First Read

FCMs Big And Small Suffer Major Losses On Latest Black Monday
Jim Kharouf – JLN
On February 5, the historic trading day when the Dow Jones Industrial Average fell 1,175 points and the S&P 500 plunged 113 points, many customers suffered significant losses which forced several futures commission merchants to cover those deficits. The severity of the losses on that day was reflected in major drops in FCM customer segregated funds, some to alarming levels.
Among the biggest shocks was at RBC Capital Markets, which on February 5 posted a deficiency of funds in segregation of $1.13 billion. FCMs should never post a negative amount there, as it is a potential violation of CFTC rules.
/goo.gl/x5hFe7

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Hits & Takes
JLN Staff

The Commodity Futures Trading Commission (CFTC) and the Center for Risk Management Education and Research at Kansas State University will jointly host “Protecting America’s Agricultural Markets: An Agricultural Commodity Futures Conference,” on April 5 – 6, 2018 in Overland Park, Kansas.~JJL

ISDA’s 33rd AGM is in Miami from Apr 24-26 and will cover challenges facing the derivatives market in the year ahead, including benchmarks, Brexit, capital, technology and more. Watch a video preview here.~JJL

FIA President and CEO Walt Lukken addressed the FIA Operations Division Washington Update at the Union League Club of Chicago sporting facial hair.~JJL

ABN AMRO won the FIA Corporate Challenge for raising the most money for the Greater Chicago Food Depository.~JJL

Jim Kharouf has written a piece for Gate 39 Media, titled “Crypto Markets Are Young, Hungry and Just Getting Started.”~JJL

Economists from Purdue University’s Center for Commercial Agriculture and CME Group will present a learning center session at Commodity Classic on Feb. 27 at 8:15 a.m. The conference runs Feb. 27-March 1 in Anaheim, California.

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Walt Lukken Boca 18 Preview
JohnLothianNews.com

Walt Lukken, president and CEO of the Futures Industry Association, gives us a preview of what to expect at the upcoming 43rd Annual Futures Industry Conference in Boca Raton, Florida on March 13-16, 2018.

Watch the video here »

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DRW’s Wilson expects cryptos will change world
Lynne Marek – Crain’s Chicago Business
DRW Holdings founder and trader tycoon Don Wilson made a rare public appearance in Chicago to plug one of his company’s growing interests: crypto assets. His mission: to explain why these holdings, including cryptocurrencies like bitcoin, are important and “will change the world,” he told about 200 people gathered yesterday for a CFA Society Chicago luncheon in downtown Chicago.
/goo.gl/YF9B8t

***** Good reporting sometimes means being a good stalker.~JJL

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TABB Group Announces New Management Structure, Appoints Bruce Morris CEO
TABB Forum
TABB Group, the international research, advisory and consulting firm focused on financial markets, today announced changes to its executive management team. Bruce Morris joins TABB Group as CEO, while Larry Tabb maintains his role as Research Chairman and assumes overall management responsibilities for the research and consulting business.
/goo.gl/xHSyDx

***** Another new CEO at the TABB Group and Larry Tabb gets control back for “overall management responsibilities for the research and consulting business.” There is a story in there somewhere.~JJL

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Wednesday’s Top Three
Our top read story on Thursday was Business Insider’s Top cryptocurrency traders asking for big shake-up to bitcoin futures. Second went to
Bloomberg’s Risky Crypto Bet Dents Dennis Gartman’s Retirement Account. Third went to Chuck Mackie in JLN’s wrap-up of the CryptoCon event, CryptoCon 2018 – Impressions

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MarketsWiki Statistics Sponsored by Level Trading Field

121,182,072 pages viewed 23,012 pages 211,767 edits

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Lead Stories

Fed’s Dudley Warns on Dangerous ‘Speculative Mania’ Around Cryptocurrencies
Michael S. Derby – WSJ
Federal Reserve Bank of New York President William Dudley warned that investing in privately issued digital money such as bitcoin could end in big financial losses for those involved.
/goo.gl/3VLFNM

Listings-Hungry Hong Kong Exchange Looks to Loosen Rules
Gregor Stuart Hunter – WSJ
Hong Kong’s stock exchange, losing listings to New York and London, is advancing a plan to permit initial public offerings that restrict shareholders’ voting rights.
/goo.gl/QEsZEM

JPMorgan’s Quants Warn Risks Are Growing for Bond Short-Squeeze
Adam Haigh, Joanna Ossinger – Bloomberg
Kolanovic highlights record short position in Treasury futures; Risk of ‘proper short squeeze’ in bond futures: Kolanovic
Investors have become so bearish on U.S. government bonds that they risk getting caught out, according to JPMorgan Chase & Co.’s quantitative and derivatives strategy team.
/goo.gl/EaSvvC

RBS First Profit in Decade Clouded by Costs and Litigation
Stefania Spezzati – Bloomberg
Shares drop 4.5% in London, its biggest decline in a year; CEO says restructuring costs will be around 2.5 billion pounds
Royal Bank of Scotland Group Plc swung to its first full-year profit in a decade, but the delay in settling with the U.S. Department of Justice over a mortgage-securities probe and rising restructuring costs are casting a shadow on any celebrations. The shares fell.
/goo.gl/YY8Z6Y

Investment Association slams FX ‘last look’ practices; The IA is looking to overhaul the last look practice in FX trading to head off misuse of information.
Hayley McDowell – The Trade
The Investment Association (IA) has raised concerns that ‘last look’ practices in FX trading are no longer acceptable due to misuse of information by liquidity providers.
/goo.gl/ytmJvv

Singapore moves to migrate OTC derivatives trading on exchange; MAS is seeking industry feedback on proposed rule changes to OTC derivatives already implemented in the US and the EU.
Hayley McDowell – The Trade
Financial authorities in Singapore have proposed changes to OTC derivatives trading, which could see a migration of activity onto electronic venues.
/goo.gl/sDTtdK

Indian Exchange Warns Indexer Compilers to Stay Out of Offshore Dispute
Santanu Chakaborty – Bloomberg
NSE’s chief executive says he’s been in discussions with MSCI; Three bourses said this month they’ll be cutting overseas ties
India’s biggest exchange operator, which ended licensing deals with its global counterparts in an effort to rein in offshore derivatives, wants index compilers to stay out of the dispute.
/goo.gl/XqSLVy

VIX Funds Face Fresh Scrutiny From U.S. Regulators
Benjamin Bain, Matt Robinson – Bloomberg
SEC is said to start broad review of exchange-traded products; CFTC is also said to examine trades tied to ‘fear gauge’
U.S. regulators are scrutinizing this month’s implosion of investments that track stock-market turmoil, including whether wrongdoing contributed to steep losses for VIX exchange-traded products offered by Credit Suisse Group AG and other firms, several people familiar with the matter said.
/goo.gl/iS6qZn

Nasdaq wants to boot iced tea maker for taking advantage of bitcoin craze
Matt Egan – Money
Nasdaq wants to boot an iced tea maker off its exchange for allegedly trying to fool investors caught up in the cryptocurrency mania.
/goo.gl/fmSN9P

Matt Simon Joins Markets Media Group; Industry veteran will drive strategic initiatives and develop new business.
Markets Media Group
Markets Media Group (MMG) is pleased to announce that Matt Simon has joined the company in the new position of Head of Strategy. Simon joins MMG from TABB Group, where he was Head of Consulting and Advisory Services. Previously in his 12-year tenure at TABB, he was Senior Research Analyst focused on equities and equity derivatives. His career also includes five years as an investment liaison at T. Rowe Price.
/goo.gl/D1Ni6m

Exchanges, OTC and Clearing

TSX Venture Exchange Announces the 2018 Venture 50; Market open ceremony held today to celebrate the Venture 50 winners
TMX
TSX Venture Exchange (TSXV) is pleased to announce today the 2018 Venture 50 – an annual ranking of top performing companies from five industry sectors: Clean Technology and Life Sciences, Diversified Industries, Mining, Oil & Gas, and Technology. Representatives of the Venture 50 companies will join TMX Group executives at a market open ceremony today at 9:30 a.m. EST to celebrate their achievement.
/goo.gl/YqLReu

EXCHANGE PROPOSES NEW LISTING REGIME FOR EMERGING AND INNOVATIVE COMPANIES
HKEX
Exchange proposes adding three new chapters to Main Board Listing Rules; Consultation paper closely follows Way Forward set out in December; Market feedback sought during one-month consultation period
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published a consultation paper seeking public feedback on the proposed new rules to expand Hong Kong’s listing regime to facilitate listings of companies from emerging and innovative sectors.
/goo.gl/4uBvn5

HKEX says listing reforms could be in place by late April
South China Morning Post
Hong Kong Exchanges and Clearing may amend its listing rules to accept companies with dual class shares and biotech companies with no revenue as early as late April, accelerating the timeline for the widely-expected listing regime change by several months, the bourse operator said on Friday. HKEX chief executive Charles Li Xiaojia in January predicted the listing rules could be amended from June.
/goo.gl/ZEfQNM

HKEX to offer concessions for U.S., UK-listed firms to list in Hong Kong
Reuters Staff
Hong Kong Exchanges and Clearing (HKEX) (0388.HK), the city’s exchange operator, said on Friday it plans to offer concessions to U.S. and UK-listed companies considering a secondary listing in Hong Kong.
/goo.gl/YaQbLc

ETF settlement: Change of settlement structure for ETFs of SSGA SPDR ETFs
Eurex
Effective 12 March 2018, SSGA SPDR ETFs Europe I plc and SSGA SPDR ETFs Europe II plc will convert their Exchange Traded Funds (ETFs) traded on Xetra (MIC: XETR) and Börse Frankfurt (MIC: XFRA) to the International Central Securities Depository (ICSD) model.
/goo.gl/XSrJcp

Clearing of Section 871 (m) Internal Revenue Code transactions: Amendment to the Clearing Conditions of Eurex Clearing AG
Eurex
This circular outlines further developments on the general clearing framework of potential Section 871 (m) Internal Revenue Code (IRC) transactions (hereinafter: potential Section 871 (m)-transactions) and reminds all Clearing Members of Eurex Clearing AG (Eurex Clearing) to fulfill all requirements of the relevant regulations of the IRC with particular reference to all withholding and reporting obligations as laid out in Eurex Clearing circulars 028/17 and 074/17.
/goo.gl/sUhtdN

Fixed Income Highlights – February 2018 edition
Eurex
/goo.gl/Eh5whD

SGX may buy stake in NSE’s GIFT exchange
Palak Shah – TheHinduBusinessLine
Singapore bourse SGX and India’s National Stock Exchange (NSE), two of Asia’s largest trading venues, are scripting a new chapter in their partnership. SGX may pick up a stake in NSE’s GIFT (Gujarat International Finance Tech-city) exchange, known as NSE IFSC, two sources told BusinessLine.
/goo.gl/zgCG25

BSE, NSE, MSEI Assure Global Stock Exchanges Of Orderly Transition
Bloomberg
Indian stock exchanges assured international bourses and index providers of orderly transition. Steps would be taken to ensure that ending licensing pacts do not disrupt the markets, BSE Ltd., National Stock Exchange of India Ltd. and Metropolitan Stock Exchange of India Ltd. said in a joint statement.
/goo.gl/NVzeUC

Nasdaq accuses Long Blockchain of misleading investors; Former drinks company added ‘blockchain’ to its name in December
Adam Samson in London – FT
Long Blockchain, the iced tea maker that last year changed its focus to blockchain, has been accused by Nasdaq of misleading investors.
/goo.gl/PS7z4S

Fintech

Look at Quant Hires for Ken Griffin’s Habit of Pouncing on Distress
By Saijel Kishan, Nico Grant, Katherine Burton – Bloomberg
Citadel hires 10 quants from Hutchin Hill as it shutters; Firm’s main funds gained 3% in January, outperforming peers
Your pain is Ken Griffin’s gain. At a time when hedge funds are struggling to lure assets and beat benchmarks, the billionaire founder of Citadel continues to pounce on opportunities. This week, Griffin hired a quant team from Hutchin Hill Capital less than three months after its founder Neil Chriss said he was closing his hedge fund.
/goo.gl/QCt264

Is Bitcoin getting better, and for five year-olds?
Dan McCrum – FT
Allow us to point you to an infographic which channels the Jesuit approach to proselytism. We are lucky enough to spend time with some smart five year-olds, and they can have surprising knowledge. Octonauts is layering in some pretty obscure marine biology, for instance.
/goo.gl/vrcktx

Politics

The Trump Administration Is a Golden Age for Corporate Crooks
Jonathan Chait – NY Magazine
The Republican Party’s main legislative achievement was to facilitate the direct transfer of hundreds of billions of dollars into the hands of business owners. (The proceeds of the Trump tax cuts are mainly going into stock buybacks, a simple windfall for owners of capital.) But a second, less visible channel is the Trump administration’s program of lax regulation. While the tax cuts spray money at business owners as a whole, weak enforcement of regulations confers a windfall targeted specifically at businesses that cheat their customers or break the law.
/goo.gl/UvppRB

An Epidemic of Dishonesty on the Right
Kevin D. Williamson – National Review
Enough with the rancid conspiracy theories
First it was the Holocaust, now Parkland — is there any act of depravity to which the less respectable right-wing media cannot imagine a connection for George Soros?
/goo.gl/mc6NQ6

BlackRock puts gunmakers on notice after Florida school shooting
Ross Kerber, Trevor Hunnicutt – Reuters
The world’s largest asset manager put U.S. gunmakers on notice on Thursday that it is no longer business as usual in the wake of a shooting that killed 17 at a Florida high school.
/goo.gl/GKvhXQ

Dina Powell, Former Trump Adviser, Weighs Return to Goldman Sachs; Powell spent a decade at Goldman before joining the Trump administration last year
Liz Hoffman – WSJ
Dina Powell, who until recently served as a top national-security adviser in the White House, is talking to Goldman Sachs GS -0.75% Group Inc. about returning to the firm, according to people familiar with the matter.
/goo.gl/zQ94VE

Two top White House advisers may leave over tensions with Trump: sources
John Walcott – Reuters
Longstanding friction between U.S. President Donald Trump and two top aides, the National Security Adviser and the Chief of Staff, has grown to a point that either or both might quit soon, four senior administration officials said.
/goo.gl/wHRFcQ

Trump, Ryan and McConnell, stop ignoring your oaths
Fred Wertheimer and Norm Eisen – CNN
President Donald Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell each took an oath of office that included solemnly swearing to defend the Constitution of the United States.
/goo.gl/rskjzy

Regulation

Podcast: CFTC Talks EP032: CFTC Commissioner Rostin Behnam
CFTC
This week on CFTC Talks, we bring on CFTC Commissioner Rostin Behnam to discuss his vision and priorities for the…
/goo.gl/7wFKeA

EU official to U.S.: clearing plans won’t undermine bilateral pacts
Huw Jones – Reuters
European Union representatives have sought to reassure the United States that plans to tighten oversight of foreign clearing houses operating in the bloc will not disrupt transatlantic ties on market access that took years to agree.
/goo.gl/8expLi

U.S. arrests operator of shuttered bitcoin investment platform
Nate Raymond – Reuters
The operator of a shuttered bitcoin-denominated exchange was arrested on Wednesday on federal charges that he lied to U.S. securities regulators to avoid taking responsibility for the theft by hackers of virtual currency now worth nearly $70 million.
/goo.gl/PBQYce

Investing and Trading

Why Markets Have Gotten So Jumpy; To understand the wild swings on Wall Street, consider a farm town, a long drought and the cost of flood insurance.
Neil Irwin – NY Times
To understand why global financial markets have been so volatile the last few weeks, imagine a town full of farmers who have been living through a decade-long drought.
/goo.gl/wJ9LYm

Playing With $100 Billion, Warren Buffett Is Giant Trader of U.S. Treasury Bills; Berkshire Hathaway now one of world’s largest owners of Treasury bills; cash pile soars as it struggles to find acquisitions
Nicole Friedman and Daniel Kruger – WSJ
Berkshire Hathaway Inc. BRK.A -0.04% shareholders will look to Warren Buffett’s annual letter on Saturday for new clues of what the conglomerate plans to do with more than $100 billion in cash.
/goo.gl/93yuFX

Equity Investors Fleeing Wall Street Are Turning to Europe
Blaise Robinson – Bloomberg
Year-to-date, U.S. funds see outflows, Europe sees inflows; Plenty of reasons playing in favor of Europe as bonds rise
Tempted in buying the dip? OK, just maybe not the one in U.S. stocks. While Wall Street is still reeling from its first 10 percent correction in two years, U.S. equity funds continue to suffer outflows, according to Bank of America Merrill Lynch, and the money is resurfacing in Europe.
/goo.gl/U1eScc

First-Time Homebuyers Make Biggest Share of Deals in 17 Years
Prashant Gopal – Bloomberg
Millennials are playing homeownership catch-up. First-time buyers rushed into the market last year, making 38 percent of all U.S. single-family home purchases, the biggest share since 2000, data released Thursday by Genworth Mortgage Insurance show. The 2.07 million new or existing homes bought by first-timers was 7 percent more than in 2016, according to the insurer, part of Genworth Financial Inc.
/goo.gl/hhwcUn

Why insurers are being blamed for equity market instability; Annuity providers in spotlight over ‘managed volatility’ strategies
Alistair Gray and Robin Wigglesworth in New York – FT
Computer-powered hedge funds shouldered much of the blame for exacerbating turmoil in markets this month but some are pointing the finger at a pillar of the financial system: the insurance sector.
/goo.gl/wdc7HN

Institutions

ETF Investors Returned to Stocks Soon After Rout, BlackRock Says
Eric Lam – Bloomberg
Investors in exchange-traded funds remain bullish about equities despite the global selloff at the start of February, according to BlackRock Inc.
/goo.gl/78VBPe

Robinhood Opens Cryptocurrency Trading
Julie Verhage – Bloomberg
Users in select states can now trade Bitcoin and Ethereum; Robinhood competing with fellow fintech startup Coinbase
More than 4 million people have signed up to open accounts at Robinhood Markets Inc. as the brokerage app begins offering commission-free trading of Bitcoin and Ethereum today for the first time.
/goo.gl/Lixkai

Regions

Latvian central bank governor accuses banks of trying to oust him; Ilmars Rimsevics tells FT that bribery allegations are ‘totally ridiculous’
Neil Buckley in Riga – FT
Latvia’s embattled central bank governor Ilmars Rimsevics has claimed that he is the victim of a concerted campaign by several banks to have him removed from his position.
/goo.gl/5xUv5u

Icy Blast Hitting Europe Sets Up Winter’s Coldest Week
Jesper Starn, Rachel Morison – Bloomberg
Rare weather pattern may extend chill to middle of March; Abnormal cold to test energy markets across continent
A last chilly blast headed for Europe is setting up the coldest week this winter.
/goo.gl/aNxKXN

Russians, Bribes and Spies Raise the Scandal Bar for EU Banking; Kremlin shrugs off the turmoil of ‘our Latvian comrades’
Aaron Eglitis, Jake Rudnitsky, Ott Ummelas – Bloomberg
Even for a country long accused of funneling dirty Russian funds into the European Union, Latvia’s latest banking scandal is a doozy.
/goo.gl/ZCgoXj

Brexit

Legal limbo looms for banks in Brexit transition tumult
Huw Jones – Reuters
Even if Britain agrees a Brexit transition deal with the European Union next month, bankers and regulators say it is unlikely to provide the legal certainty they are seeking.
/goo.gl/RpftLY

Miscellaneous

After years of testing, The Wall Street Journal has built a paywall that bends to the individual reader
NiemanLab.org
Non-subscribers visiting WSJ.com now get a score, based on dozens of signals, that indicates how likely they’ll be to subscribe. The paywall tightens or loosens accordingly: “The content you see is the output of the paywall, rather than an input.”
/goo.gl/SHhmwA

The post Fed’s Dudley Warns on Dangerous ‘Speculative Mania’ Around Cryptocurrencies appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

A report from Deloitte showed that 9 out of 10 blockchain trials go nowhere. Only 8 percent of projects started still survive, with 92 percent of blockchain projects failing or started as an experiment, according to a blog post from Chris Skinner in thefinancer.com.~JK

Steve Sears is leaving Barron’s after 12 years. Here is his last column, titled “Making a Friend of Fear.”~JJL

Former John Lothian News intern Alison Fay is now a digital marketing specialist at Divi Resorts. Congratulations and best of luck to Alison as she starts her full-time career.~JJL

I will be voting for Renato Mariotti in the Illinois Democratic primary for Attorney General. You can count that as an endorsement. He understands the challenges we face as a state and nation and has the courage to do the right thing.~JJL

Hong Kong’s financial services industry gathered at the brand new HKEX Connect Hall last night to celebrate the Year of the Dog together.~JJL

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FCMs Big And Small Suffer Major Losses On Latest Black Monday
Jim Kharouf – JLN
On February 5, the historic trading day when the Dow Jones Industrial Average fell 1,175 points and the S&P 500 plunged 113 points, many customers suffered significant losses which forced several futures commission merchants to cover those deficits. The severity of the losses on that day was reflected in major drops in FCM customer segregated funds, some to alarming levels.
Among the biggest shocks was at RBC Capital Markets, which on February 5 posted a deficiency of funds in segregation of $1.13 billion. FCMs should never post a negative amount there, as it is a potential violation of CFTC rules.
/goo.gl/x5hFe7

****JB: In case you missed this last Friday.

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Bitcoin Bulls And Bears; Who’s Hot, Who’s Not On Crypto
Bloomberg
Bitcoin’s meteoric rise has made it hard for even those in the highest spheres of finance, technology and government to ignore – and many have an opinion about its approximate 723 percent gain in the past 12 months. People have debated the potential of cryptocurrencies since the mysterious Satoshi Nakamoto released a nine-page paper explaining the technology in 2009. Here’s a look at who’s on which side and what they’re saying.
/goo.gl/pszAdk

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‘Emperor’ stocks soar in China as Xi cleared for indefinite reign
Reuters
Chinese speculators pounced on stocks with “emperor” in their name on Monday, after the ruling Communist Party set the stage for President Xi Jinping to stay in office indefinitely.
reut.rs/2HKLozw

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Whistleblowers; AML Staffing; Unlicensed Crypto Exchange; FCA-CFTC FinTech Cooperation
Gary DeWaal – Bridging the Week
The United States Supreme Court made clear that, to take advantage of a key anti-retaliation protection of the Dodd-Frank Wall Street Reform and Consumer Protection Act, an employee whistleblower must identify potential securities law violations to the Securities and Exchange Commission, and not solely to his/her employer. This is not a good outcome for businesses. Separately, a bank was sanctioned over US $600 million by four federal regulators for not employing a sufficient number of anti-money laundering personnel, and capping the number of exception reports generated by its AML surveillance system to accommodate the reduced number of AML employees. Also, one non-United States financial services regulator endeavored to succinctly distinguish the functionality of different types of digital tokens that might be issued in connection with an initial coin offering and disclosed its current regulatory approach to each.
bit.ly/2HNiH4Y

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Friday’s Top Three
Friday’s top story was the JLN piece on FCMs in the aftermath of the February 5th market drop, followed by the link in the story to RBC’s Segregated Funds report. The story, FCMs Big And Small Suffer Major Losses On Latest Black Monday was one of the most read items of the year so far, and the link to RBC Statement of Daily Segregation Requirements and Funds in Segregation showed just how much interest there was in RBC, which posted a negative $1.13 billion balance in its residual interest. Third went to Crain’s Bitcoin, blockchain and cryptocurrencies will change the world, says DRW’s Wilson

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MarketsWiki Statistics Sponsored by Level Trading Field

121,269,644 pages viewed 23,012 pages 211,776 edits

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Lead Stories

Nearly Half of 2017’s Cryptocurrency ‘ICO’ Projects Have Already Died
David Z. Morris – Fortune
Last year was without a doubt the Year of Bitcoin, as exploding interest in cryptocurrency fueled a massive market runup. As if that wasn’t enough excitement, some speculators took the further leap to investing in cryptocurrency projects through a lightly regulated process called an “ICO,” or initial coin offering, in which a startup sells its own crypto token to raise money.
/goo.gl/dNRRxk

Trump’s SEC Makes Slow Progress on Trimming Rules; Incremental gains stand in contrast to early days of Trump administration, which were punctuated by a swift succession of executive orders aimed at deregulation
Tatyana Shumsky – WSJ
Jay Clayton, President Donald Trump’s pick to lead the U.S. Securities and Exchange Commission, can point to a series of small, targeted actions aimed at easing the regulatory burden for companies nearly 10 months into his tenure.
/goo.gl/AzBsUr

There’s Still No Good Way to Let a Big Bank Fail; A new Treasury report shows why ample equity is so important.
Editorial Board – Bloomberg
Once upon a time, President Donald Trump vowed to “do a very major haircut” on the Dodd-Frank Act. After a lengthy review, his officials have apparently concluded that the 2010 law’s approach to the failures of large banks was about right. In some ways, this reversal is a pity.
/goo.gl/w9EHhZ

Fidessa and Virtu announce liquidity partnership built on next-generation high-performance technology
Fidessa group plc
Fidessa group plc and Virtu Financial today announced a partnership to connect Virtu Systematic Internaliser’s customisable liquidity to Fidessa’s award-winning market access solutions.
/goo.gl/Z76YSD

The World Federation Of Exchanges Publishes Research Report Into Family Businesses & Listing
Mondovisione
The World Federation of Exchanges (“The WFE”), the global industry group for exchanges and CCPs, today published a report into family businesses, investigating the opportunities and challenges for family firms when considering public equity as a source of funding. The report – entitled Family Firms and Listing: Opportunities for Public Capital Markets – also includes a set of recommendations for stock exchanges to consider if they wish to attract more family firms to list.
/goo.gl/R1o1jg

UK must create a cap-and-trade pollution market; Even a 100 per cent shift to electric cars by 2040 will still require three new generations of internal combustion vehicles
Dan Lewis – London School of Economics and Political Science
PMQs on Wednesday opened with an attack on the Government’s air pollution strategy from the backbenches. It was by no means the first time in recent years the strategy has been challenged. It wasn’t even the first time that day. That morning, Government had – for the third time – lost a legal battle over its plan.
/goo.gl/MseosQ

Female fund manager bonuses up to 70% below men’s; Early gender pay gap filings reveal extent of discrepancy
Attracta Mooney – FT
Women working at UK asset managers receive bonuses that are as much as 70 per cent below their male colleagues in revelations that will pile pressure on a sector that has been branded “pale, male and stale” to tackle its wide gender pay gap.
/goo.gl/LwnmF6

What’s in a Broker’s Name? SEC to Address Titles Used When Advising Investors; Planned regulation would address use of terms such as ‘financial adviser’
Dave Michaels – WSJ
Wall Street’s chief regulator on Friday confirmed it plans to target potentially misleading titles that stockbrokers use when they advise retail investors.
/goo.gl/sp95Fp

Dollar-Rate Breakdown Exposes Foreign-Exchange Mystery; The U.S. currency was expected to strengthen amid rising interest rates. Instead, it’s down 11% since late 2016.
Chelsey Dulaney – WSJ
Stumped by a deepening slide in the dollar, analysts and investors are scouring past periods of U.S. currency weakness for clues to what might happen next.
/goo.gl/uyWMFD

Scammers are tricking people to log into fake cryptocurrency exchange sites, and they’re incredibly hard to spot
Antonio Villas-Boas – Business Insider
As cryptocurrencies like bitcoin surge in popularity, so do scams.
As seen in the cryptocurrency subreddit, scammers have found a way to make their website addresses (URLs) look just like the authentic URLs of some popular cryptocurrency exchange sites, like Binance and Bittrex.
/goo.gl/hAjMTp

Fed’s Crisis-Era, Bond-Buying Plan Was Largely Ineffective, Economists Say; Research paper takes aim at central bank’s purchases of long-term Treasury and mortgage debt
Michael S. Derby – WSJ
The Federal Reserve’s signature bond buying stimulus program undertaken during and in the wake of the financial crisis was largely a dud for the economy, argues a new paper authored by a group of prominent economists.
/goo.gl/RRK6JH

Crypto ‘noobs’ learn to cope with wild swings in digital coins
Anna Irrera – Reuters
After researching digital currencies for work last year, personal finance writer J.R. Duren hopped on his own crypto-rollercoaster.
/goo.gl/EzER9J

Fidelity Rethinks Star Stock-Picker System; Mutual-fund giant weighs shift to a team-based investing approach and changes to compensation system following complaints
Sarah Krouse and Kirsten Grind – WSJ
Fidelity Investments, the mutual-fund giant synonymous with the star stock picker, is now considering abandoning the investment process that made its managers famous, according to people familiar with the situation.
/goo.gl/WzRWcy

Exchanges, OTC and Clearing

SET Ready To Launch T+2 Settlement Cycle On March 2
Mondovsione
The Stock Exchange of Thailand (SET) and market participants have confirmed their readiness to move toward the T+2 settlement cycle (T+2) on March 2, 2018, after successfully completed all preparation. SET has become one of the leading exchanges in ASEAN to move toward the T+2 cycle. This will align the operational process with international practice including Europe, and the United states.
/goo.gl/CXfZNW

ETFs from Franklin Templeton new at SIX; The ETF segment of SIX Swiss Exchange extends its product offering. Today, SIX welcomes Franklin Templeton as a new ETF issuer.
SIX
Franklin Templeton accesses the Swiss market as ETF issuer with five smart beta ETFs for which Susquehanna is acting as a market maker and providing the liquidity. The five smart beta ETFs newly tradable as of today. They provide investors additional opportunities to diversify their portfolio with European as well as American and global underlyings. With this, SIX Swiss Exchange offers 1’321 ETFs from 23 different issuers for trading.
/goo.gl/kuym8B

ETF/ETC options: Reduction of strike price intervals, clarifications on last trading day and LEPOs
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG decided to reduce strike price intervals for selected ETF/ETC options and add further clarifications concerning the last trading day and Low Exercise Price Options (LEPOs) according to the attachment.
/goo.gl/LRs58P

Amendments to the Clearing Conditions and other related documents of Eurex Clearing AG
Eurex
This circular contains information with respect to Eurex Clearing’s service offering and corresponding amendments to the Clearing Conditions of Eurex Clearing AG and other related documents regarding the following topics:
/goo.gl/xNAeAp

ETF settlement: Change of settlement structure for ETFs of SSGA SPDR ETFs Europe I plc and SSGA SPDR ETFs Europe II plc
Eurex
Effective 12 March 2018, SSGA SPDR ETFs Europe I plc and SSGA SPDR ETFs Europe II plc will convert their Exchange Traded Funds (ETFs) traded on Xetra (MIC: XETR) and Börse Frankfurt (MIC: XFRA) to the International Central Securities Depository (ICSD) model.
/goo.gl/XSrJcp

Clearing of Section 871 (m) Internal Revenue Code transactions: Amendment to the Clearing Conditions of Eurex Clearing AG
Eurex
This circular outlines further developments on the general clearing framework of potential Section 871 (m) Internal Revenue Code (IRC) transactions (hereinafter: potential Section 871 (m)-transactions) and reminds all Clearing Members of Eurex Clearing AG (Eurex Clearing) to fulfill all requirements of the relevant regulations of the IRC with particular reference to all withholding and reporting obligations as laid out in Eurex Clearing circulars 028/17 and 074/17.
/goo.gl/sUhtdN

The Louvre Brings Ancient Relief Of Tehran Stock Exchange’s Logo To Iran
Mondovisione
The first large-scale exhibition by the Louvre Museum in Iran will be inaugurated on 5 March 2018 in the National Museum of Iran.
/goo.gl/PgbGTo

Goldman-backed startup Circle buys Poloniex cryptocurrency exchange
Reuters Staff
Goldman Sachs-backed payments company Circle has acquired U.S. cryptocurrency exchange Poloniex, Circle said on Monday, in an effort to cement its position as one of the leading companies in the world of blockchain technology.
/goo.gl/wxvbMF

South Africa’s JSE to launch project bonds in March
Reuters Staff
Africa’s largest bourse, the Johannesburg Stock Exchange (JSE), will begin listing “project bonds” from mid-March, an official said on Monday, giving institutional investors a window to invest in infrastructure projects.
/goo.gl/9t5RYW

Fintech

Vermeg Acquires Lombard Risk To Create Global Financial Software Leader
Vermeg
Vermeg, a European banking and insurance software solutions leader, has acquired Lombard Risk, the leading global provider of integrated regulatory reporting and collateral management solutions.
/goo.gl/S3B4J6

Revolut broke even in December, now has 1.5 million customers
TechCrunch
Fintech startup Revolut can’t stop and won’t stop growing. The company has had an amazing month of December with a huge increase in the total volume of transactions and signups. Because of that, Revolut broke even in December for the first time ever.
tcrn.ch/2CKJJpV

Don’t Let Blockchain Cost Savings Hype Fool You
Jason Bloomberg – Forbes
Last month, management consulting giant Accenture and McLagan, an operations benchmarking research firm, published the report Banking on Blockchain: A Value Analysis for Investment Banks.
/goo.gl/2k6Vob

9 out of 10 blockchain trials go nowhere
thefinanser.com
I just read an interesting new report from Deloitte about blockchain. They tracked the history of 86,034 blockchain projects hosted on GitHub since 2009 to pull out “key lessons” on where the blockchain industry is going and its long-term prospects. Here are some of the highlights:
bit.ly/2CKMUhq

A Computer Glitch Let a Trader Claim $20 Trillion in Free Bitcoin
Chris Morris – Fortune
An error in the price calculation system at Japanese cryptocurrency exchange Zaif has allowed some customers to claim digital tokens for free—including one who “purchased” $20 trillion worth of Bitcoin.
/goo.gl/6LFK5x

Women in Cryptocurrencies Push Back Against ‘Blockchain Bros’
Nellie Bowles – NY Times
When a cryptocurrency start-up that promised to revolutionize the fruit and vegetable industry shut down last month, it left behind one word on its website:
/goo.gl/39WDNe

Tech behind cryptocurrency unites with cannabis
Carleton English – NY Post
Dude, where’s my weed? It was only a matter of time before blockchain and cannabis — two of the latest Wall Street trends shaking up the old finance guard — would join forces, the Post reports.
/goo.gl/md9cZA

Litecoin Cash Forks But Cryptocurrency Investors Barely Notice
Nathan Reiff – Inveestopedia
It has been just a few days since the litecoin blockchain was forked, and so far, litecoin cash (LCC) has failed to make much of a splash. It appears that the offshoot of the popular digital currency has yet to draw in a following.
/goo.gl/XJoHBB

Fintech Revolut Britain’s first digital bank to break even
Emma Rumney – Reuters
Financial technology firm Revolut has become the first of a new breed of digital banks in Britain to break even on a monthly basis after a swelling user base and a suite of new products helped it bolster revenues in December.
/goo.gl/xjbr3w

Miner of Biggest Diamonds Buys Blockchain Firm as CEO Exits
Thomas Biesheuvel – Bloomberg
Lucara joins De Beers and Alrosa in exploring blockchain tech; William Lamb retires as CEO; replaced by co-founder Thomas
The mining company that found the biggest diamond in more than a century has joined the race to use blockchain technology to guarantee the quality and ethics of gem supplies.
/goo.gl/SVoGYi

Bitcoin Bitterness Starts to Make Messy Divorces Even Worse
Hannah George – Bloomberg
Cryptocurrencies make it easier for a spouse to hide assets; Volatility means it’s difficult to determine the valuation
Divorces are messy, and cryptocurrencies are helping to make them a whole lot more so.
/goo.gl/H3MFLH

Broadridge Tests Blockchain for Corporate America’s Ballots
Andrea Vittorio – BNA
Corporate America’s ballots are getting the blockchain treatment for the first time in a new test by proxy vote processor Broadridge Financial Solutions Inc.
/goo.gl/QTwsrE

A top Coinbase exec explains the master plan to turn the $1.6 billion; cryptocurrency exchange into the next Google
Becky Peterson – Business Insider
Coinbase is one of the hottest startups in tech — and with good reason. The cryptocurrency exchange hit $1 billion in annual revenue as this year’s bitcoin mania sent the popular digital coin surging up to almost $20,000, before it came back down.
/goo.gl/2TvdrJ

A British financial upstart broke even for the first time after it added crypto trading
revolut photo
John Detrixhe – Quartz
Revolut, a financial technology firm based in London, broke even in December for the first time after it launched a service for converting and holding cryptocurrencies. The company says it added 500,000 customers in the past two months, bringing the total to 1.5 million.
/goo.gl/9PBa8n

Politics

America’s Leaderless Foreign Policy Has Hit a Dead End; Attempts to steer the U.S. through global affairs by ignoring Trump have failed.
Hal Brands – Bloomberg
Independent counsel Robert Mueller has indicted 13 Russians for waging information warfare against the U.S. by tampering with the American electoral process in 2016. Sadly but predictably, America’s commander-in-chief did not respond by rallying his country to meet the threat. Rather, President Donald Trump went out of his way to dodge the question of Russian interference, while publicly attacking the officials and institutions that have had the temerity to confront that issue head-on
/goo.gl/rqiyqV

Media Sites That Don’t Purge Bots Should Be Fined, Senator Says
Craig Torres, Ben Brody – Bloomberg
Klobuchar thinks social media must invest more on prevention;Democrat sponsoring bill requiring social media ad disclosure
Social media giants Facebook Inc. and Twitter Inc. should be fined if they don’t weed out automated accounts, or bots, trying to influence U.S. public opinion, said Democratic Senator Amy Klobuchar.
/goo.gl/LbAHCL

Economists Take Dim View of a Range of Trump Policies in Survey
Katia Dmitrieva – Bloomberg
Budget gap expected to grow; immigration, trade moves negative; Respondents to NABE survey see short-term gains from tax cuts
Economists took a dim view of various Trump administration policies in a survey, foreseeing a growing budget deficit along with unfavorable impacts from actions on immigration and trade, even as they expect short-term positive effects from tax cuts and looser regulation.
/goo.gl/GM8gFC

Well-Heeled Investors Reap the Republican Tax Cut Bonanza
The Editorial Board – NY Times
After President Trump signed the Republican tax cut into law, companies put out cheery announcements that they were giving workers bonuses because of their expected windfalls from the tax reductions. The president and Republican lawmakers quickly held up these news releases as vindication for their argument that cutting the top federal corporate tax rate to 21 percent, from 35 percent, would boost workers’ incomes even as it added $1.5 trillion to the debt that future generations would have to pay off.
/goo.gl/dBPXPV

Regulation

U.S. appeals court revives Schwab Libor-rigging claims against banks
Jonathan Stempel – Reuters
Charles Schwab Corp and several of its mutual funds persuaded a U.S. appeals court on Friday to revive their lawsuit seeking to hold 17 banks responsible for manipulation of the benchmark Libor interest rate.
/goo.gl/fU6LRK

SEC Cools a Red-Hot Crypto Market by Picking Up the Telephone
Matt Robinson – Bloomberg
Firms shelve ICO plans after getting calls from regulator; Companies realized offerings might violate securities laws
Wall Street’s main regulator has repeatedly warned that the hot new market for initial coin offerings is probably full of fraud. Now it’s found an old-fashioned way to slow it down: picking up the telephone.
/goo.gl/PcffCq

Four Ex-Deutsche Bank Traders Evade U.K. Euribor Case
Karin Matussek – Bloomberg
German prosecutors won’t extradite men to face U.K. trial; Frankfurt court outruled extradition on time-bar grounds
Four traders charged in the U.K. for rigging interest-rate benchmarks at Deutsche Bank AG will escape prosecution after German officials refused requests to send them to London to face trial.
/goo.gl/5xE5BJ

Sebi, bourses probe possible foul play in PSB’s equity, derivatives trade; The fake notice bearing the regulator’s logo and purportedly addressed to National Stock Exchange (NSE) was circulated on various WhatsApp groups and other social media platforms on February 21
Press Trust of India
Markets regulator Sebi and stock exchanges are looking into possible manipulation in equity and derivatives trade of some public sector banks (PSBs) in the wake of circulation of a fake letter purportedly for misleading the investors.
/goo.gl/AZGrFZ

FCA bows to pressure on register
Damian Fantato – FT Advisor
The Financial Conduct Authority has bowed to pressure on the future of the Financial Services Register and said it will put forward proposals to address concerns later this year.
/goo.gl/2GBVDz

ASIC applies to appoint liquidator to Superfunded
ASIC
ASIC has applied to the Federal Court of Australia for the appointment of a liquidator to Superfunded Pty Ltd, a WA-based company that encouraged customers to set up self-managed super funds. (Superfunded)
/goo.gl/XgKvFk

Mifid II and the return of the ‘star’ analysts; Sweeping changes to the way research is paid for means lower ranking analysts are suffering
Hannah Murphy – FT
Sweeping changes to the way investors pay for research have brought predictions that UK analyst numbers will halve, while many European asset managers have already cut their research budgets.
/goo.gl/1sb8KH

Brokers and managers grapple with Mifid ‘inducement’ rule; Regulations restrict research disclosure to those who pay for it
Owen Walker – FT
Just after the market closed on February 1, US investment bank Jefferies delivered a sucker punch to Purplebricks, the UK online estate agent.
/goo.gl/6mUenJ

CFTC’s Division of Clearing and Risk Extends No-Action Relief for Shanghai Clearing House
CFTC
The Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) announced today that it has issued a no-action letter extending the relief originally provided to Shanghai Clearing House (SHCH) in CFTC Letter 16-56. The relief, as extended by CFTC Letters No. 17-26 and 17-62, expires February 28, 2018. The new extension will last until the earlier of February 28, 2019 or the date on which the CFTC exempts SHCH from registration as a derivatives clearing organization (DCO).
/goo.gl/Cz9Y9B

Investing and Trading

Try timing the market but accept your limitations; There are limits on an ability to judge future probabilities and never pay too much
John Authers – FT
Timing the market is a mug’s game. Trying to spot when a market has hit bottom or top and leap to another is prohibitively difficult, and it costs money. In the long run, all that happens to market-timers — unless they are very, very lucky — is that they spend much more in trading costs and end up worse off than if they had stayed put all along.
/goo.gl/B2JsW3

Buffett says ‘terrible mistake’ for long-term investors to be in bonds
Trevor Hunnicutt – Reuters
Billionaire Warren Buffett prodded ordinary investors on Saturday to stay invested in U.S. stocks, ignoring price swings, guidance from people with fancy credentials and the temptation to load up on bonds.
/goo.gl/6hfP62

Bitcoin’s wild trip fails to shake cryptocurrency believers; Retail investors who believe blockchain is a key innovation say they ignore price swings
Chloe Cornish – FT
Scott Weiss bought bitcoin when it peaked at over $19,000 in December. Just days later the cryptocurrency began a lurch lower that left it languishing below $6,000 at the start of this month and many declaring the bubble had burst. The 48-year-old lawyer from Arizona insists he is unfazed.
/goo.gl/dAJNKZ

Goldman Says Stocks May Dive 25% If 10-Year Yield Hits 4.5%
Joanna Ossinger – Bloomberg
‘Stress test’ outcome could sink S&P 500 to 2,155-2,298 range; Measures outlier move vs Goldman’s 3.25% year-end scenario
If the 10-year U.S. Treasury yield hits 4.5 percent by year-end, the economy would probably muddle through — stocks, not so much, according to Goldman Sachs Group Inc.
/goo.gl/LZpy4K

Commodities trader AOT Energy faces key departures, mulls sale
Liz Hampton – Reuters
Senior executives are leaving Swiss commodities trader AOT Energy amid a shrinking credit line and losses in some trading operations, sources familiar with the matter said on Friday.
/goo.gl/DjX4aN

Investors’ Zeal to Buy Stocks With Debt Leaves Markets Vulnerable; Investors have borrowed a record $642.8 billion against their portfolios as they try to pocket bigger gains by ramping up their exposure to stocks
Michael Wursthorn and Chelsey Dulaney – WSJ
Investors borrowing record sums to bet on stocks exacerbated this month’s selloff, after they were hit with calls to reduce those obligations and forced to sell shares to raise cash.
/goo.gl/homCzA

Institutions

Bank of America cautions on potential cryptocurrency threat; US lender includes warning for first time in ‘risk factors’ for investors
Alistair Gray in New York – FT
Bank of America has warned it could face “substantial” costs as it deals with cryptocurrencies, a sign of the potential threat to the world’s largest financial institutions posed by the rise of bitcoin and its alternatives.
/goo.gl/ZNgG59

Imagine a World with No Bank Bonuses; ight shareholders and employees actually be better off?
Lionel Laurent – Bloomberg
In the financial world, bonus disappointment is cause for anguish, outrage, and sometimes a job change. Rather than enjoy guides on how to splurge on a foreign bolt-hole, victims are left instead to write pseudonymous columns about how Jeremy Corbyn’s views now pervade the corner office.
/goo.gl/NfPDw3

Deutsche Bank lines up EUR2bn float of asset management unit; DWS listing is key to John Cryan’s strategy as investment banking revenues fall
Olaf Storbeck – FT
Deutsche Bank has launched its plan to float a minority stake its asset management division DWS in March, a cornerstone in the strategy for chief executive John Cryan as he feels the pressure from sinking revenues from investment banking.
/goo.gl/FxddKv

Quantitative hedge funds take February beating; Computer-driven trend followers whipsawed as equity rally unravelled this month
Robin Wigglesworth and Lindsay Fortado in New York – FT
Computer-driven, trend-following hedge funds are heading for their worst month in nearly 17 years after getting whipsawed when the stock market’s steady soar abruptly reversed into one of the quickest corrections in history earlier in February.
/goo.gl/zDxK6S

JPMorgan CFO Emerges as Contender to Succeed Dimon; Recent executive shuffle raises profile of Marianne Lake, one of Wall Street’s most senior women
Emily Glazer – WSJ
When JPMorgan Chase JPM 2.03% & Co. tried last month to clarify the question of when Chairman and Chief Executive James Dimon would step down, the firm got a lot more questions about who could fill one of the most powerful roles on Wall Street.
/goo.gl/FHREsP

Regions

China steel and iron ore futures soar on new pollution curbs; Biggest steel-producing region to extend winter production control
Gabriel Wildau in Shanghai – FT
Steel and iron ore prices rose to year-to-date highs on Monday after China’s top steel-producing region announced it would extend winter production curbs intended to cut air pollution.
/goo.gl/dhYhxk

2,000 Confiscated Bitcoins Create a Storage Puzzle in Finland
Kati Pohjanpalo – Bloomberg
Authorities given virtual-currency guidelines by Treasury; Treasury says cryptocurrencies should be stored offline
Finland is trying to figure out how to handle the roughly 2,000 Bitcoins authorities in the country have confiscated.
/goo.gl/oYbHZM

The Blockchain Won’t Save Venezuela; The petro is just a way to hide new international debt behind crypto mumbo-jumbo.
Matt Levine – Bloomberg
I don’t know why Venezuela’s “petro” cryptocurrency annoys me so much. It is partly that the promise of cryptocurrency was supposed to be trustless decentralization: You trust the thing because of objective certainties embedded in its open-source code, not because some authority tells you to. Meanwhile the petro is just the opposite. For one thing, you can’t trust the code; in fact Venezuela’s government can’t even get its story straight on what sort of code it is:
/goo.gl/ZZbmwj

The charitable giving model is an undemocratic use of funds; The UK’s Gift Aid gives the wealthy more sway in the allocation of scarce resources
Merryn Somerset Webb – FT
If you haven’t been in the habit of making regular donations to Oxfam, you might now be feeling a little smug. After all, you haven’t been suckered into misdirecting your cash towards what is now known to be an unpleasantly imperfect organisation. None of your money has been spent on salaries for employees who reckon that the perks of a foreign posting include the foreign prostitutes.
/goo.gl/6g5yB8

Chinese Bitcoin Mining Firm Bitmain Made $3 to $4 Billion in Profits Last Year, Says DAVID Z. David Z. Morris – Fortune
Bitmain, a privately held Chinese firm that manufactures Bitcoin mining hardware and runs its own mining operations, made $3 billion to $4 billion in profits in 2017, according to estimates by Bernstein Research released this week.
/goo.gl/adxLrY

Anbang and the Financialization of China’s Economy; The trickier part of China’s war on debt is just getting started
Nathaniel Taplin – WSJ
China’s Anbang Insurance went from zero to too-big-to-fail in the blink of an eye. It is a lesson in how quickly China’s financial problems grow—and how much is left to clean up.
/goo.gl/r4QyfZ

Hong Kong’s Dilemma Is What to Do With Its Massive Cash Pile
Eric Lam – Bloomberg
Territory due to announce fiscal-year balance on Wednesday; PwC says surplus to swell to $21.5 billion on stocks, property
As Hong Kongers suffer through the world’s least affordable property market, their government is enjoying the flip-side of the real-estate and stock-market boom: One of the biggest fiscal surpluses anywhere.
/goo.gl/zCBbYM

Mexico slaps billionaire’s steel company with fine for stock manipulation
Michael O’Boyle, Christine Murray – Reuters
Mexico’s securities regulator has imposed one of its biggest fines ever for market manipulation on steel company Industrias CH, owned by billionaire Rufino Vigil Gonzalez, government data showed.
/goo.gl/uGj6Ua

Australia’s CBA disputes regulator’s new rate-manipulation allegations
Reuters Staff
Commonwealth Bank of Australia (CBA.AX) said on Monday it will dispute new claims by the Australian corporate regulator that doubles the number of allegations against the bank over rate-manipulation.
/goo.gl/afKu9b

Miscellaneous

Wool Is Cool Again, and the Prices Are Shear Madness; Brands from Adidas to Lululemon and Under Armour are touting wool’s soft feel and odor-resisting properties
Lucy Craymer – WSJ
Wool isn’t just for winter wear anymore, and its use in everything from shoes to underwear briefs is pushing prices of merino, the most popular type of wool fiber for clothes, to near-record highs.
/goo.gl/e6DY88

The post Nearly Half of 2017’s Cryptocurrency ‘ICO’ Projects Have Already Died appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Today is the 10th anniversary of the Nasdaq OMX deal that transformed Nasdaq and set the foundation for its timely position as a leading purveyor of financial technology around the world.

The OMX deal gave Nasdaq a global exchange and clearing technology business. It helped Nasdaq put down permanent roots in Stockholm, where Nasdaq before had had difficulty establishing a permanent beachhead in Europe.

For me, it always seems Nasdaq was trying to match the moves of NYSE in a game of catch-up. However, with the OMX deal, that changed. And now with Adena Friedman leading Nasdaq, the company is well positioned for the changes that are happening around the world in established and new markets.

