First Read

Tether: The Cryptocurrency Markets’ Sword of Damocles
Matt Raebel, JLN

If 2018 was the year of the ICO (initial coin offering), then October of 2018 was “Stablecoin Month.” Between the launch of new “stablecoins” like the Gemini Dollar and the ominous news surrounding Tether (the most commonly-used stablecoin in the crypto markets), last month was one of the most significant months ever for these new coins.

For the first time, Tether’s price fell to $0.92 per coin in October. For much of November, it was trading between $0.95-$0.98 per coin. It’s normal for the prices of cryptocurrencies to fluctuate rapidly; it isn’t normal for a stablecoin to do that. This has caused many to revisit long-standing concerns about Tether’s business practices that could potentially threaten the stability of the entire crypto market.

To read the rest of this report, go here.

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Hits & Takes
JLN Staff

The New York Stock Exchange, NYSE American, NYSE National, NYSE Arca, and the Chicago Stock Exchange, part of the Intercontinental Exchange (ICE) global network of exchanges, will be closed on Wednesday, December 5, 2018 in observance of the National Day of Mourning for President George H. W. Bush.~SR

The CME Group is shutting down U.S.-based equity and interest rate futures and options products on Wednesday, Dec. 5, 2018, the national day of mourning. All other CME markets will remain open.~JJL

Kenny Polcari received a clap-off from the floor traders at the NYSE because after 38 years at the NYSE he is moving on. If you want to see one of the most animated, engaging and entertaining MarketsWiki Education presentations, see Kenny’s 2016 talk here. ~JJL

Via Priceonomics – “Internal corporate spending makes up $23 billion of AI investment, nearly three times more than the current levels of venture capital and private investment in the space.”~SD

Lawsuits stemming the OptionSellers implosion, new volatility indices and more get a look in this week’s episode of “The Spread,” a weekly recap of options-related news. See video below.~SD

FOW is holding Derivatives World London: The Debates 2018 at the Grange City Hotel, London, United Kingdom tomorrow.~JJL

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The Spread – “Florida Man” Edition – 11/30
JohnLothianNews.com

Sadly, it appears no one had a funny VIX-related sign at a sporting event this week, but never fear, there’s plenty of content in this edition of “The Spread” – the Florida options trading firm blow-up, volatility products in Israel, (non-Keanu) Matrix news, and more!

The Spread is sponsored by MIAX.

Watch the video and see the stories referenced here »

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George Bush, 41st President, Dies at 94
Adam Nagourney – NY Times
George Bush, the 41st president of the United States and the father of the 43rd, who steered the nation through a tumultuous period in world affairs but was denied a second term after support for his presidency collapsed under the weight of an economic downturn and his seeming inattention to domestic affairs, died on Friday night at his home in Houston. He was 94.
/jlne.ws/2RqcRem

***** Here is the Bloomberg version of this news and here is the WSJ version.~JJL

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Opinion: Bitcoin is close to becoming worthless; Bitcoin is now entering a death spiral
Atuyla Sarin – MarketWatch
Just one year has passed since bitcoin enthusiasts forecasted that the cryptocurrency would hit a price of $1 million. But that was then. With the price of bitcoin having fallen almost 80% from its peak, and now trading well-below the support level of $6,000, everyone is wondering where it goes from here. The answer is, a swift and painful drop to zero.
/jlne.ws/2RvZBEW

***** Sell futures, mine cheaper and do it until you squeeze the last ounce of profit out of the trade. Then what happens when the miners shut down as the cost of production exceeds the price?~JJL

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A Wall Street Rule for the #MeToo Era: Avoid Women at All Cost
Gillian Tan and Katia Porzecanski – Bloomberg
Controversial strategies risk isolating women in finance; An idea from one man in the business: Try not to be a jerk
No more dinners with female colleagues. Don’t sit next to them on flights. Book hotel rooms on different floors. Avoid one-on-one meetings. In fact, as a wealth adviser put it, just hiring a woman these days is “an unknown risk.” What if she took something he said the wrong way?
/jlne.ws/2Rw3k5x

***** I am not sure this is progress.~JJL

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Bridging the Weeks: November 19 – 30 and December 3, 2018 (Investment Profits; ICOs; Taxes by Bitcoin; Spoofing)
Gary DeWaal – Bridging the Week
The Securities and Exchange Commission’s view that most cryptoassets issued as part of initial coin offerings and presales to ICOs are securities was challenged by a federal court in California when it denied the agency’s request for a preliminary injunction in an enforcement action against an individual and his company that purportedly defrauded investors in connection with a digital asset’s ICO. The court held that the SEC, at least for now, had not demonstrated that investors in the relevant cryptoasset expected to profit through the efforts of others – a key requirement to demonstrate that an investment is a security. Unrelatedly, the Chicago Board of Trade penalized an individual over US $100,000 for engaging in three different types of spoofing activity.
/goo.gl/Jhcc53

****The rule of threes has a new application – spoofing.~SD

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Friday’s Top Three
If there’s a story that gets readers interested, it’s about CME B-shares. Crain’s Chicago Business led Friday’s top stories with CME loses vote to shrink board of directors. The question is, what happens next? Our second most read story was by JLN’s Thom Thompson, The Business Bitmain Dominates. Third was the FT’s piece Deutsche Bank hit by second day of money laundering raids

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MarketsWiki Stats
136,684,615 pages viewed; 23,327 pages; 215,591 edits
MarketsWiki Statistics

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Lead Stories

Eurex plans to appeal CME antitrust case ruling
Philip Stafford – FT
Eurex plans to appeal against the loss of a 15-year old lawsuit it brought against CME Group alleging the Chicago exchange had violated US antitrust laws to stop a rival venture from getting off the ground. The group, the derivatives bourse of Deutsche Boerse, filed a notice confirming its intention in an Illinois district court late on Friday.
/jlne.ws/2Rwi5VU

***** That CME Group press release comment after winning the suit about the quality of the Eurex trading platform was an unforced error. It demanded a response from Eurex and here we have it.~JJL

Blockchain platform goes live for North Sea crude oil trading
Julia Payne – Reuters
Oil majors and trading firms can start finalizing crude oil deals on a live blockchain-based platform for the first time, in a move that could revolutionize the market.
/jlne.ws/2Rqd15s

Nikkei 225 Beats Topix by Most in 20 Years on ‘Abnormal’ Move
Min Jeong Lee – Bloomberg
Blue-chip stock gauge is outperforming due to certain stocks; Nikkei 225 seen as flawed because it is price-weighted
In Japanese equities, a gauge of the country’s biggest shares is beating the general market by the most in two decades.
/jlne.ws/2RuVLvT

Bitcoin Miner Consolidation Increases Risk of More Crypto Mayhem
Olga Kharif – Bloomberg
Threat of hacks, fights over network control seen rising; More than 100,000 mining operations likely ceased activity
One of the consequences of the recent rout in Bitcoin is well underway. And it’s likely to have a profound effect on the leading cryptocurrency.
/jlne.ws/2RvEbIh

Deutsche Bank investors fear criminal probe will hinder turnround; Shareholders voice concern over investigation into suspected money laundering
Olaf Storbeck in Frankfurt – FT
Investors in Deutsche Bank are concerned that the criminal investigation into the suspected money laundering activities of the lender’s wealth management unit will make it harder for chief executive Christian Sewing to execute his crucial turnround agenda.
/jlne.ws/2Rrug6t

Deutsche Bank chief dismisses takeover speculation
Reuters
Deutsche Bank is not at risk of a takeover, its chief executive told a German weekly paper after its shares fell to a record low on Friday in the wake of a two-day raid related to money laundering allegations.
/jlne.ws/2RqguB0

New York Stock Exchange and Nasdaq to close Wednesday for Bush mourning day; Stock markets also plan Monday moments of silence in memory of President George H.W. Bush, who died Friday at the age of 94
Michael Wright – MarketWatch
President Trump declared Wednesday a national day of mourning for former President George Herbert Walker Bush and canceled a scheduled Saturday news conference at the Group of 20 summit in Buenos Aires.
/goo.gl/mTGLQ1

Successful innovation needs a shared vocabulary; If a company cannot communicate ideas, chances of progress are low
Andrew Hill – FT
Curtis Carlson, the entrepreneur who helped revive SRI and turn it into the company that created the iPhone’s voice assistant Siri, often asks groups of would-be innovators to write their definition of “innovation” on Post-it notes. The definitions never agree. In fact, he told me, “sometimes they don’t even make sense”.
/jlne.ws/2Rw0EVo

Business schools bring AI and VR into the classroom; Institutions are increasingly using cutting edge tools to teach a tech-savvy generation of students
Seb Murray – FT
As an online MBA student, studying whenever it is convenient, it can take a day for James Connor to get a professor’s help ó “a long time when you’re on a deadline”, says the 36-year-old Briton. Soon there may be a more efficient solution for London’s Imperial College Business School students: a smartphone chatbot that will answer queries almost immediately.
/jlne.ws/2RtAgvp

Occupy Jamie Dimon: Activists Are Chasing the Billionaire Across the U.S.; JPMorgan’s CEO is dogged by protesters on stages and flagpoles.
Michelle Davis, Max Abelxon – Bloomberg
Jamie Dimon was on stage at a community college in Ohio in November, telling students not to get scared by the snakes and alligators they’ll see in life.
/jlne.ws/2Rwe3gq

Your Personal Data Is Being Used by Investors. Here’s the Potential ó and the Risks.
Avi Salzman – Barron’s
Even before the hip teenagers realized that nobody goes to the mall anymore, about a dozen math and science Ph.Ds packed into a co-working office in downtown Manhattan already knew it. On their computers, the Ph.Ds started to see a decline in the number of “pings” from cellphones that they were tracking in those malls. And that drop-off became an important signal for the stock market well before some malls announced disappointing financial results.
/jlne.ws/2RwbHhA

Qatar pulls out of Opec as relations with neighbours sour; World’s largest exporter of liquefied natural gas to quit oil cartel in the new year
Anjli Raval and Simeon Kerr – FT
Qatar plans to quit Opec from next year as relations with its Arab neighbours sour, ending a near six-decade-long membership of the oil price cartel.
/jlne.ws/2RB5yAQ

Exchanges, OTC and Clearing

New York Stock Exchange to Honor President George H. W. Bush ; Moment of Silence on Monday, December 3, 2018; NYSE Group Markets to close for Day of Mourning on Wednesday, December 5, 2018
ICE
On Monday, December 3, 2018, the NYSE will observe a one-minute moment of silence at 9:20 a.m. Eastern Time (ET) in honor of President George H.W. Bush. A single strike of the NYSE Bell at 9.20 a.m. ET will indicate the start of the minute of silence.
/jlne.ws/2Rqh7um

Cboe Global Markets’ Exchanges to Close Wednesday for Day of Mourning to Honor President George H.W. Bush
Cboe
Cboe Global Markets, Inc. announced its U.S. exchanges will close on Wednesday, December 5, in observance of the national Day of Mourning to honor Former President George H. W. Bush, who passed away November 30.
/jlne.ws/2RxC1YA

SIFMA Recommends Full Market Close Wednesday December 5 In Honor Of Former President George H. W. Bush
Mondovisione
SIFMA yesterday recommended all fixed-income cash markets close Wednesday December 5, 2018 in honor of the national day of mourning for former U.S. President George H.W. Bush. SIFMA made its recommendation following President Donald Trump’s announcement that the U.S. government will be closed on Wednesday in honor of Mr. Bush.
/jlne.ws/2Rwfqf4

CME Group U.S. Equity, Interest Rate Markets to Close for National Day of Mourning
CME Group
CME Group today announced that it will observe the passing of President George H. W. Bush with a moment of silence at 7:18 a.m. Central Time on Monday, Dec. 3, 2018, and closure of its U.S.-based equity and interest rate futures and options products on Wednesday, Dec. 5, 2018, the national day of mourning. All other markets on CME Globex, CME ClearPort and the trading floor will remain open for regular trading hours on Dec. 5.
/jlne.ws/2Rvfqfn

Nasdaq Announces the Closure of its U.S. Markets in Honor of a National Day of Mourning for President George H.W. Bush
GlobeNewswire
Nasdaq announces that it will observe the passing of President George H.W. Bush by closing all Nasdaq U.S. equities and options markets on Wednesday, December 5, 2018.
/jlne.ws/2QeGlj2

DGCX Wins ‘Exchange Of The Year’ Accolade At Global Investor MENA Awards 2018
Press Release via Mondovisione
DGCX’s outstanding performance over the last 12 months saw it beat competition from region’s leading exchanges
The Exchange’s exceptional growth continued in November as it broke its all-time annual volumes record
/goo.gl/mZrA5a

CME Group Chief Financial Officer and Global Head of Financial and OTC Products to Present at Goldman Sachs Conference
CME Group
CME Group announced today that John Pietrowicz, Chief Financial Officer, and Sean Tully, Senior Managing Director and Global Head of Financial and OTC Products, will present at the Goldman Sachs U.S. Financial Services Conference in New York on Tuesday, December 4, at 11:40 a.m. (Eastern Time).
/jlne.ws/2RweAyW

LCH SwapClear sees $1 quadrillion notional cleared record
As of 30 November LCH SwapClear’s cleared notional volumes year to date totalled just over $1 quadrillion.
Hayley McDowell – The Trade
The London Stock Exchange Group’s (LSEG) clearinghouse LCH has set a new record for its over-the-counter (OTC) interest rate swaps clearing service after surpassing the $1 quadrillion mark.
/goo.gl/q7He5Q

This week’s topic: T7 – a true success story
Eurex
Our trading architecture T7 really is an ongoing success story. Now, with Release 7.0 ready to go live on 3 December 2018, the time is just right to look back on the beginnings and to attempt an outlook on the years to come. How did it all start, what are the reasons for its success, and are there new advancements and enhancements coming with Release 7.0.? Jonas Ullmann, Head of Market Functionality, has all the answers.
/jlne.ws/2QauIcz

Cash markets will turnover 140.4 billion euros in November
Deutsche Boerse
Deutsche Boerse’s cash markets generated sales of EUR 140.4 billion in November (previous year: EUR 154.2 billion).
/jlne.ws/2Q8SV36

ICE Data Services Selected as the New Benchmark Provider for BlackRock iShares U.S. Preferred Stock ETF
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Data Services has been selected as the new benchmark provider for BlackRock’s iSharesÆ U.S. Preferred Stock ETF (PFF), which currently represents $14.7 billion in assets under management1.
/jlne.ws/2Q6Vkew

HKEX to Add Mini-HSCEI Options to After-Hours Trading from Tonight; Addition of Mini-HSCEI Options will complete roll-out of eight major stock index products in AHT; Index futures and options’ average daily AHT volumes are up sharply from their initial levels
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is adding Mini-Hang Seng China Enterprises Index (HSCEI) Options to its after-hours trading (AHT) from this evening.
/jlne.ws/2QaPclF

SGX partners Nanhua Futures to help investors capture Belt and Road Initiative investment opportunities
SGX
SGX Index Edge will collaborate with Nanhua Fund, the wholly-owned subsidiary of Nanhua Futures, to develop indices that are representative of China’s Belt and Road Initiative
/jlne.ws/2QcLyb1

SGX launches world’s first high-grade iron ore derivatives; Shift in China’s environmental policy spurs increased use of premium iron ore; 65% Fe Fines swaps and futures complement SGX’s benchmark 62% Fe contracts
SGX
Singapore Exchange (SGX) today launched the world’s first high-grade iron ore derivatives to meet demand for new risk-management tools amid a structural shift in China’s environmental policy.
/jlne.ws/2Q6ov1r

Trading Overview in November 2018; Japan Exchange Group released Trading Overview in November 2018.
JPX
Cash Equity Marke – In November 2018, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 2.9815 trillion; The daily average trading value for the ETF market was JPY 220.7 billion.
Derivatives Market- In November 2018, total derivatives trading volume was 31,173,138 contracts.
/jlne.ws/2Q9Csfa

Boerse Stuttgart records November turnover of EUR 5,3 billion; Emerging market government bonds show increase in trading volume compared with October figures
Boerse Stuttgart
Based on the order book statistics, Boerse Stuttgart generated turnover of around EUR 5.3 billion in November 2018. Securitised derivatives made up the largest share of the turnover. The trading volume in this asset class was more than EUR 2.4 billion. Leverage products generated around EUR 1.5 billion. Investment products contributed EUR 966 million to the total turnover.
(NO LINK)

Fintech

FCA says reported technology outages at firms has more than doubled
Hayley McDowell – The Trade
Technology outages at financial institutions reported to the UK’s regulator has more than doubled over the past year, according to its executive director of supervision.
/goo.gl/F5AuBV

ECB takes on PayPal with instant payment system
Reuters
The European Central Bank launched on Friday a new system aimed at letting banks settle payments instantly across Europe, helping them to compete with PayPal and other global tech giants.
/reut.rs/2Rs1P8C

Fintech company Calastone to shift fund network to blockchain
Tom Wilson and Simon Jessop – Reuters
Calastone, an investment funds transaction network, said on Monday it will shift its entire system to blockchain in May, a move that could slash costs for the sector by billions of dollars a year.
/jlne.ws/2RvxsOx

FinTech offers “huge” opportunity for Islamic banks to serve unbanked people
Deena Kamel
Bahrain is urging Islamic banks to embrace financial technology (FinTech) to grow their business by catering to unbanked populations as the kingdom seeks to position itself as a regional financial hub. FinTech provides a “huge” opportunity for Islamic finance institutions to reduce their costs, increase their investment assets and add more transparency while also promoting financial inclusion by serving people without access to banks, Khalid Saad, chief executive of Bahrain Fintech Bay, told The National.
/jlne.ws/2FX9wlO

Barclays bullish on equities business ahead of new algo and SOR platform launches; Barclays’ reinvestment will see the launch of new SOR and algo platforms, with a recent SOR upgrade producing a 10% increase in hit rates.
Hayley McDowell – The Trade
UK investment bank Barclays has said reinvestment in its equities trading business is beginning to pay off, as it prepares to launch new algo and smart order router (SOR) platforms.
/jlne.ws/2QdDYN9

Cryptocurrencies

Bitcoin ETF Seekers Met With SEC Monday In Latest Pitch for Approval
Nikhilesh De – Coindesk
Members of VanEck, SolidX and the Cboe BZX Exchange met with U.S. Securities and Exchange Commission (SEC) staff earlier this week to present a new argument on why the bitcoin market is ready for an exchange-traded fund (ETF).
/jlne.ws/2RtClaH

Hunker down, crypto owners, the worst is yet to come: Fred Wilson
Aaron Hankin – MarketWatch
Crypto owners got a much-needed reprieve on Wednesday with bitcoin and major digital currencies posting double-digit gains, breathing life into their portfolios that have been shredded to pieces of late.
/jlne.ws/2RurAoH

From Banks to Bitcoin: Goldman Sachs employees who have left Wall Street for the crypto world
by Steven Zheng – The Block Crypto
Since it was founded, Goldman Sachs has established itself as the Mecca for financial talent. The 149-year-old investment bank has produced Secretaries of Treasury, presidential advisors, and CEOs of billion-dollar companies. Goldman Sachs alumni have established themselves as pillars in many industries, from finance to politics to tech, and crypto is not an exception.
/jlne.ws/2Ruhsw1

Novogratz Remains Steadfast on Crypto, Says Wait Until Next Year
By Vildana Hajric – Bloomberg
Bitcoin’s down 37% this month, the most since August 2011; Galaxy Digital lost $136 million in first nine months of year
Billionaire investor Michael Novogratz is resolute when it comes to cryptocurrencies, even after his firm lost millions this year as the embryonic market continued to tumble in value.
/jlne.ws/2RxGLNS

I Bought Bitcoin When the Price Was Soaring. Here’s What I Learned
Alessandra Freitas – Barron’s
A year ago, Bitcoin was practically a foreign language to me. Then I watched an episode of Grey’s Anatomy in which the hospital featured in the show was attacked by a group of hackers, who demanded 4932 Bitcoins in ransom (worth $20 million in the setting of the program). After doing some research and consulting with friends who had bought Bitcoin, I thought, well, maybe I should put some money on it, too. That was my first investment, made before I really understood anything about finance.
/jlne.ws/2RuuMkb

Blockchain study finds 0.00% success rate and vendors don’t call back when asked for evidence
Where is your distributed ledger technology now?
Andrew Orlowski – The Register
Though Blockchain has been touted as the answer to everything, a study of 43 solutions advanced in the international development sector has found exactly no evidence of success. Three practitioners including erstwhile blockchain enthusiast John Burg, a Fellow at the US Agency for International Development (USAID), looked at instances of the distributed crypto ledger being used in a wide range of situations by NGOs, contractors and agencies. But they drew a complete blank.
/jlne.ws/2RAKQ45

Japanese Crypto Exchange BitTrade to Relaunch Under Huobi
Celeste Skinner – Finance Magnates
Japanese cryptocurrency exchange BitTrade, one of the 16 licenced digital asset exchanges in the country, announced via a statement that it is closing its trading platform to relaunch its operations under the Huobi Group brand.
/jlne.ws/2KRTcBE

Breaking: G20 Discusses International Cryptocurrency Tax
Simon Golstein – Finance Magnates
The G20 conference, which is happening at this moment in Buenos Aires, has produced a decision which will be interesting to the cryptocurrency world. The attendant politicians have signed a document which indicates their intention to begin working on a solution to the issue of cryptocurrency tax, and that they will collaborate to this end.
/jlne.ws/2PhE9BF

Politics

The new American dream? Northern Europe; ‘Recent polls shows most Democrats and young Americans now believe in “socialism”‘
Simon Kuper – FT
The northern European dream looks something like this: get home from work in time for dinner with the kids; no stress about paying for their education or healthcare; safe streets in a safe region; an affordable home near your extended family; frequent holidays and a long life. You won’t get rich, but you won’t need to either.
/jlne.ws/2RqHCjb

Lagarde warns G20 leaders that trade tensions threaten global economy
Reuters
International Monetary Fund Managing Director Christine Lagarde called on G20 leaders to urgently de-escalate trade tensions and reverse tariff hikes, warning that they risked slowing global growth.
/jlne.ws/2RAOCdL

Senators Blame Trump’s Tariffs and Corporate Greed for GM Cuts
Katia Dmitrieva – Bloomberg
Cardin says duties cost jobs while Brown blames company more; Senators react to GM cutting jobs, production in their states
Donald Trump’s trade war and corporate greed contributed to General Motors Co. cutting jobs and closing plants, Democratic senators in states affected by the decisions said ahead of an expected meeting this week with lawmakers and Chief Executive Officer Mary Barra. But they differed on what weighed more heavily.
/jlne.ws/2Rw1h1c

Trump says China to cut tariffs on U.S.-made autos after trade war truce
David Lawder, Christian Shepherd – Reuters
China has agreed to “reduce and remove” tariffs below the 40 percent level that Beijing is currently charging on U.S.-made vehicles, U.S. President Donald Trump said, as a trade war truce between the two countries gathers pace, cheering markets.
/jlne.ws/2RtB7w7

Regulation

Supreme Court to Rule on Kavanaugh Appeals Court SEC Case; Kavanaugh dissented on appeals court case testing how far the SEC can go in holding stockbrokers accountable for disseminating false statements
Brent Kendall – WSJ
Supreme Court justices on Monday will effectively be asked to rule on the jurisprudence of their newest colleague in a fraud case that tests how far the Securities and Exchange Commission can go in holding stockbrokers accountable for disseminating false statements to clients.
/jlne.ws/2RvwHVH

