John Lothian Newsletter: CBOE Holdings, Inc. Announces Reorganization and Names New Officers; Eurex Futures Exchange Gets New Trading System; Brokers suspended in Libor inquiry

Feb 9, 2012

CBOE Holdings provides details of a major internal reorganization of management roles. Eurex announces that since it won’t be merging with NYSE-Euronext, it will replace its trading engine at the end of 2012. The Libor price-fixing investigation continues, and brokers in London and Asia are suspended or fired as the inquiry deepens. In a fully-packed top box today, John Lothian shines a spotlight on MarketsReformWiki; he also takes aim at CME Group’s plans to sell the CBOT Building; Nicole Rohr has a piece about the upcoming Futures For Kids charity walk; and Sarah Rudolph provides a JLN Options interview with Steve Crutchfield of NYSE Amex.

Observations – Statistics – Commentary

One Year Makes All the Difference
By John J. Lothian

A year ago at this time, John J. Lothian & Company, Inc. was showing people something that we were working on behind the curtain; MarketsReformWiki.

We showed people the site and what we had, what we hoped to have and what we thought we needed. On February 28, we will celebrate the one year anniversary of the launch of this global regulatory reform online tool. The pressing question in the office is whether we will reach 1 million page views in the first year. We just passed 900K this week.

MarketsWiki did 1 million page views in its first year, then 2 million in the next. Despite MarketsReformWiki being a niche site in the greater scheme of things, there are lots of things that will happen in regulatory reform in the next 12 months to drive greater traffic.

We have already seen an acceleration of visitors to the site. At the 6 months mark, we were estimating we would see 700K page views the first year.

The other question in the office is whether MRW will see 1 million page views before MarketsWiki hits 20 million. MarketsWiki is at 19.2 million page view and climbing fast.

MarketsReformWiki has attracted an impressive audience of regulators, banks, exchanges, proprietary trading firms and many others to the site. It has become a very useful tool for the industry. Doug Ashburn, Jim Kharouf, Nicole Rohr, Ryan Lothian and others on the John Lothian News team have done a great job of developing this site.

When we launched, we hoped to add video, and we did that. Three months after launching MRW, we launched MarketsWiki.tv. When we launched we hoped to attract contributions from leading lawyers in this space. We did that too. And we have written our own commentaries as well.

But the heart of the site is all the cataloging of of proposals, comment letters, meeting notes and collateral material, calendars, PowerPoints, videos and more. The power of the Mediawiki software has been unleashed in developing this product.

For many, from their comments, this is our best work yet. But it is still a work in progress. We have a long road ahead of us in regulatory reform no matter which way the political winds blow. We will have global efforts of regulatory reform ongoing, even outside of the struggling US efforts.

And we have intrigue, suspense and lots at risk for how all this turns out.

When we were approached to build MRW, we were told we should get the law firms to pay for it because by the time the regulatory reform efforts were done, everyone would need a lawyer. Actually, everyone at MF Global needed a lawyer before then, both customers and executives. I don’t know if there has been a better time to be a futures lawyer in terms of work.

What this site could use is some more sponsors. We will be working on that in the coming days and weeks. We have built and developed the site, we have garnered support and we have attracted a great audience. This effort is worthy of your support. Ask us about becoming a sponsor.

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A Bad Trade
by John J. Lothian

Word broke yesterday that the CME Group had a buyer for the historic CBOT Building and the deal would close by June. The price of the deal was $150 to $180 million.

I just have one question. What numbskulls would sell a building at the corner of LaSalle and Jackson in Chicago? My apologies for name calling, but I just find this stupid. This is the greatest location in the Chicago financial district and it’s worth more in intangibles than all the money anyone could give me for this building.

The CME Group is a money machine. It does not need the cash. With interest rates low, this is the time to buy real estate, not sell it.

I get it that real estate is not futures trading, that the margins are different. I get that the CME Group may just break even on the CBOT Building. But what is the value of being closer to your customers? What is the value of having another significant aspect to your relationship with your customers in order to nurture their businesses?

I get it that in the era of electronic trading that the central meeting place does not hold the same value as in the days of open outcry trading. But it still has value, a lot of it.

I don’t buy into the idea that the CME Group is still made up of different groups of people, those from the Board and those from the Merc. But to hear the way that this issue is discussed, it is not the CME Group that is selling the CBOT Building, it is the Merc.

Maybe the Merc has its reasons to sell the CBOT Building, but from my perspective it is a bad trade. Ownership matters. Location really matters in real estate. And, the intangibles of owning LaSalle and Jackson are priceless.

(This column has raised some debate within John Lothian News. Jim Kharouf, editor-in-chief, will pen a counterpoint column in tomorrow’s newsletter.)

