Bits & Pieces
By John J. Lothian
The LME came to Chicago yesterday for a straightforward marketing presentation and attracted a room full of Chicago futures market participants.
They laid out their business, plans and factors impacting them in a well done program. The big news out of LME is the June 5 launch of its precious metals futures; gold and silver. Here is a FAQ about their offering.
John Lothian News is bringing its MarketsWiki Education World of Opportunity series to New York on July 11 and 12. Sign up will open up June 1. Nasdaq will host the July 11 sessions at its Marketsite and Reuters will host the July 12 session at its offices in Times Square.
We are pleased to have former NYSE CEO Duncan Niederauer as one of this year’s presenters in New York. Gregg Doud of the Commodity Markets Council is also signed up for the New York sessions.
We will bring the program back to Chicago on July 17, 19 and 21. The first two days will be held at the Stuart School of Business at Illinois Tech (IIT) and the last at Trading Technologies’ offices.
More speakers will be announced for New York and Chicago as they are confirmed. Watch our www.marketswikieducation.com site for more details.
Speaking of our MarketsWiki Education series, check out our latest video below from our recent Stockholm event with Evelin Kaup of Nordnet.
A President’s Credibility; Trump’s falsehoods are eroding public trust, at home and abroad.
If President Trump announces that North Korea launched a missile that landed within 100 miles of Hawaii, would most Americans believe him? Would the rest of the world? We’re not sure, which speaks to the damage that Mr. Trump is doing to his Presidency with his seemingly endless stream of exaggerations, evidence-free accusations, implausible denials and other falsehoods.
***** The Wall Street Journal editorial board is not fake news.
CFTC Refuses Registrations of Georgia-based Zero Chaos Advisors, LLC and Ronald Edward Fisher
The U.S. Commodity Futures Trading Commission (CFTC) today issued an Opinion and Order (Order) refusing registration with the CFTC for Zero Chaos Advisors, LLC (Zero Chaos) and Ronald Edward Fisher. Additionally, Zero Chaos and Fisher agree never to apply for CFTC registration or claim exemption from registration; and never to engage in any activity requiring registration with the CFTC, or act as a principal, agent, officer, or employee of any person registered or required to be registered with the CFTC.
**So many great headline possibilities, so little time. But let’s go anyhow.
- CFTC Reduces Georgia Firm To Zero
- CFTC Says Zero Is No Hero
- Zero + CFTC x Chaos = Still Zero
- CFTC Calmly Crushes Chaos’ Candorless Claim
Evelin Kaup, Nordnet – Is FinTech a Threat to Banks?
“Yes, fintech is a threat to banks. It’s disturbing the industry – but for the better. It’s speeding up the banks so they need to adapt faster, and we need to run faster to stay around.”
Evelin Kaup of Nordnet said the question of whether fintech is a threat to banks is being discussed at nearly every industry event these days. So far, the fintech companies have said yes while the banks have been saying no. But that may be changing.
Baymarkets Launches Clarity Platform For RegTech Solution Delivery
Baymarkets Technology AB (Baymarkets), a leading Nordic provider of FinTech and RegTech solutions to the global financial services industry, announced today its new Financial Market solution delivery platform, Clarity.
****SD: Peter Fredriksson, CEO of Baymarkets, spoke at our MWE event in Stockholm. His video can be found here.
FinTech Exchange 2017 Chicago
Brought to you by Barchart OnDemand
Don’t miss this one and only opportunity in Chicago to learn about the latest in FinTech for financial markets and trading. FinTech Exchange features a concise and engaging program, plus unique networking opportunities with both new and existing firms in the industry. We’re anticipating another sold-out year, so get your tickets now or one of the remaining sponsorships.
**JK: If you haven’t been to the FinTech Exchange, it is worth it.
The World’s Billionaires List
**JK: THE list. Bloomberg comes in 10th.
A Fake $3.6 Trillion Deal Is Easy to Sneak Past the SEC
Anders Melin – Bloomberg
Fake reports get crazier and reveal threat to U.S. markets; Why an unknown artist can say he is richer than Bill Gates
A few hours after the New York market close on Feb. 1, an obscure Chicago artist by the name of Antonio Lee told the world he had become the world’s richest man. The 32-year-old painter said Google’s parent, Alphabet Inc., had bought his art company in exchange for a chunk of stock that made him wealthier than Microsoft Corp. co-founder Bill Gates, Berkshire Hathaway Inc.’s Warren Buffett and Amazon.com Inc.’s Jeff Bezos — combined.
