Eris Exchange to Create Crypto Market Backed by DRW, Virtu

First Read

Brexit Has Industry Participants Prepping For “Worst Case Scenario”
Jim Kharouf – JLN

Industry participants are preparing for a worst case scenario with the UK Brexit coming next March.

Frustration with the process and lack of political leadership was palpable at the World Federation of Exchanges Annual Meeting in Athens. On a Brexit panel Thursday, industry executives said the damage to UK and EU markets could be severe.

“Brexit is making the European market smaller and it will take years to rebuild,” said Jarkko Syyrilä, head of public affairs at Nordea Wealth Management. “Politics is completely destructive. We are just six months away and we have no clarity on what is going to happen in the markets. What is going to happen to the liquidity of the markets. We need some guidance from regulators on what is going to happen. Now we just have rumors.”

To read the rest of this story, go https://goo.gl/z5Vf8Lhere.

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ErisX Enters the Crypto World With New Spot and Futures Platform
Sarah Rudolph – JLN

(See the ErisX press release directly below)

It looks like there is a growing market for regulated exchange trading of cryptocurrencies.

ErisX, the U.S. futures exchange best known for offering listed interest rate swap futures, just announced plans to launch a derivatives exchange (DCM) and clearing organization (DCO) that will offer digital asset futures and spot contracts on one platform. The exchange plans to offer contracts on bitcoin, bitcoin cash, ethereum and litecoin.

This is going a step beyond the CME and the Cboe (who are investors in ErisX), which began offering cryptocurrency futures in December 2017.

To read the rest of this story, go here.

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ErisX Announces New Exchange for Digital Asset Investors and Traders
ErisX Press Release via BusinessWire
ErisX today announced plans to launch a derivatives exchange (DCM) and clearing organization (DCO) that will include fully regulated digital asset futures and spot contracts on one platform.
This new venture is backed by both new and existing investors spanning the traditional capital markets and digital asset markets including DRW Venture Capital, Valor Equity Partners, TD Ameritrade (AMTD), Virtu Financial (VIRT), NEX Opportunities, Cboe Global Markets (CBOE), CTC Group Investments, Digital Currency Group, Nico Trading, Pantera Capital and Third Stone Partners. ErisX is proud to launch with the support of CMT Digital, Susquehanna International Group, XR Trading, C2 Capital Management and ED&F Man Capital Markets Inc. who also participated in the investment round.
/goo.gl/CXVM2S

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Hits & Takes
JLN Staff

ALTSO’s annual Rocktoberfest event in Chicago is right around the corner – next Thursday! – and readers of the newsletter are in for a treat. Enter the promo code “Lothian” when purchasing tickets and you’ll get three tickets for the price of two. (Scroll to the bottom of the linked page to purchase tickets.) This year’s event is bigger and badder than ever, so come out, see folks from the industry, listen to live music, grab a cocktail and bid on some awesome auction items – all in the name of a great cause. We’ll see you there! ~SD

In a complaint that found virtual currencies are commodities, the CFTC stated “As alleged in the amended complaint, Defendants lied that MBC could be bought, sold, donated, used to make purchases, and was actively trading. To give the illusion that MBC was a safe bet, Defendants also lied that MBC was backed by millions of dollars in gold, and would be used to stabilize the economies of twenty-two countries, as alleged in the amended complaint.” Since when is stabilizing the economies of multiple countries part of the fraud script? ~JJL

FIA Cares was recognized by @ASAEcenter Summit Awards as an award winner for their charitable efforts.~JJL

IMC celebrated the official opening of a new, IMC-funded soccer field, playground and basketball court at Little Village Academy in Chicago.~JJL

Frankfurt’s “Bull and Bear” sculptures in front of the Frankfurt Stock Exchange will turn 30 on Saturday.~JJL

From Athens, the World Federation Of Exchanges published five sustainability principles for member exchanges on Thursday.~JK

Samara Cohen, managing director and head of iShares Global Markets BlackRock, said the global ETF market will reach $12 trillion of assets under management by 2023, at the WFE Annual Meeting. Today it stands at $5.3 trillion.~JK

One of the realities of markets is the impact of politics. The Palestinian Exchange saw its daily stock average turnover fall from about $2 million per day to less than $300,000 since with the collapse of political dialog on Israel and Palestine. The exchange was forced to trim its staff from 61 to 24.~JK

