With KCBT acquired, CME Group announces a plan to shut the regional grain trading floor in June. Singapore Exchange is aiming to buy a piece of clearing house LCH.Clearnet. Standard & Poor’s faces charges from various US entities, who feel that the company acted wrongly by issuing happy and positive ratings for a number of bond products that turned out in 2008 to be in serious trouble. In First Read today, take a look at the latest installment of JLN’s Restoring Customer Confidence series, in which Neal Wolkoff, Of Counsel at the law firm of Richardson & Patel and longtime exchange executive, argues that not only does it make rational sense, but using SIPC could be the easiest and most cost effective way to protect futures customers.
New Restoring Customer Confidence Video
The tenth video in our Restoring Customer Confidence series deals with insurance funds. Each week we will post a new idea answering the question – how do you restore customer confidence and bring traders back?
|Restoring Customer Confidence||More ideas»|
Protection Fund: Slip it to SIPC
If there is one solution to restoring customer confidence in futures that has been talked about more than any other, it would be the creation of a customer or insurance fund. Securities customers have the Securities Insurance Protection Corporation (SIPC), so why can’t futures customers use SIPC as well? That’s the idea from Neal Wolkoff, Of Counsel at the law firm of Richardson & Patel and longtime exchange executive, who argues that not only does it make rational sense, but using SIPC could be the easiest and most cost effective way to protect futures customers. This approach differs from others who have touted some type of insurance protection fund just for the futures industry.
About the Restoring Customer Confidence video series
Visit the video series page on MarketsWiki.tv over the next several weeks for new ideas and solutions.
Analysis: Commodity hedge funds find money more scarce, pedigree pays
Reuters via Yahoo! News
NEW YORK – Pierre Andurand, who managed $2 billion at his BlueGold oil hedge fund before it folded last year under heavy losses, is headlining a host of one-time commodity stars looking to make a comeback in a less merciful market.
**JK – Scarce commodity is investor cash
NYSE Euronext Profit Shrinks in 4th Quarter to $28 Million
Jacob Bunge – Dow Jones
NYSE Euronext (NYX) said its fourth-quarter earnings dropped 75% amid a slump in futures and securities trade spanning both sides of the Atlantic. The Big Board parent in the fourth quarter ramped up a cost-cutting effort, trimming about $115 million in expenses by exiting some businesses and projects.
Will derivatives mirror equities?
Steve Grob – FOW
The derivatives industry looks set to undergo a similar set of structural changes to those experienced by the equity markets over the past few years. This had led some to look at the current shape of equity markets as a proxy for what may happen in derivatives. In particular, attention has turned to some of the more controversial outcomes of multi-market trading, such as low-latency, venue-based high-frequency trading (HFT).
**JK – Professor Grob enlightens us on trades size and the impact of market regs. I’m paying attention.
Tangle of Ties Binds SEC’s Top Ranks
JEAN EAGLESHAM And JESSICA HOLZER – WSJ.com
Enforcement cases at the Securities and Exchange Commission go nowhere unless approved by a majority of the agency’s commissioners. But conflicts for the possible new chairman and other top officials could make it harder to get to “yes.”
CME Group Announces Treasury Options Trading Volume Record
CME Group, the world’s leading and most diverse derivatives marketplace, today announced a record in daily trading volume for its Treasury options complex on Friday, February 1, 2013. These contracts are listed by and subject to the rules of CBOT.
**JK – Records are good news these days.
SGX in talks on taking LCH.Clearnet stake
Philip Stafford in London and Jeremy Grant in Singapore – FT.com
SGX, the Singapore exchange, is in discussions about taking a stake in LCH.Clearnet, the transatlantic clearing house, as bourses gear up for sweeping reform of derivatives and equities markets.
Sungard Adds Access To The European Energy Exchange, Helping Firms Expand And Diversify
SunGard has extended its Software-as-a-Service (SaaS)-based Valdi trading solutions to offer simplified and cost-effective access to the European Energy Exchange (EEX). EEX develops, operates and connects secure, liquid and transparent trading venues for energy and related products such as electricity, natural gas, CO2 emission allowances and coal.