Bob Greifeld has left Nasdaq and Magnus Böcker has left this life, but the legacy they left behind is something they both should be proud of. This was a transformative deal for both firms and made Nasdaq and OM truly global players.~JJL

Here are three stories related to the Nasdaq OMX anniversary:

Reflections On A Technology Migration
Interview with Nasdaq leadership on the Nasdaq/OMX combination 10-year anniversary
Nasdaq OMX 10th Anniversary

FOW is reporting that with a week to go they already have a record number of pre-registrations for FOW Trading Amsterdam.~JJL

Flow Traders runs a summer business course to encourage those interested in careers in trading to check it out. The program runs from May 31 to June 2 in their New York office.~JJL

++++

CFTC Steps Up Enforcement Against Fraud, Market Manipulation; Regulator to file ‘more than 10’ cases in coming weeks, bringing annual tally to a record
Gabriel T. Rubin – WSJ
U.S. derivatives regulators are expected to file “more than 10” fraud and market-manipulation cases in the next weeks as the Commodity Futures Trading Commission chairman implements his back-to-basics approach, according to a person familiar with the CFTC’s enforcement operation.
/goo.gl/42Nhhf

***** Lots of cases means lots of easy pickings.~JJL

++++

Crypto’s Hottest Hires Aren’t Millennials. They’re Banking Cops.
Annie Massa – Bloomberg
Recent appointments of notable regulators are just the start; Ventures also have recruited prosecutors and other authorities
Veteran Wall Street enforcers are landing new roles on a wild frontier: virtual currencies. A growing number of crypto startups are adding former regulators and other government authorities to their payrolls, a practice that could help them head off or prepare for stricter rules. Ventures have snapped up ex-prosecutors, national security officials and at least one former senior diplomat — all of whom may prove handy as nations decide whether to embrace or outlaw digital money.
/goo.gl/uYKbhF

***** See above. Good idea!~JJL

++++

Monday’s Top Three
Today’s top three were led by the JLN piece on the damages caused by the February 5 market drop on FCMs in FCMs Big And Small Suffer Major Losses On Latest Black Monday – the second day it was the top read piece. (The link within the story to RBC’s daily financial statements was a notable fourth). The second most read piece was Chris Skinner’s blog in The Finanser 9 out of 10 blockchain trials go nowhere, based on a Deloitte report. And third was Bloomberg’s Bitcoin Bulls and Bears: Who’s Hot, Who’s Not on Crypto

MarketsWiki Statistics Sponsored by Level Trading Field

121,297,045 pages viewed 23,018 pages 211,818 edits

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Lead Stories

Self-Proclaimed Bitcoin Inventor Accused of Swindling $5 Billion of Cryptocurrency
Jef Feeley – Bloomberg
Self-proclaimed Bitcoin inventor accused of fraud in scheme; Computer-security expert’s family lays claim to assets
Craig Wright, the self-proclaimed inventor of bitcoin, is accused of swindling more than $5 billion worth of the cryptocurrency and other assets from the estate of a computer-security expert.
/goo.gl/JUNjQv

Mark Phelps to Become Group CEO of G. H. Financials, Succeeding Mark Ibbotson Who Becomes Non-Executive Chairman
BusinessWire
G. H. Financials, a leading independent clearing firm for exchange-traded derivatives, announces the promotion of Mark Phelps to Group Chief Executive Officer, effective 2nd April 2018.
/goo.gl/Tggiu9

EU says stands ready to regulate crypto-currencies
Huw Jones – Reuters
The European Union stands ready to regulate crypto-currencies if risks from the sector are not tackled at the global level, the bloc’s financial services chief said on Monday.
/goo.gl/93cqoT

Meet the crisis expert who is saving Libor; Timothy Bowler has fought for crisis-hit homeowners and Puerto Rico, but the real test is his new job leading ICE Benchmark Administration
Samuel Agini – Financial News
Timothy Bowler is used to high-profile jobs that come under the glare of public scrutiny. Even after overseeing the unwind of the US federal government’s post-financial-crisis bailout programme and advising on Puerto Rico’s fiscal woes, however, the new president of ICE Benchmark Administration could be forgiven for flinching at first sight of his latest $350tn problem.
/goo.gl/Pg9iJC

CFETS and NEX announce the launch of ‘CFETS FX2017’; a next-generation trading platform for the Chinese FX market
NEX
NEX announces that it has partnered with China Foreign Exchange Trade System (CFETS), China’s interbank market trading platform and infrastructure provider, to launch ‘CFETS FX2017’ (“FX2017”), a next-generation trading platform for the Chinese foreign exchange (FX) market.
/goo.gl/E9BnCH

This Paris-Based Hedge Fund Has Thrived in Market Rout
Blaise Robinson – Bloomberg
Siver Time funds are up YTD while the Stoxx 600 has dropped; Market selloff is ‘reality check’ for passive investors
It looks like the revenge of long-short equity strategies has begun. While global equity markets tumbled in February as a rapid rally in government bond yields fueled panic among investors and sparked a jump in volatility, Silver Time Partners was thriving.
/goo.gl/hRrG22

Investors Chasing Stable Returns Should Buy Firms Run by Women
Frances Schwartzkopff – Bloomberg
Return on capital is more stable, Nordea researchers find; Diversity helps companies adapt to changing circumstances
When it comes to gender diversity, it’s hard to compete with the Nordics. The region is home to the world’s three most gender-equal nations: Iceland, Norway and Finland, according to the World Economic Forum. (Sweden places 5th out of 144 while the U.S. ranks 49th.) So Nordic findings in how gender equality affects areas such as corporate life and investing may offer a glimpse of things to come for other corners of the globe.
/goo.gl/Vujj9p

Europe’s top 4 investment banks hire staff for busier times; Recruitment spree signals end to cutbacks following years of restructuring
Laura Noonan, Investment Banking Correspondent – FT
Europe’s top four investment banks have begun to increase staff numbers for the first time since 2015 to capitalise on improving market conditions after years of restructuring.
/goo.gl/MaJNQQ

$1 Trillion Fund Committed to U.K. No Matter What Brexit Outcome
Sveinung Sleire, Mikael Holter – Bloomberg
Norway wealth fund delivered its best return on record in 2017; The fund’s exposure to stocks buoyed its performance last year
The world’s biggest sovereign wealth fund will continue to invest in the U.K. no matter what the outcome of Brexit talks.
/goo.gl/8pVpgB

China’s Crypto Exchanges Didn’t Just Survive – They’re Thriving
Wolfie Zhao – Coindesk
It began like this: officials from the People’s Bank of China stepped into the offices of the largest crypto exchanges in the country and sat down with their executives.
/goo.gl/eVMzAm

China to Crack Down on Cryptocurrency Trading Loophole
Bloomberg News
New measures are aimed at blocking access to offshore venues; Country has already banned domestic digital-currency exchanges
China is opening a new front in its battle against cryptocurrencies, targeting platforms that allow the nation’s investors to trade digital assets on overseas exchanges, people familiar with the matter said.
/goo.gl/3JmUbU

China’s Derivatives Guru Seeks Commodity-Benchmark Dream Abroad
Alfred Cang, Andrea Tan – Bloomberg
Asia Pacific Exchange will start in May in Singapore: CEO Zhu; Refined palm oil futures will be venue’s first contract
One of the founders of China’s derivatives market is going offshore to move closer to his dream of developing global commodity benchmarks in Asia.
/goo.gl/pxZBa1

Exchanges, OTC and Clearing

India’s BSE waives transaction fees for stocks in benchmark index
Reuters Staff
India’s second-biggest stock exchange, BSE Ltd, said it would waive transaction fees on stocks in its flagship S&P BSE Sensex 30 index in an effort to encourage retail investors to participate in “financially sound companies”.
/goo.gl/f836qu

Hong Kong’s bourse to report best year since 2015 as listing, trading increase; The operator of Hong Kong stock exchange is likely to report a profit of HK$7.34b
Enoch Yiu – South China Morning Post
Hong Kong Exchanges and Clearing is likely to report its best financial year since 2015 as more investors poured into the city’s bourse in the past year, while more companies flocked to raise capital through initial public offerings.
/goo.gl/x3ugxy

NSE sees IPO pipeline by start-ups, e-tailers; Bourse expects to help firms raise $50 billion as investors exit
Karan Choudhury & Ajay Modi – Business Standard
The country’s technology start-ups and e-commerce players may soon be the new entrants on the National Stock Exchange (NSE).
/goo.gl/RaK48m

NEX Group launches Chinese FX trading platform with CFETS; CFETS chose NEX Group in June 2016 to deliver underlying technology for new spot, forwards and swaps FX trading platform.
Hayley McDowell – The Trade
NEX Group has partnered with China Foreign Exchange Trade System (CFETS) to launch a trading platform for the Chinese FX market.
/goo.gl/5txRWY

FX Futures, FX Rolling Spot Futures and FX Options: Fee holiday for transaction fees from 1 March 2018 until 30 April 2018
Eurex
As of 1 March 2018, Eurex Clearing decided to introduce a fee waiver for transaction fees for FX Futures, FX Rolling Spot Futures and FX Options from 1 March 2018 until 30 April 2018.
/goo.gl/5X1NGn

Deutsche Börse welcomes JP Morgan Asset Management as new ETF issuer; Two bond index and three active ETFs listed for launch on Xetra
Deutsche Börse
Exchange-traded funds of the issuer JP Morgan Asset Management have been tradable for the first time since Tuesday via Xetra and the Frankfurt Stock Exchange. The product offering includes two bond index ETFs as well as three active ETFs that enable investors to invest in selected alternative beta strategies.
/goo.gl/QwiZse

First IPO in Scale 2018: STEMMER IMAGING AG new at the Frankfurt Stock Exchange
Deutsche Börse
With STEMMER IMAGING AG (ISIN: DE000A2G9MZ9 ), the first company this year has gone public in the SME segment Scale on the Frankfurt Stock Exchange. The shares of STEMMER IMAGING were trading at EUR 36.00. The issue price was 34.00 euros.
/goo.gl/K9U6NG

CC&G and CCP Austria sign landmark CCP clearing agreement
London Stock Exchange Group
MTS BondsPro bridges global markets with launch of 22-hour trading day; CC&G will provide CCP Austria with Clearing System services across different asset classes
No concentration risk: each entity remains fully responsible for its own CCP activity
CC&G, part of London Stock Exchange Group, and CCP Austria have today entered into a partnership agreement whereby CC&G will provide technology – driven CCP Clearing and Risk Management services to CCP Austria. The five-year agreement is customer-focused and each legal entity will remain fully responsible for its own distinct CCP activity. This agreement adds a new dimension to CCP cooperation by allowing CCP Austria to focus on its core commercial activities while utilizing CC&G’s trusted and reliable IT architecture.
/goo.gl/guopcG

MTS LAUNCHES GOVERNMENT BOND TRADING VENUE FOR SLOVAKIA
London Stock Exchange Group
MTS, part of London Stock Exchange Group (LSEG), today announces that it has launched an electronic interdealer trading venue for Slovak government bonds on MTS Cash.
/goo.gl/xCniNM

Fintech

Natwest to launch new fintech accelerator in London in April
Jasper Jolly – City AM
Natwest bank will launch new fintech accelerators in four cities across the UK in April, including one in the capital, it announced today.
/goo.gl/tk2rDd

Chartis Research Recognizes Hanweck as a RiskTech Quadrant® “Best-of-Breed” Provider for Hedge Fund Risk Management Technology
Hanweck
NEW YORK, Feb. 26, 2018 (GLOBE NEWSWIRE) — Chartis Research has named Hanweck as a RiskTech Quadrant® “Best-of-breed” solution for Hedge Fund Risk Management Technology. Chartis is an independent research and advisory firm that provides technology and business advice to the global financial risk management industry.
/goo.gl/eDd7Jo

Bitcoin miners turn Quebec’s cheap energy into cold cash
Steve Dent – Engadget
Bitcoin mining is a weird industry. Vast banks of dedicated computers solve complex equations to generate hashes worth a fraction of a coin, consuming huge amounts of power in the process. For such operations to be economically feasible nowadays, miners need the cheapest electricity possible.
/goo.gl/5hU7Cx

The Man Who Claimed to Invent Bitcoin Is Being Sued for $10 Billion; Craig Wright is being sued Ira Kleiman, brother of deceased coder Dave Kleiman and representative of his estate.
Jordan Pearson – Motherboard
Bitcoin’s origins are shrouded in mystery, but two people have lurked at the edges of its mythology for years: A paralyzed coder named Dave Kleiman who died in 2013 as a result of complications from an illness, and Australian Craig Wright, who claimed to be Bitcoin’s anonymous creator in 2016.
/goo.gl/1JrvQw

Crypto Legend Who Bought Pizza With 10,000 Bitcoin Is Back At It
Camila Russo – Bloomberg
It’s one of the best-known cryptocurrency legends: The guy who bought two pizzas with 10,000 Bitcoin back in 2010 to prove the digital currency worked. Now he’s at it again.
/goo.gl/Y6YL6t

BlackRock’s Turnill Sees ‘Promising’ Potential for Blockchain
Eric Lam – Bloomberg
BlackRock Inc. still sees cryptocurrencies as too volatile for all but the most adventurous of investors, though the investment company is warming to the long-term potential of the underlying blockchain technology.
/goo.gl/uSojTt

Politics

Draghi urges lawmakers to finalise rules for euro clearers ahead of Brexit
Claire Jones – FT
Mario Draghi has called on lawmakers to finalise new rules on central clearing of financial transactions denominated in euros ahead of Brexit.
/goo.gl/3Szig7

Regulation

Prosecutor to examine RBS’s scandal-hit division
Michael Glackin – The Times
Detectives investigating complaints against Royal Bank of Scotland’s controversial Global Restructuring Group have handed a file to the Crown Office.
/goo.gl/KpCWLW

Remarks of Commissioner Brian Quintenz before the Structured Finance Industry Group Vegas Conference
CFTC
Good morning. Thank you for that very kind introduction.
/goo.gl/KFwvss

How my bitcoin frustration led to a cryptocurrency conversion; Britain should grasp the opportunity to become a leader in blockchain regulation
Pierre Lagrange – FT
A few months ago, when bitcoin mania was at its height, I decided to teach my teenaged children an investment lesson via a cryptocurrency game. I would buy each of them a bitcoin for Christmas; they would have to hold on to it for a year and then they could keep it or sell it. After, say, five years, we would see which of them had been the most canny in playing this financial game.
/goo.gl/C5jiAT

SEC Commissioner Criticizes Idea of Curbing Shareholder Lawsuits; Regulator shouldn’t give public companies a shortcut to impose mandatory arbitration, says Democrat Robert Jackson Jr.
By Dave Michaels – WSJ
Public companies hoping that regulators will show them a shortcut to stifling shareholder lawsuits should instead have to go through a long slog, a Democratic member of the Securities and Exchange Commission said Monday.
/goo.gl/bSQf2q

FINRA Requests Comment on Proposed New Rule Governing Outside Business Activities and Private Securities Transactions
FINRA
FINRA seeks comment on a proposed new rule to address the outside business activities of registered persons. The proposal is the result of FINRA’s recent retrospective review of FINRA’s rules governing outside business activities and private securities transactions, FINRA Rule 3270 (Outside Business Activities of Registered Persons) and FINRA Rule 3280 (Private Securities Transactions of an Associated Person), respectively. The proposed rule would replace FINRA Rules 3270 and 3280 and is intended to reduce unnecessary burdens while strengthening investor protections relating to outside activities.
/goo.gl/bTHC4M

Cybersecurity Experts Gather for FINRA Conference
FINRA
Cybersecurity experts and regulators gathered in New York City on February 22, 2018 to focus on key ways the financial services industry can maintain cybersecurity. Check out some of the things discussed in this recap of FINRA’s Cybersecurity Conference.
/goo.gl/m179Nr

Hong Kong’s Securities And Futures Commission Obtains Disqualification And Compensation Orders Against Former Chairman And Directors Of Starlight
MondoVisione
The Court of First Instance has ordered Starlight Culture Entertainment Group Limited’s (Starlight) former chairman Mr Tong Shek Lun and two former executive directors, Ms Kinny Ko Lai King and Ms Regina Chung Wai Yu, to pay a sum of US$890,241.37 as compensation to Starlight following findings of misconduct in connection with their handling of the company’s disposal of subsidiaries in September 2008 (Notes 1, 2, 3 & 4).
/goo.gl/cr4yDM

UK financial regulator defends role after pressure to widen remit; Treasury Select Committee has pushed for more focus on promoting competition from PRA
Oliver Ralph – FT
The head of the UK’s financial regulator has launched a staunch defence of its priorities after MPs demanded it should have a wider remit.
/goo.gl/nm7Vuc

Investing and Trading

World’s largest asset manager says get ready to ‘stomach complete losses’ in cryptocurrencies
Evelyn Cheng – CNBC
Investors should only consider cryptocurrencies such as bitcoin if they are prepared to lose everything, BlackRock Investment Institute said in its weekly report Monday.
/goo.gl/pV54FG

Marxism Has Cornered the Junk-Bond Market
Passive investing doesn’t discriminate between individual winners and losers.
Jim Blanco – Bloomberg
He’s still around. Photographer: Johannes Eisele/AFP/Getty Images
In 2016, analysts at Sanford C. Bernstein & Co. offered a powerful critique of passive investing.
/goo.gl/TJTPfD

Provident Soars the Most in 29 Years as It Settles With FCA
Stefania Spezzati – Bloomberg
Lender reaches agreement with FCA on probe linked to Vanquis; Company seeks to raise about $419 million in a rights issue
Provident Financial Plc settled of one of the regulatory probes that has hobbled the U.K. subprime lender since last summer, driving the shares up the most in almost 29 years.
/goo.gl/ZT9Cwy

King Cash Threatens the Reign of Credit Markets From U.S. to Europe
Sid Verma, Luke Kawa – Bloomberg
Higher rates on U.S. risk-free curb appeal of high grade: Citi; Euro credit sensitive to real yield outlook in dollars
Investors reaching for yield are now finding it’s less of a stretch. Global credit markets are on the cusp of a post-crisis regime shift as higher rates on short-dated U.S. Treasuries challenge the investment case for high-grade corporate bonds — on both sides of the Atlantic.
/goo.gl/VYW2oT

ProShares Slashes Leverage on Surviving Volatility Products
Luke Kawa – Bloomberg
Options owners likely to face large losses on SVXY, UVXY moves; ProShares’ changes are subject to regulatory approval
After this month’s volatility earthquake caused the blow-up of a number of exchange-traded products linked to Wall Street’s fear gauge, an issuer of similar surviving funds is trying to prevent any aftershocks.
/goo.gl/rxhAvx

Fundamentals don’t matter to new breed of oil speculator; Emergence of investors who look for signals in the price action, as well as currency and bond markets
Gregory Meyer in New York – FT
Investors have built a billion-barrel bet on higher oil prices. But they are a different breed of bull than years past.
/goo.gl/VsgbFx

Dividends Pick Up Steam; Payouts are rising, but higher bond yields threaten to diminish the allure of high-dividend stocks
Michael Wursthorn – WSJ
Dividends are on the rise when investors have fewer reasons to buy the stocks that pay them out.
/goo.gl/3QfMHk

Choppy Markets Grant Hedge Funds Their Wish; Caxton, Graham Capital and other funds post gains this year after losses in 2017
Laurence Fletcher – WSJ
For years, hedge funds have been able to blame their lackluster performance on central bank interference in markets. As expansionary monetary policy programs wind down, a turbulent start to 2018 has provided the kind of conditions some of these funds have been craving.
/goo.gl/AsLjna

Institutions

JPMorgan Buys Rights for HQ From Michael Dell Partnership
David M Levitt – Bloomberg
JPMorgan Chase & Co. has acquired the bulk of the air rights it needs to build its new headquarters tower at 270 Park Ave. in midtown Manhattan from a partnership that controls Grand Central Terminal’s unused space, a person with knowledge of the transaction said.
/goo.gl/KJ5Acn

Goldman May Sell Its $1.4 Billion New European HQ in London
Jack Sidders – Bloomberg
Bank is considering a sale of the building before it moves in; London building has enough space for about 9,600 workers
Goldman Sachs Group Inc. is considering a sale-and-leaseback of its new European headquarters in London and the building could sell for more than 1 billion pounds ($1.4 billion), people with knowledge of the plan said.
/goo.gl/qaTTJU

William Blair accuses four former employees of theft
Lynne Marek – Crain’s Chicago Business
Chicago financial firm William Blair sued one of its former top financial advisers and a team of other employees who quit with him this month to form a new firm.
/goo.gl/wnbwHk

Deutsche Bank Plans Saudi, Dubai Hires as Sovereigns Drive Deals
Matthew Martin – Bloomberg
Lender sees good pipeline of bond sales, IPOs, privatizations; Also targeting Middle East as priority for wealth management
Deutsche Bank AG is expanding in Saudi Arabia and the United Arab Emirates as the lender expects sovereign bond sales and initial public offerings to drive deals this year.
/goo.gl/vcjQdC

Rothschild’s chairman to hand bank’s dynastic reins to son; Change coincides with effort to help ride out lean periods in European M&A market
Hannah Murphy in London – FT
David de Rothschild is stepping aside as chairman of Rothschild this summer to pass the reins to his son Alexandre in a long-awaited changing of the guard at the Franco-British investment bank.
/goo.gl/NRsHp9

Woodford’s flagship fund nears limit on unquoted securities; The £7.2bn fund had unquoted securities accounting for 9.69% of portfolio in January
Peter Smith in London – FT
Neil Woodford’s flagship fund is close to hitting a 10 per cent regulatory ceiling on the proportion of his fund that can be invested in unquoted securities, the latest concern for the British investment manager who has endured more than £1.2bn of redemptions since May as a string of investments soured.
/goo.gl/WFTYu7

Regions

Russian millions laundered via UK firms, leaked report says; Denmark’s biggest bank believes cash was funnelled through British companies by people linked to Vladimir Putin’s family and the FSB spy agency
Luke Harding – The Guardian
A Danish bank accused of money laundering shut down Russian accounts after concluding that they were being used to funnel cash through British companies by members of Vladimir Putin’s family and the FSB spy agency, according to leaked reports.
/goo.gl/WFe1Ry

Rome Blanketed By Snow as Arctic Storm Sets Seasonal Records
AP
The Arctic storm dubbed the “Beast from the East” saw temperatures across much of Europe fall Monday to their lowest level this winter and even brought a rare snowstorm to Rome, paralyzing the city and giving its residents the chance to ski, sled and build snowmen in its famous parks and piazzas.
/goo.gl/h4ihyF

German Court Ruling Puts Millions of Diesel Cars at Risk of Ban
Karin Matussek – Bloomberg
Stuttgart, Dusseldorf told to develop plans to cut pollution; Judges let stand court rulings that may lead to diesel-car ban
Germany’s top administrative judges put millions of diesel cars at risk of being banned from city centers, a ruling that sent the shares of the country’s carmakers lower.
/goo.gl/ksMjvJ

Jeweler Files for Bankruptcy as PNB Fraud Rises to $2 Billion
Jeanette Rodrigues, Dawn McCarty – Bloomberg
Firestar, affiliates file for bankruptcy in New York; Punjab National Bank shares plunge most since 2004 in Mumbai
The international jewelry business that’s part of the empire controlled by Nirav Modi, a billionaire accused of masterminding India’s biggest bank fraud, has filed for bankruptcy in the U.S. just as the Indian lender at the heart of the scam revised up its fraud estimate.
/goo.gl/u1f15M

Brexit

Credit Suisse to Move 250 Investment Bankers in First Brexit Shift
Jan-Henrik Foerster – Bloomberg
Swiss Bank said to sour on Paris as possible Brexit location; Lender is said to be focused on cities of Madrid and Frankfurt
Credit Suisse Group AG plans to move about 250 investment banker positions under the first phase of its Brexit planning, according to two people with knowledge of the matter.
/goo.gl/111LjD

The post Self-Proclaimed Bitcoin Inventor Accused of Swindling $5 Billion of Cryptocurrency appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

It is with sadness I report the passing of Betty Bergstrom, mother of my wife, Cheryl Lothian and of my brother-in-law and JJLCO CIO, Jeff Bergstrom. She died Saturday in Chicago at the age of 86.

Betty was a natural leader, an elected official, non-profit executive and advocate for women and children. Here is the obituary we are submitting to the newspapers in Chicago and Phoenix.~JJL

Do you know what Vermeg is? The firm just bought Lombard Risk and is expanding its footprint. We have a new page up on the company in Marketswiki.~JK

Via the funny SEC office in Forth Worth’s Twitter feed: If you have a problem hoarding old magazines, then it’s clear that you have issues.~JJL

++++

The Monetary and Fiscal History of Latin America
Becker Friedman Institute
Since 2014, the Becker Friedman Institute (BFI) has sponsored a project to investigate the economic histories of 11 Latin American countries. At a December event sponsored by BFI’s Macro Financial Research Initiative (MFRI), a diverse group of scholars gathered at UChicago to present their research and work toward the goal of publishing their completed work. For more on this groundbreaking effort and BFI’s goals for the project, please read “The Riddle of Latin American Economies.”
/goo.gl/EpyNT5

***** I love a good riddle.~JJL

++++

North Pole surges above freezing in the dead of winter, stunning scientists
Jason Samenow – Washington Post
The sun won’t rise at the North Pole until March 20, and it’s normally close to the coldest time of year, but an extraordinary and possibly historic thaw swelled over the tip of the planet this weekend. Analyses show that the temperature warmed to the melting point as an enormous storm pumped an intense pulse of heat through the Greenland Sea.
/goo.gl/fG13LG

****** Life is starting to look like a bad movie.~JJL

++++

R.J. O’Brien Wins 2018 CTA Intelligence US Services Award
for Best FCM – Client Service for Second Consecutive Year
R.J. O’Brien
Chicago-based R.J. O’Brien & Associates (RJO) announced that for the second consecutive year, the firm won the award for “Best FCM – Client Service” at the CTA Intelligence U.S. Services Awards 2018.
/goo.gl/f7Qz3c

***** A very smart win by RJO.~JJL

++++

Tuesday’s Top Three
Our top read piece of the day on Tuesday was Bloomberg’s Self-Proclaimed Bitcoin Inventor Accused of Swindling $5 Billion of Cryptocurrency. Second was the announcement Mark Phelps to Become Group CEO of G. H. Financials, Succeeding Mark Ibbotson Who Becomes Non-Executive Chairman. Third went to the Wall Street Journal’s CFTC Steps Up Enforcement Against Fraud, Market Manipulation

++++

MarketsWiki Statistics Sponsored by Level Trading Field

121,324,478 pages viewed 23,018 pages 211,834 edits

++++

Lead Stories

Bitcoin-Futures Regulator Clears Employees to Trade Crypto Coins
Robert Schmidt – Bloomberg
CFTC allows investments after ‘numerous’ employee inquiries; Critics say agency’s move could lead to lax oversight
The U.S.’s main commodities regulator recently told its employees that they are allowed to invest in cryptocurrencies, a determination that came weeks after the agency began overseeing Bitcoin futures.
/goo.gl/1WD8Mk

Coinbase made 43 percent of its 2017 revenue in December alone; The company’s $1 billion annual revenue may be difficult to repeat
Adrianne Jeffries- The Verge
The digital currency exchange and wallet service Coinbase, founded in 2012 and backed by Silicon Valley investors, recently told shareholders that it booked $1 billion in revenue in 2017. A new independent analysis says about 43 percent of that came in December when the price of bitcoin was surging, and the company’s revenue has plummeted since then.
/goo.gl/PUcZaY

Exclusive: U.S. regulators examine Wall Street’s Volcker rule wish list
Pete Schroeder – Reuters
U.S. regulators are considering changes to the “Volcker rule” that Wall Street has sought for years, including eliminating big banks’ responsibility to prove they do not trade on their own account, according to several regulatory and industry sources.
/goo.gl/sCetHg

Feds charge 24-year-old Chicago trader in first crypto-fraud case
abc7chicago.com
A 24-year-old trader who considered himself “invincible” according to federal investigators has become the first target of a criminal fraud prosecution involving “cryptocurrency,” after allegedly siphoning $2 million in Bitcoin and Litecoin from his Chicago employer.
Joseph Kim, whose bio lists him as a 2016 graduate of University of Chicago, is charged with fraud against Consolidated Trading LLC.
abc7.ws/2GQlWaR

**We missed this story, dated February 16.

CMC Markets joins QuantHouse’s API initiative; QuantHouse adds CMC Markets to API ecosystem providing access to its trading platform.
Hayley McDowell – The Trade
QuantHouse has added CMC Markets to its application programming interface (API) initiative, providing access to the firm’s trading platform to the ecosystem.
/goo.gl/G22Crb

Bitcoin exchange Coinbase is handing over user information to the IRS
Kari Paul – MarketWatch
If you’ve made thousands or even millions of dollars on cryptocurrencies, be sure to report your winnings to the Internal Revenue Service before someone else does it for you.
/goo.gl/chm1v8

Goldman Sachs, Adviser to the Elite, Wants to Be Your Local Bank; The Wall Street powerhouse is planning to sell insurance, mortgages and car loans, consumer businesses it once disdained
Liz Hoffman and Peter Rudegeair – WSJ
Goldman Sachs Group Inc. has come to Main Street. In a glass-walled tower in Utah’s capital, hundreds of Goldman employees are building what amounts to one of the world’s most ambitious consumer-finance startups.
/goo.gl/3Udhzg

Bitcoin is just the beginning, says one of the futures market’s biggest players
Aaron Hankin – MarketWatch
Clients are inquiring about Litecoin and Ripple futures, Wedbush executive says
Bitcoin futures made their debut more than two months ago. Amid a sea of critics, the market has avoided controversies and perhaps conferred a modicum of legitimacy on cryptocurrencies.
/goo.gl/Geb9wD

JPMorgan urges Fed to loosen capital shackles; Bank’s chief financial officer says measures are hindering its ‘capacity to grow’
Ben McLannahan in New York – FT
JPMorgan Chase has urged the Federal Reserve to loosen capital shackles on the biggest global banks, saying that rigid rules drawn up in the wake of the crisis could become a “barrier to growth” in the world’s largest economy.
/goo.gl/FERddY

Jay Powell jolts markets with reminder he is no academic; Powell breaks with recent pattern of central bank chiefs coming from academia
John Authers – FT
Jay Powell has introduced himself to the markets. And it looks like the markets did not like what they heard. If we go by Fed Funds futures prices, the odds of at least three rate rises this year, and of at least four, have both risen to a new high.
/goo.gl/P51qTr

Exchanges, OTC and Clearing

Cboe Announces Successful Migration of Cboe Futures Exchange to Proprietary Technology Platform
Cboe
Cboe Futures Exchange (CFE) is first legacy Cboe platform to transition to Bats technology; Nearly 160,000 contracts traded, 98 trading firms trade on launch day; Cboe’s C2 exchange on track to migrate to Bats technology on May 14, 2018; Migration date of Cboe Options Exchange to be announced in April
/goo.gl/aMSoV4

Cboe Global Markets Announces Additional $150 Million in Share Repurchase Authorization
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, announced today that its Board of Directors has authorized the company to repurchase up to an additional $150 million of its outstanding common stock, effective immediately.
/goo.gl/CVz16Q

Streamlining MOC trading with an on-exchange solution
Eurex
How using Eurex Market-on-Close (MOC) Futures can confine poor execution to the past and help minimize tracking error
/goo.gl/WCwmeE

Report on Initial Public Offering Applications, Delisting and Suspensions (As at 28 February 2018)
HKEX
/goo.gl/WEnpE1

Presentation by HKEX Chief Executive Charles Li and Group Chief Financial Officer John Killian on 2017 Final Results Announcement
HKEX
/goo.gl/4tmHwr

HKEX 2017 Consolidated Financial Statements
HKEX
/goo.gl/Pt4e9C

HKEX 2017 Final Results
HKEX
/goo.gl/oiN8gD

SGX Welcomes OTCex Hong Kong Limited as Derivatives Trading Member
SGX
Singapore Exchange (SGX) welcomes OTCex Hong Kong Limited to its derivatives market as a Trading Member. Focused on creating multi-product brokerage service on an international scale, OTCex Hong Kong Limited is an inter-dealer broker specialising in equities and derivatives products. It is part of the OTCex Group headquartered in Paris, with a global client base of over 600 institutions including banks, asset managers, hedge funds and market makers.
/goo.gl/G9UCTV

Fintech

International Blockchain Conference Returning to Raleigh; Industry Leaders to Focus on the Building the Blockchain and Token Market
Cryptolina
The Cryptolina Blockchain Expo will be returning to the Triangle in June 2018. First conceptualized in 2013 in North Carolina, Cryptolina is one of the longest running blockchain conferences in the United States. The first expo was held in Downtown Raleigh in August 2014 and was followed up with a second in Uptown Charlotte in August 2015.
/goo.gl/QHjrtf

Blockchain Tech Leaders to Attend BII Summit in Dubai
BII SUMMIT
The upcoming Blockchain Innovation and Investment Summit (BII Summit) will feature speakers and sponsors representing Blockchain companies and start-ups such as Ultroneum from Malaysia, Unibright from Germany, Evareium from the UAE, DateCoin from Russia, Shopin from USA and a host of others.
/goo.gl/Q4cKBA

Mana Partners taps Metamako’s low-latency exchange connectivity; US electronic trading and asset management firm deploys Metamako’s exchange connectivity service.
Hayley McDowell – The Trade
New York-based electronic trading and asset manager Mana Partners has implemented Metamako’s low-latency exchange connectivity service.
/goo.gl/xhALH5

Bill Gates Says Cryptocurrencies Have Caused Deaths
Lucinda Shen – Fortune
Though the philanthropy under Bill Gates’ name has partnered with cryptocurrency firm Ripple in a bid to help the unbanked, the world’s second richest man said Tuesday that the main feature of Bitcoin and its ilk is not a “good thing.”
/goo.gl/FT9ywQ

‘It Just Felt Like a Miracle’: Small Groups Win Big in Bitcoin Donor’s $56 Million Giving Spree
Drew Lindsay – Philanthropy.com
One day in January, Linda Tannenbaum opened an email that would radically change her small, medical-research charity almost overnight. The note said that her organization would soon receive a gift of $1 million, to use as it saw fit.
/goo.gl/kKRGjN

Politics

Trump campaign chief lends name to penny stock tied to felon
AP
The political strategist and online guru who was named President Donald Trump’s 2020 campaign manager Tuesday has a close financial relationship with a penny-stock firm with a questionable history that includes longstanding ties to a convicted fraudster, according to an Associated Press investigation.
/goo.gl/TxU1wX

Former Trump Adviser Dina Powell Is Returning to Goldman Sachs
Dakin Campbell, Jennifer Jacobs – Bloomberg
Dina Powell, a former deputy national security adviser to President Donald Trump, is returning to Goldman Sachs Group Inc. and will be a member of the investment bank’s management committee.
/goo.gl/KRSSwK

Kushner’s overseas contacts raise concerns as foreign officials seek leverage
Shane Harris, Carol D. Leonnig, Greg Jaffe and Josh Dawsey – Washington Post
Officials in at least four countries have privately discussed ways they can manipulate Jared Kushner, the president’s son-in-law and senior adviser, by taking advantage of his complex business arrangements, financial difficulties and lack of foreign policy experience, according to current and former U.S. officials familiar with intelligence reports on the matter.
/goo.gl/dnPY6a

Regulation

CFTC Chairman Giancarlo to Participate in a Fireside Chat at the IIB Annual Washington Conference
CFTC
/goo.gl/ejkM1Z

TCA use surges among equity buy-side traders; TCA on buy-side equity trading desks no longer considered an optional feature, but a necessity in new regulatory environment.
Hayley McDowell – The Trade
Regulatory upheaval has resulted in a surge in the use of transaction cost analysis (TCA) on buy-side equities desks, according to new research.
/goo.gl/Z7VV94

Tyson Foods sentenced after September guilty plea
Reuters Staff
Tyson Foods Inc’s poultry unit was sentenced in federal court in Missouri on Tuesday after pleading guilty in September to two criminal charges stemming from discharged feed supplement at a company facility, the U.S. Justice Department said.
/goo.gl/iVXDMa

ASIC requires boutique research provider to improve conflicts of interest disclosure
ASIC
The Australian Securities and Investments Commission (ASIC) has required research provider Far East Capital Limited (FEC) to include specific, prominent and meaningful conflicts of interest disclosure in its research reports.
/goo.gl/WxGq9Z

ASIC’s latest enforcement report highlights outcomes from the second half of 2017
ASIC
ASIC has today released its enforcement outcomes report for the period 1 July 2017 to 31 December 2017.
/goo.gl/vn5w8o

STEVEN MAIJOOR SPEECH AT THE SECOND ANNUAL FINTECH AND DIGITAL INNOVATION CONFERENCE
ESMA
The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, delivered a keynote speech at Afore Consulting’s Second Annual FinTech and Digital Innovation Conference in Brussels on 27 February.
/goo.gl/NVNzL8

SEC Announces Agenda for March 8 Investor Advisory Committee Meeting; Welcomes New Members Jennifer Marietta-Westberg and Heidi Stam
SEC
The Securities and Exchange Commission today announced the agenda for the March 8 meeting of its Investor Advisory Committee. The meeting will begin at 9:30 a.m. 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.
/goo.gl/UPTPgt

Investing and Trading

City Officials Want Chicago to Become a Responsible Investor; Proposed legislation would allow environmental, social and governance factors to be used in investment decisions
Sarah Krouse – WSJ
Officials in the nation’s third-largest city want to make a company’s record on issues like water usage, labor rights and diversity as important as creditworthiness when deciding how to invest its $8 billion operating budget.
/goo.gl/Uj52YP

Pimco launches new front in fight over Novo Banco bonds; Portuguese authorities are investigating 2015 debt sale to US asset manager
Robert Smith in London and Peter Wise in Lisbon – FT
Pimco is seeking compensation for damages stemming from alleged insider trading of Novo Banco bonds, marking the latest chapter in a bitter and long-running dispute between international investors and the country’s central bank.
/goo.gl/LcGwT6

Investors Are Paying $1,300 Per Hour for ‘Expert’ Chats
Julie Edde, Nishant Kumar, Suzy Waite, Bloomberg
Firms that link investors to experts seize on new MiFID law; Some networks were abused in U.S. insider trading scandals
They may be cutting research budgets, but European investors are more willing than ever to dole out up to $1,300 an hour to talk to someone who can give them an edge.
/goo.gl/5uqNz1

Opinion: Why I think the conventional wisdom is wrong about hedge funds
Jared Dillian – MarketWatch
Professional money management keeps volatility in check and manages drawdowns in the markets — things you don’t get in passive investing
Hedge-fund guys aren’t well-liked, which I find interesting. Most people don’t even know what a hedge fund is. And if they knew, they probably wouldn’t care. Who cares about running money for Richie Rich? But it’s not that simple.
/goo.gl/PXYKtJ

Institutions

JPMorgan Joins BofA in Quiet Warning: Crypto Could Disrupt Banks
Hugh Son – Bloomberg
JPMorgan Chase & Co. just weighed in again on virtual currencies — very discreetly. It’s not a prediction. And it doesn’t speak to Chief Executive Officer Jamie Dimon’s own declarations on Bitcoin — which he once called a “fraud,” and then later reconsidered, saying the underlying technology is “real.”
/goo.gl/5wwsHw

Goldman Sachs investment chief: Bitcoin is definitely a bubble, Ethereum even more so
Kara Chin and Jacqui Frank – Business Insider
Sharmin Mossavar-Rahmani is the CIO of the Private Wealth Management Group at Goldman Sachs where she guides the investment strategy for clients with over $10 million in assets. Mossavar-Rahmani joined Business Insider’s Sara Silverstein to discuss cryptocurrencies. Following is a transcript of the video.
/goo.gl/vy6EoF

Exclusive: U.S. hedge fund Magnolia Road shuts down after struggling to raise capital
Svea Herbst-Bayliss – Reuters
Jame Donath plans to shutter his Magnolia Road Capital, the latest casualty in the $3 trillion hedge fund industry where many small firms are struggling to attract and retain capital, according to a letter seen by Reuters.
/goo.gl/NwsqFV

Buoyant markets lift Fidelity to record $5.3bn income; Chief defends ‘value’ of active management despite $47bn pulled from equity funds
Robin Wigglesworth in New York – FT
Fidelity made a record $5.3bn in operating income last year, a 54 per cent jump from 2016, as buoyant financial markets and a turnround in performance of its fund manager lifted the investment group’s results.
/goo.gl/6q3gFj

ProShares ETFs decrease leverage after market turmoil; Action on two funds is viewed as an attempt to limit possibility of extreme price moves
Joe Rennison in New York – FT
The operator of two exchange traded funds blamed for exacerbating the recent stock market volatility is decreasing their leverage, in what is seen as an attempt to stop a similar situation from happening again.
/goo.gl/5RxVaH

Man Group touts record inflows and 35% jump in assets
Jennifer Thompson – FT
Man Group reported record inflows in 2017 as investors poured money into both quant strategies and the discretionary trading unit of the world’s largest publicly traded hedge fund group.
/goo.gl/VYpbdw

Jamie Dimon’s Had Enough of Meetings
Shareholder and board meetings are a good check on a dominant CEO.
Lionel Laurent – Bloomberg
Anyone who has attended the shareholder meeting of a Fortune 500 company will have felt a twinge of agreement at JPMorgan Chase & Co. CEO Jamie Dimon’s characterization that they are a waste of time.
/goo.gl/hgB3Po

Regions

Scandals Washing Over Corporate India Give Investors Pause
Ari Altstedter, Anirban Nag – Bloomberg
Allegations dent India’s ability to win investor confidence; Business culture is opaque and dominated by powerful families
In India, the name of billionaire jeweler Nirav Modi was once synonymous with glamour and the good life. It could be seen on billboards next to Bollywood starlets, and his diamond-studded creations were sold as far as New York’s Madison Avenue. Now, the name is synonymous with allegations of fraud.
/goo.gl/q5kpVj

Cocaine Bust Is the Latest Sign of Putin’s Weakness; A foiled cocaine shipment from Argentina helps build Russia’s reputation as a mob state.
Leonid Bershidsky – Bloomberg
The mind-boggling news story of cocaine-filled suitcases at the Russian embassy school in Buenos Aires demonstrates that the tolerance President Vladimir Putin’s regime has shown for all kinds of moonlighting and freelancing by its servants has gone too far. The regime needs to find a way to curb it; otherwise it will end up being treated as a criminal organization.
/goo.gl/dt5uYY

Fraud at Indian bank spurs calls for privatisation; Critics say scam highlights rot in state lenders and need for change
Amy Kazmin in New Delhi – Ft
In 1969, India’s then prime minister, Indira Gandhi, transformed the country’s banking landscape when she nationalised its 14 biggest commercial lenders, which together accounted for around 70 per cent of the system’s deposits.
/goo.gl/iKayvz

Xi’s power grab means China is vulnerable to the whims of one man; Autocracy is a risky system, even in a country with a solid bureaucratic tradition
Martin Wolf – FT
Sometimes an announcement succeeds in being both unsurprising and shocking. It had long been evident that China’s Xi Jinping would not — indeed, could not — step down from power. He has made too many enemies, particularly through his anti-corruption campaign, even if he wanted to go, which seems unlikely.
/goo.gl/7dtBwE

People in Sweden Now at Risk of Losing Access to Notes
Hanna Hoikkala, Amanda Billner – Bloomberg
People living in the world’s most cashless society may soon lose their access to notes and coins.
/goo.gl/QknyKY

This African Super Grain Could Solve Famine and Drought (Plus It’s Gluten-Free)
Fonio is the talk of the grain world.
Richard Morgan – Bloomberg
Last July, a Whole Foods store in New York’s Harlem decided to stock bags of fonio, a West African grain similar to couscous. The first shipment sold out in three hours. Just last week, Los Angeles Lakers forward Luol Deng hosted a fonio party at his home. It’s the hottest grain you’ve never eaten.
/goo.gl/PsHJkj

Brexit

May Says No U.K. PM Could Agree to EU Draft Deal: Brexit Update
Emma Ross-Thomas, Ian Wishart, Nikos Chrysoloras- Bloomberg
February 28, 2018, 5:26 AM CST Updated on February 28, 2018, 6:53 AM CST
The European Union on Wednesday published the draft legal text that will form the basis for the Brexit divorce treaty. It’s explosive, particularly on the issue of the Irish border, and U.K. Prime Minister Theresa May plans to reject parts of it.
/goo.gl/5xsGp8

Miscellaneous

Facebook’s algorithm has wiped out a once-flourishing digital publisher
South China Morning Post
LittleThings had quickly amassed a big following on Facebook, but a recent algorithm tweak had throttled its traffic severely, causing its profit to plummet, the company says
/goo.gl/nJagSe

Google receives 2.4m requests to delete search results; Search engine reveals impact of Europe’s ‘right to be forgotten’ rules
Aliya Ram in London – FT
Google has received 2.4m requests over the past three years to delete search engine results under Europe’s “right to be forgotten” rules, highlighting the challenge it is likely to face under even tougher new data protection regulations.
/goo.gl/bwCtk9

The post Bitcoin-Futures Regulator Clears Employees to Trade Crypto Coins appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

From today’s Bloomberg piece This $1 Trillion Money Manager Just Joined the Crypto Frenzy, “shares in Taiwan Semiconductor Manufacturing Co., which manufactures chips for Nvidia Corp. and Advanced Micro Devices Inc., have climbed 34 percent since the beginning of 2017 and surged to a record in January.”~JK

Did you know that Temenos Group AG, the Geneva-based banking technology company that has bid for Fidessa, is the fourth largest software firm in Europe? That, what “Temenos” means and more HERE~JK

JPX reported that in February 2018, total derivatives trading volume was 40,059,157 contracts, a record high for February. Also, trading volume for the night session was 15,786,914 contracts, the third highest on record. The ratio of the night session was 39.4%.~JJL

The NIBA is having their spring New York City Conference on April 19 at the New York Athletic Club. Click here to sign up.~JJL

The Dubai Gold and Commodities Exchange (DGCX) had its best month since inception in February, trading its highest monthly volume of 2,097,739 contracts, valued at USD 47.03 billion, recording 67% year-on-year (Y-o-Y) growth.~SR

GARP is having their 19th Risk Convention, titled “The New Age of Risk: Opportunities and Threats” at the New York Marquis Marriott on March 6 & 7.~JJL

The Cboe Risk Management Conference 2018 is March 7-9, 2018 in Bonita Springs, Florida.~JJL

The FIX Trading Community is having their EMEA Conference in London – 15th March 2018.~JJL

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Nasdaq pours cold water on the arguments fueling a civil war on Wall Street
Edward S. Knight, Nasdaq
We operate in a world that relies on myriad technological innovations fueled by instantaneous access to a world of data. We rely on modern technology to manage the global airways and complex life-and-death medical procedures; markets should benefit from the same technological advances borne of competition and innovation. We expect competitors to outdo each other and for new entrants to disrupt entire industries. That is certainly what’s happened on Wall Street, to the great benefit of the investing public.
/goo.gl/eq9FtV

**** I dislike the use of war language to represent competition.~JJL

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Irish Stock Exchange declares snow day (and a half)
Philip Stafford in London – FT
Snow on the fibre optic cables? The Irish stock exchange is shutting at midday on Thursday and will be closed all day Friday because of the “extreme weather conditions” that are buffeting Ireland.
/goo.gl/JJ4kod

*****If you live in an igloo made of snow, what’s the worst thing about global warming? No privacy.~JJL

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Ce*sored! China bans letter N (briefly) from internet as Xi Jinping extends grip on power
The Guardian
It is the 14th letter in the English alphabet and, in Scrabble, the springboard for more than 600 8-letter words.
But for the Communist party of China it is also a subversive and intolerable character that was this week banished from the internet as Chinese censors battled to silence criticism of Xi Jinping’s bid to set himself up as ruler for life.
jlne.ws/2GWa9Yx

****JB: They also banned the book “Animal Farm.” Banning the letter “N” seems chuckle worthy, but not that last bit where Xi Jingping seeks to be president for life (aka a dictator).

