John Lothian Newsletter – John Lothian News (JLN)

First Read

Hits & Takes
JLN Staff

Cboe Global Markets announced the settlement of its April expiry bitcoin futures, the fourth contract settlement conducted since the product’s launch on December 10, 2017. The settlement price was $8,055.68.~SR

Quote of the day: “I quite understand at the end of the day everybody evolves and changes. China was a developing market that has developed in part because they needed to — they had an economy based on export at all costs…when you have to grow at 10 percent because you have to accommodate a population moving from villages to cities — and wanting to avoid social and political unrest.” – Goldman Sachs Chairman and CEO Lloyd Blankfein at the US/China Business Summit. From CNBC.~JK

Criminals with a sense of humor: The founders of cryptocurrency startup Savedroid seem to have scammed investors on their ICO – the evidence being that their website now only has a picture of the South Park meme, “Aannd It’s Gone,” on the front page. (Editor’s Note: It seems this “scam” may have been an attempt by the Savedroid founders to teach people a lesson about the risks of ICOs. We will keep following this story and let you know more as information comes out.)~JB

Singapore Exchange was named Best Index Provider at the Structured Retail Products Asia/Pacific Awards. Last year, SGX launched a series of thematic indices on industry sectors such as robotics and cybersecurity.~JK

It seems everyone is getting in on the cryptocurrency bandwagon. Philippine boxer Manny Pacquiao is planning to start his own cryptocurrency.~JB

Regarding the above Pacquiao coin, consider that Floyd Mayweather Jr. beat Pacquiao in a unanimous decision in 2015. Also, consider Mayweather Jr. has already had a crypto experience when he endorsed an ICO. The founders of that crypto firm, Centra, have already been charged with fraud by the SEC. By the transitive property of boxing, it seems that Pacquiao’s digital endeavor has no chance of success?~SD

Don Wilson will be a keynote speaker at the June 27 Crypto Evolved event put on by Viable Markets. If you are interested in attending, contact me for a discount code for JLN readers.~JJL

CME Group has a video about volunteerism. Inspiring!~JJL

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Cross-Border Concerns – Jonathan Jachym, LSEG
JohnLothianNews.com

When Jonathan Jachym started at the London Stock Exchange Group stateside about three years ago, there were some 250 employees, most based in new York. Now, the group’s head of North American regulatory strategy and government relations has some 700 U.S.-based coworkers in six different locations. The personnel growth was matched in 2017 with revenue up across all core businesses, with its FTSE Russell and LCH arms doing particularly well.

In this video from JLN’s annual series with industry leaders, Jachym talks about compression becoming a natural part of a swap’s trading life cycle, how the group benefits from passive investing trends and the key issue facing the group and its customers – cross-border regulatory frameworks.

Watch the video and read the rest here »

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Fire extinguisher prompts lengthy outage at Nasdaq Nordic
Adam Samson – FT
The open of trade on Nasdaq equities bourses in seven countries was delayed by hours on Wednesday after the exchange operator faced a serious issue at a Swedish data centre that houses its servers. Trading across the group’s stock markets in Sweden, Denmark, Finland, Iceland, Latvia, Estonia and Lithuania did not begin on Wednesday until 1:15pm ó 2:10pm CET (12:15pm ó 1:10pm BST), hours after the typical opening time.
/jlne.ws/2vxO5mi

****** Server rattling fire alarms. Put that down as a new one.~JJL

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Lead Stories

SEC stops short of toughest broker-dealer rules; Conflict-of-interest proposals cheer industry and disappoint fiduciary rule supporters
Kadhim Shubber and Barney Jopson in Washington – FT
The Securities and Exchange Commission proposed new conflict-of-interest rules for broker-dealers on Wednesday that stopped short of calls to impose a tough new fiduciary duty on the sale of financial products.
/jlne.ws/2vqmYcx

****Other sources – MarketWatch; Reuters; WSJ; and NY Times

Alternative benchmarks emerge to challenge Libor dominance; Industry wary of change because many loans and swaps rely on reference rate
Philip Stafford – FT
Tarnished by scandal that has cost banks more than $9bn in penalties, the clock is finally running for the demise of the Libor reference rate used by companies, banks and consumers for payment on loans and derivatives.
/jlne.ws/2vnQSy0

Bank of England expects big Libor switch to start in earnest
Huw Jones – Reuters
Financial markets should start accelerating efforts to ditch Libor in favor of the Bank of England’s revamped interest rate benchmark being launched next week, a senior BoE official said.
/jlne.ws/2vpDf1t

VIX Rigging Talk Erupts on Wall Street After Another Wild Swing
Lu Wang, Elena Popina, Luke Kawa – Bloomberg
The Cboe Volatility Index is how Wall Street measures anxiety. Lately it’s the gauge’s own plumbing that’s making people nervous. It’s a recurrent claim — the VIX is rigged. It got a fresh airing Wednesday, when the index swung wildly just as derivatives on it were expiring. Billions of dollars are earned or lost as VIX futures settle. The concern is that owners of those wagers are willing to spend a few million to make them pay off.
/jlne.ws/2vxMih4

**** FT on the action here.

Many Bitcoin Miners Are at Risk of Turning Unprofitable
Olga Kharif – Bloomberg
Large miners Bitmain, Bitfury are seen increasing dominance; Dorm-room miners are becoming a relic of the Bitcoin bubble
Bitcoin is at an inflection point.
Even with the price back above $8,000, many of the so-called miners that perform the complex calculations to generate the digital currency are at risk of turning unprofitable.
/bloom.bg/2JXleuw

Ethereum’s Vitalik Buterin on the bitcoin bubble and running a $125bn blockchain
Chloe Cornish – FT
Up in San Francisco’s Monterey Heights district stands a modest detached house; a house that would be perfectly ordinary, were its wide windows not covered in neon green scribbles ó half-finished equations, anatomies of computer architecture. They are marks left by the coders who use this place as a hide-out.
/jlne.ws/2vtBEHR

Crypto Confusion, Wall Street Delusion
David Weisberger, CoinRoutes and ViableMkts – TABB Forum
Crypto is here to stay, both as an asset class and as a technology that will improve other asset classes. But the market and its denizens need to mature. The misconceptions of the crypto community, coupled with a lack of understanding on the part of ‘traditional’ financial executives, play a large role in explaining why more investors, including institutions, don’t participate in the crypto-markets.
bit.ly/2HdrC35

Wall Street’s biggest banks eager to woo consumers with credit; Critics point to risk of mounting non-performing loans if households rack up ever more debt
Alistair Gray and Ben McLannahan in New York – FT
Donald Trump believes the US economy is heading for “one of the greatest booms ever”, with consumer confidence at “an all-time high”. And the country’s top banks, which in the past week announced buoyant first-quarter results, seem to share some of the president’s optimism.
/jlne.ws/2vs1wUz

Noncompete Agreements Boost Investment But Stifle Start-Ups
Alex Verkhivker – Chicago Booth Review
While noncompetes raise investment significantly, they also measurably hamper entrepreneurial activity, according to a new working paper from Chicago Booth’s Jessica S. Jeffers.
/jlne.ws/2vAtFcn

Exchanges, OTC and Clearing

Cboe Conducts April Settlement of Cboe Bitcoin Futures
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, today announced the settlement of the April expiry Cboe bitcoin (XBT) futures, the fourth contract settlement conducted since its launch in December.
/jlne.ws/2vqAjBR

ICE Europe says could make Brexit changes quickly
Huw Jones – Reuters
The shift in contracts from London to New York earlier this year showed how the transatlantic Intercontinental Exchange (ICE.N) could respond rapidly to Brexit if need be, the bourse’s European head said on Wednesday.
/jlne.ws/2vv6L60

BoE’s Brazier says now surer of dodging Brexit hit to derivatives
Huw Jones, Andy Bruce – Reuters
The Bank of England is becoming more confident that it can avoid disruption to trillions of pounds in cross-border financial contracts after Brexit, a senior BoE official said on Wednesday.
/goo.gl/B13qYZ

SGX Index Edge recognised at SRP’s Asia-Pacific Awards
SGX
Singapore Exchange (SGX) has been named Best Index Provider at Structured Retail Products’ (SRP) Asia-Pacific Awards ceremony held last night in Singapore. The Awards recognise the best service providers and distributors and best buy and sell-side companies across the region.
tinyurl.com/y9r59yqm

T2S crosses borders with Clearstream’s new offer; Four markets migrate to Clearstream’s new investor CSD model for T2S / Centralized custody and settlement of securities in T2S, non-T2S and international markets / Asset Servicing supports cross-border T2S settlement
Deutsche Bˆrse
Clearstream, Deutsche Bˆrse’s post-trade service provider, has successfully migrated its markets in Belgium, France, Italy and the Netherlands to its new investor CSD model for TARGET2-Securities (T2S). Clearstream is thus bringing the first truly cross-border volume to the ECB’s pan-European securities settlement platform.
/jlne.ws/2HvBCUT

Nasdaq Hosted 3rd Nasdaq International Designation Virtual Investor Conference
By GlobeNewswire
Nasdaq, Inc. (Nasdaq:NDAQ) announced the conclusion of its 3rd Nasdaq International Designation Virtual Investor Conference on April 4, 2018. Nasdaq welcomed select Nasdaq International Designation Member Companies to present their current state of business to a broad audience including potential investors. The Conference also provided individual and institutional investors an opportunity to engage with CEOs, CFOs, and IROs from a wide range of sectors globally.
/jlne.ws/2qIzAqD

Fintech

Number of German Banks Declines While Fintechs Attack
Stephan Kahl – Bloomberg
Network of savings, cooperative banks shrinks by 5.1% in 2017; Bundesbank will publish report on consolidation next month
Even before Bundesbank will publish its annual statistics on the consolidation in the German banking industry in May, there are already indications that the total number of banks and branches has dropped even further. Banks from abroad or those focusing on very specific customer groups are among the few that are expanding.
/jlne.ws/2vxneqo

TradingScreen Integrates BondCliQ’s Data and Visualization for Improved Fixed Income Offering
TradingScreen
TradingScreen Inc. (TS), the all-asset class order and execution management system (OEMS), today announced a partnership and product integration with BondCliQ, the corporate bond market’s first central market system. The integration of BondCliQ’s U.S. Corporate traded volume data will provide buy-side clients with an instant, contextualized, intelligent and transparent view of decision quality market data. BondCliQ is the first data provider in the TS TradeSmart EMS content hub.
/jlne.ws/2vsqT8W

Adam Toms, CEO, OpenFin Europe, discusses the recently launched Financial Desktop Connectivity and Collaboration Consortium (FDC3) initiative and how it aims to revolutionise the buy-side trading desktop through universal standards.
By John Brazier – The Trade
What is OpenFin and how does it benefit the buy side?
/jlne.ws/2Hz7uYO

Mosaic Smart Data partners with ESA for new frontier of FinTech; FICC data analytics firm to adopt ESA algorithms to improve market surveillance technology.
By John Brazier – The Trade
Fixed income, currencies and commodities (FICC) analytics startup Mosaic Smart Data will adopt algorithms developed by the European Space Agency (ESA) for capital markets.
/jlne.ws/2qLhGUc

Cryptocurrencies

‘Big bitcoin heist’ suspect escapes prison and flees Iceland ‘on PM’s plane’
Samuel Gibbs – The Guardian
The suspected mastermind behind the theft of 600 computers used to mine bitcoin in Iceland has escaped from prison and fled to Sweden on an aeroplane reportedly carrying the Icelandic prime minister.
bit.ly/2JS3IrL

Startup Pigzbe is launching a cryptocurrency wallet for kids, introducing “a new piggy-banking paradigm”
Jenny Anderson – Quartz
One of my children currently gets £1.50 a week in pocket money; the other, £2.50 (about $2.00 and $3.50). We encourage some pretty basic behaviors with these funds: save, spend, and donate. Jars, wallets, small bags, countertops, and backpacks act as various means of storage. But in our efforts to instill some financial literacy in our grade-school-age kids, we have committed a gross oversight: We failed to incorporate the blockchain.
bit.ly/2HdHcM0

India’s cryptocurrency traders scramble after RBI crackdown; Some exchanges are repurposing their business to avoid central bank rules
Simon Mundy in Mumbai – FT
When the elusive Satoshi Nakamoto gave birth to bitcoin in 2009, Nischal Shetty was briefly intrigued. Using his home computer, the young Indian computer scientist mined a small number of the virtual coins ó then worth less than a dollar apiece ó before losing interest.
/jlne.ws/2vuW2bP

Ex-CEO of Bankrupt Bitcoin Exchange Mt. Gox Has a New Job in Crypto
Jen Wieczner – Fortune
Mark KarpelËs, the CEO who presided over Bitcoin exchange Mt. Gox until it went bankrupt in 2014, has had a hard time finding work for the last four years. After all, when he announced in February 2014 that he’d lost all of Mt. Gox’s 850,000 Bitcoins, he instantly became the biggest villain of the cryptocurrency world.
/jlne.ws/2J85dRb

Blockchain Is About to Revolutionize the Shipping Industry
Kyunghee Park – Bloomberg
Maersk, APL, Hyundai race to build paperless cargo system; Adoption of blockchain could generate $1 trillion in trade
Globalization has brought the most advanced trading networks the world has seen, with the biggest, fastest vessels, robot-operated ports and vast computer databases tracking cargoes. But it all still relies on millions and millions of paper documents.
/jlne.ws/2vqDNEa

Politics

Cohen Would Turn Against President if Charged, Counselor Warned Trump
Joe Palazzolo, Michael Rothfeld and Michael Siconolfi – WSJ
One of President Donald Trump’s longtime legal advisers said he warned the president in a phone call Friday that Michael Cohen, Mr. Trump’s personal lawyer and close friend, would turn against the president and cooperate with federal prosecutors if faced with criminal charges.
/jlne.ws/2vnPrQe

Regulation

SEC Proposes to Enhance Protections and Preserve Choice for Retail Investors in Their Relationships With Investment Professionals
SEC
The Securities and Exchange Commission today voted to propose a package of rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers while preserving access to a variety of types of advice relationships and investment products.
/jlne.ws/2vqA61x

New CFTC Videos Give Inside Look At Binary Options Fraud
Mondovisione
The Commodity Futures Trading Commission (CFTC) today released The Truth Behind Binary Options Fraud, new videos that give viewers a first-hand look at the tactics shrewd fraudsters use to con investors out of hundreds or even thousands of dollars.
bit.ly/2JYdBEo

Bank Rule Changes Chip Away at Those Pesky Stress Tests; The annual exams lose their effectiveness as they become more opaque.
Stephen Gandel – Bloomberg
After a slow start, the Trump administration, with the help of Congress, may actually be “doing a number” to Dodd-Frank financial regulations, as the president promised he would, even bigger than many people realize.
/jlne.ws/2vrQMFK

US regulatory rollback boosts sales of debt products; Bundling of lower quality company loans into CLOs surges this month
Joe Rennison and Eric Platt – FT
The bundling of lower quality company loans into collateralised loan obligations has surged this month, with activity boosted by a rollback of post-financial crisis regulations.
/jlne.ws/2vrPuuo

CFTC Charges Multiple Individuals and Companies with Operating a Fraudulent Scheme Involving Binary Options and a Virtual Currency Known as ATM Coin
CFTC
The Commodity Futures Trading Commission (CFTC) announced the filing of a Complaint in the U.S. District Court for the Eastern District of New York charging Defendants Blake Harrison Kantor, who frequently uses the alias Bill Gordon, and Nathan Mullins, both of New York, and the entities Blue Bit Banc, located in the United Kingdom, Blue Bit Analytics, Ltd. (Analytics) located in Nevis, Turks, and Caicos, and Mercury Cove, Inc. and G. Thomas Client Services (G. Thomas), both New York corporations, with operating a fraudulent scheme involving binary options and a virtual currency known as ATM Coin.
/jlne.ws/2vpgR8t

ESMA updates bonds transparency calculations for MiFID II/MiFIR
ESMA
The European Securities and Markets Authority (ESMA) has updated today its MiFID II/ MiFIR transitional transparency calculations (TTC) for bonds.
/jlne.ws/2HxDcpf

ESAs appoint new members to the Board of Appeal
ESMA
The European Supervisory Authorities (ESAs) have appointed three new members to the Board of Appeal of the ESAs.
/jlne.ws/2qIzW0r

NFA Swap Dealer Regulatory Workshop Registration
NFA
NFA will hold a swap dealer (SD) regulatory workshop at the New York Marriott Downtown in New York, N.Y. on May 9, 2018.
/jlne.ws/2qIKZa0

Investing and Trading

RFRs: Libor is changing!
Chris Barnes – Clarus Financial Technology
ICE are planning to change the calculation methodology for LIBOR.
LIBOR is not currently (April 2018) transaction based – it remains a survey.
ICE would like to change this so that it can be based on transactions, but not all Libor tenors see transactions every day.
There is therefore a new suggested “waterfall” methodology to allow all tenors to be calculated.
ICE have published data comparing LIBOR using both new and old methodologies.
bit.ly/2JYbmAY

Currency trading volumes hit record highs in first quarter
Reuters
Foreign exchange trading volumes rose to a record high in the first three months of the year, data from CLS showed on Thursday, as a rise in volatility from multi-year lows encouraged more buying and selling of currencies.
/goo.gl/m8kQv5

The end is far from nigh for the Faangs era; Regulatory risks will not stop big tech race to give world its first $1tn company
Richard Waters in San Francisco – FT
What do you do if you are a corporate leader and US President Donald Trump is hell-bent on attacking your company?
/jlne.ws/2vqGfKS

Return of US stocks correlation most dramatic since ’87 crash; Three-month correlation of stocks in the S&P 500 index has rocketed to 52%
Robin Wigglesworth – FT
Stock pickers may have started 2018 in an ebullient mood after their strongest performance in eight years, but a dramatic snapback in equity market correlations has once again soured the environment for traditional, active fund managers.
/jlne.ws/2vuVKlf

Big Bad-Volatility Complex Loses Bite as Traders Price in Calm
Dani Burger – Bloomberg
VIX curve falls back into contango in sign of normalcy; New continued high-vol regime “unlikely,” says Goldman
Welcome back, tranquility. The first stages of restored market calm are underway, suggesting that a sky-high Cboe Volatility Index isn’t the new normal, unlike what so many observers warned about after the recent turmoil. Instead, traders are pricing derivatives in a way that suggests equity swings will soon ease even further.
/jlne.ws/2vrReUs

What Happens in Treasuries Doesn’t Stay in Treasuries; The pickup in U.S. funding costs is starting to be felt across the globe.
Marcus Ashworth – Bloomberg
President Donald Trump’s $1.5 trillion of tax cuts have to be funded somehow. Step forward ever more U.S. Treasury bills and notes. As the bulk of the new supply is coming at five-year maturities or less, that’s having a pronounced effect on the U.S. yield curve. And markets on the other side of the world are starting to feel it.
/jlne.ws/2vqASeX

Commodities rocket on $100 oil talk, metals stress
Marc Jones – Reuters
Talk that Saudi Arabia has its sights on $80-$100 a barrel oil again ignited a fierce rally in commodities and resource stocks on Thursday, though the potential boost to inflation globally put some pressure on fixed-income assets.
/goo.gl/QXQev9

Institutions

JPMorgan, Wells Fargo, and Goldman Sachs have made a lot more profit after the financial crisis than before it
Preeti Varathan and Jason Karaian – Quartz
No big bank will remember 2008 fondly. That was the year that Lehman Brothers blew up, subprime mortgage-backed securities soured, and the global financial system was generally brought to its knees. Bailouts and strict new regulations followed, with policymakers pushing to rein in the profitable but risky behavior that flourished before the crash. In the future, banking would be a safer but leaner business.
For some.
/goo.gl/24nsYZ

Matt Zames Named President of Cerberus Capital Management; Private-equity firm names Frank Bruno as co-CEO alongside co-founder Stephen Feinberg
Miriam Gottfried – WSJ
Matt Zames, the former chief operating officer of JPMorgan JPM -0.81% Chase & Co. who was once seen as a possible successor to Chief Executive James Dimon, has been appointed president of private-equity firm Cerberus Capital Management LP.
/jlne.ws/2vtCvs3

BNY Mellon, Under Investor Pressure, Posts 9% Revenue Growth
Charles Stein – Bloomberg
Top-line growth in first quarter exceeds analyst expectations; BNY chief Charles Scharf sees expansion through technology
Bank of New York Mellon Corp. Chief Executive Officer Charles Scharf should be able to keep his doubters at bay — at least for awhile.
/jlne.ws/2vxQOw2

UBS, Credit Suisse Said to Explore Sharing Back-Office Costs
Jan-Henrik Foerster, Patrick Winters
Zurich-based banks said in early-stage talks on cost-sharing; UBS CEO said recently banks can’t afford separate back offices
Credit Suisse Group AG and UBS Group AG are in talks about combining some back-office functions to cut costs, according to people with knowledge of the matter.
/jlne.ws/2vqFrFQ

Blackstone Group’s Assets Jump 22% to Record $450 Billion
Heather Perlberg – Bloomberg
Investors are allocating more capital to firm, CEO says; Firm reports its first quarter inflows at $18.2 billion
Blackstone Group LP just keeps raking in money from investors.
/jlne.ws/2vqCQfl

Deutsche Bank COO Kim Hammonds to leave
Laura Noonan – FT
Deutsche Bank chief operating officer Kim Hammonds has become the latest senior executive to quit the bank.
/jlne.ws/2vtysvR

Morgan Stanley chief hails ‘exceptional’ trading in record profit; Gorman upbeat as bank closes bright Wall Street earnings season
Ben McLannahan – FT
Morgan Stanley posted record quarterly revenues and its best profits for a decade, prompting James Gorman, chief executive, to hail the “exceptional” performance of the bank’s trading arm.
/jlne.ws/2vrhSNf

BAML names new head of EMEA business
Laura Noonan – FT
Bank of America Merrill Lynch’s London-based fixed income boss Bernie Mensah is taking over as president of the bank’s Europe, Middle East and Africa business.
/jlne.ws/2vxjXY8

Regions

Iceland Takes Hard Look at Tech Boom Sparked by Its Cheap, Bountiful Power; Lawmakers rethink whether a proliferation of data centers lured by the island’s Nordic climate and geothermal steam is risking the environment and tourism business
Zeke Turner – WSJ
Steaming geysers, dramatic waterfalls and icy landscapes lure millions of tourists to this country every year. Now its geology is fueling a computer tech boom.
/jlne.ws/2J88tME

Banks Warn Sweden’s Central Bank to Stay Out of Retail Market
Amanda Billner, Rafaela Lindeberg – Bloomberg
Rapid decline in Swedish cash usage now looks to have halted; Banks say e-krona could compete with commercial banks
Swedish central bank in Stockholm. Photographer: Johan Jeppsson/Bloomberg
The Swedish central bank’s deliberation on creating an electronic currency is sounding the alarm at the country’s lenders.
/jlne.ws/2J9eYPk

JPMorgan Asset Management seeks China A-share research edge; Fund manager expands proprietary research coverage in bid to lead the industry
Emma Dunkley – FT
JPMorgan Asset Management is aiming to beat other investment managers in its research coverage of mainland Chinese equities as the country’s share market opens up to overseas investors.
/jlne.ws/2vriSAZ

Brexit

JPMorgan mulls moving 200 bankers to Paris post-Brexit – Les Echos
Reuters Staff
JPMorgan (JPM.N) is considering moving almost 200 banking jobs from London to Paris after Britain leaves the European Union, Les Echos newspaper reported on Wednesday, citing unidentified sources.
/jlne.ws/2JapLsD

Government suffers two Brexit defeats in House of Lords; Peers vote heavily for negotiating new customs union and limiting ministerial powers
Henry Mance – FT
The House of Lords defeated the government in a key Brexit vote on Wednesday, demanding that ministers take steps to negotiate a new customs union with the EU.
/jlne.ws/2JaEfIV

Miscellaneous

London’s skyline is set for a revamp with hundreds of skyscrapers planned over the next decade
Courtney Goldsmith – City AM
London’s skyline is poised for a facelift over the next decade as the capital’s appetite for new skyscrapers strengthens, with more than 500 tall buildings currently in the pipeline.
/jlne.ws/2vrOiXW

The post New SEC broker-dealer rule proposal; Challengers to Libor; VIX-rigging? appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The story of my being awarded the Silver Beaver Award by the Boy Scouts was reported in the Elmhurst Patch, posted by my friend and fellow scouter John Fabry.~JJL

The Magnetar Youth Investment Academy held The Night Out for Financial Literacy fundraiser last evening in Chicago. The academy has served more than 14,000 students at 70 schools in the Chicago area. Chance The Rapper spoke with Magnetar Capital’s founder and CEO Alec Litowitz. When asked what he would have invested in when he was 17 years old, Chance replied that he didn’t have any money to invest then, so “invest in yourself.”~JK

Chance The Rapper created Social Works, an organization that aims to empower young people through arts, education and civic engagement.~JK

If you are looking for a place to start when it comes to developing algorithms, CloudQuant’s Tayloe Draughon recommends downloading Jupyter Notebook so you can start playing with data and learning Python.~SD

CME Group has a video out with George W. Bush talking about the importance of free markets.~SD

On the conference circuit, ISDA’s annual meeting is coming up next week. The week after is OIC in Florida and FIA Law and Compliance in Baltimore. And don’t forget the Fintech Exchange 2018 in Chicago next week.~JJL

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“What’s New is Old and What’s Old is New” – Fred Grede, Bcause
JohnLothianNews.com

Bcause aims to be a full cryptocurrency ecosystem – mining, spot trading and derivatives trading all in one place.

In this video from JLN’s annual series with industry leaders, Bcause President and CEO Fred Grede talks about setting up operations, customer demand and the parallels between cryptocurrency infrastructure and the development of the futures industry.

Watch the video and read the rest here »

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Lead Stories

UK regulators to fine Barclays chief in whistleblowing probe; Decision not to ban Jes Staley leaves FCA and PRA vulnerable to criticism
Caroline Binham, Martin Arnold, Katie Martin and Patrick Jenkins – FT
UK regulators will fine Barclays chief executive Jes Staley after a probe into his efforts to uncover a whistleblower in 2016, but have concluded he will not be banned over the affair.
/jlne.ws/2vvmDWe

Deutsche Bank Flub Said to Briefly Send Away $35 Billion
William Canny – Bloomberg
Most of money quickly returned and no financial harm suffered; Derivatives payments mistake larger than bank’s market value
A routine payment went awry at Deutsche Bank AG last month when Germany’s biggest lender inadvertently sent 28 billion euros ($35 billion) to an exchange as part of its daily dealings in derivatives, according to a person familiar with the matter.
/jlne.ws/2vsbqpq

Wells Fargo Said to Be Target of $1 Billion U.S. Fine
Emily Flitter and Glenn Thrush – NY Times
An expected $1 billion penalty against Wells Fargo would mark the toughest action that the Trump administration has taken against a major bank. Credit Daniel Tepper/Bloomberg
Federal regulators are poised to impose a $1 billion fine on Wells Fargo for years of selling unnecessary products to customers, the toughest action by the Trump administration against a major bank.
/jlne.ws/2vxXom2

Ion confirms approach for Fidessa
Philip Stafford – FT
The battle for Fidessa, the UK trading software group, moved up a notch after Ion Investments said it had approached the FTSE 250 group with a potential offer that would trump an agreed £1.4bn bid with Switzerland’s Temenos.
/jlne.ws/2vsgUjT

Alpha males hurt alpha: Hedge fund managers with high testosterone lag
Leslie Picker – CNBC
After years of underperformance, researchers may have discovered what’s plaguing the hedge-fund industry: too much testosterone.
Hedge-fund managers with high testosterone underperform those with low testosterone by 5.8 percent each year, according to a study conducted by University of Central Florida and Singapore Management University.
/cnb.cx/2JZqU7r

Mifid II author warns Brexit could undo years of financial reform; ‘All the work we’ve done over the last decade is in danger of being lost,’ says MEP Kay Swinburne
Samuel Agini – Financial News
A leading European politician who spent the best part of a decade helping to shape post-crisis financial regulation has warned that Brexit risks reversing much of what makes markets safer today.
/jlne.ws/2vvifGD

Goldman’s Unconvincing Defense of Active Fund Managers; Goldman Sachs analysts say active fund managers are rather good stock-pickers.
Jacky Wong – WSJ
Actively managed mutual funds have been on the retreat in recent years thanks to the onslaught of cheaper funds which simply track indexes. Goldman Sachs, however, has come to the maligned active managers’ defense, arguing they are actually rather good stock-pickers.
/jlne.ws/2vqQ6Aq

Sweden’s Very Own Bitcoin. What Could Possibly Go Wrong?; Don’t expect central banks to go digital in a hurry.
Lionel Laurent – Bloomberg
The finance industry’s attitude to automation and technical innovation resembles the old song lyric: “Everybody wants to go to heaven, but nobody wants to die.”
/jlne.ws/2J9xy9Q

How Switzerland Lost a Currency Battle, but Won the War
Brian Blackstone and Pat Minczeski – WSJ
The euro briefly exceeded 1.20 Swiss francs Thursday and again early Friday, a level it hasn’t reached in over three years, marking a milestone for Switzerland’s economy that was battered, but not broken, by its strong currency.
/jlne.ws/2JagW1H

Wanted: New Home for a Lot of Russian Aluminum; U.S. sanctions leave Rusal with few buyers to absorb the metal
David Hodari – WSJ
Aluminum from United Co. Rusal , 0486 -7.26% the recently sanctioned Russian miner, is looking for a new home. But nobody knows where that home can be.
/jlne.ws/2J6V07J

Japanese equity funds suffer worst outflow in 17 years; More than $5bn pulled as investors seek risk in switch to EM equities and junk bonds
Nicole Bullock in New York – FT
Japanese equity funds posted their biggest net outflow since 2001 as investors regained their taste for risk assets in the past week and directed cash to emerging market equities and junk bonds.
/jlne.ws/2vvnciO

Hong Kong exchange hopes Xiaomi leads army of blockbuster IPOs; Relaxed listing rules aim at ‘innovative’ companies despite governance concerns
Emma Dunkley in Hong Kong – FT
Chinese technology giant Xiaomi is readying flotation plans as Hong Kong Exchanges and Clearing (HKEX) unveils major changes to its listings rules with the aim of winning a string of blockbuster initial public offerings with multibillion-dollar valuations.
/jlne.ws/2Jdd2W3

Exchanges, OTC and Clearing

SGX reports 3Q FY2018 net profit of S$100 million
SGX
Singapore Exchange (SGX) today reported 3Q FY2018 net profit of S$100.5 million (S$83.1 million), on the back of revenues of S$222.2 million (S$202.7 million). Operating profit was S$117.9 million (S$102.9 million), with earnings per share at 9.4 cents (7.8 cents). The Board of Directors has declared an interim dividend of 5 cents (5 cents) per share, payable on 8 May 2018.
/jlne.ws/2vtBZKT

SGX welcomes SLB Development Ltd to Catalist
SGX
Singapore Exchange (SGX) today welcomed SLB Development Ltd to its Catalist under the stock code “1J0”.
/jlne.ws/2JbGfR6

SGX welcomes Asian Healthcare Specialists Limited to Catalist
SGX
Singapore Exchange (SGX) today welcomed Asian Healthcare Specialists Limited to its Catalist under the stock code “1J3”.
/jlne.ws/2vuWt5N

Serviceware SE new at the Frankfurt Stock Exchange; Software companies listed in Prime Standard
Deutsche Bˆrse Group
With the Serviceware SE (ISIN: DE000A2G8X31) today the next company went to the Frankfurt Stock Exchange. The shares of the software provider from Bad Camberg in the Hesse were listed in the Prime Standard and listed at the start of trading at 24.005 euros. The issue price was EUR 24.00, the issue volume of the IPO at EUR 88.9 million.
/jlne.ws/2vAhjAU

Review of connectivity pricing due to the introduction of partition-specific gateways
Eurex
With this circular, Eurex Frankfurt AG (EFAG) announces changes to the Price List to the Agreement on the technical connection and the utilization of the Trading System of Eurex Deutschland (Connection Agreement) with effect from 1 June 2018.
/jlne.ws/2vtwUSy

Moscow Exchange trading schedule over May holidays
MOEX
Moscow Exchange announces the trading schedule for its markets over the May public holiday period. On holidays, 30 April and 2 May, the FX, Precious Metals, Equity & Bonds, Money and Derivatives Markets will be open.
/jlne.ws/2JbMsMU

Moscow Exchange Signs Memorandum Of Understanding With Shanghai Gold Exchange
MondoVisione
On 19 April 2018, Moscow Exchange signed a Memorandum of Understanding (MOU) with Shanghai Gold Exchange (SGE). The agreement aims to promote cooperation between China and Russia in the sphere of gold exchange trading.
/jlne.ws/2JaMYe8

Fintech

Veronica Augustsson: At the Crossroads of Business and Technology
Victor Anderson – WatersTechnology
Veronica Augustsson assumed the reins at Cinnober at the age of 33. That she was young, relative to other heads of large third-party technology firms, is not the only noteworthy feature of her rise through the Cinnober ranks. She had also spent almost her entire working life at the firm, joining as a programmer shortly after completing her master’s degree at the KTH Royal Institute of Technology in Stockholm, although the initial part of her career in technology did have its trials.
bit.ly/2HbhqYN

Fintech firms irked at RBI’s order to store payments data in India
Mayank Jain – Business Standard
Indian financial technology companies don’t seem to catch a breath. Even as firms operating in the financial space were coming to terms with know-your-customer norms, the Reserve Bank of India’s (RBI’s) directive to store all financial data in India has made them even more resentful of the regulatory environment in India.
/jlne.ws/2vuPslu

BT Radianz Cloud adds Vela’s market data feed; Vela’s SuperFeed provides market data on 100 global venues including Cboe, Nasdaq, London Stock Exchange and Euronext.
Hayley McDowell – The Trade
BT Radianz Cloud has connected to a market data feed designed and operated by trading technology provider Vela.
/jlne.ws/2JdqqcJ

Cryptocurrencies

Silicon Valley Is Into Bitcoin. It Wants to Keep Washington Out.
Gabriel T. Rubin and Dave Michaels – WSJ
Big Silicon Valley backers of cryptocurrencies have sought a broad exemption from federal oversight they say would slow digital coin growth, as the industry steps up lobbying to limit government oversight of the burgeoning world of cryptocurrencies.
/on.wsj.com/2HA8ETM

Crypto Funds Drop 29.2% in March Reveals Hedge Fund Data Specialist
Avi Mizrahi – Bitcoin.com
Hedge fund data specialist Barclay Hedge released its newest index, the Cryptocurrency Traders Index, showing that players in the field dropped 29.2% in March 2018. And year to date, it is down 43.1% after three consecutive monthly losses. The researchers explain that the new tool is an equal-weighted index of the monthly returns of a representative universe of 19 constituent funds that trade bitcoin and other cryptocurrencies, starting Jan 1st 2018.
bit.ly/2qKjqx4

Crypto exchange Unocoin to challenge RBI over access to banking services
Rajesh Bhayani – Business Standard
Bengaluru-based Unocoin, one of the largest crypto currency exchanges in India, is considering challenging the Reserve Bank of India’s notification asking banks and other regulated entities to disassociate with crypto currency service providers, including exchanges. Unocoin is a multi-crypto currency exchange.
/jlne.ws/2J9DoYO

Cryptocurrency is becoming mainstream and professional accountants need to better understand digital money
Helen Brand – City AM
Anyone who works in the City, or any finance related field, will already have faced plenty of questions from family, friends, and clients about bitcoin.
/jlne.ws/2vB0p4S

Cryptocurrency exchange owner slams Schneiderman
Kevin Dugan – NY Post
Take a hike, Eric. The owner of a virtual currency exchange on Thursday hit back at New York Attorney General Eric Schneiderman’s attempt to collect regulatory info from 13 of the largest exchanges doing business in the state. Jesse Powell, the chief executive of Kraken, a San Francisco cryptocurrency exchange, blasted the AG’s 34-question survey, saying in a tweet, “The placative kowtowing toward this kind of abuse sends the message that it’s ok. It’s not ok. It’s insulting.”
/jlne.ws/2vtAoVp

Crypto Exchange Binance Denies It Will Introduce Dollar Trading
Benjamin Robertson, Yuji Nakamura – Bloomberg
Binance, the world’s biggest cryptocurrency exchange by traded value, denied reports that it will allow users to buy digital tokens with dollars. The reports are “fake news,” a spokeswoman said by email.
/jlne.ws/2vwzE1x

The SEC Subpoenas Controversial Company Riot Blockchain – The Merkle
Steve Kaaru – The Merkle
The U.S. Securities and Exchange Commission has issued a subpoena to controversial Riot Blockchain, a company that has been in the news more often than it would wish. The Castle Rock, Colorado-based company made the disclosure in its annual report in which it listed internet retailer Overstock as one of its biggest competitors. The subpoena was not a big surprise to many, given the SEC’s promise early this year that it would investigate companies that had switched to crypto-related activities in recent times to take advantage of the heightened investor interest in the industry.
bit.ly/2qMSAV3

JPMorgan, National Bank of Canada, others test debt issuance on blockchain
Anna Irrera – Reuters
JPMorgan Chase & Co (JPM.N) has tested a new blockchain platform for issuing financial instruments with the National Bank of Canada and other large firms, they said on Friday, seeking to streamline origination, settlement, interest rate payments and other processes.
/jlne.ws/2vAnbdq

Bitcoin Whale Sightings Are Leaving Cryptocurrency Traders Jumpy
By Janine Wolf – Bloomberg
Occasional sighting of Bitcoin whales are leaving advocates of the biggest cryptocurrency anxious after what’s already been a choppy week of trading.
/jlne.ws/2vy5qLK

Politics

From Cable TV to White House: Lawrence Kudlow’s Candid Style Marks Transition; Sanctions flap highlights challenges of working with a president who likes to go off script
Peter Nicholas and Nick Timiraos – WSJ
Riding a van back to Mar-a-Lago after a news conference this week, White House officials told economic adviser Lawrence Kudlow that he had just said something bound to produce some unwanted headlines.
/jlne.ws/2J6V6fB

Trump Criticizes OPEC, Calling Oil Prices ‘Artificially’ High
Prashant S. Rao and Stanley Reed – NY Times
President Trump railed against the OPEC oil cartel on Friday, declaring that the group of oil producers had “artificially” raised oil prices and warning that such efforts would “not be accepted!”
/jlne.ws/2vy2i2s

Regulation

Federal Court orders wind up of illegal land banking investment scheme and its operator
ASIC
ASIC has today obtained orders from the Federal Court to wind up an illegal investment scheme known as the VKK Investments Unit Trust (VKK scheme), as well as the trustee and operator of that scheme, Gem Management Group Pty Ltd (Gem).
/jlne.ws/2vwDGXJ

The FCA is cracking down on “irredeemable” preference shares after Aviva scandal
Lucy White – City AM
The City watchdog has announced today it is cracking down on “irredeemable” preference shares, as many investors may not be aware of the risks they carry.
/jlne.ws/2vtwM5w

Podcast: CFTC Talks EP030: CFTC Director of Enforcement James McDonald
CFTC
This week on CFTC Talks, we bring on CFTC Director of Enforcement James McDonald. We cover the DOE’s approach to precious metals, enforcement of the CEA and recent cases.
/jlne.ws/2Ja06Qv

Japan’s Financial Services Agency: Invitation For Public Comments Regarding The Working Group On Corporate Disclosure Of The Financial System Council
MondoVisione
With great changes in the economic conditions surrounding Japanese listed companies and investors, it is essential to ensure appropriate disclosure and provision of corporate information that would promote investors’ investment decisions and constructive dialogues between investors and companies to accomplish a virtuous circle that would bring about the fruits of corporate value and its profitability for household economies through the robust functioning of the capital markets. From this viewpoint, the Working Group on Corporate Disclosure of the Financial System Council has been considering the contents to be disclosed and the means by which corporate information should be provided since last December.
/jlne.ws/2vy2zT2

Investing and Trading

With World’s Biggest FX Trade Shackled, Investors Get Creative
Katherine Greifeld – Bloomberg
Euro-dollar exchange rate locked in 4-cent range since January; Traders forced to look further afield for ways to make money
The world’s most widely traded currency pair is stuck in its deepest rut since 2014. With few signs it’s poised shake the malaise anytime soon, traders are being forced to get creative.
/jlne.ws/2J9kVvA

After 95% Stock Plunge, Steinhoff Finally Faces Angry Investors; Frustrated shareholders to seek clarity on retailer’s accounts at annual general meeting in Amsterdam
Janice Kew – Bloomberg
When Steinhoff International Holdings NV held its annual general meeting a year ago, the company had a market value of about 20 billion euros ($25 billion). Now it’s less than 1 billion euros.
/jlne.ws/2vun2Iq

Institutions

ETFs growth threatened by lack of consolidated tape; Senior market participants at the ETFs Global Markets Roundtable in London this week discussed the importance of a consolidated tape for the industry.
Hayley McDowell – The Trade
The sustained growth levels of the exchange-traded fund (ETF) industry could be under threat due to a lack of a consolidated tape, according to several senior market participants.
/jlne.ws/2vuOy8A

Barclays CEO Survives Whistle-Blowing Probe With Only a Fine
Stephen Morris – Bloomberg
Regulators to fine Jes Staley for acting without skill or care; Board continues to have “unanimous confidence” in its CEO
Barclays Plc Chief Executive Officer Jes Staley survived a year-long regulatory probe into his attempts to unmask a whistle-blower, escaping with a fine instead of losing his job.
/jlne.ws/2JaeoAF

Hedge Fund Titans Pull Money From Funds to Pay Massive Tax Bills
Katherine Burton – Bloomberg
Einhorn, Paulson, Cohen among those who dipped into holdings; Rule change tied to offshore funds meant hit for 2017
Hedge-fund billionaires were already struggling to keep investors from heading out the door. Then along came another problem: big tax bills.
/jlne.ws/2vunhmO

SunTrust says ex-employee may have leaked information on 1.5 mln clients
Reuters Staff
SunTrust Banks Inc on Friday said a former employee may have attempted to download information on nearly 1.5 million clients and share the information with a criminal third-party.
/jlne.ws/2vy1J8Q

HSBC to stop financing most new coal plants, oil sands, arctic drilling
Reuters Staff
Europe’s largest bank HSBC said on Friday it would mostly stop funding new coal power plants, oil sands and arctic drilling, becoming the latest in a long line of investors to shun the fossil fuels.
/jlne.ws/2JbMlRu

Custody bank State Street’s profit rises 36 pct
Reuters Staff
Custody bank State Street Corp reported a 36 percent rise in first-quarter profit on Friday, helped by strong asset servicing and management fees.
/jlne.ws/2Jbnm0z

Regions

China Wants Prices Just Right for Tech Listings Lured Home; Officials are working to reverse a long-standing trend of marquee companies listing overseas
Chao Deng – WSJ
China’s government wants Alibaba Group Holding Ltd. BABA -0.71% and other Chinese tech giants listed abroad to trade on the nation’s stock markets. Now regulators are trying to figure out how to do that without seeing those shares fall too low or soar too high.
/jlne.ws/2J7nKNu

Hong Kong Currency Defense Kills Fixed-Rate Mortgage Market
Alfred Liu – Bloomberg
Bank of East Asia is latest lender to stop offering the loans; Some banks ‘were probably losing money already’: analyst
Hong Kong’s banks, blindsided by rising funding costs due to the city’s costly defense of its currency peg, are clamping down on popular fixed-rate mortgages.
/jlne.ws/2vAUXPs

Brexit

Brexit details taking too long to agree, warns City chief; Call to look at fallback options owing to ‘hard boiled attitudes’ in EU
Oliver Ralph and Caroline Binham in London – FT
The British government is taking too long to thrash out the details of the UK’s future relationship with the EU, a Commons select committee has been told.
/jlne.ws/2JbgdgL

Lurpak Butter Maker Says Brexit Is Forcing $500 Million Cost Cut
Peter Levring – Bloomberg
Arla Foods, the maker of Lurpak butter, said it needs to save at least 400 million euros ($500 million) because currency losses soared after Britain voted to leave the European Union.
/jlne.ws/2JcnxZo

Brexit divorce bill could surpass £39bn, warns Whitehall watchdog; Extra £3bn budget payout and $2.9bn overseas aid fund would raise May’s estimate, says NAO
Rajeev Syal – The Guardian
The cost of the Brexit divorce bill for the UK could be billions higher than the £35bn-£39bn figure put forward by Theresa May, a report by Whitehall’s spending watchdog suggested.
/jlne.ws/2JbXGRE

The post UK regulators to fine Barclays chief; Deutsche Bank’s flub; Wells Fargo $1b fine appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

JLN Readers interested in the Crypto Evolved event in New York on June 27 from Viable Markets may receive a 10% discount when they register using THIS LINK before April 30th. Limit of 50 tickets at that price.~JJL

The SEC tracks the number of cyber actions it has taken since 2012. To date, it has opened 15 digital currency/ICO cases, 13 trading suspension cases, 4 hacking/insider trading cases, 4 market manipulation cases, 3 account intrusion cases and 2 customer information safeguard cases.~JK

Business Insider reported “Being outside can improve memory, fight depression, and lower blood pressure — here are 12 science-backed reasons to spend more time outdoors.” Now you know why I go camping. It is good for you!~JJL

ISDA’s 33rd Annual General Meeting in Miami has added new speakers. The conference is April 24-26, 2018.~JJL

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Cybersecurity and Technology Upgrades – John Davidson, OCC

JohnLothianNews.com

The OCC is in the process of making what is a big decision for a systemically important financial market utility (SIFMU) – how to best upgrade a tech stack responsible for clearing millions of options and futures contracts daily.

In this video from JLN’s annual series with industry leaders, OCC President and Chief Operating Officer John Davidson talks about how the OCC is weighing its cloud vendor options, addressing cybersecurity concerns and the regulatory initiatives on the road ahead.

Watch the video and read the rest here »

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Western & Southern Life First Insurance Company to Join and Trade on the AFX;
AFX also announced record trading day
AFX
The Western and Southern Life Insurance Company (Western & Southern Life) joined the American Financial Exchange (AFX), becoming the first insurance company to join and trade on the Exchange. AFX is an electronic exchange for direct interbank lending and borrowing for American financial institutions. AFX also announced a record day of trading on April 17, with $798 million transacted on the platform.
tinyurl.com/y6vx8tn2

**** Who can say no to Doc Sandor?~JJL

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Actual Delivery, Manipulative or Deceptive Devices; NY AG Sweep; ATS Breakdown
Gary DeWaal – Bridging the Week
A California federal court may be poised to dismiss an enforcement action brought by the Commodity Futures Trading Commission that could challenge the agency’s view of when financed sales of commodities to retail persons are subject to its oversight, as well as the circumstances when the Commission may bring an enforcement action against a person for purported fraud, relying on a Dodd-Frank provision of law that prohibits the use or employment of any manipulative device, scheme or artifice to defraud. Separately, the New York Attorney General’s office asked 13 cryptocurrency exchanges to disclose a trove of information about their operations, when only five of the enterprises have ever obtained authority to conduct a virtual currency business from or to persons in the state. As a result, the following matters are covered in this week’s edition of Bridging the Week:
bit.ly/15ZyR7H

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The Spread – Week of 4/16 to 4/20

JohnLothianNews.com

The options industry just got a new jewel – MIAX announced it would launch MIAX Emerald last week. For more on that and other stories from last week, check out this new edition of The Spread.

Watch the video and see the stories referenced here »

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Richard Jenrette, Co-Founder of DLJ Investment Bank, Dies at 89
Laurence Arnold – Bloomberg
Richard Jenrette, a co-founder of the first New York Stock Exchange member to go public, the investment bank Donaldson, Lufkin & Jenrette, has died. He was 89.
/jlne.ws/2qRzayt

***** A legend is lost.~JJL

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A Fake-News Warning From a Former Propagandist; Why readers shouldn’t underestimate the power of disinformation.
Faye Flam – Bloomberg
From pizza-parlor pedophilia rings to Sharia law in Florida, 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.
/jlne.ws/2vCI2gb

***** Lying made into an art and business.~JJL

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Friday’s Top Three
Friday’s top read story was the FT’s piece Ion reaches £1.5bn deal to buy Fidessa. Second went to Bloomberg’s Deutsche Bank’s Bad News Gets Worse With $35 Billion Flub. Third went to Bloomberg’s Four Harvard Students Jump Into the Crypto Hedge-Fund Craze

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MarketsWiki Stats
124,163,969 pages viewed; 23,080 pages; 212,841 edits
MarketsWiki Statistics

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Lead Stories

A Former Top Wall Street Regulator Turns to the Blockchain
Nathaniel Popper – NY Times
Gary Gensler was one of the top financial regulators in the Obama administration, the finance chief for Hillary Clinton’s 2016 presidential campaign and, before both of those jobs, a partner at Goldman Sachs.
/jlne.ws/2HFVXqy

***** Gensler is also rumored to be headlining a new TV show “Dancing with Blockchain.”~JJL

Fidessa dumps Temenos in favour of £1.5bn Ion offer; Deal highlights private equity’s growing interest in financial trading assets
Philip Stafford – FT
Fidessa, the UK financial technology group, has ditched a deal with Temenos of Switzerland in favour of a higher offer worth £1.5bn from the privately owned Ion Investment Group.
/jlne.ws/2HFZtBg

Kraken Defies N.Y. Attorney General’s Cryptocurrency Inquiry
Matthew Leising – Bloomberg
AG requested information from 13 crypto exchanges this week; Crypto chief Jesse Powell dismisses request as ‘insulting’
Kraken, one of the longest-running cryptocurrency exchanges, said its New York registration as a money-services business won’t affect its decision to ignore a request from the state’s top lawyer for detailed information about its operations.
/jlne.ws/2HFyyp5

Life after Libor: BoE takes on Sonia benchmark oversight
Philip Stafford – FT
A regulatory push to wean London markets off the scandal-hit Libor interest rate benchmark entered a new era on Monday after the Bank of England took on the responsibility for overseeing its preferred alternative.
/jlne.ws/2qRejLD

Investors’ New Headache: It’s Getting Harder to Buy or Sell When They Want; Worsening liquidity comes as banks have reduced inventory of riskier assets and investors more closely track bond indexes
By Gunjan Banerji and Sam Goldfarb – WSJ
Investors are having a tougher time trading in a number of financial markets, a development that is weakening their ability to raise cash or to protect against big stock declines.
/jlne.ws/2qQCRUR

A secretive high-speed trader is providing college kids with a ‘launch pad’ to build cryptocurrency companies
Frank Chaparro – Business Insider
Jump Trading is making cryptocurrency a big focus for its venture capital spin-off in 2018, and is bringing in college kids as part of the effort.
/jlne.ws/2vCkV5j

The Man Who Could Eat Half the Profit in Fund Management; A Q&A with the former CEO of AllianceBernstein and pay-for-alpha proponent.
Mark Gilbert – Bloomberg
In June 2016, he laid bare the asset management industry’s dirty little secrets: actively managed products haven’t performed better than their benchmarks; firms have grown too big as they focus on gathering assets; and fees have been structured to benefit shareholders rather than clients. That message proved unpalatable. Within a year, Peter Kraus was out as chief executive officer of AllianceBernstein Holding LP.
/jlne.ws/2vDfMtU

Bond Traders Have Lost Their Legendary Nerve; Maybe all this inflation angst is misguided.
Robert Burgess – Bloomberg
Few things strike fear in the hearts of grizzled bond traders like the whiff of inflation. They can deal with rising interest rates — remember then-Federal Reserve Chairman Alan Greenspan’s conundrum? — but there’s nothing they can do to prevent faster inflation from eroding the value of their fixed-interest payments over time and making the bonds they hold worth much less.
/jlne.ws/2HKQIFW

Banks aim to secure London jobs with back-to-back trading; Investment banks more confident that European regulators will concede ground on where risk is managed
Laura Noonan and Patrick Jenkins in London – FT
London-based investment banks are increasingly hopeful the European Central Bank will allow them to use “back-to-back” securities arrangements to manage the majority of trades in EU operations out of their existing London bases.
/jlne.ws/2vCNcZB

Securities lending proves lucrative as investors aim for alpha; Some pension schemes see the complexities as inadequate for the risk
Chris Flood – FT
Think of a global industry that generated revenues of $9.2bn last year and that plays a critical role in ensuring the efficiency of financial markets but rarely merits a mention in the mainstream press.
/jlne.ws/2vySwNm

Exchanges, OTC and Clearing

NYSE: What’s a girl got to be scared of?
Jennifer Bissell-Linsk – FT
The thing about art is that you can read into it whatever you want.
/jlne.ws/2vEZHUk

Rusal and the London Metal Exchange: a relationship explained; Sanctions on Russian aluminium producer has posed tricky questions for the LME
Henry Sanderson – FT
The sanctions on Russian aluminium producer Rusal have led to a rush to withdraw metal from the London Metal Exchange, the world’s largest metals exchange.
/jlne.ws/2qTGdXl

VIX 101: How the Volatility Gauge Works; The Cboe Volatility Index has become well known in trading circles as Wall Street’s “fear gauge”
Gunjan Banerji – WSJ
The Cboe Volatility Index, or VIX, has become well known in trading circles as Wall Street’s “fear gauge.” The gauge is supposed to be a barometer of investor expectations for stock-market turbulence 30 days out in the future. Here’s how it works: it takes the prices for a wide range of S&P 500 index options contracts, then inputs the prices into a complex formula that generates its level.
/jlne.ws/2qR2sgv

Pivotal Software Marks IPO and First Day of Trading on New York Stock Exchange
iCE
Pivotal Software, Inc. (NYSE: PVTL) opened for trading today on the New York Stock Exchange (NYSE) under the ticker symbol “PVTL” following its initial public offering. Pivotal Software has a leading cloud-native platform, which accelerates and streamlines software development and modernizes legacy applications.
/jlne.ws/2qOUZ1G

EEX and IncubEx Extend Partnership to North America, Nodal Exchange to List Environmental Products
Business Wire
European Energy Exchange (EEX) and IncubEx are pleased to announce the expansion of their partnership into North America via EEX Group’s US-based platform Nodal Exchange. The global cooperation agreement between EEX and IncubEx, which started in August 2017, aims to build and improve liquidity in environmental and other contracts globally.
/jlne.ws/2HHNenB

Fintech

Fidessa withdraws from Temenos deal for £1.5 billion ION takeover; Fidessa has reached an agreement with ION Investment Group two months after it agreed to Temenos acquisition.
By Hayley McDowell – The Trade
Fidessa has agreed to terms of a £1.5 billion all cash offer by ION Investment Group’s ION Bidco subsidiary, overturning its earlier recommended acquisition by Temenos.
/jlne.ws/2qRKf2x

Fidessa launches next generation Solace integration; Bridges enterprise systems and Fidessa hosted infrastructure
Fidessa
As part of its new approach for top tier trading firms, Fidessa group plc (LSE: FDSA) today announced the availability of a native Solace adapter which boosts throughput and resilience between Fidessa applications and customer firms’ Solace messaging infrastructure.
/jlne.ws/2vywfzk

Crèdit Andorrà Financial Group Selects NICE Actimize to Strengthen its Global Anti-Money Laundering Solutions Strategy; Relying on NICE Actimize’s depth of global AML experience, Crèdit Andorrà is working to protect its network of institutions from reputational risk
Crèdit Andorrà Financial Group
Facing the complexities of global regulations, Crèdit Andorrà Financial Group has selected NICE Actimize, a NICE (Nasdaq:NICE) business and the leader in Autonomous Financial Crime Management, to strengthen its anti-money laundering solutions strategy. Crèdit Andorrà Financial Group, the benchmark bank in Andorra, will integrate a suite of NICE Actimize anti-money laundering solutions into its financial crime operations in order to more effectively address the world’s anti-money laundering regulations. Crèdit Andorrà’s holdings include financial institutions in Luxembourg, Panama and Spain, as well as a United States-based broker-dealer.
/jlne.ws/2qN0v4P

RegTech startup ClauseMatch raises EUR5 million
Finextra
RegTech startup ClauseMatch has raised $5 million to boost its mission to help financial institutions keep pace with the “broken” regulatory system, in a Series A round led by Index Ventures.
/jlne.ws/2HGRvYt

ION plans job cuts after beating Temenos with £1.5bn Fidessa offer; Trading technology is set for change with the combination of London-listed Fidessa and Ireland’s ION
By Samuel Agini – Financial News
Fidessa, the London-listed trading technology company, has accepted a deadline-day bid from Ieland-headquartered ION Group, breaking a previous takeover agreement with Swiss firm Temenos.
/jlne.ws/2HM7bd5

Cryptocurrencies

Cryptocurrencies Like Bitcoin Can’t Replace the Dollar, Says New York Fed Chief Nominee; As the price of Bitcoin jumps, San Francisco Federal Reserve President John Williams says its not a currency. Rob Kim Getty Images
Lucinda Shen – Fortune
Twitter CEO Jack Dorsey predicted that Bitcoin will eclipse all the world’s currencies in around 10 years .
/jlne.ws/2vAdhsd

LedgerX’s Bitcoin Derivatives Trading Is Up 7X Since Launch
Nikhilesh De – Coindesk
Bitcoin trading platform LedgerX has seen a sevenfold increase in volume in the six months following its launch of cryptocurrency derivatives.
/jlne.ws/2vIL3LI

Blockchain: an overview; Blockchain, like the internet, is a revolutionary technology that is most likely here to stay, writes Demelza Hays
London School of Economics and Political Science
During the late 1990s, investors were eager to invest in any company with an Internet-related name or a “.com” suffix. Today, the word “blockchain” has a similar effect. Like the Internet, blockchains are an open source technology that becomes increasingly valuable as more people use it due to what economists call “the network effect”. Blockchains allow digital information to be transferred from one individual to another without an intermediary. Bitcoin was the first use of the blockchain technology. However, the volatility, transaction fees, and uncertain legal framework have stalled bitcoin’s widespread adoption.
/jlne.ws/2vI1GHG

Blockchain: Opening the Door to a New Media Era
Medium
We are entering an exciting new era where businesses founded on blockchain technology are disrupting existing ecosystems and creating new business models. According to recent Deloitte research and analysis, one industry experiencing significant disruption in today’s digital arena is media. This comes as a result of the increasing “commoditization” of content, which is being undermined by the rise in digital piracy. In the new crypto-economy such challenges can now be met with micropayment-based transaction models, airtight security protocols, monetization of P2P content sharing and the ability to link media usage to specific content.
bit.ly/2HGfWW9

‘The market is robust:’ Goldman Sachs-backed Circle doubles minimum bitcoin trade size to $500,000
Frank Chaparro – Business Insider
Trading activity at one of the largest cryptocurrency trading shops is picking up despite a lull across exchanges that trade crypto.
/jlne.ws/2HInLuo

‘Uncertain’ Crypto Mining Demand Sees Taiwan Chipmaking Giant Lower Revenue Estimates
Gerelyn Terzo – Yahoo Finance
Uncertainty in the cryptocurrency mining market has led to the world’s leading chipmaker, Taiwan Semiconductor, to lower its revenue forecast for the year. Adding insult to injury, weakness in demand for Apple’s iPhone, for which Taiwan Semi is the supplier, is also weighing on this year’s expected sales.
Meanwhile, bitcoin mining was the champion of 2017, helping to drive Taiwan Semi’s 2017 revenue results higher by 6%, including a 10.1% increase in the fourth quarter alone. Now volatility in the bitcoin price, which has cut into miners’ profits, is taking its toll.
/yhoo.it/2HGhrUh

The Blockchain on the High Seas; You can’t revolutionize the shipping industry if everyone’s using a different blockchain system.
Matt Levine – Bloomberg
Here’s a story about how the shipping industry, which “still relies on millions and millions of paper documents,” is pushing to get shippers, customers, banks, insurers, port authorities and others to stop filling out forms on paper and start filling them out on websites instead:
/jlne.ws/2qSkLC1

Third Centra Tech Founder Faces Charges Over Coin Offering
Christie Smythe, Chirs Dolmetsch – Bloomberg
Raymond Trapani arrested in fraud and conspiracy case; Cryptocurrency launch was promoted by boxer Floyd Mayweather
The co-founder of cryptocurrency firm Centra Tech Inc. was arrested on charges that he duped investors into committing more than $25 million to the company by lying about an initial coin offering.
/jlne.ws/2HG1Q78

Wikileaks Claims Coinbase Has Shut Down Its Online Store’s Bitcoin Account
David Z. Morris – Fortune
Wikileaks’ official online merchandise store claims that its account with Coinbase has been suspended by the cryptocurrency exchange. Wikileaks, a leaked documents depository that was central to a long string of international scandals even before the 2016 presidential election, is now calling for a boycott of Coinbase.
/jlne.ws/2HIMej3

Meet the crusader who is trying to convince the world that cryptocurrency is necessary
Chris Carter – City AM
Charles Hoskinson is a peculiar protagonist for a revolution. The American does not look much upon introductions. When one envisions a billionaire, an image not dissimilar to a sharp-suited Gordon Gekko of Wall Street ordinarily springs to mind. In Hoskinson’s case, he seems positively the opposite.
/jlne.ws/2HIYOz2

India’s central bank has been taken to court over its cryptocurrency crackdown
Nupur Anand – Quartz India
India’s complicated relationship with virtual currencies and firms dealing with them has now reached the courts.
/jlne.ws/2HEg1cX

Kraken’s Position on Regulation
Kraken
Since 2011, Kraken has been a leader in the industry, actively developing and driving multiple self-regulatory organizations (DATA, JADA), and working with regulators to enact fair and effective rules to govern the evolving blockchain industry. In fact, had we not laid off half the team in 2014, our legal bills would have bankrupted the company. As a startup (and hodler), lawyers are the last thing you want to be spending money on but we started this business because we wanted to do things differently. We left our cushy jobs as founders of another successful company out of an ideological motivation to build that legitimate, professional exchange which would be capable of bridging crypto with traditional financial institutions and bringing it to the mainstream. That is still our mission today. It is a mission that we can’t accomplish without working with regulators.
/jlne.ws/2qRvsox

Someone transferred $99 million in litecoin — and it only cost them $0.40 in fees
Oscar Williams-Grut – Business Insider
A huge litecoin trade is turning heads in the cryptocurrency community. $99 million-worth of litecoin was sent between two cryptocurrency wallets in a single trade on Thursday, attracting attention on Reddit. The identity of the parties involved in the transaction is not known.
/jlne.ws/2qRCzxh

Russian Farmer Alters Rural Economy With Virtual Currency, as Moscow Watches Warily; Cryptocurrency begun by ‘agro-anarchist’ becomes a tender for transactions from milk to tractors in a region Russia’s energy boom left behind
Thomas Grove – WSJ
Farmer Mikhail Shlyapnikov says the best way to revive the ailing economy in this remote village is cutting financial ties to Moscow.
/jlne.ws/2qXelll

Politics

Sean Hannity Isn’t A Journalist And Fox News Isn’t News
Neil J. Young -Huffington Post
Earlier this week, Fox News declared its “full support” for Sean Hannity after it was revealed the conservative commentator was also a client of Michael Cohen, President Donald Trump’s personal attorney.
/jlne.ws/2vAcebL

Wells Fargo Fine Puts Fresh Focus on Power of Trump Tweets
Jesse Hamilton – Bloomberg
President threatened risk of ‘substantially’ increased penalty; Regulators he appointed came through with $1 billion sanction
For years, Republican lawmakers and regulators have groused about big corporate fines, arguing that they mostly punish blameless shareholders, not the executives who are responsible for misconduct.
/jlne.ws/2vFDrdb

Targeting specific trade deficits is a game of whack-a-mole; It is a fallacy that countries lose out unless their exports exceed their imports
Maurice Obstfeld – FT
Fears of escalating trade disputes hung over last week’s IMF-World Bank spring meetings.
/jlne.ws/2qQXRLg

Trump Stress-Tests the World Economy; The biggest risk to global growth comes from the U.S.
Editorial Board – Bloomberg
Taking stock of the global economy as finance ministers and central-bank governors gathered in Washington for its spring meetings, the International Monetary Fund found reason for concern. “[R]isks beyond the next several quarters clearly lean to the downside,” it reports.
/jlne.ws/2vDj5RQ

U.S. grants more time to wind down business with Rusal
Reuters Staff
\Americans engaged with United Company Rusal PLC have until Oct. 23 to wind down their business with the aluminum giant amid U.S. sanctions, the U.S. Treasury Department said on Monday in a statement extending the time period.
/jlne.ws/2qXtLWL

Regulation

The SEC Wants Wall Street to Treat Clients Better. What’s at Stake?
Benjamin Bain – Bloomberg
To nix broker conflicts, SEC unveils ‘best interest’ standard; Proposal has prompted confusion, even among some SEC officials
Wall Street is known for making money by selling risky investments with complicated names. Some examples: equity indexed annuities, structured notes and leveraged inverse exchanged traded funds.
/jlne.ws/2qRyCIV

Wells Fargo CEO Faces Scrutiny of Unit He Ran
Laura J. Keller, Hannah Levitt – Bloomberg
Wholesale unit struggling to fix lapses by deadline, WSJ says; CEO Tim Sloan faces shareholders at annual gathering Tuesday
Wells Fargo & Co.’s struggle to shore up money-laundering controls in its division serving companies may prove awkward for Chief Executive Officer Tim Sloan as he faces shareholders Tuesday.
/jlne.ws/2HLKMNf

Mifid II forces fund managers into sharp research cuts; European groups rein back on analysis produced by banks and brokers
Jennifer Thompson, Attracta Mooney and Chris Flood – FT
Asset managers have cut the number of investment banks and brokerages they use after a regulatory shake-up forced them to show how much they pay for research.
/jlne.ws/2vyOBjC

Corporate access: death of the go-between?; Investors and portfolio companies increasingly prefer to arrange meetings directly
Owen Walker – FT
In the months just before the introduction of Mifid II — the wide-ranging markets regime put in place in Europe in January — much of the discussion among asset managers was about the treatment of research payments.
/jlne.ws/2vBDTcr

Court of Appeal dismisses ASIC’s appeal in AWB case
ASIC
The Victorian Court of Appeal has dismissed ASIC’s appeal from a judgment of the Supreme Court of Victoria made by Justice Robson on 15 December 2016.
/jlne.ws/2HJ9UUI

ASIC and DJSB sign Memorandum of Understanding for enhanced co-operation
Dept Jobs And Small Business Stacked Asic Coporate Logo Standard Version Colour 3
ASIC
The Australian Securities and Investments Commission (ASIC) and the Australian Government Department of Jobs and Small Business (DJSB) have today announced the signing of a Memorandum of Understanding (MOU).
/jlne.ws/2HEq7un

SEC Charges Additional Defendant in Fraudulent ICO Scheme
SEC
The Securities and Exchange Commission today announced additional fraud charges stemming from an investigation of Centra Tech Inc.’s $32 million initial coin offering. In an amended complaint filed today, the SEC charged one of Centra’s co-founders, Raymond Trapani, in a fraudulent scheme related to Centra’s 2017 ICO, in which the company issued “CTR Tokens” to investors. Earlier this month, the SEC and criminal authorities charged Centra’s two other co-founders, Sohrab “Sam” Sharma and Robert Farkas, for their roles in the scheme.
/jlne.ws/2qRagyO

An Eye to the Future – IQ April 2018
ISDA
It’s not possible to predict the future with any certainty. In this ISDA annual general meeting (AGM) issue of IQ, which focuses on the future of the derivatives market, we don’t even try. Instead, we explore some of the challenges market participants face, and the steps that are being taken now to prepare for possible future outcomes.
/jlne.ws/2qQTcJd

Investing and Trading

Treasury 10-Year Yield Sets 2018 High, Traders Focus on 3%
Liz McCormick – Bloomberg
Treasuries traders have a new level to focus on: the pivotal 3 percent mark on 10-year notes.
After the benchmark yield plowed to a new 2018 peak just shy of 2.96 percent on Friday — its highest since January 2014, chart watchers are turning their gaze to the next round number on the horizon. Investors including Jeffrey Gundlach at DoubleLine Capital and Scott Minerd at Guggenheim Partners have previously highlighted a 3 percent 10-year yield as a critical level for the bond market.
/bloom.bg/2F4mgkE

Michael Bloomberg to write $4.5 million check for Paris climate pact
Reuters Staff
Former New York mayor and billionaire Michael Bloomberg said on Sunday he will write a $4.5 million check to cover this year’s U.S. financial commitment to the Paris Climate Agreement.
/jlne.ws/2qRAVM5

Bond Traders’ Respite From Flattening Curve May Prove Fleeting
Brian Chappatta – Bloomberg
Combined auctions of 2-, 5, 7-year notes to tally $96 billion; Sales seen as ‘dress rehearsal’ for Treasury financing plan
Bond traders agonizing over the flattening U.S. yield curve got a bit of a break last week. But with a flood of Treasury supply about to hit the market, they’ll have little time to catch their breath.
/jlne.ws/2HIbxlq

