First Read
Hits & Takes
JLN Staff
The JLN Team was saddened to learn of the passing of FIA employee Bernadette Connolly, who passed away after a long illness. Bernie was loved and very respected, as FIA so appropriately shares in their tribute further down the newsletter.~JJL
Thinking about purchasing a foreign car in the United States? You should consider putting the pedal to the metal on that urge as the WSJ reported that U.S. dealers expect an imported vehicle to cost $5,800 more after a 25 percent tariff increase. ~SD
For the first time since 2008, 3mo T-bills hit a yield of 2 percent.~SD
The SEC is holding an open meeting today and will consider whether to adopt amendments to Rule 3a1-1 and Regulation ATS and new Form ATS-N under the Securities Exchange Act of 1934 related to certain alternative trading systems.~JJL
The @johnlothian Twitter account earned 670.7K impressions over the last 28 day period.~JJL
ICE has completed its acquisition of the Chicago Stock Exchange.~JJL
If we cannot fight global warming we can learn to cope. Vienna’s metro hands out 14,000 deodorants to passengers amid stifling summer heatwave.~JB
EEX reached a new daily #record in European Processing #Potatoes on Monday, 16th July 2018: 1,239 contracts were traded which is equal to a volume of 30,975 tonnes of commodity equivalent. This is the highest daily volume on EEX since the launch of the #agricultural contracts in May 2015. The previous daily record amounted to 796 contracts (equals 19,900 tons), traded on 26th June 2015.~Via LinkedIn
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FIA Family Pays Tribute To Bernadette Connolly, A Well-Respected, Loyal Colleague And Friend
FIA
With great sadness, FIA today announced the passing of Bernadette “Bernie” Connolly, a longtime and highly respected staff member in the London office. Although living with a terminal illness for a number of years, Bernie continued to be the steady cornerstone of FIA’s events in Europe.
/goo.gl/ZS4DzP
**There are unsung heroes in many organizations who do all the things that get the job done and make others look good, with grace. Bernie Connolly was certainly one of my heroes.~JK
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JLN Profile: George Gero’s long winding road through the futures industry
JohnLothianNews.com
George Gero started out as a floor broker on the New York Stock Exchange in 1959. He has been a witness to the growth and changes in the markets over the years, becoming a member of NYMEX, COMEX, and a number of other exchanges. In this John Lothian News Profile, Gero talks about some of the changes he has witnessed, and participated in, throughout his long history in the markets, from the birth of the West Texas Intermediate (WTI) crude oil contract on NYMEX, through decimalization and of course the technology revolution, which changed the entire culture of the futures industry.
Known for sharing his expertise on precious metals in numerous TV interviews, Gero says he wasn’t always bullish on gold, and explains why gold is a “misunderstood asset.” He has learned a number of lessons in his long career in the markets, including how traders use buy stops and sell stops, and that event driven selloffs in the futures markets are sure to find a retracement soon after.
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A Chicago trading firm is teaming up with a group of crypto exchanges to stamp out manipulation
Frank Chaparro – Business Insider
Trading Technologies announced Tuesday a partnership with a group of cryptocurrency exchanges to stamp out manipulation on their platforms.
/jlne.ws/2Lhe1sL
**** A positive step, but there are a lot of exchanges not covered.~JJL
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Tuesday’s Top Three
Our top story of the day on Tuesday was Citadel Securities is growing its DMM business, from Business Insider. Second and third went to the Trump-Putin meeting and so-called press conference. The New York Times’ Thomas Friedman’s Trump and Putin vs. America opinion piece was second. Bloomberg’s Trump Praises Meeting With Putin Despite a Republican Backlash was third.
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MarketsWiki Stats
129,759,170 pages viewed; 23,196 pages; 214,181 edits
MarketsWiki Statistics
Lead Stories
Battle between mainland China and HKEX heats up; Shanghai and Shenzhen’s move on dual-class listings could threaten Hong Kong’s status
Emma Dunkley – FT
Shortly before Charles Li boarded a plane to Beijing, the head of Hong Kong’s stock exchange admitted that there had been some “disagreements” over the future of Stock Connect, the trading link between Hong Kong and mainland China’s equity markets.
/jlne.ws/2Lnabyg
ETFs Unlikely to Cause Widespread Market Disruptions, Research Shows; Rapid expansion of index investing has fueled investor concerns about the pressure passive funds exert on stocks and bonds
Asjylyn Loder – WSJ
The deluge of money flooding into passive investments can swing stock prices, but fears of widespread market disruptions are overblown, according to a new report from S&P Global Inc.
