Weekly Roundup

VIX1D INDEX: Cboe Global Markets launched the Cboe 1-Day Volatility Index (VIX1D), which measures the expected volatility of the S&P 500 Index over a single trading day. The launch coincides with the 30th anniversary of the Cboe Volatility Index (VIX).

Capital Formation & CFPB:  The House Financial Services Committee held a markup on capital formation and Consumer Financial Protection Bureau (CFPB) reform legislation, passing along largely partisan lines.

Nonbank SIFI: The Financial Stability Oversight Council (FSOC) proposed rules regarding nonbank systemically significant financial institution (SIFI) status, rolling back interpretative guidance made in 2019.

Retail Losses: Bed Bath & Beyond’s bankruptcy and 99% fall in shares in 2023 has led to $142 million in profits for short sellers and about $140 million in losses for retail investors this year. Bloomberg notes that retail investors, who pushed $730 million into the company in the last couple of years, are “opting to hang along for the ride despite sitting on massive paper losses” and experts expect losses to be even greater.

Government Debt: Retail investors are showing increased interest in Treasuries and in municipal and corporate bonds. They are purchasing new US Treasury bills at a record pace and are increasingly purchasing Treasury bills in the secondary market. Accelerated by banking collapses, “retail demand for T-bills has been strong since the beginning of the year due to the attractive yields versus bank deposits.”

Coinbase Sues:  Crypto exchange Coinbase filed a suit against the SEC, asking that the regulator be forced to publicly share its answer to Coinbase’s July 2022 petition on whether existing securities rule-making processes could be extended to the crypto industry.

DEX Launch: Decentralized exchange Vertex Protocol has launched on Arbitrum, a scaling solution built on Ethereum blockchain, to offer high-speed spot and derivatives trading. The exchange will focus equally on retail and institutional traders and has prominent backers in the market-making and proprietary trading space, including Jane Street and Hudson River Trading.

ESG Transparency: NYSE and IBM are collaborating to help support NYSE-listed companies with ESG efforts. Following increased demand for transparency around ESG, IBM will offer qualified NYSE-listed companies promotional pricing of IBM Envizi, which can automate the collection and consolidation of ESG data and the calculation of GHG emissions, streamline ESG reporting, and leverage data insights and integrations with operational systems.

In the Mix: This Week’s Top FinTech Thought Leader

  • John Ramsay, IEX Chief Market Policy Officer, sat down with The Trade to discuss how the role of a stock exchange has changed, how venues can generate more interest in the lit primary market, how data access and cost can be addressed, and what regulatory changes will likely have the greatest impact on trading venues.

  • Ed Tilly, Cboe CEO, spoke with Bloomberg about the launch of the Cboe 1-Day Volatility Index as well as the firm’s goals for expansion. The options exchange expanded trading to five days last year, and zero-day options have become “widely popular” since. While critics have said short-dated options could lead to market volatility, Tilly believes they reduce risk because they settle in cash and expire at the end of the day.