First Read

“You can always tell the pioneers by the arrows in their back”
Carl Gilmore, President, Integritas Financial Consulting
Carl Gilmore That venerable quote, originally anonymous, was mentioned by our own John Lothian at the Executive Club of Chicago breakfast yesterday featuring CME Group CEO Phupinder Gill. John did a great job as mediator, which by the way, was his first time speaking publicly since his surgery. Gill also did a great job. He was realistic and in tune with the fact that change will come and the future of our industry is all about technology. A very refreshing stance as traditionally someone in Gill’s position tends to defend the status quo…Gill didn’t do that at all! Gill’s comments reflect why Chicago really is the risk management capital of the world (apologies to my friends in other geographical areas!). Good work by both.

That brings me to today’s topic – where are we going and how will we get there? There is one thing we know for sure – change is going to happen and there isn’t a darn thing that we can do to stop it. As Yogi Berra once said, “If the fans don’t want to come to the ballpark, you can’t stop them.” Thus, we need to think about how change can benefit our lives and our industry. One subject we can’t ignore is financial technology – FinTech.

FinTech, as we all know, broadly refers to using technology to make financial services more efficient. In our industry there are a lot of interesting things going on, from startups to incubators to disruptive technologies that could drastically change how our industry works.

Incubators are really interesting since they take the approach from other industries and locations (read Silicon Valley) and apply the concepts to financial services. Whether it’s the ChicagoNEXT project and the finhub that is being contemplated or one of the companies sprouting up that are using new technologies and taking new approaches to solving the challenges of the futures industry in the 21st century. It is this innovation that ensures that the futures industry will remain relevant and a vital part of our capital markets.

One of the questions that senior executives have been asking for the last several years is where the leadership of our industry will come from 20 years from now. With a few notable exceptions, we’ve all grown up around the exchange trading floors. As the trading floors have shuttered, we have collectively worried about where we will find the pool of senior management talent. I think I now know the answer. The next generation of leadership is in an incubator sitting in front of a computer and figuring out how technology can make our markets and the transfer of risk more efficient and more seamless.

The next generation of leadership speaks technology natively. They know how to code, they’ve grown up surrounded by technology, and are comfortable using it. Those of us who remember a time when the television remote control was cutting edge often have a hard time keeping up. I readily admit that at best technology is a second language for me. But there is one thing I know: change happens and we should be ready because it will come faster than we think.
All pioneers end up with some arrows in their back. If they didn’t they wouldn’t be pioneers. Let’s make sure there aren’t too many arrows flying around.


Manipulation or Brilliant Trade? The Curious Case of Don Wilson
By Matthew Leising -Bloomberg
When Don Wilson spotted a chance in 2010 to take another bite at a trade that had mostly eluded him as a younger man, he never expected he’d be defending his actions six years later in a Manhattan federal courtroom.

***A Note From Don Wilson of DRW
After a week as JLN guest editor, I’ve returned for one more day as one of today’s headlines hits a personal note. I will keep the commentary brief, and let the publicly available facts speak for themselves.

I am more baffled now than I was two-and-a-half years ago when these charges were brought against my firm and me. At the time, I didn’t know about the existence of the NFA report, or that the CFTC had evidence of our efforts to transact with MF Global when it accused us of cancelling orders to avoid transacting – both of which are described in today’s Bloomberg article. Now that we know more facts, I have to wonder: what were the Commissioners told before authorizing the Complaint? Are the Commissioners even aware of the position the government’s proposed “expert” has taken, namely that unmatched bids and offers in illiquid markets do not contribute to price discovery? (Click HERE to see the CFTC expert witness report.) The lack of transparency in this case is eye opening.

There has been other interest in this case, when the complaint was first filed and more recently. Take a look to get a fuller picture of what has occurred.

Big Trader Strikes Back Against CFTC – Wall Street Journal
Exchanges Clash With Regulators Over Market-Manipulation Case – Wall Street Journal
Firm Sues to Stop CFTC From Calling It a Bunch of Cheaters – Bloomberg View
Enjoin This! – Streetwise Professor

***CG – I don’t think this case is curious at all. Don figured out that an instrument may have been mispriced and acted accordingly. Isn’t that what market participants are supposed to do?


