Funding CFTC with fees is a bad idea, GOP senators say | MSCI calls on India to reconsider licensing, data move | No-deal Brexit endangers data transfers, UK official says
16 February 2018
CFA Institute: Financial NewsBrief
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Kuroda gets nomination to remain BoJ chief
Kuroda gets nomination to remain BoJ chief
Kuroda (Toru Yamanaka/Getty Images)
Haruhiko Kuroda, who has supported Japanese Prime Minister Shinzo Abe's effort to drive up inflation, has been nominated to a second five-year term as governor of the Bank of Japan. The government has nominated Masazumi Wakatabe, a supporter of the BoJ's aggressive monetary policy, as deputy governor.
Reuters (16 Feb.),  The Japan Times/Agence France-Presse/Jiji Press (16 Feb.) 
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Funding CFTC with fees is a bad idea, GOP senators say
A Trump administration budget plan to partly fund the Commodity Futures Trading Commission through fees on the futures industry that would likely be passed on to end users is not sitting well with Senate Republicans. CFTC Chairman J. Christopher Giancarlo, who has sought additional funding, stayed neutral on the proposal when asked at a recent hearing.
The Wall Street Journal (tiered subscription model) (15 Feb.),  Politico Pro (subscription required) (15 Feb.) 
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MSCI calls on India to reconsider licensing, data move
MSCI has called on India's National Stock Exchange, BSE and Metropolitan Stock Exchange to reconsider their "unprecedented" ban on foreign exchanges' access to licensing and data. MSCI said the restrictions could cause "unnecessary disruptions in trading or a potential change in the market classification of the Indian market in the MSCI Indexes."
Reuters (15 Feb.),  Bloomberg (free registration) (15 Feb.) 
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No-deal Brexit endangers data transfers, UK official says
Billions of pounds of digital trade could be threatened if the UK leaves the EU without a data-transfer agreement, says Steve Wood, the UK's deputy information commissioner. British businesses are asking whether they need legal authority for UK-EU data exchanges after Brexit eliminates their automatic right to cross-border transfers, Wood says.
Politico Pro (subscription required) (15 Feb.) 
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Lane, de Guindos considered for ECB vice president
Lane, de Guindos considered for ECB vice president
De Guindos (Lisa Maree Williams/Getty Images)
Philip Lane, governor of Ireland's central bank, and Spanish Economy Minister Luis de Guindos are under consideration for vice president of the European Central Bank. Lane appears to be the choice of the European Parliament's economic committee, while the French government "most likely" will back de Guindos, a source says.
Reuters (15 Feb.),  Reuters (15 Feb.) 
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EU budget should be transparent, auditors say
The EU should make budget preparation more transparent and fully open to democratic oversight, the European Court of Auditors says. The budget should present a clear picture of "costs, benefits and net balances of EU membership," auditors say.
Politico Pro (subscription required) (15 Feb.) 
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CFTC: Cryptocurrency scams cheat investors
The Commodity Futures Trading Commission has warned investors to look out for cryptocurrency "pump-and-dump" schemes, in which promoters use social media and other online outlets to manipulate the market price of cryptocurrencies. The CFTC has received complaints from investors who have lost money through the scams.
Reuters (15 Feb.) 
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Market Activity
Asian-Pacific markets mixed in light trading
Trading was subdued on mixed Asian-Pacific stock markets Friday, with exchanges in China, Hong Kong and South Korea closed for Lunar New Year. Japan's Nikkei 225 gained 1.2%; Australia's S&P/ASX 200 slid 0.1%; and India's Sensex was down 0.8%.
CNBC (16 Feb.),  The Economic Times (India) (16 Feb.) 
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Rate fears spark exodus from high-yield bond funds
Net outflows from high-yield bond funds reached $10.89 billion in the week to Wednesday, according to EPFR Global, as investors anticipated interest-rate increases and as risk-averse sentiment rose.
Financial Times (tiered subscription model) (15 Feb.) 
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Chinese investment in US government debt surges
Last year, China boosted holdings of US Treasurys by $126.5 billion, the biggest amount in seven years. The value of US sovereign debt held by China stands at $1.18 trillion.
Bloomberg (free registration) (15 Feb.) 
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Economics
French official: Long-term unemployment decline is key
France has reported an 8.9% unemployment rate for the fourth quarter, the lowest figure in nearly nine years, but Finance Minister Bruno Le Maire wants to ensure the drop in joblessness is the beginning of a long-term trend. Changes in apprenticeship and training being negotiated by the government should further improve employment in coming months, he says.
Bloomberg (free registration) (15 Feb.),  Reuters (15 Feb.),  Politico Pro (subscription required) (16 Feb.) 
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Geopolitical/Regulatory
US rejects sale of Chicago exchange to Chinese-led group
The Securities and Exchange Commission has voted against the sale of the Chicago Stock Exchange, which trades about 1% of US stocks each day, to a Chinese-led consortium. SEC staffers had recommended approval.
Bloomberg (free registration) (15 Feb.),  Financial Times (tiered subscription model) (15 Feb.) 
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CLO ruling could help White House revise Dodd-Frank
Collateralized loan obligation funds won a significant legal battle when judges declared them exempt from a Dodd-Frank Act requirement that fund managers retain some of the risk. The case could give the White House momentum in revising Dodd-Frank.
Reuters (15 Feb.) 
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US state accuses Scottrade of violating fiduciary rule
The Massachusetts Securities Division has filed charges against Scottrade, accusing the broker-dealer of violating impartial-conduct standards of the US Labor Department's fiduciary rule. The state said Scottrade "held at least two sales contests which included retirement assets" that violated the rule's provisions.
ThinkAdvisor (free registration) (15 Feb.),  InvestmentNews (tiered subscription model) (15 Feb.) 
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Special protection pledged for EU citizens working in Japan
Japan's privacy commission is drafting instructions to provide higher data protection for EU citizens transferred to jobs in Japan than is provided by domestic law. The Personal Information Protection Commission is preparing guidelines as part of an agreement with the European Commission.
MLex (subscription required) (15 Feb.) 
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CFTC official rejects idea of accelerating blockchain work
Dan Bucsa, an oversight official at the Commodity Futures Trading Commission, has given a chilly reception to an executive's suggestion that the CFTC prioritize blockchain work more. It is up to the industry to "decide to transition to a new way of doing things," Bucsa says.
MLex (subscription required) (14 Feb.) 
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China, Kazakhstan to enhance regulatory cooperation
The China Securities Regulatory Commission and Kazakhstan's Astana Financial Services Authority have agreed to bolster cooperation on securities and futures regulation. Their memorandum of understanding also covers trade, bilateral exchanges and support of the Belt and Road project.
Xinhua News Agency (China) (15 Feb.) 
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Financial Products
Direxion debuts family of 6 index-tracking ETFs
Direxion has brought to market a family of six exchange-traded funds that it calls the "Portfolio+ ETFs." All of the ETFs use leverage to increase by 25% investors' exposure to indexes tracked.
ETF Trends (15 Feb.) 
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