Top Headlines

SEC Confirms They Are Actively Seeking Mifid II Solutions – Integrity Research Associates

At an industry conference held last week, two SEC representatives acknowledged that the commission is actively looking for solutions to enable asset managers to pay for US broker research once the SEC’s temporary Mifid II oriented no-action letter lapses.

US Fines Billions for Wall Street Fraud. Nearly Half the Time It Doesn’t Collect – The Wall Street Journal (subscription)

Wall Street watchdogs often tout the fines they levy on alleged wrongdoers. Yet much of that money is never collected. The Securities and Exchange Commission over five fiscal years that ended in September 2018 took in 55% of the $20 billion in enforcement fines set through settlements or court judgments, according to agency statistics.

How Singapore Manages its Reserves – FX Week (subscription)

MAS managing director Ravi Menon explains Singapore’s total approach to reserve management

SEC Again Postpones Long-Awaited Decision on a Bitcoin ETF – Bloomberg

The US Securities and Exchange Commission is again delaying a decision on approving a Bitcoin exchange-traded fund, disappointing virtual-currency fans who have been speculating that the regulator would soon green-light the proposal by Cboe Global Markets.

Firmer Dollar and Brexit Fears Push Sterling Under $1.27 – Reuters

Sterling fell below $1.27 for the first time since mid-January, battered by dollar strength and expectations that Prime Minister Theresa May will fail to persuade cabinet colleagues to back an amended version of her Brexit withdrawal deal.

Regulatory News

FCA Warns after £27m Lost to Crypto and Forex Investment Scams – Financial Times (subscription)

The UK’s financial watchdog has warned of the rise of fraudulent online trading platforms after the reported number of cryptocurrency and foreign exchange scams more than tripled in the last financial year to more than 1,800.

LCH RepoClear Appoints UnaVista as Trade Repository ahead of SFTR Implementation – The Trade

LCH’s RepoClear is to use UnaVista as its trade repository for reporting obligations under the Securities Financing Transaction Regulation (SFTR).

ISDA Launches Two More Consultations on Benchmark Reform – Regulation Asia

ISDA is consulting on fallback adjustments for USD LIBOR, HIBOR and Canada’s CDOR. It is also proposing to include the SOFR in Singapore’s SOR calculation following USD LIBOR’s cessation.

Swaps Users Mull ‘Big Bang’ for SOFR Discounting – (subscription)

Clearing houses and industry groups tasked with moving US interest rate derivatives to new discount curves are considering a so-called big bang implementation – an overnight switch to using the secured overnight financing rate (SOFR) to value future cashflows and the interest paid on collateral posted for contracts notionally worth $169 trillion.  

Crypto News

Beyond KYC: Regulators Set to Adopt Tough New Rules for Crypto Exchanges – CoinDesk

The cryptocurrency industry is bracing for forthcoming international regulatory standards that would require exchanges to collect and share information about where and to whom they are sending money.

JP Morgan Says Bitcoin’s Jump Mirrors 2017’s Boom-Bust Pattern – Bloomberg (subscription)

The best-known cryptocurrency has surged beyond its “intrinsic value,” mirroring a similar move in 2017 which preceded a slump, JP Morgan strategists say. They come to this conclusion by treating Bitcoin as a commodity and calculating its “cost of production” using inputs such as estimated computational power, electricity expense and hardware energy efficiency.

Seed CX Extends Trading Hours – Profit & Loss

Seed CX’s digital asset exchange is now open 22 hours a day, five days a week.

Koine Acquires Hireabl to Improve On-Boarding – Profit & Loss

Koine, which offers custody and settlement of digital assets, has acquired hireabl, a fintech company for automated client on-boarding.

Company News

BNY Mellon Loses Global Head of FX Options – FX Week (subscription)

Sam Osterman, global head of foreign exchange options at Bank of New York Mellon, has left the bank. A permanent replacement for Osterman has not yet been appointed.

A Trader with Reason to be Very Angry Left Barclays in New York – eFinancialCareers

Rob Bogucki, a trader who was arguably even more wronged than David Fotheringhame and was even more senior has left Barclays (seemingly voluntarily). It’s not clear what he plans to do next, but Barclays may want to set some money aside in case he decides to go full Fotheringhame in future.

CFH Clearing Launches Single Stock CFDs – Profit & Loss

CFH Clearing is now offering trading in single stock CFDs for retail brokers and high net worth individuals.

Opponents Squash Platinum Plans of Shanghai Gold Exchange – Financial Times (subscription)

The Shanghai Gold Exchange has delayed plans for a platinum contract after failing to gain political clearance, threatening a push to open up a market for the precious metal dominated by the arm of a big state-owned company.

Market Savvy

Pain in Asia Pushes Dollar to Two-and-a-Half Week High as Investors Seek Safety – Reuters

Signs that Asia is already feeling the pinch from a trade conflict between the United States and China triggered some safe haven flows to the US dollar on Tuesday, while higher US Treasury yields made the trade more palatable.

The Trade War Is Keeping Foreigners Away from China Markets – Bloomberg (subscription)

Expectations that $200 billion of foreign money would flow into China’s capital markets this year are looking nothing short of optimistic.

Turkey Tells Banks to Slow FX Buying in Latest Lira Defense – Bloomberg (subscription)

Turkey told banks to wait one day before settling some large foreign-currency purchases, the latest move to defend the lira as President Recep Tayyip Erdogan’s party seeks to keep control of Istanbul in a controversial rerun of local elections.

Krona v Krone: Sweden and Norway’s Economies Diverge – Financial Times (subscription)

Two Scandinavian economies, often bundled together to represent a “Nordic model” with large public sectors and generous welfare systems, have this year been more marked by differences.