Looking for a speed boost, the Warsaw Stock Exchange shifts ever-increasing volume over to NYSE Euronext’s trading platform. Regulators are looking more likely to create rules that will require brokers to disclose signing bonuses when they join new firms to clients. Leaving aside images of insects and rodents, banks are departing from the ISDAfix rate-setting panel as the investigation into possible rate manipulation gathers pace.
It all began at CBOE 40 years ago this month…
Ed Tilly, President & COO, Chicago Board Options Exchange
It’s my honor to step in as this week’s guest editor. First, a tip of the hat to my fellow guest editors so far, Steve Grob, Andy Yemma, Veronica Augustsson and Gary Katz — it’s obvious that none of you wanted to let John down. We look forward to having John back in the saddle and taking his rightful place as publisher, pun-master and critic-in-chief! John, no matter how well your guest editors do, you cannot be replaced.
Since I’ve been told I can exercise total editorial discretion, I hope you’ll allow me a brief commercial on my first day on the job. This month marks the 40th anniversary of CBOE and U.S. options industry. On CBOE’s opening day in April 26, 1973, some 911 contract on 16 stocks changed hands and the listed options industry was born. There are 11 U.S. options exchanges vigorously competing in scores of products in today’s thriving and vibrant options marketplace. While CBOE still leads the industry it created, the real winner of options innovation and competition is the customer.
I think options customers and other readers of the John Lothian Newsletter will enjoy our “CBOE 40” page (www.cboeoptionshub.com/cboe40), a fun look at CBOE’s history and the growth of the U.S. options industry through videos, a “memories” blog and photos – our ‘70s fashion shots are not to be missed!
Now, onto the news…
The True Value Of A Social Community
On March 4th, John Lothian, who publishes John Lothian Newsletter, announced that he was taking a 6-week leave of absence in order to undergo double knee replacement surgery and intensive rehabilitation. During his absence, a whole cast of volunteer guest editors have been carrying the torch, helping Jim Kharouf, the President and Editor in Chief, keep the content and commentary going.
***ET: Can’t start my day without either: my Starbucks and John’s Newsletter
IntercontinentalExchange Announces April 29 Launch Of 35 New Futures Contracts
IntercontinentalExchange, a leading operator of global markets and clearing houses, today announced the introduction of 35 new energy, environmental, freight and ferrous metal contracts on April 29, 2013. The new contracts, which will be cleared at ICE Clear Europe and are subject to completion of relevant regulatory processes, include global crude oil, gasoline, middle distillate, natural gas liquid, natural gas, power, environmental, freight and iron ore futures and options products.
Fidessa Partners With Key Brokers To Provide Pan-ASEAN Trading Service
Fidessa group plc has today announced that it has partnered with a number of key Asian regional brokers to provide a simple, immediate one-stop-shop trading service for all ASEAN markets. The partnerships, with CIMB, DBS Vickers, Maybank Kim Eng, OCBC Securities, Philip Securities and UOB Kay Hian, make it possible to trade across the whole of the ASEAN region from a single connection to Fidessa’s global trading network. The service is available now for use by Fidessa’s extensive global community of buy-side and sell-side firms.
***ET: Fidessa’s ASEAN stir fry
Futures will not beat swaps on margin alone, say buy-side firms
The lower margin regime for swap futures contracts will not by itself kill off the over-the-counter swaps market, leading buy-side firms say, but some industry participants remain convinced US regulators need to even out the treatment of futures and OTC instruments.
***ET: This is about the need for regulatory parity.
Former Employee Seeks CME’s Help in Trade-Leak Case
A former CME Group Inc. employee is pushing the exchange operator to help cover his legal costs in fighting government charges that he leaked private trading details to a broker. William Byrnes is one of two former employees at CME’s New York Mercantile Exchange energy unit charged in February with passing sensitive customer trading information to an unnamed broker in return for meals and entertainment.