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CME Nears Deal to Sell Chicago Board of Trade Site
BY MAURA WEBBER SADOVI – WSJ
CME Group Inc. is close to a deal to sell most of the historic Chicago Board of Trade building for between $150 million and $180 million to a group that includes Chicago developer GlenStar Properties LLC, USAA Real Estate Co. and a Canadian pension fund, according to a person familiar with the matter.
http://jlne.ws/wng6IS

**** Priceless

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ISE Named “Best Exchange Client Service” at Wall Street Letter 2012 Institutional Trading Awards
NEW YORK, February 8, 2012 – The International Securities Exchange (ISE) announced today that it received the “Best Exchange Client Service” award at the Wall Street Letter 2012 Institutional Trading Awards. Winners were determined by a panel of independent judges and based on the level of innovation and client satisfaction demonstrated by the nominees.
http://jlne.ws/xN62Me

**** I thought the white gloves for the help desk personnel was a little over the top, but hey, if it helps you win best service, go for it!

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ICE says China backing US futures trades
By Telis Demos in New York – Financial Times
Chinese banks are filling in for European lenders in US agricultural finance, helping preserve trading activity in sugar and other commodities in the wake of MF Global’s collapse, according to a US exchange chief.
http://jlne.ws/x6uzlF

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Q&A – Ice Futures Europe’s David Peniket and Mike Davis
Pauline McCallion – Risk.net
In the second part of Energy Risk’s series on the future for the exchange-traded energy markets, Ice Futures Europe’s David Peniket and Mike Davis talk to Pauline McCallion about the likely direction of the market in 2012 and beyond
http://jlne.ws/zlBiwJ

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Milton Friedman’s 1971 Feasibility Paper
Leo Melamed
In honor of Milton Friedman’s centennial celebration, The Cato Journal has published the 1971 Feasibility Study by Milton Friedman on “The Need for Futures Markets in Currencies.”
http://jlne.ws/zJ3K3x

**** The AllSpark of financial futures.

****JM: John has helpfully provided the following link to TFWiki, that will explain that AllSpark thing to people who had (or were) Pokemon kids instead of Transformers kids: http://jlne.ws/xEIiA8

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Futures For Kids – Walk to Work 2012
by Nicole V. Rohr

Not too long ago, a couple of men working in the software business in the UK were on their normal train commute – from Kent in southeastern England to the center of London. They got out their iPhones and calculated how far they were actually traveling (roughly 36 miles) and thought, ‘Hey, I could walk that.’ And they did, for charity.

The Futures For Kids Walk to Work 2011 featured one 36-mile route from Kent to London, starting at 6 a.m. and hosting 29 walkers. The event raised £48,000, or a little more than $76,000. Walk to Work 2012 will be held on Friday, May 18, 2012, and has even loftier goals. Futures For Kids, started in 2008 and benefiting children’s charities, is shooting for a grand total of £200,000, with 50 walkers already registered for their choice of four different 36-mile routes.

David Setters, one of the founding Futures For Kids trustees, explained the challenges in organizing an event like Walk to Work. Aside from insurance questions (with the event not technically being a race) and sponsorship needs, Setters said that while he and the other walkers were on their route last year, they were already thinking of how the event could expand for 2012. Walkers are now able to join at the 10- and 20-mile markers, and charter sponsor Eurex is providing checkpoint refreshments along the way. Setters said that it is all in an effort to give back and get people involved without the thought of such a long walk scaring them away. The Eurex-sponsored finish line party helps chase away some of those fears, too.

“The idea is to give something back. You look at our business and you could say it’s going through some hard times at the moment, with MF Global and everything,” Setters said. “Over the years, it’s done fantastically well. There is a community, whether it’s in London or Chicago or New York or Asia, where everybody knows each other.”

The futures and options community, as well as the foreign exchange community with the help of Eurex, has come together to distribute the total money raised to four different children’s charities, three of which were beneficiaries of the event last year: HOPEHIV, EveryChild, Demelza and Variety (formerly Variety Club). Traiana, a subsidiary of ICAP, will sponsor awards for individuals and teams that raise the most money, either leading up to the event or on the day of the event.

Chicago-based Trading Technologies has already entered 10 people and Sungard has a team of six (and rising). Setters said that while fundraising prior to the event is obviously important, there were a few day-of surprises last year. Proprietary trading firm OSTC called friends in the trading room while they were walking and raised £5,000.

“It makes everything feel more like family, and goes back to the original goal of putting something back into our community, the futures and options community,” Setters said. “[It] is a global village, and in this instance of course, it’s a London village.”

For more information on Futures For Kids or Walk to Work 2012, please visit the website at futuresforkids.org.uk.

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JLN Options: Steve Crutchfield – NYSE Amex [INTERVIEW]
MarketsWiki.tv
JLN Options editor Sarah Rudolph spoke to Steve Crutchfield, CEO of the options business at NYSE Amex, about the 2012 Security Traders Association of Chicago (STAC) Conference and upcoming trends impacting the options market. Crutchfield, who spoke on a STAC panel titled “Cross Product Exchange Leadership,” discussed the Volcker rule and its effect on options, as well as trends in options volumes for 2012. Visit the NYSE Amex website. To see the agenda from this most recent STAC conference, click here.