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Finance, the media and a catastrophic breakdown in trust; John Authers had a ringside seat to some of the most important financial stories of our time. Here’s what he learnt
John Authers – FT
Finance is all about trust. JP Morgan, patriarch of the banking dynasty, told Congress in the 1912 hearings that led to the foundation of the US Federal Reserve, that the first thing in credit was “character, before money or anything else. Money cannot buy it.
/jlne.ws/2P8BpY5

***** John Authers is putting all his skills to work for the FT before he moves on to Bloomberg.~JJL

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The Big Hack: How China Used a Tiny Chip to Infiltrate Amazon and Apple; The attack by Chinese spies reached almost 30 U.S. companies by compromising America’s technology supply chain, according to extensive interviews with government and corporate sources.
Jordan Robertson, Michael Riley – Bloomberg
In 2015, Amazon.com Inc. began quietly evaluating a startup called Elemental Technologies, a potential acquisition to help with a major expansion of its streaming video service, known today as Amazon Prime Video. Based in Portland, Ore., Elemental made software for compressing massive video files and formatting them for different devices. Its technology had helped stream the Olympic Games online, communicate with the International Space Station, and funnel drone footage to the Central Intelligence Agency. Elemental’s national security contracts weren’t the main reason for the proposed acquisition, but they fit nicely with Amazon’s government businesses, such as the highly secure cloud that Amazon Web Services (AWS) was building for the CIA.
/jlne.ws/2Ph5t3K

**** I am surprised anyone was surprised.~JB

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American Airlines CEO: More Crowded Planes are ‘Much More Comfortable’
Bill Murphy Jr. – Inc.com
You can’t believe your own eyes. (Or your legs. Or your butt.)
That’s the message you’ll likely take away from what the CEO of American Airlines said recently.
Because American Airlines isn’t alone in reducing the spacing between seats on some of its planes in order to cram more rows in and increase revenue. But they do sometimes seem to be in a class by themselves when it comes to justifying it.
/jlne.ws/2zRAUwh

**** Someone needs a new PR person, I think. ~JB

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Stanford University students employ AI to make the dankest memes
Ryan Daws – AI News
AI will be groundbreaking in areas like healthcare, but I don’t think many expected it to be creating the dankest new memes.
Some pioneering students from Stanford University exposed a neural network to over 400,000 memes in a bid to teach it the nuances of modern humour.
/jlne.ws/2zRHyCZ

**** Once they teach the computer to post cute cat pictures it is all over for us. ~JB

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Wednesday’s Top Three
It looks like people still want to land a job on Wall Street. Our top story Wednesday was Business Insider’s These are the top 10 colleges if you want to land a job on Wall Street. Second was John Lothian News’ Build or Buy? Exchanges Continue to Branch Out For Revenues Through Acquisition. And we go from college to retirement with the No. 3 story, Barron’s’ Your Kids Are Probably Ruining Your Retirement

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MarketsWiki Stats
133,254,014 pages viewed; 23,288 pages; 215,169 edits
MarketsWiki Statistics

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Lead Stories

Eris Exchange to Create Crypto Market Backed by DRW, Virtu
Matthew Leising and Alastair Marsh – Bloomberg
Will offer traders of digital assets and related futures; Effort still needs regulatory approval to open in 2019
Eris Exchange LLC, a Chicago-based derivatives market, is opening a cryptocurrency market backed by DRW Holdings Inc., Virtu Financial Inc. and TD Ameritrade Holding Corp.
/jlne.ws/2IApxf0

Federal Court Finds that Virtual Currencies Are Commodities; Court Denies Defendants’ Motion to Dismiss in Commodity Fraud Case Involving the Virtual Currency My Big Coin
CFTC
On September 26, 2018, Senior Judge Rya W. Zobel of the U.S. District Court for the District of Massachusetts, entered an order holding that the Commodity Futures Trading Commission (CFTC) has the power to prosecute fraud involving virtual currency and denying the defendants’ motion to dismiss the CFTC’s amended complaint.
/goo.gl/P62ydB

The $500 Million Central Bank Heist—and How It Was Foiled; Officials in Angola have charged four men in connection with an alleged plot that would have been one of the biggest of its kind
Margot Patrick, Gabriele Steinhauser and Patricia Kowsmann- WSJ
An accountant walked up to a teller at a suburban London branch of HSBC Holdings PLC and asked to transfer $2 million to Japan. The teller pulled up the account and stared at her screen. There was $500 million in the account.
/jlne.ws/2P58Cnk