What Global Finance Chiefs Are Saying About the Global Economy
Enda Curran, Andrew Mayeda – Bloomberg
Trade tensions dominate amid little sign of progress; Policy makers flag several near term downside risks to growth
“Things are good, but they’re getting risky.” That’s how David Lipton, first deputy managing director at the IMF, characterized the global economic state of play in a Bloomberg Television interview.
/jlne.ws/2qXh7XN

US shale companies strike cash on higher crude prices; Landmark moment as leading producers become self-financing and boost investor hopes
Ed Crooks and Nicole Bullock in New York – FT
US shale oil companies have started to generate free cash thanks to the rise in crude prices, a landmark moment for an industry that has until now relied on an inflow of capital to support its growth.
/jlne.ws/2HHsOLK

How Windmills as Wide as Jumbo Jets Are Making Clean Energy Mainstream
By STANLEY REED, CARSTEN SNEJBJERG and RASMUS DEGNBOL – NY Times
At the northern end of Denmark’s Jutland peninsula, the wind blows so hard that rows of trees grow in one direction, like gnarled flags.
/jlne.ws/2HJdXjL

MiFID II sees more than 60% of UK-fund managers reduce broker lists; Survey of UK-based fund managers focusing on small and mid-sized companies suggests MiFID II has negatively impacted liquidity and research coverage.
By Hayley McDowell – The Trade
More than half of UK fund managers focusing on small and mid-sized companies have reduced the number of brokers they engage with just four months into the new MiFID II regime.
/jlne.ws/2qR7Y2I

FlexTrade unveils new multi-asset MiFID II compliant EMS; FlexNOW execution management system includes OMS integration and in-built TCA functionality for MiFID II purposes.
By Hayley McDowell – The Trade
FlexTrade has launched a new broker-neutral, MiFID II-compliant and multi-asset trading execution management system (EMS) for hedge funds and mini-primes.
/jlne.ws/2HKwI6y

Institutions

HSBC CEO Says Overhaul Strategy ‘Is Working’; At annual shareholders meeting, Flint says U.K. bank needs ‘to keep evolving’
Margot Patrick – WSJ
HSBC Holdings HSBC 0.43% PLC Chief Executive John Flint spent the past seven years watching the bank undergo a radical overhaul under former boss Stuart Gulliver. On Friday, he signaled much of the heavy lifting is done and that his leadership will be a period of evolution not revolution.
/jlne.ws/2vFDJAN

Low profile hedge funds post high returns in year after New York Sohn conference
David Randall, Svea Herbst-Bayliss – Reuters
One of the year’s most popular events for fund managers, the Sohn Investment Conference, will be held in New York on Monday, but if history is any guide, some of the industry’s lower-profile managers will probably provide the most profitable ideas.
/jlne.ws/2vI274M

For UBS, the Best Isn’t Yet To Come; A jump in trading revenue can’t hide the sense the best is past.
Lionel Laurent – Bloomberg
UBS Group AG CEO Sergio Ermotti is running out of goodies to sustain the Swiss bank’s premium valuation.
/jlne.ws/2qR14dM

UBS’s Freshly Combined Global Wealth Management Disappoints
Patrick Winters, Jan-Henrik Foerster – Bloomberg
Wealth, asset management misses eclipse investment bank gains; Shares fall as much as 4.4% in Zurich before paring losses
UBS Group AG’s freshly-combined wealth management unit didn’t get off to the best start.
/jlne.ws/2qR61Dp

John Paulson Seeks Big Fees While Risking His Money
Miles Weiss – Bloomberg
Managers can lose their whole investment chasing fees of 55%; Topwater, Prelude, Boothbay provide traders with capital
After most of his clients have fled, billionaire John Paulson has embarked on a strategy to raise assets and generate big fees at the risk of losing his own capital.
/jlne.ws/2vG1gS2

Amanda Staveley raises damages sum sought from Barclays to £1.5bn
Lucy White – City AM
The sum which businesswoman Amanda Staveley is seeking to wring from Barclays has risen to £1.5bn, the high street bank revealed in its annual report.
/jlne.ws/2qSmpUi

Regions

London voted top financial centre above New York for the first time in five years, according to a Duff & Phelps report
Lucy White – City AM
London has been voted by finance professionals as the world’s top financial centre for the first time since 2013, according to a report released today.
/jlne.ws/2vIVDmi

Engineers Are Leaving Trump’s America for the Canadian Dream; The long wait for green cards was bad enough. Antagonism toward immigrants is pushing skilled foreigners across the border.
Karen Weise, Saritha Rai – Bloomberg
Vikram Rangnekar grew up in Mumbai, studied computer science at the University of Delaware, and by the waning days of the Obama administration had been working in Silicon Valley for almost six years. Through his job as a software engineer at LinkedIn Corp., Rangnekar secured an H-1B, the temporary visa for high-skilled workers, and the company began the process of sponsoring his green card way back in 2012. But he had dozens of senior colleagues from India who’d been waiting a decade or more for their green cards and still didn’t have them. “Some said it’d take 20 years for my turn,” Rangnekar remembers.
/jlne.ws/2qQJOoX

How China Is Buying Its Way Into Europe
Andre Tartar, Mira Rojanasakul and Jeremy Scott Diamond – Bloomberg
For more than a decade, Chinese political and corporate leaders have been scouring the globe with seemingly bottomless wallets in hand. From Asia to Africa, the U.S. and Latin America, the results are hard to ignore as China has asserted itself as an emerging world power. Less well known is China’s diffuse but expanding footprint in Europe.
/jlne.ws/2HKvPLd

U.S. Sanctioning Russian Oligarchs Sparks Exodus of Cash From Latvia
Aaron Eglitis – Bloomberg
Regulator says banks were forced to end some relationships; Foreign money is already fleeing Baltic nation after scandals
U.S. sanctions targeting Russian billionaires have sparked a further exodus of cash from Latvia, a Baltic nation whose banking system has already been shaken by a string of money-laundering scandals.
/jlne.ws/2vCTjwT

Aluminium groups warn Rusal sanctions risk smelter closures; European companies hunt for new suppliers after US action against Russian group
Henry Sanderson and Neil Hume – FT
European aluminium producers are warning that US sanctions against Russian producer Rusal could leave them unable to keep their smelters running at full capacity and lead to severe shortages of the metal.
/jlne.ws/2vCHbMo

Brexit

Hiring tumbles at UK fund houses as Brexit plans kick in; Asset managers cut back on London appointments and bolster European bases
Owen Walker, Asset Management Correspondent – FT
Fund managers have cut the rate at which they are hiring in London by as much as half since the UK voted to leave the EU in June 2016.
/jlne.ws/2HIlFe0

Why the EU capital markets union matters for ECB policy; The EU needs deeper capital markets to help replace emergency ECB funding for businesses
Huw van Steenis – FT
The crisis taught us the importance of good financial plumbing. Enormous progress has been made but the minutes of the European Central Bank’s March meeting “stressed the need to make progress on the completion of the banking union and the capital markets union (CMU)”. So what should investors and bankers make of the EU’s announcement of plans to fast-track its CMU programme by 2019, due to Brexit?
/jlne.ws/2vI68Go

Miscellaneous

What Happened to Matthew Mellon; A proud father. A brilliant friend. Lucky in love. Inherited wealth. And an opioid addict, dead at 54.
Katherine Rosman and Jonah Engel Bromwich – NY Times
Four years ago, Matthew Mellon was living in an art-filled apartment in the Pierre hotel with his young second wife, Nicole Hanley. He had three young children, the eldest of whom lives with his first wife, Tamara Mellon, a founder of Jimmy Choo.
/jlne.ws/2vFL4jK

$7 Million of Wine Sold in Massive Burgundy Auction
Guy Collins – Bloomberg
Henri Jayer 1990 Cros Parantoux magnum sells for $45,410; Three-liter Jeroboam of Grands-Echezeaux 1990 fetches $26,290
A three-bottle lot of Romanee-Conti 2012 Domaine de la Romanee-Conti and a magnum of Henri Jayer 1990 Vosne-Romanee, Cros Parantoux each fetched $45,510 at a Hart Davis Hart Wine Co. Burgundy sale in Chicago that totaled over $7 million, its largest ever auction from the region.
/jlne.ws/2qSkX4d

The post A Former Top Wall Street Regulator Turns to the Blockchain appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Two noteworthy items about the two firms bidding for Fidessa. ION and rival bidder SS&C Technologies both claim the Carlyle Group or affiliates as investors. Both companies have grown dramatically via acquisition. SS&C has made dozens of deals – the latest a $5.4 billion purchase of DST Systems. Privately-held ION has made nine acquisitions since 2008 and has a bid of $2.09 billion for Fidessa.~JK

CBOE Chairman & CEO Ed Tilly and President Chris Concannon sent a customer letter about VIX pricing and recent erroneous claims in academic paper.~JJL

Category: So I got a little carried away. Correction: JLN Readers interested in the Crypto Evolved event in New York on June 27 from Viable Markets may receive a 15% (not 20%) discount when they register using this link, limit of 50 total registrations at that price.~JJL

Leo Melamed sold 7300 shares of CME Group stock on 2/5/18 at a higher average price than the 20,000 shares Terry Duffy sold on 2/6/2018.~JJL

At the Distributed Markets event in Chicago yesterday, Bobby Cho of DRW/Cumberland said his firm makes markets in 30-35 coins.~JJL

The National Futures Association will host a free webinar on Thursday, April 26, at 11:00 a.m. CT to educate investors about how to avoid financial scams and the importance of conducting thorough due diligence as part of #MSW2018. Register here.~JJL

Eric Patnoudes was once a trader at the CME and CBOT. Now he is in education. Here is his story.~JJL

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It’s a Scary Time to Be Trading Wall Street’s Fear Index; Concerns about the soundness of the entire ecosystem of VIX-linked trading rising
Gunjan Banerji – Bloomberg
Investors are starting to wonder if Wall Street’s fear gauge is broken. The Cboe Volatility Index tracks how much investors pay for options they often use as insurance against future stock-market declines. Known as the VIX, it typically rises as stocks fall or vice versa, reflecting shifting demand for options used to hedge investments. Playing the VIX has become a cottage industry in recent years, with billions of dollars flowing into investment products aimed at hedging or exploiting volatility trends.
/jlne.ws/2HGZ6Xd

***** Quotes in story include DRW’s Don Wilson.~JJL

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Revamping Nasdaq’s Tech Approach – Lars Ottersgård, Nasdaq

JohnLothianNews.com

After Adena Friedman became Nasdaq’s CEO at the end of 2016, the exchange group’s management team evaluated where would be best to invest moving forward. One decision out of that process was to shift to becoming more of a fully integrated, cloud-enabled managed services provider. The plan came together in 2017. 2018 is the year for execution.

In this video from JLN’s annual series with industry leaders, Nasdaq’s EVP and Head of Market Technology Lars Ottersgård talks about machine learning, data governance, parimutuel technology and cloud computing.

Watch the video and read the rest here »

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Innovation in Distributed Markets Comes to Navy Pier
Chuck Mackie – JLN Contributing Editor
The Chicago Blockchain Center and BTCMedia brought Distributed Markets to Chicago’s Navy Pier on Monday, and a sizable audience was treated to myriad examples of how far cryptoassets have come and how many dynamic and potentially revolutionary efforts are happening right now. While there are still many cases of “innovation theater” and “pilot purgatory” (terms lifted from event panelists) as well as the fundamental question as to whether or not individual cryptocurrencies are worth their valuations, there are just as many serious commercial success stories, intriguing use cases, and promising paths forward to validate the hype.
To read the rest of this story, click here.

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The Leadership Roles in America Where Women Are Outnumbered By Men Named John
Claire Cain Miller, Kevin Quealy and Margot Sanger-Katz – NY Times
In the corridors of American power, it can be as easy to find a man named John as it is to find a woman.
/jlne.ws/2HKHNnS

**** For the record, my name was supposed to be Sarah if I was a girl. Both of my brothers and I were supposed to be Sarahs, but alas were all boys. I was going to be named Sarah Lee, or Cupcake for short.~JJL

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Ending men-only panels is a spur to creativity; A diverse range of speakers brings valuable new perspectives to many events
Michael Skapinker – FT
In August last year, the Financial Times’ board decreed an end to men-only conference panels. Male journalists were encouraged to say we would not appear on panels, whether organised by the FT or by others, if no women were on the stage with us.
/jlne.ws/2qTS7jV

***** All panels should have at least one man on them.~JJL

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SGX launches Orb Awards to honour best of financial news and content
SGX
Open to all producers of content that demonstrate relevance to Singapore as an international financial hub; Six categories including awards for best commentary and top financial blogger.
Singapore Exchange (SGX) today launched the inaugural SGX Orb Awards to recognise excellence in financial journalism and content, bolstering its work to enhance financial education and empower investors.
/jlne.ws/2qVM3aA

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Monday’s Top Three
Our top read story of the day yesterday was the New York Times’ piece on Gary Gensler, A Former Top Wall Street Regulator Turns to the Blockchain. Second was Business Insider’s Jump Trading is making crypto a big focus. Third was the FT piece Fidessa dumps Temenos in favour of £1.5bn Ion offer – and that one isn’t over yet, folks. See today’s leads for more on the bids for Fidessa.

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MarketsWiki Stats
124,218,409 pages viewed; 23,082 pages; 212,853 edits
MarketsWiki Statistics

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Lead Stories

The 30 minutes that have an outsized role in US stock trading; An increasing concentration of volumes from 3.30pm to 4pm is causing concern
Robin Wigglesworth, US markets editor – FT
The increasing concentration of buying and selling of US stocks in the final 30 minutes of the day has some investors calling for a shorter trading period to help limit the market’s growing operational risk.
/jlne.ws/2HNjndF

LSE Directors Should Confront Management ‘Behavioral Issues’
Viren Vaghela – Bloomberg
Board didn’t act improperly, review by ex-KPMG partner says; Exchange hired Goldman’s Schwimmer as new CEO earlier in April
London Stock Exchange Group Plc’s directors should be prepared to confront “behavioral and performance issues” among management, according to a review that absolved its board of blame in the acrimonious departure of former Chief Executive Officer Xavier Rolet.
/jlne.ws/2HJkDON

SS&C set May 4 deadline to gatecrash 1.5 billion-pound Fidessa deal
Ben Martin – Reuters
U.S. financial software company SS&C Technologies has been given until May 4 to gategrash a 1.5 billion-pound takeover of Fidessa or walk away from the British firm, the UK’s Takeover Panel said on Monday.
/reut.rs/2qVY8f1

Upstart Exchange Blasts Nasdaq Plan to Boost Small-Stock Trading; Proposal would allow small-cap firms to restrict trading in their shares to the exchange where they are listed
Alexander Osipovich – WSJ
A proposal backed by the Trump administration to make the U.S. stock market more attractive for smaller companies came under criticism on Monday, as rivals called it a giveaway to Nasdaq Inc. NDAQ -0.54% and the New York Stock Exchange.
/jlne.ws/2HK6G3m

Nasdaq Supports Return of Market Monopolies to Save Small Stocks
Nick Baker, Brian Louis – Bloomberg
Plans to ask SEC to let thinly traded companies pool liquidity; SEC chairman agrees something should be done with small stocks
There’s a fresh push to give U.S. exchanges their monopolies back — at least for small stocks where many fret trading is too low, damaging the IPO business by scaring companies away from public markets.
/jlne.ws/2HLnXsF

LME to end free access for high speed traders
Neil Hume in London – FT
The London Metal Exchange has fired a broadside at high-speed traders with plans to end an incentive programme that allowed computer-driven funds free access to its market for six months.
/jlne.ws/2HKognU

Cboe: Unusual Vix moves were caused by whale, not manipulation
Alexandra Scaggs in New York – FT
Cboe Global Markets said on Tuesday that a recent unusual move in the so-called fear gauge was caused by an order imbalance, and sought to assuage concerns about claims of manipulation in the index.
/jlne.ws/2HLJxxq

Pimco’s New Bond King Could Be a Robot in Austin
Justin Baer – WSJ
Pacific Investment Management Co. used to rely heavily on one man to make many of its key investment decisions. Now it’s betting a big part of its future on millions of lines of software code.
/jlne.ws/2qUE6lY

Companies must start preparing for transition from Libor now; Many still seem oblivious to the fact the lending benchmark is on its last legs
Toby Stevenson – FT
The death knell for Libor has sounded. It is an important key benchmark or reference rate that underpins an estimated $370tn of financial products globally — including certain types of mortgages, consumer loans and bonds.
/jlne.ws/2HNbEMy

Wall Street Gender Gap Narrows, 5,000 Miles South of Wall Street
Fabiola Moura, Felipe Marques – Bloomberg
Brazil’s female bankers make strides at international firms; ‘We’ll be ashamed’ of diversity record: Banco do Brasil CEO
It’s been a good year for female bankers with C-suite ambitions in Brazil — the ones who work for foreign companies, that is.
/jlne.ws/2HLqhzT

Supreme Court Weighs Arguments in Case Involving SEC’s In-House Judges; Several justices concerned that striking down current system could erode political independence of civil service
By Jess Bravin and Dave Michaels – WSJ
Supreme Court justices appeared wary Monday of claims that the nonpolitical process for appointing administrative-law judges to hear securities-enforcement cases is unconstitutional, with several justices concerned that striking down the system could erode the political independence of the federal civil service.
/jlne.ws/2JpCEiC

Nasdaq proposes letting companies decide where their shares trade
John McCrank – Reuters
Nasdaq Inc (NDAQ.O) on Monday said it will ask regulators to let it give thinly-traded companies that list on its main U.S. stock exchange a choice as to whether their shares can be traded on other exchanges, with the aim of making it easier for investors to buy the stocks.
/jlne.ws/2Ho56k6

Exchanges, OTC and Clearing

NYSE challenges Nasdaq’s reign as king of the tech IPO; Having secured Snap and Spotify, Big Board readies for battle over Uber and Airbnb
Nicole Bullock in New York- FT
Ever since high-profile tech listings burst into the public imagination more than two decades ago, the Nasdaq stock exchange has been synonymous with the online giants that have helped define the modern era.
/jlne.ws/2HK8bOV

Hong Kong Adds Dual-Class Shares, Paving Way for Tech Titans
Benjamin Robertson – Bloomberg
Companies including Xiaomi and Ant Financial may choose city; Applicants can file under new rules starting April 30
Hong Kong Exchanges & Clearing Ltd. approved the biggest change to its initial public offering rules in two decades, putting it in a position to battle New York for some of the world’s hottest companies.
/jlne.ws/2qPyZDN

LSE profits rise 13% on higher financial market volatility; Most shareholders expected to back Donald Brydon for another year as chair at AGM
Philip Stafford – FT
The London Stock Exchange Group reported double digit earnings growth in the first quarter as its clearing house and information businesses benefited from sharp moves in equity and money markets.
/jlne.ws/2qSFEgq

London Stock Exchange Group reports double-digit earnings growth on back of strong information services performance
Alexandra Rogers – City AM
The group said it had posted a strong first quarter performance (Source: Getty)
Income at the London Stock Exchange (LSE) soared 13 per cent to £520m for the first quarter of the financial year, as the exchange welcomed double-digit growth for information services, LCH and capital markets.
/jlne.ws/2HNuTWg

Eurex Exchange’s Quarterly Equity Derivatives Highlights – Q1/2018
Eurex
Eurex Exchange offers the broadest range of pan-European single stock options and futures with a product offering of more than 700 equity options and 800 single stock futures from more than 10 countries. Through bundling European equity derivatives exposure at Eurex, investors are able to maximize collateral utilization and benefit from cross margining efficiencies with Eurex Clearing. This update serves you with key figures and the most important developments in our equity derivatives segment during the first quarter of 2018.
/jlne.ws/2HowPRD

End of Consultation on amendments to Special Provisions regarding the extension of the Individual Clearing Model for Specified Clients and the amendments of the Pledge Agreement
Eurex
As announced in Eurex Clearing circular 032/18, Eurex Clearing AG (Eurex Clearing) introduces the Individual Clearing Model for Specified Clients and thereby includes clarifications in the Pledge Agreement regarding the amendment provisions in case of a new execution of the Pledge Agreement by a Clearing Member.
/jlne.ws/2JkUOlm

Deutsche Börse and Catalysts invite software developers to the Coding Contest
Deutsche Börse
On April 27, Deutsche Börse will host the Coding Contest organized by the Austrian IT service provider Catalysts in Frankfurt. This is a worldwide competition in which programmers compete against each other in more than 40 cities. The participants include experienced developers and young developers, students and hobby programmers. The best entrants receive an entry in the Catalysts Hall of Fame and can win prizes.
/jlne.ws/2JpxSSe

Clearstream acquires Swisscanto Funds Center Ltd. from the Zürcher Kantonalbank
Deutsche Börse
Clearstream, the post-trade service provider of Deutsche Börse Group, is expanding its fund offering by acquiring Swisscanto Funds Center Ltd., London (SFCL), from Zürcher Kantonalbank. The sales contract was signed by both parties on April 23, 2018. The transaction, which is in the high double-digit millions of euros, is expected to close in the third quarter of 2018, subject to the approval of the competent authorities. The acquisition will have an impact on the consolidated net income of Deutsche Börse Group in the first year.
/jlne.ws/2HrabYY

Hong Kong’s Listing Regime Enters New Era, Featuring Emerging and Innovative Firms
HKEX
Overwhelming stakeholder support for new listing regime proposal; Exchange to add three new chapters in the Main Board Listing Rules; Listing applications under new regime welcome when Rules take effect on 30 April 2018
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Tuesday) announced that the proposed new rules to broaden Hong Kong’s listing regime will take effect on 30 April 2018, from which date companies in emerging and innovative sectors seeking to list under the new regime may submit formal applications.
/jlne.ws/2Hoy1o5

Fintech

Goldman-backed consortium to buy CityFibre for £538m; Infrastructure funds offer 93% premium for UK telecoms group
Nic Fildes, Telecoms Correspondent – FT
CityFibre, the British telecoms company, has recommended a £538m takeover by a consortium of infrastructure funds backed by Goldman Sachs pitched at a 93 per cent premium to the share price of the company.
/jlne.ws/2qTR3wr

Citi Establishes Service to Support New SEC Regulations for Mutual Funds
Business Wire
Citi has established a service for clients facing the SEC’s Rule changes affecting the U.S. mutual fund industry later this year. The SEC’s sweeping reporting modernization and liquidity risk management rules place an added operational burden on asset managers. Compliance with the rules requires additional market data, analytics and new reporting infrastructure.
bit.ly/2Hlsxi4

Big xyt hires former Barclays Capital man Mark Montgomery
Finextra
big xyt, the independent provider of high-volume, smart data and analytics capabilities, is delighted to announce the arrival of Mark Montgomery in a key role supporting Strategy and Business Development.
/goo.gl/asiQd6

Alphabet Is Sitting on About $11 Billion in Startup Investments
Mark Bergen, Sarah McBride – Bloomberg
Google shared a result from its years of prodigious startup investing for the first time on Monday: The holdings are worth about $11 billion, based on company estimates.
/jlne.ws/2qT1aBw

Saxo Bank And Microsoft Partner To Shape The Future Of Cloud Services In The Financial Industry
MondoVisione
Today, Microsoft and Saxo Bank announced a strategic partnership with the aim of running Saxo Bank’s entire technology stack on the Microsoft Cloud.
/jlne.ws/2Hn8VWH

Colt recognised as leading provider of network connectivity for the Japan Exchange Group
Bob’s Guide
Colt Technology Services today announced that it ranks as one of the leading providers of network connectivity services for the Japan Exchange Group (JPX). Not only does Colt offer high performance hosting and connectivity, the company is also one of the highest rated solution vendors within the JPX ecosystem, which includes both the Tokyo Stock Exchange (TSE) and the Osaka Exchange (OSE).
/jlne.ws/2Jn6K6a

Colt launches low latency connectivity between ASX and CME exchanges
Julia Gabel – IT Brief
Colt Technology Services has announced the launch of a new ultra low latency service connecting the Australia Securities Exchange (ASX) and the Chicago Mercantile Exchange (CME).
/jlne.ws/2Jpzono

Cryptocurrencies

One in five financial institutions consider cryptocurrency trading, survey says
Reuters
One in five financial institutions is considering trading cryptocurrencies within the next 12 months, a survey published by Thomson Reuters on Tuesday found. Among those respondents who said they were willing to trade cryptocurrencies like bitcoin, the best known of the digital coins, 70 percent said they were planning to start trading in the next three to six months, the survey showed.
/reut.rs/2vMkLbs

Startups Love This Cryptocurrency Strategy. Regulators Say Not So Fast; Securities and Exchange Commission is skeptical of companies’ argument that tokens offered to wealthy backers aren’t an investment
Dave Michaels – WSJ
Startups are raising money from venture capitalists and other wealthy investors by rewarding them with new cryptocurrencies, in a bid to avoid much of the cost and regulation of traditional stock sales. One problem: Regulators haven’t recognized the arrangement as a valid way to raise money in compliance with investor-protection laws.
/jlne.ws/2qSH4rg

Japan Finally Gets Self-Regulatory Body For Cryptocurrency Exchanges
William Suberg – CoinTelegraph
Japan is about to get the first self-regulatory body for its cryptocurrency exchange industry as reports of a formal agreement surfaced on the local news outlet Asahi Shimbun Tuesday, April 24.
According to Asahi Shimbun, the country’s sixteen licensed exchange operators have taken steps to finally launch what will become known as the Japanese Cryptocurrency Exchange Association (JCEA).
bit.ly/2vDIB9v

Chinese #MeToo Student Activists Use Blockchain to Fight Censors
Keith Zhai, Lulu Yilun Chen – Bloomberg
Rare student movement seeks to avert government curbs; Blockchain was used as an anti-censorship tool in the petition
Student activists trying to ignite the #MeToo movement in China have turned to the technology behind bitcoin to battle government censorship.
/jlne.ws/2HOgCJe

Former JPMorgan Blockchain Head Says Focus Should Be On Privacy
Camila Russo – Bloomberg
Amber Baldet, the former head of JPMorgan Chase & Co.’s blockchain program, isn’t revealing her next gig, but at a conference Monday it became clear that her focus is on privacy.
/jlne.ws/2HIckTp

Goldman Sachs Hires Crypto Trader Justin Schmidt to Lead Digital Assets
Sonali Basak, Lily Katz – Bloomberg
Goldman Sachs Group Inc. hired Justin Schmidt as head of digital asset markets to help clients gain exposure to cryptocurrencies.
/jlne.ws/2qT2sMS

Bitcoin put him on the street. Then it made him a fortune
Jon Martindale – Digital Trends
Much of the wealth created by cryptocurrency has been siphoned off by established tech entrepreneurs. The Winklevoss twins and Chris Larsen’s of the world, who saw the upswing coming and had money to invest in it, have gained the most. Ray Youssef, the co-founder of Bitcoin direct-trade platform, Paxful, is a little different. While he still exudes the self-driven, cavalier attitude of many tech entrepreneurs, he sees himself as Robin Hood, not a slick Silicon Valley yuppie.
/jlne.ws/2JnK6ue

Bitcoin Rival Accused of Trying to Artificially Boost Its Price
By Olga Kharif – Bloomberg
Antpool claims to have started burning 12 percent of fees; ‘This was purely a PR game’ in war with Bitcoin, Samani says
Bitcoin Cash is the hottest cryptocurrency around right now for more reasons than you may imagine.
/jlne.ws/2HqzudI

Politics

Rusal Nationalization Possible as Kremlin Cautious on U.S. Move
Ilya Arkhipov, Andrey Biryukov – Bloomberg
Signals from U.S. on relations ‘contradictory,’ Peskov says; No specific discussions on possible state takeover as yet
Russia’s government could take over United Co. Rusal temporarily to save the metals giant from the impact of U.S. sanctions, a senior official said as the Kremlin struck a skeptical tone about Washington’s decision to ease some limits on the company.
/jlne.ws/2HHMGyl

How Long Can Trump’s Long Con Last?; Trump has exaggerated his wealth for years. In office, he’s trying a similar scam.
Timothy L. O’Brien – Bloomberg
In 1982, when Donald Trump was 36 years old, he began an annual ritual of lobbying Forbes magazine to include him on its list of the 400 wealthiest Americans. Forbes debuted the list that year, and Trump pursued his inclusion with gusto — lying, cajoling and repeatedly jumping on the phone to make sure that a young reporter at the magazine, Jonathan Greenberg, would accept his inflated claims about how much money he had.
/jlne.ws/2HNwaww

Regulation

Ether, Ripple May Be Securities, Former CFTC Head Says
Camila Russo – Bloomberg
Gary Gensler, the former chairman of the Commodity Futures Trading Commission, said that the cryptocurrencies Ether and Ripple could probably be classified as securities, subjecting them to greater regulatory scrutiny.
/jlne.ws/2HKUaAs

Brexit mutual regulatory recognition is “eminently achievable” says Financial Conduct Authority boss Andrew Bailey
Jasper Jolly – City AM
A mutual recognition regime for financial regulation after Brexit is “eminently achievable”, the City watchdog’s boss today said, rejecting calls for a less integrated relationship based on equivalence.
/jlne.ws/2HopUb3

Brexit: what does it mean for financial markets to be open?
Andrew Bailey, Chief Executive FCA UK
I want to take this opportunity to talk about Brexit, where things stand from a financial services perspective. In doing so, I will focus on what it means to have open markets, and how we can preserve them for the benefit of all.
/jlne.ws/2JiyUz2

Sebi’s circular naming defaulters draws flak; companies approach FinMin; The list featured some prominent names like SBI Capital, Axis Capital, GMR Holdings, United Breweries, Alpic Finance, Saradha Realty, United Bank of India &Trident India
Shrimi Choudhary – Business Standard
Market regulator Securities and Exchange Board of India (Sebi) is once again caught on the wrong foot, and this time for one of its recent circulars that made public names of over 2,000 entities, which have defaulted on its dues.
/jlne.ws/2HqOcBi

Sebi proposes biometric check for stock trade via mobile app; The development comes against the backdrop of instances of cyber attacks on systems in different parts of the world including India.
Press Trust of India
Markets regulator Securities and Exchange Board of India (Sebi) has proposed a new set of guidelines wherein biometric authentication will be required for stock trading through mobile applications.
/jlne.ws/2HqwgH8

What will be the impact of physical delivery of stock derivatives?; By forcing physical settlement, the distinctions between cash segment and F&O are being reduced
Devangshu Datta – Business Standard
The Sebi’s decision to make physical delivery of stock derivatives mandatory will have multiple knock-on effects across cash and derivatives segments. Many of those consequences would be negative.
/jlne.ws/2JniBBf

Sebi proposed as regulator for spot commodity exchanges for gold, metals; Govt agreeable in principle to this suggestion, though Sebi itself is not
Rajesh Bhayani – Business Standard
Spot commodity exchanges for gold, metals and even energy products like natural gas could see the light of day under the Securities and Exchange Board of India (Sebi) as the regulator.
/jlne.ws/2JlqgQp

ESMA Chair Maijoor speech at ILF Conference 2018 on CCP resolution
ESMA
The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, has today delivered a keynote speech at the Institute for Law and Finance (ILF) at the Goethe University Frankfurt.
/jlne.ws/2HqfS9E

FCA warns public of increased threat of loan scams, as borrowers lose over £3.5 million a year
UK FCA
The Financial Conduct Authority (FCA) is today urging the public to be alert to the growing threat of loan fee scams targeting borrowers. This plea comes as last year over £3.5 million* was lost to loan fee fraud and reports to the FCA consumer helpline increased by 44%**.
/jlne.ws/2HttZuA

IOSCO Seeks Feedback On Good Practices To Assist Audit Committees In Supporting Audit Quality
MondoVisione
The Board of the International Organization of Securities Commissions (IOSCO) is requesting feedback on its proposed good practices for audit committees to support audit quality.
/jlne.ws/2Ho36IC

Investing and Trading

The Next Threat Stalking American Farmers Is the End of Cheap Money
Alan Bjerga – Bloomberg
Highest interest rates in five years signal more spending cuts; Fed moves are new blow to agriculture after years of crop glut
American farmers have managed to stay afloat despite years of shrinking crop values, the lowest incomes since the recession and a budding trade war with China. Now, they’re feeling a new squeeze — borrowing money is getting more expensive as interest rates rise. For some, it may be fatal.
/jlne.ws/2qUCrwK

Big Oil Still Unloved by Investors Despite Better Fortunes
Kevin Crowley, Kelly Gilblom – Bloomberg
Energy weighting in S&P 500 index is lowest in 14 years; Long-term oil pricing weak on plentiful supply, peak demand
For generations of investors, Exxon Mobil Corp. has been a cornerstone of fund managers’ portfolios alongside the biggest names in corporate America. Not so much any more.
/jlne.ws/2qSFe9Q

Institutions

Top SocGen trader exits after less than 6 months on job
Kevin Dugan – NY Post
Well, that didn’t take long. Mark Bamber, a top options trader at Société Générale, left his job earlier this month after less than six months at the French bank — part of a larger exodus at the company’s Manhattan office, The Post has learned.
/jlne.ws/2HFxQsb

Deutsche Bank Names Frank Kuhnke as Operations Chief; Mr. Kuhnke has been working in the retail, private and commercial banking division under new CEO Christian Sewing
Jenny Strasburg – WSJ
Deutsche Bank AG named longtime operations executive Frank Kuhnke as chief operating officer under new Chief Executive Christian Sewing, replacing Kim Hammonds, whose departure comes amid a high-level reshuffling at the German lender.
/jlne.ws/2HKWzuY

WorldQuant to launch its first fund open to outside investors; Quantitative investment firm seeks to raise more than $1bn to invest in global equities
Robin Wigglesworth – FT
WorldQuant, the computer-powered hedge fund that manages about $5bn on behalf of Izzy Englander’s Millennium Management, is launching its first fund open to outside investors.
/jlne.ws/2HJlkrn

KPMG faces shareholder protests over GE and Wells Fargo audits; Investor advisory groups call for US titans of banking and industry to end historic audit relationships
Alistair Gray and Ed Crooks in New York – FT
KPMG is this week facing the prospect of a rebellion from shareholders in two of its oldest and highest profile clients, Wells Fargo and General Electric, over its role auditing the beleaguered companies.
/jlne.ws/2qTPrCZ

Deutsche Bank Says Split of Investment, Retail Bad for Company
Steven Arons – Bloomberg
Deutsche Bank AG’s management opposed an investor’s proposal to split the investment bank from the retail unit, saying it would destroy value for shareholders.
/jlne.ws/2HKrQ11

Zelle, the Banks’ Answer to Venmo, Proves Vulnerable to Fraud; The personal payment platform Zelle is flourishing. But so are fraudsters, who are exploiting weaknesses in the banks’ security.
Stacy Cowley – NY Times
Big banks are making it easy to zap money to your friends. Maybe too easy. Zelle, a service that allows bank customers to instantly send money to their acquaintances, is booming. Thousands of new users sign up every day. Some $75 billion zoomed through Zelle’s network last year. That’s more than twice the amount of money that customers transferred with Venmo, a rival money-transfer app.
/jlne.ws/2qScIFw

Regions

Banker Finds He Has ‘Even More Enemies Than I Thought’
Andrew Higgins – NY Times
The governor of Latvia’s central bank, a pillar of Europe’s financial system for years and a zealous champion of austerity, has long been lambasted by his critics as a heartless enforcer of economic dogma. In a play that recently ended a long run at the National Theater, his character is stabbed to death onstage.
/jlne.ws/2HN10pg

Brexit

Banks Told by EU to Solve Their $134 Trillion Brexit Headache
Silla Brush – Bloomberg
EU’s Dombrovskis pours cold water on U.K. call for legislation; Britain says derivatives, insurance are at risk after EU exit
The European Union spurned U.K. calls for a legislative fix to the threat posed by Brexit to trillions of dollars of financial contracts, telling banks and insurers to solve the problem themselves.
/jlne.ws/2HFsVYf

Europe ‘will have final say on City’s access to financial markets’ after Brexit
The Times
The City will only maintain its access to European markets after Brexit if the EU agrees that British regulations are sufficiently similar to its own, the vice-president of the European Commission has said.
bit.ly/2vHa8GT

Miscellaneous

Markets Media Acquires GlobalTrading, FIXGlobal.com Operator
Markets Media Group
Markets Media Group is pleased to announce the acquisition of GlobalTrading, a leading publication and forum for the electronic trading industry.
/jlne.ws/2JnLZai

The post The 30 minutes that have an outsized role in US stock trading appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Exchange clearing specialist and economist Thom Thompson has joined John Lothian News part-time as a contributing editor for the CryptoMarketsWiki.com project.

Thomson has worked with the Chicago Board of Trade, BOTCC, Deutsche Boerse, Eurex, Eurex Clearing and the Swiss Exchange in a career that began at the CFTC as an industry economist.

More recently, Thomson has worked with exchange startups Seed CX and Bcause. He can be contacted at thomthompson@johnlothian.com.~JJL

If you wish to vote for whatever horse you have in the Intelligent Trading Technology Awards race, go here. ~SD

Hanweck has been shortlisted in two categories for the ITT Awards: Best Trading Analytics Platform and Best Cloud-Based Data Solution. Hint: You can vote for them here.~JJL

HKEX has published a video with the title “HKEX Begins New Era.” I like Charles Li’s line, “Great times require us to have great dreams.” I couldn’t agree more.~JJL

Speaking of HKEX, turnover of Heng Seng Index futures hit a record today, 265,385 contracts today versus 353,193 on January 26, 2018.~JJL

Also, HKEX held its 2018 Annual General Meeting today at HKEX Connect Hall. Chairman C K Chow presided over the meeting and retired after the conclusion of the AGM.~JJL

OCC was named Best Clearing House by Markets Media.~JJL

Seems we have the world’s first octodecillionaire thanks to cryptocurrency. Due to an exploit in a Smartmesh contract someone transferred 65,133,050,195,990,400,000,000,000,000,000,000,000,000,000,000,000,000,000,000 Smartmesh tokens to his/her account. Supposedly that is worth $5,684,903,807,376,320,000,000,000,000,000,000,000,000,000,000,000,000,000,000. The Fed had better turn on the money printing presses.~JB

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Bloomberg is the latest news company planning to make its readers pay
Mike Shields – Business Insider
Bloomberg is planning to start charging readers to access stories on Bloomberg.com, potentially starting next month, according to people familiar with the matter.
/read.bi/2KaGUDC
***** We don’t make you pay, but we ask you to pay. BTW, have you paid for your 2018 JLN subscription?~JJL
****Funny – this Business Insider story is paywalled. Business Insider only recently added Business Insider Prime. ~SD

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Addressing the Financing Needs of Midsize Banks – Richard Sandor, AFX

JohnLothianNews.com

Started at the end of 2015 to address the interbank funding needs of small and midsize banks, the American Financial Exchange (AFX) just welcomed its 80th member, bringing its clients’ assets to more than $1 trillion.

In this video from JLN’s annual series with industry leaders, AFX CEO and Chairman Richard “Doc” Sandor talks about American economic recovery as it relates to bank funding needs, seeking more nonbank lenders and potential derivatives that could be launched on AFX’s products once the exchange hits $1 billion in daily transactions, which Sandor considers critical mass.

Watch the video and read the rest here »

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An In-Depth Look at the Economics of Bitcoin
Bluford Putnam and Erik Norland – CME Group
What is most striking about the economics of bitcoin is the juxtaposition of the certainty of supply and the uncertainty of demand. The rate at which bitcoin is mined has been highly predictable and, unlike almost any other asset, currency or commodity, its ultimate supply is a known quantity, fixed in advance. There will never be more than 21 million coins. This feature makes bitcoin supply almost perfectly inelastic.
bit.ly/2K9wtQK

****SD: For a very different perspective, see the lead story from former Paypal CEO Bill Harris. He’s goes full Dimon in that piece – bitcoin is a “scam.”

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Forget bulls and bears — investors are either foxes or hedgehogs; Do investors have the right animal instincts?
Maike Currie – FT
With bulls and bears, hares and tortoises, ostriches and bouncing dead cats, the investment world is riddled with animal references.
/jlne.ws/2HNWR48

***** I am a bullfrog.~JJL

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Tuesday’s Top Three
Yesterday’s top stories were led by the FT’s piece The 30 minutes that have an outsized role in US stock trading. Second went to the Wall Street Journal’s It’s a Scary Time to Be Trading Wall Street’s Fear Index. Third went to Eric Patnoudes’ piece on his days as a trader and now in education technology in Trading Places in Education: My New Role in Edtech

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MarketsWiki Stats
124,280,107 pages viewed; 23,084 pages; 212,862 edits
MarketsWiki Statistics

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Lead Stories

Bitcoin is the greatest scam in history; It’s a colossal pump-and-dump scheme, the likes of which the world has never seen.
Bill Harris, former CEO Intuit, founding CEO of PayPal and Personal Capital – Recode
I’m tired of saying, “Be careful, it’s speculative.” Then, “Be careful, it’s gambling.” Then, “Be careful, it’s a bubble.” Okay, I’ll say it: Bitcoin is a scam.
/jlne.ws/2qXl5zw

***** I could have written this article a couple of years ago. Actually, I think I mostly did. It is particularly interesting coming from the former CEO of Paypal, someone who knows the alternative payment space well. His criticisms are direct and devastating, but one man’s opinion. I still believe Bitcoin is an alternative currency default swap, and thus has value. Its value is derived from its marginal utility as a means to move currency that does not play well with the regulated banking system. That could be legitimate or illegal. Whether it is legal or not depends on the jurisdiction. Whether it is used for moral purposes depends on the case. Money laundering could be illegal in one country, but not necessarily immoral. People have a legitimate need to protect their wealth during times when their home currency is under duress, even if the laws confine one’s choices.~JJL

The Winklevoss twins’ bitcoin exchange is using Nasdaq technology to monitor for manipulation
John Detrixhe – Quartz
Gemini, the digital asset exchange founded by Cameron and Tyler Winklevoss, is using Nasdaq technology to monitor for trading manipulation. The partnership comes as regulators are more closely scrutinizing crypto transactions, and may also mark the first time a digital-asset market has deployed a well-established surveillance system to root out misbehavior.
/jlne.ws/2qYJCEj

CFTC Asks Innovators for Competition Ideas to Advance FinTech Solutions; LabCFTC looking to “crowdsource” ideas for using the Science Prize Competition Act
CFTC
LabCFTC, the Commodity Futures Trading Commission’s (CFTC) FinTech initiative, announced today that it is requesting public input to gather ideas and topics for innovation competitions to advance the agency’s FinTech goals. All comments must be received within 90 days of publication of the request in the Federal Register.
/jlne.ws/2HTZLSB

CFTC: deliberate defaults may be ‘market manipulation’; Regulator statement on CDS agreements follows legal clash over Hovnanian deal
Kadhim Shubber in Washington and Joe Rennison in New York – FT
A leading US derivatives regulator has criticised the use of intentional defaults designed to trigger payouts on a company’s credit default swaps, warning that they could “constitute market manipulation”.
/jlne.ws/2HKC2qB

A loud noise knocked out computers that run stock exchanges across northern Europe
John Detrixhe – Quartz
It seems like computers can do just about anything these days. They write news articles, (almost) drive cars, and trade stocks faster than a human ever could. But our future machine overlords also have weaknesses that makes them seem, in a way, almost human. For one thing, it turns out they don’t like loud noises.
/jlne.ws/2qWvWtz

CME and Nex to pay advisers £110m for negotiating £3.9bn takeover
Philip Stafford – FT
Chicago’s CME Group and Nex Group will pay their advisers nearly £110m for their efforts in negotiating the US exchange’s £3.9bn planned purchase of its UK trading and technology rival.
/jlne.ws/2qV5Irg

Matrix Executions Announces the Creation of a High Touch Trading Desk for Options
PRNewswire
Matrix Executions, LLC, a newly formed agency only broker-dealer, has added high touch capabilities to its already robust offering of solutions for exchanges as well as institutional and retail trading professionals.
/prn.to/2K7aGsR

Winklevoss Twins Hire Nasdaq to Keep Cheaters Off Crypto Market
Matthew Leising, Nick Baker – Bloomberg
Their Gemini exchange to use Nasdaq’s market surveillance unit; Investors have wondered who’s watching out for crypto fraud. The Winklevoss twins brought in the pros to keep cheaters off their cryptocurrency exchange.
/jlne.ws/2HQ057t

Aon chief warns that insurance industry is losing its relevance; Greg Case says lack of innovation has led to failure to keep pace with client demands
Oliver Ralph, Insurance Correspondent – FT
The insurance industry is losing its relevance by failing to address its clients’ changing needs, according to chief executive of insurance broker Aon.
/jlne.ws/2HTlxZ4

Why Schwab’s CEO Bets You Won’t Be Trading Stocks on Amazon
Erik Schatzker – Bloomberg
‘It’s a wide moat and a big decision to make,’ Bettinger says; Brokerage chief discusses competitive climate in BTV interview
Walt Bettinger, the chief executive officer at Charles Schwab Corp., has some friendly advice for Amazon.com Inc.’s Jeff Bezos: Think twice before getting into the investment business.
/jlne.ws/2HOsquN

City fund manager attacks ‘amateur’ accounting watchdog; Alan Miller accuses FRC of deep-seated conflicts of interest and says it is not fit for purpose
Madison Marriage – FT
A prominent City fund manager has launched a scathing attack on the UK accounting watchdog over its handling of a complaint accusing the regulator of deep-seated conflicts of interest and an “amateur” approach to investigations.
/jlne.ws/2HQckRi

UK finance chiefs call for regulatory crackdown on tech giants; Oversight of platforms should be brought into line with that of banks
Patrick Jenkins, Financial Editor – FT
Some of Britain’s top financiers have called for a regulatory crackdown on Facebook and other technology groups to bring them into line with the kind of rules that banks must follow.
/jlne.ws/2HO4Lul

Exchanges, OTC and Clearing

TMX Group to Observe Moment of Silence Across All Markets This Morning
TMX
TMX Group offers sincere condolences to the families and friends of those affected by the tragic events in Toronto yesterday. We will be observing a minute of silence to honour the victims at 10:00 a.m. EDT across all of our markets. TMX Group support desks will not be accepting calls during this time.
/jlne.ws/2r2O7On

Saudi Arabia Is Delaying Stock Exchange IPO on Higher Valuation Hopes
Matthew Martin, Archana Narayanan and Glen Carey – Bloomberg
Saudi Arabia is delaying the initial public offering of its stock exchange on hopes that a potential MSCI Inc. upgrade could boost its value, according to people with knowledge of the matter.
/bloom.bg/2KcsEKw

Oxatis lists on Euronext Growth
Euronext
Euronext today announced the listing of the e-commerce solutions provider Oxatis on Euronext Growth Paris. Oxatis is the fourth listed company to have participated in Euronext’s TechShare programme, which familiarises growing businesses with capital markets.
/jlne.ws/2I0j7FW

Venues downplay pre-matched activity on periodic auctions; Industry leaders debated the rise of periodic auctions on a keynote discussion panel at TradeTech in Paris this week.
Hayley McDowell – The Trade
Pre-matched activity on increasingly popular periodic auction venues has been over stated, according to leading industry participants speaking at TradeTech 2018.
/jlne.ws/2HItDE7

Cboe Periodic Auction smashes EUR1 billion daily barrier; Cboe European Periodic Auction book exceeds EUR1 billion daily notional volume traded for the first time.
John Brazier – The Trade
Exchange operator Cboe’s European Periodic Auction book has set a new one-day record of EUR1.08 billion notional value traded.
/jlne.ws/2qVnHhg

Poll Results of 2018 Annual General Meeting
HKEX
/jlne.ws/2HNSdTS

ICE Benchmark Administration Publishes Report Outlining Evolution of ICE LIBOR and Transition to the Waterfall Methodology
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has published a report outlining the evolution of ICE LIBOR.
/jlne.ws/2HLwprZ

Nasdaq Reports First Quarter 2018 Results; Delivers Strong Growth in Revenues and Income
GlobeNewswire
Nasdaq, Inc. (Nasdaq:NDAQ) today reported financial results for the first quarter of 2018.
/jlne.ws/2HNpDlM

Fintech

TORA Launches AI-Powered AlgoWheel To Help Firms Adopt Systematic Best Execution Processes
Globe Newswire
TORA, provider of the industry’s most-advanced cloud-based order and execution management system (OEMS), today announced the launch of its AI-powered AlgoWheel, which will help firms create scalable, systematic best execution processes.
/goo.gl/WFfkBN

Equinix to Support Direct Connectivity to New Google Cloud Partner Interconnect Service
Benzinga
Equinix announced support for Google Cloud Partner Interconnect, a new service from Google Cloud that allows customers to connect to Google Cloud Platform from anywhere through its partners. Equinix also announced its expansion of private connectivity to Google’s Dedicated Interconnect cloud service to the Stockholm, Sydney and Munich metros, bringing the total number of markets where Google has deployed its Dedicated Interconnect service in Equinix data centers to 20, globally.
bit.ly/2HosORx

Born Technology tackles overlooked Mifid II real-time algo surveillance rules
FOW
/jlne.ws/2qW5wb7

Clients Of triReduce Take Advantage Of Trade Revision To Significantly Improve Their Compression Results
Mondovisione
NEX TriOptima, the award-winning infrastructure service provider for OTC derivatives, announces today that four major clients of the triReduce service have taken advantage of its new Trade Revision functionality in recent LCH SwapClear compression cycles. Several more banks are testing and are expected to adopt Trade Revision soon.
/jlne.ws/2Fd9Wio

Use of facial recognition systems on the rise among financial firms in Japan
Mainichi Japan
Financial institutions across Japan are continuing to bring in facial recognition systems, which can confirm a person’s identity simply by reading facial characteristics with a smartphone camera and other devices.
/jlne.ws/2qYL8Gv

HPR Extends High-Performance Capital Markets Infrastructure Platform into Europe T
Globe Newswire
Hyannis Port Research (HPR), provider of advanced capital markets infrastructure (CMI) technologies, today announced that a leading global investment bank has gone live on the HPR platform in Europe. With the launch, the bank is now using HPR’s Riskbot in EMEA, the Americas and Asia-Pacific, enabling it to provide its trading clients with sub-microsecond DMA (direct market access) to Cboe Europe, Euronext, LSE, Turquoise and Xetra.
/goo.gl/QiA4xL

Google overhauls Gmail to lure businesses away from Microsoft
Paresh Dave – Reuters
Alphabet Inc’s (GOOGL.O) Google unveiled on Wednesday its first Gmail redesign since 2013, capping what the company says was an expensive overhaul two years in the making to adopt security and offline functionality and better resemble Microsoft Outlook.
/jlne.ws/2qWjABy

Cryptocurrencies

Gemini to Launch Market Surveillance Technology in Collaboration with Nasdaq
GlobeNewswire
Nasdaq is providing SMARTS Market Surveillance technology to monitor cryptocurrency market
Gemini Trust Company, LLC (Gemini) and Nasdaq Inc. (Nasdaq:NDAQ) announced today that Gemini will be leveraging Nasdaq’s SMARTS Market Surveillance technology to monitor its marketplace. The technology, which is considered the most widely deployed surveillance system in the world, will enable Gemini to monitor across all of its trading pairs, including: BTC/USD, ETH/USD and BTC/ETH. Further, SMARTS will also surveil activity across the Gemini auction process that is used to determine the settlement price for the Bitcoin XBT futures contracts that trade on Cboe’s CFE Exchange.
/jlne.ws/2qRZQ23

Report: Iran officially bans use of cryptocurrencies
Associated Press
Iran’s Central Bank has officially banned the use of cryptocurrencies in financial transactions in order to prevent money laundering and terrorism, a newspaper reported Monday.
The move is seen as part of Tehran’s efforts to control the currency market after the rial hit an all-time low earlier this month.
bit.ly/2JnMdhI

Cboe Exchange Wants to Lower Its Bitcoin Futures Prices
Nikhilesh De – Coindesk
The Cboe wants to change the way it prices bitcoin futures contracts, a move that comes just months after the exchange operator first debuted its inaugural cryptocurrency product.
/jlne.ws/2HNQZrC

MobileCoin, a cryptocurrency from the creator of Signal, just raised $30M for mobile payments
Taylor Hatmaker – TechCrunch
A new privacy-centric cryptocurrency project with some big names on board just raised a round worth noting. On Tuesday, the team at MobileCoin announced that Binance Labs, the major blockchain incubator associated with the Binance exchange, led a $30 million round denominated in bitcoin and ether for the new cryptocurrency. MobileCoin will enjoy “priority consideration” for being listed on Binance as part of the relationship.
/jlne.ws/2qXmFRY

‘OK, I’ll say it: bitcoin is a scam,’ says the former CEO of PayPal and Intuit
Shawn Langlois – MarketWatch
Bitcoin has enjoyed a nice stretch lately, breaking through the $9,000 level on Tuesday and leading a broad advance in the crypto space, which has seen a $100-billion surge in market cap to $425 billion over the past week. So, Bill Harris, are you warming up to bitcoin as an investment?
/jlne.ws/2HMRPoQ

Founding PayPal CEO Bill Harris Says Bitcoin Is A Scam, Here’s Why He’s Wrong
Kyle Torpey – Forbes
In a recent post for Recode, founding PayPal CEO and former Intuit CEO Bill Harris made the case that Bitcoin is a “colossal pump-and-dump scheme, the likes of which the world has never seen.”
/jlne.ws/2qVwVtU

Why Some Cryptocurrencies Are Only for the Wealthy
Olga Kharif – Bloomberg
Initial coin offerings, which have become the ground floor for investing in cryptocurrencies that hope to soar like Bitcoin, raised almost $6 billion last year. In most cases, the issuer had no product — only a white paper jam-packed with business ideas — and said its coins (or tokens) weren’t securities because they’d be used in running whatever venture it was. Regulators didn’t buy that. Some crypto startups are now pitching their digital coins in a different way, by calling them security tokens, ones that can take advantage of exemptions in securities laws.
/jlne.ws/2qYdxfK

Crypto Billionaire Sued by Sequoia After Deal Falls Apart
Benjamin Robertson – Bloomberg
Binance founder Zhao Changpeng sued in Hong Kong court; Dispute sheds light on how VC firms have valued the exchange
A legal dispute between Zhao Changpeng, founder of the world’s largest cryptocurrency exchange, and a unit of Sequoia Capital is offering a rare glimpse into one of the digital-asset industry’s fastest-growing startups.
/jlne.ws/2qUDrBk

Winklevoss twins hire Nasdaq to monitor crypto market
Nicole Bullock in New York- FT
The Winklevoss twins have hired Nasdaq to monitor its cryptocurrency exchange for bad actors in the US-based exchange operator’s first such surveillance deal in the space.
/jlne.ws/2qVWhro

Politics

Mick Mulvaney Tells Bankers to Pay Up If They Want Favors From Trump
Jonathan Chait – New York Magazine
Donald Trump ran for the presidency as an economic populist who promised to implement stringent new reforms to limit the power of money in government. Not only has he ignored these promises, he’s likewise failed to observe even the old norms, which called for some pretense of good government. For instance, people in government might have always given their donors more influence over their decisions, but they at least pretended that was not the case in public. The Trump administration is not even bothering to put up a façade.
/jlne.ws/2HMSpD2

Mulvaney, Watchdog Bureau’s Leader, Advises Bankers on Ways to Curtail Agency
Glenn Thrush – NY Times
Mick Mulvaney, the interim director of the Consumer Financial Protection Bureau, told banking industry executives on Tuesday that they should press lawmakers hard to pursue their agenda, and revealed that, as a congressman, he would meet only with lobbyists if they had contributed to his campaign.
/jlne.ws/2HRBL5j

Senators push banks for information on Russian ‘oligarchs’
Patricia Zengerle – Reuters
U.S. senators are pressing many of the world’s largest financial institutions to disclose any links between their companies and wealthy Russians allied with Russian President Vladimir Putin, according to a letter released on Tuesday.
/jlne.ws/2qVlWkc

Trump’s H-1B curbs are putting off foreign students and choking the US economy
Ananya Bhattacharya- Quartz
The Donald Trump administration’s hard stance on immigration is beginning to take a toll on the US economy.
/jlne.ws/2HNP1aU

The Rusal Case Is a Failure of U.S. Sanctions; There are ways to hit Putin’s shadowy cronies without hurting top Russian firms.
Leonid Bershidsky – Bloomberg
The softening of U.S. sanctions against Russian aluminum producer Rusal sends at least two important signals to investors and to official Moscow. One is that the Trump administration has little understanding of the impact of its moves before it makes them. The other is that it doesn’t want to impose sanctions that will do a lot of collateral damage outside Russia.
/jlne.ws/2HLEMUB

Washington Wants to Weaken Bank Rules. Not Every Regulator Agrees.
Peter Eavis – NY Times
Bank regulators are on the cusp of weakening a rule put in place to prevent the nation’s biggest banks from causing another financial crisis, marking the first significant attempt by policymakers to fulfill President Trump’s promised regulatory rollback.
/jlne.ws/2qVlkuS

Regulation

SEC Upshifts on Market Structure
Rob Daly – MarketsMedia
After a long period of regulatory status quo, Wall Street should brace for a quicker tempo from the US Securities and Exchange Commission for the rest of the year.
During a recent market structure symposium hosted by the Security Traders Association and the University of Chicago’s Booth School of Business, Chairman Jay Clayton noted that the SEC would vote on the final rule of the 2015 proposal to enhance automated trading system disclosures as well as the 2016 proposal on broker order-routing disclosures in the coming months, according to James Toes, CEO of the STA, during an open call hosted by the STA Foundation.
bit.ly/2Hoiuss

ISDA Publishes Future of Derivatives Survey at 33rd ISDA Annual General Meeting
ISDA
Derivatives industry participants are optimistic about the future of derivatives markets, but have flagged a number of important changes that will have an impact on the future of the business, according to a new survey published by ISDA to coincide with the start of the 33rd ISDA Annual General Meeting (AGM) in Miami.
/jlne.ws/2qWormg

Altaba, Formerly Known as Yahoo!, Charged With Failing to Disclose Massive Cybersecurity Breach; Agrees To Pay $35 Million
SEC
The Securities and Exchange Commission today announced that the entity formerly known as Yahoo! Inc. has agreed to pay a $35 million penalty to settle charges that it misled investors by failing to disclose one of the world’s largest data breaches in which hackers stole personal data relating to hundreds of millions of user accounts.
/jlne.ws/2HOvpU8

Statement on Manufactured Credit Events by CFTC Divisions of Clearing and Risk, Market Oversight, and Swap Dealer and Intermediary Oversight
CFTC
The Commodity Futures Trading Commission (CFTC) Divisions of Clearing and Risk, Market Oversight, and Swap Dealer and Intermediary Oversight today issued the following statement regarding manufactured credit events in connection with credit default swaps (CDS):
/jlne.ws/2HYk0hY

Wells Fargo fined $1 billion for ‘unfair’ insurance practices — how to avoid being oversold
Maria Lamagna – MarketWAtch
Some car owners have been paying much more than they need to — sometimes leading to losing their vehicles entirely.
/jlne.ws/2qYeaWE

A Decade on, Madoff Geneva Case Gets Partial Reboot With Ruling
Hugo Miller – Bloomberg
Swiss feeder fund at heart of case belonged to Banco Santander; Acquittal of fund manager for criminal mismanagement upheld
Nearly a decade after Bernie Madoff was sentenced to 150 years in prison for orchestrating a $17.5 billion Ponzi scheme, Switzerland’s top court revived prospects for a criminal complaint against the manager at one of Madoff’s Geneva-based feeder funds.
/jlne.ws/2qWknlY

SIs say future is bright under MiFID II regime; TradeTech keynote panel discussion suggests the buy-side is becoming more comfortable interacting with systematic internalisers.
Hayley McDowell – The Trade
Leading European systematic internaliser (SI) operators are optimistic on the future under the MiFID II regime despite signs of initial caution from the buy-side.
/jlne.ws/2HLtGyL

FINRA Requests Comment on the Effectiveness and Efficiency of Its Rule on the Annual Compliance Meeting
FINRA
FINRA is conducting a retrospective review of Rule 3110 (Supervision), governing annual compliance meetings to assess its effectiveness and efficiency. This Notice outlines the general retrospective rule review process and seeks responses to several questions related to firms’ experiences with this specific rule.
/jlne.ws/2qWPkXo

FINRA Progress Report on FINRA360 Highlights Significant Changes; One-year Report Lays out Changes through the Organizational Review
FINRA
The Financial Industry Regulatory Authority (FINRA) today released a comprehensive progress report summarizing the significant operational and regulatory changes FINRA has made in the first year of its ongoing FINRA360 organizational review.
/jlne.ws/2qZ4A5Z

CFTC Charges New York Resident Kevin Scott Antonovich with Commodity Pool Fraud
CFTC
The Commodity Futures Trading Commission (CFTC) announced the filing of a civil enforcement action on April 23, 2018, in the U.S. District Court for the Eastern District of New York charging Defendant Kevin Scott Antonovich of Woodside, New York, with misappropriation of customer funds and fraudulent solicitation in connection with investments in a commodity pool. The CFTC Complaint also charges Antonovich with registration violations.
/jlne.ws/2HIxYan

FCA response to the Independent Review of the Funding of Debt Advice by Peter Wyman
UK FCA
Peter Wyman’s report (link is external) into the funding and delivery of debt advice in the UK is an important step which will make a real difference to policy and practice in this vital area. Good quality advice, delivered in a cost effective way, is crucial in helping avoid harm to consumers struggling with debt, many of whom can be vulnerable. We are working through the detail of the recommendations that affect the FCA directly, and look forward to working closely with the Money Advice Service and other stakeholders as we think about how we might act on the report’s findings.
/jlne.ws/2HQbjsu

Investing and Trading

U.S. Investors Just Gave Up on the Bull Market
Luke Kawa – Bloomberg
More respondents see stocks lower in 12 months than higher; S&P 500 stuck in range since February rout on host of concerns
Call it the running of the bears. With equities almost three months removed from the last record, Americans have grown less optimistic that the market will bounce back. For the first time since Donald Trump’s shock election in November 2016, a majority of consumers expect stocks to be lower 12 months from now, according to the latest sentiment reading from the Conference Board.
/jlne.ws/2qXIMaR

Analysis: China crude futures’ discount shuts Dubai-Shanghai arbitrage
Gawoon Philip Vahn – Platts News Article & Story
The bullish tone in China’s new crude oil futures contracts during late March has quickly faded this month, essentially shutting the arbitrage window for traders who were hoping to take advantage of higher prices quoted in the Shanghai exchange compared to other Middle Eastern benchmarks.
bit.ly/2Hp0ZbL

Grumpy Investors Can’t Find Anything to Look Forward To
Matt Phillips – NY Times
The stock market is forward-looking. That’s a problem when there’s not much to look forward to.
/nyti.ms/2K9RB9s

Olam Sees Cocoa Deficit Likely Next Season as Demand Grows
Isis Almeida – Bloomberg
Rising consumption will probably flip the global cocoa market into a shortage next season, according to Olam International Ltd., the world’s third-biggest processor.
/bloom.bg/2FdIBN4

A $3 Trillion Credit Market Has Corporate Bond Investors on Edge
Adam Tempkin, Brian W. Smith – Bloomberg
Notes rated BBB look increasingly vulnerable to some analysts; Strategists ‘trying to figure out when everything turns’
A huge swath of the corporate bond market is looking increasingly vulnerable.
/jlne.ws/2HLdTzZ

Institutions

Want To Replace Your Hedge Fund Allocation? Here’s One Option
Julie Segal – Institutional Investor
Under pressure to explore new ways to hedge their risks while cutting fee expenses, institutions are taking a fresh look at listed options — in some cases, at the expense of hedge funds.
/jlne.ws/2qWzoV3

The $5tn ETF market balances precariously on outdated rules; Let us create regulations that put all these investment products under one umbrella
Henry Hu – FT
In 25 years, the exchange-traded fund has become one of the most popular financial innovations of the modern era. In 2016, seven of the 10 most actively traded US securities were ETFs. But the sector is a regulatory backwater.
/jlne.ws/2qWyqrT

Lloyds Bank profits jump by 23% to £1.6bn
BBC
Lloyds Banking Group has said it has made a “strong start” to 2018, with profits for the first three months of the year jumping by nearly a quarter.
/jlne.ws/2HNPh9S

Credit Suisse Reaps Wealth Management Rewards as Assets Soar
Jan-Henrik Foerster – Bloomberg
Credit Suisse added net new assets at 7.5% rate in quarter; Bank remains confident in growth of wealth, investment bank
Tidjane Thiam is reaping the rewards of Credit Suisse Group AG’s pivot to wealth management after the bank attracted new assets at the fastest pace in seven years.
/jlne.ws/2HNa0L8

Credit Suisse Lands a Heavy Blow On a Swiss Hedge Fund; But the mission to overhaul bank isn’t over yet.
Lionel Laurent – Bloomberg
Credit Suisse AG’s first-quarter results have given CEO Tidjane Thiam ammunition against activists calling for more radical surgery. Despite a fairly weak quarter for the investment bank, the CEO’s focus on wealth management while cutting costs and dumping unwanted assets is paying off. The shares rose 4 percent in response. Profitability is still below target, though. This isn’t the finish line.
/jlne.ws/2qW2uDJ

Credit Suisse Sues to Recoup Part of $4.8 Billion Bank Bonus Tax
Jonathan Browning – Bloomberg
Swiss bank says impact of 2010 levy was ‘arbitrary’ in nature; U.K. Labour government-era tax generated $4.75 billion
Credit Suisse Group AG is seeking to reclaim hundreds of millions in taxes from a controversial U.K. bonus levy that hit banker compensation in 2010.
/jlne.ws/2qWimpU

Regions

How to Run Hedge Funds in a Communist Country; Rewards and pitfalls greet foreign money managers in China.
Shuli Ren – Bloomberg
As global managers from UBS Group AG to BlackRock Inc. get into China’s $2 trillion investment industry, they’ll need strong stomachs to run hedge funds in a Communist country.
/jlne.ws/2HNNzoM

China’s soybean imports from US plunged 27 per cent in March
Yuan Talks
China’s soybean imports from the US dropped by 27 per cent year-on-year to 3.1 million tons in March, while its imports from Brazil surged by 30 per cent in the same period compared to a year earlier to 2.33 million tons, shows data released by China’s state customs on Tuesday.
/jlne.ws/2qXjrxQ

Russia’s Wheat Crop Under Threat From Miserable Start to Spring
By Anatoly Medetsky – Bloomberg
Cold delayed winter-crop growth resumption, spring plantings; Analysts see next season’s output falling by at least 9%
Russia’s poor start to spring means farmers may struggle to collect a wheat crop that’s near to last year’s record.
/goo.gl/Fpf3Ra

A $7 Trillion Debt Pile Looms Large Over Chinese Households
Bloomberg News
Household borrowing has risen sharply over the past decade; Analysts see mortgage repayments hurting shift to consumption
The next front in China’s crackdown on debt is the one closest to home.
/jlne.ws/2HK3XH9

Brexit

David Davis admits UK could push back Brexit day – but says customs union extension would be “failure”
Catherine Neilan – City AM
David Davis has admitted the UK could push back the moment it leaves the EU – but said he would regard any need to extend the customs union membership as “a failure”.
/jlne.ws/2HRGbJr

The post Bitcoin is the greatest scam in history appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Andreas Preuss and Jeffrey Tessler have been replaced on the Deutsche Boerse AG Executive Board. Thomas Book, Christoph Bohm and Stephan Leithner have been appointed to the board.~JJL

Yesterday’s Fintech Exchange, hosted by Barchart, kicked off with with the Startup Exchange Competition – 16 start-ups introducing their innovative companies. PanXchange won the competition, for its technology and approach to raw commodities. The company listed frac sand in October 2017. Second went to Coinifide, a start-up that is building a trading education and trading platform for cryptocurrency markets. Third place went to Freight Exchange, which is listing trucking freight contracts, including futures on freight with Nodal Exchange later this year.~JK

We recently put out a video of PanXchange CEO Julie Lerner talking about developments to the platform over the past two years.~SD

Several firms at Fintech Exchange in the start-up event are taking a stab at making trading easier and more effective for retail investors. A firm from Israel, Tipigo, is using AI and scoring to narrow down stocks with the best chance to move up in price. Others using machine learning, AI and other cutting edge technologies in that space included UCX, Halo for structured notes, Upper Room for bonds, Trendy Trade and SixJupiter.~JK

Did you know the organic and non-GMO industry is a $100 billion-plus market? Mercaris, a start-up exchange focused on the space, is trying to bring some efficiencies to that space. Founder and CEO Kellee James knows a few things about start-up exchanges as a former economist with the Chicago Climate Exchange.~JK

Some people may have experienced difficulties viewing the first part of Doc Sandor’s interview from yesterday. If so, check it out now here. He will be the keynote speaker at today’s Fintech Exchange. ~SD

++++

Electronic Trading Adoption and Crypto Parallels – Richard Sandor, AFX
JohnLothianNews.com

“Sometimes these exogenous shocks force us to look at things that we do in a different way.”

The financial industry has adapted to new technologies before, but AFX CEO and Chairman Richard Sandor believes blockchain will gain traction in financial services much quicker than electronic trading did. In this video from JLN’s annual series with industry leaders, Sandor talks about why he is a “buyer” of the crypto ecosystem.