Insight: When options trading ahead of deals raises eyebrows
Within 36 hours of Warren Buffett‘s announcement of a deal to buy H.J. Heinz, U.S. authorities froze an account linked to possible insider trading. The speed of the crackdown on a lucrative options bet, combined with successful prosecutions of insider trading rings, suggested that regulators were quickly jumping on any suspicious activity. Yet some veterans of the options business are unconvinced.
***ET: Making markets safe for investors is the industry’s highest priority.
Commodity traders’ $250bn harvest
Javier Blas, FT.com via CNN
The world’s top commodities traders have pocketed nearly $250bn over the last decade, making the individuals and families that control the largely privately-owned sector big beneficiaries of the rise of China and other emerging countries.
Commodities: Tougher times for trading titans
Javier Blas – FT.com
If you want to raise $10bn quickly, you need to know who to call. When Igor Sechin, chairman of Rosneft, decided to buy TNK-BP and create the world’s biggest listed oil producer, he faced a problem: banks would not be able to provide the full $55bn required. So Mr Sechin went elsewhere.
***ET: Hard to beat FT on headlines!
Department of Justice balks at MF Global advisers’ fees
Nick Brown | Reuters
The Department of Justice is objecting to about $1.85 million (1.2 million pounds) in professional fees in MF Global‘s wind-down, including more than $500,000 for the primary law firm that represents bankruptcy trustee Louis Freeh
**JK – He ain’t free.
The agony and ecstasy of broken markets
Mohamed El-Erian – FT.com
The Japanese bond purchase programme has already had a material effect on financial prices around the world. It will now alter the global investment landscape by changing the nature and size of capital flows. Yet once the initial excitement passes, t
he real question will become whether it adds to, or subtracts from, the longer-term stability of the global monetary system.
How Sweden Became a Capitalist Model
As recently as the early 1990s, the idea that Sweden could be a model of anything except socialism gone awry would have been laughable. But Sweden today barely resembles its former self. As the Economist magazine wrote last year, “The streets of Stockholm are awash in the blood of sacred cows.”
***ET: This is about a different kind of Swedish model — the economy. Lessons to be learned here about the benefits of a critical self-review.
Shamed British bank bosses seek solace in science and cricket
Steve Slater – Reuters
Say sorry, give back some of the money and become an adviser. Playing cricket and keeping a low profile also seem to help. These appear to be the best routes to rehabilitation or at least a more peaceful life for bankers in Britain blamed and shamed for bringing their companies to their knees.
World Federation of Exchanges CEO Huseyin Erkan Shares His Perspective on the Global Economy
Huseyin Erkan is CEO of the World Federation of Exchanges (WFE) and was formerly Chairman and CEO of the Istanbul Stock Exchange (ISE) from 2007 to 2012. Before becoming CEO of WFE, he was a member of the WFE’s Board of Directors from 2008 to 2011. Erkan spoke with JLN Editor-in-Chief Jim Kharouf about the WFE’s current restructuring process, what the end of regulatory reform means for exchanges, potential drivers for growth in 2013, and what impact the global economy will have on exchanges.
***ET: New WFE Chairman Hussein Erkan makes the case for regulated markets.
MarketsWiki Page of the Day
MarketsWiki Recent Updates
Companies, Organizations and Groups
37,988,254 pages viewed, 7,449 articles, 156,773 edits
Warsaw Bourse Switches to NYSE Platform as Volumes Surge
The Warsaw Stock Exchange switched to NYSE Euronext ’s new trading system to speed up transactions after stock turnover on central Europe ’s fastest-growing equity market soared almost four-fold over the past decade.
Brokers Face Pay Disclosures
JULIE STEINBERG – WSJ.com
Securities regulators are widely expected to start forcing stockbrokers who get big bucks when they defect to another firm to tell their clients. Signing bonuses, loans that are forgiven over time and other sweeteners have become bigger as securities firms fight harder to lure brokers.