Powell Heaps Trump-Like Praise on Economy as Rate Hikes Loom
Rich Miller – Bloomberg
There’s a powerful person in Washington besides the president who can barely contain his enthusiasm for the U.S. economy.
It’s the man Donald Trump appointed to head the Federal Reserve and whom he’s attacked for raising interest rates: Jerome Powell.
/jlne.ws/2zQBJFH

Euribor transition raises fears of sleepwalk to chaos; Authorities attempt to wean investors, companies and banks off -ibor benchmarks
Philip Stafford in London- FT
When a EUR150tn market is required to make a colossal leap into the unknown the risk of a screw-up isn’t negligible.
/jlne.ws/2PaPh4b

Nasdaq’s Nordic power market boomed before default
Lefteris Karagiannopoulos – Reuters
Risk levels in Nasdaq’s (NDAQ.O) Nordic commodities market had more than doubled in the six months prior to a top trader’s default in November, the result of a rapid accumulation of bets amid soaring electricity prices, the exchange told Reuters.
/goo.gl/gb9cse

FX: Market responds to BIS report – ‘That’s evolution, baby’
Paul Golden – Euromoney
Participants and analysts have dismissed any concerns about the key findings of the BIS market committee’s electronic markets report relating to the concentration of FX turnover and spot trading fragmentation.
/goo.gl/EnE4Yq

EU regulators draft market agreements with UK’s FCA; Talks for memorandum of understanding begin as fears grow over no-deal Brexit
Philip Stafford – Financial Times
European markets regulators are drafting a series of bilateral agreements with their UK counterparts to limit market instability as fears grow that Britain will leave the EU without a political agreement.
/goo.gl/opXaEP

Bond Bears Popping Champagne See Treasury Yields Even Higher
Adam Haigh and Ruth Carson – Bloomberg
A week after Treasuries mysteriously rallied in the wake of the Federal Reserve lifting its long-term interest-rate forecast, short sellers in the $16 trillion market have reason to celebrate.
The bond selloff deepened Thursday after data Wednesday on U.S. private-sector jobs bolstered the case for the Fed to keep raising rates into 2019, sending 10-year notes down the most in more than a year. Thirty-year Treasury yields pushed above the 3.25 percent level that fixed-income veteran Jeffrey Gundlach identified as a “game changer.”
/jlne.ws/2zRt59U

UBS Warms to Italy Bonds as Allianz Sees Budget Panic as `Crazy’
Anooja Debnath and Eric Lam – Bloomberg
A trio of funds backed by $3 trillion in global assets reckon the recent sell-off in Italian bonds is overdone.
UBS Wealth Management is buying into the weakness in the nation’s debt, along with Allianz Global Investors and Nomura Asset Management. The surge in Italian bond yields is a reflection of a market in fear, which will be forgotten noise in a few months for Allianz.
/jlne.ws/2zQWili

Exchanges, OTC and Clearing

Intercontinental Exchange Reports September and Third Quarter 2018 Statistics
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported September and Third Quarter 2018 trading volume and related revenue statistics
/goo.gl/DfGqZw

CME Group Averaged 17.5 Million Contracts Per Day in September 2018, Up 3% from September 2017
PRNewswire
CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 17.5 million contracts per day during September 2018, up 3 percent from September 2017. Open interest at the end of September was 120 million contracts, up 6 percent from September 2017 and up 11 percent from year-end 2017. Third-quarter 2018 ADV reached 15.6 million contracts, down 1 percent from third-quarter 2017.
/goo.gl/xC8wn9

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

Update on the integration of Euronext Dublin
Euronext
Euronext today announced an update on the integration of Euronext Dublin, of which Euronext completed the acquisition on 27 March 2018.
/goo.gl/hCS3pH

CISOs face third-party risk management challenges; Security professionals understand all too well what’s at stake, and that’s why more companies look to tighten up security with third parties.
Steve Zurier – TechTarget
The Options Clearing Corp. in Chicago runs one of the largest equity and derivatives clearinghouses in the world.
/jlne.ws/2P8xhr3

Strong month for European equity index derivatives; 21 percent increase year-on-year with 88 million traded contracts in September
Eurex
In September, Eurex, Europe’s largest derivatives exchange and part of Deutsche Börse Group, has seen strong demand for its products. Traded European equity contracts increased by 18 percent to 23.7 million, from 20.1 million in September 2017. Demand was particularly high for European equity index derivatives (+21 percent) with 88 million traded contracts (72.6 million in September 2017).
/jlne.ws/2Iy7er4