Watch the video and read the rest here »

++++

Former UBS Trader Is Cleared in ‘Spoofing’ Case
Emily Flitter – NY Times
A federal jury on Wednesday acquitted a former trader for the Swiss bank UBS of charges related to market manipulation, dealing a blow to a Justice Department effort to crack down on a Wall Street practice known as “spoofing.”
/jlne.ws/2vMrlPg

***** We will have something on this case later today from the former U.S. Attorney who won the first spoofing case, Renato Mariotti.~JJL

++++

Solidifying the Brand – Mark Haraburda, Barchart
JohnLothianNews.com

While Barchart.com might be the most recognizable part of Barchart’s business, CEO Mark Haraburda said 2017 was instrumental in presenting a more holistic view of the company’s varying activities to market participants.

In this video from JLN’s annual series with industry leaders, Haraburda talks about investing in human capital, it’s new cmdty solution for agricultural professionals and the opportunities in proprietary indices.

Watch the video and read the rest here »

++++

Why Wall Street’s Stock Traders Are Having Their Best Year Since the Crisis; After years of muted trading, a leap in market volatility has pushed investors into stock-index futures and options
Telis Demos – WSJ
A surge on Wall Street stock-trading desks is being driven by manic investor moves in derivatives, as fund managers scramble to protect their gains from future volatility.
/jlne.ws/2r0yxTj

***** Vol, baby, vol.~JJL

++++

Wednesday’s Top Three
Yesterday’s top read story by a long shot was Bitcoin is the greatest scam in history in Recode.net, and it wasn’t even by Jamie Dimon. It was written by former PayPal CEO Bill Harris. Second was CME’s piece by Blu Putnam and Erik Norland An In-Depth Look at the Economics of Bitcoin. In third was Quartz’s article A loud noise damaged Nasdaq’s servers, stopping trading in northern Europe and the Baltics. Turns out, computers don’t like loud fire alarms.

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MarketsWiki Stats
124,350,531 pages viewed; 23,085 pages; 212,870 edits
MarketsWiki Statistics

Lead Stories

Swaps Rules Due for Overhaul in Bid to Boost Liquidity; CFTC chairman expects rollout of new rules in coming months after long criticizing Dodd-Frank regulations as too prescriptive
Gabriel T. Rubin – Reuters
U.S. regulators want to make it easier for companies to complete swaps trades, responding to industry complaints that postcrisis rules have hurt market liquidity.
/jlne.ws/2qZl1iI

***FT here.

Ex-UBS Metals Trader Beats Spoofing Conspiracy Charge
Christie Smythe – Bloomberg
Defendant found not guilty of scheming to manipulate markets; Expert defense witness raised doubts about trading patterns
If anything is more precious than gold, it might be an acquittal. A former UBS Group AG precious metals trader was found not guilty on Wednesday of scheming to manipulate futures markets through a practice known as spoofing.
/jlne.ws/2vO6USf

Central Bankers Can’t Agree on Cryptocurrencies; But cooperation will be essential to avoid disruption.
Fernando Giugliano – Bloomberg
The joke doing the rounds at last week’s spring meetings of the International Monetary Fund and the World Bank in Washington was that central banks are looking into cryptocurrencies so that their governors have something to say when they go to conferences and are asked about Bitcoin.
/jlne.ws/2HVuxxb

New Financial Transaction Methods Pose Challenge in Terror Fight, Officials Say; French President Emmanuel Macron hosts ministers from 70 countries in Paris to try to coordinate a crackdown of financing
William Horobin – WSJ
President Emmanuel Macron called ministers from over 70 countries to Paris on Thursday in an effort to coordinate a crackdown on new terror-financing methods that French officials say pose a growing threat to global security.
/jlne.ws/2qYgqgQ

Goldman Joins Barclays, Citigroup on Structured Debt Platform
Viren Vaghelo – Bloomberg
Low rates fueling investor demand for structured securities; More than 700 million euros of notes issued since May 2017
Goldman Sachs Group Inc. is joining its peers on a platform for structured notes run by a group of global banks, including JPMorgan Chase & Co. and Citigroup Inc.
/jlne.ws/2HRROzS

Nasdaq is open to becoming cryptocurrency exchange, CEO says; Once the regulation is smoothed out and the space “matures”, Nasdaq would consider becoming a digital currency exchange, the company’s CEO says.
Kate Rooney – CNBC
Once the space matures, Nasdaq is open to becoming a platform for trading cryptocurrencies like bitcoin, according to the company’s CEO.
/jlne.ws/2HTY1v2

Barclays and Deutsche Bank Paths Diverge as Sewing Plots Retreat
Donal Griffin, Stephen Morris – Bloomberg
Staley boasts of beating U.S. rivals as Sewing plans cuts; Trading revenue falls 17% at Deutsche Bank, up 8% at Barclays. Deutsche Bank AG is retreating from its Wall Street rivals. Barclays Plc still thinks it can take them on.
/jlne.ws/2HTUrB8

Barclays Answers Critics With Investment-Banking Growth; U.K. bank swings to overall loss on Justice Department settlement
Max Colchester – WSJ
Barclays Chief Executive Jes Staley faced down investor pressure over its investment bank by boosting revenue at the unit in the first quarter, even as a settlement with the U.S. Justice Department pushed the British lender into an overall loss.
/jlne.ws/2HUbnrl

Deutsche Bank Posts Sharp Fall in Profit Amid Vast Overhaul; Bank says it will pull back in certain trading and lending activities
Jenny Strasburg – WSJ
Deutsche Bank AG DB -1.22% said Thursday net income in the first quarter declined 79% and that it will shrink its U.S. investment bank, the latest sign of struggle at the German lender, which this month replaced its CEO and reshuffled several other top executives.
/jlne.ws/2qYfr08

Deutsche Bank fired 300 U.S.-based investment bankers on Wednesday: source
Reuters Staff
Deutsche Bank (DBKGn.DE) fired 300 U.S.-based investment bankers on Wednesday as part of a broader overhaul of the global unit, a person with knowledge of the matter said on Thursday.
/jlne.ws/2vLIuJ3

NYSE plan to expand floor-traded stocks hits snag; Trading in Amazon and Alphabet curtailed after technical issues
Nicole Bullock – FT
A plan by the New York Stock Exchange to extend floor trading to securities listed on rival exchanges hit a snag on Wednesday.
/jlne.ws/2r1fbNH

***Bloomberg here.

Seven UK banks targeted by co-ordinated cyber attack; International police operation shuts down site used to launch IT assaults
David Bond in London – FT
Seven of the UK’s biggest banks including Santander, Royal Bank of Scotland and Tesco Bank were forced to reduce operations or shut down entire systems following a cyber attack last year using software which can be rented for as little as £11, according to the National Crime Agency.
/jlne.ws/2vQHrHG

Initial Margin for Non-Cleared Derivatives Rises by 22%, ISDA Margin Survey Finds
ISDA
The International Swaps and Derivatives Association, Inc. (ISDA) has published its latest Margin Survey, which shows a strong increase in the amount of initial margin (IM) held by the largest 20 market participants for their non-cleared derivatives trades.
/jlne.ws/2vQOQqF

Top 10 Managed Futures Programs in March
RCM Alternatives
Here’s the Top performing CTAs in the BarclayHedge database in March, after most of last month’s returns have now been reported.
bit.ly/2qVhn9G

Market complexity growing alongside large-in-scale trading and periodic auctions
John Brazier – The Trade
The increased use of large-in-scale (LIS) trading platforms and periodic auction books are creating further market complexity and fragmentation, according to a cross-industry panel at this year’s TradeTech conference.
/jlne.ws/2HROAMB

BP Names Oil Industry Veteran Helge Lund as Chairman; Norwegian previously ran Statoil and BG Group
Carlo Martuscelli – WSJ
BP has appointed energy industry veteran Helge Lund as its next chairman as the oil giant seeks to move past the Deepwater Horizon disaster and get to grips with a fast-changing industry.
/jlne.ws/2HP3q6D

Who Took the Fun Out of Fund Management?; Three reasons why the industry is so full of angst right now.
Mark Gilbert – Bloomberg
“Happy families are all alike; each unhappy family is unhappy in its own way,” was how Leo Tolstoy started his novel Anna Karenina. The three tribes that make up the asset management business are each suffering their own crisis of confidence — and none of them has anything to do with Brexit.
/jlne.ws/2vOmXPJ

Exchanges, OTC and Clearing

French market regulator hits out at Cboe Europe
Philip Stafford – FT
The head of the French regulator has hit out at one of the fast-growing areas of European equities trading, saying its levels of transparency were “very limited”.
/jlne.ws/2vOdloj

Supervisory Board of Deutsche Bˆrse AG decides on personal details; Dr. Thomas Book, Dr. Christoph Bˆhm and Dr. Stephan Leithner appointed to the board
Deutsche Bˆrse AG
Against the backdrop of the foreseeable departure of Andreas Preuss and Jeffrey Tessler from the Executive Board, the Supervisory Board of Deutsche Bˆrse AG made the following personnel decisions in its meeting today, subject to regulatory non-appeal:
/jlne.ws/2HRFcIY

Q1 / 2018: Deutsche Boerse AG with a strong start to the year; Net sales increased by 11 percent to EUR692 million in Q1 / 2018
Deutsche Boerse AG
Deutsche Boerse AG published its financial results for the first quarter of 2018 on Wednesday. The company generated net revenues of EUR691.6 million, an increase of 11 percent compared to the previous year (Q1 / 2017: EUR623.4 million). In line with its plans, Deutsche Boerse achieved growth in structural net sales of around 7 percent. In addition, cyclical effects, such as increased stock market volatility and higher US interest rates, boosted net revenues.
/jlne.ws/2r0b8kK

Selective RFQ: Voice Bridging E-Trading Part 1 – Why Selective RFQ?
Eurex
MiFID II and the associated compliance has been a catalyst for change as new rules are causing a shift in the way global market participants assess and track their executions. The ability to preserve key elements of the OTC trading workflow while leveraging the benefits of electronic price formation is becoming more and more important.
/jlne.ws/2HOr1Vf

Baltic Exchange developing container shipping index in new market push
Reuters
London’s Baltic Exchange is developing a container shipping index with Hong Kong-headquartered group Freightos in another sign that the centuries-old business is moving into new markets.
/goo.gl/wJRyBh

Shanghai Stock Exchange issues new rules governing tri-party repos
Reuters
The Shanghai Stock Exchange has introduced new temporary rules governing tri-party “pledge-style” bond repurchase agreements in what it says is a move to further develop China’s bond market.
/reut.rs/2HsbZFi

Euronext publishes first commodity trading reports
Reuters
Euronext said on Wednesday it had launched reports on investors’ trading positions in commodity derivatives to comply with new European Union regulations.
/goo.gl/t7nu4J

ELITE welcomes eleven new UK companies to its unique high growth business programme
London Stock Exchange Group
London Stock Exchange Group (LSEG) today welcomes eleven new UK companies to its unique business support and capital raising programme for high growth companies, ELITE. This brings the total number of UK companies in the ELITE community to over 130.
/jlne.ws/2HRR1Pf

ICE Benchmark Administration Publishes Report Outlining Evolution of ICE LIBOR and Transition To The Waterfall Methodology
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has published a report outlining the evolution of ICE LIBOR.
/jlne.ws/2HLwprZ

Appointment of Chairman
The Board of Directors (“Board”) of Hong Kong Exchanges and Clearing Limited
(“HKEX”) today resolved to appoint Mrs Cha May-Lung, Laura as the Chairman of the Board (“Chairman”) for a term to be coterminous with her directorship.
/jlne.ws/2HSFpvC

New Appointments
HKEX
Following the Government’s appointment of Laura Cha and Benjamin Hung, and shareholders’ re-election of T C Chan, Fred Hu and John Williamson as Directors of Hong Kong Exchanges and Clearing Limited (HKEX), the HKEX Board today (Thursday) appointed Laura Cha as the HKEX’s Chairman, subject to the written approval of the Chief Executive of the Hong Kong Special Administrative Region.
/jlne.ws/2HXzOUC

Fintech

Vela adds Eris Exchange to DMA platform
Vela
Vela, a leading provider of trading and market access technology, and Eris Exchange (Eris), a U.S.-based CFTC registered futures exchange that offers Eris Swap Futures as the leading alternative to traditional over-the-counter (OTC) swaps, are pleased to announce the expansion of Vela’s award-winning Direct Market Access (DMA) platform market coverage to include trading connectivity access to Eris Swap Futures.
/goo.gl/ZZfoy3

Societe Generale Selects big xyt’s Liquidity Cockpit For Enhanced Equities Trading Activity Analysis
big xyt
big xyt, the independent provider of high-volume, smart data and analytics capabilities, is pleased to announce the addition of Societe Generale Corporate & Investment Banking (SG CIB) as a client of its Liquidity Cockpit, providing a consolidated view across all European trading venue activity with on-exchange and off-exchange liquidity including over-the-counter (OTC) equities and Systematic Internaliser (SI) transactions.
/goo.gl/1kZJcR

High-growth Tech Firm Metamako Buys xCelor’s Hardware Business
PRNewswire
Metamako, provider of the world’s leading low-latency, FPGA-enabled network solutions, announced today the acquisition of xCelor’s network device business. In a clear strategic move Metamako is making its first acquisition, strengthening its position as the premier network technology platform for companies developing and deploying high-performance applications. xCelor will now concentrate on its applications business, providing its apps on the Metamako hardware. This is further testament to Metamako becoming the solution of choice for running cutting-edge network/FPGA applications.
/goo.gl/WPxy7s

UK fintech company Revolut valuation passes $1bn
Nicholas Megaw – FT
Revolut, the banking and foreign exchange group, has become the latest UK fintech company to lift its valuation above $1bn, with a $250m fundraising to fund its international expansion.
/jlne.ws/2qZkBZG

Cryptocurrencies

Hacked Crypto Exchange Earned $490 Million Before Epic Heist
Yuji Nakamura – Bloomberg
Coincheck made the money in 10 months before $500 million hack; Figures show how lucrative Bitcoin bubble was for bourses
Running a cryptocurrency exchange can be enormously profitable — so long as you don’t lose your clients’ assets to hackers.
/jlne.ws/2r1vSZr

Barclays, Goldman Champion ISDA Standard for Blockchain Derivatives
Ian Allison – Coindesk
Blockchains and smart contracts were supposed to fix the inefficiencies and slash the costs of derivatives trading, but two years since such promises came in vogue, a foundational issue has yet to be ironed out.
/jlne.ws/2vPSj8H

VC Firm With Rockefeller Roots Turns to Crypto Startups
By Olga Kharif – Bloomberg
Venrock sees potentially hundreds of billion-dollar companies; Equity investment takes precedence over currency speculation
A venture capital firm that sprang from the Rockefeller fortune is setting its sights on cryptocurrency businesses while sticking to its roots: investing in startup equity rather than simply snapping up digital tokens.
/jlne.ws/2vQNBrv

A Software Bug in Ethereum Tokens Is Helping Halt the Crypto Rally
By Camila Russo – Bloomberg
Resurgent cryptocurrencies were able to shrug off yesterday’s broad financial market sell-off, but they’re not so immune today amid concern that one of the cornerstones of the sector has run into some problems.
/jlne.ws/2vLk7eE

Most Cryptocurrency Trading Is Moving to Malta, at Least Legally
By Lily Katz – Bloomberg
Digital-coin exchanges have found a new haven in an archipelago in the Mediterranean Sea.
/jlne.ws/2vMyf7p

Genesis Trading looks to stay open 24/7 as it rides a wave sweeping up traders in one corner of the bitcoin market
Frank Chaparro – Business Insider
Genesis Trading, a New York-based cryptocurrency trading firm, is hiring an overnight trader to meet demand from clients in Asia as it weighs whether or not to expand onto the continent.
/jlne.ws/2vMyr6D

The former head of JPMorgan’s crypto efforts says blockchain today is a lot like the internet in 1969
Frank Chaparro – Business Insider
Amber Baldet was the face of JPMorgan’s blockchain initiatives before she left the bank earlier this month to start her own venture.
/jlne.ws/2vQGr6o

HashChain Technology Enters Binding Agreement Increasing Mining Operations to estimated 15 Megawatts
HashChain Technology Inc.
HashChain Technology Inc. (“HashChain” or the “Company”) (TSXV: KASH; OTCQB: HSSHF) announced today that the Company has entered into a binding letter agreement (the “Binding Agreement”) to acquire 100% of the outstanding shares of a company (“Target”) in consideration for the issuance of 55 million HashChain shares at a deemed price of $0.35 per share (the “HashChain Shares”) equivalent to $19.25 million.
/jlne.ws/2vNDlQF

Politics

U.S. Bank Regulator Acquired Bank Stock While Nomination Was Under Review; Comptroller of the Currency Joseph Otting was confirmed for the post in November, sold stock in January
Ryan Tracy – WSJ
A top regulator of the nation’s largest banks purchased bank stocks while his nomination for the job was under review, financial disclosures indicate. Comptroller of the Currency Joseph Otting, a former banker who has taken the agency in a deregulatory direction, was confirmed for the post in November and sold the stock in January, according to forms he has filed with U.S. agencies including the Office of Government Ethics.
/jlne.ws/2r1B0Nb

Regulation

CFTC Charges Pennsylvania Resident Michael Salerno and his Entities with Solicitation Fraud and Misappropriation in Connection with Retail Forex Transactions in Violation of the Commodity Exchange Act
CFTC
The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action charging Defendants Michael Salerno of Chadds Ford, Pennsylvania, and his companies Black Diamond Forex LP and BDF Trading LP, both Pennsylvania limited partnerships, and Advanta FX, a Pennsylvania corporation, with fraudulently soliciting members of the public to become foreign currency (forex) proprietary traders and with misappropriating the traders’ funds for purposes other than forex trading.
/jlne.ws/2HVALNz

ASIC suspends AFS licence of Direct FX for compliance failures
ASIC
ASIC has suspended the Australian financial services (AFS) licence of Direct FX Trading Pty Ltd (AFS licence 305539) (Direct FX) for a minimum of ten weeks and up to six months, depending on whether key criteria are satisfied.
/jlne.ws/2HPDYOx

ASIC releases guidance on AFS licensing exemption for tax and BAS agents
ASIC
The Australian Securities and Investments Commission (ASIC) has updated its guidance for accountants who provide services on self-managed superannuation funds (SMSFs) to cover the exemption from the Australian Financial Services (AFS) licensing requirements for tax and BAS agents.
/jlne.ws/2qZ6vHI

Basel tells big banks that simple might be better
Huw Jones – Reuters
Big investment banks should accept that simple may be better when it comes to new rules for capital requirements to protect them from trading risks, a top regulator said on Wednesday.
/goo.gl/5i4ycu

Danske Wealth Management Robot Gets Caught Shirking Regulations
Frances Schwartzkopff – Bloomberg
Danish regulator reprimands Danske’s asset management robot; The robot failed to live up to investor protection rules: FSA
Danske Bank A/S was rapped over the knuckles by the Danish regulator for failing to ensure its wealth management robot lives up to investor protection rules.
/jlne.ws/2HNKbKT

EU moves to regulate tech giants’ business practices
Julia Fioretti – Reuters
Tech giants including Google, Apple and Amazon will for the first time face rules governing their commercial relations with smaller businesses under a law proposed by the European Union on Thursday.
/jlne.ws/2HM7zZh

Sebi could make ‘pre-trade’ allocation mandatory in Indian markets; Pooled investors such as MFs or FPIs will have to state schemes under which they are acquiring shares
Pavan Burugula and Sachin Mampatta – Business Standard
The Securities and Exchange Board of India (Sebi) will soon issue a set of rules for trade allocations of institutional investors such as mutual funds (MFs) or foreign portfolio investors (FPIs).
/jlne.ws/2vQBn1S

Ex-Deutsche Bank Trader Says U.K. Questioning Taints Case
Bob Van Voris – Bloomberg
Gavin Black is charged with helping rig Libor benchmark; Ruling against prosecution could derail trial set for June
A former Deutsche Bank AG trader said he shouldn’t have to face a criminal trial in the U.S. over allegations of Libor-rigging because he was coerced in the U.K. into making statements that implicated him.
/jlne.ws/2vU4Eci

Investing and Trading

Don’t bet against bubbles, look for ‘anti-bubbles’; Assets with under-allocated capital exist so avoid techs and cryptocurrencies
John Authers – FT
How do we deal with bubbles? Much study has gone into asset price bubbles and we know from the experience of the past two decades that they can do deep damage to the world economy. But what exactly is an investor to do about them?
/jlne.ws/2HMbe9t

Computerised trading drives up NY cocoa price
US-quoted price for the commodity usually trades at a discount to London
Emiko Terazono – FT
Computers are dominating the trading of cocoa in New York, sparking a dramatic divergence in the longstanding price relationship with the London market.
/jlne.ws/2HRfzIb

Coffee market struggles under ‘big short’ position; Funds take bearish bets as record Brazil crop and high stocks lead to low volatility
Emiko Terazono – FT
The coffee market is struggling under a “big short” created by hedge funds that have built up record bearish positions.
/jlne.ws/2vMqqOO

Institutions

Deutsche Bank to shrink rates trading team and review global equities business; Deutsche Bank’s plans will involve a significant reduction in headcount across the US and Asia.
Joe Parsons – The Trade
Deutsche Bank has stated it will scale back its US rates trading and sales capabilities and conduct a review of its global equities business, the latest restructuring move for the investment bank
/jlne.ws/2r0q6aC

Sell-side will seek “deeper partnerships” as margins shrink; Ever-increasing costs on sell-side institutions will see more consolidation and deeper partnerships, according to a keynote discussion panel at TradeTech.
Hayley McDowell – The Trade
Increasing pressure on margins at sell-side institutions will see some consolidation and “deeper” partnerships forming over the next few years, according to leading market participants.
/jlne.ws/2r0vtX9

Asset managers vie for £109bn Lloyds investment contract; BlackRock, JPMorgan Asset Management and Schroders in second round bids for mandate
Peter Smith and Nicholas Megaw – FT
A £109bn investment contract put up for tender by Lloyds Banking Group has attracted interest from some of the world’s largest asset managers, with BlackRock, JPMorgan Asset Management and Schroders chosen to take part in a second round of bids.
/jlne.ws/2r0F9RF

Barclays reports quarterly loss of £764m; Bank hit by costs of mis-selling probe in US and charge for UK payment protection
Martin Arnold – FT
Barclays has reported a quarterly loss of £764m, hit by the cost of settling a mortgage mis-selling probe in the US and another charge for the UK payment protection insurance scandal, which overshadowed an improved underlying performance.
/jlne.ws/2HS8vuQ

Deutsche Bank retreats in investment bank overhaul
US and trading operations to be scaled back in refocus on Europe and corporate customers
Olaf Storbeck – FT
Deutsche Bank announced a retreat from the US investment banking market under its new chief executive, scaling back its trading operations in the country to refocus on Europe and corporate customers.
/jlne.ws/2HS7YsQ

Regions

After sorghum spat, U.S.-China trade fears halt soybean imports
Naveen Thukral and Dominique Patton – Reuters
China’s purchases of U.S. soybeans have come to a grinding halt, trade and industry sources say, as fears of further action by Beijing to curb imports of U.S. crops following last week’s anti-dumping move on sorghum rattles the agriculture industry.
/reut.rs/2HuzA87

Swiss Franc’s Slide Takes Fun Out of Crossborder Shopping Sprees
Hugo Miller, Catherine Bosley – Bloomberg
Franc weakens to 1.20 against euro for first time since 2015; Switzerland still an island of high prices in heart of Europe
For years, the French shopkeepers of Val Thoiry were making a killing selling to the Swiss. The tide may now be turning.
/jlne.ws/2r1g9JY

Abu Dhabi’s Al Hilal Bank Uncovers Internal Fraud
Archana Narayanan, Dinesh Nair, Arif Sharif – Bloomberg
38 people arrested and case being heard, says Judicial Dept.; Police and central bank retreived 625 million dirhams
Abu Dhabi’s Al Hilal Bank PJSC uncovered internal fraud worth more than 500 million dirhams ($136 million), according to people with knowledge of the matter.
/jlne.ws/2HRQWeA

Struggling Russians Turn to Day-Trading to Pay the Bills
Natasha Doff – Bloomberg
Four out of 10 families can’t always afford food, clothing; Disposable income only starting to recover from recession
When Natalia Orlova isn’t working a $400-a-month job at a Moscow factory that makes Cold War-era space rockets, she’s glued to the trading app she uses to speculate on oil.
/jlne.ws/2r1xxhD

Brexit

U.K. Lords Inflict Further Defeat on May Over Key Brexit Bill
By Alex Morales – Bloomberg
Peers attempt to curb ministers’ power to change regulations; Upper chamber defeats government by 349 votes to 221
The U.K.’s upper house defeated Prime Minister Theresa May on her flagship Brexit legislation for the sixth time in eight days, this time attempting to strip ministers of powers she hoped to grant them after Britain quits the European Union.
/jlne.ws/2vOEhEh

U.K. in ‘Preliminary Foothills’ of EU Financial Services Talks
By Jill Ward, Jess Shankleman – Bloomberg
Chancellor of the exchequer testifies to lawmakers Wednesday; Says he remains ‘ambitious’ about making progress in talks
The U.K. is not yet in any “substantive discussions” with the European Union about a future relationship in financial services, Chancellor of the Exchequer Philip Hammond said on Wednesday.
/jlne.ws/2vMqAWq

The post Swaps Rules Due for Overhaul – CFTC; Ex-UBS Trader Beats Spoofing Charge appeared first on John Lothian News (JLN).

First Read

Lessons From the “Not Guilty” Verdict in This Week’s Criminal Spoofing Trial
Renato Mariotti

Mariotti is a former federal prosecutor who spent almost 10 years investigating and prosecuting hundreds of cases in a wide variety of areas and is now a defense attorney. He is a former candidate for the Democratic nomination for Attorney General in Illinois.

Wednesday’s stunning “not guilty” verdict in United States v. Andre Flotron, only the second spoofing case ever taken to trial, is a reminder that it is extremely difficult for prosecutors to prove a defendant’s intent beyond a reasonable doubt in the absence of direct evidence. We should expect the DOJ and CFTC to reevaluate their charging practices in the wake of this significant defense victory.

The seeds of the “not guilty” verdict were sown when the DOJ drafted an initial indictment charging Flotron in the District of Connecticut with a single count of conspiring with others to “drive prices” up and down by causing the price to “change” using spoof orders that were “designed and intended to deceive” other traders to purchase contracts “at prices and at times that they otherwise would not.” This is a higher burden than the Justice Department needed to take on – spoofing is merely entering orders with the intent to cancel them before execution, yet the DOJ took on the burden of proving that the defendant moved prices.

By charging only conspiracy in the one-count indictment, the government also took on a difficult burden because there was no evidence of an explicit agreement – either verbal or oral – between Flotron and his co-workers. Perhaps for that reason, the DOJ later obtained a superseding indictment that added several additional counts, including spoofing counts that did not involve a conspiracy. In a highly unusual move, however, the venue for those additional counts was the Northern District of Illinois, even though the indictment was returned by a Connecticut grand jury.

For the rest of the commentary go here.

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Hits & Takes
JLN Staff

Congratulations to Barchart CEO Mark Haraburda and his team for another successful Fintech Exchange event.~JJL

Barchart’s Fintech Exchange featured several more innovative companies at its lightning round yesterday with a strong focus again on data. What is interesting is how firms are using data. Gate39 Media introduced a new service called FinVox, which uses futures pricing data for Amazon’s Alexa and other devices. Data Robot is deploying data scientists to work with companies on AI programs in a faster and more efficient way. Sterling Technologies took on the world with its cloud-based risk analytics tool that includes all equities, equity options and futures data – 20 billion elements.~JK

Adam Honoré, executive director, head of product management for data services at CME Group, broke news at the Fintech Exchange with the announced launch of CME Virtual Hub, an exchange-based distribution of market data through a network that allows customers to access the data in a variety of ways around the world “in a much more cost effective manner.”~JK

ICYMI, Q1 2018 set the record for best options volumes in history.~SD

A Finnish NGO wants to make a 115 foot tall ice sculpture of Donald Trump in the Arctic. Project Trumpmore is intended to demonstrate climate warming is real rather than an attempt to immortalize President Trump. I know it is not financial news, but some things just have to be shared. As political stunts go this is more original than most.~JB

SmartBrief’s Alaina Love has a story about When you work for a bully.~JJL

Euronext published its first Commitments of Traders (CoT) reports for #Commodities this week, a new feature required by #MiFID II that gives an overview of positions held by traders at the end of each week. Via LinkedIn.~JJL

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A Decade After the Financial Crisis, These Lessons Can’t Be Forgotten
John Davidson, OCC President and Chief Operating Officer
During the 2008 financial crisis, everyone in the business world, and many observers outside of it, were riveted to the news of the chaos unfolding daily in the markets. I viewed the crisis from a much different seat from the one I occupy now, having been effectively on the front row as the turmoil spread around the globe.
/jlne.ws/2vQZrBF

***** More thought leadership from the OCC and John Davidson.~JJL

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Thursday’s Top Three
Spoofing? Yesterday’s top stories were led by two articles on the former UBS trader, Andre Flotron, who was found not guilty on charges of spoofing in Former UBS Trader Is Cleared in ‘Spoofing’ Case by the New York Times and Ex-UBS Metals Trader Beats Spoofing Conspiracy Charge. Third went to the Wall Street Journal’s story Swaps Rules Due for Overhaul in Bid to Boost Liquidity

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Wall Street’s Latest Trend in Networking: Board Game Nights
Mark Ellwood – Bloomberg
The rattle of dice is syncopated but constant.
A dozen or so men sit at different tables, each littered with an elaborate assortment of board game pieces—plastic figures, cards, and tokens. A bowl filled with candy-colored dice sits on one table like a giant assortment of the worst-ever M&M’s.
/bloom.bg/2Jrss9i

****JB: As long as they don’t play Diplomacy. Never was there a game better at making friends hate each other.

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MarketsWiki Stats
124,413,335 pages viewed; 23,085 pages; 212,870 edits
MarketsWiki Statistics

Lead Stories

Why Amazon and Google Haven’t Attacked Banks; Banks’ move to cloud computing makes them attractive clients to tech giants
Telis Demos – WSJ
Technology giants and big banks have been warily circling each other, especially in the payments arena. So far, they are more frenemies than rivals.
/jlne.ws/2HwYf88

Short-Sellers May Not Make Money When Markets Know Their Trades
Ruben Munsterman, Gavin Finch – Bloomberg
Academic study shows Dutch data leak drove up shorted stocks; Nasdaq, NYSE have demanded more disclosure of short selling
When Dutch regulators accidentally revealed who was betting against local stocks last year, they didn’t just just expose George Soros and other short sellers’ secret trades. The stocks stopped underperforming, providing a case study for U.S. exchanges that argue shorts shouldn’t be allowed to operate in secret.
/jlne.ws/2vWQGX8

North and South Korea Set Bold Goals: A Final Peace and No Nuclear Arms
Choe Sang-hun – NY Times
SEOUL, South Korea — The leaders of North and South Korea agreed on Friday to work to remove all nuclear weapons from the Korean Peninsula and, within the year, pursue talks with the United States to declare an official end to the Korean War, which ravaged the peninsula from 1950 to 1953.
/goo.gl/FnNB2X

ASX blockchain post-trade system to go live by 2021; Testing of ASX’s new blockchain-based post-trade system to begin in Q2 next year, with industry-wide testing in Q1 2020.
Joe Parsons – The Trade
The Australian Securities Exchange (ASX) plans to go live with a new equity post-trade system based on blockchain technology by the first quarter of 2021.
/jlne.ws/2HxKMNh

Junk Bond King Milken on Drexel’s Legacy and Negotiating With Carl Icahn; The 71-year-old financier and philanthropist talks to Bloomberg News.
Tom Metcalf – Bloomberg
It’s been about three decades since the heyday of Michael Milken’s Drexel Burnham Lambert. It all came crashing down, but his legacy lives on in the high-yield market, in such firms as Moelis & Co. and at the Milken Institute, a think tank whose global conference starts Sunday in Los Angeles. A reunion dinner for Drexel alumni and clients is also planned.
/jlne.ws/2HwZhRy

Former HSBC exec gets 2 years in prison for currency scam
Kevin Dugan – NY Post
A British trader accused of bragging that ripping off a client was like “f—ing Christmas” was sentenced to two years in prison on Thursday amid a global crackdown on currency rigging.
/jlne.ws/2vMiGfM

Disruptive trade technologies will usher in the ‘internet of rules’; Trade policy 3.0, with algorithmic law and automation friendly legislation, will help more firms trade, writes Craig Atkinson
London School of Economics and Political Science
Businesses, especially micro, small and medium-sized enterprises (MSMEs), face many challenges in understanding and complying with international commercial rules and regulations. Research also indicates low utilisation of eligible tariff preferences, or favourable tax rules, by traders. In other words, many businesses do not always effectively benefit from their negotiated market advantages. Unfortunately, the current “version history” (or stage in the functional evolution) of trade policy creates costs for governments, firms and consumers and constrains achievement of the benefits associated with free trade.
/jlne.ws/2HvXZWP

FCA’s Bailey slams EU’s post-Brexit plans for asset managers
Caroline Binham – FT
The UK’s top financial watchdog has slammed plans by European regulators to shake up the rules governing asset managers after Brexit.
/jlne.ws/2vQoQM2

Glass still 5% full for women CEOs in 2017
Catherine Yoshimoto – FTSE Russell
A year has passed since I first took a closer look at how women CEOs are represented in our US index constituent companies. As the global women’s rights movement has continued to gain momentum over the past year, I thought I’d revisit these numbers to gauge whether we were any closer to gender parity in the corporate boardroom. Unfortunately, the glass still remains just 5% full for female CEOs for companies in the Russell 3000® Index.
bit.ly/2Fl5ZrM

To Spot the Next Financial Crisis, Look Who Was Spared by the Last One; Australia, Canada and other countries benefited from the lowest global interest rates in history, without first suffering the economic meltdown that led the U.S. and Europe to take emergency action
James Mackintosh – WSJ
Countries hard-hit by the financial crisis have spent much of the decade since trying to fix their banks. Countries that escaped unscathed have done the exact opposite, going on a borrowing binge that makes them prime candidates to be victims of any credit squeeze resulting from rising U.S. interest rates.
/jlne.ws/2vR6BGp

Wells Fargo’s 401(k) Practices Probed by Labor Department; Department is examining if bank pushed participants in low-cost 401(k) plans into more expensive IRAs
Gretchen Morgenson and Emily Glazer – WSJ
The Labor Department is examining whether Wells Fargo WFC -1.26% & Co. has been pushing participants in low-cost corporate 401(k) plans to roll their holdings into more expensive individual retirement accounts at the bank, according to a person familiar with the inquiry.
/jlne.ws/2Hyu9kJ

Virtu boss slams ‘stupid’ French regulator for 2015 fine
Samuel Agini – Financial News
The chief executive of one of the world’s most prominent trading firms has lashed out at the “stupidity” of the French financial regulator over a fine his company received in 2015.
/jlne.ws/2r9J2nt

Exchanges, OTC and Clearing

CME Group Inc. Reports Record First-Quarter 2018 Financial Results
CME Group
CME Group Inc. (NASDAQ: CME) today reported record revenue of $1.1 billion and operating income of $741 million for the first quarter of 2018. Net income was $599 million and diluted earnings per share were $1.76. On an adjusted basis, net income was $634 million and diluted earnings per share were $1.86. Financial results presented on an adjusted basis for the first quarters of 2018 and 2017 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1
/jlne.ws/2HyTXgy

Exchange operator CME Group’s revenue misses, shares fall
Reuters Staff
World’s largest futures exchange operator CME Group Inc (CME.O) narrowly missed analysts’ estimates for first-quarter revenue on Thursday as a rise in lower rate contracts outweighed the benefits from a surge in overall trading volumes.
/jlne.ws/2r3AHBF

ASX CHESS Replacement Scope and Implementation Plan
ASX
ASX has today released a consultation paper outlining the planned new features and timetable for replacing CHESS with a distributed ledger technology (DLT) solution as the post-trade infrastructure for Australia’s equity market.
/jlne.ws/2vNZgr6

MarketAxess Reports First Quarter 2018 Record Revenues of $114.7 Million, Record Operating Income of $60.2 Million and Record Diluted EPS of $1.27
MarketAxess
MarketAxess Holdings Inc. (Nasdaq:MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced results for the quarter ended March 31, 2018.
/jlne.ws/2r3CK8D

ICE Clear Europe CDS sales director joins LCH; Michael Amakye joins LCH as head of CDS sales following a six year stint at ICE Clear Europe.
Hayley McDowell – The Trade
LCH Group has appointed a new head of credit default swaps (CDS) sales from ICE Clear Europe.
/jlne.ws/2HwhRJv

Moscow Exchange Announces AGM Results
Mondovisione
Moscow Exchange (MOEX) held its Annual General Meeting of Shareholders (AGM) on 26 April 2018.
/jlne.ws/2HBAqfd

Japan Exchange Group: Introduction Of New Stock Compensation Plan For Executives
MondoVisione
Japan Exchange Group, Inc. (hereinafter “JPX”) decided today at the meeting of its Compensation Committee that it will introduce a new trust-type stock compensation plan for executives (meaning executive officers and those equivalent thereto, excluding persons such as outside directors, directors who are members of the Audit Committee, and auditors; hereinafter the same) of JPX and its subsidiaries that provide core businesses of JPX (hereinafter the “core subsidiaries”; JPX and the core subsidiaries are hereinafter collectively referred to as the “implementing companies”) (This plan shall hereinafter be referred to as the “Plan”.).
/jlne.ws/2vNf39i

Candidates for Directors, etc
JPX
/jlne.ws/2HBxxLp

Luminex Wins “Best Dark Pool” At 2018 Markets Choice Awards
Mondovisione
/goo.gl/HLFrMd

Fintech

Societe Generale bolsters FX algo service with TCA; BestX adds another major investment banking client as Societe Generale signs up for its FX TCA.
Hayley McDowell – The Trade
Societe Generale Corporate and Investment Banking has implemented transaction cost analysis (TCA) from BestX to its algorithmic execution service for foreign exchange (FX).
/jlne.ws/2vTw5CM

M&G Investments upgrades FX EMS with Deutsche Börse’s 360T; 360T was chosen by M&G to implement workflow technology following extensive selection process.
Hayley McDowell – The Trade
Deutsche Börse Group’s foreign exchange (FX) technology company 360T has been chosen by M&G Investments to upgrade its workflow technology for order handling and execution.
/jlne.ws/2vQL8x6

Tradewind Closes $10.6M Strategic Placement; New Investors Include Agnico Eagle, IAMGOLD and Wheaton Precious Metals
Tradewind
Tradewind, a financial technology company, announced the closing of a $10.6 million strategic placement today. Led by investments from Agnico Eagle, IAMGOLD and Wheaton Precious Metals, the fundraising round also included existing investors Goldcorp and Sprott, and new investor Sapphire Ventures.
/jlne.ws/2r3Ud0V

Cryptocurrencies

Show ‘Basic Respect’: Kraken CEO Double Downs on ‘Insulting’ New York Crypto Exchange Inquiry
CCN
Kraken CEO and co-founder Jesse made headlines recently for his strongly-worded response to the New York Attorney General’s request for information on the Kraken exchange, the largest bitcoin exchange based on euro volume in the world.
/goo.gl/vFUXq5

Bitcoin frenzy settles down as big players muscle into market
Tommy Wilkes, Vidya Ranganathan – Reuters
After bouncing up, falling down and keeping investors on the edges of their seats, bitcoin may be maturing into a period of relatively boring stability, experts say.
/jlne.ws/2HAei5d

Shenzhen, China Backs $79 Million Fund To Support City’s Blockchain Startups
Molly Jane Zuckerman – Cointelegraph
The launch of a 500 mln yuan (about $79 ml) Blockchain venture capital fund for Chinese city Shenzhen was announced at a Blockchain Expo held in the city, local news outlet Sohu reported yesterday, April 22.
/jlne.ws/2HxklqR

Ethereum Founder Is Boycotting One of the Biggest Crypto Summits
Camila Russo – Bloomberg
One of the biggest names in cryptocurrencies is boycotting one of the highest-profile conferences in the space.
/jlne.ws/2HA7O6m

IBM is using blockchain to confirm the origins of jewelry
Swapna Krishna – Engadget
IBM is using blockchain to confirm the origins of jewelry
While blockchain is the system that supports cryptocurrency, the decentralized ledger can have wide applications outside of crypto
/jlne.ws/2r2lDnK

Politics

Trump airs grievances in revealing Fox interview
Jeremy Diamond and Maegan Vazquez – CNN
President Donald Trump acknowledged for the first time Thursday that his personal attorney, Michael Cohen, is representing him with regards to legal matters involving Stormy Daniels, the porn star who says she had an affair with Trump.
/cnn.it/2JvBF02

Wall Street seeks rule changes to encourage IPOs, staying public
Sinead Carew and Michelle Price – Reuters
Wall Street lobby groups urged U.S. policy makers and regulators to revamp rules to encourage more initial public offerings and to reduce the regulatory cost of staying public, in a white paper issued on Thursday.
/jlne.ws/2HyZzqS

We Are All Doomed — CBO
Joachim Klement – CFA Institute Enterprising Investor Blog
The bipartisan US Congressional Budget Office (CBO) recently published its annual Budget and Economic Outlook and it is a must-read for anyone interested in a comprehensive overview of where the US economy is heading in the next 10 years.
Of course, some readers do have lives, so I will try to summarize some key findings.
/cfa.is/2FnDxpu

House is Expected to Act on Bank-Deregulatory Bill; Bill had been on hold while senior House lawmaker pressed for changes to Senate-passed bill
Andrew Ackerman – WSJ
A month-long standoff between House and Senate lawmakers over bipartisan legislation to ease red tape for small- and medium-size banks may soon draw to a close, allowing the bill to clear Congress and become law.
/jlne.ws/2HC5jAw

Trump administration picks the wrong time to ease up on banks; Loosening the rules on leveraged loans right now looks peculiar
Gillian Tett – FT
Back in 2013, when memories of the financial crisis were still fresh(ish), US banking watchdogs made a joint, solemn pact.
/jlne.ws/2Hyvg3T

Regulation

SEC advice rule: Jay Clayton says brokers must adhere to ‘fiduciary principles’; However, he believes they also deserve a different standard of care from investment advisers
Greg Iacurci – Investmentnews
The head of the Securities and Exchange Commission said Thursday that brokers would be governed by “fiduciary principles” under the agency’s newly proposed investment-advice rule, but argued they also deserve a different standard of care from investment advisers.
/jlne.ws/2vSMVSf

Ex-HSBC foreign exchange trader gets 2-year US prison term; Judge denies request to let Mark Johnson serve his sentence in the UK
Alistair Gray in New York – FT
A British banker found guilty of defrauding a client in a $3.5bn currency deal has received two years of prison time in the US after a judge denied his request to serve the sentence in the UK.
/jlne.ws/2HAcVDA

Giancarlo expects to resolve EU-US CCP spat
Helen Bartholomew – Risk.net
The US Commodity Futures Trading Commission (CFTC) will seek to avoid a drawn-out transatlantic scrap over European Union plans to toughen oversight of foreign central counterparties (CCPs), according to Christopher Giancarlo, chairman of the US agency.
/jlne.ws/2HxjJBz

Hong Kong’s Securities And Futures Commission Proposes Enhancements To The Investor Compensation Regime
MondoVisione
The Securities and Futures Commission (SFC) today launched a two-month consultation on proposed enhancements to the Investor Compensation Regime (Note 1).
/jlne.ws/2w0srr5

Yale professor appointed chief economist at World Bank; Pinelopi Goldberg is a specialist on effects of globalisation on emerging economies
Delphine Strauss – FT
The World Bank has appointed Pinelopi Goldberg, a Yale professor specialising in the effects of trade liberalisation on developing countries, as its new chief economist.
/jlne.ws/2vO0B16

Podcast: CFTC Talks EP040: Derek Scissors, AEI resident scholar on Chinese and Indian Economy
CFTC
This week on CFTC Talks, we discuss China and US Trade.
/jlne.ws/2vQ3kH7

Market Cap, Explained
Kaitlyn Kiernan – FINRA
If you are researching stocks or stock funds, you’ll often see companies categorized by market capitalization. But what is it and why does it matter? Read on to learn more.
/jlne.ws/2HwFZM2

The ESAs conclude a multilateral Memorandum of Understanding with the EFTA Surveillance Authority
ESMA
The European Supervisory Authorities (EBA, EIOPA, and ESMA – the ESAs) have concluded a multilateral Memorandum of Understanding (MoU) on cooperation, information exchange and consultation with the EFTA Surveillance Authority.
/jlne.ws/2vP7xen

Investing and Trading

Old rules, algorithmic traders add costs to U.S. share buybacks
John McCrank – Reuters
U.S. companies are on track to buy back a record amount of their own stock this year, but a decades-old markets rule aimed at preventing manipulation makes these trades easy to game and has probably cost companies billions in recent years.
/jlne.ws/2vR6uut

Opinion: Time to worry? Trading volume is rising when stocks are falling
Mark Hulbert – MarketWatch
Does stock-exchange volume follow the market’s trend, or does the trend follow volume?
/jlne.ws/2vQLq7h

The Risk Contribution of Stocks: Part 3
Ajay Dravid – Equinox Funds
In the previous two Insights in this series, we focused on the risk of various stock-bond- managed futures portfolios, and examined how much of this risk comes from each of their three component asset classes. Based on what we believe are some reasonable assumptions about volatilities and correlations, we first showed that most of the risk of traditional stock-bond portfolios comes from stocks.
/goo.gl/eC8QVs

****Parts 1 and 2 can be found here.

Oil: How the Market Dynamics Have Changed
Bluford Putnam – CME Group
Oil prices are rising, driven by strong global growth and the reemergence of a Mideast risk premium. The market dynamics of this round of oil price increases, however, are strikingly different from recent episodes, such as in 2008 or 2012-2013. There are two key differences this time around that deserve our focus: (1) shale oil supply may respond more rapidly to price incentives than older technologies, and (2) the U.S. is now an oil exporter (as well as importer). As we explore these two topics, we will see some special nuances and caveats, too.
/goo.gl/1JCYVa

Investing: Past, Present, and Future
CFA Institute Enterprising Investor
Memes are simple ideas that sometimes take hold and change the world. A successful meme creates a viral pattern that is replicated over and over again. Each person in the cycle embraces and applies the meme as though it was their own.
Memes are more than ideas, they can become mandates for living.
Finance has undergone two major cycles of transformation under this principle over the last 100 years and a third more recently.
/cfa.is/2FlaCSH

Libor death threatens to blow hole in hedges
Duncan Wood – Risk.net
Swaps users are worried gaps will open up in their hedging portfolios in the event of Libor’s death, unless the industry is able to line up so-called fallback language across different rates products – from mortgages and bonds to interest rate swaps.
/jlne.ws/2vPpsBo

Institutions

Steve Cohen’s hedge fund sued over use of another fund’s name
Reuters
Billionaire Steven Cohen’s hedge fund was sued on Wednesday by a San Francisco money manager seeking to stop it from using its name on a new investing project.
/jlne.ws/2vWSfEu

RBS more than triples profits while threat of US fines lingers; State-backed bank comfortably beat forecasts
Nicholas Megaw – FT
Royal Bank of Scotland more than tripled its profits in the first quarter of 2018, as both revenue and costs came in better than analysts had expected, but the lingering threat of a major fine from the US Department of Justice continued to cast a shadow over its efforts to achieve a second consecutive year of profitability.
/jlne.ws/2vP46V1

Citi Says U.S. May Become World’s Top Oil Exporter Next Year
Sharon Cho – Bloomberg
U.S. crude, product exports rise to record 8.3m b/d last week; Higher prices encourage the nation to pump more: Citigroup
The U.S. looks likely to overtake Saudi Arabia to become the world’s biggest oil exporter next year, according to Citigroup Inc.
/jlne.ws/2HwvaK4

RBS Gains Profit Traction as It Works to Settle U.S. Probe
Stefania Spezzati, Stephen Morris – Bloomberg
Pretax profit jumps 70%, beating estimates, as costs plunge; State-owned bank cannot pay dividends until DOJ settlement
Royal Bank of Scotland Group Plc forged ahead in the first quarter, cutting costs to the lowest in at least five years, indicating the lender is well-positioned to restore dividends once it settles a U.S. misconduct probe.
/jlne.ws/2vRbGhU

Regions

A Closer Look at Indices Country Classifications
Alka Banerjee – S&P Dow Jones Indices Indexology Blog
As large sums of global money flows now follow global indices, it is important to understand how global index providers decide on country classifications and country weightages. A global equity index typically has two components, a developed market index and an emerging market index. Until the nineties, emerging market investments were not necessarily mandatory for all large institutional investors but that changed more than a decade ago and global investment portfolios are the norm now. What has also changed is that earlier markets were classified on the basis of their GDP per capita, size of the stock market and accessibility criteria, since most of these parameters were in sync with each other.
/goo.gl/LkzySd

EU carbon allowance market to shake its over-supply problem; Changes to Europe’s emissions-trading scheme from next year should be a turning point
Mark Lewis – FT
Check which energy commodity has performed best over the past 12 months and you might be surprised. Oil? No. Gas? Try again. Coal? Bad luck, you only get three guesses.
/jlne.ws/2vOmgpP

Market volatility saddled Norway’s massive sovereign fund with its biggest loss in years
Eshe Nelson – Quartz
Norway’s massive sovereign wealth fund isn’t immune from the market volatility that has roiled investors around the world this year. The fund reported today that it lost 1.5% in the first three months of the year, its worst quarterly decline since the third quarter of 2015. It also broke a seven-quarter streak of positive returns.
/jlne.ws/2Hwkxa1

Norway’s $1 Trillion Wealth Fund Posts First Loss in Two Years
Sveinung Sleire, Mikael Holter – Bloomberg
Stocks declined 2.2% in the first quarter, bonds lost 0.4%; Fund analyzing growing size of tech companies and risks posed
Whipped by a global stock selloff, Norway’s $1 trillion wealth fund reported its first loss in two years in the first quarter.
/jlne.ws/2w0qaw3

Iran’s Standoff With the U.S. Has Paralyzed Money Markets and Businesses
Golnar Motevalli, Ladane Nasseri – Bloomberg
Standoff with U.S. administration has closed currency markets; European leaders are offering alternatives in Washington
For half a century, Payam’s family hardware firm near Ferdowsi Square has supplied Tehran’s builders with tools — through revolution, war and more recently sanctions. But it has rarely seen times as bad as these.
/jlne.ws/2HxNiDa

Venezuela’s Inflation Is So Extreme It’s Broken the Stock Market
Brendan Walsh – Bloomberg
Venezuela’s currency devaluation is so out of control the stock market is about to bust.
/jlne.ws/2r5iymM

Brexit

A Brexit Choice Between Bad and Worse; A customs union won’t solve Britain’s problems — but it’s better than the looming alternative.
Michael R. Bloomberg
Theresa May’s government is still promising to quit Europe’s customs union when Brexit happens next year. The prime minister’s position is politically understandable, yet entirely indefensible. And it perfectly captures the bind Britain has gotten itself into.
/jlne.ws/2vSGCOz

Miscellaneous

Mind the GAAP- 19 creative schemes for money-losing startups
Oliver Staley, Jason Karaian and Adam Pasick – Quartz
WeWork, the shared-office startup, isn’t just pioneering new ways of working, but new ways of accounting.
/goo.gl/V9zvZ2

Bahamas billionaires’ $50M brouhaha is back on
Richard Morgan – NY Post
The 10-year battle of billionaires Louis Bacon and Peter Nygard isn’t over yet. A New York appellate court gave hedge funder Bacon’s $50 million defamation suit against his Bahamian next-door neighbor, Canadian fashion-mogul Nygard, a new life this week.
/jlne.ws/2HwwZ9S

Mets Shares Are for Sale Six Years After Madoff Fraud
Scott Shoshnick – Bloomberg
Investors paid $20 million six years ago for 4% stakes in club; Mets owners have right to buy back shares at current valuation
Wealthy Mets fans who have ever dreamed of owning a piece of New York’s National League baseball team are about to get their chance.
/jlne.ws/2HBXtXC

The post Amazon and Google’s Cloud for Big Banks; Bold goals from Korean meeting appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Members of the JLN team are headed to Florida for the Options Industry Conference this week. Spencer Doar, Mike Forrester and John Lothian will be in attendance. Reach out to us if you want to set up a meeting there.~JJL

A big thank you to Renato Mariotti for the brilliant piece he wrote for JLN on the recent spoofing acquittal.~JJL

IFLR.com has an exclusive that the CFTC’s Chairman, Christopher Giancarlo, will retire at end of his term.~JJL

ICODA has a seminar planned in Geneva, Switzerland, “Blockchain is here, now what?” It is on June 28. This event is aimed at trade professionals interested in understanding what Blockchain means for their business and what is on the horizon. ~JJL

After so many fintech and crypto events in Chicago last week, I am sure you can find some more this week if you really need a fix.~JJL

April 29 was the 35th anniversary of the 1983 foul mouth rant in a press conference by Cubs manager Lee Elia in which he lashed out at Chicago Cubs fans and local media. One of the all-time great rants, but not appropriate for an open office playing.~JJL

++++

Regulatory Issues Confronting the Options Industry

JohnLothianNews.com

The OCC has a number of regulatory initiatives it’d like to see implemented in the coming years and in this video Craig Donohue, OCC executive chairman and CEO, talks about two key calculations that need changing. First, regulators need to adopt a risk weighted asset calculation that better reflects the true exposure of a clearing member firm. Second, the supplemental leverage ratio needs to include customer initial margin. The OCC is working on potential interpretive relief or narrowly tailored rulemaking in the interim to help ease the burden. These issues and more will be discussed at this year’s Options Industry Conference, which starts this Wednesday.

Watch the video »

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Blockchain Will Be Theirs, Russian Spy Boasted at Conference
Nathaniel Popper – NY Times
Last year, representatives of 25 countries met in Tokyo to work on setting international standards for the blockchain, the technology that was introduced by the virtual currency Bitcoin and has ignited intense interest in corporate and government circles.
/jlne.ws/2vXGGwG

***** Russian spy says it all.~JJL

++++

Why trusted journalism matters
Stephen J. Adler, President and Editor-in-Chief, Reuters
Beyond fostering transparency, we believe that careful, honest reporting facilitates savvier decision-making in all areas of life. When a trusted news organization delivers reliable news and insight, it gives its users tools they need to make decisions more effectively.
/jlne.ws/2vYxdF9

***** Free markets need a free press to work properly.~JJL

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Swaps Clearing, Trading and Reporting; Wire Fraud; Spoofing
Gary DeWaal – Bridging the Week
J. Christopher Giancarlo, Chairman of the Commodity Futures Trading Commission, proposed reforms to enhance swaps trading and reporting, the central clearing of swaps, swaps dealers’ capital, and persons subject to mandatory clearing and margin requirements. He said that implementing his recommended trading reforms would justify expanding the number of swaps required to trade on swap execution facilities. Unrelatedly, Andre Flotron — a former trader for a worldwide investment bank — was acquitted of conspiracy to defraud in connection with allegations that he engaged in spoofing-type futures trading activity from 2008 to 2013. As a result, the following matters are covered in this week’s edition of Bridging the Week – which, belatedly, marks the fifth-year anniversary of this publication:
bit.ly/15ZyR7H

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The Spread – Week of 4/23 to 4/27

JohnLothianNews.com

Who likes TV show theme songs (especially older ones that still live on through syndication)? If you don’t, well, shame on you, but watch this week’s episode of The Spread anyway for some updates on happenings in the options world.

Watch the video and see the stories referenced here »

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Friday’s Top Three
Our top read stories on Friday were led by Renato Mariotti’s piece [http://bit.ly/2HtEmTk|Lessons From the “Not Guilty” Verdict in This Week’s Criminal Spoofing Trial]]. Among the lessons learned is that it’s really, really, really difficult to prove intent to spoof, at least the way the Department of Justice went about it. Second went to the Wall Street Journal’s Why Amazon and Google Haven’t Attacked Banks. Third went to Financial News’ Virtu boss slams ‘stupid’ French regulator for 2015 fine

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MarketsWiki Stats
124,678,131 pages viewed; 23,085 pages; 212,879 edits
MarketsWiki Statistics

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Lead Stories

Did Chicago Exchanges Muscle a Rival Out of Town? A Jury May Soon Decide; Dispute Over Alleged Exchange Collusion Nears Day in Court, 14 Years Later
Alexander Osipovich – WSJ
Exchange giant CME Group Inc. is facing scrutiny over its political clout and hardball tactics as a 14-year-old lawsuit nears trial.
/jlne.ws/2w0OMVa

Stock Fever Grips India, as Millions of New Investors Pile In; Flood of domestic cash helped boost the country’s market capitalization by 50% last year, crowding out foreign investors for the first time in decades
Julie Wernau and Debiprasad Nayak – WSJ
Satyajit Sadangi decided to take the leap into Indian stocks this January after his colleagues told him about the 12%-15% returns they had earned while his real-estate investments trailed behind.
/jlne.ws/2vXl5UZ

Why Banking Scandals Will Continue; The financial-advice business is inherently flawed and possibly unfixable.
Satyajit Das – Bloomberg
The best reality TV show in Australia right now is the televised hearings of the Royal Commission into Australian banks. The formal public inquiry, led by a retired judge with broad coercive powers, has uncovered a litany of wrongdoing including bribery and fraud rings, poor lending practices, and pervasive lying to regulators.
/jlne.ws/2vYHAsP

Mifid II regime shines light on trading relations; Drive to reveal which brokers asset managers use for majority of trades
Philip Stafford and Hannah Murphy – FT
Fund managers in Europe may face tough conversations with some brokers this week after a regulatory drive to publicly disclose more information on their trading relationships begins.
/jlne.ws/2w0P9zf

Financial regulators turn their sights on banks’ use of cloud; Big finance groups rely on internet storage services run by Google, Amazon and Microsoft
Caroline Binham in London – FT
Financial regulators on both sides of the Atlantic have turned their attention to the cloud, as concerns mount over how to supervise online storage services, which hold information from the world’s biggest banks.
/jlne.ws/2vXGcGN

Switzerland Wants to Be the World Capital of Cryptocurrency; Four of the 10 biggest initial coin offerings last year were in Switzerland, more than any other country
Brian Blackstone – WSJ
ZUG, Switzerland—When 24-year-old Ian Worrall launched his crypto-investment startup MyBit last year, he chose this Swiss lakeside city.
/jlne.ws/2w1GrAG

At Rothschild, Generation Macron Needs a Helping Hand; Young scion hires a blast from the past for a very French transition.
Lionel Laurent – Bloomberg
French magazine L’Express calls it “an epidemic of youth-ism.” Corporate France is ushering in a new generation of CEO to coincide with its new, 40-year-old head of state. Publicis Groupe SA, Carrefour SA, Vivendi SA and even Rothschild — Emmanuel Macron’s old shop — have in the past year named or lined up bosses whose ages range from 37 to 46. Not bad, considering the average French board member is 59.
/jlne.ws/2w0ZNpH

In Chicago deal, NYSE buys a lab for innovation
Lynne Marek – Crain’s Chicago Business
The Chicago Stock Exchange is about to be swallowed by the New York Stock Exchange and become part of that company’s international trading complex.
/jlne.ws/2vYK9eu

ICE Benchmark Administration Becomes Authorised Benchmark Administrator under EU Benchmark Regulation
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has been authorised as a regulated benchmark administrator under the EU Benchmarks Regulation (BMR).
/jlne.ws/2vYqUkX

Citadel Securities names Nazarali global head of business development
John McCrank – Reuters
Citadel Securities said on Friday it named Jamil Nazarali global head of business development of the trading and market-making firm, effective immediately.
/reut.rs/2HBkNJ6

Investors’ Message for European Banks: Forget About Wall Street
Geoffrey Smithy – Bloomberg
Stock investors reward wealth managers after initial earnings; Investment bank units struggle to keep pace with U.S. peers
Investors have a message for Europe’s banks: you can’t win with investment banking — even when you do.
/jlne.ws/2vUxqsY

Deutsche Bank likely to axe 1,000 U.S. investment bank jobs: source
Reuters
Deutsche Bank (DBKGn.DE) is expected to cut around 1,000 jobs or 10 percent of its workforce in the United States, a person familiar with the matter said on Friday, as the German lender scales back its global investment banking ambitions.
/reut.rs/2HvTW10

The Dangers of Undoing Dodd-Frank; Will the Trump Administration dismantle our best protection against another financial crisis?
Nicholas Lemann – The New Yorker
We are fast approaching the tenth anniversary of the worst financial crisis since the Great Depression. What passes for the official date is September 15th, the day that Lehman Brothers collapsed, but the crisis was under way months earlier, and the commemorative reëvaluations have already begun in the business press. The obvious question to ask is whether the financial markets, which have risen for most of the past decade but have been alarmingly shaky of late, could crash again. The answer largely depends on whether the Trump Administration undoes the best protection that we have against such an event: the Dodd-Frank law, which was passed in 2010, in response to the crash, after thirty years of financial deregulation.
/jlne.ws/2w7FkzF

Pimco Pushes Further Into the Lucrative but Risky World of Alternatives; A new commercial real-estate debt fund is among the firm’s moves into more lucrative, less liquid markets
Justin Baer – WSJ
Pacific Investment Management Co. is raising money for a new, multibillion-dollar commercial real-estate debt fund, the bond manager’s latest foray into more lucrative—and less liquid—markets, people familiar with the matter said.
/jlne.ws/2vYnzlV

SocGen deputy chief quit to limit US penalties over Libor
Didier Valet resigned to avoid extra damage for bank over rate-rigging allegations
Martin Arnold, David Keohane and Kadhim Shubber – FT
Société Générale would have faced much tougher penalties from the US Department of Justice if Didier Valet, the French bank’s deputy chief executive, had not resigned over the accusations of Libor rate-rigging.
/jlne.ws/2vYvGz9

Exchanges, OTC and Clearing

Canadian exchange operator TMX blames hardware failure for outage
Reuters
Canada’s largest stock exchange operator said on Saturday that the failure of data storage equipment caused an outage that shut down the world’s sixth-largest stock market for several hours on Friday afternoon.
/goo.gl/VUrBXy

Canada stock markets, abruptly shut by technical issue, to resume on Monday
Fergal Smith – Reuters
Canada’s stock market, the world’s sixth-largest, abruptly shut down on Friday after an outage cut market participants off the main exchanges but will resume trading on Monday after resolving “internal technical issues,” the exchange operator said.
/reut.rs/2Hwfdre

Hong Kong scrambles for talent in battle for Nasdaq’s biotech crown
Julie Zhu, Alun David John – Reuters
When Hong Kong unveiled plans last year to encourage biotech companies to list in the city by loosening listing rules, the financial industry and investors cheered.
/goo.gl/tP1y82

Dawn of a new era
HKEX
We have been on a remarkable journey in the Hong Kong financial market over the past several years, and a brand new era will begin tomorrow when new rules take effect that will open the door to innovative companies that use non-standard share structures and pre-revenue biotech companies.
/jlne.ws/2vYFEk9

Nasdaq asks regulators to let companies decide where they trade
John McCrank – Reuters
Nasdaq Inc has asked regulators to allow it to give small companies a choice of trading on a single U.S. stock exchange, rather than all 13 of them, in an effort to make it easier for buyers and sellers of the stocks to find each other.
/reut.rs/2HyfVnV

Mayor Emanuel and CME Group Award Scholarship for Star Scholars to Continue at Four-Year CME Group
Mayor Rahm Emanuel and CME Group, the world’s leading and most diverse derivatives marketplace, today will present 25 Chicago Star Scholars with scholarships to go towards continued education at a four-year college or university. Once students graduate from City Colleges of Chicago (CCC) with an associate degree, they will receive a two-year, $5,000 scholarship.
bit.ly/2Jy3swX

Swiss exchange SIX sees many takeover targets, has been approached
Helen Reid – Reuters
In an industry undergoing consolidation, privately-owned Swiss exchange SIX sees potential takeover targets in Iberia and central Europe and has itself been approached by potential buyers, Chief Executive Officer Jos Dijsselhof told Reuters in an interview.
/jlne.ws/2vY36xJ

TMX Group Provides Update on Market Outage Incident and Confirms Readiness for Regular Market Opening Monday
TMX
MX Group today provided further details regarding the market interruption that affected trading on Toronto Stock Exchange (TSX), TSX Venture Exchange (TSXV), TSX Alpha Exchange (TSX Alpha) and Montreal Exchange (MX), on Friday, April 27.
/jlne.ws/2vXJLwF

FX Futures, FX Rolling Spot Futures and FX Options: Fee holiday for transaction fees from 1 May 2018 until 31 May 2018
Eurex
As of 1 May 2018, Eurex Clearing decided to introduce a fee waiver for transaction fees for FX Futures, FX Rolling Spot Futures and FX Options from 1 May 2018 until 31 May 2018.
/jlne.ws/2vYmj2k

Fintech

Hodjatzadeh exits TT in Asia-Pacific
Jack Ball – Global Investor Group
Su Hodjatzadeh has left her role as sales manager for Trading Technologies in Asia Pacific, FOW has learned, leaving two senior figures responsible for sales in the region.
bit.ly/2JwuEw4

FENICS Selected by Dah Sing Bank for FX Options Pricing & Distribution
BGC Partners
BGC Partners, Inc. announced today that FENICS, the award winning provider of FX options solutions, has been selected by Dah Sing Bank, a leading local Hong Kong-based bank, to power the institution’s FX options pricing and distribution.
/jlne.ws/2vWqKuH

Liquidnet’s Next Gen Algo Suite Leverages Virtual High Touch® Technology
Business Wire
Enhancements give buy-side traders greater ability to access and interact with hidden and block institutional liquidity
Liquidnet, the global institutional trading network, today announced two enhancements to its Next Gen Algo suite, Liquidnet’s premium offering of liquidity-seeking and benchmark strategies designed specifically for institutions.
/jlne.ws/2w11Rhm

Transparency concerns linger around artificial intelligence despite proposed industry benefits; Speakers at this year’s TradeTech conference were keen to extol the virtues of artificial intelligence and machine learning, but perceptions around transparency and trust must be addressed.
John Brazier – The Trade
Artificial intelligence (AI) has become one of the key watchwords in asset management technology in recent years, with institutional and boutique firms alike having made significant investments in this space.
/jlne.ws/2w1wOlw

Cryptocurrencies

Iran cryptocurrency project on track despite cenbank ban, minister says
Reuters
Iran has developed an experimental local cryptocurrency, a government minister said on Saturday, days after the country’s central bank banned trading in digital currencies including bitcoin.
/goo.gl/B7UxRS

Exciting Q2 Start: BitcoinCash Up 137%, Ethereum Up 86% & Ripple Up 83%
Naeem Aslam – Forbes
goo.gl/5Zjoww

Ethereum Founder Is Boycotting One of the Biggest Crypto Summits
Camila Russo – Bloomberg
goo.gl/Pg4AV3

Most Cryptocurrency Trading Is Moving to Malta, at Least Legally
Lily Katz – Bloomberg
Digital-coin exchanges have found a new haven in an archipelago in the Mediterranean Sea.
/jlne.ws/2vYHnpD

A hot crypto hedge fund keeps poaching talent from Goldman Sachs
Frank Chaparro – Business Insider
Cryptocurrency hedge fund BlockTower Capital keeps scooping up talent from Goldman Sachs, as Wall Streeters continue to flee big banks in favor of bitcoin firms.
/jlne.ws/2w19Cnu

Is the Tokyo bitcoin whale set to strike again?
MarketWatch
Speculation is growing that the trustees for the defunct Mt. Gox cryptocurrency exchange are getting set for another significant bitcoin sale.
/jlne.ws/2w0OwFG

Litecoin founder Lee has some regrets about dumping his stake
Aaron Hankin – MarketWatch
The price of Litecoin has fallen 50% since founder Charlie Lee sold his stake in December 2017
Four months after the founder of Litecoin announced that he had sold his entire stake in the cryptocurrency he founded, Charlie Lee admitted that the move may have been a mistake, in a recent interview.
/jlne.ws/2w4ybjA

Warren Buffett on buying bitcoin: ‘That is not investing’
Daniel Roberts – Yahoo Finance
When Warren Buffett speaks, investors listen. And Buffett is still not sold on bitcoin. In an exclusive interview with Yahoo Finance in Omaha, Neb., leading up to Berkshire Hathaway’s May 5 annual shareholder meeting, Buffett laid out his latest thinking on cryptocurrency investing.
/jlne.ws/2vYJZ6V

Politics

Al Gore: sustainability is history’s biggest investment opportunity; Strong returns prove asset manager’s mission, says former US vice-president
Owen Walker – FT
Flanked by his children and grandchild, Al Gore joined 200,000 protesters on the streets of Washington DC in the blazing sunshine exactly one year ago.
/jlne.ws/2vXRqLr

EU plans to cut funding to nations where rule of law is at risk; Contentious move likely to provoke flare-up with Poland and Hungary
Alex Barker in Brussels – FT
Brussels will this week propose tough powers to cut off funding to countries such as Poland and Hungary where judicial independence is under threat, but will leave them on the hook for billions of euros in EU budget commitments.
/jlne.ws/2vYJj1h

Kirsten Gillibrand Unveils A Public Option For Banking; The idea would provide a low-cost alternative to payday loans — and it might just save the Postal Service, too.
Daniel Marans – Huffington Post
Sen. Kirsten Gillibrand (D-N.Y.) is introducing legislation Wednesday that would require every U.S. post office to provide basic banking services, an ambitious step aimed at improving the lives of Americans with limited financial resources.
/jlne.ws/2vYtQhC

Regulation

EXCLUSIVE: CFTC’s Giancarlo to retire at end of term
IFLR.com
Christopher Giancarlo has confirmed that he does not intend to seek reappointment when his term ends on April 13, 2019.
/jlne.ws/2w13600

T. Rowe Price’s trading head dubious on MiFID II and the emergence of new venues; Global head of systematic trading and market structure at US firm throws doubt on systematic internalisers and periodic auctions.
By John Brazier – The Trade
Mehmet Kinak, global head of systematic trading and market structure at US-based asset manager T. Rowe Price, has thrown significant doubt at the new European trading landscape under MiFID II.
/jlne.ws/2w377kE

Hong Kong Regulator Concerned on Nine-Fold Rise in Margin Loans
Benjamin Robertson – Bloomberg
Borrowing against pledged stock hit $26.3 billion at end-2017; Firms involved are illiquid, so risk to brokers ‘is not small’
Hong Kong’s Securities and Futures Commission is consulting brokers about risks stemming from a rapid run up in margin lending.
/jlne.ws/2vYq3Rj

Investing and Trading

Canada stock market shutdown pushes investors to explore options
John Tilak, Fergal Smith – Reuters
A rare outage at Canada’s major stock exchanges could dent the credibility of operator TMX Group Ltd (X.TO) and encourage investors to explore alternative trading channels, fund managers and traders told Reuters.
/goo.gl/DzSNZz

Next liquidity crisis could be hiding in plain sight; Rules have reduced banks’ ability to ‘store’ risk that delivered instant liquidity
Amin Rajan – FT
“The paradox of liquidity is that it disappears as soon as one is in serious need of it,” says Pascal Blanqué in The Economic and Financial Order. He pulls no punches when reviewing the weakness of modern portfolio theory, the guiding star of investors.
/jlne.ws/2w7I6oz

Oil Hedge Fund Manager Says $300 Oil ‘Not Impossible’
Javier Blas – Bloomberg
Andurand says on Twitter lack of investment risks price spike; Higher prices aren’t a threat to the economy, Andurand says
Pierre Andurand, one of oil’s most prominent hedge fund managers, said the current reluctance of energy companies to invest in new production meant $300 a barrel was “not impossible” within a few years.
/jlne.ws/2w4GiMG

Fed Far From Ready to Declare Mission Accomplished on Inflation
Rich Miller – Bloomberg
Bank to hew to gradual rate rises even if inflation hits goal; Policy makers comfortable with above-target price rises
The Federal Reserve is closing in on its elusive 2 percent inflation target but that doesn’t mean policy makers are ready to pronounce mission accomplished.