Watch the video >

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Too Stupid Not To Fail…
In yesterday’s newsletter, John commented that we need an acronym for MF Global’s too-stupid-not-to-fail practices. A reader came through with the acronym for the following:

They Hurriedly Inappropriately Entrusted Funds (THIEF)

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Enroll Now in Industry-Driven Professional Development Courses
The IFM, a nonprofit educational foundation, and an affiliate of the Futures Industry Association, offers a variety of courses for new employees studying for their Series 3 exam, to advanced industry topics for seasoned veterans and firm clients, including:

Futures and Options/Series 3 Exam Course
Feb. 28-29 9:00 AM-5:00 PM in Chicago
This two-day course provides a strong foundation in the fundamentals of market theory and industry practice. The course covers relevant aspects of the futures, options and underlying cash markets for both physical commodities and financial instruments. The program also provides a comprehensive treatment of the major types of futures and options orders, the principles and practices of futures clearing and margining, hedging and industry regulation.

Introduction to Treasury Futures: Factoring the Risk
Mar 1 9:00 AM-12:00 Noon in Chicago
Treasury futures are one of the most popular futures contracts for both hedging and speculating. Some of the factors that influence value in the treasury complex include: interest rate risk, inflation risk, and the willingness of investors to continue buying Treasury debt. These factors lead to volatility in the underlying value of debt instruments as interest rates move up or down. This IFM short course provides the foundation to understand how the cash and futures markets are connected, and how to guard against interest rate volatility.

Treasury Futures Basis: Beyond the Risk
Mar 1 2:00 PM-5:00 PM in Chicago
This short course extends the knowledge gained from the IFM’s Introduction to Treasury Futures: Factoring the Risks, and explores the important, yet subtle nuances of the fixed income future contracts. We begin by defining and calculating the gross basis, net basis, implied repo-rates, and the synthetic duration of a hedged position. Next we will consider how high or low must interest rates move to precipitate a cross-over in the CTD bond/note.

For complete course listing and details, visit the IFM at http://www.theifm.org/, or call 202.223.1528.

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MarketsWiki Page of the Day
CBOE Holdings Inc.
http://jlne.ws/zGYc8s

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MarketsWiki Recent Updates

People

David Setters; Philip M. Slocum; Scott A. Brusso; Edward Provost; Carol Kennedy; John Spiegel; Bradley Samuels; Michael Todd; Eileen Smith; David Ruder

Companies, Organizations and Groups

Quote MTF; NASDAQ OMX Group, Inc.; CBOE Holdings Inc.

Statistics

19,220,019 pages viewed, 6,684 articles, 136,670 edits
MarketsWiki Statistics
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Lead Stories

CBOE Holdings, Inc. Announces Reorganization and Names New Officers
Press Release
CHICAGO, Feb. 8, 2012 /PRNewswire/ — CBOE Holdings, Inc. (NASDAQ: CBOE) announced today an organizational realignment, including the consolidation of two major divisions, the creation of new areas of business development, and the appointment of new CBOE officers. The reorganization was designed to better align key business functions and operations with the company’s evolving business and market models.
http://jlne.ws/yjfsl9

Deutsche Boerse’s Eurex Futures Exchange Gets New Trading System
By Nandini Sukumar – Bloomberg
Feb. 9 (Bloomberg) — Deutsche Boerse AG said it’s Eurex futures exchange will move to a new trading system in the fourth quarter after its plan to buy NYSE Euronext was blocked by European competition regulators.
http://jlne.ws/z6JzmL

Brokers suspended in Libor inquiry
By Caroline Binham, Brooke Masters and Megan Murphy in London – Financial Times
More than a dozen traders and brokers in London and Asia have been fired, suspended or put on leave by their employers as a multinational probe into alleged manipulation of crucial global lending rates accelerates.
http://jlne.ws/zs91CX

NFA levies $700,000 fine against futures and forex firm Peregrine Financial Group
Press release
National Futures Association (NFA) has levied a fine of $700,000 against Peregrine Financial Group, Inc. (Peregrine), a Futures Commission Merchant and Forex Dealer Member of NFA with headquarters in Cedar Falls, Iowa and Chicago, Illinois.
http://jlne.ws/z1mkVu

**** PFG Best provided John Lothian News’ Editor-in-Chief Jim Kharouf with the following comments regarding this story:

* NFA has taken several recent BCC actions against our competitors alleging similar violations of NFA rules. The allegations against PFGBEST in the BCC action concerns general supervision of 4 of its 113 guaranteed introducing brokers (“GIB”). These 4 GIBs were alleged to have recommended trading strategies to their clients that maximized commissions. PFG quickly terminated these 4 GIBs when NFA’s concerns were initially raised.

* The Complaint also raised allegations concerning one of PFGBEST outside auditors (Investment Reference, owned by Dennis Stahr). The gist of the allegations revolve around Dennis Stahr being registered at firms that had had sales practice issues. Investment Reference was widely used in the industry to perform audits of branches and GIBs for several FCMs since 1983. Being proactive with the ever changing regulatory environment PFGBEST in 2010 started using the services of another firm to conduct the GIB audits.