Money Market Derivatives: Introduction of Three-Month SARON Futures
Eurex
Effective 29 October 2018, Eurex Clearing AG (Eurex Clearing) will offer clearing for the Three-Month SARON Futures introduced at Eurex Deutschland.
/jlne.ws/2IHOgOR

Euronext, Turquoise Boost Block Competition
MarketsMedia
Euronext has added 25 new stocks from the London Stock Exchange’s small and mid-cap market to its block trading venue. Last month Turquoise, the LSE Group’s pan-European multilateral trading facility, said Euronext Growth stocks were available to trade on its platform.
/jlne.ws/2Ozyo65

The World Federation of Exchanges publishes five Sustainability Principles for member exchanges
World Federation of Exchanges
?Athens, 4 October 2018 – The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today published a set of five WFE Sustainability Principles (“the Principles”) that constitute a formal declaration by the WFE and its membership to take on a leadership role in promoting the sustainable finance agenda.
/jlne.ws/2OzQc12

ASX AGM results
ASX
/jlne.ws/2OxtNBD

Fintech

A senior Goldman Sachs fintech banker was about to join JPMorgan — but then got lured back —and it’s another sign of the fierce battle for M&A talent
Dakin Campbell and Olivia Oran – Business Insider
Jeff Gido, a partner at Goldman Sachs and the head of the bank’s financial technology group, was set to leave the bank after 17 years and join rival JPMorgan.
That is, until Goldman countered with what’s known as a bid-back, according to people familiar with the matter. Gido is now staying put at Goldman. He joined Goldman in 2001, according to FINRA records, and became partner in 2014.
/jlne.ws/2zQWbXa

Investors Cool on Hotly Anticipated London FinTech IPO
Philip Georgiadis – WSJ
London’s landmark fintech IPO flopped Wednesday, with shares trading sharply below their offer price, in a key test of investor appetite for the sector.
Shares in peer-to-peer lender Funding Circle closed at 365 pence per share ($4.74) on Wednesday, well below the firm’s flotation price of 440 pence. Shares had earlier fallen as low as 335 pence, a more than 20% discount to the IPO.
/jlne.ws/2zSoiW1

JPMorgan taps blockchain tech to combat Amazon, FinTech threat
Olivier Acuña – Coin Rivet
US financial giant JPMorgan’s future is based on a digital transformation strategy that will include blockchain, robotics and artificial intelligence (AI) among other new technologies.
A study by Research and Markets, titled ‘Digital Transformation, and FinTech Strategies of JPMorgan Chase’, reveals how the FI has been expanding “aggressively with many mergers and acquisitions”.
/jlne.ws/2zQOT5G

Fintech bolsters Bahrain’s bid to revive finance hub status; The kingdom is trying to carve out a niche amid tough competition from regional rivals
Simeon Kerr – FT
Bahrain rose to prominence as a financial centre during Lebanon’s civil war more than 30 years ago, usurping Beirut as regional hub by positioning itself as a global offshore banking centre with easy access to Saudi Arabia. But Dubai wrested this position from the kingdom a decade ago. “Dubai stole the services sector away from Bahrain,” in the words of one banker.
/jlne.ws/2P9cK5R

Luxembourg and Australia enter agreement on fintech and regtech
ASIC
The Luxembourg Commission de Surveillance du Secteur Financier (‘CSSF’) and The Australian Securities and Investments Commission (‘ASIC’) today signed a Cooperation Agreement which provides a framework for cooperation to understand financial innovation in each jurisdiction.
/jlne.ws/2OAaOWN

smartTrade Technologies Chosen By SEBA Crypto AG To Provide Best-In-Class Crypto And Traditional Assets Trading Platform
MondoVisione
smartTrade Technologies (smartTrade), a multi-asset electronic trading pioneer, has been chosen by SEBA Crypto AG (SEBA), to deliver SEBA’s state-of-the-art crypto and traditional assets trading platform.
/jlne.ws/2OD5stS

Fear of FinTech: 5 misconceptions keeping you from the future of finance
Andrew Boyajian – TechRadar
The world of finance and the technology that supports it is constantly evolving. As early as 1866, the first transatlantic cable was laid, providing an infrastructure for financial globalization. A century later, the ATM/ABM was introduced, and by 1998, banks established the first transactional websites for Internet banking. That commitment to innovation continues to drive the finance technology or “FinTech” industry at a rapid pace, as evidenced by the more recent arrival of mobile banking and smartphone payments.
/jlne.ws/2zS0Hoq