Institutions

Goldman Sachs is battling to contain an outbreak of mumps on the trading floor
Rachael Levy, Dakin Campbell and Olivia Oran – Business Insider
The Wall Street investment bank has been telling staff to get shots or visit the firm’s health center if they didn’t receive the vaccine during childhood.
Goldman Sachs is battling to contain a rare but contagious flare-up of mumps after a few employees contracted the disease.
/jlne.ws/2w0U9Ux

A bunch of former KCG staffers have found a new home at Wall Street broker Instinct
Frank Chaparro – Business Insider
Instinet, the brokerage firm owned by Japanese investment bank Nomura, has hired William Wiley as an executive director and head of strategy.
/jlne.ws/2vYuviZ

Goldman, Hedge Funds Drawn Into Noble Group’s Legal Battles
Krystal Chia – Bloomberg
Goldilocks lists creditors as defendants in Singapore lawsuit; Chairman Paul Brough highlights risks facing trader at SGM
Noble Group Ltd.’s dissident shareholder Goldilocks Investment Co. listed a raft of hedge funds and banks, including Goldman Sachs Group Inc. and Deutsche Bank AG, as defendants in its legal battle against the commodity trader, as the fund presses on with a bid to stop its debt-for-equity swap.
/jlne.ws/2w0VP0c

JPMorgan’s Guide to the End of ‘Easy Money’
Joanna Ossinger – Bloomberg
Advice comes as Goldman sees upside risks to Fed rate forecast; JPM doesn’t share market ‘fixation’ on flattening, 3% 10-year
The moves in stocks lately are just strange — but there’s still a logical approach to investing for the expected end of “easy money,” according to JPMorgan Chase & Co.
/jlne.ws/2vYlExV

Top 100 Hedge Funds: Smaller Funds Hit the Mark
Eric Uhlfelder – Barron’s
Boldface money-management giants like AQR, BlackRock, Citadel, D.E. Shaw, and Renaissance Technologies catch the eye on Barron’s 2018 Top 100 Hedge Fund survey. But a small foreign fund pushed its way past bigger, better-known rivals to grab the No. 1 spot.
/jlne.ws/2w00D5R

An audience with ex-Citi CEO Vikram Pandit: ‘My five years were war’; Financial crash survivor returns to take part in banking’s next existential crisis: technology
Paul Clarke – Financial News
Back in his heyday, the rumour was that if you went into a meeting with Vikram Pandit unprepared, you were toast. A former academic who became known as a cerebral trader with an eye for detail, he was often the smartest guy in a room full of big-brained Wall Street types.
/jlne.ws/2vYwZxN

Workers claim Bain firings tied to age, medical conditions
Josh Kosman – NY Post
Bain Capital bagged a fortune as it fired workers at an Oregon-based software company. Now, federal authorities allegedly are probing whether it also broke the law.
/jlne.ws/2vXQCGu

Regions

China eases restrictions on foreign ownership of securities ventures
Reuters
China’s securities regulator has released new guidelines for foreign investment in Chinese security joint ventures in which it eased some restrictions and launched an application process for more foreign ownership.
/goo.gl/TvrU9X

Australia banking scandal claims more AMP scalps, chairwoman quits
Paulina Duran – Reuters
Australia’s largest-listed wealth manager AMP announced the resignations of its chairwoman and legal counsel on Monday, and slashed its directors’ fees by a quarter as it races to stem the fallout from damaging revelations of misconduct at the firm.
/goo.gl/jg2wRZ

Commodity trader Trafigura launches panda bond programme
Neil Hume – FT
Trafigura has become the first international commodity trader to issue bonds in China’s mainland debt market.
/jlne.ws/2vTC8Hw

LinkedIn study shows UK losing workers to EU; EU has become a more attractive workplace than Britain, according to analysis
Gavin Jackson – FT
The UK became an exporter of workers during the first three months of this year, according to an analysis of users on the social network LinkedIn.
/jlne.ws/2vYPYsm

A Decade of Banks Behaving Badly Is Being Laid Bare in Australia
Emily Cadman – Bloomberg
Bribery, lies, and charging the dead among misconduct admitted; Inquiry may lead to slower earnings growth, higher costs
In a quiet courtroom in Melbourne, a decade of scandalous behavior at Australia’s biggest banks is being forensically laid bare.
/jlne.ws/2vTLm6C

Chinese and US bond yields converge; Investors puzzle over government policy and the economy in China
Gabriel Wildau and Yizhen Jia – FT
The US and China may be far apart on disputes over trade and investment, but when it comes to bond yields the two sides are moving closer.
/jlne.ws/2vXlEy5

Mexican Banks Targeted in Cyber Attack
Michelle Davis, Nacha Cattan – Bloomberg
Three banks experienced ‘incidents’ in recent days: Banxico; Banorte system back up; BanBajio using alternate SPEI system
Cyber attackers attempted to penetrate Mexico’s electronic payment systems Friday, forcing three banks to enact contingency plans, according to people familiar with the matter.
/jlne.ws/2w1JFnM

Brexit

Banks Seem Oddly Unconcerned About Brexit; They keep doing more business from the U.K.
Mark Whitehouse – Bloomberg
Is the U.K. really going to leave the European Union? Judging from their lending activity, bankers might be having some doubts.
/jlne.ws/2w7HjnB

Brexit Failure Looks More Likely Every Day; Too many things are lining up against the U.K. leaving the EU.
Barry Ritholz – Bloomberg
Today, I will violate one of my favorite principles, and hereby make this prediction: No Brexit! In other words, the U.K. will not exit the European Union. By 2023, we will look back at the entire ridiculous affair as if it were a rediscovered lost episode of “Fawlty Towers.”
/jlne.ws/2w0MzJz

Eurosceptics fear ‘bonkers’ post-Brexit customs union plan; Tory MPs fret unworkable deal could result in UK remaining by default
George Parker, Political Editor – FT
Eurosceptics in Theresa May’s cabinet are braced for defeat in their attempt to block what they have called a “cretinous” and “bonkers” post-Brexit customs plan, which they fear is unworkable and could end up with the UK remaining in a customs union by default.
/jlne.ws/2vYQ2s6

Gina Miller urges UK fund industry to speak out on Brexit; Campaigner warns of huge risks to the City of higher barriers to dealing with the EU
Attracta Mooney – FT
Gina Miller, the anti-Brexit campaigner and fund industry professional, has urged asset management executives to speak out publicly about the UK’s exit from the EU, warning that the City faces huge risks.
/jlne.ws/2w7QnJ9

Miscellaneous

Is Stock Market Volatility Good for the Art Market?; We’re about to find out during May’s art fairs and auctions in New York.
James Tarmy – Bloomberg
Until January, the stock market was on an almost-unbroken bull run for nine years. Now that run appears to be ending and prominent members of the financial community are warning about the possibility of a significant correction, leaving people in the art world wrestling with whether this will affect their sales.
/jlne.ws/2w3gQra

The post Did Chicago Exchanges Muscle a Rival Out of Town? appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The Wall Street Journal’s Did Chicago Exchanges Muscle a Rival Out of Town? A Jury May Soon Decide yesterday was the most read story of the year on JLN. Names to remember not included in the story are: Rudolf Ferscha, Michael McErlean, Andreas Preuss, Harris Brumfield and Satish Nandapurkar.~JK

NFA is seeking an Analyst of Financial Analysis and Surveillance for NFA’s New York Compliance Department. The Analyst is responsible for supporting NFA’s regulatory programs through financial surveillance of Members, with an emphasis on the managed funds sector, investigations and Member services.~JJL

Information on the FIA Operations Americas 2018-2019 Scholarship Program is now available. H/T to Jessica Darmoni.~JJL

JLN Contributing Editor Chuck Mackie is moderating the financial #innovation panel at Terrapinn’s #TheTradingShow on May 10 with Rumi Morales, Kimberly Trautmann E., CFA, Peter Johnson, and Manoj Narang.~JJL

Macro Risk Advisors, a provider of global market risk analysis and execution services for institutional investors, raised $265,000 in Sixth Charitable Trading Day.~JJL

Great story in the Sunday Chicago Tribune about girls coming into Boy Scouts.~JJL

Econ Illinois’ The American Dream Dinner will be held on May 17, 2018, at the Union League Club of Chicago. The featured speaker will be former 1871 CEO Howard Tullman. This event has broad support from across the industry.~JJL

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TT Appeals to the Crypto Masses with New Crypto Only Trading Platform
Jim Kharouf – JLN
In another sign Trading Technologies is going all in on the cryptocurrency space, it announced today a new trading platform just for digital currencies called TT Crypto. Mike Unetich, vice president of cryptocurrencies at TT, said the move could be a game changer for the company.
/jlne.ws/2rdnJ3p

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Back to the (Broker) Dealer’s Table

JohnLothianNews.com

It was back at the turn of the century that Tony Saliba founded LiquidPoint, the broker-dealer known for its options execution management technology that at one point executed a fifth of daily options volumes. LiquidPoint would eventually be sold to ConvergEx Group in 2007, which in turn would spin off LiquidPoint to Dash in 2017, forming Dash Financial Technologies. Saliba remained with LiquidPoint through 2014.

Saliba said he swore he’d never get back into the broker dealer space, but in 2018 it was announced he was launching Matrix Executions, a multi-asset broker dealer serving both the buy and sell-side. It’s a new endeavor, but Saliba is bringing back together veterans from his LiquidPoint days to help the firm through its nascent stages.

In this video, Saliba talks about why he got back into the execution and routing space, bringing the team together and the firm’s approach.

Watch the video »

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Oscar Mayer launches cryptocurrency for bacon
Daniel Roberts – Yahoo Finance
Oscar Mayer, the hot dog maker, has launched a cryptocurrency called bacoin, the company announced on Monday. The coin is redeemable for packs of bacon—if you win coins in the first place. You cannot buy them.
/jlne.ws/2Fue1Pl

***** Memes collide.~JJL

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Monday’s Top Three
Out top read story on Monday was a blast from the past. Does anyone remember Eurex US? Deutsche Boerse still does and its lawsuit against the CME and CBOT is coming to trial, 14 years later. The Wall Street Journal’s Did Chicago Exchanges Muscle a Rival Out of Town? A Jury May Soon Decide was the top story by a long shot. Second was another Chicago story from Crain’s Chicago Business, NYSE could be more competitive via Chicago Stock Exchange. And third was yet another Chicago story, Reuters’ piece Citadel Securities names Nazarali global head of business development

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MarketsWiki Stats
124,774,984 pages viewed; 23,085 pages; 212,884 edits
MarketsWiki Statistics

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Lead Stories

A Goldman Trading Desk That Once Had 500 People Is Down to Three
Sonali Basak, Christopher Palmeri – Bloomberg
Many Wall Street traders are concerned about being replaced by machines in the future, but at one Goldman Sachs Group Inc. unit it’s already happened.
/jlne.ws/2w7GBXs

The Real Risk Is Believing That Volatility Is Risk; Investors are much more concerned about a surge in the VIX than they are by the prospect of nuclear war—that’s a mistake
James Mackintosh – WSJ
Which risk should you be more scared by: American cities being vaporized by North Korean nuclear missiles, or the VIX spiking above 20? Judging by recent market reactions, investors are much more worried about volatility than they are by the prospect of nuclear armageddon.
/jlne.ws/2w1BFTJ

World’s Second Most Valuable Cryptocurrency Under Regulatory Scrutiny; Securities, commodities officials examine whether ether, other cryptocurrencies should be regulated
Dave Michaels and Paul Vigna – WSJ
Bitcoin has largely escaped government oversight, but regulators are examining whether other widely traded cryptocurrencies should be regulated as securities, according to people familiar with the matter.
/jlne.ws/2w0ivxs

Trading services CEO aims to lure clients from former firm
Lynne Marek – Crain’s Chicago Business
Chicago-based trading firm Matrix Executions and its CEO, Anthony Saliba, are gunning to take business from New York-based rival Dash Financial Technologies—a firm he knows very well.
/jlne.ws/2vY1gNe

Peter Thiel-Backed Venture to Help Big Investors Bet on Bitcoin; Tagomi expects to be the equivalent of a broker-dealer, executing orders to buy or sell cryptocurrencies
Alexander Osipovich – WSJ
Billionaire Peter Thiel’s venture-capital firm is backing a startup that aims to bring Wall Street electronic-trading expertise to the bitcoin market—a bet that cryptocurrencies will continue to gain mainstream popularity.
/jlne.ws/2w1gaT8

Probe exposes Australian banks’ abuse of customers; Closed and cosseted industry has tended towards culture of rule-breaking
Jamie Smyth in Sydney – FT
AMP was founded 170 years ago on the principle of providing sound advice. But revelations at a royal commission that the Australian financial services firm ripped off customers and lied to regulators have savaged its reputation and shaken one of the world’s most profitable banking sectors to its core.
/jlne.ws/2w19DI6

Banking Brilliance Has Suffered a Serious Setback in the Nordics
Frances Schwartzkopff, Hanna Hoikkala – Bloomberg
Nordic banks, once coveted as the best-run and best-capitalized in Europe, appear to be losing their luster.
/jlne.ws/2vZ1lk4

Why Traders Love Volatility Except When It Bites Back: QuickTake
Joanna Ossinger, Cecile Vannucci – Bloomberg
Mom and pop investors fear it. Traders by and large love it, and normally miss it when it’s gone. Volatility was absent from the financial markets for an unusually long time before rushing back. It’s now on everyone’s radar screen, and likely to stay that way in the months ahead. Volatility not only affects investments; investing in volatility has become something of a cottage industry.
/jlne.ws/2w7Jfwm

Star trader Saitta alleged to have rigged Euribor
Laurence Fletcher – MarketWatch
A former JPMorgan & Co and Citigroup Inc. trader, who is currently a star manager at hedge fund giant Brevan Howard, has been named in a U.K. court as an alleged co-conspirator in what prosecutors call a scheme to manipulate interest rates.
/jlne.ws/2w42cQt

This Hedge Fund Trade Is Stirring Fresh Controversy in the CDS Market
Sridhar Natarajan – Bloomberg
McClatchy’s loan deal with hedge fund roils CDS market; Publisher’s deal comes as regulators step up scrutiny of CDS
It seemed like a sure-fire bet: short the debt of a highly leveraged newspaper company that’s losing money. And for a while, it worked as investors piled up almost $500 million of wagers by buying credit-default swaps on the publisher, McClatchy Co.
/jlne.ws/2w2bYCD

Broker research model comes under fire as effects of new Mifid II regulations start to play out
Lucy White – City AM
The way in which brokers conduct and charge for company research given to investment houses is coming under scrutiny following sweeping new regulations introduced earlier this year.
/jlne.ws/2vXXV0E

T. Rowe Price’s trading head dubious on MiFID II and the emergence of new venues; Global head of systematic trading and market structure at US firm throws doubt on systematic internalisers and periodic auctions.
John Brazier – The Trade
Mehmet Kinak, global head of systematic trading and market structure at US-based asset manager T. Rowe Price, has thrown significant doubt at the new European trading landscape under MiFID II.
/jlne.ws/2w377kE

Banker’s Alleged Use of F-Word Sparked Legal War With Jersey Guy
Anders Melin – Bloomberg
Activist investor has made a career as watchdog of small banks; Spencer Savings Bank said the gadfly made ‘predatory attacks’
The F-word has helped trigger a 14-year legal tussle between a banker and a shareholder activist.
/jlne.ws/2w6xF4w

This Billionaire Has Put Half His Net Worth Into Gold
Tamim Elyan, Manus Cranny – Bloomberg
Egypt’s Sawiris has put half his entire net worth into gold; He’s been waiting 10 years for North Korea stakes to pay off
Some big investors see warning signs ahead for markets but are holding their positions. Egyptian billionaire Naguib Sawiris is taking action: He’s put half of his $5.7 billion net worth into gold.
/jlne.ws/2w0Cyff

Exchanges, OTC and Clearing

Trading Overview in April 2018; Japan Exchange Group released Trading Overview in April 2018.
JPX
Cash Equity Market – In April 2018, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 2.8437 trillion.
Derivatives Market – In April 2018, total derivatives trading volume was 26,061,234 contracts.
/jlne.ws/2vZSUF9

Change of communication related to Cross Currency and Minimum Collateral Security Haircuts
Eurex
Eurex Clearing will change the way of communication concerning regular adjustments of the Cross Currency Haircuts and Updates of minimum Haircuts for Eurex Clearing Admissible collateral securities.
/jlne.ws/2w1c4ue

Foreign Exchange (FX) derivatives: New Liquidity Provider scheme for FX Futures and FX Rolling Spot Futures and Fee Holiday for transaction fees
Eurex
Effective 1 June 2018, the following measures of Eurex Clearing will come into effect:
/jlne.ws/2w1UW7r

Foreign Exchange (FX) derivatives: New Liquidity Provider scheme for FX Futures and FX Rolling Spot Futures
Eurex
This circular announces a new Liquidity Provider (LP) scheme for FX Futures and FX Rolling Spot Futures. The new scheme will run from 1 June 2018 until 31 December 2027.
/jlne.ws/2vXbnSy

ASX Investor Presentation to Macquarie Conference
ASX
/jlne.ws/2w1V5I1

Fintech

First Derivatives’ Kx Technology Powers R5’s Connection Between China and London
Victor Golovtchenko – Finance Magnates
It’s been a couple of months since the announcement by UK Prime Minister Theresa May that London’s and China’s foreign
bit.ly/2HHplxC

Think like Wall Street: a different vantage point
Donald Broughton, chief market strategist, FreightWaves
We spent last week meeting with some of the largest investors in the transportation industry, and had a few key messages that we wanted to deliver. As is often the process, we ended up learning as much or more than we taught, and after listening to their educated dissections of outlook, we came away with a distilled version of our outlook and a clear understanding of investors current concerns. Since they are approaching the industry from a pure financial investment perspective and don’t have a single ‘ongoing operational challenge’ thought in their heads, we thought Freightwaves readers might appreciate the chance to look at the industry from a different vantage point.
/jlne.ws/2w4jahq

Schroders taps Commcise for global research evaluation platform; UK-based asset manager implements platform for research and interaction evaluation, broker voting and allocations.
John Brazier – The Trade
Schroders has adopted a research and interaction evaluation platform to analyse the quality of research it receives.
/jlne.ws/2w0I9SN

A New Crop of Fintech IPOs Will Face Skeptical Investors
Julie Verhage – Bloomberg
While there’s no shortage of financial technology startups, few have been brave enough to enter the public market here in the U.S. That’s likely to change in the next 12 to 18 months.
/jlne.ws/2w1UBBF

These Fintech Firms Are Succeeding By Making Finance More Accessible To Everyone
Sara Hsu – Forbes
At the Lendit Fintech conference on April 10, I sat down with Anju Patwardhan, the Managing Director of Creditease’s Fintech VC Fund. Creditease is a large China-based firm that participates in the P2P as well as wealth management industries. Anju Patwardhan manages the fintech VC fund, which was started in March of 2016 and is a billion-dollar fund that is invested so far in 25 companies, mostly in China and the U.S.
/jlne.ws/2w2cNeH

Marketo Acquires Bizible to Create Industry’s Leading Analytics and Engagement Platform; Combined company will be first to enable marketers to plan, engage, and measure across entire customer journey
PRNewswire
In the largest acquisition in the company’s history, Marketo, Inc., the leading provider of engagement marketing software and solutions, today announced that it has acquired Bizible, the top provider of marketing performance management software. The acquisition combines two best-in-class companies with complementary technologies and analytics, designed to supercharge marketing and allow organizations to seamlessly link revenue back to marketing investment.
/jlne.ws/2w0NYj7

Theorem Technologies Integrates PortfolioScience’s RiskAPI
Theorem Technologies
The latest addition to Theorem’s expanding platform provides interactive, on-demand risk analysis for asset managers and hedge funds.
/jlne.ws/2KqVMOl

Cryptocurrencies

The Lies Spread by Bankers About Cryptocurrencies
Chris Skinner, TheFinanser.com via TABB Forum
It is complete rubbish to suggest the main use of cryptocurrencies is criminal, says Chris Skinner. It is complete baloney and is a smokescreen being created by financial people to deflect the real purpose of cryptocurrencies, which is to use software and servers to manage value rather than buildings and humans – in other words, to reduce or even replace banks.
/goo.gl/RbLYzz

Hong Kong Report Suggests Cryptocurrency Is Largely Left Out Of City’s Organized Crime
Leonhard Weese – Forbes
The Hong Kong Police Force (HKPF) notes that they see “no apparent sign of organized crime or ML/TF concerning trading of cryptocurrencies,” although they have been used as a pretext in Ponzi schemes.
Since 2013 when monitoring began, police have received 167 Bitcoin-related reports, most of which related to ransomware, including WannaCry. Drug or smuggling offences are not among those offences, and police consider this risk to be low.
/jlne.ws/2w1LT6z

Japanese Banking Giant SBI Plans Summer Launch for Crypto Exchange
Samburaj Das – CCN
Japanese financial services giant SBI Group is reportedly planning a summer launch of ‘SBI Virtual Currencies’, its cryptocurrency exchange, this year.
According to Business Insider Japan, SBI Holdings president Yoshitaka Kitao has confirmed the long-awaited full-scale launch of SBI Virtual Currencies in what will be the country’s first wholly bank-owned cryptocurrency exchange. The executive made the revelation during a press briefing on April 26th, stressing plans toward a launch in the summer which runs between June and September in Japan.
/jlne.ws/2wbfJ91

The UK’s cryptocurrency trade body is urging MPs to regulate the industry
Courtney Goldsmith – City AM
British cryptocurrency platforms are calling on a group of influential MPs today to support proposals to regulate the industry in the UK.
/jlne.ws/2w0l4j4

Investment Association targets cyber security action for asset managers; IA establishes cyber security committee to improve collaboration efforts with UK asset management industry.
John Brazier – The Trade
The UK’s Investment Association (IA) has established a cyber security committee to enhance awareness and proactive approaches to the increasing threat of cyber-attacks.
/jlne.ws/2vX9Sno

Plus500’s Sales More Than Triple on Crypto Demand
Will Hadfield – Bloomberg
Shares jump about 15% after first quarter trading statement; Says that it’s unlikely to repeat the performance for year
Plus500 Ltd. more than tripled its revenue as customers flocked to cryptocurrency derivatives, pushing the broker’s shares up as much as 15 percent.
/jlne.ws/2w0DDUl

Volatile cryptocurrencies helped boost a trading company’s revenue by 284% — but the boom is fading
Oscar Williams-Grut – Business Insider
Revenue at trading platform Plus500 jumped 284% in the first quarter of the year, led by a surge in cryptocurrency trading, the company said on Tuesday.
/jlne.ws/2w0ofau

Politics

Investment Boom From Trump’s Tax Cut Has Yet to Appear
Matt Phillips And Jim Tankersley – NY Times
After years of costly layoffs and plant closings, things are looking up for the heavy-machinery giant Caterpillar, which forecasts solid global sales growth and increased demand this year. Yet despite the corporate investment incentives at the center of President Trump’s tax overhaul, the company’s executives have no plans to supercharge investment or expansion.
/jlne.ws/2w4S4H4

Trump Postpones Steel Tariff Decision for EU, Other U.S. Allies; Decision postponed until June 1; countries were granted temporary exemptions
Michael C. Bender and William Mauldin – WSJ
President Donald Trump eased trade pressure on top U.S. allies Monday, giving the European Union and some nations outside the bloc more time to negotiate deals that would exempt them from U.S. steel and aluminum tariffs.
/jlne.ws/2w4l0is

Democrats Tell Judge ‘Emoluments Clause’ Applies to Trump
Patricia Hurtado – Bloomberg
A group of almost 200 Democrats who’ve sued President Donald Trump told a judge he must comply with a Constitutional provision that would bar his businesses from taking money from foreign governments.
/jlne.ws/2w7HiA2

Regulation

ESMA closed for public holiday on Tuesday 1 May
ESMA
The European Securities and Markets Authority (ESMA) is closed for a public holiday on Tuesday 1 May and will reopen on Wednesday 2 May.
/jlne.ws/2vXZ9sM

Guidance on Implementing Effective Heightened Supervisory Procedures for Associated Persons With a History of Past Misconduct
FINRA
FINRA is publishing this Notice to reiterate the supervisory obligations of member firms regarding associated persons with a history of past misconduct that may pose a risk to investors. FINRA Rule 3110 (Supervision) requires member firms to establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and FINRA rules.
/jlne.ws/2w4ncGI

FINRA Requests Comment on FINRA Rule Amendments Relating to High-Risk Brokers and the Firms That Employ Them; Comment Period Expires: June 29, 2018
FINRA
FINRA seeks comment on proposed rule amendments that would impose additional restrictions on member firms that employ brokers with a history of significant past misconduct. These brokers, while relatively small in number, may present heightened risk of harm to investors, and any misconduct by them also may undermine confidence in the securities markets as a whole. The rule proposals would strengthen the existing controls, some of which are highlighted below, FINRA has applied to such brokers to further promote investor protection and market integrity.
/jlne.ws/2w0moCy

Panasonic Charged With FCPA and Accounting Fraud Violations
SEC
The Securities and Exchange Commission today announced that Japan-based Panasonic Corp. will pay more than $143 million to resolve charges of Foreign Corrupt Practices Act (FCPA) and accounting fraud violations involving its global avionics business.
/jlne.ws/2w0JYPD

Federal Court Enters $3.5 Million in Final Judgments against Ryan Madigan of Pittsford, New York, Randell A. Vest of Fort Myers, Florida, and Colorado; Company R2 Capital Group, LLC
CFTC
Judgment Follows Partial Summary Judgment in which Federal District Court Concluded that Ryan Madigan Engaged in Various Acts of Commodities Fraud
Washington, DC – The Commodity Futures Trading Commission (CFTC) today announced that on April 11, 2018, the U.S. District Court for the District of Colorado entered Default Judgment against Defendants Randall A. Vest and his holding company, Bulletproof Vest, Inc. (Bulletproof Vest). The judgment resolves a CFTC enforcement action filed on August 6, 2014, charging Defendants Ryan Madigan of Pittsford, New York; Vest of Fort Meyers, Florida; and Ryan Tomazin of Stamford, Connecticut with commodity futures and off-exchange retail foreign currency(forex) fraud and misappropriation (see CFTC Complaint and Press Release 6981-14, August 21, 2014).
/jlne.ws/2w12CqF

CFTC Orders Glencore Agriculture B.V. and Glencore Ltd. to Pay a $2 Million Penalty for Exceeding Cotton Futures Position Limits, Transacting Illegal EFPs, and Submitting Inaccurate Form 304s; Cotton Trading by Glencore Agriculture B.V. and Glencore Ltd. Was under Common Control by Head of Glencore Cotton Trading
CFTC
The Commodity Futures Trading Commission (CFTC) today issued an order filing and settling charges against Glencore Agriculture B.V., f/k/a Glencore Grain B.V. (Glencore B.V.), located in Rotterdam, the Netherlands, and Glencore Ltd., located in Stamford, Connecticut, finding that on multiple trading days during May 2013, June 2013, May 2014, and June 2014, Glencore B.V. and Glencore Ltd. held net positions in the ICE Futures Cotton No. 2 contracts (cotton futures) that, on an aggregated basis, exceeded the speculative position limits established by the CFTC.
/jlne.ws/2w1XMcz

ASIC takes action on misleading or deceptive conduct in ICOs
ASIC
ASIC is focused on misleading or deceptive conduct in the marketing and selling of digital or virtual tokens via initial coin offerings (ICOs). These offers can involve significant risks for investors that are often not disclosed or well understood.
/jlne.ws/2w4eeJq

ASIC takes further action against Rio Tinto Limited and its former CEO and CFO
ASIC
ASIC has today expanded its legal proceedings recently filed in the Federal Court in Sydney against Rio Tinto Limited (RTL) and its former Chief Executive Officer, Mr Thomas Albanese, and its former Chief Financial Officer, Mr Guy Elliott. The new allegations relate to RTL’s failure to recognise an impairment of a wholly owned subsidiary, Rio Tinto Coal Mozambique (RTCM) in its 2012 Interim Financial Statements in accordance with the relevant accounting standards, RTL’s failure to disclose the substantial impairment and other related breaches of the Corporations Act.
/jlne.ws/2w40caV

SEC Wants Boards’ Views on Contested Shareholder Proposals
Mara Lemos Stein – WSJ
The Securities and Exchange Commission wants to hear from boards when determining if shareholders’ proposals amount to meddling with a company’s day-to-day business.
/jlne.ws/2w4ce3S

Investing and Trading

JPMorgan Says Treasury Selling Pressure From Quants Likely Over
Dani Burger and Sid Verma – Bloomberg
Trend followers shift to short position in April amid selloff; U.S. active mutual funds still long duration, bank’s data show
Fast-money investors have their fingerprints all over this month’s Treasury selloff — and that may be good news for bulls hoping for a reprieve.
/bloom.bg/2HFYyla

BP Profit Beats Estimates Even as Oil-Spill Fines Boost Debt
Kelly Gilblom – Bloomberg
Company paid $1.6 billion for Macondo disaster last quarter; Profit reached highest since 2014 as crude prices surged
BP CFO Brian Gilvary discusses the company’s earnings and performance.
BP Plc capped a shaky Big Oil earnings season on a more upbeat note, as shareholders reacted positively to the highest profit in years even as the continuing burden of oil-spill payments pushed debt higher.
/jlne.ws/2w4aSpO

The U.S. Just Borrowed $488 Billion, a Record High for the First Quarter
Saleha Mohsin, Randy Woods – Bloomberg
Treasury sees stage set for growth pickup over near term; CBO sees U.S. budget deficit rising to $1 trillion by 2020
U.S. Treasury Secretary Steven Mnuchin said he’s unconcerned about the bond market’s ability to absorb rising government debt after his department said it borrowed a record amount for the first quarter.
/jlne.ws/2w6vj5G

Morningstar Launches Portfolio Carbon Risk Score To Help Investors Evaluate Funds’ Carbon-Risk Exposure – The Carbon Risk Score Moves Beyond Carbon Footprinting To Provide An Assessment Of The Carbon Risks And Opportunities Embedded In A Portfolio
MondoVisione
At its 12th annual UK investment conference in London, Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today introduced the Morningstar® Portfolio Carbon Risk Score, a measure that will help investors evaluate a portfolio’s exposure to carbon risk. Portfolios that have low carbon-risk scores and low levels of fossil-fuel exposure will receive the Morningstar® Low Carbon Designation to help investors quickly identify low-carbon funds.
/jlne.ws/2w1GXyz

FIS Reports First Quarter 2018 Results
Business Wire
FIS (NYSE:FIS), a global leader in financial services technology, today reported first quarter 2018 results. All financial results, calculations and year over year comparisons reflect the adoption of Accounting Standards Codification 606 (ASC 606) on a full retrospective basis. The comparability of the Company’s GAAP results is impacted by the divestitures of its public sector and education business and its consulting businesses in 2017.
/jlne.ws/2w7NCrg

Swiss trader Trafigura bulks up management committee
Julia Payne – Reuters
Trafigura has tripled the size of its management committee, bolstering the position of CEO Jeremy Weir while also giving more responsibility to the next generation of potential leaders, the Swiss commodities trader said on Tuesday.
/jlne.ws/2w0Ltxf

Institutions

A Goldman Trading Desk That Once Had 500 People Is Down to Three
Sonali Basak and Christopher Palmeri – Bloomberg
Many Wall Street traders are concerned about being replaced by machines in the future, but at one Goldman Sachs Group Inc. unit it’s already happened.
/bloom.bg/2HFEZte

HNA Set to Scuttle Deal for Scaramucci’s SkyBridge
Julie Steinberg, Kate O’Keeffe and Rob Copeland – WSJ
Chinese conglomerate HNA Group Co. is set to drop its pursuit of SkyBridge Capital, the investment firm founded by onetime White House communications chief Anthony Scaramucci, amid resistance from the Committee on Foreign Investment in the U.S.
/on.wsj.com/2HAIf94

Morgan Stanley Plans to Boost Junior Banker Pay as Much as 25%
Sonali Basak and Will Mathis – Bloomberg
Analysts to gain promotions more quickly, firm memo shows; Banks have been increasing perks to retain young employees
Morgan Stanley plans to raise some salaries and offer quicker promotions as part of its years-long push to improve conditions for junior bankers, according to people familiar with the matter.
/bloom.bg/2HBJhl7

Morgan Stanley boosting salaries for college recruits
Kevin Dugan – NY Post
Morgan Stanley is boosting salaries for its youngest bankers by as much as 25 percent — plunking down as much as $215,000 annually for college recruits, The Post has learned.
/jlne.ws/2w1C4pd

Barclays Looks Outside for New Chairman; Gerry Grimstone, a key ally of?CEO?Jes Staley, has decided not to apply
Max Colchester – WSJ
Barclays PLC’s will look externally for a new chairman after front-runner Gerry Grimstone unexpectedly pulled out of the race to head the British bank.
/jlne.ws/2w21wLv

Climate protesters storm annual Barclays shareholder meeting
Nicholas Megaw – FT
Protesters crashed Barclays’ annual general meeting on Tuesday morning, as the bank came under pressure from investors to cut its lending to fossil fuel projects.
/jlne.ws/2w0pu9E

Regions

Swiss 1MDB Case Widens With Criminal Probe Into Petrosaudi Pair
By Hugo Miller – Bloomberg
Complaint filed by former Petrosaudi executive being analyzed; Over $3 billion allegedly diverted from 1MDB with outside help
Swiss prosecutors widened their probe into allegations of corruption at Malaysian development fund 1MDB, opening criminal proceedings to look into two officials of Saudi Arabian oil producer PetroSaudi who were allegedly tied to the affair.
/jlne.ws/2vZ140w

Indonesia Officials Laud Country’s Financial Stability; Bank Indonesia Governor says would be open to an interest-rate increase if the rupiah continues to weaken
By I Made Sentana – WSJ
Indonesia’s financial system is well and under control despite the recently increased pressure on the financial markets, authorities said Monday.
/jlne.ws/2w2ff4W

Middle East Billionaire Gets Ready for Money Exchange IPO
Dinesh Nair, Matthew Martin, Ruth David – Bloomberg
Finablr weighing London share sale as early as next year; Company owns Travelex, UAE Exchange and Xpress Money brands
Middle East billionaire Bavaguthu Raghuram Shetty hired Evercore Inc. to advise on a potential initial public offering for his financial-services company, according to people with knowledge the matter, as he seeks to expand a sprawling empire built on offering money transfers and currency exchange.
/jlne.ws/2w4hWTm

Brexit

Amber Rudd’s resignation throws Theresa May’s government into crisis; The home secretary’s departure could tilt the balance of power in both the cabinet and the party at large
The Economist
In this week’s Bagehot column I ventured that Amber Rudd, Britain’s home secretary, was probably not fatally wounded by recent events, “unless there is another scandal festering in the Home Office’s basement”. It turned out that there was a lot of festering going on. Just before 10pm on April 29th Ms Rudd tendered her resignation, pitching Theresa May’s ill-starred government into yet another crisis.
/goo.gl/9tDqoa

May Suffers Huge Brexit Defeat As Lords Backs ‘Meaningful Vote’ On EU Deal
Paul Waugh – Huffington Post
Theresa May has suffered her most damaging Brexit defeat so far after the House of Lords voted to give Parliament a say over the terms of any future EU deal.
bit.ly/2HCdVuJ

The post A Goldman Trading Desk That Once Had 500 People Is Down to Three appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

CME Group reported its E-mini S&P 500 futures average daily volume rose 17 percent in April to 2.4 million contracts, E-mini Nasdaq future rose 107 percent to 490,000 contracts and E-mini Dow futures rose 82 percent to 261,000 contracts. It also reported record open interest in copper options, Fed Fund futures and 18 record OI days for soybean futures.~JK

Quartz is holding a free event in London on June 5, “Cryptocurrency’s Journey into Mainstream Culture.” The event will be at The Relay Building, 1st Floor,114 Whitechapel High Street, London.~JJL

The London Stock Exchange Group is to establish operations in Romania.~JJL

JLN has learned that OCC Chief Transformation Officer Adi Agrawal has left the company.~JJL

Here is a terrific Bitcoin resource from Jameson Lopp. H/T to Rumi Morales.~JJL

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OCC’s Evolving Leadership Role in the Options Industry

JohnLothianNews.com

The OCC didn’t always position itself as a thought leader in the derivatives industry, but as exchanges’ business interests shifted over the years to multiple asset classes, OCC is one of the few organizations left that can bring its focus solely to bear on equity options. In this video, OCC CEO and Executive Chairman Craig Donohue talks about the evolution of the OCC and the Options Industry Council.

Watch the video »

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Hey crypto bros! Journalism ? advertising
Jemima Kelly – FT
Read more articles in SOMEONE IS WRONG ON THE INTERNET SERIES
On Friday, a cryptocurrency exchange executive decided he’d had enough of dealing with “nocoiner” journalists:
/jlne.ws/2Kxad3A

***** Great line from this story: As the late William Randolph Hearst liked to say (in an adage he most likely did not coin): Journalism is printing what someone else does not want printed; everything else is public relations.

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How to Use Metrics Instead of Being Used by Them; Two new books take on performance measurement from different angles and end up in a similar place.
Justin Fox – Bloomberg
Jerry Z. Muller is a professor of history at the Catholic University of America known for his finely wrought accounts of capitalism’s intellectual origins. John Doerr is the billionaire chairman of venture capital firm Kleiner Perkins Caufield & Byers, known for his early investments in the likes of Amazon.com Inc. and Google. They both have new books out about performance measurement. Muller’s is titled “The Tyranny of Metrics.” Doerr’s is “Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs.”
/jlne.ws/2KvItw8

**Muller asserts that for government and non-profits “the best way to motivate people within these organizations is by attaching rewards and penalties to their measured performance.”~JK

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The world’s first blockchain toothbrush lets you mine coins by brushing your teeth
Technode.com
Blockchain is the biggest buzzword of the year. However, we are just now beginning to see what silly creative ways will this technology be applied. The newest example from China is a blockchain-based toothbrush by Shenzhen-based 32Teeth, currently crowdfunding the project through the JD Finance platform.
/jlne.ws/2I7wwhD

****JB: The coins it mines can be used for new toothbrushes. They worry in the article that someone might give it to their dog to chew on to keep mining coins.

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Tuesday’s Top Three
Yesterday’s top three were led by Bloomberg’s interview with David Solomon, president and COO of Goldman Sachs, in A Goldman Trading Desk That Once Had 500 People Is Down to Three. Second went to the Wall Street Journal’s Did Chicago Exchanges Muscle a Rival Out of Town? A Jury May Soon Decide. Third went to John Lothian News’ piece, TT Appeals to the Crypto Masses with New Crypto Only Trading Platform

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MarketsWiki Stats
124,862,449 pages viewed; 23,086 pages; 212,901 edits
MarketsWiki Statistics

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Lead Stories

Milk Is Risky Business. Got Futures?; Dairy contracts are relatively new to the global markets, but trading is booming.
Shruti Singh, Lydia Mulvany – Bloomberg
Doug Block, a dairy farmer for 45 years, says he grew up in an era when the price of corn feed for cows fluctuated by just 6¢ a bushel. The U.S. didn’t ship much cheese and butter overseas, and the government often bought cheese to buoy the market when prices sagged. Those days are gone. Block’s business depends on pasture conditions in New Zealand, Europe’s inventories, and China’s milk consumption. He also has to deal with wild swings in the market after the U.S. government scaled back support over the last decade.
/jlne.ws/2w18Dn8

***** The great thing about milk futures is the cliches, and none of them are cheesy.~JJL

Large New York Money Manager AllianceBernstein Is Moving to Nashville; Move part of broad cost-cutting effort pressed by index-tracking funds and low-cost investing
Sarah Krouse – WSJ
One of the oldest names on Wall Street is moving to one of the fastest-growing cities in the South, reinforcing a recent shift in finance jobs to cheaper parts of the U.S.
/jlne.ws/2KuLa0N

Economists Invoke Great Depression in Warning to Trump on Trade
Josh Wingrove – Bloomberg
U.S. ‘paid the price’ for tariffs in 1930, letter says; Signatories caution against repeating protectionist history
To some of the biggest voices in U.S. economics, it could be 1930 all over again. More than 1,100 economists, including Nobel laureates and former presidential advisers, have signed a letter warning Donald Trump about his tariff-heavy approach to trade. Many of its passages quote directly from another letter sent in 1930, cautioning against protectionist measures the U.S. imposed at the start of what became the Great Depression.
/jlne.ws/2FzhPic

Global Market Volatility Now a ‘Made in the U.S.A.’ Phenomenon
Luke Kawa – Bloomberg
Implied volatility of U.S. stocks runs higher than in Europe; Rising rates, Trump comments helping America export turbulence
The U.S. is home to the world’s largest economy, the global reserve currency — and now, the rebirth of market volatility.
/jlne.ws/2Fy70wU

World’s largest hedge fund managers predict industry rebound at gathering
The Star Online
Hedge funds, following an extended period of low investor confidence and unspectacular returns, are poised to be great again, according to managers at a West Coast gathering of some of the world’s largest investors.
/jlne.ws/2jppOps

Bond Trader Turns to Lawyer Who Made a Name in Murder Cases
Chris Dolmetsch – Bloomberg
David Demos, formerly of Cantor Fitzgerald, on trial for fraud; Jose Baez handled defense of Aaron Hernandez, Casey Anthony
Jose Baez is better known for helping clear accused killers than defending white-collar cases. Should the Miami-based lawyer win an acquittal for a former Cantor Fitzgerald LP mortgage-bond trader accused of fraud, he might find Wall Street calling more often.
/jlne.ws/2KtWCKf

Goldman Sachs to Pay $110 Million to Resolve Forex Probes
Greg Farrell – Bloomberg
Settlements with Fed, New York state cover 2008-13 conduct; Trader shared tips about order coming from ‘Satan,’ DFS says
Goldman Sachs Group Inc. has agreed to pay about $110 million to resolve allegations that its foreign exchange traders improperly shared information about client orders on an electronic chat room, putting clients at a disadvantage.
/jlne.ws/2jnFA3W

Begging the Question on VIX Manipulation
Streetwise Professor
Stung by yet another allegation of manipulation of the VIX, Cboe Chairman and CEO Ed Tilly and President and COO Chris Concannon fired off an open letter defending the exchange and VIX. To say it begs the key questions is an understatement.
/jlne.ws/2jmNpaj

China Iron-Ore Futures Open to Outside World; Foreign investors will be able to trade in the historically volatile market
Biman Mukherji – WSJ
Barely a month after launching yuan-denominated oil futures, China on Thursday will start allowing foreign investors to trade in its historically volatile iron-ore market.
/jlne.ws/2FAAev3

Exchanges, OTC and Clearing

CME Group Reached Average Daily Volume of 17 Million Contracts in April 2018, Up 4 Percent from April 2017
Press Release
CME Group announced it reached average daily volume (ADV) of 17 million contracts during April 2018, up 4 percent from April 2017. Open interest at the end of April was 126 million contracts, an increase of 4 percent from the end of April 2017, and up 17 percent from year-end 2017.
/jlne.ws/2rcX6MY

Deutsche Börse: Increased Trading Volumes, New Records For ETFs – Cash Market Turnover Totals EUR127.2 Billion In April
Press Release
The high trading volume on the cash markets since the beginning of the year has led to new records in ETF trading on Xetra, Europe’s leading platform for exchange-traded funds. The first quarter of 2018 saw a total of more than 1.9 million orders executed, the highest number since the products were introduced in 2000, and around 30 percent up year on year. The number of tradable ETFs also rose to a new high of 1,264 at the end of April.
/jlne.ws/2jm9RQM

A dark hour for traders as rare outage crippled Canada stock markets
John Tilak and Fergal Smith – Reuters
For about an hour and 11 minutes last Friday afternoon, traders in Canada’s biggest stock exchanges were left in the dark, as the stock market operator battled with a hardware failure.
/jlne.ws/2KweRP5

London Stock Exchange clearing unit expands Asia offering
Reuters Staff
The London Stock Exchange’s clearing arm LCH has begun clearing interest rate swaps denominated in yuan, won and rupees to bolster its Asia base as euro business faces the threat of relocation.
/jlne.ws/2jki1cy

OCC Cleared Contract Volume Up 27 Percent in April; Equity options volume up 32 percent in April and average daily volume up 30 percent year-to-date
OCC
OCC announced today that total cleared contract volume in April reached 405,853,179 contracts, a 27 percent increase from April 2017 volume of 320,547,848 contracts and marking the highest April on record. OCC’s year-to-date average daily cleared contract volume is up 29 percent from 2017 with 22,026,812 contracts compared to 17,027,383 contracts in 2017.
/jlne.ws/2KwzhaL

Cboe Expands Market Data Sales Team with Key Hires; Experienced market data professionals Richard Barden and Stephen Dorrian join Cboe’s London team; Join growing team focused on extending the reach of Cboe’s global suite of market data products
Cboe
Cboe Global Markets, Inc. announced the expansion of its Market Data Services team with two key appointments in its London office
/jlne.ws/2Kxv2vs

Ag Barometer declines for second month amid looming trade war concerns
Tue May 01 2018
CME Group
Trade war concerns continue to drive a sharp decline in producer sentiment toward the agricultural economy, according to the Purdue University/CME Group Ag Economy Barometer.
/jlne.ws/2KwhhgD

2018 Recorded As Best April In MGEX History
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announces an impressive 272,068 contracts recorded for April of 2018. This number topples over the previous reigning April by 24% while also breaking into the top five overall monthly volume charts coming in at fifth-best in MGEX history.
/jlne.ws/2jmjY8n

LCH clears first non-deliverable interest rate swaps; Clearing for Chinese Yuan, Korean Won and Indian Rupee-denominated non-deliverable interest rate swaps
LCH
LCH, a leading global clearing house, today announced that it has begun clearing of non-deliverable interest rate swaps. Market participants are now able to clear this product denominated in Chinese Yuan, Korean Won and Indian Rupee. This is the first time that SwapClear has offered clearing of derivatives denominated in these currencies.
/jlne.ws/2FAxMER

OTC Clear Expands its Services to USD/HKD Cross Currency Swaps and Extends Clearable Tenors of HKD Interest Rate and Basis Swaps to 15 years?
HKEX
OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX) that provides clearing and settlement services for over-the-counter (OTC) derivative transactions, commenced clearing of US dollar – Hong Kong dollar Cross Currency Swaps (USD-HKD CCS) and extended the clearable tenor of both HKD Interest Rates Swaps (IRS) and HKD Basis Swaps from 10 years to 15 years on 30 April 2018.
/jlne.ws/2FzjhBa

Fintech

Israeli company BioCatch helps international banks to prevent fraud and catch criminals by tracking keystrokes and mouse movements.
Nati Yefet – Globes
A few minutes before the beginning of the interview with Howard Edelstein, chairperson and CEO of Israeli company BioCatch, one of the pioneers in financial technology, it turns out that he is almost completely fluent in Hebrew.
/jlne.ws/2w5h94G

Barchart Partners with AFX to Distribute the Ameribor Overnight Interest Rate
Press Release
APIs, Market Data, and Software for Financial Services, Media, and Commodities
Today, Barchart, a leading provider of financial market data and technology, and American Financial Exchange (AFX), an electronic exchange for direct interbank lending and borrowing for American financial institutions, have announced a new data partnership where Barchart has become a distributor of the Ameribor interbank interest rate. Barchart is the first financial data provider to make Ameribor available via API access.
/jlne.ws/2w4v8aP

The AI arms race: China and US compete to dominate big data; Beijing plans to be the world leader in the technology by 2030. The contest will come down to who can better manipulate the data
Louise Lucas in Hangzhou and Richard Waters in San Francisco – FT
Algorithms trained on mountains of Chinese data may soon be making decisions that deeply affect the lives of people in the US.
/jlne.ws/2jofn5y

SPIDERSTREAM -Real-Time Volatility & Greek Feed
Spiderrock
SpiderRock is excited to announce the commercial release of SpiderStream, a Real-Time Volatility & Greek data feed. This feed is available through the SpiderRock Gateway Technologies cloud-based managed infrastructure.
/jlne.ws/2KuQBwJ

Cryptocurrencies

Crypto Startups Hand Out Digital Coins for Free Amid Scrutiny
Olga Kharif – Bloomberg
Startups are giving away crypto tokens to help boost profiles; Free coins usually don’t provide any ownership in enterprise
When Michael Terpin peered inside his cryptocurrency wallet recently, he found several new coins — ones that he didn’t buy.
/jlne.ws/2jkOdwl

Kraft Heinz Issues ‘Bacoins’ in Spite of Buffett’s Distaste for Crypto
Olga Kharif – Bloomberg
Warren Buffett has said cryptocurrencies such as Bitcoin will come to a “bad ending.” He probably wasn’t referring to cholesterol.
/jlne.ws/2jluFb2

Wall Street veteran and CEO of Japanese online broker says cryptocurrencies could take off like derivatives did; Despite some pushback from global regulators, a Wall Street veteran and CEO of Japanese online broker Monex says the new crypto asset class could take off like derivatives did 38 years ago.
Kate Rooney – CNBC
Despite some pushback from global regulators, Wall Street veteran and CEO of Japanese online broker Monex Group says the new crypto asset class could take off like derivatives did 38 years ago.
/jlne.ws/2jmJqdR

4,000 Ethereum, Bitcoin and Litecoin ATMs to Roll Out in Argentina
Trustnodes
Argentina, that forgotten land of sunshine is seemingly trying to catch up with this century by no better method than rolling out some 4,000 ethereum, bitcoin and litecoin bi-directional ATMs.
/jlne.ws/2I6oVjG

More Big Cryptocurrency News at Trading Technologies: Announcing TT Crypto
Michael Unetich – TT
Crypto. TT. And FREE.* Now that’s a combo worth writing about! You can now trade cryptocurrencies for free through what we believe is the world’s greatest trading platform. Traders have been asking us for this functionality, and I’m excited to bring it to market. Yes, any exchange trading commission fees still apply, but we will charge no fees to use TT software. Here’s the scoop on that, with a little background to start.
/jlne.ws/2rczLuJ

Nexo Launches World’s First Instant Crypto-backed Loans Platform; Crypto Fintech Allows Investors to Spend the Value of Their Crypto without Selling it
Nexo
Nexo, powered by 10-year-old leading European FinTech group, Credissimo, launched its platform for instant crypto-backed loans. The release of the product irrevocably alters the blockchain landscape by allowing investors and businesses to access instant cash, while retaining ownership of their digital currency holdings. Nexo’s innovation marks an important milestone for the cryptocurrency space, as the platform has the potential to free up hundreds of billions of dollars for spending.
/jlne.ws/2KtBMuA

Blockchain insiders tell us why we don’t need blockchain
Jemima Kelly – FT
We’ve written before about how blockchain is a belief system, complete with prophets, disciples, traitors, rituals and schisms.
/jlne.ws/2FA69eY

Politics

Milken Party-Goers Courted for Cash in Fight for Congress
Christopher Palmer, Nabila Ahmed, John Gittelsohn – Bloomberg
Mike Pence stars at two fundraisers with conference attendees; Dealmaking get-together lures politicians to pot industry
Mike Pence wasn’t on the roster of speakers or guests at this week’s annual Milken Institute Global Conference in Beverly Hills, California, but he was very much a presence.
/jlne.ws/2FAvbL7

Democracy’s resilience: Is America’s democracy threatened?
Brookings Institution
In the aftermath of the 2016 election and during the tumultuous first year of the Trump presidency, observers across the political spectrum have struggled to anticipate the likely consequences for American democracy. Never before has a sitting president so harshly questioned the integrity of elections, challenged the separation of powers, and verbally threatened the freedom of the press. Partisan polarization is at an all-time high, public trust at a historic low. For many Americans, democracy seems more imperiled now than at any time in living memory. And similar problems are afflicting other democracies around the world.
/jlne.ws/2Kt4Hig

Why Trump’s tariffs threaten Americans’ standard of living
Rick Newman -Yahoo Finance
President Trump thinks new tariffs on certain imports will protect American jobs and make US workers better off. But tariffs can also make some people worse off, and they may even degrade American living standards if Trump goes too far.
/jlne.ws/2jkXUL9

President Trump has made 3,001 false or misleading claims so far
Glenn Kessler, Salvador Rizzo and Meg Kelly May – Washington Post
In the 466 days since he took the oath of office, President Trump has made 3,001 false or misleading claims, according to The Fact Checker’s database that analyzes, categorizes and tracks every suspect statement uttered by the president.
/jlne.ws/2jmn5Nn

The Questions Mueller Wants to Ask Trump About Obstruction, and What They Mean; The questions show the special counsel’s focus on obstruction of justice and touch on some surprising other areas.
Matt Apuzzo and Michael S. Schmidt – NY Times
The special counsel, Robert S. Mueller III, recently provided President Trump’s lawyers a list of questions he wants answered in an interview. The New York Times obtained the list; here are the questions, along with the context and significance of each. The questions fall into categories based on four broad subjects. They are not quoted verbatim, and some were condensed.
/jlne.ws/2jnxaJV

Trump’s Antitrust Bust; The feds failed to make their case against the AT&T-Time-Warner tie.
The Editorial Board – WSJ
You can tell a lawyer is losing a case when he offers the court an exit ramp even before a verdict. That’s how the Justice Department is trying to save its floundering antitrust case against an AT&T – Time Warner merger, and we hope federal Judge Richard Leon doesn’t fall for it.
/jlne.ws/2jqe1ad

U.S. Gives Rusal Path to Escape Sanctions; Aluminum giant’s owner EN+ Group was at risk of a delisting from LSE without Treasury reprieve
Ian Talley – WSJ
The Trump administration on Tuesday amended its Russia sanctions program, paving the way for aluminum giant United Co. Rusal to escape from the blacklist and granting the metals market a reprieve from a supply scare that rocked markets over the past month.
/jlne.ws/2KxbB6i

Former Boehner Aide Eyed for Oil Trade Group CEO
Jennifer A Dlouhy, Ari Nattter – Bloomberg
Mike Sommers now heads the American Investment Council; American Petroleum Institute seeks replacement for Jack Gerard
The American Petroleum Institute is recruiting a former top Republican congressional staffer with financial-sector expertise to lead the oil industry trade group, according to people familiar with the hiring deliberations.
/jlne.ws/2jnxWqj

Trump asks court to dismiss emoluments lawsuit against him
Katelyn Polantz, CNN
President Donald Trump has asked a federal court to dismiss a lawsuit accusing him of violating the Constitution’s Emoluments Clause related to private payments from other governments.
/jlne.ws/2KtzpYI

Rosenstein Says He Won’t Be ‘Extorted’ Amid Impeachment Threat
Chris Strohm, Billy House – Bloomberg
‘We’re going to do what’s required’ despite threats, he says; Some GOP lawmakers have drafted articles of impeachment
Deputy Attorney General Rod Rosenstein, who’s overseeing the Russia investigation, dismissed those trying to intimidate him after a group of House Republicans drafted articles of impeachment against him.
/jlne.ws/2jkiQCa

Regulation

SEC Names Raquel Fox Director of the Office of International Affairs
SEC
The Securities and Exchange Commission today announced that Raquel Fox will succeed Paul Leder as the Director of the Office of International Affairs, which advises the Commission on cross-border enforcement and regulatory matters and coordinates the SEC’s involvement with regulatory authorities outside the United States. Ms. Fox will formally assume the position in July 201
/jlne.ws/2KwwX3x

Japan’s regulators battle over more than just a banking merger; Both FSA and FTC believe they are acting in the best interests of the country
Leo Lewis – FT
In the final trading session before this year’s Golden Week national holiday, investors have a last chance to place their bets on one of Japan’s most fascinating intra-governmental punch-ups in recent memory. Two regulators, both bristling with self-belief, clashing over the fate of two regional banks in the south-western island of Kyushu.
/jlne.ws/2KuO6KR

SEC Shuts Down $85 Million Ponzi Scheme and Obtains Asset Freeze
SEC
The Securities and Exchange Commission today announced the unsealing of fraud charges against a Mississippi company and its principal who allegedly bilked at least 150 investors in an $85 million Ponzi scheme. The defendants agreed to permanent injunctions, an asset freeze, and expedited discovery.
/jlne.ws/2KweJPB

Proposed Rule Change Relating to Statutory Disqualification Application Fees
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend Section 12 to Schedule A of the FINRA By-Laws, regarding statutory disqualification application fees.
/jlne.ws/2KtBwf6

FINRA’s Senior Helpline: Addressing the Unique Needs of Senior Investors
FINRA
“Can we make a difference? Can this actually work?” Those are the questions FINRA’s Yvette Panetta and her team asked themselves when they launched the Securities Helpline for Seniors.
/jlne.ws/2KxvycS

Caymans and Bermuda face new corporate transparency laws; UK approves plans for public registers about company owners in overseas territories
Henry Mance and Madison Marriage in London – FT
British overseas territories, including the Cayman Islands and Bermuda, will be forced to lift the veil of secrecy over the ownership of companies based there after the UK approved radical new measures to tackle money-laundering and corruption.
/jlne.ws/2FzMyvB

Goldman to pay $110m over foreign exchange trades; Bank accused of putting clients at a disadvantage in carrying out currency orders
Ben McLannahan in New York – Ft
Goldman Sachs has been ordered by two US regulators to pay $110m for “unsafe and unsound” practices in its foreign-exchange trading business.
/jlne.ws/2FxyKSl

SEC Enforcement Division Issues FAQs for Share Class Selection Disclosure Initiative
SEC
The Securities and Exchange Commission’s Division of Enforcement today issued answers to frequently asked questions (FAQs) on the Share Class Selection Disclosure Initiative, providing additional information about adviser eligibility, disgorgement, and the distribution of funds to clients.
/jlne.ws/2FA9PO4

ESMA launches bond liquidity system under MiFID II
ESMA
The European Securities and Markets Authority (ESMA) has published today its first liquidity assessment for bonds subject to the pre- and post-trade requirements of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
/jlne.ws/2FA7en2

ASIC welcomes AFCA authorisation
ASIC
ASIC welcomes the authorisation by the Minister for Revenue and Financial Services of the operator of the new single external dispute resolution (EDR) scheme for consumer and small business complaints: the Australian Financial Complaints Authority (AFCA).
/jlne.ws/2FyVoKb

Investing and Trading

Facebook Plans a Dating Feature, Sending Match, IAC Plunging
Gerrit De Vynck, Sarah Frier – Bloomberg
Dating app owner Match Group falls most in more than two years; Facebook announcement comes after outcry over data privacy
Facebook Inc. announced it’s rolling out a new dating feature, sending shares in matchmaking app company Match Group Inc. and its owner IAC/InterActiveCorp. plunging.
/jlne.ws/2Kx9xLA

Facebook to Launch Opt-In Dating Feature; CEO says the feature, aimed at 200 million ‘single’ users, would be designed ‘for building long-term relationships, not just hookups’
Deepa Seetharaman and Georgia Wells – WSJ
Facebook Inc. FB 1.08% plans to launch a dating feature on its platform, in an unexpected push into a new business even as the social-media giant battles questions about how it handles users’ data and privacy.
/jlne.ws/2KtZRkV

ADM profit rises on higher soy processing margins
P.J. Huffstutter – Reuters
Archer Daniels Midland Co (ADM.N) on Tuesday reported a 16 percent increase in quarterly profit, as the U.S. grains merchant highlighted higher margins for and record volumes of soybean processing in North and South America.
/jlne.ws/2jnxOHl

How to become an algo trader
Dan Butcher – eFinancialCareers.com
Are you a crack programmer without any financial services experience who wants to become an algorithmic trader? While making that career transition may seem daunting, it actually might not be as difficult as you think.
/jlne.ws/2jppBCG

Another Weird Deal Upsets CDS Traders; Also singing CEOs, banks and guns, bacoin and air-cooled Porsches.
Matt Levine – Bloomberg
Orphan CDS. Man, what a great time it is to be alive, if you like counterintuitive credit-default-swap structuring. Here’s the latest, from Bloomberg’s Sridhar Natarajan:
/jlne.ws/2KwgiwX

Sugar Low: Commodity Plummets on Surplus; The future has a bitter edge
David Hodari – WSJ
For sugar, there’s no sweet ending in sight after a long period of declining prices. And analysts forecast another surplus next season, which begins in October, suggesting a recovery in sugar prices is a long way off.
/jlne.ws/2FzVKjL

It’s Not 2007, and Junk Bonds Can Still Be Dancing; Spreads are tight, but credit markets are functioning as they should.
Marcus Ashworth – Bloomberg
This year’s Milken Institute conference, a Davos-like gathering of the world’s most eminent financial minds but in the sunny climes of Beverly Hills, has one consistent theme: valuations can’t keep rising so the music must be about to stop. References to 2007 or even 1994 abound.
/jlne.ws/2FA5cDF

Bunge plans filing to explore IPO for Brazil sugarcane business
Reuters Staff
Global agricultural trader Bunge Ltd (BG.N) expects to make a filing in Brazil as soon as this month to explore a public offering for its Brazilian sugarcane milling business, Chief Executive Soren Schroder said on Wednesday.
/goo.gl/7cNjYd

Institutions

Why Central Banks’ Dominion Over Markets Is Here to Stay
Policy makers’ meticulous communication has held sway over markets over the past decade—and shows little sign of fading
By Jon Sindreu, WSJ.com
Ten-year Treasury yields’ rise above 3% for the first time in four years last week confirmed the end of a decade of unprecedented monetary stimulus. But central banks’ vast power over markets may not be over.
/goo.gl/UbTcG8

Wall Street Job Exodus Grows as AllianceBernstein Move Leaks
Noah Buhayar – Bloomberg
More than 1,000 staff may go to Nashville, local report says; It’s part of a trend as firms in New York look to lower costs
New York’s hold on finance and investing jobs keeps slipping. On Tuesday, word began leaking in both Manhattan and Nashville, Tennessee, that AllianceBernstein Holding LP plans to relocate its headquarters from the city known for Broadway shows to one more famous for country music. The firm’s senior leaders including Chief Executive Officer Seth Bernstein will move, according to the Wall Street Journal. And they may be joined by more than 1,000 staff, the Nashville Post reported.
/jlne.ws/2Kwi8hw

Legendary Investment Banker Richard Jenrette Left These 24 Rules for Success
Katia Porzecanski – Bloomberg
Richard Jenrette Photographer: Nancy R. Schiff/Hulton Archive via Getty Images
Richard Jenrette, who co-founded the investment bank Donaldson, Lufkin & Jenrette in 1959, spent four decades on Wall Street. When he died last week from complications of cancer at the age of 89, he left behind on his desk 24 rules to succeed — in finance, and in life. The list, titled “What I Learned,” was shared Sunday at an intimate memorial service for family and local friends in Charleston, South Carolina. Here’s what it said:
/jlne.ws/2Kt4g7C

JPMorgan Buys Building in Washington for Regional Headquarters
Michael J Moore, Daniel Taub – Bloomberg
JPMorgan Chase & Co., which is constructing a new corporate headquarters in New York, purchased a building in central Washington, D.C., to serve as its base for that region.
/jlne.ws/2jmhua3

Morgan Stanley names first woman Emea chief
Laura Noonan in Charlotte – FT
Morgan Stanley’s Clare Woodman is set to become the first woman to lead a major investment bank in the City after the US lender named her as its new head of Europe, the Middle East and Africa.
/jlne.ws/2jo1ILS

Rokos Overtakes Howard as Billionaire’s Hedge Fund Loses Assets
Nishant Kumar – Bloomberg
Brevan Howard’s AUM have dropped more than 75% from their peak; Investors are pulling money from firms to bet on startups
The protege has overtaken the master. Chris Rokos’s investment firm manages more money than Brevan Howard Asset Management for the first time as clients continue to quit billionaire Alan Howard’s hedge fund company.
/jlne.ws/2FySS6H

Regions

Hong Kong’s Thriving Broker Bazaar Hit After Regulators Step In
Benjamin Robertson – Bloomberg
Chinese acquirers have bought about 20% of H.K.’s brokers; SFC has tightened scrutiny of the practice amid concerns
Chinese firms splashed out on purchases of Hong Kong brokerages in recent years to get a foothold in the former British colony. That wave is ebbing after regulators tightened scrutiny of the practice.
/jlne.ws/2jlvela

Banks Seeking Hong Kong Deposits Push Rates as High as 3%
Alfred Liu, Emma Rai – Bloomberg
StanChart is among lenders competing in $292 billion business; Banks are securing funding in anticipation of loan growth
Competition in Hong Kong’s $292 billion time-deposit business is intensifying as a surge in short-term borrowing costs forces banks to seek other avenues of funding.
/jlne.ws/2Kt76JO

EU Warns of More U.S. Uncertainty After Tariff Delay
Andrew Mayeda – Bloomberg
Trump gives another 30 days for EU, Canada permanent relief; Allies want unconditional reprieve from American steel duties
The European Union and businesses warned of more market uncertainty following the Trump administration’s decision to delay U.S. steel and aluminum tariffs for the next month.
/jlne.ws/2Kuiw03

Eastern European Currencies Wake Up to Battle Dollar Gains
Adrian Krajewski, Marton Eder – Bloomberg
Poland’s zloty leads rebound after May Day’s steep declines; Investor focus turns to European Union budget proposal: ING
Eastern European currencies recovered some of their losses inflicted in May Day’s thin-liquidity driven sell-off, but still face headwinds.
/jlne.ws/2FBviGb

Singapore Has Just Become Asia’s Best-Performing Stock Market
Abhishek Vishnoi, Nguyen Kieu Giang – Bloomberg
2018 Scorecard: Straits Times Index up 6.2%, VN Index up 4.6%; Investors remain skeptical on whether the rally can continue
There’s been lots of competition for the title of Asia’s best-performing stock market this year. Among the major equity indexes in the region, eight have climbed to records in the first four months alone.
/jlne.ws/2FAT3hv

Hong Kong Takes Steps to Ensure Liquidity When MSCI Adds China
Benjamin Robertson – Bloomberg
Banks asked to stockpile offshore yuan ahead of MSCI rebalance; Plans come after stock connect quota raised to avoid logjams
Hong Kong regulators are taking measures to ensure there will be enough offshore yuan available to investors when Chinese shares are added to MSCI Inc. benchmarks on June 1.
/jlne.ws/2FAZOjA

Emerging Markets Are Under Threat
By Chelsey Dulaney, WSJ
The Federal Reserve’s policy-tightening plans are finally catching up with emerging markets.
The currencies, stocks and bonds of nations from Turkey to South Africa have fallen in recent weeks, pressured by a sudden resurgence in the U.S. dollar, rising expectations for U.S. interest-rate increases and uncertainty over the path for global growth.
/goo.gl/D3aDMR

The Trump Effect May Finally Be Weighing on China’s Exports
Bloomberg News
China’s exporters may be finding it harder to avoid the effect of trade disputes with the U.S., according to the freshest manufacturing purchasing managers index data.
While the official manufacturing gauge and a private counterpart both held up last month, their sub-indexes tracking new export orders both declined. The Caixin Media Co. and Markit Economics Ltd. reading for booked shipments dropped to the weakest level since June 2016.
/goo.gl/yrYToi

Brexit

Founder of pro-Brexit think?tank has link with Russian intelligence, says MP; Bob Seely uses parliamentary privilege to claim billionaire Christopher Chandler was ‘object of interest’ to French intelligence
Luke Harding – The Guardian
A Conservative MP has claimed that a billionaire who founded an influential pro-Brexit thinktank has “a link with Russian intelligence”.
/jlne.ws/2jqcEs5

Miscellaneous

Introducing Behind The Money, a new FT audio show; New podcast takes you inside the biggest business and financial stories of the moment
Aimee Keane – FT
Behind The Money is a new show from the Financial Times that extends the reach of the FT’s corporate and financial coverage. It is hosted by me, Aimee Keane, a multimedia journalist and a producer on Alphachat, Tech Tonic and other FT podcasts.
/jlne.ws/2KuNTax

Drinking frequency increases with income; About 70% of people in managerial and professional jobs have drunk alcohol in past week
Delphine Strauss in London – FT
Professionals and people on higher incomes drink alcohol more frequently than those in routine and manual jobs in the UK, according to figures that have been seized upon by both advocates and critics of Scotland’s new minimum unit price for alcohol.
/jlne.ws/2jkhvLE

The post Milk Is Risky Business. Got Futures? appeared first on John Lothian News (JLN).