**JK – Giving energy to EEX.
The Buy Side Wants Transparency, So Get Ready for Big Data
Ivy Schmerken – Advanced Trading
One of the hot topics at an institutional trading conference this week in New York City had to do with the buy-side tracking their orders as “hops along the way.” That may seem like a strange phrase, but with the complexity of executing algorithmic orders across many different lit and dark venues, buy side traders are asking their brokers for more data to gain transparency into order routing practices.
Trial of Putin Foe Shows No Russian Investors are Safe
Henry Meyer – Bloomberg
“Are you totally out of your mind?” Russian newspaper tycoon Alexander Lebedev exclaimed as he jumped to his feet. He stared combatively at property developer Sergei Polonsky, who had taunted Lebedev for ridiculing his claim to be a major charity donor. As tempers flared during the recording of a TV discussion in Moscow, the host appealed for calm, Bloomberg Markets magazine will report in its March issue. Seconds later, the athletic Lebedev punched Polonsky, knocking him off his chair, as seen in a video of the Sept. 16, 2011, incident that became a YouTube sensation.
**JK – Russia, according the Condolezza Rice is an “oil cartel” not a democratic country.
Wall Street’s toughest octogenarian woman
Muriel Siebert, the first woman to own a seat on the floor of the New York Stock Exchange, talks about risk-taking, feminism, and ethics in finance.
**JK – What a success story.
Alan Grigoletto on OIC’s new education efforts
Alan Grigoletto was recently promoted to vice president, education at the Options Industry Council (OIC), where he is responsible for expanding OIC’s educational efforts, including developing educational programs for the European markets. He was interviewed by Sarah Rudolph of John Lothian News about the challenges for market makers in the current atmosphere and OIC’s response to those issues, the growing use of options by pension funds and others, what’s ahead for options volume, and the OIC’s new seminars for 2013.
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CME to Close Kansas City Board of Trade Pits in June
Jacob Bunge – Dow Jones
CME Group Inc. plans to close the trading pits of the Kansas City Board of Trade in late June as part of the futures-exchange giant’s 2012 acquisition of the regional grain market.
MarketAxess Announces Monthly Volume Statistics for January 2013
Business Wire via Yahoo! Finance
MarketAxess Holdings Inc. , the operator of a leading electronic trading platform for U.S. and European corporate bonds, emerging markets bonds and other types of fixed-income securities, today announced total monthly trading volume for January 2013 of $56.8 billion, consisting of $35.2 billion in U.S.
S&P To Face Charges From States, U.S. Over Wrongdoing Before Financial Crisis: Report
Federal and state prosecutors intend to bring civil charges against Standard & Poor’s for wrongdoing in its rating of mortgage bonds prior to the 2008 financial crisis, The Wall Street Journal said on Monday, citing people familiar with the matter.
Barclays takes another $1.6 billion hit for mis-selling
Reuters via Yahoo! News
LONDON – Barclays set aside another 1 billion pounds to compensate customers for mis-selling products, dropping another British banking bombshell as the industry struggles with the scale of redress for past misdemeanors.
Ethics at Barclays Went Into the Shredder
William D. Cohan – Bloomberg
There are two ways to look at the news that Antony Jenkins, the chief executive officer of Barclays Plc (BARC), will turn down his $1.6 million bonus this year. One is that it is another positive step to reforming the embattled bank, which among other scandals was fined half a billion dollars in June for trying to manipulate the London interbank offered rate. The alternative explanation is that this is a public relations gambit intended to mute public outrage and get back to business as usual as soon as possible.
NYSE Fourth-Quarter Profit Tops Estimates on Cost Cutting
NYSE Euronext, the U.S. exchange operator being bought by IntercontinentalExchange Inc., reported fourth-quarter earnings that beat analyst estimates after the company cut costs.
MF Global Customer Funds Rules Get Another CFTC Hearing
The top U.S. derivatives regulator will discuss with futures industry participants a proposal to bolster protections for customer funds following the collapse of MF Global Holdings Ltd. and Peregrine Financial Group Inc.
Dimon Says U.S. Lacks Europe’s Willpower to Fix Fiscal Policy
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said U.S. policy makers need to muster more willpower to overhaul rules and fiscal policy, emulating European leaders who are committed to solving their debt crisis.
Moscow Exchange valued at up to $4.6bn
Courtney Weaver in Moscow and Philip Stafford in London – FT.com
The Moscow Exchange, Russia’s main stock index, is set to become one of Europe’s largest bourses by market capitalisation after publishing a price range for its flotation that values the company at $4bn-$4.6bn.