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Wednesday’s Top Three
Our top read story on Wednesday was last week’s news about Joseph Kim in Feds charge 24-year-old Chicago trader in first crypto-fraud case, from ABC Channel 7 News. Second went to Bloomberg’s piece, Bitcoin-Futures Regulator Clears Employees to Trade Crypto Coins. Third went to Marketwatch’s story with Bob Fitzsimmons of Wedbush in Bitcoin is just the beginning, says one of the futures market’s biggest players. Incidentally, JLN posted a Q&A February 20th with Fitzsimmons called Wedbush’s Bob Fitzsimmons Says We’re Just Beginning To Build A Market For Bitcoin

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MarketsWiki Statistics Sponsored by Level Trading Field

121,344,643 pages viewed 23,021 pages 211,870 edits

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Lead Stories

Stock exchanges cast wary eye at threat from big tech; Study finds that disruptive forces such as artificial intelligence could be harnessed
Philip Stafford – FT
Stock exchanges and trading venues fear that Amazon, Google and Microsoft are more likely than start-ups to harness artificial intelligence, big data and automation to challenge their role as the providers of the infrastructure for global financial markets.
/goo.gl/YjNxWb

Cryptocurrency Firms Targeted in SEC Probe; Regulator issues subpoenas to parties engaged in booming market for initial coin offerings
Jean Eaglesham and Paul Vigna – WSJ
The Securities and Exchange Commission has issued dozens of subpoenas and information requests to technology companies and advisers involved in the red-hot market for cryptocurrencies, according to people familiar with the matter.
/goo.gl/SDP69X

Exclusive: LJM Partners shutting its doors after ‘vol-mageddon’ losses in U.S. stocks
Trevor Hunnicutt – Reuters
A Chicago-based fund manager that took risky bets on stock-market swings is shutting its doors after the strategy failed during the slump in U.S. equity markets in early February, according to a letter sent to investors on Wednesday.
jlne.ws/2F6g24G

FCA’s Bailey urges market to examine a ‘synthetic Libor’; Key potential alternatives to the tarnished benchmark are widely seen as impractical
Philip Stafford – FT
The head of the UK markets regulator has called on market participants to look at creating a “synthetic Libor” to resolve a headache created by a potential global market shift away from the key lending benchmark in coming years.
/goo.gl/Sujtm6

Norway’s $1 Trillion Fund Says It Likes Volatility
Michael Holter, Sveinung Sleeire – Bloomberg
Slynsgstad discusses market volatility and investing for the long term.
Norway’s sovereign wealth fund says a spike in volatility may well help it with a plan to add almost $40 billion in stocks.
/goo.gl/xCfLb8

‘Expert Networks’ Are Back, Thanks to MiFID II; Money managers are opening their wallets to experts in obscure fields.
Matt Levine – Bloomberg
Here is a story about the return of “expert networks” — companies that connect investors with subject-matter experts for background conversations, for a large fee — that is fascinating on all sorts of levels. For one thing, it is a story of unbundling: The article frames the renewed interest in expert networks (which became less popular after they were involved in a string of insider-trading cases) as a response to new European MiFID II rules that require investment firms to pay for research directly rather than receiving it for “free” from banks and compensating the banks with trading commissions:
/goo.gl/34dY3J

Trump Expected to Announce Stiff Steel, Aluminum Tariffs
Jennifer Jacobs, Joe Deaux – Bloomberg
President to announce decision on Thursday, people say; Tariffs could antagonize China and hurt relations with allies
President Donald Trump is set to announce steep tariffs on steel and aluminum imports Thursday, people familiar with the matter said, in what would be one of his toughest actions yet to implement a hawkish trade agenda that risks antagonizing friends and foes alike.
/goo.gl/4NDxPz

Exchanges, OTC and Clearing

The Big Interview: Stéphane Boujnah
Hayley McDowell – The Trade
CEO of Euronext Stéphane Boujnah sat down with The TRADE to discuss the exchange group’s acquisition activities, how it has prepared for Brexit and the future of clearing in London.
/goo.gl/fYJTC7

Deutsche Börse is expanding its location in Cork
Deutsche Börse
Deutsche Börse Group plans to expand its presence in Cork by 200 employees to 600 employees in the next two years / The expansion is supported by the growth of Clearstream’s investment fund business; additional product innovation capacity to be created / The company will move into new business premises in the center of Cork in March 2019
/goo.gl/wWUeiV

Strongest February sales in the cash markets since 2008; Trading volume of 158.5 billion euros / 45 percent increase over the previous year
Deutsche Börse
Deutsche Börse’s cash markets posted sales of 158.5 billion euros in February, making them the highest-selling February since 2008. In February 2017, sales still amounted to 109.0 billion euros.
/goo.gl/1Pj953

Stock market segment Scale celebrates its first birthday; Company liquidity up 130 percent / 49 shares listed in the segment
Deutsche Börse
Deutsche Börse draws a positive interim conclusion on the SME segment Scale, which started exactly one year ago today. The number of shares listed in Scale has since increased to 49, of which five companies have been included in the segment via an IPO.
/goo.gl/3nxct5

Nasdaq Announces the Board of Directors of its Canadian Exchange
GlobeNewswire
Nasdaq, Inc. (Nasdaq:NDAQ) today announced the full slate of directors of Nasdaq CXC Limited (“Nasdaq Canada”):
/goo.gl/JDLDzL

Nasdaq and Extraordinary Re Sign Market Technology Agreement
GlobeNewswire
Extraordinary Re will leverage cloud and blockchain technology to power new insurance risk allocation platform
/goo.gl/3GqXev

Straits Times Index Series Quarterly Review Q1 2018; No change 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 March quarterly review.
/goo.gl/mrYw58

Trading Overview in February 2018
JPX
Japan Exchange Group released Trading Overview in February 2018.
/goo.gl/MXgTPA

Fintech

Bitcoin Reaches Major Scaling Milestone as Users Adopt Upgrade
Camila Russo – Bloomberg
Bitcoin has quietly reached a major milestone in its quest to reach the masses. Segregated Witness, or SegWit, the software upgrade designed to speed up Bitcoin transactions, is gaining traction. The number of transactions using the technology doubled to more than 30 percent in just the past three days, according to the SegWit.Party website, which tracks the data. The following chart shows the percentage of transactions using SegWit in the past week.
/goo.gl/XRykga

This $1 Trillion Money Manager Just Joined the Crypto Frenzy
Eric Lam – Bloomberg
Add Wellington Management Co. to the list of mainstream investors getting serious about digital coins. The Boston-based firm with $1 trillion under management is considering including cryptocurrencies in some portfolios, it said in a February report from a team that includes equity research analyst Matthew Lipton and trading technologies principal Lee Saba. The company’s systems were upgraded to enable trading in Bitcoin derivatives, and Wellington has started taking positions in companies related to cryptocurrencies.
/goo.gl/TEvsnr

Singapore Agrees Blockchain Cooperation with India’s Maharashtra State
cryptovest.com
The Monetary Authority of Singapore (MAS) on Monday signed an agreement with the Indian state of Maharashtra to explore joint opportunities in the field of blockchain technology and innovation.
/goo.gl/cEhgtt

Fintech Startups Need Industry Partners to Thrive, Report Says
Julie Verhage – Bloomberg
Financial technology startups are seeing no shortage of venture dollars flowing their way, but there are increasing concerns over whether they can survive without partnering with the industry they’re seeking to disrupt.
/goo.gl/zHPyWo

Texas Issues Another Cease-and-Desist over Alleged Crypto Fraud
Wolfie Zhao – CoinDesk
A Texas regulator is gunning for yet another cryptocurrency-related company it accuses of promoting unregistered securities targeting the U.S. state’s residents.
According to a document received and reviewed by CoinDesk, the Texas State Securities Board (TSSB) issued a new cease-and-desist order on Feb. 26 to a Panama-based cryptocurrency firm named LeadInvest.net.
/goo.gl/i7XQAF

Singapore’s Temasek backs fintech startup C2FO’s $100m round
Julie Verhage – Dealstreetasia.com
Financial technology startup C2FO raised $100 million in funding in a new round led by the investing arm of global insurance and asset management giant Allianz SE as well as Abu Dhabi’s Mubadala Investment Co.
/goo.gl/CFuF9T

Is Bitcoin a Waste of Electricity, or Something Worse?
Binyamin Appelbaum – NY Times
A manufacturing start-up recently announced plans to move into a shuttered aluminum factory in upstate New York, taking advantage of abundant cheap electricity from the St. Lawrence River.
/goo.gl/dAhw63

Banks complete 25 million euros securities transaction on blockchain platform
Anna Irrera – Reuters
Credit Suisse Group AG and ING Groep NV have completed a 25 million euros ($30.48 million) securities lending transaction using blockchain-based software, the companies said on Thursday, as more projects involving the nascent technology behind cryptocurrencies get closer to yielding results.
/goo.gl/zcWbC3

Bitcoin is a ‘disruptive innovation,’ legendary investor Bill Miller says
FOXBusiness
Legendary hedge fund investor Bill Miller is betting big on cryptocurrency as a “bitcoin observer,” with his firm betting nearly half of its assets in the digital currency.
/goo.gl/qEQRS9

Monumentally stupid tweet blows up in blockchain company’s face
Jack Morse – Mashable
The blockchain can’t solve for stupid. That painful truth hit the internet-of-things blockchain project Waltonchain hard today, with one Twitter huge [mess-up] leading to the erasure of tens of millions of dollars in the market cap of its associated Walton Coin.
/goo.gl/34oKNm

Bitcoin Enters Awkward Adolescence
Yahoo Finance
Last fall, as cryptocurrencies seemed on the brink of a linkage with the traditional financial system, 1 there were predictions of a price explosion along with institutional, regulatory and mainstream acceptance of the currencies. Others predicted disaster or a collapse to zero value. In the end, despite some dramatic price moves, not much happened. Still, liquid crypto derivative trading gives us a lot more insight into what might happen in the remainder of 2018. Derivatives give us greater visibility into Bitcoin price moves. Instead of relying on an opaque, fragmented market for price data, we have clean institutional-quality data on both prices and implied volatilities.
/goo.gl/dGTQ3H

Politics

Kushner’s Business Got Loans After White House Meetings
Jesse Drucker, Kate Kelly And Ben Protess – NY Times
Apollo, the private equity firm, and Citigroup made large loans last year to the family real estate business of Jared Kushner, President Trump’s senior adviser.
/goo.gl/hDzmCd

Why Italian Elections Matter: A New Type of Populism Is Rising; 5 Star Movement is poised to be the country’s largest party after Sunday’s national elections
Giovanni Legorano – WSJ
Last October, Beppe Grillo headlined a protest by the 5 Star Movement, the populist political party he founded. Standing outside the Pantheon he denounced a new electoral law that will limit direct voting for parliamentary candidates and help protect incumbents in national elections on Sunday.
/goo.gl/7VhgeY

More Than 30 Trump Aides Lose Top-Secret Clearance, Sources Say
Margaret Talev, Jennifer Jacobs – Bloomberg
Officials have been downgraded to lower-level security status; Kelly crackdown comes after Porter domestic abuse revelations
More than 30 aides to President Donald Trump have been stripped of access to top secret intelligence, two people familiar with the move said.
/goo.gl/q4isxD

Robert Mueller Is Going Way Beyond Trump’s Red Line; The special counsel is digging deeper into Trump’s business ties to Russia—including how his financial interests might intersect with the origins of his presidential campaign.
Abigail Tracy – Vanity Fair
Last summer, Donald Trump cautioned that Robert Mueller would be crossing a red line if he began digging into his family’s finances. “I think that’s a violation. Look, this is about Russia,” Trump said at the time. Mueller, however, seems to believe that questions surrounding Trump’s business deals and Russian ties are intertwined. The day after Trump issued his ultimatum, reports emerged that the special counsel was, in fact, probing his overseas business transactions. But the president backed down, allowing Mueller to continue his investigation. And Mueller, unbowed, has kept digging.
/goo.gl/ZmCSMM

Regulation

Britain’s White-Collar Cops Are Getting Too Good at Their Job; In the era of Brexit, not everyone wants the Serious Fraud Office to chase rich wrongdoers out of the country.
Sufi Ring, Franz Wild – Bloomberg
Britain’s top white-collar crime enforcer left his London office one damp evening late last year, hailed a black cab to Canary Wharf, and took a seat in the front row of a wood-paneled auditorium. David Green, the director of the Serious Fraud Office, had come to hear former Prime Minister David Cameron give a speech on corruption and the spread of dirty money. Early in the Q&A portion, Green signaled for a microphone and asked a deceptively straightforward question: What did Cameron think of the anticorruption work of the SFO—an agency set up precisely to investigate and prosecute high-level corporate crime?
/goo.gl/Q2RegN

ESMA updates EMIR validation rules
ESMA
The European Securities and Markets Authority (ESMA) has updated today its validation rules regarding the European Markets Infrastructure Regulation (EMIR) with regards to the revised technical standards on reporting under Article 9 of EMIR.
/goo.gl/mhN35a

SEC Charges Ameriprise With Overcharging Retirement Account Customers for Mutual Fund Shares
SEC
The Securities and Exchange Commission today announced that a Minnesota-based broker-dealer and investment adviser has agreed to settle charges for recommending and selling higher-fee mutual fund shares to retail retirement account customers and for failing to provide sales charge waivers.
/goo.gl/jAHiX4

CFTC Chairman Giancarlo to Testify before the U.S. House Appropriations Subcommittee Regarding the Commission’s FY 2019 Budget Request
CFTC
/goo.gl/V8aTXn

SEC Issues Subpoenas in Hunt for Fraudulent ICOs
Matt Robinson – Bloomberg
Regulator focused on firms it suspects of breaking the law; Agency concerned some ICOs seeking funds for fake businesses
Expanding a broad crackdown on fraudulent initial coin offerings, U.S. regulators have sent a number of subpoenas to firms they suspect might be violating securities laws, said a person with direct knowledge of the matter.
/goo.gl/XPx6GA

Investing and Trading

Spotify Kicks Off Its Unusual IPO; Shares of the music-streaming service could begin trading publicly by end of March
Maureen Farrell and Anne Steele – WSJ
Music-streaming company Spotify Technology SA cemented plans for its unusual initial public offering while revealing the financial particulars of a fast-growing company that upended the music industry and revolutionized how consumers listen—but spent heavily to do so.
/goo.gl/GjVF2n

Boom in Share Buybacks Renews Question of Who Wins From Tax Cuts; Large U.S. companies announced over $200 billion in repurchases in past three months
Akane Otani, Richard Rubin and Theo Francis – WSJ
U.S. companies are buying back their shares at an aggressive pace, stirring debates in Washington and on Wall Street about how savings from corporate tax cuts are being used and who benefits most.
/goo.gl/ikpFSX

It’s 2006 Again for Ex-Millennium Trader Sniffing LBO Excess
Cecile Gutscher – Bloomberg
Ex-Millennium trader set up fund to benefit from rising stress; TDC’s leveraged buyout is echo of similar deal before crisis
For trader Georges Gedeon, it’s just what he’s been waiting for: a debt-laden buyout like he saw on the eve of the global financial crisis.
/goo.gl/nR6jfH

Harvard Blew $1 Billion in Bet on Tomatoes, Sugar, and Eucalyptus; The university’s highly paid money managers thought they could manage risks other schools avoided.
Michael McDonald, Tatiana Freitas – Bloomberg
Six years ago, Jane Mendillo, then head of Harvard’s endowment, spent a week in Brazil, flying in a turboprop plane to survey some of the university’s growing holdings of forest and farmland. That year, Harvard began one of its most daring foreign adventures: an investment in a sprawling agricultural development in Brazil’s remote and impoverished northeast. There, workers would produce tomato paste, sugar, and ethanol, as well as energy after processing crops. The profits, in theory, could outstrip those of conventional stocks and bonds and keep the world’s richest university a step ahead of its peers.
/goo.gl/qiXNSe

The Next Warren Buffett Will Be a Woman; Everything that’s made him the world’s most celebrated investor lines up with what we’ve learned about the tendencies of female investors.
Lara Lachapelle – Bloomberg
One big difference between Warren Buffett and many other investors is, in a word, patience.
/goo.gl/SyjWZQ

Why an Unpleasant Inflation Surprise Could Be Coming; There is a plausible, if unlikely, scenario in which inflation marks a new, dangerous trend
By Greg Ip – WSJ
Inflation is going to head up this year—on that there isn’t much debate. The real debate is over whether it will be a nonevent or something more ominous.
/goo.gl/JcY365

Champion of Ethical Investing Owns U.S. Gun Makers; Norway’s sovereign wealth fund has restrictions on tobacco and weapons companies, but gun makers are allowed in
Ken Brown – WSJ
The Norway Government Pension Fund Global, the world’s biggest sovereign-wealth fund, has been a pioneer in shunning investments it deems unethical or immoral. The $1 trillion fund’s stringent standards don’t appear to include U.S. gun makers.
/goo.gl/H2Y8no

New leader of $6 billion money-management firm looks to podcasts and cryptocurrencies to keep active investing relevant
Business Wire
At 32, Patrick O’Shaughnessy is becoming CEO of a $6 billion asset management firm, 10 years after starting there as an intern.
/goo.gl/R4cMEc

Institutions

Wells Fargo Is Accused of Harming Fraud Victims by Closing Accounts
Emily Flitter And Stacy Cowley – NY Times
When signs of fraud appear on a customer’s account, such as a counterfeit check or an unauthorized withdrawal, a bank is required by law to investigate whether criminal activity has occurred. Wells Fargo had a simpler solution, according to a former employee: Close the account and drop the customer.
/goo.gl/jmr9XH

More Firings at Bank of America Amid Sexual-Misconduct Probe; Two employees were fired in hedge-fund-focused prime-brokerage unit
Rob Copeland and Rachel Louise Ensign – WSJ
Bank of America Corp. BAC -0.71% fired two employees in its hedge-fund-focused prime-brokerage unit as it expands an investigation into potential sexual misconduct in the division, people familiar with the matter said.
/goo.gl/gUccLq

New York regulator asks Deutsche, other banks about Kushner loans: source
Karen Freifeld – Reuters
New York’s state banking regulator asked Deutsche Bank AG (DBKGn.DE) and two other lenders for information on their relationships with U.S. President Donald Trump’s son-in-law and White House senior adviser Jared Kushner and his family’s real estate company, a person familiar with the matter told Reuters.
/goo.gl/dF6tgJ

Einhorn’s Greenlight Hedge Fund Down 12% After February Loss
Simone Foxman – Bloomberg
Value-oriented stock picker’s main fund fell 6.2% in month; Manager has said ‘a reversion may finally be coming soon’
David Einhorn’s main hedge fund at Greenlight Capital fell 6.2 percent in February, extending losses to 12.3 percent this year, according to a client update seen by Bloomberg.
/goo.gl/UpYBfZ

BlackRock says outside commentaries on index funds could pose risk
Trevor Hunnicutt – Reuters
BlackRock Inc, the world’s largest asset manager, on Wednesday said that commentary by third parties suggesting possible adverse impacts from the growth in index investing could pose a risk to its business.
/goo.gl/QDaRWE

Man Group Needs to Feed its Inner Shark; The hedge fund manager needs to keep expanding its range of strategies.
Mark Gilbert – Bloomberg
Hedge funds regained their mojo last year, with Hedge Fund Research’s index of global managers showing positive returns every single month for the first time since at least 2010. And Man Group Plc, the largest publicly-traded hedge fund, is riding the wave of revived investor interest in the industry.
/goo.gl/6EPNPc

Regions

CEFC Chairman Probed by Chinese Authorities, Caixin Reports
Bloomberg News
CEFC Chairman Ye Jianming is said to have been investigated; Company bought $9 billion stake in Russian oil giant Rosneft
Ye Jianming, the founder and chairman of rapidly expanding Chinese conglomerate CEFC China Energy Co., has been investigated by government authorities, according to people with knowledge of the situation.
/goo.gl/g7MweV

Brexit

Brexit Talks Yield Some Hope With Citizens’ Rights Deal Closer
Tim Ross, Ian Wishart – Bloomberg
U.K. government says EU citizens arriving by end-2020 can stay; Differences still persist, mostly about family reunion
Prospects for a Brexit transition deal improved after the U.K. and the European Union appeared to converge on the thorny issue of citizens’ rights.
/goo.gl/zs31ek

Brexit Talks in Peril After May Rejects EU Draft Deal
Tim Ross, Ian Wishart – Bloomberg
PM says EU text would undermine integrity of U.K. economy; EU fall-back option would keep N. Ireland in customs union
U.K. Prime Minister Theresa May vowed she will never accept a draft Brexit agreement published by the European Union on Wednesday, raising the prospect that the negotiations are heading for a breakdown. The pound fell.
/goo.gl/bFZ1Xt

The post Stock exchanges cast wary eye at threat from big tech; Cryptocurrency Firms Targeted in SEC Probe appeared first on John Lothian News (JLN).

First Read

Don’t Blink, The Markets Are Changing Right In Front of Your Eyes; Eighteen Years Later, Another Inflection Point
By John Lothian – JLN

Eighteen years after the start of this newsletter, the markets and its participants face new challenges that make reading JLN today even more important, relevant and necessary to keep abreast of the latest disruptive challenges.

Today we find ourselves at an inflection point in the markets, with a new generation of digital natives discovering whole new opportunities in the markets, billions of dollars pouring into potentially disintermediating fintech and intense global interest in all things fintech and crypto.

Back in 2000, when this newsletter was first published, the markets were facing the move from traditional open outcry trading and other trading formats to electronic trading. The changes in market structure were going to impact everyone, and they did. Gone are firms, exchanges, traders and colleagues who could not pivot to the new electronic trading world.

Today, billions of dollars around the world are being invested in fintech applications which have the potential to disintermediate the disintermediators of the last eighteen years. Crypto markets, blockchain, artificial intelligence, machine learning, big data and other technologies represent material challenges to the status quo and the entities who profit from it.

For a deep dive into what is happening in fintech in the exchange space, read the World Federation of Exchanges & McKinsey joint report on fintech in capital markets infrastructure industry.

But don’t blink, because the world is changing right before your eyes.

For the rest of the commentary, click HERE

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Hits & Takes
JLN Staff

For the fourth year, a global collaboration across 59 stock exchanges around the world plans to ‘Ring the Bell for Gender Equality’ to celebrate International Women’s Day 2018 on 8 March. The World Federation of Exchanges is partnered with several other organizations to raise awareness. Is your exchange ringing the bell?~JK

Commodity Markets Council reported that Jim Newsome, former chair of the CFTC and co-founder of Delta Strategy Group, will replace Gregg Doud as CMC president. Doud was confirmed as Chief Agricultural Negotiator for the United States Trade Representative.~JJL

To find out more about or sign up for the CBOE’s Risk Management Conference, go to www.cboermcus.com.~JJL

Via LinkedIn: QB is thrilled to have won the CTA 2018 US Services Award for “Best 3rd Party Algo Trading Solution”~JJL

Hehmeyer is now publishing its own Hehmeyer Crypto Index (HCI), a weighted index of 12 coins. You can find it HERE. An investment pool based on the index is coming soon.

Do you want to know the top 15 cities for blockchain jobs, according to Forbes? Click HERE.~JJL

Timothy P. Peterson of the law firm of Murphy & McGonigle offers some good advice on what to do if the SEC comes calling about your ICO. See the story below.~JJL

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As SEC Subpoenas to Tech Companies in Digital Tokens Market Increase, What Issuers Need to Know
By Timothy P. Peterson – Murphy & McGonigle

(Timothy P. Peterson, a former senior counsel in the SEC Division of Enforcement, is a partner in the Washington DC office of Murphy & McGonigle.)

The Securities and Exchange Commission (“SEC”) reportedly has revved up its focus and issued a significant number of subpoenas targeting technology companies in the digital token space, following on earlier pronouncements from the agency that it would expand its focus on ICOs and cryptocurrencies. The subpoena process is one of the primary weapons in the SEC’s enforcement arsenal, and ICO issuers will need to understand what they can expect over the next few weeks.

What is a subpoena?

For the rest of the story, click HERE

**Also see JLN’s piece ICO Rules and Regs: Initial Coin Offerings Under Regulatory Spotlight

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NFA Board Update—February 2018 Meeting
NFA
NFA Vice-Chairman Maureen Downs and President Tom Sexton discuss highlights and other notable information from NFA’s February Board meeting, including NFA’s recent Long-Range Planning meeting, Board elections and cryptocurrencies. The video is intended to keep NFA Members and the investing public apprised of the important topics discussed by NFA’s Board.
/goo.gl/UM1NWT

***** Of course cryptocurrencies were discussed. What else would anyone talk about during the last few months?~JJL

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NFA permanently bars Chicago, Ill. introducing broker Fortune Trading Group, Inc.
NFA
NFA has permanently barred Chicago, Ill. guaranteed introducing broker (GIB) Fortune Trading Group, Inc. (FTG) from membership and from acting as a principal of an NFA Member. NFA also barred FTG’s sole principal and an associated person Jonathan Schuler from membership and from acting as a principal of an NFA Member for five years. In addition, NFA ordered Chicago, Ill. futures commission merchant Ironbeam, Inc. (Ironbeam), FTG’s guarantor, to pay a $100,000 fine.
/goo.gl/vs7zZK

***** That is how the cookie crumbles.~JJL

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Thursday’s Top Three
Thursday’s top read stories were led by Reuters’ article LJM Partners shutting its doors after ‘vol-mageddon’ losses in U.S. stocks. Second went to Business Insider’s Nasdaq pours cold water on the arguments fueling a civil war on Wall Street. Third went to Bloomberg’s slightly misleading headline This $1 Trillion Money Manager Just Joined the Crypto Frenzy, which was really more about Wellington investing in chip makers than trading on Bitcoin spot and futures markets.

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MarketsWiki Stats
121,366,036 pages viewed; 23,021 pages; 211,875 edits
MarketsWiki Statistics

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Lead Stories

BOE’s Carney Calls for Rules to End Cryptocurrency Anarchy
Lucy Mekin, Edward Robinson – Bloomberg
Says Bitcoin volatility shows problems with virtual coins; He rejects chances of central-bank issued crypto in near term
Mark Carney is calling for greater regulation to bring the era of cryptocurrency “anarchy” to an end. “The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system,” the Bank of England governor said Friday in a speech at Bloomberg’s European headquarters in London.
/goo.gl/gXhEoP

***Ok, I gotta say it: “Anarchy In The UK?”~JK

Nasdaq sues IEX for allegedly infringing technology patents; Rival claims move is attempt ‘to obstruct an innovative new competitor’
Nicole Bullock in New York – FT
Nasdaq is suing rival IEX, alleging the upstart exchange knowingly violated a series of Nasdaq patents in developing its trading platform.
/goo.gl/5mjqmu

***** The spirit of the ISE lives on at Nasdaq.~JJL

Overstock’s Byrne Says SEC Wants to `Know Everything’ About ICO
Lily Katz – Bloomberg
Regulator asked about investor accreditation, company history; Retailer has had many meetings with SEC and Finra, CEO says
Overstock.com Inc. Chief Executive Officer Patrick Byrne has a colorful history when it comes to dealing with Wall Street and regulators. It could get even more interesting.
/goo.gl/2FJymz

London Stock Exchange makes ‘good progress’ in hunt for new chief; Exchange continues to look at large deals as it reports double-digit earnings growth
Philip Stafford in London – FT
The London Stock Exchange Group is continuing to look at large deals even as the company had little news for investors on its long-running search for a new chief executive to replace Xavier Rolet.
/goo.gl/StLAqW

CME Group Announces New SOFR Futures Launch Date and Contract Specifications
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will launch monthly and quarterly Secured Overnight Financing Rate (SOFR) futures on May 7, 2018, pending regulatory review. The futures will be based on the Alternative Reference Rates Committee-endorsed SOFR index, scheduled to be published daily by the Federal Reserve Bank of New York in cooperation with the U.S. Office of Financial Research beginning on April 3, 2018.
/goo.gl/Yo89WW

The CHX is a Target for Cryptocurrency Exchanges
By: Richard Johnson – Greenwich Associates
On February 15th, the SEC blocked the sale of the Chicago Stock Exchange (CHX) to a China-based consortium, due to concerns over the proposed ownership structure. This is the latest blow to the storied exchange, which was founded in 1882 but has struggled to stay relevant in a space dominated by ICE, Nasdaq and the Chicago Board Options Exchange (CBOE). Back in October, the SEC also put a halt on their plans to implement a speed bump that the CHX hoped would attract new business and boost their market share from a paltry 0.5%.
/goo.gl/FFCoVJ

OCC Declares Nearly $80 Million Clearing Member Refund for 2017
OCC
OCC, the world’s largest equity derivatives clearing organization, today announced the declaration of a nearly $80 million refund to clearing members under its approved capital plan. This is the second largest clearing member refund made by OCC since the inception of its capital plan.
/goo.gl/vBCvBF

Digital Tokens Rise Even as SEC Bears Down
Camila Russo – Bloomberg
Securities regulators in the U.S. are reportedly investigating a large number of digital-asset projects yet the market is responding with a resounding: “Crypto don’t care.”
/goo.gl/H7shX8

The SEC’s Uneven Cryptocurrency Crackdown; ICOs need tougher scrutiny, but so do Reg A+ stock offerings.
Stephen Gandel – Bloomberg
Two weeks ago, Bitzumi Inc., which describes itself as a “vertically integrated bitcoin exchange” of online media and crypto-related offerings, began soliciting investors on its website.
/goo.gl/Eq64r8

Tudor Jones likens Powell’s job to Custer’s Last Stand
Robin Wigglesworth – FT
Hedge fund magnate Paul Tudor Jones has compared new Federal Reserve chair Jay Powell’s job to that of George Custer “looking down at an array of menacing warriors” at the Battle of the Little Bighorn.
/goo.gl/PdeKmy

Japanese venture capital investment hits record levels; Panasonic joins Toyota and Sony in bid to fund innovative tech start-ups
Kana Inagaki in Tokyo – FT
Venture capital spending by Japanese corporations including Toyota and Sony have reached record levels as established companies look to the start-up world to keep pace with digital innovation.
/goo.gl/52xSA5

Schwarzman Collects $787 Million in ’17 to Rule Over Wall Street
Anders Melin and Melissa Mittelman – Bloomberg
The Blackstone Group LP co-founder received $786.5 million for 2017, his biggest take-home ever, according to calculations based on the firm’s annual report filed March 1. His stake in New York-based Blackstone—and the $661 million in dividends it yielded—fueled much of the payout.
/goo.gl/aLc4zs

Exchanges, OTC and Clearing

CME Group Reaches Highest-Ever Monthly Volume of 27.3 Million Contracts for February 2018
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it reached an all-time high monthly average daily volume (ADV) of 27.3 million contracts during February 2018, up 48 percent from February 2017. This milestone surpasses the prior peak of 20.9 million contracts in November 2016 by 31 percent. During 2018 to date, there were 26 trading days with volume above 20 million contracts, compared with four days during the same period in 2017. Open interest at the end of February was 130 million contracts, an increase of 11 percent from the end of February 2017, and up 21 percent from year-end 2017.
/goo.gl/9D7nep

OCC Announces Cleared Contract Volume Up 43 Percent in February; Securities lending up 39 percent in February and 34 percent year-to-date; Index options volume up 70 percent in February and average daily volume up 58 percent year-to-date; Cleared futures volume up 27 percent in February and average daily volume up 22 percent year-to-date
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in February was 477,587,355 contracts, up 43 percent from February 2017 volume of 333,411,251 contracts. OCC’s year-to-date average daily cleared contract volume is up 39 percent from 2017 with 23,934,996 contracts.
/goo.gl/7eVQYt

Nasdaq Files Patent Infringement Lawsuit to Protect Intellectual Property; Lawsuit Aims to Halt Unauthorized Use of Proprietary Electronic Trading Platform Technology
Globe Newswire
Nasdaq (Nasdaq:NDAQ) filed a patent infringement lawsuit in the United States District Court for the District of New Jersey today, aiming to protect Nasdaq’s electronic trading technology from unauthorized use by IEX Group, Inc. and Investors Exchange LLC (IEX).
/goo.gl/Xb72ca

London Stock Exchange Group Plc Preliminary Results For The Year Ended
London Stock Exchange Group
Unless stated otherwise, all figures in the highlights below refer to continuing operations for 12 months to 31 December 2017 and comparisons with the prior 12 month period on the same basis.
/goo.gl/Uo6TSJ

London Stock Exchange profits rise but investors kept waiting for new CEO
Samuel Agini – Financial News
The London Stock Exchange Group saw profits rise sharply in 2017 but investors remain in the dark over who will be the next leader of the iconic British institution.
/goo.gl/XQxxTz

Data and clearing help boost LSE in slow markets; Exchange says it’s making ‘good progress’ finding a new CEO
Philip Stafford – FT
The London Stock Exchange Group shrugged off last year’s slow trading environment on global markets, reporting double digit earnings growth on the back of its push into indices and derivatives clearing.
/goo.gl/Fg9DZ2

FTSE Russell and LCH drive profits at LSEG;
Hayley McDowell – The Trade
The London Stock Exchange Group (LSEG) has reported a 17% increase in revenues in 2017, with its FTSE Russell and LCH businesses driving growth.
/goo.gl/Ei3epA

Cboe and oneZero Financial team up on market data; oneZero Financial’s clients will gain access to Cboe’s real-time market data.
Hayley McDowell – The Trade
Cboe Global Markets will provide institutional broker software provider oneZeroFinancial with real-time stock and quote and trade data.
/goo.gl/fvFx6b

Editorial changes of the General Terms and Conditions and the Price List of Eurex Frankfurt AG, effective 2 May 2018
Eurex
In agreement with the Swiss financial market supervisory authority FINMA, Eurex Zürich AG will discontinue the operation of its derivatives trading venue Eurex Zürich by 31 March 2018. Trading at Eurex Deutschland will continue unchanged. It will have no effect on the admission of Exchange Participants at Eurex Deutschland.
/goo.gl/jQ2Y4g

Introduction of discount for OTC IRS & ZCIS Gold Packs for Clearing Members’ own accounts
Eurex
Effective 1 March 2018, Eurex Clearing will introduce a discount on the OTC IRS and ZCIS Gold Pack for Clearing Members’ Own Accounts. The Discounted Gold Pack allows subscribing Clearing Members unlimited clearing of all OTC IRD products including IRS, OIS, FRA, Basis, ZCIS across all currencies from 1 March until 31 December 2018. The existing Gold Packs are offered at a discount of ~68 percent.
/goo.gl/JYGdHT

LME announces introduction of financial OTC booking fee and enhanced trading regulations
LME
Modifications made to financial OTC booking fee following market feedback; Proposed new rules concerning the use of LME data, systems, trading venues and intellectual property to be implemented with immediate effect; Financial OTC booking fee policy to be payable from 1 June 2018
The London Metal Exchange (LME) today announced the introduction of its updated Financial OTC Booking Fee Policy and enhanced trading regulations, following a consultation period with the market.
/goo.gl/4x7Gej

London Metal Exchange announces $1 OTC contract fee
Neil Hume – FT
The London Metal Exchange plans introduce a new fee from start of June for contracts in the over-the-counter market that reference its prices.
/goo.gl/6K5YCh

OCC securities lending activity sees increase
Securities Lending Times
OCC has calculated that its securities lending activity was up 39 percent in new loans from February last year with 224,374 transactions last month.
/goo.gl/p7DU45

The World Federation of Exchanges & five partner organisations bring together 59 stock exchanges to ‘Ring The Bell For Gender Equality’
WFE
For the fourth year, a global collaboration across 59 stock exchanges around the world plan to ‘Ring the Bell for Gender Equality’, to celebrate International Women’s Day 2018 (Thursday 8 March).
/goo.gl/gQq6Yg

Fintech

These 3 companies could sprint ahead of Wall Street when it comes to cryptocurrency
Frank Chaparro – Business insider
Fundstrat, the research firm, is predicting the next two years will be big for bitcoin and the world of crypto.
/goo.gl/XZ7euT

Ascent Technologies, a leading regulatory technology (regtech) company, announced the successful completion of their Series A funding round.
Finextra
Ascent raised $6 million in this oversubscribed round, which was led by Alsop Louie Partners and joined by Randall Kroszner, member of the Board of Governors of the Federal Reserve System from 2006 to 2009.
/goo.gl/sP2jm5

This Bitcoin-Trading Family Man Faced Years in Prison. Now He’s Telling His Story
Katy Steinmetz – Time
“When I first got into this, I’d have to explain what it was because no one would have any idea,” says Jason Klein says as he sips tea at a cafe in the Ozarks on a cold winter day. “Now it seems like I could walk up to almost anyone in this room and they’d know.”
/goo.gl/NDkVRK

Sheila Bair says bitcoin has no intrinsic value — but neither does the dollar
Mike Murphy – MarketWatch
Former FDIC chair Sheila Bair isn’t too worried about the mania surrounding cryptocurrencies, and sees no reason why bitcoin and its brethren should be outlawed.
/goo.gl/9cXips

Opinion: These 3 trends could give fintech a bigger say in your money matters
Eyal Lifshitz – MarketWatch
Uses and usefulness of financial technology are growing
Fintech, short for “financial technology,” is dramatically changing how consumers and businesses access and manage their money.
/goo.gl/v9XkD3

Bitcoin Transaction Volume Is Puzzling Investors; Bitcoin’s price comeback isn’t being reflected in transaction volume.
Bloomberg
Earlier this year, when Bitcoin’s price fell by more than 60% from its record close, a less-noticed Bitcoin figure also plunged: the number of daily transactions.
/goo.gl/gUb9e7

Former Fed governor helps fund markets compliance AI group; Investment highlights interest in using machine learning to reshape trading industry
Philip Stafford in London – FT
Former Federal Reserve governor Randall Kroszner is among a group of investors in a start-up US fintech company that has raised $6m to apply artificial intelligence to markets compliance.
/goo.gl/7h4bep

Cryptocurrencies failing as money, but technology has promise: Carney
William Schomberg, Andy Bruce – Reuters
Cryptocurrencies such as Bitcoin are failing as a form of money and have shown clear signs of being a financial bubble, but their technology could improve the financial system in future, Bank of England Governor Mark Carney said on Friday.
/goo.gl/eXRdDw

Politics

Senate Readies Rollback of Bank Rules; Midsize banks have been wondering if Republicans will actually loosen financial regulations. The Senate is about to try to.
Andrew Ackerman and Christina Rexrode – WSJ
The Senate is expected to soon approve the most significant bipartisan rollback of postcrisis financial rules since Republicans took control of Washington last year.
/goo.gl/tqnUdT

Crapo’s Dodd-Frank Rewrite Set for Senate Floor Vote Next Week
Elizabeth Dexheimer – Bloomberg
Senate Majority Leader Mitch McConnell has set the stage for a vote on one of the biggest rewrites of financial industry rules since the Dodd-Frank Act was passed nearly eight years ago.
/goo.gl/HMVUJY

Trump’s tariff war nudges Cohn toward White House exit; The president’s top economic adviser lost a battle to prevent the imposition of steep tariffs pushed by protectionist advisers.
Ben White And Andrew Restuccia – Politico
Gary Cohn, President Donald Trump’s top economic adviser, has been rumored to be on the brink of leaving the White House for months but stayed for one main reason: to stop the president from imposing steep tariffs. By Thursday afternoon, Cohn had lost the fight.
/goo.gl/NUjiML

Trump’s racially charged, xenophobic words hurt our economy. Will that make him stop?
Bennie G. Thompson, Opinion Contributor
President Trump’s incendiary, xenophobic rhetoric — often masquerading as homeland security policy — corresponds directly with recent declines in U.S. favorability abroad and overall global confidence in U.S. leadership.
/goo.gl/sF6mgs

Nothing Trump Does Can Save Coal; Don’t blame liberals and regulations; blame capitalism and technology.
Barry Ritholtz – Bloomberg
It’s not the new black. Photographer: Kirill Kukhmar/TASS/Getty Images
On the campaign trail and in the White House, Donald Trump has warmly embraced coal. He has rolled back regulations on its use and eliminated some federal subsidies for alternative energies like solar and wind, along with electric cars. A few coal miners even landed jobs in the industry as the producers anticipate rising use. “Coal is BACK, baby!,” Breitbart News declared.
/goo.gl/qVsF2d

Senate Intelligence Leaders Say House G.O.P. Leaked a Senator’s Texts
Nicholas Fandos – NY Times
The Senate Intelligence Committee has concluded that Republicans on the House Intelligence Committee were behind the leak of private text messages between the Senate panel’s top Democrat and a Russian-connected lawyer, according to two congressional officials briefed on the matter.
/goo.gl/ktBNJu

Trump’s Tariff Folly; His tax on aluminum and steel will hurt the economy and his voters.
The Editorial Board – WSJ
Donald Trump made the biggest policy blunder of his Presidency Thursday by announcing that next week he’ll impose tariffs of 25% on imported steel and 10% on aluminum. This tax increase will punish American workers, invite retaliation that will harm U.S. exports, divide his political coalition at home, anger allies abroad, and undermine his tax and regulatory reforms. The Dow Jones Industrial Average fell 1.7% on the news, as investors absorbed the self-inflicted folly.
/goo.gl/SbRnXQ

Trump’s Chaos Theory for the Oval Office Is Taking Its Toll
Mark Landler And Maggie Haberman – NY Times
For 13 months in the Oval Office, and in an unorthodox business career before that, Donald J. Trump has thrived on chaos, using it as an organizing principle and even a management tool. Now the costs of that chaos are becoming starkly clear in the demoralized staff and policy disarray of a wayward White House.
/goo.gl/cPovf1

SEC dropped inquiry a month after firm aided Kushner company
Bernard Condon and Stephen Braun?-?AP
he Securities and Exchange Commission late last year dropped its inquiry into a financial company that a month earlier had given White House adviser Jared Kushner’s family real estate firm a $180 million loan.
/goo.gl/DLCruC

Regulation

The SEC is reportedly investigating a number of ICOs
Jon Russell – TechCrunch
The SEC is getting up close and personal with companies that have raised ICOs, according to a new report.
/goo.gl/omxY7U

CFTC Chairman Giancarlo to Participate in a Fireside Chat at the Managed Funds Association’s Legal & Compliance 2018 Conference
CFTC
/goo.gl/rw9eo5

Carney calls for crackdown on cryptocurrency ‘mania’
BBC
Cryptocurrencies such as Bitcoin should be regulated to crack down on illegal activities and protect the financial system, Mark Carney has warned.
/goo.gl/RJ5r4q

BoE’s Carney calls for crypto crackdown; Bitcoin and other digital currencies ‘exhibit the classic hallmarks of bubbles’
Caroline Binham – FT
The governor of the Bank of England, Mark Carney, has pledged that it is time to regulate elements of cryptocurrencies and their ecosystem, as policy makers at the central bank weigh how much of a risk they pose to financial stability.
/goo.gl/QbmoZd

Bank of England chief Mark Carney says cryptocurrencies are failing as money
Caitlin Morrison – City AM
Carney said cryptos are too volatile to operate well as a system of money (Source: Getty)
Bank of England governor Mark Carney said cryptocurrencies are failing as a system of money.
/goo.gl/B4D9sz

Wells Fargo’s Wealth Management Unit Attracts Justice Department Attention; Whistleblowers accuse the bank of pushing products that may not have been the best fit for the customer
By Emily Glazer – WSJ
Wells Fargo & Co.’s problems are expanding to its wealth-management business. The Justice Department in late 2017 told the bank to conduct an independent investigation of its wealth-management business after whistleblowers from the bank alleged sales problems to the agency, people familiar with the matter said.
/goo.gl/Zqgpc2

ASIC takes action against Rio Tinto and its former CEO and CFO for misleading and deceptive conduct
ASIC
ASIC has commenced legal proceedings in the Federal Court in Sydney today against Rio Tinto Limited (RTL) and its former Chief Executive Officer, Mr Thomas Albanese, and its former Chief Financial Officer, Mr Guy Elliott. The proceedings relate to statements which ASIC alleges were misleading or deceptive contained in the RTL annual report for 2011 which was signed on 5 March 2012 and published on 16 March 2012.
/goo.gl/hGchxN

ASIC permanently bans financial adviser for unethical conduct
ASIC
The Australian Securities and Investments Commission (ASIC) has permanently banned Muneer Mahmood Khan (also known as ‘Ivan Khan’) from providing financial services after finding that he was not of good fame or character, and that he had acted unethically.
/goo.gl/SBp1iP

FINRA Foundation Seeks Applicants for Military Spouse Fellowship; Fellows Provide Military Service Members and Their Families with Financial Counseling and Education Services While Earning Professional AFC® Credential
FINRA
Starting today, the FINRA Investor Education Foundation Military Spouse Fellowship is accepting applications for its 2018 class of financial Fellows — a unique program designed to increase the financial capability of U.S. service members and their families.
/goo.gl/YZz824

Podcast: CFTC Talks EP033: Chamber of Digital Commerce
CFTC
This week on CFTC Talks, we bring on Chamber of Digital Commerce’s President Perianne Boring and General Counsel Amy…
/goo.gl/ZPFBh8

Investing and Trading

Stocks Roiled on `Trade War’ Talk; Bonds Advance: Markets Wrap
Robert Bland – Bloomberg
S&P 500 futures drop; carmakers lead European stocks lower; Japan’s Topix slumps after BOJ chief flags stimulus exit
Headwinds mounted for global stocks on Friday as President Donald Trump ratcheted up his “trade war” talk, compounding investor concerns over a more hawkish Federal Reserve and the timing of ending monetary stimulus in Japan.
/goo.gl/TBHtSX

California Fruit Will ‘Die on the Vine’ After ICE Raids, Labor Warns
Kartikay Mehrotra – Bloomberg
Undocumented workers are arrested, detained in federal sweeps; Oakland mayor’s warning condemned by administration, officials
Maria’s husband spent the past 15 years pruning citrus trees on farms across California’s Central Valley. In that time, he’d become skilled enough to earn more than the state’s $11-an-hour minimum wage trimming branches for Sun Pacific, the company that brings the Cuties brand of mandarin oranges to grocers and tables across the U.S.
/goo.gl/tmQf93

Are men hard-wired to take risks?; Why the idea that the ‘Lehman Sisters’ might have averted the financial crisis is a delusion
Cordelia Fine – FT
If you study the science of sex differences, social events always have a whiff of testosterone.
/goo.gl/1ZeHb8

Libor surge is nearing danger level for debt-drenched world
Ambrose Evans-Pritchard – Telegraph
New Fed chief Jay Powell at his hawkish debut on Capitol Hill this week
The stress signals of the global credit system are flashing amber. The offshore dollar funding markets that lubricate world finance are facing an incipient squeeze.
/goo.gl/b3tYQP

Volatility Is Back But Volatility Funds Are Duller; The managers of an inverse-VIX fund just reduced risk for investors and also for themselves
Spencer Jakab – WSJ
Capital Decimation Lite, anyone? Volatility is back in the stock market, but the investments that imploded spectacularly in February are gone except for one survivor. That fund is now a much tamer version of its former self.
/goo.gl/wHnBy1

Why It’s So Hard to Invest With a Social Conscience
Ron Lieber – NY Times
Peer under the hood of your mutual fund or portfolio of index investments. If you’re like most people, you’ll find that you own shares of at least a few companies that make you squeamish. Perhaps you no longer wish to make money when Equifax collects and sells your data, especially when it has proved that it can’t do so safely. Or perhaps you have soured on big banks that treat customers poorly.
/goo.gl/6rQCt3

Institutions

Scaramucci Says He Fears John Kelly Will Thwart SkyBridge Sale
Jennifer Jacobs – Bloomberg
Accuses Kelly of blocking him from meeting with Trump; Says he fears Kelly will stymie Skybridge sale in revenge
Former Donald Trump aide Anthony Scaramucci tore into White House Chief of Staff John Kelly, accusing him of blocking his access to the president at the White House and Davos and driving away Trump’s most-important advisers at a critical moment when the White House is in chaos.
/goo.gl/xyYDxq

Neuberger Berman boss Walker dismisses comparison with behemoths; While he takes engagement seriously, big passive managers are ‘in different industry’
Owen Walker – FT
On the school run in St Louis, Missouri, George Walker’s father would often stop the car outside a grand house. He would tell his son that inside lived the “big man” who ran the St Louis Trust Company, the local wealth manager.
/goo.gl/PCytZ8

Ken Griffin’s Citadel Dismisses 21 People
Katia Porzecanski – Katherine Burton – Bloomberg
Culling leaves stock unit with a dozen portfolio managers; About half of departures were hired from Visium in 2016
Billionaire hedge fund manager Ken Griffin has made a habit of pouncing on other firms’ distress to seize — or in some cases, save — top talent. He can also be unforgiving when it comes to his own business.
/goo.gl/MTXGfc

Barclays Won’t Face Criminal Case for Hewlett-Packard Trades
Tom Schoenberg – Bloomberg
New Justice Department approach encourages bank cooperation; Prosecutors will reward companies that report securities fraud
Barclays Plc will not face criminal charges over allegations that one of its traders defrauded Hewlett-Packard Co., signaling a new U.S. approach that results in lesser penalties for institutions that report securities fraud themselves.
/goo.gl/5SPWSF

BNP Paribas makes major reshuffle to global markets business; BNP Paribas has made a number of leadership changes to its electronic trading, prime services and derivatives teams across the global markets business.
Joe Parsons – The Trade
BNP Paribas has made a series of high-level appointments to its markets businesses, with the aim to integrate its electronic trading and technology teams.
/goo.gl/hikdLr

Regions

The Saudis Can’t Just Throw Their Bond Market Weight Around; The kingdom has to respect the power of the Fed.
Marcus Ashworth – Bloomberg
Saudi Arabia could return to the international bond market this month for a third time, once it has wrapped up refinancing a syndicated loan. The kingdom’s last two jumbo issues went well, but this time is different.
/goo.gl/sg8iNA

EU considers imposing ‘safeguard’ import tariffs in response to US; Trade commissioner says Trump’s move could have ‘dangerous domino effect’
Shawn Donnan in Washington – FT
The EU will consider imposing its own “safeguard” tariffs on imports of steel and aluminium in response to US president Donald Trump’s decision to levy national security tariffs on imports of the metals from around the world, the EU’s top trade official has warned.
/goo.gl/34dE6A

Russia to Rescue as Europe Draws More Gas in Siberian Chill
Elena Mazneva, Anna Shiryaevskaya, Matthew Carr – Bloomberg
More pipeline shipments and a rare LNG cargo due to arrive; Spot gas prices in Europe tripled to a record as demand surged
Russia is sending more natural gas to Europe than ever before as a blast of Arctic air lifted demand for heat and electricity, underlining the region’s dependence on its eastern neighbor.
/goo.gl/MXcCgX

Oil Traders Make Sea Odyssey as Gasoline Criss-Crosses Globe
Ann Koh, Serene Cheung, Laura Blewitt – Bloomberg
China supplying Mexico, which usually imports fuel from U.S.; Just weeks ago, cargoes also moved from Europe to Australia
Over the course of March, the oil tanker Nave Pyxis will slice through the Pacific Ocean as it makes an unusual journey of about 8,000 miles from China to Mexico.
/goo.gl/HCZZ6S

Amsterdam Prepares for Bumper Crop of IPOs
Wout Vergauwen, Ruben Munsterman – Bloomberg
Alfen listing intention is third IPO announcement this week; LeasePlan, Adyen biggest name that could still come this year
The Dutch IPO drought is over. With at least four confirmed initial public offerings in Amsterdam, 2018 is already looking twice as busy as all of last year.
/goo.gl/eP1NYQ

Venezuelans Are Paying a 100% Premium for Cash; It’s yet another infuriating inconvenience of living in an imploding economy.
Andrew Rosati – Bloomberg
My most recent order arrived by motorcycle, a loaded, black trash bag tossed my way. “This is what’s available,” the courier said gruffly before zooming off. I nodded. There’s no begging in the bolivar business.
/goo.gl/3dNh8Z

Deutsche Bank, JPMorgan Hire as Banks Look Past Saudi Purge
Sarah Algethami, Matthew Martin – Bloomberg
Banks announce new hires, deals after anti-corruption campaign; Deutsche Bank sees ‘more positive’ outlook for deals
Global banks are pushing ahead with growth plans in Saudi Arabia four months after a crackdown on corruption threatened to derail ambitious plans to transform the economy.
/goo.gl/793DQD

Brexit

A No-Deal Brexit Risks U.K. Food Crisis, Sainsbury CEO Warns
Sam Chambers – Bloomberg
Leaving EU with no deal is ‘inconceivable,’ Coupe says; U.K.-EU tensions simmer over shape of trading relationship
Brexit would lead to an unprecedented food shortage if the U.K. leaves the European Union without a deal, the CEO of the country’s second-biggest grocer said.
/goo.gl/wwkGkp

Miscellaneous

David Mullins Rose to Fed Vice Chairman, Then Joined Doomed Hedge-Fund Firm; Finance expert taught at Harvard and helped sort out S&L crisis in the 1980s
James R. Hagerty
David W. Mullins Jr. -1946-2018
David W. Mullins Jr. had a soaring career as a finance professor at Harvard, a senior Treasury official under President George H.W. Bush and vice chairman of the Federal Reserve Board. He helped clean up after the widespread collapse of savings and loan institutions in the late 1980s and steered the Federal Reserve to lower interest rates in the early 1990s. He was seen as a possible future Fed chairman.
/goo.gl/4PfiDY

A Fake-News Warning From a Former Propagandist; Why readers shouldn’t underestimate the power of disinformation.
Faye Flam – Bloomberg (paywalled)
From to, viral fake news stories often seem propelled by their own preposterousness. It’s a different matter for professionally produced disinformation. That, I learned from a former pro, requires a core of logic and verifiable fact.
/goo.gl/BE3cBP

The post BOE’s Carney Calls for Rules to End Cryptocurrency Anarchy appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

See what our friend David Setters is doing protesting in the UK, in ITV’s piece Motor neurone disease patients protest in Westminster. Brave, focused and strong. Keep fighting, David. He issued a special thanks to Cathryn Lyall, Belinda Gooderham, Mark Thornberry, Thom Lant, Mark Gately, FCIM and MCIPR for coming out to support him that day.~JK

Chuck Mackie and Rumi Morales were part of a Chicago SunTimes event last week, the story of which is, “Experts break down future of bitcoin, blockchain in Sun-Times discussion.”~JJL

From the World Federation of Exchanges latest report, “41 percent of respondents noted that large technology companies (firms such as Amazon, Google and Microsoft) could be the most impactful in the capital markets infrastructure space in the next five years.”~JK

In a circular to members, SGX has declared their gold futures to be dormant due to the “absence of trading interest.” The exchange suspended the Singapore Kilobar Gold Contract trading on SGX-DT with immediate effect.~JJL

The Dubai Gold & Commodities Exchange (DGCX) today announced that its physically-backed Sharia-compliant Gold contract will commence trading on the exchange on March 29, 2018.~JJL

The FEAS, Federation of Euro-Asian Stock Exchanges, announced that this week is dedicated to their member Iran Fara Bourse. During this whole week FEAS will share news and updates about IFB and their mission.~JJL

Dr. Milton Friedman gave a concise and lucid argument for international free trade at Utah State University in 1978, including why steel producers love tariffs.~JJL

Just to brighten your Monday, here is the musical “Hamilton” set to a polka by Weird Al Yankovich.~JJL

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Would You Wait Six Months To Get A Bitcoin Account? TT’s Michael Unetich Outlines The Crypto Obstacles And Opportunities Ahead
Jim Kharouf – JLN

Michael Unetich is seeing cryptocurrencies from both sides – as a trader and now on the service side as vice president of cryptocurrencies at Chicago-based Trading Technologies. JLN’s Jim Kharouf sat down with him at FinTank’s CryptoCon event in Chicago last month to find out where this asset class is going and the many things it still needs to grow.

