New Restoring Customer Confidence Video

The second video in our Restoring Customer Confidence series deals with customer segregation. Each week we will post a new idea answering the question – how do you restore customer confidence and bring traders back?

Restoring Customer Confidence More ideas»
Customer Segregation: A Clear View - Byron Baldwin

Customer Segregation: A Clear View

MarketsWiki.tv

Moving excess customer funds to a clearing house is one way to reduce the amount of capital at risk. Byron Baldwin, SVP, Buyside Relations at Eurex, says his exchange developed segregated account services that can be as wide or granular as needed.

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About the Restoring Customer Confidence video series

In the aftermath of the MF Global collapse, fraud at Peregrine Financial Group and high profile high-frequency trading shocks, John Lothian News asks – how do you restore customer confidence and bring traders back?

The Restoring Customer Confidence video series answers that question by exploring potential solutions using expert interviews and simple animations.

John Lothian News interviewed more than a dozen professionals in the industry to get their ideas and solutions. As these ideas become practice, or as new concepts are adopted by the industry, we will continue to add them to the site.

Visit the video series page on MarketsWiki.tv over the next several weeks for new ideas and solutions.

Lead Stories

NYSE Arca Options announces Mini Options Launch Date of March 18, 2013
Press Release
NYSE Arca Options is pleased to announce that it will commence trading Mini Options on March 18, 2013. This launch date has been selected after extensive consultation with a broad cross section of the options industry including liquidity providers and order flow providers.  NYSE Arca Options will initially list Mini Options on the following securities: APPL, AMZN, GLD, GOOG, and SPY.
Via email (no link)
** NYSE Arca was first to announce they had filed a proposal to list mini options back in April, but ISE filed shortly after and then was first to announce the launch date of March 18, 2013 (see yesterday’s lead story).  The two exchanges’ proposals originally differed in some specifics, including in the underlying stocks, and the exchanges had been working with the SEC to come up with a common proposal. According to the latest press releases the underlying stocks are now the same. Also, according to an SEC filing, NASDAQ OMX PHLX has also filed a proposal to offer mini options (see link: http://www.sec.gov/rules/sro/phlx/2012/34-68132.pdf )    — SR

Also, here is the JLN Options article on the two filings from back in April: http://jlne.ws/HTtsyo

PRECIOUS-Gold dips as U.S. data lifts the dollar
Jan Harvey and David Brough, Reuters
Gold eased on Tuesday after comments from a Federal Reserve policymaker on monetary stimulus and well-received U.S. data lifted the dollar, but prices held in a range as traders turned their attention to the December Comex options expiry.
http://jlne.ws/Ts6xjT

Fear Gauge Shows Nerves of Steel
Steven Russolillo, The Wall Street Journal
Measures of volatility in U.S. markets are pointing to relative calm, but some investors say the low readings are a sign of complacency, especially with the fiscal cliff looming only weeks away.
http://jlne.ws/Ts7wkb

Mysterious Hedge Fund Gets Even More Mysterious
John Carney, CNBC
Renaissance Technologies is one of the most mysterious hedge funds in the world.
With over $15 billion in assets, it is one of the largest single trading entities on the planet. Its flagship fund has one of the greatest long-term records in the history of modern financial markets. And almost no one — perhaps not even the folks who run the company’s hedge funds — knows how it is done.
http://jlne.ws/Ts6Nzy
** “It is a riddle, wrapped in a mystery, inside an enigma.” –Winston Churchill (admittedly not in reference to this but couldn’t resist the quote –JB)

Exchanges

CME Group Must Defend Price-Settlement Suit, Judge Rules
Andrew Harris, BloombergBusinessweek
CME Group Inc. (CME), operator of the world’s largest futures market, must defend a lawsuit brought by Chicago Board of Trade brokers and traders challenging a change in how final-trade settlement prices are determined. Cook County Circuit Judge Lee Preston in Chicago today denied in part a defense request that he throw out the lawsuit filed against CME in June.
http://jlne.ws/Ts7fhc

CME Daily Options Volatility Report: Vols Hit 5-year Low
Larry Shover, Yahoo Finance
http://jlne.ws/Ts799b

Miami Options Exchange Final Planned Mock Trading Test will be held on December 1, 2012
Press Release
MIAX Options Exchange final planned industry mock trading test will take place on Saturday, December 1, 2012 from 9:00 a.m. – 1:00 p.m. ET.
Pending SEC approval, this final industry mock trading test will be in preparation for the launch of its options trading platform on December 7, 2012.
http://jlne.ws/TiM4ev

BPS IRS Form 1099 Notifica
tion #2

CME Group
November 30, 2012 marks the end of the 2012 BPS tax year for brokerage. The following 1099 processing schedule will be effective for the 2012 tax year:
http://jlne.ws/TiM9Pp (PDF)

REGULATIONS

Walter to Become SEC Chairman After Schapiro Steps Down
Joshua Gallu, Robert Schmidt and Jesse Hamilton, Bloomberg
Mary Schapiro will step down next month as U.S. Securities and Exchange Commission chairman, turning over the reins to Commissioner Elisse Walter in a move industry observers say will bring little change at the agency.
http://jlne.ws/Ts7Dwb

Global regulators to hold NY meet on derivatives rules
Douwe Miedema, Thomson Reuters
Global regulators will meet in New York on Wednesday, hoping to hammer out a deal on how to jointly supervise the $650 trillion derivatives market, a thorny issue they have to solve before the end of the year.
Years after opaque derivatives markets were widely blamed for exacerbating the financial crisis that peaked in 2008, regulators have largely completed new rules to make the industry less susceptible to sudden crashes.
http://jlne.ws/Ts6FQA

Technology

BATS expands risk management tool suite to all members
Press Release
BATS Global Markets, operator of securities markets in the U.S. and Europe, has introduced a suite of risk management tools available at no charge to all members of its U.S. equities and equity option markets to help them mitigate risk.
The tools are available to all members of the BATS BZX Exchange, BYX Exchange and BATS Options at no charge with no additional latency incurred on inbound orders to BATS.
http://jlne.ws/UUf26G

Strategy

Stand Back From the Cliff
Steven M. Sears, Barron’s
It is time to stop standing before the mighty fiscal cliff, trembling about the calamity that higher taxes and lower government spending would have on the U.S. economy and stock prices should politicians send us headlong into the abyss.
http://jlne.ws/Ts7N6B
**  Not sure if that last bit is hyperbole or not but after all managing risk is what this is all about. –JB

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