/jlne.ws/2uIpDux
Bernanke, Geithner, Paulson Voice Some Concern About Next Crisis
Rich Miller – Bloomberg
Emergency powers to tackle turmoil seen as weaker than before; Former policy makers also decry rising budget deficits
Federal Reserve policy makers appear confident that they have the weapons they’ll need to fight the next financial crisis. Some of their predecessors on the front lines are not so sure.
/jlne.ws/2LfwBld
Export Boom May Give Houston New Status as Oil-Futures Hub
Stephanie Yang – WSJ
Houston is set to get its own oil futures, a sign of the city’s growing importance as the U.S. sends more crude abroad. Intercontinental Exchange Inc. is planning a new crude futures contract with physical delivery in Houston, the company said Tuesday. The contract will provide traders with direct access to Houston prices. The exchange is aiming to launch this quarter, subject to regulatory review.
/on.wsj.com/2L13S4e
****Reuters – ICE to launch Houston oil contract, building on export growth
DTCC rolls out Brexit plan with new Dublin office; DTCC is the latest post-trade market infrastructure planning to move its European operations from London to Ireland.
Joe Parsons – The Trade
The Depository Trust and Clearing Corporation (DTCC) is planning to open a new office in Ireland to ensure it continues to fully serve European clients after the UK’s exit from the EU.
/jlne.ws/2Jx6n8T
Goldman Sachs Is Secretive and Hidebound. Its New Chief Wants to Change That
Liz Hoffman – WSJ
Lloyd Blankfein secured the survival of Goldman Sachs Group Inc. by leading it through the financial crisis. The challenge for its next leader: how to thrive in a radically altered postcrisis world.
/jlne.ws/2LkOpev
Blankfein’s Vindication and His Uncertain Legacy; As Goldman Sachs CEO Lloyd Blankfein departs, his new strategy for the firm is untested
Aaron Back – WSJ
Goldman Sachs Chief Executive Lloyd Blankfein is leaving on a high note with the firm’s earnings showing strong performance nearly across the board. But the course he has set for the future, featuring more traditional bank activity like lending to consumers, remains unproven.
/jlne.ws/2LnaHMI
With Blankfein exit, Dimon sole survivor of 2008 financial crisis
Kevin Dugan – NY Post
And then there was one. Following the Sept. 30 exit of Goldman Sachs’ Lloyd Blankfein, Wall Street will be down to one major bank CEO who was in that position since before the financial crisis: JPMorgan Chase’s Jamie Dimon.
/jlne.ws/2uHRCe4
HKEX and Mainland exchanges agree on adjusting inclusion arrangements for eligible securities under Stock Connect’s Southbound trading
HKEX
The Stock Exchange of Hong Kong, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), reached a consensus yesterday (Tuesday) with the Shanghai and Shenzhen stock exchanges on adjusting the inclusion arrangements for eligible securities for Stock Connect’s Southbound trading. This followed a productive meeting of the three exchanges.
/jlne.ws/2LjdruM
Coinfloor and Coinfloor EX Partner with Trading Technologies to Implement TT Score Machine Learning Technology for Market Surveillance and Provide Direct Market Access to CoinfloorEX Through the TT and TT Crypto Trading Platforms
Trading Technologies
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, and Coinfloor, a group of leading cryptocurrency exchanges designed for institutional investors, announce that Coinfloor and their subsidiary companies, Coinfloor Exchange UK, Coinfloor Exchange Gibraltar and CoinfloorEX, a British Virgin island-based cryptocurrency futures and spot exchange, will implement Trading Technologies’ TT Score machine learning technology to surveil all market activity on their cryptocurrency exchanges.
/goo.gl/sEnAS3
Quant Funds Are Getting a Bad Rap; Many commentators mix and match to make the results seem worse than reality suggests.
Aaron Brown – Bloomberg
Poor results in the first half of 2018 have led to a backlash against so-called factor investing, which is a strategy that chooses securities based on certain attributes such as profitability or price volatility. But many commentators talk as if the results are worse than reality suggests. These are strategies with decades of strong evidence in favor of them, both in terms of academic studies and realized performance, in diverse market conditions. This year represents a normal downturn.
/jlne.ws/2Lg5rux
Exchanges, OTC and Clearing
Intercontinental Exchange Finalizes Acquisition of Chicago Stock Exchange
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that it has completed its acquisition of the Chicago Stock Exchange (CHX). Terms of the transaction were not disclosed. The financial impact of the acquisition is not material to ICE and will not impact capital return plans.