Sponsored Content


Re-assessing the classic risk-return trade off
Financial Times
“If you can keep your head when all about are losing theirs, it’s just possible that you haven’t grasped the situation.” That was how the American satirist Jean Kerr updated Rudyard Kipling’s poem, and new financial research suggests she was on to something.
It also adds to the growing supply of data suggesting we should re-examine the traditional financial view that investment is about trading off risk and return, with greater risk ultimately rewarded with greater return.

***CG – Alternatively, in the land of the blind, the one-eyed man is king.


Illinois Innovation Index: More university startups staying in state
Chicago Tribune
More companies born at Illinois universities are remaining in the state, according to the Illinois Innovation Index. The report, based on self-reported data from the universities, found that during the past five years, Illinois universities have created 611 startups, 80 percent of which remain active.

***CG – This is a good sign. Mr. Mayor and Governor Rauner – let’s get this to 100%.


Fidessa extends Optimized Trading initiative with launch of Prospector
Sales traders today need to be more efficient than ever before, but this is made harder by the huge volume and complexity of data available to them. Up until now the only tools available have been standalone, located in different systems and required manual intervention across each of them in order to produce any meaningful output.


Listed Dividend Derivatives: Why This Asset Class Is Going Mainstream
A complimentary webinar March 15th 2016
Listed dividend derivatives is one of the younger asset class going mainstream. In a DerivSource webinar, we explore how and why firms are incorporating dividend futures (and swaps) as part of their hedging strategies in 2016.
For more info or to register, click HERE

**CG – And the avant-garde moves into the mainstream…


Tuesday Toppers: Most Read Stories
In yesterday’s JLN, the top click-getter was actually a press release from CME naming four new promotions, proving once again that stories about people and jobs figure quite prominently into what we do. Second place went to another job-related story, although of a different stripe, NYT’s Royal Bank of Scotland Loses Finra Arbitration Over Firing. Rounding out the top three, and you guessed it – a job story, was NYT’s Wall Street Bonuses Fell in 2015

Lead Stories

Deutsche Boerse reshuffles Eurex leadership
The Trade News
Deutsche Boerse has appointed Thomas Book and Erik Muller to lead its derivatives exchange and clearing house respectively, as it looks to finalise restructuring its markets and products division. Book will lead the exchange as part of his new role as head of derivatives market trading at Deutsche Boerse. He was previously CEO of Eurex Clearing.

A reason for the ‘Fear Gauge’ to be afraid? Meet the new VIX competitor
Financial News
operator Bats Global Markets and indexing firm T3 Index on March 8 launched a volatility index that will compete with the market’s main ‘fear gauge’, the CBOE Volatility Index. The SPYIX is based on prices of SPDR S&P 500 exchange-traded-fund options, compared with the VIX, which is based on S&P 500 options prices. Both measure expectations for stock swings over the next 30 days.

***CG – You can never have enough fear, or ways to measure it.

ICE Said to Start Lining Up Financing for LSE Bidding War
Bloomberg Business
Intercontinental Exchange Inc. is lining up financing for a bid for the London Stock Exchange Group Plc, according to people familiar with the matter, as it prepares to go head to head with Deutsche Boerse AG to win control of the U.K. company. ICE, which is working with Morgan Stanley and Moelis & Co. to explore a takeover of LSE, is in discussions with banks to fund a formal offer in the coming weeks, the people said, asking not to be identified as the deliberations are private.

***CG – Do not underestimate Jeff Sprecher

CME Group Announces Launch of Interest Rate Swaption Clearing
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will begin clearing Interest Rate Swaptions on April 11. Five clearing members are approved to clear swaptions upon launch, with additional firms working through the approval process to begin clearing swaptions.

***CG – Swaptions – that is fun to say.

Ex-JPMorgan Broker Gets Five Years for Gambling Funds Away
Bloomberg Business
A former JPMorgan Chase & Co. broker who said he stole millions of dollars from customers because his brain was “hijacked” by an addiction to sports gambling was sentenced to five years in prison. Michael Oppenheim, who at one point had about 500 clients and almost $90 million under management at JPMorgan, got so deeply in debt that, according to his lawyer, even his bookie expressed sympathy for him.

***CG – Reminds me of the guy that owes me $223.

Britain’s finance lobby says Brexit would hit City of London
All alternatives to Britain’s membership of the European Union are second best and risk damaging the competitiveness of the City of London’s finance industry, although Brexit would not be ruinous for the economy, TheCityUK lobby said on Wednesday.