**JK: We can all dream and file a report with the SEC detailing that dream, can’t we?
Tuesday’s Top Three
Yesterday’s runaway winner for top story was about the state of HFT firms, particularly market makers, in the Wall Street Journal’s High-Frequency Traders Fall on Hard Times. Second was Doug Monieson’s recap, Takeaways from FIA Boca. Third was from Chris White, ViableMkts, on corporate bond trading transaction costs
96,070,651 pages viewed; 22,388 pages; 204,457 edits
Webinar: Improving execution quality using market microstructure, 28 March, 10:00 EDT
Join FOW and Deltix for a free technical webinar on order execution, discussing prerequisites for managing execution quality and how you can capitalise on CME’s new Market by Order (MBO) data.
Providing full transparency into order book composition, CME’s new MBO data offers a new level of insight and opportunities for increased precision in execution strategies.
The webinar is aimed at algorithmic trading firms seeking to better understand advanced order management strategies and improve their execution quality.
To register, visit: http://bit.ly/FOWwebinar.
ETF Trading Glitch Fuels Worries Over Modern Markets; Arca’s problem at Monday’s close marks the latest high-tech headache for NYSE
Alexander Osipovich – WSJ
A botched software update that snarled trading in hundreds of securities in the New York Stock Exchange’s Arca platform has renewed worries about fragility in U.S. markets.
Teza sells high-speed trading as lucrative business sours; Purchase by Quantlab comes as mounting costs make it harder to compete on speed alone
Gregory Meyer in New York – FT
Teza Technologies, a pioneer of electronic markets, has sold its high-speed trading business to Quantlab Financial after conditions soured in the once-lucrative sector.
ICE delays launch of clearing for London gold benchmark: sources
Peter Hobson and Pratima Desai – Reuters
Intercontinental Exchange (ICE) has delayed the launch of clearing for London’s benchmark gold price because not all participants in the auction will be ready, two sources involved in the process said on Tuesday.
Goldman, Morgan Stanley Signal London Job Moves Ahead of Brexit
Senior Goldman Sachs Group Inc. and Morgan Stanley executives said they’re preparing to shift staff and operations from London to elsewhere in the European Union as Prime Minister Theresa May sets up the U.K.’s exit from the bloc.
CBOE sells equities and options execution platform; CBOE’s Livevol X platform has been acquired by Sterling Trading Tech.
Hayley McDowell – The Trade
CBOE will sell its trade execution platform for US equities and options, Livevol X, to equities and futures technology provider, Sterling Trading Tech (STT).
London’s trading infrastructure retains edge despite Brexit; City seen as desirable location for vital price-matching engines
Philip Stafford – FT
As the UK looks to start the process of leaving the EU next week, optimism reigns that London will remain home for the vital physical infrastructure that underpins trading across Europe’s financial markets.
Glitch at NYSE Arca hits hundreds of exchange traded funds; ‘System issue’ at end of trading meant funds unable to close by traditional auction
Nicole Bullock, Eric Platt and Joanna Kao in New York – FT
A technical problem at NYSE Arca, the Big Board’s listing venue for exchange traded funds, stymied the end of the trading day on Monday, hindering the closing auction for 341 securities, NYSE said on Tuesday.
Ex-JPMorgan London Whale Manager Loses FCA ‘Identity’ Fight
Suzi Ring – Bloomberg
Achilles Macris wasn’t identifiable in Whale penalty; Surprise ruling may affect court cases involving other traders
The U.K.’s top court issued a surprise ruling in favor of the Financial Conduct Authority, saying the agency didn’t identify a former JPMorgan Chase & Co executive in a penalty notice related to the London Whale scandal.
Authorities give SGX two years to improve recovery process
Hayley McDowell – The Trade
Singapore Exchange (SGX) has been given 24 months to improve its recovery processes after the disruption caused by a trading halt in July last year.