CFTC Approves a Proposed Rule to Provide Exception to Annual Privacy Notice Requirement
CFTC
The Commodity Futures Trading Commission (CFTC) today approved a proposed rule to revise a CFTC regulation that requires certain futures commission merchants, retail foreign exchange dealers, commodity trading advisors, commodity pool operators, introducing brokers, major swap participants, and swap dealers to provide annual privacy notices to customers. Under the proposed rule these annual privacy notices would no longer be required where certain conditions are satisfied.
/goo.gl/nVJHLE

Call to crack down on multibillion-euro tax tricks as scandal bites; ATP chief resigns in wake of allegations over questionable dividend trades
Chris Flood – FT
One of the world’s biggest tax scandals involving an estimated EUR55bn and 12 European governments last week claimed its first high-profile casualty from the investment industry. The resignation of Christian Hyldahl as chief executive of ATP, the largest pension fund in Denmark, may prove to be just the first of many departures related to complex dividend-related trades that exploited loopholes in tax laws.
/jlne.ws/2RuC0EQ

ESMA registers A.M. Best (EU) Rating Services B.V. as credit rating agency
ESMA
The European Securities and Markets Authority (ESMA), the EU’s direct supervisor of credit rating agencies (CRAs), has registered today A.M. Best (EU) Rating Services B.V. as a CRA under the CRA Regulation.
/jlne.ws/2Q6KTYB

SEC Adopts FAIR Act Rules Promoting Research Reports on Investment Funds
SEC
The Securities and Exchange Commission today adopted rules and amendments designed to promote research on mutual funds, exchange-traded funds, registered closed-end funds, business development companies, and similar covered investment funds. These changes reduce obstacles to providing research on investment funds by harmonizing the treatment of such research with research on other public companies. The Commission took this action in furtherance of the mandate in the Fair Access to Investment Research Act of 2017 (FAIR Act).
/jlne.ws/2Qa8cAR

Investing and Trading

We Went to a Steak Dinner Annuity Pitch. The Salesman Wasn’t Pleased.
Ron Lieber – NY Times
The pitch arrived in my aunt’s mailbox, just after her 80th birthday and in the wake of a few frightening weeks for retirement investors.
“Tired of the stock market roller coaster ride? Want to protect your principal and lock in interest earnings?” the invitation read.
/nyti.ms/2E6VdZZ

Here’s How Carbon Gets Priced Around the World
Mathew Carr and Shawn Hasto – Bloomberg
It’s an idea that’s been around for more than two decades: To slow climate change, make polluters pay for the damage they cause. Worldwide, more than 50 nations, states and cities have adopted what’s known as carbon pricing, an approach held up by environmentalists, politicians and even many oil companies as an elegant, free-market approach to slow global warming. It’s done either through a tax on each metric ton of carbon dioxide emitted or by creating a market to trade permits to pollute. Carbon prices of $40 or more per ton are crucial if the world is to meet greenhouse-gas reduction targets in the Paris agreement to halt climate change, according to scientists.
/jlne.ws/2RqfEnQ

BlackRock warns investors to ‘build resilience’ against recession; Biggest money manager launches economic forecasts for institutions
Chris Flood – FT
BlackRock has warned clients to “build resilience” into investment portfolios with the help of new asset-class performance forecasts that it will release this week.
/jlne.ws/2RweKq7

New Rules for a Volatile Market
Steve Garmhausen – Barron’s
As co-head of Morgan Stanley Wealth Management, Andy Saperstein helps lead 15,632 brokersóthe largest force in the industry. Needless to say, he’s one of the most powerful people on Wall Street.
/jlne.ws/2RuAeDG

Shell yields to investors by setting target on carbon footprint; Cutting emissions to be linked to executive pay in industry first
Anjli Raval, Leslie Hook and Attracta Mooney – FT
Royal Dutch Shell will set carbon emissions targets next year and link these to executive pay, reversing its chief executive’s opposition and following intense pressure from shareholders who want fossil fuel companies to take greater responsibility for their contribution to global warming.
/jlne.ws/2Rud545

Yes, Market Moves Are More Extreme. But It’s Not the Apocalypse
Samuel Potter, Eddie van der Walt and Vildana Hajric – Bloomberg
Data show bigger moves more common but far from extraordinary; ‘Recency bias’ makes recent swings seem especially brutal
U.S. stocks posted the strongest rally in eight months on Wednesday, just a few days after the largest Bitcoin slump since February. That followed the biggest crude-oil drop for three years. In October, tech shares had their worst day since 2011.
/jlne.ws/2RwldRE

Institutions

Losses at Einhorn’s hedge fund Greenlight grow in November
Reuters
Billionaire investor David Einhorn told investors on Friday that losses at his hedge fund Greenlight Capital grew this month, leaving the fund down nearly 28 percent for the year.
/jlne.ws/2RxEvWU

UBS to take majority stake in China joint venture; Swiss bank will hold a landmark 51% in a local securities operation
Don Weinland – FT
UBS will become the first foreign bank in China to increase its stake in a local securities joint venture to 51 per cent, in a sign that the country is making good on promises to open up its financial sector to overseas competition.
/jlne.ws/2RwgzDo

Goldman eyes monitoring of high-risk staff after 1MDB; Bank looking to show officials that ‘lessons have been learned’ over scandal
Laura Noonan – FT
Goldman Sachs is considering a special surveillance programme to monitor higher risk employees in far-flung locations so the bank can demonstrate that “lessons have been learned” from the 1MDB scandal.
/jlne.ws/2RCqkQc

Volatility Is Only Making Matters Worse for Hedge Funds
Saijel Kishan and Nishant Kumar – Bloomberg
Managers counting on price swings to boost returns were burned; ‘They should have made money,’ says one hedge fund investor
This was meant to be Deepak Gulati’s moment. The hedge fund manager has been waiting for the return of market volatility to help him recover losses after years of calm markets hurt his $955 million firm. Yet even with the recent whipsaw in stocks, Gulati hasn’t made any money through the first 10 months of the year.
/jlne.ws/2RwoHnk

Regions

Japan brokers readying for new client surge ahead of SoftBank’s mammoth IPO
Taiga Uranaka – Reuters
Japan’s stockbrokers are rubbing their hands ahead of SoftBank’s record-breaking $21 billion share sale, banking on the telco’s brand power and unprecedented marketing campaign to boost business in a country replete with IPO-hungry investors.
/jlne.ws/2Rx1120

Pot Is So Hot in Canada That Firms Are Importing Workers
Kristine Owram – Bloomberg
Biggest companies are recruiting for 1,700 open positions; Soft-gel encapusulation manager is just one open position
It was mid-summer, less than three months before Canada legalized recreational marijuana, and Vic Neufeld had a problem.
/jlne.ws/2Rwjyvw

Why is Canada’s Alberta forcing oil production cuts?
Julie Gordon – Reuters
Alberta Premier Rachel Notley said on Sunday that the Western Canadian province would mandate temporary oil output cuts to deal with a pipeline bottleneck that has led to a glut of crude in storage and driven down Canadian crude prices.
/jlne.ws/2RwZjh6

Australia’s GrainCorp receives $1.8bn buyout bid; Shares jump by a quarter on offer that comes 5 years after Canberra blocked takeover by ADM
Jamie Smyth – FT
Australian agricultural group GrainCorp said it has received a A$2.4bn ($1.8bn) takeover bid from Long-Term Asset Partners, an asset management company, sending its shares up by more than a quarter.
/jlne.ws/2Rwe6Jd

Brexit

EU Doctors Quit Britain as Brexit Looms; An exodus of medical specialists is putting new strains on the U.K.’s National Health System
Donato Paolo Mancini and Jason Douglas – WSJ
Pioneering transplant surgeon Paolo Muiesan is returning to Italy after about 1,000 operations and 26 years in the U.K. The reason, he says, is Brexit.
/jlne.ws/2RAOmLP

Regulator warns banks over Brexit moves out of City; FCA urges lenders to limit number of clients transferred overseas
Barney Thompson – FT
The UK’s financial regulator has urged a group of international banks in the City to limit the number of clients they move overseas as part of their Brexit preparations.
/jlne.ws/2RxtqFs

Two banks begin moving swaps out of London, pre-Brexit
Helen Bartholomew – Risk.net
Time has run out for London-based banks pinning their hopes on a Brexit deal that will save them from transferring swaps contracts to EU27 hubs. At least two dealers have now kick-started processes that will allow contracts to be moved en masse, with the mooted UK and European Union withdrawal agreement facing fierce opposition in the UK Parliament.
/goo.gl/EyWx6d

Miscellaneous

Nexstar to Buy Tribune Media for $4.1 Billion in TV Megadeal
Gerry Smith, Nabila Ahmed, and Eric Newcomer – Bloomberg
Deal would unseat Sinclair as biggest local-TV company in U.S.; Sinclair’s earlier plan to acquire Tribune hit FCC roadblock
Nexstar Media Group Inc. agreed to buy Tribune Media Co. for about $4.1 billion, creating the largest owner of local-TV stations in the U.S.
/jlne.ws/2RAOiM5

Romanee-Conti Burgundy Wine Collection Auctioned for $12 Million
Corinne Gretler – Bloomberg
An auction of top Burgundy wines garnered $12 million in Geneva on Sunday, another success for upstart auctioneer Baghera Wines, which is on track for a record year.
/jlne.ws/2Rtzi2f

The post Eurex plans to appeal CME antitrust case ruling; Blockchain platform goes live for North Sea crude oil trading appeared first on John Lothian News (JLN).

First Read

Wilson goes all in against the CFTC and the industry wins
Jim Kharouf, JLN

There are traders who put their careers on the line every day in the markets. And then there’s Don Wilson, who put his career and firm on the line in court with the Commodity Futures Trading Commission, and won.

Yesterday, US District Court Judge Richard Sullivan cleared Don Wilson and his firm DRW in a case brought by the regulator back in 2013 during the contentious and combative tenure of Gary Gensler. The court case itself stretched across two years and three chairmen of the CFTC.

At stake was a lifetime ban for Don Wilson and his firm, DRW, and a $100 million fine. Instead of buckling, paying a fine, and “neither admitting nor denying any wrongdoing,” Wilson dug in and made his case, went through a multi-year legal process and won. And judging from Sullivan’s comments, Wilson’s team embarrassed the CFTC. For all of those who’ve felt Gensler and the CFTC have been heavy handed in their market manipulation cases, Wilson just earned himself a lifetime of free drinks for administering a legal butt whuppin’. He should put Sullivan’s quote on T-shirts for the office: “It’s not illegal to be smarter than your counterparties in a swap transaction.”

To read the rest of this article, go here

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The Curious Case of Our Regulatory Environment (Part II), or Why the Earth Isn’t Flat.
Carl Gilmore for JLN

Two years ago I wrote about the Commodity Futures Trading Commission enforcement action against Don Wilson and his company DRW Investments alleging price manipulation in certain financial instruments. Back then, I (along with many other industry participants) suggested that DRW’s trading activity not only wasn’t manipulative, but that DRW’s discovery of pricing discrepancies in the relevant instruments that resulted from convexity bias, and DRW’s subsequent market activity actually corrected artificial prices rather than created them.

Yesterday in New York, U.S. District Court Judge Richard Sullivan dismissed all claims against Wilson and DRW, issuing an opinion that could be described as a CFTC “spanking.” In the case, the CFTC Division of Enforcement alleged, among other things, that Wilson and DRW attempted to create artificial prices by submitting bids near the close that the CFTC described as inflated and artificial. Wilson and DRW argued throughout the litigation that the prices they submitted weren’t artificial, that they stood ready to transact business at those prices and that they had identified a discrepancy in the valuation of those instruments that created an arbitrage opportunity.

To read the rest, go here.

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Hits & Takes
JLN Staff

Congratulations to Don Wilson and DRW on winning the CFTC civil suit which alleged they manipulated the markets.~JJL

CFTC Chairman Chris Giancarlo had this to say (or really, not say) about Don Wilson’s case: “We acknowledge the Court’s long-awaited decision in this case, which involves the CFTC’s pre-Dodd Frank legal authority. We are reviewing the decision and will analyze it carefully in considering next steps. We will continue to vigorously enforce the Commission’s anti-manipulation provisions and to prosecute cases through trial where necessary.”~SD

U.S. markets will be closed Wednesday for a national day of mourning. While there will be no trades, the OCC will be open for usual processing. As there are Wednesday expirations, the OCC will use Tuesday’s (today’s) closing prices in those calculations. The exceptions are VIX futures and options which will use the price determined by Thursday’s SOQ. Stay up to date via OCC’s notices page. ~SD

For more details on U.S. exchanges’ and clearinghouses’ operations on Wednesday, see FIA’s post of relevant links.~SD

If you want a good visual timewaster, peruse this “Periodic Table of Investments” infographic and see if you agree with its layout.~SD

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DRW statement on the decision in CFTC matter; DRW issued the following statement regarding the November 30, 2018 decision in CFTC v. Donald R. Wilson and DRW Investments, LLC:
DRW
“We are gratified by the Court’s decision, which confirms our longheld position that our trading activity was lawful, legitimate and in line with market regulation. Importantly, the Court affirmed that artificiality is required for market manipulation to have occurred. Today’s decision upholds the principles of price discovery, transparency and integrity in the markets.”
/jlne.ws/2zFECIS

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The U.S. Yield Curve Just Inverted. That’s Huge.
The move ushers in fresh questions about the Fed and the economy.
Brian Chappatta – Bloomberg Opinion
The U.S. Treasury yield curve just inverted for the first time in more than a decade.
It’s a moment that the world’s biggest bond market has been thinking about for the past 12 months. I wrote around this time last year that Wall Street had come down with a case of flattening fever, with six of the 11 analysts I surveyed saying that the curve from two to 10 years would invert at least briefly by the end of 2019.
/goo.gl/znjbW1

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Glencore CEO Says He Wants His Replacement To ‘Look Like Me’
Jack Farchy – Bloomberg
Ivan Glasenberg won’t say much about who will replace him as the next chief executive of Glencore Plc. But one thing is clear, it’s not likely to be a woman.
“I’ve got my eye on a few guys. There’s three to four guys who could potentially be there,” Glasenberg told journalists on Monday. “Do I see any woman in that pack today? No.”
/goo.gl/rVtfc4

****I guess he’s in the #Me2.0 crowd…~SD

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Monday’s Top Three
Our top three stories ranged from women in the workplace to Eurex to bitcoin. Our readers have a wide and diverse set of interests. The top read piece was Bloomberg’s Wall Street Rule for the #MeToo Era: Avoid Women at All Cost, which shows how far (backwards) some men have come regarding women in today’s workplace. Second went to the never-ending saga of Eurex US v. CME Group in the FT’s Eurex plans to appeal CME antitrust case ruling. Both sides should watch War of the Roses. Third went to Marketwatch’s excellent analysis of what may happen with bitcoin prices and what is driving the exodus Bitcoin is close to becoming worthless

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MarketsWiki Stats
136,736,626 pages viewed; 23,327 pages; 215,591 edits
MarketsWiki Statistics

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Lead Stories

DRW’s Wilson scores big win in market-manipulation case; “It is not illegal to be smarter than your counterparties in a swap transaction.” That’s what a New York federal judge wrote while ruling in favor of DRW in a case brought against the big Chicago trading firm and its owner, Don Wilson, by the CFTC.
Lynne Marek – Crain’s Chicago Business
A New York federal judge has ruled in favor of DRW Trading in a case brought against the big Chicago trading firm and its owner, Don Wilson, by the Commodity Futures Trading Commission in 2013.
/jlne.ws/2EeZw5I

Judge Dismisses Market-Manipulation Case Against Don Wilson Jr., DRW; CFTC had sued Wilson and DRW in 2013, citing a large trade in interest-rate swap futures
Alexander Osipovich and Gabriel T. Rubin – WSJ
A federal judge sided with Donald Wilson Jr., founder and chief executive of proprietary trading firm DRW Investments LLC, in a showdown with U.S. regulators over whether Mr. Wilson’s firm had engaged in market manipulation.
/jlne.ws/2PhJXLK

Derivatives trader Don Wilson cleared in manipulation case; Ruling against CFTC is setback for regulator’s definition of market manipulation
Gregory Meyer – FT
A US financial regulator has been defeated in its pursuit of Don Wilson, one of the world’s leading derivatives traders, in a stinging ruling by a judge who derided the agency for bringing a misbegotten market-manipulation case.
/jlne.ws/2FW2cXD

U.S. CFTC loses case against prominent trader Donald Wilson, DRW
Jonathan Stempel – Reuters
A federal judge in Manhattan has dismissed a U.S. regulator’s lawsuit seeking to hold the prominent Chicago trader Donald Wilson and his firm DRW Investments LLC liable for market manipulation.
/jlne.ws/2Pi0Khy

Brussels sets out plans for euro to challenge dollar dominance
Jim Brunsden and Mehreen Khan – Financial Times
Brussels is to set out plans to increase the use of the euro in “strategic sectors” such as energy, commodities and aircraft manufacturing, in a bid to challenge the dominance of the US dollar as the world’s reserve currency.
The European Commission will on Wednesday publish a blueprint to promote a “stronger international role” for the euro, saying policies pursued by Donald Trump have underlined the need to increase the EU’s economic sovereignty.
/jlne.ws/2Rxl28C

Justices Seem Likely to Reinforce U.S. Securities-Fraud Laws
Greg Stohr and Benjamin Bain – Bloomberg
Supreme Court hears arguments on SEC fraud case against banker; Banker was ‘big-deal participant’ in scheme, Breyer says
U.S. Supreme Court justices seemed likely to reinforce the Securities and Exchange Commission’s powers, hearing the case Monday of an investment banker accused of duping investors about a startup company’s financial condition.
/jlne.ws/2G7IloC

Swedish banks considering Stibor alternative
Reuters
Swedish banks will look at ways to revamp Stibor, an interbank rate used as a reference for billions of crowns of financial contracts, the Swedish Banker’s Association said on Tuesday, after worries about transparency and governance.
/jlne.ws/2PhQRR5

Aquis urges EU to allow investors to continue trading Swiss shares
Huw Jones – Reuters
The European Union should allow EU investors to continue trading Swiss shares from January and avoid a stand-off with Switzerland that would harm competition, a senior stock exchange industry official said on Monday.
/jlne.ws/2EcZ9IZ

After Amazon HQ2, Uproar in New York Over Real Estate ‘Insider Trading’
Josh Barbanel – WSJ
Amazon.com Inc.’s deal for a second headquarters in Long Island City, N.Y., has prompted a state senator to draft legislation that would prohibit the buying or selling of real estate based on any nonpublic government action.
/jlne.ws/2Ea1rZb

High speed trading still a concern for Treasury market, says Fed’s Brainard
Joe Rennison – FT
High-frequency trading in the $15tn US Treasury market is still a cause for concern for regulators and policymakers, according to Lael Brainard, a governor at the Federal Reserve.
/jlne.ws/2PiNYPM

EU finance ministers strike eurozone reform deal; Agreement to bolster banking union and sovereign bailout fund to protect bloc from future financial crises
Jim Brunsden and Mehreen Khan in Brussels – FT
EU finance ministers have agreed on steps to bolster the eurozone against future financial crises, striking a deal after negotiations that went through the night and pitted French-led reform ambitions against the reluctance of northern European capitals to share more financial risk.
/jlne.ws/2zFMFFY

Brussels sets out plans for euro to challenge dollar dominance; EU seeks ‘stronger international role’ for single currency in face of Trump policies
Jim Brunsden and Mehreen Khan in Brussels – FT
Brussels is to set out plans to increase the use of the euro in “strategic sectors” such as energy, commodities and aircraft manufacturing, in a bid to challenge the dominance of the US dollar as the world’s reserve currency.
/jlne.ws/2Rxl28C

‘London Blue’ hacker group targets chief financial officers; List of 50,000 targets found by cyber security firm Agari
Hannah Kuchler – FT
A hacker group has compiled a list of 35,000 chief financial officers, some working at the world’s biggest banks and mortgage companies, so it can target them with requests to transfer money.
/jlne.ws/2G0F1eE

Investors bet on rate volatility as no-deal Brexit fears mount; Demand for derivatives contracts covering the Brexit deadline hit a record
Philip Stafford in London – FT
Growing concern over how a no-deal Brexit could unbalance the British economy has sparked a record-breaking surge in demand for derivatives contracts betting that the UK faces volatility in interest rates in coming months.
/jlne.ws/2FTVDVo

ABN Amro to clear Eurex FX futures and options; ABN Amro Clearing to provide support for classic FX derivatives contracts with monthly and quarterly expiries, as well as rolling spot futures.
By Hayley McDowell – The Trade
Dutch investment bank ABN Amro has started clearing Eurex foreign exchange (FX) futures and options for its clients.
/jlne.ws/2FVqlNN

CFTC adds four UK-based MTFs to SEF exemption list; With addition of four UK-based MTFs, the CFTC’s list of EU-based venues exempt from SEF registration now totals 20.
By Hayley McDowell – The Trade
Four UK-based multilateral trading facilities (MTFs) have been granted authorisation to operate in the US without having to register as a swap execution facility (SEF) with the derivatives regulator.
/jlne.ws/2G0AAAN

Exchanges, OTC and Clearing

The World Federation of Exchanges publishes report into attracting international investors to emerging market equities
WFE
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today published a report that seeks to identify factors that attract international portfolio investment into emerging market (EM) equities.
/jlne.ws/2E0oRPZ

ICE Benchmark Administration Launches Survey on the use of LIBOR
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced the launch of a survey by ICE Benchmark Administration (IBA) on the use of LIBOR currencies and tenors.
/jlne.ws/2PiNk4O

CME Group Averaged 21.7 Million Contracts Per Day in November 2018, Up 21% from November 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 21.7 million contracts per day in November 2018, up 21 percent from November 2017. Open interest at the end of November was 128 million contracts, up 4 percent from November 2017 and up 19 percent from year-end 2017.
/jlne.ws/2G1YVGb

OCC Surpasses Annual Cleared Contract Record With 4.81 Billion YTD; November volume up 10.4 percent year over year; ETF options volume up 32.7 percent, securities lending CCP activity up 4.2 percent
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in November reached 438,027,585 contracts, up 10.4 percent compared to November 2017 volume of 396,779,462. Year-to-date, OCC has cleared 4.71 billion options contracts and 4.81 billion total contracts, with both reaching new annual cleared contract volume records for the U.S. exchange-listed options industry. The previous records, set in 2011, were 4.56 billion options contracts and 4.60 billion total contracts.
/jlne.ws/2Rtub24

EuroCCP Clearing Borsa Italiana Trades
MarketsMedia
EuroCCP is delighted to announce that regulatory approval was received to provide clearing services for trades executed on Borsa Italiana’s Regulated Markets and MTF – Mercato Telematico Azionairo (MTA), Borsa Italiana Equity MTF and ETFplus Market.
/jlne.ws/2EbCpsP

Moscow Exchange launches dollar vs. yuan, yen vs. rouble trading
Reuters
The Moscow Exchange (MOEX.MM) has launched five new currency trading options to boost liquidity on its currency market, the bourse said on Monday.
/jlne.ws/2Ebr2ku