/jlne.ws/2uJU0kx
How does China, the largest commodities buyer, become a price maker? Owning an offshore exchange is a start
Elaine Chan and Zhang Shidong – South China Morning Post
As the trade war with the US heightens concerns over the security of supplies – from soybeans to technologies – to the world’s biggest factory, China is building its first offshore commodities exchange, which it hopes will buy it a voice in influencing global prices beyond the ongoing dispute.
/goo.gl/YNJFJu
Hong Kong Exchange Moves Closer to Deal With Mainland For Supervoting Shares; Xiaomi shares helped by the news and hit fresh highs
Joanne Chiu – WSJ
Hong Kong Exchanges and Clearing Ltd. touted progress in letting mainland Chinese investors trade locally listed companies with supervoting shares, giving Xiaomi Corp 1810 3.11% a boost.
/jlne.ws/2uGc132
NEX Markets adds BME Clearing to BrokerTec platform; BME Clearing will be available on the NEX Markets BrokerTec FX and fixed income trading platform.
Hayley McDowell – The Trade
NEX Group’s FX and fixed income electronic trading business has added a new clearing option to its BrokerTec platform with BME Clearing.
/jlne.ws/2uIrJdT
Credit Suisse, Goldman Sachs and JP Morgan clear first SOFR swaps with LCH
Hayley McDowell – The Trade
The London Stock Exchange Group’s central counterparty (CCP) LCH has cleared its first interest rate swaps referencing the newly introduced US alternative to the Libor benchmark.
/jlne.ws/2uIUs2g
****Risk.net – First SOFR swaps trade as banks test new benchmark
INTL FCStone Ltd Becomes Member Of LMEprecious
Mondovisione
INTL FCStone Inc. (NASDAQ: INTL) today announced that its London-based subsidiary, INTL FCStone Ltd, is one of the first general clearing members to join the London Metal Exchange’s (LME) newly created LMEprecious service, following its launch last year. The LME, along with the World Gold Council and a group of industry participants, created LMEprecious to introduce exchange-traded, loco London precious metals products.
/goo.gl/otGewv
Warsaw Stock Exchange (GPW): Jakub Modrzejewski Elected New Chairman Of The Exchange Supervisory Board
Mondovisione
Janusz Krawczyk was elected Deputy Chairman of the Exchange Supervisory Board
/jlne.ws/2LjioDU
Nigerian Stock Exchange Sets To Host 6th Nigerian Capital Market Information Security Forum
Mondovisione
The Nigerian Stock Exchange (“NSE” or “The Exchange) is pleased to announce that the 6th edition of its bi-annual Nigerian Capital Market Information Security Forum (NCMISF), themed, “Social Engineering, The Neglected Human Factor”, will hold on Wednesday, July 25, 2018, at the NSE Event Center, 2/4 Customs Street, Lagos.
/jlne.ws/2Lgy8qZ
Single Stock Futures, equity options: Change of the contract size for SSFs on EXOR NV; Withdrawal of admission of eleven Single Stock Futures and two equity options; Further editorial changes
Eurex
The Management Board of Eurex Deutschland took the following decisions with effect from 23 July 2018:
/jlne.ws/2Jxznxd
LCH clears first SOFR swaps
LCH
LCH becomes first clearing house to offer clearing of U.S. Dollar interest rate swaps benchmarked to the new reference rate; This underlines LCH’s support of global rates reform driven by market participants and regulators;\ Credit Suisse, Goldman Sachs and J.P.Morgan among the first participants to clear SOFR swaps
LCH, a leading global clearing house, today announced that it has cleared the first U.S. Dollar interest rate swaps referencing the Secured Overnight Financing Rate (SOFR). Credit Suisse, Goldman Sachs and J.P. Morgan were among the first participants to clear swaps using the new rate.
/jlne.ws/2uMeqsS
Tokyo Stock Exchange and Kyoto University Agreed on Joint Research for Developing New Stock Price Index
JPX
Tokyo Stock Exchange, Inc. and the Education Unit of the Investment Study at the Graduate School of Management of Kyoto University have agreed to commence joint research for developing a new stock price index as below
/jlne.ws/2uJDyRc
Fintech
EU fines Google record EUR4.3bn over Android; Brussels penalises US group for abusing dominance in mobile operating systems
Alex Barker – FT
Brussels has hit Google with a EUR4.3bn fine, imposing a record penalty on the US group for abusing its dominant position in the Android operating system for mobile phones.
/jlne.ws/2LiDW3q
Thomson Reuters Partners with Finbourne for Cloud Investment Platform; Startup signs major data deal for cloud-based portfolio management.
James Rundle – Waters Technology
Thomson Reuters’ clients will use the platform to manage their portfolio and transaction data, which will incorporate Lusid’s event-based ledger system. The technology allows for a bi-temporal view of data, in which data can be viewed as it existed at any point in its history.