Cryptocurrencies

A slew of Wall Street giants are getting behind an upstart exchange looking to launch a wide-range of crypto futures, and it could be a big rival to Bakkt
Frank Chaparro – The Block Crypto
Brokerage giant TD Ameritrade, a slew of high-speed traders, and a long list of Wall Street firms are getting behind a brand new market for crypto called ErisX, the firm announced Wednesday. The venture, which is being led by trading veteran Thomas Chippas, would provide a place for individuals and institutions to trade cryptocurrencies and derivatives tied to digital assets, according to a news release put out by the firm.
/jlne.ws/2P9YQ3o

Winklevoss’s Gemini Obtains Insurance for Crypto-Assets
Annie Massa – Bloomberg
Gemini Trust Co., the digital-asset exchange founded by Cameron and Tyler Winklevoss, said that it secured insurance for customers’ digital assets. The company obtained insurance coverage for virtual currency it holds on behalf of clients in online wallets, according to a release Wednesday.
/goo.gl/aHMUB6

WSJCoin: Yes, We Created Our Own Cryptocurrency; In this documentary, we experiment with a digital currency of our own to understand what drives the market
Steven Russolillo and Clément Bürge – WSJ
In 2017, bitcoin was one of the greatest investment manias in recent memory. This year, that boom has turned to bust.
/jlne.ws/2IDowD0

Abra Wallet and Exchange Service Introduces Token That Tracks Crypto Index
Ana Alexandre – CoinTelegraph
Digital currency wallet and exchange Abra has launched support for a new token, BIT10, that tracks the Bitwise 10 Large Cap Crypto Index, according to an announcement published Oct. 3.
The Bitwise 10 Large Cap Crypto Index was developed by cryptocurrency asset management firm Bitwise Asset Management and is reportedly listed exclusively on Abra. The index tracks the ten largest cryptocurrencies by market capitalization, currently representing 80 percent of the total crypto market capitalization.
/jlne.ws/2zRf24h

Crypto Exchange Poloniex Removes Margin and Lending Products for US Users
Ana Alexandre – CoinTelegraph
U.S.-based cryptocurrency exchange platform Poloniex will remove margin and lending products for its customers in the U.S and delist three digital assets, according to an announcement published October 3.
Poloniex is a cryptocurrency trading platform founded in 2014 and designed as a digital-currency-to-digital-currency exchange. In 2018, Poloniex was acquired by Dublin-based payments technology firm Circle for $400 million. Currently, Poloniex is ranked 38th by the adjusted trading value, according to CoinMarketCap.
/jlne.ws/2zRL9kA

Crypto regulators work to fit old frameworks into new tech
Peter J. Brown – Asia Times
The under-regulated era of crypto-currency is quickly coming to an end, argues Julie Myers Wood, Chief Executive Officer of Guidepost Solutions, a New York-based consulting firm that offers compliance-related investigations and security services.
Wood points to a steady uptick in suspicious activity reports – known in the intelligence community as “SARS” – around crypto-currencies. The United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) says there are now 1,500 such reports every month.
/jlne.ws/2zRM9Fm

Ripple Grapples With Its $21 Billion ‘Gorilla’: Crypto Asset Adoption
David Floyd – CoinDesk
The organizers of Ripple’s two-day Swell conference in San Francisco didn’t beat around the bush when they named the final panel of the event “The 800-Pound Gorilla.”
The question of crypto asset adoption was certainly on many of the attendees’ minds, especially since Ripple CEO Brad Garlinghouse announced the previous day that xRapid, the company’s product the leverages the XRP cryptocurrency for “on-demand liquidity” in cross-border payments, is now being used in commercial payments by three companies.
/jlne.ws/2zQA3fB

Politics

Sanders to launch new plan to break up Wall Street giants, including Goldman Sachs and JP Morgan
Jeff Stein – Washington Post
Sen. Bernie Sanders (I-Vt.) on Wednesday unveiled legislation that would place a hard cap on the size of financial institutions, a proposal that would splinter Wall Street’s biggest firms in an effort to ward off future taxpayer bailouts. The measure is dead on arrival with a Republican Congress and President Trump in office. And even if the current Democratic Party were to take control of government, it would face a difficult path to passage, as many of the party’s moderates have opted for answers to the banking crisis that did less to alter the financial system.
/goo.gl/83YQ7M

