Philipp Schuster’s Post

New research from our faculty Philipp Schuster and his colleagues Gjergji Cici and Franziska Weishaupt reveals that bond fund managers with prior experience as traders have a distinct advantage in managing funds! 🔍 Their paper "Once a Trader, Always a Trader: The Role of Traders in Fund Management" finds that these "trader-managers" are able to: ✅ Better identify and capitalize on short-term trading opportunities ✅ Achieve lower transaction costs ✅ Exhibit more sophisticated risk management behavior These skills are especially valuable during times of market volatility. 📈 The paper has been featured in the latest issue of Institutional Money magazine (German). You can access the full study here: https://lnkd.in/eb3FjpJ3 #FundManagement #BondTrading #FinanceResearch #LinkedInPost

Check out my article in today's Börsenzeitung about the maturity mismatch in the bond markets (German):

U.S. Charges Subject Of RFE/RL Report With Stock Manipulation Over False Claims - from Radio Free Europe/Radio Liberty: A U.S. businessman whose extravagant claims about supposed projects in Ukraine were exposed in an RFE/RL investigation has been charged with stock manipulation by financial regulators in the United States. The Securities and Exchange Commission (SEC) said that Benjamin Ballout, the CEO of Enerkon Solar International, "authored, approved, and issued" at least three false press releases designed to drive up the price of the company's stock so that he and his associates could sell shares for a profit. The charges stem from what the SEC said were false claims about purported U.K. and U.S. deals in press releases published between March and May 2021, at least two months after the initial Ukraine project claims. This kind of scheme, known as "pump and dump," is not uncommon in the world of public companies that are valued at well under $1 billion and trade on the over-the-counter market as opposed to regulated exchanges. Two of Ballout's associates, Mohamed Zayed and William Fielding, were also charged, the SEC said in a September 23 statement. The government watchdog said it was seeking to force the return of the trio's allegedly illegal gains, impose civil penalties, and bar them from trading what are known as "penny stocks." It said Fielding had agreed to settle with the SEC, giving up $311,000 in profits and $53,230 in interest and paying a $195,000 fine. RFE/RL exposed Ballout's activities in a March 2021 article after he published a press release claiming that Enerkon had been "awarded" the right to create a massive solar-power project in Ukraine and build out a next-generation wireless-technology network around the country. Enerkon's stock price jumped in the days and weeks following the press release, making Ballout overnight a multimillionaire on paper. https://lnkd.in/ekU43dkV

SEBI Introduces New Guidelines for Monitoring Market Infrastructure Institutions’ Shareholding Limits: The Securities and Exchange Board of India (SEBI) has issued a new circular aimed at strengthening the monitoring of shareholding limits for Market Infrastructure Institutions (MIIs). The move follows recommendations from SEBI’s Secondary Market Advisory Committee and is set to take effect on January 12, 2025. The circular broadens the applicability of existing SEBI regulations, including the Securities Contracts (Regulation) (Stock Exchange and Clearing Corporation) Regulations, 2018, and the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018. Previously, these regulations applied only to listed Stock Exchanges, Clearing Corporations, and Depositories, but the new guidelines extend to all MIIs, whether listed or unlisted. The circular also mandates that MIIs adhere to disclosure norms outlined in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). MIIs will now need to publish their shareholding patterns quarterly on their websites, providing a category-wise breakdown similar to that required for listed companies. For listed MIIs, the recognized stock exchanges on which they are listed must also display this shareholding information. Under the new framework, MIIs are required to appoint a ‘Designated Depository’ (DD) to monitor shareholding thresholds. The DD will be responsible for flagging any breaches in shareholding limits and implementing corrective actions. In case of violations, the DD must notify the MII and the stock exchange, freeze excess shares at the ISIN level, disable e-voting rights, and redirect dividends to either the Investor Protection Fund (IPF) or the Settlement Guarantee Fund (SGF). In situations where the shareholding exceeds prescribed limits, listed MIIs will divest the excess through a special stock exchange window, while unlisted MIIs will follow SEBI’s disinvestment guidelines. The circular further emphasizes that all shareholders must meet the ‘fit and proper person’ criteria at all times. MIIs are required to inform investors about these criteria and make the relevant information available on their websites. For unlisted MIIs planning to launch public offerings, a declaration of fitness will be included in pre-listing application forms. For listed companies, references to fit and proper regulations will be incorporated into the contract notes. In cases where shareholders do not meet the fit and proper criteria, MIIs must submit an exceptional report to SEBI on a quarterly basis. This report must detail the shareholder's name, the nature and percentage of their holding, the reason for their non-compliance, and any actions taken. SEBI’s new guidelines aim to ensure stricter compliance with shareholding norms and enhance transparency in the market. #sebi #marketupdate #update #regulatorynorms

