First Read

Cubs Win World Series
By John J. Lothian

The Chicago Cubs won the World Series. It is a big deal in Chicago and the U.S. For the rest of the world, maybe not so much.

I returned home last night from the UK about the 7th inning, just in time to see the Cubs blow a 3-run lead and have the game go into extra innings. It was a terrific game with incredible drama, but I missed the early innings while on a flight from London to Chicago.

The Cubs won 3 games in row, something they did 21 times now during the 2016 season, in order to win the World Championship. But it seems more likely we will see an NFL team in London sooner than an MLB team. There were plenty of Redskins and Patriots jerseys on people roaming around London last weekend, and hardly any Cubs or Indians ones.

We had a great week in London, putting on our MarketsWiki Education World of Opportunity program on Monday at the Woolgate Exchange facility of the University of Chicago Booth School of Business. Besides having to adjust to the jet lag, we also had to adjust to staying up from 1 AM to 3 AM and watching the Cubs games. We did not miss one while in London, but it took watching online via the MLB.com offering rather than local London coverage of the World Series.

If you love baseball, you loved last night’s game. It had everything. A big hat tip to the Cleveland Indians for their gritty performance. They took the Cubs to extra innings in the 7th game of a 7 game series. I am glad I made it home to share the end of the game with my wife and youngest son.

For the record, one-time Milwaukee Brewer fan Jim Kharouf watched the final out of the game with Chip Dempsey and a couple of Irishman at a closed Columbian ice cream shop in Cartagena, Columbia, where he is there for a World Federation of Exchanges conference.

Maybe it is the World Series after all.

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Cubs Win 1st Series Title Since 1908, Beat Indians in Game 7
THE ASSOCIATED PRESS via Bloomberg
Kris Bryant started to smile even before he fielded the ball. And with his throw to first for the final out, the agonizing wait ’til next year was over at last.
/goo.gl/pQw022

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London Metal Exchange under pressure from key member
Neil Hume and Henry Sanderson – Financial Times
The London Metal Exchange faced pressure from one of its oldest members during its annual gathering as veteran hedge fund trader Michael Farmer called the cost of trading “prohibitive”. The remarks at the annual dinner were greeted by applause in a sign of the pressure the Hong Kong Exchanges and Clearing owned exchange faces from its members after it raised fees to recoup some of the £1.4bn it spent acquiring the LME in 2012.
/goo.gl/HKTtMH

***** I am used to exchange members bitching about costs. If they did not, I would worry. But I was appalled by Farmer’s misrepresentation of frontrunning as something related to speed differences in traders and high frequency trading rather than illegal use of knowledge of customer orders and stepping in front of those customer orders. It is hard enough to keep the public straight about this kind of thing, but it is many times harder when you have a 50-year LME member espousing this kind of misinformation.

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Can Banks Make Wall Street Sexy Again for Millennials?; Student debt programs may help banks woo talent back to industry
Saleha Mohsin – Bloomberg
Ask a bright 20-something graduate where he or she wants to work and chances are they will tell you Google. That’s a far cry from before the global banking meltdown when whiz kids saw a career on Wall Street as a badge of honor.
/goo.gl/dZKiuI

***** This is exactly why we created the MarketsWiki Education World of Opportunity series and why the industry should support our efforts here. We want to bring the series to Frankfurt and Stockholm. We need some help to penetrate these new markets for us. We need speaker ideas and firms and schools that can send attendees. Contact me if you have thoughts.

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Making the Case for Smarter Regulation of Centrally Cleared Markets
By Craig Donohue, OCC Executive Chairman and CEO
Centrally cleared, exchanged-traded derivatives markets have flourished over the last several decades. Under substantial regulation at all critical points in the ecosystem, (i.e. brokers, clearing members, exchanges and central counterparties (CCPs)), these markets proved to be resilient during the 2008 financial crisis. The regulatory regime for these markets included requirements respecting record-keeping, price reporting and transparency, and intermediated access to centralized counterparties such as OCC. Providing robust, independent risk management of financial transactions under the comprehensive regulatory oversight of and examination by the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC), OCC has served as the foundation for secure markets in the U.S. listed equity options markets since 1973.
/goo.gl/dvVhRA