***CG – Only if the tax cap on foreign investment goes away.

Hopes of Trading Rebound Take a Hit
Citigroup Chief Financial Officer John Gerspach on Tuesday dealt another blow to investors hoping for a rebound in trading revenue at major Wall Street banks. Speaking at an investor conference hosted by RBC Capital Markets, Mr. Gerspach said revenue from equities and fixed-income trading likely fell 15% in the first quarter. The comments add to the building consensus that a hoped-for rebound isn’t coming soon.

ECB Faces Difficult Balancing Act to Revive Eurozone Inflation
The European Central Bank faces a tough challenge at its policy meeting this week: how to combat persistently low inflation without undermining the region’s fragile banks.


Bankers ‘terrified’ at new regulations
New rules to make bankers more accountable already seem to be giving some of them nightmares. City of London bosses warn they may be so “terrified” of the latest regime that they will hesitate to make decisions, eschew risk-taking and struggle to hire directors.

***CG – Join the club.

EU regulators publish tougher rules for derivatives trades
Banks and companies will have to set aside billions of euros to back derivatives trades from September under new European Union rules designed to make the $550 trillion market safer.
The tougher rules apply to derivatives like interest rate or credit default swaps that are traded privately or over-the-counter (OTC), and not passed through a clearing house.

Pension funds face derivatives exodus
The Trade News
European pension funds could be forced out of the derivatives market if rules requiring them to post cash as variation margin are not changed. In a joint letter to the European Commission’s Jonathan Hill, the heads of Europe’s largest pension funds warned that rules restricting the use of non-cash collateral, such as government bonds, would reduce liquidity in the OTC derivatives market and could result in them being shut out.

Should Fiduciary Advisers Swear Off Mandatory Arbitration?
MoneyBeat – WSJ
Many investment-advisory contracts require investors to take disputes to arbitration rather than court, but requiring investors to take disputes to arbitration may run against a fiduciary-bound adviser’s duty to act in a client’s best interest, says Wealth Adviser columnist Norb Vonnegut.

SEC’s White Says Stock-Market Overhaul Won’t Happen This Year
The stock market won’t be getting an imminent makeover after all—not while Mary Jo White is leading the Securities and Exchange Commission. Ms. White, the SEC’s chairman, said Tuesday the agency won’t advance any major changes this year to the fragmented system of trading U.S. stocks across more than 10 national exchanges and more than 40 private venues.

U.S. Senate banking panel sets hearing for Obama’s SEC nominees
The U.S. Senate Banking Committee has set a hearing date for President Barack Obama’s two nominees to the Securities and Exchange Commission, a move that follows Democrats’ complaints about a backlog of nominations.

ESAs Publish Final Draft Technical Standards On Margin Requirements For Non-Centrally Cleared Derivatives
The Joint Committee of the European Supervisory Authorities (EBA, EIOPA, ESMA – ESAs) published the final draft Regulatory Technical Standards (RTS) outlining the framework of the European Market Infrastructure Regulation (EMIR). These RTS cover the risk mitigation techniques related to the exchange of collateral to cover exposures arising from non-centrally cleared over-the-counter (OTC) derivatives.

New accountability regime for banks and insurers comes into force
Financial Conduct Authority
The Senior Managers Regime for the banking sector and the Senior Insurance Managers Regime both come into force today. The new regimes will hold individuals working at all levels within relevant firms to appropriate standards of conduct and ensure that senior managers are held to account for misconduct that falls within their area of responsibility.

SEC Announces Creation of Office of Risk and Strategy for its National Exam Program
Peter B. Driscoll will lead the office and has been named as its first Chief Risk and Strategy Officer. In this role, Mr. Driscoll will manage the new office and the Investment Adviser/Investment Company examination staff based in Washington, D.C.

***CG – Progress, I suppose.

Robert M. Fisher Named Managing Executive of the Office of Compliance Inspections and Examinations
The Securities and Exchange Commission today announced that Robert M. Fisher has been named Managing Executive of the Office of Compliance Inspections and Examinations (OCIE). In this role, Dr. Fisher will oversee OCIE’s business operations, technology services, examiner training, and Tips, Complaints and Referrals programs. He succeeds Peter B. Driscoll who has been named Chief Risk and Strategy Officer of OCIE’s new Office of Risk and Strategy.