Q: Do you have a sense of how this is evolving as far as participants? I hear that even if institutional players are not in it yet, they are looking at it and getting ready for it.

A: Yes. Some have flipped the switch to do it, but they just can’t get in. You hear about corporate customers having onboarding experiences as long as six months at different exchanges. The Coinbase app is one of the top downloaded apps every month and we see different exchanges hitting different milestones every month in terms of new customer accounts. In some ways, the market is only moving as quickly as the infrastructure is letting it move. So I don’t think it is slowing down. I don’t feel like the price sell-off has dented enthusiasm for it. The general public might now realize you can lose a lot of money in it, but the professional market is ready and rarin’ to go.

Read the rest HERE.

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Coinbase Hit with 2 Class Action Lawsuits: Accused of Insider Bitcoin Cash Trading
Samantha Chang – Investopedia
Bitcoin exchange Coinbase was hammered with two federal class action lawsuits in two days, with one accusing employees of insider trading of Bitcoin Cash (BCH).
/goo.gl/vLKvUy

***** Hammered is what you get after you get the lawsuit.~JJL

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Ex-Vatican Bank President Indicted for Embezzlement, Money Laundering; Prosecutors to charge Angelo Caloia and his lawyer for generating losses of more than $60 million
Francis X. Rocca – WSJ
“Vatican prosecutors have indicted a former president of the Vatican bank and his lawyer for embezzlement and money laundering, the latest move in a long-term cleanup of the historically scandal-plagued institution.
/goo.gl/uT71nH

*****Brings new meaning to Lent.~JJL

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Roger Bannister, the First Person to Run a Mile in Less Than 4 Minutes, Dies at 88
Chris Lehourites, AP via Time
It was a typical British afternoon in early May: wet, cool and blustery. Not exactly the ideal conditions for running four laps around a track faster than many thought humanly possible.
/goo.gl/QTaW8P

****Former Euronext executive Lee Hodgkinson dedicated a MarketsWiki Education talk to Roger Bannister and his quest to break the 4-minute mile.

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Friday’s Top Three
Everyone wants to know who just got banned. The NFA’s release Permanently Banning Fortune Trading Group and its principal, Jonathan Schuler, for five years was the top read story. Second went to another banishment of sorts in Bloomberg’s Ken Griffin’s Citadel Dismisses 21 People. Third went to a self-inflicted banishment, in Reuters’ LJM Partners shutting its doors after ‘vol-mageddon’ losses in U.S. stocks. An honorable mention to the WFE’s McKenzie report on fintech in capital markets, which can be accessed via its press release

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MarketsWiki Stats
121,478,177 pages viewed; 23,022 pages; 211,931 edits
MarketsWiki Statistics

Lead Stories

Crypto Investing Comes With a Big Risk: The Exchanges; Recent hacks show the vulnerability investors can face when buying speculative tokens on startup exchanges
Paul Vigna – WSJ
Cryptocurrency traders are learning that where they buy and sell digital tokens can be just as risky as choosing a coin or picking a price. Investors have lost more than $700 million this year in hacks of two major cryptocurrency exchanges. The thefts at Florence, Italy-based BitGrail and Japan’s Coincheck bring total investor hacking losses since 2014 to around $1.4 billion, according to a Wall Street Journal review of recent hacks.
/goo.gl/Cj3yKK

Rare Loss for Wall Street in Senate’s Reboot of Financial Rules
Elizabeth Dexheimer – Bloomberg
Despite lobbying, big banks don’t get many changes they wanted; Smaller banks would be freed from too-big-to-fail oversight
The U.S. Senate is expected to approve a sweeping revamp of financial rules this week. Of all the surprises that entails — about a dozen Democrats signing on, Republicans leaving a lot of the much-maligned Dodd-Frank legislation intact — the biggest is the lack of goodies for Wall Street.
/goo.gl/NLUvdE

Beware Fintech Firms Bearing Bitcoin; Banking isn’t addictive, but getting rich certainly is.
Lionel Laurent – Bloomberg
Fintech startups have long had trouble turning feel-good rhetoric into profitable growth. Competition is intense, consumers tend to want things for free, and dinosaur banks are far from extinct. To make matters worse, finance just isn’t as addictive as messaging or catching up with friends. That counts in an era where billions are made through monetizing attention.
/goo.gl/cxBD5F

Surprise: LaSalle Street balks at LaSalle Street tax
Lynne Marek – Crain’s Chicago Business
Gubernatorial hopeful Dan Biss has a tax idea so anathema to Chicago business that not even his Democratic rivals will go there. The Illinois state senator proposes a “LaSalle Street tax” on every trade running through the city’s futures and options exchanges operated by CME Group and Cboe Global Markets. It’s “one fair way to increase revenue for Illinois,” he says, eyeing $10 billion to $12 billion annually.
/goo.gl/iAyj6H

Sheila Bair Sees the Seeds of Another Financial Crisis
Reshma Kapadia – Barron’s
Sheila Bair has demonstrated that she’s not afraid to be the lone person flagging potential problems. The former head of the Federal Deposit Insurance Corp. is best known for her early warnings about the subprime mortgage market, and she’s still spotting problems in the financial system.
/goo.gl/n4YiJ8

Virtu Financial moves to distance itself from ‘VirtCoin’
Nicole Bullock in New York – FT
Virtu Financial, the high speed trader, on Friday moved to disassociate itself from VirtCoin, which was using Virtu’s logo on a website describing a cryptocurrency operation.
/goo.gl/Q46N8B

What a Longer Xi Reign May Mean for Investors
Vito J. Racanelli – Barron’s
“I found Rome a city of bricks and left it a city of marble” is attributed to Augustus, the first Roman emperor. It’s an ancient boast that comes to mind as Chinese President Xi Jinping maneuvers his power and his country for the future.
/goo.gl/cMjZCx

Exchanges, OTC and Clearing

Kuwait Stock Exchange Plans Share Sale as Early as This Year
Yousel Gamal El-Din, Abbas Al Lawati, Filipe Pacheco – Bloomberg
Market studies will be completed at the end of April: CMA; Vice Chairman Al-Usaimi says liquidity “remains an issue”
Kuwait, which was classified as an emerging market by index provider FTSE Russell in September, plans to sell a stake in its stock exchange as early as this year.
/goo.gl/o53NGH

Deutsche Boerse AG: Release Of A Capital Market Information
MondoVisione
In the period from 26 February 2018 to, and including, 02 March 2018, Deutsche Boerse AG purchased a number of 63,446 shares within the framework of its ongoing share buy-back program which had been announced by the announcement of 22 November 2017 pursuant to Art. 5 (1) lit. a) of Regulation (EU) No 596/2014 and Art. 2 (1) of Delegated Regulation (EU) No 2016/1052.
/goo.gl/ebFNvE

NASDAQ and IEX – Sue Everybody!
Themis Trading
What is one to do when their monopoly power and cash cows are threatened? Send in the lawyers, that’s what!
/goo.gl/9k6mRP

Dubai Gold & Commodities Exchange Appoints INTL FCStone Commodities DMCC To Serve As Market Maker For Their Sharia- Compliant Spot Gold Contract (DGSG)
MondoVisione
INTL FCStone Inc. today announced that its Dubai-based subsidiary, INTL FCStone Commodities DMCC (“the Company”) will serve as the market maker for the Dubai Gold & Commodities Exchange (DGCX) Sharia-compliant Spot Gold contract, which will be available for trading beginning on March 29, 2018. The release of this contract is a first for DGCX, and will mark its entry into the Islamic Finance sector.
/goo.gl/bur2d8

Intercontinental Exchange Reports February Statistics; ICE Average Daily Volume (ADV) +16% y/y, Open Interest (OI) +8% y/y
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported February 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.
/goo.gl/hDxouK

Intercontinental Exchange Sets Date for 2018 Annual Meeting of Stockholders
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges, clearing houses and provider of data and listings services, will hold its 2018 Annual Meeting of Stockholders on Friday, May 18, 2018 at 8:30 a.m. ET at The St. Regis Atlanta. The proxy statement and admission procedures will be available in early April for stockholders of record as of March 20, 2018. A live audio webcast and replay of the annual meeting will be available on the company’s website www.theice.com in the investor relations and media section.
/goo.gl/z1cNRP

Basis Trade at Index Close (“BTIC”) Eligibility on CME Globex and Expansion of Listing Schedule for Certain CME and CBOT Equity Index Futures Contracts
CME Group
/goo.gl/LmF2G3

LSE chairman calls in ex-KPMG chief Simon Collins to probe boardroom crisis
Mark Kleinman, City Editor – Sky News
The London Stock Exchange Group (LSEG) has drafted in a City heavyweight to conduct an independent probe of the boardroom crisis which triggered the ousting of its former chief ex?ecutive.
/goo.gl/Pwezkw

Fintech

Why Bill Gates Is Wrong About Cryptocurrencies
Rob Viglione of ZenCash
Bill Gates’ recent criticisms of cryptocurrencies ó in which he suggested that blockchain technology facilitates financial crime and drug dealing, and has directly caused people harm ó are extremely disappointing. Still, Gates is not the only billionaire who has come out as strongly opposed to the new technology. Warren Buffett has called bitcoin a “joke,” while his partner Charlie Munger referred to it as “noxious poison” that the government should wipe out.
/goo.gl/B2anj7

Cryptocurrency is terrible as money but “crypto-assets” are for real, says Bank of England’s chief
TechnologyReview.com
Cryptocurrencies represent a deeply flawed form of money, but policymakers should be careful not to crack down too hard on “crypto-assets,” Mark Carney, governor of the Bank of England, argued in a speech (pdf) today.
/goo.gl/8LXJ5F

Bitcoin Billionaire Tyler Winklevoss Reveals Litecoin’s True Role; It’s … a little patronizing, honestly.
Alasdair Wilkins – Inverse.com
Litecoin has enjoyed some recent undivided attention from cryptocurrency enthusiasts with the ultimately confusing launch of LitePay. But the truth is that perhaps more than any other coin, it is defined in terms of bitcoin. Litecoin uses almost exactly the same blockchain technology as bitcoin, and it was specifically created to be a more accessible, user-friendly alternative to bitcoin.
/goo.gl/SRcqt7

Iceland’s ‘Great Bitcoin Heist’ sees 600 computers worth $2 million disappear
Jack Morse – Mashable
Mining for cryptocurrency can be an expensive proposition ó albeit less so if you just go ahead and steal 600 powerful computers to do it for you.
/goo.gl/bWD73j

How Trump’s Hudson Tunnel Snit Threatens the National Economy
Elise Young and Demetrios Pogkas – Bloomberg
Economic risks keeping Americans up at night include the hastily rewritten tax code and the possibility of a global trade war set off by U.S. tariffs. Consider another cause for insomnia: President Donald Trump’s opposition to a new rail tunnel linking New York and New Jersey beneath the Hudson River.
/goo.gl/WJUKKv

Politics

Trump’s Tariff Plan Leaves Blue-Collar Winners and Losers
Natalie Kitroeff and Ana Swanson – NY Times
President Trump’s announcement that he planned to impose steep tariffs on imported steel and aluminum delighted some blue-collar industries he had championed. “Enthusiastic and gratified are probably understatements,” said Michael A. Bless, the president of Century Aluminum.
Behemoth steel buyers like Boeing and General Motors weren’t as pleased.
/goo.gl/Uv1dkm

Shortly before Trump announced tariffs, his former adviser dumped millions in steel-related stocks
Marwa Eltagouri – Washington Post
President Trump’s decision Thursday to impose crippling tariffs on the imports of steel and aluminum took many by surprise ó particularly investors, as the Dow Jones Industrial Average closed the day’s trading down more than 400 points, or 1.7 percent, at 24,608.
/goo.gl/uQgjvy

Trump tax cuts herald $1tn bonanza for US investors; Growth in stock buybacks outstrips investment in capex, R&D and employees
Andrew Edgecliffe-Johnson – FT
US companies are on track this year to return a record $1tn to shareholders, as Donald Trump’s tax cuts prompt boards to boost buybacks and dividends at a faster rate than their capital expenditure, research and development budgets or wage bills.
/goo.gl/vQGWwV

Scaramucci Is on White House ‘Exclusion List’ Blocking Visits
Jennifer Jacobs, Justin Sink – Bloomberg
White House official had denied his claim he was on blacklist; Statement confirms he is on list requiring special approval
Anthony Scaramucci, President Donald Trump’s former communications director, is on a list of people blocked from entering the White House without special approval.
/goo.gl/BnTM1Z

The Good Donald, the Bad Donald and the Ugly Market; Stock investors’ reaction to the president’s plan creates an internal conflict.
Stephen Gandel – Bloomberg
Call it the tariff tantrum. The big question investors should be asking during the market’s plunge this week is how could the threat of tariffs — which would affect only 2 percent of all U.S. imports, representing just 0.2 percent of GDP — cause stocks to lose more than $600 billion. The answer is that either tariffs will sock a bigger punch to the economy than most economists think, or it’s about more than just tariffs.
/goo.gl/ZZe4GQ

State Dept. Was Granted $120 Million to Fight Russian Meddling. It Has Spent $0.
Gardiner Harris – NY Times
As Russia’s virtual war against the United States continues unabated with the midterm elections approaching, the State Department has yet to spend any of the $120 million it has been allocated since late 2016 to counter foreign efforts to meddle in elections or sow distrust in democracy.
/goo.gl/oQXuFv

Regulation

U.S. prosecutors want stay lifted to settle ‘The Wolf of Wall Street’ suit
Reuters Staff
The U.S. Justice Department has asked a court to lift a stay on civil proceedings linked to a Malaysian fund at the center of its biggest ever “kleptocracy” probe, so that a settlement can be reached with producers of the movie ‘The Wolf of Wall Street’.
/goo.gl/gG3v2h

Ex-Deutsche Bank Trader Called Gollum by Tom Hayes Fined
Franz Wild – Bloomberg
FCA fines Guillaume Adolph $250,000, bans him from industry; Bank paid $3.5 billion in fines, disgorgements over Libor
A former Deutsche Bank AG trader, nicknamed “Gollum” by Tom Hayes, was fined 180,000 pounds ($250,000) for his role in the Libor-rigging scandal.
/goo.gl/7wZ4ww

ASIC consults on updated guidance for its oversight of the Australian Financial Complaints Authority (AFCA)
ASIC
ASIC today released draft updated Regulatory Guide 139, Oversight of AFCA (updated RG139) for public consultation.
/goo.gl/HSRbSy

SEC Celebrates African American History Month
SEC
The Securities and Exchange Commission this week concluded its month of celebrations, events, and remembrances – at its Washington, D.C. headquarters as well as in regional offices around the country – in honor of African American History Month. With the help and leadership of the Office of Minority and Women Inclusion (OMWI) and the SEC’s African American Council, the SEC highlighted this year’s national theme, “African Americans in Times of War,” and held a number of events celebrating the contributions of African Americans to the United States. Highlights of African American History Month at the SEC included a keynote address by Command Sergeant Major Michael L. Gragg of the U.S. Army Medical Command and a roundtable discussion on diversity hosted by SEC Chairman Jay Clayton.
/goo.gl/ftCGge

FCA fines and bans former Deutsche Bank trader, Guillaume Adolph
UK FCA
The Financial Conduct Authority (FCA) has fined Guillaume Adolph £180,000 and banned him from performing any function in relation to any regulated financial activity.
/goo.gl/eCb6Dm

Big Wall Street Banks See Chance to Weaken Post-Crisis Rule
Emily Flitter, Kenneth P. Vogel and Alan Rappeport – NY Times
The first significant bipartisan attempt to alter rules established after the 2008 financial crisis is turning into a battle on Capitol Hill, as some of the biggest Wall Street banks seek to weaken a crucial requirement aimed at ensuring that they can withstand financial losses.
/goo.gl/ba4LR2

Investing and Trading

Shades of 1987 in the Dow’s 500-Point Drop
Randall Forsyth – Barron’s
With the Dow Jones Industrial Average down more than 500 points, Gluskin Sheff’s chief economist David Rosenberg neatly sums up in a tweet the parallels from just over three decades ago:
/goo.gl/pjnGNZ

Bogle on Bubbles
Barron’s
John C. Bogle, founder of Vanguard Group, was quick to write us after he read an opinion piece we ran last week by Jeffrey Frankel, a professor at Harvard University’s Kennedy School of Government. And Frankel had a few thoughts for Bogle. Here’s their spirited exchange.
/goo.gl/VwvuVQ

Why High-Yield Bonds Could Be Mispriced
Mary Childs – Barron’s
There’s something funny in the high-yield bond market, and even Martin Fridson isn’t quite sure what it meansóthough he does believe the junk-bond market has enjoyed a false tranquility for the past 30 years.
/goo.gl/trZEif

Currency markets send a warning on the US economy; Concerns over the dollar weakness are magnified by the decision to impose across the board tariffs on steel and aluminium
Lawrence Summers – FT
One of the many surprising aspects of financial market performance over the past year has been the weak performance of the US dollar, which has fallen by close to 10 per cent on a trade weighted basis and by more than 10 per cent against the euro.
/goo.gl/o77Tzv

Risk-taking trading firms eye riches in global gas market; Traders such as Trafigura and Vitol are benefiting as the LNG market moves away from long-term contracts
Emiko Terazono and Anjli Raval – FT
The world’s biggest independent commodity traders have carved out reputations and built their billion-dollar balance sheets on a willingness to take calculated risks in oil and metals markets that more staid and established rivals shunned.
/goo.gl/d1t6eu

Stockpickers’ chance has arrived, but will they seize it?; Focus also turns to monetary policy divergence and junk bonds
FT Reporters
Will stockpickers seize clear opportunities?
Over the past five years it has been common to hear traditional equity fund managers complain that a high degree of correlation between good and bad companies has made the art of stock picking difficult.
/goo.gl/3GTsUu

Boom times for US shale oil producers; Industry emerges from downturn more productive and propels spectacular output growth
Ed Crooks – FT
“We are in the BOOM of FRAC SAND HAULING” proclaims a job advertisement on the website Indeed.com. Dozens of companies are looking for truck drivers in west Texas to haul the sand used for hydraulic fracturing, one of the processes that has unleashed the US shale oil revolution of the past decade. The sand is mixed with water and chemicals and pumped into wells at high pressure, to open cracks in the rock through which oil can flow.
/goo.gl/izKRdc

Investors Warm Up to Bond ETFs; After many years of lagging behind stock-focused funds, bond ETFs draw attention
Gerrard Cowan – WSJ
Fixed-income exchange-traded funds are late bloomers compared with their equities-based cousins. But their popularity has surged in recent yearsówith funds focused on shorter-duration bonds drawing interest latelyóas investors look to marry the benefits of fixed income with the advantages of an ETF.
/goo.gl/AdbPdH

Institutions

World’s Best Performing Macro Hedge Fund Lost 16% Last Month
Klaus Wille – Bloomberg
PruLev Global Macro Fund slumps after gaining 52% last year; Singapore-based fund fell as markets roiled in February
The PruLev Global Macro Fund gave up almost one-third of last year’s 52 percent gain in February, after being caught out by the return of volatility.
/goo.gl/omAoTj

Deutsche Investor Anchors $140 Billion on Bet Bond Rout Over
Natasha Doff – Bloomberg
Christian Hille sees less likelihood yields will overtake 3%; Sees market dips as opportunity to add to EM, stock holdings
Deutsche Asset Management’s Christian Hille is tuning out a chorus of warnings that Treasuries are in a bear market. In fact, he’s staked most of his $140 billion portfolio on a bet that the rise in yields has pretty much topped out, clearing the path for gains in risk assets.
/goo.gl/AM5JLf

Fund managers ‘asleep at the wheel’ over exorbitant executive pay; Many of US’s most overpaid CEOs have their packages rubber stamped by asset managers
Attracta Mooney – FT
BlackRock and Vanguard have been accused of being “asleep at the wheel” for failing to tackle exorbitant executive pay in a sign of the growing public and political pressure fund managers are coming under to rein in excessive remuneration packages.
/goo.gl/5YLmTu

These Banks Can’t Pretend They’re Not Important; History suggests that freeing midsize banks from special scrutiny would be a bad idea.
Mark Whitehouse – Bloomberg
Judging from their latest effort to roll back the Dodd-Frank Act, congressional Republicans think that regulators shouldn’t worry so much about the country’s next-to-largest banks ó the ones with between $50 billion and $250 billion in assets. Are they right? History suggests not.

Shadow banking grows to more than $45tn assets globally; Financial Stability Board data include China and Luxembourg assets for first time
Caroline Binham in London – FT
“Shadow banking” grew by nearly 8 per cent globally to more than $45tn on a conservative measure after international rulemakers were able to include detailed data from China and Luxembourg for the first time.
/goo.gl/mcrSxT

The Smart Ways for Fund Investors to Deal With Currency Fluctuations; Analysts say investors are best off with a plain-vanilla approach to currency moves
Dan Weil – WSJ
The dollar’s recent drop to a three-year low against other major currencies raises a natural question: How should investors in mutual funds and exchange-traded funds handle currency fluctuations?
/goo.gl/tgMgsY

Regions

What Eyebrows Might Tell You About Japan’s Stock Market
Bloomberg
Some analysts see a correlation between eyebrow trends and Japanese stocks. So what are they telling investors now? (Source: Bloomberg)
/goo.gl/Nkxdhw

Parched South Africa City Struggles to Avoid ‘Day Zero’: Water Shutdown
Gabriele Steinhauser – WSJ
Officials who huddled recently to discuss a debilitating drought delivered an unexpectedly apocalyptic conclusion: Unless Cape Town’s four million residents slash consumption, the seaside city under Table Mountain must take the rare step of shutting its taps to avoid running out of water.
/goo.gl/Rea1M1

China Pig Feed King Says U.S. Trade War Will Hurt
Bloomberg News
The man who runs China’s biggest consumer of American soybeans said he hopes his country will avoid a clash with the U.S. over trade, though his firm can line up alternative suppliers if necessary.
/goo.gl/4AKJzm

Indian police say gold bribes given in $2 billion bank fraud case
Abhirup Roy, Krishna N. Das – Reuters
An official of India’s Punjab National Bank (PNBK.NS) received gold and diamond jewelry from a billionaire jeweler accused of being involved in a $2 billion bank fraud, the federal police told a court on Saturday.
/goo.gl/PbmFn4

Why has the US opioid crisis not spread to the UK? Thank the NHS
LSE US Centre
The US is currently experiencing an epidemic of opioid use – a crisis which has yet to cross the Atlantic to the United Kingdom. But why has opioid use reached crisis point in the US but not in the UK? Diarmuid Denneny and Silvie Cooper argue that the US crisis has its roots in the promotion of opioids for chronic pain management more than 20 years ago which led to a culture of attempting to end chronic pain rather than to manage it. The National Health Service in the UK, by contrast, made pain management services universally accessible and offers pain-management strategies beyond opioids.
/goo.gl/UFF5uN

Brexit

Global investors shun UK stock market; Influential fund managers see British equities as world’s least popular asset class
Chris Flood – FT
The UK stock market is the most unpopular asset class in the world among big international investors, with confidence languishing at its lowest levels since the financial crisis.
/goo.gl/sBj6FH

May defends stance on post-Brexit financial services rules
William James – Reuters
Prime Minister Theresa May defended her decision to rule out so-called’passporting’ rights for banks after Brexit, saying Britain could not become a”rule taker” when it came to financial services.
/goo.gl/8pa3KJ

The post Risks of Crypto Exchanges; Wall Street Loses in Senate’s Reg Reboot; Beware Fintech Firms Bearing Bitcoin appeared first on John Lothian News (JLN).

First Read

The Man Who Molded Chicago’s Merc; Leo Melamed, chairman emeritus of CME Group, helped make his company the world’s largest manager of financial exchanges. Now he’s focusing on the development of Asian markets
Jacob Bunge – WSJ
In 1939, Leo Melamed learned about the power of financial markets in a bakery in Vilnius, Lithuania. He was 7 years old, trying to use Polish money to buy a loaf of bread. Though Lithuania’s government had deemed the two countries’ currencies equal in value, the baker informed Mr. Melamed that he’d need two Polish zlotys for a loaf that cost one Lithuanian litas.
/goo.gl/YPvsNv

***** A hearty “THANK YOU” is due to Leo for all his contributions to Chicago and global markets, and I am not talking about the three times he busted out (according to this story).~JJL

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Hits & Takes
JLN Staff

Check out this number – U.S. semi-truck orders rose 76 percent in February. More proof of a tightening freight market. Related, but on the shipping front – S&P expects that global demand for the three main shipping categories (dry bulk, tankers and containers) will surpass supply for the first time in several years.~SD

As Jim noted yesterday, the WFE’s latest report said 41 percent of those surveyed thought the big tech companies would be the most impactful in the financial infrastructure space. And what happened right after the report came out? News broke that Amazon is mulling a checking-account like product with big banks.~SD

Some time in February, Interactive Brokers launched a blog dedicated to quants called IBKRQuant. It’s a bit on the heavier side content-wise (as you might imagine).~SD

The Trading Show Chicago, held May 9-10 at Navy Pier, is upping the price of tickets this Friday. Sign up here.~SD

Quote of the day from Chicago Stock Exchange’s CEO and President John Kerin, on dropping plans to sell the exchange to a consortium of investors that included a Chinese firm. “We are very disappointed by the Commission’s decision. We believe that consummating a transaction with NACH (North America Casin Holdings), a consortium comprised mainly of U.S. investors, would have been a good outcome for our shareholders.” ~JK

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Reed Smith Releases Comprehensive Update Of Blockchain Landscape; Chamber of Digital Commerce Hails Firm’s Bird’s-Eye View of Past, Present and Future of Distributed Ledger Technology
Reed Smith
Reed Smith, a global law firm, today released an in-depth white paper on the global legal landscape impacting blockchain technology.
/goo.gl/XqCsqj

*****Get a cup of coffee, this is going to take some time.~JJL

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Eventus Systems Establishes Presence in Asia Pacific Region; Ariel Almeda Representing Firm out of Singapore
Eventus Systems
Eventus Systems, Inc., a provider of innovative regtech software solutions for the capital markets, announced today that the firm has established a presence in the Asia Pacific (APAC) region. The decision to provide a regional sales presence for its Validus surveillance and risk software platform follows growth throughout 2017 in the firm’s client base, as well as regulatory requirements in multiple jurisdictions that have created a demand for affordable surveillance solutions.
/goo.gl/Nb1ZFp

***** Shouldn’t this be in all Latin?~JJL

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Monday’s Top Three
Monday’s top read story was Bloomberg’s Ken Griffin’s Citadel Dismisses 21 People, about trimming staff from one of its stock trading units. Second went to Jim Kharouf’s Q&A with Michael Unetich in Would You Wait Six Months To Get A Bitcoin Account? TT’s Michael Unetich Outlines The Crypto Obstacles And Opportunities Ahead. Third went to the Chicago Sun-Times, Experts break down future of bitcoin, blockchain in Sun-Times discussion

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MarketsWiki Stats
121,512,480 pages viewed; 23,025 pages; 211,948 edits
MarketsWiki Statistics

Lead Stories

U.S. considering ‘material changes’ to ‘Volcker Rule’ – Fed’s Quarles
Pete Schroeder – Reuters
The chief regulator for the U.S. Federal Reserve said Monday the nation’s regulators are actively considering a significant rewrite of the”Volcker Rule.”
jlne.ws/2FgAQq9

****Other sources – NY Times, Bloomberg and WSJ

Stock Bulls in Trump Country Are Freaking Out Their Brokers
Michelle Davis – Bloomberg
‘The market is up because of Trump. They all think it’s Trump’; Enthusiasm is so strong that advisers are urging caution
As 2017’s roaring bull market gives way to a markedly choppier 2018, the buzz among Wall Street stock touts is that the best of the Trump Trade has passed. Sure, more gains could be wrung out, but nothing like the 30 percent burst over the past 16 months.
/goo.gl/QxGV9L

Replacing Libor proves harder in practice after scandal; Floating interest rate benchmark remains a pivotal part of the financial system
Philip Stafford – FT
Abolishing a tarnished benchmark reference rate such as Libor is proving far harder in practice and comes in spite of regulators pushing the market towards adopting a replacement.
/goo.gl/pZMUPQ

Chicago Stock Exchange Ends Proposed Sale to Chinese Investors; Announcement means the exchange won’t seek to fight the SEC, which had blocked the deal last month
Alexander Osipovich – WSJ
The Chicago Stock Exchange has ended a two-year effort to sell a major stake to Chinese investors, the latest deal to run afoul of rising trade tensions between the U.S. and China.
/goo.gl/WzAdm9

**** FT here

New Tech Centers Sprout in Europe; Lisbon, Krakow, Poland, and Edinburgh are among the cities that have become popular for the industry
Shefali Anand – WSJ
New technology centers are mushrooming throughout Europe, boosting office markets in unlikely places.
/goo.gl/kAXCra

Special Report: Fidelity puts 6 million savers on risky path to retirement
Tim McLaughlin, Renee Dudley – Reuters
For three years, the mutual funds in Fidelity’s flagship retirement franchise have outperformed at least 85 percent of their competitors, reversing a decade-long trend of subpar performance.
jlne.ws/2FgcKMm

Equity on Ethereum: Firm Offers Real Stock Through ICO
Investopedia
Testifying before the Senate in early February, Securities and Exchange Commission (SEC) chair Jay Clayton said he believes “every ICO I’ve seen is a security.” Coming from the U.S.’s top markets regulator, those words struck fear into the hearts of blockchain entrepreneurs, with the exception, that is, of Joe Forbes. The CEO of Causam eXchange Inc. is perfectly willing to refer to the company’s upcoming sale of blockchain-based assets to investors as a securities offering.
/goo.gl/oRu9Bc

A Pioneer in Real Estate Blockchain Emerges in Europe; Sweden’s Lantmateriet will test using blockchain technology for property sales
Shefali Anand – WSJ
The blockchain technology that underpins cryptocurrencies such as bitcoin could change the way property deals are done and recorded more than any other new technology, real-estate and technology experts say.
/goo.gl/kczy2B

EU Raises Stakes for Trump by Aiming Levies at GOP Heartland
Viktoria Dendrinou, Jonathan Stearns – Bloomberg
Tit-for-tat tariffs of 25% to hit $3.5 billion of U.S. goods; Retaliatory list includes jeans, cosmetics, bourbon, boats
The European Union is preparing punitive tariffs on iconic U.S. brands produced in key Republican constituencies, raising political pressure on President Donald Trump to ditch his plans for taxing steel and aluminum imports.
/goo.gl/R7eRdf

Continental Grain to push Bunge to consider potential sale: source
Tom Polansek – Reuters
U.S. agricultural investor Continental Grain Co plans to push Bunge Ltd to consider a potential sale, a person familiar with the matter said on Monday, after Archer Daniels Midland Co approached Bunge about a takeover.
/goo.gl/NJmJvZ

Megabanks Get One Big Win in Senate Rollback Bill; Nation’s largest banks would gain incentive to buy more municipal bonds in legislation targeting smaller banks
Andrew Ackerman – WSJ
Bipartisan legislation expected to clear the Senate this week has just one provision that is set to directly benefit the nation’s megabanks: a section aimed at making it easier for them to buy state and local bonds.
/goo.gl/xPFGjv

Citigroup, Kabbage Form Consortium on Fintech Cybersecurity; Group also includes Zurich Insurance and Depository Trust & Clearing Corp.
Lalita Clozel – WSJ
Four financial companies including Citigroup Inc. C 1.00% and online lender Kabbage Inc. said Tuesday they have formed a consortium to address fintech firms’ cybersecurity risks, a sign of the industry’s growing links to traditional banks and insurers.
/goo.gl/4T8UT6

****Reuters here

Exchanges, OTC and Clearing

Chicago Stock Exchange and North America Casin Holdings Terminate Merger Agreement
Chicago Stock Exchange via Medium
The Chicago Stock Exchange, Inc., and North America Casin Holdings, Inc., announced today that they have mutually agreed to terminate their previously announced merger agreement, due to the order of the Securities and Exchange Commission (the “Commission”) issued February 15, 2018, which disapproved proposed changes to the rules of the CHX that are necessary for the consummation of the Merger Agreement.
jlne.ws/2FWWIZ9

Cboe Global Markets Reports February 2018 Trading Volume
Cboe
VIX futures, VIX options and SPX options set new ADV records in February 2018; Record month of trading across Cboe Options Exchange, Cboe Futures Exchange, Cboe Periodic Auctions Book and Cboe FX
/goo.gl/yxmoVH

When VIX Aftershocks End, So Will Cboe Global’s Pain
Crystal Kim – Barron’s
The volatility blowup of Feb. 5 continues to reverberate through the exchange-traded fund industry, the subject of Barron’s “Volatility ETF Aftershocks.” And few companies have been impacted more than Cboe Global Markets (CBOE), which has declined 13% since early February to around $113.
/goo.gl/aL1HWA

Wall Street’s volatility products in the spotlight; Market retains potential for upsets after February’s ‘Vix-mageddon’
FT
Christian Pfrang in Hong Kong and Robin Wigglesworth in New York YESTERDAY 1
A month ago global markets were thrown into a tailspin, with US equities suffering one of their fastest 10 per cent corrections in history. The mayhem raised questions about a small but complex corner of markets where investors trade volatility itself.
/goo.gl/VgiRaV

Nasdaq February 2018 Volumes
Reuters
Nasdaq Inc – Feb U.S. equity options volume 155 million contracts versus 120 million contracts in Feb 2017
jlne.ws/2FXcKlM

BSE shows how to make the most of a minuscule market share
Mobis Philipose – Livemint
Despite its best efforts, BSE Ltd has ended up with nearly zero market share in the equity derivatives segment, the largest category in the exchange business in India. And notwithstanding a 120-year head start over NSE, its market share in the cash equities segment has dwindled to 13.4%, from 33% ten years ago. Put together, BSE has only a tiny sliver in the market for trading Indian equities.
/goo.gl/zXPQZ2

Japan’s Crypto Exchanges Self-Regulate In Wake of $500 Million Hack
Wolfie Zhao – Coindesk
Sixteen cryptocurrency exchanges in Japan have formed a new self-regulatory organization, an effort that comes in the wake of the $500 million theft in January.
/goo.gl/Zd5oGV

Ex-Thomson Reuters chief’s FinTech startup raises $20 million; EBS BrokerTec’s former CEO, Traiana’s former head of technology and the former CEO at Thomson Reuters founded Capitolis in 2017.
Hayley McDowell – The Trade
FinTech startup Capitolis, co-founded by the former CEO of Thomson Reuters, has raised $20 million in funding. The FinTech firm’s second funding round was led by Index Ventures, while the first round was led by Sequoia Capital and generated $9 million in funding. Capitolis was established in 2017 by the former CEO of EBS BrokerTec Gil Mandelzis, former head of technology at Traiana Igor Teleshevsky, and Tom Glocer, formerly the CEO at Thomson Reuters.
/goo.gl/KJVCqX

Euronext announces volumes for February 2018
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for February 2018.
/goo.gl/ZYx1VL

CCP Release 15.0: Introduction announcement
Eurex
With this circular, Eurex Clearing announces the introduction of CCP Release 15.0 on 18 June 2018.
/goo.gl/4hFYsN

ASX Monthly Activity Report – February 2018
ASX
/goo.gl/UgVtTY

HKEX to introduce Tracker Fund and Hang Seng China Enterprises Index ETF futures
HKEX
Tracker Fund and Hang Seng China Enterprises Index ETF futures to be introduced on 9 April; Commission Levy for new futures to be waived for first 6 months
Hong Kong Exchanges and Clearing Limited (HKEX) will introduce Tracker Fund of Hong Kong (Tracker Fund) and Hang Seng China Enterprises Index ETF futures, its first futures on Exchange Traded Funds, or ETFs, that track Hong Kong stocks, on Monday, 9 April 2018.
/goo.gl/MczPsL

Nasdaq ties up with Sina to offer US stock market data to China’s growing pool of investors
South China Morning Post
The US exchange will license two of its products offering data on individual stocks as well as indices and exchange-traded funds
/goo.gl/G83r6C

Fintech

Nouriel Roubini: The blockchain is a pipe dream
Nouriel Roubini and Preston Byrne – Financial News
Blockchain is a slow, energy-inefficient dinosaur that will never be able to process transactions as quickly or inexpensively as an Excel spreadsheet
/goo.gl/UgCDeP

‘Splinternet’ to herald a trade war for the ages
Rana Foroohar – Financial Times
It’s ironic that the one thing that trade ministers could agree on at the end of the seventh round of Nafta trade talks in Mexico City ó the need to modernise the agreement to account for the shift towards a digital economy ó is also likely to be the real focus of any future trade war.
Steel and aluminium tariffs announced by President Trump have, of course, sucked up all the attention in recent days, particularly as Mr Trump threatened Mexico and Canada (trade allies which would normally be exempt from such measures) with implementation of tariffs if they didn’t comply with US demands on Nafta.
jlne.ws/2FXEcjl

ICOs delivered at least 3.5x more capital to blockchain startups than VC since 2017
Jason Rowley -TechCrunch
Recently, we found that, for 2018, the amount of money being raised by blockchain and blockchain-adjacent companies via traditional VC rounds is on pace to surpass 2017’s highs.
/goo.gl/dejPFd

We Are Living in the Golden Age of Fintech
Ron Suber, Prosper Marketplace Via Tabb Forum
While the current golden age of fintech is the product of many forces, Ron Suber highlights the six biggest driving forces today and into the future. Every fintech entrepreneur should be aware of their impact and positioned to benefit from the trends, he says. The golden age will draw to a close in the next few years, and the landscape will change dramatically as the next phase in the innovation cycle begins, triggering a wave of consolidations that will replace today’s crowded and fragmented marketplace.
/goo.gl/sBuXya

Coinbase has hired LinkedIn’s M&A boss to spearhead new acquisitions
Fitz Tepper – TechCrunch
Coinbase is continuing its executive hiring spree as the company has announced that Emilie Choi is joining Coinbase as vice president of Corporate and Business Development.
/goo.gl/jk1726

Amazon mulling checking-account like product with big banks: WSJ
Reuters
Amazon.com Inc is in talks to create a checking-account-like product with big banks such as JPMorgan Chase & Co, the Wall Street Journal reported, citing people familiar with the matter.
jlne.ws/2FkvF8E

World Economic Forum leads creation of fintech cybersecurity consortium
Anna Irrera – Reuters
The World Economic Forum has led the creation of an industry consortium focused on improving the cybersecurity of financial technology companies, as collaboration between fintechs and financial institutions grows.
/goo.gl/CyV4dm

Politics

Stock Buybacks Are Proof of Tax Reform’s Success; Companies help workers not by being philanthropic but by investing capital in profitable ideas.
John H. Cochrane – WSJ
As the Republican tax reform has gained popularity, the Democrats have had to update their messaging. To cast corporate tax cuts as a “scam” and redistribution to the wealthy, opponents have shifted their focus to the evils of stock buybacks and dividends.
/goo.gl/zPLmT6

Mitch McConnell’s big gift to the banks
Jennifer Taub – CNN
This month marks the tenth anniversary of the $29 billion US government-backed bailout of Bear Stearns. The collapse of this giant investment bank in March 2008, under the weight of its bad mortgage-linked bets, marked the beginning of the global financial crisis.
/goo.gl/SW79KN

Bankers, reformers in opposition on regulatory rollback
Francine McKenna – MarketWatch
Banking bill will either put system at significant risk again or provide much needed relief for smaller banks
The Senate is expected to approve this week the most significant reversal of regulatory requirements for financial services firms since the financial crisis, including a significant retrenchment of the heightened scrutiny for banks with less than $250 billion in assets that was implemented by the Dodd-Frank Act of 2010.
/goo.gl/ZHyPJr

Goldman Sachs Rips Into Trump’s Tariffs Plan
Jasmine Ng – Bloomberg
Bank warns duties will add to price pressures and hurt allies; Report comes as BHP says move is a ‘black day for the world’
Goldman Sachs Group Inc. delivered a comprehensive critique of Donald Trump’s planned metal tariffs, saying they risk damaging the world’s biggest economy by raising costs just as price pressures build, hurting allies more than others, and creating a two-tier global market.
/goo.gl/jp6yjh

Regulation

City watchdog: ‘We’re taking action on asset managers that aren’t transparent with clients’
Megan Butler – The Telegraph
Consumers can choose between as many investment funds as they can shades of paint. Lots of choice can be a good thing and we at the Financial Conduct Authority welcome innovation. But consumers might be surprised if they took home a variety of colours, only to discover that each tin just contained white.
jlne.ws/2FXlZCj

The IRS Is Cracking Down On Cryptocurrency Transactions. Here’s What That Means For You
Ryan Derousseau – Time.com
Investors aren’t the only ones interested in big cryptocurrency profits. The IRS has a growing curiosity about them too.
/goo.gl/egr4Ha

U.K. watchdog fines, bans ex-Deutsche Bank trader ‘Gollum’ over Libor
Samuel Agini – MarketWatch
Financial Conduct Authority concludes that Guillaume Adolph ‘improperly influenced’ Libor submissions to benefit his own trading positions
The UK’s Financial Conduct Authority has fined and banned a former Deutsche Bank derivatives trader for his role in the Libor scandal.
/goo.gl/AwMnsF

****SD: As he’s writing the check I’m hoping he mutters, “My precious…”

SEC can recoup ill-gotten gains from New Mexico businessman: U.S. appeals court
Jonathan Stempel – Reuters
A federal appeals court on Monday ordered a New Mexico businessman to disgorge $5 million to the U.S. Securities and Exchange Commission, nine months after the U.S. Supreme Court curbed the regulator’s power to claw back ill-gotten gains.
/goo.gl/XbFiuv

FCA bans former Co-op Bank boss Paul Flowers from industry; Action clears way for Treasury inquiry into regulators’ crisis-era supervision of lenders
Caroline Binham in London – FT
Paul Flowers, the former chairman of the Co-operative Bank, has been banned from working in financial services by the City regulator.
/goo.gl/rZQRHu

FCA bans former Co-operative Bank Chair, Paul Flowers, from the financial services industry
UK FCA
The Financial Conduct Authority (FCA) has banned the former Chair of Co-operative Bank PLC (Co-op Bank), Paul Flowers, from the financial services industry.
/goo.gl/Z1MzYu

ASIC remakes ‘sunsetting’ class order about share and interest sale facilities
ASIC
ASIC has remade Class Order [CO 08/10] Share and interest sale facilities, which was due to expire on 1 April 2018.
/goo.gl/bCWDDQ

Upcoming Board Meeting
FINRA
This week, the FINRA Board of Governors will meet for the first time in 2018. I want to take this opportunity to highlight some of the discussions scheduled to take place.
/goo.gl/JcdtyL

CFTC Charges Iowa Resident Lon Olen Friedrichsen with Solicitation Fraud in Violation of the Commodity Exchange Act; CFTC also Charges Friedrichsen with Acting as an Unregistered Commodity Trading Advisor
CFTC
The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Southern District of New York, charging Lon Olen Friedrichsen of Alton, Iowa, with fraud and failing to register with the CFTC as a Commodity Trading Advisor, as required. Friedrichsen, as alleged, also solicited clients under the names of Lon Kummer and Lon Richardson, but omitted that these were false names.
/goo.gl/4z295M

Investing and Trading

Mind the gap: Diversity and passive investment
Fong Yee Chan – FTSE Russell Blog
March 8 is International Women’s Day. This week we’d like to reflect on the progress being made to improve diversity in the global workforce. In recent years, a series of initiatives have been enacted around the world to encourage a more diverse and inclusive work environment by increasing female representation at leadership levels. Current research suggests that increasing women’s participation on corporate boards can result in economic and financial benefits, such as increased female employment at all levels as well as positive corporate performance.
/goo.gl/UgEWA2

Trump Facing ‘Dow Vigilantes’ in Stock Market Verdict on Tariffs
Lu Wang – Bloomberg
Boeing, the heaviest-weighted Dow member, seen vulnerable; ‘Bears could come back’ on rising Trump protectionism – Yardeni
Donald Trump’s yardstick for his own success is going rogue. That’s the Dow Jones Industrial Average, a regular feature in the U.S. president’s commentary over the past year as the equity bull market raged on. Take early January, when the index sailed past 25,000 for the first time: “This is all about the Make America Great Again agenda! Jobs, Jobs, Jobs. Six trillion dollars in value created!”
/goo.gl/fe2TcG

Are Building-Block Funds on the Scrap Heap?
Chris Chancellor – CFA Institute Blog
The world of mutual funds is often divided into competing categories. Typical distinctions include equity vs. bond, active vs. passive, and proprietary vs. third-party distribution.
/goo.gl/PV5cYn

Keep Calm About U.S. Crisis And Invest in Stocks, Barclays Says
Ksenia Galouchko – Bloomberg
There’s no need to hide your money under the mattress for fear that the next selloff is around the corner, according to Will Hobbs, head of investment strategy at Barclays Plc in London.
/goo.gl/W1oyaJ

Institutions

Goldman creates new commodities finance team as unit seeks turnaround
Catherine Ngai – Reuters
Goldman Sachs Group Inc is creating a new commodities finance team that will move staff from the securities division into the investment banking division, according to an internal memo on Monday.
/goo.gl/K2TpX1

****Bloomberg

Opec says hedge funds lack ‘basic understanding’ of oil; Cartel’s Mohammad Barkindo urges more focus on market fundamentals
Gregory Meyer in Houston – FT
Hedge funds are important players in the oil market, but some do not comprehend how it works, a senior Opec official has said.
/goo.gl/oUUHyu

‘Banks will get burned’: Fixed income hiring rises again
Financial News
For European fixed income traders, the long hiring-drought nightmare is over ó but banks who resisted job cuts may be hard to compete with
/goo.gl/cmS2av

$1.7 Trillion Asset Manager Sticks to Unloved Stock Market Bet
Aleksandra Gjorgievska – Bloomberg
Europe’s largest asset manager says U.K. equities are trading at a discount they may not deserve.
/goo.gl/SQERsZ

Regions

How to break the banker-promoter nexus; A public trial of bankers will erode both confidence of the bankers as well as people’s trust in the banking system, something which India can ill afford when growth is returning to the economy
Tamal Bandyopadhyay – Livemint
You must have seen the popular TV advertisement campaign for a men’s deodorant brand where different sets of people casually ask each other, “kya chal raha hai?” (‘what’s going on?’). The reply, always, is: “Fogg chal raha hai” (Fogg is very popular these days, referring to the brand). Newspaper headlines and prime time TV discussions over the past fortnight may encourage us to rephrase this: “kya chal raha hai?” “Fraud chal raha hai.”
/goo.gl/LvxASQ

Investigators Summon Top Bank Chiefs as India Widens Fraud Probe
Shruti Srivastava, Anto Antony, PR Sanjai – Bloomberg
Enforcement Directorate said to seek meetings with 31 banks; Serious fraud unit to meet CEOs of ICICI, Axis Bank: report
Federal investigators are seeking to question the chiefs of India’s biggest lenders as they widen their probe into the $2 billion fraud at Punjab National Bank.
/goo.gl/gevVmD

India bets on new financial centre to challenge Singapore; Low-tax financial centre in Gujarat is designed to bring more derivatives trading to India
Simon Mundy in Gandhinagar – FT
On a quiet expanse of scrubland in India’s western state of Gujarat, dotted with a few glass-fronted office towers and others under construction, GIFT City does not look like a buzzing hub of international finance.
/goo.gl/9Aprvi

Brexit

UK farmers caught between Brexit and changing consumer tastes; Concerns about animal welfare and rise of ‘flexitarians’ come as subsidies face reform
Scheherazade Daneshkhu in London – FT
When triplet calves were born for the first time on the Suffolk dairy farm belonging to Jonny and Dulcie Crickmore, the husband and wife team excitedly posted the pictures online. But they were not prepared for the reaction of extremist vegan groups.
/goo.gl/nXPXRq

The post U.S. considering ‘material changes’ to ‘Volcker Rule’; Stock Bulls in Trump Country; Replacing Libor is harder in practice appeared first on John Lothian News (JLN).

First Read

Bitcoin and Blockchain: A WILD Opportunity
Sarah Rudolph – JLN

Bitcoin is not at the dizzying high it was back in December, but interest in cryptocurrencies and blockchain is still strong. The world of crypto and distributed ledger technology keeps expanding, with CME and Cboe now trading bitcoin futures, companies getting into initial coin offerings, cryptocurrency meetups forming, and the list of cryptocurrencies getting longer every week.

Women In Listed Derivatives (WILD) and Morgan Lewis jointly hosted a panel on the future of blockchain and cryptocurrencies Tuesday evening to a packed house.

The main takeaway on cryptocurrency from the panel was that, although crypto is a new and very speculative investment, it’s a significant opportunity in the financial markets, where there are currently not many of those.

