John Lothian Newsletter: Carlyle, Nasdaq OMX Discussed Going-Private Deal; Turkish bourse chief has ambitious plans; NYSE plans to offload wheat futures market

Feb 12, 2013

Nasdaq talks to Carlyle about a buyout; the talks don’t produce a deal, but they do produce a lot of talk and speculation. The head of the stock exchange in Turkey has plans to catch up to the country’s recent increase in visibility on the world’s stage. NYSE Euronext reveals plans to spin off its European grain trading operation in the event of a successful merger with ICE.

First Read

Nasdaq Talks With Carlyle Signal Exchange Takeovers Not Over Yet
Bloomberg
Nasdaq OMX Group Inc.’s talks with Carlyle Group LP about taking the company private are spurring speculation among investors and analysts that a $50 billion wave of attempted exchange deals in the past three years isn’t over.
jlne.ws/V2Z3rD

***** Carlyle has persistently been interested in this business.

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Relationship Science Plans Database of Names and Connections
ANDREW ROSS SORKIN – NYTimes.com
It sounds like a Rolodex for the 1 percent: two million deal makers, power brokers and business executives — not only their names, but in many cases the names of their spouses and children and associates, their political donations, their charity work and more — all at a banker’s fingertips.
jlne.ws/V2Z3rI

***** Relationships are not a science; they are an art.

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Rating Victims Didn’t Know S&P’s Toxic AAA Born of Greed
Jody Shenn – Bloomberg
When Charles O. Prince III was chief executive officer of Citigroup Inc. from 2003 to 2007, he didn’t know about a surge in mortgage risk that his own investment bankers loaded on to its bank’s books. Because such debt carried top credit ratings from firms such as Standard & Poor’s, few financial executives paid attention to the potential dangers.
jlne.ws/V2Z6nb

***** Concentration risk, even with all quality inventory, presents a big risk.

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The MIAX Options Exchange Joins the Options Industry Council
The MIAX Options Exchange (MIAX) has become a member of The Options Industry Council (OIC). MIAX joins OCC, its member firms and the other OIC exchanges in helping promote the responsible use of equity options through education.
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****** For irresponsible use of equity options, see other organizations.

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SunGard Introduces Global Intraday Securities Lending Data to Improve Price Discovery and Trading Decisions
SunGard has launched global, 24-hour real-time streaming of live securities lending transactions through its Astec Analytics solution suite. With the introduction of this global intraday data service, SunGard is helping its customers increase profitability, improve transparency and make smarter decisions throughout the world’s trading day.
jlne.ws/V2Z6nc

******* Some find similar information through Single Stock Futures.

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Novus Ranked #1 by Autumn Gold
Novus Precious Commodities, a managed futures program offered by Novus Investments LLC, is proud to announce its ranking of Top Performing Commodity Trading Advisor (CTA) in the United States for the 5 year period of 2008-2012 according to Autumn Gold.
jlne.ws/V2Z5Qo

****** Novus means new, not old.

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Sommers blasts CFTC’s approach to Dodd-Frank
Risk.net
The US Commodity Futures Trading Commission (CFTC) imposed unnecessary hardships on derivatives market participants by forcing them to comply with complex Dodd-Frank stipulations before they had time to adapt, according to outgoing CFTC commissioner Jill Sommers.
jlne.ws/V2Z6DG

****** Bingo!!!!

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Making the House Less Cozy for Ratings Firms
FRANCESCO GUERRERA – WSJ.com
After the U.S. government settles the case it launched last week against Standard & Poor’s Ratings Services (and settle it most likely will), after the financial community stops sniggering at the hapless S&P analyst who released a subprime version of “Burning Down the House,” after victory laps have been run, words of regret uttered and political brownie points gained, we will still be left with one fundamental issue: How to fix a credit-rating system that failed so badly during the financial crisis, yet remains central to the functioning of global capital markets.
jlne.ws/V2Z66E