European Commission Adopts Delegated Regulation Relating to EMIR Clearing Obligations for Certain Credit Derivative Contracts
Orrick – Structured Finance Group – JDSupra
On March 1, the European Commission adopted a Delegated Regulation supplementing the European Union regulation on derivatives, central counterparties and trade repositories (“EMIR”).

Exchanges & Trading Facilities

Deutsche Boerse-LSE eye savings from merger move: sources
Deutsche Boerse (DB1Gn.DE) and the London Stock Exchange (LSE.L) are targeting cost savings of more than 300 million euros ($331 million), once a merger of the two exchanges is completed, three people familiar with the matter said on Tuesday. Deutsche Boerse and LSE are expected to officially announce a merger agreement next week, well ahead of a March 22 deadline, two of the sources said.

ETF trading on LSE hits record £6.8bn in February
Investment Week
ETFs reported record trading volumes during February, with £6.8bn in total traded on the London Stock Exchange, the latest figures revealed.

This figure was up 4% on the previous record high on the London Stock Exchange, which was set during January 2015.

Deutsche Börse announces new leadership structure within Market Data + Services
Deutsche Börse Group
Deutsche Börse Group today announced changes in the leadership structure of its Market Data + Services (MD+S) business area, which is part of the recently created division “IT & Operations, Data & New Asset Classes”, headed by Deputy Group CEO Andreas Preuss. With immediate effect, MD+S activities will be bundled in four major service lines: Regulatory Services, Data Services, Index Services (incl. STOXX) and Infrastructure Services. Alongside these will be a new, central unit “Content Lab”. The restructuring aims to enhance market and client focus of the area in line with Deutsche Börse’s “Accelerate” strategy. Managing Director Holger Wohlenberg will continue to lead MD+S.

Implementation of new leadership structure for Eurex trading and clearing business
Deutsche Börse Group
Thomas Book, Managing Director at Deutsche Börse Group, has been appointed CEO of the Eurex Frankfurt AG and Eurex Zürich AG as part of his new role as Head of Derivatives Markets Trading for Deutsche Börse Group. Michael Peters was appointed new Deputy CEO of Eurex Frankfurt AG and has been a member of this Executive Board since 2006.
As of 1 July 2016, Erik Müller, Managing Director at Deutsche Börse Group responsible for Group Strategy and M&A, Treasury and IR, will take over as CEO of Eurex Clearing AG. Effective 7 March, Heike Eckert has been appointed new Deputy CEO of Eurex Clearing AG; she has been serving as COO since April 2013.

DGCX Welcomes INTL FCStone Into Its Member Community
The Dubai Gold & Commodities Exchange (DGCX) is pleased to welcome INTL FCStone Commodities DMCC as a Trade Member of the Exchange. INTL FCStone Inc., including its subsidiaries, is a leader in the development of specialized financial services in commodities, securities, global payments, foreign exchange and other markets.

Warsaw Stock Exchange Monthly Statistics For February 2016
Warsaw Stock Exchange Monthly Statistics for February 2016 is now available. For Main Market, NewConnect, Alternative Market and Catalyst Bond Market statistics click here.

***CG – Some interesting things happening economically in Poland. One of the fastest growing European economies.


5 numbers that explain Tuesday’s election results
By Steven Shepard – Politico
Pollsters felt the Bern in Michigan on Tuesday, while Donald Trump rebounded to sweep three out of four Republican contests.
Here’s how Bernie Sanders upset Hillary Clinton, and Trump topped Ted Cruz and his other GOP rivals in Michigan, Hawaii and Mississippi, according to exit polls on Tuesday.

****JB: Some people at Clinton HQ are undoubtedly feeling the Bern this morning.

***CG – It’s a long and winding road.

Hedge Funds & Managed Futures

One year of ECB quantitative easing
A year into the European Central Bank’s money printing programme, Mario Draghi and his colleagues have spent more than 700 billion euros, and yet the results are far from what they would have hoped. Having spent the equivalent of 1.3 million euros a minute or 2,000 euros ($2,200) for every man, woman and child in the 19-country euro zone, inflation barely registers, economic growth remains sluggish, and stock markets are down 13 percent.

