Dutch lawmakers warn about chaos after Brexit | Global authority pushes LEI requirement for fintech firms | LSEG cancels meeting with shareholder TCI
17 November 2017
CFA Institute: Financial NewsBrief
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Tax bill clears US House
The House has passed a bill to significantly change US taxation, including $1.5 trillion in cuts for individuals and companies. The overhaul, backed by President Donald Trump, heads to the Senate, which is developing a bill that has major differences from the House measure.
The New York Times (free-article access for SmartBrief readers) (16 Nov.),  Los Angeles Times (tiered subscription model) (16 Nov.),  TIME online (16 Nov.) 
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Dutch lawmakers warn about chaos after Brexit
The Netherlands must prepare for the UK to leave the EU without having reached agreement on a post-Brexit transition, the Dutch parliament's European affairs committee said. "What was long considered impossible is suddenly thinkable: a chaos scenario in which the UK abruptly leaves the EU on 29 March 2019 without an exit agreement, a transition period or a framework for future relations," according to a committee report.
The Guardian (London) (16 Nov.),  Politico Pro (subscription required) (16 Nov.) 
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Global authority pushes LEI requirement for fintech firms
The Global Legal Entity Identifier Foundation is calling on the Basel Committee on Banking Supervision to include the use of LEIs in a pending standard for financial technology. "For banks to be able to implement fintech and to address the associated operational, cyber and compliance risks, banks are going to need to be able to unequivocally identify all service provider types," according to the foundation.
MLex (subscription required) (15 Nov.) 
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LSEG cancels meeting with shareholder TCI
LSEG cancels meeting with shareholder TCI
Rolet (Leon Neal/AFP/Getty Images)
London Stock Exchange Group has decided not to meet with TCI Fund Management because the activist shareholder has demanded an extraordinary shareholders' meeting, which reportedly means every investor gets access to the board. TCI wants LSEG to remove Chairman Donald Brydon and to extend the contract of CEO Xavier Rolet, who is set to depart next year.
Sky News (15 Nov.),  Financial Times (tiered subscription model) (15 Nov.) 
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Investors sue US Treasury dealers
A group of public pension funds, insurers and other investors are suing US Treasury dealers over allegations that the banks blocked access to some electronic Treasury trading venues. The lawsuit, filed in New York, also alleges that the banks shared client information via online chat rooms to manipulate Treasury auctions.
New York Post (16 Nov.),  Financial Times (tiered subscription model) (16 Nov.) 
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Goldman's Blankfein: UK should vote again on Brexit
Goldman's Blankfein: UK should vote again on Brexit
Blankfein (Bryan Bedder/Getty Images)
Britain should hold a second referendum on whether to withdraw from the EU, said Goldman Sachs CEO Lloyd Blankfein. "So much at stake, why not make sure consensus still there?" he asked in a Twitter post.
The Telegraph (London) (tiered subscription model) (16 Nov.),  BBC (16 Nov.) 
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Market Activity
Asian-Pacific markets close week mixed
Stock markets were mixed Friday in Asia-Pacific, despite a higher close on US markets. Japan's Nikkei 225 and Australia's S&P/ASX 200 each rose 0.2%; Hong Kong's Hang Seng Index gained 0.6%; China's Shanghai Composite lost 0.5%; South Korea's Kospi was flat; and India's Sensex was up 0.7%.
CNBC (17 Nov.),  The Economic Times (India) (17 Nov.) 
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Walmart shares spike to record
Walmart reported that sales were up 2.7% in the third quarter, the strongest performance in more than eight years. The price of the company's shares surged to $99.62, the highest closing price since Walmart's initial public offering in 1970.
Bloomberg (free registration) (16 Nov.) 
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Norway's SWF proposes selling $35B in oil, gas investments
Norges Bank Investment Management, Norway's sovereign-wealth fund and the world's biggest equity investor, has proposed divesting $35 billion of oil and gas stocks to protect the fund from price volatility. The Finance Ministry said it will spend at least a year evaluating the proposal before deciding.
Bloomberg (free registration) (17 Nov.) 
