Nasdaq suffers the latest operational error in the exchange sector and shuts down for some hours on Thursday. The CFTC is nearly ready to release its road map to govern its regulation of computer-based trading. Hopefully they’ve included rest stops and those helpful blue highway signs. Brazil’s BM&FBovespa exchange receives recommendations to dump penny stocks from its main index.

First Read

NASDAQ Outage Should Spur Competition
John J. Lothian
Yesterday’s NASDAQ outage was perplexing to me as someone who is completely befuddled by the complex securities trading market structure. I am still waiting to find someone who can completely explain to me how the securities markets work. In detail. Down to the order type.

If this outage had happened at a futures exchange, especially one with a contract listed by other exchanges, we would have seen the volume move to the exchanges that were still trading. There would have likely also been a decline in overall volume, much like we saw yesterday, but traders would have still had a venue to hedge their risk.

To have stocks multiply listed on different exchanges, but then have a single point of failure, is the result of bad market structure design and bad regulation. In cases like this, other exchanges ought to be able to report NASDAQ-listed trades on an alternative method, whether an industry utility or their own.

The idea that these bastions of capitalism all simultaneously take a timeout when one of them has a problem seems off. Where is the competition? Where is the innovation? Where are the solutions?

The truth is that the securities markets are over-regulated. New rules mandating better technology is not going to get it done. Competition will get it done. But it will take the U.S. to create a better regulatory structure allowing greater competition for this to happen.

The markets as they are structured are too complex for the average investor to understand. I will bet the average or even above-average stock broker can’t explain the complete market structure either. I am still looking for someone who can. So if we need to simplify the market structure, we need to unleash the power of competition. Making the market more complex with more rules from the SEC will not solve our complexity problems.

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US markets crippled by Nasdaq outage
Arash Massoudi in New York – FT.com
US equity markets were crippled by a technical breakdown on Nasdaq on Thursday that brought stock trading on the country’s second-largest exchange to a halt for more than three hours.
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***JM: Lots of articles and blog coverage on this topic, no surprise. For more, see today’s “Nasdaq Outage” section below, just after Lead Stories.

++++

Goldman Is a Victor in Ruling on Options Trades
KAITLYN KIERNAN – WSJ.com
Goldman Sachs Group Inc. won a decisive victory Thursday when the NYSE Euronext‘s Amex options exchange canceled most of the errant trades that buffeted markets Tuesday morning.
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***** The responsibility for this was a clear as Knight and day.

Goldman should take the hit on tech-glitch losses, says Scholes
Neil Munshi in Chicago – FT.com
Myron Scholes, one of the founding fathers of modern options trading, has said Goldman Sachs and others should be forced to incur huge losses if they make mistaken trades, instead of being able to cancel them.
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***** Opinions are great Mr. Scholes, but what are the rules? Just apply the rules.

++++

FIA, FOA And FIA Asia Complete Formation Of FIA Global And Name Initial Board Members
The Futures Industry Association, the Futures and Options Association and FIA Asia are pleased to announce the completion of the final bylaw changes needed to form FIA Global, the confederation of associations that will enhance their combined global voice and reach. Members of the FOA approved the proposed affiliation in July along with its name change to FIA Europe. This week FIA Asia and FIA announced the completion of the necessary changes to their bylaws, the final steps in the process for forming FIA Global.
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***** Next is FIA Intergalactic!

++++

Central bank chiefs need to master the art of storytelling
Gillian Tett – FT.com
What skills does the next chairman of the US Federal Reserve really need? A decade ago, the answer seemed clear: political acumen, excellent economic knowledge, and the ability to analyse reams of statistics to deliver effective monetary policy responses. But if Douglas Holmes, a professor of anthropology, is correct, the Fed chairman needs something else, too: the linguistic and cultural skills of a preacher-cum-therapist.
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***** Some stories are told during the Summers and some are told by Yellen.

++++

Elegant Design and Market Structure: An Oxymoron
Larry Tabb – TabbFORUM
While we all aspire to great design, great design isn’t always practical. In fact, great design often gets in the way of what we really need to accomplish.
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***** Larry, have you seen the Apple computers?

