Member Info for knot

Source : https://www.fca.org.uk/publication/data/short-positions-daily-update.xlsx

Qube virtually closed out.... 0.06% balance. They were likely the bulk of the 20% rally.....

Walleye increase to 0.61% - nominal and looking more like swap or other derivative related hedges

Marshall - down to 0.97% - steadily backing out

Caius - unchanged

The rabbit in the headlights Caius, curiously in light of thier reporting obligation to notify 0.1% changes...... have supposedly not changed their position. That appears to be difficult to believe given the trade history and position build. This could be a developing story in more than one sense, I think I need some more popcorn as this could get really interesting.....

In cases where a judgement is made that is contrary to what the government would like, the process is that the government then passes legislation, which overrules or replaces the foundation that the judgement represents. Each law and ruling is a building block for the legal system as a whole.

Should the SC still rule on the basis they have lost the plot, the government and the FCA will instigate changes.

The King could (first in history ?) overrule the judges and shatter confidence in the UK system.

Having watched the 10hrs of the original case, read all the related cases, read the Barclays case (after the CoA), my conclusion is the SC will find it near on impossible to agree with the CoA without damaging the credibility of the legal and commercial system in the UK. My earlier posts cover some of the specific reasons.

That's called a dictatorship...

That's when we move on from starters to the main course. CBG would need to be around 360 for entry.

https://www.stockchallenge.co.uk/ftse.php

The revalations in the short position update after todays market close will give the game away as to when that is reached and not if it is reached. It is no longer the case that CBG will remain outside the 250 index, however much people would like to argue the sky is green and the grass is blue, each to their own. It just takes time for the realisation to sink in. That's why I'm just sitting back eating popcorn watching the show....

The payments may well be a lot less than 50% in the context as to what the Plevin and PPI issues were ruled against. i.e. if you have a claim of say £1000 and the commission was £600 under a Plevin type application of the 50% the commission redress would be £100, which ends up being 10% or 16.7% depending on what you want to view the 100% as. The CoA ruling was 100% was due and zero allowable commission if it was not explicitly declared. That is verbally - because anything written was hidden in plain sight according to the CoA, so what would be to stop chaos of who said what when claimants possibly cant remember anything.

The other interesting challenge that has not been raised .. yet .. is that having an interest rate variable included as any part of the determination of a redress value creates problems when looking at interest rates over the last 60 years. If you have an interest rate at 5%, the interest payable is say £500 and a commission cap is £250, is it fair that the allowable commission cap and redress increases when interest rates rise and decreases when rated drop. Zero change in the "work done" relating to the commission. Where interest rates have been in the last 10 years has not been normal and a 2009 QE derived artifact of a dysfunctional system. The main problem is that if rates return to zero or worse negative (e.g. Japan/Germany), how is a market supposed to function. Nobody appears to have recognised this aspect... The ruling will also apply to finance in general not just to cars, so the SC needs to be sure they don't replace one bit of Swiss cheese with a different flavour of Swiss cheese..

As for other parties intervening, nobody else at this stage is going to matter after the Treasury entered. The extras would or are effectively bystanders just joining in with something they would have not done if it were not for the change in the governments view (realisation of some hidden in plain sight unintended consequences). I noted a comment someone said in an article that Borris Johnson was the type of character that would look at to which way a crowd was moving. He would then run to the front and shout "follow me !"...... watch for those shouting follow me...

Key question for today is, another gap due on a trading reflection from yesterday or the mythical round number stickyness of illogical attraction to round figures in our mathematically chaotic world.. 300 being akin to the movie, are the shorts the Spartans, Persians or did they just loose the plot as it was just rewritten by the Treasury... Just like a sandcastle on a beach, it may now appear an inevitability as to it being washed away and the only consideration is when. Those would be my thoughts before reaching for the next bucket of popcorn....

So, the short report is in (or not...) and apparently no change in positions, which is looking like the shorts were completely blind sided by the Treasury intervention. The run up yesterday and the attempts to push down were likely viewed as a no change day and were waiting for today to push down. Pausing on a supported day and waiting for a pullback. Well, they were certainly caught.... short.

Interestingly today the CBG market did not start on time due to the slightly chaotic gap and first trade was at 08:05:19 at 268p against the 16:35:27 auction close of 244.8p.

Volumes today had nothing larger than 82,300 go through (no apparent single chunky large institutional buy) with 3,691 trades and around 4.49m in total volume. Chunky day.. Some of that will have been the caught short shorts trying to hold and also trying to close, some could be larger holders accumulating. Anyone building a new position, bear in mind the 5% threashold for longs, it is the point they reach 5% it becomes reportable. Tommorrows close report for todays short positions will be hugely interesting as it will be a key indicator as to who is going to be the last short short and or any potential for a doubling up all or bust attempt. Other than that not much else to say appart from wheres the popcorn...