Goldman Says Commodity Bounce is Premature
MoneyBeat – WSJ
The last week was a stellar one for commodity prices. A fierce rebound in oil has propelled Brent crude back above the $40-a-barrel mark, taking its gains since the start of March alone to over 14%. Goldman Sachs Group Inc. analysts attribute this surge to “reflation, realignment and re-levering”. But is it sustainable in the longer run? They don’t think so.

Low commodity prices drive 2016 defaults, oilfields to shut
Commodity prices at multi-year lows drove a rise in defaults early this year, and the oil sector could see still more unprofitable fields shut, industry analysts said on Wednesday. Debt defaults in the commodity sectors rose in the first two months of 2016 from the same period a year ago, credit ratings agency Moody’s said.

Hedge funds back off bets on China devaluation
Two of the three types of hedge funds which bet heavily on a sharp devaluation of China’s yuan last year have backed off the trade, leaving only some ultra-bearish “Black Swan” investors holding long-term bets, fund managers and bankers said.

Competing goals make Saudi oil policy hard to predict
When Saudi Arabia last month announced with Russia and other big oil producers a conditional agreement to freeze production at current levels in the face of rock bottom prices, the decision was seen as an indication that it was changing policy. Economics had finally trumped geopolitics. Where Riyadh’s earlier decision not to cut output was seemingly spurred by geopolitical rivalry with Iran and Russia, economic hardship had catalysed co-operation.

Supporting a new approach to risk management
Changing attitudes to risk management in the financial services industry have created a demand for innovative technology that addresses new regulations and creates an accurate and consistent enterprise-wide view of risk. IBM, which was ranked at number one for enterprise-wide risk management in the Risk Technology Rankings 2015, explains why adopting a multi-layered approach is essential.

Central bank policies distort market signals –
How can we know the dancer from the dance? In times past, financial markets proved a reliable predictor of economic conditions to come, the signalling value of equity indices and bond market yield curves taking pride of place in long-established lead economic indicator gauges. Alas, today’s markets proffer more noise than signal, their predictive powers now distorted into submission by years of unprecedented and increasingly aggressive central bank intervention.

Banks & Brokers

Citigroup markets, investment banking revenue slow: CFO
Citigroup Inc first-quarter markets revenue is running 15 percent lower than a year earlier and its investment banking revenue is off by 25 percent, Chief Financial Officer John Gerspach said on Tuesday. “It has been a tough quarter,” Gerspach said at an investor conference.

Citigroup in ‘tough’ 1-qtr for mkts, investment banking, says CFO
Citigroup Inc first-quarter markets revenue is running 15 percent lower than a year earlier and its investment banking revenue is off by 25 percent, Chief Financial Officer John Gerspach said on Tuesday.

Barclays offering high-tech ‘labs’ to business customers
Barclays is attempting to woo businesses and entrepreneurs by offering digital equipment such as 3D printers in up to 20 “labs” this year in some branches. Barclays has revealed its first “Eagle lab” in an old branch in Brighton, following pilots in Bournemouth and Cambridge.

Greece’s Piraeus and Attica banks probed over recapitalisation
Two of Greece’s biggest lenders are being probed by the eurozone’s banking watchdog in connection with last year’s EUR14.4bn recapitalisation of the sector, which was as a condition of Greece’s latest international bailout.

Clearing & Settlement

Credit Suisse and RBS to offer swaptions clearing with CME
The Trade News
Credit Suisse and RBS are among five banks that will offer voluntary swaptions clearing with CME, as banks look to push more products through clearing to avoid higher costs. CME Group announced it will begin clearing interest rate swaptions on April 11, making it the first central counterparty (CCP) to offer clearing for the product.

CME Group Announces Launch of Interest Rate Swaption Clearing
FTSE Global Markets
CME Group says it will begin clearing Interest Rate Swaptions on April 11th. Five clearing members are approved to clear swaptions upon launch, with additional firms working through the approval process to begin clearing swaptions. The initial product scope will include US Dollar denominated swaptions with European style exercise, a maximum two-year option expiry, and a maximum underlying swap tenor of 30 years.