A crisis needs a firewall not a ringfence
Alistair Darling – FT.com
Fortunately I’ve only ever had to take one telephone call that made my blood run cold. On the morning of October 7, 2008, Sir Tom McKillop, the then chairman of Royal Bank of Scotland, called me to say that his bank was fast running out of money. He asked me what I was going to do about it.
Gloves come off in fight over Emir
Michelle Price – Financial News
The European Parliament’s Economic and Monetary Affairs Committee, known as Econ, is today poised to reject key details of new European derivatives reforms in a development that European policy experts have described as “precedent-setting” for the future of the European policymaking process.
SEC Rethinks the Penny Tick in Stock Trading
Remember when stock market regulators ditched fractions and started rounding to the nearest penny? After some unintended consequences, the SEC is reviewing the move and considering alternatives.
Should We Take the Department of Justice’s Suit Against Standard & Poor’s Seriously?
I know cynicism-hardened Naked Capitalism readers will expect the answer to the question in the headline to be “no”. But based on a summary of the filing at Bloomberg, the answer looks more like “possibly yes”.
Debates On Key Regulatory Topics And Presentation Of Latest EDHEC-Risk Institute Research At The EDHEC-Risk Europe Days Conference In London, March 26-27, 2013
Canadian Securities Administrators renew term of Chair, appoint new Vice-Chair [CSA]
Exchanges & Trading Facilities
CME Group Volume Averaged 11.4 Million Contracts per Day in January 2013, Up 18 Percent from December 2012
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that January 2013 volume averaged 11.4 million contracts per day, down 2 percent from January 2012, but up 18 percent from December 2012. Total volume for January 2013 was more than 240 million contracts, of which 87 percent was traded electronically.
ICE Reports Daily Futures Volume for January
IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, today reported futures volume for January 2013. ICE’s average daily volume (ADV) for futures and options was 3,478,414 contracts, a decrease of 15% from the prior January. Total contract volume in January 2013 was 73 million contracts. All prior period contract volumes have been adjusted to include the converted futures contracts, which previously traded in ICE’s OTC markets.
BATS Global Markets U.S. Options Business Reports Second-Best Market Share Month
BATS Global Markets (BATS), a leading operator of securities markets in the U.S. and Europe, today reported the second-best month for its U.S. equity options business with 3.9% market share in January vs. 3.0% one year ago and 3.5% in December 2012.
SGX January volumes grow strongly
Lee Meixian – Business Times
January volumes saw strong growth across securities, derivatives and commodities on the Singapore Exchange, according to its monthly market statistics report out on Tuesday.
EEX Trading Results In January – New Monthly And Daily Record On The Natural Gas Spot Market
In January 2013, the total trading volume traded in power derivatives on the European Energy Exchange (EEX) amounted to 125.2 TWh. Compared to January 2012, the volume increased by 19 percent. The Power Derivatives Market volume contained 65.4 TWh from OTC clearing.
ASX Group Monthly Activity Report – January 2013
ASX Compliance Monthly Activity Report – January 2013
Equiduct January Trading Statistics
LME: Commerzbank Applies for Category 2 Membership of Exchange
The London Metal Exchange said Monday that Commerzbank AG has applied for category two associate broker clearing membership of the exchange.
Warsaw Stock Exchange And Exchange Members Representatives Meet
NYSE Technologies’ Marketplace Welcomes Everbright Securities and GF Securities
Corporate Board Member and NYSE Euronext to Host Educational Forum for Compensation Committee Members
BM&FBOVESPA Foreign Investors: Exemption From Paying Financial Transactions Tax (IOF) On Real Estate Funds
MIAX Options Exchange: Listing Alert: New Listings Planned For February 11th 2013
Hedge Funds & Managed Futures
Money-Market Funds Beset by Excess Cash
KATY BURNE – WSJ.com
Money-market funds have a high-quality problem: investors are entrusting them with too much cash. The flood of money is prompting the funds, which buy short-term, top-rated debt, to seek higher returns in investments that until recently were seen as too risky, including French bank debt.
Bridgewater to launch new hedge fund: WSJ
Reuters via Yahoo! News
The world’s largest hedge fund, Bridgewater Associates, told investors it will launch a new hedge fund this year, and that it had sold a minor equity stake in the firm to an unidentified buyer, the Wall Street Journal reported on Monday.