++++

Q&A: Algorithms
Philip Stafford – FT.com
Why are algorithms important? The mathematical formula that maps a set of steps for solving problems are omnipresent in the digital world. In financial markets they do all the buying and selling of assets, be it shares, derivatives or currencies. With a few exceptions, it is almost impossible to trade on an exchange without one.
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***** I have an algorithm for tying my shoes.

++++

Where have all the cowboys come from?
Lisa Pollack | FT Alphaville
“I’d like to be instrumental in the manipulation of key interest rate benchmarks to the benefit of my employer”, said no aspiring financier ever. Equally unimaginable are freshly-minted bankers starting out wide-eyed, bushy-tailed and eager to aggressively mark books in order to disguise losses. And yet, here we are with a plethora of scandals and misdeeds. Why do so many in the industry lose their way?
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***** We need more Boy Scouts.

++++

Fixing the Economy with Financial Experiments
Clarke Camper – Inside the Beltway
Financial industry experts met at the National Press Club in D.C. this week to discuss the U.S. economy and prospects for stronger economic growth.
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***** The economy is never fixed, it is dynamic.

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One more trading movie for the week
(Regarding Jay Sorkin’s “The Top Ten Movies About the Markets”, published last Friday on the JLN blog)

Guy Taylor from ICAP submits Margin Call

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[YouTube] WWII Movie German Bunker Meme on the Stock Market (Nasdaq Closes)
jlne.ws/1ayjlPP

***** This came out yesterday before the market even reopened.

++++

CFA/CDA 201
3 Summer China-U.S. Futures Industry Forum, Chicago, July 24

This Saturday, July 24, the China Futures Association (CFA) and the Chinese Derivatives Association (CDA) will host a group of senior executives from Chinese FCMs and exchanges, including China Financial Futures Exchange, Shanghai Futures Exchange, Zhengzhou Commodity Exchange, Dalian Commodity Exchange and the China Futures Margin Monitoring Center. The event, to be held from 4-8pm at the Metropolitan Club, 67th floor of the Willis Tower, will feature an industry update and a networking session with a group from the fastest growing segment of the global futures industry.
jlne.ws/1ch7bfJ

***DA: A golden opportunity to rub elbows with the China contingent.

++++

MarketsWiki.tv

Lance Zinman

Lance Zinman, Katten Muchin Rosenman, SEC Hedge Fund Marketing Rule
MarketsWiki.tv

Lance Zinman is a law partner at Katten Muchin Rosenman and head of the firm’s Chicago financial services practice. He regularly advises hedge funds, commodity pools, commodity trading advisors and proprietary trading firms on compliance and regulatory matters. He sat down with John Lothian News Editor-at-Large Doug Ashburn to discuss the SEC rule on private fund solicitation, released July 10, 2013. In the interview, Zinman cuts through the misinformation and explains the key points of the rules. He also explains how the 506 exemption may not be claimed by anyone with a “disqualifying event” and other limitations. He also highlights a few areas in which the rule is unclear or needs to be harmonized with other regulators such as the CFTC. According to Zinman, it remains to be seen whether this rule will truly usher in a new wave of marketing on behalf of hedge funds and other private funds.

Watch the video »

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Lead Stories

CFTC Moves to Rein In High-Speed Traders
SCOTT PATTERSON – WSJ.com
Federal commodities regulators are preparing to take their first big step toward reining in high-speed computer trading and subjecting it to tougher oversight. The Commodity Futures Trading Commission is completing a road map it will use to develop rules aimed at taming the practice of computer trading, which has led to market disruptions such as Thursday’s failure at Nasdaq OMX Group Inc. NDAQ -3.42% and the 2010 “flash crash” that sent markets plunging in a matter of minutes.
jlne.ws/1ayjlPQ