First Read

Crypto Regulation Is Just Getting Started
Jim Kharouf – JLN

One thing is certain about regulation of cryptocurrencies and other digital assets. We’re in the earliest of stages.

And we’re caught between industry participants clamoring for clarity and regulators taking varied and measured approaches. It’s an awkward time for this market as new ideas and uses for initial coin offerings range from the next great financial payment system on blockchain to the world’s first blockchain toothbrush that lets you mine coins by brushing your teeth.

Last month, the Institute For Financial Markets hosted its second Smart Regulation Roundtable event, Implications of Cryptocurrencies, which covered just where we are and where we may be headed with regulation on coins and ICOs. You can find the report John Lothian Productions wrote, The Dawn of Crypto Regulation for the IFM.

To read the rest of this story, go HERE.

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Hits & Takes
JLN Staff

Congratulations to Gary Katz on being awarded the Joseph W. Sullivan Award at the Options Industry Conference. Katz was humble in his description of how previous Sullivan award winners Ivers Riley and David Krell mentored and guided him during his career. He flashed his understated humor in comparing his new initiative in snack foods to the options industry, noting his snacks had “brown shells and the options industry has Shelly Brown (of Miax).~JJL

Here is a picture of Gary Katz on the big screen at OIC while accepting the Options Conference Joseph Sullivan Award. In a nice hat tip to JLN, he said all his thanks to everyone who helped and influenced him would be “longer than the longest MarketsWiki page.”~JJL

Gary Katz said his path back to the options industry involves snack foods, shown here.~JJL

TMX’s OIC beaver swag HIGHlights cannabis options trading success.~JJL

The new TT Crypto platform is now available – and it’s free. Trade #bitcoin, #ethereum and more on @Coinbase’s @GDAX.~JJL

Thank you to all the sponsors of the Options Conference.~JJL

Hanweck sponsored flip flops during the beach party at OIC. They made a good impression on the attendees and the sand.~JJL

After 13 rewarding years Kelly Brown has departed CME Group for other opportunities, he reported on LinkedIn.~JJL

Patrick Thornton-Smith passed this along: The inaugural Futures for Kids (FFK) 10k , and a 5K, fun run to celebrate the 10th anniversary of the charity is on course for a great event on May 23rd at the London Olympic Park. The event is being sponsored and supported by: ION Trading, Calypso, Cinnober, GHF, OSTC, RJO’Brien, Fidessa, FIA, FOW, Kite Consulting, KRM 22, Illuminate Financial, JLN and Cult Wines. Over 100 runners have signed up and they expect to get close to 200. Anyone interested in joining or donating please go here. ~SR

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Nandini Sukumar Explains the WFE’s Mission and Vision

JohnLothianNews.com

Nandini Sukumar took the reins as CEO of the World Federation of Exchanges in 2015. Under her leadership, the 57-year-old organization has been revitalized and its membership now represents more than 200 market infrastructure providers. She spoke with JLN’s Jim Kharouf about how WFE approaches key issues facing exchanges, clearing houses and other market participants. She said one of the organization’s main points of focus, now 10 years since the 2008 financial crisis, is maintaining trust in the exchange space.

Watch the video »

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IFM Publishes New Report: The Dawn Of Crypto Regulation
IFM
On April 11, 2018, regulators, academics and market users gathered in Washington DC to discuss the issues, challenges and future of regulation for the digital asset space. Titled “Smart Financial Regulation Roundtable: Implications of Cryptocurrencies,” the program featured three separate sessions. Here is a full recap from the event and the state of crypto regulation, produced by John Lothian Productions.
/jlne.ws/2rdyin4

**This report features great commentary from CFTC Commissioner Rostin Behnam, Gary DeWaal, Chris Brummer, Paul Atkins, Sara Hanks and others. It contains more than 20 different links to sources on cases, papers and issues in crypto regulation.

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A Verbal Cryptobrawl Breaks Out at Milken Over Bitcoin’s Future
Matthew Leising – Bloomberg
Sides square off on whether cryptoassets can change the world; Nouriel Roubini gets colorful, internet pioneers push back
A cryptocurrencies panel at the Milken Institute Global Conference was more like a cryptobrawl — no punches but a barrage of barbed comments. “All this talk of decentralization is just bullsh*t,” said Nouriel Roubini, an economist known as Dr. Doom for predicting the chaos of the 2008 financial crisis.
/jlne.ws/2FDYTyO

***** Hyperbole meets economic straight talk.~JJL

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The Gambler Who Cracked the Horse-Racing Code; Bill Benter did the impossible: He wrote an algorithm that couldn’t lose at the track. Close to a billion dollars later, he tells his story for the first time.
Kit Chellel – Bloomberg
Horse racing is something like a religion in Hong Kong, whose citizens bet more than anyone else on Earth. Their cathedral is Happy Valley Racecourse, whose grassy oval track and floodlit stands are ringed at night by one of the sport’s grandest views: neon skyscrapers and neat stacks of high-rises, a constellation of illuminated windows, and beyond them, lush hills silhouetted in darkness.
/jlne.ws/2jp4259

***** Any relation to Peaky Blinders?~JJL

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Wednesday’s Top Three
We love milk. Bloomberg’s As Dairy Goes Global, More Farmers Turn to Futures and Options, about hedging with milk futures, was the most read piece yesterday. Second was the Streetwise Professor’s Begging the Question on VIX Manipulation. Third was the Bloomberg piece Economists Invoke Great Depression in Warning to Trump on Trade

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MarketsWiki Stats
124,950,338 pages viewed; 23,091 pages; 212,929 edits
MarketsWiki Statistics

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Lead Stories

Why Profiting From Wall Street Fear is No Longer Easy for Cboe; Number of VIX futures contracts outstanding declined precipitously since early February, ahead of Cboe’s earnings
Gunjan Banerji – WSJ
Anxiety is back on Wall Street. That should be good news for Cboe Global Markets Inc., CBOE -0.47% the operator of the VIX index of expected stock swings, widely known as the market’s fear gauge.
/jlne.ws/2jqItkQ

Stock Exchanges Get Warning Shot From SEC Over Data Profits
Nick Baker – Bloomberg
Regulator took unusual step of blocking request to raise fees; SEC’s chairman has signaled he’s scrutinizing this area
U.S. regulators blocked stock exchanges’ request to raise some fees for market data, an unusual step suggesting closer scrutiny of an increasingly important slice of their businesses.
/jlne.ws/2HNFUYM

Goldman to Add Crypto Contracts Without Trading Bitcoins
Bloomberg
Don’t call Goldman Sachs Group Inc.’s long-awaited Bitcoin-trading business a full-fledged desk, and don’t expect it to buy and sell Bitcoins, at least at first. The bank, preparing to pioneer a new cryptocurrency market on Wall Street, plans to start small and offer a limited number of derivatives, according to a person briefed on the decisions. It will trade Bitcoin futures in a principal, market-making capacity and will also create non-deliverable forward products.
/jlne.ws/2jpamtx

Coinbase is allowing customers to make big trades in the shadows in attempt to lure big Wall Street traders to its exchange
Frank Chaparro – Business Insider
Coinbase is opening an office in Chicago, a city known for its large number of trading firms, to lure in talent to help build-out GDAX’s trading tech.
Coinbase, the San Francisco-based cryptocurrency company, is making big moves to shake off its scrappy startup roots and transform into a first-class trading firm.
/jlne.ws/2FDYUmk

SEC Launches Additional Investor Protection Search Tool; The SEC’s “SALI” Tool Will Allow Investors to Identify Individuals Subject to Judgments or Orders in Enforcement Actions
SEC
The Securities and Exchange Commission today announced the launch of an additional online search feature that enables investors to research whether the person trying to sell them investments has a judgment or order entered against them in an enforcement action. The new tool is intended to assist the public in making informed investment decisions and avoiding financial fraud.
/jlne.ws/2FDgrvb

Does the VIX Need Fixing? Sure Looks That Way; The first step is acknowledging that something is wrong.
John M. Griffin – Bloomberg
Last week, the Chicago Board Options Exchange (CBOE) responded to a research report into manipulation of the monthly settlement of the VIX, sometimes referred to as the stock market’s fear index, and attempted to assure participants that the process was not rigged. “The academic paper’s analysis and conclusions are based upon a fundamental misunderstanding about how VIX derivatives are traded and settled,” the CBOE wrote. I was an author of the research paper. The CBOE’s most recent response has left my “fundamental misunderstanding” still very much unresolved.
/jlne.ws/2w2IMLJ

“Active management really shines in a bear market.”
Joshua M Brown – The Reformed Broker
This is a thing people say all the time, and have said recently quite a bit.
While less than 10% of actively managed stock mutual funds have been able to outperform their benchmarks over five year periods according to SPIVA, the proponents of active strategies bring up the fact that, in a downturn, passive funds bear the full brunt of the market’s losses while they can be more defensive. Managers posit that they’ll be able to lower the risk for investors by owning more defensive names or raising their allocation to cash or employing tax-loss harvesting or adding hedges to their portfolios.
/jlne.ws/2w9lkfY

The Hedge Fund Manager Who Became A Billionaire From Tech
Nathan Vardi – Forbes
With the Nasdaq more than doubling in five years, Philippe Laffont took the stage at the Forbes and Shook Research Top Advisors Summit in Las Vegas in February to talk about technology stocks. You would think an audience made up of hundreds of financial advisors would be used to hearing from hedge fund managers specializing in technology, but Laffont is something of a rarity in the hedge fund world these days.
/jlne.ws/2w7Y0z3

Wall Street’s Big Gender Lawsuit Is 13 Years in the Making; Cristina Chen-Oster’s fight with Goldman Sachs began in 2005. It just got huge.
Dune Lawrence, Max Abelson – Bloomberg
Cristina Chen-Oster was settling into her seat for a late-March Broadway matinee of Mean Girls when she remembered to check her voicemail. The day before, she’d ignored a call from an unrecognized number. Now she hit play and heard the voice of her lawyer, Kelly Dermody: “Huge congratulations!” it said. “Really, really, really, really happy for you.”
/jlne.ws/2FE6lKl

Inside the World’s Most Elite (and Secret) Traders’ Club; The nameless group confers “a hunting license” that lets an investor sit at the “big boy table and make high-level trades not available to stupid amateurs.”
Alastair Marsh – Bloomberg
In an industry where power and influence are measured in dollars and cents, this may be the most exclusive club in finance: The price of admission is at least $25 million.
/jlne.ws/2riXTLp

At Milken, Wall Street touts itself as force for good
Lawrence Delevingne – Reuters
The titans of finance who flock to the annual Milken Institute Global Conference each spring say they believe their quest for profits can also make the world a better place.
/jlne.ws/2FCAkm3

BSE board likely to discuss charges against chairman Sethurathnam Ravi
Shrimi Choudhary – Business Standard
The BSE plans to discuss the ongoing investigation against its chairman, Sethurathnam Ravi, named in the Central Bureau of Investigation’s (CBI’s) First Information Report in connection with the alleged ~6 billion IDBI-Aircel loan fraud. The board of directors of the exchange will meet on Friday to declare the March quarter results.
/jlne.ws/2FEpKLc

Exchanges, OTC and Clearing

EEX Trading Results For April 2018 – EEX Markets On Growth Path
Mondovisione
In April 2018, the European Energy Exchange (EEX) increased volumes on its power derivatives markets by 12% to 246.6 TWh (April 2017: 220.7 TWh). In particular, the markets for Italy (38.8 TWh, +100%) and France (19.8 TWh, +48%) contributed to this development. Also the smaller markets for Spain (7.2 TWh, +54%) and the Netherlands (4.3 TWh, +358%) recorded significant growth. In Options on Phelix-DE Futures, at 36.7 TWh, EEX achieved the highest volume since the launch of this product.
/jlne.ws/2FB1ZUl

ICE posts better-than-expected profit on higher trading volumes
Reuters
Intercontinental Exchange Inc, owner of the New York Stock Exchange, posted a better-than-expected quarterly profit as a spike in market volatility pushed trading volumes higher.
Volatility surged in February after a prolonged calm in 2017, roiling global equities, bonds, currencies and commodities markets, with turbulence remaining elevated through the end of March, benefiting exchange operators.
/jlne.ws/2wenURY

Exchange Traded Commodities: Introduction of options on iShares Physical Gold ETC (IGLN)
Eurex
Effective 22 May 2018, Eurex Clearing AG (Eurex Clearing) will offer clearing services for options on iShares Physical Gold ETC (IGLN) introduced at Eurex Deutschland.
/jlne.ws/2KwkVXO

Increased trading volumes, new records for ETFs; Cash markets were up 127.2 billion euros in April / 20 percent more than in the previous year
Deutsche Börse Group
High trading volumes on the cash markets since the beginning of the year have led to new records in ETF trading on Xetra , Europe’s leading stock exchange exchange traded fund exchange. In total, more than 1.9 million orders were executed in the first quarter of 2018, more than ever since the products were launched in 2000 and around 30 percent higher than in the same quarter of the previous year. The number of tradable ETFs has also hit a new high of currently 1,264.
/jlne.ws/2jnF5qN

ASX Monthly Activity Report – April 2018
ASX
/jlne.ws/2jqoNxy

HKEX Appoints Group Risk Officer
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) has appointed Roland Chai to serve as Group Risk Officer, effective 1 June 2018.
/jlne.ws/2jqyP1i

The Listing Committee censures Mr Zhang Jing Zhi, a former Executive Director of Sound Global Limited (Stock Code: 967), for breaching the Director’s Undertaking
HKEX
/jlne.ws/2KxGPKh

The Listing Committee censures Mr Jiang An Ping, a former Executive Director of Sound Global Limited (Stock Code: 967), for breaching the Director’s UndertakingShare
HKEX
/jlne.ws/2KuZXsq

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

Fintech

UnionBank of the Philippines Chooses FIS to Digitize its Lending Processes
Press Release
FIS announced that UnionBank of the Philippines (UnionBank) has selected its comprehensive suite of risk management, compliance and analytics solutions to help the bank digitize and enhance its commercial lending processes.
/jlne.ws/2w80k9f

Goldman building team to sell its own alternative data; New group tasked with finding data within the securities division that could be sold to clients
Faye Kilburn – Risk.net
Goldman Sachs is getting into the alternative data business. The firm is in the early stages of building a team of quant researchers within its securities division, to identify internal data that might be valuable to clients in both investment and risk management.
/jlne.ws/2FCAdXF

Cryptocurrencies

Nouriel Roubini says bitcoin is ‘bulls – t’ and only attracts ‘suckers’
Carleton English- MarketWatch
Trades barbs with Alex Mashinsky, head of crypto-lending space Celsius Network, and Bill Barhydt, CEO of crypto app Abra
Nouriel Roubini just crapped on the cryptocurrency party. The famously bearish NYU economist — who earned the nickname “Dr. Doom” for predicting the financial crisis — blasted bitcoin BTCUSD, +0.48% fanatics as “suckers” and said repeatedly that its underlying technology was “bulls – t.”
/jlne.ws/2Kytf9G

Reddit to Relaunch Bitcoin Payments (And Add More Cryptos)
Wolfie Zhao – Coindesk
Social media platform Reddit is planning to reinstate cryptocurrency as a payment option for its gold members – and this time bitcoin won’t be the only option.
In an interview with Cheddar on Thursday, the site’s chief technology officer, Chris Slowe, said that, while bitcoin’s spiking transaction fees and an integration issue with its cryptocurrency payments processor Coinbase had led to Reddit dropping bitcoin as a payment method in March, the option is likely to return once the platform has completed a redesign.
/jlne.ws/2w4OpJa

Telegram Token Sale Is Likely a Victim of Rising ICO Scrutiny
Camila Russo and Olga Kharif – Bloomberg
Telegram Group Inc., an encrypted messaging app, has reportedly scrapped plans to issue digital tokens in a public sale after raising a whopping $1.7 billion privately.
/jlne.ws/2Kzc1ci

Goldman to Add Crypto Contracts Without Trading Bitcoins
Jennifer Surane – Bloomberg
Don’t call Goldman Sachs Group Inc.’s long-awaited Bitcoin-trading business a full-fledged desk, and don’t expect it to buy and sell Bitcoins, at least at first.
/jlne.ws/2jpamtx

Goldman Sachs to Open a Bitcoin Trading Operation
Nathaniel Popper – NY Times
Most big banks have tried to stay far away from the scandal-tainted virtual currency Bitcoin.
/jlne.ws/2FDzntv

Alibaba cannot block cryptocurrency firm from using similar name: U.S. judge
Jonathan Stempel – Reuters
A U.S. judge on Monday rejected Alibaba Group Holdings Ltd’s bid for a preliminary injunction to block the Dubai cryptocurrency firm Alibabacoin Foundation from using the Alibaba name.
/jlne.ws/2FDqrED

Bitcoin Analysts Brace for ‘Dogfight’ With Narrowing Trading Range
Janine Wolf – Bloomberg
The narrowest trading range in about six months has Bitcoin technical analysts scouring price charts to help figure out whether the biggest cryptocurrency is poised to build upon its April rally.
/jlne.ws/2FDhKKy

Cinnober sets up Lightning node to test scalability on the blockchain
Finextra
Capital markets software house Cinnober is running tests on the Lightning Network to determine its potential for scaling up cryptocurrency transactions across the bitcoin blockchain.
/jlne.ws/2FBw0mY

Politics

Kim Jong Un Is Masterfully Playing Trump’s Game; The North Korean leader’s moves show a keen sense of The Art of the Deal.
Marc Champion – Bloomberg
Donald Trump will soon sit down to the most consequential negotiation of his career if, as expected, he becomes the first U.S. president to meet a North Korean leader since the devastating war on the peninsula in the 1950s. Trump, of course, wrote a book on dealmaking, only this time nuclear war and peace will hang in the balance, rather than a real estate contract. And on the evidence so far, his sparring partner Kim Jong Un has mastered The Art of the Deal, too. In fact, frequent North Korea visitor Dennis Rodman told TMZ he gave Kim a copy of the book for his birthday in 2017.
/jlne.ws/2Ku4xXQ

Cambridge Analytica Closing Operations Following Facebook Data Controversy
The data company had lost clients in recent months
Rebecca Ballhaus in Washington and Jenny Gross in London – WSJ
Cambridge Analytica , a data firm that worked for President Donald Trump’s 2016 campaign, is shutting down following allegations about its misuse of Facebook data and the campaign tactics it pitched to clients.
/jlne.ws/2FE4xB3

***** I have seen this trick before.~JJL

Regulation

Wall Street should be worried about Justice Department report
John Crudele – NY Post
This I guarantee. When the next report from Michael Horowitz, the Justice Department’s inspector general, comes out, Wall Street is going to be very interested. And very worried.
/jlne.ws/2jqJ1Hq

SEC Chief Pitches Investors, Brokers to Back Rule Targeting Stockbroker Conflicts; Jay Clayton starts effort to promote agency’s proposal on investment advice
Dave Michaels – WSJ
Wall Street’s chief regulator took to the road Wednesday to promote proposed stricter rules on how stocks brokers advise their clients, saying they would help investors and not hurt the brokerage industry.
/jlne.ws/2KzexiQ

Fund says Wells Fargo unit worsened ‘vol-mageddon’ losses: court filing
Trevor Hunnicutt – Reuters
A Chicago fund manager that suffered catastrophic losses in a market plunge earlier this year has blamed the actions of its broker, a Wells Fargo & Co unit, according to court documents filed on Wednesday.
/jlne.ws/2wb7n0Y

Bigger say for Hong Kong’s securities watchdog will lead to better investor protection: study; Study finds Hong Kong lags behind the NYSE when it comes to protecting shareholders’ interests, which can be boosted by sharpening the city’s edge in corporate governance
Alice Shen – South China Morning Post
The Securities and Futures Commission should have more power over listed companies to protect shareholders’ interests, a study said on Wednesday.
/jlne.ws/2FCBFJB

Ex-CEO Faces Third Trial Over Insider Tip to Ex-Orioles Fielder
Edvard Pettersson – Bloomberg
Despite two whiffs, the U.S. will get a third chance to win an insider-trading conviction against the former chief executive officer of a Southern California medical supply company. James Mazzo, who headed Advanced Medical Optics Inc., was charged over a tip he allegedly gave almost 10 years ago to his friend, former Baltimore Orioles third baseman Doug DeCinces, about an imminent takeover by Abbott Laboratories.
/jlne.ws/2FCZ6lS

SEC Launches Searchable Database of Individuals With Enforcement Record; SALI helps identify registered and unregistered individuals who have been parties to past SEC enforcement actions and against whom federal courts have entered judgments.
Melanie Waddell – Think Advisor
The Securities and Exchange Commission said Wednesday that it has launched a searchable database that allows investors to find information on brokers and advisors with a judgment or order against them in an enforcement action.
/jlne.ws/2FE235H

New York Bans NRA Insurance Program and Fines Broker; State regulator says the National Rifle Association’s Carry Guard program unlawfully provides liability insurance to gun owners for certain acts of intentional wrongdoing
Leslie Scism – WSJ
New York financial regulators on Wednesday said an insurance program for members of the National Rifle Association violates state law, and have imposed a $7 million fine on the broker who arranged it.
/jlne.ws/2FEQ73t

Sebi disposes off show-cause notice against ex-official of FTIL; Vaidyalingam was holding managerial position in MCX, FTIL and NSEL from May 2005 to June 2012
Press Trust of India
Markets regulator Sebi today disposed of a show-cause notice against Hariharan Vaidyalingam, a former official of MCX, NSEL and FTIL, after charges of insider-trading could not be established.
/jlne.ws/2FEUnjx

SocGen Is Ready to Pay Up to $1 Billion to End U.S. Probes
Tom Schoenberg and Fabio Benedetti Valentini – Bloomberg
French authorities will receive a portion of the penalties; Settlement would resolve Libor rigging, Libya bribery cases
Societe Generale SA is nearing an agreement to pay as much as $1 billion to resolve two U.S. probes — into the rigging of benchmark interest rates and allegations of bribery in Libya — according to people familiar with the matter.
/jlne.ws/2FDZnoC

ESMA announces Meet-the-Market workshop on ESEF in Warsaw 28 May
ESMA
The European Securities and Markets Authority (ESMA) is organising a MTM workshop for software developers on the European Single Electronic Format (ESEF), on 28 May (afternoon).
/jlne.ws/2Kwlgty

FINRA Revises the Sanction Guidelines
FINRA
FINRA is revising its Sanction Guidelines to instruct adjudicators in the disciplinary process to consider customer-initiated arbitrations that result in adverse arbitration awards or settlements when assessing sanctions. Thus, when a respondent’s disciplinary history, and history of arbitration awards and arbitration settlements together with the violation found in a disciplinary case, form a pattern, the Sanction Guidelines advise that adjudicators should consider imposing more stringent sanctions.
/jlne.ws/2jnPCCf

Remarks of Commissioner Brian Quintenz at FIA’s 40th Annual Law and Compliance Conference
CFTC
Good afternoon and thank you for that very kind introduction. I’m delighted to be here with you today at FIA’s 40th Annual Law and Compliance Conference. Before I begin, let me quickly say that the views contained in this speech are my own and do not represent the views of the Commission.
/jlne.ws/2jnGj5n

CFTC Staff Issues Interpretive Guidance Regarding Exemption from Aggregation
CFTC
The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight today issued interpretive guidance regarding CFTC Regulation 150.4(b)(1), which is an exemption from position aggregation requirements for certain commodity pool investors.
/jlne.ws/2jp9SDB

Investing and Trading

Oil trader Gunvor slumps to lowest profit in seven years
David Sheppard and Neil Hume – Financial Times
Gunvor, one of the world’s largest independent energy traders, saw its profits almost half last year as its faced tough market conditions that squeezed margins as it invested heavily to build a presence in the US.
The Geneva-based commodity trader said net profits dropped by 48 per cent to $162m in the year to December, the lowest level since at least 2010.
/jlne.ws/2w7YOE5

Markets Are Underestimating the Fed; The recent acceleration in inflation poses significant risks to the current slow normalization approach.
By Charles Lieberman – Bloomberg
The Federal Reserve will release its latest statement on monetary policy today, and although no change is anticipated, it’s becoming clearer that interest rates are too low and the risk of an acceleration in the pace of rate increases is much higher than currently perceived by investors.
/jlne.ws/2FERhfl

Grain Giants Expect Higher Profits From Bad Weather; ADM, Bunge say trading and processing business is improving after years of bumper harvests
Jacob Bunge – WSJ
Grain-trading firms are making more money again after struggling for years against a global oversupply of crops.
/jlne.ws/2FG5jxg

British banking leverage remains ‘dangerously high’; Regulators have fallen short in imposing capital requirements, says John Vickers
Martin Arnold , Banking Editor – FT
Leverage in the British banking system remains “dangerously high” after regulators “fell short” in the capital requirements they imposed on lenders, one of the main architects of the UK’s post-crisis financial regulation said.
/jlne.ws/2FEprA2

U.S. stock pickers beat benchmarks amid volatility
David Randall – Reuters
The volatility that stopped the bull market in U.S. stocks in its tracks after hitting record highs in January is rewarding stock-picking fund managers.
/jlne.ws/2FEjRNT

Institutions

Wall Street Slaps Down NYC Again With AllianceBernstein’s Move to Nashville
By Patrick Clark and Noah Buhayar – Bloomberg
The asset manager is shifting about 1,050 jobs to Nashville; It’s part of a trend as financial firms look to reduce costs
New York is losing more than a thousand financial-industry jobs — and Manhattan’s loss is Music City’s gain.
/jlne.ws/2FDxJbe

Deutsche Boerse to cut 300 jobs in cost-cutting drive
Reuters
Deutsche Boerse AG (DB1Gn.DE) plans to cut around 300 jobs as new CEO Theodor Weimer seeks to lower operating costs by 100 million euros ($120 million) through to 2020, Handelsblatt reported on Wednesday.
/jlne.ws/2w7Wgpr

Rising margin costs could slash hedge fund returns; Regulatory change may see hedge funds subject to 70% additional margins.
By John Brazier – The Trade
Hedge funds could see returns plummet due to additional margin costs set by clearing houses as a result of regulatory changes.
/jlne.ws/2js8m3E

Flint prepares new strategy as HSBC puts troubled years behind it; Plan expected to involve building up asset management and insurance businesses
Henny Sender in Hong Kong – FT
John Flint, chief executive of HSBC, has some much needed breathing space to put together his three-year plan for Europe’s biggest bank as it emerges from a scandal-plagued past.
/jlne.ws/2KwdTTa

Goldman Sachs vote backs pay, shows less support for stock plan
David Henry and Ross Kerber – Reuters
Goldman Sachs Group Inc (GS.N) leaders said more than 87 percent of shares were voted in favor of its executive pay at its annual shareholder meeting, and that a stock plan for employees was approved by more than 65 percent of votes cast.
/jlne.ws/2FDp6xB

Regions

China’s Xiaomi files for Hong Kong IPO
Louise Lucas in Hong Kong – FT
Xiaomi kicked off what is set to be one of the world’s biggest initial public offerings to raise up to $10bn, filing a prospectus that gives investors their first look at the Chinese handset maker’s financials. It is due to list in early July.
/jlne.ws/2Kzck6W

UBS Group becomes first global bank to apply for majority control of Chinese securities venture
Laura He – South China Morning Post
China’s top securities regulator has accepted and is reviewing an application by the UBS Group to increase its stake in its Chinese securities venture to 51 per cent, after the Swiss bank became the first global financial institution to apply for a controlling share in its local operations.
/jlne.ws/2w8JRl9

Danske reprimanded over weak money-laundering controls; Danish regulators uncover ‘serious weaknesses’ in the bank’s governance
Richard Milne, Nordic Correspondent – FT
Danske Bank has been extensively criticised and reprimanded by Danish regulators over weak or non-existent money-laundering controls that gave rise to suspected “criminal activities involving vast amounts of money”.
/jlne.ws/2jsVnOZ

Has China Really Kicked Its Debt Addiction?; While analysts were raving about China’s campaign against debt last year, overall credit growth barely slowed
Nathaniel Taplin – WSJ
Here’s a widely told yarn: Last year China successfully curtailed skyrocketing debt issuance without hurting growth.
/jlne.ws/2FEVnEi

China Shunning U.S. Soybeans on Trade Tensions, Bunge CEO Says
Mario Parker – Bloomberg
China is ‘very deliberately not buying anything from the U.S.’; Bunge CEO Schroder says Canada, Brazil picking up sales
The world’s biggest oilseed processor just confirmed one of the soybean market’s biggest fears: China has essentially stopped buying U.S. supplies amid the brewing trade war.
/jlne.ws/2FEMtXl

It appears China has stopped buying soybeans from the US altogether because of trade fight
Evelyn Cheng – CnBC
China is apparently no longer buying U.S. soybeans amid the rise in trade tensions, Bloomberg reported Wednesday.
/jlne.ws/2FDa4HS

Miscellaneous

Boy Scouts unveil new name: Scouts BSA
CBS News
For 108 years, the Boy Scouts of America’s flagship program has been known simply as the Boy Scouts. With girls soon entering the ranks, the group says that iconic name will change. On Wednesday, the organization announced a new name for its Boy Scouts program: Scouts BSA. The change will take effect next February.
/jlne.ws/2FGTBmo

Bloomberg’s New Paywall Will Charge Users $35 a Month; The paywall, which allows visitors to read 10 articles a month for free, includes a $39.99 option that comes with a subscription to Bloomberg Businessweek and access to events
By Benjamin Mullin – WSJ
For more than a decade, Bloomberg has allowed readers to devour journalism on its consumer-facing website at no charge, in the hopes of burnishing its brand, generating advertising dollars and complementing its core terminal business.
/jlne.ws/2FBtDR6

A Letter From Our Editor-in-Chief About the New Bloomberg Digital; We’ve introduced big changes to our offerings.
John Micklethwait
Dear Reader, As editor-in-chief, I usually try to keep out of your way. But today marks an important moment for us: We’re launching a subscription business for Bloomberg Digital, with a redesigned website, a twice-daily regional newsletter and a host of other new features. And it deserves a brief explanation.
/jlne.ws/2jnqICI

The post Why Profiting From Wall Street Fear is No Longer Easy for Cboe appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Congratulations to OIC’s Mary Savoie and the OCC/OIC team that organized this year’s Options Industry Conference. The venue was great, the weather nice and the execution of the conference was terrific.~JJL

No one wanted to sponsor a porta potty for the OIC beach cabana party yesterday. Something about bad branding. I suggested OCC should have sponsored them. After all, OCC is where our liquidity is pooled.~JJL

We forgot to unlock the video interview with WFE’s Nandini Sukumar. The video is now unlocked and available for viewing. Our apologies, but shame on all of you who tried to hack the password.~JJL

FIA’s event, Listed Derivatives for the Retail Market on May 14 in Chicago, will be held at the Union League Club from 12:15 pm to 4:30 pm, followed by networking. JLN’s Jim Kharouf will moderate the panel “Products – Crypto, Equity Options, FX and More” with Nick LaMaina of TradeStation, Dan Ryba of E*Trade, John Tornatore from Cboe and Mark Omens from CME. Should be a great event and good panel on what’s happening in retail. Sign up HERE. ~JK

TP ICAP has appointed Pieter Van Vredenburch, previously head of global markets at HSBC, as head of institutional services, Americas. Vredenburch also held senior roles at UBS and Droit Financial Technologies.~SR

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SIX Turns 10: SIX’s Urs Rüegsegger Says the Vertical Model and Interoperability Works

JohnLothianNews.com

Ten years ago, SIX Group was formed in a merger between SWX Group, Telekurs Group and SIS Group, creating a new vertical business model. Urs Rüegsegger, chairman of SIX Swiss Exchange, helped lead that transition and growth as CEO of the exchange for nine years before stepping down last December. JLN’s Jim Kharouf sat down with Rüegsegger at the WFE’s IOMA Conference in Chicago to talk about how SIX and its clearing business has grown over the past decade.

Watch the video and read the rest of the story»

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How Could Bitcoin Suspect Leave an Iceland Prison’s Comforts Behind? Easily; Held for questioning in a $2 million theft of Bitcoin-mining computers, Sindri Stefansson soon escaped a low-security facility. But his arrest days later in Amsterdam made him eager to get back.
David Segal – NY Times
It has been more than four months since thieves pulled off the biggest heist in the history of Iceland, and the police here still have no idea where the booty — roughly $2 million worth of Bitcoin-mining computers — is stashed.
/jlne.ws/2KzeKT3

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Thursday’s Top Three
Our top read story of the day yesterday was Bloomberg’s The Gambler Who Cracked the Horse-Racing Code. Second was another Bloomberg story, Inside the World’s Most Elite (and Secret) Traders’ Club. Third went to Bloomberg’s Stock Exchanges Get Warning Shot From SEC Over Data Profits

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MarketsWiki Stats
125,031,727 pages viewed; 23,091 pages; 212,939 edits
MarketsWiki Statistics

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Lead Stories

VIX Faces Probes With Controversial Auction at Issue
Matt Robinson and Nick Baker – Bloomberg
Allegations that Cboe Global Markets Inc.’s widely used VIX benchmark is being manipulated have drawn attention from regulators.
The nation’s top two markets watchdogs — the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission — opened investigations into the gauge of stock market volatility, according to people familiar with the matter.
/jlne.ws/2roNiPg

Liquidity ousts leverage as the big market worry; Some say banks’ retreat from their role as market makers will amplify the next crisis
Robin Wigglesworth and Ben McLannahan in New York- FT
Since the financial crisis investment banks have beat a rapid retreat from their historic role in buying and selling equities and bonds. Almost a decade on it is stirring concern that deteriorating liquidity could prove as dangerous as leverage has been in past crises.
/jlne.ws/2jvIbZH

CFTC Officials Want Close Cooperation With SEC on Crypto Rules
Coindesk
Two officials at the Commodity Futures Trading Commission (CFTC) spoke about regulating cryptocurrencies this week, stressing the need for cooperation between their agency and another powerful U.S. regulator, the Securities and Exchange Commission (SEC).
/jlne.ws/2rg8PcG

How Morgan Stanley Got Its Mojo Back; CEO James Gorman wasn’t a star trader or a banker. He was a consultant, and well matched for Wall Street’s new mundane style of business
Liz Hoffman – WSJ
Morgan Stanley MS -1.20% had slashed bonuses after another bad year. Chief Executive James Gorman, at a Swiss Alps conference, defended the move in a television interview. “If you’re really unhappy,” he told employees, “just leave.”
/jlne.ws/2KyRzIt

SGX takes stake in UK start-up Cobalt; Cobalt plans to use blockchain in vast foreign exchange market
Philip Stafford – FT
SGX, the Singapore exchange, has taken an undisclosed minority stake in Cobalt, a UK start-up trying to put the plumbing of the vast foreign exchange market on blockchain technology.
/jlne.ws/2js8Y9t

Goldman to treble Swedish office as post-Mifid equities hub; US bank to expand fintech team as well as some Brexit relocations
Martin Arnold and Philip Stafford in London – FT
Goldman Sachs plans to more than treble the size of its Swedish office to use the country’s financial technology expertise to bolster its European equities trading as well as find new homes for bankers ahead of Brexit.
/jlne.ws/2jpSKh0

Hong Kong Stock Exchange Sees High IPO Demand After Rule Changes
Benjamin Robertson and Stephen Engle – Bloomberg
New rules for initial public offerings in Hong Kong have helped boost applications, according to the head of the city’s stock exchange. Hong Kong Exchanges & Clearing Ltd.’s Chief Executive Officer Charles Li expects a “very substantial autumn” for IPOs, he said in an interview on Bloomberg Television on Friday. Chinese smartphone maker Xiaomi Corp. was the first to file for a listing under the new regime, kicking off what could be the world’s biggest debut since 2014.
/jlne.ws/2KBHbQo

Wall Street’s Fear Gauge Hasn’t Jumped Like This Since XIV Died
Luke Kawa – Bloomberg
Jump from under 15 to above 18 last occurred in early February; Return to a low-volatility world may not be imminent
The wall of worry is growing taller. Not only has the S&P 500 Index breached its 200-day moving average, but the Cboe Volatility Index — the VIX, Wall Street’s fear gauge — leapt from below 15 intraday on Wednesday to above 18 in trading on Thursday.
/jlne.ws/2wfci14

Virtu posts ‘outstanding’ first quarter as market volatility returns
Philip Stafford – FT
Virtu Financial, the US high-speed market maker, reported what it called “an outstanding” first quarter as market volatility returned and it benefited from its $1.4bn purchase of rival KCG Holdings.
/jlne.ws/2jtGwnH

High-speed trader Virtu saw net income increase 1,845% thanks to anxious markets
Frank Chaparro – Business Insider
Virtu Financial, the market making firm, reported eye-popping results on Friday for the first quarter of 2018, a period marked by a return of volatility and volume to the markets.
/jlne.ws/2FGGy4p

The Problem With Prosecuting ‘Spoofing’
Peter J. Henning – NY Times
Federal prosecutors sometimes lose trials, and it is usually not considered too much of a setback. But when the loss involves only the second prosecution for a new crime called “spoofing,” it raises questions about how the government will pursue future cases.
/jlne.ws/2jtqavj

How Five Robots Replaced Seven Employees at a Swiss Bank
Stephan Kahl – Bloomberg
St. Galler Kantonalbank’s pilot project seen as a success; Bank will decide on further assignments by the end of May
Have seven employees work for three days or use software robots instead? In a pilot project, St. Galler Kantonalbank AG opted for the second option. The bank is so satisfied with the test results that it wants to decide on further assignments by the end of May.
/jlne.ws/2jqtBCK

Poor quality bond data hits live reporting under Mifid II; Difficulties in capturing data under new trading rules remain an issue for banks and fund managers
Samuel Agini – Financial News
A flagship initiative to bring more transparency to European bond markets has run into early problems, as difficulties in capturing data under new trading rules remain an issue for banks and fund managers.
/jlne.ws/2FHsirV

Exchanges, OTC and Clearing

Singapore Exchange Backs Distributed Ledger Alternative For FX Trading
Michael del Castillo – Forbes
The Singapore Exchange Limited (SGX) has increased its wager that distributed ledger technology will be the key to leadership in global financial markets in the future.
/jlne.ws/2FGQdaM

1 million contracts traded – another milestone achieved by Eurex Total Return Futures
Eurex
Achievements are nothing new to Eurex’ Total Return Futures (TRF) on the EURO STOXX 50® Index. Only three months after their launch in December 2016 their traded notional value already exceeded EUR one billion. Now, a little more than one year on, they have reached another important marker: 1 million traded contracts on 3 May, which is equivalent to EUR 35 billion.
/jlne.ws/2KBOE1M

Record Activity in Eurex Clearing’s Partnership Program
Eurex
In March, Eurex Clearing’s OTC Interest Rate Derivatives (IRD) segment saw record activity under the new Partnership Program. Volumes increased around elevenfold compared to March 2017 with a total of EUR 1.7 trillion notional cleared. The total notional outstanding reached EUR 4.7 trillion compared to EUR 1.2 trillion in March 2017.
/jlne.ws/2KB5fmk

13 new international companies join ELITE, bringing the total number of companies to over 850 London Stock Exchange Group
ELITE, London Stock Exchange Group’s business support and capital raising programme, today welcomes 13 new international companies, bringing the total number of companies in the ELITE community to over 850. The CEOs of the 13 new ELITE international companies and seven CEOs from the newly graduated ELITE companies opened trading in London this morning alongside Luca Peyrano, CEO, ELITE.
/jlne.ws/2ju6QOm

Single Stock Futures: Introduction of five SSFs; Single Stock Dividend Futures: Introduction of one SSDF
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 9 May 2018, due to previous corporate actions:
/jlne.ws/2KBPlrU

Swiss Exchange Acquires Microwave Network
Markets Media
SIX has formed a joint venture so the Swiss exchange can own and operate a microwave-based trading network and send trade data far more quickly.
/jlne.ws/2KCWIiy

SET Officially Launches “LiVE” Platform With Blockchain Technology To Grow Startups
MondoVisione
“LiVE” – the first Thailand crowdfunding platform for startups and SMEs developed by The Stock Exchange of Thailand (SET) with support from the public and private sectors – has officially launched with eight targeted businesses from various sectors such as mobile application, consumer products and medical equipment, to join while prompting over 50 companies to follow suit amid growing enthusiasm from investors.
/jlne.ws/2FGkoPH

Cboe Global Markets Reports Record Results for First Quarter 2018 and Raises Run-rate Expense Synergy Target to $85 Million
CHICAGO, May 4, 2018 /PRNewswire/ — Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE) today reported record financial results for the first quarter of 2018.
/goo.gl/4g7Msm

Fintech

CQG Connects to Dalian Commodity Exchange to Offer International Market Participants First Access
CQG
CQG, Inc. today announced its connectivity to the Dalian Commodity Exchange (DCE) to offer global clients access to iron ore futures. The move marks the second Chinese market available on CQG, as the firm continues to expand business in China with offices, local staff, infrastructure, and exchange coverage.
/jlne.ws/2jufCMi

Cobalt FX post-trade network secures investment from SGX
SGX
Cobalt, the foreign exchange (FX) post-trade processing network based on shared infrastructure and high performance technology, has secured a strategic investment from Singapore Exchange (SGX), which operates Asia’s largest, most diverse and fastest growing FX exchange.
/jlne.ws/2KzzEBt

Fidessa scoops industry award for its low touch execution services
XOMS platform recognised for excellence and innovation at RegTech Awards
Fidessa
Fidessa group plc (LSE: FDSA) today announced that its low touch execution OMS (XOMS) has been named Best Algorithmic Tagging Solution at the 2018 RegTech Awards. Presented at a ceremony in London last night, these awards recognise technology excellence and innovation amongst providers of RegTech solutions and services.
/jlne.ws/2jqS7ng

A new leader in capital markets technologies
ITIVITI TALKS
/jlne.ws/2KwXZHY

BTS Profiles: Brian Muhr
Blue Trading Systems
Blue Trading System’s is a family of traders, technologists, innovators and committed professionals. The women and men that work here want to build something that not only meets demand but advances the industry. We are sharp, loyal and strategic.
/jlne.ws/2FH6QmR

‘Fintech’s success depends upon talent which is in short supply’; In an increasingly competitive global landscape, the UK’s attractiveness for innovators, entrepreneurs and firms alike will be key to the future prosperity of our financial services
BY CHARLOTTE CROSSWELL, chief executive of Innovate Finance
From changing how we manage our money, to creating a more pluralistic finance industry, financial technology (fintech) represents a growth sector for the UK.
/jlne.ws/2FIqjDB

Cryptocurrencies

Asset Freeze Continues for Public Company That Pivoted to Crypto
Annaliese Milano – Coindesk
May 3, 2018 at 02:00 UTC | Updated May 3, 2018 at 02:02 UTC
The U.S. Securities and Exchange Commission (SEC) is likely to win its case against three individuals associated with Longfin Corp, a company whose stock skyrocketed after a blockchain pivot, said a federal judge.
U.S. District Judge Denise Cote said on Tuesday that the regulatory agency has a good chance of proving that Andy Altahawi, Suresh Tammineedi and Dorababu Penumarthi illegally benefited from the pivot. Longfin’s price jumped by more than 2,000% last year after it announced the acquisition of a blockchain startup.
/goo.gl/tPXKLG

Mastercard’s quarterly report slumps due to cryptocurrency ban
Coinstar
Mastercard’s growth for the last quarter was slightly lower than expected due to a decline in the number of customers purchasing Bitcoin, Ethereum, and other cryptocurrencies, CNBC reported.
“This is due to the recent drop-off in crypto wallet funding,” Mastercard chief financial officer Martina Hund-Mejean said on the earnings call Wednesday. “We expect cross-border growth to moderate somewhat.”
/jlne.ws/2wbXro5

Bermuda Geeked Out With Blockchain Fans After Davos
Lily Katz and Rob Urban – Bloomberg
Enthusiasts made impromptu trip to meet with government; Territory seeks to create ‘sandbox,’ gets funding from Binance
It was the last day of the World Economic Forum in Davos and Wayne Caines, Bermuda’s minister of national security, was about to head home after an exhausting week. But before leaving, he told a group of blockchain enthusiasts, “If you are really serious about advancing this space and working with us, meet us in Bermuda on Monday.”
/jlne.ws/2jqYNlr

Crypto Is In Limbo, Whatever Goldman Does; It will take more than a derivatives desk to boost waning investor enthusiasm.
Lionel Laurent – Bloomberg
Three coins representing Bitcoin cryptocurrency sit on a computer circuit board in this arranged photograph. Photographer: Chris Ratcliffe/Bloomberg
Imagine if Goldman Sachs Group Inc. had announced a Bitcoin trading operation at the end of 2017, just as public enthusiasm was reaching fever pitch. What an endorsement! With Bitcoin futures being rolled out on exchanges and hedge funds reinventing themselves as cryptocurrency firms, supporters of stateless money would no doubt have claimed Wall Street’s use of it as inevitable step on the path to riches.
/jlne.ws/2jqXaUR

Politics

Obama martial law scare was stoked by Russian bots, say ex-director of CIA; Right speculated that 2015 military exercise was attack on Texas; Michael Hayden: success encouraged Moscow to target election
Tom Dart – The Guardian
Speculation about a US armed forces exercise that led some Texans to fear that the Obama administration was plotting martial law was stoked by a Russian disinformation campaign, according to a former director of the CIA.
/jlne.ws/2KzSLeP

Can Markets Make Us Equal?; A new book argues that markets don’t just have to make people rich. They can make society fairer.
Peter Coy – Bloomberg
Proposed solutions for inequality are depressingly familiar. Liberals want to raise taxes; conservatives want to cut them; populists in the Trump mold want to exclude immigrants and restrict foreign trade. The centrist business community triangulates between stale agendas. Doesn’t anybody have anything new to offer?
/jlne.ws/2KxxwKq

Banks Thought They Had a Win With Guns. Now They’ve Got a Big GOP Headache; How Citigroup and Bank of America shot themselves in the foot with D.C. Republicans.
Robert Schmidt – Bloomberg
On April 24 a handful of Citigroup Inc. executives went to the Securities and Exchange Commission for what they thought would be a routine meeting about a boring but key part of their business: derivatives regulation. Instead, they got a stern lecture on guns. A month earlier, in the aftermath of the school shooting in Parkland, Fla., Citigroup had announced it would curtail some of the business it does with companies that sell firearms. That didn’t go over well with Michael Piwowar, one of three Republican appointees on the five-member SEC.
/jlne.ws/2KAyt4W

Regulation

ASIC revises licensing regime for domestic and overseas market operators
ASIC
ASIC has modernised and updated its regulatory guidance on the licensing regime for financial markets.
/jlne.ws/2KwHPOO

ASIC consolidates guidance on market integrity rules for market participants
ASIC
ASIC has today published two regulatory guides that consolidate and replace guidance in seven regulatory guides for securities and futures markets participants.
/jlne.ws/2jsfQ6B

Podcast: CFTC Talks EP041: Alex Rampell, General Partner at Andreessen Horowitz
CFTC
This week on CFTC Talks, CFTC’s Dan Gorfine and I bring on Andreesen Horowitz’ lead on fintech investments, Alex Rampell. We cover a wide range of fintech issues from crypto currencies to blockchain (what it’s not) and AI.
/jlne.ws/2jsq4nF

Sebi’s risk management measures for derivatives likely to impact volumes; Market players attribute this to sharp drop in several F&O stocks
Pavan Burugula – Business Standard
The Securities and Exchange Board of India’s (Sebi’s) additional risk management measures for the derivatives market are likely to impact volumes and increase trading costs.
/jlne.ws/2Kvqztj

Swiss likely to oppose ‘Vollgeld’ banking overhaul, poll shows; Central bank chairman says ‘sovereign money’ plan would be dangerous experiment
Ralph Atkins in Zurich – FT
Radical proposals meant to make Swiss banks safer by changing the way they provide loans to the economy are set to be rejected decisively in a national referendum on June 10, the first opinion poll of voter intentions has shown.
/jlne.ws/2FEtcpb

NFA bars Rapid City, S.D. commodity trading advisor The Stock Mentor LLC and its principal Brian Kelly Johnson from membership
NFA
NFA has permanently barred Rapid City, S.D. commodity trading advisor The Stock Mentor LLC (Stock Mentor) and its principal and associated person, Brian Kelly Johnson, from membership and from acting as a principal of an NFA Member.
/jlne.ws/2FGQRFi

Investing and Trading

Active versus passive trading: The end of a false dichotomy?; The active versus passive trading debate has evolved with the emergence of new technologies and products, but does this make any difference to the end investor?
David Whitehouse – The Trade
Active investors are sensing that the long-term tide towards passive investing may be starting to turn. According to Morningstar’s bi-annual Active/Passive Barometer published in March 2018, the success rate of stock-pickers in the US increased sharply in 2017: 43% of active managers outperformed their average passive peer, compared with just 26% of active managers in 2016. With US interest rates starting to rise, could 2018 be the year when active strategy finally rebounds?
/jlne.ws/2Kzg5cx

Elon Musk Rejects ‘Boring, Bonehead Questions,’ and Tesla’s Stock Slides
Matt Phillips – NY Times
Investors seemed to take another big quarterly loss from Tesla in stride. At least until the company’s chief executive, Elon Musk, started talking.
/jlne.ws/2jqsnaN

What to Do Now That the Deduction for Investment Fees Is Dead; For starters, refocus how you pay those fees and do some research
Laura Saunders – WSJ
Now is the time to refocus on how you pay your investment fees. In a little-noticed move, the recent tax overhaul repealed a deduction for investment-advisory fees that effectively will raise these fees for millions of investors.
/jlne.ws/2KzRqoj

Watch Out: Junk Bonds Are Getting Junkier; Increased demand has allowed high-yield issuers to get away with weaker covenants that would never have been accepted in the past
James Mackintosh – WSJ
One thing owners of junk bonds are usually sure of is that when the borrower defaults, they will get a veto on cash going to shareholders, to junior debtors or into new deals.
/jlne.ws/2KBkxY7

Institutions

AllianceBernstein’s Nashville move threatens New York and London; Digital disruption makes it easier for financial companies to relocate
Gillian Tett – FT
In decades past, the city of Nashville, Tennessee, has been famous for its vibrant music scene. Now its leaders are singing a new note — finance. Yes, you read that right. On Wednesday AllianceBernstein, one of the largest US asset managers with $550bn under management, said it will move its headquarters out of New York, where it has been based for 50 years.
/jlne.ws/2jt8XCk

HSBC shares slide despite $2bn stock buyback; John Flint’s first results as chief reveal rising costs and falling return on equity
Martin Arnold in London and Don Weinland in Hong Kong – FT
John Flint has made a shaky start to his tenure as HSBC chief executive after costs rose faster than expected in the first quarter, overshadowing a $2bn share buyback and sending the bank’s stock down as much as 2.7 per cent in Hong Kong.
/jlne.ws/2jqyDzd

Lloyds ‘tried to silence’ whistleblower over HBOS fraud; ‘Extraordinary’ that bank removed employee, says police commissioner
Jonathan Ford in London – FT
Bosses at Lloyds Banking Group tried to silence a whistleblower whose internal report heavily criticised their handling of a fraud that destroyed scores of small business customers, a police commissioner has claimed.
/jlne.ws/2jqA7tc

HSBC Costs and Conduct Charge Overshadow $2 Billion Buyback
Stephen Morris and Alfred Liu – Bloomberg
Shares fall as first-quarter expenses rise faster than revenue; New CEO John Flint says job like ‘drinking from a fire hose’
John Flint is off to a bumpy start at HSBC Holdings Plc. Costs at Europe’s largest bank rose at a quicker pace than revenue in the first quarter and it took a surprise charge for past misconduct. It also said a $2 billion share buyback would be the only one this year given the “growth opportunities” it currently sees, signaling HSBC plans to reinvest the excess capital it’s generating rather than return it to investors. Some analysts had expected $4 billion or more to be repurchased.
/jlne.ws/2KyIT4I

Former Millennium Trader Dodson to Start New Oil Hedge Fund
Jack Farchy – Bloomberg
Dodson is targeting $500 million in assets for Philipp Oil; Launch bucks recent trend of closures among commodity funds
Andrew Dodson, a former partner at Izzy Englander’s Millennium Management, has set up a new fund to trade oil, bucking the trend of closures among commodities hedge funds in recent years.
/jlne.ws/2jrlR3y

BNP Paribas, SocGen Tumble After Missing Out on Trading Rebound
Fabio Benedetti Valentini – Bloomberg
Banks’ trading revenue lags behind U.S., European competitors; French retail revenues slip on slower mortgage refinancings
BNP Paribas SA and Societe Generale SA missed out on the trading gains that boosted earnings at some of their U.S. and European rivals in the first quarter, sending their shares tumbling.
/jlne.ws/2KzOhVx

Norway’s $1 trillion fund says high return is key objective
Reuters Staff
Norway’s $1 trillion sovereign wealth fund, the world’s largest, continues to seek high returns regardless of its other objectives, its chief executive told an annual hearing in parliament on Friday.
/jlne.ws/2FIqrTF

Regions

Vivo Energy – largest UK-listed African IPO in over a decade
London Stock Exchange Group
London Stock Exchange today welcomes Vivo Energy, a leading retailer and marketer of Shell-branded fuels and lubricants in Africa, to the Premium Segment of the Main Market. Shareholders raised £548 million from the sale of existing shares to international investors, valuing the company at £1.98 billion.
/jlne.ws/2jqGA7x

Big Winners From India’s Cash Clampdown Are Private Bankers
Anto Antony – Bloomberg
HDFC Bank to add up to 150 private bankers to 250-strong team; Advises clients to steer clear of India’s stressed assets
India’s clampdown on unaccounted cash has sent a flood of money into the private banking industry, prompting a major lender to embark on a hiring binge for wealth managers.
/jlne.ws/2KyAFKd

Overflowing With Cash, The World’s Largest-Money Market Fund Is Trying a New Tactic; Billionaire Jack Ma’s Ant Financial Services Group said it would offer two additional money-market funds to customers who have been parking their spare cash in its hugely popular online fund.
Stella Yifan Xie – WSJ
The world’s largest money-market fund has too much cash to manage. Billionaire Jack Ma’s Ant Financial Services Group on Thursday said it would offer two additional money-market funds to customers who have been parking their spare cash in its hugely popular online fund, the latest attempt by the company to limit flows into the giant fund.
/jlne.ws/2KyyKFv

The post VIX Faces Probes With Controversial Auction at Issue appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Former Barron’s columnist Steve Sears has emerged as the chief market strategist for StratiFi Technologies.

Eurex Clearing’s new partnership program, aimed at creating an EU-based clearing facility for interest rate swaps, cleared a record EUR1.7 trillion in March.~JK

Cboe Global Markets’ FX volume rose 37 percent to $762.9 billion in April, up from $554 billion a year earlier. Year-to-date notional volume is up 41 percent.~JK

Did you know Cboe has an office in Quito, Ecuador?~JK

Joe Noviello, the former head of eSpeed, is now managing director of Dealerweb Technologies at Tradeweb, according to the Trading Places Newsletter.~JK

Not one to mince words, Charlie Munger compares cryptocurrencies to “turds” and “dementia”. ~JB

In other fun cryptocurrency news, no sooner did Oscar Mayer launch a “Bacoin” ad campaign than they got a cease and desist notice from Kirk Steele, who started a cryptocurrency called “Bacoin” several years ago.~JD & ~SR

MarketsWiki has exceeded the 125 million page view mark.~JJL

We will publish The Spread later today. We shot it on Friday at the Options Industry Conference from a lookout above the sunken forest with a view of the ocean. There was a live version of The Spread broadcast on Twitter on Friday, but Spencer (“I love the teleprompter”) Doar won’t let me include a link. You will have to find it yourself on my Twitter feed.~JJL

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The case for a five-hour working day; One financial services boss was so productive on his reduced week he has rolled it out
Pilita Clark – FT
The other day I heard a story about something so odd yet compelling that I have not been able to stop thinking about it. It happened in the Australian city of Hobart where the boss of a financial advice firm started working part-time after his wife ó a new mother ó began treatment for cancer.
/jlne.ws/2rq3z7n

***** Note to JLN staff: NO!

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Oscar Mayer Gets Cease and Desist Over Cryptocurrency Ads Because ‘Bacoin’ Already Exists
Rhett Jones -Gizmodo
It’s only been a few days since Oscar Mayer launched its horrendous “Bacoin” ad campaign, and a hero has come along in an attempt to kill it for good. Kirk Steele started a cryptocurrency called “Bacoin” a few years ago, and now he wants Oscar Mayer to cease-and-desist in conducting this viral travesty of a promotion.
/jlne.ws/2jAxQvJ

***** Bacoin is a not the weiner they thought it would be.~JJL

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Rockefeller Trove Ignites Bidding Frenzy With $26,000 Money Clip
Katya Kazakina – Bloomberg
About 1,500 lots are expected to fetch more than $500 million; Christie’s auction draws huge interest from Asian collectors
Get ready for the biggest tag sale in history. More than 1,500 items from the estate of Peggy and David Rockefeller — Impressionist and American paintings, English furniture and silver, 19th century carriages, Persian rugs, Japanese porcelain, Moroccan lamps, a Napoleon’s dinner service, duck decoys, gilded Buddhist deities, African figurines — are coming up for auction, starting May 8 at Christie’s in New York. There is an online sale and six live auctions. Christie’s officially estimated the trove at more than $500 million, while privately whispering that it may be much higher.
/jlne.ws/2jCKwCv

***** How much money was in the clip?~JJL

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Bridging the Week by Gary DeWaal: April 30 to May 4 and May 7, 2018 (Cotton Trading Blues; Source Code Theft; XRP a Security?; Monex Redux)
Katten Muchin Rosenman LLP
Two trading firms within a group structure were fined US $2 million in aggregate by the Commodity Futures Trading Commission for alleged violations of various provisions of law and CFTC rules related to their cotton futures transactions, including purported speculative limit violations. Separately, the conviction of a former programmer for a major investment bank for misappropriating his former employer’s algorithmic trading system source code was upheld by New York’s top appellate court, while a class action lawsuit was filed against Ripple and its chief executive officer, claiming the defendants were engaging in a continuous, unlawful offering of an unregistered security – the XRP digital token. As a result, the following matters are covered in this week’s edition of Bridging the Week:
/jlne.ws/2rs9mZZ

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Friday’s Top Three
Our top read stories of the day were led by Bloomberg’s piece VIX Faces Probes With Controversial Auction at Issue. Second went to The New York Times’ story The Problem With Prosecuting ‘Spoofing’. Third went to Bloomberg’s Inside the World’s Most Elite (and Secret) Traders’ Club

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MarketsWiki Stats
125,303,518 pages viewed; 23,091 pages; 212,941 edits
MarketsWiki Statistics

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Lead Stories

US judge scraps trial into CME Group’s defence of home market; 14-year-old case had been expected to shed light on exchange’s influence
Philip Stafford and Joe Rennison – FT
A US judge has cancelled a planned trial into the practices of CME Group defending its home turf against rivals, throwing into doubt whether a 14-year-old lawsuit alleging the world’s largest futures exchange violated antitrust laws is heard in public.
/jlne.ws/2roZeB1

Federal Reserve should give everyone checking accounts, new study says
Greg Robb – MarketWatch
Word that the Federal Reserve was open to the prospect of launching a cryptocurrency made headlines late last year, but what is actually much likelier is that the Fed will create “central bank electronic money for all,” researchers at the St. Louis Fed say in a new blog post.
/jlne.ws/2rq45Cl

Libor Refuses to Die, Setting Up $370 Trillion Benchmark Battle
Alex Harris – Bloomberg
Key rate seeks second life after regulators sound death knell; Presumptive heir faces challenges as futures trading begins
A struggle that will dictate the future of financial markets is brewing. Long beleaguered Libor is fighting to preserve its status as the premier global benchmark for dollar-based assets just as questions pile up over the credibility of its presumptive heir.
/jlne.ws/2jANsiT

New Crypto Exchanges Don’t Want (to Hold) Your Money
Benjamin Robertson, Matt Leising, Andrea Tan – Bloomberg
Just as stocks are untradable without an exchange, the same is true for Bitcoin and other digital currencies. That has made crypto exchanges a crucial — and sometimes problematic — element of the rapidly emerging world of digital currencies. On the surface, they look a lot like stock markets, matching buyers with sellers and publishing prices. Yet in many ways they differ vastly, potentially exposing investors to risks they may not fully appreciate. That’s worrying regulators and prompting new exchanges to come up with ways to mitigate the dangers.
/jlne.ws/2rnxLjw

Amid Blockchain Hype, Few Deployments, Limited Interest, Survey Finds; Yet companies that ignore blockchain do so at their own peril, Gartner says
Angus Loten – Bloomberg
Inadequate technology, a skills shortage and a lack of interest, among other issues, are keeping companies away from blockchain technology – for now, Gartner Inc. reports.
/jlne.ws/2rlaO0f

Barron’s Alum Steve Sears’ Next Act: Helping Advisors
Steve Garmhausen – Barron’s
It looks like my old Barron’s colleague Steven Sears is finally making an honest living: He’s joined the startup world, with an eye toward helping financial advisors.
/jlne.ws/2jzELFm

Foes of market data fee hikes encouraged by SEC scrutiny
John McCrank – Reuters
A recent move by U.S. securities regulators demanding stock exchanges do a better job justifying price changes for public market data feeds could lead to more transparency around data costs, the head of one of the world’s largest trading firms said on Friday.
/jlne.ws/2rplevP

Should the Fed Create ‘FedCoin’ to Rival Bitcoin? A Former Top Official Says ‘Maybe’; If cryptocurrency and blockchain technology really are the future of money, the world’s central banks need to get involved, a former Fed governor argues.
Neil Irwin – NY Times
Many enthusiasts of Bitcoin and other cryptocurrencies are motivated by deep skepticism of the central banks that control the world’s money supply.
/jlne.ws/2rl7n9R

Cboe says VIX just needs more liquidity as manipulation rumblings continue
Rachel Koning Beals – MarketWatch
SEC and CFTC are taking a look, Bloomberg reported this week
That’s the stance taken Friday by the Chicago Board Options Exchange, part of Cboe Global Markets Inc. as allegations its widely used VIX stock-market volatility benchmark is manipulated continued to swirl.
/jlne.ws/2rqqYWa

OCC’s Morrison on combating the cyber threat to clearing; Cyber security chief eyes analytics and machine learning to help anticipate – and defend against – breaches
Dan DeFrancesco – Risk.net
Mark Morrison’s resumÈ speaks for itself, and that’s fortunate considering most of his previous employers can’t do it for him. The chief information security officer at the Options Clearing Corporation has an ideal CV for cyber security, with stints at the US Department of Defense, Office of the Director of National Intelligence, Defense Intelligence Agency, and National Security Agency.
/jlne.ws/2jAZ997

China is letting in foreign firms, but will the financial market really be open?; Analysts say recent flurry of activity is a response to looming trade war with the United States, but Beijing insists it is expanding access on its own terms
Frank Tang – South China Morning Post
China’s financial regulators are fast-tracking approvals for foreign firms to access some parts of the market, as Beijing tries to reposition itself as an “open” advocate of “free trade” amid an escalating row with the United States.
/jlne.ws/2rpAokD

Bank of Montreal Planning Actively Managed Exchange-Traded Funds
Kristine Owram – Bloomberg
ETF head Kevin Gopaul says he’ll avoid thematic strategies; BMO is Canada’s second-largest ETF company with C$48.5 billion
Bank of Montreal plans to start offering actively managed ETFS but will avoid the exotic niches that some of its competitors offer.
/jlne.ws/2rqJs8M

Exchanges, OTC and Clearing

Cboe Global Markets Reports April 2018 Trading Volume; Year – to – date ADV across all Cboe exchanges up over 2017; April ADV in options, U.S. equities and global FX up over year ago
Cboe
Cboe Global Markets, Inc. today reported April monthly trading volume and average revenue per contract (RPC)/net revenue capture data at www.cboe.com/monthlyvolrpc.
/jlne.ws/2rph1s6

Nasdaq CEO on gender parity: We need to fix the recruitment issue
Haley Draznin – CNN
Nasdaq CEO Adena Friedman tells CNN’s Poppy Harlow that we need to encourage more women to go into tech and finance in order to achieve gender parity in the financial industry.
/jlne.ws/2rqMIRH

Euronext Announces Volumes for April 2018
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for April 2018. Following the completion of the acquisition of the Irish Stock Exchange on 27 March 2018, the monthly volumes press release now includes historical data[1] and monthly figures on Euronext Dublin activity.
/jlne.ws/2jAVM27

TMX Group pledges support to flood relief efforts in New Brunswick
TMX
TMX Group has donated $15,000 to the Canadian Red Cross New Brunswick Floods Appeal, to provide emergency relief to help those affected by severe flooding in New Brunswick.
/jlne.ws/2rpajSM

TMX Group Equity Financing Statistics – April 2018
TMX
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for April 2018.
/jlne.ws/2jAWYCt

Appointment of Chairman Approved
HKEX
Reference is made to the announcement of Hong Kong Exchanges and Clearing Limited (“HKEX”) dated 26 April 2018 in relation to the appointment of Mrs Cha May-Lung, Laura as the Chairman of the Board of Directors of HKEX (the “Chairman”).
/jlne.ws/2rldCdN

New Hong Kong dual-share listings to be tradeable through Stock Connect schemes
South China Morning Post
Index compiler’s decision means mobile phone maker Xiaomi will join Hang Seng Composite Index, allowing both mainland Chinese and international investors to trade its shares
/jlne.ws/2jDBdCa

CapBridge names SGX’s Chew Sutat as non-executive director; bags S$5m Series A funding
Businesstimes.com.sg
SINGAPORE-based startup CapBridge announced it has appointed Singapore Exchange’s (SGX) Chew Sutat as a non-executive director.
/jlne.ws/2rq0qEi

Fintech

StratiFi Technologies Announces Series A Funding Round
Business Wire
StratiFi Technologies Inc., whose technology solutions help advisors improve investment outcomes for clients, while increasing the stability of their own businesses, has announced a Series A funding round that was led by Anthemis Group.
/jlne.ws/2jCkejK

Adapt or Die: What Can Brokers Do to Keep Pace in a Rapidly Evolving Industry?; Brokers’ reluctance to change is only hurting themselves, with clients demanding new technology and solutions.
Silviu Pojar – Finance Magnates
Brokers are continuously faced with difficult challenges, among them the ongoing evolution of technology and client approaches. Many retail venues have opted to just continue the status quo, leading to a stagnation of the mindset towards innovation and improvements in recent years.
/jlne.ws/2jBZ6K8