To read the rest of the article, go HERE

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Hits & Takes
JLN Staff

The Trading Technologies link to cryptocurrency exchange GDAX from the TT platform is now live. You can find more information HERE.~JK

NYSE is the recipient of the first-ever SEC charge of violating business continuity and disaster recovery requirements.~SD

Cboe released an update of its options funds white paper. The 105 options-based funds studied have AUM of $38.1 billion. Some $8.5 billion of that total comes from Gateway. Did you know Gateway is eight years older – inception date Dec 1977 – than the same-named computer company?~SD

The Northeast can’t catch a break with the weather. Some folks are still without power after last week’s bomb cyclone and now more nuttiness is in the air…~SD

Coca Cola is preparing to launch its first ever alcoholic beverage (not available in the States though – debuting in Japan).~SD

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If you’re so smart, why aren’t you rich? Turns out it’s just chance
Emerging Technology
The distribution of wealth follows a well-known pattern sometimes called an 80:20 rule: 80 percent of the wealth is owned by 20 percent of the people. Indeed, a report last year concluded that just eight men had a total wealth equivalent to that of the world’s poorest 3.8 billion people.
/goo.gl/M8nTXv

**I’m buying my lottery ticket today.~JK

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Google Searches for Bitcoin Drop to Lowest Since October
Eddie Van Der Walt – Bloomberg
People just aren’t that interested in Bitcoin since the digital currency’s manic price surge came to an abrupt end late last year.
/goo.gl/NmqdxW

**Let’s all search for ICOs! ~JK

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Singapore Exchange and New Zealand’s Exchange sign MOU
SGX
Singapore Exchange (SGX) and New Zealand’s Exchange (NZX) have signed a Memorandum of Understanding (MOU) to expand co-operation in Asia-Pacific markets.
/goo.gl/eNLzsu

****What a mooove – dairy derivatives on SGX?~SD

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Tuesday’s Top Three
Yesterday’s top story was the Wall Street Journal’s profile on the soon to be retired Chairman Emeritus Leo Melamed, in The Man Who Molded Chicago’s Merc. Second went to Reuters’ piece U.S. considering ‘material changes’ to ‘Volcker Rule’: Fed’s Quarles. Third was Monday’s top story, Bloomberg’s article Ken Griffin’s Citadel Dismisses 21 People

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MarketsWiki Stats
121,549,956 pages viewed; 23,029 pages; 211,971 edits
MarketsWiki Statistics

Lead Stories

Gary Cohn to Resign as Trump’s Top Economic Adviser
Kate Kelly, Maggie Haberman and Peter Baker – NY Times
Gary D. Cohn, President Trump’s top economic adviser, plans to resign, becoming the latest in a series of high-profile departures from the Trump administration, White House officials said on Tuesday.
jlne.ws/2G0BSI2

****From the AP – Wave of exits from West Wing sparks talk of brain drain; Bloomberg – Wall Street Alarmed as Cohn Departure Fires Up Trade War Angst; CNBC – Ex-Obama advisor Goolsbee wouldn’t fill Cohn’s shoes ‘if it was the last job on Earth’; FT – Cohn resignation could prove a new departure for markets; MarketWatch – Dow set to drop after Cohn’s departure; Bloomberg – Trump Confronted Cohn on Trade Hours Before Resignation, Sources Say

Flexpoint Ford Backs Management Buyout of Dash Financial Technologies
PRNewswire
Dash Financial Technologies today announced that its co-founders, Peter Maragos and David Karat, have partnered with private equity investment firm Flexpoint Ford to acquire the Dash business from private equity firm GTCR in a management-led buyout.
/goo.gl/Rd45Jd

Virtual currencies are commodities, U.S. judge rules
Brendan Pierson – Reuters
Virtual currencies like bitcoin can be regulated as commodities by the U.S. Commodity Futures Trading Commission, a federal judge ruled Tuesday.
/goo.gl/mfk7kX

NYSE to Pay $14 Million Penalty for Multiple Violations
SEC
The Securities and Exchange Commission today announced that it charged the New York Stock Exchange and two affiliated exchanges with regulatory failures in connection with multiple episodes, including several disruptive market events. The charges arose from five separate investigations and include the first-ever charged violation of Regulation SCI. The Commission adopted Reg SCI to strengthen the technology infrastructure and integrity of the U.S. securities markets, and today charged two NYSE exchanges with violating Reg SCI’s business continuity and disaster recovery requirement. In settlement, the exchanges agreed to pay a $14 million penalty.
/goo.gl/FAuQyh

LJM sued by its broker Wells Fargo over missed payments
Reuters
A Chicago fund manager that is closing after big losses in last month’s U.S. stock market plunge was sued on Tuesday for $16.4 million by its clearing broker Wells Fargo Securities for having allegedly missed required margin payments.
/goo.gl/JjbcMW

Euroclear to move holding company from London to Brussels; Securities depositories group makes move ahead of Brexit to reduce reliance on London
Philip Stafford – FT
Euroclear, one of the world’s largest securities depositories, is to move its holding company from Britain, redrawing its corporate structure in preparation for the UK’s departure from the European Union.
/goo.gl/oQgYpK

RBS reaches $500 million settlement with New York over mortgage securities
Jonathan Stempel – Reuters
Royal Bank of Scotland Group Plc (RBS.L) has reached a $500 million settlement with New York state to resolve charges it misled investors by selling risky mortgage securities that contributed to the 2008 global financial crisis.
jlne.ws/2FZbvSP

****Bloomberg here

S&P Global to buy AI firm Kensho for $550 million
Reuters
S&P Global Inc (SPGI.N) will buy artificial intelligence and analytics firm Kensho Technologies Inc for about $550 million in cash and shares, the ratings agency said on Tuesday.
/goo.gl/RFmvbU

Shrinking European capital markets widen gap with US; Growing bond markets fail to compensate fully for fall in bank finance
Kate Allen – FT
European capital markets have failed to keep pace with the continent’s economic growth since the financial crisis, mostly because of underperformance by London, according to research.
/goo.gl/i4GwRS

How Hedge Funds Are Winning Back Investors
Katia Porzecanski – Bloomberg
Hedge fund managers often get a reputation for being greedy and unwilling to acquiesce to the changing demands of the money-management business. But in the face of investor backlash over middling returns, they’ve made a range of concessions to stay afloat.
jlne.ws/2Fim1Dz

Ripple Develops Blockchain Payments App With 61 Japanese Banks
Gareth Allan and Takako Taniguchi – Bloomberg
Mobile app will roll out at three of the lenders this year; Latest effort to use blockchain technology in finance
Ripple, the U.S. digital payments company, is working with 61 Japanese banks on an application that will enable customers to settle cash transfers instantly around the clock, the latest effort to apply blockchain technology in finance.
/goo.gl/8kiCn3

Bitcoin’s Tokyo Whale Sold $400 Million and He’s Not Done Yet
Go Onomitsu – Bloomberg
He’s not your typical Bitcoin whale, but Nobuaki Kobayashi has become a force to be reckoned with in the cryptocurrency world. The Tokyo attorney and bankruptcy trustee for the now-defunct Mt. Gox exchange disclosed on Wednesday that he sold about $400 million worth of Bitcoin and Bitcoin Cash since late September. Kobayashi is sitting on another $1.9 billion of the tokens and will consider offloading those too as he raises cash to distribute to Mt. Gox’s creditors.
/goo.gl/jAAWDx

Exchanges, OTC and Clearing

Japan to punish several cryptocurrency exchanges, halt operations at others: Nikkei
Reuters Staff
Japan’s financial regulator will this week slap several cryptocurrency exchanges with administrative punishment notices and is considering forcing some to suspend their business, the Nikkei business daily reported on Wednesday.
/goo.gl/wjDq5G

Chicago Stock Exchange Re-engaging in a Process to Explore Strategic Alternatives To Enhance Shareholder Value
CHX via Medium
Following the mutual termination of the merger agreement between CHX Holdings, Inc., and North America Casin Holdings, Inc., the Chicago Stock Exchange, Inc. (CHX), announced today that its Board of Directors is re-engaging in a process to explore strategic alternatives to further enhance shareholder value, including a potential sale of the company.
jlne.ws/2FYniB1

Polish confirms bid for Tel Aviv stock exchange
Reuters
Poland’s state-run stock exchange GPW, along with state fund PFR, has submitted a non-binding offer to buy a 71.7-percent stake in Tel Aviv Stock Exchange TASE, GPW said on Tuesday.
jlne.ws/2FZe4o5

Rewiring today’s exchanges and post trade to forge tomorrow’s market success – Part 1
Hirander Misra, GMEX Group – TABB Forum
The pressure is on for market operators to meet the widening expectations of customers as technology presents new efficiencies and opportunities.
Market participants are seeking exchanges that can provide the latest in electronic trading and post-trade infrastructure. Not only that, they’re looking for operators that are future-proofing those services with platforms that can adapt to, and incorporate, new innovations such as Blockchain as well as connect with a broad range of external technologies.
jlne.ws/2D3MyTi

Inverted Exchanges: Higher Leakage or Higher Quality?
Pragma via TABB Forum
Orders on inverted exchanges effectively hop the inter-market queue and have a higher probability of fill, lower adverse selection, and ultimately less shortfall relative to the arrival of the child order. (Of course, these benefits come at a cost.) Despite the evidence of these benefits, however, some traders have lingering doubt as to whether posting orders on an inverted exchange may degrade performance by leaking more information than orders on regular exchanges.
jlne.ws/2FWPsfz

Aramco IPO venue in the balance as Saudi prince embarks on trip
Rania El Gamal, Alex Lawler, Yara Bayoumy – Reuters
Saudi Crown Prince Mohammed bin Salman’s upcoming trip to Britain and the United States could shape the decision on where to list oil giant Aramco, at a time when sources say the chances of London and New York hosting the IPO appear to be receding.
jlne.ws/2FXozYU

TMX Group Consolidated Trading Statistics – February 2018
Mondovisione
TMX Group Limited today announced February 2018 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha) and MontrÈal Exchange (MX).
/goo.gl/bBFAj3

****SD: Both derivatives volume (9,703,208 contracts) and open interest (6,902,931 contracts) are up YoY and MoM – volume by much larger margins.

B3 Launches The 2018/2019 ISE Process
Mondovisione
B3 launched today the 2018/2019 Corporate Sustainability Index (ISE) Process. During the launch event, which is geared to companies and interested participants, there was the presentation of the 2018 activities calendar, the agenda, and the review methodology for the 2018 ISE Questionnaire
jlne.ws/2FmxO45

Focus on Total Return Futures; How innovation opens up investment opportunities
Eurex
Eurex asks Edouard Pelier, head of delta one and collateral trading, equity and commodity products at UniCredit Bank, and Ziad Kerbage, executive director of the equity derivatives group at JP Morgan, why market participants should trade Total Return Futures (TRFs), how they can be incorporated into trading strategies and how the TRF market will develop in the future.
/goo.gl/kYqcen

Equity Index Derivatives: Withdrawal of admission of futures and options on the Sensex Index
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Z¸rich AG decided the following with effect from 3 April 2018:
/goo.gl/KmxuWD

Fintech

The Fintech Files – Who wants to regulate blockchain?
Financial News
Welcome to The Fintech Files, keeping you up-to-date with the latest developments in financial tech and innovation. Regular host Yolanda Bobeldijk is on maternity leave, so this week’s edition is brought to you by Liz Pfeuti, FN’s deputy online editor.
jlne.ws/2G0Bppg

Bitcoin exchange Coinbase launches the Dow Jones of cryptocurrencies
Kate Rooney – CNBC
Coinbase is launching a weighted index fund for cryptocurrencies.
Much like how the Dow Jones Industrial Average gives a sense of the American economy, this fund tries to reflect major trends in the cryptocurrency market.
“It’s an easy way to get exposure to the crypto assets that we offer on our exchange,” says Coinbas President and COO Asiff Hirji.
/goo.gl/PjMYRH

****Bloomberg here.

McKay Brothers Receives Minority Investment From Jane Street Group
Mondovisione
McKay Brothers, a market leader in low latency networks, today announces a minority investment from Jane Street Group, LLC that will support the continued growth of McKay’s successful private bandwidth and market data businesses.
jlne.ws/2G1codW

Google Researchers Are Learning How Machines Learn
Cade Metz – NY Times
Machines are starting to learn tasks on their own. They are identifying faces, recognizing spoken words, reading medical scans and even carrying on their own conversations.
jlne.ws/2Flz1sj

SmartTrade Technologies appoints Soren Haagensen sales director, the Americas
Finextra
SmartTrade Technologies, a multi-asset electronic trading pioneer, announced today the appointment of Soren Haagensen as Sales Director for the Americas where he will be contributing to smartTrade’s growth as well as ensuring smartTrade continues to deliver excellent services to both new and existing clients.
/goo.gl/2SfcfM

Blockchain will track how meat gets from Australian farms to Chinese tables
Echo Huang – Quartz
Last year, Chinese consumers got a chance to verify the goodness of the steaks coming to them from a local producer. Now they’ll be able to track their meat all way back to farms in Australia, one of the country’s major beef suppliers, thanks to the help of technology that makes it hard to tamper with information.
/goo.gl/FfQv8t

Politics

McConnell: Republicans concerned tariffs could spark trade war
Jordain Carney – TheHill
Senate Majority Leader Mitch McConnell (R-Ky.) broke his silence on President Trump’s proposed tariffs, saying he and other Republicans have “genuine concern” the administration could start a trade war.
jlne.ws/2FlJ7Js

Cohn’s Exit Leaves Hard-Liners Ascendant in Trump White House
Justin Sink, Jennifer Jacobs, Margaret Talev – Bloomberg
Economic adviser departing after a showdown over tariffs; Wilbur Ross, Peter Navarro expected to gain influence on trade
Gary Cohn’s departure from the White House is a victory for the protectionists and immigration hawks who have sought to push President Donald Trump to fully embrace their views.
/goo.gl/Myr7q7

House could vote on trillion-dollar funding package next week
Scott Wong and Mike Lillis – TheHill
The House could pass a $1 trillion omnibus next week to give the Senate extra time to approve the massive spending package before funding for the government runs out on March 23, Majority Leader Kevin McCarthy (R-Calif.) told colleagues in a private meeting Tuesday.
jlne.ws/2Fitlzb

IMF’s Lagarde says nobody wins a trade war
Geert De Clercq – Reuters
No one emerges victorious from a trade war, International Monetary Fund chief Christine Lagarde said on Wednesday, warning that the economic impact of U.S. import tariffs would be serious if other countries respond with their own barriers.
/goo.gl/hNs7uU

Regulation

New York Stock Exchange fined by SEC over outages, repeat violations
Steve Goldstein – MarketWatch
The New York Stock Exchange and two of its more specialized exchanges on Tuesday were fined by the Securities and Exchange Commission, for allegedly making up rules as they went along in the face of market volatility.
jlne.ws/2D2OxHz

Warren vows fight as U.S. Senate begins debate on Dodd-Frank rewrite
Pete Schroeder – Reuters
Democratic Senator Elizabeth Warren promised to fight a U.S. Senate bill easing bank rules introduced following the 2007-2009 global financial crisis as the chamber moved on Tuesday to begin debating the draft bipartisan legislation.
jlne.ws/2G3EeWU

‘The Wolf of Wall Street’ producers to pay $60 million to U.S. in lawsuit settlement
Reuters
The company behind the 2013 film, “The Wolf of Wall Street”, agreed to pay the United States government $60 million to settle a civil lawsuit that sought to seize assets allegedly bought with money stolen from a Malaysian state fund.
/goo.gl/Ee7zik

MIFID II: The story since January
Hayley McDowell & John Brazier – The Trade
The early days of the new MiFID II regime haven’t thrown up the kind of turmoil some pessimists predicted, so far at least, failing to stunt activity at major asset management firms throughout Europe.
jlne.ws/2D3cyOI

LIBOR Replacement II
Kurt Dew – Seeking Alpha
The LIBOR replacement proposed by the Alternative Reference Rates Committee (ARCC) appointed by the federal government, discussed here, is already threatened. UK Financial Conduct Authority head, Andrew Bailey, earlier put his considerable weight behind the ARRC proposal, in his July 27, 2017, speech, “The future of LIBOR.” Most recently (March 2, 2018), Bailey backtracked from his earlier support for an overnight rate, saying:
jlne.ws/2D5eSoj

Who has the burden of persuasion when invoking fraud-on-the-market?
Rodney Tonkovic – Jim Hamilton’s World of Securities Regulation
A petition for certiorari asks the Supreme Court to consider key recurring questions posed by the invocation of the fraud-on-the-market presumption of reliance under Basic Inc. v. Levinson. The first question posed by the petition asks which party has the burden of persuasion when a defendant tries to rebut the presumption. The second question asks what evidence must be put forth by a plaintiff seeking to rebut the presumption (Barclays PLC v. Waggoner, February 28, 2018).
jlne.ws/2D3mbwQ

Wells Fargo Pushed by Nuns to Report on Its Ethical Lapses
Emily Chasan – Bloomberg
Sisters of St. Francis spearhead campaign on bank’s culture; Rhode Island treasurer calls lender’s action ‘a first step’ Wells Fargo & Co. agreed to publicly report on the root causes that led to a rash of ethical lapses in recent years, a group of investors said.
jlne.ws/2FmtqBZ

****SD: Methinks the ladies doth not protest too much.

Japan’s Financial Services Agency: For Those Engaging In High Speed Trading
Mondovisione
As of April 1, 2018, a new system will be introduced in relation to High Speed Trading (“HST”) of shares and other types of financial instruments, and those engaging in HST will now be required to register.
jlne.ws/2FZsO6e

U.S. says ‘Pharma Bro’ Shkreli deserves at least 15 years in prison
Brendan Pierson, Jonathan Stempel – Reuters
U.S. prosecutors on Tuesday said former drug company executive Martin Shkreli should spend at least 15 years in prison after being convicted of fraud, saying his lack of remorse and respect for the law justified a long time behind bars.
jlne.ws/2D5Kyd4

FINRA Midwest Region Member Forum
FINRA
The FINRA Midwest Region Member Forum is a one-day event designed to provide financial professionals associated with FINRA member firms in the Midwest Region the opportunity to engage in key discussions with FINRA staff, and connect with industry leaders and peers. The seminar also includes thoughtful discussions around the future landscape of the financial services industry, and the opportunity to meet one-on-one with FINRA Regulatory Coordinators, and Surveillance and District Directors to discuss firm-specific questions.
/goo.gl/ZxZGQW

FINRA Plans Changes to FIX Trade Reporting Related to Processing of Execution Time
MARCH 6, 2018
FINRA
Beginning Monday, August 20, 2018, FINRA will require a change to all FIX trade reporting related to the processing of execution time during Daylight Savings Time (DST) changes. This update affects firms’ transaction reports for all FINRA Multi Product Platform products (MPP), including TRACE, the OTC Trade Reporting Facility (ORF), and The Alternative Display Facility (ADF).
/goo.gl/GRufb1

Federal Court in New York Enters Preliminary Injunction Order against Patrick K. McDonnell and His Company CabbageTech, Corp. d/b/a Coin Drop Markets in Connection with Fraudulent Virtual Currency Scheme
CFTC
The Commodity Futures Trading Commission (CFTC) today announced that the Honorable Jack B. Weinstein of the U.S. District Court for the Eastern District of New York entered a Preliminary Injunction Order against Defendants Patrick K. McDonnell and CabbageTech, Corp. d/b/a Coin Drop Markets (CDM). The Court’s decision stems from the CFTC’s January 18, 2018 Complaint charging Defendants with fraud and misappropriation in connection with purchases and trading of the virtual currencies Bitcoin and Litecoin (see CFTC Press Release & Complaint 7675-18).
/goo.gl/M26LqQ

Investing and Trading

Chevron expects LNG supply shortage by 2025
Reuters
Chevron Corp said on Tuesday it expected supply shortage in the global liquefied natural gas (LNG) market by around 2025, echoing comments made last month by top LNG trader Royal Dutch Shell.
jlne.ws/2D4hl2k

U.S. options-based funds grow in number despite volatility lull: study
Reuters Staff
The number of U.S. options-based funds grew steadily over the last three years and the assets under management at these funds hit a record high in 2017, even as equity market volatility plummeted, according to a study released on Tuesday.
/goo.gl/WJrNpZ

Even aluminum producers don’t want Trump’s aluminum tariff
Preeti Varathan – Quartz
Donald Trump’s plan for tariffs of 25% on imported steel and 10% on imported aluminum should be a boon to domestic producers, whose output will now be relatively cheaper. The markets have agreed: Share prices of large American aluminum companies rose on last week’s news.
/goo.gl/p8bbK8

How Currency Investors Are Bracing for a Full-Blown Trade War
Katherine Greifeld, Liz McCormick – Bloomberg
Threat of retaliatory tariffs has investors assessing risks; Some funds seek havens, others hedge bets on global expansion
In foreign-exchange markets, investors aren’t waiting to find out if all the tariff threats being thrown around lead to a full-blown trade war.
/goo.gl/dnWCuF

Fed’s Brainard Sees Rate Increases as Appropriate as Inflation Firms; Fed governor says economic headwinds have turned into tailwinds
David Harrison – WSJ
Federal Reserve governor Lael Brainard said Tuesday she has become more confident inflation will hit the central bank’s target, allowing officials to continue raising interest rates gradually.
/goo.gl/UMqPiK

Institutions

FX, electronic bond trading volumes surge in February
Tommy Wilkes – Reuters
Currency trading volumes on Thomson Reuters’ platforms hit a record high in February and fixed-income venues have reported a surge in activity as a resurgence in volatility and new regulations push investors to trade electronically.
jlne.ws/2D4e3MF

PwC scrambles to return assets to Beaufort investors
Hannah Murphy an hour ago – Financial Times
Administrators for Beaufort Securities, the UK broker closed by regulators on Friday, are scrambling to find ways of returning £850m in cash and assets to thousands of private investors.
jlne.ws/2FmcJXi

Banco Popular shareholders seek Santander info to fight Spain
Christopher Spink – Reuters
Former shareholders in Banco Popular, which was sold for EUR1 to Santander last June after being put into resolution, have opened up two fresh fronts in their battle to seek compensation for their losses.
jlne.ws/2D56QvT

BlackRock, Soros may invest in Deutsche’s asset management IPO: source
Reuters
BlackRock (BLK.N), George Soros and big sovereign wealth funds are among investors expressing interest in buying stakes in the initial public offering of Deutsche Bank’s (DBKGn.DE) asset management arm, a person familiar with the matter said on Tuesday.
jlne.ws/2FmRDbc

Citigroup moving toward ‘national digital bank’: CFO
Reuters
Citigroup Inc (C.N) is laying the foundation, through a growing network of mobile banking tools, to support the launch of a national digital consumer bank sometime within the next three years, its chief financial officer said on Tuesday.
jlne.ws/2FlJbZK

What Bust? European Banks Are Loading Up on Real Estate Availability of debt financing is a sign of health in the European real-estate market
Peter Grant and Jeannette Neumann – WSJ
When Spain’s Bankia SA received a bailout in 2012, it was prohibited from making the kind of real-estate loans that triggered the bank’s implosion.
/goo.gl/dTSGuF

Exclusive: Goldman puts London staff on notice for German move by June – sources
Sinead Cruise, Arno Schuetze – Reuters
Goldman Sachs (GS.N) has put more than a dozen UK-based banking, sales and trading staff on notice to move to Frankfurt within weeks, two sources with knowledge of the matter said, as it braces for divorce between Britain and the European Union.
/goo.gl/1bMzxG

Bitcoin exchange Coinbase launches the Dow Jones of cryptocurrencies
Kate Rooney – CNBC
Popular online exchange Coinbase is releasing a weighted index fund for cryptocurrencies.
/goo.gl/PjMYRH

Regions

India bets on new financial centre to challenge Singapore
Simon Mundy – Financial Times
On a quiet expanse of scrubland in India’s western state of Gujarat, dotted with a few glass-fronted office towers and others under construction, GIFT City does not look like a buzzing hub of international finance.
But the architects of this special economic zone, a pet project of prime minister Narendra Modi, insist that it can be India’s answer to Hong Kong: a haven for foreign investors to transact Indian securities with minimal tax and bureaucracy, and for domestic companies to raise funding in foreign currencies.
jlne.ws/2D5jniA

Bursa tweaks FCPO for vegetable oils traders’ convenience
New Straits Times
Bursa Malaysia Bhd is monitoring and has enhanced the global reference crude palm oil futures (FCPO) for vegetable oil traders’ convenience, in view of Singapore launching its third derivatives market.
/goo.gl/6Ezd5N

Bitcoin’s Tokyo Whale Sold $400 Million and He’s Not Done Yet
Go Onomitsu – Bloomberg
He’s not your typical Bitcoin whale, but Nobuaki Kobayashi has become a force to be reckoned with in the cryptocurrency world.
/goo.gl/jAAWDx

The story behind India’s biggest banking IPO began with rural women
Nupur Anand – Quartz India
Unlike other players in the microfinance industry, Bandhan Bank joined the league of big banks only in August 2015. In less than three years, it has emerged as a leader and is set for India’s biggest banking initial public offering (IPO), at a time when its older and bigger peers are in duress.
/goo.gl/saLcHM

Moving cash within Africa is the untapped opportunity for money transfer firms
Yinka Adegoke – Quartz Africa
Since 2010, international migrant population numbers from Africa have grown significantly. So much so that eight in 10 of the fastest-growing migrant populations are from sub-Saharan African nations, according to a Pew Research Center analysis of the latest United Nations data on the number of emigrants, or people living outside their country of birth.
/goo.gl/aw94L9

U.S. Considers Broad Curbs on Chinese Imports, Takeovers
Andrew Mayeda, Jennifer Jacobs – Bloomberg
USTR investigating China’s intellectual-property practices; Gary Cohn to resign as top Trump economic adviser amid tariffs
The Trump administration is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property, according to people familiar with the matter.
/goo.gl/5Ks86K

Brexit

Brexit Opponents Find New Strategy in Effort to Nix Departure
Robert Hutton and Kitty Donaldson – Bloomberg
Opponents of Brexit are looking into whether Britain could postpone its exit from the European Union to give lawmakers and voters more time to weigh up whether they really want to leave.
jlne.ws/2G0VDiS

City of London to press for ‘achievable’ EU mutual access deal
Huw Jones – Reuters
Keeping British and European Union rules in lock-step after Brexit is an ambitious but achievable to maintain access to each other’s financial markets, the City of London’s Lord Mayor said on Wednesday.
/goo.gl/5FAVh7

May ‘double cherry-picking’ on Brexit, says leaked EU report; Exclusive: Brussels analysis dismisses proposed model on trade as unworkable
Anushka Asthana, Heather Stewart and Daniel Boffey – The Guardian
The EU has dismissed Theresa May’s Brexit speech as being more about Conservative party management than putting forward sensible solutions on trade, according to an internal document leaked to the Guardian.
/goo.gl/gxhx8W

EU rejects UK’s plans for post-Brexit trade relationship; Brussels instructs negotiators to take austere approach to trade talks
Alex Barker, Jim Brunsden and Mehreen Khan – FT
The EU has forcefully rebuffed Theresa May’s vision for trade after Brexit, laying out a narrow view of future relations with the UK and warning of the “negative economic consequences” of her choices.
/goo.gl/9wtd43

The post Cohn leaving White House; Dash Financial Technologies buyout; Crypto a commodity – judge appeared first on John Lothian News (JLN).

First Read

Statement on Potentially Unlawful Online Platforms for Trading Digital Assets
Divisions of Enforcement and Trading and Markets
SEC
Online trading platforms have become a popular way investors can buy and sell digital assets, including coins and tokens offered and sold in so-called Initial Coin Offerings (“ICOs”). The platforms often claim to give investors the ability to quickly buy and sell digital assets. A number of these platforms provide a mechanism for trading assets that meet the definition of a “security” under the federal securities laws. If a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration
/goo.gl/zKYwmE

****More on the action yesterday: Bloomberg – Bitcoin Dives After SEC Says Crypto Platforms Must Be Registered; Reuters – U.S. regulator urges registration of cryptocurrency exchanges; ThinkAdvisor – SEC: Digital Assets Trading Platforms Must Register

++++

Hits & Takes
JLN Staff

Next week at FIA Boca, John J. Lothian & Company, Inc. will be making an announcement about a new project. In the meantime, today we announce Jim Falvey has been named a contributing editor to John Lothian News and a managing director of JJLCO. We had previously named Chuck Mackie as a contributing editor to JLN. Chuck will also have a business role in the new endeavor to be announced next week.~JJL

Nasdaq‘s Fintech Trends 2018 report identifies seven areas key to capital markets moving forward: the cloud, machine intelligence, blockchain, cybersecurity, quantum computing, pari-mutuel technology and behavioral science. Did you know the Hong Kong Jockey Club (cited in the study) uses a pari-mutuel system to offer more types of bets? Did you know that Longitude is the distributor of that system? And that Tom Ascher was the CEO of that ISE company when it negotiated that partnership?~SD

SGX‘s total derivatives volume was 18.1 million in February, up 45 percent year-on-year. It’s FTSE China A50 Index Futures remained the most active contract with volume of 7.1 million, up 53 percent from a year earlier.~JK

In a study regarding the banking potential of Amazon, Bain surveyed US consumers about tech companies they’d trust with their money. After big banks the order from most trustworthy to least was PayPal, Amazon, Apple, Google, Microsoft, Facebook and Snapchat. To which Bane from Batman says to big banks, “Do you feel in charge?”~SD

Futures for Kids 9th Annual Quiz Night is on Wednesday, April 18 in London at The Minster Exchange, Minster Court from 6 PM to 10:30 PM. For details, contact ffk.enquiries@gmail.com.~JJL

Hehmeyer has launched a new Hehmeyer Trading + Investments Blog~JJL

++++

Nasdaq Commits to Further Empower Women in the Workplace
Nasdaq
Nasdaq has enhanced its commitment to equal opportunity for women by signing the CEO Statement of Support for the Women’s Empowerment Principles (WEP). This United Nations initiative covers seven broad areas of engagement, committing signatories to action on human rights, nondiscrimination, health and safety, education, public reporting, and other principles related to gender dynamics. The signing coincides with International Women’s Day (March 8).
/goo.gl/oMhW5r

**** A great way to mark and celebrate International Women’s Day.~JJL

++++

5 Questions with Adam White of Coinbase’s GDAX, the U.S.’s Largest Digital Currency Exchange
Mike Unetich – Trading Technologies Blog
As we hope you have now heard, Trading Technologies has launched connectivity to an important new asset class, spot cryptocurrencies! We thought it would be fun to catch up with Adam White, Vice President and General Manager of GDAX, to get his perspective on the GDAX exchange, partnering with TT and the crypto market.
jlne.ws/2D9uze3

****Jim Kharouf had a Q&A with Unetich earlier – here’s that story. Now Unetich has a Q&A with White. I can’t find a story of White interviewing someone, so the chain ends here.~SD

++++

Bond Guru Bill Gross to Sell $42.2 Million Stamp Collection
Katya Kazakina and John Gittelsohn – Bloomberg
Bill Gross gained fame as the bond king. Now he rules the market for collectible stamps. His $42 million collection of U.S. postage is so comprehensive that when the first part of it comes up for auction in September, the entire field of philately will feel the effect.
jlne.ws/2G3hrdJ

****Mention famous stamps and philatelists and I inevitably end up wanting to rewatch “Charade.” Not that you need an excuse for that 1963 Hepburn/Grant classic.~SD

++++

The Next Frontier In Exchange Trading Systems (part 2 of 4)
Hirander Misra, CEO of GMEX Group and Chairman of GMEX Technologies
Being a financial exchange services provider has rarely been as hard or competitive as it is today. As the business models for exchanges continue to evolve, the technological requirements to run an exchange – be it established or a new entrant – are shifting as well. Modern exchanges need to meet a variety of requirements to service clients, from providing low latency and agile platforms to offering flexibility with regards to language, trading methods, and data models covering a wide variety of asset classes. The days of operating a simple equity exchange, solely in English, with little concern for operational costs, are over, and consequently simply embracing the traditional exchange technology model is no longer the obvious way forward.
/goo.gl/RgQWU2

++++

Wednesday’s Top Three
Yesterday’s top read piece from Technology Review If you’re so smart, why aren’t you rich? Turns out it’s just chance, piqued the most interest. Second went to Reuters’ story, LJM sued by its broker Wells Fargo over missed payments. Third went to Sarah Rudolph’s recap piece Bitcoin and Blockchain: A WILD Opportunity. That finally edged Bloomberg’s Ken Griffin’s Citadel Dismisses 21 People out of the top three. (But today’s newsletter has another Citadel firing story, so…)

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MarketsWiki Stats
121,584,323 pages viewed; 23,031 pages; 212,000 edits
MarketsWiki Statistics

Lead Stories

Hong Kong Exchange May Have Reached Its Peak; The stock market operator faces a growing threat from mainland Chinese rivals
Jacky Wong – WSJ
What next for Hong Kong? The city’s future as one of Asia’s pre-eminent financial centers has felt ever more precarious in recent years, as rival mainland Chinese markets in Shanghai and Shenzhen have expanded and opened up to foreign investors. Still, one proxy for confidence in the city is buoyant: Shares in Hong Kong Exchanges and Clearing, the city’s stock exchange operator, have been on a tear, rising 48% in the past 12 months.
/goo.gl/1U2DLB

Crypto Strategy Could Be a Lifeline for a Sleepy Chicago Market
Nick Baker and Annie Massa – Bloomberg
Now that the Chicago Stock Exchange’s push to reinvent itself as a conduit to China was rejected, it’s free to consider an audacious backup plan: trading cryptocurrencies.
Companies involved with digital currencies were among aspiring suitors that approached the exchange over the past two years, expressing interest in a merger or takeover if the China deal failed, according to two people familiar with the matter, who asked not to be identified discussing a private situation.

****Link not available at time of publication.

Hundreds of European stocks barred from dark pools
Philip Stafford – Financial Times
Shares of hundreds of European companies will be temporarily barred from private trading venues known as dark pools, as new rules designed to increase transparency in trading finally come into effect.
The London market was hardest hit, as widely expected, according to the data published late on Wednesday by European regulators.
jlne.ws/2G3lXc8

****SD: Bloomberg here

Investing More in Women Will Help Traders Sleep Better at Night
Eric Lam – Bloomberg
Investing in companies that have more women in leadership roles can help lower the volatility of your portfolio, according to Bank of America Corp.
/goo.gl/1qRU84

Ken Griffin’s Citadel cuts 45 people as gutting of Aptigon stock unit deepens
Katherine Burton and Katia Porzecanski, Bloomberg via Chicago Tribune
The doors at Citadel have been swinging fast and furiously.
Ken Griffin’s giant hedge fund has pushed out 45 people from its Aptigon Capital stock unit, or about a third of its staff, in one of the biggest shakeups at the hedge fund in recent years, according to people familiar with the matter. Griffin has been concerned about the direction of the unit, which has failed to make money since last year, the people said.
/goo.gl/wHp7Md

Crypto exchange Binance faced ‘large scale’ theft attempt; Incident came on same day SEC issued warning on crypto exchanges
Adam Samson – FT
One of the world’s biggest digital currencies exchanges says it has thwarted a bold, “large-scale” attempt by cyber crooks to steal traders’ cryptocurrency.
/goo.gl/UGsp78

**** Forbes here; TechCrunch here and Yahoo here.

Fearless Girl’s First Year Helped Reshape Corporate Boardrooms
Emily Chasan, Jeff Green
State Street to target boards in Japan, Canada this year; Asset manager’s campaign reached more than 780 companies
In the year since State Street’s Fearless Girl statue started her showdown with Wall Street’s Charging Bull, the $2.6 trillion asset manager has faced a confrontation of its own in corporate boardrooms: pressing firms to add more women to their boards.
/goo.gl/UXueSz

****Reuters – Investor State Street uses financial clout to get more women to the top

Stock Markets Are Scary. Suddenly, It’s a Good Time to be a Trader.
Landon Thomas Jr. – NY Times
Inflation scares. Trade wars. Rising interest rates. Suddenly, it is a scary time to be an investor ó but a great time to be a trader. After nearly a decade of calmly climbing stock markets, a period during which algorithms and index-tracking funds reigned supreme, newly volatile markets and the return of a little bit of fear have given new life to an old Wall Street creature: the swaggering risk-taker.
/goo.gl/jQCF63

U.S. fund manager Breakwave to launch first ETF for shipping futures
Jonathan Saul, Maiya Keidan – Reuters
U.S.-based fund manager Breakwave Advisors is launching the first exchange-traded fund (ETF) focusing on freight futures, reflecting growing investor interest in shipping as it emerges from a near-decade long crisis, a regulatory filing showed.
/goo.gl/f89yvd

OpenFin to foster connectivity across capital markets desktops
Finextra
OpenFinA newly formed group of major finance industry players announced today that they have joined an OpenFin-led initiative to bring universal connectivity and standards to all of the financial industry’s desktop applications.
/goo.gl/PmJ3QL

Iosco consults on recommendations to help trading venues manage extreme volatility
Finextra
The Board of the International Organization of Securities Commissions (IOSCO) is seeking feedback on its proposed recommendations to assist trading venues and regulatory authorities in the implementation of mechanisms to manage extreme volatility.
/goo.gl/uMnyje

Exchanges, OTC and Clearing

Japan suspends trade on 2 cryptocurrency exchanges; Regulator sanctions 7 operators after finding loose compliance and poor training
Robin Harding – FT
Japan’s Financial Services Agency has ordered two cryptocurrency exchanges ó Bitstation and FSHO ó to stop doing business for a month. Five others, including Coincheck, were instructed to improve internal controls and report back to the regulator.
/goo.gl/SQbBoR

****WSJ here and CNN here

Overview of the Hong Kong Trade Repository
Chris Barnes – Clarus Financial Technology
Hong Kong started interim trade reporting in August 2013, with Legislative vetted rules implemented on 10 July 2015. Unlike other jurisdictions in Asia, HKMA built the trade reporting solution themselves. The Hong Kong Trade Repository (HKTR) was built by their subsidiary Hong Kong Interbank Clearing Limited (HKICL). HKICL also built/manages Hong Kong’s payment infrastructure on behalf of HKMA.
jlne.ws/2D7cZaI

Cboe gets green light for benchmark administrator position in Europe; Market participants can use the exchange group’s benchmarks within the EU BMR regulatory framework.
Hayley McDowell – The Trade
Cboe Global Markets has gained regulatory approval to act as a benchmark administrator under EU regulation.
/goo.gl/GQ9DA5

BlackRock expands Open Trading partnership with MarketAxess; BlackRock will use MarketAxess for Asian credit trading after signing up to Open Trading for US and European credit trading.
Hayley McDowell – The Trade
BlackRock has expanded its partnership with MarketAxess and will use the Open Trading platform for Asian credit markets.
/goo.gl/eVfPoU

Roadmap for collateral: Collateral fee adaptations and incentives to strengthen CCP risk management
Eurex
Effective 3 April 2018, the following measures of Eurex Clearing will come into effect:
/goo.gl/UMdQma

SGX reports market statistics for February 2018
SGX
Securities daily average value (SDAV) highest since May 2013.
Total Derivatives volume was 18.1 million, unchanged month-on-month (m-o-m) and up 45% year-on-year (y-o-y).
/goo.gl/oC8fxh

National Stock Exchange ‘hopeful’ of going public in FY19
Reuters
India’s National Stock Exchange said on Thursday it was hopeful of going public in the next financial year beginning April and that it was committed to expeditiously resolving regulatory issues that have delayed its initial public offering.
/goo.gl/zFFxDu

Sebi has returned NSE consent plea citing pending investigation: Sources
Samie Modak – Business Standard
The National Stock Exchange (NSE) will have to re-file not just the initial public offer (IPO) document but also the consent plea for settling the co-location issue with market regulator Securities and Exchange Board of India (Sebi).
/goo.gl/zwNoub

Sebi’s P-note derivative ban fails to dent Indian futures market volumes
Pavan Burugula – Business Standard
It has been six months since market regulator Securities and Exchange Board of India’s (Sebi’s) diktat of not allowing participatory notes (p-notes) to take unhedged positions in Indian derivative markets took effect. Contrary to industry concerns at the time the decision was taken, however, the volumes in Indian futures market have only increased since August 2017.
/goo.gl/2M47Bn

JPX Monthly Headlines – February 2018
JPX
JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users.
/goo.gl/DFXZjL

Euronext announces annual review of the AEX, AMX and AScX
Euronext
/goo.gl/yW4bpQ

Adjustment in the Scale 30 index; Daldrup & Sohne AG replaces Ringmetall AG on 19 March 2018
Deutsche Boerse
/goo.gl/11ncL7

HKEX Presents Stock Connect Awards To Honour Market Participants
HKEX
Awards recognise market participants’ contributions to Stock Connect in 2017; Shenzhen Connect included for first time
Hong Kong Exchanges and Clearing Limited (HKEX) today (Thursday) presented its Stock Connect Awards for 2017 to recognise major brokerages for their achievements last year in the city’s landmark stock trading linkages with the Shanghai and Shenzhen stock exchanges.
/goo.gl/tzSkAT

Fintech

GTCR hands fintech firm Dash off to Flexpoint Ford
Lynne Marek – Crain’s Chicago Business
Private-equity firms don’t do business with each other very often, but today Chicago heavyweight GTCR is doing a fintech deal with a local peer, Flexpoint Ford.
GTCR said in a statement that it’s selling New York-based Dash Financial Technologies to that company’s co-founders, Peter Maragos and David Karat, who in turn partnered with Flexpoint to make the purchase. A Dash spokesman declined to say what size ownership stake Flexpoint is buying or how much it paid.
jlne.ws/2G203pD

EU proposes crowdfunding ‘passports’ in boost for fintech
Huw Jones – Reuters
The European Commission has proposed crowdfunding “passports” for the European Union in a draft law that forms part of efforts to boost growth in the financial technology sector.
/goo.gl/48V5C7

Exchange Data International Launches Short Interest Feed
Mondovisione
Exchange Data International (EDI), a provider of global security corporate actions, pricing and reference data, announced today the release of its Short Interest service.
jlne.ws/2G16Yzj

SWIFT Claims ‘Huge’ Progress on DLT Bank Pilot
Nikhilesh De – CoinDesk
Interbank messaging platform SWIFT has published the results of a long-running distributed ledger proof-of-concept project.
/goo.gl/EPrKxi

19 of the top ex-bankers in fintech
Dan Butcher – efinancialcareers
It’s becoming more common for bankers to quit the traditional financial services in favor of financial technology, either co-founding a startup or landing at an established fintech firm. Some crash and burn and come crawling back to banking with their tail between their legs, but many have found great success in the fintech space.
jlne.ws/2D9LXzl

Amazon could become the third-biggest US bank if it wants to: Bain study
Thomas Franck – CNBC
Bain writes that Amazon’s banking services could grow to more than 70 million U.S. consumer relationships over roughly five years, rivaling Wells Fargo. Amazon could evade more than $250,000,000 in credit card interchange fees every year if it finds a bank willing to partner.
The Bain report finds one-quarter of those using voice assistants like Amazon’s Alexa would consider using them for everyday banking.
jlne.ws/2D5WY4J

Comcast Makes First Big Bet on a Multi-Blockchain Future
Michael del Castillo – CoinDesk
Comcast is banking on a world with multiple blockchains.
Revealed exclusively to CoinDesk, the venture arm of the telecommunications giant is leading a $3.3 million seed investment in Blockdaemon, a New York City-based startup that creates enterprise software for interacting with a wide range of blockchains.
jlne.ws/2D93cRs

Qarnot unveils a cryptocurrency heater for your home
Romain Dillet – Techcrunch
Qarnot unveiled a new computing heater specifically made for cryptocurrency mining. You’ve read that right, the QC1 is a heater for your home that features a passive computer inside. And this computer is optimized for mining.
/goo.gl/fmYNQp

Politics

Trump to Sign Tariffs on Thursday but Some Countries Could Escape Them
Ana Swanson – NY Times
President Trump is expected to formally sign off on stiff and sweeping tariffs on steel and aluminum imports at noon on Thursday, according to people familiar with the deliberations, capitalizing on the pending departure of his top economic adviser, Gary D. Cohn, who was the plan’s primary opponent.
jlne.ws/2G3K7mF

****SD: Reuters – White House opens door to tariff exclusions for some countries

Oil and corn tout dueling studies on future of U.S. biofuel program
Ayenat Mersie – Reuters
Big oil and big corn are touting opposing studies released this week on proposed biofuels policy reforms under consideration by the Trump administration, part of an ongoing clash between the two sides over the future of the program.
/goo.gl/2cdt4S

EU Tells Trump to Brace for Retaliation Over Metal Tariffs
Jonathan Stearns – Bloomberg
The European Union mounted a last-ditch push to stop U.S. President Donald Trump from triggering tariffs on foreign steel and aluminum, vowing a “firm” response and warning of widespread damage from a trans-Atlantic trade war.
jlne.ws/2D8AMqU

‘Death by China’ economist ascendant as Trump pushes tariffs, hits China
David Chance, Roberta Rampton – Reuters
An economist who believes that Chinese goods are literally poisoning Americans, advocates ending Washington’s “One China” policy and says trade deals have weakened the United States economically with the connivance of U.S. business has emerged as the big winner from renewed turmoil in the White House.
jlne.ws/2D8BG6F

Gary Cohn Quitting Trump Administration May Not Be a Huge Change
Daniel Moss – Bloomberg
Chill out, everyone. We don’t know whether this adviser actually kept the administration out of trouble, or whether his successor will.
jlne.ws/2D8ndrp

Cohn Is Out, and the Verdict Is In: The Nationalists Are Back; The former Goldman Sachs executive brought “a sane voice to a very chaotic cabinet.” In the end, it wasn’t enough.
Joshua Green – Bloomberg
When the Dow Jones industrial average closed at a record high on Jan. 26, it looked like the reigning wisdom about Donald Trump and his presidency might be all wrong: Trump had sold himself to voters as a fire-breathing nationalist eager to rip up trade deals, stick it to Wall Street, and impose Steve Bannon-style protectionism.
/goo.gl/ekBSRP

***** Also see Bloomberg’s “Gary Cohn’s Exit Isn’t the End of Western Civilization”.~JJL

Gary Cohn is the latest Goldman Sachs alum to ill-serve America
Jeffrey Sachs – CNN
Most observers today, including myself, bemoan the reason that Gary Cohn is leaving the Trump White House. The President’s top economic adviser lost the trade policy battle with Trump and the protectionists around him, as the President insists he will impose tariffs on steel and aluminum — and stock markets are falling as a result.
/goo.gl/UDfpo3

Tax Law Doesn’t Pay for Itself, Harvard Economists Find; Study estimates net cost of $1.2 trillion to the Treasury over a decade
Richard Rubin – WSJ
The recent changes to the U.S. tax law will increase economic growth modestly but not fast enough to pay for themselves, according to a new estimate from a pair of economists from different sides of the political spectrum.
/goo.gl/khkUBJ

Congress Has Another Faulty Bank-Reform Bill; Lighter regulation plus too little capital equals bad news.
Editorial Board – Bloomberg
Congress is about to revisit the financial protections put in place after the 2008 crisis. Some would call what’s proposed a gutting of the Dodd-Frank reforms. It’s hardly that, but it’s troubling nonetheless.
/goo.gl/3J7ojo

Big Bank Custody Fight; A Senate bill includes a sneaky reduction in capital rules.
Editorial Board – WSJ
The Senate is debating a bill that would relax Dodd-Frank’s chokehold on small banks, but a couple of provisions that ease capital and liquidity standards for the giants will make the financial system more vulnerable in a panic.
/goo.gl/Zcucf1

Regulation

CFTC Talks to the Chamber of Digital Commerce
Brad Rosen – Jim Hamilton’s World of Securities Regulation
Chamber of Digital Commerce President Perianne Boring and General Counsel Davine Kim recently took part in a riveting conversation about the chamber and its activities in an episode of the CFTC Talks podcast. The talk centered on the chamber’s mission, the market problem it seeks to address, and where digital assets and Blockchain based technologies might be heading. The interview was moderated by podcast host Andrew Busch, the CFTC’s chief market intelligence officer.
jlne.ws/2DbhD7O

Crypto bull John McAfee says SEC is striking out ‘in panic’ at digital currencies
Mike Murphy – MarketWatch
SEC had earlier warned of risk some crypto exchanges pose to investors
John McAfee speaks at a blockchain conference in Hong Kong in 2017.
Cybersecurity tycoon-turned-cryptocurrency bull John McAfee lashed out at the Securities and Exchange Commission on Wednesday night, claiming that the agency is running scared of digital currencies.
/goo.gl/1wMuxf

Lawyer’s ‘Get-Rich’ Scheme Starts Like B Movie, Ends With Prison
Jef Feeley – Bloomberg
DOJ lawyer gets 30 months over pilfered whistle-blower cases; Prosecutor says Werkin’s scheme motivated by ‘money and greed’
A job at a prestigious law firm with a salary of almost half a million dollars didn’t stop Jeffrey Wertkin from wearing a wig to carry out a criminal scheme that his defense attorney said was like a scene out of a “B grade action movie.”
/goo.gl/vuFFXR

ASIC takes civil action against Antares Energy and a director
ASIC
ASIC has commenced civil penalty proceedings in the Federal Court of Australia against Antares Energy Limited (‘Antares’) and one of its directors, former CEO and Chairman James Cruickshank (‘Cruickshank’) regarding Antares’ announcements made in September 2015 about the proposed sale of its oil and gas interests in the Permian Basin of Texas in the United States of America.
/goo.gl/ZVfQ7R

Working together for stronger financial capability
ASIC
ASIC has released the National Financial Literacy Strategy Annual Highlights Report 2016-17. The Report paints a national picture of financial literacy programs and initiatives delivered by a wide range of organisations across the government, education, industry and community sectors in support of the National Financial Literacy Strategy, led and coordinated by ASIC. The scale of work continues to grow with over 70 organisations supporting or contributing to initiatives aligned with the National Strategy.
/goo.gl/rnQ1dv

EU Agencies Joint declaration on sexual harassment
ESMA
On International Women’s Day, the heads of EU agencies, including ESMA, commit to zero tolerance on sexual harassment in a joint statement.
/goo.gl/j87rd8

MiFID II: ESMA publishes double volume cap data
ESMA
The European Securities and Markets Authority (ESMA) has published today trading volumes and calculations regarding the double volume cap (DVC) under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
/goo.gl/MukRon

FINRA’s Cloud Strategy Shone amid Recent Volatility
Steve Randich – FINRA
Early last month, when U.S. markets experienced their most turbulent week in years, a record-setting 99 billion electronic messages coursed through FINRA’s regulatory platform in a single day to cap a week of record volume. We handled the unprecedented volume seamlessly, thanks to FINRA’s pioneering cloud strategy.
/goo.gl/8nXUvT

FINRA Updates Designation Criteria to Require Firms Reporting U.S. Treasury Securities to TRACE to Participate in FINRA’s Business Continuity/Disaster Recovery Testing
FINRA
As required by Regulation Systems Compliance and Integrity (Regulation SCI), FINRA, in 2015, adopted Rule 4380 requiring member firm participation in business continuity and disaster recovery (BC/DR) testing. The rule authorizes FINRA to designate firms that must participate in FINRA’s annual BC/DR test based on established standards, which FINRA published in Regulatory Notice 15-43. Since FINRA published Notice 15-43, it began collecting transaction reports for U.S. Treasury securities. This Notice updates the criteria in Notice 15-43 to include criteria for designating firms that report a significant volume of transactions in U.S. Treasury securities to TRACE for mandatory BC/DR testing participation.
/goo.gl/2YdjxK

AgCon2018 Agenda Announced Today
CFTC
AgCon2018, the upcoming joint conference of the Commodity Futures Trading Commission (CFTC) and the Center for Risk Management Education and Research (CRMER) at Kansas State University (KSU), will explore a range of current questions and topics facing the agricultural futures markets.
/goo.gl/vZhoNN

Written Testimony of Chairman J. Christopher Giancarlo before the U.S. House Committee on Appropriations Subcommittee on Agriculture, Rural Development and Related Agencies, Washington, D.C.
CFTC
Thank you, Chairman Aderholt, Ranking Member Bishop and Members of the Subcommittee for the opportunity to testify before you today on the Commodity Futures Trading Commission (Commission or CFTC) FY 2019 Budget Request.
/goo.gl/h6vuVA

Investing and Trading

Massive Block Trades Recorded in ETFs Before Stocks Plunged
Carolina Wilson – Bloomberg
Almost $4 billion in block trades of exchange-traded funds were recorded Tuesday, encompassing strategies from sector funds to popular international bets, according to Josh Lukeman, head of ETF market making for the Americas at Credit Suisse Group AG.
jlne.ws/2D7VIya

U.S. investors wanting out of gun stocks find it’s not so easy
David Randall, Laila Kearney – Reuters
In the three weeks since America’s deadliest high school took the lives of 17 students and teachers, companies such as Delta Air Lines Inc and Dick’s Sporting Goods Inc have cut ties with gun-rights groups or restricted sales of weapons.
jlne.ws/2G2NwSL

Spotify Picks Citadel Securities to Handle NYSE Debut
Alexander Osipovich – WSJ
Spotify Technology SA has chosen electronic-trading firm Citadel Securities LLC to oversee its unusual debut at the New York Stock Exchange, people familiar with the situation said.
The music-streaming company settled on Citadel Securities as its designated market maker in recent days, the people said. Such DMM firms, also called specialists, help ensure the orderly trading of NYSE-listed stocks. Their role is especially important during key moments such as initial public offerings.
jlne.ws/2D6wfoT

Investors Flock to BlackRock’s Tech ETF — in Europe, That Is
Yakob Peterseil – Bloomberg
European investors are making some big bets on U.S. technology.
jlne.ws/2D91Xlg

Getting Robbed May Save These Crypto Traders $262 Million
By Yuji Nakamura – Bloomberg
For victims of the $500 million heist at Japanese cryptocurrency exchange Coincheck Inc., getting robbed may have been a blessing in disguise.
/goo.gl/HqNWbQ

JPMorgan Co-President Sees Possible 40% Correction in Equity Markets
By Gavin Finch, Francine Lacqua – Bloomberg
Banker’s comments come as investors fret about rising rates; He says there will be a markets correction ‘at some point’
Pinto says he sees the possibility of a “deep correction” of between 20 and 40 percent.
JPMorgan Chase & Co. executive Daniel Pinto warned equity markets could fall as much as 40 percent in the next two to three years.
/goo.gl/GczjHc

Rolls-Royce Makes Gold Out of Base Metals; By some measures, 2017’s performance was far less impressive than it first appears.
By Chris Bryant – Bloomberg
If you’re a customer of Rolls-Royce Plc, there’s a fair bet you got a call toward the end of last year, politely asking you to pay your bill.
/goo.gl/o6VhGw

Even women who can handle money are reluctant investors; I challenge the finance industry to launch an ad campaign placed with sanitary protection brands
Claer Barrett – FT
I am the female editor of the FT’s personal finance section. The majority of my readers are male. The majority of people I meet in the investment, financial advisory and asset management industries are also male.
/goo.gl/Pbfack

Institutions

Morgan Stanley CEO says steel, aluminum tariffs ‘bad idea’
Reuters
Morgan Stanley’s top executive said on Wednesday that potential tariffs on steel and aluminum that President Donald Trump is to expected to formally sign off on later this week are a “bad idea.”
jlne.ws/2G8bgoV

Anne Boden, the steelworker’s daughter who started her own bank
Sarah Dickins – BBC
The daughter of a steelworker and a department store worker from Bonymaen in Swansea, Anne Boden had a fairly ordinary Welsh childhood. Now she’s part of a revolution in the financial world – and has set up her own online bank.
/goo.gl/eZaVNx

Regions

Africa’s banks lag behind on innovation in financial services
John Aglionby – Financial Times
African central banks are stifling development by failing to keep up with financial services innovation, according to the head of a UN economic agency and industry executives.
jlne.ws/2G3NoSZ

Banks Reject Fears That Sweden May Run Out of Cash
Niklas Magnusson and Hanna Hoikkala – Bloomberg
Sweden’s biggest banks say warnings that the country might be running dangerously low on cash are overblown.
jlne.ws/2D92qUy

Iran’s Oil Boom Hasn’t Showed Up; Many international companies are hesitant to invest as the Trump administration threatens to reimpose sanctions
Benoit Faucon – WSJ
Iran’s oil-and-gas industry was supposed to take off after the nuclear deal. Instead, one of the world’s largest energy sectors is languishing.
jlne.ws/2D95lMW

Japan cracks down on cryptocurrency exchanges after massive hack
Rishi Iyengar – CNN
Japan has forced two cryptocurrency exchanges to halt trading as it cracks down on an industry that was shaken recently by a $530 million cyber heist.
/goo.gl/GavzuM

Why Blockchain Is Booming In Liechtenstein, The Sixth Smallest Country In The World
Oliver Smith – Forbes
It may be smaller than Brooklyn, but Liechtenstein is working on something pretty big.
With a population of 40,000 and only a single hospital, Liechtenstein is smaller than small, but a low tax rate over the years has made it a hub for financial services – part of the reason it’s now home to more registered businesses than citizens.
jlne.ws/2G3nizC

Britain’s CO2 Emissions Have Fallen to Levels Last Seen in 1890
Yale Environment 260
Driven by a rapid decline in coal use, the United Kingdom’s greenhouse gas emissions fell to 388 million tons of CO2 in 2017 ó a level last seen in 1890, when the country’s population was nearly half the size it is now, according to an analysis of energy use figures by Carbon Brief.
jlne.ws/2G5lypN

China promises ‘justified and necessary response’ if trade war breaks out
Victor Reklaitis – MarketWatch
Chinese officials are joining the worldwide outcry over the latest shift in U.S. trade policy.
/goo.gl/Pp23k3

London is top for financial services talent say global investors
Jasper Jolly – City AM
The capital is the best city for business in Europe, the poll finds
The vast majority of big global investors believe London has the best talent pool for financial services in Europe, according to a survey to be published today.
/goo.gl/Vkpx8g

Brexit

Hammond to reveal impact of Brexit bill on UK public finances; Decades of annual payments to be listed when chancellor presents Spring Statement
Chris Giles – FT
Decades of payments from Britain to Brussels will be spelt out for the first time when Philip Hammond presents his Spring Statement next Tuesday.
/goo.gl/MWZ9ku

UK should not favor financial services in Brexit: Labour Party
Reuters
Britain should not favor financial services over other sectors of the economy as it negotiates its future trading relationship with the European Union after Brexit, Labour Party finance spokesman John McDonnell said on Thursday.
/goo.gl/sTgKTc

Miscellaneous

Deloitte Pays U.K. Women 43% Less Than Men
David Heller – Bloomberg
Firm’s revised gender pay figures approach gap seen at banks; Lawmakers slammed firms that excluded partners from data
Deloitte’s U.K. division said its female staff are paid 43.2 percent less on average than male employees — one of the wider gender gaps reported so far, but also one that included the high-earning partners that similarly structured firms have been excluding from their data.
/goo.gl/5dr3VT

International Women’s Day 2018: Why this year’s event is more important than ever
Caitlin Morrison – City AM
There is more work to do, but the City is already changing for women
International Women’s Day never passes without fevered debate around whether it is really necessary, but this year there are more arguments than usual in favour of dedicating a day to women.
/goo.gl/vDcsqL

The post HKEx May Have Reached Its Peak; Crypto Could Be Lifeline for CHX; Hundreds of European stocks barred from dark pools appeared first on John Lothian News (JLN).