SEBI: CLOSES PROBE INTO UNITECH STOCK MANIPULATION BY FORMER PROMOTERS; CITES INSUFFICIENT CORROBORATIVE EVIDENCE SEBI closes an alleged stock manipulation investigation against former Unitech promoters Sanjay Chandra and Ajay Chandra (Noticees) citing lack of evidence to prove that the Noticees engaged in fraudulent practices by routing funds to Indian Securities Market using overseas bank accounts with UBS AG (Switzerland-based bank), in violation of PFUTP Regulations, 2003 and the SEBI Act, 1992; Notes that according to its suo-moto investigation, the Noticees had dealt in securities of Unitech, indirectly in a fraudulent manner and employed manipulative and deceptive practices in connection with the purchase and sale of such securities while misrepresenting the truth and concealing material facts, thereby violating PFUTP Regulations, however, there is no direct evidence to link the ‘routing of funds’ inference drawn in the investigation with the end-use of the transferred funds, given the absence of details of bank transactions or without any other supporting documentary evidence; W.r.t. Noticee’s contention that he was not a shareholder/director/beneficiary of Pluri Emerging (protected cell company) and since Unitech had a large number of FIIs investing on a regular basis, he was not aware or responsible for their buying and selling of shares, SEBI states that, “…there is neither any evidence, documents or detail on record to establish that the fund transferred by Unitech to Unitech Overseas Ltd. was only subsequently transferred to Pluri nor there is any material/facts/information whatsoever brought on record in the IR to show that the source of investment by Pluri w.r.t. its investment in the scrip of Unitech, directly or indirectly, is linked to Unitech.”; Further, observing lack of corroborative evidence to establish stock manipulation by Noticees via UBS from 2006 to 2008, SEBI inter alia remarks that there isn’t sufficient corroborative evidence, either in the IR or in the material made available along with the IR to establish the allegation that Noticees have dealt in securities of Unitech indirectly in a fraudulent manner and employed manipulative and deceptive practices in connection with the purchase and sale of securities of Unitech or have misrepresented the truth and concealed a material fact known to them of buying the shares of Unitech fraudulently; Lastly, highlighting that the facts of the case as well as material information available on record does not corroborate that the alleged routing of funds commenced from Unitech and after being transferred among various foreign entities, the funds were ultimately invested back in the scrip of Unitech, SEBI concludes that it would not be feasible to hold the Noticees in violation of PFUTP Regulations, and thereby disposes of the proceedings without issuance of any directions:SEBI The order was passed by Mr. G. Ramar (Chief General Manager).

📣 Listed companies: The new recommendation concerning information to be disclosed in connection with directed share issues highlights the need to provide more comprehensive reasoning for the deviation from the shareholders’ pre-emptive rights and the scope of investors the offering is directed to. Read more on our latest article on the topic.

Hot off the press our take on the Securities Markets Association recommendation on directed share issues, which provides more meat on the bones on key disclosure elements to consider especially when discounts to prevailing market price are a significant factor

The Australian Securities and Investment Commission (ASIC) has levelled accusations of making misleading comments at Australia’s largest share market operator, ASX Ltd, in relation to its Clearing House Electronic Subregister System (CHESS) replacement project. These allegations concern statements by the ASX in February 2022 that the project was “on-track for go-live” and “progressing well” for its slated launch in April 2023. ASIC says those statements were misleading as the project was not on schedule at the time the announcement was made and the ASX did not “have any reasonable basis to imply the project was on track to meet future milestones”. More at #Proactive #ProactiveInvestors #MarketRegulation #ASX #ASIC #FinancialRegulation http://ow.ly/ISEp105FlIp