Silicon Valley’s Backers of New Stock Exchange Seek Approval
Dave Michaels – WSJ
A Silicon Valley plan to create a stock exchange that appeals to its hottest startups kicked off the process Friday of seeking regulatory approval to operate.
/jlne.ws/2Ebz0Ks

NZX appoints next future director
NZX
The NZX board has appointed Anna Scott as its next future director, effective 1 January 2019. Anna is Development Director at Hobson Wealth Partners.
It is the second time NZX has appointed a future director, an initiative designed to help identify and grow the next generation of New Zealand directors.
/goo.gl/k5dUQQ

Sky News Says Don Robert, Experian Chairman, Frontrunner To Replace Donald Brydon As London Stock Exchange Group Chairman
Mondovisione
Sky News has announced that according to market sources, Don Robert, chairman of Experian, is the frontrunner to replace Donald Brydon as the new chairman of the London Stock Exchange Group, replacing Donald Brydon.
/jlne.ws/2Pie6u4

Revised lists of the Moscow Exchange Indices announced
MOEX
Moscow Exchange announced today the results of the quarterly review for MOEX indices. All changes will be implemented from 21 December 2018. The Exchange has also set free floats for a number of companies.
/jlne.ws/2Pn2JS0

Update: The Swiss Federal Council Takes Measures To Protect Swiss Stock Exchanges
Mondovisione
On 30 November 2018, the Swiss Federal Council announced that it had adopted special regulations designed to protect Swiss financial markets infrastructures: the “Ordinance on the Recognition of Foreign Trading Venues for the Trading of Equity Securities of Companies with Registered Office in Switzerland (the “ORFTV”). The measure was announced only a few days after the European Commission indicated that it was considering not extending its equivalence decision for Swiss stock exchanges beyond December 2018.
/jlne.ws/2Pidm8g

MGEX Welcomes November 2018 into the Record Book
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives
Clearing Organization (DCO), reports November 2018 as the second best November in
Exchange history with a total exchange volume of 246,638 contracts. In addition, this
past month is recorded as the 13th best month of all-time at MGEX.
/jlne.ws/2Q7bK6N

ABN AMRO Clearing offers immediate support for Eurex FX derivatives; ABN AMRO Clearing today has started clearing Eurex FX futures and options for its clients.
Eurex
ABN AMRO Clearing now provides immediate support for the Classic FX derivative contracts with attributes including monthly and quarterly expiries that are immediately familiar to existing FX derivative users, as well as the innovative Rolling Spot Futures product that is now live.
/jlne.ws/2Qa7ljn

Strong November for Eurex Exchange: 12 percent increase in total turnover; In November, Eurex, Europe’s largest derivatives exchange and part of Deutsche Bˆrse Group, has again seen very strong demand for its products. A total of 149.5 million contracts were traded in November. This is 12 percent more than in last November (133.3 million).
Eurex
European equity derivatives increased by 26 percent to 27.5 million traded contracts from 21.7 million in November 2017. Demand was also particularly high for European equity index derivatives (+5 percent) with 71.9 million traded contracts (68.8 million in November 2017). With a record turnover of 468,350 contracts the EURO STOXX 50Æ month-end options, introduced in July, were a great addition to the weekly options. Turnover in European interest rate derivatives increased 17 percent to 50.0 million traded contracts (42.8 million in November 2017).
/jlne.ws/2PgjwG8

Trading hours at Eurex Exchange on 28 December 2018
Eurex
This year, Friday, 28 December 2018 will be the last exchange trading day at Eurex Exchange. This is also the last day of the year on which exercises can be done. On XetraÆ and at the Vienna Stock Exchange there will be shortened trading hours on the last trading day of the year 2018.
/jlne.ws/2PiK6ym

DFV Deutsche Familienversicherung AG new at the Frankfurt Stock Exchange
First exchange price at 12,30 Euro
Deutsche Bˆrse Group
DFV Deutsche Familienversicherung AG (ISIN: DE000A2NBVD5 ) is listed on the Prime Standard of the Frankfurt Stock Exchange today . The shares of the Frankfurt-based Insurtech company were listed at the start of trading at EUR 12.30 after an issue price of EUR 12.00.
/jlne.ws/2PkC3kG

Three Minutes With John Fennell, Chief Risk Officer At OCC; Supporting Market Innovations, Managing Industry Risk and Addressing Advancements in the Derivatives Space
Jessica Darmoni – Hehmeyer
“From a Central Counterparty Clearing (CCP) perspective, it is our role to provide stability and certainty behind the trading of a new asset class,” said Options Clearing Corporation (OCC) Chief Risk Officer John Fennell about clearing Cboe’s bitcoin contract. “It is important for OCC to support new asset classes like crypto and ensure we can provide confidence, both financially and operationally, in a manner comparable to existing products we clear.”
/jlne.ws/2EbYZlc

Fintech

SONIA: Trading Opportunities in an Emerging Benchmark
Ahmed Heikal – Vela
Competition might be the hallmark of a healthy market, but when multiple providers offer an almost identical product, users need to be properly equipped to switch quickly from one to the other so that they can always be sure of getting the best possible service at the best possible price.
/jlne.ws/2EfcxMC

Trading system testing: a practitioner checklist
Vaibhav Shukla – Itiviti Blog
End-to-end testing of trading environments is essential for financial services firms today – yet it can seem daunting to implement these complex systems, especially if it involves an overarching overhaul of existing point or legacy solutions. Taking a step-by-step approach can break this down into a more manageable process, while the resulting benefits have the potential to streamline operations, improve efficiency and add value.
/jlne.ws/2Ebbcq3

IPC and GreenKey Technologies Win 2018 American Financial Technology Award for
‘Best Partnership or Alliance’
Press Release
IPC, a leading global provider of secure, compliant communications and networking solutions for the financial markets community, and GreenKey Technologies, creator of patented voice software with integrated speech recognition designed specifically for the financial markets, today announced that they have jointly been awarded the 2018 American Financial Technology Award (AFTA) for “Best Partnership or Alliance.”
/goo.gl/zzDXo1

Digital newcomers out to disrupt South African banking
Tiisetso Motsoeneng, Nomvelo Chalumbira, Wendell Roelf – Reuters
Armed with low-cost operating models, three South African digital banks are betting on aggressive pricing and data analytics to attract tech-savvy, price-conscious consumers when they launch next year in a rare challenge to the old guard.
/jlne.ws/2PiZ6MO

France and Germany abandon ambitious plans for EU digital tax; Narrower reforms will focus on garnering ad revenues
Mehreen Khan – FT
France and Germany have abandoned EU plans to impose a wide-ranging digital tax on tech companies, in favour of a narrow levy on advertising sales that would be likely to exclude giants like Amazon and Apple.
/jlne.ws/2zAPiZx

Cryptocurrencies

Fidelity, Nasdaq Ventures invest in cryptocurrency exchange ErisX
Reuters
New cryptocurrency exchange ErisX said Tuesday it raised a total of $27.5 million from investors including Fidelity Investments and Nasdaq Ventures.
ErisX says it will offer investors the ability to trade the cryptocurrencies bitcoin, litecoin and ether on spot and futures markets starting next year, subject to regulatory approval.
Cryptocurrencies are virtual tokens that can be used as forms of payments on a variety of online applications. They can also be traded on dedicated online exchanges.
/goo.gl/RdsJMz

Crypto miners undeterred by market collapse, Argo Blockchain says; Steep fall in value of many virtual coins has failed to dent demand in mining subscriptions
Adam Samson in London – FT
Left HODL’ing the bag? London-listed Argo Blockchain on Tuesday said crypto enthusiasts are still clamouring for its coin mining services despite a market collapse that has severely dented the profitability of such operations.
/jlne.ws/2FVOMuE

OKEx Launches Perpetual Swap, Perfecting Its Derivatives Product Suites
Markets Insider
OKEx, a Malta-based world-leading digital asset exchange, today announced to launch a brand-new derivative product, Perpetual Swap, taking a big step forward to completing its crypto-based financial product suites. With the new addition, users of OKEx can now perform perpetual swap, futures contract, and spot trading with margin and leverage at one stop. Perpetual swap trading will be officially available at OKEx on December 11, 2018 at 01:00 (GMT+9).
/jlne.ws/2RxhyTA

Democratic Values: EOS Node Openly Offers Money for Votes
Simon Golstein – Finance Magnates
Starteos, a block producer for the EOS blockchain, has openly offered to share part of its income with users. This is significant because it suggests that the EOS network, which is one of the most valuable blockchains in the world, is not, in fact, decentralised or democratic at all, contrary to its own claims.
/jlne.ws/2KRkAzE

Bitcoin Miner Makes Bold Statement About ‘Bright’ Future After Market Rout
Billy Bambrough – Forbes
Bitcoin miner Argo Blockchain, a UK-listed company, has today sought to soothe shareholder unrest following a steep decline over the last month in the price of bitcoin and other cryptocurrencies, including Ripple’s XRP, ethereum’s ether, and stellar lumens.
/jlne.ws/2PfA94Q

Ripple’s XRP 8 pairs live on KuCoin: XRP USD ignores support
John Isige – FX Street
Ripple has been gaining traction in the Asian market in the last few months. Beside Ripple’s entrance into the region with its financial solutions, its official digital asset has today landed support on KuCoin exchange.
/jlne.ws/2BNMfyH

Bitcoin Will Regain Its Dominance In The Cryptocurrency Markets In 2019
Panos Mourdoukoutas – MarketWatch
Bitcoin, the “peoples” currency, is expected to regain its market dominance in the cryptocurrency markets by the end of 2019. In terms of market capitalization, that is.
/jlne.ws/2Pibv3i

How the Digital Asset Market Is Preparing for Institutional Traders
Edward Woodford and Sam Tegel, Seed CX – Tabb Forum
Since late 2017’s price rally, digital assets have captured the interest of institutional traders, offering growth potential in a new asset class and technology space. But the digital asset market still lacks the infrastructure necessary to support their trading needs. CEO Edward Woodford and chief strategy officer Sam Tegel of institutional digital asset exchange Seed CX detail six key areas where the digital asset market’s structure currently falls short for institutional adoption, along with the changes that will reduce friction for institutional traders.
/goo.gl/rFdSFc

Politics

White House seeks to end subsidies for electric cars, renewables
Reuters
White House economic adviser Larry Kudlow said on Monday the Trump administration wants to end subsidies for electric cars and other items, including renewable energy sources.
/jlne.ws/2PjIJPR

Trump Comes Dangerously Close to Witness Tampering; His tweets about Roger Stone and Paul Manafort make you wonder what Robert Mueller is thinking.
By Timothy L. O’Brien – Bloomberg
President Donald Trump’s Twitter feed ó awash in daily musings, threats, cajoling, criticism and flagrant meddling in a federal investigation ó is a font of information and evidence for Special Counsel Robert Mueller’s investigators.
/jlne.ws/2PicQXS

Trading on Uncertainty About Tariffs; Trade ambiguity makes investing in the U.S. more attractive
By James Mackintosh – WSJ
Investors supposedly hate uncertainty, but the uncertainty of a 90-day delay to extra tariffs on China turned out to be better than the certainty of extra tariffs. Stocks soared Monday and the dollar weakened as markets welcomed the cease-fire over the weekend in the U.S.-China trade war.
/jlne.ws/2PiQvK6

An alarming slowdown in global trade shows Trump’s tariff war is having a devastating impact
Will Martin – Business Insider
The negative impact of the ongoing trade battle between the US and China is plain to see in new data from Swiss freight giant Kuehne + Nagel.
/jlne.ws/2PhPMsv

Opinion: The stock market made President Trump and the Fed’s Powell blink
By Howard Gold – MarketWatch
“I used to think if there was reincarnation, I wanted to come back as the president, the Pope or a 0.400 baseball hitter,” President Clinton’s adviser and attack dog, James Carville, told Bob Woodward in 1994. “But now I want to come back as the bond market. You can intimidate everybody.”
/jlne.ws/2PiN6dY

Stock-Market Vigilantes Show Trump Who’s Boss
By Sarah Ponczek and Vildana Hajric – Bloomberg
Fed turns dovish, trade truce reached after equity correction; Dow vigilantes achieved Trump and Powell puts: Yardeni
The “Dow vigilantes” are back. At least, that’s what some say is the force behind the sudden truce in Donald Trump’s trade war with China and Jerome Powell’s dovish turn.
/jlne.ws/2zFSEue

Investors’ New Lifeline: The Trump Put; Like the Federal Reserve’s tendency to put out a safety net for investors in time of turmoil, stocks’ volatility appears to have contributed to President Trump’s laying off China
By Justin Lahart – WSJ
Never mind the Fed put. It is the Trump put that investors need to pay attention to now.
The Fed put is a trade on the idea that the Federal Reserve will step in to assist whenever things get dicey in the stock market, offering the sort of insurance that a put in the options market does. Originally the “Greenspan put,” it is an idea that originated early last decade from the Fed’s tendency, under then-Chairman Alan Greenspan, to cut rates or hold off in response to market turmoil.
/jlne.ws/2Ec6RmD

Trump’s Political Risk Spreads to Small-Town America, Poll Finds
By John McCormick – Bloomberg
His 2020 prospects best among those in purely rural areas; Less than a third say they definitely plan to vote for him
Donald Trump is nearly as unpopular in small towns as he is in suburban areas and cities, signaling potential trouble for his re-election prospects, according to a survey that highlights the Republican president’s vulnerabilities.
/jlne.ws/2G0k4k6

Don’t Like Trump? Your Financial Analysis Might Be Biased; Partisanship should have no place in a corporate-credit rating. A new study says it does.
By Barry Ritholtz – Bloomberg
The dangers of political bias for investors has long been one of my favorite rants. Politics is tribal, opinionated and typically one-sided. These are emotional hot buttons that lead to biased thinking. And as we have learned from both behavioral finance and decades of experience, those affectations are the enemy of good returns and smart investing.
/jlne.ws/2G0dt9j

Regulation

US regulators push for new technology to tackle financial crime; mised not to penalise banks that use artificial intelligence tools to spot gaps in existing anti-money laundering programmes, paving the way for the use of new technologies to tackle illicit financial activity.
Finextra
The Federal Reserve Board along with four other regulatory agencies – the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network (FinCEN), the National Credit Union Administration, and the Office of the Comptroller of the Currency – say they want depository institutions to explore innovative approaches to both meet their Bank Secrecy Act/anti-money laundering (BSA/AML) compliance obligations and to further strengthen the financial system against illicit financial activity.
/jlne.ws/2zH2pIF

China relaxes index futures trading rules
Reuters
China’s financial futures exchange said on Sunday it was further relaxing index futures trading rules,reducing margin requirements,cutting trading fees and allowing more trading activities.
/jlne.ws/2EbvTSK

2018 G20: A Lot More Than a Photo Op
Russell Rhoads – TABB Forum
Nine years after the Pittsburgh G20 Summit kickstarted OTC derivatives reform, the G20 meeting in Argentina this year brings together more than 5,000 policymakers to discuss world events, including the progress of the 2009 directives intended to reduce systemic risk in the global swaps market.
/jlne.ws/2EdzOib

Commission Statement on Passing of President George H.W. Bush
SEC
Our nation is mourning the passing of a great leader and statesman. President George Herbert Walker Bush embodied the spirit and promise of America. His unwavering commitment to our country and his deep belief in the power of each and every American to contribute to our society provide an example that should endure.
/jlne.ws/2PiLyAO

Joint Statement On Innovative Efforts To Combat Money Laundering And Terrorist Financing
Date 03/12/2018
Mondovisione
The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Financial Crimes Enforcement Network issued today a joint interagency statement to encourage banks to consider innovative approaches in meeting their Bank Secrecy Act/anti-money laundering compliance obligations.
/jlne.ws/2Pl11k5

Remarks by Chairman J. Christopher Giancarlo at the Fourth Annual Conference the Evolving Structure of the U.S. Treasury Market, New York, New York; “The Complex and Dynamic Liquidity Hierarchy of the US Treasury Market”
CFTC
Thank you. Good afternoon. I want to thank John Williams, Nate Wuerfel, and the New York Fed for inviting me to speak to you today.
/jlne.ws/2Pn2pCM

CFTC Allows Additional UK Multilateral Trading Facilities to Operate without CFTC Registration as Exempt SEFs
CFTC
The Commodity Futures Trading Commission (CFTC) today issued an amended order that will allow an additional four multilateral trading facilities (MTFs) authorized within the European Union (EU) to be exempted from the requirement to register with the CFTC as swap execution facilities (SEFs).
/jlne.ws/2Pl0QF8

ASIC permanently bans convicted Victorian former brokers
ASIC
ASIC has permanently banned Mr Najam Shah, formerly of Glen Waverley, Victoria, Mr Mohamed Ahmed of Hampton Park, and Mr Aizaz Hassan of Truganina, from providing financial services and engaging in credit activities.
/jlne.ws/2PiPpOl

ASIC cancels Solar Financial Advisory’s AFS licence
ASIC
The Australian Securities and Investment Commission (ASIC) has cancelled the Australian financial services (AFS) licence of Sydney-based Solar Financial Advisory Pty Ltd (Solar), effective from 21 November 2018.
/jlne.ws/2PgJtoZ

Major financial reporting changes and other focuses
ASIC
Announcing its focus areas for 31 December 2018 financial reports of listed entities and other entities of public interest with many stakeholders, ASIC has called on companies to focus on new requirements that can materially affect reported assets, liabilities and profits.
/jlne.ws/2PhbgFR

The Structure of the Treasury Market: What Are We Learning?
Governor Lael Brainard – Federal Reserve
At “The Evolving Structure of the U.S. Treasury Market” Fourth Annual Conference Hosted by the Federal Reserve Bank of New York, New York, New York
/jlne.ws/2zFMJWe

Remarks of Commissioner Brian Quintenz at the 14th Annual China International Derivatives Forum (CIDF)
CFTC
Thank you for that very warm welcome. It is a great honor to join you today at the 14th Annual China International Derivatives Forum (CIDF) in Shenzhen. I would like to thank Chairman Wang of the China Futures Association for inviting me and am grateful for the very productive dialogue with the China Securities Regulatory Commission Vice Chairman Fang Xinghai. Before I begin, let me quickly say that the views contained in this speech are my own and do not represent the views of the Commodity Futures Trading Commission (Commission or CFTC).
/jlne.ws/2G0EHfW

German criminal probe zeroes in on tiny unit sold by Deutsche Bank; Business being investigated was barely profitable and put up for sale in 2016=
Olaf Storbeck in Frankfurt – FT
The business at the core of Deutsche Bank’s latest money laundering probe was tiny, barely profitable and earmarked for sale since early 2016, according to several people briefed on the matter.
/jlne.ws/2FYDlCA

ESMA is seeking experts in financial innovation for its consultative group
ESMA
ESMA is today launching the process to renew the Consultative Working Group (CWG) of the Financial Innovation Standing Committee (FISC). ESMA is calling for expressions of interest from stakeholders to become a member of the CWG by 15 January 2019.
/jlne.ws/2FYJtdQ

ESMA appoints new Securities and Markets Stakeholder Group
ESMA
The European Securities and Markets Authority (ESMA) has published the new list of members of its Securities and Markets Stakeholder Group (SMSG) following its approval by its Board of Supervisors. The selected individuals begin a 2Ω year term on 1 January 2019 and will replace the group whose mandate expires on 31 December 2018.
/jlne.ws/2G7KOzo

Unexpected Close of Securities Markets
FINRA
On occasion, the securities markets may unexpectedly close for business, for example, on the national day of mourning declared in memory of President George H.W. Bush on December 5, 2018. This Notice provides guidance to members regarding SEA Rules 15c3-1, 15c3-3, 17a-5(a) through (d), Rule 204 under Regulation SHO, FINRA Rules 4210, 4230(b), 4521 and 4524, and Federal Reserve Board Regulation T in the event of such an unexpected close. The Notice addresses, among other things, the circumstances under which the day of the unexpected close should be considered a regular business day versus a non-business day for purposes of these rules.
/jlne.ws/2FVY2Pi

FINRA System Closures for National Day of Mourning
FINRA
In observance of the National Day of Mourning in honor of former President George H.W. Bush, FINRA will be closed on Wednesday, December 5, 2018. Firms should refer to Regulatory Notice 18-39 for information relating to an unexpected close of the securities markets. This closure includes the following systems:
/jlne.ws/2FYDW7i

CFTC Chairman Giancarlo Statement on the Decision in CFTC v. Wilson et al.
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo issued the following statement regarding the December 3, 2018 decision in CFTC v. Wilson et al., which followed a bench trial that concluded on December 7, 2016.
/jlne.ws/2FW3RfW

Guidance on the annual affirmation requirement for entities currently operating under an exemption from CPO or CTA registration
NFA
The CFTC requires any person that claims an exemption from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), an exclusion from CPO registration under CFTC Regulation 4.5 or an exemption from CTA registration under 4.14(a)(8) (collectively, exemption) to annually affirm the applicable notice of exemption within 60 days of the calendar year end, which is March 1, 2019, for this affirmation cycle.
/jlne.ws/2FYJHlc

FCA publishes Decision Notice against former CEO of Sonali Bank (UK) Ltd for AML failings
UK FCA
The Financial Conduct Authority (FCA) has today published a Decision Notice in respect of Mohammad Ataur Rahman Prodhan, the former Chief Executive Officer of Sonali Bank (UK) Limited (SBUK), fining him £76,400.
/jlne.ws/2FTWBku

ScamSmart prompts tens of thousands of pension holders to seek information
UK FCA
The number of people seeking information about pension scams has soared since the launch of the first joint campaign by the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) this summer.
/jlne.ws/2G0gsyx

Investing and Trading

Investors’ New Lifeline: The Trump Put
Justin Lahart – WSJ
Never mind the Fed put. It is the Trump put that investors need to pay attention to now.
The Fed put is a trade on the idea that the Federal Reserve will step in to assist whenever things get dicey in the stock market, offering the sort of insurance that a put in the options market does. Originally the “Greenspan put,” it is an idea that originated early last decade from the Fed’s tendency, under then-Chairman Alan Greenspan, to cut rates or hold off in response to market turmoil.
/jlne.ws/2Ec6RmD

Misdiagnosing The Risk Of Margin Debt
Lance Roberts – Real Investment Advice
This past week, Mark Hulbert wrote an article discussing the recent drop in margin debt.
/jlne.ws/2Rxvr4v

Goldman Sees Another Weak Year for Markets After a Lousy 2018
Chris Anstey – Bloomberg
Prospects for weaker economic backdrop unhelpful for risk; Goldman advises overweight cash, selective equity hedges
Slowing economic growth, shrinking central bank balance sheets and continued bouts of volatility will help make 2019 another poor year for risk-adjusted investment returns, with few obvious havens, according to Goldman Sachs Group Inc.
/jlne.ws/2PiOTQy

Investors Deserve a Peek at Bond Managers’ Tricks; Grading with benchmarks that better reflect investing styles would be a good start.
Nir Kaissar – Bloomberg
Active bond managers have dazzled investors by outpacing the bond market in recent years. But it’s a simple sleight of hand, and the big reveal is coming.
/jlne.ws/2Pn1eTS