***** More thought leadership out of the OCC. Some call this Smarter Clearing.

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Wednesday’s Top Three
Leading off our top three stories from yesterday is Bloomberg’s Deutsche Bank Thinks Draghi’s Gone Over to the ‘Dark Side’. Next up was Cubs’ runaway victory creates spike in price of Game 7 tickets. If you saw what was probably one of the most exciting World Series games in memory you might think those prices were almost justified. Third was not a finance story either but I admit I read it too; The David Bowie emoji has arrived

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Lead Stories

Euronext and Algomi to launch new trading facility to improve liquidity in pan-european corporate bond trading
Euronext
Under a ten year strategic partnership agreement, Euronext and Algomi will form a Joint Venture Special Purpose Vehicle (“JV SPV”), capitalised by Euronext, with technology supplied by Algomi, to improve liquidity in pan-European corporate bond trading
/goo.gl/ZqqnmD

***** Someone was going to partner with Algomi. Euronext steps up smartly.

Hedge Fund Clients Dump Humans for Computers and Still Lose
Nishant Kumar – Bloomberg
Funds using mathematical models raise $21 billion this year; Investors seeking out good performance in tough times
Losses at Leda Braga’s computer-driven hedge fund this year are running at about twice the level suffered by a macro fund run by billionaire Alan Howard. Yet, while Braga has raised money, investors have pulled billions of dollars from Howard’s fund.
/goo.gl/n1SWl3

***** Can you fire a computer?

Trading Giants Clash Over Chicago Exchange’s Speed-Bump Proposal
Alexander Osipovich and Dave Michaels – WSJ
The tiny Chicago Stock Exchange has giants of electronic trading split over a proposal that borrows elements of IEX Group Inc.’s “speed bump.” The Chicago exchange, which handles a sliver of U.S. stock-trading volume, says it wants to reduce costs for investors and thwart aggressive high-frequency-trading strategies by slowing down trading for some orders but not others. Supporters such as Virtu Financial Inc. say the plan will improve market quality. Critics including Citadel Securities LLC say it won’t do any good.
/goo.gl/zPpyOS

***** Can the equity market structure be any worse? I don’t think so. So let them try it.

LCH to launch LCH SwapAgent, a centralised service for the non-cleared derivatives market
LCH
LCH SwapAgent will provide centralised trade processing, valuation, margining, risk calculation and optimisation services for the OTC bilateral rates & FX markets; Service is designed to facilitate the standardisation and streamlining of bilateral OTC market infrastructure and end to end workflow and processing; 11 dealers confirm support; Complements LCH’s strong track record in serving cleared OTC markets; Expected to go-live in H1 2017, subject to necessary approvals
LCH, a leading global clearing house, announced today that it will be launching a new service for the non-cleared derivatives market. LCH SwapAgent will benefit from LCH’s expertise in serving and managing risk for the cleared rates & FX derivatives market, providing market participants with a number of solutions designed to materially improve standardisation, efficiency and simplicity in the bilateral derivatives market.
/goo.gl/uv83SV

What Rising Bond Yields Are Trying to Tell Us
By Mark Gilbert – Bloomberg
Benchmark government borrowing costs in the bond market have climbed since the middle of the year, after several years of relentless decline. As a paid-up member of the “Price-Is-Knowledge” club, I’m intrigued about the signal bond yields are trying to send.
/goo.gl/AScmw2

***** The market often whispers things in my ear, but sometimes I just don’t want to listen.

Shadowy margin lending fuels China commodity futures boom
Gabriel Wildau – Financial Times
Chinese hedge funds are providing margin finance for leveraged bets on the country’s booming commodity futures market, in an echo of the practices that led to last year’s stock market boom and bust. Futures prices for the so-called ferrous complex of steel, iron ore, coking coal and coke have risen sharply this year as Chinese fiscal and monetary stimulus has produced a revival of construction activity in real estate and infrastructure.
/goo.gl/SotRmD

Wall Street Journal begins layoffs, to launch with fewer sections: memos
Jessica Toonkel – Reuters
News Corp’s The Wall Street Journal will launch a new format for the newspaper with fewer sections on Nov. 14, and has begun laying off employees as part of an effort to cut costs, according to two memos reviewed by Reuters on Wednesday.
/goo.gl/8Ab0Mn

