial solution.
bit.ly/2DzhfU9

SGX sets out guidelines for initial coin offerings
Singapore Business Review
The Singapore Exchange (SGX) has laid out guidelines for listed companies considering conducting initial coin offerings (ICO) given the growing popularity of the fundraising method. –
An ICO is when a firm makes an offer of digital tokens or coins to investors that are paid for either with fiat currencies or other cryptocurrencies.
bit.ly/2DAyODE

Deutsche Boerse’s Clearstream Posts Flat Volumes for October
Aziz Abdel-Qader – Finance Magnates
Clearstream, a provider of post-trade services for financial services participants, has reported its aggregated operational metrics for October 2018, which showed a mixed performance when weighed against its counterparts a year ago, though specific segments did undergo healthy growth.
bit.ly/2QRFMrv

Nasdaq Nordic members face fresh capital demand if make Brexit switch
Lefteris Karagiannopoulos – Reuters
Nasdaq’s Nordic clearing house will calculate additional risk-related capital requirements for trading members that move their accounts and positions from Britain to the European Union because of Brexit, the exchange said on Monday.
/reut.rs/2qXwmPW

LSE moves euro government bond trading from London to Italy ahead of Brexit
Reuters
The London Stock Exchange said on Monday it will move its European government bond trading from London to Italy in time for Britain’s exit from the European Union next March.
/reut.rs/2qUaTHo

Fintech

Disrupting the Order Management Landscape
Jason Shaffer – Trading Technologies Blog
At this year’s FIA Expo, we made the exciting announcement that we are launching a full service order management system called TT OMS. For years now, we have been describing at length how the TT platform has re-imagined and redefined what a professional trading system is capable of. Offering a full-service OMS allows us to deploy our disruptive technology to provide a very compelling alternative to a segment of customers in need of a trustworthy partner who can deliver the level of service for which TT is known.
bit.ly/2QWpEFl

The Chip Industry Can’t Seem to Escape Its Boom-and-Bust Past
Robert Cyran – NY Times
The chip industry’s new paradigm looks like the old one.
As cutting-edge semiconductors got harder to make and demand boomed from new fields like bitcoin mining, the world’s top processor manufacturers seemed invulnerable. But shrinking sales forecasts from Nvidia and Applied Materials show that companies are as prone as ever to economic cycles and excess inventory.
/nyti.ms/2QXMbkY

US considers export controls on AI and other new tech; Restrictions applied to weaponry could be extended as trade war with China intensifies
James Politi in Washington – FT
The Trump administration is considering curbs on exports of advanced technologies ranging from artificial intelligence to robotics, as it seeks new means to protect American leadership in innovation from Chinese competition. On Monday, the commerce department said it was seeking public comment by December 19 on “whether there are certain emerging technologies that are essential to the national security of the US”.
/on.ft.com/2qXS3PW

Eventus Systems Named to Global RegTech 100 for 2019
List Identifies the Most Innovative Technology Solution Providers Addressing Regulatory Issues in Financial Services
Specialist research firm RegTech Analyst has just named Eventus Systems, Inc., a provider of regulatory technology software solutions for the capital markets, to its global RegTech 100 list for 2019, recognizing the pioneering companies transforming compliance, risk management and cybersecurity.
/goo.gl/rHo9K4

Goldman Sachs’ big bet on the future of Wall Street had a rocky start. Here’s the inside story of the bank’s struggle to grow its next business and an exclusive look at its plans
Dakin Campbell – Business Insider
It was early 2017, and Marquee, a trading and risk-management platform in which the firm had invested millions with the hopes of turning it into its next big business, was struggling to gain momentum.
/read.bi/2qYfZCJ

CloudQuant Partners with RavenPack to Expand Use of Alternative Data
CloudQuant
CloudQuant LLC today announced the addition of RavenPack analytics within their trading strategy incubator. Crowd researchers can now use RavenPack historical data to discover tradable alpha signals on CloudQuant’s online Python and JupyterLab-based tools.
/goo.gl/dvUpGW

Cryptocurrencies

Bitcoin Bulls Who Lived by This Metric Now Dive With It; A gauge based on transactions shows the digital currency should drop even more.
Stephen Gandel – Bloomberg
Bitcoin bulls are going to need a new reason to buy. The gauge that many said they were relying on suggests the price, even after falling below $5,000 for the first time in more than a year on Monday, has even further to drop, perhaps a lot.
/bloom.bg/2qVFVic

Jamie Dimon Vindicated? Bitcoin’s Back to Where He Cried ‘Fraud’
Michael Patterson – Bloomberg
Maybe Jamie Dimon was right after all. In September 2017, the JPMorgan Chase & Co. chief executive officer famously called Bitcoin a “fraud” and threatened to fire any employee caught trading it. While the cryptocurrency briefly fell on his remarks, it went on to rally more than fourfold in three months as crypto-mania swept the globe. Dimon became a favorite punching bag for Bitcoin bulls, even after saying later that he regretted the comments and that he believes in the digital asset’s underlying blockchain technology.
/bloom.bg/2qUnuKO