/jlne.ws/2LpKq0B
JPMorgan Chase invests in artificial intelligence startup Volley
Anna Irrera – Reuters
JPMorgan Chase & Co (JPM.N) has made a strategic investment in Volley.com, a San Francisco-based startup that uses artificial intelligence to help large enterprises automatically generate training content for employees, the companies said on Tuesday.
/jlne.ws/2LjjXBM
Schroders digital chief to lead Investment Association FinTech initiative; Graham Kellen, chief digital officer at Schroders has been appointed chair of the Investment Association’s FinTech accelerator advisory panel.
Hayley McDowell – The Trade
The chief digital officer at Schroders has been chosen to lead the Investment Association’s FinTech accelerator programme for the asset management industry.
/jlne.ws/2JuLknn
Algomi gains new investor in Euroclear; The data business at Euroclear joins Algomi’s other investors, S&P Global, Euronext and AllianceBernstein.
Hayley McDowell – The Trade
Euroclear’s data and information services business has made a strategic investment in fixed income trading and technology specialist Algomi.
/jlne.ws/2JxUYFy
Japan Revamps Financial Regulatory Agency to Address Issues in FinTech, Cryptocurrencies
Ana Alexandre – Cointelegraph
Japan has overhauled its financial regulator, the Financial Services Agency (FSA), in order to better deal with fintech-related fields, including cryptocurrencies, news outlet Nikkei Asian Review reported July 17. Changes were made to various bureaus in order to make the organization more suited to address new problems and challenges in the financial sector.
bit.ly/2LmEJjI
Cryptocurrencies
Lost your bitcoin password? Call in the crypto-hunters; About $25bn worth of bitcoin is floating out there in the ether, lost or ‘probably lost’
Hannah Murphy – Financial Times
Three-and-a-half years ago, Roger Ver, a bitcoin evangelist so vocal in his support for the cryptocurrency that he was nicknamed the Bitcoin Jesus, showed me how to set up my own online bitcoin wallet. He rounded off his demonstration by giving me £5 worth of the currency. One day, he said, my holdings would be worth more than £1,000.
/goo.gl/XTwxGH
Coinbase Says It Was Wrong About SEC Approval of Acquisitions
Lily Katz – Bloomberg
Coinbase Inc., which on Monday said it got the green light from the U.S. Securities and Exchange Commission to move forward with a trio of acquisitions, now says it never got such an endorsement.
/jlne.ws/2LmBfhd
IBM Is Helping Launch a Price-Stable Crypto With FDIC-Insured Funds
Marc Hochstein and Ian Allison – Coindesk
The latest attempt to create a cryptocurrency pegged to the U.S. dollar, or “stablecoin,” combines 21st-century technology with an invention from the Great Depression.
/jlne.ws/2LjBiu9
The economics of blockchains
Markus K Brunnermeier, Joseph Abadi – VOX
Cryptocurrencies and the underlying distributed ledger technology have exploded into public consciousness over the last few years, with devotees insisting that the technology will revolutionise financial transactions and ownership data. This column identifies a ‘blockchain trilemma’ whereby no ledger can fully satisfy the three desirable properties of decentralisation, correctness, and cost-efficiency. It further explains how distributed ledgers enhance competition but introduce costs above and beyond the well-known electricity costs.
/jlne.ws/2LeE2c9
After Scandal and Death, Two Alpine Banks Target Crypto Gold
Hugo Miller and Patrick Winters – Bloomberg
Falcon, Frick target bitcoin brokers and own private clients; ‘Crypto Valley is almost unbanked,’ says Falcon’s desk head
Walk into Falcon Private Bank on the Pelikanstrasse in central Zurich and you’re immediately struck by the giant photo of a woman crouched in the sprinter’s starting position, painted head-to-toe in gold.
/jlne.ws/2LgSbFQ
W. Va. Blockchain Experiment Could Be the Future of U.S. Voting
Jen A. Miller – ThirtyK
With the U.S. election process shown to be vulnerable to hacking during the 2016 presidential race, West Virginia could be leading the way to prevent a repeat in the 2018 midterms.