****** On a scale of 1 to 10, rating services are a D-?

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Commodity trading houses face growing pains-study
Emma Farge – Reuters
Commodity trading houses pouring millions of dollars into buying physical assets risk shifting capital away from their core business and driving out top talent, according to a study by advisory firm Deloitte Switzerland.
jlne.ws/V2Z66N

****** The risk is getting into things you don’t know so well.

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Global Association Of Risk Professionals Announces Financial Services Committee To Develop Global Benchmark Portfolios
Today, the Global Association of Risk Professionals (GARP) is pleased to announce a financial services industry committee has been formed to study the development of the GARP Benchmark Portfolio Initiative (GBPI).
jlne.ws/Xvp4hr

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Bank Customers Make Smartphone Connection
ROBIN SIDEL – WSJ.com
Americans are growing increasingly comfortable using their mobile phones to conduct basic financial transactions, sending banks racing to offer new technology that will cut down on costly customer-service calls and branch visits.
jlne.ws/V2Z66O

***** I almost forgot to pay for my parking via my smartphone.

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Pope Retirement a Reality Check for Aging Business Lions
Makiko Kitamura, Drew Armstrong & Kristen Hallam – Bloomberg
How old is too old to lead? The retirement of Pope Benedict XVI, the first such abdication in almost six centuries, may force aging lions from politics, academia and business to confront that painful question. For the legions of leaders well into their 80s and beyond, the evidence isn’t encouraging.
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****** Letting go is hard to do. Congrats to the Pope on leading by example.

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Bacon enthusiasts converge in Iowa for festival
BARBARA RODRIGUEZ – AP
The smell of bacon was in the air Saturday as thousands converged on Iowa’s capital city for an increasingly popular festival celebrating all things connected with the meat.
jlne.ws/VS1mIS

****** Now we know where the guys from the old belly pit hang out.

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Iowa governor pardons pig before bacon festival
AP
A young pig has won a reprieve from the frying pan just as Iowa’s popular bacon festival is about to begin.
jlne.ws/Z7sOIO

******* First turkeys, now pigs? What is next, Corzines?

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Job opening: OneChicago
Financial services company looking for Java/GUI/C++ Developer. 2-4 years’ experience. Finance, Computer or Math degree required. Knowledge of FIX Protocol, and interest/experience in financial markets a plus. Exceptionally bright problem solvers with no experience will be considered. Competitive benefits including Medical/Dental Insurance and 401K. Loop location. Send resume to info@onechicago.com.

****** How about exceptionally bright problem makers?

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WILD Chicago Member Meeting
Please join us for a members-only meeting to review WILD’s recent progress and plans for the coming year. Board members will provide a short update on committee activities which will be followed by a reception.

WHO: WILD 2013 Members
WHAT: Member Meeting
WHEN: February 13, 2013
WHERE: Lloyd’s – 1 S. Wacker Drive

RSVP events@womeninlistedderivatives.org
COST $15 Paypal

For complete details visit
jlne.ws/V2Z6DX

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MarketsWiki.tv

Sanjeev Joshipura

Sanjeev Joshipura of the Commodity Markets Council on Dodd-Frank in 2013
MarketsWiki.tv

Sanjeev Joshipura, president of Commodity Markets Council, talks about how Dodd-Frank rules will impact his membership base. Joshipura talks with JLN editor-in-chief Jim Kharouf about the future of the controversial position limit rule, which was vacated by a US District Court on September 28, 2012. A new position limit rule is expected from the Commodity Futures Trading Commission (CFTC), which will include a cost-benefit analysis. CMC is also focused on the CFTC’s reauthorization this year and the continuation of EMIR regulations. Joshipura also talks about US and EU regulatory harmonization and the challenges facing that goal.