***** Begins layoffs? Continues layoffs.

Options Trader Nabs ‘Lottery Ticket’ With Explosive Upside; ‘If the market explodes higher they’ll make a fortune,’ one market watcher says
By CHRIS DIETERICH AND BEN EISEN AND GUNJAN BANERJI – WSJ
Protection against a stock market crash is so pricey right now that a trader willing to wager on a year-end rally bought a bullish lottery ticket for almost nothing.
/goo.gl/fMlIIR

Shadowy margin lending fuels China commodity futures boom; Grey market loans feed speculation in ‘ferrous complex’ of steel, coal and iron ore
by Gabriel Wildau in Shanghai – FT
Chinese hedge funds are providing margin finance for leveraged bets on the country’s booming commodity futures market, in an echo of the practices that led to last year’s stock market boom and bust.
/goo.gl/QGDgPd

Brexit

U.K. Government Loses Brexit Lawsuit Over Article 50 Vote
Kit Chellel, Patrick Gower – Bloomberg
Pound surges to a three-week high in wake of court decision; Supreme Court schedules appeal between Dec. 5 and Dec. 8
The U.K. must hold a vote in Parliament before starting the two-year countdown to Brexit, a panel of London judges decided, setting up a constitutional confrontation at the country’s Supreme Court next month.
/goo.gl/aSQZOe

Brexit Is Making It Too Expensive to Go Skiing
Dylan Griffiths, Hugo Miller, Giles Broom – Bloomberg
U.K. Christmas bookings fall as skiing regains luxury billing; Chalets from Chamonix to Zermatt expect fewer British guests
The promise of snow across the Alps this weekend won’t be enough to lift the gloom at some of Europe’s top ski resorts as the pound’s post-Brexit slide dents British bookings.
/goo.gl/Egvw7L

France Sets Up One-Stop Shop for British Firms Fleeing Brexit
Mark Deen – Bloomberg
Prime Minister Valls points to falling coporate tax rate; Safran’s McInnes named ambassador for post-Brexit Push
France created a one-stop shop to welcome businesses from Britain — and the rest of the world — who are looking to set up new European headquarters as the U.K. prepares to leave the European Union.
/goo.gl/aEQ9qF

Mark Carney Has a New Set of Brexit Problems to Solve
John Ainger, Lucy Meakin – Bloomberg
Officials may revise forecasts after 3Q growth beat estimates; Inflation almost doubled in Sept., damping rate-cut chances
Mark Carney has a new set of Brexit problems to solve
/goo.gl/r7UoyK

Exchanges, OTC and Clearing

Stock exchange chief warns on risk to London’s euro business
Huw Jones – Reuters
The European Union is considering a limit on processing euro-denominated security transactions in the United States in a sign of what Britain might face after Brexit, London Stock Exchange Group chief executive Xavier Rolet said on Wednesday.
/goo.gl/A5LJFK

TMX Group Introduces Four Letter Trading Symbols
TMX
Canada’s Markets lead industry efforts to align ticker symbol conventions with U.S.
Yesterday TMX Group marked the first trading day for four letter stock symbols on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV), an industry initiative designed to offer Canadian issuers and applicants greater choice in how they are identified and also to provide interlisted issuers with the opportunity to be uniformly represented throughout the North American marketplace. Prior to this initiative, a stock’s root symbol was limited to three letters or less.
/goo.gl/8Zp6Vq

CME Group Reached Average Daily Volume of 13.1 Million Contracts per Day in October 2016, up 2 Percent from October 2015
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that October 2016 average daily volume (ADV) reached 13.1 million contracts per day, up 2 percent from October 2015. CME Group October 2016 electronic options volume averaged 1.5 million contracts per day, up 7 percent versus October 2015. CME Group year-to-date 2016 ADV through October averaged 15.2 million contracts per day, up 8 percent from the same period a year ago. Open interest in October was 104 million contracts, up 3 percent from October 2015.
/goo.gl/Dh5BPL

ICE Futures Europe Announces Record Daily Volume in Low Sulphur Gasoil Contract
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that the ICE Futures Europe Low Sulphur Gasoil contract achieved a daily volume record of 766,054 contracts on 1 November 2016.
/goo.gl/XPHfI6

CBOE Holdings Reports October 2016 Trading Volume
CBOE
CBOE Holdings, Inc. (NASDAQ: CBOE) reported today October monthly trading volume and average revenue per contract (RPC) data on its website under the Quotes & Data section.
/goo.gl/H2LDSU