Buyside reluctant to join the clearing party
Financial News
Most banks are members of the major clearing houses, and after June 2016, interest rate derivatives in Europe will be the first, and most substantial, tranche of products that have to be cleared, rather than traded between two parties over-the-counter as before. But while the banks have been quick to offer clearing services to their clients, those clients have so far shied away from joining directly.

***CG – Un-disintermediation? Is that even a word?

DTCC Preps for T+2
Press Release
The migration to a T+2 settlement environment for U.S. equities and fixed income trades has passed another milestone as the industry Steering Committee announced that the new settlement is slated to go live on September 5, 2017.

Indexes & Products

db x-trackers ETF on US dollar-denominated corporate bonds with currency hedge launched on Xetra
Deutsche Börse Group
The db x-trackers Barclays USD Corporate Bond UCITS ETF (DR) (EUR) gives investors access to the performance of fixed-income bonds denominated in US dollars. The bonds included in the reference index are issued by companies in the industrial, utilities and financial services sectors and are based in the US or elsewhere. Criteria for acceptance into the reference index are an investment-grade rating as well as fulfilment of specific maturity and liquidity requirements. The USD-EUR exchange rate risk is hedged.

Deutsche Börse Cash Market: Ossiam Japan Minimum Variance ETF With Currency Hedging Launched On Xetra
The new Ossiam Japan Minimum Variance ETF enables investors to participate in the performance of the most liquid Japanese stock corporations in the S&P/TOPIX 150 Index and to benefit from currency hedging of the yen against the euro. Companies from the reference index are selected with the aim of minimising expected volatility.

S&P Dow Jones Indices And MSCI Revisions To The Global Industry Classification…
Press Release – PRNewswire
S&P Dow Jones Indices, a leading provider of financial market indices, and MSCI Inc., a leading provider of portfolio construction and risk management tools for global investors, today issued a reminder regarding the previously announced exciting changes to the Global Industry Classification Standard (GICS®) structure. A new Real Estate Sector is being created, elevating its position from Industry Group within the Financials Sector. This is the first time a new Sector has been created under the GICS structure since its inception in 1999, and the update acknowledges the importance of real estate in the global economy.

Smart Beta ETFs That Stood Out Amid Market Volatility
Seeking Alpha
The ‘smart beta’ rage has lately taken the charge of the ETF world. Simply put, the days of plain vanilla ETFs or market-cap weighted ETFs are gone and products with several winning attributes are coming on stream.


DGCX boosts global connectivity with Stellar trading systems
The Dubai Gold and Commodities Exchange (DGCX) today announced that Stellar Trading Systems, a multi-asset trading software and services specialist, has become an approved independent software vendor (ISV) on the exchange.

Rival Systems Reduces Latency by 25 Percent, Widening Gap with Competition
Rival Systems
Press Release
Chicago-based Rival Systems (Rival), a trading software company established last year, announced today that the latest version of its platform further reduces latency by 25 percent. The significant speed increase improves on a platform already widely regarded as the fastest in the industry.

OptionsCity connects to EEX via CityTrader
Automated Trader
OptionsCity Software, a provider of futures and options trading and analytics solutions, has announced that its cloud-based futures and options platform, CityTrader, will now offer direct access to the European Energy Exchange (EEX). The agreement will provide CityTrader users with access to EEX’s power, emissions, coal, freight and agriculture products.

Good news — fintech could disrupt finance
Martin Wolf,
Information technology has disrupted the entertainment, media and retail businesses and, most recently, the supply of hotel rooms and taxis. Is it going to do the same to finance? My first response is: please. My second response is: yes. As Bill Gates has said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Don’t let yourself be lulled into inaction.” This advice applies to people in the business itself, but also to policymakers.

***CG – I wholeheartedly agree – obviously.


S.E.C. Fraud Case Says Adviser Puffed Up His Background Online
The New York Times
An unregistered investment adviser with a criminal past and an interest in the wine business is facing fraud charges by the Securities and Exchange Commission, which has accused him of going to extraordinary lengths to hide his past from investors and make his firm appear legitimate.

***CG – Caveat emptor.

SEC Awarding Nearly $2 Million to Three Whistleblowers
The largest of the three awards will go to a whistleblower who voluntarily provided original information that prompted the SEC to open its investigation. That whistleblower, who will receive about $1.8 million, continued to provide valuable information throughout the investigation. The other two whistleblowers will receive approximately $65,000 each for providing information after the investigation started.