The Aradel Holdings PLC Journey – From Transparent Trading to Unique Price Discovery; an Exchange’s Promise Today, we are pleased to announce a unique development in the Nigerian capital market resulting from the successful meeting of one of the key objectives of the NASD OTC Securities Exchange. Our NASD Over the Counter (OTC) trading platform has hosted and nurtured to prominence a fully indigenous company that is ready for its significant next steps of growth. This signposts the developmental role of NASD Plc as a strategic financial infrastructure (FI) that discovers and projects organisations at their early to mid-life growth stages for further interaction with the broader capital markets – local and global.  The listing of Aradel Holdings Plc (aradel”) on the NGX Limited in the week ahead reaffirms the importance of the NASD as a capital market incubator and catalyst. We have worked with Aradel to provide an efficient market platform for interaction with all stakeholders of the capital market and are happy to see it mature into its next stage of development along this trajectory. Our Goals and Beginning The NASD Plc (NASD) is the over-the-counter (OTC) securities exchange licensed in 2012 by the Nigerian Securities & Exchange Commission (SEC), to trade the securities of public unlisted companies and offer a capital formation portal for unlisted corporations. Before its being licensed, and following the epic global financial markets collapse in 2008/2009, several investors in companies that had undertaken private placement of shares on the Nigerian Capital Market and those that had also invested in Initial Public Offerings (IPOs) at the time, found themselves stranded in their inability to get title (share certificates) to their investments and worse still to identify an organized way of selling the shares of the companies they had subscribed to, if they needed to. Some investors resorted to bilateral trading of these shares, looking for counterparties personally or through capital market agents to secure opportunities to sell or buy at mutually negotiated prices. Under these circumstances, the NASD Plc. was licensed in 2012 and created market liquidity in a transparent price discovery arrangement for unlisted securities. The NASD exists as a market growth catalyst for unlisted securities; the growth of Aradel Holdings PLC. on the NASD OTC Securities Exchange would validate NASD as a capital market incubator for aspirational organisations.

Hong Kong SFC starts Market Misconduct Tribunal (MMT) proceedings against the ex-Chairman of investment group Ding Yi Feng Holding (Sui Guangyi) & 20 individuals of suspected market manipulation to create false or misleading appearance of active trading in 2018.  The trading of Ding Yi Feng Holding was suspended in 2019 & resumed in 2020.  Ding Yi Feng Holding current market value is around $152 million (28/3/24).  Sui Guangyi owns around 22.26% of Ding Yi Feng. Read - https://lnkd.in/dBjdhk7B follow Caproasia | Driving the future of Asia The Hong Kong Securities and Futures Commission (SFC) has started Market Misconduct Tribunal (MMT) proceedings against the ex-Chairman of investment group Ding Yi Feng Holding (Sui Guangyi) & 20 individuals of suspected market manipulation to create false or misleading appearance of active trading in 2018.  The trading of Ding Yi Feng Holding was suspended in 2019 & resumed in 2020.  Ding Yi Feng Holding current market value is around $152 million (28/3/24).  Sui Guangyi owns around 22.26% of Ding Yi Feng.  Hong Kong SFC: “The Securities and Futures Commission (SFC) has commenced proceedings in the Market Misconduct Tribunal (MMT) against Mr Sui Guangyi, former chairman and non-executive director of Ding Yi Feng Holdings Group International Limited (Ding Yi Feng), and 20 other individuals (Notes 1 and 2).  The SFC alleges that between 1 March 2018 and 14 September 2018, Sui and the other individuals conducted manipulative trading and a significant number of matched trades in Ding Yi Feng shares to, among other things, create a false or misleading appearance of active trading in the shares and the price of the shares (Note 3). By doing so, the overall trading volume was significantly increased, thereby creating a false impression of larger market liquidity of Ding Yi Feng shares and misleading other market participants in their decision making.  Trading in Ding Yi Feng shares were suspended on 8 March 2019 at the direction of the SFC and resumed on 23 January 2020 when the SFC announced that it was commencing proceedings (Note 4).  The SFC also had issued restriction notices to freeze client accounts linked to the suspected market manipulation of Ding Yi Feng shares. The restriction notices remain in force (Note 5).  The SFC appreciates the support and assistance provided by the China Securities Regulatory Commission during the investigation.”