In May, the Mountain State became the first to allow voting by blockchain when it allowed overseas servicemen, servicewomen and their spouses from two of the state’s counties to cast ballots in the state’s primary using the Voatz app. Officials are now saying the program likely will be expanded to the entire state for the November general election.
bit.ly/2Ljq8p7
Cryptos Push Korea’s Financial Regulator to Consider Restructuring
Marin Marinov – Cryptovest
South Korea’s Financial Services Commission (FSC) has revealed a plan for restructuring in a bid to foresee market changes and safeguard investors from the challenges that new financial technologies like cryptocurrencies pose. The organizational reshuffle includes a new body that will issue recommendations related to virtual coins as well as a mega-department that will supervise all financial sectors.
bit.ly/2LltXu5
Oracle Blockchain Cloud Service Now Available for All Potential Clients
Anatol Antonovici – Cryptovest
US tech corporation Oracle announced on Monday that its Oracle Blockchain Cloud Service has become available for all clients. The move follows months of system testing by early adopters. Businesses and organizations can now use the solution to develop blockchain networks that ensure secure and seamless transactions and would allow streamlining processes in the supply chain. Oracle’s blockchain system is already used by several companies, such as Indian Oil, MTO, Arab Jordan Investment Bank, TradeFin, CargoSmart, Neurosoft, Certified Origins, Intelipost, and Nigeria Customs.
bit.ly/2LlPKBK
Politics
How we lost America to greed and envy; The US president is hostile to the core values the country used to stand for
Martin Wolf – FT
Who lost China? This cry went up in the US after Mao Zedong’s victory in China’s civil war in 1949. It was a strange question. When did the US own China? Strange or not, this cry helped Republicans win power in 1952. It promoted the rise of Joseph McCarthy, whose politics had similarities to those of Donald Trump ó above all, in the charge that traitors infest the US government. In the senator’s case, the target was the state department; for Mr Trump, it is the FBI. The question today is: who lost America? And is it lost for good?
/jlne.ws/2LiGrCQ
Trump Sheds All Notions of How a President Should Conduct Himself Abroad
Mark Landler – NY Times
President Trump, who gleefully defies the norms of presidential behavior, went somewhere in Helsinki, Finland, on Monday where none of his predecessors have ever gone: He accepted the explanation of a hostile foreign leader over the findings of his own intelligence agencies.
/jlne.ws/2LjfcYU
Now We All Know What Putin Has on Trump
Julia Ioffe – GQ
After a summit that left most Americans stunnedóbut maybe not surprisedóthe truth is? now? obvious: Trump is doing Putin’s bidding. And the reasons why are clear. GQ’s Julia Ioffe on Putin’s monumental win and the lasting result of Trump’s Helsinki debacle?.? The kompromat is out of the bag.
/jlne.ws/2LpXDqc
The Trump First Doctrine; Putin respects strength but Trump showed weakness.
The Editorial Board – WSJ
Donald Trump left for Europe a week ago with his reputation enhanced by a strong Supreme Court nomination. He returned Monday with that reputation diminished after a tumultuous week of indulging what amounts to the Trump First Doctrine.
/jlne.ws/2LjRAmE
Winklevoss twins donate $130K to Cuomo after getting state approval
Nolan Hicks – NY Post
The Facebook-famous Winklevoss twins donated $100,000 to Gov. Cuomo’s campaign ó and less than a month later, state authorities approved their cryptocurrency exchange, campaign-finance filings show.
/jlne.ws/2LjgVxo
U.S. Treasury moves to protect identities of ‘dark money’ political donors
Reuters Staff
he U.S. Treasury said on Monday that it will no longer require certain tax-exempt organizations including politically active nonprofit groups, such as the National Rifle Association and Planned Parenthood, to identify their financial donors to U.S. tax authorities.
/jlne.ws/2LpVb2Y
Twitter boots Guccifer 2.0 and DCLeaks after Mueller indictment
Fox News
Twitter on Saturday kicked off two accounts, Guccifer 2.0 and DCLeaks, that were connected to the 2016 hack of the Democratic National Committee and the leak of stolen documents. Axios reported the suspension of the accounts, which comes after the U.S. Department of Justice on Friday said that 12 Russian military officers have been indicted on accusations of interfering in the 2016 U.S. presidential election. Both accounts were active during the election cycleóGuccifer 2.0 was also suspended once in 2016óand spread a range of documents that showed some of the backroom happenings at the DNC.
/jlne.ws/2LiC0YI
Trump Retreats and Says He Accepts U.S. Finding Russia Meddled
Jennifer Jacobs and Justin Sink – Bloomberg
Still casts doubt, saying it ‘could be other people also’; Responds to GOP Blowback Against Helsinki Summit Comments
President Donald Trump said Tuesday he accepts the conclusion by U.S. intelligence agencies that Russia interfered in the U.S. presidential election, marking a rare retreat from comments just a day earlier amid a backlash from Republicans.