The F.B.I. Probe Ignored Testimonies from Former Classmates of Kavanaugh
Jane Mayer and Ronan Farrow – The New Yorker
Frustrated potential witnesses who have been unable to speak with the F.B.I agents conducting the investigation into sexual-assault allegations against Donald Trump’s Supreme Court nominee, Brett Kavanaugh, have been resorting to sending statements, unsolicited, to the Bureau and to senators, in hopes that they would be seen before the inquiry concluded.
/jlne.ws/2PaUFEi

Russian Meddling Is a Symptom, Not the Disease; More worrisome than foreign interference in our elections is how our own tech and media companies feed and profit from our deepening domestic political polarization.
Zeynep Tufekci – NY Times
Given the credible evidence of Russian meddling in the 2016 presidential election, it’s only natural that Americans are concerned about the possibility of further foreign interference, especially as the midterms draw closer.
/jlne.ws/2P9tbz7

UK blames ‘reckless’ cyber attacks on Russia’s GRU spy agency; London steps up pressure on Moscow after Salisbury novichok poisoning
David Bond in London and Max Seddon in Moscow – FT
The UK has stepped up pressure on Russia in the wake of the nerve agent attack in Salisbury by blaming the GRU, Moscow’s military intelligence agency, for a series of “indiscriminate” and “reckless” cyber attacks over the past three years.
/jlne.ws/2P9uo9D

Trump should reflect on an oil leap of his own making; US sanctions against Iran are so aggressive it’s unlikely Opec can make up shortfall
David Sheppard, Energy Editor – FT
As uncomfortable as it is to find oneself in agreement with Vladimir Putin, the Russian president has articulated exactly what energy traders are thinking: if Donald Trump wants to blame someone for high oil prices, he should start by taking a long hard look at himself.
/jlne.ws/2P4VO05

Regulation

CFTC Commissioner Behnam Announces the Establishment of New Subcommittee of the Market Risk Advisory Committee and Seeks Nominations for Membership
CFTC
Commodity Futures Trading Commission (CFTC or Commission) Commissioner Rostin Behnam announced today that the Commission has voted to establish the Interest Rate Benchmark Reform Subcommittee (Subcommittee) under the CFTC’s Market Risk Advisory Committee (MRAC). Commissioner Behnam, sponsor of the MRAC, is seeking nominations for membership on the Subcommittee through a formal request in the Federal Register. The deadline for submissions is October 16, 2018.
/jlne.ws/2P8lucx

CFTC’s Technology Advisory Committee Announces Agenda for its October 5 Public Meeting
CFTC
The Commodity Futures Trading Commission (CFTC) today announced the agenda for the upcoming Technology Advisory Committee (TAC) public meeting on Friday, October 5, 2018 at CFTC’s headquarters in Washington, DC. [For attending, viewing, and listening instructions, see CFTC Press Release 7798-18].
/jlne.ws/2Izxy3O

CFTC Charges Owner of Precious Metals Firm with Defrauding More than 130 Customers in Precious Metals Scheme
CFTC
The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Western District of Washington charging Defendant Aaron Michael Scott of Portland, Oregon, with fraud and misappropriation in connection with contracts of sale of precious metals, specifically gold and silver. Scott conducted his scheme through now-dissolved Washington-based company BMC Worldwide, Inc. (d/b/a Blue Moon Coins) (Blue Moon).
/jlne.ws/2Iza3Ia

CFTC Wins Trial against Fraudster in Futures Markets
CFTC
A Colorado federal court entered final judgment ordering Defendant Gregory L. Gramalegui of Vail, Colorado, d/b/a Emini Trading School, (Defendant or Gramalegui) to pay more than $1.9 million in civil monetary penalties and disgorgement in connection with a federal enforcement action brought by the Commodity Futures Trading Commission (CFTC) alleging fraudulent solicitation of customers in connection with the offering of a futures trading system and an advisory service, making false statements to the CFTC, and violations of a prior CFTC order against the Defendant.
/jlne.ws/2IBqPGD

SEBI may consider circuit filters for F&O segment as stock prices halve
Tarun Sharma – Moneycontrol
The steep fall in one stock often has a domino effect as players who lose heavily in that stock start unwinding positions in other stocks or futures to make up for the losses
/goo.gl/8XkKoA