Bitcoin Rout Marks Third-Biggest Selloff in Crypto History
Eddie van der Walt – Bloomberg
Reversal is worst since fallout from Mt. Gox 2014 bankruptcy; Losses snowballed after coin plunged through $6,000 support
Bitcoin’s woes continued with its selloff now the third-biggest it has ever faced. The oldest cryptocurrency plunged as much as 78 percent from its intraday high of $19,666 in December, according to data from exchange Bitstamp. That makes it the biggest retracement since the fallout from the Mt. Gox bankruptcy in 2014 and a dip in 2011 when it was trading below $50.
/bloom.bg/2qVGZTe

Politics

Elizabeth Warren Throws Down the Gauntlet on Leveraged Loans
Brian Chappatta – Bloomberg
It seemed like only a matter of time before Senator Elizabeth Warren of Massachusetts, one of the fiercest Wall Street critics on Capitol Hill, joined the fray over potential risks in U.S. leveraged loans. She didn’t disappoint, blasting the $1.3 trillion market in a letter to regulators as a repeat of the subprime mortgage crisis that nearly toppled the financial system a decade ago.
/bloom.bg/2QWu92C

China’s Biggest Problem Isn’t Trump. It’s China.; Long before the trade war heated up, Beijing started cooling off its own economy.
Mark Gongloff – Bloomberg
For all the tariffs and threats President Donald Trump hurls at China, they’re not nearly as harmful as what China throws at itself.
/bloom.bg/2qTfObK

Trump Threatens High-Tech Export Curbs in Latest Swipe at China
Sarah Wells – Bloomberg
Move may affect Apple, Amazon, IBM, Washington Post reports; Chinese surveillance stocks slide in Tuesday trading
The Trump administration is considering tighter curbs on technology exports, a step that Deutsche Bank AG says would have a “profound and long lasting adverse impact” on relations between the U.S. and China.
/bloom.bg/2qU9XCS

Brexit shows why CEOs cannot be political leaders; Business has finally taken a position, but they are not democratically accountable
Michael Skapinker – FT
After staying largely quiet during the Brexit referendum, the UK’s business leaders have finally taken a position: they are backing prime minister Theresa May and the EU’s withdrawal agreement.
/on.ft.com/2qYgSLz

‘Extremely Weak’: A Pro-Brexit Bastion Takes Dim View of May’s Deal; In the town of Stoke-on-Trent, many residents see the prime minister’s compromise arrangement for leaving the EU as a betrayal of the 2016 ‘yes’ vote
Donato Paolo Mancini – WSJ
In June 2016, nearly 70% of residents in this town in the English Midlands voted for the U.K. to end its membership in the European Union, making their post-industrial town a bastion of anti-EU sentiment.
/on.wsj.com/2qXy5oe

Regulation

Ex-UBS Compliance Officer Used Burner Phone to Make Club Dates
Franz Wild – Bloomberg
Fabiana Abdel-Malek begins defense in insider-trading trial; Defendant said her family friend suggested using burner phone
A former UBS Group AG compliance officer charged with insider trading told a London court that she started using a burner phone to call a day trader as a way to keep in touch and go out clubbing.
/bloom.bg/2QY0t4X

CFTC Vacates SEF Registration Upon Request of GTX SEF, LLC
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that it issued an order vacating the swap execution facility (SEF) registration of GTX SEF, LLC (GTX SEF). The order was issued at the request of GTX SEF. The CFTC granted GTX SEF registration as a SEF on May 26, 2016.
/goo.gl/L5TsDQ

CFTC Commissioner Dan Berkovitz Announces Staff Appointments
CFTC
Commodity Futures Trading Commission (CFTC) Commissioner Dan Berkovitz announced that Erik Remmler will serve as Chief of Staff and Lucy Hynes will serve as Special Counsel.
bit.ly/2FtnJGI

Singapore authorities launch probe into Noble Group; Commodity trader under investigation over suspected false financial statements
Stefania Palma, Neil Hume and David Sheppard – FT
Singapore authorities have launched an “unprecedented” investigation into suspected false and misleading statements at Noble Group, the commodity trader trying to push through a $3.5bn debt restructuring to stave off collapse.
/on.ft.com/2qYRwNn

SocGen laundered nearly $13B to Cuban terrorist groups: DOJ
Kevin Dugan – NY Post
A major European bank laundered nearly $13 billion in transactions from Cuba and state terrorism sponsors for 10 years as part of a scheme to evade US financial sanctions, according to a $1.34 billion settlement with the Department of Justice announced Monday.
/nyp.st/2qYiKE5

Investing and Trading

Vitol’s first-half profits tumble as volatile energy markets bite
Neil Hume and David Sheppard – Financial Times
Vitol suffered a sharp drop in profits during the first six months of 2018 as the world’s biggest independent oil trader struggled with volatile energy markets and tough trading conditions.
/on.ft.com/2QWxVZE

The market right now doesn’t care how fantastic your stocks are; In the short run, good decisions don’t always produce lucrative results
Vitaliy Katsenelson – MarketWatch
The Roman philosopher Seneca wasn’t talking about the stock market when he wrote that “Time discovers truth,” but he could have been. In the long run a stock price will reflect a company’s (true) intrinsic value. In the short run the pricing is basically random. Here are two real-life examples.
/on.mktw.net/2qY3vuO