* Since PFGBEST takes its regulatory responsibilities very seriously, in its Settlement Offer PFGBEST agreed to retain a consultant to review our compliance procedures.

* The BCC Complaint is not a result of PFGBEST annual audit that was conducted by the NFA in 2011. In fact, the most recent NFA audit did not have any findings regarding our supervision of our GIB network. Further, in 2011, NFA audited 34 of our GIBs and noted no major violations.

* More importantly, neither the BCC Complaint alleged nor did PFGBEST’s 2011 audit have ANY violations regarding the segregation of customers funds or PFGBEST’s financial strength. In light of what has happened with MFGlobal, it is important to know that the segregation of customer funds is audited by NFA and our independent CPA annually.

SEC Eases Reporting for Audits of Trading
BY ANDREW ACKERMAN – WSJ
WASHINGTON—U.S. regulators are altering plans for a multibillion-dollar computer system to monitor trades on stock exchanges and other markets to blunt criticism that the project would be expensive and to speed the system’s implementation.
http://jlne.ws/AzTRny

Cost of ‘tail risk’ protection to soar
By Telis Demos and Michael Mackenzie in New York – Financial Times
Not so long ago, the idea of “tail risk” was alien to many investors. Now, bruised by the 2008-09 financial crisis, fund managers pay to insure their portfolios against market meltdown. And tough, new regulations mean that the cost of that protection could soon soar.
http://jlne.ws/zoCvED

CME Group: Corporate Bonds as Collateral for Cleared Interest Rate Swaps
Press Release
We are pleased to announce that we will expand our already robust clearing collateral program, effective March 12, 2012, to allow corporate bonds to be pledged as initial margin collateral for Cleared OTC Interest Rate Swaps. Previously, we only accepted corporate bonds as collateral for futures. With this expansion, Clearing Members will be able to post up to $3 Billion in select assets, including corporate bonds, with specific limits determined by the needs and margin requirements of their customers.
http://jlne.ws/wa0Cl6

Ranchers Dismiss CME Protection Fund as Chickenfeed to Cattlemen
By Elizabeth Campbell – Bloomberg
Feb. 9 (Bloomberg) — Pete Bonds, a 59-year-old Texas rancher, doffed his cowboy hat and stepped to the microphone. He wanted to tell an executive from CME Group Inc., owner of the world’s largest futures market, what he thought of the $100 million fund set up to help protect ranchers and farmers from a collapse like that of commodities broker MF Global Holdings Ltd.
http://jlne.ws/wo16KT

MF Global Customers Protest Corzine’s ‘Wrongful Act’ Insurance
By Joseph Checkler Of DOW JONES DAILY BANKRUPTCY REVIEW
Customers of MF Global Holdings Ltd. (MFGLQ) say the failed brokerage shouldn’t be allowed to pay for a potential “wrongful act” legal defense of former Chief Executive Jon S. Corzine and others with money from MF Global’s own insurance subsidiary.
http://jlne.ws/A7Cq3I

Goldman executive talks up Volcker rule
By Tracy Alloway in New York – Financial Times
A senior Goldman Sachs executive told an industry conference that a ban on speculative trading at commercial banks could end up improving profitability, breaking with the consensus about the effects of the new financial regulation.
http://jlne.ws/xFf1EV

New Greek demands threaten debt deal
By Peter Spiegel in Brussels and Kerin Hope in Athens – Financial Times
Representatives of eurozone bail-out lenders were scrambling on Thursday to finalise an agreement with the Greek government after last-minute demands by Athens threatened to upend the deal.
http://jlne.ws/AaKxXp

France Details Financial Tax Proposal, Hopes To Set Precedent
By William Horobin Of DOW JONES NEWSWIRES
PARIS (Dow Jones)–The French government Wednesday gave details of a financial transaction tax it hopes will bring in over EUR1 billion (US$1.3 billion) a year in revenue and drive away speculative trading activities, including high frequency trading.
http://jlne.ws/AvpJ6s

Draghi: The Eurozone’s Hero?
FOX Business
If President Obama wanted to thanks someone for the relative calm in Europe that is buoying U.S. equity markets, perhaps he should consider an Italian economist few Americans have ever heard of.
http://jlne.ws/z3dxzE

Ernst & Young fined record $2m over audit
By Shahien Nasiripour in Washington – Financial Times
Ernst & Young has been hit with a record $2m fine for failing to properly audit a pharmaceutical company’s annual financial statements and disregarding its own internal policies.
http://jlne.ws/wAG6n5

CME close to selling part of Board of Trade building
Ryan Ori and Alby Gallun – Crain’s
(Crain’s) — A joint venture led Chicago developer GlenStar Properties LLC is in the process of buying two Chicago Board of Trade towers from CME Group Inc., sources say.
http://jlne.ws/A26S7y

Environmental Trading News

Warning on EU carbon market ‘meddling’
Financial Times
Europe’s largest employers’ group has warned against meddling in the carbon market to prop up sagging prices, just a day after one of the continent’s top energy executives declared the market “dead” and demanded urgent intervention to save it.
http://jlne.ws/zfjWbX

South Korean Lawmakers Vote for Limits on Greenhouse-Gas Emissions
Bloomberg
Lawmakers in South Korea voted to impose greenhouse-gas limits on the nation’s largest companies, overruling industry opposition and laying groundwork for the third emissions-trading program in the Asia-Pacific region.
http://jlne.ws/wJiQy9

Airlines seek swift end to row over EU CO2 scheme
Reuters
British Airways, Qantas and other airlines are calling on governments to find a swift resolution to a political dispute over the European Union’s carbon scheme, because the deadlock may create competitive distortions.
http://jlne.ws/z7Gkay

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Visit http://www.jlnenvironmental.com to subscribe.