Hedge Funds Get New Benchmark Indexes with BRI Partners, LLC
BRI Partners today announced that it has launched the next generation of hedge fund indexes beginning with the BRI Long/Short Equity Index (BRILSE), calculated by Wilshire Associates, the first in a family of investable indexes that delivers the beta of hedge fund strategies. BRI Partners has developed eight indexes that will be rolled out over the coming months.
Deutsche slips in European investment bank rankings; JPMorgan retains crown as German group drops in home region and world league table
Laura Noonan and Ben McLannahan – FT
Deutsche Bank loosened its grip on the European investment banking market last year and is now tied with Goldman Sachs in the race to be the Emea region’s second-biggest investment bank after JPMorgan Chase.
Brexit to shape rethink of EU financial supervision
A more powerful securities watchdog may be needed in the European Union to counter market fragmentation after Britain, its biggest financial centre, leaves the bloc, an EU consultation paper said on Tuesday.
Exchanges, OTC and Clearing
ASX chief says post-trade equities competition could lift costs
James Eyers – Financial Review
Competition in clearing and settlement of the equity market may increase costs for stockbrokers as the ability to “net” trades at the end of the day is curtailed, and increase the amount of capital in the system as multiple clearing houses duplicate buffers, says ASX chief Dominic Stevens.
Deutsche Bˆrse launches Sustainable Finance Initiative; Kick-off conference on 23 May 2017 in Frankfurt
Deutsche Bˆrse launches the sustainability initiative Sustainable Finance at the Frankfurt financial center. The aim is to establish new interdisciplinary structures for sustainable entrepreneurship together with around 100 high-ranking players in the financial center and to explore new areas of business. The participants are made up of banks and financial institutions, rating and ranking agencies, investors, insurance companies, data providers, representatives from the public sector, science, NGOs and churches.
Frenchman who tried to sell London Stock Exchange to the Germans pocketed £5.7m last year
James Burton For The Daily Mail
The London Stock Exchange chief executive who led calls to sell his business to the Germans pocketed £5.7million last year. Wine-loving Frenchman Xavier Rolet has been a cheerleader for the £21billion tie-up with Frankfurt-based Deutsche Boerse, which was attacked for harming the national interest.
Scots chairman of stock exchange says EU needs successful London
Mark Williamson – Herald Scotland
THE Scot who chairs the London Stock Exchange, Donald Brydon, has played down fears about the impact of Brexit on the City saying the European Union needs the Square Mile to be successful.
First buy-side client live with credit default swaps clearing at LCH
Amundi is LCH’s first live buy-side client on CDSClear; BNP Paribas acts as Amundi’s clearing broker; Reflects continued growing momentum behind CDSClear service
LCH, a leading global clearing house, announced today that its first European buy-side client is now live on CDSClear. Amundi is now clearing credit default swaps (CDS) at CDSClear via its clearing broker BNP Paribas.
Amundi joins LCH as first buy-side CDS clearing member; LCH seeks to grant wider clearing access to buy-side CDS traders, a move which could boost liquidity.
Joe Parsons – The Trade
Europe’s largest asset manager, Amundi, has joined LCH as the first buy-side clearing member for credit default swaps (CDS), a move which some experts say could revive trading and bring back market makers.
SGX-listed companies can electronically transmit shareholder documents
Listed companies will soon be able to use electronic communication (e-communication) to transmit annual reports and other documents to shareholders.
Bats Europe launches Brexit indices; Bats 50/50 indices designed to assess impact of Brexit on companies with large revenue portions in the UK.
Hayley McDowell – The Trade
Bats Europe has developed two new indices designed to provide insight into the impacts of Brexit ahead of Article 50 being triggered by the UK government.
MCX eyes agri commodities segment with a slew of new products; Focus on agri commodities comes following the govt’s plan to double farmers’ income in 5 years
Rajesh Bhayani – Business Standard
Multi Commodities Exchange (MCX) has set its sight on strengthening its position in the agricultural commodities segment and consolidating the non-agricultural segment with its plan to introduce a slew of new products, many of which were not available for trading in derivatives till now.