***** I will be in Washington, DC on September 12 for the TAC meeting mentioned in this article. Should be interesting.

Brazil’s BM&F Bovespa May Alter Index Rules to Retire Penny Stocks
Rogerio Jelmayer – MoneyBeat – WSJ
Brazilian oil firm OGX Petróleo e Gás Participações SA may be dumped out of the country’s main stock exchange index if a proposed change to the methodology is adopted. A working group has recommended that BM&F Bovespa SA retire penny stocks from the index, bringing the country into line with companies such as the New York Stock Exchange, which prohibited penny stocks.
jlne.ws/1ayjnqY

Japan Exchange Group set for major derivatives push
Michelle Price in Hong Kong – Financial News
The Japan Exchange Group – created by the $1.7 billion merger of the Tokyo Stock Exchange and the Osaka Securities Exchange in January – is planning to boost its derivatives volumes by almost 50% within two years and revive trading in the local commodities market.
jlne.ws/1ayjnqU

MF Global Judge Delays Approval of CFTC Settlement
Bloomberg
MF Global Inc. can’t get court approval for a settlement with the U.S. Commodity Futures Trading Commission until the defunct broker determines whether an admission of wrongdoing will cause insurers to deny coverage to its directors and officers, a judge said.
jlne.ws/1ayjnr3

JPMorgan Said to Face ‘Whale’ Fines as Soon as Next Month
Bloomberg
U.K. and U.S. regulators are preparing to impose fines as soon as mid-September on JPMorgan Chase & Co. after an investigation into the bank’s London trading losses last year, a person with direct knowledge of the matter said.
jlne.ws/1ayjnr6

NSEL declares 9 entities as defaulters
Business Line
Following the directions of the Forward Markets Commission, NSEL has declared nine entities- ARK Imports, Loil Overseas Foods, Lotus Refineries, N.K. Proteins, NCS Sugars, Spin Cot Textiles, Tavishi Enterprises, Vimladevi Agrotech and Yathuri Associates as defaulters.
jlne.ws/1ayjlPW

MCA to check if NSEL violated companies law
Business Standard
The Ministry of Corporate Affairs would soon meet to discuss the National Spot Exchange Ltd (NSEL) crisis and decide whether the companies law had been violated. In case of violations, the ministry might also consider the action to be taken.
jlne.ws/1ayjlPY

Newsmaker: Jignesh Shah
Business Standard
Fit and proper. These three words have come back to haunt the chairman and chief executive officer of Financial Technologies, Jignesh Shah, twice in less than three years.
jlne.ws/1ayjnaw

Schaeuble says Greek aid shocker was designed to bring clarity | Reuters
German Finance Minister Wolfgang Schaeuble said on Thursday that his blunt comments earlier in the week that Greece would need a third bailout had been aimed at reassuring people who feared the government was hiding bad news before next month’s election.
jlne.ws/1ayjlQ4

U.S. looks to turn the screw in Swiss banks talks
Reuters
The United States is pushing Switzerland for a deal to settle a long-running dispute over banks that shelter tax evaders, a Swiss government source said on Thursday, ratcheting up the pressure after parliament rejected an accord in June.
jlne.ws/1ayjlQ5

Swiss prosecutor opens probe into ex-SNB chairman Hildebrand
Reuters
Switzerland’s state prosecutor opened an investigation into former Swiss National Bank (SNB) Chairman Philipp Hildebrand in connection with possible violations of secrecy laws, after receiving an undisclosed complaint.
jlne.ws/1ayjm6k

Nasdaq Outage

Trading Resumes in Nasdaq-Listed Securities
JACOB BUNGE, JENNY STRASBURG and SCOTT PATTERSON – WSJ.com
A technical glitch knocked out trading in all Nasdaq Stock Market securities for three hours Thursday afternoon, an unprecedented meltdown for a U.S. exchange that paralyzed a broad swath of markets and highlighted the fragility of the financial world’s electronic backbone.
jlne.ws/1ayjm6l