Exchange & ECN News

Eurex to introduce new trading system in Q4 2012
Eurex announced today its plan to launch a completely new trading system. Subject to the required legal approvals, first roll-out is currently scheduled for December 2012, followed by a migration phase, where products will be moved in a stepwise approach from the current to the new trading system. It will be developed internally and based on Deutsche Börse Group’s proprietary global trading architecture, which is already in use at the International Securities Exchange (ISE).
http://jlne.ws/AxNPz5

CME Group Announces Record Energy Trading Volumes
NEW YORK, Feb. 8, 2012 /PRNewswire/ — CME Group, the world’s leading and most diverse derivatives marketplace, today announced it set a new record for trading volumes for its energy products on Tuesday, February 7. Trading volume for energy futures and options contracts totaled 3,489,302 contracts yesterday, climbing 13 percent higher than the previous record of 3,098,129 contracts on February 22, 2010.
http://jlne.ws/cjpXeb

S&P Lowers Rating On CME Group Amid MF Global Fallout
By Jacob Bunge and Ben Fox Rubin Of DOW JONES NEWSWIRES
Standard & Poor’s Ratings Services lowered its rating on CME Group Inc. (CME), saying the clearinghouse is increasing its financial risk due to the sudden growth of its over-the-counter clearing business, and it faced a hit to its reputation after the fall of MF Global Holdings (MFGLQ).
http://jlne.ws/zIxF5G

S&P cuts CME Group Inc
Reuters
Feb 8 – Standard & Poor’s Ratings Services said today that it lowered its long-term issuer credit rating on CME Group Inc. (CME Group) to ‘AA-‘ from ‘AA’ and affirmed its ‘A-1+’ short-term rating on the company. The outlook on the long-term rating is negative.
http://jlne.ws/ymgqdc

CBOE Holdings, Inc. Reports Solid Fourth Quarter And Record Full-Year 2011 Financial Results
Press Release
CHICAGO, Feb. 9, 2012 /PRNewswire/ — CBOE Holdings, Inc. (CBOE) today reported GAAP net income allocated to common stockholders of $31.3 million, or $0.35 per diluted share, in the fourth quarter 2011 compared with $30.7 million, or $0.31 per diluted share in the fourth quarter of 2010. On an adjusted basis, net income allocated to common stockholders increased 10 percent to $33.2 million, or $0.37 per diluted share, compared with $30.2 million, or $0.31 per diluted share, in the prior year period. Adjusted operating revenues for the fourth quarter were $120.2 million, an increase of 6 percent compared to $113.0 million in 2010?s fourth quarter.
http://jlne.ws/ybB2mc

ICE Sees 2012 Revenue Rising On Commodities Trade
By Jacob Bunge and Mia Lamar Of DOW JONES NEWSWIRES
IntercontinentalExchange Inc. (ICE) expects its revenue in 2012 to grow by at least 10% thanks to rising demand for the derivatives exchange operator’s commodity markets, with profits seen benefiting from a reduced tax rate, according to a senior executive.
http://jlne.ws/woRhll

ICE Rallies as Net Rises on Europe Energy Trading: Atlanta Mover
By Matthew Leising – Bloomberg
Feb. 8 (Bloomberg) — Intercontinental Exchange Inc., the second-largest U.S. futures market, rose the most since August as fourth-quarter profit gained 28 percent, led by European energy trading and over-the-counter clearing commissions.
http://jlne.ws/w2OGwE

ICE Announces Launch Of Futures Contracts On EUAAs
Press Release
http://jlne.ws/xwc58C

CBOE Holdings Declares First Quarter 2012 Dividend
CHICAGO, Feb. 8, 2012 /PRNewswire/ — CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that its Board of Directors has declared a quarterly cash dividend of $0.12 per share of common stock payable on March 23, 2012, to stockholders of record at the close of business on March 2, 2012.
http://jlne.ws/z7UISw

TMX Group Inc. Reports Results for the Full Year and Fourth Quarter 2011
http://jlne.ws/xNOzGL

TMX Group Inc. declares dividend of $0.40 per common share
http://jlne.ws/yhRieX

CME Group Clearing Advisory
REMINDER: Cross-Exchange Allocations (MOS) on FECPlus Utilizing FIXML 5.0 Scheduled for February 27, 2012
http://jlne.ws/zNbziR