Banks Drop Off IsdaFix Panel Amid Rate-Rigging Probes
Liam Vaughan – Bloomberg
Banks are leaving the panel that sets ISDAFix, the benchmark for the $379 trillion swaps market, as regulators probe suspected manipulation of the rate.
ISDAfix Probe Unveils Obscure Rate Affecting Bonds to Annuities
ISDAfix rates at the center of a U.S. price-manipulation probe, while often relegated to the fine print of regulatory filings, help determine everything from borrowing costs on bonds that finance skyscrapers to interest on annuities.
Support Grows for European Effort to Fight Tax Havens
JAMES KANTER – NYTimes.com
Europe’s effort to crack down on tax havens gained momentum during the weekend as the number of countries agreeing to share more bank information doubled.
Crunch-time for money managers as swaps clearing deadline nears
Reuters via Yahoo! Finance
Asset managers have been slow to set up accounts with clearing houses for over-the-counter derivatives ahead of a mandatory deadline, creating a nearly unmanageable backlog that could leave many firms unable to trade, industry participants said.
Regulators’ bright light could thwart dark pool growth
Tim Cave – Financial News
Dark pools have become increasingly important to US and European equity markets over the past few years, but the controversy surrounding them shows little sign of waning.
Ackermann Says Euro Destruction More Costly Than Deepening Union
Josef Ackermann, the former chief executive officer of Deutsche Bank AG who now chairs Zurich Insurance Group AG, said allowing the euro to fail would be more costly than deepening the region’s fiscal and political ties.
Rock Star Draghi Needs a New Song for Europe
SIMON NIXON – WSJ.com
We live in the era of rock star central bankers, so it is no wonder expectations are running high. The New Bank of Japan Gov. Haruhiko Kuroda’s decision to mount a gigantic government bond-buying program equivalent to 160% of this year’s forecast net issuance was greeted by widespread euphoria amid the near-universal consensus that the BOJ was finally facing up to its responsibility to do what is necessary to kick-start the economy.
Clawback debate grips business bosses
Mike Foster and Giles Turner – Financial News
Bonus clawbacks are crossing over from the banking sector in which they originated, and appearing on the corporate governance agenda in other sectors. Governance experts are now demanding that clawbacks be applied for poor performance, not merely misconduct, as is now predominantly the case.
Regulators mull ‘gaps’ in chain of responsibility
Sarah Krouse – Financial News
As the number of service providers in the financial services industry continues to grow, UK regulator the Financial Conduct Authority is concerned that firms trying to limit their liability could create gaps in the chain of responsibility.
CFTC should extend US persons fix, says O’Malia
The Commodity Futures Trading Commission (CFTC) has not started work on a final definition of the term “US person” according to Scott O’Malia, one of its five commissioners, and a temporary exemptive order that expires on July 12 should be extended as a result, he says.
Note to New S.E.C. Chief: The Clock Is Ticking
By GRETCHEN MORGENSON – NY Times
For a lot of cases involving questionable practices and disclosures arising from the mortgage bust of 2008, time is running out.
Virtu Financial’s Concannon Unlikely to Join SEC
JENNY STRASBURG – WSJ.com
Chris Concannon, an executive at a high-frequency-trading firm and a former senior Nasdaq OMX Group Inc. NDAQ +0.03% official, has told executives at Virtu Financial LLC he is unlikely to leave the company for a big job at the Securities and Exchange Commission, people familiar with the situation said.
Give Basel a Chance Before Introducing New Reforms
Mayra Rodríguez Valladares – American Banker
Following President Barack Obama’s re-election, I argued financial reform would not be a priority for his administration, given other challenges such as job creation, gun control, housing policy reform and immigration. Recently, however, some politicians have been fired up over the “too big to fail” debate.
Regulatory revolving door spins ever faster
Richard Partington – Financial News
Nomura, the Japanese bank, became the latest financial institution to appoint a former senior regulatory gamekeeper to its executive ranks when it named Jeremy Bennett, formerly of the UK Treasury and the UK Financial Services Authority, as its new chief executive for Europe, the Middle East and Africa, subject to regulatory approval.