As Markets Wobble, Cash Is King; U.S. cash and cash equivalents are on track to be some of the best-performing assets in 2018
Riva Gold – WSJ
In a year of anemic returns and wild gyrations across most markets, cash is a star. U.S. cash and cash equivalents are on track to be some of the best-performing assets in 2018, enticing money managers struggling with a rare synchronized downturn in stocks, commodities and bond markets. Rising returns on cash make it more appealing for investors to move out of other investments, risking a turning point for markets as the global economy shows signs of slowing and the Federal Reserve slowly normalizes interest rates.
/goo.gl/CgFbnu

Cannabis Company Craters After Shortseller Calls It a ‘Black Hole’
Luca Casiraghi, Kristine Owram, Joshua Fineman and Matt Robinson – Bloomberg
Aphria falls as much as 29% in New York trading on Monday; Canadian company is latest targeted by Quintessential Capital
Aphria Inc., one of the biggest Canadian pot companies, fell 23 percent in New York after a short seller said it was a “black hole”.
/jlne.ws/2FVow3p

Institutions

Northern Trust Expands Newly Launched Alts Platform to Include Private Markets
Business Wire
Northern Trust announced today it has added private market capabilities to supplement the recently launched ArcLine Alternatives platform for the firm’s wealth management clients.
/jlne.ws/2RrXr9C

TD Ameritrade becomes first US brokerage to partner with Tencent’s WeChat in America; TD Ameritrade announced it is opening a portal on WeChat for U.S. users, following a similar launch in August for Hong Kong users.
Evelyn Cheng – CNBC
TD Ameritrade is partnering with Tencent as the U.S. brokerage firm looks to tap the massive user base of the Chinese technology company’s WeChat messaging app.
/jlne.ws/2PhVfPP

The ‘big squeeze’: Ray Dalio, founder of the world’s largest hedge fund, breaks down how the next financial meltdown will look different from the last
Joe Ciolli – Business Insider
When Ray Dalio talks about the future of the global financial landscape, everyone should listen.
/jlne.ws/2PiNPfn

Regions

Asia’s Retail Investors Are Looking To Futures
Christopher Fix, CME Group – Emerging Market Views
Asian retail investors are increasingly flexing their muscles and becoming important participants in the derivatives market. CME Group’s retail trading volume has risen 40 percent from 2015 to 2017, with the top three traded products in Asia Pacific being crude oil futures, E-mini S&P 500 futures and gold futures. Over the past two years, nearly half of all retail clients acquired globally by CME Group are from Asia Pacific, signifying that interest from this particular group of traders in this region is on the rise.
/jlne.ws/2EbB6Kr

Why The Coal Markets Are Moving East
Owain Johnson – OpenMarkets
Before the emergence of oil and gas, there was coal. Cheap and plentiful coal powered the Industrial Revolution in Europe and the United States.
In recent years, coal consumption in those regions has declined, largely because of competition from natural gas, which also has fewer harmful emissions.
But demand for coal remains very strong in other parts of the world, particularly from the growing economies of Asia, which are adding more and more electricity production every year to power their industrialization strategies.
/jlne.ws/2E9E9CX

ETF Investors Pour Cash Into Politically Battered Mexico
Carolina Wilson, Aline Oyamada and Vinicius Andrade – Bloomberg
iShares Mexico fund had its best month of inflows since 2016; Biggest Brazil ETF takes in cash on optimism over Bolsonaro
The rush to invest in emerging markets is lifting one of the most politically volatile parts of Latin America — Mexico.
/jlne.ws/2PfB9G8

It’s Hard Out There for a Hedge-Fund Analyst
Katia Porzecanski and Nishant Kumar – Bloomberg
Fewer firms, passive investing, less research mean fewer posts; Experienced workers are most expensive, hence ‘juniorfication’
After 30 years in finance, David Goldburg’s dream was fading. His resume was good. Goldman Sachs prop desk. Managing money for Michael Milken. He tried to start his own hedge fund. His timing was bad. It didn’t work.
/jlne.ws/2PiMWmS

China Announces New Punishments for Intellectual Property Theft
Bloomberg News
Government announced a total of 38 different punishments; Violators banned from issuing bonds or other financing tools
Intellectual property theft is one of the main points of contention in China’s dispute with Washington, and just days after President Xi Jinping promised to resolve the U.S.’s “reasonable concerns,” China has announced an array of punishments for IP theft.
/jlne.ws/2PhPjqf

Europe’s tech startups suffer from ‘diversity debt’, survey finds; Study by investment firm finds 85% of funding deals are made with all-male founding teams
Alex Hern – The Guardian
Europe’s startup sector has a “shocking” lack of diversity, with 93% of all funds raised in 2018 going to all-male founding teams, according to a report by the investment firm Atomico.
/jlne.ws/2zFS6oa

Qatar Leaving Is an Ominous Sign for OPEC; It’s a relatively tiny oil-producer, but it exposes the organization’s growing weaknesses.
Liam Denning – Bloomberg
The immediate question raised by Qatar leaving OPEC is, of course, what to call this? Qatarexit, or even Qatexit, sound wrong. Qatar-ta-for-now has a nice ring to it, even if it’s a tad unwieldy. Maybe just go with Qatout.
/jlne.ws/2G0EmKc

Germany May Boost Offshore Wind Auction Capacity 33% by 2030
Brian Parkin – Bloomberg
Nation could increase tenders to 20GW after industry pressure; Details published in 162-page energy law passed Nov. 30
Chancellor Angela Merkel’s government is bowing to industry pressure to boost Germany’s offshore wind capacity, already among the biggest in Europe.
/jlne.ws/2FZkhUN

Brexit

UK rakes in record 75 billion pounds in City taxes amid Brexit warnings
Iain Withers – Reuters
Financial services firms in Britain paid a record 75 billion pounds in taxes in the last financial year, but City bosses warned a chaotic Brexit could blow a hole in the industry’s tax receipts in future years.
/jlne.ws/2PhUEO5

FCA’s warning to Brexit-ing banks shows direction of travel; Somewhat late in the day, the regulator has woken up to some geographic realities
Matthew Vincent – FT
If the recently resigned Brexit secretary Dominic Raab is not prevailed upon by the Tory party ó or a grateful nation ó to become our next prime minister (and the odds are as short as 6-1), he could always join the Financial Conduct Authority. He seems sufficiently quick on the uptake.
/jlne.ws/2zIbVLI

U.K. Can Still Unilaterally End Brexit, EU Top Court Indicates
Stephanie Bodoni – Bloomberg
Advisory opinion says U.K. could revoke its notice to quit EU; Final EU court ruling in Brexit case will come at later date
The U.K. should be allowed to reverse Brexit, according to an advisory opinion from the European Union’s top court that will fuel the campaign to thwart the divorce.
/jlne.ws/2zDXPdZ

The Brexit Short: How Hedge Funds Used Private Polls to Make Millions; Private pollsóand a timely ‘concession’ from the face of Leaveóallowed the funds to make millions off the pound’s collapse.
Cam Simpson, Gavin Finch, Kit Chellel – Bloomberg
At 10 p.m. on June 23, 2016, Sky News projected the words “IN OR OUT” across the top of a London building as an orchestral score ratcheted up the tension. “In or outóit is too late to change your mind,” declared Adam Boulton, the veteran anchor, seated in a makeshift studio across from Big Ben.
/jlne.ws/2G7J5do

Carney defends BoE’s doomsday disorderly Brexit projection; Central bank chief faced criticism over forecast that showed deep contraction in worst case
Delphine Strauss – FT
Mark Carney has defended the Bank of England’s analysis of Brexit’s economic impact, telling a parliamentary committee that it had held back the details of its dire no-deal scenario for as long as possible rather than employing scare tactics.
/jlne.ws/2G0A1XH

Miscellaneous

Young people get tough with older generations over ‘messed-up planet’
Megan Rowling – Reuters
Older generations have “messed up the planet”, letting down younger people, who are “angry” about it and want it to stop, British naturalist David Attenborough said on Monday.
/jlne.ws/2FVlVqb

The First Book Written About a Stock Market Is Selling for $300,000; Joseph Penso de la Vega’s Confusion of Confusions was published in 1688.
James Tarmy – Bloomberg
On Tuesday the first book known to be written about a stock exchange went on sale at Sotheby’s Rare Books and Manuscripts online auction, carrying an estimate of $200,000 to $300,000. Written by Joseph Penso de la Vega in 1688, the Confusion of Confusions is a primer for the Amsterdam stock exchange, which was set up by the Dutch East India company in 1602. Bids close on Dec. 17.
/jlne.ws/2PiYKWu

The post DRW wins big versus CFTC – comprehensive commentary and reporting appeared first on John Lothian News (JLN).

First Read

Bitcoin’s role in the Mueller investigation
Matt Raebel – John Lothian News

What do the investigation by FBI special counsel Robert Mueller and bitcoin have in common? Potentially, they’re both connected to a Russian hacker named Alexander Vinnik.

The crypto world is lousy with individuals who have criminal records, in addition to all the criminals who haven’t been caught yet. Among those in the former is Alexander Vinnik, a Russian programmer affiliated with the bitcoin (BTC) exchange BTC-e, which has been indicted by a grand jury of the Northern District of California for operating an unlicensed money service business, as well as helping cybercriminals by laundering up to $9 billion worth of money using bitcoin. It was also the first and only crypto exchange found to have had a direct connection to the 2014 hacking attacks against the bitcoin exchange Mt. Gox, one of the first and worst cyber attacks in crypto history. That attack cost bitcoin holders tens of millions of dollars worth of digital assets. If you compare bitcoin’s prices in 2014 to its current prices, that amount has now increased tenfold despite the massive price decreases in bitcoin and altcoins this year.

To read the rest of this story, go here.

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Murphy & McGonigle Launches New Commodities & Futures Division To Help Clients With Regulatory Challenges
Sarah Rudolph – John Lothian News

These days, traders need good lawyers. They are a must-have in the age of regulatory overreach after the Dodd-Frank law, and for comprehending and complying with the rules as they get refined and re-tuned and as crypto markets come into the mix.

One example of a law firm addressing this need is Murphy & McGonigle, a firm with offices in New York, Washington D.C. and Richmond, VA that advises financial services firms like FCMs and broker dealers on regulatory matters. The firm has just added a Commodities, Futures and Derivatives practice to its business to help clients manage and comply with these regulations.

To read the rest of this story, go here.

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Hits & Takes
JLN Staff

At the gala dinner of the FOW International Awards, Terry Duffy and Andreas Preuss were honored. Duffy took home the CEO of the Year and former Eurex CEO Preuss was honored with a Lifetime Achievement Award.~JJL

CME Group was also a big winner at the FOW event, receiving four awards; the U.S. exchange group won Global Exchange of the Year, Americas Exchange of the Year, Best new interest rates contract and Proprietary Traders’ Exchange of the Year.~JJL

Chicago-based R.J. O’Brien & Associates (RJO) won the 2018 FOW International Award for Non-Bank Futures Commission Merchant (FCM) of the Year – its third consecutive win in the category.~JJL

Also, Cinnober was awarded the Best New Technology Product in Risk Management for its TRADExpress CCP Risk Solution at last night’s FOW International Awards in London.~JJL

My LinkedIn post of the FT story titled “Derivatives trader Don Wilson cleared in manipulation case” was viewed 4657 times.~JJL

What do eight of the top 10 hedge funds and 14 of the top 15 largest banks have in common? They use the alternative data provider Quandl, which was just purchased by Nasdaq yesterday. See below for stories about Nasdaq’s acquisition of of the company. From Quandl CEO Tammer Kamel via blog post: “Everything is business as usual: our data, our APIs, our website, our services ó everything will remain as is and will keep getting better in the future. We will continue to operate under the Quandl brand, with Quandl technology, people, and processes. I will continue to run the business with my co-founder, Abraham Thomas, and your points of contact will remain the same.”~SD

CFTC Commissioner Brian Quintenz was at the 14th Annual China International Derivatives Forum and spoke about China’s growing futures markets, mentioning that quite a few of the most popular global metals, agriculture and energy contracts are based at one of three Chinese exchanges – either Dalian, Zhengzhou or Shanghai. Based on FIA data through the halfway point of 2018, eight of the top 10 agricultural futures and options contracts are traded at one of those three exchanges (the only two contracts that aren’t are the CBOT’s corn and soybean futures contracts). Three of the top 10 energy contracts are Chinese – Shanghai’s bitumen futures, Dalian’s coke futures and Zhengzhou’s thermal coal futures. When it comes to the top 10 global metals contracts, the Shanghai Futures Exchange dominates with seven of the top 10. Dalian’s iron ore futures offering is number two on the metals list, which means China has 19 total entries in those 30 potential “top” spots.~SD

Not so fun fact of the day: with yesterday’s stock market plunge, the four biggest single day declines in the Dow Jones average have all occurred during the presidency of Donald Trump. Maybe I was right about the volatility thing after all.~JJL

ICAP has moved its U.S. Charity Day from Wednesday, Dec. 5 (today) to Thursday, Dec. 6 to observe Wednesday’s National Day of Mourning for President George H.W. Bush. Other global ICAP offices will still host Charity Day on Wednesday. ~SR

Rosenblatt’s head of Fintech Investment Banking, Vikas Shah, has been selected once again to Institutional Investor’s Fintech Finance 40, climbing four spots in the annual ranking.~JJL

On Thursday, December 6 the CME Group will host the first ever CME Group Global Commodities Summit in Hong Kong, bringing together leading voices from across the investment community to discuss the key trends and innovations in commodity investment that are driving the market forward.~JJL

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Trying to Buy Stuff You Want Is Not Manipulation; Also hedge fund analysts, dollar hegemony and the yield curve.
Matt Levine – Bloomberg
“Market manipulation” is a famously hard-to-define term. In casual usage, people often use it to mean doing stuff that tends to push the price of a thing up or down, but it can’t really mean that: Any time you buy or sell a thing, that will affect its price, and surely not all trading is manipulation. In practice, manipulation seems to have two elements:
/jlne.ws/2rlVxMf

***** More analysis about the DRW win against the CFTC.~JJL

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FTSE Russell & Sustainalytics announce global ESG partnership
FTSE Russell
Strategic partnership between leading providers in global benchmarks and ESG research and ratings; First products, ESG indexes based on the Russell US Indexes and Sustainalytics ESG Risk Ratings, to be introduced in early 2019; FTSE Russell to complement its in-house sustainable investment capabilities by partnering with Sustainalytics to deliver greater choice for investors in integrating ESG into benchmarks and strategies
FTSE Russell, a leading global multi-asset index, data and analytics provider together with Sustainalytics, a global leader in ESG and corporate governance research, ratings and analysis, today announced a new strategic partnership to serve the rapidly growing demand for ESG integration into investment strategies. Through this partnership, FTSE Russell and Sustainalytics will work together to develop new FTSE Russell ESG indexes using the new Sustainalytics ESG Risk Ratings.
/jlne.ws/2rnLyG0

**** I love the name, Sustainalytics.~JJL

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Does cloud computing mean game over for Xbox and PlayStation?; Hardware makers must adapt to a world where superfast broadband can stream blockbuster games without the need for a box
Leo Lewis – FT
Home entertainment has always been a ruthless business, but games consoles’ 50-year territorial war for the living room has been endlessly brutal.
/jlne.ws/2QfJpLs

***** Xbox and Playstation to join Pong console fate?~JJL

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Tuesday’s Top Three
For good reason, yesterday’s top clicks all went to Don Wilson-related material. The top story was Jim Kharouf’s commentary on the court ruling that saw DRW prevail against the CFTC. Second was Carl Gilmore’s piece that he wrote for JLN, The Curious Case of Our Regulatory Environment (Part II), or Why the Earth Isn’t Flat. In third was the court ruling itself CFTC, Plaintiff, versus Donald R. Wilson and DRW Investments, LLC, Defendants.

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MarketsWiki Stats
136,793,583 pages viewed; 23,329 pages; 215,597 edits
MarketsWiki Statistics

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Lead Stories

London’s stockbrokers fight for their survival; Regulation, a dearth of IPOs and automation unleash radical industry change
Hannah Murphy – FT
A new game has become popular in the City of London: making bets on which famous stockbroking name will disappear first. The industry ó whose business is notoriously feast or famine ó is staggering under the weight of new European legislation, a tougher market for initial public offerings and a squeeze on commissions from a move to automated share trading.
/jlne.ws/2QfQBY4

Nasdaq moves into ‘alternative data’ with Quandl acquisition; Exchange group diversifies as price of traditional trading feeds comes under fire
Robin Wigglesworth – Financial Times
Nasdaq has acquired one of the biggest “alternative data” platforms, highlighting the swelling investor interest in non-traditional information from satellite images, web-scraping and credit card purchases and potentially presaging a burst of consolidation in the fragmented industry.
/jlne.ws/2RyErX3

****See the press release here.

Trump Whipsaws Markets Again With Habit of Overstating Success
Joshua Gallu and Shawn Donnan – Bloomberg
Boasts of win in Xi meeting give way to more nuanced reality; Markets plunge as investors grow skeptical of Trump’s claim
President Donald Trump turned to a familiar playbook after his high-stakes dinner with Chinese President Xi Jinping on Saturday: boast of a big victory first, and let a more nuanced reality sink in later.
/jlne.ws/2rkya5P

Shanghai-London Stock Connect launch delayed by at least a month – sources; Plans until this week were for scheme to go live by year-end; Huatai Securities’ U.K. prospectus had been expected this week; Technical issues, Brexit vote might be factors in the delay
Samuel Shen and Julia Fioretti – Reuters
The launch of the Shanghai-London Stock Connect scheme will be delayed at least one month, people with knowledge of the matter said, in a blow to Beijing’s plan for at least one leg of the two-way investing scheme to be up and running by year-end.
/jlne.ws/2Qf8Lcz

Theresa May suffers double defeat on Brexit deal; Government will publish legal advice on Wednesday after MPs seize more control of EU exit
Henry Mance, George Parker and Jim Pickard – FT
Pro-EU campaigners celebrated twin victories on Tuesday that appeared to reduce sharply the chances of a no-deal Brexit and further eroded the authority of prime minister Theresa May.
/jlne.ws/2QhNAqb

Deutsche Bank shares fall to new all-time low; Stock in German lender falls below EUR8 amid money laundering probe
Camilla Hodgson – FT
Shares in Deutsche Bank fell to a fresh record low in early European trading on Wednesday, as it battles a criminal probe into suspected money laundering.
/jlne.ws/2QbcSGo

Fidelity and Nasdaq back ErisX with $27.5 million investment; ErisX raises upwards of $27.5 million from major investors as it prepares to launch new marketplace for digital assets.
Hayley McDowell – The Trade Crypto
Eris Exchange’s soon-to-launch crypto marketplace has raised upwards of $27.5 million in a Series B funding round from major institutions including Fidelity Investments and Nasdaq Ventures.
/jlne.ws/2QfJ1wu

A self-learning trading venue has raised $9 million, and it’s hoping that it can solve a big headache hanging over the stock market
Frank Chaparro – Business Insider
Fintech company Imperative Execution said on Tuesday that it has raised $9 million.
The firm is trying to lower the cost of executing large trades for big funds like Fidelity.
A trading firm that is trying to solve one of the biggest headaches in US stock trading has raised $9 million to build out its artificial-intelligence-powered matching engine.
/jlne.ws/2QfQb3O

UK Parliament claims right to Brexit Plan B
Lucy McNulty – Financial News London
The UK Parliament has voted to take more control of the Brexit process if Prime Minister Theresa May is defeated in a crunch vote on her EU withdrawal agreement next week.
In a victory for pro-EU politicians, Members of Parliament on Tuesday evening voted to adopt an amendment to the exit process, which will enable them to suggest alternatives if the government’s Brexit deal is voted down on December 11 ó as is quite likely.
/jlne.ws/2EdlA0r

Thomson Reuters to cut 3,200 jobs in next two years
Matt Scuffham – Reuters
Thomson Reuters Corp (TRI.TO) said on Tuesday that it will cut its workforce by 12 percent in the next two years, axing 3,200 jobs, as part of a plan to streamline the business and reduce costs.
/jlne.ws/2RzgTkO

Crypto hedge funds are getting creative as the bear market tightens its grip
Frank Chaparro – The Block Crypto
Those that have survived are exploring new investment strategies and redistributing burn rates
Some funds have been issued subpoenas, while others are seeing large investors withdraw
The crypto explosion of 2017 gave birth to hundreds of hedge funds aimed at generating asymmetric returns from the speculative “crypto asset class.” However, this year’s downwards price action has been bad news for once high-flying funds, forcing many to shut and others to explore creative ways to stay afloat. Crypto Fund Research reports that 35 cryptocurrency funds have closed shop since the beginning of the year; 5% of the 633 funds it tracks. As for the funds that haven’t shut down, they’re wising up, experts tell The Block.
/jlne.ws/2QfQ1tm

ErisX Positioned to Dominate the Digital Asset Space with Support from Second Round of Investors
Business Wire
ErisX today announced the closing of Series B funding from an influential group of investors spanning the traditional capital and digital asset markets including Bitmain, ConsenSys, Fidelity Investments, Nasdaq Ventures (NDAQ) and TradeStation Securities’ parent company, Monex Group Inc. (TSE: 8698). ErisX is receiving additional support from existing investors including CTC Group Investments, Digital Currency Group, DRW Venture Capital, Pantera Capital and Valor Equity Partners.
/jlne.ws/2GaGNtE

R.J. O’Brien Wins 2018 FOW International Award for Non-Bank FCM of the Year, Marking Third Consecutive Year in Category
R.J. O’Brien
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, last night won the 2018 FOW International Award for Non-Bank Futures Commission Merchant (FCM) of the Year – its third consecutive win in the category. FOW, part of the Global Investor Group, presented the award at a dinner ceremony following its Derivatives World London: The Debates conference.
/jlne.ws/2rkuL6T

Exchanges, OTC and Clearing

Extension Brings 21-Hour Futures Trading to Frankfurt This Month
Jan-Patrick Barnert and Abhishek Vishnoi – Bloomberg
Trading is extended with an additional seven hours next week; Move brings exchange nearer session length of S&P 500 Futures
Futures trading at derivatives exchange Eurex Frankfurt AG will soon be extended by seven hours daily to offer a 21-hour dealing window, as it moves closer to the session length provided by the S&P 500 Futures platform.
/goo.gl/PXKBic

Intercontinental Exchange Reports November 2018 Statistics ; ICE ADV up 24% y/y driven by record energy ADV up 19% y/y and interest rate ADV up 37% y/y; ICE open interest up 10% 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 November 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/2rkWxA3

Ag Barometer Holds Steady in November But Farmers Express Concern About Lack of a New Farm Bill
James Mintert and Michael Langemeier – Purdue
The Purdue University/CME Group Ag Economy Barometer November reading was 134, a decline of just over 1 percent from a month earlier when the barometer stood at 136. The November reading leaves the barometer 6 percent below its most recent peak, which was reached back in June before the impact of trade disruptions were felt throughout much of U.S. agriculture. Although November’s ag sentiment index was below the level attained last spring, it was still 6 points higher than a year earlier when the index of agricultural producer sentiment was 128.
/jlne.ws/2rkZ9Os

AllianceBernstein Selects ICE Liquidity Indicators for Investment Management, Risk Management, and Regulatory Compliance
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced that AllianceBernstein L.P. (“AB”) has selected ICE Data Services’ ICE Liquidity IndicatorsTM service to help support AB with its investment management, liquidity risk management and regulatory compliance obligations.
/jlne.ws/2ruhTeJ