Goldman Sachs is setting up a research lab in Stockholm with a ‘no shoes’ policy
Oscar Williams-Grut – Business Insider
Goldman Sachs is tripling its headcount in Stockholm as part of a push to set up a fintech hub in the region.
/jlne.ws/2rq9NUJ

Metamako turns 5! A look back at our Top 5 achievements
by Annekathrin Hase – Metamako
It has been exactly 5 years, on the 6th May 2013, since we flipped the switch (no pun intended) and set out to transform networks. Dave, Charles and Scott opened an office in Sussex Street/Sydney together with a handful of world class engineers and Lalitha looking after operations … Metamako was born. We are intending to pop the corks across continents and office locations later today but wanted to share a little of the excitement and look back at some of the things we have achieved.
/jlne.ws/2jzSrAg

Cryptocurrencies

Ripple Hit With Class-Action Suit Over ‘Never Ending ICO’
Lily Katz – Bloomberg
Plaintiff alleges Ripple sold unregistered securities; Startup created XRP tokens ‘out of thin air,’ complaint says
Ripple Labs Inc., the fintech startup that controls the world’s third-largest cryptocurrency, was hit by a lawsuit alleging that it led a scheme to raise hundreds of millions of dollars through unregistered sales of its XRP tokens.
/jlne.ws/2jCnRpE

Will the Real Bitcoin Please Stand Up?
Jen Wieczner – Fortune
The great Bitcoin fork of 2017ówhen the original blockchain split last August to create Bitcoin Cashóappears to have ended pleasantly, at least for investors. The sum of the parts turned out to be greater than the whole: Within a week of the split, the two assets together were worth more than $15 billion in additional market value that didn’t exist prior to the fork.
/jlne.ws/2rqLO7L

J.P. Morgan Files Patent for Blockchain-Powered Payments
Polina Marinova – Fortune
Here we go. J.P. Morgan Chase has applied for a patent to facilitate payments between banks using the blockchain.
/jlne.ws/2rpy0dE

Top crypto exchange Coinbase prepares for a monster increase in trading
Kate Rooney – CNBC
In a response to New York Attorney General Eric Schneiderman’s inquiry into exchanges, Coinbase said it increased its transaction capacity by 1000 percent year over year. The private company doubled the size of its full-time engineering staff and has overhauled much of the the platform’s code to gear up for more activity. The leading U.S. marketplace for cryptocurrencies has been quietly preparing for a monster increase in trading volume.
/jlne.ws/2rp6gG4

Is Bitcoin a Safe Investment?
Ellen Chang – U.S.News & World Report
The recent volatility in bitcoin and other cryptocurrencies has made many investors wary along with the continued hacking of the exchanges where people buy and sell the digital currencies.
/jlne.ws/2jFDtch

Warren Buffett says cryptocurrencies ‘will come to bad endings’
MarketWatch
Billionaire investor Warren Buffett hasn’t become any fonder of cryptocurrencies. In reply to a question at Berkshire Hathaway’s annual meeting on Saturday, the chairman and chief executive reiterated …
/jlne.ws/2rpx3SC

Tokenised diamonds to test limits of cryptocurrency investing; Digital issues backed by Siberian assets the latest in a clutch of experimental sales
Don Weinland and Krithika Varagur – FT
A Russian state-owned fund has a novel strategy for attracting investment to the tundra and swamps of Siberia: selling its forests, gas, gold, even its fresh water and fish, one digital token at a time.
/jlne.ws/2jzktvJ

Cryptocurrency exchanges step away from Japan and Hong Kong; Big industry players find homes where regulators are not as strict
Masayuki Yuda – Nikkei
Asia is becoming a less attractive market for large cryptocurrency exchange operators due to regulatory uncertainties. At least three major exchanges have announced or voiced the idea of fleeing the region.
/jlne.ws/2rp5Iju

Crypto Pioneers Head to Brooklyn to Reshape Finance
Rob Urban and David M Levitt – Bloomberg
Bushwick, Williamsburg neighborhoods sprout cultural ferment; Employees followed Ethereum guru Joseph Lubin to borough
The building looks abandoned, but inside the graffiti-covered door, 200 workers tap at laptops with the goal of reshaping the world.
/jlne.ws/2jB2zJd

Crypto Brokers Push for Transparency Before Rules Get Made
Todd White – Bloomberg
Quest for regulation may be a sign crypto market is maturing; Austria’s Bitpanda, eToro in U.K. both see benefit from rules
The latest calls to regulate the exploding cryptocurrency market come from an unusual place.
/jlne.ws/2jABVjx

Politics

FBI Probing Possible Banking Fraud by Trump Lawyer Michael Cohen: Report
David Morris – Fortune
As his client Donald Trump steamrolled political opponents in early 2016, lawyer Michael Cohen engineered access to as much as $774,000 in new credit. The FBI and federal prosecutors are reportedly investigating whether Cohen may have committed bank fraud in obtaining the credit lines, which some speculate may have been opened in anticipation of hush-money payments to protect Trump. Fraud charges could be used to compel Cohen’s cooperation in the ongoing Mueller investigation into Russian campaign meddling, or in criminal investigations targeting Trump.
/jlne.ws/2jCnvzk

Trump Repeats Threat of Federal Shutdown to Get His Border Wall
Toluse Olorunnipa – Bloomberg
Says at tax-focused event that trade relationships must change; Appearance in Ohio comes days before Republican primary vote
President Donald Trump renewed a threat to close down the federal government when current funding runs out in September if immigration reforms and funding for a wall on the U.S. border with Mexico aren’t forthcoming.
/jlne.ws/2rpfsdI

Life in Emmanuel Macron’s inner circle; Lots of reform, little sleep and a population to persuade: inside the president’s first year
Anne-Sylvaine Chassany – FT
Something was bugging the French president ó a small line in a draft bill about Romanian physiotherapists. The paragraph that caught Emmanuel Macron’s eyes a few months ago stated that a lack of response from the French regulator would mean the rejection of any foreign practitioner’s application to settle and work in France. Macron knew the inertia of the government all too well. The clause could become a protectionist tool that would go against his Europhile principles. So he requested further technical assessment. Civil servants were stunned. “We don’t expect that level of detail from a president,” one said.
/jlne.ws/2rpOZMS

Revealed: Trump team hired spy firm for ‘dirty ops’ on Iran arms deal; Israeli agency told to find incriminating material on Obama diplomats who negotiated deal with Tehran
Mark Townsend and Julian Borger – The Guardian
Aides to Donald Trump, the US president, hired an Israeli private intelligence agency to orchestrate a “dirty ops” campaign against key individuals from the Obama administration who helped negotiate the Iran nuclear deal, the Observer can reveal.
/jlne.ws/2jzFma8

Regulation

Ex-State Street employee accused by U.S. of defrauding insurer
Nate Raymond – Reuters
A former State Street Corp employee in Massachusetts was arrested on Friday and charged with participating in a scheme to defraud an insurance company by applying hidden fees to fixed income trades conducted for funds advised by the insurer.
/jlne.ws/2jCo8ZI

Insider Trading Needs a Law That Says What It Is; Practically all bad stuff with securities is lumped into a single statute.
Matt Levine – Bloomberg
Here are a blog post and related paper from Miriam Baer of Brooklyn Law School with the excellent title “Insider Trading’s Legality Problem,” describing one reason why it’s bad that there’s no actual statute defining and prohibiting insider trading:
/jlne.ws/2rprELu

Fed’s Quarles says paying ‘a lot’ of attention to spread of machine learning in finance
Howard Schneider – Reuters
Federal Reserve vice chair for supervision Randal Quarles said the central bank is in the early stages of studying how the expanding use of machine learning in the financial sector may change its regulatory approach, but that so far it fits within the existing regulatory framework.
/jlne.ws/2jC3b1b

Volatility InvestingóNot for the Faint of Heart
FINRA STAFF
The investor on the other end of the line was distraught. He put virtually all of his family’s assets into an exchange-traded product (ETP) that tracked the inverse of the performance of futures on the Cboe Volatility Index or VIX.
/jlne.ws/2rpw6tG

Proposed Rule Change to Create a $100 Fee and Honorarium for Late Cancellation of a Prehearing Conference
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rules 12500 and 12501 of the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and FINRA Rules 13500 and 13501 of the Code of Arbitration Procedure for Industry Disputes (“Industry Code” and together, “Codes”), to charge a $100 per-arbitrator fee to parties who request cancellation of a prehearing conference within three business days before a scheduled prehearing conference.
/jlne.ws/2rp62P5

Investing and Trading

A Small College’s Endowment Manager Beat Harvard With Index Funds; How little Carthage College surpassed the Crimson giant’s returns on its $37 billion trove, and most others.
Janet Lorin – Bloomberg
From his home office in Charlotte, one of the most successful investors in higher education plies his trade in blissful obscurity. Bill Abt employs no stable of hotshot bond traders. He doesn’t dabble in the fanciest Silicon Valley venture capital funds, hedge funds, or the latest computer-driven brainchildren of Ivy League physicists and mathematicians.
/jlne.ws/2JWykYk

Fight the Faangs, not China; The Trump administration must break the power of big tech
Rana Foroohar – FT
The US and China are heading in different directions when it comes to technology, the sector that will drive global growth over the next several decades. Last week’s demands by US officials that China eliminate state support for its own high tech industry won’t fly ó Beijing has made it very clear that it will never disband its China 2025 plan, which aims to make the Middle Kingdom independent from American technology within the next few years.
/jlne.ws/2jFCJ6Z

Buying and Holding the Market Has Many Pitfalls; Trying to mimic the performance of the S&P 500 leaves you overexposed to overvalued companies, and underexposed to undervalued ones.
Aaron Brown – Bloomberg
Perhaps the best-known piece of financial advice is that retail investors should buy and hold the market, which in practice usually means owning an index mutual fund or exchange-traded fund that mimics the performance of the S&P 500. This has been a winning strategy for investors over the decades, outperforming fads that come and go and paying for active management.
/jlne.ws/2roGpOm

Nestle Pays $7.2 Billion to Sell Starbucks Coffee
Thomas Mulier and Corinne Gretler – Bloomberg
CEO Mark Schneider makes Nestle’s third-largest acquisition; Upfront payment is for marketing licenses, no fixed assets
For years, a smoldering George Clooney would sip his espresso and ask: “Nespresso…what else?” Turns out the answer is: Starbucks.
/jlne.ws/2rr3tw0

The threat of secular stagnation has not gone away; The economy is prone to sluggish growth ó if the past few years are anything to go by
Save to myFT
Lawrence Summers – FT
Unemployment in the US is below 4 per cent and growth in the economy is accelerating. By recent standards growth in Europe and Japan is also strong. In these circumstances many believe the idea of secular stagnation can be written off.
/jlne.ws/2jANoj9

Institutions

Fidelity Employees Fired After Alleged Misuse of Reimbursement Programs; In some instances, employees purchased computer equipment and immediately canceled their orders but still collected the company’s reimbursement
Sarah Krouse and Rob Barry – WSJ
Fidelity Investments has fired or allowed more than 200 employees to resign over alleged misuse of workplace-benefits programs, according to people familiar with the matter.
/jlne.ws/2jBNQgT

Deutsche Bank to Close Houston Office, Cut About 70 Jobs; Under new CEO Christian Sewing, the German lender is cutting investment-banking staff to reduce costs
Jenny Strasburg – WSJ
Deutsche Bank AG DB 1.10% will close its Houston office and cut around 70 investment-banking jobs primarily focused on advising oil-and-gas companies in the U.S., according to people familiar with the matter and an internal memo.
/jlne.ws/2roSoLV

Deutsche Bank to move NY headquarters from Wall Street
Reuters Staff
Deutsche Bank AG will shift its New York headquarters from Wall Street to a location midtown, at a time when Germany’s largest bank is scaling back its U.S. operations.
/jlne.ws/2rl5sCb

Commonwealth Bank admits it lost backup data for 20m accounts; The bank, one of the Australia’s big four, assures customers the information has not been compromised
Australian Associated Press
The Commonwealth Bank is reportedly facing renewed investigations after admitting it lost backup data on tape for more than 15 years of customer statements in 2016, affecting almost 20 million accounts.
/jlne.ws/2jAjTxS

Carlyle set to close new Asia fund at $6.5 billion: sources
Sumeet Chatterjee, Kane Wu – Reuters
Carlyle Group (CG.O) is set to close its biggest-ever Asia private equity fund at $6.5 billion, people with direct knowledge of matter said, in a deal that adds to the record levels of funds seeking deals in the region.
/jlne.ws/2rpMjiz

Goldman’s $1 Billion Bankers Are Benchmark in Asia’s Wealth Race
Chanyaporn Chanjaroen – Bloomberg
Relationship managers at private banks running larger pools; Goldman Sachs topped Asian private banks in assets per manager
For years, Asia’s biggest private banks have been on a hiring spree to keep pace with the ranks of newly minted millionaires. Now, they’re squeezing more out of their bankers.
/jlne.ws/2jCHjTm

Regions

Greek Banks’ Clean Bill of Health Frees Bailout Funds
Marcus Bensasson, Christos Ziotis and Paul Tugwell – Bloomberg
ECB says largest lenders had sufficient capital in stress test; Results leave 20 billion euros of bailout cash untouched
Greece’s biggest banks emerged unscathed after a stress test, giving European policy makers one less worry as they plan for the end of the nation’s latest bailout in August.
/jlne.ws/2rqGrFu

China opens iron ore futures market to foreigners; Glencore among investors despite volatility concern
Tom Hancock and Neil Hume – FT
China opened trading in Dalian iron ore futures to overseas investors on Friday, aiming to increase its pricing influence over the commodity of which it is the world’s largest importer.
/goo.gl/sFc4K6

How to Lose $20,000 in Hong Kong’s IPO Slot Machine; Making a killing on day one is far from guaranteed.
Shuli Ren – Bloomberg
Any stock market is a dead pool without IPOs. But too many share sales can give investors indigestion. Take Ping An Healthcare & Technology Co., or Good Doctor. It struggled on its first day on Friday, despite being 653 times oversubscribed. Its performance is in sharp contrast to Tencent Holdings Ltd. spinoff China Literature Ltd., which soared 86 percent when it debuted in November.
/jlne.ws/2jC8bmy

At World Bank, China Moves to the Grown-Up Table; Borrowing less and lending more: This is what it looks like when a “developing nation” develops.
Daniel Moss – Bloomberg
The World Bank will scale back loans to China. No matter, China wins anyway.
/jlne.ws/2jyUC7f

China Is Quietly Setting Global Standards; A little-noticed effort could be a very big deal.
Andrew Polk – Bloomberg
High-level trade talks last week between the U.S. and China grabbed headlines around the world, but in many ways they were beside the point. In the years ahead, tariffs and industrial policy — the main focus of the talks — will probably matter less in the growing competition between the two countries, while another, much quieter initiative will matter more.
/jlne.ws/2roPvL5

One of India’s largest jewellery chains is caught in a stock market spiral
Suneera Tandon – Quartz India
Over the last five months, PC Jeweller has been caught in a spiral that has wiped off billions in investor wealth. To be precise, since Jan 19, 2018, the jewellery chain from New Delhi has lost over 75% of its market value, worth $2.8 billion up until last week, on the BSE.
/jlne.ws/2jAjgo0

EU Set to Settle Antitrust Case Against Gazprom Soon; Move could be seen as bending to the Russian state-owned company
Natalia Drozdiak and Emre Peker – WSJ
The European Union is poised to settle its long-running antitrust case against PAO Gazprom as soon as this month, according to people familiar with the discussions, a move that could be perceived as bending to the Russian state-owned energy giant and at a time of rising tensions between Moscow and the West.
/jlne.ws/2rpgFlb

Chinese banks are big. Too big?
Jeff Spross – The Week
Lots of things are bigger in China: the population, the IPOs, the electrical dams, the Starbucks, even the mosquitos. Turns out the banks are bigger too.
/jlne.ws/2rnWa8q

US hedge funds drive surge in Asia investor activism; Number of campaigns up almost tenfold since 2011 amid search for higher returns on risk
Don Weinland in Hong Kong and Leo Lewis in Tokyo – FT
Activist investment campaigns have surged almost tenfold in Asia since 2011 as US hedge funds seek higher returns, Japan’s corporate governance reforms begin to bite and Asia’s tycoon families slowly loosen their grip on their companies.
/jlne.ws/2jCeTJf

Brexit

Brexit and bankruptcies to raise UK trade credit insurance prices; Euler Hermes chief executive expects cost of protection to increase 5%
Oliver Ralph, Insurance Correspondent – FT
Brexit and a string of bankruptcies are driving up the cost of UK companies protecting against their customers going out of business, the head of the world’s largest credit insurer has said.
/jlne.ws/2jCtGn0

Miscellaneous

Yes, It’s Bad. Robocalls, and Their Scams, Are Surging.
Tara Siegel Bernard – NY Times
It’s not just you. Those pesky robocalls ó at best annoying disturbances and at worst costly financial scams ó are getting worse.
/jlne.ws/2rqcPrT

The post US judge scraps trial into CME Group’s defence of home market; Fed Reserve checking account? appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Galina Hale, Arvind Krishnamurthy, Marianna Kudlyak and Patrick Shultz from the Federal Reserve Bank of San Francisco have published an economic letter, “How Futures Trading Changed Bitcoin Prices.”~JJL

You may know Matthew Scharpf as the extraordinary vice president of fixed income derivatives and clearing, Americas at Eurex in Chicago. But he’s an equally talented musician with a new album called “All That I’ve Left” which is now officially released and available on iTunes, Amazon, Spotify, Pandora, Napster and CDbaby. Matt’s band will be playing live on May 12 at Wire in Berwyn, IL at 8 pm. A great musician, and great speaker at our Marketswiki Education event, who is worth checking out.~JK

Don’t miss the Trading Show at Navy Pier in Chicago this week on May 9-10.~JJL

I am off on Friday to Missouri to see my son, Timothy Lothian, graduate from the University of Missouri with a bachelor’s degree in geography. Tim is currently working for a Montessori school as the head teacher and implementing a sustainability program that includes an outdoor classroom he designed and is building. He gives credit to his interest in sustainability to his internship with Deutsche Boerse a couple of summers ago.~JJL

Maria Aranda has left the Pathway to Adventure Council of the Boy Scouts of America and accepted a position as a young adult engagement coordinator at Archdiocese of Chicago. Maria was a great help with the Trading Tech 300 program. ~JJL

Natasha Solis is now managing director, global sales at Matrix Executions.~JJL

++++

U.S. Markets Regulator Considers Buyouts, Extension of Hiring Freeze; Stuck with a flat budget, CFTC also asks other government agencies for help with its work
Gabriel T. Rubin – WSJ
After years of budget pressure and escalating responsibilities, the U.S. derivatives regulator is considering employee buyouts and the extension of a hiring freeze. It also is asking other government agencies for help with some work.
/jlne.ws/2I4sB1Q

***** The stinginess of Congress towards the CFTC is a recipe for disaster.~JJL

++++

Moving Beyond SunGard – Andrew Whyte, FIS
JohnLothianNews.com
It was summer 2015 when FIS announced it was acquiring SunGard. Nearly three years later, FIS and SunGard are integrated, and according to Andrew Whyte, group president, post trade services at FIS, the firm can now concentrate on revamping its tech. In this video from JLN’s annual series with industry leaders, Whyte lays out the three areas of focus for FIS.

Watch the video and read the rest here »

++++

Hehmeyer Announces Impressive Performance Of Its Cryptocurrency Index Fund
Hehmeyer
After launching on April 1, 2018, Hehmeyer Trading + Investments today announced a successful first month of its Hehmeyer Cryptocurrency Index Fund. The Fund ended its first month up 51.07%. These results are net of management fees but not expenses.
/jlne.ws/2rrZzT0

*****Get your seatbelts on for this ride.~JJL

++++

Microsoft commits $25M over 5 years for new ‘AI for Accessibility’ initiative to help people with disabilities
GeekWire
The aim of the new program announced at the Microsoft Build developer conference in Seattle this week is to use AI to help people with disabilities deal with challenges in three key areas: employment, human connection and modern life.
/jlne.ws/2rvYCcq

++++

The Spread – Amelia Island – 5/4
JohnLothianNews.com
It took 30 minutes of Spencer messing up his lines for us to get 2 minutes of commentary about the Options Industry Conference which was held in Amelia Island, Fla. from May 2 through May 4. Next year’s conference will be hosted by MIAX and held in… Miami!

Watch the video here »

++++

Monday’s Top Three
Our top read story of the day on Monday was the FT’s US judge scraps trial into CME Group’s defence of home market. Second was what we all think about, The case for a five-hour working day, from the FT. And third went to Bloomberg’s New Crypto Exchanges Don’t Want (to Hold) Your Money

++++

One Wall Street: New York landmark raises the bar for luxury living; The regeneration of historic One Wall Street in Downtown Manhattan is nearing completion, with luxury condominiums now available to Hong Kong buyers.
South China Morning Post
New York City has always been on the map for global real estate investors. Now, multibillion dollar developments are creating even more opportunities to live and invest in the very heart of the world’s most famous city.
/jlne.ws/2HYh6NL

***** Live near the ghost of Alexander Hamilton.~JJL

++++

Vanilla ice cream off the menu as traders cannot afford the spice
Chris Dyer – Telegraph
It has been one of the most popular flavours of ice cream for generations and its taste is synonymous with the traditional British summer. But vanilla is being taken off the menu by some independent retailers who cannot afford the ingredient after a shortage sent prices rocketing.
/jlne.ws/2HXL4l0

***** Maybe the Spice Girls can fix this.~JJL

++++

MarketsWiki Stats
125,403,935 pages viewed; 23,094 pages; 212,958 edits
MarketsWiki Statistics

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Lead Stories

NYSE Owner ICE Is Said to Be Working on Bitcoin Trading Platform
Matthew Leising and Sonali Basak – Bloomberg
Intercontinental Exchange Inc., the owner of New York Stock Exchange, has been working on a trading platform that would let investors bet on Bitcoin, according to two people with knowledge of the project.
/jlne.ws/2I13iSk

***Business Insider here

Republican Regulator Who Blasted Dodd-Frank Rules to Step Down; Michael Piwowar’s departure will leave the agency with four commissioners, meaning some votes could be deadlocked
Dave Michaels – WSJ
A Republican member of the Securities and Exchange Commission who was a frequent critic of post-crisis regulations and helped quash some rules embraced by Democrats plans to leave the agency in July.
/jlne.ws/2I11kli

NY attorney-general Schneiderman quits after misconduct claims; #MeToo movement supporter resigns after 4 women accuse him of physical abuse
Kadhim Shubber – FT
Eric Schneiderman, the New York attorney-general who has been a prominent supporter of the #MeToo movement, resigned late on Monday after four women accused him of physical abuse in a New Yorker article.
/jlne.ws/2HVTrNI

CME’s SOFR futures debut with more than 50 participants
Karen Brettell – Reuters via CNBC
The CME Group Inc on Monday saw more than 50 global firms participate in its new futures contracts backed by the Secured Overnight Financing Rate (SOFR), a U.S. alternative to the benchmark Libor interest rate.
/jlne.ws/2I7tjM1

Bitcoin drop tied to CME futures listing, Fed paper shows
Reuters
Bitcoin’s drop in value from its December 2017 peak of $19,511 was tied directly to the listing of futures contracts tied to the cryptocurrency’s value, new research published by the San Francisco Federal Reserve showed Monday.
/jlne.ws/2FSRVWX

****Full Fed white paper here.

The Father Of Digital Trading Jumps Into The Ranks Of The Top 20 Richest Americans
Max Jedeur-Palmgren – Forbes
The stock of Thomas Peterffy’s Interactive Brokers has outperformed most over the last year – up 114% – catapulting its founder up to an all-time high on the FORBES 400 Real-time ranking.
/jlne.ws/2IjSU7I

Swiss Wealth Manager Loses Paris Fight Over $1.2 Million Bail
Gaspard Sebag – Bloomberg
Man was charged with enabling 4.4 million-euro insider trade; Bail required to ensure Swiss man doesn’t vanish during probe
A Swiss wealth manager embroiled in an insider-trading case linked to Air Liquide SA’s $13.2 billion takeover of Airgas Inc. has lost his bid to avoid posting bail of 1 million euros ($1.2 million).
/jlne.ws/2HYrqp1

Dimon Says Prepare for 4% Yields, Potential Volatility Rise
Stephen Engle and Chris Anstey – Bloomberg
U.S. borrowing may jump to $400 billion a quarter, Dimon says; Volatility could rise as QE exit proceeds, JPMorgan chief says
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said it’s possible U.S. growth and inflation prove fast enough to prompt the Federal Reserve to raise interest rates more than many anticipate, and it would be wise to prepare for benchmark yields to climb to 4 percent.
/jlne.ws/2ImNGIp

Big Banks Steal Smaller Brokers’ Thunder; Popularity of ETFs, decline in active asset managers and Europe’s new rules on research hurt smaller brokerages
Telis Demos – WSJ
It’s a good time to be a megabank. In many businesses, the largest global banks such as JPMorgan Chase JPM 0.87% & Co. and Bank of America Corp. BAC 1.16% are getting bigger, while others are struggling to keep pace. The latest example: the volatility-induced surge in first-quarter stock-trading revenue that smaller U.S. investment banks almost universally missed out on.
/jlne.ws/2I64yje

Exchanges, OTC and Clearing

CME Group considers raising corn, soybean storage rates
Reuters
Exchange-operator CME Group Inc is weighing an increase in the storage rates for its corn and soybean futures to address concerns the contracts’ prices are not accurately reflecting the underlying U.S. cash grain markets.
/jlne.ws/2HTRsJM

JCCH volume report for April 2018
JCCH
www.jcch.co.jp/uploads/volume_open_interest/2018/April_2018.pdf

HKEX announces plan to offer MSCI Asia ex Japan index futures from 11 June
HKEX
HKEX’s first regional stock index futures contract; Underlying index: MSCI All Country Asia ex Japan Net Total Return Index
Hong Kong Exchanges and Clearing Limited (HKEX) plans to introduce MSCI All Country (AC) Asia ex Japan Net Total Return Index (MSCI AxJ) Futures, the first regional stock index futures contract for HKEX, on Monday, 11 June 2018, pending regulatory approval.
/jlne.ws/2IqaMOc

Pioneering CCP transparency to maintain safer markets (part 5)
Eurex
The Public Quantitative Disclosure (PQD) is an internationally agreed format defined by CPMI-IOSCO with the intention of enhancing CCP market transparency. Eurex Clearing has been publishing its PQD since 2015 and continues to strongly support CCP transparency and market stability.
/jlne.ws/2HZQcVs

Barclays Acquires Licenses for Two EURO iSTOXX 50 ESG Focus Indices
Eurex
STOXX Ltd., the operator of Deutsche Boerse Group’s index business and global provider of innovative and tradable index concepts, has licensed to the British bank Barclays the use of the EURO iSTOXX 50 ESG Focus Index and the EURO iSTOXX 50 ESG Focus GR Decrement 5% Index issued as underlyings for the issuance of structured products.
/jlne.ws/2HZgS96

Fintech

China’s Got Jack Ma’s Finance Giant in Its Crosshairs
Bloomberg News
Draft rules would impose capital requirements on Ant Financial; Regulatory risk looms over company’s highly anticipated IPO
There’s no other company on Earth quite like Ant Financial. Spanning online payments, insurance, lending, credit scores, asset management and more, Jack Ma’s Chinese behemoth resembles a mashup of PayPal, Geico, Wells Fargo and Equifax — with a bit of BlackRock thrown in for good measure.
/jlne.ws/2HYdYkP

Money.Net Adds Real-Time Futures Prices
MarketVoice
Money.Net, the market data and financial news platform that positions itself as a low-cost alternative to Bloomberg and Reuters terminals, has added real-time futures and options on futures from exchanges in Europe, Asia-Pacific and the Americas. The company is sourcing the price data from CQG and other providers, and making it available through its new cloud-based HTML5 platform.
/jlne.ws/2ruyAGp

It’s IPO Time for iZettle, Europe’s Answer to Square
Nate Lanxon – Bloomberg
Sweden’s iZettle plans initial public offering for 2018; Intends to raise about $227 million to expand business
Swedish fintech company iZettle AB announced its intention to file for an initial public offering on the Nasdaq Stockholm stock exchange.
/jlne.ws/2ItDm18

Cryptocurrencies

Bitcoin Sees Wall Street Warm to Trading Virtual Currency
Nathaniel Popper – WSJ
Some of the biggest names on Wall Street are warming up to Bitcoin, a virtual currency that for nearly a decade has been consigned to the unregulated fringes of the financial world.
/jlne.ws/2HZoKr5

Buffett and Gates Are the Latest Bitcoin Critics, Halting $10,000 Push
Camila Russo and Katherine Chiglinsky – Bloomberg
Surprise! Bitcoin is getting no love from two of the world’s wealthiest men.
/jlne.ws/2HYt4qH

Dancing Badgers Draw More Attention Than SEC at Ethereum Meeting
Camila Russo – Bloomberg
In the crypto world, all eyes are on a meeting today where U.S. regulators may discuss whether Ethereum is a security, but developers at the center of the network showed few signs of caring at a three-day gathering that ended this weekend, where scaling and security were the main focus.
/jlne.ws/2Iq7LNS

Bitcoin to Rally on Consensus Conference, Fundstrat Analyst Says
Matthew Leising – Bloomberg
Bitcoin is relatively cheap ahead of a major cryptocurrency conference in New York next week, setting the stage for a rally, according to researchers led by Tom Lee of Fundstrat Global Advisors.
/jlne.ws/2HXFCOW

Oracle Is Rolling Out Blockchain Products
Nico Grant – Bloomberg
Oracle Corp. will unveil its blockchain software starting this month, joining the growing list of companies offering products that use the digital-ledger technology behind Bitcoin.
/jlne.ws/2HYa9vZ

Blockchain May Soon Be Helping Puerto Rico Keep the Lights on
Naureen S Malik – Bloomberg
Australian blockchain firm seeks to deploy exchange on island; Goal is to stop an exodus of workers from Puerto Rico
Solar panels. Batteries. Emergency fossil fuel-fired generators. They’ve all been deployed across Puerto Rico to help get the lights back on in the months following devastating hurricanes Irma and Maria.
/jlne.ws/2wi50tc

‘Put your money where your mouth is’: Winklevoss twin challenges bitcoin hater Bill Gates
Frank Chaparro – Business Insider
The cofounder of one of the largest cryptocurrency exchanges is calling out Bill Gates for his recent anti-bitcoin comments.
/jlne.ws/2I234GD

Bill Gates says he would short bitcoin if there was an easy way to do it
Aaron Hankin – MarketWatch
Microsoft co-founder doubles down on bitcoin take
Microsoft co-founder Bill Gates is the latest billionaire to pour cold water on digital currencies, saying if there was an easy way to bet against bitcoin and other cryptocurrencies he would.
/jlne.ws/2I8p0Ad

Blockchain ETF Asks for Patience; Founder of Reality Shares and BLCN says he is focused on blockchain technology’s future
Gerrard Cowan – WSJ
The term “blockchain” conjures up, for most, thoughts about cryptocurrencies. However, the technology has far wider implications for investors, says the founder of an exchange-traded fund that tracks the technology.
/jlne.ws/2wmjubE

Politics

Eric Schneiderman: New York attorney general resigns following assault allegations; Schneiderman, who is suing Harvey Weinstein over sexual misconduct claims, accused in New Yorker of assaulting four women
Lauren Gambino and agencies – The Guardian
New York’s attorney general, Eric Schneiderman, abruptly resigned on Monday night following accusations published in the New Yorker that he physically assaulted four women he was romantically involved with.
/jlne.ws/2IrizeZ

***WSJ here

Trump to Make Announcement on Iran Nuclear Deal Tuesday; President has criticized the pact as ‘ridiculous;’ there have been no indications that his concerns have been assuaged
Michael R. Gordon, Felicia Schwartz and Ian Talley – WSJ
Washington’s European allies were bracing for the U.S. to withdraw from the Iran nuclear accord, after President Donald Trump said he would announce on Tuesday his decision on the landmark agreement that he has repeatedly condemned.
/jlne.ws/2I0gtDa

Donald Trump set to reveal decision on Iran nuclear deal, Announcement by the president expected at the White House at 2pm Eastern Time
Patrick Wintour – The Guardian
Donald Trump is set to announce a decision on the Iran nuclear deal at the White House, in what could mark the most significant foreign policy move of his presidency.
/jlne.ws/2HYws4T

The World According to Trump; Maybe the president really believes that allies, values and institutions are for losers. But it’s the U.S. that will lose.
The Editors – Bloomberg
President Donald Trump recently wrapped up a three-week whirlwind of summitry, meeting with the leaders of Japan, France and Germany. If his visitors found the experience bewildering, who can blame them?
/jlne.ws/2I1b7rh

Regulation

CFTC probed CDS market under last enforcement head; Goelman compares manufactured payouts to match-fixing, and says CFTC has jurisdiction to bring case
Kris Devasabai, Helen Bartholomew – Risk.net
The former head of the US Commodity Futures Trading Commission’s division of enforcement has backed the agency’s efforts to clamp down on ‘manufactured’ credit default swap payouts, in which a market participant strikes an agreement with the reference entity, helping both firms but potentially hurting other CDS users.
/jlne.ws/2HVSftI

Remarks of Chairman J. Christopher Giancarlo at the Association of German Banks, Berlin, Germany
CFTC
Thank you, Andreas Krautscheid for that kind introduction. I also wish to thank the Bankenverband for hosting this event. Good afternoon. Thank you all for coming.
/jlne.ws/2HXowRc

Upcoming Board Meeting
FINRA
This week, the FINRA Board of Governors will convene for its May 2018 meetingóour second of the year. Our agenda includes discussions on a range of important topics, and we will be joined by two guest speakers from the SECóPeter Driscoll from the Office of Inspections and Examinations and Kevin Goodman from the FINRA and Securities Industry Oversight group.
/jlne.ws/2IqXDEH

Scheduled Maintenance of FINRA Order Form
FINRA
FINRA will perform scheduled maintenance of the FINRA Order Form on the evening of Friday, May 11, 2018. The maintenance will not impact user functionality. However, any FINRA Order Forms saved in draft status will be deleted.
/jlne.ws/2IlEvrz

New Rate for Fees Paid Under Section 31 of the Exchange Act
FINRA
Effective May 22, 2018, the Section 31 fee rate applicable to specified securities transactions on the exchanges and in the over-the-counter markets will decrease from its current rate of $23.10 per million dollars in transactions to a new rate of $13.00 per million dollars in transactions.
/jlne.ws/2IhX5kD

SEC commissioner announces plans to step down
Kevin Dugan – NY Post
Wall Street’s favorite regulator is on his way out.
/jlne.ws/2HVOzrU

****FT here

Investing and Trading

A Private-Market Deal Gone Bad: Sketchy Brokers, Bilked Seniors and a Cosmetologist; Investments called private placements are among the fastest growing in finance, outpacing the public stock market. They are frequently populated by brokers with red flags in their record
Jean Eaglesham and Coulter Jones – WSJ
Ray Kay, who works as a financial adviser in Beverly Hills, Calif., advertised on the radio a purportedly low-risk, high-income investment.
/jlne.ws/2InCWcM

The Next Bond Crash: An ETF Story
Dave Nadig – ETF.com
These are the two statements you most often hear about liquidity and ETFs: ETFs are only as liquid as what they own [and] ETFs are only as liquid as what you see on the screen.
Both of these are fundamentally flawed, and interact in interesting ways. And nowhere are there more histrionics about these issues then junk bonds and their ilk (say, bank loans).
/jlne.ws/2HVq1PX

Pension Funds Still Making Promises They Probably Can’t Keep; Public pension fund projections don’t always match actual experience
Heather Gillers – WSJ
The value of investments by public pension funds declined last quarter, widening the gap between what these funds say they will earn and what they actually earn.
/jlne.ws/2IoIrYF

Oil Market May Get Blindsided by Iran Deal; Crude oil bulls have factored in too much from President Trump’s decision on sanctions on May 12
Spencer Jakab – WSJ
The oil market has surged on the expectation that President Donald Trump will reimpose sanctions on Iran. No matter what Mr. Trump decides, oil bulls and other beneficiaries of higher prices shouldn’t get too confident.
/jlne.ws/2woYTDD

Top Collectors Reveal the Secrets of How to Invest in Art; Returns can be eye-popping, but collectors must avoid the pitfalls of forgeries, fakes and rapidly changing tastes.
Fredrik Balfour – Bloomberg
Andy Warhol once said: “Making money is art.” But what about making money from art?
/jlne.ws/2IkgW2l

Institutions

ING to expand debt capital markets business into US
Alexandra Scaggs – FT
Dutch bank ING Groep NV is building out its debt capital markets (DCM) business in the Americas, with the aim of underwriting its clients’ investment-grade US bond issuance.
/jlne.ws/2IlbDQf

Barclays appoints Matt Pecot to run equities trading in APAC; Barclays raids Credit Suisse again as new head of equities for APAC joins from Swiss bank.
John Brazier – The Trade
Barclays has appointed Matt Pecot from Credit Suisse as head of its equities business in Asia Pacific.
/jlne.ws/2HVONPM

Activist Sets Sights on Citigroup; ValueAct puts focus on bank’s ability to grow as a service provider for companies
David Benoit, Cara Lombardo and Telis Demos – WSJ
Activist investor ValueAct Capital Partners LP has built a roughly $1.2 billion stake in Citigroup Inc., C 0.82% a bet that the giant bank’s strength as a service provider to corporations will enable it to thrive in the post-crisis era and make up ground its shares have lost in recent years.
/jlne.ws/2Iq8Cyf

Exclusive: World’s biggest gold ETF launching new low-fee fund – source
Peter Hobson – Reuters
The World Gold Council, owner of the world’s largest gold-backed exchange traded fund (ETF), is launching a new fund with a cut-price management fee to fend off rivals with lower charges, a source familiar with the matter told Reuters.
/jlne.ws/2I6bRaO

D.E. Shaw fired a high-profile hedge-fund manager after an investigation into alleged inappropriate behavior, and now he’s fighting back
Rachael Levy and Olivia Oran – Business Insider
A longtime D.E. Shaw portfolio manager says he was unfairly terminated after an investigation into allegations of inappropriate behavior. Now he’s fighting back.
/jlne.ws/2wt4Oro

Regions

Ireland set to pick up legal business from derivatives market
Irish Legal News
Ireland is set to pick up more legal business from financial services companies after Brexit following a boost from the International Swaps and Derivatives Association (ISDA).
/jlne.ws/2FSyOw1

Bruised Swedish krona vulnerable with quiet summer trading ahead; ‘The market hates being wrong, and has sold the krona hard’
Cat Rutter Pooley – FT
The Swedish krona has picked up from the near nine-year low it reached against the euro last week, but with the Riksbank showing few signs of departing from its super-cautious monetary policy stance, analysts are divided about the path for the currency.
/jlne.ws/2HXXc5n

A Newspaper Is Sold, and Cambodians Fear the End of Press Freedom
Julia Wallace and Mike Ives – WSJ
A newspaper widely seen as the last bastion of a free press in Cambodia has been sold to a Malaysian investor with ties to Cambodia’s strongman prime minister, a move that critics say further highlights the country’s slide toward outright authoritarianism.
/jlne.ws/2InQx3D

Macquarie lays off analysts as Mifid bites; Equity research regulations spur shake-up at Australian bank’s European arm
Laura Noonan – FT
Macquarie’s European division is laying off a handful of analysts and reshaping its coverage around six key sectors, as EU groups get to grips with regulations forcing investors to explicitly pay for reports and analysts’ time.
/jlne.ws/2HZn6pp

Brexit

For a win-win financial services Brexit deal, a reboot is needed
Barnabas Reynolds – City AM
If the EU and the UK are each to achieve a win-win outcome in the Brexit trade talks, the EU must become more accountable politically to its own citizens.
/jlne.ws/2IqaCGA

The real divide over the UK’s post-EU future is hope and despair; Negativity will depress confidence but there is a strong case for optimism
Norman Blackwell – FT
With less than a year to go until the UK leaves the EU, the real divide is no longer between former Leavers and Remainers. Rather it is between those who, whichever way they voted, now take an optimistic view of Britain’s future and those who are entrenched in a negative outlook. While the pessimists are entitled to their view, the danger is that their continued disparagement of Britain’s prospects is itself a source of damage ó reducing economic confidence and raising doubts for foreign investors. It is time we all embraced a realistic but positive stance on long-term opportunities.
/jlne.ws/2ImOT2p

Boris Johnson calls Brexit customs partnership plan a ‘crazy system’; UK foreign secretary’s comments bring cabinet divisions into the open
Robert Wright – FT
The British cabinet’s divisions over post-Brexit customs policy burst into the open on Monday when Boris Johnson, the foreign secretary, criticised Prime Minister Theresa May’s preferred policy as a “crazy system” that would leave the UK “locked in the tractor beam of Brussels”.
/jlne.ws/2HYaNtz

All Creatures Great and Small Will Get Stuck at Brexit’s Border; A shortage of veterinarians promises another Brexit trading nightmare.
Suzi Ring – Bloomberg
For Colin Moore’s family-run fish bait business in southwestern England, eggs are essential. They stiffen a paste made of semolina, fishfeed and other flavorings so it can be rolled into boilies, which carp anglers across Europe love to toss into freshwater to make the huge oily fish easier to catch.
/jlne.ws/2wnunKm

The post ICE working on bitcoin platform; SEC’s Piwowar stepping down; NY AG quits appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

On this day in 1973 the Black-Scholes options pricing formula was published – trivia courtesy of John Nelson, president and founder of The Applied Research Company.~SD

Also on this day, Buffalo Bill’s Wild West show opened in 1887, which is not related to options but maybe volatility.~JJL

Elizabeth Lan Davis, a former chief trial attorney at the Commodity Futures Trading Commission (CFTC), and Brian Walsh, both of the law firm of Murphy & McGonigle, wrote a commentary for JLN titled “CFTC Division of Enforcement Trends.”~JJL

CME Group WTI Futures hit record open interest on Friday, May 4 of 2,695,178 contracts. After yesterday’s Middle East news, CME’s data shows open interest is a new record of 2,698,402 contracts. ~SD

SGX’s April volume report showed that total derivatives volumes were up 13 percent from a year earlier. Its FTSE China A50 Index futures was up 11 percent to 5.7 million contracts. It was the fourth straight month SGX saw more than one million FX futures contracts traded.~JK

CME posted a record average daily volume of 3,745 bitcoin futures contracts last month.~JK

On May 22, The Executives Club of Chicago will present “Bitcoin Boom: Chicago’s Role in the Digital Currency Movement” featuring Sunil Cutinho, Peter Johnson, Matt Kluchenek and Michael Unetich.~JJL

Former Business Insider Executive Editor Mohammed Hadi will join BizDay as news director.~JJL

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Gemini’s Tyler Winklevoss informs Bill Gates that actually he can short bitcoin
Taylor Hatmaker – TechCrunch
While plenty of the scathing criticism aimed at the cryptocurrency world is well deserved, sometimes a jab fails to land. In the midst of the mostly grossly-worded slew of insults that the institutionally rich lobbed at the bitcoin crowd over the weekend, Bill Gates may have landed the furthest from the mark.
/jlne.ws/2K9oVwK

***** Futures 101?~JJL

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Decreasing Collateral Tech Spend – Steve Husk, CloudMargin
JohnLothianNews.com

CloudMargin, a cloud-based collateral management platform, spent 2017 acquiring new clients, including two tier one institutions. In 2018, CloudMargin wants to double its client list from 50 to 100. According to CloudMargin CEO Steve Husk, banks can spend $1000 a year managing and maintaining each of its credit support annexes (CSAs) – CloudMargin’s technology brings that number down to around $100. In this video from JLN’s annual series with industry leaders, Husk talks about more goals for CloudMargin and why the company doesn’t do bespoke solutions.

Watch the video and read the rest here »

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Tuesday’s Top Three
We’ve got bitcoin on the mind again. Our top three stories were all related to crypto, with none of them calling it a fraud or something to do with the business end of a cow. Our top read piece was Bloomberg’s NYSE Owner ICE Is Said to Be Working on Bitcoin Trading Platform. Second went to the Hehmeyer Blog Post, Hehmeyer Announces Impressive Performance Of Its Cryptocurrency Index Fund. Third went to Reuters’ Bitcoin drop tied to CME futures listing, Fed paper shows

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MarketsWiki Stats
125,489,503 pages viewed; 23,098 pages; 212,967 edits
MarketsWiki Statistics

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Lead Stories

Bond trading: technology finally disrupts a $50tn market; Fixed income is being dragged into the 21st century with a shift towards electronic trading on exchanges
Robin Wigglesworth and Joe Rennison – FT
Abbie has enjoyed a brilliant start to her new job as a junior fund manager at AllianceBernstein, a $500bn investment group in New York. In her first three months she has handled thousands of bond trades worth nearly $19bn, never complaining, messing up or even taking a break.
/jlne.ws/2wpDWZc

Dutch State Treasury Agency taps Eurex for IRS swaps clearing; Dutch State Treasury Agency to begin clearing interest rate swaps through Eurex Clearing by the end of 2018.
John Brazier – The Trade
The Dutch State Treasury Agency has announced it will voluntarily begin central clearing of euro-denominated interest rate swaps through Eurex Clearing.
/jlne.ws/2wtBa58

Starting Next Week You Can See Brokers’ Profits From Bond Sales; New rule effective Monday is meant to curb abusive practices, but critics say
Andrew Ackerman and Heather Gillers – WSJ
Starting next week, mom-and-pop investors will learn how much their broker made selling them bonds.
/jlne.ws/2wpiTFY

On the offensive – Seeking a new edge, buy-side invests in portfolio and risk analytics
James Church, FINCAD – Risk.net
A fast-moving, headstrong hedge fund – hit by rare losses after a black swan event touched on an overweight country exposure – ponders adding fresh quantitative expertise. Much to traders’ chagrin, the chief investment officer and chief operating officer recruit several quants, running them through the gauntlet and backtesting their behavioural algorithms, before eventually deciding to take on the project themselves
/jlne.ws/2K4Up73

Asset managers double spending on new data in hunt for edge; With its fees under pressure, investment groups are attempting to reinvigorate returns
Robin Wigglesworth in New York – FT
Investment groups have more than doubled their spending on new digital information sets and data scientists in the past two years, as the asset management industry has tried to reinvigorate its fading fortunes.
/jlne.ws/2wsZeVG

Deutsche Bank denies planning to cut U.S. workforce by 20 percent
Reuters
Deutsche Bank does not plan to cut its U.S. workforce by about 20 percent, it said on Tuesday, denying a media report.
/jlne.ws/2K0P3cM

The Wealthy Are Hoarding $10 Billion of Bitcoin in Bunkers
Tom Metcalf – Bloomberg
Xapo’s Casares is Bitcoin’s ‘Patient Zero’ in Silicon Valley; Fingerprint scanners prevent amputated hands from being used
Behind the guards, the blast doors and down corridors of reinforced concrete, sit the encrypted computer servers — connected to nothing — that hold keys to a vast digital fortune.
/jlne.ws/2K6nqzn

Bloomberg chooses Amsterdam as EU trading hub
Philip Stafford – FT
Bloomberg has chosen Amsterdam as the base for its trading operations in the European Union, to give it access to EU markets after Britain leaves the 27-country bloc next year.
/jlne.ws/2wqQn6Y

Swaps data: the allure of liquidity
Amir Khwaja, Clarus Financial Technology – Risk.net
It’s often said that clearing is a business that naturally tends to monopoly. The primary burden for most users is the funding cost generated by margin calls, so bigger central counterparties – that are able to reduce margin demands via netting – will attract more business.
/jlne.ws/2FTGr5u

Gary Cohn Says a ‘Digitized’ Bank Is One Option for Future Role
Will Mathis – Bloomberg
A board seat doesn’t appeal to former Goldman executive; Getting involved with young entrepreneurs is another option. Gary Cohn, the former director of the White House Economic Council, said he’s still weighing options for his next role but one possibility is a digital bank.
/jlne.ws/2K49TIB

Wall Street’s Quest for China Supremacy Takes a Political Turn
Bloomberg News
Non-U.S. firms are first to apply for majority-owned JVs; Nomura, UBS applied after urging by China securities regulator
International politics are looming large over the race among global investment banks to secure coveted permits for taking majority stakes in Chinese securities joint ventures.
/jlne.ws/2wqVF2u

***More on Nomura – Nomura Wants a Bigger Piece of China

DTCC begins night cycle re-engineering for faster settlement
Finextra
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced a timetable for the first phase of settlement optimization, a significant enhancement aimed at removing an entire market day of settlement exposure without eliminating a calendar day from the standard trade settlement process.
/jlne.ws/2IpweDb

Exchanges, OTC and Clearing

Major cryptocurrency exchange lands in Chicago
Lynne Marek – Crain’s Chicago Business
Coinbase, one of the biggest cryptocurrency companies in the U.S., is planning to open an office in Chicago sometime soon, and it has already begun hiring employees in the city.
The San Francisco-based company has tapped former CME Group executive Paul Bauerschmidt as its “product lead” in Chicago and has posted ads for other Chicago positions on its website. Bauerschmidt, who was head of CME’s swap execution facility from 2013 to 2015, declined to comment, saying the company expects to have an announcement soon.
/jlne.ws/2FWUuqQ

World Federation of Exchanges Responds to IOSCO’s Consultation on Volatility Control Mechanisms
Proshareng.com
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has responded to IOSCO’s Consultation Report on ‘Mechanisms used by trading venues to manage extreme volatility and preserve orderly trading’.
bit.ly/2rvC2RL

New Hong Kong dual-share listings to be tradeable through Stock Connect schemes
Enoch Yiu – South China Morning Post
Companies with dual-class shareholding structures that list on the Hong Kong bourse under its new listing rules will join the Hang Seng Composite Index so that they can be traded by mainland Chinese and international investors through the Stock Connect schemes, the index compiler, Hang Seng Indexes Company, said on Monday.
/jlne.ws/2K2ou7a

Dubai Gold & Commodities Exchange Set For Further Growth With New Technology From Cinnober
DGCX
The Dubai Gold & Commodities Exchange (DGCX), and its 100% fully owned subsidiary the Dubai Commodities Clearing Corporation (DCCC), has upgraded its integrated trading and clearing solution from Cinnober to the latest version of the TRADExpress platform. http://bit.ly/2rv2s66

Dutch State Treasury Agency to clear IRS swaps via Eurex Clearing
Eurex Group
The Dutch State Treasury Agency has decided to enable central clearing of euro denominated interest rate swaps via Eurex Clearing in Frankfurt for the State of the Netherlands. As Debt Management Office, the Dutch State Treasury Agency is exempt from the obligation to clear swaps through a Central Counterparty (CCP). However, the Dutch State Treasury Agency has investigated options to clear its interest rate swaps centrally for risk management reasons and opted for the services of Eurex Clearing and is expected to operationally start clearing at the end of the year at the earliest. To this end, Eurex Clearing and the State of the Netherlands entered into a clearing agreement on 8 May 2018.
/jlne.ws/2K6vqjx

Pioneering CCP transparency to maintain safer markets (part 5)
Eurex Group
The Public Quantitative Disclosure (PQD) is an internationally agreed format defined by CPMI-IOSCO with the intention of enhancing CCP market transparency. Eurex Clearing has been publishing its PQD since 2015 and continues to strongly support CCP transparency and market stability.
/jlne.ws/2K4qcoC

Nasdaq Boardvantage And passiveIQ Win American Business Awards’ Gold Stevie For “Best New Product Of The Year”
Mondovisione
Nasdaq, Inc. (Nasdaq:NDAQ) is pleased to announce that the following products and services have been named Gold Stevie winners at the 2018 American Business Awards
/jlne.ws/2K4SSOa

“We Will Introduce New Order Types.” – Tony Shaw, Director London Office, Securities & Exchanges Of SIX, Presents The Current Success Factors And Future Potential Of SwissAtMid.
Press Release
SwissAtMid, the non-displayed order book provided by Exchange Services of SIX that offers the opportunity for mid-point execution on Swiss equity instruments, continues to grow. As Tony Shaw of SIX pointed out in a recent interview (see below), increasing volumes have been accompanied by significant improvements regarding time to fill.
/jlne.ws/2K1krIn

Adjustment of Minsheng Bank Structured Products, Futures and Options
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to China Minsheng Banking Corp Ltd (Minsheng Bank) structured products, futures and options to account for Minsheng Bank’s capitalisation issue.
/jlne.ws/2I3PyXe

HKEX 2018 First Quarter Results
HKEX
/jlne.ws/2ItteWn

The owner of the New York Stock Exchange is working on a bitcoin trading platform
Taylor Hatmaker – TechCrunch 18 hours ago
The New York Stock Exchange is working on its own bitcoin trading platform.
The New York Stock Exchange is working on its own bitcoin trading platform. According to a new report from The New York Times, the NYSE’s parent company is developing an online exchange geared toward large institutional investors ó the kind of financial heavyweights that the cryptocurrency community is waiting for with bated breath.
/jlne.ws/2wnEbnG

SGX reports market statistics for April 2018
SGX
Market turnover value of structured warrants and DLCs rise 44% year-on-year
Securities – Total Securities market turnover value was at S$26.7 billion, down 4% month-on-month (m-o-m) and up 24% year-on-year
Derivatives – Total Derivatives volume was 15.25 million, down 12% month-on-month (m-o-m) and up 13% year-on-year (y-o-y).
/jlne.ws/2I2ErxO

Fintech

Now Available: TT REST API
Trading Technologies
One of the things that has made our trading solutions stand out through the years is our focus on providing application programming interfaces (APIs) that enable end users and developers to integrate their applications with our trading platform. To this end, I’m excited to announce that we have officially released the TT REST API, which gives our users tools to leverage the power of the TT platform within their own applications.
/jlne.ws/2FWxsQU

Quantitative Brokers Partners with Rebar Systems to Provide Best Execution Algorithms for Futures
BusinessWire
Quantitative Brokers (QB), an independent provider of advanced algorithms and data-driven analytics to clients in the Futures and US Cash Treasury markets, today announced that they have partnered with Rebar Systems (Rebar), a FinTech company specializing in building highly flexible, multi-asset order and execution management systems, to offer QB’s award-winning, premium execution algorithms on Rebar’s flagship product, ROME (Rebar Order Management & Execution).
/goo.gl/SxuMTq

AccessFintech signs Liquidnet for risk control dashboard
Finextra
Access Fintech announced today that Liquidnet, a global institutional trading network, is now using AccessFintech’s Business Operations Centre.
bit.ly/2rwk2Xq

Itiviti introduces VeriFIX Enterprise to automate trade tech testing
Finextra
Itiviti and ULLINK, market-leading global provider of multi-asset trading technology and financial infrastructure, today introduced VeriFIX Enterprise by Itiviti, an integrated platform for automated enterprise-level testing of trading systems.
/goo.gl/Zf5wYG

WH Trading selects QuantHouse for global market access
Finextra
QuantHouse, the leading independent global provider of end-to-end systematic trading solutions including innovative market data services, algo trading platform and infrastructure solutions, today announced that WH Trading, the leading global proprietary trading firm, has selected QuantHouse in order to leverage the QuantLINK and QuantFEED suite of advanced solutions.
/jlne.ws/2K42gld

Bryne Steps Back from tZero
MarketsMedia
The digital asset market vendor tZero CEO Patrick Byrne has issued a letter to stockholder announcing that he is stepping down as CEO.
/jlne.ws/2FWtN5x

Fintech mortgage broker Trussle secures £13.6m in Goldman Sachs-led funding
Oscar Lopez – City AM
Online UK mortgage broker Trussle has has secured £13.6m in financing from a group of international investors led by investment bank Goldman Sachs as part of its Series B funding round.
/jlne.ws/2K79xAQ

NovaSparks Bows Data Compressor to Boost Microwave Throughput Rates
Max Bowie – WatersTechnology
The conflation feature will help clients sent more data than previously possible over ultra-low latency microwave networks.
/goo.gl/M9ZyqV

Broadridge Acquires FundAssist to Further Expand Regulatory Communications Capabilities for Asset Managers Extends
PRNewswire
Broadridge Financial Solutions, Inc. (NYSE: BR), a global fintech leader, has completed the acquisition of FundAssist Limited, a regulatory, marketing and sales solutions service provider to the global investments industry. Based in Dublin, Ireland, FundAssist is a natural extension of Broadridge’s governance and communications business and brings a complete suite of capabilities to enable the composition, management and distribution of digitized regulatory and disclosure documents for global fund managers distributing in Europe.
/goo.gl/SkfLJ7

Cryptocurrencies

Judge: Man’s cryptocurrency is ‘grand misrepresentation’
Kevin Dugan – NY Post
A Brooklyn federal judge called a digital currency at the center of a seminal fraud case a “grand misrepresentation” during a hearing on Tuesday, seemingly handing federal prosecutors an advantage before the trial is even set to begin.
/jlne.ws/2K78q48

Accused Crypto-Fraudster Faces Skeptical Judge Over His Defense
Patricia Hurtado – Bloomberg
A Brooklyn, New York, man accused of peddling cybercurrency offerings backed by non-existent investments in real estate and diamonds claims he can’t be prosecuted for securities fraud. But a judge wasn’t buying that defense.
/jlne.ws/2wqF0w1

Cryptocurrency creeps into the mainstream; Institutionalising bitcoin lowers risk ó but sends an unsettling signal
FT
The irony is delicious. Bitcoin, biggest of the cryptocurrencies, was heralded as a technology that would set us free from the sclerotic institutions of a fetid financial system: central banks, commercial bank oligopolies, bought-and-paid-for regulators.
/jlne.ws/2wlDwTw

Politics

Trump Withdraws U.S. From Iran Accord; President announces pullout from deal aimed at curbing Tehran’s nuclear activity, calling it ‘horrible’
Michael C. Bender, Michael R. Gordon and Rebecca Ballhaus – WSJ
The U.S. is exiting the Iranian nuclear accord, President Donald Trump said Tuesday, dismantling his predecessor’s most prominent foreign-policy initiative and bucking the appeals of some of America’s closest allies.
/jlne.ws/2K5hlTA

The dangerous cult of Donald Trump
Reza Aslan – LA Times
I am not the first person to point this out: There’s been a cultish quality to President Trump’s most ardent supporters. He seemed to acknowledge the phenomenon when he boasted that he could “stand in the middle of Fifth Avenue and shoot somebody” and not lose voters.
/jlne.ws/2Inax6L

Trump’s Most Foolish Decision Yet
By Susan E. Rice
Ms. Rice was the national security adviser during President Barack Obama’s second term.
President Trump’s reckless decision to withdraw the United States from the Iran nuclear deal will not force Iran back to the negotiating table, nor will it address serious concerns about Iran’s behavior in the Middle East. But it will leave Iran’s nuclear program unconstrained, and an inconstant America isolated from its allies and far less safe.
/goo.gl/xUwxUy

Europe, Again Humiliated by Trump, Struggles to Defend Its Interests
Steven Erlanger – NY Times
It is now a familiar, humiliating pattern. European leaders cajole, argue and beg, trying to persuade President Trump to change his mind on a vital issue for the trans-Atlantic alliance. Mr. Trump appears to enjoy the show, dangling them, before ultimately choosing not to listen.
/jlne.ws/2wpIgYq

Wall St must suppress its delight at Eric Schneiderman’s fall; The New York attorney-general played a key role in checking bad behaviour in finance
Brooke Masters – FT
You have got to be kidding me! On Monday, Eric Schneiderman, who has been leading efforts to hold movie producer Harvey Weinstein to account for sexual misconduct, said he would resign as New York attorney-general. His departure came three hours after the publication of allegations that he had physically abused four women with whom he had, or wanted to have, sexual relationships.
/jlne.ws/2wnEv5S

Donald Trump declares trade war on China; No sovereign power could accept the humiliating demands being made by the US
Martin Wolf – FT
The Trump administration has presented China with an ultimatum on trade. That is what the US’s “draft framework” for the trade talks with Chinese officials in Beijing last week actually is. China could not accede to its demands. The US administration is either so foolish that it does not understand this or so arrogant that it does not care. This may be a decisive moment for relations between the world’s two greatest powers.
/jlne.ws/2wnhUWZ

Regulation

New Jersey Federal Court Orders Alcibiades Cifuentes, Jennifer Wee Cifuentes, and Cifuentes Fund Management, LLC, to Pay More Than $2.2 Million for Forex Fraud Scheme
CFTC
The Commodity Futures Trading Commission (CFTC) announced that Judge Esther Salas of the U.S. District Court for the District of New Jersey has entered an Order of default judgment and permanent injunction against Alcibiades Cifuentes (Cifuentes) and Jennifer Wee Cifuentes (Wee), both of West New York, New Jersey, and their corporate entity, Cifuentes Fund Management, LLC (collectively, Defendants).
/jlne.ws/2IqrwoO

Remarks of Commissioner Brian Quintenz at SIFMA 2018 Operations Conference & Exhibition; Cutting the Grass, Adding Integrity, and Promoting Growth
CFTC
Good morning and thank you for that very kind introduction. I’m delighted to be here with you today. Before I begin, let me quickly say that the views contained in this speech are my own and do not represent the views of the Commission.
/jlne.ws/2I1TdF5

Hedge Fund Firm Charged for Asset Mismarking and Insider Trading; CFO Charged With Failing to Supervise Portfolio Managers
SEC
The Securities and Exchange Commission today announced the hedge fund advisory firm Visium Asset Management LP has agreed to settle charges related to asset mismarking and insider trading by its privately managed hedge funds and portfolio managers. Separately, the firm’s CFO agreed to settle charges that he failed to respond appropriately to red flags that should have alerted him to the asset mismarking.
/jlne.ws/2IrTxfv

ESMA closed for public holidays on 9, 10 and 11 May
ESMA
The European Securities and Markets Authority (ESMA) is closed for a public holidays on Wednesday 9 May – Europe Day, Thursday 10 May and Friday 11 May and will reopen on Monday 14 May.
/jlne.ws/2I3Rxe8

FINRA Sanctions Fifth Third Securities, Inc., $6 Million for Cost and Fee Disclosure Failures and Unsuitable Recommendations Related to Variable Annuity Exchanges
FINRA
The Financial Industry Regulatory Authority (FINRA) announced today it has fined Fifth Third Securities, Inc., $4 million and required the firm to pay approximately $2 million in restitution to customers for failing to appropriately consider and accurately describe the costs and benefits of variable annuity (VA) exchanges, and for recommending exchanges without a reasonable basis to believe the exchanges were suitable. This is the second significant FINRA enforcement action against Fifth Third involving the firm’s sale of variable annuities.
/jlne.ws/2IprkpL

ESMA details latest double volume cap breaches; Updated dark pool data finds breaches for 58 equities for the 8% cap and 10 equities for the 4% cap.
John Brazier – The Trade
The European Securities and Markets Authority (ESMA) has published the latest set of data on the MiFID II dark pool double volume caps (DVC).
/jlne.ws/2wplQ9D

Investing and Trading

Oil and Gas Prices are Breaking Up
Owain Johnson – CME Group OpenMarkets
Divorce is always a challenging event, particularly when the couple in question have been together for so long.
/goo.gl/3DDnxf

Libor Was a Crappy Wrench. Here – Use This Beautiful New Hammer Instead!
Streetwise Professor
When discussing the 1864 election, Lincoln mused that it was unwise to swap horses in midstream. (Lincoln used a variant of this phrase many times during the campaign.) The New York Fed and the Board of Governors are proposing to do that nonetheless when it comes to interest rates. They want to transition from reliance on Libor to a new Secured Overnight Financing Rate (SOFR, because you can never have enough acronyms), despite the fact that there are trillions of dollars of notional in outstanding derivatives and more trillions in loans with payments tied to Libor.
/goo.gl/xpKbQM

Musk vs. Buffett: An Invitation for Investors to Take Sides
John Foley – NY Times
Elon Musk and Warren E. Buffett clashed over the weekend after Mr. Musk, Tesla’s chief executive, derided as lame Mr. Buffett’s concept of companies having “moats” to keep potential competitors at bay. When Mr. Buffett, the Berkshire Hathaway chairman, cited his confectionery maker, See’s Candies, as proof to the contrary, Mr. Musk pledged to launch his own candy maker. It’s an invitation for investors to take sides; many already have.
/jlne.ws/2K7crpi

Impatient Investors Get Caught in the ‘Return Gap’; Investors on average lose 1 to 2 percentage points a year because of behavioral inefficiencies, writes this professor
Derek Horstmeyer – WSJ
Most investors think of themselves as rational and immune from the behavioral elements that periodically roil markets. Human factors, however, do continue to affect our personal portfolio decisionsóusually to the detriment of our long-run returns.
/jlne.ws/2K9iWbb

Rockefeller ‘Premium’ Draws Billionaires to $646 Million Auction
Katya Kazakina – Bloomberg
Picasso sells for $115 million; Monet fetches $84.7 million; Seven artist auction records were establised at Christie’s
Billionaires from around the world fought for a chance to own Peggy and David Rockefeller’s art trophies, sending paintings by Henri Matisse and Claude Monet to record prices at Christie’s in New York on Tuesday.
/jlne.ws/2K7DQqS

****WSJ here.

Sell in May and Go Away? This Robot-Run ETF Disagrees
Kristine Owram – Bloomberg
MIND cuts cash position to 1%, goes all in on equities; Canadian firm recently added currency hedging to AI-run fund
The artificial intelligence behind the Horizons Active A.I. Global Equity ETF has apparently never heard the phrase “sell in May and go away.”
/jlne.ws/2K53Bs0

FTSE Russell ESG Ratings model reflects global climate standards
Charles Fruitiere, sustainable investment analyst – FTSE Russell
There is a growing awareness among institutional investors globally that climate change and the policy and regulatory responses to it represent potential major sources of investment risk and investment opportunity.
/goo.gl/sDQtH4

A Fix Everyone Loves to Hate for the $4 Trillion Retirement Savings Gap
Katherine Chiglinsky, Ben Steverman – Bloomberg
Saving for retirement is hard enough, but another difficult challenge is making sure the money lasts. Invest your nest egg conservatively, and you might not be able to stretch the money out, especially if you live longer than you expect. Putting more in the stock market could keep the pile growingóbut once you stop adding money, a streak of bad returns could decimate your stake and leave you little chance to recover.
/jlne.ws/2wqUdwL

Institutions

Barclays vs Deutsche Bank: A tale of two mediocrities
David Wighton – Financial News
The UK and German institutions have had similar battles to fight, but it is Deutsche that has fared worse
/goo.gl/iuE1AY

Disgraced ex-BofA exec raises uncomfortable questions about #MeToo
Bethany McLean – Yahoo Finance
When Omeed Malik, an executive at Bank of America Merrill Lynch, was fired at the start of 2018, he quickly became the poster child for #MeToo on Wall Street.
/goo.gl/3BHQYK

ITG Releases April 2018 U.S. Trading Volumes and Provides International Trading Commission Update
Investment Technology Group, Inc.
ITG, a leading independent broker and financial technology provider, today announced that April 2018 U.S. trading volume was 2.5 billion shares and average daily volume (ADV) was 117 million shares, compared to 2.9 billion shares and ADV of 136 million shares in March 2018 and 2.4 billion shares and ADV of 127 million shares in April 2017. There were 21 trading days in both April 2018 and March 2018, and 19 trading days in April 2017.
/jlne.ws/2FTV2O9

****Finance Magnates – ITG Sees Slump in Month on Month Trading This April

Regions

Argentina seeks financing deal with IMF to address peso volatility
Jorge Otaola – Reuters
Argentina is seeking a financing deal with the International Monetary fund to address recent market volatility punctuated by the local peso plumbing new lows and the central bank jacking interest rates up to 40 percent, the president said on Tuesday.
/jlne.ws/2K7qfQF

Meteoric Singapore Stock Comes Crashing Back to Earth
Livia Yap – Bloomberg
Venture plunges over eight days after short report, earnings; That comes after tech darling more than tripled in two years
After a spectacular rise for two years, Singapore’s biggest technology company is suddenly returning to earth.
/jlne.ws/2K5ZcFa

Brexit

Theresa May forced to give MPs single market vote after shock defeat; More than 80 Labour peers defy whip on amendment calling for vote on EEA membership
Anne Perkins – The Guardian
MPs will have a vote on remaining in the European Economic Area – effectively a vote on the single market – after a shock defeat for the government in the Lords.
/goo.gl/Sa9F9y

Miscellaneous

Britain’s press singled out for further punishment; New legislation risks curtailing journalists’ ability to do their jobs
FT
Press regulation is an itch that some British politicians cannot stop scratching. Six years on from the end of the Leveson inquiry, which sought to restore trust in the newspaper industry following the phone hacking scandal, publications operate in a more constrained regulatory and economic environment. Yet some MPs and peers remain blissfully ignorant of this reality and continue to push for a more punishing regime.
/jlne.ws/2wtzjxc

The post Tech finally disrupting bond markets; Eurex tapped for Dutch IRS swaps clearing appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

CFTC Commissioner Brian Quintenz will give an introductory keynote Address at Consensus 2018 on May 14 in New York.~JJL

The uber efficient Jessica Darmoni interviewed Wedbush’s Bob Fitzsimmons for exactly three minutes for the Hehmeyer blog.~JJL

OCC offers the FidelityStudent Debt Contribution Program to their employees to aid in efforts to attract and retain the best talent.~JJL

CME Group had 3116 bitcoin futures contracts trade yesterday. Cboe saw bitcoin volume of 7,062 contracts yesterday.~JJL

The list of firms offering bitcoin trading on the Cboe includes Advantage Futures, ED&F Man Capital Markets, E*Trade, Interactive Brokers, INTL FC Stone, Phillip Capital, RJO, Straits Financial, TD Ameritrade, TradeStation and Wedbush Futures.~JJL

After the AOL IM disappeared, the JLN team moved to Slack. Look for us there.~JJL

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CME Adds to Interest Rate Arsenal with Eris Licensing Deal
Spencer Doar – JLN

The CME Group just moved even closer to its goal of becoming a one-stop shop for all things related to interest rates.