Nasdaq Points to Issue With NYSE Arca for Glitch
JENNY STRASBURG And JACOB BUNGE – WSJ.com
Nasdaq OMX Group Inc. executives internally on Thursday pointed to a “connectivity” problem with competing electronic exchange NYSE Arca as the trigger to technical issues that led to a three-hour halt in trading of Nasdaq-listed stocks, according to people familiar with the matter.
jlne.ws/1ayjnrd

Nasdaq outage prompts gripes but no panic
Dan McCrum, Tracy Alloway and Arash Massoudi in New York – FT.com
At 12.15pm on a quiet summer Thursday in New York, the head of trading for one of the large banks that sits at the heart of US stock markets heard an unusual shout across the open floor: “Nasdaq has stopped trading!”
jlne.ws/1ayjnHu

Morning MoneyBeat: Nasdaq Snafu a ‘Black Eye’ for Markets
Steven Russolillo – MoneyBeat – WSJ
The latest stock-market snafu won’t bode well for the already fragile state of investor sentiment.
jlne.ws/1ayjm6m

Wall Street holds gains as trading resumes on Nasdaq
Reuters
U.S. stocks held to gains in afternoon trading on Thursday after trading resumed at the Nasdaq exchange following a more than three hour halt.
jlne.ws/1ayjm6o

SEC: Nasdaq Trading Glitch ‘Serious’
MoneyBeat – WSJ
SEC Chairman Mary Jo White in a statement Thursday called Nasdaq’s glitch “serious” and said she plans to “convene a meeting of leaders of the exchanges and other major market participants to accelerate ongoing efforts to further strengthen our markets.”
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Nasdaq mishap puts SEC in spotlight
Kara Scannell in New York – FT.com
The Securities and Exchange Commission responded quickly to Nasdaq’s latest computer glitch but the agency’s biggest challenge is how it responds more broadly to the string of systems outages that have revealed the fragility of the market and undermined investor confidence.
jlne.ws/1ayjm6q

Thanks to Nasdaq Halt, Volume Hits Year Low
Paul Vigna – MoneyBeat – WSJ
This is what happens when nothing happens for three hours. Thursday’s trading in New York wasn’t likely to set any records anyway, volume has been low all month as the dog days drag on, but the three-hour trading halt the Nasdaq Stock Market-listed securities helped to ensure that today’s trading volume was the lowest this year.
jlne.ws/1ayjnHy

The Nasdaq Halt, in Five Charts
MoneyBeat – WSJ
What a day. An otherwise quiet summer trading session quickly transformed into a frantic afternoon when an unexplained technical issue paralyzed a large chunk of the U.S. stock market. Trading was halted in Nasdaq Stock Market-listed securities for more than three hours before re-opening for business in the final trading hour.
jlne.ws/1ayjnHB

Paralyzed Nasdaq opted for caution over speed in restoring trade
Jed Horowitz, Lauren Tara LaCapra and Herbert Lash – Reuters
Thirty minutes into the crippling outage that hobbled the Nasdaq stock market on Thursday afternoon, stopping all trading in $5.9 trillion worth of U.S. equities, exchange officials had the problem fixed.
jlne.ws/1ayjnHD

Chuck Jaffe: Nasdaq outage a ‘black squirrel event’
Market Watch
There were three types of investor Thursday when the Nasdaq had a surprise shutdown that lasted for about three hours in the afternoon. There were the folks who were completely oblivious, the ones who were freaking out, and the group that was hoping it would all get blamed on a dead squirrel.
jlne.ws/1ayjm6y

Nasdaq Issues Statement on Trading Halt
MoneyBeat – WSJ
Here’s the statement from Nasdaq OMX Group regarding Thursday’s three-hour trading halt:
jlne.ws/1ayjnHF

Statement On Nasdaq Trading Interruption – SEC Chair Mary Jo White
jlne.ws/1ayjm6z

In Markets’ Tuned-Up Machinery, Stubborn Ghosts Remain
NYTimes.com
A generation ago, when the stock market crashed on Oct. 19, 1987, the Nasdaq stock market appeared to have done much better than the New York Stock Exchange. While the Dow Jones industrial average fell 23 percent that day, the Nasdaq composite index was off just 11 percent. It was not, it turned out, that Nasdaq stocks were more highly regarded. It was, instead, a question of the technology used.
jlne.ws/1ayjnHH