NYSE Group Announces 2019, 2020 and 2021 Holiday and Early Closings Calendar
ICE
NYSE Group announced today the 2021 holiday calendar and early closing dates for its cash equity markets: New York Stock Exchange, NYSE American, NYSE Arca Equities, NYSE National, and Chicago Stock Exchange, as well as the NYSE American Options, NYSE Arca Options and NYSE Bonds markets. The 2019 and 2020 holiday and early closing dates are also set forth below.
/jlne.ws/2rmSR0J

Introduction of a discount for OTC IRS and ZCIS Gold Packs and introduction of a FRA Pack for Clearing Members’ own accounts
Eurex
Effective 1 January 2019, Eurex Clearing will introduce a discount on the OTC IRS and ZCIS Gold Packs for Clearing Members’ own accounts.
/jlne.ws/2rnWVOt

Pensions: “savers should acquire financial and stock exchange knowledge”; Deutsche Boerse Launches Seminar Series on Exchange Knowledge / Evening Seminars “Your Path to the Stock Market” will take place from January to May 2019 in Eschborn
Deutsche Boerse
From 28th January 2019, Deutsche Boerse is organizing evening seminars for private investors at its corporate headquarters in Eschborn near Frankfurt through its Academy, the Capital Markets Academy.
/jlne.ws/2rjYkpb

ASX Monthly Activity Report – November 2018
ASX
/jlne.ws/2rnUw6s

Important Matters Concerning to the Revision of Tick Size for TSE Mothers Index Futures Strategy Trades
JPX
Osaka Exchange, Inc. will revise the tick size of TSE Mothers Index Futures Strategy Trades from 0.1pts to 0.5pts since February 12, 2019. Due to this revision, orders with validity period of more than one day which were entered into J-GATE before the revision will be all cancelled at the end of the night session of February 8, 2019 (trading day as of February 12, 2019). Please note that this cancellation will be applied to not only strategy trades’ orders but also all the other orders.
/jlne.ws/2riYoWc

Fintech

BNP Paribas Moves to Real-time Margin Calculations with FIS Margin Advisor
FIS
FIS (NYSE: FIS), a global leader in financial services technology, today announced that BNP Paribas has selected FIS’ Cleared Derivatives Margin Advisor, an innovative solution that enables sell-side firms, investment funds and institutional investors to better assess and calculate initial margin requirements on cleared derivatives portfolios.
/jlne.ws/2FZyxN7

Northern Trust buys FX algo trading platform; Northern Trust has agreed to acquire Chicago-based FX algo trading platform and global liquidity aggregator provider, BEx.
Hayley McDowell – The Trade
Northern Trust has confirmed that it has agreed to acquire a foreign exchange (FX) software services provider as it seeks to grow its global FX business.
/jlne.ws/2rhK2Wa

Robo Adviser Wealthfront Makes Automated Financial Planning Free
Anne Tergesen – WSJ
Robo advisory firm Wealthfront Corp. is making its automated financial planning free to anyone who downloads the company’s app.
The Redwood City, Calif.,-based company had provided its financial planning service to clients who opened an account and paid the firm 0.25% annually to select their investments and manage their assets.
/jlne.ws/2REBp3C

Internet giants pose existential threat to banks: BIS chief
Marc Jones – Reuters
Internet and ‘big data’ giants like Amazon and China’s Alipay pose an existential threat to traditional banks, the head of the Bank for International Settlements, AgustÌn Carstens, said on Tuesday.
/jlne.ws/2QfRnEk

Swift takes on fintechs with new payment system; Banks seek to hedge tech bets with legacy platform’s latest pilot
Laura Noonan – FT
Legacy payments platform Swift is piloting a new system to speed up banks’ cross-border transfers and reduce errors, firing a shot across the bow of a blockchain-based project that claims to do the same thing and payments fintechs that offer cheaper, faster services.
/jlne.ws/2QhOmDB

BSO wins Best New Connectivity Product Award at FOW International Awards 2018; Integrating the world’s fastest Radio Frequency network into global trading network
?BSO
BSO, the Ethernet network, cloud and hosting provider is pleased to have received the Best New Connectivity Product award by Global Investor Group at the FOW International Awards dinner last night, following the annual FOW Derivatives World: The Debates in London. The FOW Awards recognize the very best achievements from across the global cleared derivatives market.
/jlne.ws/2Qdl2hv

Itiviti recognized at FOW International Awards; Itiviti’s Systematic Internaliser solution named Best New Technology Product – Trading and Execution at 2018 FOW International Awards
Itiviti
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, received an award at the 2018 FOW (Futures & Options World) International Awards, presented last night during a prize event in London. The FOW Awards are judged by a panel of industry experts, and celebrate the best innovations in the derivatives industry in a range of categories.
/jlne.ws/2QeyJNr

Derivatives Service Bureau Announces 2019 Fees and Increase in Users; Higher number of overall users, with an increase in the diversity of those using the service
Derivatives Service Bureau
The Derivatives Service Bureau (DSB), the fully automated generator of International Securities Identification Numbers (ISINs) for the OTC derivatives market, today published their User fees for 2019. The DSB provides a trusted service which puts the user first, working on a cost recovery basis only. This coming year’s User fees reflect the increase in the number of DSB Users, as well as some User type adjustments following a year of operational activity which has enabled Users to have a better view of their connectivity requirements.
/jlne.ws/2QfO3Jm

CloudMargin Named Best Technology Product – Collateral Management at FOW International Awards 2018; Company’s Third Win in Category in Past Four Years among Multiple Global Award Wins this Quarter
CloudMargin
CloudMargin, creator of the world’s first and only collateral and margin management solution native to the cloud, last night won the award for Best Technology Product – Collateral Management at the FOW International Awards 2018. Presented at a gala dinner following the FOW Derivatives World London: The Debates conference, the awards celebrate the achievements of the top-performing global derivatives firms that have provided exceptional service and/or innovation to their clients and the industry this year.
/jlne.ws/2QbuEtg

Integral sees growth across all segments resulting in 10.7% increase in November 2018 volumes compared to October 2018; Average daily volumes (ADV) totaled $ 38.3 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 $38.3 billion in November 2018. This represents an increase of 10.7% compared to October 2018, and 9.4% increase compared to the same period in 2017.
/jlne.ws/2FZ6q0u

Cryptocurrencies

The Hope and Betrayal of Blockchain
Paolo Tasca – The New York Times
Blockchain is far more than just the technology underlying Bitcoin, the cryptocurrency. It is a tool that promises to decentralize the structures governing all economic transactions and, in the process, redefine our concept of trust. This is the most revolutionary and innovative aspect of blockchain. But its promise could be undermined.
/jlne.ws/2E3MMy6

Fidelity, Nasdaq Ventures invest in cryptocurrency exchange ErisX
Elizabeth Dilts, Frances Kerry – Reuters
New cryptocurrency exchange ErisX said Tuesday it raised a total of $27.5 million from investors including Fidelity Investments and Nasdaq Ventures. ErisX says it will offer investors the ability to trade the cryptocurrencies bitcoin, litecoin and ether on spot and futures markets starting next year, subject to regulatory approval.
/jlne.ws/2QxelGF

Pathway to Compliance for Illegal ICOs?
Vincent Molinari, Templum Markets – Tabb Forum
Many digital coins were issued in violation of SEC regulations, and many ICO investors are now in legal limbo, stuck with billions of dollars in coin investments with no way to exit. A recent statement from the SEC, however, points to a possible pathway for issuers and market professionals to bring digital asset offerings into compliance.
/goo.gl/9xm57w

Hyperledger Launches Cryptography Toolbox for Blockchain Developers
Yogita Khatri – Coindesk
Blockchain consortium Hyperledger has launched a new tool for developers – a modular, shared cryptographic library dubbed Ursa.
/jlne.ws/2RAO7A4

Bitcoin Miner Makes Bold Statement About ‘Bright’ Future After Market Rout
Billy Bambrough – Forbes
Bitcoin miner Argo Blockchain, a UK-listed company, has today sought to soothe shareholder unrest following a steep decline over the last month in the price of bitcoin and other cryptocurrencies, including Ripple’s XRP, ethereum’s ether, and stellar lumens.
/jlne.ws/2DYt9HD

A Faster Bitcoin? Conflux Raises $35 Million from Chinese Web Giants for New Blockchain Protocol
Jeff John Roberts – Fortune
A big knock on Bitcoin is that its underlying technology is too slow to be a useful real world ledger. And while developers are tinkering with a variety of fixesóto Bitcoin and other decentralized blockchain protocolsóthey have yet to solve the speed problem.
/jlne.ws/2RyAy49

Bitcoin Bear Market Forces Ethereum Cofounder To Make Changes
Billy Bambrough – Forbes
The fall in the price of bitcoin, ethereum, and Ripple’s XRP (as well as the wider cryptocurrency market) over the last month is beginning to cause companies to rethink their strategiesóbattening down the hatches in preparation for what could be a long crypto winter.
/jlne.ws/2QdnNzn

DNotes and its Co-Founder Alan Yong Featured in Newly Released NLTV Blockchain SuperStars International Television Special
DNotes Global
The Blockchain SuperStars program brings the Industry’s top experts and Hollywood’s brightest A-list superstars into the living rooms of every day Americans during a major Television Special Event Program that will be distributed nationally in all 220 major DMAs in the U.S. and to more than 50 countries around the globe.
/jlne.ws/2Qgelvi

Avelacom Chosen to Provide IT Infrastructure for XTRD Cryptocurrency Trading Platform
Avelacom
Avelacom, the high-performance connectivity and IT infrastructure solutions provider for the financial services industry, today announced that it has partnered with XTRD to provide ultra-reliable and low latency access to all major crypto exchanges globally.
/jlne.ws/2Qh52LF

Seed CX expands crypto trading to institutional market
Betsy Vereckey – MIT
In the fast-moving cryptocurrency market, large institutional traders have sat on the sidelines. With Seed CX, which launched last month, two MIT Sloan Master of Finance alumni expect to change that.
/jlne.ws/2rnIOZe

Politics

Maryland and D.C. Seek Trump’s Trust, Business Tax Returns
Andrew M Harris and Shahien Nasiripour – Bloomberg
Subpoenas issued Tuesday after getting judge’s approval; President had warned probe of financial records is off limits
Maryland and Washington D.C. officials unleashed a burst of subpoenas seeking financial records that would penetrate Donald Trump’s closely guarded trust and business and reveal whether the president is profiting off foreign governments.
/jlne.ws/2rnRkHX

‘Tariff Man’ Trump Says He May Extend Truce in China Trade War
Terrence Dopp, Laura Curtis and Shawn Donnan – Bloomberg
Car tariff deal not signed, Trump economic adviser says; President said Sunday China ‘agreed’ to reduce auto tariffs
Donald Trump suggested Tuesday that he could extend a 90-day truce in his trade war with China, while his top White House economic adviser backtracked from the president’s announcement that Beijing had agreed to reduce tariffs on U.S.-made cars.
/jlne.ws/2QbUwoO

Tariff Man’s Trade War Will Claim Innocent Victims; Trump thinks China pays when he slaps penalties on imports. It’s actually American consumers who bear the burden.
Noah Smith – Bloomberg
In a series of tweets earlier today, President Donald Trump announced that he was a “Tariff Man,” trumpeting the revenue raised by tariffs and declaring that import taxes would maximize the U.S.’s economic power:
/jlne.ws/2QbW0iR

White House: We May End Electric Car Subsidies to Punish GM, Protect Free Market
Eric Levitz – New York Magazine
The Republican Party has always been a stalwart supporter of government intervention in the economy. For decades, it has fought to deliver billions in subsidies to (highly profitable) agricultural giants and fossil fuel companies, and to give the Pentagon a budget so large, big government defense projects now account for 10 percent of all manufacturing output in the United States.
/jlne.ws/2rmlr2A

Regulation

Vegas Gambler’s Insider-Trading Conviction Upheld on Appeal
Bob Van Voris – Bloomberg
Las Vegas gambler Billy Walters’s insider-trading conviction was upheld by a federal appeals court in New York, which rejected his argument that it should throw out the verdict because FBI leaks tainted his trial.
/jlne.ws/2EdfLQD

Opening Statement of Commissioner Rostin Behnam before the Market Risk Advisory Committee
CFTC
Today’s agenda begins with Tom Wipf, Vice Chairman of Institutional Securities at Morgan Stanley and our newly appointed Chairman of the Interest Rate Benchmark Reform Subcommittee. Tom has more than forty years of experience as an industry leader, and has served in multiple capacities at Morgan Stanley in New York, London, and Tokyo. Over the years, he has held several key roles at the U.S. Treasury, the Federal Reserve Bank of New York, and currently serves as a member of the Alternative Reference Rates Committee (“ARRC”) of the Board of Governors of the Federal Reserve System (“Federal Reserve Board”), which will be particularly relevant to his role as the Subcommittee Chairman.
/jlne.ws/2RzQTWn

Opening Statement of Commissioner Brian Quintenz before the CFTC Market Risk Advisory Committee
CFTC
Due to a previously scheduled official overseas trip, I am unable to participate in today’s meeting of the Market Risk Advisory Committee (MRAC). However, given the importance to me of the issues presented today, specifically around the leverage ratio and incentives to clearing, I would like to provide the following comments.
/jlne.ws/2QfPuaQ

ASIC publishes 2017 – 18 regulatory costs; ASIC has published its regulatory costs for FY 2017-18.
ASIC
ASIC Commissioner Cathie Armour said this was the first year of a new industry funding model that requires ASIC to recover the actual amount spent in regulating the industry sectors under its jurisdiction.
/jlne.ws/2rnYRXf

PODCAST – Insider Trading: Finding the Needle in the Haystack
FINRA
When it comes to detecting insider trading, it really is like finding a needle in a haystack with more than 15,000 different stocks, options and bonds trading every day across millions of transactions. Yet, Sam Draddy and the Insider Surveillance team in the Office of Fraud Detection and Market Intelligence manage to find those needles.
/jlne.ws/2rl1mte

Glencore, Trafigura, Vitol bribed Petrobras staff-Brazil prosecutors
Reuters
Brazil prosecutors alleged on Wednesday that trading giants Vitol, Trafigura and Glencore paid over $30 million in bribes to employees at state-owned oil company Petroleo Brasileiro SA in return for business.
/jlne.ws/2rlY8FZ

Investing and Trading

Pound in `Total Discombobulation’ on Brexit Scenarios, RBC Says
Francine Lacqua – Bloomberg
The wide range of potential outcomes to the Brexit process is leaving the pound in “total discombobulation,” as Prime Minister Theresa May faces a crucial vote in Parliament next week, according to Elsa Lignos, global head of currency strategy at RBC Europe.
/jlne.ws/2Ehmvx0

How Forgiving Is the Muni Market? Detroit Will Find Out
Gunjan Banerji – WSJ
Detroit is poised to sell bonds backed by its full taxing power as soon as Tuesday, testing demand for the city’s debt from investors still scarred by losses from its bankruptcy.
/jlne.ws/2RzoQ9E

Uranium Markets Are Drawing New Interest
Owain Johnson – CME Group OpenMarkets
hanging fundamentals for uranium have led to a 30 percent rise in prices over the past five months, bringing new attention to this key power generation fuel.
Uranium production has outpaced demand for many years, suppressing prices. Front-month uranium futures settlement prices fell from a high of $73/pound in February 2011 to a low of $18/pound in December 2017.
/jlne.ws/2Edlypp

Financial Meltdowns Have Something in Common; Hedge-fund manager Ray Dalio has a new book out on the structural similarities of debt crises.
Barry Ritholtz – Bloomberg
This week is a special occasion: We have our very first Masters in Business Live, with guest Ray Dalio, the founder of Bridgewater Associates, the world’s biggest hedge fund, and the author of “Principles: Life and Work.”
/jlne.ws/2rnGVM8

Bond Traders Try Hard to Invert the Whole Curve; Skepticism about the U.S. economy leads market commentary.
Robert Burgess – Bloomberg
Stocks plunged the most since October on Tuesday, with the Dow Jones Industrial Average at one point plummeting 818 points. The thinking among commentators was that the sell-off was sparked by some tweets from President Donald Trump, calling himself “Tariff Man” and implying more are on the way if talks with China break down. But a bigger bogeyman has rattled investors, and it’s called the bond market.
/jlne.ws/2Qbaks1

Tumbling Stocks Show You Can’t Ignore the ‘Harbinger of Doom’
Yakob Peterseil and Vildana Hajric – Bloomberg
Yield curve woes infecting markets from equities to dollar; Shares at risk from drivers behind inversion; EM may benefit
U.S. stocks suffered the biggest rout in almost two months Tuesday, and among the primary culprits is a shift in how bond investors view risks to the economy.
/jlne.ws/2roiePH

Institutions

How do we solve the public pension fund crisis in the US? Are hedge funds to blame?
Don Steinbrugge, Agecroft Partners – HedgeWeek
An article recently published about the grossly underfunded Kentucky State Retirement System suggests that gambling on high fee hedge funds and private equity funds, and the use of placement agents, were primarily to blame. For many readers, it was likely a persuasive article. Quotes from scared retirees who have dedicated their lives to public service and are now rightly worried about their retirement benefits would pull on anybody’s heartstrings. The article was also potentially quite dangerous because it was fraught with inaccuracies and prejudices that, if taken as fact, could have severe negative effects on decisions made by other public pension funds and politicians.
/jlne.ws/2Ec46S9

Deutsche Bank Tightens Personal Trading Rules for Staff
Alastair Marsh and Donal Griffin – Bloomberg
Deutsche Bank AG is tightening its rules on how employees can trade with their own money, according to people familiar with the matter.
/jlne.ws/2rlooQJ

Wells Fargo computer glitch blamed as hundreds lose their homes
CBS News
Wells Fargo says a computer glitch is partly to blame for an error affecting an estimated 545 customers who lost their homes. The giant bank filed papers with the Securities and Exchange Commission last month, revealing it incorrectly denied 870 loan modification requests. About 60 percent of those homeowners went into foreclosure.
/jlne.ws/2QbWA01

Chicago hedge fund Balyasny is said to cut 125 as assets shrink; The multi-manager, multi-strategy firm started 2018 with $11.3 billion in assets and expects to begin next year with $7.3 billion, according to sources.
Katherine Burton – Bloomberg
Dmitry Balyasny is cutting at least 125 people from his hedge fund firm, about one-fifth of the total, as losses and client withdrawals erased $4 billion in assets.
/jlne.ws/2QfVOPM

JPMorgan CEO Dimon: Buybacks are for times when stock is cheap
Reuters
Jamie Dimon, chief executive of JPMorgan Chase & Co, (JPM.N) on Tuesday said he favors using the bank’s excess capital to reinvest in its business instead of buying back stock.
/jlne.ws/2QbUfSO

Goldman Is on the Brink of Erasing the Trump Bump
David Scheer – Bloomberg
Goldman Sachs Group Inc. soared in the months after U.S. President Donald Trump’s election in 2016, enriching shareholders and its staff. That so-called Trump Bump is now almost gone.
/jlne.ws/2Qgh6Na

Morgan Stanley: Big asset managers saw shares take a hit this year, but these 2 stocks are poised to surge in 2019
Meghan Morris – Business Insider
Asset managers’ stocks tumbled this year, and 2019 doesn’t look much better, a new report from Morgan Stanley said.
/jlne.ws/2rknLqL

Goldman Sachs has happier staff than Apple, recruiter says; UK employees reckon leading banks are better places to work than tech giants
By Nell Mackenzie – Financial News
Brits are happier to work at banks like Metro Bank, JPMorgan and Goldman Sachs than tech companies like Apple and Facebook, according to a survey from the recruitment website, Glassdoor.
/jlne.ws/2G9NyfE

Regions

Market participants optimistic about the opening of Chinese derivatives markets; Panelists at FIA Asia say patience and education will help globalization efforts
Jeff Reeves – MarketVoice
In 2018, China has taken great strides towards globalizing its derivatives markets. Yuan-denominated crude oil futures contracts began trading internationally in March, followed by iron ore contracts that began trading internationally in May. And most recently, the China Securities Regulatory Commission granted UBS Group permission for a majority stake in its Beijing-based subsidiary in December — making it the first foreign bank to formally control a Chinese securities firm.
/goo.gl/AxQzck

Police: Upper ranks of Sicilian mob dismantled with arrests
Nicole Winfield – Associated Press
Italian authorities said Tuesday they had dismantled the rebuilt upper echelons of the Mafia in the Sicilian capital by arresting 46 people, including the man presumed to have taken over as provincial kingpin after the death of “boss of bosses” Salvatore “Toto” Riina.
/jlne.ws/2Ehms4i

Protectionism could drain top talent from Silicon Valley, VC says
Elizabeth Schulze – CNBC
Protectionism is creating a perception that top talent isn’t welcome in Silicon Valley, according to one venture capitalist.
/jlne.ws/2QhIri9

Boom Has Turned to Bust for Asia Hedge Funds
Bei Hu – Bloomberg
About 1-in-10 regional funds have lost at least 20% this year; Almost 72% of funds with double-digit 2017 returns now in red
Last year’s boom has turned to bust for Asia-focused hedge funds. Eleven percent of funds tracked by Eurekahedge Pte. lost at least 20 percent in the first 10 months of the year. And almost 72 percent of those that posted double-digit gains in 2017 — the best year for regional funds since 2009 — are in the red this year.
/jlne.ws/2QeQ5cL

Don’t Discount China’s Role in the Stock Selloff; The weakness in equities is similar to late 2015 and early 2016, when concerns over the Asian nation’s economy spooked investors. Also, yet more Brexit follies.
John Authers – Bloomberg
The stock market endured a painful day Tuesday, which, according to plenty of analysts, should not have happened. To make sense of it all, the most obvious course of action is to round up the usual suspects. So I will now attempt to piece together what occurred and take the opportunity to throw in gratuitous references to some famous movies. Sadly, I cannot end with a dramatic twist to match “The Usual Suspects,” or an impossibly romantic farewell as in “Casablanca.” But I can at least guide readers to one of the most famous memes in the history of the internet.
/jlne.ws/2QfQSu4

China’s Fund Managers Challenged as Banks Wade Into Industry
Bloomberg News
Wealth management units stand to benefit from new rules; The entities can leverage parents’ wider network of clients
China’s new rules for the wealth management units spun off from its gigantic banks could help them grab market share in the $15 trillion fund industry.
/jlne.ws/2Qc86J1

Hotter world threatens the breadbasket of the US; Climate change predicted to hold back growth in crop yields
Gregory Meyer – FT
The past summer was fecund for US farms. Yields per acre of corn, soyabeans and spring wheat are all forecast to break records.
/jlne.ws/2Qezl5H

Brexit

Investors recalibrate chances of Brexit reversal after May defeats
Guy Faulconbridge, Sujata Rao – Reuters
U.S. investment bank J.P. Morgan said on Wednesday the chances of Britain calling off its divorce from the European Union had increased after a string of humiliating parliamentary defeats for Prime Minister Theresa May cast new doubt over her plan to quit the bloc and sent sterling higher.
/jlne.ws/2QbxUou

BoE ready to loosen bank ‘rainy-day’ buffers on Brexit upheaval; Lowering lenders’ capital requirements would give a £250bn boost to lending
Caroline Binham – FT
The Bank of England would allow banks to use ‘rainy day’ funds held for times of economic trouble to give a £250bn boost to lending should the UK suffer upheaval after Brexit.
/jlne.ws/2QaqIZE

Norway-style deal poses risk to UK financial sector, says Carney; BoE governor warns against ‘outsourcing supervision’ of important and complex industry
Delphine Strauss- FT
A Norway-style arrangement that left the UK subject to European rules it could not influence would be “highly undesirable” for financial stability, Mark Carney said on Tuesday.
/jlne.ws/2Qf6FJJ

Miscellaneous

Eddie Lampert Shattered Sears, Sullied His Reputation, and Lost Billions of Dollars. Or Did He?
The untold story of how a hedge fund titan profited as an American icon fell.
Michelle Celarier – Institutional Investor
They called Eddie Lampert many things. “The Next Warren Buffett,” Business Week gushed in 2004. “Genius,” wrote Fortune in 2006. A “celebrity shareholder,” Institutional Investor labeled him in 2013.
/jlne.ws/2Ee6pUY

Ex-Citadel Trader Gears Up for $200 Million Food-Allergy Fight
Amanda L Gordon – Bloomberg
Dave Bunning learned sons had allergies when they were babies; Nonprofit he chairs launches nationwide messaging campaign
Dave Bunning was on the trading desk at Citadel when he learned that an acquaintance of a co-worker had died from a food allergy.
/jlne.ws/2Qas6LQ

Purdue University Takes Giant Leaps In Democratizing Higher Education
By Renata Pompeu-Pividal, SAP via Forbes
When Neal Ottinger looks up at the sky, he sees more than clouds and stars – he sees the future. Like many other kids in America, the 21-year-old student always wanted to be an astronaut. But life wouldn’t make things easy for him.
/jlne.ws/2G2jKBo

The post London’s stockbrokers fight for their survival; Nasdaq acquires alt-data company Quandl appeared first on John Lothian News (JLN).