Few financial workers fail “fit and proper” test
British financial regulators have blocked just 30 out of a possible 227,000 applications to the sector’s most risk-sensitive jobs since the banking crisis erupted, figures seen by Reuters show.
Boundaries of Insider Probes Expand
JEAN EAGLESHAM – WSJ.com
The parking-lot photograph of a KPMG LLP partner allegedly accepting an envelope stuffed with cash doesn’t just show one of the U.S. government’s most powerful pieces of evidence in a big insider-trading case.
Letter on Margin Requirements for Non-Centrally-Cleared Derivatives
We, the undersigned organizations, support the intent of global policymakers to develop a regulatory framework that improves the safety of the global over-the-counter (OTC) derivatives markets. In a number of critical areas of reform, ranging from improving regulatory transparency through trade repositories to reducing counterparty credit risk through increased clearing, we have collaborated extensively with policymakers and worked hard with market participants to help drive real progress.
Testimony Of CFTC Chairman Gary Gensler Before The U.S. House Appropriations Subcommittee, Washington, DC
Testimony Of CFTC Commissioner Scott D. O’Malia Before The US House Committee On Appropriations, Subcommittee On Agriculture, Rural Development, Food And Drug Administration, And Related Agencies, Washington, DC
Exchanges & Trading Facilities
IntercontinentalExchange Announces Daily Volume Record In Heating Oil
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today announced a daily volume record of 35,733 contracts was reached in ICE Heating Oil futures on April 11, 2013. The previous volume record was 26,850 contracts on March 6, 2013.
NYSE Euronext launches Young Professional Sessions
On 17 April 2013, NYSE Euronext Lisbon will hold its Young Professional Sessions (YPS) for the first time. This initiative aims to promote financial literacy in the capital markets, and by providing such training the Exchange is able to contribute directly or indirectly to the development of the Portugues capital markets.
NASDAQ OMX Holds First Quarter 2013 Investor Conference Call
NASDAQ OMX Group SEC Filing – Executive Compensation Highlights
Montreal Exchange Raises Position Limits For Equity And ETF Options
Montréal Exchange Inc. (MX), a wholly-owned subsidiary of TMX Group and Canada’s derivatives exchange, announced that it will raise position limits for equity and exchange-traded fund options, effective today.
[CBOE] Trader E-News
Rally Software Celebrates Initial Public Offering and First Day of Trading on the New York Stock Exchange
TOM MTF Statistics Week 15 2013
Hedge Funds & Managed Futures
SAC’s First Asia-Based Manager to Start Own Macro Hedge Fund
Yip Ka-hay, the first Asia-based manager hired by Steven Cohen’s $15 billion SAC Capital Advisors LP, plans to start a macro hedge fund in July to trade currencies, interest-rate securities and equity indexes in the region.
SAC Capital loses staff in Hong Kong at challenging time
Reuters via Yahoo! News
By Nishant Kumar HONG KONG – SAC Capital Advisors, run by hedge fund titan Steven A. Cohen, has lost seven staff in Hong Kong and relocated five others there to New York and London, according to regulatory filings and people familiar with the matter.
John Paulson Loses Over $300 Million On Friday’s Gold Tumble
There were many casualties following Friday’s 4% gold rout, but none were hurt more than one-time hedge fund idol John Paulson, who according to estimates, lost more than $300 million of his own money in one day. Per Bloomberg : “Paulson has roughly $9.5 billion invested across his hedge funds, of which about 85 percent is invested in gold share classes.
Einhorn’s big bet on gold slammed by sell-off
Reuters via Yahoo! News
By Svea Herbst-Bayliss and Matthew Goldstein BOSTON/NEW YORK – This year’s sell-off in gold has been harmful for dedicated gold-bugs like hedge fund manager John Paulson but it has also hit managers like David Einhorn who is better known for his stock picks than his love of the yellow metal.