/jlne.ws/2LmAepk
Mayor Lloyd Blankfein? Jon Corzine Says He’d Be ‘Very Good’
Max Abelson – Bloomberg
Few executives wield more power over global capitalism than the head of Goldman Sachs Group Inc. Fewer know what it’s like to leave that perch. Jon Corzine is one of them.
/jlne.ws/2Llp1p3
Prayer, Guns Paved Path to GOP Influence for Accused Russian
David Kocieniewski, Greg Farrell and Polly Mosendz – Bloomberg
Aide to Putin ally cultivated NRA, religious groups, U.S. says; Erickson said to be prominent conservative vouching for Butina
As a Russian seeking to ingratiate herself in the U.S. political world, Mariia Butina zeroed in on two pillars of the conservative establishment: gun rights activists and religious groups.
/jlne.ws/2LfuFJt
Regulation
ESMA Is Seeking Secondary Market Experts To Join Its Consultative Working Group
Press Release
The European Securities and Markets Authority (ESMA) today launches a process to renew the composition of the Consultative Working Group (CWG) of the ESMA Secondary Markets Standing Committee (SMSC). ESMA is calling for expressions of interest from stakeholders to become a member of the CWG by 28 August 2018.
/goo.gl/wgDj6a
Daniel Gorfine to Testify before the House Committee on Agriculture
U.S. CFTC
Daniel Gorfine, Director of LabCFTC and Chief Innovation Officer, will testify before the House Committee on Agriculture on Cryptocurrencies: Oversight of New Assets in the Digital Age
/goo.gl/MMg51R
Kraft Says Traders Shouldn’t Get CFTC Reports In Wheat Row
Diana Novak Jones – Law360
A proposed class of traders suing Kraft over its alleged manipulation of the wheat futures market shouldn’t get expert reports from a parallel U.S. Commodity Futures Trading Commission suit, the food giant told an Illinois federal judge Monday, arguing the material would give them an unfair advantage.
/jlne.ws/2NqxYe9
US swaps users want CFTC rules lifted in Libor switch; Dodd-Frank should not catch contracts amended as part of move to new rates, letter argues
Robert Mackenzie Smith – Risk.net
Swaps users in the US have called for guidance on the regulatory treatment of trades that are amended as part of the market’s transition away from US dollar Libor. Without some form of exemption, trades that pre-date clearing, margining and other post-crisis rules could suddenly be dragged into scope if changes are made to the contracts.
/jlne.ws/2Liipb4
SEC Charges BGC Financial for Failure to Preserve Documents and Maintain Accurate Books and Records
SEC
The Securities and Exchange Commission today announced that New York-based broker-dealer BGC Financial has agreed to pay a $1.25 million penalty to settle charges that it failed to preserve audio files sought by the SEC and inaccurately recorded travel, entertainment, and other expenses.
/jlne.ws/2LpnA90
BGC fined $1.25 million for deleting audio records; BGC will pay fine after failing to provide audio records and data requested by US financial watchdog.
Hayley McDowell – The Trade
New-York-based broker dealer BGC Financial has agreed to pay a $1.25 million fine to settle allegations that it deleted records sought after by US authorities.
/jlne.ws/2Jx7llx
Ex-Deutsche Bank Executive Denies Index Rigging in Paschi Case
Sonia Sirletti, Vernon Silver and Sergio Di Pasquale – Bloomberg
Says trader’s “well done!” email not linked to Paschi deal; Deal was so large “entire bank” consulted for transaction
Former Deutsche Bank AG executive Michele Foresti, in key court testimony, denied he manipulated the firm’s indexes as part of an allegedly fraudulent scheme to help Banca Monte dei Paschi di Siena SpA conceal losses.
/jlne.ws/2Jxw8px
Asset Manager With Fake Rothschild Website Gets BaFin Warning
Jan-Patrick Barnert – Bloomberg
Helmuth Newin website almost identical to that of private bank; Rothschild plans to take legal action to protect its brand
An asset manager sporting a website that closely resembles that of Edmond de Rothschild Group has no license to conduct business in Germany, the country’s financial regulator BaFin said, warning investors away from the “unauthorized institution.”
/jlne.ws/2uJQUNo
ESMA clarifies endorsement regime for non-EU credit ratings
ESMA
The European Securities and Markets Authority (ESMA) has published today supplementary guidance on the application of the endorsement regime for non-EU credit ratings under the Credit Rating Agencies Regulation (CRAR). In order to ensure that third-country credit ratings, which are endorsed for use by EU investors, meet requirements which are at least as stringent as those set out in CRAR, ESMA adds a new section to its Guidelines on Endorsement first published in November 2017.