The open ended liability is actually the fault of the FCA. They introduced the aspect that you can claim within a claim window for compensation for a wrong doing when that wrong doing is discovered. The problem was the FCA did not create a limit and the lack of a limit was in effect illegal to implement because it was contrary to the underlying established laws of the land relating to time expired liability. That was just one of the problems in the Swiss cheese the CoA produced.. Read some of my earlier comments.

The 5% shorts positions have possibly lost them around £4m today at 298p. Current book is around £25m.

3.1m shares through today so far, which points to some short reductions. That said it does appear that one may be trying to day trade the price down in order to exit at a lower level. The initial attempt early in the morning tried to move the market (with minimal trades) to 275p was promptly run over and the price reverted back up. The afternoon attempt appeared to last longer as trade velocity decreased, however the price was ramped back up again as other off book volume appeared to kick in. May well pull back a bit towards the close if the shorts have bought some daily options as a means to gain some volume back in. The really big news may be an announcement of another long holder taking a position, at which point, let the fireworks begin. The volume points to either bigger closing of shorts or a new long build.

The current price move is still the initial reflection on the update from the Treasury about intervention.

The price was over 500p when CBG said they would suspend the dividends (which was already quite clear they were, due to prior anoundements around 800p) and then before the CoA at 366p. For those with short memories, CBG was trading around 1,500p before the FCA decided some unintended consequences were a good idea. Todays 300p appropriate market value ? lol... where's the popcorn....

My thoughts....

Caius - spec position unhedged - doubling down crew

Qube - spec position unhedged - doubling down crew

Marshall - was unwinding steadily, now might get more urgent

Millennium - possible unwind of a swap position so likely less sensitive to price moves

Walleye - possible unwind of a swap position so likely less sensitive to price moves

Given the volumes at the open some of the short positions may have closed and they may now be trying to hold 290-295 on the back of day traders (and short termists) proffit taking later in the day. Would be a reasonable play and allow to close out some more with the short term players. If you sell today, give yourself a pat on the back for helping the shorts get out at a lower price...

Think about where this share is going to be next week and after the court ruling....

The shorts tried to pull the price back to 275 and were immediately run over... hillarious...

The article says that Reeves plans to intervene in the Supreme Court case via the Treasury. That would be the rabbit in the £100bn headlights I mentioned some time back. It's not about the cars anymore it's the realisation the CoA was completely wrong and the repercussion would be in the £100bn range. This is why even the Treasury want the CoA changed. Good luck with the judges next reviews...

"potential to cause considerable economic harm". lol. wow and face plant all combined.

Based on the article I would say it's 85% (yes a guess, 85 feels like a good number) certain the Plevin 50% rule will apply.

If we apply Plevin to CBG and where CBG have stated 3% commission, they will then have zero claim value. The Premium finance sector may or may not have claims, however this will likely be small.

The claims companies will scream and if you open a window you may just be able to hear them....

Todays trading may look like we skipped starters. Caius will possibly panic and may revert to exiting after a strong rally, although I'm guessing today might gap at the open... just a little..lol...... All the shorts, unless they have the short as a hedge against a swap (Millenium and Walleye) that was taken to effectively zero out the swap risk, will be looking as to how fast they can close out against the other shorts.... Marshall may have more time than Caius and Qube... The prisoners may be rushing the door to try and get out first..... popcorn time.... or rather go back to bed time dreaming of the morning gap.... virtual beer cheers....

The key line is “We can never rule out firms having to pay redress for serious misconduct” and the key word is "serious" - which to me reads as PPI and Plevin level of 50%. The scheme is off the table, so highly likely dividends are back in 2026.

On the shorters, we are now past the introduction stage and now at the beginnings of the starters. Let infighting begin.....

Caius now seem to be faced with holding the line, while the others bail out. This was always a prisoners dilema, to which the capitalist system does not work well at all, especially if you are trapped in a position with no apparent exit plan..... More so now with the FCA softening comments and Jupiter buying in changing institutional sentiment.

MW drew down more, which I'm presuming was around the 230 level, which they had been hitting before.

Qube may well be on a steady MW type draw down, which may become a bit more of a gradual pace now that the context and size of Caius position build on Friday relative to the run up in price is apparent.