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Hits & Takes
JLN Staff

A scan of recent CME notices showed that three individuals were the subject of disciplinary actions yesterday. First, one Mihir Salla was fined $60k and banned for life from CME platforms for disruptive trading activity (read: spoofing-related) in gold, silver and copper futures over a period of two months in 2015. He also let employees use his Tag 50 ID for trading. Next up, Ge Shuai was also fined $60k and banned for life for disruptive trade practices in gold and silver futures. He entered orders using another person’s Tag 50 ID. Last up is Xiaobao Huang, who got dinged for $45k and a lifetime ban for disruptive practices in copper and crude oil futures. Huang also misused a TAG 50 ID.~SD

Yesterday’s newsletter included the Reuters story “Glencore, Trafigura, Vitol bribed Petrobras staff – Brazil prosecutors.” That story’s first paragraph was updated after our newsletter went out, adding that the “scheme… may still be going on.”~SD

MarketsWiki’s busiest day in 2018 was May 22 when Stacey Cunningham’s appointment as NYSE president was the news of the day.~JJL

In today’s “Odd Press Release Corner” we have a California law firm warning Orange County homeowners about the forthcoming “next leg of the financial crisis that started in 2008.” I don’t recall a forecast like this being the subject of a press release before. See Orange County Real Estate Firm Signals Next Leg of Financial Crisis~SD

John Damgard, former president of the FIA, has been named to the board of Interactive Brokers.~JJL

Will Turner, not to be confused with the pirate, has joined the blockchain practice in Chicago of Steptoe & Johnson LLP.~JJL

It looks as though we’re long past bitcoin’s “dead cat bounce.” Now, what we’re seeing is more like a dead cat’s slow, sad slide down an icy hill.~MR

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Market Outlook with Cboe’s Ed Tilly: Regs, Crypto and Liquidity
JohnLothianNews.com

In this video, Cboe Chairman and CEO Ed Tilly addresses the SEC’s commentary on market data offerings, what’s next for crypto products, and the need to alter regulations that are hindering index options liquidity.

Watch the video »

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Trading in US stock futures had to be halted after violent moves, and markets are spooked
Sam Jacobs – Business Insider
The world’s largest futures exchange, CME Group, had to repeatedly halt trading in US stock futures for brief periods this morning because of violent price moves, in an unusual intervention that has stunned traders.
/jlne.ws/2QC4HlP

****** Get out the rule book and check “Look Out Below!!!”~JJL

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Special report: CFTC Meeting Focuses on Clearinghouse Risks
FIA
The U.S. Commodity Futures Trading Commission held a public meeting of its Market Risk Advisory Committee on Dec. 4 in Washington, D.C. The MRAC discussed, among other issues, clearinghouse risk management, governance and clearing incentives, and explored the challenges of balancing the interests of clearinghouses, their members and end-users. Rostin Behnam, the CFTC Commissioner who oversees this committee, also announced the launch of a subcommittee on interest rate benchmark reform and released a list of the subcommittee members.
/jlne.ws/2L4uaQ1

****”MRAC!” could double as an onomatopoeia worthy of a Batman punch.~SD

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Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up
Asawin Suebsaeng and Lachlan Markay – The Daily Beast
Since the 2016 presidential campaign, Donald Trump’s aides and advisers have tried to convince him of the importance of tackling the national debt.
Sources close to the president say he has repeatedly shrugged it off, implying that he doesn’t have to worry about the money owed to America’s creditorsócurrently about $21 trillionóbecause he won’t be around to shoulder the blame when it becomes even more untenable.
/jlne.ws/2zJ0Hq6

******There is some good news there.~JJL

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NYC Mayor’s Ex-Goldmanites Blast Ice-Out of Wall Street Women
Katia Porzecanski and Gillian Tan – Bloomberg
Senior officials at the New York City Mayor’s office have some thoughts for those Wall Streeters unsure of how to behave around colleagues in the wake of the #MeToo movement.
Alicia Glen, the deputy mayor for housing and economic development, spent a dozen years at Goldman Sachs Group Inc. before joining the De Blasio administration. In response to a Bloomberg report that some men in finance have taken to avoiding their female counterparts at any cost, Glen and three colleagues — also former Goldmanites — wrote a letter to the editor describing the behavior as “ironic and sickening.”
/jlne.ws/2RDO5Yu

***** A Pence for your thoughts.~JJL

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Wednesday’s Top Three
Our number one story on Tuesday was a Bloomberg opinion piece on DRW Trading’s victory over the CFTC, in Trying to Buy Stuff You Want Is Not Manipulation. Second was Sarah Rudolph’s story, Murphy & McGonigle Launches New Commodities & Futures Division To Help Firms Deal With Regulatory Challenges. And in third was our lead story, London’s stockbrokers fight for survival

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MarketsWiki Stats
136,860,707 pages viewed; 23,329 pages; 215,604 edits
MarketsWiki Statistics

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Lead Stories

Eurex Clearing gains ground with profit scheme for repo; Major investment banks including Citigroup and JP Morgan sign up to use the Eurex clearing profit scheme for repo as Brexit looms.
Hayley McDowell – The Trade
Deutsche Boerse’s Eurex has said that 24 market participants from the UK, US and Europe have registered for its repo partnership program after extending the scheme to additional instruments.
/jlne.ws/2QBw0gg

It’s the Worst Time to Make Money in Markets Since 1972
Elena Popina – Bloomberg
Not a single of 8 main asset classes is up at least 5% in 2018; There was bull market somewhere in 2008, 1974 routs, NDR says
Market statisticians are falling over each other in 2018 to describe the pain being felt across asset classes. One venerable shop frames it this way: Things haven’t been this bad since Richard Nixon’s presidency.
/jlne.ws/2QwsnID

Oslo Bors and LSEDM end linked derivatives order book partnership; The linked derivatives order book partnership between LSEDM and Oslo Bors has been in effect since 2009.
Hayley McDowell – The Trade
Norway’s Oslo Bors and the London Stock Exchange Derivatives Markets (LSEDM) have decided to end their linked derivatives order book partnership after almost 10 years in operation.
/jlne.ws/2QEzXAT

Greenhouse Gas Emissions Accelerate Like a ‘Speeding Freight Train’ in 2018
Kendra Pierre-Louis – NY Times
Greenhouse gas emissions worldwide are growing at an accelerating pace this year, researchers said Wednesday, putting the world on track to face some of the most severe consequences of global warming sooner than expected.
/jlne.ws/2QzWYVI

Highly Anticipated Moderna Listing Is Seen As Test of New IPOs; Critics worry about a high cash-burn rate and still unproven programs amid recent choppiness in the stock market
Corrie Driebusch and Jonathan D. Rockoff – WSJ
The initial public offering market faces a major year-end test, as Moderna Inc. attempts to stage one of the biggest stock-market debuts for a biotechnology company at a time of heightened investor jitters.
/jlne.ws/2QG4NZG

Brexit uncertainty makes pound ‘impossible’ to trade; Cost of insuring against future price swings in the currency soars
Eva Szalay and Philip Stafford – FT
Nervous investors are shying away from making big bets on the pound because of uncertainty around Brexit, sending the cost of insuring against future price swings in the currency soaring to its highest levels since the UK voted to leave the EU.
/jlne.ws/2QCOXz8

LIBOR Basis Swaps
Chris Barnes – Clarus FT
For the first time, basis trading reported to the SDRs has topped $1trn in a single month. Similarly, global basis trading has now topped $2trn cleared at LCH SwapClear in a single month. We see that average maturity of basis trades varies according to the indices being traded. Activity in 30y and 50y basis trading has recently increased at LCH.
/goo.gl/8TywFG

Tariff effects broaden across U.S., wage growth higher: Fed
Reuters
Tariff-driven price increases have spread more broadly through the U.S. economy, though on balance inflation has risen at a modest pace in most parts of the country, the Federal Reserve said on Wednesday in its latest report on the economy.
/jlne.ws/2EgnQnY

Setting a good example
Anne Plested – Fidessa
Meanwhile in another part of Europe, time is running out for Swiss equivalence. The one year period previously granted in December 2017 is set to expire on 31st December. Switzerland needs equivalent third-country status in order to preserve the status quo and allow EU trading participants bound by MIFID to continue accessing the Swiss market locally in the EU.
/jlne.ws/2E4FJoA

Dash to Acquire eRoom Securities; eRoom Securities will be rebranded as Dash Prime, bringing unmatched scale, technology and service to the professional trading community.
Dash Financial Technologies
Dash Financial Technologies, the industry’s leading capital markets technology and execution provider, today announced it has signed a definitive agreement to acquire eRoom Securities, LLC.
/jlne.ws/2E3DlhT

Vela to facilitate electronic access to Eurex EnLight
Eurex
Eurex, Europe’s largest derivatives exchange, and Vela, a global leader in trading and market access technology, have teamed up to facilitate electronic access to Eurex EnLight, the new selective request-for-quote (RfQ) platform, via Vela’s Metro Trading Platform.
/jlne.ws/2QBwEuc

The Trouble With Huawei Will Spread
Jacky Wong – WSJ
Just when investors were hoping to take a breather following the weekend’s trade truce between the U.S. and China, the arrest of Chinese telecom-equipment company Huawei’s chief financial officer at the behest of the American authorities has served a warning that they shouldn’t get too complacent.
/jlne.ws/2QzWT4l

Top Huawei executive arrested on U.S. request, clouding China trade truce
Julie Gordon, Christian Shepherd – Reuters
The daughter of Huawei’s founder, a top executive at the Chinese technology giant, was arrested in Canada and faces extradition to the United States, roiling global stock markets as it threatened to inflame Sino-U.S. trade tensions afresh.
/jlne.ws/2QB2es1

Bank of England urges investors to adopt FX code
Eva Szalay – FT
The Bank of England has called for investors to sign up to the voluntary principles of good practice in currencies markets, stressing to asset managers that from the end of next year, adhering to the standards will help to demonstrate the standards of the Senior Managers Regime.
/jlne.ws/2E49rdt

Judge Sullivan Channels SWP, and Vindicates Don Wilson and DRW
Streetwise Professor
After two years of waiting after a trial, and five years since the filing of a complaint accusing them of manipulation, Don Wilson and his firm DRW have been smashingly vindicated by the decision of Judge Richard J. Sullivan (now on the 2nd Circuit Court of Appeals).
/jlne.ws/2E4Qes0

Exchanges, OTC and Clearing

Great interest in the Eurex partnership program for the repo segment
Deutsche Boerse Group
In addition to expanding the cleared repo business for pension funds and asset managers, the program aims in particular to expand the repo business in the interbank market in European government bonds at Eurex. Repos are secured money market instruments by which banks cover their short-term liquidity needs by depositing securities. The repo market is thus an important element in the money market cycle between banks, central banks and investors.
/jlne.ws/2QAx7ge

Intercontinental Exchange Announces Record Trading in TTF Natural Gas and JKM LNG (Platts) Futures Contracts
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced record trading in the TTF Natural Gas and JKM LNG (Platts) futures contracts.
/jlne.ws/2QFf2xx

SGX welcomes HGNH International as Derivatives Trading and Clearing Member
SGX
Singapore Exchange (SGX) today welcomed HGNH International Financial (Singapore) Pte Ltd. as a Trading and Clearing Member of its derivatives market.
/jlne.ws/2E41VPN

Joint Statement by Singapore Police Force, Monetary Authority of Singapore and Singapore Exchange Regulation
SGX
The Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX Regco) have decided not to allow Noble Group Limited (NGL) to transfer its listing status to New Noble as part of NGL’s proposed restructuring. This follows a careful review of the findings to-date from the ongoing investigations into NGL and Noble Resources International Pte Ltd (NRI) by MAS, the Commercial Affairs Department (CAD) of the Singapore Police Force, and the Accounting and Corporate Regulatory Authority (ACRA).
/jlne.ws/2E3cd2E

Straits Times Index (STI) quarterly review – December 2018; No changes to the constituents of the STI
SGX
FTSE Russell announces that there will be no changes to the constituents of the Straits Times Index (STI), following the December quarterly review.
/jlne.ws/2E5lAi8

Pensions: “savers should acquire financial and stock exchange knowledge”; Deutsche Bˆrse Launches Seminar Series on Exchange Knowledge / Evening Seminars “Your Path to the Stock Market” will take place from January to May 2019 in Eschborn
Deutsche Bˆrse Group
From 28th January 2019, Deutsche Bˆrse is organizing evening seminars for private investors at its corporate headquarters in Eschborn near Frankfurt through its Academy, the Capital Markets Academy.
/jlne.ws/2rjYkpb

Impacts of German Investment Tax Act 2018 on the clearing of securities lending and repo transactions
Eurex
On 15 May 2018, the German Federal Ministry of Finance (Bundesministerium f¸r Finanzen, BMF) published a circular on the application of the German Investment Tax Act 2018 (“Investmentsteuergesetz; InvStG”). This BMF circular provided further clarification on withholding tax obligations in securities lending and repo transactions with German equity underlyings, in case one of the counterparties is an investment fund in meaning of the InvStG.
/jlne.ws/2QFiFng

CME Group Inc. Declares Annual Variable Dividend
CME Group
CME Group Inc. (NASDAQ: CME) today declared its annual variable dividend, amounting to $1.75 per share. The dividend is payable January 16, 2019, to shareholders of record on December 28, 2018. When CME Group adopted its annual variable dividend structure in February 2012, the intention was to determine the excess cash available at the end of each year, with the level to increase or decrease from year to year based on operating results, potential investment activity and other forms of capital return.
/jlne.ws/2QCO7T0

CME says it intervened to prevent ‘even harder’ falls on equity futures; CME experienced multiple Velocity Logic events from the open in Equity futures today
Forexlive.com
The pauses allow participants to enter the market preventing even harder moves
If you are following the ES there were large lot sizes going through, drove price down hard indeed. According t0 the CME statement (they are the exchange for the ES) it could have been worse.
/jlne.ws/2QK7RV3

Euronext announces volumes for November 2018
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for November 2018.
Cash trading – In November 2018, the average daily transaction value on the Euronext cash order book stood at EUR7,474.9 million, down -10.4% compared to November 2017 and down -15.7% from the previous month.
Derivatives trading – In November 2018, the overall average daily volume on derivatives reached 560,143 contracts, down -11.1% compared to November 2017 and down -7.0% compared to the previous month.
/jlne.ws/2QBYBSv

NZX Operating Dashboard
NZX
These shareholder metrics represent the key operations of NZX’s business.
/jlne.ws/2EgoHVl

Fintech

How AWS Has Turned Into An Unstoppable Juggernaut
Janakiram MSV – Forbes
AWS re:Invent, Amazon’s annual user conference hosted at Las Vegas concluded last week. As expected, Amazon launched a slew of new services ranging from a robotic automation tool to an on-premises hardware appliance.
/jlne.ws/2EcC8FS

Mark Mobius’ emerging market fund selects Northern Trust for asset servicing and outsourced trading; Northern Trust will provide custody, depository, fund accounting and FX services to the investment trust, and fund administration to Mobius Emerging Markets Fund vehicle.
Joe Parsons – The Trade
Mobius Capital Partners, the emerging and frontier markets fund set up by Mark Mobius, has selected Northern Trust to provide a range of asset servicing and integrating trading solutions.
/jlne.ws/2QwtS9J

Podcast: Wall Street Wants Your Data
Barron’s
For decades, corporations and investors have been fighting a battle over data. Shareholders push for transparency, while companies do the bare minimum to comply. Just last month, Apple said it would no longer provide details on its iPhone sales. But investors are a resourceful bunch and there’s a booming world of alternative data that’s helping to fill in the gaps.
/jlne.ws/2QAvrmW

Cryptocurrencies

Bitcoin Derivatives That Cost $1 Million Will Soon Be Worthless
Gregor Stuart Hunter – Bloomberg
The biggest-ever bet on Bitcoin options is about to expire worthless. Purchased for almost $1 million on LedgerX’s trading platform just days after Bitcoin peaked a year ago, the call options have a strike price of $50,000 and an expiry date of Dec. 28, 2018. For the contracts to retain any value at expiry, Bitcoin would need to rally more than 1,200 percent.
/jlne.ws/2QC5yDj

A Crypto-Friendly Congressman Seeks to Regulate ICOs
Simon Golstein – Finance Magnates
Warren Davidson, a Republican politician from Ohio, is continuing with his quest to get cryptocurrency recognised by law, announcing a plan to create regulation for initial coin offerings.
/jlne.ws/2zJe2Ps

Machine learning identifies cryptocurrency scams before they happen
MIT Technology Review
The emergence of cryptocurrencies in the last few years has been a roller coaster ride. During 2017, Bitcoin rose in value from $900 to almost $20,000 before collapsing dramatically. Today, at the beginning of December 2018, a single bitcoin is worth just under $4,000. All this has encouraged the rapid development of other cryptocurrenciesówell over 1,000 of them by most estimates. The dream is that these could reproduce Bitcoin’s success. But the reality is that few are traded in large volume or are worth anything at all.
/jlne.ws/2QiBBZF

R3’s New Corda App Supports Payments in XRP Cryptocurrency
Ian Allison – Coindesk
Distributed ledger technology provider R3 has launched the Corda Settler, an application aimed to facilitate global cryptocurrency payments within enterprise blockchains – and it’s starting with XRP. R3 said XRP is the first globally recognized cryptocurrency to be supported by Settler, bringing the Corda and XRP ecosystems into closer alignment – something of a rapprochement considering Ripple and R3 were previously locked in a legal dispute.
/jlne.ws/2zM07b6

As Cryptocurrency Losses Exceed $706 Billion, Chinese Investors Are Losing Faith In Blockchain
Nina Xiang – Forbes
The global cryptocurrency market has already seen more than $706 billion of its total market capitalization evaporate since hitting a peak in early January, according to research site CoinMarketCap, and those losses appear to be triggering a shakeout in the wider blockchain community in China. Many startups there are finding it increasingly difficult to gain access to capital as investors grow skeptical of the fundamental claims around digital currencies and the blockchain technology that underpins them.
/jlne.ws/2Uqaiem

Thought you got burned by bitcoin in 2018? Just wait till next year
Vildana Hajric – The LA Times
Bitcoin is turning negative again. And the technicals aren’t looking too good either going into 2019. The largest cryptocurrency slumped as much as 5.9% to $3,668.09 on Wednesday, approaching the more than one-year low of $3,522.58 reached on Nov. 26. After a few days of relative stability, volatility has increased again in the wake of November’s plunge, which was the biggest monthly drop in over seven years.
/jlne.ws/2rlTDv9

Why bitcoin ó by design ó won’t become worthless, according to this crypto heavyweight
Aaron Hankin – MarketWatch
As bitcoin flounders to its lowest level in 14 months, concerns over mining profitability have some wondering if the best-known cryptocurrency is headed for a hard landing as those solving the complicated puzzles hit the off-switch on their energy-guzzling mining equipment.
/jlne.ws/2AX1RhF

Crypto fund manager Bitwise has launched two new funds to address client demand
Frank Chaparro – The Block Crypto
Bitwise has launched two new funds for crypto; It’s a move that appears to put them up against Grayscale, one of the largest investors in the digital asset market
California-based Bitwise Asset Management on Wednesday announced the launch of two new crypto funds, a move that could put the firm up against one of the largest investors in the market for digital currencies.
/jlne.ws/2Qws8xd

Politics

From Nixon to Trump: Here’s how stocks performed under each U.S. president
Jared Blikre – Yahoo Finance
U.S. presidents, for better or worse, get too much credit for the economy and stock market performance. The Federal Reserve, in its quest for the elusive soft landing, exerts more direct control over the nation’s economic levers.
/jlne.ws/2QC6ZBr

Trump Is Even Worse at Enforcing White-Collar Crimes Than George W. Bush Was
Terri Gerstein – Slate.com
Last month, when our government blasted tear gas at women and children seeking refuge at our Southern border, ostensibly in service of law and order, a very different picture emerged of other parts of the Trump administration. Even leaving aside the regular revelations about criminal activity by top Trump associates, the administration itself has shown its law and order mantra to be completely hollow in another crucial area: enforcement of white-collar laws.
/jlne.ws/2QzCjB2

Hong Kong Fears Trump Will End Special Trading Status
David Tweed – Bloomberg
U.S. president has unilateral right to change city’s status; Beijing moves have spurred questions about Hong Kong autonomy
Hong Kong business groups are starting to worry the Trump administration will open the door to ending the financial hub’s preferential trade status, rendering it “just another Chinese city” as its government gets closer to Beijing.
/jlne.ws/2QBu6ME

America is paying an awful price for Trump
Frida Ghitis – CNN
After a “wonderful and very warm dinner” with China’s President Xi Jinping, last weekend, President Donald Trump launched a barrage of tweets extolling his great accomplishments. The Chinese, he said, had agreed to remove a 40% tariff on American car imports; they would soon start buying US agricultural products; they had apparently made major concessions as part of a 90-day pause in raising tariffs. The stock markets revved up for a big jump, believing Trump’s damaging trade war was coming to an end.
/jlne.ws/2QFfSKH

Trump fears political price from oil spike, market turmoil
Stephen Collinson, CNN
President Donald Trump is fretting about two rising global challenges that threaten a political gut punch as he gears up for his 2020 election bid — a possible oil price hike and market shocks triggered by his trade wars.
/jlne.ws/2QG3Dxi

Michael Bloomberg heads to Iowa: ‘I have a lot of experience which would be useful if I was president’
Megan Keller – The Hill
Former New York Mayor Michael Bloomberg on Tuesday during a visit to Iowa said he has “a lot of experience” that would come in handy if he was elected president.
/jlne.ws/2QFfmfQ