‘The Big Halt,’ and Other Exchange Shut Downs
Paul Vigna – MoneyBeat – WSJ
Shutting down a stock exchange is bad for business on Wall Street. Shut downs are painful, they can also be embarrassing, and they always cost the Street money. Here’s a partial list of some of the more notable shut downs:
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Computer Bugs and Squirrels: A History of Nasdaq’s Woes
WILLIAM ALDEN – NYTimes.com
It was yet another technical difficulty for Nasdaq. On Thursday, when a problem at the Nasdaq stock market halted trading in all Nasdaq-listed stocks, it brought back memories of past problems at the exchange, which trades shares of some of the world’s most prominent technology companies.
jlne.ws/1ayjmmU

Regulatory

SEC calls for cooling-off period for more staff
Sarah N. Lynch | Reuters
The U.S. Securities and Exchange Commission is making more of its staff who leave the agency for the private sector subject to a one-year cooling-off period.
jlne.ws/1ayjnHJ

Patchwork Global Regulations Continue To Create An Environment Of Uncertainty
GreySpark Partners, the capital markets consultancy, has published a new report today exploring the emerging global regulatory landscape, taking an international perspective of what are often seen only as regional mandates. A key finding is that despite differences in regulations between territories, the uptake of intergovernmental agreements (IGAs) highlights the desire for cooperation among some jurisdictions.
jlne.ws/1ayjnXY

Sefs and exchanges echo EC’s CDS licence complaints
Peter Madigan – Risk.net
Being able to grant a licence is a powerful thing. The belief of the European Commission (EC) is that the International Swaps and Derivatives Association and Markit, at the behest of 13 banks, abused that power to keep CME Group and Deutsche Börse out of the credit default swap (CDS) market between 2006 and 2009. And the claim from some market participants is that the licensing process is still being used to stifle competition in the CDS space today.
jlne.ws/1ayjnY0

Small Firms Facing Increased Regulatory Scrutiny
Greg MacSweeney – Wall Street & Technology
Regulators make small firms jump through the same data backup hoops as their larger peers.
jlne.ws/1ayjnY1

National Futures Association: Business Continuity and Disaster Recovery Plan – Proposed Amendments to NFA Compliance Rule 2-38
jlne.ws/1ayjmmX

National Futures Association: Increase to Fees for Late Financial and Regulatory Filings – Proposed Amendments to NFA Financial Requirements Sections 10 and 13 and NFA Compliance Rule 2-48
jlne.ws/1ayjnY4

National Futures Association: Phase 2 of the Daily Segregation Monitoring Systems – Proposed Technical Amendment to NFA Financial Requirements Section 4
jlne.ws/1ayjnY6

Exchanges & Trading Facilities

CME says ‘technical issue’ affected CBOT soy data
Reuters
The CME Group on Thursday said it was monitoring a “technical issue” that affected the display of some market data in its Chicago Board of Trade soy futures complex but had no impact on trade.
jlne.ws/1ayjmn5

Derivatives top agenda for ASX chief
Michelle Price in Hong Kong – Financial News
The chief executive of the Australian Securities Exchange has said the company will focus on expanding its derivatives business over the next 12 months, as regulatory efforts to overhaul the global swaps market gather pace in Asia Pacific.
jlne.ws/1ayjnYc

NYSE Could Face Vast Layoffs Amid ICE Tie-Up
Fox Business
The merger of IntercontinentalExchange (ICE) and NYSE Euronext (NYX) could lead to massive layoffs as new management targets redundancies at the Big Board in a bid to improve profitability, FOX Business Network has learned.
jlne.ws/1ayjnYe

MIAX Trade Breaks In All NASDAQ Symbols Between 12:18:00 And 12:26:22
jlne.ws/1ayjmn9

Program Trading Averaged 25.3 Percent Of NYSE Volume During Aug. 12-16
jlne.ws/1ayjpiz