Japan Exchange Group: Notice Of Revision To Earnings Forecast And Dividend Forecast
Japan Exchange Group hereby announces that the consolidated earnings forecast and year-end dividend forecast for the fiscal year ending March 31, 2017 released on October 28, 2016 have been revised as follows.
First stock exchange in the new Scale segment; IBU-tec advanced materials AG plans initial listing on 30 March / DirectPlace supports companies in the placement of their shares
IBU-tec advanced materials AG is the first company to enter a stock exchange in Scale, the new segment of Deutsche Bˆrse for small and medium-sized enterprises (SMEs). Ulrich Weitz, CEO of IBU-tec, said: “IBU-tec is the first scale stock exchange, and we are well positioned for this new segment with the high transparency requirements for our further growth path.” Production suppliers for inorganic substances new materials and improves material properties of existing products. One focus is on green mobility.
Tokyo Commodity Exchange Launches Platinum Rolling Spot Futures Today
The Tokyo Commodity Exchange Inc., announced today the launch of the Platinum Rolling Spot Futures contract. On the first trade date, a total of 21,606 contracts were traded.
The Blockchain Will Do to the Financial System What the Internet Did to Media
Joichi Ito, Neha Narula and Robleh Ali – Harvard Business Review
Even years into the deployment of the internet, many believed that it was still a fad. Of course, the internet has since become a major influence on our lives, from how we buy goods and services, to the ways we socialize with friends, to the Arab Spring, to the 2016 U.S. presidential election. Yet, in the 1990s, the mainstream press scoffed when Nicholas Negroponte predicted that most of us would soon be reading our news online rather than from a newspaper.
Deutsche Bank launches tech startup lab in New York City
Anna Irrera – Reuters
Deutsche Bank AG (DBKGn.DE) has opened a new center in New York to work with financial technology startups that can help it improve its technology.
Warburg Pincus buys stake in Swiss fintech group Avaloq; Software provider already serves 155 banks and wealth managers
Javier Espinoza, Private Capital Correspondent – FT
Warburg Pincus has agreed to pay close to SFr300m for a minority stake in Avaloq, Switzerland’s largest software provider to banks.
N.Y. Rule Could Be Model for Cyber-Collaboration
Richard Hill – Bloomberg BNA
New York financial regulators’ outreach efforts while developing new cybersecurity rules could serve as a model for harmonizing existing regulations elsewhere.
Trump’s former campaign chairman Paul Manafort was paid $10 million yearly in secret deal to help Vladimir Putin
President Donald Trump’s former campaign chairman, Paul Manafort, secretly worked for a Russian billionaire to advance the interests of Russian President Vladimir Putin a decade ago and proposed an ambitious political strategy to undermine anti-Russian opposition across former Soviet republics, The Associated Press has learned. The work appears to contradict assertions by the Trump administration and Manafort himself that he never worked for Russian interests.
Meet Emmanuel Macron, the 39-year-old former investment banker tipped to beat Marine Le Pen in the French election
Andree Gorman – Business Insider
Emmanuel Macron is currently the favourite to win the 2017 French election.
Trump SEC Pick Set for Contentious Reunion With Elizabeth Warren
Benjamin Bain – Bloomberg
Jay Clayton, the Wall Street lawyer tapped to lead the Securities and Exchange Commission, faces what could be an uncomfortable reunion this week with U.S. Senator Elizabeth Warren.
FBI’s Russian-influence probe includes a look at Breitbart, InfoWars news sites
Peter Stone and Greg Gordon – McClatchy Washington Bureau
Federal investigators are examining whether far-right news sites played any role last year in a Russian cyber operation that dramatically widened the reach of news stories ó some fictional ó that favored Donald Trump’s presidential bid, two people familiar with the inquiry say.
ESMA finds sovereign bond liquidity has increased; Latest report on trends and vulnerabilities suggests sovereign bond liquidity has improved, but corporate bond liquidity remains an issue.
Hayley McDowell – The Trade
Liquidity in the EU bond market has increased since the financial and sovereign debt crisis, according to a report from the EU regulator.
FINRA Seeks Comment on Its Engagement Programs; Part of New Initiative to Evaluate Various Aspects of Operations and Programs
The Financial Industry Regulatory Authority (FINRA) today issued a Special Notice seeking comment on how to enhance its programs for engagement with its members and other stakeholders, with particular focus on FINRA’s advisory and ad hoc committees, rulemaking process, member relations programs, and the information it provides regarding its programs and operations.