Trio buck trend as commodities revenues dip
Just three commodities desks from 10 of the largest investment banks increased revenues in 2012, according to a JP Morgan report, as new regulations and higher capital requirements dragged on earnings.
DealBook: Hedge Fund Titans’ Pay Stretches to 10 Figures
New York Times
A number of the hedge fund leaders who had giant paydays last year earned their riches the old-fashioned way: by posting big returns on their investments.
Corporate pension schemes embark on talent scramble
Sophie Baker and Mark Cobley – Financial News
UK corporate pensions are scrambling for talent at a pace not seen in years. In the past month, seven top-level pensions executives involved in schemes with total assets of £125bn have either been promoted, changed jobs or retired.
Ireland prepares to overhaul its pensions system
Marek Handzel – Financial News
Three years after it was first proposed, the Irish government is still getting to grips with exactly how, or when, its dream of automatically enrolling employees into an occupational pension scheme will be realised.
Sugar Seen Lower With Hedge Funds Most Bearish Ever: Commodities
Sugar traders are the most bearish in nine weeks and hedge funds are making their biggest ever bet on lower prices on mounting concern that record supply from Brazil will extend a global glut.
CFTC Commitments Of Traders Reports Update
Subscription starts for Constantin Medien AG corporate bond
Banks & Brokers
State Street electronic FX chief departs in shake-up
Reuters via Yahoo! News
By Tim McLaughlin BOSTON – State Street Corp said on Saturday the top executive of its electronic foreign exchange trading business has left the company in a leadership shake-up. The departure of Clifford Lewis raises questions about the direction of Boston-based State Street’s high-frequency trading platform for forex called Currenex.
Goldman Sachs Declares Preferred Stock Dividends
State Street Names Jeff Conway To Lead Data And Analytics Solutions For Clients – Integration Of Existing Capabilities Provides Clients With Easier Access To Solutions
Citigroup names Joseph Chang as Asia Pacific prime finance head
Reuters via Yahoo! Finance
HONG KONG – Citigroup Inc has named Joseph Chang as head of prime finance in Asia Pacific, according to an internal memo obtained by Reuters on Monday.
Barclays Launches Automated Capital Commitment for Algorithmic Trading
Barclays has introduced an automated capital commitment feature available through select equity algorithmic trading strategies for US clients. This new functionality, called capital commitment, allows clients to partner with Barclays in creating liquidity and transferring risk.
Goldman Sachs Gives Blankfein $5 Million Long-Term Incentive
Goldman Sachs Group Inc. awarded Chief Executive Officer Lloyd C. Blankfein a $5 million long- term cash bonus, which will pay out in three years if he meets certain targets, on top of $21 million in 2012 compensation.
Goldman Sachs Pays Cohn More Than Evans in First Gap Since 2007
President Gary Cohn , 52, was awarded a $19 million compensation package, 12 percent more than Vice Chairmen J. Michael Evans and John S. Weinberg, according to the New York- based firm’s annual proxy filing.
JPMorgan Chase, Wells Fargo post sharply higher profits
Los Angeles Times
JPMorgan and Wells, two of the nation’s healthiest banks, also reported fewer loan delinquencies, but a slowdown in the mortgage business disappointed investors. Two of the nation’s healthiest banks reported sharply higher profits and fewer loan delinquencies as bank earnings season began, but a slowdown in the mortgage business disappointed investors.
UBS Sued by Fired Singapore Traders’ Former Manager
UBS AG , fighting lawsuits from two Singapore traders it fired for alleged serious misconduct, was sued by their former boss Balasubramanian Venkatesan.
Shrinking coverage leaves some in the rain
Tim Cave – Financial News
When Italian economist Vilfredo Pareto observed in 1904 that 20% of the peapods in his garden contained 80% of the total peas, he could hardly have imagined he was creating a blueprint for many 21st century business models.