Morgan Stanley traders reassemble as Muller opens PDT in London
Harriet Agnew and Giles Turner – Financial News
PDT Partners, the hedge fund manager spun out of Morgan Stanley’s proprietary trading division last year and led by quant expert Peter Muller, has opened offices in London and Hong Kong.
Anderson Said to Hire Credit Suisse’s Paul for Hedge Fund
Keith Anderson , a former chief investment officer for George Soros , hired Doug Paul, who worked for 43 years at Credit Suisse Group AG, as president of the hedge fund he started after leaving Soros Fund Management LLC, according to a person familiar with the matter.
Venture Firms Narrow Sights in Tough Times
The Wall Street Journal
Venture capital firms are taking stiff measures to survive a tough fundraising environment and lacklustre returns, including gutting their partnerships, slashing their fund sizes and refocusing their investment areas.
Bank of America’s Hedge-Fund Clients Boost Leverage in Asia
Hedge-fund clients of Bank of America Corp.’s Asian prime brokerage unit have increased their leverage since October as the market outlook improved, according to the second-largest U.S. bank by assets.
Fidelity Target Date Funds Fall Short of Their Rivals
NATHANIEL POPPER – NYTimes.com
Fidelity Investments is the giant of “target date” mutual funds, one of the hottest ideas in 401(k) plans. For its customers, the payoff has hardly been outsize.
Banks & Brokers
ICAP electronic broking volumes up 17% year-on-year
ICAP (IAP.L), the world’s leading interdealer broker and provider of post trade risk and information services, announces today that average daily volumes on the BrokerTec and EBS platforms for January 2013 were $767.9bn, 17% higher than in January 2012 .
ICAP adds Hazard Rates and Survival Probabilities to Credit Derivatives Service
ICAP plc (IAP.L), the world’s leading interdealer broker and provider of post trade risk and information services, today announces that it has launched Hazard Rates and Survival Probabilities as part of an expanded end of day Credit Derivatives Service.
Moody’s Warns Jefferies on ‘Excessive’ Executive Pay
MICHAEL J. DE LA MERCED | New York Times
The $78 million compensation package that the Jefferies Group doled out to its top executives raised more than a few eyebrows — including those at Moody’s Investors Service.
Knight Sees $9 Million to $11 Million Charge Linked to Staff Cuts
Jacob Bunge – Dow Jones
Knight Capital Group Inc. (KCG) estimated Monday that it would take a pre-tax charge of $9 million to $11 million linked to layoffs. The Jersey City, N.J., trading firm moved to cut about 5% of its approximate 1,500-person global staff as part of a restructuring that came as brokerages and exchanges grapple with a three-year slide in securities trading activity, Knight’s core business.
Goldman Sachs Hired by Russia as Corporate Broker to Boost Image
Goldman Sachs Group Inc. has been hired by the Russian government to burnish the nation’s image overseas and attract more institutional investors.
UBS private bank inflows weak as reports big loss
Reuters via Yahoo! News
ZURICH – UBS saw weak client inflows at its flagship private bank in the fourth quarter as it reported a hefty net loss due to a $1.5 billion fine for rigging benchmark interest rates and restructuring costs.
Merrill Lynch Wealth’s investment chief Shalett leaves
Reuters via Yahoo! Finance
Lisa Shalett, the chief investment officer for Merrill Lynch’s retail brokerage force, left the company on Monday, the company said.
Morgan Stanley Corporate Affairs Chief McFadden to Depart Firm
Morgan Stanley ’s Jeanmarie McFadden, the global head of corporate affairs, is retiring from the Wall Street firm. McFadden’s duties included overseeing media relations, marketing and community affairs, according to an internal memo from Chief Executive Officer James Gorman and obtained today by Bloomberg News.
Morgan Stanley Fixed Income Investor Conference Call
UBS To Buy Back Outstanding Bonds In Public Tender Offers
Barclays Bank: Provisions For Interest Rate Hedging Products (IRHP) And Payment Protection Insurance (PPI)
UBS’s Fourth-Quarter 2012 Result
Clearing & Settlement
Further delays for clearing rules
Philip Stafford in London and Alex Barker in Brussels – FT.com
European plans to introduce mandatory clearing of more off-exchange derivatives are set for further delays after a key vote in the European Parliament rejected some of the proposals drawn up by the region’s market regulators.