My suspicion is that this morning they had an initial go at pushing down and held off at 9:03 for another day after around 80k shares went through in 5 minutes (a daily rate equivalent pace of 8.1m per day). Previously with the index exit forced sellers they would have continued, however they no longer have that momentum and forced sellers. I'm not quite sure they really understood that and possibly just thought they were great day traders, which put themselves into a trap.

If the market is flat tomorrow (no Trump rally) I would have a guess they may try for another push down. That said I think they are trapped, more so with two of the other shorts pulling back. Who is going to be a forced seller at this level or even 20-30p lower ? That 20-30p would likely cost them an extra 0.2-0.5% short build. Caius seem to be trying to protect a book with a loss and now trying the doubling down approach against the whole market. I don't think this will end well for Caius.... more popcorn, munch, munch....

Having read through the Guardian article again I think CBG will get to 600p mid summer. The FCA is now indicating they will not apply a redress scheme in 2026 having been given the Reeves / Starmer exposure, which may be akin to kryptonite exposure. The “not applying rules around DCAs retrospectively” has been overriden by the CoA invention of an imaginary (and ironically secret) negative fee being valid to create a fiduciary obligation. The Supreme Court may have to have a special smoking session before they look at the case so they can maybe see things the way the CoA did and just see all the holes in the case or not really there because they are all hidden in plain sight..... I'm bulk ordering some popcorn.....

If I'm not mistaken this is a thread on Close Brothers and not Santander, however, hopefully Santander will withdraw from the market as it will provide less competition for Close Brothers in the long run. Higher loan margins for the consumer, oh, an unintended consequence, I guess the FCA missed that tutorial on how not to inadvertantly mess up the market.

5 Sorters really do offset, oh hang on, it does not actually, the single largerst holder in Close. Oh, and one long added two short positions worth in one trade last week. Hmmm... I wonder who is going to be right, the doubling up short twins with no exit strategy or the long term institutions ?

I'm back to being convinced someone really is working for a foreign NGO as a fully qualified specialist. Farmers may want to hire them for spreading on the fields because they seem to be areally good at throwing muck around.

The article indicates why (amongst the swiss cheese CoA ruling) the supreme court will near on destroy the CoA because the judges erroneous ruling has done more damage to the UK than Reeves budget. I had been shouting about this from day one, however the full ramifications of the ruling are still sinking in. Even Marting the wise one Lewis realised it had issues early on. It's 100% certain the ruling applies outside car commissions and the as for the "hidden in plain sight" complete and utter nonsense two of the judges should resign (not Lord Justice Birss who seemed quite offended by the matter in the hearing at the time).

To think in any sort of sensible way you think the CoA ruling will stand I say you are completely dilusional. That is why I am quite bullish Close Brothers.... Mid April 450p. Popcorn at the ready.....

Given the legal situation (ongoing court case) the directory are likely in an extended closed period (unable to buy). Normal closed periods are around financial reporting. The ongoing small purchases are effectively not active choices because they are part of incentive schemes or longer dated pre-agreed transaction as such.

Employees in any listed company generally have closed periods, where they are not allowed to buy and sell. In some instances those restrictions also extend to other companies (i.e. all banks) because the inside information may impact other companies share prices.

Employees may or may not (depending on role, etc.) be in the same closed arrangement as the board, but you will not see any notification of the employees buying......

Shelite : You do realise how ironic the "can't be ****d to read them" is in the context of the Johnson case ? You do have the option to just not read them. I had been trying to add the explanations and aspects that will apply to other trading in the future, rather than just posting unfounded short opinion statements that are as useful as seeing which way the wind is blowing. As for a natter, lol. I'd rather go down the pub.

Chid : The CoA is done, it's the Supreme Court next.... time would have to reverse for the CoA to have another go. Shorter No 5 far smaller than new Long no (lost count), scales tipping...

So, yesterdays buyer revealed and what it does say is that institutions are willing to take a risk on CBG now. After the CoA they would have all backed off, because internally it would have been near on impossible to justify a position increment due to the apparent uncertainty. The increment by Jupiter today is very significant and will have the shorts really considering their positions. Do they go for broke (get fired by doubling up a few times and drop a few £m in the process) or try and get out without loosing much. If they go for broke, I will buy in another bucket of popcorn as there will be some spectacular burning ahead.

Bear in mind the reporting requirement is after they breach a holding of 5% or more and Jupiters declaration is 5.59%. From that and the volumes that went through yesterday the increment may have only been around 1%. The big part of this is the 1% is still against the short positions and all of the buying today is spread across on the whole lots of small trades appart from 08:22:28 this morning with a 250k (£575m) trade going through.