MB Financial’s Feiger highest paid of local midsized bank CEOs
Crain’s Chicago Business
CEO Mitchell Feiger received $3.1 million in total compensation in 2012, making him the highest paid chief executive of Chicago’s five publicly traded, midsized banks.
Indexes & Products
S&P Dow Jones Indices Announces Quarterly Index Reviews
Transact Chooses Calastone’s Re-Registration Solution
Calastone, the global fund transaction network, has been selected by Transact to provide it with a fully interoperable, electronic re-registration solution.
Enyx FPGA Feed Handler Chosen By Quincy Data For CME Data
Former Credit Suisse Executive Pleads Guilty to Inflating the Value of Mortgage Bonds
PETER LATTMAN – NYTimes.com
A former senior trader at Credit Suisse Group pleaded guilty on Friday to charges that he fraudulently inflated the value of mortgage bonds as the housing market collapsed, becoming one of the highest-ranking Wall Street executives to admit to crimes related to the 2008 financial crisis.
Environmental & Energy
US, China vow to boost climate efforts amid ‘increasing dangers’
The Hill’s E2 Wire
China and the United States, citing the “overwhelming scientific consensus” on human-induced climate change and its worsening effects, are pledging to boost cooperation through an agreement unveiled during Secretary of State John Kerry’s visit.
**RKB – China and the U.S. announced a new “Climate Change Working Group,” which will present a report at the next meeting of the joint Strategic and Economic Dialogue in Washington, D.C. in July.
Alberta Looks at Renewable Energy Amid Push for Keystone
Alberta may boost the use of renewable energy to cut carbon dioxide emissions as the province lobbies U.S. officials to approve TransCanada Corp. (TRP)’s Keystone XL pipeline.
Should the Federal Government Regulate Fracking?
The Wall Street Journal
Fracking supporters say it could set America on the road to energy independence and drastically change our economic prospects while helping address climate change.
EEX To Auction Additional 4.3 Million Phase II EU Allowances
Woori Chairman to Quit Amid Fourth Sale Attempt by South Korea
Woori Finance Holdings Co. Chairman Lee Pal Seung plans to step down ahead of the South Korean government’s fourth attempt to find a buyer for its stake in the country’s biggest financial services group.
Shenzhen Stock Exchange Revises The Appraisal Measures For Information Disclosure Of Listed Companies
SIFMA Statement On Japan Joining The Trans-Pacific Partnership
HKEx Announces Primary Market Makers for Its Stock Options Market
Thai Bourse Includes Infrastructure Funds In Sectoral Indices And REITs In Property Fund Sector
Dalian Commodity Exchange: Notice On Doing Simulation Test Of Egg Products Trading System
Dalian Commodity Exchange: Notice On Revising Rules On Settlement Prices Of Non-traded Contracts
Dubai Mercantile Exchange CEO on Outlook, Crude Oil
April 15 — Christopher Fix, chief executive officer of the Dubai Mercantile Exchange, talks about the bourse’s expansion strategy in Asia and the outlook for the crude oil market.
Qatar Exchange Highlights Success of DvP Mechanism
Qatar Exchange is pleased to report that on the 2nd Anniversary since the implementation of the DVP system at Qatar Exchange on April 11, 2011, the DVP mechanisms that were implemented have been performing successfully and that in no instance was a securities buy-in or a cash close-out execution required.
Stymied European mid-market firms turn to emerging markets
Alec Macfarlane – Financial News
With lacklustre growth expected across Europe this year, many private equity firms in the mid-market are looking to emerging markets to expand their portfolio companies.
Bursa Malaysia Derivatives Branching Initiative Takes Off With The First Futures-Only Branch Office In Johor Bahru
IFC To Organize A Special Training For Alternate Dispute Resolution For Lahore Stock Exchange Stakeholders
Nigerian Stock Exchange Weekly Report For The Week Ended April 12, 2013
Malawi Stock Exchange Weekly Trading Report
MCX Weekly Market Report April 05, 2013 – April 11, 2013