Sebi wants MFs to adopt tougher benchmarks; The net asset value (NAV) of MF schemes takes into account dividends for computing returns
Ashley Coutinho – Business Standard
The Securities and Exchange Board of India (Sebi) is evaluating the category of benchmarks being currently used to compare the returns of mutual fund (MF) schemes. The net asset value (NAV) of MF schemes takes into account dividends for computing returns.
Libor Mastermind Tom Hayes Deserves a Lot of Company in Prison; David Enrich’s The Spider Network makes him seem borderline sympathetic.
Nick Summers – Bloomberg
For anyone burning to see financial wrongdoers put behind bars, Tom Hayes might seem like an ideal white-collar villain. As a superstar derivatives trader at a series of investment banks in London and Tokyo, Hayes masterminded a conspiracy to manipulate a benchmark interest rate that underlies hundreds of trillions of dollars’ worth of loans. British prosecutorsóarmed with gigabytes of evidence showing Hayes caught in the act, plus his own taped confessionsóput him on trial in 2015; he’s now serving an 11-year sentence.
Texas judge shoots down latest effort to halt DOL fiduciary rule; Chief Judge Barbara M.G. Lynn denied the financial trade association plaintiffs’ motion for an injunction to stop the regulation
Bruce Kelly – InvestmentNews
Opponents of the Department of Labor’s fiduciary rule were dealt another blow Monday, when a federal judge in Dallas denied their latest effort to halt its implementation.
Boaz Weinstein’s Saba Hedge Fund Settles Investor Lawsuit; Move brings legal battle with Canada’s Public Sector Pension Investment Board to a close
Rob Copeland – WSJ
Hedge-fund manager Boaz Weinstein has ended a legal feud with one of his largest former investors.
Top Democrat on Senate panel: No rollback on Dodd-Frank because it works
Pete Schroeder – Reuters
The top Democrat on the U.S. Senate Banking Committee told bankers gathered in Washington on Tuesday that his party would not support drastic changes to the Dodd-Frank financial reform law.
ESAs welcome European Commission’s public consultation on their operation
The European Supervisory Authorities (ESAs – EBA, EIOPA and ESMA) welcome the European Commission’s public consultation to seek views on possible changes to their current framework of operation.
NFA Comment Letters
Federal Court in Florida Orders Neil Pecker and His Company, Vision Financial Partners, LLC, to Pay More than $6.5 Million in Restitution and a Civil Monetary Penalty in CFTC Binary Options Fraud Action; Relief Defendants Prometheus Enterprises, Inc. and GDCM Trust Ordered to Disgorge Ill-Gotten Funds Totaling More than $1 Million
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge James I. Cohn of the U.S. District Court for the Southern District of Florida entered a Consent Order against CFTC Defendants Neil Pecker with a last-known address in Longwood, Florida and his company, Vision Financial Partners, LLC (Vision) of Deerfield Beach, who were charged with fraudulent solicitation and misappropriation in connection with off-exchange binary options. The Order, entered on March 9, 2017, requires Pecker and Vision, jointly and severally, to pay restitution to defrauded investors totaling $2,777,130 and a $3.75 million civil monetary penalty.
Investing and Trading
‘Long US dollar’ is most overcrowded trade, BAML survey shows
Akin Oyedele – Business Insider
Investors continue to hold seemingly conflicting views on the US dollar. Bank of America Merrill Lynch’s latest survey of fund managers published on Tuesday showed that bets the US dollar would rise are considered the “most crowded” trade.
Worries about stock valuations reach highest since 2001; Should a battle over healthcare delay US tax cuts, markets are likely to become more nervous
Eric Platt and Mamta Badkar in New York – FT
More investors say stocks are overvalued than undervalued than at any point since at least 2001, pointing to an anxiety that was amplified on Tuesday as US stocks appear at risk of their first daily drop of 1 per cent since October.