[CBOE] Supplement to the Options Disclosure Document
http://jlne.ws/wPTJ0A

MICEX-RTS Group To Launch Direct Access Trading On Its FX Market For All Client Categories
Press Release
http://jlne.ws/Aypghn

[ASX] Australian Resources Conference 2012
http://jlne.ws/y40F9u

NZX 2011 Full Year Financial Results Analyst Call
Press Release
http://jlne.ws/xQF5q1

NYSE Euronext Announces Trading Volumes for January 2012
http://jlne.ws/w9oSCr

NYSE Euronext Signs First Contract to Manage Three China Securities Indices
http://jlne.ws/xKjJNJ

NYSE AMEX TO DELIST SECURITIES OF EASTERN LIGHT CAPITAL, INC.
http://jlne.ws/xU7Oh5

Banks, Brokers & Dark Pools

RBS Condoned Libor Conduct, Sought Scapegoats, Fired Trader Says
BusinessWeek
Royal Bank of Scotland Group Plc, which accused a fired Singapore trader of manipulating London interbank offered rates, had condoned such behavior and sought scapegoats in an internal probe, the former employee said.
http://jlne.ws/wdL0Tk

QUADRISERV APPOINTS CESTARO, TURNER AS CO-CEOS
NEW YORK, NY – February 8, 2012 – Growing securities lending innovator Quadriserv, Inc. announced today that Pasquale “Pat” Cestaro III and Bruce C. Turner have been named Co-Chief Executive Officers and Members of the Quadriserv Board of Directors.
http://jlne.ws/yfC4Ip

Knight’s Electronic Execution Services Knight Direct and Hotspot FX Win Institutional Trading Awards
PR Newswire via Yahoo! Finance
JERSEY CITY, N.J., Feb. 8, 2012 /PRNewswire/ — Knight Capital Group, Inc. (NYSE Euronext: KCG) today announced that Knight Direct was named Best Agency Broker – Algorithms and Hotspot FX was named Best …
http://jlne.ws/A9z41u

DealBook: Goldman Wins New York Fed Auction for A.I.G. Assets
New York Times
The Federal Reserve Bank of New York announced that it had sold securities with a face value of $6.2 billion to Goldman, which beat out four other investment banks in the auction.
http://jlne.ws/y0KA4b

Barclays Falls Short of Big Dreams
By DAVID ENRICH And DANA CIMILLUCA – WSJ
LONDON—In June 2009, top Barclays PLC executive Robert Diamond laid out an ambitious plan for the venerable British bank “to be the premier global investment bank,” a goal he hoped to achieve “over the next couple of years.”
http://jlne.ws/yK2hua

UBS MTF Trading Notification Addition Of Irish instruments
Press Release
http://jlne.ws/yUzXgs

Fees for closing accounts draw attention
Boston Globe
Upset about bank fees? Want to close your bank account? No problem, your bank says. Just one catch: There may be a fee for that. Many banks across the country, including several in Massachusetts, are charging customers if they close a checking or savings account within several months of opening it. Boston-based Sovereign Bank, Citibank, PNC Bank and US Bank charge $25. Some smaller financial …
http://jlne.ws/zBJMEn

Deutsche’s Trading Platform Is Tops in Europe, Portfolio Managers Tell Institutional Investor
Marketwire via Yahoo! Finance
NEW YORK, NY– – Money managers that acquire European equity research from multiple brokerages prefer to trade through Deutsche Bank; the firm captures first place in Institutional Investor’s inaugural …
http://jlne.ws/zXq9xh

Goldman Sachs’ van Praag retiring in March
Market Watch
Goldman Sachs Group Inc.’s colorful and sometimes controversial head of communications, Lucas van Praag, is retiring at the end of March.
http://jlne.ws/xnbLHn

UBS gives data on rivals in US tax probe
AFP via Yahoo! News
Swiss banking giant UBS has handed over to US tax authorities data indicating which of the bank’s rivals took on its American clients following a probe, it was reported on Thursday.
http://jlne.ws/xG1sT6

Citigroup Sued by Lehman for $2.5 Billion ‘Wrongfully’ Taken
BusinessWeek
Citigroup Inc.’s Citibank was sued for $2.5 billion by bankrupt Lehman Brothers Holdings Inc., which said the bank “wrongfully” withheld the money after it was transferred by Lehman in the months before its 2008 bankruptcy.
http://jlne.ws/yqcAs0

Deutsche Bank Said to Cap Immediate Bonuses at 200,000 Euros
BusinessWeek
Deutsche Bank AG, Germany’s largest lender, told employees it will impose a 200,000 euro ($266,000) cap on bonuses paying out this year, said three people with knowledge of the discussions.
http://jlne.ws/zKxyjZ

Credit Suisse Posts First Loss in Three Years on Investment Bank
BusinessWeek
Credit Suisse Group AG, the second- biggest Swiss bank, said it had a loss in the fourth quarter for the first time since 2008, hurt by “adverse markets” and costs to reorganize the investment bank.
http://jlne.ws/xzMA30