Watch the video »

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Companies, Organizations and Groups

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Lead Stories

Carlyle, Nasdaq OMX Discussed Going-Private Deal
Dow Jones Business News
Nasdaq OMX Group Inc. and buyout shop Carlyle Group LP discussed a deal to take the exchange company private, though the talks didn’t result in a transaction and they aren’t ongoing, according to people familiar with the matter.
jlne.ws/V2Z6Uf

Turkish bourse chief has ambitious plans
Daniel Dombey – FT.com
Istanbul’s stock exchange chief says the institution he heads has not kept pace with Turkey’s rise on the world stage – and he wants to transform the country’s business and finance in his attempt to catch up.
jlne.ws/V2Z9iQ

NYSE plans to offload wheat futures market
Dow Jones Newswires
NYSE Euronext plans to spin off Europe’s largest grain futures market as part of efforts to secure regulatory and political backing for its planned takeover by IntercontinentalExchange.
jlne.ws/V2Z6Ur

New Rules for Credit-Default Swaps Targeted for April
Katy Burne – Dow Jones
The credit-default-swap market is set to get its second major overhaul or “big bang” this year as the industry looks to fix structural problems some traders say have been stifling the market.
jlne.ws/V2Z9j0

Obama S&P Case Started When Toxic Debt Masqueraded as AAA
Phil Mattingly – Bloomberg
When the U.S. Justice Department charged Standard & Poor’s with fraud earlier this month and demanded $5 billion in restitution, it was the culmination of the Obama administration’s four-year pursuit of financial chicanery masquerading as sacrosanct credit ratings.
jlne.ws/Vdcwe9

Trash Talk Haunts Barclays Traders in Manipulation Probe
Brian Wingfield – Bloomberg
Boastful chatter among young traders, preserved in digital archives, has come back to haunt Barclays Plc as it defends itself against allegations that it manipulated U.S. energy markets.
jlne.ws/12IEenn

The Temptation to Trade on Confidential Information
PETER J. HENNING – NYTimes.com
Everyone loves a sure thing. And in the case of insider trading, the profits may be just too tempting. Two cases filed last week by the Securities and Exchange Commission epitomize just how quickly some have jumped at the opportunity to profit from confidential information, despite the risks of being discovered and the subsequent costs.
jlne.ws/V2Z7aN

Investor lobby group launches last ditch Mifid effort
Michelle Price – Financial News
A European investor advocacy group has launched a last-ditch attempt to push for changes to the Market in Financial Instruments Directive text which it claims “discriminates” against the end investor. The new lobbying effort comes as European policymakers move to put the finishing touches on the text in coming weeks.
jlne.ws/V2Z7aS

Libor Scrutiny Turns to Middlemen
JEAN EAGLESHAM and EVAN PEREZ – WSJ.com
U.S. regulators are widening their probe of global interest-rate-rigging by scrutinizing what they claim is a pivotal role of two U.K. brokerage firms in the scandal, people close to the investigation say.
jlne.ws/V2Z7b0

Markets: With the volume down
Ralph Atkins – FT.com
Politician walks out of door. Journalist puts microphone to his mouth. Politician mouths something. Markets move.” Life became rudimentary for European financial markets when the eurozone debt crisis erupted, says John Phizackerley, chief executive of Nomura’s European operations.
jlne.ws/V2Z9zr

Regulatory

S.E.C. Nominee Mary Jo White Discloses Law Firm Wealth
PETER LATTMAN – NYTimes.com
It is no secret that the partners at the white-shoe law firms Debevoise & Plimpton and Cravath, Swaine & Moore earn a decent living. The financial disclosure form of Mary Jo White, the Obama administration’s pick to become the next chairwoman of the Securities and Exchange Commission, reveals just how decent.
jlne.ws/V2Z7rs

CFTC Approves Amendment to Cantor Clearinghouse, L.P., Registration Order
The Commodity Futures Trading Commission (CFTC) today granted the petition of Cantor Clearinghouse, L.P. (Cantor) to amend its order of registration as a derivatives clearing organization (DCO).
jlne.ws/V2Z7HL

EU Banks May Need to Hit Basel Liquidity Targets Early
Bloomberg
Banks in the European Union may need to comply with an international liquidity rule before competitors in other parts of the globe as part of a deal on how the bloc should implement Basel banking standards.
jlne.ws/V2Z9PZ