Options on Euro Fixed Income futures: Extension of Post Trading period on regular trading days
Eurex
Effective from 7 November 2016, the Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG decided to extend the Post Trading hours on regular trading days for options on Euro Fixed Income Futures. Trading hours for continuous trading, trading via Eurex Trade Entry Services (TES) and post-trading times on the last trading day will remain unchanged.
/goo.gl/aOTKW4

Utilizing a European volatility index for Pan-European volatility
by Mark Shore published in the VSTOXX® Outlook newsletter via Eurex
In past articles, I’ve discussed the negative correlation between the VSTOXX® Volatility index and the EURO STOXX 50® Index and how the volatility index tends to rally when equities decline (downside volatility).
/goo.gl/8ZAofp

World Federation Of Exchanges Holds Emerging Market Liquidity Roundtable With Oliver Wyman & The World Bank
Mondovisione
The World Federation of Exchanges (“WFE”), which represents more than 200 market infrastructure providers including exchanges and CCPs, today held a roundtable to discuss how best to grow liquidity in emerging market exchanges.
/goo.gl/daWB9d

SIX Swiss Exchange Details New Dark Pool
Aggelos Andreou – WatersTechnology
SIX Swiss Exchange launched SIX Swiss Exchange at Midpoint (SwissAtMid), the exchange’s new midpoint execution book, with no pre-trade transparency and minimized opportunity risk. On October 18, SIX Swiss Exchange launched its new dark pool, which allows users to get midpoint execution. It has been added directly into the matching algorithm of the lit order book, allowing SIX to introduce and implement a sweep order.
/goo.gl/DwTcmP

BSE revises transaction charges for currency derivatives
Business Standard
Top stock exchange BSE has decided to levy transaction charge in a phase manner from this month on trades done in currency futures and options contracts. The exchange has increased the transaction charge to Rs 12 per Rs 1 crore of turnover on both active and passive trades done on its currency future contracts. Earlier, Rs 10 per crore transaction fee was levied on such contracts.
/goo.gl/zJxjRz

TMX Group Introduces Four Letter Trading Symbols
Mondovisione
Yesterday TMX Group marked the first trading day for four letter stock symbols on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV), an industry initiative designed to offer Canadian issuers and applicants greater choice in how they are identified and also to provide interlisted issuers with the opportunity to be uniformly represented throughout the North American marketplace. Prior to this initiative, a stock’s root symbol was limited to three letters or less.
/goo.gl/JdAE2H

NMCE hoping for merger to stay alive
Business Standard
To prevent an order to exit, the Ahmedabad-based National Multi Commodity Exchange (NMCE) wishes to merge with an existing bourse in the segment. It has to do so before before May 5, 2017, the deadline for meeting the minimum net worth criteria.
/goo.gl/oqupa9

BME Traded EUR44 Billion In Equities In October, Up 3% From September
Mondovisione
From January-October the effective trading volume totaled EUR557.4 billion
/goo.gl/f4TE3Y

Bats Reports Third Quarter Net Income Growth of 13%
KANSAS CITY – November 3, 2016 – Bats Global Markets, Inc. (Bats: BATS), a leading global exchange operator and provider of market data and other financial markets services, today reported net income of $28.5 million and adjusted Earnings of $35.3 million for the third quarter ended September 30, 2016.
/goo.gl/SiQ2b1

Moscow Exchange Trading Volumes in October 2016
MOEX
Moscow Exchange (ticker: MOEX) announces trading volumes for October 2016. Total trading volumes increased by 5.5% YoY to RUB 70.8 trln.
/goo.gl/iD5A7y

ASX Monthly Activity Report – October 2016
ASX
/goo.gl/by7MVW

Politics

Trump Gives Betting Markets That Brexit Feeling
Michael P. Regan – Bloomberg Gadfly
Markets are obviously jittery at the sudden possibility that a Donald Trump presidency isn’t as far-fetched as it previously seemed. So it looks like a good time to get some counsel from the real experts out there: British bookies. And, well, tighten your chinstraps folks: The pattern of bets looks very similar to what occurred before Britain voted to leave the European Union.
/goo.gl/FYvi4r

Can Globalization Be Salvaged?
Greg Ip – WSJ
No matter what happens in this election,” venture capitalist Peter Thiel said in Washington this week, “what Trump represents isn’t crazy and it’s not going away.” When it comes to globalization, Mr. Thiel, a prominent donor to Republican nominee Donald Trump, is almost certainly right. Mr. Trump is unique, but his antipathy to free trade and increased immigration isn’t.