Conversely Millenium would not need to report until breaching 0.5%. (Short threashold is 0.5% and long is 5%) so they have not just added a new 0.51% position. What is reported is necessarily not what has just been traded unless it is a change to and existing reported position. Be aware of this.

The shorts could drag the price down, but they will need to add to their positions and be in a situation another Jupiter or worse a BoA could rock up and completely set them on fire, dumpster style. The shorts don't seem to have a credible exit strategy and that is what seem to be quite apparent.

On a net approximation, finger in the air, direction of the wind, guess, around 1% of buying pushed the price up around 15-20p. I wonder what closing out 5.61% of short positions will do, asside from new longs adding on top of that..

No todays run up is not CBAM. No, not mortgate related. It's mainly in front of you.

If some of the buying today has not been any short closing the fireworks have not started yet. The current run up is not even the warm up act.... it's the intro to the warm up.... popcorn, munch, munch....

Your missing one of the main points. The bondholders will also defend the share price well before it get's to being called if the shares are low. As a bondholder with a 665p conversion your not necessarily going to sit back and wait for a 100p conversion to happen.....

Think about it, if you were a bond holder and for the sake of buying a few £m you get to save £200m from being reduced to around £70m at todays prices, that becomes quite a good deal. Especially if all of the issues are transitory.

I do wonder who had been buying at times....

This is for reference and a context for the current share price level....

I had mentioned before a £200m contingent convertible bond that was issued at 11.125pct interest rate (5yr gilt rate plus 7.039pct). This is a contingent convertible debt, which is triggered if the capital ratio falls below 7pct. The £200m is converted into shares at 665p, regardless of the current market price. So the £200m at todays prices would be diluted as they would be issuing 30m new shares in that instance and your existing holding would be then worth around 83pct of its original holding in the company. Diluted, but not by much for a £200m injection to the shares. This would effectively remove £200m of debt from the balance sheet and in relation to the claims values bounded about and impacts this is an aspect of the company fundamentals that has not been highlighted and may be of interest to know.

So, with the shorty mc short faces saying the shares are going to zero and beyond, try and factor this bit of reality back into the picture. Even at the panic moments of bleak times when Buffet would be loading up.

https://otp.tools.investis.com/clients/uk/close_brothers/rns/regulatory-story.aspx?cid=61&newsid=1736284

Contains a link to the actual CoCo contract details, all 169 pages worth.... strangely all of it is "hidden in plain sight", nobody complains and they actually read the document. Funny that ?

Now that I have stopped laughing..... Based on the reported positions over the last few days, this is what I think has gone on.

Caius / Qube may have been day trading the market down Friday, Monday, Tuesday. Possibly backed off a bit and appeared to reduce the short by a small amount likely also trying to slow the momentum down intra day after the lower inflation report and bank rally on Wednesday. Thursday they tried to catch up and pull the shares back down with a sustained sell through the morning until they were hit by possibly one or two large buys, which they may have tried to reverse briefly and continue the down trend. The volumes could also also have been a contract expiry on a derivative, which would close out some of one of the short holders positions. Back to the prisoners dilema - only one trade took the volume - think this through carfully....

That is when the afternoon rally took off because they may have either figured out who the buyer was or had a lunchtime evaluation about the position or one had closed out a chunk. Caius may be sticking with the reporting requirement threasholds and not reporting any differences under 0.1% so appearing not to be doing anything in comparison to Qube reporting daily minor changes. Could also be a short-short game of chicken as to who tries to stomp the price down in front of a pending steamroller..

Friday may have a repeat morning push down, if they think they have an exit strategy, however I'm having trouble seeing how they can exit (without a derivative contract) without causing a large rally or a massive short build and associated risk of being run over with a multi £m loss BoA style while trying to flush volume out below 200p. The tracker exit volumes are no longer the bearish backwind they were before CBG exited the FTSE 250 index.

Looking at the trade data

https://www.londonstockexchange.com/stock/CBG/close-brothers-group-plc/company-page

10:25:55 had 1,246,000

10:26:00 had 1,246,818

That looks more like a duplicate trade and only 1.25m went through. That is less than 1%. Still a chunky single trade if it was just a single trade.

End of Friday report will show what happened between the shorts and will very likely set the stage for trading on Monday.

That's my perspective/guess/thoughts as to what recently happend and what may happen next week. In the politest possible way.... go figure...

Ah, I get it.. it was the random copy and paste from the court ruling... yeah, he did not write that... Hillarious that Chid did not recognise it was direct extracts, although I guess when you dont read anything relevent to see what it is..... I guess you do make one hell of a mistake and look like a right clown.