Opening Remarks At Foreign Bribery And Corruption Training Conference By SEC Chairman Elisse Walter
jlne.ws/V2Z9Q4

ESMA Rules Aim To Curb Excessive Risk Taking By Alternative Fund Managers
The European Securities and Markets Authority (ESMA) has published final
jlne.ws/V2Z9Qb

[Japan] FSA publishes Weekly Review No.32
jlne.ws/V2Z7I1

Exchanges & Trading Facilities

Kremlin Fund Said to Seek $100 Million of Moscow Exchange
Bloomberg
The Russian Direct Investment Fund will seek to buy as much as $100 million of stock in the Moscow Exchange’s initial public offering, according to a person with knowledge of the Kremlin-backed private-equity fund’s plan, who asked not to be identified because the information isn’t public.
jlne.ws/V2Za6y

January 2013: Strong Start Into The New Year – The Statistical Monthly Report Contains The Latest Trade And Turnover Figures For SIX Swiss Exchange And Scoach Switzerland
jlne.ws/V2Za6B

CBOE Holdings To Present At Credit Suisse 14th Annual Financial Services Forum On February 14
jlne.ws/V2Z7Yr

CME Group Chief Executive Officer to Present at the 14th Annual Credit Suisse Financial Services Forum, February 12
jlne.ws/V2Z7Yw

Corporate Board Member and NYSE Euronext to Host Annual Risk Oversight Conference
jlne.ws/12Gu8mM

NYSE MKT Issues Short Interest Report
jlne.ws/V2Z8f1

NYSE Group Inc. Issues Short Interest Report
jlne.ws/V2Z8vi

NASDAQ Announces End-Of-Month Open Short Interest Positions In NASDAQ Stocks As Of Settlement Date January 31, 2013
jlne.ws/V2ZaTX

Austrian Companies With Baader Bank And The Vienna Stock Exchange On Road Show To Milan
jlne.ws/V2ZaTY

TOM Insight January 2013
jlne.ws/V2Z8LO

Hedge Funds & Managed Futures

Legg Mason to name new CEO this week
The Wall Street Journal
Five months after launching a search for a new chief executive, money manager Legg Mason is expected to announce its choice this week, according to people familiar with the search.
jlne.ws/V2ZaU5

UK property fund managers put up the gates
Sarah Krouse – Financial News
UK property fund managers are again attempting to impede investors from exiting funds as performance stalls.
jlne.ws/V2Z8M2

Blackstone Said to Add Executive in Push for Fund Stakes
Bloomberg
Blackstone Group LP hired Anthony Maniscalco to help run a new business that will buy stakes in hedge-fund managers, said three people familiar with the plans, as the firm tackles an investing area where institutions such as Goldman Sachs Group Inc. have had mixed results.
jlne.ws/V2ZbHx

Fulcrum Asset Management Hedge Fund Makes Bevan, Fawaz Partners
Bloomberg
Fulcrum Asset Management LLP, the $1.4 billion computer-driven hedge fund group founded by former British Broadcasting Corp. Chairman Gavyn Davies, made Andrew Bevan and Mohammed Fawaz partners.
jlne.ws/V2ZbHA

Passive fund assets claim larger slice of UK pie
Sarah Krouse – Financial News
The rise of passive funds has led the products to control a record share of assets under management in UK-domiciled funds, even as net retail sales fell year-on-year, according to new research.
jlne.ws/V2ZbaB

G-30 Urges More Long-Term Investment
Dow Jones
Major economies need to take steps to encourage more long-term investment and to ensure the current shake-up of the financial system doesn’t limit such funding, according to a report published by the Group of 30 Monday.
jlne.ws/V2ZbHH

Hedge-fund long positions in S&P 500 on rise
Market Watch
SAN FRANCISCO — Hedge-fund long positions in the S&P 500 Index rose in the past week, once again crowding long positions for speculators, according to a Bank of America Merrill Lynch note Monday.
jlne.ws/V2ZbHK