Why Donald Trump Might Root Against the Cubs Tonight
Michael Rapoport – WSJ
Beyond the markets and the presidential election, there’s another big rival for investors’ attention this week: baseball’s World Series. And both candidates have reason to take a rooting interest in the series, too. That’s because in 21 out of the 27 World Series that have been played in a presidential election year, the state of the winner’s team went on to vote for the winner of the presidential race days later.
/goo.gl/TIZZFh

Wall Street and Kochs Fuel Most Expensive U.S. Senate Race Ever
Bill Allison Elizabeth Dexheimer – Bloomberg
$139 million already spent in Pennsylvania Senate contest; Koch-backed groups have spent almost $10 million for Toomey
The most expensive U.S. Senate race in history is unfolding in Pennsylvania, where Wall Street, unions and billionaire industrialists Charles and David Koch are flooding the state with money.
/goo.gl/Yom3HQ

Investing and Trading

Here’s why everyone loves the Swiss franc during turmoil
Joseph Adinolfi – MarketWatch
It is a phenomenon that has persisted for decades: When uncertainty hits financial markets, investors crowd into the Swiss franc. This pattern resurfaced this week as Republican nominee Donald Trump gained ground on Democratic rival Hillary Clinton in the run up to the Nov. 8 presidential election. Many investors expect a Trump victory would spur a prolonged bout of risk aversion, especially if his protectionist rhetoric and promises for massive tax cuts and spending increases become reality.
/goo.gl/k67xt7

Eisman of ‘Big Short’ Sees Massive Changes for Hedge Funds
Vincent Bielski – Bloomberg
Neuberger manager finds carried interest debate ‘unfathomable’; He’s concerned about possible correction with passive ETFs
Steve Eisman, a fund manager at Neuberger Berman Group who was profiled in “The Big Short,” says Europe still faces the risk of a financial crisis like the one portrayed in the book while the probability of such an event in the U.S. is very low.
/goo.gl/5BiI30

U.S. Treasury to keep coupon auction sizes steady
Reuters
The U.S. Treasury said on Wednesday it will hold steady the size of coupon auctions in the upcoming quarter and plans to conduct a small-value test buyback operation.
/goo.gl/Iurqi5

The S&P May Do Something It’s Only Done During Financial Crises
Julie Verhage – Bloomberg
Over the last 20 years the S&P 500 index has only recorded a seven-day losing streak on three separate occasions. The first was in 2008 after Lehman Brothers collapsed, while the other two were during Europe’s 2011 debt crisis. If the index ends the day lower on Wednesday, it’ll chalk up a fourth.
/goo.gl/YxJXHD

The S&P May Do Something It’s Only Done During Financial Crises; Not a good sign.
Julie Verhage – Bloomberg
Over the last 20 years the S&P 500 index has only recorded a seven-day losing streak on three separate occasions. The first was in 2008 after Lehman Brothers collapsed, while the other two were during Europe’s 2011 debt crisis. If the index ends the day lower on Wednesday, it’ll chalk up a fourth.
/goo.gl/uIpIHA

Institutions

Can Banks Make Wall Street Sexy Again for Millennials?
Saleha Mohsin – Bloomberg
Ask a bright 20-something graduate where he or she wants to work and chances are they will tell you Google. That’s a far cry from before the global banking meltdown when whiz kids saw a career on Wall Street as a badge of honor.
/goo.gl/dZKiuI

Banks team up for standard repack terms
Helen Bartholomew – Reuters
Four global banks have teamed up to offer standard documentation for repackaged transactions that enable insurers and pension funds to customise the risk and return profile of their debt investments.
/goo.gl/8sQwBj

Deutsche Bank set to be among hardest hit by new capital rules: sources
Francesco Canepa and John O’Donnell – Reuters
Germany’s Deutsche Bank (DBKGn.DE) is among roughly a dozen large European lenders that face higher capital requirements when new banking rules come into force in the coming years, several sources familiar with the matter told Reuters.
/goo.gl/89qtHh

Bank of England’s Carney to juggle prices and politics
David Milliken – Reuters
Bank of England Governor Mark Carney settled questions about his future this week but faces a new challenge on Thursday, when he is due to present the central bank’s latest attempt to estimate the hit to Britain’s economy from June’s Brexit vote.
/goo.gl/eyUqwR