First Read

Renato Mariotti for Illinois Attorney General; A Former Prosecutor and Current JLN Reader Is The Best Choice For Illinois AG
John Lothian – JLN

Democratic Attorney General candidate Renato Mariotti stopped by the John Lothian News offices in the Chicago Board of Trade Building on Tuesday, March 6 for a sit down video interview. He has been a John Lothian Newsletter reader since 2012, and he used the market and industry knowledge he gained from reading the newsletter to bolster his success as a federal prosecutor.

Mariotti is a former prosecutor in the US Attorney’s office in Illinois who is seeking election to a public office for the first time and is trying to replace Democratic insider Lisa Madigan. I endorsed Mariotti in JLN last week and this interview gave me a chance to validate even more my decision to endorse this political newcomer.

While in the US Attorney’s office in Illinois, he brought the first spoofing case and received a conviction for Michael Coscia after just 40 minutes of jury deliberation. Today, as a defense attorney, he works with industry firms and individuals who need his help defending against the legal risks present in the trading world.

For the rest of this commentary, click HERE. Our video interview with him will be published later today.

++++

Hits & Takes
JLN Staff

CFTC Commissioner Brian Quintenz yesterday gave what may be one of the finest speeches from a CFTC Commissioner I have ever read. It was timely, historically researched, data based and persuasive in its support for self regulation. Well done Commissioner.~JJL

If you ever wanted to see how A Leg To Stand On is changing lives, this is the article to read and video to watch. So many of our readers have contributed to the Rocktoberfest events and this one shows how your contributions really make a difference – The Danger Underfoot from the New York Times.~JK

Topstep Trader commented on Twitter regarding a story about how now is such a good time to be a trader that the firm “funded 159 traders with our capital in February alone.”~JJL

According to the newly released Tabb/Hanweck Options Liquidity Matrix covering February’s trading activity, the industry averages for bid/offer spread was $0.356, trade size was 15.7 contracts and trade value was $7,463. Specifically, the smallest bid/offer spread went to Cboe C2 ($0.14), the most contracts per trade went to OMX PHLX (24.8 contracts) and the largest average trade value went to Cboe ($23,125). Also, in line with February 2017, penny options accounted for 70 percent of the total options volume.~SD

The Hong Kong dollar fell to 33-year lows, trading at 7.8425 per U.S. dollar. Its “band” as dictated by Hong Kong monetary policy is 7.75-7.85.~SD

There are three March 2 NYMEX disciplinary actions from CME Group – two of them pertain to violations of position limits while the third involves misreporting infractions.~SD

Amid all the tariff talk, China acknowledged that its myriad financial holding companies pose liquidity risks.~SD

HKEX struck the gong on March 8, 2018 to mark International Women’s Day before hosting a seminar on the advancement of women in the workplace.~JJL

Barchart.com Is Expanding FinTech Exchange Conference to Two Days.~JJL

Chris Harrison has joined Barchart as their CTO.~JJL

Blue Trading Systems posted a profile of Kevin Darby on their blog.~JJL

Dan Smalley of Fidessa has a LinkedIn post on “How do your FCM operations handle periods of extreme volatility?”~JJL

++++

Yerkes Observatory closing after 100 years on lakefront
Scott Williams – Lake Geneva Regional News
After more than a century of scientific exploration on the shores of Geneva Lake, the renowned Yerkes Observatory is ceasing operations. The University of Chicago, which owns Yerkes, announced today that it is closing the facility effective Oct. 1 and shifting all programs and services to Chicago.
/goo.gl/YWirr3

***** Charles Yerkes was a former stock and grain broker who got involved with Chicago’s mass transit. He donated $300K to build the observatory in Williams Bay. He was also involved in London’s underground transit system and managed to “thwart an attempt by J. P. Morgan to enter the London underground railway field.”~JJL

++++

Bitcoin Is Ridiculous. Blockchain Is Dangerous; The true believers won’t stop until they’ve remade the world. Some of it will be thrilling. Some of it will keep us up at night.
Paul Ford – Bloomberg
On the days when Bitcoin crashes, a holiday atmosphere takes over in my corners of the internet. People tweet screengrabs of Reddit fights. It’s always good fun to watch strangers grieve as their digital nonsense nickels melt into slag.
/goo.gl/k8DPG3

***** Quote of the day: “It’s always good fun to watch strangers grieve as their digital nonsense nickels melt into slag.”~JJL

++++

Thursday’s Top Three
Yesterday’s top story was the Wall Street Journal’s Hong Kong Exchange May Have Reached Its Peak. Second went to Michael Unetich‘s interview with GDAX’s Adam White in 5 Questions with Adam White. Third goes to the ongoing Citadel layoff show in the Chicago Tribune’s Ken Griffin’s Citadel cuts 45 people as gutting of Aptigon stock unit deepens

++++

MarketsWiki Stats
121,620,236 pages viewed; 23,031 pages; 212,004 edits
MarketsWiki Statistics

Lead Stories

Spot Trading appears to have shut down operations
Lynne Marek – Crain’s Chicago Business
Chicago trading firm Spot Trading has closed its doors, according to an online message, after a series of worker reductions in recent months as the industry has consolidated.
/goo.gl/NQLbHC

EU banking watchdog sets out ‘roadmap’ to regulate fintech
Huw Jones – Reuters
The European Union’s banking watchdog set out a “roadmap” on Friday to help plug gaps in how the rapidly evolving financial technology sector is regulated, but urged caution in tackling cryptocurrencies.
/goo.gl/doi55J

EU probes UK tax treatment of commodity derivatives; Brussels investigates whether Britain’s approach on trading breaks single market rules
Philip Stafford and Rochelle Toplensky – FT
The EU is investigating whether Britain has failed to respect single market laws by not imposing enough tax on commodity derivatives trades, according to the UK Treasury.
/goo.gl/wkUbdj

Market-making giant Citadel Securities shuns cryptocurrencies; Cryptocurrencies like bitcoin continue to fight for acceptance in mainstream finance
Samuel Agini – Financial News
One of the world’s leading market-making firms has decided that trading in bitcoin and other cryptocurrencies is too risky, underlining the assets’ struggle for acceptance in mainstream finance.
/goo.gl/io2MJr

How China Is About to Shake Up the Oil Futures Market
Sungwoo Park – Bloomberg
China, the world’s biggest oil buyer, is opening a domestic market to trade futures contracts. It’s been planning one for years, only to encounter delays. The Shanghai International Energy Exchange, a unit of Shanghai Futures Exchange, will be known by the acronym INE and will allow Chinese buyers to lock in oil prices and pay in local currency. Also, foreign traders will be allowed to invest — a first for China’s commodities markets — because the exchange is registered in Shanghai’s free trade zone. There are implications for the U.S. dollar’s well-established role as the global currency of the oil market.
jlne.ws/2G7wcfD

Trade Spat Just Noise as ECB Edges to Exit
Richard Barley – WSJ
The past few weeks have seen financial markets swing to and fro sharply, with fears around trade and protectionism now added to the mix. But central banks like the European Central Bank aren’t changing direction.
jlne.ws/2Dbe9C6

China’s Li Keqiang Index: Headwinds for Commodities?
Erik Norland – CME Group
The official growth rate of China is of intense interest to economists and investors worldwide. The gross domestic product of the world’s second largest economy is also subject to a certain degree of skepticism. Observers ponder over its unusual stability and unfailing ability to fall within the consensus estimate. Among the skeptics is none other than Li Keqiang, the Premier of the People’s Republic of China. His remarks to a U.S. diplomat a decade ago describing the official GDP as “man-made,” inspired The Economist to create an index of his three preferred measures of economic growth in China that now bears his name: the Li Keqiang index.
jlne.ws/2G6i5Hk

Swift says blockchain not ready for mainstream use; Progress needed before technology can handle bank cross-border payments, messaging service says
Martin Arnold – FT
Blockchain technology needs to make more progress before it can handle the billions of dollars of daily cross-border payments between the world’s banks, Swift has concluded after testing the new system on its interbank messaging network.
/goo.gl/DjJVbd

US proxy advisory industry draws regulatory scrutiny; SEC commissioner has asked companies for comment on an industry dominated by two players
Robin Wigglesworth – FT
The influence of corporate governance advisory groups is drawing scrutiny from US regulators and politicians, as the shift towards passive investing hands them ever more clout in corporate America.
/goo.gl/FDSgJb

EU regulator rolls out trading caps for bulk of stock market
Huw Jones – Reuters
The European Union’s securities watchdog said curbs on trading shares in the “dark” or off public exchanges across the European Union will be rolled out on March 12 and cover the bulk of blue-chip stocks such as HSBC and Unilever.
/goo.gl/Bi8NGn

Federal Court to decide whether tokens issued through an ICO are securities | By Clifford Histed – FinTech Law Watch
In a criminal case in Brooklyn, New York, a federal court has been asked to decide for the first time whether tokens or coins issued through an initial coin offering constitute “securities” under U.S. securities laws.
/goo.gl/pYVw8W

Exchanges, OTC and Clearing

Brazil Hedge Funds Take Stake in Argentina’s BYMA on Growth Bet
Paula Sambo, Carolina Millan and Ignacio Olivera Doll – Bloomberg
Brazilian hedge funds have amassed a 10 percent stake in the operator of Argentina’s stock exchange and are seeking to exert their influence.
/goo.gl/hkVbvP

Coinbase snags an executive from the New York Stock Exchange as it tries to become the Google of crypto
Frank Chaparro – Business Insider
Count this as a sign that Coinbase is snagging talent to build the Google of crypto. Coinbase, the cryptocurrency trading platform, hired an executive from the New York Stock Exchange, according to a blog post out Thursday.
/goo.gl/TmsZrB

Coincheck to Start Compensating Victims from Next Week
Arnab Shome – Finance Magnates
Japanese cryptocurrency exchange Coincheck announced that it will begin the compensation process to the victims of the theft of $530 million worth of NEM tokens from next week.
jlne.ws/2G7nQVl

NEX strives for ‘community focused’ approach as the ‘other London stock exchange’
ProactiveInvestors.co.uk
The exchange’s chief executive said that one of the key offerings from NEX was the level of engagement, rather than having to “fit the box the exchange wants you to fill”
/goo.gl/QCgdJK

Dark pools hit by MiFID II caps after delay; European watchdog releases figures for January and February on double volume caps after delaying initial publication due to insufficient data.
Hayley McDowell – The Trade
The European Securities and Markets Authority (ESMA) has published data on the MiFID II dark pool double volume caps (DVCs) following a delay earlier this year, with hundreds of stocks affected by the restrictions.
/goo.gl/3rFiJU

Cboe Chairman and CEO Ed Tilly Kicks Off Day Two of Cboe RMC, Provides Thoughts on VIX, Volatility and Risk Management
Cboe
Day two of Cboe RMC U.S. 2018 kicked off with Ed Tilly, Chairman and Chief Executive Officer of Cboe Global Markets, welcoming approximately 300 attendees to this year’s event, the 34th annual Cboe Risk Management Conference.
/goo.gl/CitXYN

Euronext announces quarterly review results of the CAC family indices
Euronext
Euronext today announced the results of the quarterly review of the CAC family indices. The changes following the review will be effective from Monday 19 March 2018.
/goo.gl/9xmjeQ

Equity Index Derivatives: Futures and options on the CECE EUR Index: Last trading day and final settlement day for the March 2018 expiration
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Z¸rich AG decided with immediate effect that the last trading day and final settlement day for Eurex futures and options on the CECE EUR index shall be 14 March 2018 for the March 2018 expiration. This is due to exchange trading holidays at Budapest Stock Exchange Hungary on 15 and 16 March 2018.
/goo.gl/3UBCxi

Cross Currency Haircuts: Adjustments as of the end-of-day batch run on 14 March 2018
Eurex
Please find attached a specification of Eurex Clearing’s Cross Currency Haircuts effective with the end-of-day batch run on 14 March 2018.
/goo.gl/RzAtyh

TMX Group Wins Information Technology Deal of the Year
TMX
TMX Group was awarded the Information Technology Deal of the Year by Canadian Dealmakers at their annual gala event last evening in Toronto. The awards honour excellence in mergers and acquisitions, recognizing Canadian companies and individuals whose transactions have significantly impacted their industry through innovation and growth; establishment of best practices; enhancement of customer needs and products; and creation of value.
/goo.gl/7GCF1m

SFC and Exchange sign addendum to MOU Governing Listing Matters
HKEX
The Securities and Futures Commission (SFC) and The Stock Exchange of Hong Kong Limited (Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), have signed an addendum (Addendum) to the Memorandum of Understanding (MOU) Governing Listing Matters (Notes 1 & 2).
/goo.gl/4cCULN

Women In ETFs At Swiss Exchange
MondoVisione
As part of the International Women’s Day, Women in ETFs rang the stock exchange bell at SIX Swiss Exchange.
On 8 March 2018, SIX Swiss Exchange acted as a host for the fourth bell ringing of Women in ETFs (WE). The event was part of a global bell ringing in celebration of International Women’s Day. Over 60 stock exchanges around the world joined the UN Global Compact, Sustainable Stock Exchange Initiative, UN Women, the International Finance Corporation, World Federation of Exchanges, and Women in ETFs in raising awareness about the importance of gender equality to both business and sustainable development. SIX Swiss Exchange is proud to host this event for the fourth time in a sequence.
/goo.gl/Ptq5Gf

Fintech

Barchart Expands FinTech Exchange Conference to Two Days
Barchart
Today, Barchart, a leading provider of financial market data and technology, has announced the dates for FinTech Exchange 2018 (FTX), their annual event which focuses on technology within financial markets and trading. Marking its fourth consecutive year, FTX has been expanded into a two-day event that will be held on April 25 and 26 at Venue SIX10 in downtown Chicago.
/goo.gl/YQ8PSe

Bitcoin classes are coming to Chicago-area universities
Bitcoin classes
Ally Marotti – Chicago Tribune
At DePaul University, cryptocurrency has worked its way into a class called Foundations of Finance.
/goo.gl/xbhwZz

Comparing Bitcoin to Beavers: Using Darwinian Theory to Address the Evolution of Cryptocurrencies
Shanna McEachern, IPC Systems – TABB Forum
Some investors predict the total value of cryptocurrencies issued will surpass $2 trillion by the end of 2018. With numbers like that, can the argument still be made that cryptocurrencies are just a fad, or is this the natural next step in the evolution of capital markets? And do digitally currencies have any place in an institutional investment portfolio?
jlne.ws/2G5cwZH

Sierra Leone Secretly Holds First Blockchain-Powered Presidential Vote
Michael del Castillo – CoinDesk
Behind the scenes of Sierra Leone’s presidential election Wednesday, a second, perhaps larger milestone was quietly achieved.
jlne.ws/2DbzZWh

Crypto Miner Bitfarms to Invest $193 Million in Canadian Centers
Camila Russo – Bloomberg
Backbone Hosting Solutions Inc., a cryptocurrency mining company, said it plans to invest C$250 million ($193 million) in computing centers in Sherbrooke, Canada.
/goo.gl/Ew9S6u

The Bitcoin Landscape; In a decade, bitcoin has grown from an obscure proposal for a virtual currency to an entire ecosystem of companies and services. How does it all work?
Colin Wilhelm, Patterson Clark and Todd Lindeman – Politico
In a decade, bitcoin has grown from an obscure proposal for a virtual currency to an entire ecosystem of companies and services, all scrambling to capitalize on the more than $100 billion in estimated total bitcoin holdings.
/goo.gl/Z5Rv7D

This Is What Happens When Bitcoin Miners Take Over Your Town; Eastern Washington had cheap power and tons of space. Then the suitcases of cash started arriving.
Paul Roberts – Politico
Hands on the wheel, eyes squinting against the winter sun, Lauren Miehe eases his Land Rover down the main drag and tells me how he used to spot promising sites to build a bitcoin mine, back in 2013, when he was a freshly arrived techie from Seattle and had just discovered this sleepy rural community.
/goo.gl/epp1NN

Businesses turn to software robots for office work; New wave of automation could take over the jobs of millions of cubicle dwellers
Richard Waters – FT
Software robots have become one of the hottest fads in business automation, as a new wave of AI is poised to sweep through the back-office functions of large corporations.
/goo.gl/m6XQ5X

OpenFin universal standards initiative draws cross-industry support; Consortium aims to establish universal connectivity standards for industry desktop applications.
John Brazier – The Trade
An initiative to establish universal connectivity and standards across the financial industry’s desktop applications has received support from a number of cross-industry financial institutions.
/goo.gl/F8LvtC

Politics

Donald Trump agrees to meet Kim Jong Un; Landmark summit looms after US president accepts invitation from North Korean leader
Katrina Manson in Washington – FT
President Donald Trump is to meet Kim Jong Un within weeks, the first summit between the US and North Korea, after Pyongyang offered to suspend nuclear and missile tests.
/goo.gl/W41q7L

****CNN here.

Paul Manafort Pleads Not Guilty to Tax, Bank Fraud Charges; Trump’s former campaign chairman placed under additional home-confinement requirements; Virginia trial set for July
Aruna Viswanatha – WSJ
Paul Manafort, President Donald Trump’s former campaign chairman, pleaded not guilty to tax and bank fraud charges in federal court in Virginia on Thursday, setting up the prospect of back-to-back trials stretching through the summer into Mr. Manafort’s business dealings.
/goo.gl/sCStAF

Regulation

Keynote Address by Commissioner Brian Quintenz before the DC Blockchain Summit
CFTC
Good afternoon and thank you for that very kind introduction. As an alumnus, I’m always happy to be back at the McDonough School of Business. It’s great to be with you here at the DC Blockchain Summit. I want to congratulate Perianne and the Chamber of Digital Commerce on hosting such a fascinating event with such robust participation by the DLT and cryptocurrency community. What you have accomplished in advocacy and connectivity in such a short period is incredible.
/goo.gl/1Ed2sX

Merrill Lynch to pay $1.25 million penalty in SEC settlement: statement
Reuters
Merrill Lynch has agreed to settle U.S. charges over allegations that it did not properly prevent unregistered sales of a software company’s shares on behalf of a China-based issuer, the Securities and Exchange Commission said on Thursday.
jlne.ws/2G6akBh

Merrill Lynch Charged With Gatekeeping Failures in the Unregistered Sales of Securities
SEC
The Securities and Exchange Commission today announced settled charges against Merrill Lynch, Pierce, Fenner & Smith Inc. for its failure to perform required gatekeeping functions in the unregistered sales of securities on behalf of a China-based issuer and its affiliates.
/goo.gl/7MRXKq

PBOC governor says Bitcoin not a legitimate method of payment
Reuters Staff
China does not recognize Bitcoin and other digital currencies as legitimate forms of payment, the central bank governor, Zhou Xiaochuan, said on Friday.
/goo.gl/kxSezY

‘Pharma Bro’ Shkreli to be sentenced for defrauding investors
Brendan Pierson – Reuters
Martin Shkreli, the former drug company executive who made headlines by jacking up the price of a lifesaving drug before he was found guilty of defrauding investors, is scheduled to be sentenced on Friday.
/goo.gl/Cz14Rj

A top regulator’s close ties to Wall Street damage one of its most crucial functions 10 years after the crisis
Pedro Nicolaci da Costa – Business Insider
The Federal Reserve is supposed to be a public institution, yet every president of the Federal Reserve Bank of New York has worked for Wall Street before or after his tenure at the regional central bank.
/goo.gl/72jbAz

Lehman to Pay $2.4 Billion to End Crisis-Era Mortgage Claims
Tiffany Kary – Bloomberg
Judge rules on mortgage-backed securities from pre-2008 loans; Hedge funds and institutional investors own payment streams
Lehman Brothers Holdings Inc.’s bankruptcy estate will pay $2.38 billion to compensate for its role in the previous decade’s mortgage crisis, a federal judge decided, far less than the $11.4 billion some hedge funds had sought.
/goo.gl/kTEhBV

Massachusetts’ securities regulator investigates Wells Fargo Advisors
Elizabeth Dilts – Reuters
Massachusetts Secretary of the Commonwealth William Galvin said Thursday his office is investigating possible customer abuses by employees of Wells Fargo & Co’s brokerage division.
/goo.gl/WKL89f

Investing and Trading

EU and asset managers clash over ‘sustainable’ investing plan
Huw Jones – Reuters
The European Union has proposed making it a formal requirement for asset managers to consider “sustainability” when picking investments, a move the EU’s 23 trillion euro ($28.5 trillion) funds industry swiftly dismissed as a “tick-the-box” exercise.
jlne.ws/2G6JZ5T

Investors Prepare for the End of ECB’s Corporate Bond Buying; After two years and $8.42 billion in average monthly purchases, the central bank is one of the largest buyers of such debt
Mike Bird – WSJ
The European Central Bank became one of the world’s biggest corporate bond buyers two years ago, and now investors are asking what happens when the buying stops.
/goo.gl/dnei8F

Bitcoin prices fall below $9,000 ó a 24% decline for the week
Cheang Ming – Bloomberg
Bitcoin fell below $9,000 during Friday afternoon Asia trade, extending losses seen earlier in the week when it dropped below the key $10,000 level.
/goo.gl/sM8Biy

Soaring Treasury Bill Rates to Test Markets, Warns HSBC’s Major
Sid Verma – Bloomberg
HSBC’s famed bond bull Steven Major has a bearish warning as short-term dollar funding costs swell to levels last seen in the financial crisis.
/goo.gl/rYRzzW

Cobalt price hits highest level since 2008 on electric car demand; Potential increase in royalties payable to DRC government has also pushed up prices
Henry Sanderson – FT
The price for the battery metal cobalt has hit its highest level since 2008, prompted by rising demand from electric cars and the prospect of higher taxes in the Democratic Republic of Congo.
/goo.gl/WYsNcr

Institutions

Bitcoin Dealer Plays Cat and Mouse With Banks Closing Accounts
Raine Tiessalo – Bloomberg
Finnish company Prasos has had four accounts closed, one left; Closures followed ten-fold transaction volume growth in 2017
The company exchanges cryptocurrencies into euros, and relies on banks to help it with those transactions. But banks are increasingly saying no to Prasos and firms like it, for fear of getting into trouble with anti-money laundering rules. Prasos says it’s now waiting and hoping regulators will set clear guidelines that allow it to continue doing business.
/goo.gl/tMfaLR

At Goldman, Blankfein Touches a Nerve With Powell’s Return
Dakin Campbell – Bloomberg
After White House stint, she’s rejoining bank with a promotion; It’s stirring some debate inside the highly competitive firm
Dina Powell’s departure from the White House offered Wall Street the chance to enlist a rare set of skills: an industry insider who can also navigate President Donald Trump’s inner circle. Lloyd Blankfein seized it.
/goo.gl/pPS7L8

UBS warns of MiFID II’s impact on profits; Swiss investment bank’s annual report outlines potential revenue impacts of MiFID II unbundling and changes to OTC derivatives trading.
Hayley McDowell – The Trade
UBS has warned MiFID II’s rules on unbundling and changes to over-the-counter (OTC) derivatives trading will reduce revenue potential for certain businesses.
/goo.gl/SiyFf9

TradeStation Partners with GDAX to Deliver Free Real-Time Spot Data for Crypto
Victor Golovtchenko – Finance Magnates
Securing solid data sources for cryptocurrencies has been one of the main challenges for brokers and their clients. US-based online broker-dealer TradeStation, which is a subsidiary of Japanese Monex Group, has announced that it is teaming up with GXAD to deliver rep-time spot data rates on four cryptocurrencies for free.
jlne.ws/2G7LSiK

Morgan Stanley Fires Two 50-plus Year Brokers in Boston
Mason Braswell – Advisor Hub
It’s been a tough few months at the Exchange Place branch of Morgan Stanley in Boston, where the firm has fired a pair of brokers with 100 years of experience after two junior members of their seven-person team were barred from the industry amid federal fraud charges.
jlne.ws/2DbGt7a

SAXO Bank Posts Record Monthly Trading Volumes in February at $612 billion
The Industry Spread
Denmark based multi-asset brokerage house, SAXO Bank has netted record trading volumes in the month of February at $612.1 billion across diverse asset class. The two consecutive record-setting volume numbers in January and February have boosted the company’s operating metrics which witnessed slowing trading activity and revenues in the second half of 2017. The February numbers are boosted by the massive spike in volatility mainly due to rising bond yields and inflationary worries. The numbers are also one of the best for retail FX broker outside of Japan.
jlne.ws/2G6gXTZ

BNP Paribas failed to book trades in Germany for a week; Revelation over 2015 glitch caused by botched systems upgrade comes in lawsuit by day trader
Caroline Binham and Claire Jones – FT
A botched systems upgrade by BNP Paribas prevented the French bank from properly booking structured-products trades in Germany for a week, potentially affecting thousands of trades.
/goo.gl/Lw4573

Regions

Tillerson tells Africa that China finance imperils their sovereignty; First senior Trump official to visit continent questions Beijing’s investment drive
John Aglionby and Katrina Manson – FT
Rex Tillerson has warned African governments they risk forfeiting their sovereignty when accepting money from China as the US secretary of state began the first visit to the continent by a senior Trump administration official.
/goo.gl/782GjB

China’s War on Pollution Will Change the World
Jeff Kearns, Hannah Dormido and Alyssa McDonald – Bloomberg
China is cracking down on pollution like never before, with new green policies so hard-hitting and extensive they can be felt across the world, transforming everything from electric vehicle demand to commodities markets.
/goo.gl/W6mKRq

Swedish Krona Still on Shaky Ground After Worst Loss Since 2009
Love Liman – Bloomberg
Currency may lose support as housing troubles weigh on economy; Risk of global trade war could add to krona weakness, ING says
The Swedish krona’s troubles seem far from over even after its worst slump since the global financial crisis.
/goo.gl/FyeDTM

Hedge Funds Are Placing Record Bets That Danish Stocks Will Fall
Christian Wienberg – Bloomberg
Hedge funds only target very specific Danish stocks, ABG says; Short interest is rising as hedge funds have more money
Hedge funds have placed record bets that Danish stocks are set to decline, in a development that has local investors sitting up and paying attention.
/goo.gl/9BCqqX

International Women’s Day 2018: Why this year’s event is more important than ever
Caitlin Morrison – City AM
There is more work to do, but the City is already changing for women (Source: Getty)
International Women’s Day never passes without fevered debate around whether it is really necessary, but this year there are more arguments than usual in favour of dedicating a day to women.
/goo.gl/vDcsqL

Brexit

UK makes Brexit promise to Gibraltar on financial services
Catherine Neilan – City AM
The UK government has pledged to give financial services firms based in Gibraltar market access until 2020, in a bid to give greater certainty to those living on The Rock.
/goo.gl/dqxxBq

Miscellaneous

The Changing World of Art Financing
Abby Schultz – Barron’s
If you’re at The Armory Show of 20th and 21st century art this weekend and are considering the purchase of a sculpture by Samuel Biggers, an emerging artist who often obliquely tackles political themes, you might consider snapping a photo of the piece and sending it to Andrea Danese, CEO of Athena Art Finance.
jlne.ws/2Dbt5jP

****Tired of blue chip stocks? Try borrowing against your “blue-chip” art. Apparently, Danese used to be a credit derivatives specialist. That background isn’t surprising with quotes like, “Our major concern is always liquidity, if we have to sell the artwork, and price volatility.”

A Warning Cry From the Doomsday Vault
Humanity’s food security is at far more risk than you realize.
Jonas O Bergman – Bloomberg
On this winter day, the world was upside down: it was raining in the Arctic Circle and snowing in Rome.
/goo.gl/Mve9L8

Fake news travels far faster than the truth
Tom Whipple, Science Editor – The Times
A lie, it is said, gets halfway around the world before the truth can put its boots on. Scientists have updated the proverb, albeit less poetically, by discovering that a lie is also 70 per cent more likely to be shared on social media.
/goo.gl/RCnnoK

The post Spot Trading Closes; EU Fintech Regulatory Roadmap; EU probes UK derivatives tax treatment appeared first on John Lothian News (JLN).

When you enter Chicago’s Navy Pier Grand Ballroom for the Magnetar Team Challenge, something feels right – about education, about learning, about our kids and our future.

Inside the beautiful and towering landmark space, 34 high schools brought 48 teams and more than 400 students to compete for the best high school trading team in the Chicagoland area. Each team of five to seven students huddled around computer screens at each table to plan and execute a trading strategy on an undefined previous trading period using $100,000 in a simulated stock portfolio. Each team was supported by teachers plus more than 50 volunteer coaches from the financial industry to help kids navigate economic fundamentals, volatility and market trends. Over the next several hours, a winner would emerge.

That was the backdrop on Saturday.

But what is more telling of just how hungry students and schools are to learn and deliver the basics of personal finance – from credit and debt, saving and spending, to student loans, risk management, insurance and investing – is the number of students that have taken the curriculum since Magnetar Academy was launched seven years ago by Magnetar Capital, based in Evanston, IL. So far, more than 14,400 students from 115 schools have participated in the Magnetar Academy program in Chicago and its suburbs with 180-plus area teachers trained in providing the curriculum. The team challenges have attracted more than 1,250 students. Saturday’s event was its sixth competition and the largest to date.

Alec Litowitz, founder and CEO of Magnetar Capital (pictured above), said the program and the team challenge are part of a goal the firm set from the beginning: give kids the tools they need for some of the most important aspects of their lives.

“There are two things that are unavoidable in our lives today, technology and finance,” Litowitz said. “We want every single high school student to learn about this. This is our life curriculum.”

In July 2016, the firm partnered with the University of Chicago, with a goal to roll out Magnetar Academy’s 30-  to 40-hour curriculum across the country. It dipped its toe outside Chicago for the first time this school year with a high school in New York City, but organizers say there is still room for growth and tweaking in Chicagoland before a taking on a larger push nationally.

What is interesting and inspiring about the team challenge event is that it makes the markets very tangible. That seems odd to say in today’s super high speed digital stock and derivatives markets. But each team had a trading screen, a portfolio of stocks to enter or exit the market, pie charts based on market caps, economic indicators and price charts showing historical trends. The markets were very visible to them. Betsy Sumner, a teacher at Wolcott School in Chicago, said the curriculum takes students on an informative journey that literally starts at square one.

“We started the year with kids not knowing what a stock was,” said Sumner, who is now in her fourth year teaching the curriculum. “Now we’re focusing on stock portfolios, talking about diversifying portfolios, looking at economic indicators and other industries. No matter what they do in life, they need to know about the stock market.”

Futures industry veteran Sean Smith volunteered to coach one of the two Wolcott teams on Saturday.

“To have this type of introduction to the markets is absolutely critical,” he said. “And students learn that you should not be afraid of the markets or trading.”

Another industry executive Tony Saliba, CEO of MatrixEX, served as a volunteer coach for Garcia High School. He said “the financial literacy these students are learning should be part of every public school’s offering.”

The six hour event, which featured a financial literacy quiz for extra investment bucks and the trading competition was won by Northside Prep. Second went to Deerfield High School and third to Lincoln Park High School. The financial literacy quiz winner was Whitney Young Magnet High School.

All of this is still thought of as a start on the long road to financial literacy across the United States. A 2016 survey by Bankrate.com found that just four out of 10 Americans, and just one in three Millennials own stocks. Some of that is attributed to younger generations often not investing until later in life. But with programs like Magnetar’s, that trend could change in the coming years, perhaps with a teenager’s first trading challenge.

The post Kids Rock The Market: Magnetar’s Trading Challenge Brings Financial Education To High Schools appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Last week the European Commission announced a “Fintech Action Plan” aimed at helping crowdfunding platforms, like initial coin offerings, in the EU.~JK

On Friday, the CME officially got out of the credit defaults swaps business, as the CFTC approved the transfer of open interest to ICE Clear Credit.~JK

You might not know Madelyn La Salle, but you’ve probably seen her likeness. Artist John Storrs used the then 14-year-old as the model for his six ton aluminum statue of Ceres on top of the Board of Trade building. How’d they meet? Storrs saw her in an elevator on her way to a job interview.~SD

Former Barron’s columnist Steve Sears is joining a California FinTech company as Chief Market Strategist.~JJL

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Kids Rock The Market: Magnetar’s Trading Challenge Brings Financial Education To High Schools
Jim Kharouf – JLN
When you enter Chicago’s Navy Pier Grand Ballroom for the Magnetar Team Challenge, something feels right – about education, about learning, about our kids and our future. –

Inside the beautiful and towering landmark space, 34 high schools brought 48 teams and more than 400 students to compete for the best high school trading team in the Chicagoland area. Each team of five to seven students huddled around computer screens at each table to plan and execute a trading strategy on an undefined previous trading period using $100,000 in a simulated stock portfolio. Each team was supported by teachers plus more than 50 volunteer coaches from the financial industry to help kids navigate economic fundamentals, volatility and market trends. Over the next several hours, a winner would emerge.

That was the backdrop on Saturday. For the rest of the story click HERE

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John Lothian Wins Silver Beaver Award from the Boy Scouts of America
JLN Staff
Saturday night John Lothian received the Silver Beaver award from the Boy Scouts of America. The award recognizes registered Scouters of exceptional character who have provided distinguished service within a council. Among Lothian’s many accomplishments with the Boy Scouts is the Trading Tech 300 (TT300) program which he founded. TT300 asks firms in the Chicago financial community to hold merit badge workshops in their offices and has become very successful and popular both with the boys and the firms that participate.

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R.J. O’Brien Limited Hires Elena Patimova as Senior Vice President, Business Development
Press Release
R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, announced that Elena Patimova today joined its London-based affiliate, R.J. O’Brien Limited (RJO Limited), as Senior Vice President, Business Development.
In that role, Patimova will help the firm further grow its electronic sales, clearing and voice execution business while also raising the profile of RJO in the Europe, Middle East and Africa (EMEA) region. Patimova reports to Adam Solomons, RJO Limited Chief Customer Officer, EMEA.
jlne.ws/2p4yzbT

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ICOs, Cryptocurrencies; Securities Exchanges; Moving the Money
Gary DeWaal – Bridging the Week
A US federal court, the US Department of Treasury and the Securities and Exchange Commission all issued views on the regulation of cryptocurrencies that portend increasing complexity for market participants. A defendant in a separate criminal action, which alleges that an initial coin offering he orchestrated constituted an illicit sale of securities, argued that cryptocurrencies are not securities because they are currencies, and currencies are not included in the definition of securities under applicable law. Moreover, digital tokens issued in initial coin offerings do not take value from the sole or even significant entrepreneurial or managerial efforts of others – a hallmark of investment contracts (a type of security), he said.
jlne.ws/2p6EgWD

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Friday’s Top Three
Friday’s top read story by a very long, long margin was Crain’s breaking story Spot Trading appears to have shut down operations. Indeed they have. Second went to CFTC Commissioner Brian Quintenz’s Keynote Address by Commissioner Brian Quintenz before the DC Blockchain Summit. Third went to Bloomberg’s essay Bitcoin Is Ridiculous. Blockchain Is Dangerous: Paul Ford

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MarketsWiki Stats
121,918,013 pages viewed; 23,036 pages; 212,037 edits
MarketsWiki Statistics

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Lead Stories

Lloyd Blankfein Prepares to Exit Goldman Sachs as Soon as Year’s End
Liz Hoffman and Joann S. Lublin – WSJ
Lloyd Blankfein is preparing to step down as Goldman Sachs Group Inc.’s chief executive as soon as the end of the year, capping a more than 12-year run that has made him one of the longest-serving bosses on Wall Street.
jlne.ws/2Dd60gz

****Bloomberg – Goldman: Blankfein Prepares for Exit And It’s Time for a New Era; Reuters – Goldman CEO Blankfein prepares to exit as soon as year-end; FT – Blankfein keeps Wall Street guessing on future at Goldman

G.O.P. Rushed to Pass Tax Overhaul. Now It May Need to Be Altered.
Jim Tankersley And Alan Rappeport – NY Times
The legislative blitz that rocketed the $1.5 trillion tax cut through Congress in less than two months created a host of errors and ambiguities in the law that businesses big and small are just now discovering and scrambling to address.
jlne.ws/2p9ztnx

Brokers to Investors: Your Cash Ain’t Nothin’ But Trash
Jason Zweig – WSJ
Interest rates are on the rise, but customers of brokerage firms aren’t going along for the ride.
The Federal Reserve has driven short-term interest rates up a full percentage point since late 2016; one-month Treasury bills were yielding 1.6% this week. But you’d never know any of that from looking at the returns on the cash in your brokerage account.
jlne.ws/2G9vxu1

How Illinois Universities Power The Chicago Startup Ecosystem
Peter Wilkins – Forbes
Ten years ago, Chicago was not a major player in the startup ecosystem. Now, it’s one of the most important cities in tech.
jlne.ws/2DeWTMf

China Banking Crisis Warning Signal Still Flashing, BIS Says
John Glover – Bloomberg
China, Canada and Hong Kong are among the economies most at risk of a banking crisis, according to early-warning indicators compiled by the Bank for International Settlements.
Canada — whose economy grew last year at the fastest pace since 2011 — was flagged thanks to its households’ maxed-out credit cards and high debt levels in the wider economy. Household borrowing is also seen as a risk factor for China and Hong Kong, according to the study.
jlne.ws/2p3TFqE

Congratulations to the Only Woman Speaking at the Sohn Conference!
Mary Childs – Barron’s
On Thursday, we learned the chosen few who will share their best trade ideas at 2018’s Sohn Investment Conference, one of the most prestigious and closely watched gatherings in the investing industry, which will take place on April 23 in New York.
jlne.ws/2DeEpf3

Deutsche Bank Management Board Waives Bonuses for Third Year
Piotr Skolimowski and Steven Arons – Bloomberg
Deutsche Bank AG management waived its bonuses for a third consecutive year while the German lender is boosting payouts for bankers and traders despite reporting a loss for 2017.
/goo.gl/hFVoHX

U.S. stock market volatility gets derivatives conference hopping
Saqib Iqbal Ahmed – Reuters
February’s wild U.S. stock market ride brought a higher tempo and some must-hear presentations to the often staid discussions at the Cboe’s Global Market Inc’s major annual derivatives conference. In the shadow of the February plunge in stock prices and their more than two-thirds recovery from the decline, focus was on the dramatic demise of some funds as well as strategies that bet against market turbulence.
jlne.ws/2p48ny2

Opinion: Vanguard Disrupted Active Investing. Now It Could Save It.
Nir Kaissar – Bloomberg
Indexing pioneer Vanguard Group may be stock pickers’ last hope.
Investors are increasingly turning their stock picking over to computers. So-called smart beta exchange-traded funds track indexes that replicate traditional styles of active management such as value, quality and momentum. Investors handed $184 billion to smart beta ETFs from 2015 to 2017 while pulling $308 billion from equity mutual funds, according to data compiled by Bloomberg Intelligence.
/goo.gl/jZH12h

Why Blockchain Will Survive, Even If Bitcoin Doesn’t
Christopher Mims – WSJ
We’re now awash in “crypto” hype—cryptocurrencies like bitcoin and fundraising efforts like initial coin offerings. All that noise has obscured the bona fide efforts involving the underlying technology, blockchain. Of all the manifestations of crypto, it’s the most seemingly mundane applications of blockchain that could lead to the biggest and most concrete changes in all of our lives.
jlne.ws/2p3I0YR

Warren Keeps Pressure on Banking Bill, Says No 2020 Run in Mind
Ros Krasny and Katia Dmitrieva – Bloomberg
Senator Elizabeth Warren said a bill giving banks relief from rules imposed after the 2008 financial crisis could usher in a new round of taxpayer-funded bailouts, while making it easier for banks to discriminate on home mortgages and target minorities with excessive fees.
/goo.gl/wj83a7

Big tech is already behaving like a big bank
Lionel Laurent – Bloomberg
Picture a bank that lends $1 billion to small businesses in 12 months, holds $150 billion in corporate bonds, runs the world’s largest money-market fund, offers mobile payments and credit cards, and gives customers cash balances that can be topped up across thousands of homely bricks-and-mortar outlets. Except it’s not really a bank at all, but a technology firm.
jlne.ws/2p4HoCt

Japan’s Coincheck to start repaying customers Monday after digital money heist
Reuters
Japanese cryptocurrency exchange Coincheck Inc, reeling from government reprimands over lax standards after $530 million dollar theft of digital money, said it would from Monday start repaying customers affected by the heist.
jlne.ws/2p0UnFd

Don’t Spend A Cent On Bitcoin Until You See John Oliver’s Cryptocurrency Warning
Ed Mazza – HuffPost
Confused by cryptocurrencies? Baffled by bitcoin?
“Last Week Tonight” host John Oliver is here to help with a funny-but-thorough explanation of all the terms being thrown around and the absolutely crazy amounts of money some people are making just by owning them.
jlne.ws/2p60pEo

Exchanges, OTC and Clearing

CFTC Approves the Transfer of Open Interest in Credit Default Swaps from CME to ICC
CFTC
At the request of Chicago Mercantile Exchange Inc. (CME) and ICE Clear Credit LLC (ICC), the Commodity Futures Trading Commission (CFTC) issued an order today approving the transfer of all open interest in credit default swaps (CDS) at CME to ICC.
jlne.ws/2G9ejNi

‘We all better listen up’: The CEO of an FX trading firm says Wall Street needs to pay attention to the breakneck growth of crypto exchanges
Frank Chaparro – Business Insider
Some of most powerful people on Wall Street have derided cryptocurrencies as a “fraud,” “bleeding edge,” and as a “bubble.”
But it might be cryptocurrency companies that have the last laugh, according to David Mercer, the chief executive of LMAX Exchange, a UK-based forex trading technology company.
jlne.ws/2DeHDyT

NZ Exchange Seeks Scale Through Strategic Alliances
Mondovisione
NZX provides a further update on its refreshed strategy and delivery plans, announcing its intention to progress strategic alliances with global exchanges in order to increase its connectivity and global scale.
jlne.ws/2DeeiET

Fintech

SGX collaborates with FinTech firm Smartkarma to roll-out C-Suite Pilot Program
SGX
Singapore Exchange (SGX) and FinTech firm Smartkarma today announced a partnership to roll out the C-Suite Pilot Program, a cloud-based platform that will enable SGX-listed companies to streamline their communication and data reporting to the institutional, analyst and investor communities.
jlne.ws/2DkBC3R

IBM Reveals 400 Blockchain Projects with 63 Future-Minded Companies
www.bitsonline.com
The American powerhouse tech company IBM revealed in a new investor briefing that more than 63 IBM customers have embraced the company’s blockchain platform. Recently, interest in distributed ledger technology has caught fire with companies the world over.
jlne.ws/2p32yku

Twitter Says It Is Implementing Measures to Prevent Crypto Scams
Nour Al Ali – Bloomberg
Twitter Inc. is attempting to halt alleged cryptocurrency-related scams spreading via its platform, joining fellow social media companies in striving to cut down on harmful content.
Twitter is aware of cryptocurrency-related “manipulation,” and is implementing measures to “prevent these types of accounts from engaging with others in a deceptive manner,” a spokesman told Bloomberg, declining to elaborate further.
jlne.ws/2p4HHND

Bitcoin sentiment data added to Thomson Reuters terminals
John Detrixhe – Reuters via Quartz
Thomson Reuters has added bitcoin sentiment to its financial data feeds that are used by professional traders around the world. While bitcoin and its crypto asset cousins have mainly become a phenomena among individual retail investors, the rollout shows one of the ways that digital tokens are gradually entering the world of institutional investing.
jlne.ws/2p4HdXP

Ripple hires Bloomberg TV’s Cory Johnson as chief market strategist
Ari Levy – CNBC
Ripple, the payments start-up that holds billions of dollars worth of digital currency XRP, has hired a chief market strategist to tell its complex story to investors.
Bloomberg Television’s Cory Johnson confirmed to CNBC that he left the news network this week and started at Ripple on Thursday. A former hedge fund manager, Johnson spent eight years at Bloomberg, primarily covering technology on TV and for Bloomberg Radio.
jlne.ws/2DgmHaH

Jeff Bezos Wants To Send Amazon Prime To Your Home…The One He Owns The Mortgage On
Dealbreaker
At this point, Amazon’s world domination plans have become something of a standing joke, the only problem being that with every new industry the company steps into, there are by definition fewer people laughing.
jlne.ws/2DexPFl

Politics

Warren Keeps Pressure on Banking Bill, Says No 2020 Run in Mind
Ros Krasny and Katia Dmitrieva – Bloomberg
Senator Elizabeth Warren said a bill giving banks relief from rules imposed after the 2008 financial crisis could usher in a new round of taxpayer-funded bailouts, while making it easier for banks to discriminate on home mortgages and target minorities with excessive fees.
The Massachusetts Democrat, a popular figure among progressives and a regular target of scorn for President Donald Trump, also said in a series of interviews on Sunday morning political shows that she’s not running for president in 2020.
jlne.ws/2p2GshS

Mueller Might Delay Obstruction Charges in Trump Probe
Fortune
Special Counsel Robert Mueller’s investigation into whether President Donald Trump obstructed justice is said to be close to completion, but he may set it aside while he finishes other key parts of his probe, such as possible collusion and the hacking of Democrats, according to current and former U.S. officials.
/goo.gl/eUyDoz

Putin’s Russia: From basket case to resurgent superpower
Washingtonpost.com
Vladimir Putin and his Russia look more invincible today than at any other time in his 18 years in power.
/goo.gl/q8WxKZ

Treasury Secretary Mnuchin Gives Consent for Release of UCLA Video
Kate Davidson – Bloomberg
‘Our prior objection was providing a platform for the non-student protesters, who sought to disrupt the event,’ a Treasury spokeswoman said
Treasury Secretary Steven Mnuchin has had a change of heart about a video showing him being heckled at a California university last month.
/goo.gl/ixYEY6