/jlne.ws/2Jwfzuc
2018 South Region Member Forum
FINRA
The South Region Member Forum is a one-day event designed to provide financial professionals associated with FINRA member firms in the South Region the opportunity to engage in key discussions with FINRA staff, and connect with industry leaders and peers. The seminar also includes thoughtful discussions around the future landscape of the financial services industry. Meet one-on-one with FINRA Regulatory Coordinators, and Surveillance and District Directors to discuss firm-specific questions.
/jlne.ws/2Jz8hps
2018 North Region Member Forum
FINRA
The North Region Member Forum is a one-day event designed to provide financial professionals associated with FINRA member firms in the North Region the opportunity to engage in key discussions with FINRA staff, and connect with industry leaders and peers. The forum also includes thoughtful discussions around the future landscape of the financial services industry. Meet one-on-one with FINRA Regulatory Coordinators, and Surveillance and District Directors to discuss firm-specific questions.
/jlne.ws/2JyWmI3
FCA response to the CMA’s provisional decision report on its investment consultants market investigation
UK FCA
We welcome the Competition and Markets Authority’s (CMA’s) in-depth work on competition in the market for investment consultancy and fiduciary management services. As part of our asset management market study, we referred this sector to the CMA for a detailed investigation because we had serious competition concerns.
/jlne.ws/2Jy3Jj2
Investing and Trading
The business value of appearing on The New York Times
London School of Economics and Political Science
Firms that are more visible in the press are better governed and more profitable. But investors underestimate the value of visibility and could profit from investing into high-visibility firms.
/jlne.ws/2LmBRU3
New York FX Traders Are More Bullish the Dollar Than Londoners
Emma Ockerman – Bloomberg
Depending on where you’re trading in the world, the sun might shine a little differently on certain currency pairs.
/bloom.bg/2JxmYt8
All Eyes Are Glued to a Leveraged Gold ETF That’s Trading Its Size in Volume
Carolina Wilson – Bloomberg
Direxion’s $1.2 billion NUGT absorbs $1.8 billion in trades; Gold hits lowest since July 2017, triggering action in fund
/bloom.bg/2LqLVYV
Buffett’s Berkshire Hathaway loosens policy on stock buybacks
Jonathan Stempel, Trevor Hunnicutt – Reuters
Berkshire Hathaway Inc (BRKa.N) on Tuesday eliminated a restriction on its ability to buy back its own stock, a change that could help billionaire Chairman Warren Buffett deploy more of the conglomerate’s cash.
/jlne.ws/2Lpmkmi
Jerome Powell Hints at a Little Trouble With the Curve; An inversion might change the Federal Reserve’s plans for rate hikes.
By Brian Chappatta – Bloomberg
Federal Reserve Chairman Jerome Powell didn’t give bond traders a lot to chew on during his testimony before the Senate Banking Committee on Tuesday.
/jlne.ws/2LlomE5
Treasury Yield Curve Is Heading for Inversion, Fund Managers Say
Luke Kawa – Bloomberg
The Treasury curve is on a one-way trip to inversion. That’s the assessment of fund managers surveyed this month by Bank of America Merrill Lynch, which reported that investors’ expectations for curve steepening sank to the lowest level in more than seven years.
/jlne.ws/2LiC6iZ
How to Prepare for a Stock Market Surprise; The markets have been fairly calm lately. But when financial stress returns, will you be prepared? We offer a classic solution, as well as market insight and analysis, in our quarterly report on investing.
Jeff Sommer – NY Times
When you consider how sharply stocks declined early in 2018 and how many problems still appear to be lurking around the world, the peaceful state of financial markets over the last few months has been nothing short of remarkable.
/jlne.ws/2Ln9DZe
Institutions
Goldman Sachs pressed on strategy as new CEO confirmed
Matt Scuffham, Aparajita Saxena – Reuters
Goldman Sachs Group Inc was pressed for details on new businesses after an uneven second-quarter performance, a likely preview of challenges incoming Chief Executive David Solomon will face as he leads the Wall Street bank’s overhaul.
/reut.rs/2LpZBTU
Goldman Is Carving Out Less Revenue for Banker Bonuses
Sridhar Natarajan – Bloomberg
A big change is afoot inside Goldman Sachs — aside from the disc jockey slated to become CEO.
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New Goldman CEO shows Wall Street is still a man’s world; The male-dominated firm’s new leader is the third straight without hair
Aaron Elstein – Crain’s New York
Back in 1997, Goldman Sachs had about 10,000 employees, the overwhelming majority of them white men. The firm’s chief executive at the time, Jon Corzine, told The Wall Street Journal that one measure he would judge his tenure by would be progress in hiring and promoting minorities and women. He said he wasn’t “satisfied with where we are by any stretch of the imagination.”