CME and Eris Exchange entered into an exclusive licensing agreement Thursday allowing CME to list Eris’s USD Interest Rate Swap Futures. Eris still retains the intellectual property underlying the contract.

“This news for us is a really big deal for the adoption of the Eris product globally,” said Eris Exchange CEO Neal Brady. “It just clears away a whole host of obstacles in people further adopting the product.”

But more than just removing obstacles for Eris, the move adds to CME’s ever growing clout in the rate space. CME made a splash in March when news broke it would acquire Michael Spencer’s NEX Group for $5.5 billion. That move brings together cash, OTC and futures trading under one roof. The Eris deal adds to CME’s dominant standing.

Read the rest here.

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FIA Comes to Chicago to Talk Retail Derivatives
John J. Lothian – JLN

The FIA is coming to Chicago for an event focused on the retail listed derivatives market. The event features a keynote address by CFTC Chief Market Intelligence Officer Andrew Busch and panels led by the Most Interesting Man in the World, CQG’s Pat Kenny and JLN’s Contributing Global Markets Editor Jim Kharouf

The event is on Monday, May 14 and free to FIA members. Non-members can attend the event at the Union League Club for $75.

FIA CEO and President Walt Lukken will open the event, which is scheduled to start at 1:00 p.m. and end at 5:30 p.m., with a networking reception beginning at 4:30 p.m.

Kenny’s panel will talk about education, technology and distribution. Panelists include Scott Bauer from Prosper Trading Academy, David Klotz from Phillip Capital, Colleen Lazar from CME Group and JB Mackenzie from TD Ameritrade.

Kharouf’s panel includes Nick LaMaina from TradeStation Securities, Mark Omens from CME Group, Daniel Ryba from E*Trade and John Tornatore from Cboe.

To find our more, click HERE

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CQG Creates a Chief of Staff Position; Names Alli Brennan to Role
John J. Lothian – JLN

CQG has created a new position to help execute their strategic business plan. The position is chief of staff, and for that position they selected Alli Brennan. She started in that role on May 1.

Brennan’s rise at CQG is a product of her strong leadership skills, industry understanding and a knack for integrating data into the decision making process. She is not a seat of the pants manager, but a data driven change agent who understands the markets and the industry.

“Alli will be responsible for the execution for our strategic business initiatives and to help align everyone around our Goals and Priorities as an organization,” CQG said in an internal memo obtained by JLN.

For the rest of the story, click HERE

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Wednesday’s Top Three
Our top story yesterday was the FT’s Bond trading: technology finally disrupts a $50tn market. Second was TechCrunch’s piece Gemini’s Tyler Winklevoss informs Bill Gates that actually he can short bitcoin. Third was Elizabeth Lan Davis and Brian Walsh’s piece CFTC Division of Enforcement Trends from JLN.

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MarketsWiki Stats
125,586,653 pages viewed; 23,102 pages; 213,003 edits
MarketsWiki Statistics

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Lead Stories

CME Says It’s About to Win 14-Year-Old Eurex Antitrust Lawsuit
Nick Baker and Margaret Cronin Fisk – Bloomberg
CME Group Inc. says it’s poised to win a 14-year-old court case that alleges its anti-competitive behavior blocked a huge German exchange from getting a foothold in the U.S.
/bloom.bg/2K91bbI

The SEC’s plan to protect retail investors is short on detail; ‘Regulation Best Interest’ fails to define crucial terms and standards
Barbara Roper – FT
The US Securities and Exchange Commission has seized a chance to protect small investors from unscrupulous brokers. But it is too soon to tell whether “Regulation Best Interest”, as the SEC is calling its proposed new rules, will live up to its sweeping promises.
/jlne.ws/2IuA65K

Five of the largest US FCMs lose customer business
Global Investor Group
Top broker Goldman Sachs grew its business by 10% between February and March
bit.ly/2rzsxQT

RBS in $4.9 Billion U.S. Settlement Over Mortgage-Backed Securities; U.K. lender is the second bank to settle historic mortgage backed issues under the Trump administration
Max Colchester – WSJ
Royal Bank of Scotland Group PLC has agreed to pay $4.9 billion to settle with the Justice Department over the sale of toxic mortgage-backed securities in the lead-up to the global financial crisis, clearing the path for the bank’s privatization.
/jlne.ws/2wtDvNt

Hedge fund Citadel emerges as player in US natural gas market; Breaking with other funds, the Ken Griffin-led fund buys and sells physical gas
Gregory Meyer in New York – FT
Citadel, a $28bn hedge fund titan, last year traded enough natural gas to meet more than a month of US residential demand, becoming an unusual force in a market dominated by merchants, energy producers and utilities.
/jlne.ws/2K8jcHd

Eric Schneiderman’s Legacy in Financial Cases May Survive His Downfall
Matthew Goldstein – NY Times
The job of New York attorney general over the past two decades has proved to be a launching pad for aspiring politicians who used their legal authority to go after Wall Street hucksters, corrupt politicians and real estate scofflaws.
/jlne.ws/2KaDC2w

Who do ‘rock-star’ central bankers answer to?; National banks have become bulwarks against crisis ó and in effect gained the power to pick winners and losers
Desmond King – FT
In Ashes and Diamonds, Andrzej Wajda’s film set in war-torn Poland on May 8 1945, the young assassin dispatched to eliminate the party secretary Comrade Szczuka muses to his superior that “everyone’s got to be responsible to somebody”.
/jlne.ws/2wtUYFE

What financiers’ jokes tell us about wealth, power and inequality; ‘The audience laughed when someone suggested private equity funds were like pirates’
Gillian Tett – FT
Earlier this month I participated in one of the big modern rituals of US finance – the annual Milken Institute Global Conference in Los Angeles, created two decades ago by Michael Milken, the former “junk bond king”.
/jlne.ws/2Iu0SLC

Bonds and swaps trading reveals Mifid’s erratic light; Europe’s flagship legislation is experiencing initial problems with transparency ambitions
Philip Stafford – FT
If Europe’s flagship markets legislation of Mifid II had one overriding ambition when it was introduced in January, it was transparency.
/jlne.ws/2K88Jf4

Goldman blames mom-and-pop investors for volatility in stocks; Retail volume ‘leapt to the highest levels in at least a decade’ in early 2018: Goldman
Ryan Vlastelica – Market Watch
The U.S. stock market has seen volatility rear up in 2018, with major indexes experiencing wild swings on a nearly daily basis. There have been a number of causes often cited for the recent bout of turbulence, including concerns over inflation, geopolitical uncertainty, and the first-quarter earnings season, but one of Wall Street’s most prominent investment banks fingers one key culprit: Main Street.
/jlne.ws/2wxSrdy

Exchanges, OTC and Clearing

CME Group Inc. Announces Preliminary Results from its 2018 Annual Meeting of Shareholders
CME Group
CME Group Inc. (NASDAQ: CME) today announced the preliminary shareholder voting results from its 2018 annual meeting.
/jlne.ws/2IAhOzY

Nasdaq Announces End-of-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date April 30, 2018
GlobeNewswire
At the end of the settlement date of April 30, 2018, short interest in 2,336 Nasdaq Global Market securities totaled 7,180,931,585 shares compared with 7,225,723,436 shares in 2,332 Global Market issues reported for the prior settlement date of April 13, 2018. The end-of-April short interest represents 4.56 days average daily Nasdaq Global Market share volume for the reporting period, compared with 3.68 days for the prior reporting period.
/jlne.ws/2KaJBEq

TMX Group Limited Increases Dividend to $0.58 per Common Share
TMX
The Board of Directors of TMX Group Limited today declared a dividend of $0.58 on each common share outstanding, an increase in $0.08 or 16%, from the previous $0.50 per common share. This dividend is payable on June 8, 2018 to shareholders of record at the close of business on May 25, 2018.
/jlne.ws/2wtKh5N

TMX Group Limited Reports Record Results for First Quarter Q1/18
TMX
TMX Group Limited [TSX:X] (“TMX Group”) today announced results for the first quarter ended March 31, 2018.
/jlne.ws/2wt1nRo

Fintech

VantagePoint Software Names Lane Mendelsohn as President
VantagePoint
VantagePoint Software, the global leader of artificial intelligence trading technologies, announced Lane Mendelsohn as President. Mendelsohn, a 23-year veteran of the company and son of founder Louis Mendelsohn, previously served as Vice President. The promotion was immediately effective after a formal announcement made at the company’s most recent quarterly meeting.
/jlne.ws/2KcC3kF

Itiviti Group AB: Jitneytrade Chooses ULLINK’s UL BRIDGE for Connectivity and Pre-trade Risk in the Canadian Equities Market
PRNewswire
ULLINK, the global provider of connectivity and electronic trading solutions, has announced that Jitneytrade Inc., a direct access broker specializing in active traders, is using UL BRIDGE as its connectivity and pre-trade risk gateway to the Canadian equities market.
/jlne.ws/2wDruFt

Metamako Enters Security Market, Launching Low-Latency Firewall Solution
MondoVisione
Metamako, the acknowledged leader in the low-latency, FPGA-enabled network solutions space, has now entered the security space with the announcement of its MetaProtectô Firewall solution.
/jlne.ws/2IqFeYL

Cryptocurrencies

Japan’s Bitcoin King Poaches Wall Street Talent for Crypto Empire
Yuji Nakamura, Hideki Sagiike and Takahiko Hyuga – Bloomberg
Yuzo Kano wants to make bitFlyer the biggest crypto exchange; He’s recruiting staff from Goldman, Barclays, Credit Suisse
Yuzo Kano is trying to build a global cryptocurrency powerhouse, one former financier at a time.
/bloom.bg/2K8ntum

Former Goldman Sachs president Gary Cohn predicts global cryptocurrency in the future, but not bitcoin
Torjus Roberg – City AM
Former Goldman Sachs president Gary Cohn predicts that in the future we will have a global cryptocurrency, but that it will not be bitcoin.
/jlne.ws/2Ka1yTL

Crypto Hedge Fund Pantera Says Returns Outpaced Bitcoin in April
Lily Katz – Bloomberg
Digital Asset Fund is still down 34 percent year-to-date; Winter slump was likely tied to tax-related selling, firm says
Bitcoin had a pretty good April. Pantera Capital had an even better one.
/jlne.ws/2IrWZqy

De Beers Tracks First Gems From Mine to Shop Using Blockchain
Thomas Biesheuvel – Bloomberg
Bitcoin technology helps guard against fakes, blood diamonds; Virtual ledger shows transactions while keeping them anonymous
The world’s biggest diamond producer says it’s tracked its first diamonds all the way from the mine to jewelry retailers using the technology behind bitcoin.
/jlne.ws/2Iu18Kr

Wall Street Journal Explores Criminal Side of Cryptocurrency
Bryan Chaffin – The Mac Observer
The Wall Street Journal has an excellent piece exploring the criminal side of cryptocurrency. Long-time readers know I’m a fan of cryptocurrency, but this piece offers excellent insight on the dark side of this technology. Here’s a snippet:
/jlne.ws/2wsDb1r

Putting Bitcoin in the Swaps Box; Also Bitcoin futures, BCFP vs. CFPB, adviser pay, Jay-Z and probably not insider trading.
Matt Levine – Bloomberg
If I sell you a Bitcoin, what have I sold you? Is it a currency? A commodity? A financial asset? A security, even? Something new and different? There are tedious debates. I suppose you might find them interesting if you’re a philosopher of money, or of Bitcoin. But you might find them importantóyet still tedious!óif you are a regulated financial institution thinking about trading Bitcoins. The regulations that apply to you contain lots of lists of things and what you can do to them, and you need to figure out where Bitcoin fits on those lists. You can do some things to securities, and other things to commodities, and still other things to currencies. What things can you do to Bitcoin?
/jlne.ws/2K9azfz

***** I described Bitcoin as a “swap” months ago.~JJL

Bitcoin’s Biggest Rival Faces Overhaul as Computing Power Rises
Olga Kharif – Bloomberg
Ethereum community could face consolidation by big miners; Bitmain to introduce faster ASIC gear in next several months
A fight is on for the soul of Ether. With a market capitalization of $73 billion, the biggest cryptocurrency after Bitcoin has been hailed as the future of digital finance because of its ability to layer software applications on top of transactions. But as Ether rises in price and importance, powerful players within the virtual currency world such as equipment maker Bitmain are angling for greater control and profit.
/jlne.ws/2wqCllG

Lack of Wall St back-office deters mainstream crypto investments
Lawrence Delevingne, Anna Irrera – Reuters
Mundane back-office concerns are giving pause to potential investors in digital currency hedge funds who have otherwise warmed up to the volatile asset class.
/jlne.ws/2K8RbPS

***** I know some guys trying to fix this, and they even live in my hometown.~JJL

Facebook shakes up management, launches blockchain division
David Ingram – Reuters
Facebook Inc Chief Executive Mark Zuckerberg on Tuesday ordered one of the biggest management shakeups in the history of the social network, giving more responsibility to his chief product officer and launching a blockchain division.
/jlne.ws/2wzV1Qm

Why Nasdaq’s CEO is bullish on cryptocurrencies
by Haley Draznin – CNN Money
At Nasdaq, the future will likely include cryptocurrencies.
/jlne.ws/2woVHHY

Crypto exchanges are stepping up their game to lure high-speed traders like Virtu and Citadel
Frank Chaparro – Business Insider
Crypto exchanges are trying to step up their game to lure the fastest traders on Wall Street. These exchanges, which helped shepherd the nascent market for digital currencies through 2017’s boom, have been adding customers and making money hand-over-fist. Bloomberg estimates crypto exchanges bring in $3 million a day in fees. Still, many have failed to attract large institutional investors to the platform, relying for now on small time traders for liquidity.
/jlne.ws/2wvw7B5

Politics

Europe, Again Humiliated by Trump, Struggles to Defend Its Interests
Steven Erlanger – NY Times
It is by now a familiar, humiliating pattern. European leaders cajole, argue and beg, trying to persuade President Trump to change his mind on a vital issue for the trans-Atlantic alliance. Mr. Trump appears to enjoy the show, dangling them, before ultimately choosing not to listen.
/jlne.ws/2wpIgYq

Italian bonds under further pressure on mounting political risk; Yield gap between nation’s 10-year sovereign bond and equivalent German debt up 5bp
Adam Samson – FT
The premium investors demand to hold Italian government bonds ratcheted higher on Thursday for the third day in a row, with investors fixated on negotiations aimed at forming a government.
/jlne.ws/2KatI0C

Bolton pushing to eliminate White House cyber job; The move could send the message ‘that the U.S. is taking the gas pedal off of cybersecurity,’ one former NSC official says.
Eric Geller – Politico
President Donald Trump’s national security team is weighing the elimination of the top White House cybersecurity job, multiple sources told POLITICO ó a move that would come as the nation faces growing digital threats from adversaries such as Russia and Iran.
/jlne.ws/2K99bJT

Donald Trump threatens to ‘take away media’s credentials’ over negative news stories about him
Tom Embury-Dennis – The Independent
Donald Trump has suggested he could “take away credentials” of media organisations over negative stories about him.
/jlne.ws/2wDrW6D

**** Free markets need free press, says John Lothian over and over again.~JJL

Regulation

Ex-Wall Street law clerk gets 37 months prison in insider case
Reuters
A former clerk at the Wall Street law firm Simpson Thacher & Bartlett was sentenced on Wednesday to 37 months in prison for his role in an insider trading ring that passed merger tips on napkins and Post-it notes in New York’s Grand Central Terminal.
/reut.rs/2KaetFd

SEC Charges Hedge Fund Adviser With Deceiving Investors by Inflating Fund Performance
SEC
The Securities and Exchange Commission today announced that it has charged New York-based investment adviser Premium Point Investments LP with inflating the value of private funds it advised by hundreds of millions of dollars. The SEC also charged Premium Point’s CEO and chief investment officer Anilesh Ahuja as well as Amin Majidi, a former partner and portfolio manager at the firm, and former trader Jeremy Shor.
/jlne.ws/2wu7ogA

RBS agrees to $4.9bn settlement with US; Deal with Department of Justice will open up path for UK to sell more shares in the bank
Martin Arnold in London – FT
The Royal Bank of Scotland has agreed to pay $4.9bn in a provisional settlement of a US Department of Justice investigation into US mortgage mis-selling that contributed to the financial crisis, clearing the way for the British government to sell more shares in the bank.
/jlne.ws/2IwoZJI

‘Humbling’ U.S. settlement clears crisis-era hangover for RBS
Emma Rumney, Lawrence White, Sinead Cruise – Reuters
Shares in Royal Bank of Scotland (RBS.L) rose as much as 6 percent on Thursday after it secured a far lower than expected settlement with U.S. authorities, paving the way for a long-awaited return of cash to British taxpayers who provided support during the financial crisis.
/jlne.ws/2wDpSLV

Visium Will Pay $10 Million Over Former Traders’ Misconduct
Matt Robinson – Bloomberg
Hedge fund profited from mismarking by ex-employees, SEC says; Agency also accuses ex-CFO Steven Ku of failing to supervise
Embattled hedge fund Visium Asset Management will pay more than $10 million to settle a U.S. regulator’s allegations that it illegally profited from former traders’ misconduct, likely closing a sweeping investigation that led to criminal charges against individuals and the collapse of the firm.
/jlne.ws/2KcBOWN

Investing and Trading

U.S. Pullout From Iran Nuclear Deal May Unsettle Oil Markets
Clifford Krauss – NY Times
President Trump’s decision to withdraw from the Iran nuclear deal has so far had no more than a muted effect on oil and gasoline prices. But that could easily change.
The full impact on global oil markets may not be seen for weeks or months. It will depend on how tightly the administration enforces new sanctions on Iran, and whether the entire deal collapses or can somehow be salvaged. That may well depend on the responses of a diverse cast of geopolitical actors from Moscow to Beijing to New Delhi since the United States imports no oil directly from Iran.
/nyti.ms/2G177RQ

Record Buybacks Help Steady Wobbly Market; S&P 500 firms are on pace to have returned almost $1 trillion to shareholders for the 12 months through March though dividends and buybacks
Ben Eisen and Akane Otani – WSJ
U.S. companies are buying back their shares at a record pace, providing fresh support during a rocky stretch for the stock market when many investors have rushed for the exits.
/jlne.ws/2K93zzj

Nvidia’s $18 Billion Rally Burns Bears Just in Time for Earnings
Jeran Wittenstein – Bloomberg
Data-center sales and gaming are key metrics to watch Thursday; Stakes are elevated for year’s best-performing chip stock
A record valuation and increasingly bullish predictions from Wall Street have made Nvidia Corp.’s earnings report on Thursday one of the most anticipated of the season.
/jlne.ws/2IqqHfF

Corporate America Is Staring Down a $4 Trillion Wall of Refinancing
Shelly Hagan – Bloomberg
That’s the amount of debt coming due in the next five years; Tax reform is the wild card; some companies may have more cash
Corporate America partied like never before on cheap money over the past decade, and now comes the hangover.
/jlne.ws/2IrUxjQ

Student debt just hit $1.5 trillion; It stood at about $600 billion 10 years ago
Jillian Berman – MarketWatch
America’s student loan problem just surpassed a depressing milestone. Outstanding student debt reached $1.521 trillion in the first quarter of 2018, according to the Federal Reserve, hitting $1.5 trillion for the first time.
/jlne.ws/2K6nRtl

Institutions

INTL FCStone Doubles Year on Year Revenue for Q1 of 2018
David Kimberley – Finance Magnates
INTL FCStone Inc, a firm that provides execution, risk management, advisory services, market intelligence and clearing services, announced its financial results this Tuesday for the second quarter of the 2018 fiscal year. The quarter, which ended on March 31st, saw the firm substantially increasing its year on year revenues.
bit.ly/2K9GEnz

Societe Generale appoints Fleury as head of equities; Former BAML global head of equities structured products to join Societe Generale in June.
John Brazier – The Trade
Societe Generale has appointed Alexandre Fleury as its new head of equities and equity derivatives.
/jlne.ws/2K9jltX

Deutsche Bank Point Man for Hedge Funds, Barry Bausano, to Leave
Sonali Basak – Bloomberg
He’s also stepping down as CEO of Deutsche Bank Securities; Bank credits him for forging relationship with fund leaders
Deutsche Bank AG’s Barry Bausano, a longtime senior executive overseeing its relations with hedge fund clients, is leaving as the firm shakes up its U.S. operations.
/jlne.ws/2KbbUTf

China receives JPMorgan application to set up JV brokerage
Reuters Staff
China’s securities regulator has received an application from JPMorgan Broking (Hong Kong) Ltd, a unit of JPMorgan Chase & Co. (JPM.N), to set up a joint-venture brokerage, it said on Thursday.
/jlne.ws/2Isd2EF

Regions

Venezuela’s PDVSA sued for $25 million in U.S. over non-payment: complaint
Reuters
Venezuela’s state-run oil firm PDVSA [PDVSA.UL] is being sued for more than $25 million in the U.S. over non-payment of notes issued for work performed by Canadian energy contractor SNC-Lavalin, according a court filing.
/reut.rs/2FYzD6E

China’s ZTE halts operations as US ban bites; Telecoms group hopes for political solution to crippling sanctions barring US suppliers
Yuan Yang and Xinning Liu in Beijing – FT
China telecoms company ZTE has “ceased operations” after being banned for seven years from doing business with US companies, making it the biggest casualty so far of deteriorating trade relations between Beijing and Washington.
/jlne.ws/2IsIjaJ

Venezuela’s Brewing Oil Shock May Be Bigger Than Iran’s; Two threats could further disrupt Venezuelan exports, possibly taking as much crude off the market as the renewal of Iran sanctions
Spencer Jakab – WSJ
The oil headlines this week have all been about Iran, but the slowly unfolding disaster in Venezuela may be even more significant.
/jlne.ws/2wu8t88

Trump’s Iran Move May Kick Worst U.S. Gas Market While It’s Down
Ryan Collins and Naureen S Malik – Bloomberg
Oil rally set to boost natural gas production from Permian; West Texas gas price seen dropping to zero some days
President Donald Trump’s decision to scrap the Iran nuclear deal and restore sanctions was great for oil bulls. But for natural gas drillers in America’s hottest shale play, it could be a disaster in the making.
/jlne.ws/2wtPvhV

Place your bets on Japan’s great casino investment narrative; Tokyo-listed Tanseisha boosted by expectations that gaming bill will pass
Leo Lewis – FT
For nearly two decades from the mid-1990s, Tokyo-listed Tanseisha was more or less dead to investors.
/jlne.ws/2wvsdbp

Brexit

$14 Billion Says Brexit Threat Is Real; Threadneedle’s move isn’t simply technical. It’s about Brexit.
Mark Gilbert – Bloomberg
On the face of it, Columbia Threadneedle’s decision to transfer 10 billion pounds ($14 billion) of assets from its U.K. fund range to equivalents in Luxembourg looks nothing more than a technical reshuffling. Viewed through the lens of Brexit, though, it highlights that ó in the worst-case scenario ó a chunk of the British asset management industry could melt away almost overnight.
/jlne.ws/2wA3VwS

Miscellaneous

Mormon Church Ends Century-Old Partnership With Boy Scouts of America
Laurie Goodstein and Christine Hauser – NY Times
The Mormon Church and the Boy Scouts of America formed a partnership 105 years ago based on shared beliefs in God, country and the necessity of teaching morals and responsibility to boys. The groups became so intertwined that one of every five Boy Scouts in the United States is Mormon, and all Mormon boys were expected to participate in scouting.
/jlne.ws/2K9mppX

The post CME About to Win 14 year old Eurex Suit; SEC’s Retail Protection Plan Short on Details appeared first on John Lothian News (JLN).

First Read

Chicago Venture Capital Firms Are Funding Fintech
Sarah Rudolph, JLN

Chicago may not be doing as well as some other cities in certain areas, but it is leading the charge in technological innovation in the financial world and in the crypto world. Several Chicago-based venture capital companies took part in a panel on financial innovation moderated by Chuck Mackie, consultant at Maven Wave Partners and contributing editor to John Lothian News, at The Trading Show Chicago on Thursday.

DRW works with companies on development in the later stages. Its Digital Asset Holdings venture, headed by Blythe Masters, is building a database to speed up trading, clearing and settlement using blockchain technology. But the company’s projects are diverse, including work on digitizing legacy portfolios and streamlining swaps dealing with Asian counterparties, said DRW Venture Capital director Kimberly Trautmann.

To read the rest of this commentary, go here.

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Hits & Takes
JLN Staff

I have decided to attend the national meeting of the Boy Scouts of America in a couple of weeks in Dallas, TX to advocate for an early adopter program for bringing girls into Scouts. My Exploring Club members, all girls, want to be able to join what is now called Boy Scouts and what will be Scouts BSA in January of 2019 right now and start earning rank requirements over the summer. More on this in the future.~JJL

More VIX talk. A well written-piece from Tom Lee, managing director, investment strategy and research at Parametric, a $200 Billion asset manager based in Seattle, asks, “Is The VIX Rigged?” He concludes that it isn’t but that “a large option trade submitted in the final minutes of the opening auction on the day of VIX futures and option expiration doesn’t feel right.”

IDX 2018 is coming up in London. On Tuesday, 5 June, the conference will highlight fintech startups with a special exhibition and a session dedicated to up-and-coming firms at the “Innovators Vault, sponsored by Citigroup Global Markets Limited, on the lower level of The Brewery. There is also a “Meet the Innovators panel” at 2:00 p.m. that day. ~SR

There is only one week left to register and save for IDX 2018 registration.~JJL

B3, (formerly BM&F Bovespa), posted record equity and derivatives in Q1. Derivatives volumes were up 37.6 percent and equities increase 40.6 percent.~JK

HKEX’s three most actively traded equity index options will be available for trading in the derivatives market after-hours trading session starting Monday. They are also rolling out a new Trading Halt Mechanism for equity index options to protect the market.~JJL

FOW is holding an event in Stockholm next week on May 15 called “Trading Scandinavia Asset Management Forum.”~JJL

Meet the only female broker on New York’s stock exchange, via BBC.~JJL

Next week is LME ASIA WEEK.~JJL

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Alexa and Siri Can Hear This Hidden Command. You Can’t; Researchers can now send secret audio instructions undetectable to the human ear to Apple’s Siri, Amazon’s Alexa and Google’s Assistant.
Craig S. Smith – The New York Times
Many people have grown accustomed to talking to their smart devices, asking them to read a text, play a song or set an alarm. But someone else might be secretly talking to them, too.
Over the last two years, researchers in China and the United States have begun demonstrating that they can send hidden commands that are undetectable to the human ear to Apple’s Siri, Amazon’s Alexa and Google’s Assistant.
/goo.gl/X2tqzv

**Subliminal messaging for Alexa is (buy Amazon) very, very (sell Apple) weird.~JK

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Thursday’s Top Three
Thursday’s top three stories were led by Bloomberg’s CME Says It’s About to Win 14-Year-Old Eurex Antitrust Lawsuit. Second was the paywalled but attractive piece from Global Investor Group Five of the largest US FCMs lose customer business. Third was the Hehmeyer Blog Post Three Minutes With Wedbush’s Bob Fitzsimmons, who talks about the demand for bitcoin futures.

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MarketsWiki Stats
125,667,688 pages viewed; 23,102 pages; 213,004 edits
MarketsWiki Statistics

Lead Stories

Barclays CEO Jes Staley Is Hit With U.K. Fine of About $850,000; Probe finds that Barclays chief ‘made serious errors of judgment’ by attempting to identify whistleblower
Max Colchester – WSJ
Barclays PLC Chief Executive Jes Staley has been fined £642,430 ($868,501) by U.K. regulators over his efforts to unmask a whistleblower.
/jlne.ws/2wzvCGc

Former JPMorgan trader charged with conspiring to fix currency prices
Kadhim Shubber – FT
The Department of Justice charged a former trader at JPMorgan Chase with conspiracy to fix currency prices on Thursday in the latest case relating to its investigation into FX market fraud.
/jlne.ws/2wDp5Ky

Robinhood Gets Valuation Jump and New Backers in Latest Round
Julie Verhage – Bloomberg
Robinhood Markets Inc. has raised a new funding round that saw its valuation soar nearly fourfold, and brought in several new investors to the company. The online stock brokerage startup also reported big user growth, reaching more than 4 million accountsósurpassing E*Trade Financial Corp.’s 3.7 million brokerage accounts.
/goo.gl/kaT6DD

****Finance Magnates on the funding round here.

Cryptocurrency Exchange Upbit Raided by Korean Authorities
Shinhye Kang and Heejin Kim – Bloomberg
South Korean prosecutors raided the offices of Upbit, one of the world’s largest cryptocurrency exchanges. Authorities searched the exchange’s offices on Thursday and Friday, according to an official from the Seoul Southern District Prosecutors’ Office, who asked not to be identified citing office policy. She declined to provide further details of the raid, which was first reported by the Korea Economic Daily.
/jlne.ws/2wxuItJ

TP Icap Merger Unearths Treasure Map of Regional Data Packages; Release of Scandinavian and Pacific data packages represents a new approach for TP Icap, moving from asset class-specific data packages to regional products.
Jamie Hyman – Waters Technology
They went on a data treasure hunt, and they dug up gold. Chris Dearie, COO of data and analytics at TP Icap, says a thorough inventory check of Icap’s broking data “unearthed a large swathe of data that we know has not yet been made commercially available,” and which until now had only been released in “very limited instances” via “highly restricted” view-only mechanisms.
/jlne.ws/2IwmQO5

U.S. Raises Pressure on Iran With Sanctions on Currency Exchange; In first action since pulling out of nuclear deal, Treasury accuses Iran’s central bank of being complicit in funneling dollars to elite military unit
Ian Talley – WSJ
The U.S. took a step toward cutting Iran off from the global economy on Thursday, levying sanctions on a financing network and accusing the country’s central bank of helping funnel U.S. dollars to the blacklisted elite military unit known as the Quds Force.
/jlne.ws/2wvkKcD

Managed futures are worst performing strategy in 2018
Louisa Chender – Global Investor Group
Managed futures have been the worst performing major strategy for hedge funds so far this year, according to a report. Returns on managed futures are down 2.32% year-to-date according to the hedge fund industry performance report by Nasdaq-owned analytics firm eVestment, which said it is the “worst performing major strategy”.
/goo.gl/dz45qo

Bonuses are about to soar across Wall Street ó and a group left for dead might wind up the biggest winner
Alex Morrell – Business Insider
Bonuses are expected to soar across Wall Street, and stock traders, after several rough years, are on track to see the biggest gains, as the return of market volatility has helped revive their prospects.
/jlne.ws/2IykqhT

BlackRock Backs a Startup to Find Out What Young Investors Want; Acorns Grow works by rounding up the amount of a user’s credit-card purchase and investing the change
Peter Rudegeair and Sarah Krouse – WSJ
The world’s biggest money manager is buying a stake in a startup that invests its users’ pocket change, reinforcing a broader push by BlackRock Inc. BLK 0.92% to serve individual investors.
/jlne.ws/2wzM6yc

Different Rules for Different Brokers; Also gun activism, access and crypto fungibility.
Matt Levine – Bloomberg
Last week, when former bond trader Jesse Litvak had his fraud conviction overturned again, I quoted extensively from the U.S. Court of Appeals for the Second Circuit’s description of how the bond market operates.
/jlne.ws/2KbejgQ

Exchanges, OTC and Clearing

B3 Announces Results For The First Quarter Of 2018
Press Release
Double-digit revenue growth for BM&F (+23.4%), Bovespa (+30.1%) and Cetip Liens and Loans (+16.1%) segments. New business model adopted for the vehicle loans Contracts System service (Cetip liens and loans segment) impacted revenues, expenses and net income, and led to the release of a new guidance. 1Q18 recurring net income1 reached R$448.2 million, while adjusted EBITDA2 was R$760.2 million.
bit.ly/2rBgWk5

TMX says no change in market share after exchange outage
Reuters
Toronto Stock Exchange operator TMX Group Ltd said on Thursday it had not seen any change in market share after a major outage shut down its exchanges for more than two hours last month.
/goo.gl/oMAhvd

NZX CEO Remuneration Disclosure
MondoVisione
The NZX Board confirms CEO Mark Peterson’s remuneration disclosure for 2018. As outlined in the NZX 2017 Annual Report, Mark’s remuneration is a mix of base salary, and short and long-term incentive plan components. Mark’s base salary for 2018 is $500,000. His potential short term incentive (STI) plan payment for 2018 is $500,000 ($250,000 for on-target performance).
/jlne.ws/2Iw6Ifz

CME Group to List USD Eris Interest Rate Swap Futures
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, and Eris Exchange, a U.S.-based futures exchange group that offers swap futures as the leading alternative to traditional over-the-counter (OTC) swaps, today announced they have entered into an exclusive licensing agreement to list USD Eris Interest Rate Swap futures, which already clear at CME Clearing.
/jlne.ws/2wzA3kk

CME looks to bolster presence in US rates market with Eris deal
Joe Rennison – FT
CME Group is taking another step to claim market share in the US rates market, entering an exclusive licencing agreement to list Eris Exchange’s swap futures, a derivatives product that replicates an interest rate swap as a futures contract.
/jlne.ws/2wxmZfz

****The Trade here.

Launch Date of Flexible Options (June 25, 2018)
JPX
Osaka Exchange, Inc. (OSE) has decided the launch date of Flexible Contract Months as June 25, 2018. As announced earlier, Flexible Contract Months is a new listed options trading method for securities options trading and index options trading.
/jlne.ws/2wucEB2

IPO on the Frankfurt Stock Exchange: NFON listed in Prime Standard since today
Deutsche Boerse Group
The current number of IPOs in Frankfurt since the beginning of the year thus amounts to nine.
/jlne.ws/2wD55bk

TMX says no change in market share after exchange outage
Reuters Staff
Toronto Stock Exchange operator TMX Group Ltd said on Thursday it had not seen any change in market share after a major outage shut down its exchanges for more than two hours last month.
/jlne.ws/2wxpxtV

Fintech

Dubai Gold & Commodities Exchange set for further growth with new technology from Cinnober; Speeds up business development and improves client accessibility
Cinnober
The Dubai Gold & Commodities Exchange (DGCX), and its 100% fully owned subsidiary the Dubai Commodities Clearing Corporation (DCCC), the leading derivatives exchange and clearing house in the Middle East, has upgraded its integrated trading and clearing solution from Cinnober to the latest version of the TRADExpress platform. The purpose was to enhance and speed up business development capabilities even further, and to benefit from a more refined trade and market data protocol, leading to improved bandwidth usage. As the new version went live, DGCX launched the region’s first, and world’s only exchange-traded Shari’ah Compliant Spot Gold contract (DGSG).
/jlne.ws/2KbWUEG

Goldman Sachs and Apple Plan to Offer a New Credit Card
Emily Flitter and Jack Nicas – NY Times
One company has a devoted customer base teeming with wealthy, well-traveled young adults. The other is a financial powerhouse with few offerings for everyday consumers.
/jlne.ws/2KenEEm

Enso founders exit Nex
Andrew Neil – Global Investor Group
The founders of a hedge fund data firm now owned by Nex Group have left the business, seven years after setting up the company. Matt Bernard and Michael Gentile co-founded Enso Financial Analytics in 2011, along with former UBS banker Dwaine Alleyne.
/goo.gl/QAtfYy

Cryptocurrencies

Cryptocurrency Trading Platform Launches First Regulated Ethereum Futures
Michael del Castillo – Forbes
So, you think Ethereum is a crock? Later today you’ll be able to express that belief with a regulated futures product. Following in the path of bitcoin futures launched by UK-based CryptoFacilities in 2015, and XRP futures launched in 2016, the company regulated by the Financial Conduct Authority (FCA) in the UK will start trading Ethereum futures at 4pm UK time today.
/jlne.ws/2IwmXJv

Kodak reveals new image copyright system using own blockchain cryptocurrency
Torjus Roberg – City AM
Photo pioneer Kodak has developed its own cryptocurrency (Source: Getty)
Wenn Digital, who has developed a blockchain image copyright system, is trying to raise $50m (£37m) in cooperation with Eastman Kodak Co in a token offering.
/jlne.ws/2KgOXxN

Crypto “hedge fund” update
Dan McCrum – FT
Numbers this week from Eurekahedge, a data provider, caught our eye for the sheer bonkersness of attempts to invest in the funny-money world. Rollercoaster fails to do justice to the ride:
/jlne.ws/2KadSmP

Nvidia Reveals Crypto Sales for First Time and Predicts Big Drop
Jeran Wittenstein – Bloomberg
Nvidia Corp. revealed for the first time how much revenue it generated from chip sales to the cryptocurrency market — and said that figure will be much smaller in the second quarter.
/jlne.ws/2Ka3TxG

Morgan Stanley: Here’s how the rise of cryptocurrencies could change the way central banks deal with future financial crises
Will Martin – CNBC
Central banks could use cryptocurrencies to allow them to aggressively cut interest rates in the future, mitigating the impacts of any future financial crisis.
/jlne.ws/2IwsXC1

Wall Street is moving into the bitcoin market. So why aren’t prices rising?
John Detrixhe – Quartz
Wall Street is working its way into the world of bitcoin, with several notable firms announcing this month that they are getting ready to participate in the market. You might think mainstream support for the highly speculative digital asset would give bitcoin and its crypto cousins a boost, as it helps unlock demand from much bigger investors.
/jlne.ws/2Iykcax

Cryptocurrencies create ‘chaos’ for payments, says economist who predicted the financial crisis
Kate Rooney – CNBC
Economist Nouriel Roubini, best known for predicting the financial crisis, piled on his recent criticism of cryptocurrencies Thursday, saying they create “chaos” and confusion in the payments world.
/jlne.ws/2IzYmmY

Robinhood Aims to Rival Coinbase in Crypto With $363 Million Funding Round
Fortune
Robinhood, the free stock trading app, has raised $363 million in a new investment round valuing the company at $5.6 billion.
/jlne.ws/2wxoE4K

Politics

White House withdraws nominee for Treasury post; Adam Lerrick criticised international financial institutions he was tapped to oversee
Shawn Donnan in Washington – FT
The Trump administration withdrew its nominee to oversee US relations with international financial institutions after his candidacy bogged down in Congress amid questions about his role as an advocate for bondholders in a fight with Argentina.
/jlne.ws/2wzvJ4I

Putin Wants to `Break’ With the Dollar But Dumps Euros Instead
Anna Andrianova – Bloomberg
Squeezed by ever-expanding U.S. sanctions, Vladimir Putin says he wants to dump the dollar. His central bank has been doing just the opposite.
/jlne.ws/2wx3un3

Regulation

Barclays CEO Fined About $870,000 on Whistle-Blower Incident
Stephen Morris and John Glover – Bloomberg
Last month, FCA and PRA decided not to remove him from post; Staley ‘breached standard of care,’ FCA’s Steward says
Barclays Plc Chief Executive Officer Jes Staley was fined 642,430 pounds ($870,557) by British regulators for his attempts to uncover a whistle-blower.
/jlne.ws/2wx5X0T

Hong Kong’s Securities And Futures Commission CEO Reappointed Chair Of IOSCO Board
MondoVisione
The Securities and Futures Commission (SFC) is pleased to announce that its Chief Executive Officer, Mr Ashley Alder, has been reappointed as Chair of the new Board of the International Organization of Securities Commissions (IOSCO) at IOSCO’s annual conference in Budapest.
/jlne.ws/2IB214g

FCA and PRA jointly fine Mr James Staley £642,430 and announce special requirements regarding whistleblowing systems and controls at Barclays
UK FCA
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have together fined Mr James Staley, Chief Executive of Barclays Group (Barclays), a total of £642,430. Mr Staley failed to act with due skill, care and diligence in the way he acted in response to an anonymous letter received by Barclays in June 2016.
/jlne.ws/2Kd3rPj

Podcast: CFTC Talks EP042: Mike Englund, Action Economics
CFTC
This week on CFTC Talks, we bring on Mike Englund, Chief Economist at Action Economics. We discuss his outlook for GDP (+3.4% for next 2 quarters), capex, and when he thinks the next recession will begin. Also, we dissect how corporate debt is going to be impacted by the higher US interest rates and the large amount of new US Treasury securities.
/jlne.ws/2KgJI1n

Outsourcer Interserve’s shares plummet on news it’s being investigated by the FCA over its handling of inside information
Lucy White – City AM
Construction outsourcer Interserve, which suffered a torrid 2017 after issuing a string of profit warnings, today revealed its darkest days may not yet be behind it.
/jlne.ws/2wyRsJV

MiFID II caps bite as dark MTF trading volumes fall; Research from ITG shows equity trading volumes falling for dark MTFs as volume caps take hold.
John Brazier – The Trade
MiFID II’s double volume caps (DVC) on dark pool trading are already resulting in decreasing dark multilateral trading facility (MTF) volumes, according to data from ITG.
/jlne.ws/2wyQ223

Investing and Trading

Thomson Reuters beats estimates, sees higher 2018 revenue
Jessica Toonkel
Thomson Reuters Corp on Friday reported slightly higher-than-expected first-quarter sales and earnings, and forecast low single-digit growth in 2018 revenue in its remaining business.
/jlne.ws/2wxd5uf

Possibility of El NiÒo by winter ‘nearing 50 per cent’
Emiko Terazono – FT
The possibility of an El NiÒo weather pattern emerging in the winter of 2018-19 has increased, according to official forecasts from US meteorologists.
/jlne.ws/2wzwvPa

In the Long Run, Fear of Short-Termism Is Mostly Bunk; Is the economy suffering from CEOs pushed by investors to focus only on the next quarter? The evidence shows it isn’t
James Mackintosh – WSJ
The critics of short-termism have it wrong. The evidence doesn’t support the idea that the economy is suffering because shareholders focused on quarterly reports leads to myopic management.
/jlne.ws/2wz55ZP

Oil bull Pierre Andurand bounces back with big April gains
Fareed Sahloul – Financial News
Renowned energy investor recently predicted that a supply squeeze could drive oil past $300 a barrel
/goo.gl/Ycnhw9

AXA Equitable Flops in Largest IPO of the Year; Shares started trading far below earlier expectations
Maureen Farrell – WSJ
The largest initial public offering of the year received a weak reception from investors as shares of insurer AXA Equitable Holdings Inc. EQH 1.70% made their debut Thursday at a price well below earlier expectations, showing that recent strength in the new-issue market is largely confined to the technology sector.
/jlne.ws/2wwJjWy

Institutions

Blackstone Promotes New Energy Fund as Oil Prices Rise; Private-equity firm sees investment opportunities as producers tighten their belts
Luis Garcia and Dawn Lim – WSJ
The world’s biggest listed private-equity firm is marketing its latest energy fund to capitalize on rebounding oil prices and tighter financial discipline among public oil producers.
/jlne.ws/2KgocKf

More Deutsche Bank offices under threat in cost-cutting drive
Tim Burke – Financial News
New London and New York offices are the most high-profile steps taken so far to rationalise property portfolio
/goo.gl/3vw2UG

JPMorgan applies to re-enter China securities market; US bank looks for controlling stake in JV after exiting market in 2016
Don Weinland – FT
JPMorgan Chase has applied to re-enter China’s securities market with a controlling stake in a joint venture after exiting two years ago.
/jlne.ws/2wwrbMu

Banks wake up to benefits of hiring autistic people; Goldman, Deutsche and JPMorgan are actively seeking to recruit people with autism amid the struggle to lure tech workers
Becky Pritchard – Financial News
Since Jonathan Andrews was diagnosed with autism at age nine, he says he has faced many negative stereotypes and people with “outdated or inaccurate views” of his condition. Despite that, last year, Andrews landed a training contract at City law firm Reed Smith.
/goo.gl/xaZcDM

JP Morgan revamps its stock trading business in a sign of the changes sweeping through Wall Street
Hugh Son – CNBC
J.P. Morgan Chase, the world’s biggest investment bank by revenue, has created a new management team to help it better serve Wall Street clients who increasingly want to trade with algorithms through electronic platforms.
/jlne.ws/2IxA64T

Michael Platt tops Sunday Times hedge fund manager rich
Hedgeweek
Michael Platt is the richest hedge fund manager in the City, according to the new edition of The Sunday Times Rich List, to be published this Sunday 13 May.
/goo.gl/iH6Fxr

Regions

Fed Study Shows U.S. Hikes Hit High-CPI Emerging Markets Hardest
Chris Anstey – Bloomberg
Trade ties the key factor for advanced countries: Fed study; Financial vulnerability most important for developing nations
Emerging markets with the weakest financial metrics, especially those with high inflation, tend to be the worst affected by U.S. interest-rate shocks, according to a study by Federal Reserve Board economists.
/goo.gl/3hHoQ2

China’s multi-story hog hotels elevate industrial farms to new levels
Dominique Patton – Reuters
On Yaji Mountain in southern China, they are checking in the sows a thousand head per floor in high-rise “hog hotels”.
/jlne.ws/2IAZYgA

Bond Investors Face Shrinking Rewards From Emerging Market Currencies
Saumya Vaishampayan – WSJ
The dollar’s revival is curbing the appeal of a popular investment in emerging markets. The excess yield investors can earn by holding local currency emerging-market bondsócompared with such bonds denominated in dollarsóhas shriveled to zero in recent weeks. Emerging-market investors earned higher returns in local-currency bonds than U.S. dollar bonds last year, in part because they benefited from higher yields.
/goo.gl/UjYQvD

US acts against currency network it says has Iran links; Treasury aims to disrupt operation it accuses of transferring millions to military unit
Sam Fleming – FT
The US Treasury took action against a network it said was channelling dollars to a top Iranian military unit as it moved against the country days after Donald Trump’s decision to abandon the 2015 nuclear deal.
/jlne.ws/2KgbsmP

Brexit

Banks to seek special exemptions for foreign staff post Brexit: sources
Andrew MacAskill, Huw Jones – Reuters
Global banks in Britain are calling for a special work visa waiver after Brexit to preserve the City of London’s standing as a top global financial center, two industry sources said, a move that would be more generous than the current arrangements.
/jlne.ws/2wAbx2C

The post Barclays CEO Hit With $850k Fine; Former JPMorgan trader charged FX fixing appeared first on John Lothian News (JLN).

First Read

Ibbo’s Kilt Challenge
By Mark Ibbotson

I am wearing a kilt to the IDX 2018 Gala for Futures for Kids because I believe in this charity’s mission!

Each year, FIA hosts the IDX Gala in aid of Futures for Kids, an organization that raises funds on behalf of the futures and options industry for charities that strive to provide better lives and futures for children internationally. Over the last nine years, the IDX Gala has raised more than £1.4 million for Futures for Kids, including through the Kilt Challenge.

Since 2010, various giants from the futures industry (to wit – John Lothian and Bill Herder) have accepted the sporran and the challenge to beat the previous year’s Kilt Challenge fundraising record. In 2017, the CME Group’s Kim Taylor beat the records set by the seven men that had taken on the Kilt Challenge – raising more than £13,500. After dropping a special note and a lipstick in the sporran, Kim challenged me, GH Financials’ Mark Ibbotson, to don the kilt and beat her fundraising record!

I am a long-time supporter of Futures for Kids and am proudly taking on this fashion challenge and curious tradition for the kiddos – and I am looking for your support. Donate now and help me raise £14,000 for Futures for Kids.

To donate, click HERE

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The Options Industry Leader Series 2018 – Nasdaq’s Kevin Kennedy

Brought to you by the OCC

In this video from the 36th annual Options Industry Conference in Amelia Island, Fla., Kevin Kennedy, Nasdaq senior vice president and head of U.S. options, talks about how the industry weathered low volatility, Nasdaq’s proprietary product suite and capital requirement issues.

Watch the video here »

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Hits & Takes
JLN Staff

JLN Contributing Editor Chuck Mackie is in New York this week for Consensus, which has reached the 8,000 attendee mark.~JJL

JLN will be in London for IDX with our video team. We will be conducting interviews for exchange and industry leaders again. Contact me if you have news at IDX to report.~JJL

According to the FIA, worldwide exchange traded derivatives volume in April was down 9.9 percent month over month to 2.307 billion contracts.~SD

The consortium of firms that includes TMX Group working on digital ledger technology developed a proof of concept that “shows that it is possible to deliver payments in a way that has never been done before.”~JK

Only 8.5% of bitcoin and cryptocurrency traders are female. Women’s intuition?~JB

On Thursday 17 May 2018, the second annual cricket competition for the David Setters Trophy will be taking place in the City. The day will be host to a cricket tournament where six organisations will compete to see who will be taking home the coveted trophy.~JJL

This month, NFA hosted a CPR/AED training for staff. SOS Technologies Chicago was onsite to teach participants how to properly handle an emergency situation by using CPR and AED’s located throughout the office. Via LinkedIn.~JJL

Timothy James Lothian did graduate from the University of Missouri at Columbia on Saturday. It is official. I heard his name called and saw him walk across the stage.~JJL

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The stock market is in good hands
Mike Ferguson and Mike Williams, Equity Markets Association via Business Insider
American investors today benefit from an efficient, well-regulated, and easily accessible financial system that is both trusted and respected globally.
/jlne.ws/2wKzOmu

*****State Farm is buying what?~JJL

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Stop getting The Flintstones wrong
Bryce Elder
There’s a lot of sense in Nouriel Roubini’s column for Project Syndicate on ICO flimflam and it’s all undone by one big mistake…The Flintstones has a currency. Clams.
/jlne.ws/2wCHsQ7

***** Nouriel Roubini clearly did not spend enough time watching cartoons.~JJL

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Whistleblowing; Piling On; Mismarks; Insider Trading; Let’s Talk About ICOs
Gary DeWaal – Bridging the Week
The chief executive officer of a major worldwide banking group agreed to pay the equivalent of US $870,000 as fines to two United Kingdom regulators, and had the equivalent of US $677,000 of prior pay clawed back by his employer because he tried to uncover the identity of a possible whistleblower. Separately, The Department of Justice announced a new policy aimed at minimizing “piling on” of penalties on corporations for wrongdoing where multiple sections of the DOJ are involved, as well as multiple domestic and foreign law enforcement agencies. However, there is a precondition – cooperation!
bit.ly/2jTr5W1

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Friday’s Top Three
Our top read story of the day on Friday was the JLN piece by Sarah Rudolph, Chicago Venture Capital Firms Are Funding Fintech. Second was the New York Times’ article Alexa and Siri Can Hear This Hidden Command. You Can’t. Third went to the FT story Former JPMorgan trader charged with conspiring to fix currency prices

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The Spread – Week of 5/7 to 5/11

JohnLothianNews.com

This week’s episode of The Spread touches on all the important things in options news last week… like pets dressed in varying historical garments. (But it all makes sense because it has to do with the Consolidated Audit Trail, otherwise known as the CAT.)

Watch the video here »

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MarketsWiki Stats
125,893,736 pages viewed; 23,103 pages; 213,005 edits
MarketsWiki Statistics

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Lead Stories

Michael Bloomberg Slams ‘Epidemic’ Of Political Lies As Danger To Democracy; “How did we go from a president who could not tell a lie to politicians who cannot tell the truth?”
Mary Papenfuss – Huffington Post
Billionaire and former New York City mayor Michael Bloomberg lashed out Saturday at the “epidemic of dishonesty” in politics that he said poses “one of the most serious dangers” to American democracy.
/jlne.ws/2wEHMgX

CME Group and Crypto Facilities Launch Ether Reference Rate and Ether Real Time Index
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, and Crypto Facilities Ltd, a world-leading cryptocurrency trading platform, today launched the CME CF Ether-Dollar Reference Rate (Ether Reference Rate), which will provide a daily benchmark price in U.S. dollars at 4 pm London time, and CME CF Ether-Dollar Real Time Index (Ether Real Time Index), which will allow users access to a real-time Ether price in U.S. dollars.
/jlne.ws/2wEApWR

Payments Canada, the Bank of Canada, TMX Group, Accenture and R3 Demonstrate Feasibility of Instantaneous Equity Settlement through Distributed Ledger Technology
TMX
Payments Canada, the Bank of Canada, TMX Group and Accenture have demonstrated that the instantaneous clearing and settlement of securities on-ledger is feasible, showing for the first time that both central bank cash and assets can be tokenized to complete an instant, end-to-end equity settlement on distributed ledger technology (DLT).
/jlne.ws/2wEHzdO

Singapore Exchange (SGX) and Tel-Aviv Stock Exchange (TASE) Establish Partnership to Grow Cross-Border Capital Raising Opportunities for Technology Companies
SGX
Singapore Exchange (SGX) and The Tel-Aviv Stock Exchange (TASE) today announced that they have established a partnership focused on growing capital raising opportunities for companies, particularly in the technology sector.
/jlne.ws/2KkrTON

The 130-Year-Old Bankruptcy That Created a $5 Billion Oil Giant
Kevin Crowley – Bloomberg
Texas Pacific Land Trust has surged almost 2,200% since 2010; Mineral rights offer revenues linked to Permian oil production
The hottest oil stock from the U.S. shale boom has never pumped a single barrel of crude. Texas Pacific Land Trust, a listed land bank created out of a railroad bankruptcy more than a century ago, has climbed more than 2,200 percent since 2010, outperforming the stocks of shale oil producers, service companies and prospectors alike. It’s now worth more than $5 billion.
/jlne.ws/2KhAiCw

Futures Algos: A Class of Their Own
Larry Tabb – TABB Forum
The agency futures business typically has been supported by the more profitable equities and fixed income businesses, often forced to fight for tech resources and to creatively adopt solutions that didn’t exactly fit. This was especially true for trading algorithms, developed predominantly for equity trading but re-patterned for the global futures markets. This, however, is changing. Independent third-party technology firms are developing specialized futures algos that are breaking the dated equity mold by providing solutions specifically geared to a market that dwarfs equities.
bit.ly/2G7Td0f

Farmers Across High Plains Brace for Hard Times as Drought Bears Down; Drought could affect everything from cotton to cattle to farming-equipment sales
Jim Carlton – WSJ
This time of year, Shawn Holladay is usually sitting atop a tractor, laying cotton seeds into rows of red soil on his farm here on the High Plains.
/jlne.ws/2wDJeQW

Swaps users to get three choices for synthetic Libor; Consultation due next month as industry tries to avoid big losses on benchmark’s death
Lukas Becker – Risk.net
Swaps users will be invited to decide next month on how to create a synthetic Libor rate, as the industry attempts to avoid potentially huge transfers of value in the event of the benchmark’s death.
/jlne.ws/2Kmjsmg

HSBC claims first trade-finance deal with blockchain; Bank says letter of credit for Cargill opens door for technology in $9tn market
Don Weinland in Hong Kong – FT
HSBC has completed the world’s first commercially viable trade-finance transaction using blockchain, opening the door to mass adoption of the technology in the $9tn market for trade finance.
/jlne.ws/2KhCIBh

Banks Rush Into Chinese Black Box; Majority control of local securities ventures won’t be a bonanza.
Nisha Gopalan, Anjani Trivdes – Bloomberg
To assume China’s black box will produce a bonanza for global banks would be naive. Global banks are rushing to plant their flags in China. That doesn’t guarantee they’ll be winners. Last week, JPMorgan Chase & Co. lodged an application to take a majority stake in a securities company, having exited a venture where it was a junior partner.
/jlne.ws/2KnJNQX

The Mystery of A vs B Uncovers a London Fight Club for the Rich
Franz Wild – Bloomberg
London remains the destination of choice for major court cases; Glencore, Deripaska and Angola were all recently in court
On a sunny Friday morning in central London, journalists were looking for A v B, a case scheduled for London’s commercial court. Finding the lawsuit could lead to illuminating details about a fascinating case of sanctions, alleged corruption and mines producing a metal used in Tesla Inc. batteries.
/jlne.ws/2wGPkjm

A Crypto Tycoon, Banking Heir and the Mysterious Fight for Gold
Thomas Biesheuvel – Bloomberg
Gold miner Petropavlovsk is facing a second investor revolt; Key issue will likely be whether ex-CEO, chairman can return
The battle for some of Russia’s richest gold mines has an unusual cast of characters: the scion of one of Europe’s great banking families, a Kazakh tycoon with his own cryptocurrency, hedge fund D.E. Shaw, and mystery shareholders.
/jlne.ws/2KhzKMY

Exchanges, OTC and Clearing

CME Group in deal to offer ether reference rate
Reuters Staff
CME Group Inc said on Monday it had launched the CME CF ether-dollar reference rate along with crypto-trading platform Crypto Facilities Ltd to provide real-time ether price in dollars.
/jlne.ws/2wBawHD

Euro Fixed Income Futures: Definition of reporting and position limits for June 2018
Eurex
The reporting and position limits for the June 2018 contracts in the Euro Fixed Income Futures were set as follows:
/jlne.ws/2KltaW5

Extension of trading hours for selected benchmark futures and MSCI futures
Eurex
Eurex Deutschland plans to extend its trading and clearing hours (together: “extended service hours”) for selected Equity Index, Fixed Income, Volatility and MSCI futures into the Asian time zone in
December 2018.
/jlne.ws/2wH50mO

Fintech

Thomson Reuters reports Q1 loss on one time charge on financial and risk sale
Canadian Business
Thomson Reuters Corp. reported a loss in its first quarter as it took a one-time charge related to the sale of its financial and risk business announced earlier this year.
/jlne.ws/2KmfLNq

Thomson Reuters expects higher 2018 costs, shares drop
Jessica Toonkel – Reuters
Thomson Reuters Corp (TRI.N) (TRI.TO) forecast its corporate costs would more than double for the year but revenue would only increase modestly. The prediction sent shares of the news and information company down 4 percent as investors fretted about earnings growth after it completes a plan to sell a majority stake in its largest unit.
/jlne.ws/2KorCKD

Facebook suspends 200 apps over data misuse investigation
Reuters Staff
Facebook Inc has so far suspended around 200 apps in the first stage of its review into apps that had access to large quantities of user data, a response to a scandal around political consultancy Cambridge Analytica.
/jlne.ws/2KiLWxi

Chinese hackers defy government warnings on Beijing Def Con; Authorities had ordered local attendees not to share knowledge with international community
Yuan Yang in Beijing – FT
One of the world’s biggest American hacker conferences has attracted large numbers of people to its first China event, despite the government warning its citizens against sharing their tools with the international community.
/jlne.ws/2wECXUV

Cryptocurrencies

Blockchain Week: Snoop Dogg, Dorsey Bring Crypto to the Masses
Lily Katz – Bloomberg
New York City to draw thousands to industry events, parties; Speakers range from Twitter CEO to St. Louis Fed president
Who says the hype around Bitcoin is over? Even with the world’s best known virtual currency down more than 50 percent from its record high, thousands of advocates are expected to descend upon New York in what’s been dubbed Blockchain Week. Named after the decentralized computer ledger technology that’s been pitched as the solution to everything from inefficient financial transactions to global poverty, the affair represents a push to bring more blockchain jobs to the world’s financial capital.
/jlne.ws/2wErbdb

Korea’s Biggest Crypto Exchange Raided Over Suspected Fraud
Daniel Palmer – Coindesk
Prosecutors in South Korea have reportedly raided the largest cryptocurrency exchange in the country, UPbit.
goo.gl/FNa3YG

100+ Crypto Exchanges in South Korea – Government’s Real-Name System Ineffective
Kevin Helms – Bitcoin.com
There are reportedly more than 100 exchanges in South Korea, most of which are not using the government’s real-name system. None of the small and medium-sized exchanges can use this system since banks have opted to only provide this service to the country’s largest exchanges.
bit.ly/2jSNtyK

Facebook reportedly plans to launch its own cryptocurrency
Chaim Gartenberg – The Verge
Facebook is reportedly planning to launch its own cryptocurrency, according to a report from Cheddar’s Alex Heath.
goo.gl/6hm5Qu

This Crypto Vending Machine Can Tell If You’re 21 And Sell You Beer
Pete Rizzo – Coindesk
“We’re definitely not in the beer-vending business.” That might not be something you’d expect the marketing manager for a crypto tech company to clarify, but it’s perhaps now necessary when discussing Civic, the startup founded by entrepreneur and “Shark Tank South Africa” star Vinny Lingham in 2016.
goo.gl/49EcTP

Steve Eisman of ‘The Big Short’ Bashes Cryptocurrency: ‘I Don’t See the Purpose of It’; He rose to fame off the bat of his predictions about the 2008 financial crisis
Steven Russolillo – WSJ
Steve Eisman, the money manager who earned celebrity status for correctly betting against subprime mortgages a decade ago, isn’t such a fan of the investing craze around cryptocurrencies.
/jlne.ws/2KkmG9K

Why Switzerland attracts cryptocurrenices
FT
The FT’s Ralph Atkins explains why the Alpine country is attractive to start-ups developing new cryptocurrencies.
/jlne.ws/2KnKYQn

Inside the Multi-Year Quest to Create a Bitcoin ETF
Tracy Alloway and Joe Weisenthal – Bloomberg
When Bitcoin first began generating headlines, there were some who thought the cryptocurrency was a fraud and others who thought it was the next big thing. Greg King, CEO of Rex Shares LLC, was one of the latter. Like the Winklevoss twins, he set out to create an exchange-traded fund (ETF) that would allow people to invest in Bitcoin in a new way. But many years later, the U.S. securities watchdog hasn’t approved such plans. On this edition of the Odd Lots podcast, we use the Bitcoin example and King’s experience to explain the inner workings of ETFs.
/jlne.ws/2KjDNbQ

Facebook is reportedly considering its own cryptocurrency
Swapna Krishna – Engadget
Facebook is reportedly looking into creating its own cryptocurrency. According to Cheddar, it would be a way for the social network’s billions of users to make electronic payments on the platform, as well as outside it. There are no real details about the project; all we know is that a source who asked not to be identified told Cheddar, “They are very serious about it.”
/jlne.ws/2wEwOIC

Crypto custody solutions for institutional investors
David Wills – FTSE Global
As a growing number of investors enter the cryptocurrency world, the question of how crypto custody works with existing systems is becoming a pressing issue. The market is figuring this out as it goes in piecemeal fashion, but a more comprehensive solution is needed
bit.ly/2G5t4ze

Politics

ZTE reprieve paves way for next round of US-China trade talks; Beijing confirms vice-premier’s DC visit after Trump U-turn on telecoms group
Tom Mitchell and Sherry Fei Ju in Beijing, and Shawn Donnan in Washington – FT
US President Donald Trump’s surprise reprieve for ZTE Corp has paved the way for a Chinese delegation’s arrival in Washington for at least three days of talks aimed at averting a trade war, according to people briefed on the discussions.
/jlne.ws/2KnTQFJ

Moscow may provide some support for Deripaska’s Rusal, GAZ
Denis Pinchuk – Reuters
Russia is considering providing support to tycoon Oleg Deripaska’s Rusal (0486.HK) and GAZ GAZ.MM, two companies hit by U.S. sanctions, but will not go as far as buying stakes in his firms, Finance Minister Anton Siluanov said on Monday.
/jlne.ws/2KkoD62

A Financial-Crisis Settlement Shows Trump Team’s Lighter Touch on Banks
Greg Farrell and Tom Schoenberg – Bloomberg
Bank says it’ll pay $4.9 billion, half what analysts expected; HSBC also seeking to resolve Obama-era subprime mortgage probe
If HSBC Holdings Plc, UBS Group AG and Wells Fargo & Co. were concerned that the Trump administration might continue the big-ticket bank penalties of the Obama era, there are mounting signs that they need not be.
/jlne.ws/2KhB5DF

Regulation

Talking Money With Mom: Gender, Generation and Financial Knowledge
Erika Karell – FINRA
You might have heard about the gender gap that exists between men and women when it comes to financial literacy. Financial literacy—having the knowledge to make informed financial decisions—has been linked to a number of important outcomes, including wealth accumulation, stock market participation and retirement planning. So it’s an important topic for the whole family.
/jlne.ws/2Kk8zRJ

FinCEN issues an Advisory on the FATF-identified jurisdictions with AML/CFT deficiencies
NFA
On April 27, 2018, the Financial Crimes Enforcement Network (FinCEN) issued an Advisory announcing that the Financial Action Task Force (FATF) had updated its list of jurisdictions with strategic AML/CFT deficiencies. NFA Member FCMs and IBs should review this Advisory to ensure that their AML programs have the most current information on FATF-identified jurisdictions with AML/CFT deficiencies and revise their AML programs accordingly. A copy of the Advisory is available on FinCEN’s website.
/jlne.ws/2wCyrX7

FCA secures confiscation orders totalling £1.69 million against convicted insider dealers
UK FCA
Today, His Honour Judge Pegden QC sitting at Southwark Crown Court made confiscation orders in the sum of £1,074,236 against Martyn Dodgson and £624,521 against Andrew Hind. The orders must be paid within 3 months or Mr Dodgson will face a further 7 and a half years in prison and Mr Hind will face a further 5 and a half years.
/jlne.ws/2wEyq4R

IT consultant charged with gaining unauthorised access to data and insider trading
ASIC
IT consultant Steven Oakes, of Sydney, New South Wales, has been charged with a total of 115 offences for unauthorised access to data held in a computer, insider trading, and destroying or concealing books required by ASIC. The filing hearing for Mr Oakes’ charges was listed at the Melbourne Magistrates’ Court on 14 May 2018.
/jlne.ws/2wEAGJE

ASIC consults on short selling proposals
ASIC
ASIC is seeking feedback on various proposals relating to both naked and covered short selling.
/jlne.ws/2wCxNZH

Investing and Trading

Wall Street Is Getting In On the House Flipping Game; Residential transitional loans command juicy interest rates of 8% to 12% but come with risks
Ryan Dezember and Peter Rudegeair – WSJ
KKR & Co. is raising its bet on high-interest, short-term home loans, the latest sign that Wall Street firms are aiming to cash in on the risky but lucrative house-flipping market.
/jlne.ws/2wCvfe5

Recycling, Once Embraced by Businesses and Environmentalists, Now Under Siege; Local officials raise fees and send recyclables to landfills as economics erode
Bob Tita – WSJ
The U.S. recycling industry is breaking down. Prices for scrap paper and plastic have collapsed, leading local officials across the country to charge residents more to collect recyclables and send some to landfills. Used newspapers, cardboard boxes and plastic bottles are piling up at plants that can’t make a profit processing them for export or domestic markets.
/jlne.ws/2wDg3xc

Boom in green bonds attracts green rating agencies; Business of judging a borrower’s green credentials raising regulatory scrutiny
Kate Allen in London – FT
The growing influence of a new kind of credit rating aimed at green bonds has prompted calls for greater regulation of how a borrower’s environmental credentials are judged in the rapidly expanding market.
/jlne.ws/2wEFJtq

How to make sense of the volatile natural gas market; Rising prices in Asia seem to suggest we are at the start of a new super cycle
Nick Butler- FT
Why has the price of natural gas risen so much in Asia this year? The Japanese import price is at a three-year high, having increased almost 15 per cent year on year. Was there not supposed to be a glut? That raises the question of whether we are at the beginning of a new super cycle that sees the price rising even higher.
/jlne.ws/2wEAxFP

Institutions

Scepticism persists on ‘ETFs for good’; Investors want responsible options but remain concerned about performance
Chris Flood – FT
Widespread protests against lax US gun laws erupted in February after the mass shooting of 17 people at a high school in Florida.
/jlne.ws/2KlpUKl

Banks struggle to combat the cyber crime bad guys; Digital banking has created openings for criminals and lenders must fight back
Bill Winters – FT
The criminals are no longer simply winning when it comes to money laundering; they’re harnessing a growing arsenal of digital capabilities to completely change the game.
/jlne.ws/2wB2qid

Goldman Sachs eyes Germany for expansion of Marcus; US bank plans further European rollout of consumer operation after UK launch
Laura Noonan and Patrick Jenkins in London – FT
Goldman Sachs plans to extend its Marcus consumer bank across Europe and has picked Germany as the market to follow its imminent UK launch, the chief executive of the bank’s London-based international arm told the Financial Times
/jlne.ws/2wI68qo

Eisman of ‘The Big Short’ Fame Recommends Shorting Deutsche Bank
Peter Vercoe and Yvonne Man – Bloomberg
Bank has profitability issues, may need more capital: Eisman; Eisman is also betting against Canadian banks, Wells Fargo
Steve Eisman, the Neuberger Berman Group money manager who famously predicted the collapse of subprime mortgages before the 2008 financial crisis, recommended shorting Deutsche Bank AG shares.
/jlne.ws/2Km4Wuy

Regions

About That Argentine Peso: One Bank Says It’s Too Risky to Short
Aline Oyamada – Bloomberg
Just how risky is it to trade the Argentine peso these days? One bank says it’s so dangerous that investors shouldn’t even bet against it.
/bloom.bg/2KhJ4AP

The multi-billion-dollar scandal that brought down Malaysia’s grand old party
Rozanna Latiff – Reuters
Malaysia’s new government, led by 92-year-old Prime Minister Mahathir Mohamad, has vowed to bring back billions of dollars allegedly stolen from state fund 1Malaysia Development Berhad (1MDB).
The alleged misappropriation of $4.5 billion from the fund, founded by ousted premier Najib Razak, is under investigation by the U.S. Department of Justice and other countries like Switzerland and Singapore.
/reut.rs/2I7WAdz

Malaysia’s Antigraft Boss Quits as Mahathir Prepares 1MDB Probe; But the country’s attorney general—who cleared former leader Najib of 1MDB wrongdoing—is refusing to go, sources say
Yantoultra Ngui and Tom Wright – WSJ
Prime Minister Mahathir Mohamad increased pressure on the country’s attorney general to step down, while Malaysia’s antigraft chief resigned, as the new government prepared to relaunch investigations into financial scandals surrounding former leader Najib Razak.
/jlne.ws/2wBkx7O

Jignesh Shah wants High Court to quash CBI probes against him
PTI
Embattled businessman Jignesh Shah today said that he has filed an appeal at the Bombay High Court seeking to quash CBI’s FIR and to declare the searches by the central agency as illegal.
/jlne.ws/2wEy6Dv

JPMorgan applies to set up majority-owned securities business in China
Sumeet Chatterjee – Reuters
JPMorgan Chase & Co (JPM.N) said on Monday it has applied to China’s securities regulator to set up a securities business in which the U.S. bank would own a majority stake under recently relaxed ownership rules.
/jlne.ws/2wES8gY

China’s night-owl retail investors leverage up to dominate oil futures trade
Meng Meng, Josephine Mason – Reuters
As 9 pm approaches every weekday night in China, a small army of individual investors from around the country log onto trading apps on their mobile phones and laptops.
/jlne.ws/2wEmyA3

Brexit

UK ‘held to ransom’ by hard Brexit demands, says David Miliband
Former foreign secretary returns to political fray to join cross-party campaign
George Parker- FT
David Miliband, former Labour foreign secretary, returned to the British political fray on Monday to join a cross-party campaign for a soft Brexit.
/jlne.ws/2KnYJOZ

U.K. Urgently Needs Post-Brexit Foreign Policy Plan, Panel Says
Thomas Penny – Bloomberg
The U.K. must spell out plans for post-Brexit co-operation on foreign and security policy before next month’s European Council if it is to live up to its goal of continuing to work closely with its European Union allies, lawmakers said.
/jlne.ws/2wI30e8

Miscellaneous

A Wine Billionaire Emerges in Bordeaux; Four decades after her father bought Chateau Margaux, Corinne Mentzelopoulos has built the vineyard into a billion-dollar business.
By Devon Pendleton – Bloomberg
When her father died in 1980, Corinne Mentzelopoulos inherited a business empire that included 1,600 grocery stores, 80 buildings in central Paris, a hotel that was once the home of Louis XIV—and a run-down vineyard the family had purchased almost on a whim three years earlier.
/jlne.ws/2KouXcD

The post Michael Bloomberg Slams ‘Epidemic’ Of Political Lies As Danger To Democracy appeared first on John Lothian News (JLN).