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2012/dig020912.htm

Regulator warns on input for derivatives rules
By Philip Stafford in London – Financial Times
Rules for key European legislation on off-exchange derivatives could be made with minimal industry consultation as the timetable is “unreasonable”, the top European markets regulator warned on Wednesday.
http://jlne.ws/ACZTmn

SEC Plays “Patty Cake” with Big Banks
Forbes
We’ve been demanding for years now answers to a core question coming from the financial collapse of 2008. Why have the securities regulators, namely the Securities and Exchange Commission, failed to punish the Wall Street banks that fueled the mortgage crisis by underwriting toxic mortgages and selling them to the public? Well, now we know.
http://jlne.ws/xKmayj

‘Perfect World’ Eludes Regulators in Aligning Global Swaps Rules
By Silla Brush and Jim Brunsden – Bloomberg
The potential for U.S. and foreign regulations to reach across national borders and create overlapping or conflicting rules is gaining urgency as global authorities seek to complete rules this year to prevent a repeat of the 2008 credit crisis.
http://jlne.ws/w2HHKw

CFTC Charges Texas Resident Christopher B. Cornett in Foreign Currency Fraud Action
CFTC.gov
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of an enforcement action against Christopher B. Cornett of Buda, Texas, charging him with solicitation fraud, issuing false account statements, misappropriating pool participants’ funds, and failing to register in connection with an off-exchange foreign currency (forex) fraud.
http://jlne.ws/yt2oEa

ESMA Chair Speaks At The AFME Market And Liquidity Conference
Press Release
http://jlne.ws/AqchCD

FSB Legal Entity Identifier (LEI) Initiative Industry Advisory Panel – Membership
Press Release
http://jlne.ws/wI9cvz

SIFMA Statement On Proposed FATCA Regulations
Press Release
http://jlne.ws/yTYIYB

Investments – Indexes – Managed Futures – Managed Funds

Index Contingent Credit-Default Swaps Ready To Trade
By Katy Burne Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–A group of dealers and investors have agreed on uniform trading standards for a new type of privately traded credit derivative, anticipating a rare growth spurt in a quiet corner of the much-criticized $32 trillion credit-default swap market. The so-called “contingent” credit-default swaps have been traded on individual borrowers for a few years, but now will be made available to trade on a basket or index.

A Not-So-Noble Idea
ISDA media.comment
Joseph Stiglitz, the economics professor and Nobel laureate, doesn’t much like OTC derivatives. He thinks, for example, that banks should be banned from trading them. So it’s not a big surprise that he sees OTC derivatives – specifically CDS – as a problem in the negotiations over the Greek debt crisis.
http://jlne.ws/vZGw52

The hedge fund mini-crisis
The Christian Science Monitor
The hedge fund industry may be just as overbuilt as the credit and housing markets were.
http://jlne.ws/yNM8jV

Bacon’s Moore Is Said to Invest $800 Million in Former Traders’ Hedge Fund
Bloomberg
Moore Capital Management LLC, the New York firm founded by Louis Moore Bacon, invested $800 million in a hedge fund started last year by two of its former traders, according to two people with knowledge of the matter.
http://jlne.ws/xsuGas

Lazard Asset Management Launches Alternative Strategies 1099 Fund
Business Wire via Yahoo! Finance
Lazard Asset Management LLC today announced the launch of the Lazard Alternative Strategies 1099 Fund , a fund of hedge funds that offers investors the ability to participate in the hedge fund asset class with a minimum investment of $25,000.
http://jlne.ws/yHPH0c

Hedge Fund Snaps Seven Annual Gains in ‘Ugly Year’: Commodities
BusinessWeek
Michael Coleman is suspending a three-decade trading career to focus on risk after a year in which the Merchant Commodity Fund he co-founded lost 30 percent and its assets contracted twice as much.
http://jlne.ws/w9zmx3

Group suspends California public pension reform ballot effort
The Sacramento Bee
The cause of pension reform in California took a significant body shot Wednesday when a group hoping to put an overhaul measure before voters this year suspended its campaign.
http://jlne.ws/wMxSTe

Deadline for Hedge Fund, Private Equity Fund Managers to Register with SEC Rapidly Approaching
Forbes
Since the Dodd-Frank Act eliminated the private adviser exemption that many investment advisers relied on to avoid registering with the SEC, hedge fund and private equity fund managers now face a deadline of March 30, 2012 to file their registration forms and become be subject to the same registration requirements, regulatory oversight and other requirements that apply to other SEC-registered …
http://jlne.ws/AoPqZz

Falcone’s lulu loan
New York Post
Billionaire Phil Falcone’s hedge fund, which tumbled by almost half last year because of a troubled wireless venture, is paying a 15 percent interest rate for a $190 million loan, almost triple what the riskiest corporate borrowers pay, said two people with knowledge of the loan. Falcone borrowed the…
http://jlne.ws/yG6k7e

VelocityShares Launches Suite of Eight Commodities-Related ETNs including 3x Leveraged Long and Inverse Crude Oil, Brent Crude, and Natural Gas and 2X Leveraged Long and Inverse Copper ETNs
Press Release
http://jlne.ws/yDCipX