Former investment banker jailed, fined for insider trading
The Star
The Kuala Lumpur Sessions Court today convicted and sentenced a former investment banker for insider trading in the shares of PacificMas Bhd, the Securities Commission said.
/goo.gl/ms9fUk

Do not blame accounting rules for the financial crisis; Current standards are designed to reflect economic reality as closely as possible
Hans Hoogervorst – Financial Times
Ten years after the outbreak of the financial crisis, there are still persistent arguments about the role that accounting standards may have played in its genesis.
/goo.gl/yF313z

Q&A: CFTC’s Giancarlo on the race to overhaul cross-border rules; New Sef rules imminent, but deference to foreign regulators may not be completed by 2020
Robert Mackenzie Smith – Risk.net
When Christopher Giancarlo announced plans in early September to overhaul how the US Commodity Futures Trading Commission will treat foreign clearing houses, he literally moved markets. But now he tells Risk.net that his far-reaching proposals in this area might not be completed during his time as chairman. His current term expires in April 2019, though he is widely expected to lead the CFTC through 2020.
/jlne.ws/2OBLHmH

Investing and Trading

The Romantic Backlash to Boring Robot Investing What’s behind the enduring appeal of prime bank scams?
Matt Levine – Bloomberg
At a high enough level, predicting the future of investing is easy. The future of investing is that people will spend less time and money on it and that it will work more efficiently and predictably. This is also the future of driving and the present of, like, dishwashing. The ideal future of most boring, stressful, specialized, and necessary activities is that someone will build a machine to do it for you so you don’t have to think about it anymore.
/goo.gl/iDyT7n

Ultra-Short Term Treasury ETFs Lure Buyers Amid Rising Rates
Carolina Wilson and Vildana Hajric
Treasury fund tops $2 billion in assets; Investors are holding onto for new opportunities, bank says
Investors are snatching up ultra-short Treasury bonds as they race for safety.
/goo.gl/rGrgwR

Sovereign bond sell-off spreads worldwide; Rising optimism on US economy triggers sales in Treasuries and Bunds
Edward White in Taipei and Michael Hunter in London – FT
A sudden sell-off in government bonds spread across the globe on Thursday as signs of a strengthening US economy bolstered expectations of further interest rate rises from the Federal Reserve.
/jlne.ws/2Ph78q0

Institutions

Stock brokerage giant TD Ameritrade bets on a new cryptocurrency exchange
Kate Rooney – CNBC
Despite a massive slump in cryptocurrency prices, TD Ameritrade is doubling down on the sector. The U.S. brokerage firm announced a strategic investment Wednesday in an exchange called ErisX, which offers both bitcoin spot and futures trading. High-speed trading company Virtu Financial will also back the exchange.
/goo.gl/oJgCVh

Race bias lawsuit against Morgan Stanley sent to private arbitration
Brendan Pierson – Reuters
A black former Morgan Stanley broker who filed a lawsuit accusing the bank of racial bias must pursue his claims in private arbitration, a federal judge ruled on Wednesday.
/goo.gl/Y8GBNh

Interactive Brokers (IBKR) Reports Rise in September DARTs
Zacks Equity Research
Interactive Brokers Group, Inc. released its Electronic Brokerage segment’s performance metrics for September 2018. The segment, which deals with clearance and settlement of trades for individual and institutional clients globally, reported a rise in Daily Average Revenue Trades (DARTs).
/goo.gl/Kx7Lmo

Highfields Capital Returning Money to Investors After 20 Years
Katherine Burton – Bloomberg
CEO Jon Jacobson’s hedge fund manages $12.1 billion in assets; Highfields has struggled with performance in last few years
Investor Jon Jacobson is winding down his $12.1 billion hedge fund, joining other veteran managers who have exited the business as returns have faltered.
/jlne.ws/2PaaUS4

Danske discloses criminal investigation by US prosecutors; Bank is co-operating with justice department inquiry into EUR200bn money laundering scandal
Richard Milne, Nordic and Baltic Correspondent – FT
Danske Bank is facing a criminal investigation by US federal prosecutors into its EUR200bn money laundering scandal, raising the possibility of a large fine for Denmark’s biggest lender.
/jlne.ws/2PeHHWs

U.S. to Allow Small Banks to Pool Anti-Money-Laundering Resources; Sharing resources could increase efficiency for banks with lower risk profiles, regulators say
Samuel Rubenfeld
Community banks and credit unions can share certain resources for anti-money-laundering compliance purposes, helping them address the risk of financial crime while keeping down costs, federal regulators said Wednesday.
/jlne.ws/2PaHBPB