First Read

Notes from Day One at Consensus
Chuck Mackie – JLN

If you had any doubts about the swelling surge of interest in cryptoassets, you only had to try and check in to Coindesk’s Consensus conference in midtown Manhattan around mid-morning on Monday. The line snaked its way back and forth through the 2nd floor lobby, down the escalator and out of the front door of the hotel, and it took up to two-and-a-half hours for the reported 7,700 attendees to check in for the event. Consensus began four years ago with 500 true believers in attendance, grew to 1,500 in 2016, reached 2,800 last year, and was up 275 percent this year. Full crypto craziness may be upon us.

Beyond the numbers, Consensus kicked off with a rousing endorsement from a corporate titan, featured numerous interesting and enlightening new developments, and a bit of a dust-up at the end of the day that helped to keep it all in perspective.

For the rest of the story, click HERE

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Hits & Takes
JLN Staff

A few highlights from the FIA’s Listed Derivatives for the Retail Market event in Chicago yesterday. Andrew Busch, CFTC chief market intelligence officer, provided a macro-economic overview which included the forecast that the US Treasury will add $1.5 trillion in T-bills to the market over the next several years.~JK

TD Ameritrade’s JB Mackenzie said education is key to the growth of its derivatives business. As such, TD Ameritrade provides 9-plus hours of live content per day.~JK

Dan Ryba, vice president, futures brokerage at E*TRADE, said Coinbase traders are the “traders of the future.” He added that new accounts at E*Trade tripled on the first days after bitcoin futures were introduced at Cboe and CME.~JK

John Tornatore, director of business development and head of cryptocurrencies at Cboe, told the audience that bitcoin futures “is the just the beginning” and that this space will “look much different” six months to a year from now.~JK

Here are Walt Lukken’s opening comments from yesterday’s FIA Retail Market Event in Chicago.~JJL

Thank you to the FIA for not ordering cookies for their Retail Futures event yesterday at the Union League Club in Chicago. My waistline clearly does not need cookies, so the absence of cookies was a big help that I appreciate today, even if yesterday I was miserably hungry at the event after missing lunch. The food served during the cocktail hour did take the edge off, thankfully.~JJL

According to a FTSE Russell piece about Poland, when ranked by number of IPOs in 2017, the top five European exchanges were LSEG, Nasdaq Nordic, Warsaw Stock Exchange, BME and Euronext. ~SD

Sports betting looks like it’s now on the national table courtesy of a big Supreme Court ruling on Monday. Elsewhere in the gambling world there are $5 million in bets tied to the Royal Wedding, according to Bloomberg.~SD

Here’s a look at which states are likely to legalize sports betting in the next few years.~JB

NFA will hold compliance regulatory workshops at Summit Chicago in Chicago, IL on June 4, 2018 and the New York Marriott Downtown in New York, NY on June 12, 2018.~JJL

In light of the Consensus crypto conference in New York this week, CME has a video out with Don Wilson regarding the potential of cryptocurrencies.~SD

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Notes from The Trading Show Chicago
Chuck Mackie – JLN

Terrapinn’s Trading Show has established itself as a sure sign of spring in Chicago, and while the past few years have found the event swinging heavily to a focus on the technology side of trading, including chips, servers, databases and connectivity, the 2018 edition of the show had a strong leaning towards…you guessed it: cryptocurrencies. Everywhere you go in financial markets in 2018, bitcoin and other cryptocurrencies are sure to be there.

The exhibitors at the conference still skewed to the hard technology side (let’s face it, all of trading is touched by technology at this point) but the open seminars and VIP panel discussions were weighted heavily towards crypto, with 11 of 19 seminars focusing on blockchain, etc. and a separate track just for crypto panels and presentations. Also, the title sponsor for the Trading Show was Kraken, the large crypto exchange, and their team was everywhere on the trade show floor, leading roundtable discussions, appearing on panels, and even throwing an overcrowded (read: successful) party after the last day of the show.

For the rest of the recap, click HERE

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20 in their 20s Meet the 2018 class
Crain’s Chicago Business
Looking for the next big thing in Chicago business, tech and innovation? Follow these 20 young change-makers to find clues. Among their ranks: social problem-solvers, emerging entrepreneurs and money masters. Some generate big revenues. Others challenge the status quo. Not one is older than 29. Click here to get to know them all.
/jlne.ws/2KmoeQM

**** IMC’s Christine Hansen, head of equity options trading, is one of them.~JJL

++++

Two Canadian Companies Are Merging in the Biggest Weed Deal Ever
Simon Casey, Eric Pfanner, and Kristine Owram – Bloomberg
Canada’s Aurora Cannabis to buy MedReleaf in all-stock merger; Industry consolidation heats up as Canadian legalization looms
Consolidation in Canada’s nascent marijuana industry is heating up, with two of the largest players agreeing to the biggest merger seen so far in the sector.
/jlne.ws/2KrFaFx

***** I have been encouraged by a couple of people to consider starting a cannabis newsletter and or wiki. Any thoughts on the matter? I asked a question about the cannabis market at the FIA retail event yesterday in Chicago and only got dodges and jokes.~JJL

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At NYC’s Big Crypto Conference, the Lamborghinis Are Rented and Protests Are Staged
Lily Katz – Bloomberg
John Nouri makes a living renting out exotic cars for weddings, birthdays, bachelorette parties, and now … Bitcoin conferences?
/jlne.ws/2KllQte

***** I can’t wait to see Chuck Mackie’s expenses from Consensus. How to you classify a rented Lamborghini? Italian transportation expense? Image enhancement expense?~JJL

++++

Monday’s Top Three
Our top read story yesterday was Michael Bloomberg Slams ‘Epidemic’ Of Political Lies As Danger To Democracy from Bloomberg news. Second went to Tabb Forum’s Futures Algos: A Class of Their Own. Third went to CME’s announcement CME Group and Crypto Facilities Launch Ether Reference Rate and Ether Real Time Index

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MarketsWiki Stats
125,973,397 pages viewed; 23,105 pages; 213,016 edits
MarketsWiki Statistics

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Lead Stories

CFTC Official Urges SEC to Clarify Ether’s Status; Is the world’s No. 2 cryptocurrency a security or a commodity? Regulators should decide soon, CFTC’s Quintenz says
Gabriel T. Rubin – WSJ
A top U.S. derivatives regulator urged his counterparts at the Securities and Exchange Commission to quickly reach a decision about the status of ether, the world’s second-most-valuable cryptocurrency after bitcoin.
/jlne.ws/2KoorTj

$15 Million in a Few Minutes at Robin Hood, But Who’s Counting?
Amanda L Gordon – Bloomberg
Anti-poverty charity in New York draws Steve Cohen, Blankfein; Jennifer Lopez and Paul Tudor Jones don costumes and sing
Every year, the Robin Hood Foundation concludes its fundraising gala by counting up millions of dollars in donations on big screens at the cavernous Javits Center in New York. On Monday night, auctioneer Jamie Niven counted 15 pledges of $1 million each in a matter of minutes. Then, abruptly, the tally stopped.
/jlne.ws/2KoWCKA

**** That is a lot of big dogs.~JJL

Cryptocurrency Firm Founders Indicted on Federal Fraud Charges
Chris Dolmetsch – Bloomberg
The co-founders of a cryptocurrency firm that raised money on social media with the help of celebrities were indicted Monday on charges they duped investors into committing millions of dollars in digital funds by lying about an initial coin offering.
Sohrab Sharma, Raymond Trapani and Robert Farkas, the founders of Centra Tech Inc., were previously charged with fraud and conspiracy, and their indictment moves the case closer to a trial. Prosecutors say they lied about their product and the relationships they had with financial institutions.
/jlne.ws/2KpatAR

***** Even the feds are getting in on Bitcoin Week.~JJL

EU Sees $23.5 Billion in Revenue From Financial-Transaction Tax
Nikos Chrysoloras – Bloomberg
Derivatives account for more than half of the projected total; Hard Brexit could create a ‘more tricky enforcement issue’
A proposed tax on financial transactions in 10 European Union countries could generate about 19.6 billion euros ($23.5 billion) of annual revenue, though Brexit could make collection more difficult, according to a new estimate.
/jlne.ws/2wHoFTJ

Bitcoin exchange Coinbase opens Chicago office in bid to attract investors, local talent
Samantha Bomkamp – Chicago Tribune
Coinbase, a digital currency exchange based in San Francisco, has opened a Chicago office to be close to burgeoning digital currency markets, big investors and what its leaders say is a vast pool of local talent.
/jlne.ws/2IJFQJ5

**** Two words. Paul Bauerschmidt.~JJL

‘Gigantic Pool’ of Cash Awaits Teams in Dawn of Legal Betting
Eben Novy-Williams and Ira Boudway – Bloomberg
Fan engagement, advertising, media and data rights fees rise; Leonsis: ‘A gigantic pool of revenue moves into the sunshine’
Professional sports team owners, already some of the richest people in the U.S., are about to get richer.
/jlne.ws/2Kr4w6h

U.S. high court paves way for states to legalize sports betting
Lawrence Hurley – Reuters
The U.S. Supreme Court on Monday paved the way for states to legalize sports gambling, striking down a 1992 federal law that barred it in most places and setting off a rush by businesses and states to cash in on an expected multibillion-dollar jackpot.
/jlne.ws/2wKclC0

U.S. Must Move Quickly on Ether Status, CFTC’s Quintenz Says
Benjamin Bain – Bloomberg
Regulators weighing whether cryptocurrency is a security; Decision not imminent, but could be coming in near future. Federal agencies should quickly clarify the legal status of Ether as industry players clamor to list derivatives tied to the world’s second-most traded cryptocurrency, a Republican financial regulator said.
/jlne.ws/2wGCSA6

SwapsInfo First Quarter 2018 Review
International Swaps and Derivatives Association
The ISDA SwapsInfo Quarterly Review provides analysis of interest rate derivatives (IRD) and index credit default swap (CDS) trading activity. The report provides a breakdown of cleared and non-cleared activity and trading volumes executed on swap execution facilities (SEFs) and bilaterally, as well as by product and currency.
/goo.gl/FXP9Ky

Euronext’s FastMatch adds EUR5.2 million to group revenues; Euronext finalised its acquisition of the spot FX market network firm FastMatch in August last year.
Hayley McDowell – The Trade
Euronext’s FastMatch business has contributed EUR5.2 million to the exchange group’s Q1 2018 revenues, less than a year after it acquired the spot FX market firm for EUR153 million.
/jlne.ws/2wHA7OZ

Bankers With Broken English Are Luxembourg’s Brexit Bottleneck
Stephanie Bodoni – Bloomberg
Grand Duchy is a top target in EU for U.K. financial firms; Limited supply of candidates with near-perfect English skills
Luxembourg’s citizens can quickly impress with their language skills, switching with ease between their local tongue and German, French and English.
/jlne.ws/2wK5vws

Exchanges, OTC and Clearing

Exchanges face share price test from lower volatility; Earnings vulnerable to fewer consolidation deals and quieter summer of trading
Philip Stafford – FT
With a few exceptions, it has been a good year to be an investor in the shares of companies at the heart of global markets trading.
/jlne.ws/2KrNtRN

Exchange operator CME is going deeper into cryptocurrencies
Oscar Williams-Grut – Business Insider
Exchange operator CME Group is launching a daily price benchmark for ethereum, a sign of its growing commitment to cryptocurrencies.
/jlne.ws/2KshMr9

Euronext publishes Q1 2018 results
Euronext
Today Euronext, the leading pan-European exchange in the Eurozone with 1,300 listed issuers, announces its results for the first quarter of 2018.
/jlne.ws/2wKz7K6

Client’s view: Sylvain Broyer, Head of Economics at Natixis, on Brexit, monetary policy and market trends
Eurex
The current economic and political situation in Europe raises a number of questions. We talked to Sylvain Broyer, Head of Economics at French investment bank Natixis, about the likelihood of another financial crisis and some key issues investors should keep an eye on.
/jlne.ws/2wKk3fq

Brexit: Support for derivatives trading and clearing
Eurex
With less than one year before Brexit becoming effective, Deutsche Börse Group is closely monitoring Brexit processes, engaging with regulators and governments and will strive to take all necessary measures to mitigate the impact on existing business relations.
/jlne.ws/2KlvxYE

Deutsche Börse is working with leading FinTech companies to create a FinTech Acceleration Platform
Deutsche Börse
Together with the German fintech company figo and the Luxembourg RegTech startup Finologee, Deutsche Börse Group and its post-trade service provider Clearstream are setting up a FinTech Acceleration Platform. The platform is scheduled to go live in the fourth quarter of 2018, subject to regulatory approvals.
/jlne.ws/2KohsK6

Deutsche Börse Partners With Leading FinTechs To Launch FinTech Acceleration Platform
MondoVisione
Deutsche Börse Group and its post-trade services provider Clearstream will partner with Germany-based FinTech figo and Luxembourg-based RegTech start-up Finologee to create a common FinTech Acceleration Platform. The launch is targeted for the fourth quarter of 2018, subject to regulatory approval.
/jlne.ws/2IDKd8B

HKEX to Enhance its USD/CNH Futures with New Contract and Calendar Spreads
HKEX
Sixth calendar quarter month contract and 19 calendar spreads to be added; Full combo suite of 45 calendar spreads between any two contracts to be offered; Changes take effect from 19 June 2018
Hong Kong Exchanges and Clearing Limited (HKEX) announced today (Tuesday) that it will offer the sixth calendar quarter month contract and 19 additional calendar spreads for its USD/CNH Futures (US dollar/Offshore Renminbi, or RMB, Futures) from the day trading session on 19 June 2018.
/jlne.ws/2wHYxIg

LME Asia Week 2018 Kicks Off in Hong Kong
HKEX
Sixth-annual LME Asia Week set to be biggest ever, with over 800 delegates to main seminar event and around 1,900 guests for LME Asia Dinner; More diverse industry representation this year; new participants from precious metals, electric vehicle sectors, and from African markets
Hong Kong Exchanges and Clearing Limited (HKEX) and the London Metal
Exchange (LME) today (Tuesday) kicked off the sixth-annual LME Asia Week, Asia’s leading metals event, bringing together hundreds of leading metals market participants from around the world to discuss the state of the industry and the opportunities ahead, with a particular focus on Mainland China and the rest of Asia.
/jlne.ws/2wD4PZE

‘1000 Companies to Inspire Britain’ report shows SMEs are vital to economic growth | London Stock Exchange Group
London Stock Exchange Group
‘1000 Companies to Inspire Britain’ report shows SMEs are vital to economic growth; 13 new international companies join ELITE, bringing the total number of companies to over 850; Fifth edition of London Stock Exchange Group’s annual report identifies UK’s fastest-growing and most dynamic SMEs; SMEs in the report growing at 71% on average; One third of businesses in the report come from the Northern Powerhouse and Midlands Engine regions
Top two sectors featured in the report are Engineering & Construction and IT
Today, London Stock Exchange Group launches the fifth annual edition of its ‘1000 Companies to Inspire Britain’ report, identifying the UK’s most dynamic and fastest growing Small and Medium Sized Enterprises (SMEs).
/jlne.ws/2wHRX4J

Fintech

Thomson Reuters to relocate FX MTF to Dublin ahead of Brexit; Thomson Reuters has applied for authorisation to operate its FX MTF in Dublin before the Brexit deadline.
Hayley McDowell – The Trade
Thomson Reuters has confirmed that it is seeking authorisation to relocate its foreign exchange (FX) multilateral trading facility (MTF) from London to Dublin.
/jlne.ws/2wGHlTo

Private Equity’s Plan to Beat the Low-Cost Investing Robots; Under threat from automated rivals, financial advisers are getting bigger, and guess who’s there to profit from it all.
Charles Stein – Bloomberg
Private equity firms smell money in the financial advice business. Last month, Hellman & Friedman LLC paid $3 billion to buy Financial Engines Inc., an online retirement planning service. Thomas H. Lee Partners LP in October took a stake in HighTower, a Chicago-based wealth adviser with $50 billion under management at the time. And in April 2017, private equity giant KKR & Co. and Stone Point Capital LLC bought a majority share of Focus Financial Partners LLC in a deal that valued the wealth manager at $2 billion.
/jlne.ws/2wK59WE

How cloud scalability is seducing the financial sector
Monica Brink – Cloud Tech
The financial sector, while forging ahead in other areas of digital transformation, has been relatively slow to adopt the cloud and there has been good reason for it: banks have to deal with highly sensitive data and sharing data storage and compute resources with others could not even be envisaged, let alone adopted.
bit.ly/2IfiFHg

Metamako Launches Low-Latency Firewall System
John D’Antona Jr. – Traders
Metamako, the acknowledged leader in the low-latency, FPGA-enabled network solutions space, has now entered the security space with the announcement of its MetaProtect Firewall solution.
/jlne.ws/2IIlrUF

Cryptocurrencies

Coinbase plans revamp to lure institutional and high-speed traders
Anna Irrera, John McCrank – Reuters
Cryptocurrency exchange Coinbase is planning a revamp of its trading technology and creating a new suite of services to attract more institutional investors, including hedge funds and high-frequency trading firms, it said on Tuesday.
/jlne.ws/2jVCIvA

CoinDesk Releases Q1 2018 State of Blockchain Report
Peter Ryan – Coindesk
After reaching historic highs in 2017, cryptocurrencies languished across multiple fundamental metrics in this year’s first quarter.
Unease permeated the industry, mostly from regulatory uncertainty and pull-back after a year of parabolic growth.
To shed light on a tumultuous Q1, CoinDesk’s latest State of Blockchain report provides a 90-plus slide analysis of some of the most significant data points.
bit.ly/2jZdLiO

Winklevoss Brothers Bitcoin Exchange Adds Zcash, Litecoin, Bitcoin Cash
Michael del Castillo – Forbes
The Gemini bitcoin exchange founded by Tyler and Cameron Winklevoss is adding support for Zcash, a privacy-focused cryptocurrency with a market valuation of over $1 billion.
bit.ly/2IiBs4g

****Press release here.

The World’s First Trade Finance Transaction on the Blockchain Involves Soybeans
Polina Marinova – Fortune
HSBC said it has performed the world’s first trade finance transaction using blockchain technology.
goo.gl/gQ8KhU

NASDAQ-Powered Crypto Exchange DX Set to Launch Next Month
Finance Magnates
There’s a new crypto exchange in town. But if you feel that the town is getting too crowded, this resident is quite different.
Learn how to buy Bitcoin and Ethereum safely with our simple guide!
dx.exchange, which is set to launch next month, is the first crypto exchange powered by NASDAQ. “The advantage of this cooperation is threefold: the brand name, the technology and the regulations,” said DX Exchange CEO Daniel Skowronski, commenting on the topic exclusively to Finance Magnates.
bit.ly/2IJWBnw

Bitcoin Mining Rig Maker Canaan Files for $1 Billion IPO
Crystal Tse and Blake Schmidt – Bloomberg
China’s Canaan Creative aims to start trading as soon as July; Firm seeks first Hong Kong IPO from cryptocurrency industry
Canaan Creative, the world’s second-biggest maker of bitcoin mining hardware, has submitted an application for a Hong Kong initial public offering that could raise about $1 billion, people with knowledge of the matter said.
/jlne.ws/2wKqQ90

Forex Platform Serving Goldman Sachs and Morgan Stanley Adds Crypto Trading
Helen Partz – Cointelegraph
Software developer Kx Systems has launched cryptocurrency trading on its white label forex (FX) trading platform Kx for Flow, the company reported in a blog post May 14. Starting today, Kx for Flow customers are able to conduct spot trading of Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), and Ripple (XRP).
bit.ly/2IJzY2m

Wyoming Aims to Be America’s Cryptocurrency Capital – The state is passing laws to attract the country’s digital-money business.
Benjamin Bain – Bloomberg
Wyoming is about 1,000 miles from Silicon Valley and even farther from wealthy East Coast investors. But the Cowboy State is hitching its wagon to the virtual currency craze, bidding to reinvent itself as the most crypto-friendly state in the U.S.
/jlne.ws/2Kqmciy

REX Shares to Launch Blockchain ETF, Managed by CNBC’s ‘Fast Money’ Brian Kelly
Ricardo Esteves – NewsBTC
The U.S. Securities and Exchange Commission (SEC) has blocked the filings of Bitcoin exchange-traded-funds (ETFs) even after the launch of Bitcoin futures contracts in December 2017. The regulator now seems closer to accept this financial instrument, but some investment firms chose not to wait and get creative. REX Shares is about to launch BKC, its Blockchain ETF.
bit.ly/2GeLZrz

****REX Shares CEO Greg King had a hand in developing a number of the first VIX-linked ETPs to hit the market.~SD

30+ Real Examples Of Blockchain Technology In Practice
Bernard Marr – Forbes
While Bitcoin and cryptocurrency may have been the first widely known uses of blockchain technology, today, it’s far from the only one. In fact, blockchain is revolutionizing most every industry. Here are just a few of the practical examples of blockchain technology.
bit.ly/2IfYE3l

FedEx CEO: Adopt New Tech Like Blockchain or Be Disrupted
Wolfie Zhao – Coindesk
“Blockchain has the potential to completely revolutionize what’s across the border.”
goo.gl/aLmLnC

Ethereum Founder Acknowledges Promising Solution To Blockchains’ Scalability Problem
Andrew Rossow – Forbes
Vitalik Buterin, the cofounder of Ethereum, holds some serious clout in the blockchain space. So when he tweeted last week about a new project that he’s looking forward to going live, peoples’ heads started to turn. You know when Buterin endorses a project, it must be good.
goo.gl/fVfRhY

Fed’s Bullard: Cryptocurrencies creating ‘non-uniform’ currency in US
Mamta Badkar – FT
Cryptocurrencies are creating a “drift toward non-uniform currency in the US”, St Louis Federal Reserve president James Bullard said on Monday, cautioning that historically these have been “disliked and eventually replaced”.
/jlne.ws/2KmpHXi

Bitcoin cash is expanding into the void
Jemima Kelly – FT
I like big blocks and I cannot lie.
That was the opening line from nChain CEO Jimmy Nguyen — whose company wants to make bitcoin spin-off bitcoin cash (BCH) the cryptocurrency of the future — on a panel (or more precisely, a man-el) last week at Exeter University. He was referencing Sir Mix-A-Lot’s early 90s classic Baby Got Back (NSFW music video here).
/jlne.ws/2wJnm6N

Kx Systems launches support for cryptocurrency trading
Finextra
Kx SystemsKx Systems, a division of First Derivatives plc (AIM:FDP.L, ESM:FDP.I), announces that its Kx for Flow electronic trading platform has been extended to support the trading of cryptocurrencies.
/jlne.ws/2IJJYbU

Politics

U.S., China Discussing Deal on ZTE, Agricultural Tariffs; Agreement would also ease roadblocks in China for U.S. semiconductor firm Qualcomm
Lingling Wei and Bob Davis – WSJ
The U.S. and China are closing in on a deal that would give China’s ZTE Corp. a reprieve from potentially crippling U.S. sanctions in exchange for Beijing removing tariffs on billions of dollars of U.S. agricultural products, said people in both countries briefed on the deal.
/on.wsj.com/2IfWUaj

Cohen revelations put spotlight on Washington’s ‘shadow lobbyists’; Unregistered consultants play growing role in business of accessing the powerful
Barney Jopson in Washington and Andrew Edgecliffe-Johnson in New York – FT
After news broke last week that AT&T and Novartis had respectively paid $600,000 and $1.2m to Michael Cohen, both companies’ chief executives told their employees that hiring Donald Trump’s personal lawyer had been a “mistake” that they now regretted.
/jlne.ws/2wEqxwt

Soros foundation office to pull out of Hungary; Operations moved to Berlin in face of ‘increasingly repressive political environment’
Neil Buckley – FT
Billionaire George Soros’s philanthropic foundation is closing its Budapest office and shifting operations to Berlin as it faces what it called an “increasingly repressive political and legal environment” in Hungary.
/jlne.ws/2wR7NKr

Michael Bloomberg launches China-linked rival to Davos gathering; New Economy Forum focuses on emerging world order in challenge to WEF
Andrew Edgecliffe-Johnson in New York – FT
Michael Bloomberg, the former New York mayor, is launching a rival to the World Economic Forum’s annual gatherings in Davos, aimed at addressing a changed global order in which China’s rise challenges the primacy of the US.
/jlne.ws/2Ko7U1K

Regulation

Compliance staff enjoy pay boom as demand for expertise rockets
Owen Walker – Financial Times
Down the corridor from the chief executive’s office and away from the banks of star portfolio managers sits the most in-demand worker in asset management: the humble compliance officer.
/on.ft.com/2Ih0MHZ

RBS Is Set to Overtake Deutsche Bank as Europe’s Most Penalized
Nicholas Comfort – Bloomberg
Royal Bank of Scotland Group Plc may overtake Deutsche Bank AG as the European lender with the highest disclosed legal bills since the financial crisis.
/bloom.bg/2IgDkuu

Fed Nominee Michelle Bowman Says Bank Rules Should Be Tailored for Size, Complexity; Federal Reserve Board of Governors nominee plans to criticize postcrisis regulations at her Senate confirmation hearing
Paul Kiernan – WSJ
Michelle Bowman, one of President Donald Trump’s nominees to join the Federal Reserve Board of Governors, plans to criticize postcrisis banking regulations at her Senate confirmation hearing Tuesday.
/jlne.ws/2KopsL7

Thieves suck millions out of Mexican banks in transfer heist
Michael O’Boyle – Reuters
Thieves siphoned hundreds of millions of pesos out of Mexican banks, including No. 2 Banorte, by creating phantom orders that wired funds to fake accounts and promptly withdrew the money, two sources close to the government’s investigation said.
/reut.rs/2IfTEf3

ASIC consults on code of ethics compliance schemes for financial advisers
ASIC
The Australian Securities and Investments Commission has released a consultation paper outlining its proposed approach to approving and overseeing compliance schemes for financial advisers.
/jlne.ws/2wKiluE

Investing and Trading

18 Chart Crimes and Misdemeanors
Sloane Ortel – CFA Institute Enterprising Investor
Truth is relative, falsehoods are seductive, and shortcuts are commonplace.
Chart crimes are a clear manifestation of this. These badly built graphics are blunders at best.
Most commonly, they are financial fake news.
/cfa.is/2IeCIoZ

Shell Spreads Its Bets Around as It Prepares for a Greener Future
Stanley Reed – NY Times
There seems to be little about the scrappy energy company in central England that would appeal to Royal Dutch Shell, the button-down oil giant.
/jlne.ws/2KslkJZ

IPO Slowdown Leads Silicon Valley Venture Giant NEA to Sell $1 Billion Worth of Startup Stakes; New Enterprise Associates seeks to create new venture-capital firm that would buy its stakes in about 20 companies
By Rolfe Winkler and Eliot Brown – WSJ
New Enterprise Associates, one of Silicon Valley’s largest venture-capital firms, plans to sell off a big chunk of its startup investments in response to a dearth of initial public offerings, according to people familiar with the discussions.
/jlne.ws/2wFMFXf

Institutions

Striking an NAV: Fund Managers’ Contingency Options
Chris Kentouris – FinOps
We need a backup plan — yesterday.
That is what fund management operations directors are quickly realizing when it comes to striking a net asset value. They can’t blindly rely on their administrators’ results because mathematical errors or, even worse, technological outages can happen. Then what? Potential regulatory fines, investor lawsuits and reputational risk can occur.
bit.ly/2KlPZc6

Two Goldman Sachs securities co-heads to step down; Exits highlight pressure as younger traders compete for shrunken profit pool
Ben McLannahan in New York – FT
Two of Goldman Sachs’ three securities division heads are to stand down, capping a period of turmoil for a division that was once the bank’s biggest and most powerful growth engine.
/jlne.ws/2wHxKvz

Goldman Sachs Shakes Up Leadership in Trading Unit
Liz Hoffman – WSJ
Goldman Sachs Group Inc. is shaking up the leadership of its powerful trading arm, which was once the envy of Wall Street but has struggled in recent years.
/on.wsj.com/2IfAhCI

****Bloomberg on the moves here.

Steve Cohen’s Point72 Hires Macro Team From Balyasny
Hema Parmar – Bloomberg
Steve Cohen’s Point72 Asset Management is beefing up macro investing by poaching a five-person team from Balyasny Asset Management.
/bloom.bg/2IhhE1h

Chief Investment Officer Ted Eliopoulos To Leave CalPERS – Search Begins For New CIO
Mondovisione
The California Public Employees’ Retirement System today announced that Ted Eliopoulos, CalPERS’ chief investment officer (CIO), is leaving the pension fund in order to relocate to the East Coast to be closer to family. A search for his permanent replacement will begin immediately.
bit.ly/2IeVGvH

MSCI to add 234 Chinese A-shares to flagship index; List of companies spans banking, real estate and consumer sectors
Emma Dunkley in Hong Kong – FT
Index provider MSCI has unveiled a list of 234 Chinese mainland-listed stocks to be added to its flagship emerging markets index, an inclusion that represents a key development in the opening of the country’s markets to overseas investors.
/jlne.ws/2Kqpd2e

Goldman Loses Its ‘Queen of Commodities’ Marking End of an Era
Javier Blas and Jack Farchy – Bloomberg
Isabelle Ealet was last of a generation of commodities bankers; Departure follows worst year for unit since Goldman’s IPO
Isabelle Ealet, the departing co-head of the securities unit at Goldman Sachs Group Inc., is the last of a generation of bankers who battled for supremacy in a golden era of commodity profits for Wall Street.
/jlne.ws/2KsgoEX

Regions

The Future of Fake News in India: 1,000 WhatsApp Messages a Day; In election season, campaigners are using the messaging service more to target voters, but its opaque nature makes it hard to hunt down sources of false content
Newley Purnell, Samarth Bansal, Krishna Pokharel, and Bill Spindle – WSJ
For Gurupad Kolli, a 40-year-old lawyer who lives in a remote Indian village, the torrent of WhatsApp messages surging to his phone a few weeks ago meant one thing: election day was near.
/jlne.ws/2KoEZdP

Argentine Peso Tumbles as Central Bank Changes Strategy
Ignacio Olivera Doll and Carolina Millan – Bloomberg
The Argentine peso fell to a record low as the central bank changed its strategy to protect the currency and the International Monetary Fund said it won’t set any exchange-rate targets for a stand-by arrangement.
/bloom.bg/2Ikl4Aw

Index IDEA: Charting Poland’s journey toward FTSE Developed Market status
FTSE Russell
In its new research report, entitled Poland: The journey to Developed Market status, FTSE Russell examines key market statistics for Poland linking back to the FTSE Country Classification System, introduced in 2004 as a structured, objective and transparent global framework for determining equity markets’ development status.
bit.ly/2GeVQ0u

Erdogan vows to take greater control of Turkey’s monetary policy; Lira hits record low as president restates commitment to lower interest rates
Laura Pitel in Istanbul and Jonathan Wheatley in London – FT
The Turkish lira hit a record low on Tuesday after Recep Tayyip Erdogan vowed to take greater control of monetary policy if he wins elections next month.
/jlne.ws/2KrNNzZ

Spying fears prompt Russian software company move to Zurich; Kaspersky Labs opens Swiss data centre to ease worries on Kremlin intelligence activity
David Bond, Security and Defence Editor – FT
Russian cyber security company Kaspersky Labs is to open a new data centre in Switzerland to address concerns that its antivirus software can be used as an intelligence-gathering tool by the Kremlin.
/jlne.ws/2wG0aX5

Thomson Reuters to move forex derivatives out of London after Brexit; Group will shift business that trades more than $300bn a day to Dublin next year
Philip Stafford in London – FT
Thomson Reuters is planning to transfer its widely used foreign exchange derivatives trading from London to Dublin to be ready for the UK’s departure from the EU next year.
/jlne.ws/2Kqcv3z

Norway Eases Off Dipping Into World’s Biggest Piggy Bank
Sveinung Sleire and Mikael Holter – Bloomberg
Withdrawal seen at $2.6 billion, 71% below earlier estimate; Revised budget based on $65/barrel oil price assumption
Norway expects to withdraw less from its giant sovereign wealth fund this year as a recovery in oil prices is boosting the country’s coffers.
/jlne.ws/2KpajcJ

Chinese Stocks Aren’t Normal—Whatever MSCI Thinks; Mainland-listed shares will enter MSCI’s key benchmarks, but that won’t resolve the problems with China’s markets
By Jacky Wong – WSJ
Global investors are about to get a larger dose of Chinese stocks in their portfolios. But as Big Bangs go, this one has a pretty low decibel count.
/jlne.ws/2IHYWiE

What’s Polarizing China’s Bond Market?; A government campaign to curtail financial risk is making it tough for weaker, mostly private firms to raise cash, and people are worried
By Shen Hong – WSJ
Investors are demanding the highest premiums in two years for buying lower-grade Chinese corporate bonds, now that Beijing’s campaign to rein in financial risk has made it harder for the country’s weaker, mostly private firms to raise cash.
jlne.ws/2takvBv

Brexit

Brexit Britain Wasting Time on Pay Gap, Billionaire Spencer Says
Will Hadfield – Bloomberg
ICAP founder urges priority financial-services deal, tax cuts; Shareholders of Spencer’s NEX meet Friday to vote on CME offer
British business is “wasting time” reviewing the gender pay gap when it should be focused on limiting the fallout from Brexit, according to Michael Spencer, the billionaire founder of electronic markets operator NEX Group Plc.
/jlne.ws/2wHNkY3

Miscellaneous

It’s A Good Time To Be A Reporter Covering Trump If You Like Money And Going On TV
Steven Perlberg – BuzzFeed News
A whirlwind Washington era has vaulted White House reporters into a charmed, somewhat awkward, but characteristically Trumpian reality: fame and fortune.
/bzfd.it/2IiUWpH

An Ice Core Reveals the Economic Health of the Roman Empire
Nicholas Wade – NY Times
A year by year economic history of the Roman Empire might seem as impossible to reconstruct as the lost 107 books of Livy’s history of Rome. Yet something close to such a record has now been retrieved from the unlikeliest of places — a glacier in central Greenland.
/jlne.ws/2Kqvcnw

The post CFTC Official Urges SEC to Clarify Ether’s Status appeared first on John Lothian News (JLN).

First Read

Notes from Consensus 2018 – Day 2
Chuck Mackie – John Lothian News

As expected, Day 2 of Coindesk‘s Consensus conference lacked some of the energy and fireworks of the first day but it did manage to defy what seems to be a law of nature: fewer people in attendance at the second day of an industry event when compared to the first. In this case, Coindesk announced that total registration ticked up to over 8,500 and it was definitely harder to fight the lines for lunch on the second day compared to the first. Somehow I survived.

Beyond that, there was the expected slew of mostly underwhelming corporate enterprise announcements, some insights from other panels, and one blockbuster investment partnership to finish off the day like the cherry on top of a sundae. Read on to find out more.

Koch, IBM, Deloitte, ConsenSys, SAP. . . . . .zzzzzzzz!

Corporate America took over the morning session and it was, for the most part, exactly what you would expect at this point in the evolutionary history of blockchain: loads of marketing speak about enterprise worthy efforts to transform either this or that.

IBM made a good go of it by bringing their partners Veridium and Global Citizen to the stage to highlight the ways that they are trying to make the world a better place. Veridium intends to use blockchain to create a program to digitize carbon credits and offsets while Global Citizen announced the “Challenge Accepted: Blockchain for Good” developer challenge. It’s open to all and details can be found on the IBM website. In both cases, the efforts are aspirational and even inspirational but they are not operational.

To read the rest of the recap, go here.

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Hits & Takes
JLN Staff

The Volcker 2.0 rule is expected to include five US agencies: the Federal Reserve, the Commodity Futures Trading Commission, the Securities and Exchange Commission, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp., according to the Wall Street Journal.~JK

Happy VIX expiration day! ~SD

After yesterday’s C2 transition, three of Cboe Global Markets’ four options exchanges are now running on Bats’ technology.~SD

No meeting on cryptocurrencies is complete without a protest…even one that is not real. Genesis Mining organised a fake protest at Consensus 2018 as a marketing stunt.~JB

Bloomberg: Dan Silber, who led Credit Suisse Group AG’s Americas foreign-exchange sales business, has died. He was 48.~JJL

Mark Rzepczynski: The single most important chart for any portfolio manager or investor – The power of diversification (low correlation)~JJL

Are you interested in insights about European regulations and financial markets? Then make sure to check out Nasdaq’s new blog at #MarketInsite~JJL

Check out INTL FCStone’s new corporate video.~JJL

Here is the deal. If I make you laugh at my best two kilt jokes, you have to donate to Mark Ibbotson’s kilt challenge fundraiser for Futures For Kids. Here are my two best kilt jokes, though they are a bit risque.~JJL

What is worn under a kilt? Nothing, everything is in perfect working order.~JJL

How many parakeets can you fit under a kilt? Because this is a family publication, I can’t give you the exact answer, but I can tell you it depends on the size of the perch.~JJL

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Crypto Never Sleeps. Now DRW’s Big Trading Desk Doesn’t Either
Matthew Leising – Bloomberg
Firm says it’s first to offer non-stop buying and selling; Singapore expansion allowed for overnight U.S. coverage
Much like the market where it trades, the cryptocurrency desk at DRW Holdings LLC is going non-stop. Its Cumberland division will now buy and sell Bitcoin, Ether and about 30 other cryptocurrencies 24 hours a day, seven days a week, lead trader Bobby Cho said in an interview. A November expansion in Singapore allowed Chicago-based Cumberland to do business with customers non-stop on weekdays, but demand didn’t cease on Saturdays and Sundays, he said.
/jlne.ws/2wLa6yv

***** I hear with DRW’s new hyperdrive time warp crypto trading technology they are actually trading 25 hours a day.~JJL

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The Options Industry Leader Series 2018 – BOX’s Ed Boyle

Brought to you by the OCC

In this video from the 36th annual Options Industry Conference (OIC) in Amelia Island, Fla., Ed Boyle, CEO of BOX, talks about constraints placed on the market making community, forward-starting daily options and the impact of the OIC.

Watch the video here »

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SGX Bull Charge welcomes ONE Championship as official fitness partner; World-class martial arts athletes to pair with youths from SGX Bull Charge beneficiaries in mentoring programme
SGX
SGX Bull Charge, Singapore Exchange’s (SGX) flagship charity initiative, today welcomed ONE Championship as its official fitness partner for 2018. The highlight of the collaboration will be a mentoring programme pairing martial arts athletes with underprivileged youths.
/jlne.ws/2wLf9yJ

***** I am tired just reading this. Where do I send the check?~JJL

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BCause LLC Announces Engagement of ASGARD Partners & Co. as Capital Markets Advisor for $25 Million Series B Capital Raise
BCause LLC
BCause LLC, creator of what is believed to be the world’s first full-stack cryptocurrency ecosystem, today announced that the firm has engaged ASGARD Partners & Co. as its exclusive Capital Markets Advisor for a Series B capital raise of $25 million in equity. After launching its cryptocurrency mining facility in February, BCause is in the process of establishing a spot market and, pending regulatory approval, a derivatives exchange and clearing house.
/jlne.ws/2wLbu3X

***** Was Thor the broker on this deal? I would not use Loki.~JJL

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Tuesday’s Top Three
Everyone wants to know, who’s next? Crain’s Chicago Business’ Meet the 2018 20 In Their 20s was the top read story of the day yesterday. Second was Chuck Mackie’s coverage of the crypto conference, Notes from Day One at Consensus. Third was Bloomberg’s coverage of the Robin Hood charity event $15 Million in a Few Minutes at Robin Hood, But Who’s Counting?

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MarketsWiki Stats
126,042,207 pages viewed; 23,111 pages; 213,060 edits
MarketsWiki Statistics

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Lead Stories

Why Germans Are Getting Fed Up with America; It’s getting harder for Angela Merkel and the German elite to hold back growing anti-Americanism.
Leonid Bershidsky – Bloomberg
Germans have never liked U.S. President Donald Trump, and the backlash against his actions is stronger than ever after he pulled the U.S. out of the Iran nuclear deal last week. But there’s a growing gap between the German establishment and German voters: The former may be anti-Trump, but the latter are increasingly anti-American.
/jlne.ws/2wK5ush

Deutsche Boerse to Cut as Many as 50 Management Positions
Nicholas Comfort and Geoffrey Smith – Bloomberg
Theodor Weimer’s pruning of Deutsche Boerse AG has only just begun. The German exchange group’s chief executive officer told shareholders Wednesday that he wants to cut as many as 50 management jobs as part of a plan to lower its annual running costs by 100 million euros ($118 million) by the end of 2020.
/jlne.ws/2wUx7zd

Volcker Rule Rewrite to Drop Trading Burden on Banks, Sources Say
Jesse Hamilton and Benjamin Bain – Bloomberg
Agencies may ditch crucial assumption on what’s a banned trade; Regulators expected to issue Volcker overhaul by end of May
Wall Street is poised to get a big reprieve from the Volcker Rule, as U.S. agencies prepare to scrap a restrictive presumption that most short-term trades violate the post-crisis regulation, three people with knowledge of the matter said.
/jlne.ws/2wUvJfZ

Big Bitcoin Exchange Welcomes High-Speed Traders; Coinbase plans to allow trading firms to place servers directly in its data center, a practice called co-location
Alexander Osipovich – WSJ
The bitcoin market is about to get a lot faster. Coinbase Inc., which operates the largest U.S. cryptocurrency exchange, said on Tuesday that it would upgrade its systems with services that cater to ultrafast traders. The upgrade, planned for later this year, will make Coinbase one of the first bitcoin exchanges to welcome the controversial business of high-speed trading.
/jlne.ws/2wNP8yQ

Crypto Exchange Kraken Says It Will Probably Register With SEC
Lily Katz and Annie Massa – Bloomberg
Move would come after firm dismissed questions from New York; CEO is also considering stock trading and going public
Kraken, the digital-currency exchange that recently refused to respond to inquiries from New York’s top lawyer, seems to be warming up to regulators — at least federal ones.
/jlne.ws/2Kv0n1b

U.S. Crypto Trading Platforms Are About to Get More Competition
Camila Russo – Bloomberg
Cryptocurrency trading platform eToro plans to open its doors to U.S. investors. U.S. users can join the waiting list for the Tel Aviv-based platform and the service will be rolled out in the second-half of this year, eToro Chief Executive Officer and co-founder Yoni Assia said in an interview Tuesday.
/jlne.ws/2Ks5ajW

CME to Gauge User Interest for Ether Futures After Index Launch
Camila Russo – Bloomberg
CME Group Inc. will review client demand for Ether futures after launching an index tracking prices of the second-largest cryptocurrency.
/jlne.ws/2wInKSZ

The Final Nail in the Coffin
Jim Greco – Trading Places
The U.S. interest rates complex, centered around trading U.S. Government debt, used to be the province of primary dealers (mostly large banks). There were 46 primary dealers in 1988, at the peak of their influence. Nearly every single U.S. Treasury transaction involved a primary dealer on one or both sides of the trade.
/goo.gl/1SjnZA

New Stock Exchanges Could Appear If SEC Pilot Cuts Fee Revenue for Cboe, Others
Declan Harty, S&P Global Market Intelligence- TabbFORUM
The SEC’s long-awaited access fee pilot threatens a sizable revenue stream for exchange operators, which could encourage them to spin up new exchanges to hedge against lower revenue, making the structure of U.S. markets even more complicated.
/goo.gl/znG1MA

5 Questions with Merritt Black of SMB Capital
Trading Technologies
Merritt Black trades for SMB Capital in New York, where he is focused on expanding the futures trading desk. As part of a new program, Merritt will be training new traders and assessing their skills. Our advanced risk administration tools, Trader Analytics and our premier trading simulation functionality are among the features that led SMB to choose the TT platform.
bit.ly/2Gjw8rF

TMX Group Announces Election of Directors
TMX
TMX Group today announced that the nominees listed in the management proxy circular for the 2018 Annual and Special Meeting of Shareholders were elected as directors of TMX Group Limited. Detailed results of the vote for the election of directors held at the Annual and Special Meeting on Thursday, May 10, 2018 in Toronto are set out below.
/jlne.ws/2wRhBnk

Exchanges, OTC and Clearing

Cboe Announces Successful Migration of Cboe C2 Options Exchange to Proprietary Technology Platform
Cboe
Cboe Global Markets, Inc. today announced the successful migration of Cboe C2 Options Exchange (C2) to its proprietary Bats technology, marking the latest step in the company’s multi-exchange, multi-year technology integration.
/goo.gl/evjJ6X

Cboe, IHS Markit and BlackRock Join Forces to Launch First U.S. Corporate Bond Index Futures
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, today announced a collaboration with IHS Markit Ltd. (Nasdaq: INFO) and BlackRock, Inc. (NYSE: BLK), for Cboe to develop the first-ever broad-based U.S. corporate bond index futures.
bit.ly/2wKsqYm

ICE Futures Europe Emissions Auction Result
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced that today’s auction of 4,593,500 EU Allowances (EUAs) held on behalf of the UK Government’s Department for Business, Energy & Industrial Strategy (BEIS) was cancelled as a result of the total volume of bids falling short of the volume of the allowances being auctioned
/jlne.ws/2wLiXjC

Strategic Partnership Between Worldline And SIX Consolidating European Payments – Worldline To Acquire SIX Payment Services
Mondovisione
SIX is entering a strategic partnership with Worldline in the cards business (merchant acceptance & acquiring and international card processing). SIX will bring the existing cards business into the partnership and will receive a 27% stake in Worldline. SIX Payment Services and Worldline complement each other very well in terms of geography and product offering. The combined company will be the leading and largest European provider in the payments industry.
bit.ly/2KqitRV

FIA April 2018 SEF Tracker
FIA
Total trading volume on SEFs averaged $637 billion in notional value per day during April 2018. That was up 48.4% from April 2017 but down 23.1% percent from March 2018, which set the all-time record in terms of total volume traded. The month-over-month decrease in trading volume was driven mainly by a drop in on-SEF trading of interest rate swaps, which was down 22.2% from March 2018 but up 50.8% from April 2017. Trading of FX products in April 2018 continued at a high level; though FX trading in April was down from March, it was higher than any other month in prior years. Note: this month’s release of the SEF Tracker was delayed in order to verify the accuracy of certain SEF data.
/goo.gl/vvYPMB

NZX announces sale of Farmers Weekly
NZX
NZX announces the sale of rural newspaper Farmers Weekly as the exchange focuses on delivering strategic initiatives that support the growth of its core markets business.
/jlne.ws/2Gj0TwQ

Fintech

Buy-side increases critical reception of algorithms as MiFID II comes into play; The TRADE’s 2018 Algo Trading Survey finds MiFID II has heightened critical approach to electronic trading among buy-side firms.
John Brazier – The Trade
Buy-side firms are becoming increasingly critical of the algorithms and the providers they use as the effects of MiFID II begin to bed in, according to The TRADE’s Algorithmic Trading Survey 2018 for long-only firms.
/jlne.ws/2wKH1TN

China’s WeChat weighs banker-friendly messaging; Service aimed at letting global bankers do bond trades without compliance breach
Emma Dunkley in Hong Kong and Yuan Yang in Beijing – FT
Tencent-backed WeChat is in talks about developing a messaging service aimed at allowing international bankers to discuss bond trades with China-based bankers without breaching compliance rules that were implemented in the wake of a series of high-profile rate-rigging scandals.
/jlne.ws/2wLhNV9

Fintech is now the most popular sector among high-net-worth investors
Sebastian McCarthy – City AM
Financial technology has now become the most popular sector among high-net-worth investors, according to an analysis by the direct private investment platform Capitama.
/jlne.ws/2KuWoSh

Thomson Reuters Harnesses Artificial Intelligence to Filter Media Content in Fight Against Financial Crime; World-Check One’s Media Check helps prioritise media content most relevant to Anti-Money Laundering/Know Your Customer compliance
Thomson Reuters
Thomson Reuters has enhanced its World-Check One platform with the launch of Media Check, a unique media screening and processing feature powered by artificial intelligence (AI) that helps address the regulatory and reputational consequences of overlooking key data in the fight against financial crime. Media Check’s machine learning capability increases efficiency by filtering unstructured content from over 11,000 global print and web sources, giving financial institutions more accurate and relevant data faster.
/jlne.ws/2Goi0xq

Iconiq Co-Founder Starts Rival Wealth Firm, Swipes at Conflicts
Simone Foxman – Bloomberg
Boeding’s Epiq Capital will cater to ultra-wealthy clientele; He says new adviser won’t offer in-house funds as Iconiq does
One of four co-founders of Iconiq Capital has left to start a rival firm, while calling out conflicts of interest in the wealth-management industry.
/jlne.ws/2KrXJJw

Exchange Data International Launches Canadian Fixed Income Evaluated Pricing Service; The Company Expands its Current Offering by Including 5 New Fixed Income Asset Classes
Exchange Data International
Exchange Data International (EDI), a leading provider of global security corporate actions, pricing and reference data services, officially announces the launch of its Canadian Fixed Income Evaluated Pricing service.
/jlne.ws/2L23Jtu

Cryptocurrencies

Leading cryptocurrency trader Coinbase moving an exchange to Chicago
Lynne Marek – Crain’s Chicago Business
San Francisco-based Coinbase is making a big move into Chicago, bringing the backbone of its system to the city.
Coinbase plans to transfer its current exchange to Chicago and overhaul it using the city’s trading tech talent to upgrade the matching engine, says Paul Bauerschmidt, who was recently hired to oversee the company’s new Chicago office. The rebranded Coinbase Markets infrastructure will be rolled out over the next year.
bit.ly/2Gm8sme

French Finance minister: Let France be the first blockchain & crypto-active innovation in Europe Steemit.com
During a breakfast with entrepreneurs, including representatives of Blockchain Partner, the Minister of Economy and Finance Bruno Le Maire revealed his plans for French blockchain and cryptocurrencies. He assured his ” total and determined support “. Among the themes mentioned: the banking difficulties of companies in the sector, the taxation of cryptocurrencies, their accounting treatment and the legal framework of the ICO
bit.ly/2wIoac1

Circle raises $110 million, plans to create dollar-pegged cryptocurrency
Anna Irrera – Reuters
Goldman Sachs-backed (GS.N) cryptocurrency startup Circle has raised $110 million in an investment round led by Chinese virtual coin mining giant Bitmain Technologies, Circle said on Tuesday.
/reut.rs/2Ktn7ii

LedgerX Debuts First Bitcoin Savings Account Licensed By CFTC
Ana Alexandre – Coin Telegraph
Trading and clearing platform LedgerX has launched a new Bitcoin (BTC) savings product that is licensed by the US Commodities Future Trading Commission (CFTC), Forbes reported May 15.
The savings product introduced by LedgerX is certified by a CFTC derivatives clearing organization (DCO) license and a swap execution facility (SEF) license.
bit.ly/2wGFPAK

US Regulators Say They Want to Avoid ‘Hindering’ Blockchain Innovation
Nikhilesh De – Coindesk
U.S. regulators are still looking into cryptocurrencies and initial coin offerings, but don’t aim to suppress the industry, according to comments made during a panel at CoinDesk’s Consensus 2018 conference in New York.
bit.ly/2wGGUIO

Bitcoin Mining Equipment Maker Canaan Files for $1 Billion IPO
Crystal Tse and Blake Schmidt – Bloomberg
China’s Canaan aims to start trading as early as July; Firm seeks first Hong Kong IPO from cryptocurrency industry
Canaan Inc., the world’s second-biggest maker of bitcoin mining hardware, submitted a listing application to the Hong Kong stock exchange.
/jlne.ws/2wNQ2vm

Bitcoin in Zimbabwe has been banned by Reserve bank
Tawanda Karombo – Quartz
Tech savvy Zimbabweans have long used bitcoin and other cryptocurrencies to plug foreign currency and liquidity gaps plaguing the country, so much so that the southern African country has become one of Africa’s most active markets for crypto transactions. But that hedging strategy has suffered a major setback after the Zimbabwean central bank ordered finance houses to stop processing virtual currency payments and gave then a two-month ultimatum to put this into effect.
/goo.gl/WuqudB

Nomura becomes first crypto custody bank; Institutional investors have held back from large-scale investing in cryptocurrencies due to lack of certainty around storage and security of digital assets.
Joe Parsons – The Trade
Nomura has become the first bank to offer custody services for digital assets such as bitcoin, a move that could unlock significant institutional investor interest.
/jlne.ws/2KsNbK8

Bitcoin May Be Down, but a Digital Currency Startup Still Soars; Circle Internet Financial Ltd., backed by Goldman Sachs, now worth about $3 billion after new fundraising round
Telis Demos – WSJ
A digital-currency startup backed by Goldman Sachs Group Inc. is now worth about $3 billion after a new fundraising round.
/jlne.ws/2KtQnW1

IBM Is Helping Build a Carbon Credit Blockchain Token
Stan Higgins – Coindesk
IBM is collaborating with environmental technology firm Veridium Labs to launch a token with the goal of shaking up the carbon credits industry.
Veridium, whose plan to issue the so-called verde was revealed last year, isn’t the first token-related project to land IBM as a partner, but it could prove to be one of the most consequential.
bit.ly/2wO61tk

A match made in Silicon Valley: can blockchain reinvent dating?; ‘The company hopes to make anonymised data open to researchers, who will design algorithms to match couples’
Hannah Kuchler – FT
I rolled my eyes when I first heard about Luna, described as “blockchain for dating”. In Silicon Valley, “blockchain for x” is the new “Uber for y” as start-ups embrace the idea of digital ledgers. On Wall Street, the Securities and Exchange Commission has warned companies to stop “pivoting to blockchain” to boost their stock.
/jlne.ws/2KvotZR

Blockchain Is Being Taken Seriously by Companies, Deloitte Finds
Olga Kharif – Bloomberg
Nearly 75 percent of executives see a business case for it; Only 22 percent surveyed don’t see a compelling application
Blockchain may be one of the hottest catchphrases among global companies right now, but a survey from Deloitte LLP finds that it’s more than lip service.
/jlne.ws/2KrUfXp

Facebook deleted 583 million fake accounts in the first three months of 2018; That’s more than a quarter of Facebook’s 2.2 billion monthly active users.
Alfred Ng – CNet
Facebook is in a state of constant deletion. The social network released its Community Standards Enforcement Report for the first time on Tuesday, detailing how many spam posts it’s deleted and how many fake accounts it’s taken down in the first quarter of 2018. In a blog post on Facebook, Guy Rosen, Facebook’s vice president of product management, said the social network disabled about 583 million fake accounts during the first three months of this year — the majority of which, it said, were blocked within minutes of registration.
/jlne.ws/2wMOemp

Facebook’s blockchain experiment raises eyebrows; Mark Zuckerberg flirts with decentralisation of his very centralised social network
Hannah Kuchler in San Francisco and Chloe Cornish in London – FT
“A lot of us got into technology because we believe it can be a decentralising force that puts more power in people’s hands,” Mark Zuckerberg wrote in his New Year message to his Facebook followers.
/jlne.ws/2wJzggR

Politics

Investors lose their appetite for Turkey; Erdogan sends uncompromising message he is intent on taking control of monetary policy
Roger Blitz and Jonathan Wheatley in London and Laura Pitel in Istanbul – FT
When banks and investment funds sent senior representatives to dine with Recep Tayyip Erdogan, they probably expected the Turkish president to deliver a reassuring message about investing in his country.
/jlne.ws/2KpwiQD

Top ECB official calls for accelerated banking union drive; In implicit rebuke to Germany, Vítor Constâncio highlights reforms by southern countries
Claire Jones in Frankfurt – FT
The eurozone’s southern members have done enough to reform their economies and reduce risk in their financial systems for the bloc to speed up banking union, the vice-president of the European Central Bank has said, in an implicit criticism of German foot-dragging.
/jlne.ws/2wNRhuo

Italy Bonds Roiled as Populists Debate $300 Billion Write-Down
John Follain , John Ainger , and Chiara Albanese – Bloomberg
The yield on 10-year notes rose on news of debt write-off plan; Talks between parties drag on as parties struggle to find deal
Italian bonds slumped as populist parties struggling to form a government discussed a potential government debt write-down worth billions of euros.
/jlne.ws/2KrWf1W

Bharara Weighs Independent Bid for New York Attorney General
Henry Goldman – Bloomberg
He has the name recognition, resume and money to make the race; Former prosecutor plays coy about run and says ‘Stay Tuned’
When a New York jury convicted ex-Assembly Speaker Sheldon Silver on bribery charges last week, the biggest winner might have been Preet Bharara, even though he was nowhere near the courtroom.
/jlne.ws/2wLgkOD

White House eliminates top cyber adviser post
Eric Geller – Politico
The Trump administration has eliminated the White House’s top cyber policy role, jettisoning a key position created during the Obama presidency to harmonize the government’s overall approach to cybersecurity policy and digital warfare.
/jlne.ws/2wQTyVY

Justice Department and F.B.I. Are Investigating Cambridge Analytica
Matthew Rosenberg and Nicholas Confessore – NY Times
The Justice Department and the F.B.I. are investigating Cambridge Analytica, the now-defunct political data firm, and have sought to question former employees and banks that handled its business, according to an American official and other people familiar with the inquiry.
/jlne.ws/2wLF5dF

Former Obama ethics chief says $500m Chinese support for Trump project ‘violates emoluments clause’
Clark Mindock – The Independent
A top ethics official in former President Barack Obama’s administration has accused President Donald Trump of violating the Constitution’s emoluments clause after it was disclosed that the Trump Organisation is involved in a project that has received up to $500 million in support from the Chinese government.
/jlne.ws/2wKmI8S

Regulation

SEC Names Caryn E. Kauffman As Chief Financial Officer
Mondovisione
The Securities and Exchange Commission today announced that Caryn E. Kauffman has been named the agency’s Chief Financial Officer (CFO). Ms. Kauffman has served as Acting CFO since February 2017. The CFO plays a key role in making sure SEC resources are effectively allocated to the activities that best accomplish the agency’s mission.
bit.ly/2GiMK2K

SEC Names James Reese Chief Risk and Strategy Officer of the Office of Compliance Inspections and Examinations
SEC
The Securities and Exchange Commission today announced that James Reese has been named the Chief Risk and Strategy Officer of the agency’s Office of Compliance Inspections and Examinations (OCIE). Mr. Reese has served as Acting Chief since February 2017.
/jlne.ws/2wLRWfV

PNB-Nirav Modi fraud: Allahabad Bank CEO might face the axe
Nupur Anand – Quartz
Three months after India’s biggest banking fraud was uncovered, the axe may finally fall on one of the country’s top bankers.
bit.ly/2Ilghyq

The FCA’s Business Plan and Priorities
UK FCA
It is a real pleasure to be at the British Insurance Brokers’ Association (BIBA) Conference today. I want to use my time on the subject of our Business Plan for the next year, and the issues that we have picked out in the general insurance world. I want to then take one particular issue that is attracting much more attention generally, namely the subject of data and its use. I could have given this speech the sub-title ‘9 Days and Counting’. You would rightly have concluded that my counting skills had gone severely off for the royal wedding. I am not trying to match that for popular appeal when I say that it is 9 days to go until the European Union (EU) General Data Protection Regulation (GDPR) comes into force.
/jlne.ws/2wGBo94

Monthly Disciplinary Actions May 2018
FINRA
/jlne.ws/2wLkDth

Remarks of Commissioner Rostin Behnam before Energy Risk USA, Houston, Texas
CFTC
Delivering a Message on Relationship Patterns
/jlne.ws/2wLNcH9

SEC Files Charges in International Manipulation Scheme
SEC
The Securities and Exchange Commission today charged four individuals for their roles in a fraudulent scheme that generated nearly $34 million from unlawful stock sales and caused significant harm to retail investors.
/jlne.ws/2wNW8vK

Testing of FINRA Data Feed Test IP Addresses
FINRA
As previously announced, beginning Monday, July 9, 2018, FINRA will introduce dedicated test broadcast IP multicast channels for evening format testing for its data feeds—BTDS, ATDS, 144A, SPDS, SPDS-144A, TDDS 2.0 and BBDS. FINRA will discontinue disseminating test data via the production data feed channels when the dedicated test broadcast IP multicast channels are implemented.
/jlne.ws/2KumHrU

ASIC cancels AFS licence of Wealth & Risk Management
ASIC
ASIC has cancelled the Australian financial services (AFS) licence of Wealth & Risk Management Pty Ltd (WRM).
/jlne.ws/2wIf9zH

Volcker Rewrite Only Widens Existing Loopholes; The landmark banking rule always allowed for plenty of gray areas.
Stephen Gandel – Bloomberg
The Volcker Rule — which limits banks from risking their own, and more importantly, their depositors’, money on the trading floor — was always supposed to be a regulation that was all about what feels right. Former Federal Reserve chairman Paul Volcker said as much when he advocated for the rule shortly after the financial crisis, equating proprietary trading to pornography with the old line that you know it when you see it.
/jlne.ws/2wImkYM

Investing and Trading

There’s Another, Hidden Rockefeller Auction With Real Bargains; Nadeau’s auction house in Connecticut is very quietly hosting its own Rockefeller estate sale.
James Tarmy – Bloomberg
Much of the success of Christie’s $833 million estate sale of David and Peggy Rockefeller’s belongings can be attributed to the Rockefeller name. It’s hard to imagine a gold money clip selling for $75,000 without it.
/jlne.ws/2wNZXky

Capital Spending Boom Is No Great Boost to Capital Markets; Capex spending by S&P 500 companies is expected to rise 24% in first quarter to $166 billion. But do investors want it?
Akane Otani, Ben Eisen and Chelsey Dulaney – WSJ
U.S. companies are ramping up spending on their businesses at the fastest pace in years, a long-awaited development after years of tepid growth.
/jlne.ws/2wLfr8L

U.S. grain handler Bartlett to merge with logistics firm
Tom Polansek – Reuters
U.S. crop handler Bartlett and Company, which exports American grain to Mexico, will merge with logistics provider Savage Companies, the firms said on Wednesday, in the latest round of consolidation to hit the struggling agriculture sector.
/jlne.ws/2wUCq1B

It’s a Great Time to Be a Wealthy Heir After Trump Tax Overhaul; New law doubles the estate-tax exemption to $22 million a couple, spurring interest in dynasty trusts.
Ben Steverman – Bloomberg
Many of the biggest beneficiaries of President Donald Trump’s tax overhaul haven’t even been born yet. The new law doubles the amount that can be passed to heirs without worrying about estate and gift taxes, to about $22 million for a married couple. But the thresholds are in place only until 2025, and the ultra-rich are turning to a key tool—the dynasty trust—to secure the financial futures of their grandchildren, great-grandchildren and beyond.
/jlne.ws/2KrlktY

Institutions

Barclays appoints exotics and derivatives head from Credit Suisse; Barclays names new global head of exotics and head of derivatives for equities in latest hire from Credit Suisse.
Hayley McDowell – The Trade
Barclays has appointed a new global head of exotics trading and head of derivatives trading for Europe and the Middle East within its equities trading business.
/jlne.ws/2wKf1j0

Regions

City demands ‘practical’ action in Mental Health Awareness Week
Becky Pritchard – Financial News
As the stigma around mental health challenges erodes, City firms aim to improve support for struggling staff
/goo.gl/q5281L

Mark Mobius says he’d invest in North Korea if he could
Steve Mollman – Quartz
North Korea should be a wealthy economy, judging by its natural resources. The mountainous country has mineral wealth worth trillions of dollars, but it lacks the infrastructure and expertise to properly tap into it.
bit.ly/2IhXt33

Voting With Their Cash, Investors Lose Faith in Erdogan Economy
Tugce Ozsoy and Constantine Courcoulas – Bloomberg
Erdogan’s rule no longer seen as optimal result for markets; Turks head to polls to vote in early elections on June 24
For the first time since he came to power in Turkey 15 years ago, investors aren’t so enthusiastic about the prospect of Recep Tayyip Erdogan winning another election.
/jlne.ws/2KptCm3

How the west should judge a rising China; Advanced countries are hobbled by their inability to manage their own affairs
Martin Wolf – FT
Today’s advanced countries, dominated by the US and Europe, have a preponderant share of the global economy. The 14 per cent of humanity that lives in advanced countries generates 60 per cent of world output at market prices and 41 per cent at purchasing power parity.
/jlne.ws/2KrTOMQ

China’s crude oil futures boom amid looming Iran sanctions
Henning Gloystein and Meng Meng – Reuters
A U.S. decision to reimpose sanctions on Iran is supporting China’s newly established crude oil futures, and may spur efforts to start trading oil in yuan rather than dollars, traders and analysts said.
/jlne.ws/2wIpATT

Brexit

Britain’s Hiring Problems Are Widening as EU Workers Stay Away
Andrew Atkinson – Bloomberg
Bank of England highlights issue of fewer foreign workers; Report may fuel concern about Brexit’s impact on economy
The Bank of England cited the loss of European Union workers as it warned that British companies are facing a mounting labor shortage.
/jlne.ws/2wNNsFG

Miscellaneous

Where Graduates Move After College; Which cities have the most drawing power among college grads? Small metros lose out to big ones in gaining graduates, but some buck the trend. Our database of 445 schools shows where the alumni of each one wind up.
Danny Dougherty, Brian McGill, Dante Chinni and Aaron Zitner – WSJ
A college education is often a ticket to the best career opportunities. For most graduates, that means moving to the nation’s biggest metropolitan areas, boosting the intellectual capital that helps those cities thrive.
/jlne.ws/2wMHQeH

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