TriOptima launches groundbreaking counterparty credit risk analytics service, triQuantify
TriOptima announces today that it is launching triQuantify, a groundbreaking counterparty credit risk analytics service for OTC derivatives. TriOptima has licensed Global Valuation Ltd’s (“GVL”) software to power the new service.
ED&F Man Capital Markets Approved As Full Clearing Member Of ICE Clear US – Firm Now Member Of All The World’s Leading Clearing Houses
Indexes & Products
SGX: FTSE ST China Index Gained 11.4% In January
FTSE/JSE Africa Indices – Weekly Market Wrap As At 1 February 2013
S&P Capital IQ’s QuantHouse Operation Selects KVH Data Centre for Low Latency Access to Japanese Exchanges
QuantHouse, S&P Capital IQ’s Real Time operation and the global provider of next generation trading solutions, has aligned with KVH, Asia’s leading information delivery platform, to enable its clients to benefit from proximity to the main Asian exchanges.
Hedge Fund Journal Awards Eze Castle Integration “Leading IT Infrastructure Provider” Accolade; FSTech Shortlists …
PRWeb via Yahoo! News
Federal Court in Florida Imposes over $22.8 Million in a Monetary Sanction and Restitution against Floridian David Merrick and His Company, Trader’s International Return Network
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Charlene Edwards Honeywell of the U.S. District Court for the Middle District of Florida entered an order requiring defendants David Merrick, previously of Apopka, Fla., and his company, Trader’s International Return Network (TIRN), to jointly pay a civil monetary penalty of over $11.4 million for fraud in connection with a foreign currency trading program that victimized more than 700 customers
SEC Charges Husband and Wife in Florida with Defrauding Seniors Investing in Purported Charity
The Securities and Exchange Commission today charged a husband and wife who raised millions of dollars selling investments for a purported charitable organization in Tallahassee, Fla., while defrauding senior citizens and significantly exaggerating the amount of contributions actually made to charity.
Former RBS Head CDO Trader Sues for Unfair Firing at Tribunal
Royal Bank of Scotland Group Plc’s former head trader for collateralized debt obligations is suing for unfair dismissal at an employment tribunal.
New Zealand’s Financial Markets Authority: Two More Directors Plead Guilty In Capital + Merchant Finance Case
Environmental & Energy
Mark Langley To Head Cleartrade Exchange (CLTX) Market Development In Asia
Cleartrade Exchange (CLTX), the Singapore Regulated Futures Exchange is delighted to announce the appointment of Mark Langley as its new Asia Business Development Director. Mark Langley was previously with UBS and has extensive experience in the freight and commodities markets, which form the mainstay of CLTX’s business.
Thai Bourse Prepares Companies To Adopt ASEAN CG Scorecard
The Stock Exchange of Thailand (SET) announces the revision of its corporate governance (CG) principles to be in line with ASEAN CG Scorecard and prepare Thai listed companies to be recognized in CG when the ASEAN Economic Community (AEC) starts in 2015.
BOJ Chief Offers to Leave Early
Bank of Japan Gov. Masaaki Shirakawa said he offered to resign as of March 19, three weeks before his term ends, and the prime minister “listened carefully.”
SGX: China A50 Futures Achieve New Volume Records
Hong Kong’s Securities And Futures Commission Bans Ho Wing Kin For Life
JSE And IoDSA Collaborate On Corporate Governance Guidelines
As stakeholder interest in the corporate governance of listed companies continues to grow, companies grappling with how to be more transparent about these practices have received guidance from two practice notes issued by the King Committee on Corporate Governance.
Aditya Trading Solutions Outperforms MCX in Trading Volume Growth Through Apr. 2012 – Jan. 2013
Aditya Trading Solutions (ATS), South India’s biggest commodity broker, announced that its clients continued to repose faith in its reliable and extensive research-based broking services, driving the monthly trading volume growth by approximately 30 per cent during April 2012 – January 2013 period, as compared to 4 per cent growth in trading volumes recorded by the Multi-Commodity Exchange (MCX).
Bursa Malaysia Securities Publicly Reprimands Tracoma Holdings Berhad And Fines Six Directors A Total Of RM135,000