The whistleblower who exposed Bernie Madoff thinks the insurance industry is riddled with fraud
Business Insider
The Big Four accounting firms are so bad at catching fraud that they couldn’t even catch a cold, with incentives in the industry totally screwed up. That’s the view of the of the whistleblower who uncovered the $65 billion Madoff Ponzi scheme and he thinks fraud is endemic in the insurance industry as well.
/goo.gl/ch9xK6

SocGen Rises After Profit Beats Estimates on Trading Jump
Fabio Benedetti Valentini – Bloomberg
Equities revenue rises, bucking industry trend in quarter; Loan-loss provisions decline as Russia returns to profit
Societe Generale SA rose the most in almost seven months after reporting third-quarter profit that exceeded analysts’ estimates on higher revenue from trading stocks and bonds.
/goo.gl/P6MwLg

Wells Fargo’s Stars Thrived While 5,000 Workers Got Fired
Laura J Keller, Dakin Campbell, Kartikay Mehrotra – Bloomberg
Manager’s team said to order unwanted cards for Wachovia staff; Leaders ‘intently focused’ on restoring trust after CEO’s exit
After Wells Fargo & Co. executive John Sotoodeh handed off more than a hundred branches in Southern California to a colleague in 2009, problems surfaced quickly.
/goo.gl/vXSaj7

Fintech

UK fintech finds EU barriers emerging after Brexit vote
Reuters
Fallout from the vote to leave the European Union is already threatening the growth of financial technology firms in Britain, industry officials said on Wednesday.
The “fintech” sector comprises new forms of online lending, such as crowdfunding and peer-to-peer lending, and Apps for making payments and sending money abroad. It is being touted by the government as key to creating new jobs and growth in financial services.
jlne.ws/2fkQ00q

Bitcoin’s at It Again
By Christopher Langner – Bloomberg
It’s happening again. Bitcoin has locked step with gold and taken to the skies as uncertainty about the U.S. election increases volatility in global markets. It is, in short, acting as a haven.
/goo.gl/qmn6Kl

Fintech’s Struggling Lenders Want Your Help
Peter Rudegeair – WSJ
Money managers spent much of the past year fleeing loans generated by online lenders.
Now, online lenders are hoping retail investors could provide a less flighty source of capital through new investment funds that will purchase their loans.
The catch for those investors: they might find themselves locked into loans due to the illiquid structure of these funds, even as they shoulder fees that are high relative to other investments.
jlne.ws/2fkQ5RD

Swiss propose light-touch rules to lure fintech sector
Reuters
Switzerland’s cabinet proposed new light-touch regulations for financial technology (fintech) companies on Wednesday aimed at bolstering business and competitiveness.
Easing rules could help reduce barriers to market entry and provide more legal certainty for the burgeoning sector, said the finance ministry, which must now turn the changes into draft legislation.
jlne.ws/2fkU4NY

Regulation

SEC Delays Ruling on Chicago Stock Exchange’s Speed Bump
WatersTechnology
The Securities and Exchange Commission (SEC) has extended its deadline for ruling on the Chicago Stock Exchange’s (CHX’s) Liquidity Taking Access Delay (LTAD) proposed rule change. he SEC has added 45 days to its deadline for ruling on LTAD, which was originally set to be ruled on by November 6—45 days after the publication of notice for LTAD. The Commission now has until December 21 to “approve, disapprove or institute proceedings to determine whether to disapprove the proposed rule change,” according to a statement by the SEC.
/goo.gl/p26DRE

FINRA Fines Eight Firms a Total of $6.2 Million for Supervisory Failures Related to Variable Annuity L-Shares
FINRA
The Financial Industry Regulatory Authority (FINRA) announced today that it has fined eight firms, including VOYA Financial Advisors, five broker-dealer subsidiaries of Cetera Financial Group, Kestra Investment Services, LLC, and FTB Advisors, Inc., a total of $6.2 million for failing to supervise sales of variable annuities (VAs). FINRA also ordered five of the firms to pay more than $6 million to customers who purchased L-share variable annuities with potentially incompatible, complex and expensive long-term minimum-income and withdrawal riders.
/goo.gl/L163Mq