Regulation

CFTC Financial Data for Futures Commission Merchants Update
Futures commission merchants (FCMs) and retail foreign exchange dealers (RFEDs) must file monthly financial reports with the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) within 17 business days after the end of the month. Selected financial information from these reports is published below. The most recent month-end information generally is added within 12 business days after FCMs and RFEDs file their reports, but occasionally may be added later. For example: The 17th business day filing “due date” for February 28, 2015 financial reports was March 25, 2015. The 12 business day target for posting these data was April 10, 2015.
/goo.gl/bYqxNA

Mess of Beaufort Securities raises wider questions about Aim
Kate Burgess – Financial Times
A week or so ago, a chill wind blew through London’s junior market. The Financial Conduct Authority used special powers to shut down Beaufort Securities, the small-company stockbroker based close to the Gherkin building that boasted of being “number 1 broker” for miners on the Alternative Investment Market.
jlne.ws/2p2fU0a

Former Transmar executives plead guilty to U.S. fraud charges
Brendan Pierson – Reuters
Two former executives at Transmar Commodity Group Ltd pleaded guilty on Friday to defrauding banks to win a $400 million credit line for the now bankrupt New Jersey-based cocoa trading company.
jlne.ws/2GctpSu

Martin Shkreli Sentenced to Seven Years in Prison
Patricia Hurtado and Erik Larson – Bloomberg
Martin Shkreli, the pharmaceutical industry’s enfant terrible, was sentenced Friday to seven years in prison, putting an end to a saga that captivated and sometimes enraged Washington, Wall Street and the tabloids.
jlne.ws/2GcC4nZ

SEC Charges Penny Stock “Mailman” With Scalping Investors In Gold Mining Stocks
SEC
The Securities and Exchange Commission has charged a penny stock promoter based in Florida with defrauding investors in a pair of gold mining stocks by secretly amassing shares before touting the companies publicly. He allegedly sold the bulk of his stock and reaped more than $1.1 million in illicit profits after his promotions caused the share prices and trading volumes to skyrocket.
/goo.gl/YBRL4d

SEC Foils Penny Stock Executive’s Plan to Pump Stock and Exploit Investors
SEC
The Securities and Exchange Commission today barred the president of a penny stock company from ever again serving as a public company officer or director after he was caught making false and misleading statements about the company to investors in an effort to increase demand for the stock.
jlne.ws/2DfzLx0

Scam-hit PNB may need to provide for around Rs 60 bn in losses this quarter
Somesh Jha – Business Standard
Punjab National Bank may have to provide for around Rs 60 billion in losses in this quarter due to the Rs 127 billion scam related to the fraudulent Letters of Undertaking (LoUs).
/goo.gl/um7jMx

Investing and Trading

S&P accused of weakening ratings model to win business in landmark Australian lawsuit
Tom Westbrook – Reuters
Ratings agency Standard and Poor’s weakened its risk assessment criteria to win business and turn out high ratings on opaque debt products that started to unwind during the global financial crisis, an Australian court heard on Monday.
jlne.ws/2p4KIxn

Global super rich are booking profits and slashing risk following February’s harsh shakeout, says Citi private bank
Alun John – South China Morning Post
The volatility which hit markets with a jolt in February has changed the way the super rich are investing their money.
Peter Charrington global head of Citi Private Bank, said that his clients around the world are starting to turn more defensive in how they invest their money, looking to protect the gains they have made.
jlne.ws/2p2HQkA

Rockefeller Estate Sells for 50% Over Its $22 Million Asking Price
The mansion owned by the estate of David Rockefeller sold for $33 million. The 75-acre property is located in New York’s Westchester County.
Katherine Clarke – Wall Street Journal
A Pocantico Hills, N.Y., mansion owned by the estate of David Rockefeller, the venerable chief executive of Chase Manhattan Bank, has sold for $33 million, 50% above its $22 million asking price.
/www.wsj.com/articles/rockefeller-estate-sells-for-50-over-its-22-million-asking-price-1520633667

Die Hard With a Vengeance: Mt. Gox is Killing Crypto Again
Rachel McIntosh – Finance Magnates
Outcry has erupted across the crypto community as many have accused the man responsible for the remainder of Mt Gox’s assets of intentionally or unintentionally contributing to the sinking price of Bitcoin, according to a report from Business Insider.
jlne.ws/2DeR3dN

Regulatory Scrutiny Sends Bitcoin Into 20% Tailspin This Week
Andrea Tan and Lily Katz – Bloomberg
Bitcoin’s rough week headed for a bitter ending.
The virtual currency fell 6 percent to $8,760 at 12:30 p.m. in New York Friday, after earlier losing as much as 10 percent.
jlne.ws/2DeWtpb

Institutions

Keep calm and carry on with policy normalization, BIS tells central banks
Marc Jones – Reuters
The recent volatility in global financial markets should not deter top central banks from lifting interest rates or ending years of unprecedented stimulus, the Bank for International Settlements said on Sunday.
The latest report from the Switzerland-based group said that after such a long period of calm there were bound to be more market wobbles and that trade war worries were making the “delicate task” of trying to normalize policy more complicated.
jlne.ws/2p4Cs0t

Deutsche Bank to pay staff 2 billion euros in bonuses for 2017
Reuters
Deutsche Bank (DBKGn.DE) said on Sunday its 2017 bonus pool would be above 2 billion euros ($2.46 billion), as the loss-making bank seeks to retain staff during a major overhaul.
But the bank’s top managers are foregoing their annual bonuses for 2017 after coming under fire for awarding big incentive payouts even though Germany’s largest bank lost money last year.
jlne.ws/2p0VYuM

Old Dogs Learn New Tricks in Payments Battle
Aaron Back – WSJ
Now that they’ve gotten their act together, don’t count big banks out of the mobile payments war.
The way Americans make purchases and pay friends has changed rapidly over the past few years. Major financial institutions initially were caught off guard by the success of digital upstarts like Venmo, the payment app owned by PayPal that makes it easy to transfer money to friends with a few smartphone clicks.
jlne.ws/2p4wVH0

ECB staff eyes rate rise in mid-2019, but road looks bumpy, sources say
Francesco Canepa, Frank Siebelt – Reuters
European Central Bank staff offered policymakers meeting this week a scenario where interest rates would be raised in mid-2019 after winding down their bond purchases at the end of this year, three sources told Reuters.
jlne.ws/2G9xYg4

Regions

Chile says companies to invest $754 million in lithium industry
Reuters
Chile’s development agency Corfo said on Friday that companies from China and South Korea, as well as Chile, had been approved to make investments of around $754 million in the red-hot lithium industry.
jlne.ws/2GdfLy8

Brexit

Economist Paul Johnson: ‘We are nowhere near out of austerity’
Stephen Moss – The Guardian
As the man relied on to make sense of the numbers in the chancellor’s spring statement, the IFS director warns that cuts have taken Britain to crunch point – and that Brexit will make it worse
jlne.ws/2Gdp41q

Think-tank accused of trying to drive Theresa May towards a hard Brexit is left in turmoil after exodus of top staff
Simon Walters -The Mail
A controversial think-tank accused of trying to drive Theresa May towards a hard Brexit was in turmoil last night after an exodus of top staff. Up to six senior figures have quit the Legatum Institute since The Mail on Sunday’s revelations about its hidden influence on the Government’s EU agenda.
/goo.gl/rQKffV

Miscellaneous

Auditing market that makes ‘lemons’ of us all must change
Jonathan Ford – Financial Times
When the American economist George Akerlof wrote his celebrated 1970 paper about “lemons”, he described a dysfunctional world where inferior goods drove out better ones because suppliers could not attract a premium for higher-quality products.
Customers might be prepared to pay $1,000 for a “peach”, a well-kept used car, as against just $500 for a “lemon”, in Mr Akerlof’s example. But if the lemon owners concealed their cars’ faults and passed them off as peaches, buyers would rationally lower the price they would offer to reflect the higher possibility of ending up with a duff vehicle. That way, through a process of adverse selection, those lower prices would lead to the peaches being withdrawn from the market. All that would remain would be duds.
jlne.ws/2p3IKNO

The post Lloyd Blankfein Prepares to Exit Goldman Sachs as Soon as Year’s End appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Boca Bits:

Today we announced in a Special Report to the readers of this newsletter that John J. Lothian & Company, Inc. has begun work on a microwiki site named CryptoMarketsWiki.com. Click HERE to see the release.~JJL

Jessica Titlebaum Darmoni, founder of The Title Connection and co-founder of WILD, was on Anthony Crudele’s Futures Radio Show recently. Here is the link to LISTEN.~JJL

Seismic Foundry closed its second investment on Monday with a regulation technology start-up called Enforcd, which provides a regulatory database for institutions. The platform includes news, analysis and statistics that help firms identify and manage regulatory risk. Seismic partner Brendan Bradley said the firm has identified and begun to carve out a niche in the regulation technology by pulling research on enforcement actions, identifying common compliance errors and adopting effective practices for clients. The practical information database, which covers both the US and European Union regulation, will eventually include other regulatory jurisdictions. Pages of regulatory documents can be searched quickly by staff to help manage and mitigate risk.~JK (Full disclosure: Jim Kharouf is affiliated with Seismic Foundry).

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Hehmeyer Trading + Investments Launches Cryptocurrency Index Fund Commodity Pool
Hehmeyer
Hehmeyer Trading + Investments announced the launch of the Hehmeyer Cryptocurrency Index Fund, a new product that will provide certain qualified investors access to the cryptocurrency market by investing in a fund that aims to track the performance of the proprietary Hehmeyer Cryptocurrency Index (“HCI”).
/goo.gl/85SeQr

***** You have to love derivatives!~JJL

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Monday’s Top Three
On a day when one of the most powerful men in banking and finance is moving on, our top story on Monday was about the Ceres statue atop the Chicago Board of Trade building in Up Close and Personal with the Goddess of Grain… from Classic Chicago Magazine. Second was (not Lloyd Blankfein)… the Huff Post’s piece Don’t Spend A Cent On Bitcoin Until You See John Oliver’s Cryptocurrency Warning. Finally, viewership returned to the real world and one of the biggest stories of the year – (not Lloyd Blankfein), the tax overhaul. The New York Times’ piece G.O.P. Rushed to Pass Tax Overhaul. Now It May Need to Be Altered was third. Sorry Lloyd.

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MarketsWiki Stats
121,959,869 pages viewed; 23,039 pages; 212,060 edits
MarketsWiki Statistics

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Lead Stories

Central Banks Urged to Study Digital Currency Risks and Rewards
Jana Random – Bloomberg
BIS warns of destabilizing effect if used by general public; Regulating crypto currencies to be topic at next week’s G-20
Digital currencies are a revolutionary tool that central banks should consider, but they remain far too risky to be used as legal tender any time soon, according to the Bank for International Settlements.
/goo.gl/FzzoG4

BIS says volatility funds ‘amplified’ equity turmoil in February; Increase in Vix exceeded historical relationship with S&P 500, says central bankers’ bank
Robin Wigglesworth – FT
Volatility-linked funds aggravated the stock market turmoil of early February, highlighting how complex strategies can “create and amplify” outsized slumps across financial markets, according to the Bank for International Settlements.
/goo.gl/9ZvzLU

Hong Kong Exchange, MSCI Are Said to Plan New Asian Futures
Kana Nishizawa and Benjamin Robertson – Bloomberg
Hong Kong Exchanges & Clearing Ltd. is working with index compiler MSCI Inc. to create futures contracts that would track hundreds of Asian companies, a broadening of the bourse’s offerings as it looks to build its derivatives business.
/goo.gl/VmtPtR

CQG Connects to INE, New Energy Exchange in Shanghai; Gives Market Participants Outside China Opportunity to Trade Highly Anticipated INE Markets; Enables Chinese Buyers to Lock in Oil Prices in Local Currency
CQG
CQG, a leading global provider of high-performance trading, market data, and technical analysis tools, announced today that the soon-to-be-launched, highly anticipated Shanghai International Energy Exchange (INE), a unit of the Shanghai Futures Exchange, will be the first Chinese market available on CQG. The company made the announcement at the annual FIA International Futures Industry Conference in Boca Raton.
/goo.gl/YxLi7T

Thomson Reuters launches bitcoin sentiment gauge for crypto traders
Reuters Staff
Thomson Reuters Corp is to track and analyze chatter about bitcoin on hundreds of news and social media websites to help investors looking for an edge in trading the world’s biggest cryptocurrency, the company said on Monday.
/goo.gl/Av2MmB

Bond Market’s Most Feared Traders Threaten Treasuries Once Again
Liz McCormick – Bloomberg
The vigilantes are poised to return after years in abeyance; Expansionary fiscal policy, resurgent inflation spur revival
E. Craig Coats Jr. never set out to be a bond vigilante.As the former head of Salomon Brothers’ Treasuries desk, the last thing on his mind running the world’s biggest debt trader in the 1970s and 80s was fighting Washington’s fiscal largesse. He had a much simpler agenda: survive.
/goo.gl/cJz3mz

What Solomon’s Ascent Signals About Goldman’s Future
Dakin Campbell – Bloomberg
Analysts see investment bankers rising if he takes the helm; A new leader may bring ‘fresh perspective’ as trading drags
When Goldman Sachs Group Inc.’s leaders unveiled their strategy six months ago to reshape the Wall Street powerhouse into a more traditional bank, it was trading veteran Harvey Schwartz who led the presentation.
/goo.gl/d5g7Zt

Harvey M. Schwartz To Retire From Goldman Sachs, David M. Solomon To Serve as Sole President and Chief Operating Officer
Goldman Sachs
The Goldman Sachs Group, Inc. (NYSE: GS) today announced that Harvey Schwartz, the firm’s President and Co-Chief Operating Officer, has decided to retire effective April 20, 2018. David Solomon will serve as sole President and Chief Operating Officer of the firm upon Harvey’s retirement.
/goo.gl/obFSto

The Evolving Middle Office: A Seal of Approval
Tom Lehrkinder – Tabb Forum
The middle-office technology supporting the futures industry finally is evolving after years of underdevelopment. Buy-side clients are demanding their FCMs provide new and improved tools to enable near-real-time processing and reconciliation of trades. TABB Group reached out to C-level operations and business executives to discuss the state of middle-office technology. Download a complimentary copy of the results below.
/goo.gl/VmqM5h

Lawsuit claims Wall Street’s ‘fear gauge’ was ‘manipulated’
Nathaniel Meyersohn – CNN
Wall Street’s so-called fear gauge was “manipulated,” a new federal class action lawsuit alleges.
/goo.gl/1Y7xeb

Hacked Japanese Cryptocurrency Exchange Pays Back Customers; Coincheck spends $435 million to compensate customers who kept a digital currency called NEM at Coincheck
Takashi Mochizuki – WSJ
Coincheck Inc., a Japanese cryptocurrency trading platform operator that was hacked in January, said Tuesday that it has completed compensating customers affected by the hacking and resumed some exchange services.
/goo.gl/MRm2wG

Exchanges, OTC and Clearing

trueEX plans launch of cryptocurrency marketplace; trueEX has established new ‘trueDigital’ business to offer non-deliverable forwards for Bitcoin on new marketplace.
Hayley McDowell – The Trade
trueEX has confirmed plans to roll out a regulated derivatives marketplace for digital assets in a bid to win business from institutional investors looking to enter the cryptocurrency market.
/goo.gl/uATd9e

TP ICAP 2017 cost savings higher than indicated at £27m
Philip Stafford – FT
TP ICAP, the world’s largest interdealer broker, said on Tuesday its cost-cutting programme had gone deeper and further than it had previously indicated to the market.
/goo.gl/u5j1tm

CCP Release 14.5: Production launch on 26 March 2018
Eurex
As already announced in Eurex Clearing circular 134/17, the launch of CCP Release 14.5 is scheduled to take place on 26 March 2018.
/goo.gl/VK98ck

Deutsche Börse and Eintracht Frankfurt support Frankfurt children’s project Arche; Action for the Rhine-Main derby on 17 March
Deutsche Börse Group
As part of its corporate citizenship activities, Deutsche Börse Group and Eintracht Frankfurt will support the children’s project Arche eV in Frankfurt with a special promotion around the 27th matchday. The market infrastructure provider waives its sponsorship rights on 17 March and returns them, including the sleeve logo, to the ark to introduce the club to a wider public. Deutsche Börse has long been involved with this local club, which is very actively fighting child poverty in Germany.
/goo.gl/bttjid

London Stock Exchange Group strengthens partnership with Kenya
London Stock Exchange Group
London Stock Exchange Group (LSEG) is in Nairobi to build on the strong economic partnership between the UK and Kenya and discuss how best to encourage greater capital markets collaboration, in particular around equity & debt dual-listings.
/goo.gl/DX4gZh

SGX proposes to refine members’ Derivatives Clearing Fund requirements
SGX
Singapore Exchange (SGX) is proposing refinements to enhance the robustness of the SGX-Derivatives Clearing (SGX-DC) Clearing Fund. These will result in each member contributing to the Clearing Fund an amount that more accurately reflects the risk it poses to SGX-DC.
/goo.gl/Ez3oBZ

Coincheck refunds investors and resumes trading after heist; Japanese cryptocurrency exchange stages comeback despite doubts it had the funds
Emma Dunkley in Hong Kong and Robin Harding in Tokyo – FT
Japanese cryptocurrency exchange Coincheck has paid nearly $435m to investors and has resumed limited trading after being targeted in one of the world’s biggest heists.
/goo.gl/ZgRGg9

Cboe Periodic Auctions Hits New One-Day Record of EUR582 Million Traded on March 12
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, today reported that Cboe Europe’s Periodic Auctions book set a new one-day record of EUR582.8 million traded on Monday, 12 March 2018. The previous one-day record was EUR488 million set on 6 February 2018.
/goo.gl/BsnTGF

JCCH volume report for February 2018 (Japanese commodity market)
JCCH
www.jcch.co.jp/uploads/volume_open_interest/2018/February_2018.pdf

Fintech

Fidessa develops block trading tool for placing multiple orders; BlockShadow service provides users with the chance to interact with multiple block trading venues.
Hayley McDowell – The Trade
Fidessa has launched a new service aimed at allowing institutional investors to place multiple conditional block trade orders across the various venues that have emerged under MiFID II.
/goo.gl/pKNh42

Rookie crypto investors look past risks, flock to London show
Tommy Wilkes – Reuters
Dozens of stallholders, pitching anything from a happy retirement to commercial property to the future of electronics, set up shop in central London last weekend to pitch their wares.
/goo.gl/6abzkZ

Rosenthal Collins Group Signs with Eventus Systems for Trade Surveillance; Cloud Version of Validus Platform Brings RCG New Efficiencies, Flexibility
Eventus Systems
Eventus Systems, Inc., a provider of innovative regtech software solutions for the capital markets, announced today that Rosenthal Collins Group LLC (RCG®), a leading independent futures brokerage and clearing firm, has deployed its Validus platform for RCG’s trade surveillance needs.
/goo.gl/7fjxEZ

Ripple Loses Bid to Keep Its Cryptocurrency Fight in California
Christie Smythe – Bloomberg
Ripple CEO Brad Garlinghouse discusses the future of XRP and other cryptocurrencies.
Blockchain developer Ripple Labs Inc. lost its shot at a home-court advantage in a dispute with rival R3 Holdco over ownership of cryptocurrency XRP that was once worth more than $16 billion.
/goo.gl/G84s9j

Bitcoin not the answer to a cashless society; Digital token reveals the weakness of our current payment systems
Benoît Cœuré and Jacqueline Loh – FT
Next week, finance ministers and central bankers from the group of G20 countries will discuss bitcoin and other blockchain-based digital tokens. Such cryptocurrencies are poor imitations of money. Almost nobody prices goods in bitcoin, few use them for payments, and, as a store of value, they are no better than gambling in a casino. Policymakers are rightly worried about consumer and investor abuses, as well as illicit use.
/goo.gl/WjfvE7

Bitcoin not the answer to a cashless society
European Central Bank
Opinion piece by Benoît Cœuré, Member of the Executive Board of the ECB and Chair of the Bank for International Settlements (BIS) Committee on Payments and Market Infrastructures (CPMI), co-authored by Jacqueline Loh, chair of the BIS Markets Committee, published in the Financial Times on 13 March 2018
/goo.gl/MmcJy1

Bitcoin start-ups in Asia take aim at remittances market
Marius Zaharia, Dahee Kim – Reuters
Bitcoin, battered by warnings about volatility and bubble-like appreciation, may have found a way to play a niche role in a big market: overseas money transfers.
/goo.gl/LH9i6S

FIX Trading Community Announces Release Candidate 3 Of FIX Orchestra – The Open Standard For Machine Readable Rules Of Engagement For All Financial Protocols
MondoVisione
FIX Trading Community, the non-profit, industry-driven standards body at the heart of global financial trading, today announced the publication of Release Candidate 3 for FIX Orchestra for public review, to help the industry move further towards standardisation and automation of rules of engagement and deliver major efficiencies to the counterparty onboarding process. This enables firms to define their service offerings in an entirely systematic way, allowing them to certify their flows faster and with greater accuracy, while significantly reducing the need for manual intervention.
/goo.gl/4IA3xV

Politics

China’s Communist Party Centralizes Power Over Finance and Pollution Control
Keith Bradsher And Chris Buckley – NY Times
The Chinese government said on Tuesday that it planned to overhaul supervision of the country’s debt-ridden financial sector, its environmental regulators and other essential government agencies in a broad move intended to further consolidate the Communist Party’s hold on official levers of power.
/goo.gl/E75Ru1

Trump tariffs pose threat to global economic revival, OECD warns; Rosy world outlook clouded by threat of retaliatory trade barriers
Chris Giles in London – FT
Tit-for-tat trade barriers in response to the Trump administration’s tariffs on steel and aluminium threaten to pull the rug from under a strengthening global economy, the Organisation for Economic Co-operation and Development said on Tuesday.
/goo.gl/vaQKWj

Trump blocks Broadcom’s $142bn hostile bid for Qualcomm; President cites national security concerns in taking unprecedented action against deal
Richard Waters in San Francisco and Eric Platt in New York – FT
US president Donald Trump has blocked Broadcom’s $142bn hostile bid for rival chip company Qualcomm, saying he was acting to protect national security.
/goo.gl/KFtWnj

No One’s Sure Who Qualifies for This $415 Billion U.S. Tax Deduction
Ben Steverman – Bloomberg
IRS guidance on pass-through break could miss June deadline; Veterinarians, massage therapists among those in cross hairs
Congressional Republicans created a juicy new tax break for business owners when they rewrote the U.S. tax code late last year. Three months later, hundreds of thousands of U.S. employers still don’t know if they qualify.
/goo.gl/4n3RWH

U.S. Posts Biggest Budget Deficit Since 2012
Sarah McGregor – Bloomberg
Revenue fell 9%, spending rose 2% in February: Treasury data; Wider gap could fuel concerns about tax cut-driven debt load
The U.S. recorded a $215 billion budget deficit in February — its biggest in six years — as revenue declined.
/goo.gl/5ZJBHX

***** This is not supposed to happen when the economy is humming and unemployment is low. This is bad tax policy and economics that will make the policy choices for when things turn down that much more difficult.~JJL

Larry Kudlow Emerges as Trump Favorite to Replace Cohn, Sources Say
Jennifer Jacobs, Toluse Olorunnipa – Bloomberg
CNBC personality is already informal adviser to the president; Trump hasn’t made final decision and could change his mind
CNBC personality Larry Kudlow has emerged as President Donald Trump’s favorite to replace Gary Cohn, the outgoing director of the White House National Economic Council, two people familiar with the matter said.
/goo.gl/5CTaep

***** And speaking about bad economics.~JJL

The world’s first blockchain-powered elections just happened in Sierra Leone; People queue to cast their vote at a polling station during Sierra Leone’s presidential election in Freetown, Sierra Leone March 7, 2018.
Yomi Kazeem – Quartz Africa
On Mar. 7, elections in Sierra Leone marked a global landmark: the world’s first ever blockchain-powered presidential elections.
/goo.gl/ifXfXo

Regulation

Central banks told to think twice before boarding Bitcoin bandwagon
Huw Jones – Reuters
Central banks should think hard about potential risks and spillovers before issuing their own cryptocurrency, the Bank for International Settlements (BIS) said in a report on Monday.
/goo.gl/U218cB

Cryptocurrency scammers run off with more than $2 million after ditching their investors
Arjun Kharpal – CNBC
Scammers appear to have made off with more than $2 million in cryptocurrency after carrying out an apparent fake initial coin offering (ICO), and the individuals linked to the incident may be connected to another recent theft, CNBC has learned. A bad actor or actors used a fake LinkedIn profile and copied pictures from another user’s Instagram to create a false persona — and successfully drew more than 1,000 investors into the ICO project, which was called Giza.
/goo.gl/sojhKs

Central Bank Cryptocurrencies Promising As Use Of Cash Disappears, Says Global Regulator Group
Ted Knutson – Forbes
Potential cryptocurrencies and other forms of digital currencies issued by central banks show promise as the use of cash is “rapidly disappearing,” a report issued today by a consortium of global regulators, the Bank for International Settlements.
jlne.ws/2p8yyUh

South Korea: ICO and Cryptocurrency Trading Policy Under Consideration
Eli Meixler – Fortune
South Korea is preparing a policy plan for ICOs, or initial coin offerings, opening the door for Korean companies to raise funds on the crypto-crazed market despite the government’s prior reservations, The Korea Times reports.
jlne.ws/2p5XcEW

Minutes of Euro Risk Free Working Group 1st Meeting now available
ESMA
The European Central Bank has published the minutes of the first meeting of the Euro Risk Free Rates Working Group held on 26 February 2018, including concluding remarks from ESMA’s Chair.
/goo.gl/EnfiHx

U.S. Libor trader loses UK appeal against conviction
Reuters Staff
A U.S. former Barclays trader, who alleged his London Libor rate-rigging trial was unfair because a key prosecution witness lacked credibility, on Tuesday lost an appeal against his conviction.
/goo.gl/Qwf74P

FCA to limit rule changes in Brexit run-up
Damian Fantato – FT Adviser
The Financial Conduct Authority has agreed to limit the number of rule changes it will make in the run-up to Brexit because of the risks this would involve.
/goo.gl/uPhGBv

Whistleblowers deserve our thanks — and protection, too; Many remain sceptical about people willing to turn in their colleagues
Brooke Masters – FT
Jeffrey Wertkin had a problem. After six years of handling fraud cases for the US Department of Justice, he had landed a $450,000-a-year job as a defence attorney at Akin Gump, a prestigious law firm. At last, he would be able to provide his wife and two young children with a new house in a better neighbourhood and private school.
/goo.gl/wsRXzo

Investing and Trading

Investors urge US to introduce new Treasury bill; Two-month T-bill could help government tap demand for shorter-dated debt and help fund the deficit
Joe Rennison in New York – FT
Bond investors are pushing the US to introduce a new Treasury bill in a move that would allow the government to tap demand for shorter-dated debt and fund the country’s growing deficit.
/goo.gl/Cahjsp

Havens Just Aren’t Safe Any More, Goldman Says
Eric Lam – Bloomberg
No traditional havens had positive beta to VIX lately: Goldman; Derivative hedges will become more important, strategists say
Traditional safe havens haven’t been working out for investors in the latest ructions in financial markets, strategists at Goldman Sachs Inc. warned.
/goo.gl/7MC1jD

This Commodity Cowboy Is Hoarding the World’s Cobalt Supply; Backed by a Russian billionaire, Anthony Milewski started stockpiling the metal in 2015.
Mark Burton – Bloomberg
Anthony Milewski was among the first investors to realize that if electric-vehicle sales take off the way automakers expect, the world is going to need a lot more cobalt—an essential ingredient in lithium-ion batteries.
/goo.gl/pNead1

The Fed Must Teach Markets a Lesson on Inflation; Officials keep saying they will let inflation veer above 2 percent. Investors don’t believe them.
Conor Sen – Bloomberg
Like a parent whose toddler thinks “no” means “maybe,” the Fed must eventually prove that it means what it says.
/goo.gl/CYgrz7

Institutions

New York financier Lynn Tilton puts Zohar funds into bankruptcy
Tom Hals, Jonathan Stempel – Reuters
Colorful New York financier Lynn Tilton has put her Zohar investment funds, a key element of her distressed-debt empire and the subject of several legal battles, into Chapter 11 bankruptcy, with a goal of selling assets or refinancing debt.
/goo.gl/TkbzLw

R.J. O’Brien hires LME sales head to bolster clearing and execution business; Elena Patimova joins R.J. O’Brien from the London Metal Exchange where she was head of financial markets sales.
Hayley McDowell – The Trade
R.J. O’Brien has poached the London Metal Exchange’s (LME) head of financial markets sales to grow its electronic sales, clearing and voice execution business.
/goo.gl/984ijJ

The Next Goldman Chief Could Be a Banker Who Moonlights as a D.J.
Kate Kelly – NY Times
As bake-offs go it was pretty unusual: a part-time disc jockey and a karate black belt vying to be the next leader of arguably the world’s most influential bank.
/goo.gl/N4pZ4A

Bank of America Proxy Shows CEO Made 250 Times More Than Median Employee; This year, U.S. publicly traded firms required for first time to divulge median CEO,
Rachel Louise Ensign – WSJ
Bank of America Corp. BAC 0.37% on Monday became the first big U.S. bank to unveil how much more its CEO makes than its typical employee.
/goo.gl/QM9aFw

Hedge Funds That Use AI Just Had Their Worst Month Ever
Dani Burger – Bloomberg
Machine-learning funds ‘played big role’ in correction; Correlation between AI funds, CTAs has risen in past year
Chalk one up for the humans. Hedge funds that use artificial intelligence and machine learning in their trading process posted the worst month on record in February, according to a Eurekahedge index that’s tracked the industry from 2011. The first equity correction in two years upended their strategies as once-reliable cross-asset correlations shifted.
/goo.gl/64ReMM

Deutsche Bank Asset-Management IPO Pricing Values Unit at Up to $8.9 Billion; Japan’s Nippon Life will be cornerstone investor in DWS Group with 5% stake
Jenny Strasburg – WSJ
Deutsche Bank AG DB -0.06% on Sunday said the share pricing for the coming partial float of its asset-management unit values the business at EUR6 billion to EUR7.2 billion ($7.4 billion to $8.9 billion), and announced a “cornerstone” investor in the offering, Japan’s Nippon Life Insurance Co.
/goo.gl/vAs69V

Goldman Sachs Puts David Solomon in Line to Be Next CEO; Solomon’s status rises at firm after fellow president, Harvey Schwartz, announces plans to retire in April
Liz Hoffman – WSJ
David Solomon became the heir apparent at Goldman Sachs GS 0.96% Group Inc. Monday after his main rival for the top job abruptly resigned, moves that show the Wall Street powerhouse is continuing to move beyond its trading roots.
/goo.gl/oqwcH3

Regions

How an Australian bank laundered money for Hong Kong drug gangs; The Drop; A billion-dollar money laundering scandal at an Australian bank has revealed ties to the drug gangs of Hong Kong.
Jamie Smyth and Ben Bland – FT
Like many backpackers, Yeuk Tung Kong travelled to Australia from Hong Kong in search of adventure and to learn English.
/goo.gl/mzV6za

Indonesia eyes fintech regulation to avoid ‘loan shark-like’ practices
Reuters
Indonesia’s financial regulator said it was considering setting a cap on interest rates and the size of loans offered by fintech firms, in a move aimed at minimizing the risk of defaults.
jlne.ws/2p6zWa2

Qatar Stocks Surge Amid Steps to Raise Foreign Ownership Limit
Filipe Pacheo – Bloomberg
QNB, Industries Qatar to raise foreign ownership limit to 49%; Increase could lead to inflows by investors tracking EM gauges
Qatar’s main index posted its best two-day performance since December 2014 as two benchmark heavyweights prepare to raise the limit foreigners can own of their stock, a step that could lead to millions of dollars in inflows from investors tracking emerging markets equities.
/goo.gl/8gzLpY

$103 Billion Quant Firm Piles Into China as Foreigners Welcomed
Ben Bartenstein – Bloomberg
Acadian Asset Management says it’s starting A-Share strategy; Russian, Turkish stocks rallied after consolidation of power
The world’s No. 2 stock market is ripe for a quantitative style of investing, according to a $103 billion money manager that lists a cement maker, pharmaceutical brand and bank as its top picks in China.
/goo.gl/bojKUF

How Blackstone Turned India Into Its Most Profitable Market
George Smith Alexander and Anto Antony – Bloomberg
PE firm shifts strategy to concentrate on bigger buyouts; Focus on select industries follows losses on early India deals
Blackstone Group LP says it’s found the formula for making money in India, which has become its top-performing market globally after the firm began focusing on bigger buyout deals.
/goo.gl/ZPv81R

Saudis Said to Use Coercion and Abuse to Seize Billions
Ben Hubbard, David D. Kirkpatrick, Kate Kelly And Mark Mazzetti – NY Times
Businessmen once considered giants of the Saudi economy now wear ankle bracelets that track their movements. Princes who led military forces and appeared in glossy magazines are monitored by guards they do not command. Families who flew on private jets cannot gain access to their bank accounts. Even wives and children have been forbidden to travel.
/goo.gl/92NiwV

Brexit

Many Financial Firms Still Aren’t Prepared for Brexit, Irish Regulator Says
Peter Flanagan, Dara Doyle – Bloomberg
Many firms remain unprepared for U.K. exit from the EU; Regulator sees ‘significant step up’ in Brexit-based inquiries
Irish Central Bank Deputy Governor Ed Sibley warned that many financial firms remain unprepared for Britain’s exit from the European Union as the two sides remain at odds on their future relationship.
/goo.gl/PnEsf5

Brexit threatens to undo Mifid II dark pool rules; London and Brussels cannot look to the EU-Swiss deal for comfort
Philip Stafford – FT
European stock trading has entered a new era with the introduction of caps on the volume of business that can be traded in private venues known as dark pools. Yet this regime may be shortlived and possibly a waste of time and resources.
/goo.gl/zCw8uf

EU and UK prepare to open talks on post-Brexit trade ties; A Free Trade Area is likely to increase barriers between Britain and its largest market
Chris Giles and Gemma Tetlow in London – FT
In just a few weeks, Britain will begin what could be the country’s most momentous negotiations since joining the EU in the 1970s: talks on how it will trade with Europe for decades to come.
/goo.gl/jdn2Rf

The post Central Banks Urged to Study Digital Currency Risks and Rewards appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Stephen Hawking the physicist who reshaped cosmology has died (via Bloomberg) at the age of 76. HERE is the WSJ’s story too.~JJL

Boca Bits:

The Singapore Exchange (SGX) saw record FX trading in 2017, with notional value in FX futures of $952 billion since their launch in November 2013, as well as record trading in iron ore of 16 million contracts. It was the first exchange in Asia to offer MSCI Emerging Market futures, and in 2018 SGX plans to complete its suite of MSCI index derivatives to offer investors the ability to implement a “complete EM strategy.” Also, SGX CEO Loh Boon Chye survived not only having a gun pulled on him at a golf course in China, as he reported last year, but a bad fall in which he broke his collarbone but did not have surgery, because he is risk-averse.

At Tuesday’s Opening Panel on “Looking to the Future,” Blythe Masters of Digital Asset holdings said the invention of blockchain, which inspired Digital Ledger Technology (DLT) in private form, was a “genuinely extraordinary breakthrough,” although a poll of the audience concluded that artificial intelligence, rather than DLT, was the technology advancement that will have the biggest effect on the financial industry. The DTCC’s Michael Bodson said DLT will help with the friction firms in the industry are experiencing, particularly in the post trade arena, where “people are still faxing derivatives instructions,” as well as aiding transparency and helping with cyber security.

To a question about diversity in the business, in particular the pay gap between men and women, panelists suggested that advancement in the industry was a more pertinent problem than the wage gap, since pay per capita doesn’t adjust for seniority.

The audience thought the biggest growth potential for the next 24 months was in the opening of markets in China and India. Some of the biggest problems in the industry remain the shrinking of the number of FCMs, which is not expected to reverse itself any time soon, and the potential risk of balkanization of the markets and an imbalance across CCPs.

The audience thought the biggest threat to the industry in the coming 24 months will be the lack of cyber security. ~SR

Cboe’s Ed Tilly said today at the exchange’s press breakfast that he would invest in a broad portfolio of crypto assets rather than picking a winner among the myriad of coins when asked it he would take his deferred compensation in bitcoin.~JJL

Cboe’s Chris Concannon said the exchange would like to develop a crypto suite of products when the time is right from a demand and regulatory basis, which would be further down the road.~JJL

++++

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FIA elects new board members at annual meeting
FIA
FIA today announced the election of directors to its board at its annual meeting in Boca Raton, Fla. Fourteen directors were elected for a two-year term.
/goo.gl/iK4rQJ

***** The big news is that Mike Dawley is retiring as chairman of the FIA board. Congratulations to Mike on a long and successful tenure. And may he continue to do God’s work even after he retires from Goldman.~JJL

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Opening remarks at Boca 2018 by Walt Lukken
FIA
Good Afternoon and welcome to the 43rd annual FIA Boca.
Over the years, Boca has come to represent more than our industry’s break from our winter hibernation. For me, Boca embodies the perennial hope, anticipation and optimism of our industry and the belief that tomorrow will be better than today.
/goo.gl/QvB8bs

***** Walt Lukken is a glass half full kind of Hoosier.~JJL

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TT at Three: The Next Wave
Rick Lane, CEO – TT
At the start of last year’s FIA Conference in Boca Raton, I wrote a blog comparing the TT platform to my twin toddlers (all three turned two that year). With another year and many milestones under their belt, my now 3 ½ year old children seem to have become…actual people. Whereas the first couple years seemed to be packed with equal parts novelty and anxiety, now life is really all about getting used to the new normal: that we have two more roommates living with us.
/goo.gl/gVPUiZ

****** I miss those days.~JJL

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RIP Professor Hawking
Jeff Bergstrom – JLN
I just wanted to add my condolences for Stephen Hawking to his family and friends. I read his book “A Brief History of Time” in my early 20’s and it opened my eyes to the wonder and grandeur of the universe we live in (I also read his other books, but that first one affected me the most). That Hawking did all he did given his medical struggles was always an inspiration to me. He was important to the world. He was important to me. He will be missed.

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Tuesday’s Top Three
Our most read story yesterday was a press release from BusinessWire, Hehmeyer Trading + Investments Launches Cryptocurrency Index Fund Commodity Pool. Second was a repeat from yesterday, Classic Chicago Magazine’s Up Close and Personal with the Goddess of Grain… Rounding out the top three is Bloomberg’s Bond Market’s Most Feared Traders Threaten Treasuries Once Again

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MarketsWiki Stats
122,011,501 pages viewed; 23,039 pages; 212,062 edits
MarketsWiki Statistics

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Lead Stories

Ten Years After the Bear Stearns Bailout, Nobody Thinks It Would Happen Again; Key players have spent the last decade arguing about what was done, defending past decisions and wondering how such a crisis would play out today
Justin Baer and Ryan Tracy – WSJ
A major investment bank careens toward bankruptcy. It has $400 billion in assets, 85 years of history and deep ties to every major bank on Wall Street. As word of its troubles spreads, a run begins, sending its stock plummeting.
/goo.gl/gwGpi4

Google to ban cryptocurrency advertisements from June
Alice Woodhouse in Hong Kong – FT
Google will ban advertisements for cryptocurrencies and initial coin offerings from June as part of a move to clamp down on unregulated financial products.
/goo.gl/CYXe9j

***** Here are the WSJ and Bloomberg stories too.~JJL

Nymex Veteran Targets Institutions With Cryptocurrency Exchange
Camila Russo – Bloomberg
The lucrative market for cryptocurrency exchanges may soon have some competition for institutional investors.
/goo.gl/fESJ3x

Blythe Masters says women in finance face ‘advancement problem’
Joe Rennison – FT
Blythe Masters, a former JPMorgan executive and founder of a company focused on applying crypto-technology to the financial industry, said that there is an “advancement problem” in the promotion of women in finance.
/goo.gl/sLsfhi

Don’t Mistake Market Calm for Being Out of the Woods
Richard Barley – The Wall Street Journal
Investors should search the past for lessons about where we are in the market cycle. 2005 was an instructive moment.
Is the fuss all over? February’s sharp fall in stocks has faded, with the S&P 500 only 3% below its January peak and up 4% for the year. The rise in Treasury yields has paused and corporate-bond spreads are still tight.
/goo.gl/X8JdYq

Trade Wars Can Be a Game of Chicken. Sometimes, Literally.
Eduardo Porter – The New York Times
Here’s a little known fact: One of the reasons the Ford F-Series pickup acquired its perch at the very top of the sales ranks of cars and trucks in the United States more than 36 years ago had a lot to do with chicken. The story: Hoping to fend off a surge of cheap American chicken into West Germany, in 1962 the European Common Market tripled the tariff on the birds to about 13.5 cents a pound. The United States struck back, of course. It imposed tariffs on brandy, a popular French export, and dextrin and potato starch to hit the Dutch.
goo.gl/AmYXMg

Bitcoin exchange in banking tie-up with Barclays; Deal will simplify deposits and withdrawals for Coinbase’s UK customers
Hannah Murphy and Chloe Cornish – FT
A major bitcoin exchange has struck a banking relationship with Barclays, a move that marks a break in the ranks of UK lenders who have been shunning the cryptocurrency industry as it comes under growing scrutiny from regulators.
/goo.gl/G8P3ym

MuniBrokers expands to ETFs, corporate bonds
Christine Albano – Bond Buyer
More in Broker dealers Technology MSRB rules Liquidity ETFs Corporate bonds
Four years after introducing its shared software platform for municipal interdealer brokers and their customers, MuniBrokers is expanding its capabilities.
/goo.gl/2ZumqZ

Hedge Funds Seek Fixes to Credit Default Swaps After Being Stung by Loopholes
Sridehar Natarajan, Nabila Ahmed – Bloomberg
Elliott, Apollo said to be among firms working on market fixes; Effort said to gain steam after controversial Hovnanian deal
A group of powerful hedge funds is banding together to repair the credit-default swaps market after a spate of manufactured defaults has threatened the usefulness of the product.
/goo.gl/bHZc8j

The Surprisingly Large Winners in a Bill to Help Small Banks; Huge custody banks like BNY Mellon and State Street would be among the biggest beneficiaries
Aaron Back – WSJ
Three of the biggest winners, in a bill meant to help small and midsize banks, are anything but.
/goo.gl/Qeywp3

Britain to consider taxing digital giants’ revenue
Paul Sandle – Reuters
Britain said it was considering taxing the revenues of internet companies like Facebook (FB.O) and Google (GOOGL.O) until international tax rules are changed to cope with digital firms that can shift sales and profits between jurisdictions.
Finance minister Philip Hammond said on Tuesday he had published a paper setting out proposals for taxing global digital firms before a meeting with his G20 counterparts later this week. Big internet companies have previously paid little tax in Europe, typically by channeling sales via countries such as Ireland and Luxembourg, which have light-touch tax regimes.
/goo.gl/LScjee

Goldman’s Solomon sets out to prove bank’s revenue engine can roar again
Catherine Ngai, Greg Roumeliotis – Reuters
Before Goldman Sachs Group Inc (GS.N) operating chief David Solomon takes the next step in his career, the 56-year-old banker will have to prove that a strategy he has championed to increase annual revenue by $5 billion can actually work.
goo.gl/bvk3ay

Broadcom Withdraws Bid for Qualcomm, Will Still Redomicile to U.S.
Cara Lombardo – The Wall Street Journal
Broadcom Ltd. withdrew its hostile bid for Qualcomm Inc. Wednesday after the Trump administration blocked it, but the Singapore-based company will continue plans to redomicile to the U.S.
goo.gl/Bx8JNb

The Surprisingly Large Winners in a Bill to Help Small Banks
Aaron Back – The Wall Street Journal
Three of the biggest winners, in a bill meant to help small and midsize banks, are anything but. The bill, championed by Senate Banking Committee Chairman Mike Crapo, would raise the threshold for stricter oversight by the Federal Reserve to $250 billion in assets from $50 billion, a boon for midsize regional lenders. It also contains measures to reduce the burden of regulation on smaller community banks.
goo.gl/sHvEYU

Ten Years After the Bear Stearns Bailout, Nobody Thinks It Would Happen Again
Justin Baer and Ryan Tracy – The Wall Street Journal
A major investment bank careens toward bankruptcy. It has $400 billion in assets, 85 years of history and deep ties to every major bank on Wall Street. As word of its troubles spreads, a run begins, sending its stock plummeting.
goo.gl/3N5SZ5

A $31 Billion Trading Halt Has Left HNA Investors Trapped
Blake Schmidt, Pei Yi Mak and Venus Feng – Bloomberg
HNA Group Co., the poster child for runaway corporate debt in China, is increasingly drawing attention to another of the nation’s financial ills: trading halts that leave stock investors trapped for weeks on end. Seven listed units of HNA have halted their shares for seven weeks or more, creating the largest swathe of frozen stock tied to a single business group in China. The suspensions, which affect $31 billion of equity, have prevented minority shareholders from selling at a time of mounting financial stress for the aviation-to-hotels conglomerate.
goo.gl/4Z7mjG

Exchanges, OTC and Clearing

ICE Benchmark Administration To Publish Test Data For The Evolution Of ICE Libor
ICE
Intercontinental Exchange, Inc., a leading operator of global exchanges and clearing houses and provider of data and listings services, announces that ICE Benchmark Administration Limited (IBA) will publish data relating to a three-month testing period during which all 20 LIBOR panel banks were required to make parallel LIBOR submissions. These parallel submissions used the evolved waterfall methodology (the “waterfall methodology”) set out in the ICE LIBOR output statement (the “output statement”).
/goo.gl/qNAZLK

TP-ICAP reveals sharp rise in costs from 2016 acquisition; World’s largest interdealer broker says £27m in savings from ICAP deal cost £79m to achieve
Philip Stafford – FT
The world’s largest interdealer broker TP ICAP has disappointed investors with full-year results that revealed a sharp rise in costs arising from a major acquisition at the end of 2016.
/goo.gl/aKdJvr

Instinet adds RFQ function to BlockMatch MTF; Traders will be able to trade RFQ on the Instinet BlockMatch trading venue alongside existing continuous, non-displayed and mid-point matching.
Hayley McDowell – The Trade
Agency broker Instinet Europe has added request for quote (RFQ) functionality to its equities multilateral trading facility (MTF) BlockMatch.
/goo.gl/y1AcPE

Ice Benchmark Administration To Publish Test Data For The Evolution Of Ice Libor
Businesswire
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announces that ICE Benchmark Administration Limited (IBA) will publish data relating to a three-month testing period during which all 20 LIBOR panel banks were required to make parallel LIBOR submissions. These parallel submissions used the evolved waterfall methodology (the “waterfall methodology”) set out in the ICE LIBOR output statement (the “output statement”).
/goo.gl/VbhuLV

Fintech

JP Morgan invests in fixed income analytics startup; JP Morgan implemented Mosaic Smart Data’s technology across its fixed income trading business in October last year.
By Hayley McDowell – The Trade
JP Morgan has taken a minority stake in fixed income, currencies and commodities (FICC) analytics startup firm Mosaic Smart Data.
/goo.gl/UnnG7R

CloudMargin Completes Design, Begins Roll-out of New User Interface and User Experience (UI/UX); Extensive Upgrade Creates Dynamic, Intuitive Interface Conducive to Meeting Changing Financial Services Landscape,
Intensive Data Needs of Growing Client Base
CloudMargin
CloudMargin, the award-winning creator of the world’s first and only collateral and margin management solution native to the cloud, announced today that it has successfully completed the design of a new User Interface and User Experience (UI/UX) for its cloud-based platform. The new UI/UX design, rolling out beginning this month, establishes a strong foundation for the company’s plans to launch several new, innovative features this year. It also enables CloudMargin to build on its connectivity and enhance clients’ interactive experience while meeting the data-intensive needs of its growing client base of major sell-side and buy-side firms.
/goo.gl/cc9z9y

Cryptocurrencies

Crypto exchanges are charging up to $1 million per ICO to list tokens: ‘It’s pure capitalism’
Oscar Williams-Grut – Business Insider
Cryptocurrency exchanges are charging between $50,000 and $1 million to list initial coin offerings, according to a Business Insider investigation. “The exchanges are where the liquidity is — it’s where the money is — so that’s where the power is just at the moment,” Michael Jackson, a partner at venture capital firm Mangrove Partners, told BI. Exchanges are dominant now but that may change with tougher regulations and more standardised business models. LONDON — Cryptocurrency exchanges are charging up to $1 million to list initial coin offerings on their platforms, according to multiple industry sources. Around half a dozen market participants, from investors to CEOs of companies with their own coins, told Business Insider that some exchanges are charging anywhere between $50,000 to $1 million to get their tokens listed.
/goo.gl/VVYTM9

Digital currency sales face rocky path with more regulatory focus
Gertrude Chavez-Dreyfuss – Reuters
A global regulatory crackdown on cryptocurrencies created by startups to finance new projects could slow the pace of virtual currency sales as questions mount about their transparency and the risk of scams for investors. More than 500 digital technology startups around the world have raised funds by selling their own cryptocurrencies, or tokens, that sidestep banks or venture capital firms as intermediaries. The huge investment in the largely unregulated market, which began in 2009 with the launch of bitcoin and includes more than 1,200 tokens, has turned the financial world on its heels, especially as a stunning bitcoin rally in 2017 attracted speculators and stoked concerns about a bubble.
goo.gl/hsyxvc

PwC testing a blockchain analytics tool for tracking the global footprint of ICO tokens
Georgina Lee – South China Morning Post
Accounting firm PwC is testing a blockchain analytics tool to help trace digital tokens after their launch, helping companies to guard against the risk their tokens will be misused as a medium for money laundering and other crimes.
/goo.gl/Y7iJ1i

Crypto exchanges are charging up to $1 million per ICO to list tokens: ‘It’s pure capitalism’
Oscar Williams-Grut – Business Insider
Cryptocurrency exchanges are charging up to $1 million to list initial coin offerings on their platforms, according to multiple industry sources.
/goo.gl/aHRYvy

Digital currency sales face rocky path with more regulatory focus
Gertrude Chavez-Dreyfuss – Reuters
A global regulatory crackdown on cryptocurrencies created by startups to finance new projects could slow the pace of virtual currency sales as questions mount about their transparency and the risk of scams for investors.
/goo.gl/tL1cqq

German antitrust head plans third digital market investigation
Foo Yun Chee – Reuters
German antitrust regulators plan to open its third investigation into the digital market soon, its chief said on Tuesday, sending a warning to tech companies not to abuse their dominance or misuse their collection of personal data.
/goo.gl/h8DFb9

Coinbase Gets a U.K. Money License and Reportedly a Bank Account
Lily Katz – Bloomberg
Coinbase Inc., one of the largest cryptocurrency exchanges, said it obtained an e-money license in the U.K. as it expands services in Europe. A local subsidiary also opened an account at Barclays Plc, easing deposits and withdrawal for clients, the Financial Times said.
/goo.gl/djtKhg

Google to Ban Cryptocurrency, Initial Coin Offering Ads
Mark Bergan – Bloomberg
Policy change comes with report on ‘bad ads’ crackdown; Search giant follows Facebook’s ban on crypto ads in January
Google will ban online advertisements promoting cryptocurrencies and initial coin offerings starting in June, part of a broader crackdown on the marketing of a new breed of high-risk financial products.