[CBOE] Restrictions on Transactions in TranSwitch Corporation (TXCC)
jlne.ws/1ayjpiB

Hedge Funds & Managed Futures

BNP Paribas in commodity securitisation first
Ajay Makan in London – FT.com
French bank BNP Paribas has sold a bundle of commodity trade finance loans to investors in the first deal of its kind, as financiers and traders seek to diversify the funding sources available to the industry.
jlne.ws/1ayjpiD

Value investors battle it out for dominance in a ‘new bull market’
Mike Foster – Financial News
Value equity investors have achieved a critical market breakthrough, securing their best chance of winning business in five years.
jlne.ws/1ayjpiF

FCA ups pace for AIFMD compliance, sparking an early fight for funds
Brian Bollen – Financial News
Pressure is increasing on private equity houses with existing funds to start the process of complying with the Alternative Investment Fund Managers Directive earlier than had been expected.
jlne.ws/1ayjoez

Family Offices Are Increasingly Cautious Of Hedge Funds
Forbes
Hedge funds as well as pretty much all investment managers are recognizing the wealth – the liquid assets – controlled by family offices. Additionally, there’s a boom in the number of family offices making this cohort all the more attractive and potentially profitable.
jlne.ws/1ayjpiJ

Banks & Brokers

Headcount at banks’ commodity units down 21 pct since 2011
Reuters
Headcount in commodities units of the top 10 investment banks has slid by a fifth over the past two years as the firms have been hit by increased regulation and higher capital requirements, a consultancy said on Thursday.
jlne.ws/1ayjoeG

ICAP appoints Alex Newman as Head of Dry Bulk Commodities (Asia Pacific)
ICAP plc today announces the appointment of Alex Newman as Head of Dry Bulk Commodities (Asia Pacific), based in Singapore. Reporting to George Dranganoudis, Managing Director of ICAP Energy in Asia Pacific, Newman will develop and manage ICAP’s Asia Pacific dry bulk commodities platform with an initial focus on iron ore and coal.
jlne.ws/1ayjpiK

BofA, Chase Have Stopped Disclosing Relief Paid to Homeowners Under Mortgage Pac
Shayndi Raicet – MoneyBeat – WSJ
Bank of America Corp. and J.P. Morgan Chase & Co. have stopped disclosing how much relief they are providing to struggling homeowners as part of a 2012 national mortgage pact, according to a report released by the monitor of the deal.
jlne.ws/1ayjoeI

ABN Amro awaits privatization plan
TOBY STERLING – AP
The Dutch government is set to unveil Friday its plan for reprivatizing ABN Amro NV, the bank that was nationalized in 2008 to prevent a meltdown of the financial system.
jlne.ws/1ayjoeJ

Barclays Promotes Deck to Australia, NZ Chief Executive
Gillian Tan – MoneyBeat – WSJ
Barclays PLC has named Jeff Deck as its chief executive and country head for Australia and New Zealand, according to an internal memo seen by MoneyBeat.
jlne.ws/1ayjoeK

UBS Promotes O’Connor CIO Fitzpatrick in Fund Unit Revamp
Bloomberg
UBS AG , Switzerland’s biggest bank, promoted Dawn Fitzpatrick, the investment chief of the firm’s $5.2 billion O’Connor hedge-fund business, as the company seeks to increase assets under management.
jlne.ws/1ayjoeL

Japan’s Financial Services Agency: Memorandum Of Cooperation With National Bank Of Slovakia
On August 22, the Financial Services Agency signed Memorandum of Cooperation with the National Bank of Slovakia related to the supervision of funds and fund managers conducting their business on a cross-border basis.
jlne.ws/1ayjpz4

David Weidner’s Writing on the Wall: On Wall Street, are bankers all the same?
David Weidner – WSJ.com
J.P. Morgan, led by the dynamic James Dimon, after all, was supposed to be the bank that did things differently than its run-of-the-mill Wall Street counterparts. As Mr. Dimon has said when it comes to banking, it’s not about the model, it’s about the management. The reality, of course, is that those counterparts hopscotch around Wall Street firms like tourists checking out rides at Walt Disney World. Whatever “culture” each institution had has been watered down by the free-agency banking and brokerage executives.
jlne.ws/1ayjpz6