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Next Goldman CEO to take on old problems, new businesses
Matt Scuffham and Jessica DiNapoli – Reuters
Goldman Sachs Group Inc (GS.N) named David Solomon as its next chief executive officer on Tuesday, ushering in a new era for the Wall Street bank as it expands into different businesses and revamps familiar ones.
/jlne.ws/2LiEQgk
Read Lloyd Blankfein’s Farewell Memo to His Goldman Sachs Team
Jamie Condliffe – NY Times
Goldman Sachs on Tuesday announced that its chief executive, Lloyd C. Blankfein, will step down on Oct. 1. Here’s the farewell memo that Mr. Blankfein sent to Goldman’s employees:
/jlne.ws/2LlLKRK
Scaramucci’s Path to $20 Billion Runs Through a Hot China Market
Bloomberg News
Funds of hedge funds are opening at a record pace in China; Crackdown on shadow banking sends investors to alternatives
An investment offering that most of the world has shunned is suddenly all the rage in China, and money managers from UBS Group AG to SkyBridge Capital are moving to grab a slice of the bounty.
/jlne.ws/2LnaER2
Lloyd Blankfein Poised for $85 Million Payout When He Leaves Goldman
Alicia Ritcey – Bloomberg
Lloyd Blankfein could get as much as $84.7 million in compensation when he departs Goldman Sachs Group Inc. in October after 36 years at the investment bank.
/jlne.ws/2LpXSBC
Morgan Stanley profits surge on trading, investment banking gains
Laura Noonan in New York – FT
Morgan Stanley has rounded off the US banks earnings season on a high, reporting a 39 per cent surge in quarterly net income as its investment bank enjoyed a trading and deal-making boom while its wealth management division improved profitability.
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Regions
Japan, EU Sign Trade Deal: ‘We Stand Together Against Protectionism’; The agreement, which eliminates most bilateral tariffs, comes as the U.S. has put up trade barriers
Alastair Gale and Emre Peker – WSJ
The leaders of Japan and the European Union signed a deal to create one of the world’s largest liberalized trade zones, a contrast to escalating trade disputes between the U.S. and several of its trading partners.
/jlne.ws/2Lmrdg7
Danske’s Latest Selloff Brings 2018 Market Loss to $10 Billion
Christian Wienberg – Bloomberg
This year may go down as one of the worst in Danske Bank A/S’s post WWII history.
/jlne.ws/2JxLwlH
Noah Confident of Profit in Consolidating China Wealth Market
Bloomberg News
U.S.-listed shares fell 26% after company’s poor 1Q results; President Lam expects 85% of rivals to be weeded out
China’s first private asset manager for the ultra rich is confident it’ll meet its 2018 profit forecast, despite disappointing first-quarter results that triggered a slide in the company’s U.S.-listed shares.
/jlne.ws/2Jy6uAN
India Poised to Infuse $2 Billion Into State-Run Banks
Siddhartha Singh – Bloomberg
Punjab National Bank is said to get largest single allocation; Injection intended to bolster capital, meet bond payments
India will inject at least 135 billion rupees ($2 billion) into state-controlled banks this month, as it seeks to shore up capital buffers and help the lenders meet coupon payments on their bonds, people familiar with the matter said.
/jlne.ws/2uKj3DL
Russian warship ‘carrying £100 billion in gold’ discovered off South Korea
Julian Ryall – Telegraph
A South Korean salvage team has discovered the wreck of a Russian warship that was sunk in a naval battle 113 years ago and is believed to still contain a trove of gold bullion and coins worth 150 trillion won, or £100 billion.
/jlne.ws/2uIVxHm
Brexit
No-deal Brexit would have big economic consequences – Carney
Richard Partington – The Guardian
Mark Carney has warned that Britain would face “big economic consequences” and could need emergency interest rate cuts if the country crashes out the European Union without a deal.
/goo.gl/41xQA5
‘Fanatical’ pro-Brexit lawmakers pushing UK toward new election: former PM Major
Reuters
Prime Minister Theresa May could be forced to call another election in months if the “fanatical” pro-Brexit wing of her party do not compromise over how Britain leaves the EU, former prime minister John Major warned on Tuesday.
/reut.rs/2JwsQTD
Miscellaneous
Exclusive: Snapchat is launching a news partnerships initiative
Axios
Snapchat is launching a news partnership initiative with the goal of helping journalists and news organizations better mine the billions of public videos and photos shared daily on Snapchat for news and information.
/jlne.ws/2LkPAL0
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