Regulation

May pledges Treasury action on rogue advisers
Maria Espadinha – FT Adviser
Prime minister Theresa May has vowed to ensure that HM Treasury and the Financial Conduct Authority (FCA) will work together to crack down on rogue financial advisers.
/jlne.ws/2EenY7j

FCA publishes findings on long-term mortgage arrears
UK FCA
Today the Financial Conduct Authority (FCA) published findings on how mortgage lenders treat customers who have long-term mortgage arrears and provide forbearance to affected customers.
/jlne.ws/2E6fWN3

ASIC reports on decisions to cut red tape – April 2018 to September 2018
ASIC
ASIC has released its latest report outlining decisions on relief applications, highlighting ASIC’s efforts to reduce red-tape and achieve a practical, positive outcome for companies seeking regulatory flexibility.
/jlne.ws/2E5CzBa

U.S. Prosecutors Charge Four People in Panama Papers Probe; Unsealed indictment includes charges of wire and tax fraud and money laundering
Sadie Gurman – WSJ
Federal prosecutors in New York have charged four people with ties to Mossack Fonseca & Co., the now-defunct law firm at the center of the so-called Panama Papers tax-evasion scandal, according to an indictment unsealed Tuesday.
/jlne.ws/2L3UZUt

$100 million fraud settlement for buyout firm co-founded by Steve Young
Josh Kosman – MarketWatch
A buyout firm that was co-founded by Pro Football Hall of Fame quarterback Steve Young has settled a high-profile lawsuit that accused it of a massive fraud cover-up, The Post has learned.
/jlne.ws/2QImlEU

Soros Family Office Fined by Hong Kong Watchdog for Naked Short Selling
Bei Hu – Bloomberg
Securities and Futures Commission fined company HK$1.5 million; Sanction was for October 2015 trade involving Great Wall Motor
Soros Fund Management, the about $25 billion family office of billionaire George Soros, was fined by Hong Kong’s securities regulator for naked short selling.
/jlne.ws/2QExwOL

Send Noncompete Agreements Back to the Middle Ages; The free flow of employees and ideas encourages innovation. Just ask Silicon Valley.
Stephen Mihm – Bloomberg
Noncompete agreements, once restricted to tech workers and high-level executives, have become commonplace among ordinary workers, including security guards, home health aides or hair stylists. If history is any guide, the spread of these contracts could have far-reaching negative implications for the U.S. economy.
/jlne.ws/2Qyq3AP

World’s biggest oil traders paid bribes in Brazil scandal -prosecutors
Pedro Fonseca, Marcelo Rochabrun – REuters
Leading global oil traders Vitol, Trafigura and Glencore paid more than $30 million in bribes to employees at state-owned Brazilian company Petrobras in a scheme that may still be going on, prosecutors said on Wednesday.
/jlne.ws/2QIjvzK

National Futures Association: Proposed Amendments to NFA’s Interpretive Notice: NFA Compliance Rules 2-9, 2-36 and 2-49: Information Systems Security Programs
NFA
/jlne.ws/2KXLGVQ

U.S. Prosecutors Charge Four People in Panama Papers Probe; Unsealed indictment includes charges of wire and tax fraud and money laundering
Sadie Gurman – WSJ
Federal prosecutors in New York have charged four people with ties to Mossack Fonseca & Co., the now-defunct law firm at the center of the so-called Panama Papers tax-evasion scandal, according to an indictment unsealed Tuesday.
/jlne.ws/2L3UZUt

Investing and Trading

What the Market Reaction to The G-20 Taught Us about 2019 Expectations
Blu Putnam – CME Group OpenMarkets
The recent G-20 meeting was full of interesting developments and the market reactions were equally fascinating.
First, the U.S.-China Trade War ceasefire ignited a relief rally in equities lasting all of one day, then returning to up/down volatility without any real trends.
The problem preventing follow through in the equity rally was that the United States and China have different stories on what deal was cut.
/jlne.ws/2Eh18vQ

Miners bear brunt of risk aversion as investors take fright
Clara Denina, Barbara Lewis – Reuters
A two-year recovery in the mining industry has faltered, as trade tensions between China and the United States and concerns about economic growth weaken commodity prices and deter investment.
/jlne.ws/2RBPvlY

Lies, damned lies and ESG rating methodologies
Kate Allen
Environmental, social and governance criteria are becoming an increasingly popular way of assessing companies’ performance across a bunch of non-financial factors.
/jlne.ws/2QCP4e2

Carry Trade Regains Oomph With Emerging Markets Dodging Fed Squeeze
Paul Wallace – Bloomberg
Central bankers have juiced up carry returns through hikes; Emerging-market currencies bolstered by high reserve buffers
The hunt for higher yields is all set to return to emerging markets in 2019 as central banks zealously guard their interest-rate advantage over the Federal Reserve.
/jlne.ws/2QAvYFs

AIG hit with $750 million to $800 million in fourth-quarter catastrophe losses: CEO
Suzanne Barlyn – Reuters
American International Group (AIG.N) Inc has racked up an estimated $750 million to $800 million in catastrophe losses so far during the 2018 fourth quarter, its chief executive officer said on Wednesday.
/jlne.ws/2QB25ET

European Stocks Look Cheap, and for Good Reason; There’s just too many risks facing the region to be sucked in by relatively low P/E ratios. Also, Italians are phlegmatic.
John Authers – Bloomberg
It would be easy to overlook Europe as the unfolding U.S.-China trade dispute captures global investors’ attention, but that would be a mistake. The exceptional calm of financial markets in 2017 owed much to the surprise resurgence of the European economy, while this year’s turbulence can, in part, be tied to deep disappointment with Europe’s faltering economy.
/jlne.ws/2QyrFun

The Yield Curve Is Trying to Tell Us Something; An inversion means it’s time to start the recession clock – the only question is how long to wait.
Mark Gongloff – Bloomberg
Brace yourselves everybody, a recession is coming! Sometime in the next, uh, two years. Or less. Or more.
/jlne.ws/2QwsbZV

Stocks Slump, Treasuries Gain as Sell-Off Resumes: Markets Wrap
Samuel Potter – Bloomberg
10-year Treasury yield falls to 2.89% as investors seek safety; Arrest of Huawei CFO among catalysts as equity rout continues
U.S. equity futures tumbled alongside stocks in Europe and Asia as concern resurfaced that trade tensions between the world’s two largest economies are far from resolved. Oil slid as OPEC ministers met in Vienna.
/jlne.ws/2QAuMls

Apollo’s Leon Black Says Credit Markets Are In ‘Bubble Status’
Sabrina Willmer – Bloomberg
‘A thirst for yield” is creating excesses, Black says; C-Corp switch remains an issue Apollo is examining, he says
The credit markets are facing excesses as investors chase yield, Apollo Global Management LLC co-founder Leon Black said.
/jlne.ws/2QwrCiL

Institutions

Citi CFO forecasts lower markets revenue for fourth quarter
Reuters
Citigroup Inc (C.N) Chief Financial Officer John Gerspach said the bank expects market revenue in the current quarter to be slightly lower than last year.
/jlne.ws/2EeQQw9

Investors Aren’t Buying Bank Chiefs’ Optimism; The heads of America’s biggest three banks all spoke positively about the economy Tuesday as their share prices fell sharply
Aaron Back – WSJ
Bankers are often criticized for being out of touch with the real world. Often that is unfair, but on Tuesday, as the leaders of the nation’s three biggest banks told investors that the economy was great, investors were acting like the boom was over.
/jlne.ws/2QImCYs

$2.15 Trillion is Right to Snub Hedge Funds; European pension fund managers have little appetite for allocating hard-earned retirement money to these underperformers. Why should they?
Mark Gilbert – Bloomberg
With global investment banks predicting a lackluster 2019 for financial market returns, you might expect the guardians of pension assets to chase performance either by seeking the alpha promised by hedge funds or warming to Brexit-beaten U.K. stocks. You’d be wrong on both counts.
/jlne.ws/2QIcK0u

Citi says it will fall short on efficiency target; Company blames shortfall on lower revenues from bond trading and investment banking
Laura Noonan – FT
Resurgent market volatility has forced Citigroup to admit it will miss the 2018 efficiency target it reaffirmed just two months ago, putting the bank in the line of fire of analysts and investors wearied by previous disappointments.
/jlne.ws/2QB2pUd

Interactive Brokers Names John Damgard as New Director
Finance Magnates
Damgard joins the firm to fill the vacancy left by Kenneth Winston, whose resignation is effective from December 31, 2018.
Interactive Brokers Group, a securities firms with over $6 billion in equity capital, announced on Monday via a regulatory filing that it has appointed John Damgard to serve as a director of the firm, effective from the beginning of this month.
/jlne.ws/2KZexsW

Regions

‘Shocking’ Huawei Arrest Threatens to Upend Trump-Xi Trade Truce
David Tweed and Peter Martin – Bloomberg
U.S. seeking extradition of daughter of Huawei’s founder; Move stokes fears U.S. seeking to deny China key technology
On the same day Donald Trump and Xi Jinping struck a trade war truce in Argentina, some 7,000 miles away Canadian authorities made an arrest that now threatens to make the U.S.-China conflict much worse.
/jlne.ws/2QIdbrE

The Price of a Cup of Coffee in Venezuela Is Up 285,614% in a Year
Fabiola Zerpa – Bloomberg
Instead of celebrating minimum wage hikes in hyperinflation-pummeled Venezuela, consumers now run as fast as they can to buy goods before the inevitable price increases. In other words, higher wages are as much bad news as good news as they simply mean the printing press will run faster at the central bank and businesses will react accordingly.
/jlne.ws/2ATrZKn

This Swiss Village Bet on Hedge Funds and Lost; After shifting away from finance as an engine of the economy, Pfaeffikon is finding prosperity again.
Patrick Winters – Bloomberg
As the clock ticks down toward Brexit, cities across Europe are scrambling to win jobs fleeing the City of London. In the Swiss village of Pfaeffikonóonce one of the biggest global centers for hedge fund moneyóa potential influx of investing professionals is being met with a decided lack of enthusiasm.
/jlne.ws/2QGlswk

Brexit

The London Banker Fighting to Keep Executives Behind Brexit Deal; As the prime minister’s business envoy, William Vereker has his work cut out as the drama plays out in parliament.
Suzi Ring, David Hellier and Alex Morales – Bloomberg
Less than 24 hours after U.K. Prime Minister Theresa May returned from getting her Brexit agreement signed off in Brussels last week, more than 120 company executives gathered in No. 10 Downing Street. With the help of her business envoy, William Vereker, she implored them to support her deal and lobby lawmakers to do the same.
/jlne.ws/2QGAfHi

UK PM May urges lawmakers to back her Brexit deal but rebels remain unconvinced
Kylie MacLellan – Reuters
British Prime Minister Theresa May on Thursday urged lawmakers to back her agreement to leave the European Union, but made little headway with a bid to coax rebellious members of her party into supporting her deal.
/jlne.ws/2QGktw8

Brexit: A Test for Humanity; How the U.K. and the EU resolve their differences has profound consequences for the wider world.
Tyler Cowen – Bloomberg
I am here to tell you that you should give a damn about Brexit. Yes, you probably already do if you live in the U.K., or perhaps Ireland, which now faces a possible hard border with Northern Ireland. But most Europeans seem to have moved on, and, except for some rabid populists, most Americans were never caught up in the struggle to begin with.
/jlne.ws/2QK9GkR

London’s Stock Traders Get a Brexit Warning From Switzerland
Silla Brush – Bloomberg
Europe’s equities markets not immune from nationalism; EU-Swiss talks on equivalence is ‘depressing’ precedent
The City of London is getting a warning from Switzerland about just how fraught its dealings with the European Union could become after Brexit.
/jlne.ws/2QBtsPe

Miscellaneous

Widow of investor duped by Madoff sues shrink over suicide
Julia Marsh – NY Post
Her husband killed himself after losing millions to Bernie Madoff ó but now his wife is blaming the shrink. The widow of a hedge-fund executive Charles Murphy, 56, whose fund at Fairfield Greenwich lost $50 million in the epic Ponzi scheme revealed in December 2008, filed suit in Manhattan Supreme Court Wednesday against NYU Langone Professor Aaron Metrikin.
/jlne.ws/2QC7Dz7

The post Eurex Clearing Gains Repo Ground; Worst Time to Make Money in Markets Since 1972 appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The CME Group raised more than $234K for Movember in support of men’s health. Nice job, hairy people.~JJL

Molly McGregor is now managing director, marketing and communications at Axioma Inc. She recently left Hanweck and was previously at the ISE as well.~[[JJL

If the cost of electricity figures into the breakeven price of bitcoin mining, how do you figure in college students using free electricity in the econometric equation?~JJL

The arrest of Huawei CFO Meng Wanzhou, a move widely viewed as a U.S. attempt to gain another bargaining chip at the trade negotiation table, is the icing on an already bad year for Huawei. (Huawei suppliers are also getting it handed to them in the wake of the arrest.) The year kicked off with Huawei finding out AT&T wouldn’t sell its phones, the U.S. intelligence community recommending not to use Huawei’s devices, and Best Buy announcing it would stop carrying Huawei products. The list goes on. The timing of the arrest just so happens to coincide with the kick off this week of China’s National Science and Technology Leading Small Group which is tasked with developing the country’s long term technology strategy.~SD

The Security Traders Association of Chicago’s 93rd Annual Mid-Winter Meeting is January 16-18. SEC Commissioner Hester M. Peirce will address the gathering.~SD

Elaine Wah is now head of quantitative research at IEX. She spoke at our MarketsWiki Education event last summer.~JJL

As of this writing BTC is trading south of $3400.~SD

++++

NFA Board Update – November 2018 Meeting
NFA
NFA Vice-Chairman Maureen Downs and President Tom Sexton discuss highlights and other notable information from NFA’s November Board meeting, including CFTC Commissioner Behnam’s visit to NFA’s New York office, upcoming Board elections and an update on recent rulemaking initiatives. The video is intended to keep NFA Members and the investing public apprised of the important topics discussed by NFA’s Board.
/jlne.ws/2G4SsdK

****** Get the latest on the upcoming elections.~JJL

++++

“US Regulators Have Essentially Become Do-Nothing Institutions”
Asher Schechter – Promarket.org – The Stigler Center at the University of Chicago
In an interview with ProMarket, Jonathan Tepper talks about the rise of America’s oligopoly problem, why he believes antimonopoly is not a left-right issue, and how a passionate fan of free markets came to write a book titled “The Myth of Capitalism.”
/jlne.ws/2G24HYo

***** A shocking headline from the University of Chicago.~JJL

++++

Cinnober Group 2018: Year in review
Peter K. Lenardos – Cinnober
As we approach the end of 2018, I wanted to take the opportunity to reflect on what has been a milestone year for the Cinnober Group. 2018, our twentieth year, has been one of our best years yet in terms of new client wins, important product breakthroughs and system go-lives across the globe, not to mention our pending transaction with Nasdaq. And we have achieved all of this while undergoing major change across the business. As you know, I was appointed Cinnober Group CEO in August, and I feel very privileged to be entrusted with the responsibility of leading the Group forward.
/jlne.ws/2rlNQ8S

***** Peter only says things one time, but very well. He does not want to repeat.~JJL

++++

Thursday’s Top Three
Yesterday’s top story was Trading in US stock futures had to be halted after violent moves, and markets are spooked. It did indeed turn into a sea of red in the morning, but an afternoon tech rally helped erase the day’s losses. Second place went to Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up.
The third most clicked story was Bloomberg’s NYC Officials Blast Wall Street’s Ice-Out of Women in Wake of #MeToo.

++++

MarketsWiki Stats
136,918,757 pages viewed; 23,329 pages; 215,609 edits
MarketsWiki Statistics

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Lead Stories

Permanent measures to put hole in CFD bucket shops
Dan McCrum – FT
An announcement from the Financial Conduct Authority has landed. The UK regulator is to make temporary Europe-wide restrictions on contract for difference companies permanent. Best understood as bucket shops – the US term for companies offering punters the chance to bet inside a closed system – CFD providers had found a highly profitable way to seperate the unwary from their money in recent years, by letting them play with complex financial derivatives.
/jlne.ws/2G4H0ie

*****Here is the release from the UK FCA, “FCA proposes permanent measures for retail CFDs and binary options.”~JJL

A Democratic Proposal Would Ban Lawmakers From Trading Any Stocks at All
Jesse Westbrook – Bloomberg
Senators Merkley, Brown say recent scandals show law is needed; Legislation faces long odds in politically divided Congress
Recent investing scandals involving members of Congress have prompted two Democrat senators to push a Draconian legislative proposal: a total ban on U.S. lawmakers trading any stocks at all.
/jlne.ws/2G1ndQv

Behind the Market Turmoil Lies Nothing But Excuses; After years of central bank quantitative easing, little makes sense. Also, there’s a clash of tech titans and London’s calling.
John Authers – Bloomberg
Did investors have a reason or an excuse to sell stocks? During World War I, British army recruiters asked a powerful question: Did you have a reason or merely an excuse for not enlisting? Presumably, not wanting to die in a horrible and pointless war did not count as a good reason.
/jlne.ws/2G5De8l

CME Group completes Eris swap futures migration with 10 trading firms; Eris interest rate swap futures migrated to CME Globex on 3 December, with 10 firms actively trading.
Hayley McDowell – The Trade
CME Group has completed the first trades of USD Eris interest rate swap futures following the migration of the derivatives to its exchange on 3 December, with ten firms actively trading.
/jlne.ws/2G2jhis

Buy-side evades FX Global Code of Conduct labelling it ‘regulation in disguise’; The Bank of England’s Andrew Hauser says that buy-side concerns with compliance remain an issue, with just 11 of the 30 largest buy-side firms agreeing to adoption.
Hayley McDowell – The Trade
Asset management firms have expressed their frustration at being urged to comply with the FX Global Code of Conduct, describing it as ‘regulation in disguise’ and more relevant to the sell-side.
/jlne.ws/2G5Ikl0

Nasdaq Launches U.S. Corporate Bond Exchange
GlobeNewswire
Nasdaq (Nasdaq:NDAQ) today announced it launched a Corporate Bond exchange for listing and trading of corporate bonds. The Securities and Exchange Commission approved this exchange on November 13, 2018.
/jlne.ws/2GdSZu2

Financial Services Coming Up Short for Women
Dane Deaner – Barron’s
Attention financial services firms: By not fostering relationships with women, you’re missing out big timeóto the tune of an estimated $782 billion in investable assets.
/jlne.ws/2G1oCXh

Climate Change Moves From Risk to Reward; America’s biggest financial institutions make a big move to invest in a low-carbon future.
Mary L Schapiro – Bloomberg
As the effects of climate change loom ever larger, financial markets are embracing sustainability. Long a marginal concern at best, it has become a central component of any successful investment strategy.
/jlne.ws/2G2gwh6

Deutsche Bank hit by new laundering report; shares slide again
Andreas Framke – Reuters
Deutsche Bank (DBKGn.DE) defended its record in fighting money laundering on Thursday after the Financial Times reported it had processed 31 billion euros ($35 billion) more in questionable funds for Danske Bank (DANSKE.CO) than previously thought.
/jlne.ws/2G6ZQFi

Deutsche Bank processed additional EUR31bn of funds for Danske; German lender said to have handled 1m transactions from Estonia branch at heart of scandal
Olaf Storbeck and Caroline Binham – FT
Deutsche Bank processed EUR31bn more of questionable funds for Danske Bank than previously thought, increasing its exposure to the world’s biggest money-laundering scandal.
/jlne.ws/2G68Bzw

Why Huawei Matters; Huawei Technologies, the world’s largest maker of telecom equipment, has been a focus of U.S. concern
Dan Strumpf – WSJ
Huawei Technologies Co. has been the target of a yearslong, multipronged effort by Washington to limit the telecom-equipment giant’s footprint, both in the U.S. and around the world. Here’s what you need to know:
/jlne.ws/2G3kard

China demands release of Huawei CFO held on US charges; White House denies Trump knew about arrest before G20 dinner with Xi
Louise Lucas in Hong Kong, Demetri Sevastopulo – FT
China has demanded the release of Huawei’s chief financial officer, whose arrest in Vancouver on US sanctions-busting charges sent financial markets reeling from the intensifying confrontation between the world’s two largest economies.
/jlne.ws/2G3jZw3

U.S. securities regulator to consider stricter rules on shareholder proposals -chairman
Reuters
The chairman of the U.S. Securities and Exchange Commission said on Thursday that the regulator will consider stricter rules for setting aside shareholder proposals in 2019, including the ownership and resubmission threshold.
/jlne.ws/2G24CE4

U.S. regulators warn over ‘Brexit’ risk to global markets, companies
Pete Schroeder, Michelle Price – Reuters
Two top U.S. regulators called on Britain and the European Union on Thursday to ensure a path forward for Britain’s exit from the EU that would minimize disruption for financial firms and markets, emphasizing the need for clarity and stability.
/goo.gl/azVn41

SEC Rulemaking Over the Past Year, the Road Ahead and Challenges Posed by Brexit, LIBOR Transition and Cybersecurity Risks
Chairman Jay Clayton – SEC
Thank you Jason [Healey] for that kind introduction. For many, December is a time to reflect on the past year and to look forward to what the New Year may bring. I believe organizations also should mark milestones, take stock of what has been done and what needs to be done, and adjust course accordingly.
/jlne.ws/2G3NnSJ

11 Women Who Are Changing The Face Of Finance
Jaime Catmull – Forbes
The face of finance is changing. Now, more women are emerging as powerful movers and shakers in the finance industry, potentially taking the “old boys’ club” out of the arena once and for all.
/jlne.ws/2G5DGTR

Retail customers in Asia demand better tech, global access
FIA
When it comes to finding new retail customers in Asia, the playbook should be familiar to derivatives market participants: deploy cutting-edge technology, offer expansive market access, and educate new traders to use those tools responsibly.
/jlne.ws/2rsgEfH

Millennials to Advisors: We Don’t Need You
WealthManagement
Millennials familiar with YCharts are more likely than not to be financial do-it-yourselfers, according to a survey published by the company. Only 11 percent of millennials surveyed have an advisor-directed brokerage account and most would rather go it alone than work with an advisor.
/goo.gl/ZnNeb9

Exchanges, OTC and Clearing

CME Group Announces 10 Firms Trading USD Eris Interest Rate Swap Futures on CME Globex
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the first trades of USD Eris Interest Rate Swap Futures, transitioned to CME Globex on Dec. 3, 2018. Ten firms have participated in trading since the transition.
/jlne.ws/2G4KdhM

NZX: Lindsay Wright Appointed As Lead Independent Director
Mondovisione
The NZX board advises that Lindsay Wright has been appointed as lead independent director. NZX Chair James Miller commented: “Lindsay’s appointment reflects recommendations from proxy advisors and will further enhance NZX’s corporate governance standards. The appointment is effective immediately and reflects Lindsay’s strong performance on the board and her contribution to the broader organisation.”
/jlne.ws/2G24DYE

Cboe Global Markets Reports November 2018 Trading Volume; Year – to – date ADV across options, futures, U.S. and European equities and global FX up over 2017
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today reported November monthly trading volume and average revenue per contract (RPC)/net revenue capture data at www.cboe.com/monthlyvolrpc.
/jlne.ws/2G5C3Wt