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Hong Kong IPO raises $870M for Chinese online car dealer
Yixin Group, China's biggest internet-based auto dealer, raised $870 million in a Hong Kong initial public offering. The portion of the offering open to retail investors was 560 times oversubscribed.
South China Morning Post (Hong Kong) (17 Nov.) 
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Economics
Siemens to lay off 6,900 workers worldwide
German conglomerate Siemens said it is downsizing its global workforce by 6,900, with about half of the cuts in Germany. The company said demand for its large gas turbines has fallen dramatically in response to "disruption of unprecedented scope and speed" in the power-generation business.
Deutsche Welle (Germany)/Agence France-Presse/Deutsche Presse-Agentur/Reuters (16 Nov.) 
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Geopolitical/Regulatory
OMB's Mulvaney to fill in as consumer bureau's temporary head
OMB's Mulvaney to fill in as consumer bureau's temporary head
Mulvaney (Astrid Riecken/Getty Images)
US Office of Management and Budget Director Mick Mulvaney will take over as temporary head of the Consumer Financial Protection Bureau, filling the vacancy left by the resignation of Richard Cordray. Mulvaney has been a vocal critic of the agency.
CBS News (16 Nov.) 
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Former bank CEO confirmed as comptroller of the currency
The Senate has confirmed Joseph Otting, formerly president and CEO of OneWest Bank, as US comptroller of the currency. Otting will help implement the Trump administration's review of and revisions to the Dodd-Frank Act.
Reuters (16 Nov.),  The Hill (16 Nov.),  The Wall Street Journal (tiered subscription model) (16 Nov.) 
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EU nears US equivalence deal ahead of MiFID II
The European Commission has reportedly made an informal agreement to offer equivalent status to US trading venues ahead of Europe's revised Markets in Financial Instruments Directive, with similar approval for Swiss venues said to be possible but as yet unconfirmed. If EU states agree to the deal, it would ease investor access across European, Swiss and US markets.
Reuters (16 Nov.) 
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Nowotny: Cryptocurrency regulation on ECB radar
Nowotny: Cryptocurrency regulation on ECB radar
Nowotny (Dieter Nagl/Getty Images)
Legislators and central bankers are considering regulations for cryptocurrency trades to protect investors, said Ewald Nowotny, governing council member of the European Central Bank. Investors must understand the risks involved with cryptocurrencies, he said.
Reuters (16 Nov.) 
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ESMA takes aim at false stock-picking funds
The European Securities and Markets Authority announced increased scrutiny of closet indexing, in which funds charge higher fees for using their expertise to pick stocks but actually just track market indexes. ESMA says it will request input from national regulators while also mandating them to heighten vigilance.
Reuters (16 Nov.) 
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Group: UK banks should have post-Brexit access to big EU clients
After Brexit, UK banks should be free to offer services to institutional clients and large sophisticated investors in the EU, bank lobby UK Finance said. UK and EU supervisors should grant mutual recognition to one another's rules so British banks licensed by the Bank of England would not have to obtain licenses in the EU to do business outside the UK, the group said.
MLex (subscription required) (16 Nov.) 
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European Parliament would like EU agencies to charge fees
The European Parliament is examining the idea of making EU agencies more self-sufficient by charging fees for some of the services they provide. The EU is inviting research centers, consultants and think tanks to submit proposals for what activities EU agencies could charge fees for.
Politico Pro (subscription required) (16 Nov.) 
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China tightens risk controls for policy-lending banks
China is strengthening risk-management procedures and oversight for the China Development Bank, the Export-Import Bank of China and the Agricultural Development Bank of China. Safeguards taking effect at the start of the year include mandatory reviews of internal capital adequacy at least once a year.
MLex (subscription required) (16 Nov.) 
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Financial Products
Direxion launches leveraged ETF focused on drug stocks
Direxion has brought to NYSE Arca an exchange-traded fund offering leveraged exposure to pharmaceutical and medical stocks. The Direxion Daily Pharmaceutical & Medical Bull 3X Shares is designed to deliver 300% of the return of the PowerShares Dynamic Pharmaceuticals Portfolio.
ETF (15 Nov.),  Bloomberg (free registration) (15 Nov.) 
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