Hedge Funds Take Big Bets on Argentine Debt
CNBC
Hedge funds are actively trading in Argentina’s choppy markets ahead of its legal showdown with rebel sovereign bondholders later this month.
jlne.ws/V2ZbY4

Banks & Brokers

Fund Managers May Face Longer Wait for Bonuses Under ESMA Rules
Bloomberg
Senior hedge-fund and private-equity managers may face longer waits for bonuses under guidelines published by the European Union’s top market regulator.
jlne.ws/V2ZbY7

Barclays to axe 3,700 jobs as new boss lays out revival
Reuters via Yahoo! News
LONDON – Barclays is axing at least 3,700 jobs and pruning its investment bank as its new boss put his stamp on the troubled British bank by aiming to cut 1.7 billion pounds in annual costs and raise standards after a series of scandals.
jlne.ws/V2ZbYa

Ex-Hedge Fund Boss Lost Claim Versus RBS on Ponzi Account
Bloomberg
A former hedge-fund manager who invested about 20 million pounds in a Ponzi scheme lost a claim against Royal Bank of Scotland Group Plc’s NatWest unit, which operated accounts used in the fraud.
jlne.ws/V2ZbYd

Goldman Sachs names new global, EMEA M&A heads
Reuters via Yahoo! News
LONDON – Goldman Sachs has promoted Gregg Lemkau to jointly head its global mergers and acquisitions team and Gilberto Pozzi to lead its M&A coverage in Europe, the Middle East and Africa.
jlne.ws/V2ZbYi

Morgan Stanley Commodities Head Allidina Said to Leave Bank
Bloomberg
Hussein Allidina, head of commodity research for Morgan Stanley, has left the New York bank, according to a person familiar with the situation.
jlne.ws/V2ZemO

RBS Executives: Too Busy Fixing Bank to Spot Libor Warning Signs
FOX Business
Top executives at Royal Bank of Scotland Group PLC said Monday that they were too busy attempting to save the bank in the wake of the financial crisis to notice the activities of traders who were trying to rig inter-bank lending rates.
jlne.ws/V2ZemV

Clearing & Settlement

ISDA: Preparation For Mandatory Clearing Requirements Beginning March 11
jlne.ws/V2ZeDd

DTCC Payment aXis Brings Enhanced Automation And Accuracy To The Mutual Funds Sector
jlne.ws/V2ZceL

CME Group Clearing Advisory: FIXML Trade Register Additions/Changes – UOM
jlne.ws/V2ZceM

CME Group Clearing Advisory: Live Cattle Delivery – Sioux Falls Regional Livestock (Worthing, SD) Special Black Out Day
jlne.ws/V2ZceO

Indexes & Products

Tokyo Stock Exchange ETF/ETN Monthly Report For January 2013 – Trading Value Increased Significantly Due To Bullish Conditions
In January, active Japanese stock price index ETFs drove a vibrant ETF/ETN market, with the trading value of “Nikkei 225 Exchange Traded Fund (1321)” exceeding JPY 100 billion. Average daily trading value rose significantly by 62.54% from the previous month.
jlne.ws/V2ZeTM

Five new iShares ETFs launched on Xetra
jlne.ws/Y4sXGb

Technology

Weak trading volumes squeeze Fidessa
Philip Stafford – FT.com
Weak trading volumes have pushed stretched banks to squeeze the prices of Fidessa, one of the industry’s main providers of trading technology, the UK software group said on Monday. Consolidation, restructurings and job cuts at its financial services customers took seven percentage points off annual revenue growth, Fidessa said, although that figure was flat on last year’s interim figures.
jlne.ws/V2ZeTT

Fidessa group announces the preliminary results for the year ended 31st December 2012
jlne.ws/V2Zcvh