Clearing & Settlement

ICE Link and Cetip Launch Post-Trade Solution for the Brazilian Bond Market; Brings Efficiency, Standardization and Operational Risk Mitigation
IntercontinentalExchange, a leading operator of global markets and clearing houses, today announced that its post-trade workflow tool for the global credit default swap (CDS) market, ICE Link, is now available on Cetip’s bond trading platform, Cetip|Trader. ICE Link provides operational efficiency to the post-trade workflow, making these activities faster, safer and more standardized.
jlne.ws/14mDiFD

CMEGroup – NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (HHQ) Effective Friday, August 23, 2013
jlne.ws/1ayjouY

Indexes & Products

How New Financial Regulation Could Impact Bond ETFs
ETF Trends via Yahoo! Finance
The exchange traded product business has grown by leaps and bounds over the past several years with the number of ETFs and ETNs trading in the U.S. rising to around 1,500 with about $1.5 trillion in assets under management. On a global basis, the totals are 3,660 funds with over $2.1 trillion in AUM, according to new research published by Credit Suisse.
jlne.ws/1ayjpz9

Technology

Traditum Group Selects OptionsCity Metro for Market Making
OptionsCity Software, a leading provider of electronic trading solutions, today announced that Traditum Group, a diversified proprietary trading firm specializing in market making, has adopted OptionsCity Metro for its energy, grains, and soft commodities trading operations.
jlne.ws/13UpWNc

Enforcement

FINRA Fines Morgan Stanley $1 Million and Orders Restitution of $188,000 for Best Execution and Fair Pricing Violations in Customer Bond Transactions
The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. LLC $1 million and ordered $188,000 in restitution plus interest for failing to provide best execution in certain customer transactions involving corporate and agency bonds, and failing to provide a fair and reasonable price in certain customer transactions involving municipal bonds.
jlne.ws/1ayjpzd

CFTC Files Action to Revoke Registration of Commodity Trading Advisor Prestige Capital Advisors, LLC
The U.S. Commodity Futures Trading Commission (CFTC) today filed a Notice of Intent (Notice) to revoke the registration of Prestige Capital Advisors, LLC (Prestige) of Charlotte, North Carolina, as a Commodity Trading Advisor (CTA).
jlne.ws/1ayjpzg

Federal Court Enters $2.2 Million Default Judgment Order against Florida-based Global Precious Metals Trading Company and its Owner, Michael Ghaemi, for Operating a Fraudulent Off-Exchange Precious Metals Scheme
The U.S. Commodity Futures Trading Commission today announced that it obtained a federal court default judgment Order against Global Precious Metals Trading Company, LLC (GPMT) of Coral Gables, Florida, and its principal Michael Ghaemi of Miami, Florida, charged with running a fraudulent precious metals scheme and misappropriating customers’ funds (see CFTC Press Release 6587-13, May 13, 2013).
jlne.ws/1ayjpzk

SEC Stops California Company With Misleading Registration Statement From Issuing Public Stock
The Securities and Exchange Commission today issued an order to stop an initial public offering (IPO) of a Los Angeles area company before its shares were sold to the public. In issuing its stop order against Counseling International, the Commission determined that the company’s registration statement contains false and misleading information.
jlne.ws/1ayjov4

Former ‘King of Biotech’ settles with SEC
Reuters
An investor formerly known as the “King of Biotech” has reached a settlement with the U.S. Securities and Exchange Commission over a market manipulation scheme, according to court documents filed on Thursday.
jlne.ws/1ayjov5

New Martoma indictment describes second doctor as insider source
Reuters
U.S. prosecutors on Thursday restated their case against a former portfolio manager who worked for Steven A. Cohen’s hedge fund SAC Capital Advisors, adding a new twist to what is considered to be the centerpiece of the multi-pronged legal action against SAC, court papers showed.
jlne.ws/1ayjpPy