Swedbank says its anti-money laundering procedures not being investigated
Reuters
Sweden’s Swedbank (SWEDa.ST) said on Thursday that there were no ongoing investigations into its anti-money laundering procedures, a day after its shares slumped on worries about cross-border transactions by banks in Estonia.
/jlne.ws/2OD8puB

Regions

From sukuk to warrants, Iran works to deepen capital markets
Bernardo Vizcaino – Reuters
Iran is developing a range of new financial products, from Islamic bonds to warrants and insurance-linked securities, in an effort to give local firms more funding options as sanctions put pressure on the economy.
/goo.gl/W6v1ja

A Decade After Financial Collapse, Iceland Faces a New Crisis
Ragnhildur Sigurdardottir and Nick Rigillo – Bloomberg
Iceland tourism arrivals could decline next year, Arion says; Turmoil in industry triggered central bank krona intervention
Just as Iceland looks back at a decade of recovery since its financial and economic collapse, the north Atlantic island is once again grappling with an existential challenge for one of its key industries.
/jlne.ws/2PaQ5Gn

Wife of former Malaysian PM charged with money laundering; Rosmah Mansor pleads not guilty as crackdown escalates over missing 1MDB funds
Stefania Palma in Singapore – FT
Rosmah Mansor, the wife of former Malaysian prime minister Najib Razak, has pleaded not guilty to 17 counts of money laundering and tax evasion in a court hearing that marks an escalation in the south-east Asian country’s crackdown on corruption.
/jlne.ws/2Ph83qs

London IPO market hit by double disappointments; Aston Martin and Funding Circle raise doubts about outlook for listings
Katie Martin and Robert Smith in London – FT
Two high-profile London stock flotations have stumbled after hitting the market, revealing a fragility in the UK that bankers say could prompt a pause in new deals for the rest of the year.
/jlne.ws/2P5arRc

Brexit

Nomura looks to Paris as post-Brexit EU lending hub; Japanese bank joins global peers in moving some business to French capital
Laura Noonan and Leo Lewis in Tokyo and David Keohane in Paris – FT
Nomura is in advanced talks with regulators about using Paris as its post-Brexit European lending hub, in another boost to the French capital’s bid to become the continent’s pre-eminent banking centre.
/jlne.ws/2PaVTPU

Forget Brexit, we’re headed for Brino; ‘Brexit In Name Only’ would be a pointless act of self-harm, but it would solve almost all other problems
Simon Kuper – FT
Nobody knows how Brexit will unfold between now and next March. It’s feasible that the UK and the EU fail to strike a deal, that Theresa May falls, that Jeremy Corbyn is elected prime minister, that Brexit is delayed, or that a second referendum is held. As the Adidas slogan says: “Impossible is nothing.” Only when you look further into the future do things become clearer. I’ve been interviewing many Brexit participants in Britain and on the continent, and have concluded that the two scenarios now being endlessly debated — Britain living under no-deal, or a second referendum killing Brexit — are almost inconceivable. Even if there’s briefly a no-deal, or a second vote is held, neither will stick. Long-term, the most likely outcome is Brino (Brexit in name only) or a very soft Brexit.
/jlne.ws/2PbeZpe

EU regulators prepare for no-deal Brexit with MiFID II back-up plans; No-deal could mean market participants losing their authorisations
Mike Sheen – InvestmentWeek
Pan-European regulator European Securities and Markets Authority (ESMA) is in the process of drawing up memorandums of understanding (MoU) between the Financial Conduct Authorities (FCA) and the 27 other EU regulators in a safeguard against the fall-out of a no-deal Brexit.
/jlne.ws/2OxOeym

UK Brexit bill could rise as EU reveals record spending promises
Jennifer Rankin – The Guardian
The EU’s spending promises and pension costs rose by tens of billions of euros last year, an official report reveals, raising the possibility of an escalating Brexit divorce bill for the UK.
The EU’s auditor also described member countries’ annual budget fees as “moveable”, because they are linked to commitments and liabilities that change.
/jlne.ws/2zRpmcw

Miscellaneous

EBay Accuses Amazon of Illegally Poaching Sellers
Laura Stevens – WSJ
EBay Inc. is accusing Amazon.com Inc.’s sales reps of trying to poach sellers for its own marketplace through eBay’s messaging system.
/goo.gl/RVdsMK

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