Indonesian Bitcoin Investors Set to Outnumber Stock Participants
Fathiy Dahrul – Harry Suhartono – Bloomberg
The biggest Indonesian platform to buy and sell digital currency may soon have more members than the nation’s century-old stock exchange.
/goo.gl/yXzxFY

Politics

Trump ousts Tillerson, will replace him as secretary of state with CIA chief Pompeo
Ashley Parker, Philip Rucker, John Hudson and Carol D. Leonnig – The Washington Post
President Trump asked Secretary of State Rex Tillerson to step aside after months of disagreement, and picked CIA Director Mike Pompeo to replace him.
President Trump said Tuesday he has ousted Secretary of State Rex Tillerson and plans to nominate CIA Director Mike Pompeo to replace him as the nation’s top diplomat, orchestrating a major change to his national security team amid delicate outreach that includes possible talks with North Korea.
/goo.gl/mkkg7p

Trump Shuffles Team by Firing Tillerson and Tapping CIA’s Pompeo
Nick Wadhams – Bloomberg
Top diplomat doesn’t thank or praise Trump in farewell remarks; Ouster signals shift in Trump’s approach to Iran, North Korea
Bloomberg’s Nick Wadhams reports on the firing of Secretary of State Rex Tillerson.
President Donald Trump ousted U.S. Secretary of State Rex Tillerson on Tuesday, ending a rocky tenure in an abrupt move that stunned the former Exxon Mobil Corp. CEO and set in motion a shakeup of the administration’s foreign policy team.
/goo.gl/sfdP1h

Trump’s Personal Assistant Fired Over Security Issue; Problems related to online gambling and mishandling taxes prevented John McEntee from gaining necessary security clearance
Michael C. Bender and Rebecca Ballhaus – WSJ
President Donald Trump’s personal assistant, John McEntee, was fired and escorted from the White House on Monday after being denied a security clearance over financial problems in his background, according to senior administration officials and people close to the former aide.
/goo.gl/o87BwE

Trade Wars Can Be a Game of Chicken. Sometimes, Literally.
Eduardo Porter – NY Times
Here’s a little known fact: One of the reasons the Ford F-Series pickup acquired its perch at the very top of the sales ranks of cars and trucks in the United States more than 36 years ago had a lot to do with chicken.
/goo.gl/7wGMng

Attention, President Trump: Talented people won’t work for a boss who discredits and undermines them in public
Ashley Pratte – CNN
President Donald Trump has ousted another senior Cabinet official, Secretary of State Rex Tillerson. The two men had apparently rarely seen eye to eye on foreign policy, so while the firing isn’t shocking, the timing is.
/goo.gl/9wCT8y

Trump Moves Closer to Presidency of One With Tillerson Firing
Toluse Olorunnipa, Nick Wadhams – Bloomberg
Removing constraints on a leader determined to pursue own path; Pivot as critical choices loom on North Korea, Iran and trade
Robert Hormats, vice chairman at Kissinger Associates, discusses Rex Tillerson’s firing.
In accepting the Republican nomination for president in 2016, Donald Trump described a nation plagued with problems and declared: “I alone can fix it.”
/goo.gl/M4hR3y

As Oil Rally Fades, Trump’s Iran Hawk Pick Seen Aiding Bulls
Sharon Cho – Bloomberg
Pompeo nomination seen raising risk of sanctions targeting oil; Collapse of Iran nuclear deal could curb OPEC nation’s exports
For those in the oil market, it may seem like there’s no end to U.S. events determining the course of prices these days. Donald Trump’s sudden firing of Rex Tillerson is unlikely to prove an exception.
/goo.gl/5DKTKV

Regulation

German antitrust head plans third digital market investigation
Foo Yun Chee – Reuters
German antitrust regulators plan to open its third investigation into the digital market soon, its chief said on Tuesday, sending a warning to tech companies not to abuse their dominance or misuse their collection of personal data. The comments underline growing regulatory concerns across Europe about the collection of personal data by tech companies. Last month, the Federal Cartel Office kicked off a sector inquiry into online advertising after advertisers and publishers voiced worries about Google and Facebook’s strong market position. The move came two months after it launched a sector inquiry to find out how smart TV makers handled user data and the terms of their contracts. Smart TVs, which allow viewers to receive and transmit their user data, have become increasingly popular. “There will be a third one (sector inquiry) in a short period of time which we are hoping to get out,” antitrust chief Andreas Mundt told a conference organized by the Studienvereinigung Kartellrecht association.
goo.gl/qGwGdz

Statement of CFTC Commissioner Brian Quintenz on a Proposal by Cameron and Tyler Winklevoss for a Virtual Commodity SRO
CFTC
I congratulate Cameron and Tyler Winklevoss on their energetic leadership and thoughtful approach in outlining a virtual commodity self-regulatory organization (SRO) concept.
/goo.gl/oKRmwb

FCA calls on banks to reform company culture; Regulator blames institutions rather than individuals for string of conduct failings
Nicholas Megaw, Retail Banking Correspondent – FT
The UK’s financial regulator has called for banks and other financial services companies to reform their institutions in a report that blames bad culture, rather than individuals, for conduct failings since the financial crisis.
/goo.gl/dZ5qVX

Statement of CFTC Commissioner Brian Quintenz on a Proposal by Cameron and Tyler Winklevoss for a Virtual Commodity SRO
I congratulate Cameron and Tyler Winklevoss on their energetic leadership and thoughtful approach in outlining a virtual commodity self-regulatory organization (SRO) concept. Ultimately, a virtual commodity SRO that has the most independence from its membership, the most diversity of views, and the strongest ability to discover, reveal, and punish wrongdoing will add the most integrity to these markets. I encourage Gemini (or any other market participant, advocacy group, platform, or firm) to be aggressive in promoting these qualities within any SRO construct.
/goo.gl/uaQhAC

Investing and Trading

Half of investors will own an ETF by 2020: BlackRock
Ryan Vlastelica – MarketWatch
Last year, just 25% of investors owned an ETF.
Exchange-traded funds, long one of the fastest-growing segments of Wall Street, could become the dominant investing vehicle in just a few years — not even 30 years after they were first introduced.
According to a BlackRock survey, ETFs are just two years away from hitting a remarkable milestone, where half of all U.S. investors have a position in at least one ETF.
/goo.gl/KSTx39

U.S. LIBOR/OIS spread seen widening to 50 bps: Bank of America Merrill Lynch
Reuters Staff
A measure of stress in U.S. dollar funding is expected to intensify into the end of first quarter due to a rising supply of Treasury bills and maturing short-term bank debt, Bank of America Merrill Lynch analysts said on Tuesday.
/goo.gl/jHJUR3

Investors Hate Leverage Like It’s 2009, According to This Metric
By Dani Burger – Bloomberg
Long-short bet on indebted stocks tumbles amid rising rates; Cash-rich technology stocks lead gains in U.S. stocks
The expansive stock rally over the past year masks an ugly truth: investors are worried about corporate debt as tighter monetary policies loom.
/goo.gl/HtSgYC

U.S. LIBOR/OIS spread seen widening to 50 bps: Bank of America Merrill Lynch
Richard Leong and Reuters Staff – Reuters
A measure of stress in U.S. dollar funding is expected to intensify into the end of first quarter due to a rising supply of Treasury bills and maturing short-term bank debt, Bank of America Merrill Lynch analysts said on Tuesday.
The spread on the three-month London interbank offered rate (LIBOR) and three-month overnight indexed swap rate may widen to 50 basis points before gradually easing in the second quarter. On Tuesday, the spread reached 48.45 basis points, the widest since January 2012, the analysts wrote in a research note.
/goo.gl/T2PjxJ

Institutions

Goldman Succession Battle: Tame, Placid, Bald; The future of Wall Street came down to a runoff between a pair of look-alikes.
Matt Levine – Bloomberg
“If I come over to your house at Thanksgiving and I sharpen your knife, you will definitively know the difference right away,” Goldman Sachs Group Inc. Co-President Harvey Schwartz told the New York Times in November, and while he was talking about his early job working in a butcher shop, there was at least the hint of a metaphor. Schwartz, a karate black belt and expert knife-sharpener, was locked in a succession battle with his co-president David Solomon, whose extracurricular activities run toward electronic music DJ’ing, eating at fancy restaurants and drinking expensive wine. While Solomon was partying, Schwartz studied the blade.
/goo.gl/EVdhFt

Swiss Cities Top Europe Survey for Traces of Cocaine
Hugo Miller – Bloomberg
5 Swiss cities make Europe Top 10 for evidence of cocaine use; Researchers studied wastewater for traces of drug in 60 cities
Swiss financial centers, shunned by some British hedge fund managers for lacking culture and nightlife, are vying with London in a less celebrated ranking: cocaine consumption.
/goo.gl/zQ75e5

TP-ICAP reveals sharp rise in costs from 2016 acquisition
Philip Stafford – Financial Times
The world’s largest interdealer broker TP ICAP has disappointed investors with full-year results that revealed a sharp rise in costs arising from a major acquisition at the end of 2016. The London broker formerly known as Tullett Prebon revealed savings of £27m from the deal in 2017 — its first year owning the global broking business of rival ICAP. This was against a previous target of £10m and was helped by cutting 295 jobs. But the cost of achieving the savings, said the broker, was £79m, double its previous market guidance. Shares in TP ICAP fell 10.5 per cent in response, to a four-month low.
/goo.gl/usmTS5

Regions

China’s Super-Regulator Can’t Kill Shadow Banking
Nathaniel Taplin – The Wall Street Journal
Tackling risks in China’s labyrinthine financial system is often compared with a game of whack-a-mole: knock down one risk and another pops up somewhere else.
It doesn’t help when no one has a very big hammer or reliable mole data.
/goo.gl/8a6MEQ

China’s sovereign wealth fund sells stake in Blackstone; CIC’s move comes amid mounting trade tensions between Washington and Beijing
Henny Sender in Hong Kong and Lucy Hornby in Beijing – FT
China’s sovereign wealth fund has sold its stake in Blackstone, ending a controversial 11-year ownership of the US private equity group that reflected early attempts by Beijing to broaden its international investments.
/goo.gl/E4TPrw

Not a Single Japanese 10-Year Bond Traded Tuesday: Death by BOJ
Chris Anstey, Hidenori Yamanaka
Some jobs might be threatened by automation. But when it comes to government bond trading in Japan, the biggest threat might be the country’s central bank.
/goo.gl/jFLEkv

Britain to consider taxing digital giants’ revenue
Paul Sandle – Reuters
Britain said it was considering taxing the revenues of internet companies like Facebook (FB.O) and Google (GOOGL.O) until international tax rules are changed to cope with digital firms that can shift sales and profits between jurisdictions.
/goo.gl/KaXDUc

A $31 Billion Trading Halt Has Left HNA Investors Trapped
Blake Schmidt, Pei Yi Mak and Venus Feng – Bloomberg
Seven units of the conglomerate have been suspended for weeks;It’s the largest chunk of China’s $456 billion in halted stock
HNA Group Co., the poster child for runaway corporate debt in China, is increasingly drawing attention to another of the nation’s financial ills: trading halts that leave stock investors trapped for weeks on end.
/goo.gl/m1Ro2a

Miscellaneous

Once Synonymous With Wall Street, Harry’s Revamps for New Clientele; After a million-dollar redesign, the storied dining room tries appealing to a new downtown crowd with pasta and cocktails.
By Kate Krader – Bloomberg
In the 1970s, Harry’s was the only place to go downtown. Steps from the New York Stock Exchange, the restaurant would get so packed after work that traders, no strangers to a scrum, couldn’t push their way past the door. According to legend, the action on a Friday night was like an alcohol-sodden Animal House frat party.
/goo.gl/CKsks3

The post Ten Years After the Bear Stearns Bailout, Nobody Thinks It Would Happen Again appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

CFTC Chairman Chris Giancarlo opened his speech to the FIA International Conference in Boca Raton by honoring Leo Melamed and his contributions to the industry upon which all market participants benefit. Leo is the giant “upon whose shoulders we all stand,” Giancarlo said, noting Leo had announced his retirement from the CME Group’s board. It was a classy display from the popular CFTC Chairman. Kudos Mr. Chairman!~JJL

During the lunch at the FIA Conference, before the presentation by the journalist and author Walter Isaacson, a tribute video was shown honoring Mike Dawley, who is retiring from Goldman Sachs at the end of the month. John Lothian Productions produced the video for FIA. We are also producing a longer version for Dawley with some of the comments we shot but that did not make it into the final 3 minute video produced. Congratulations Mike on the great career! You are leaving on top, which is hard to do.~JJL

A poll of the audience for the blockchain panel showed that 61 percent were glad the exchanges launched bitcoin futures, 22 percent were not, 17 percent were not sure.~JK

EEX CEO Peter Reitz said the exchange is looking to convert the Nodal exchange technology over to the T7 platform and launch a new US trucking freight contract in the coming months. It also has become the largest power exchange in the world with US and European markets, and Singapore on the way.

The true cause of the 2008 financial crisis is still a matter for debate. A multiple-choice audience poll during a panel on the crisis came up with the result that the cause was “easy money and excessive leverage” rather than exotic OTC derivatives, housing policies, or careless regulators. ~SR

“Blockchain is a humanizing technology. It lets us prove who we are, what we’ve done and what we own,” said author Michael Casey in a fireside chat with ICE’s Jeff Sprecher at the FIA Conference in Boca Raton.~JD

Remember medtech company Theranos? Well, it’s in some serious trouble after an investigation by the SEC.~SD

Nasdaq interviewed a tall, fat man in a bright green polo shirt with a shiny forehead to start their TradeTalks live video interviews at the FIA International Conference in Boca Raton, FL yesterday.~JJL

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Keynote Address of Chairman J. Christopher Giancarlo before FIA Annual Meeting, Boca Raton, Florida
CFTC
Thank you. Good morning. Thank you, Walt. It is great to be here at FIA’s 43rd International Futures Industry Conference. It is certainly the one annual event that brings together all participants in the global derivatives markets.
/goo.gl/cVZukW

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The 16th of March is for the fourth time the “day of the share”; Private investors can buy DAX shares and DAX ETFs free of charge on the Frankfurt Stock Exchange / Share-based retirement provision must become more attractive
Deutsche Börse
With the support of numerous banks, Deutsche Börse is calling for the 4th “Share Share” on 16 March. With the event, Germany’s leading stock exchange operators and the participating banks want to increase the importance of the stock as an instrument for retirement provision in the population.
/goo.gl/yqR9nZ

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Kudlow to be top White House economic adviser as Trump adds longtime loyalist
By Robert Costa and Josh Dawsey – Washington Post
Conservative commentator Larry Kudlow on Wednesday accepted an offer from President Trump to head the White House’s National Economic Council, the latest in a rapid series of firings and personnel changes that have roiled the administration.
/goo.gl/pUe874

***** Here is a 1994 NY Times article titled “A Wall St. Star’s Agonizing Confession” about Kudlow.~JJL

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FANG+ Puts the UMPH Back into the Markets and Exchange Competition
John Lothian – John Lothian News
Hallelujah! The magical power of innovation from exchange competition in Chicago is alive and well after a noticeable absence. The NYSE FANG+ index at ICE Futures US is the most innovative and timely new contract I have seen since the Cboe introduced the VIX. Besides the FANG+ contract, we have the expectation of the CME Group and Cboe slugging it out later this year with competing bitcoin futures offerings. Earlier this year we had the CME Group resteal the Russell index complex from ICE, returning the contracts to the CME where they were in 2007.
goo.gl/iJgA6S

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Wikipedia’s forgotten women: inside the editing marathon to fix imbalance
Nadja Sayej – The Guardian
There’s a better way to celebrate Women’s History Month than simply buying Hillary Clinton’s new book. Those looking to improve the public record can volunteer a few hours at the fifth annual Wikipedia edit-a-thon at the National Museum of Women in the Arts in Washington DC, where one can create, edit and add to Wikipedia pages on women in the arts on 17 March. “It’s for the promotion and establishment of art history,” said Sarah Osborne Bender, the museum’s library director. “We encourage gender equality in the arts and this is one way of doing it.”
goo.gl/pXnBVE

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Wednesday’s Top Three
Yesterday’s most read story was from FIA, FIA elects new board members at annual meeting. Coming in number two was Bloomberg’s Nymex Veteran Targets Institutions With Cryptocurrency Exchange, and rounding out the top three most read stories yesterday was WSJ’s Ten Years After the Bear Stearns Bailout, Nobody Thinks It Would Happen Again

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MarketsWiki Stats
122,135,072 pages viewed; 23,040 pages; 212,063 edits
MarketsWiki Statistics

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Lead Stories

What’s the Biggest Trade on the New York Stock Exchange? The Last One; The NYSE operates between 9:30 a.m. and 4 p.m., but much of the action has moved to the final moments, thanks to index funds and others that flock to the day’s closing auction
Corrie Driebusch, Alexander Osipovich and Gregory Zuckerman – WSJ
Around 3:40 p.m. on a recent trading day, a dozen or so brokers at the New York Stock Exchange hustled back to their posts after bathroom breaks and a last coffee. They strapped on headphones to prepare for the closing minutes of the U.S. stock market—the pinnacle moment for investors world-wide.
/goo.gl/bCLFgR

SEC cyber unit eyes initial coin offerings with suspicion; As corporate fundraising evolves, investors need greater protection
Ben McLannahan in New York – FT
PlexCorps was the latest in a long line of hot initial coin offerings. The Montreal-based company had published a white paper, setting out the ways in which it would shake up the world of payments.
/goo.gl/YoZjAC

Exchanges ordered to test new trading rules; SEC pilot programme will examine changing the controversial ‘maker taker’ system
Nicole Bullock in New York – FT
The Securities and Exchange Commission on Wednesday approved a pilot programme that will test rules underpinning trading in the world’s largest equity market.
/goo.gl/aEXdxh

A Decade After Bear’s Collapse, the Seeds of Instability Are Germinating Again; A big financial-firm collapse in near future is exceedingly unlikely, but another crisis isn’t
Housing activists protested the government-backed bailout and sale of Bear Stearns in March 2008.
Greg Ip – WSJ
Since the bailout of Bear Stearns Cos. a decade ago this week and the failure of Lehman Brothers six months later, regulators have made it their mission to prevent a repeat.
/goo.gl/nyzGFZ

New economic adviser Larry Kudlow set to translate Trump’s vision; TV pundit might be short on fiscal training, but can spread free-market message
Barney Jopson in Washington – FT
Minutes after being confirmed as Donald Trump’s new top economic adviser, putting him at the centre of momentous decisions on trade and tax, Larry Kudlow was preparing to spend the first hour of the new era in an old habitat: on the set of CNBC, Wall Street’s favourite cable channel.
/goo.gl/i4NTzB

CQG Partners with Nasdaq Futures (NFX) to Offer Trading Platform for NFX Products
PR Newswire
CQG, Inc., a leading global provider of high-performance trading, market data, and technical analysis tools, today announced a new partnership with Nasdaq Futures (NFX), a leading futures exchange, to provide a trading solution for clients trading NFX products. NFX, leveraging CQG Desktop for its trading system, now makes that offering available with zero fees, providing direct trading access of NFX listed products to its clients.
/goo.gl/F6y4n9

Deep Systems Announces Indigo the First Cross-Asset, Exchange Neutral, Institutional-Grade Digital Asset Trading Platform
BusinessWire
Deep Systems, a provider of next-generation infrastructure, software, and IT services, today announces the April roll out of its Indigo application, an institutional-grade, digital asset trading platform. Designed to overcome the localized tool sets required to participate in cryptocurrency markets, users will trade futures, spot, equities and options all from a single, exchange neutral interface.
/goo.gl/zysMB1

Billionaire Alan Howard Makes a Bet on Cryptocurrencies
Alastair Marsh and Nishant Kumar – Bloomberg
Hedge fund billionaire Alan Howard made sizable personal investments in cryptocurrencies last year and plans to put more of his own money into digital assets and the blockchain technology behind them, according to people with knowledge of the matter.
/goo.gl/rPbFPD

Transaction Fee Pilot for NMS Stocks
SEC
The Securities and Exchange Commission is proposing to conduct a Transaction Fee Pilot for National Market System stocks to study the effects that transaction-based fees and rebates may have on, and the effects that changes to those fees and rebates may have on, order routing behavior, execution quality, and market quality more generally. The data generated by the proposed pilot should help inform the Commission, as well as market participants and the public, about any such effects and thereby facilitate a data-driven evaluation of the need for regulatory action in this ar
/goo.gl/kJrtc8

Traders Beware: Political Black Swan Looms Over Yen, Nikkei
Chris Anstey – Bloomberg
Yen seems not to have priced in political risks, analysts say; While policy change unlikely, foreign investors could react
The scandal embroiling Prime Minister Shinzo Abe’s administration may be more serious than some investors realize, raising the potential for a rapid move in Japanese markets to discount the potential for a surprise end to the champions of Abenomics.
/goo.gl/XhZeit

Imagine Wall Street Without Jamie Dimon and Lloyd Blankfein; The succession plans at JPMorgan and Goldman say a lot about where the companies—and the Street—are headed.
Hugh Son – Bloomberg
In another universe, they might have starred in an odd-couple comedy about a pair of New Yorkers who rise to fame and fortune: Jamie Dimon, the voluble, sometimes ill-tempered alpha male from Queens; Lloyd Blankfein, shorter and bald, the wisecracking sidekick from Brooklyn.
/goo.gl/XscUsV

The Blood Unicorn Theranos Was Just a Fairy Tale; Founder Elizabeth Holmes spun a beautiful fantasy for investors, not so much for patients.
Matt Levine – Bloomberg
It was fun while it lasted. Photographer: David Paul Morris/Bloomberg
It has been pretty obvious for a few years now that Theranos Inc. was a huge fraud. Theranos is a blood-testing startup that developed devices, which it called “TSPUs” and “miniLabs,” that were supposed to be able to do a wide range of laboratory tests on a finger-prick blood sample. It seems like Theranos founder Elizabeth Holmes really wanted to build devices that would actually do these things, and thought she could, and tried to. But it didn’t work, and Theranos ran out of time: It talked Walgreens into offering Theranos tests at its stores, 1 but “it became clear to Holmes that the miniLab would not be ready” in time for the Walgreens rollout.
/goo.gl/HJ2th1

Nobody’s Trading 10-Year Japanese Government Bonds
Suryatapa Bhattacharya – The Wall Street Journal
Trading volume in Japan’s benchmark 10-year government bond has been slowing even as caution has increased in global markets since the start of February, with no exchange trading of the debt on Tuesday.
goo.gl/KgFVRa

Lawrence Kudlow to Become Trump’s White House Economic Adviser
Nick Timiraos – The Wall Street Journal
Lawrence Kudlow, a conservative economic commentator whose career included jobs in the White House, Wall Street, radio and business television, will become one of President Donald Trump’s top economic advisers as director of the National Economic Council.
goo.gl/ZjPWDY

Wells Fargo Paid CEO Timothy Sloan $17.4 Million Last Year
Emily Glazer – The Wall Street Journal
Wells Fargo & Co. awarded Chief Executive Timothy Sloan $17.4 million in compensation for 2017, his first full year leading the embattled bank. Mr. Sloan received $2.4 million in base pay, with a bonus that included shares valued at $15 million.
goo.gl/pcc49M

Dark underbelly of the European financial system is being exposed
Simon Nixon – The Times
Something is rotten in the European financial system. Britain’s status as the global capital of money-laundering is once again back in the spotlight after the poisoning of the former Russian spy Sergei Skripal and his daughter in Salisbury. The British government has blamed Russia and the affair has revived concerns about the UK’s remarkable openness to the mysteriously amassed fortunes of oligarchs with links to President Putin and the extraordinary role that companies registered in the UK have played in some of the biggest money-laundering scandals of recent years.
goo.gl/X9DFjr

Exchanges, OTC and Clearing

JPX, KRX and TWSE sign trilateral Memorandum of Understanding
JPX News Release
Japan Exchange Group, Inc. (JPX), Korea Exchange (KRX) and Taiwan Stock Exchange Corporation (TWSE) signed a memorandum of understanding (MOU) today. Under the MOU, the three exchanges will build a closer relationship through information sharing in areas of mutual interest and assist each other in market development in Japan, Taiwan, and South Korea. The three exchanges have a framework for cooperation and collaboration through personnel exchanges and joint market promotion. Mr. Akira Kiyota, Group CEO of JPX, said, “We are very pleased to be expanding our cooperation with KRX and TWSE. This MOU will provide even greater opportunity for the three exchanges to strengthen our cooperative relationships to further develop capital markets in Asia.”
goo.gl/66Es1i

Societe Generale joins Euronext’s Best Execution service for retail investors
Euronext
Societe Generale and Euronext announced today they are joining forces to offer retail investors “Best of Book”, Euronext’s best execution service. This service will enable customers in Societe Generale’s French network to benefit from a greater quality of order execution on the exchange at a competitive price
/goo.gl/nrhn7

CurveGlobal launches client incentive programme; The new programme will award up to 10% of CurveGlobal equity capital to the largest customers.
By Hayley McDowell
The London Stock Exchange Group’s (LSEG) interest rate derivatives platform CurveGlobal has developed a new customer partnership incentive programme.
/goo.gl/SwoqsE

Billionaire Alan Howard Makes a Bet on Cryptocurrencies
Alastair Marsh and Nishant Kumar – Bloomberg
Hedge fund billionaire Alan Howard made sizable personal investments in cryptocurrencies last year and plans to put more of his own money into digital assets and the blockchain technology behind them, according to people with knowledge of the matter.
goo.gl/8pehMe

Publication of JPX Working Paper, Vol.22 “Study on Applicability of Distributed Ledger Technology in Trade Matching Processes”
JPX
Japan Exchange Group, Inc. (JPX) today published JPX Working Paper, Vol.22 “Study on Applicability of Distributed Ledger Technology in Trade Matching Processes”.
/goo.gl/eZSmC1

JPX, KRX and TWSE sign trilateral Memorandum of Understanding
JPX
Japan Exchange Group, Inc. (JPX), Korea Exchange (KRX) and Taiwan Stock Exchange Corporation (TWSE) signed a memorandum of understanding (MOU) today.
/goo.gl/QxTBzy

Fintech

OANDA Partners With Dell Boomi To Provide seamless Itegration Of Rates API With Major ERP Systems
MondoVisione
A global leader in corporate and consumer foreign exchange solutions, OANDA recently announced a collaboration with Dell Boomi, a leading provider of cloud integration and workflow automation software, to offer the OANDA Exchange Rates API Connector to all Dell Boomi customers.
/goo.gl/4IA3xV

Hackers learn to hurdle two-factor authentication; Biometrics, apps and machine learning are adding layers of security
Hannah Kuchler – FT
For years, cyber security experts have been urging users to add a second layer of authentication to their accounts, often a code sent by text message to their phone.
/goo.gl/h9rAoh

Itiviti and ULLINK complete merger to build a global technology force in the capital markets industry; Torben Munch appointed CEO; The Board of Directors of Itiviti AB announces that the transaction to merge the company with ULLINK was completed on March 14, 2018.
Itiviti
With annual sales exceeding $200 million, 1,000 employees and local presence in major financial markets across Europe, Asia-Pacific and the Americas, the combination of Itiviti and ULLINK creates a full-service technology and infrastructure provider for global and regional financial institutions.
/goo.gl/JmF75N

Cryptocurrencies

Billionaire Alan Howard Makes a Bet on Cryptocurrencies
Alastair Maresh, Nishant Kumar – Bloomberg
Hedge fund billionaire Alan Howard made sizable personal investments in cryptocurrencies last year and plans to put more of his own money into digital assets and the blockchain technology behind them, according to people with knowledge of the matter.
/goo.gl/rPbFPD

The Bitcoin Fad Is Fading—for Now
Olga Kharif – Bloomberg
Google searches and tweets about bitcoin decline sharply; The number of stories proclaiming death of bitcoin rises
Suddenly, Bitcoin seems a bit boring. It might be hard to believe. But after the 1,400 percent rally of 2017, with wild swings along the way, the great crypto craze has cooled, at least for now. For the past month, Bitcoin’s price has stalled between $8,500 and $11,300 — a minuscule range by its standards. And internet searches for “Bitcoin” have plunged, suggesting public interest has, too.
/goo.gl/fbpBuu

Politics

Donald Trump admits making up ‘facts’ in trade meeting with Justin Trudeau; US president told donors ‘I had no idea’ when he complained to Canada’s prime minister over (non-existent) trade deficit
David Smith in Washington – The Guardian
Donald Trump bragged that he made up facts in a meeting with the Canadian prime minister, Justin Trudeau, according to an audio recording obtained by the Washington Post.
/goo.gl/hQNnpS

Lawrence Kudlow to Become Trump’s White House Economic Adviser
Nick Timiraos – WSJ
Lawrence Kudlow, a conservative economic commentator whose career included jobs in the White House, Wall Street, radio and business television, will become one of President Donald Trump’s top economic advisers as director of the National Economic Council. Mr. Kudlow, 70 years old, said he was offered the job after a series of recent phone conversations with the president in which the two discussed differences of opinion about trade, among other things.
/goo.gl/oXiytu

****SD: CNBC here.

TV economist Larry Kudlow to translate Trump’s vision
Barney Jopson – Financial Times
Minutes after being confirmed as Donald Trump’s new top economic adviser, putting him at the centre of momentous decisions on trade and tax, Larry Kudlow was preparing to spend the first hour of the new era in an old habitat: on the set of CNBC, Wall Street’s favourite cable channel.
The 70-year-old from New Jersey is a made-for-TV economist, a chatty Reaganite commentator with an everyman touch. He can express wonkery in plain English and dodge awkward questions with a smile, while ensuring the world appreciates that he has friends who are great people in high places.
goo.gl/aHmL25

National School Walkout: Thousands Protest Against Gun Violence Across the U.S.
Vivian Yee And Alan Blinderup – NY Times
A month ago, hundreds of teenagers ran for their lives from the hallways and classrooms of Marjory Stoneman Douglas High School, where 17 students and staff had been shot to death.
/goo.gl/s91Q66

LSE’s Woolcock Says Trump Is ‘Upping the Ante’ on Trade
Bloomberg Daybreak: Europe
Stephen Woolcock, associate professor at the London School of Economics, discusses global trade and impact from U.S. tariffs. He speaks with Matt Miller on “Bloomberg Daybreak: Europe.” (Source: Bloomberg)
goo.gl/L2CSMe

Regulation

SEC Charges Theranos CEO Elizabeth Holmes With Fraud; Silicon Valley’s first female billionaire startup founder gives up control of her company as part of settlement with regulators
John Carreyrou – WSJ
Theranos Inc. Chief Executive Elizabeth Holmes, widely hailed as Silicon Valley’s first female billionaire startup founder, agreed to a settlement with federal regulators that strips her of voting control, bans her from being an officer or director of any public company for 10 years and requires her to pay a $500,000 penalty.
/goo.gl/ac7d5T

Remarks of Commissioner Rostin Behnam before the Commodity Futures Trading Commission’s International Regulators Meeting, Boca Raton, Florida
CFTC
Thank you for the kind introduction. It is a pleasure to be with you today. Before I begin, just a quick housekeeping note that the views contained in this speech are my own and do not represent the views of the Commission. Before I dive into the main topic of my remarks this afternoon, I want to spend some time sharing some key points from my first six months at the CFTC, and my vision for the next six months and beyond.
/goo.gl/TJTzyA

Keynote Address of Commissioner Brian Quintenz before FIA Annual Meeting, Boca Raton, Florida
CFTC
…Trust is fundamental and essential to our international engagements. It is the foundation of successful collaboration and goodwill between regulators. Participation in international standards-setting bodies and bilateral discussions with foreign regulators depend on trust.
/goo.gl/FFgnec

Former Equifax Executive Charged With Insider Trading
SEC
The Securities and Exchange Commission today charged a former chief information officer of a U.S. business unit of Equifax with insider trading in advance of the company’s September 2017 announcement about a massive data breach that exposed the social security numbers and other personal information of about 148 million U.S. customers.
/goo.gl/3T9MdM

Theranos, CEO Holmes, and Former President Balwani Charged With Massive Fraud Holmes Stripped of Control of Company for Defrauding Investors
SEC
The Securities and Exchange Commission today charged Silicon Valley-based private company Theranos Inc., its founder and CEO Elizabeth Holmes, and its former President Ramesh “Sunny” Balwani with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance. Theranos and Holmes have agreed to resolve the charges against them. Importantly, in addition to a penalty, Holmes has agreed to give up majority voting control over the company, as well as to a reduction of her equity which, combined with shares she previously returned, materially reduces her equity stake.
/goo.gl/ZGTocL

Ex-Equifax Executive Charged With Insider Trading Tied to ’17 Breach
Stacey Cowley – The New York Times
A former top Equifax executive was charged on Wednesday with insider trading for selling nearly $1 million in company stock after he learned about a major data breach in 2017 but before it was publicly announced. Jun Ying, the former chief information officer of Equifax’s core United States consumer reporting division, exercised all of his vested stock options and sold nearly $1 million in shares a little more than a week before Equifax announced that hackers had broken into its systems, according to the Securities and Exchange Commission.
goo.gl/bFykPf

SEC Proposes Transaction Fee Pilot for NMS Stocks
SEC Press Release
Washington D.C., March 14, 2018 — The Securities and Exchange Commission today voted to propose new Rule 610T of Regulation NMS to conduct a Transaction Fee Pilot in NMS stocks. The proposed pilot would subject stock exchange transaction fee pricing, including “maker-taker” fee-and-rebate pricing models, to new temporary pricing restrictions across three test groups, and require the exchanges to prepare and publicly post data.
goo.gl/PhtWCE

How bitcoin IRA investments bypass U.S. fiduciary protections
Mark Miller – Reuters
Bitcoin in an IRA? You might think holding a volatile, unregulated investment like cryptocurrency in a retirement account would violate the U.S. Department of Labor’s fiduciary rule, which took effect last summer. But despite the risks, the “bitcoin accepted here” shingle is hanging proudly in the Wild West of retirement investing – self-directed Individual Retirement Accounts.
goo.gl/y4tupi

SEC Proposes Targeted Changes to Public Liquidity Risk Management Disclosure
SEC
The Securities and Exchange Commission today proposed amendments to public liquidity-related disclosure requirements for certain open-end investment management companies. Under the proposal, funds would discuss in their annual report the operation and effectiveness of their liquidity risk management program, replacing a pending requirement that funds publicly provide the aggregate liquidity classification profile of their portfolios on Form N-PORT on a quarterly basis.
/goo.gl/XCy4QR

SEC Proposes Transaction Fee Pilot for NMS Stocks
SEC
The Securities and Exchange Commission today voted to propose new Rule 610T of Regulation NMS to conduct a Transaction Fee Pilot in NMS stocks.
/goo.gl/kiEFCr

Report from FINRA Board of Governors Meeting – March 2018
FINRA
FINRA’s Board of Governors held its first meeting of 2018 on March 7-8 in New York, where it approved two new rule proposals and FINRA’s 2018 corporate goals, as well as reviewed the progress of the ongoing FINRA360 organizational improvement initiative introduced nearly one year ago.
/goo.gl/NjYs2Y

March 2018 Board Update
FINRA
FINRA President and CEO Robert Cook, Chairman Bill Heyman, Board members and FINRA staff provide updates on the March 2018 FINRA Board of Governors meeting.
/goo.gl/AESCXT

Ex-Equifax Executive Charged With Insider Trading Tied to ’17 Breach
Stacy Cowley – NY Times
A former top Equifax executive was charged on Wednesday with insider trading for selling nearly $1 million in company stock after he learned about a major data breach in 2017 but before it was publicly announced.
/goo.gl/ydRE65

ASIC releases market integrity report
ASIC
ASIC has today released its latest report on market integrity for the period 1 July to 31 December 2017.
/goo.gl/4XutbX

Investing and Trading

These Huge Fund Outflows Show Growing Distaste for U.S. Dollar
Dani Burger and Sid Verma – Bloomberg
Investors rotate out of hedged ETFs in favor of unhedged funds; Europe, Japan flows suggest weak greenback in 2018: Deutsche
Here’s one sign that investors remain hostile to the dollar: Buyers of U.S.-listed funds are rushing into European and Japanese stocks without currency protection.
/goo.gl/JyedUC

Why It’s So Hard to Replace Libor
John Glover – Bloomberg
Libor, the London interbank offered rate, for decades was a reliable benchmark set daily by banks to determine interest rates on everything from student loans and mortgages to derivatives and credit cards. But ever since European and U.S. banks were found to have manipulated rates to benefit their own portfolios, the benchmark has been seen as tainted. Along with its kinfolk — Euribor for the euro and Tibor for the yen — Libor is probably headed for history’s scrap heap in a few years. But with more than $370 trillion in financial contracts pegged to Libor, it can’t just disappear. That has presented bankers with a big headache: figuring out how to cause the least amount of market disruption in the transition to more reliable and transparent substitutes.
/goo.gl/NhwBpD

Opinion: This emerging-market ETF continues to blow away the competition
Philip Van Doorn – MarketWatch
Back in July 2015, during the middle of a major pullback for shares of Chinese companies, Kevin Carter, the founder of the Emerging Markets Internet & Ecommerce ETF, said his fund had significant downside protection when compared to the dominant emerging-markets index funds and ETFs, as well as better upside potential.
goo.gl/HexTT2

CurveGlobal launches Jump Ball, a customer partnership programme?
CurveGlobal
CurveGlobal announced today its intention to launch Jump Ball, a customer partnership incentive programme to start on 3 April 2018, subject to regulatory approval. The programme will award up to a total of 10% of CurveGlobal’s equity capital to participants – up to 9% through six quarterly assessment periods and a final award of 1% to the largest participant at the end of the scheme.
/goo.gl/DqkwS7

Institutions

Société Générale slides after abrupt resignation of deputy CEO
David Keohane – FT
Société Générale’s shares fell in Paris on Thursday morning after the bank’s deputy chief executive resigned in a sudden move linked with the Libor rate-rigging scandal.
/goo.gl/HzeLHG

Wells Fargo Paid CEO Timothy Sloan $17.4 Million Last Year; He is still dealing with a scandal over the bank’s sales practices
Emily Glazer – WSJ
Wells Fargo awarded Chief Executive Timothy Sloan $17.4 million in compensation for 2017, his first full year leading the embattled bank.
/goo.gl/htVcio

Och-Ziff to Shut European Hedge Fund as New CEO Shifts Focus
By Nishant Kumar and Katia Porzecanski
Och-Ziff Capital Management Group LLC is shutting its European hedge fund as the firm refocuses on its main products under the new leadership of Robert Shafir, according to people with knowledge of the matter.
goo.gl/faCgiZ

Credit Suisse Sued by Investor Over Volatility Note That Crashed
Noah Buhayar – Bloomberg
Investor accuses firm, leaders of manipulating notes’ price; Bank disputes claim, says product was for sophisticated buyers
Credit Suisse Group AG was sued by an investor who got burned last month betting against stock-market turmoil, as more people seek to recoup steep losses on VIX exchange-traded products.
/goo.gl/JDGwfY

Deutsche Bank Hires in Geneva, Miami for Wealthy Latin Americans
Jonathan Levin, Dakin Campbell – Bloomberg
Deutsche Bank AG hired three bankers, including a managing director, to help bolster its business for wealthy Latin American clients.
/goo.gl/CJaE95

Regions

Swiss Take No Chances on Franc as Intervention Threat Maintained
Catherine Bosley – Bloomberg
Deposit rate at minus 0.75%, as forecast by economists; Swiss central bank says franc remains ‘highly valued’
President Thomas Jordan isn’t taking any chances with the franc even with the currency within striking distance of what was once the Swiss National Bank’s red line.
/goo.gl/GBtaey

Swiss parliament rejects call to return 1MDB profits to Malaysia
Michael Shields and Edmund Blair – Reuters
Switzerland’s parliament rejected on Thursday a bid to amend the law handling ill-gotten bank profits seized by authorities that had aimed to return more than $100 million linked to scandal-hit sovereign fund 1MDB to the Malaysian people.
Champions of the campaign had acknowledged they faced an uphill struggle to get the idea through parliament, whose lower house shot the plan down at the request of the government.
goo.gl/XXT57T

Exclusive: Gazprom to cut hundreds of traders as Kremlin retreats from West
Christian Lowe – Reuters
Russian gas giant Gazprom will cut hundreds of jobs at its overseas trading and export offices, including Britain, and move them to St Petersburg, according to two sources familiar with the plan, which comes at a time of rising tensions with the West.
/goo.gl/L3kneS

Sebi plans to link retail investors’ exposure to derivatives with income; Sebi plans to address with the new norms any inefficiencies present in the market
Press Trust of India
Markets regulator Sebi is considering linking retail investors’ exposure to derivatives with their income, a move aimed at preventing them from taking unreasonable positions in risky instruments.
/goo.gl/DWQTGK

How the financial crash made our cities unaffordable; Since 2008, property markets in the world’s major cities have ‘synchronised’ and left nations and citizens behind
Nathan Brooker – FT
In the stormy spring of 2008, the UK’s worsening property downturn was yet to hit Sloane Street in central London. A full year after the start of the credit crunch and the run on Northern Rock — which started a slide that would see more than 20 per cent chalked off the average house price — the local Savills office was still processing bumper sales.
/goo.gl/se4t2K

Brussels under fire over Barroso’s move to Goldman; EU watchdog calls for a formal reassessment over position at investment bank
Alex Barker in Brussels – FT
The European Commission has come under renewed fire for mishandling the ethical issues raised by the move of José Manuel Barroso, its former president, to Goldman Sachs.
/goo.gl/c6NteC

China’s $814 Billion Fund Will Cut Exposure to Volatile Markets
Bloomberg News
CIC unveils 3-year plan to boost alternative investments; Wealth fund has capacity to pull off big deals, president says
China’s $930 billion sovereign wealth fund plans to expand investments in areas such as real estate, hedge funds, infrastructure and private equity for more stable returns, as it reduces exposure to volatile public markets.
/goo.gl/a7Pb3A

Singapore and Paris Top World’s Most Expensive Cities
Melissa Check – Bloomberg
Low inflation pushes Tokyo and Osaka further down the ranks; European cities account for half of top 10 most expensive
Pedestrian stand on a promenade in Singapore. Photographer: Ore Huiying/Bloomberg
Singapore is the world’s most expensive city for the fifth straight year in the Economist Intelligence Unit’s latest Worldwide Cost of Living report, with Paris and Zurich tied for second place.
/goo.gl/9SeZPj

Dark underbelly of the European financial system is being exposed
Simon Nixon – The Times
Something is rotten in the European financial system. Britain’s status as the global capital of money-laundering is once again back in the spotlight after the poisoning of the former Russian spy Sergei Skripal and his daughter in Salisbury. The British government has blamed Russia and the affair has revived concerns about the UK’s remarkable openness to the mysteriously amassed fortunes of oligarchs with links to President Putin and the extraordinary role that companies registered in the UK have played in some of the biggest money-laundering scandals of recent years
/goo.gl/BGzo9e

Miscellaneous

Wikipedia’s forgotten women: inside the editing marathon to fix imbalance; The fifth annual event at the National Museum of Women in the Arts aims to arm volunteers with tools and knowledge to bring gender equality to the platform
Nadja Sayej – The Guardian
There’s a better way to celebrate Women’s History Month than simply buying Hillary Clinton’s new book.
/goo.gl/bueRiK

The post What’s the Biggest Trade on the New York Stock Exchange? The Last One appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Wednesday night I was about to head home when I ran into a friend outside the Bar Luna at the Boca Raton Resort and Club. He told me about a rumor the CME was going to buy NEX and some other details about potential counter-bids or the sale of parts of NEX that CME may not want. That news caused me to stay at the bar until 1 PM in search of other sources, but I found none.

I did find sources yesterday who confirmed the CME was having an emergency board meeting, but there was also news that a decision in the lawsuit against the CME Group by some of their members over market access was going to be published by the end of the week.

The first published report of the potential deal was in Patrick Young’s ego-filled Exchange Invest newsletter. Bloomberg was the first mainstream media to report the story. I will have more to say in an analysis piece published later.~JJL

Sign up for the CME Foundation’s new newsletter and keep up to date with everything that is happening at CME Group Foundation.~JJL

Wednesday at FIA Boca, CFTC Commissioner Brian Quintenz shook up the audience and the panel immediately following him by lambasting the European Commission for breaching the 2016 agreement between EU authorities and the CFTC with a new proposal that would extend European regulators’ (including ESMA’s) oversight of U.S. CCPs. Quintenz said it was common knowledge the proposal was a response to Brexit, but that while Brexit presents challenges, it is “irrelevant to the U.S. and no justification to renege” on the 2016 agreement. On the panel, Patrick Pearson of the EC played defense (“I am the enemy, apparently,” he said), remarking that the EC started reviewing the regulations three years before Brexit and felt there were a lot of unintended consequences in swaps regulation. He also said the EC receives only six pages of information on the biggest US clearing facility, while the smallest European facility provides 600 pages. “We need more information” about those large clearinghouses that are systemically important, he said.

Patrice Aguesse of Autorite des Marches Financiers said they welcomed the proposal and think ESMA should be the supervisor for CCPs, but the CFTC’s Eric Pan said Europe’s “buyer’s remorse” over the agreement was disturbing and that when you say you will do something, you should stick with it. Pan also argued with Pearson, who said the EC had copied Dodd Frank in their own rules, responding that Europe’s rule was not a copy, but “If they want to mimic us, we would welcome that.”~SR

The FT’s Joe Rennison, @JARennison tweeted that at the FIA Boca conference panel on bitcoin, CME Group’s Tim McCourt, in charge of Bitcoin futures, was the only panellist not to personally own bitcoin.~JJL

FIA CEO Walt Lukken was certainly one of the hardest working people at the FIA Boca conference, moderating what seemed like more than half of the panels. He did a terrific job as moderator, asking great questions and providing a sense of humor. ~SR

Thank you to Bo Collins and his firm Renovatio Puerto Rico for sponsoring the closing cocktail party at the FIA’s International Conference in Boca Raton that was also a fundraiser for Futures For Kids.~JJL

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Do You Own Bitcoin? The IRS Is Coming for You; Agency collects data on Coinbase account holders who bought, sold, sent or received digital currency
By Laura Saunders – WSJ
Pay your taxes on bitcoin…or else. Late last year, the Internal Revenue Service persuaded a federal judge to require Coinbase, a San Francisco-based digital-currency wallet and platform with about 20 million customers, to turn over customer information. Driving the IRS’s decision was its belief that few bitcoin investors appear to be paying taxes due on sales. The court order is one of the agency’s first moves as it clamps down on cryptocurrency scofflaws.
/goo.gl/jBEfm2

******Knock-knock. Who’s there? Bad News.~JJL

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White House Aide Tells Wall Street to ‘Relax’ Over Trade Worries
By Katia Dmitrieva – Bloomberg
Navarro says president to be firm, flexible on steel tariffs; U.S. trade office to deliver China IP report in coming weeks
White House trade adviser Peter Navarro said U.S. investors should “relax” over fears that new trade penalties will spark a skirmish that could hurt the world economy.
/goo.gl/sHWbPY

***** Rule number one: Never tell Wall Street what to think. Rule number two: See rule number one.~JJL

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Thursday’s Top Three
Our most read story yesterday is the WSJ’s What’s the Biggest Trade on the New York Stock Exchange? The Last One. Coming in second is a collection of short video interviews from Nasdaq, Jill Malandrino FIA interviews. In third is the The Washington Post’s Kudlow to be top White House economic adviser as Trump adds longtime loyalist

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MarketsWiki Stats
122,190,253 pages viewed; 23,042 pages; 212,071 edits
MarketsWiki Statistics

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Lead Stories

CME Considers Bidding for Michael Spencer’s NEX Group
Matthew Leising, Dinesh Nair, Manuel Baigorri, Viren Vaghela – Bloomberg
London-based markets firm could also attract other suitors; NEX market value surges to $4.8 billion after confirming talks
Michael Spencer’s NEX Group Plc rose the most in almost two decades after CME Group Inc., a $56 billion giant of futures trading, approached the company on a potential takeover.
/goo.gl/z5g8kj

Michael Spencer’s Nex Group receives CME preliminary bid approach; UK financial technology company in early-stage talks
Philip Stafford in London – FT
Nex Group, the UK financial technology company headed by Michael Spencer, had confirmed it has received a preliminary approach about being taken over by CME Group, the world’s largest futures exchange.
/goo.gl/SxkZDu

Nasdaq CEO says era of exchange consolidation is over
Joe Rennison in Boca Raton – FT
Nasdaq’s chief executive thinks the era of exchange consolidation is over, given the regulatory hurdles, and instead predicts more partnerships will emerge in an industry that has historically been characterised by cutthroat competition.
/goo.gl/4XjEge

Nex shares rocket 36% on CME takeover talks; Sale negotiations spark speculation of auction for UK financial technology business
Philip Stafford – FT
Shares in Nex Group, the UK financial technology business headed by Michael Spencer, soared more than 30 per cent to a record high on Friday after it confirmed it had held preliminary talks about being purchased by CME Group, the US derivatives exchange.
/goo.gl/8Zuo7L

How Jamie Dimon came to rue his Bear Stearns deal; It looked like a steal 10 years ago, but JPMorgan’s $2-a-share takeover quickly soured
Ben McLannahan in New York – FT
The takeover of Bear Stearns by JPMorgan Chase, sealed exactly a decade ago in the crucible of the 2008 financial crisis, was one of the signature deals of a turbulent year, and the knockdown price of $2 a share was a shock to Wall Street.
/goo.gl/oH7dwP

Call for US Treasury to fill cryptocurrency ‘regulatory vacuum’; CFTC’s Rostin Behnam says focus needed on distributed ledgers and initial coin offerings
Joe Rennison in Boca Raton, Florida – FT
The US Treasury needs to intensify efforts to fill the “regulatory vacuum” for the cryptocurrency industry, according to a top US regulator.
/goo.gl/VknL2K

U.S. judge dismisses currency-rigging claims against big banks
Reuters Staff
A U.S. judge on Thursday dismissed a lawsuit against 16 big banks by retail foreign currency investors who claimed they were indirectly harmed by a conspiracy to rig prices.
/goo.gl/DVzbf4

U.S. appeals court voids Obama-era ‘fiduciary rule’
Jonathan Stempel – Reuters
A federal appeals court on Thursday voided the U.S. Department of Labor’s “fiduciary rule,” an Obama administration measure adopted in 2016 meant to curb conflicts of interest among providers of financial advice to Americans planning for retirement.
/goo.gl/Ef279r

Brokers Will Have to Reveal More to Investors Under Coming SEC Rule; SEC is close to proposing rule requiring new disclosures on financial advice, its own version of Labor Department’s ‘fiduciary rule’
Dave Michaels – WSJ
Investors wary of biased advice from stockbrokers can look forward to new disclosures that shine more light on the terms of their relationship, industry officials and regulators say.
/goo.gl/jS32Dh

Exchanges, OTC and Clearing

CME in approach for Michael Spencer’s £2.6bn Nex Group; Preliminary offer set to spark global exchange race for UK fintech company
Philip Stafford in London and Joe Rennison in Boca Raton, Florida – FT
CME Group, the US futures exchange, has made a preliminary bid for Michael Spencer’s Nex Group, a move likely to spark a race among global exchanges to buy the UK financial technology company.
/goo.gl/kDDgci