ASIC to remove liquidator from industry
jlne.ws/1ayjpPC

[ASIC] Former Gunns chairman convicted of insider trading
jlne.ws/1ayjova

Environmental & Energy

U.K. Seeks EU Draft Legislation on Carbon Market Fix by Year-End
Bloomberg
The U.K. wants the European Commission to propose by the end of this year draft legislation to strengthen the EU emissions trading system after 2020, according to the Department of Energy & Climate Change.
jlne.ws/1awz2Hi

UN opens carbon trading office in Bogota
Responding to Climate Change
The UN has opened a carbon markets office in the Colombian capital Bogota, its latest regional initiative to boost interest in emissions trading.
jlne.ws/14nvhQT

Whitfield Plans Mega-Hearing on Obama Climate Plan
Bloomberg
House Republicans are seeking 13 federal agencies representing basically every federal decision-maker on the issue to testify at a massive hearing on the White House’s climate change agenda.
jlne.ws/153Fgxh

Asia-Pacific

Charlene Chu Is the ‘Rock Star’ of Chinese Debt Analysis
ALEX FRANGOS – WSJ.com
When top officials at the U.S. Federal Reserve want to understand the Chinese financial system, they meet Charlene Chu. Goldman Sachs, which isn’t short of China experts, interviewed her and sent the transcript to its clients. And one of the world’s most influential investment firms calls her a rock star.
jlne.ws/1ayjpPF

Japan’s Women to the Rescue
LAURA D’ANDREA TYSON – NYTimes.com
Among economists (most of whom are male), there is a tendency to treat diversity and gender equality as “soft” issues – worthy social goals perhaps, but secondary to the real business of economic growth, job creation and productivity. But these soft issues have jumped to the top of the long-term growth agenda in Japan, the world’s third-largest economy, where Prime Minister Shinzo Abe is working to shake the nation out of its 20-year deflationary slump.
jlne.ws/1ayjpPK

Everbright error a sign of tough era for China securities brokers
Paul J Davies and Josh Noble in Hong Kong – FT.com
As Everbright Securities battles to calm the storm around its near $4bn trading error, its larger Hong-Kong listed rival, Haitong Securities, laid out the problems faced by China’s 100-plus securities brokers with poetic clarity.
jlne.ws/1ayjovb

Fat fingers in Shanghai shake investor confidence
CNN Money
China’s top stock market has been shaken in recent days by a series of fat-finger trades that have damaged investor confidence and raised questions over how the market is regulated.
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SGX: Enhanced Shareholder Engagement And Greater Transparency In General Meetings
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Frontier Markets

NSE justifies stand on flash crash
Business Standard
It was triggered by an ‘error’ and not an ‘event’. That’s how National Stock Exchange (NSE), in its response to the Securities and Exchange Board of India (Sebi)’s show-cause notice, has justified a decision not to shut its equity segment for two hours on October 5, 2012, when a trade caused a 900-point dive in the Nifty in two minutes, resulting in the index hitting the lower circuit filter.
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Crashing markets spell trouble for India’s privatisation plans
Reuters
The collapse of the rupee is derailing India’s hopes of raising more than $6 billion from the sale of stakes in state-run firms, jeopardising a key plank of Finance Minister P.Chidambaram’s blueprint to reverse the country’s economic malaise.
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Emerging markets endure wild rollercoaster ride
Robin Wigglesworth and Claire Jones – FT.com
Thursday was another day of turmoil for emerging markets. Unimpressed by the Turkish central bank’s recent efforts to support its currency, investors sent the lira down to a record low against the US dollar; India’s rupee fell to its lowest-ever level; Indonesia’s rupiah dropped to the weakest since 2009.
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MCX Weekly Market Report: August 16, 2013 – August 22, 2013
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Christopher Fix, Chief Executive, Dubai Mercantile Exchange Shares Key Developments With Stakeholders At CME Offices
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