Panopticon Announces New Professional Certification Program
Panopticon Software, the leading provider of visual data analysis software for real-time, CEP and historical time series data, announced today that it is launching a new series of Professional Certification Courses for its clients and partners. The courses will be conducted monthly in London and New York.
jlne.ws/YTRFw6

London Stock Exchange Group Acquires A Majority Stake In GATElab
London Stock Exchange Group (LSEG) announced that it has acquired a 67% stake in GATElab, an Italian and UK based technology company supplying advanced trading and post trade services technology around the world.
jlne.ws/V2ZcLA

ACTIV Financial Extends North American Pre-Trade Risk Control Offering To Canada
ACTIV Financial, a global provider of real-time, multi-asset financial market data and solutions, today announced it is extending its North American coverage of ACTIV TradeDeck, a fully managed solution providing an ultra low latency pre-trade risk gateway, to all Canadian exchanges for equities, options and futures.
jlne.ws/V2ZcLG

Erste Group Bank AG Selects Asset Control for Data Management
Erste Group Bank AG, one of the largest banking groups in Central and Eastern Europe, will implement Asset Control’s AC Plus enterprise data management solution. The bank will use AC Plus in its headquarter for the acquisition, cleansing, validation and distribution of all its market data, time-series and reference data in its treasury operations.
jlne.ws/V2ZcLJ

SuperDerivatives – Alfa Capital deploys SuperDerivatives to supercharge structured products offering
Alfa Capital, one of the leading Russian assetmanagement companies, has selected SDX, the real-time cross-asset front officesystem from SuperDerivatives, to drive its structured products offering.
jlne.ws/TOTR90

Enforcement

New York fund manager arrested on Ponzi scheme charges
Reuters via Yahoo! News
A New York fund manager was arrested on Monday on charges of orchestrating a Ponzi scheme and stealing around $2 million from three hedge fund investors, U.S. authorities said. Federal prosecutors charged Jason Konior, 39, with defrauding investors by promising to match their investments in his fund, Absolute Fund LP, many times over.
jlne.ws/V2ZcLR

CFTC Charges South Carolina Resident Robert Stanley Harrison with Commodity Pool Fraud
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge G. Ross Anderson of the U.S. District Court for the District of South Carolina entered an emergency Order freezing and preserving the remaining pool participant assets under the control of defendant Robert Stanley Harrison of Easley, S.C. The Order also prohibits Harrison from destroying books and records and grants the CFTC immediate access to those records.
jlne.ws/V2Zd24

UBS fined £9.45m for failings in its sale of an AIG fund
The Financial Services Authority (FSA) has fined UBS AG (UBS) for failures in the sale of the AIG Enhanced Variable Rate Fund (the Fund). These failures led to UBS customers being exposed to an unacceptable risk of an unsuitable sale of the Fund. UBS also failed to deal properly with complaints from customers about sales of the Fund.
jlne.ws/V2Zfav

ASIC obtains court orders against Sydney financial adviser
jlne.ws/V2Zd2j

ASIC accepts enforceable undertaking from Mr Rental
jlne.ws/V2ZfqM

SIX Exchange Regulation: Reprimand Issued Against Valartis Group AG
jlne.ws/V2ZfqR

Environmental & Energy

EEX Awarded Contract for Emissions Auctions for the Flemish Region
jlne.ws/V2ZdiH

Asia-Pacific

Tokyo Commodity Exchange: Good Delivery Material Price Differential For February 2013 Rubber Contract
jlne.ws/V2ZfqW

Osaka Securities Exchange SPAN Parameter Updated – Feb. 18, 2013 – Feb. 22, 2013
jlne.ws/V2ZfHh

Frontier Markets

Third Exchange Goes Live, Setting Up Battle in India
New York Times
The MCX Stock Exchange takes up a challenge to build liquidity and win market share against two more established Indian bourses.
jlne.ws/V2Zdz9

DFM And NASDAQ Dubai Are Joined By DP World To Inaugurate The First Company Focus Week
jlne.ws/V2Zdzf

John Lothian Newsletter

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