Asset Managers Are Drowning Not Waving; Profits have been flattered by rising markets. With markets lackluster this year, expect mid-sized firms to struggle most.
Mark Gilbert – Bloomberg
It’s only when the tide goes out that you find out who’s been swimming in the nude, billionaire investor Warren Buffett famously opined. And as the bull market in global stocks starts to ebb, asset management companies will find themselves dangerously exposed – with medium-sized firms the most at risk of finding themselves naked and shivering on the beach.
/bloom.bg/2qUOlqf

Volatile stock market spooking some older workers, retirees
Andrew Soergel – AP
The recent turbulence in the U.S. stock markets is spooking some older workers and retirees, a group that was hit particularly hard during the most recent financial crisis.
bit.ly/2qYfkRL

Goldman Says It’s Time for Equity Investors to Boost Their Cash
Divya Balji and Joanna Ossinger – Bloomberg
Base case sees a modest 5% gain in S&P 500 Index next year; Goldman’s downside case has the S&P 500 down 7% by end-2019
Stock investors have had a great run in recent years, but with cash now offering positive inflation-adjusted returns, it may be wise to dial back on risk, according to Goldman Sachs Group Inc.
/bloom.bg/2qXx5R0

Credit Set for Worst Year Since 2008 as Crashes Roil Market
Tasos Vossos – Bloomberg
High-yield and high-grade notes face losses in euros, dollars; Market pessimism fanned by shocks including GE, Ghosn arrest
Credit markets are set for the worst year since the global financial crisis as investors abandon hope of a late-2018 rally.
/bloom.bg/2qXx5AE

Limit dual-class share structures rather than shun them; Banning groups like Snap and Dropbox from stock indices only hurts ordinary investors
Scott Kupor – FT
A fight is raging between chief executives and big investors over “dual” (or multi) class share structures, which give disproportionate voting rights to corporate founders and leaders at companies including Google, Facebook, Dropbox and Snap.
/on.ft.com/2r4lHTL

Institutions

Deutsche Bank was correspondent bank for Danske Bank in Estonia – spokesman
Reuters
Deutsche Bank processed payments for Danske Bank in Estonia but ended the relationship in 2015 after it found suspicious activity, a spokesman for the German lender said on Monday.
/reut.rs/2QW6lf0

Barclays not liable to buyers of U.S. IPO before 2008 crisis: appeals court
Jonathan Stempel – Reuters
Barclays Plc (BARC.L) is not liable to investors who bought its U.S.-listed stock a few months before the 2008 financial crisis and accused the British bank of hiding its risky debt exposure and a capital shortfall, a U.S. court ruled on Monday.
/reut.rs/2qVDmg0

Regulator says UBS Securities Australia Ltd fined for improper buy-backs
Reuters
UBS Group AG’s (UBSG.S) Australian unit was fined A$120,000 ($87,552) after the Markets Disciplinary Panel found that certain buy-backs were not in the ordinary course of trading, the Australian corporate watchdog said on Tuesday.
/reut.rs/2qXwgYA

Warburg Pincus plans to raise up to $4 billion for new China fund: sources
Julie Zhu – Reuters
Warburg Pincus LLC is looking to raise its second China-focused private equity fund of up to $4 billion, giving the U.S. investment firm more firepower to cut deals in the world’s second-largest economy, sources told Reuters.
/reut.rs/2qUPpKv

Some Merrill Brokers Say Pay Plan Urges More Customer Debt; Financial advisers have complained that the pay structure pits them against their clients
Lisa Beilfuss – WSJ
Some brokers at Merrill Lynch are pushing back against a compensation plan they claim rewards them for increasing debt their clients take on and in some cases can punish them for reducing it.
/on.wsj.com/2qYTkG9

Regions

Cashew traders scramble after Tanzanian government intervention; Prices jump as president orders army to buy country’s entire harvest
Tom Wilson and Emiko Terazono – FT
Cashew prices have jumped after John Magufuli, Tanzania’s president, ordered the army to buy the country’s entire 2018 cashew nut harvest.
/on.ft.com/2qXvLh0

Could Italian private wealth compensate for flight of foreign bond-holders?
Jan Mazza and Silvia Merler – Bruegel
Italy’s deputy prime minister Matteo Salvini is “convinced” that Italians can help out their government, in the face of a widening yield spread between German and Italian government bonds. The authors assess the feasibility of recourse to household wealth in Italy, and estimate the relative importance of foreign debt-holders in the upcoming bond redemptions.
/goo.gl/6R3EKf

How China Walled Off the Internet
Raymond Zhong – NY Times
Today, China has the world’s only internet companies that can match America’s in ambition and reach. It is years ahead of the United States in replacing paper money with smartphone payments, turning tech giants into vital gatekeepers of the consumer economy. And it is host to a supernova of creative expression – in short videos, podcasts, blogs and streaming TV – that ought to dispel any notions of Chinese culture as drearily conformist.
/goo.gl/hC1bfF