CFTC and Canadian Authority Sign Counterpart to Memorandum of Understanding to Enhance Supervision of Cross-Border Regulated Entities
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) announced today that CFTC Chairman Timothy Massad signed a Counterpart to a 2014 Memorandum of Understanding (MOU) with John O’Brien, Superintendent of Securities for Newfoundland and Labrador (SNL), and Patricia Hearn, Deputy Minister for Intergovernmental Affairs. The MOU relates to cooperation and the exchange of information in the supervision and oversight of regulated entities that operate on a cross-border basis in the United States and in Canada.
/goo.gl/8Qk3KM

SEC Names Marc A. Panucci as Deputy Chief Accountant
SEC
The Securities and Exchange Commission today announced the appointment of Marc A. Panucci as a Deputy Chief Accountant in the Office of the Chief Accountant.
/goo.gl/sBSm1Y

CFTC’s Market Risk Advisory Committee to Meet on November 17, 2016
CFTC
The U.S. Commodity Futures Trading Commission’s (CFTC) Market Risk Advisory Committee (MRAC) will hold a public meeting on November 17, 2016 at the CFTC’s Washington, DC, headquarters.
/goo.gl/igwH9a

Regions

Nothing Like a Threat of Treason to Make Turkish Banks Cut Rates
Constantine Courcoulas, Ercan Ersoy – Bloomberg
Prime minister renewed warning after ‘treason’ threat; Erdogan seen trying to jump-start slowing growth by fiat
For months, President Recep Tayyip Erdogan has been leaning on Turkey’s banks to give the economy a boost with easier credit. In August, he warned that failure to comply could amount to “treason.”
/goo.gl/SJfIPv

Why China’s Latest ‘Financial Innovation’ Might Not Work; Goldman Sachs asks a tough question about the credit default swaps introduced in the country this week.
Tracy Alloway – Bloomberg
Behold, the latest in Chinese financial innovation.
That’s a statement published this week by the National Association of Financial Market Institutional Investors. It heralds the start of trading, in China, of credit-default swaps (CDS), or derivatives used by investors to protect against default by companies and other entities. It says that 10 institutions, including China’s four biggest banks, have on Oct. 31 conducted 15 CDS transactions totaling 300 million yuan ($44.4 million) of notional principal across a bevy of companies related to gas, electricity, coal, and aviation, among others.
/goo.gl/7OgLI9

High-Speed Traders Woo More Asia Recruits Than ‘Gloomy’ Banks
Andrea Tan – Bloomberg
For students like Sun Jiaxuan at the National University of Singapore, the future of finance is all about high-frequency trading firms, not the Wall Street banks that graduates once aspired to. Recruiters from DRW Holdings LLC, a Chicago firm that’s expanding in Asia, found that out last month when they visited the school.
/goo.gl/HQI3Km

Worried about yuan drop, Chinese foreign buying binge gives authorities a headache
Samuel Shen and John Ruwitch – Reuters
Wealth managers like Huang Qing are tormenting the authorities in Beijing. The Chinese government has introduced a slew of measures to curb capital outflows in recent years as it seeks to prevent a sudden plunge in the yuan. They include cracking down on underground banks and sales of foreign insurance products that are more like investments, increasing scrutiny of overseas deals, and keeping tight restrictions on foreign currency purchases by individuals.
/goo.gl/p7Xd73

Ukraine stunned as vast cash reserves of political elite are made public
Shaun Walker – The Guardian
Two years after angry Ukrainians deposed Viktor Yanukovych and broke into his vast, opulent residential compound outside Kiev, revelations thrown up by a new system that requires government officials to declare their wealth and property online have led many to suspect the new elite are no better.
/goo.gl/PxJA0D

Vietnam plans to streamline commodity hedging rules
Blake Evans-Pritchard – Risk.net
The State Bank of Vietnam (SBV) is preparing to issue a new law that will make it easier for companies in the country to manage their commodity risk, but it may take more than legislation to encourage better hedging practices. “One of the major obstacles to developing a commodity derivatives market in Vietnam has been a lack of regulation from the government, which prevents corporates entering hedging positions, even though they might have a huge exposure to commodity price fluctuations,”
/goo.gl/qf7pTG

Blockchain to be used on Myanmar stock exchange
Nicky Cappella – The Stack
Daiwa Securities Group, a major Japanese financial services company, has announced that it intends to implement blockchain technology for trading on the Yangon Stock Exchange in Myanmar (formerly Burma).
/goo.gl/WlXrZT

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