NYSE is accused of letting Morgan Stanley make after-hours trade
Kevin Dugan – NY Post
At the New York Stock Exchange, some traders are more equal than others. That’s the bitter takeaway from stock brokers, who say the Big Board, in an unusual move last week, gave special treatment to a broker at Morgan Stanley who asked to trade large blocks of stocks for several minutes after the markets closed.
/jlne.ws/2G2pbjR

French exchange Euronext loses global fixed-income boss; Newly-recruited London chief will take over the fixed-income business
By Samuel Agini – Financial News
Euronext, which operates stock exchanges in several top European capitals, has parted ways with its global head of fixed income, currencies and commodities, marking the latest management change at the company.
/jlne.ws/2rp1Azy

UBS agrees to act as intermediary on Cboe FX; UBS will act as intermediary for smaller firms with limited bilateral credit and relationships on Cboe FX.
By Hayley McDowell – The Trade
Swiss investment bank UBS has agreed to act a central credit intermediary for counterparties on Cboe FX.
/jlne.ws/2GhoROr

Celebration times for Eurex
Eurex
When it comes to industry awards Eurex never had reason to complain, but the last few weeks have outperformed everything else. Five awards in total and three of them based on clients’ views.
/jlne.ws/2G0bqlA

Amendments to the Conditions for Trading at Eurex Deutschland and Exchange Rules of Eurex Deutschland
Eurex
With this circular, we would like to inform you about the amendments to the Conditions for Trading at Eurex Deutschland (Trading Conditions) and Exchange Rules of Eurex Deutschland (Exchange Rules) which have been approved by the Exchange Council of Eurex Deutschland on 8 November 2018.
/jlne.ws/2G2nQJP

MSCI index derivatives: Specification of procedure to determine the final settlement price in the event of market disruptions
Eurex
The Executive Board of Eurex Clearing decided to specify the procedure to determine the final settlement price for MSCI index derivatives in the event of market disruptions, which will come into effect with the March 2019 expiration.
/jlne.ws/2G4Nfma

Strong interest in Eurex’s Partnership Program for the Repo segment
Eurex
The extension of Eurex’s Partnership Program to the Repo segment meets strong interest from major Repo market participants. So far, 24 participants from the U.S., the U.K. and Continental Europe registered for the program.
/jlne.ws/2Ghp7wT

SGX reports market statistics for November 2018; Single-stock DLCs launched during month increased overall activity of listed structured products; Freight Derivatives volume hits record high
SGX
Securities – Total Securities market turnover value was at S$21.6 billion, down 11% month-on-month (m-o-m) and down 24% year-on-year (y-o-y), over 21 trading days. There were 23 trading days in October 2018 and 22 in November 2017.
Derivatives – Total Derivatives volume was 19.6 million, down 11% month-on-month (m-o-m) and up 9% year-on-year (y-o-y).
/jlne.ws/2G5rrXy

Fintech

BNP Paribas Moves to Real-time Margin Calculations with FIS Margin Advisor
FIS
FIS (NYSE: FIS), a global leader in financial services technology, today announced that BNP Paribas has selected FIS’ Cleared Derivatives Margin Advisor, an innovative solution that enables sell-side firms, investment funds and institutional investors to better assess and calculate initial margin requirements on cleared derivatives portfolios.
/jlne.ws/2E5RCLe

Vela to facilitate electronic access to Eurex EnLight
Vela
Eurex, Europe’s largest derivatives exchange, and Vela, a global leader in trading and market access technology, have teamed up to facilitate electronic access to Eurex EnLight, the new selective request-for-quote (RfQ) platform, via Vela’s Metro Trading Platform.
/jlne.ws/2E5RFXq

Fidelity eyes robo-advice launch as banks pile in; Investment group already runs a similar service in Germany
Kate Beioley – FT
Fidelity International is weighing up the launch of a robo-advice service, in the latest sign that fund supermarkets are feeling the pressure to appeal to a wider range of customers amid increased competition.
/jlne.ws/2G6KHUJ

EU’s tech commissioner says Europe should be worried about Huawei
Reuters
The European Union should be “worried” about Huawei and other Chinese technology companies because of the risk they pose to the bloc’s industry and its security, the EU tech commissioner said on Friday.
/jlne.ws/2rpTDu3

Cryptocurrencies

Crypto Market Crash Leaving Bankrupt Startups in its Wake
Olga Kharif – Bloomberg
ConsenSys plans to cut 13% of workforce; ETCDEV to close; More than 1,000 crypto companies received funding since 2012
The plunge in the cryptocurrency market is weighing on the software-development community that spawned over 1,000 digital coins amid dreams of independence from traditional financial systems and instant wealth.
/jlne.ws/2Ghjoan

****You can find a price action crypto update from CNBC here.

SEC Again Delays Decision on VanEck-SolidX Bitcoin ETF
Nikhilesh De – Coindesk
The U.S. Securities and Exchange Commission (SEC) extended a rule change proposal allowing the nation’s first bitcoin exchange-traded fund (ETF), pushing the decision deadline to next year. In a notice posted online, the securities regulator said it was extending the review period for the ETF to Feb. 27, 2019. The proposal was first submitted by money manager VanEck and blockchain startup SolidX, who partnered with the Cboe exchange earlier this year.
/jlne.ws/2E42TeK

Cryptocurrency trading platform ErisX adds $27.5M Series B to its wallet
Alton Zenon III – Built In Chicago
ErisX just added a bunch of coin to its wallet. The Chicago-based company, which is building a centralized platform for individuals and institutions to access, manage and trade spots and futures for cryptocurrencies like Bitcoin, Ethereum and Litecoin, announced the raise of a $27.5 million Series B.
/jlne.ws/2L2jq4t

New Protocols And Super-Fast Transactions; What To Expect From Cryptocurrency In 2019
Gerald French – Forbes
Roughly a year after the cryptocurrency market exploded and surged to unimaginable heights, there is absolutely no doubt that the market is continuing to exhibit bearish signals. The current state of affairs in the cryptocurrency space is of sharp contrast to the status quo.
/jlne.ws/2PozxK1

Bipartisan lawmakers seek cryptocurrency rules to protect consumers and keep US competitive
Kate Rooney – CNBC
Congress is getting more serious about cryptocurrency. Members of the House plan to introduce two bills on Thursday to prevent fraud, protect consumers and make sure the country doesn’t fall behind as a leader in the global digital asset class. The bipartisan bills don’t give specific recipes for how to achieve those goals. Instead, they ask the Commodity Futures Trading Commission to come up with recommendations.
/jlne.ws/2Ut8Urt

Cryptocurrency index fund follows Warren Buffett’s playbook, but with a $1 million bet against the S&P
Kate Rooney – CNBC
A cryptocurrency asset manager is mimicking the playbook of one of the industry’s most notable critics: Warren Buffett. Morgan Creek Digital is recreating Buffett’s famous $1 million wager pitting the performance of the S&P 500 against a group of hedge funds. But unlike the famous value-investor, Morgan Creek is betting against the S&P and placing its faith in the 10-year performance of cryptocurrencies.
/jlne.ws/2G4S5zE

6,000 cryptocurrency laundering cases suspected in Jan-Oct period
Japan Today
Tokyo – Nearly 6,000 cases of suspected money laundering linked to cryptocurrency were reported to police in the January-October period, National Police Agency officials said Thursday. The figure is more than eight times higher than the 669 cases reported from April to December last year. Cryptocurrency exchange operators are required to report transactions suspected of involving money laundering after the law on prevention of transfer of criminal proceeds was revised in April 2017.
/jlne.ws/2G1tRpV

Roger Ver, Bitmain Sued for BCH Hard Fork ‘Manipulation’
Rachel McIntosh – Finance Magnates
The Bitcoin Cash ‘hard fork’ that many cite as the reason for the latest cryptocurrency market crash is now the subject of a lawsuit. A ‘hard fork’ is a kind of software upgrade on a cryptocurrency network that creates a new blockchain, and sometimes a new cryptocurrency. The Bitcoin Cash hard fork that took place several weeks ago resulted in two version of Bitcoin Cash, supported by two opposing parties: the Bitcoin ABC version, which uses the ‘BCH’ ticker symbol; and Bitcoin Cash Satoshi’s Version, which uses the ticker symbol ‘BCHSV’.
/jlne.ws/2AYjr4Y

Politics

In Dow he trusts: Trump’s reassuring faith in stocks; He may not admit it but the president has to find any decline in prices worrisome
Tom Braithwaite – FT
He may ride roughshod over many American institutions, but there is one that President Donald Trump respects. His belief in the power of the stock market knows no bounds. This faith offers a glimmer of hope for companies dismayed by the current geopolitical whirlwind.
/jlne.ws/2G4KO30

Trump Plans to Open 9 Million Acres to Oil Drilling and Mining
Coral Davenport – The New York Times
The Trump administration on Thursday detailed its plan to open nine million acres to drilling and mining by stripping away protections for the sage grouse, an imperiled ground-nesting bird that oil companies have long considered an obstacle to some of the richest deposits in the American West.
/goo.gl/8dxLku

Trump Hasn’t Tweeted About the Stock Market Since Nov. 12
Sarah Ponczek – Bloomberg
Stocks go south and President Donald Trump goes quiet. Since his election, Trump has tweeted about the stock market more than 35 times. Yet since Nov. 12, his social media account has been mum on the wild vacillations in U.S. equities.
/jlne.ws/2G6DeEZ

Impeachment and the ‘Preposterous’ Power of the Presidency; Obama’s White House counsel Robert Bauer on “reckoning with a problem that has been obvious for some time.”
Francis Wilkinson – Bloomberg
Robert Bauer served as counsel to President Barack Obama’s 2008 and 2012 presidential campaigns and as White House counsel from 2009 to 2011. One of the leading experts in U.S. laws regulating political activity, he teaches law at New York University. In late November we communicated via email. What follows is a lightly edited transcript.
/jlne.ws/2G2mizv

Europe’s Tech Tax Is a Mistake in the Making; If France and Germany cared about efficient and equitable taxation, they’d drop their planned “Google tax.”
Editorial Board – Bloomberg
One way or another, Europe is determined to get tech companies to pay their fair share. All that remains is to decide the meaning of “tech company,” “pay,” “fair” and “share.”
/jlne.ws/2Ghievx

8 of the most influential millennial women in US politics
Eliza Relman – Business Insider
Women are serving in larger numbers in American politics and government today than ever before. A record number of women will serve in Congress next year after a surge of female candidates ran for office in this year’s midterm elections. And the House’s freshman class will be the most diverse in history.
/jlne.ws/2rshB7L

Regulation

Statement of Chairman J. Christopher Giancarlo on Financial Stability Concerns regarding Brexit
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) continues to carefully monitor discussions between the United Kingdom (U.K.) and the other EU member states (EU27) regarding the U.K.’s exit from the European Union. Uncertainty surrounding the effect of Brexit on the U.K. and EU27 financial markets is already having a substantial impact on entities and markets regulated by the CFTC. If not dispelled, such uncertainty has the potential to create instability in the global derivatives market. For this reason, we look forward to the U.K. and EU27 settling the terms of Brexit in a manner that provides sufficient legal and regulatory certainty to market participants so that European and international derivatives markets can continue to carry out their essential role in economic risk transfer essential to global economic growth.
/jlne.ws/2E3RETD

CFTC Wins Judgment against Commodities Trader for Commodity Pool Fraud, Including Misappropriating Funds
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that Defendant Mark R. Slobodnik of Libertyville, Illinois, has been ordered to pay approximately $370,000 in fines in connection with a $1.76 million commodity pool fraud operated under the name Blue Guru, LLC.
/jlne.ws/2G6aT1A

Shell’s carbon emissions targets are a clear model for others; Victory for investor groups puts oil majors under pressure
The Editorial Board – FT
Royal Dutch Shell’s decision to set carbon emissions targets from next year is as welcome as it is overdue. The announcement was made as signatories to the Paris climate change agreement, which seeks to limit global temperature rises, gathered for the COP24 talks in Poland to try to agree rules on implementation. Like the Paris commitments themselves, Shell’s pledge and its plan to link 1,200 executives’ pay to progress against its targets raise the bar for everyone.
/jlne.ws/2G3jSk7

Exclusive: U.S. probe of China’s Huawei includes bank fraud accusations: sources
Karen Freifeld – Reuters
Chinese telecoms giant Huawei Technologies Co Ltd’s chief financial officer was arrested as part of a U.S. investigation into an alleged scheme to use the global banking system to evade U.S. sanctions against Iran, according to people familiar with the probe.
/jlne.ws/2G5DTql

SEC Investor Advisory Committee to Meet on December 13
SEC
The Securities and Exchange Commission will hold a meeting of its Investor Advisory Committee on Dec. 13, 2018. The meeting will begin at 9 a.m. ET in the Multipurpose Room at SEC Headquarters at 100 F Street NE, Washington, D.C. and is open to the public. The meeting will be webcast live and archived on the committee’s website for later viewing.
/jlne.ws/2G2pjQn

SEC Halts Alleged Insider Trading Ring Spanning Three Countries
SEC
The Securities and Exchange Commission has filed insider trading charges against an IT contractor and two others he illegally tipped with confidential client information he stole while working in the Singapore branch of an investment bank.
/jlne.ws/2G24nc8

British Columbia Securities Commission: Securities Market Fee Changes To Support Stronger Enforcement And Regulatory Innovation
Mondovisione
The British Columbia Securities Commission (BCSC) is increasing fees to bolster the commission’s ability to carry out its mandate to protect investors and oversee an increasingly complex securities marketplace.
/jlne.ws/2G67jEG

CFTC set to have its say in case concerning NFA’s publications about FXCM
FinanceFeeds
The CFTC is invited to file a brief as “amicus curiae” in a case launched by Effex Capital, which accuses the NFA of making false statements in documents relating to the FXCM settlement.
/jlne.ws/2Szgdf8

Wiped-out fund investors, represented by Cleveland law firm, seek to recoup losses from broker
Crain’s Cleveland
Twelve investors of wiped-out investment firm OptionSellers.com are seeking to recoup more than $7 million in losses from INTL FCStone Inc., the brokerage that handled their accounts.
/jlne.ws/2SA5d11

HSBC Monitor Flagged Suspicious Huawei Transactions to Prosecutors; Canadian authorities arrested Huawei CFO Meng Wanzhou at the request of the U.S. for alleged violations of Iran sanctionsS
Rachel Louise Ensign – WSJ
A federally appointed overseer at HSBC Holdings HSBC -3.62% PLC flagged suspicious transactions in the accounts of Huawei Technologies Co. to prosecutors seeking the extradition of the Chinese company’s finance chief, people familiar with the matter said.
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Podcast: CFTC Talks EP075: Georgetown Law Prof. Chris Brummer
CFTC
This week on CFTC Talks, we talk with University of Georgetown’s Faculty Director of the Institute of…
/jlne.ws/2G753wQ

Investing and Trading

Traders Cast Doubt on More Fed Hikes as Even December Odds Ease
Liz McCormick – Bloomberg
Traders of U.S. interest-rate futures are rapidly losing confidence that the Federal Reserve will raise rates even once more next year and are also beginning to have some doubts if they’ll notch rates higher this month.
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Record-Breaking Day in Front-End Rates as Fed-Hike Bets Crumble
Edward Bolingbroke – Bloomberg
Volumes surge across fed funds futures and eurodollars; Open interest data for Thursday may offer clues to the rally
A dramatic day across the front end of the U.S. rates curve was backed by record volumes in a number of futures contracts amid crumbling confidence in the Federal Reserve’s ability to follow through on its projection of three 2019 rate hikes.
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Trading Trump: Wall Street stresses over White House comments
Lawrence Delevingne and Trevor Hunnicutt – Reuters
JPMorgan Chase & Co’s trading desk was not buying what U.S. President Donald Trump was selling this week.
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Afraid of the Yield Curve? You’re Looking at the Wrong One; When bond yields flatten to current levels before a recession, the S&P often posts gains over next year
James Mackintosh – WSJ
Shareholders constantly live up to their reputation as flighty irrational beings prone to panic and wild abandon. What is odd is that so many have come to view their counterparts in the bond market as stolid and sensible forecasters on whose views they can rely.
/jlne.ws/2G4Nxt4

4 Things Not to Do in Times of Stock Market Volatility
Al Root – Barron’s
Things are getting a little hairy in the markets, to say the least. Did we already say that? The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all opened with sharp losses on Thursday. The Dow and the S&P 500 both regained ground to finish with narrow losses, while the Nasdaq finished slightly in the green.
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Wild market swings hinge on a different kind of leverage; Modest developments these days are triggering extreme volatility
Gillian Tett – FT
Many American stock market investors are feeling seasick. That is not simply because a tumble on Thursday reflected that equity markets are down on the year; more unnerving are recent, wild swings.
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Biggest Worry for Traders? They Don’t Know Why Stocks Are Moving
Vildana Hajric and Sarah Ponczek – Bloomberg
Trade, rates, tariffs — no one reason explains wild swings; Geopolitical risks difficult to fit into trading analysis
It would be nice to write the market’s convulsions off to liquidity failures, or tariffs, the Federal Reserve or tech valuations.
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When a Loss Feels Like a Win: Biggest Stock Swing Since 2010
Luke Kawa – Bloomberg
If that tiny loss in the S&P 500 almost felt like a huge gain, there’s a good reason. The S&P 500 was down 2.9 percent at its lows of the day. From that level, the benchmark equity gauge rose 2.8 percent. U.S. stocks haven’t declined that much and gone on to enjoy a bigger intraday recovery at the close since May 25, 2010. That session, the S&P 500 fell as much as 3.1 percent before recouping the losses to close flat on the day.
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Investors withdraw billions from US equity funds; Corporate bond funds also suffer as market turmoil increases appeal of government debt
Joe Rennison – FT
Investors pulled money from equity and corporate bond funds over the past week, preferring the safety of US government debt as trade uncertainties and a re-assessment of global growth forecasts roiled US markets.
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Trade Fears Are Robbing Stocks of Their Tax-Cut Gains; Trump’s signature economic policies are at war with each other.
Stephen Gandel – Bloomberg
“Tariff Man” Donald Trump is close to squandering all of the gains of his tax cut, at least as far as the market is concerned.
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What is the yield curve and why has it spooked investors?; Measure could be the best indicator investors have of an oncoming recession
Joe Rennison and Robin Wigglesworth – FT
What if there was a way to know when the next recession was close? What if there was a market measure that could clearly communicate economic trouble ahead, without fail?
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Noble facing insolvency after new share listing is blocked; Singapore authorities deal blow to commodity trader’s restructuring plan
Neil Hume and Stefania Palma – FT
Noble Group is facing insolvency after authorities in Singapore said the crisis-hit commodity trader would not be able to list shares in a new entity, dealing a potentially fatal blow to its emergency debt restructuring.
/jlne.ws/2G3izBJ

Institutions

The Never-Ending Turnaround of Credit Suisse; Tidjane Thiam has spent three years pivoting the Swiss bank from Wall Street to its roots serving the world’s richest. Shareholders are still waiting for the results.
Jan-Henrik Foerster – Bloomberg
Tidjane Thiam is still standing. By simply surviving as chief of Credit Suisse Group AG, the Ivory Coast-born trained engineer has done what more experienced bankers couldn’t in trying to fix Europe’s troubled banks. With a restructuring plan he masterminded coming to an end this month, Thiam’s next feat will be to prove to skeptics that a one-time consultant can do more than just cut costs.
/jlne.ws/2G6bjoG

Wells Fargo reform plans fail to satisfy Fed after scandals: sources
Patrick Rucker – Reuters
The Federal Reserve has rejected Wells Fargo & Co’s plans to prevent further consumer abuses and told the scandal-plagued lender it needs stronger checks on management, according to three people with knowledge of the discussions.
/jlne.ws/2G3kqXd

Hedge fund industry’s big guns misfired in November; Point72, Millennium and Balyasny suffered losses even as equity markets rose
Laurence Fletcher and Lindsay Fortado – FT
Some of the hedge fund industry’s biggest names, including Millennium Management and Steve Cohen’s Point72 Asset Management, suffered sharp losses in November, even as equity markets bounced back.
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Regions

Maduro Thanks Putin for Helping Venezuela ‘Survive’
Frances Martel – Breitbart
Venezuelan dictator Nicol·s Maduro met with Russian President Vladimir Putin in Moscow Wednesday, where the latter agreed to support the socialist regime economically and politically. As of press time, both sides have kept the details of this support secret, however.
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Germany’s DAX Enters Bear Market in Worst Year Since 2008
Jan-Patrick Barnert – Bloomberg
Germany’s DAX index tumbled 3.5 percent on Thursday, the most since mid-2016, with the benchmark entering a bear market as profit warnings mount, political tensions prevail and the global equity market sell-off accelerates.
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Fearing ‘Act IV’ of unrest, France to close Eiffel Tower, Louvre, at weekend
Richard Lough, Marine Pennetier – Reuters
France will close the Eiffel Tower and other tourism landmarks in Paris and draft in thousands more security forces on Saturday to stave off another wave of violent protests in the country over living costs.
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In major shift, U.S. now exports more oil than it ships in
David Gaffen – Reuters
The United States last week exported more crude oil and fuel than it imported for the first time on record, according to data released on Thursday, the same day OPEC ended a meeting without a decision to curb global output to balance out the historic surge in U.S. supply.
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Australia’s IOOF drops as banking regulator targets top executives; Disqualification action marks step change by Apra over attitude to misconduct
Jamie Smyth – FT
Australia’s banking regulator said on Friday it was seeking to disqualify five senior executives and directors of IOOF Holdings, one of the country’s biggest wealth managers, for failing to act in the best interests of pension fund members.
/jlne.ws/2G4L8i2

Brexit

Barricades in Paris make Brexit bankers think again; Frankfurt suddenly looks more attractive amid the ‘gilets jaunes’ protests
Henry Mance – FT
French president Emmanuel Macron has been rocked by leaderless protesters nicknamed the ” gilets jaunes”, or yellow vests. His government has backpedalled on fuel tax increases. Yet the violence threatens Mr Macron’s attempt to brand France as a home for financial services and tech companies. Some bankers have already crossed the Channel from Brexit Britain; might they be having second thoughts?
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Financial services exports to EU face 59% fall, warns think-tank; Post-Brexit trading barriers will force economic activity to relocate, says report
Delphine Strauss – FT
Britain’s exports of financial services to the EU could fall by almost 60 per cent as a result of leaving the single market, marking a “sea change” in the services sector that drives the UK economy, according to new research by the Centre for European Reform.
/jlne.ws/2G2jTot

Norwegian politicians reject UK’s Norway-plus Brexit plan; Norwegian MP says it is not in either country’s interest for UK to use trade agreement
Patrick Wintour – The Guardian
Senior Norwegian politicians and business figures have rejected Norway-plus, the increasingly touted British cross-party plan for the UK to leave the EU but join Norway in a free trade trade area inside the EU single market.
/jlne.ws/2Swxy8A

Sleeping bags and mini golf as traders brace for Brexit all-nighter
Lawrence White, Ben Martin – Reuters
As lawmakers gather in Britain’s parliament on Tuesday to vote on the future of the country’s relationship with Europe, traders in London’s financial hub will be bracing for a potential burst of market turmoil that could affect the Brexit process itself.
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