Libor trader Tom Hayes denied appeal
Tom Hayes, the first person to be found guilty by a jury of manipulating Libor in the global investigation, had his request to appeal against the conviction to the UK’s highest court denied. The Court of Appeal said Mr Hayes, a former UBS and Citigroup trader, could not ask the Supreme Court to hear whether the lower court had erred on a point of law.

Securities Commission Malaysia: Court Of Appeal Jails Former Directors For Market Manipulation
The Court of Appeal today unanimously upheld convictions against Dato’ Phillip Wong Chee Kheong, 54, and Francis Bun Lit Chun, 46, former directors of the Impetus Group of Companies for manipulating Suremax Group Berhad shares over a period of four months.

Environmental & Energy

When It Rains, It Increasingly Pours, Scientists Say
Bloomberg Business
As the climate heats up, the forecast is also calling for more rain. Think downpours. Cats and dogs. Or just “extreme rain,” as the scientists call it. The overall rain and snowfall average is increasing only moderately. But observations since 1951 show that the wettest days every year have increased their intensity by 1 percent to 2 percent per decade

Forget fracking. Choking, lifting latest efforts to stem U.S. shale bust
Something is awry in the beleaguered U.S. shale patch: older wells, which normally gush oil or natural gas in their first few months before rapidly depleting, are not petering out as quickly as they should.

Bankruptcy court ruling stings operators of energy pipelines
Sabine Oil & Gas Corp won an important court ruling on Tuesday that will allow the bankrupt energy producer to shed certain pipeline contracts, potentially exposing companies that transport and process gas to the crisis in the energy industry. The ruling by New York’s influential bankruptcy court is the first major test of whether Chapter 11 can be used to end a contract with companies in what is known as the midstream sector of the energy industry.


Hong Kong Plans to Uncloak Investors With See-Through System
Hong Kong’s financial markets watchdog will be able to identify investors behind the trades they are making in real time with a plan to require identification codes.
The Securities and Futures Commission, which currently can monitor live trading only at the broker level, is developing policies and data protection measures for the new system, said Keith Lui, executive director for market supervision at the agency. The agency will consult banks and brokerages on the plan prior to implementation, he said.

The China Intervention Trade Is Back as State Funds Battle Bears
The Chinese stock market has once again turned into a battleground for bearish investors and state-directed funds determined to spark a rally.
During each of the past six days, the Shanghai Composite Index has recorded intraday losses before recovering to end the trading session higher, with suspected intervention targets including Industrial & Commercial Bank of China Ltd. and PetroChina Co. leading the rebound. After dropping as much as 3.1 percent on Wednesday, the benchmark gauge pared its loss to 1.3 percent at the close as ICBC jumped.

China, Fighting Money Exodus, Squeezes Business
Chinese officials are trying anew to slow a money exodus from the country, clamping down on individuals seeking to flee the yuan and making life tougher for companies that need to trade the currency for dollars to do business.

How China’s Emergence Could Redraw The Markets Map
Sometimes markets take mere seconds to change direction, their path swinging around events like this week’s hotly anticipated European Central Bank meeting. But the most powerful forces in capital markets can be much slower to take effect—and have much bigger consequences.

Hedge funds back off bets on China devaluation
Economic Times
Two of the three types of hedge funds which bet heavily on a sharp devaluation of China’s yuan last year have backed off the trade, leaving only some ultra-bearish “Black Swan” investors holding long-term bets, fund managers and bankers said.

How Hong Kong can survive – even thrive – amid a decline in demand from mainland China
South China Morning Post
According to the just-published outline of the 13th five-year plan, China’s average annual rate of growth will slow from 7.8 per cent in the previous five years to over 6.5 per cent, and per capita disposable income will also fall, from 7.7 per cent to over 6.5 per cent. There is, however, no target for international trade, except that it will be optimised by increasing domestic value-added content in exports and both quality and quantity in imports. This may imply low or no growth in the gross value of total exports and a decline in the trade surplus.

Frontier Markets

Iran plays hardball with European oil buyers, slowing exports
Iran has managed to sell only modest volumes of oil to Europe since the lifting of sanctions seven weeks ago and several former buyers are staying away, citing legal complications and Tehran’s reluctance to sweeten terms to win back customers.

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