Oil Tightens Its Noose Around Currency Market as Rout Deepens
Cecile Gutscher and Kristine Aquino – Bloomberg
Oil is re-asserting its stranglehold on the currencies of energy producers. After ignoring volatile crude prices for most of the year, the currencies of Norway and Canada are succumbing to a selloff that has knocked 12 percent off the value of their biggest export this month. Russia’s ruble, a favorite destination of carry traders using borrowed dollars to invest in higher-yielding assets, has proved more resilient.
Sears Warns of ‘Substantial Doubt’ About Company’s Future
Nick Turner and Lauren Coleman-Lochner – Bloomberg
Troubled retailer adds ‘going concern’ language to filing; Company has struggled to recover from billions in losses
Sears Holdings Corp. acknowledged “substantial doubt” about its ability to keep operating, raising fresh concerns about a company that has lost more than $10 billion in recent years.
Wells Fargo Digs Deeper Into Its Culture Issues; CEO Timothy Sloan says the bank is working with an academic to survey 269,000 employees about its culture
Emily Glazer – WSJ
Wells Fargo & Co. has admitted it has culture problems related to its sales-practices scandal. Now, it is turning to an academic for help.
Morgan Stanley’s Colm Kelleher on fixed income ‘WTF moment’
Portia Crowe – Business Insider
Morgan Stanley No. 2 executive Colm Kelleher said it took a “WTF moment” to trigger a major revamp of his firm’s fixed income business.
Goldman Sachs Keeps Top Spot in Commodities Revenue in 2016
Thomas Seal – Bloomberg
Major banks’ revenue from commodities sank even as prices rose; Canadian and Australian lenders have expanded in commodities
Goldman Sachs Group Inc. kept its top spot in commodities last year, bringing in more revenue than other banks even as earnings from the industry slumped.
UBS Introduces Charges on Euro Accounts Exceeding 1 Million
Jan-Henrik Foerster and Jeffrey Voegeli – Bloomberg
Bank becomes latest to pass on region’s negative rate; Wealthy clients, some institutional customers already charged
UBS Group AG is extending charges on cash holdings to more of its customers, becoming the latest bank to pass on the euro region’s negative interest rates.
FXCM cuts Board to seven with departures of Eric LeGoff and Jim Brown
The departures at retail forex broker FXCM and its newly-named parent company Global Brokerage Inc (NASDAQ:GLBR) aren’t limited to just the management ranks. The company has announced that two outside directors, Eric LeGoff, and James G. (Jim) Brown, would be stepping down from the Global Brokerage board, without replacements planned.
Tracking the Effect of Demonetization on Capital Markets in India
Ved Malla – Indexology
November 9, 2016, was the day when the world witnessed two big unexpected eventsóone was Mr. Donald Trump winning the U.S. presidential election, and the second was the Indian Prime Minister Mr. Narendra Modi announcing that 500 and 1,000 rupee notes would no longer be considered legal tenders. Both of these events were expected to affect India in a big way.
U.K.’s Non-Financial Services at Risk After Brexit, Lords Say
Robert Hutton – Bloomberg
Broadcasters and airlines not covered under WTO rules; Panel urges May to agree transitional trade deal for services
U.K. Prime Minister Theresa May should seek a free-trade deal with the European Union that includes services or risk damaging industries that aren’t covered by World Trade Organization rules, a House of Lords panel found.
Dublin Is Best EU City for Bankers Fleeing Brexit, Study Says
Gavin Finch – Bloomberg
Frankfurt came in sixth place in relocation company’s index; Cities ranked for rental costs to price of evening cocktail
Dublin is the best destination in the European Union for London-based bankers forced to move after Brexit, according to an index of 15 cities compiled by a relocation company.
Exclusive – Brexit banks set to avoid lengthy euro zone entry test: sources
John O’Donnell – Reuters
Banks in London that relocate operations to the euro zone after Brexit are likely to be spared a lengthy entry test by regulators, making it easier for them to shift, according to two officials with knowledge of the matter.
Global Art Sales Fall 11% to Lowest Point Since Financial Crisis
Katya Kazakina – Bloomberg
2016 tally of $56.6 billion was down for second straight year; Geopolitical risks add to uncertainty for 2017, report shows
The global art market contracted for the second straight year in 2016, falling to the lowest level since the financial crisis as economic and political volatility weighed on auction sales.