Technology News

Neonet Selected as Execution Service Provider by Öhman Securities Finland
Press Release
Neonet, the independent execution services provider, today announced that E. Öhman J:or Securities Finland Ltd has entered an Execution Service Provider agreement to support its trading operations.
http://jlne.ws/wjMf8d

SunGard’s Cash Management Investment Study Highlights Growing Importance of Money Market Funds for Corporate Treasurers
http://jlne.ws/zcII5n

First Financial Investment Fund (a division of FFAM) Selects SunGard’s AvantGard Predictive Metrics
http://jlne.ws/Ag9kVi

Edison Trading Selects Trayport’s Automated Trading And Implied Price Calculator Products To Optimise Trading
Press Release
http://jlne.ws/xqmavY

Thomson Reuters Goes Live with Delta Data Factory
Press Release
First Derivatives, a leading provider of software and consulting services to the capital markets industry, is pleased to announce that, Thomson Reuters pricing and reference data group have selected and fully implemented First Derivatives’ Delta Data Factory (DDF) service.
http://jlne.ws/wvgMCS

Media News

Groupon Posts Loss of $9.8 Million
NY Times
The fourth-quarter loss, disclosed by Groupon in its first financial report as a public company, disappointed investors, who drove its shares down sharply in after-hours trading.
http://jlne.ws/xd5fbW

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cmegroup.com/tools-information/calendars/

Asia-Pacific News

OSE President Says Glitch at Tokyo Stock Exchange No Barrier to Merger
Bloomberg
The merger of Japan’s two biggest bourses won’t be derailed by the Tokyo Stock Exchange’s worst trading disruption in six years or European regulators blocking another deal last week, Osaka Securities Exchange Co. (8697) President Michio Yoneda said.
http://jlne.ws/wf2Do2

China to Reintroduce Government-Bond Futures
WSJ
SHANGHAI—China is on track to reintroduce the trading of government bond futures, a major financial derivatives instrument banned 17 years ago after a trading scandal, a person familiar with the matter said Thursday.
http://jlne.ws/yzQPd4

NYSE Euronext Signs First Contract To Manage Three China Securities Indices – First Foreign Company To Oversee The Calculation And Administration Of CSI Indices
Press Release
http://jlne.ws/wj0hv4

Goldman Sachs to Buy 4.8% of Mongolia’s Trade & Development Bank
BusinessWeek
Goldman Sachs Group Inc., the fifth- biggest U.S. bank by assets, will buy 4.8 percent of Trade & Development Bank of Mongolia LLC to help the lender develop as the economy expands.
http://jlne.ws/y9k7W3

[TSE] Release of the “Improvements to Listing Rules pertaining to Amendments to the Financial Instruments and Exchange Act and Consolidation of Trading Units”
http://jlne.ws/AELSGa

[TFX] Rollover of Leading Contract Month
http://jlne.ws/wtA7f8

Frontier Markets

DFSA Announces its Chief Executive to Step Down Later This Year
Dubai, UAE, 9 February 2012: The Dubai Financial Services Authority (DFSA) announces, today, that after nearly four years in the Chief Executive’s role, Mr Paul M Koster has decided to step down in September 2012.
http://jlne.ws/9LW62j

Bursa Malaysia Announces 29% Increase In 2011 Patami On Strong Securities And Derivatives Trading Performance
Press Release
http://jlne.ws/AwYc1n

MSCI February Index Review Announcement Scheduled for February 15, 2012
Business Wire via Yahoo! Finance
MSCI Inc. , a leading provider of investment decision support tools worldwide, including indices, portfolio risk and performance analytics and corporate governance services, will announce the results of the February 2012 Quarterly Index Review for the MSCI Equity Indices – including the MSCI Global Standard, MSCI Global Small Cap and MSCI Micro Cap Indices, as well as the MSCI Global Value and …
http://jlne.ws/A4XM06

Templeton’s Mobius undeterred by Nigeria unrest
Reuters via Yahoo! News
http://jlne.ws/zGa8aL

Miscellaneous News

Slay the Basel Accord Beast
Steve Forbes
The Fed is not the only obstacle to a sound, sustainable expansion. One constructive step the next President’s new financial team should take is to have the U.S. abandon the so-called Basel Accord approach to international bank regulation.
http://jlne.ws/yBKbQi

On ‘Bleak’ Street, Bosses in Cross Hairs
By LIZ MOYER – WSJ
Wall Street’s bleak bonus season just got bleaker at Goldman Sachs Group Inc. and Morgan Stanley, where it is becoming clear that traders aren’t the only ones at risk of having their pay taken back. Their bosses are on the hook, too.
http://jlne.ws/xhbbYK

A Star Panel Debates Financial Crisis Prosecutions
By PETER LATTMAN – NY Times
Did felons get a free pass in the financial crisis? That was the provocative title of a panel discussion at New York University School of Law on Wednesday, featuring a trio of bold-faced names in the white-collar world
http://jlne.ws/xiC9xo

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