Hits & Takes
By JLN Staff
Former CBOT and MidAm member Darren S. Bohm passed away. I knew him from my days of trading on the MidAmerica Commodity Exchange. He most recently was with Tradelink, according to his LinkedIn page.~JJL
Want to hear something scary? Physical gold investors in Canada might want to check their holdings after news broke that a sealed, “pure” gold wafer certified by the Royal Canadian Mint contained no gold. This has echoes of the 2012 gold bar scare which resulted from the discovery of a tungsten filled gold bar. (If you’re looking for a more macro scare, take a look at a chart of G20 debt compared to GDP.)~SD
Supporting the LaSalle Street Trading Tech Awards not only helps underserved Scouts earn merit badges, but more importantly, it inspires them. Through the Trading Tech 300 program Scouts earn STEM-focused merit badges with the assistance of professionals in the financial district. Please consider investing some of your charitable giving budget in a program that is educating and positioning our next generation of talent. Join industry VIP’s to honor those who partnered with the Boy Scouts to provide merit badge clinics throughout the year at the LaSalle Street Trading Tech Awards in the iconic Chicago Board of Trade Building on November 9.~JJL
The Industry Discusses MiFID II, Part II
At the 33rd Annual FIA Futures and Options Expo in mid-October, John Lothian News spoke with a variety of industry participants about upcoming milestones and trends in financial markets.
This is the second video in the series focused on MiFID II. Specifically, part two focuses more on the MiFID II effects on U.S. based participants. In part two, Drew Shields, CTO of Trading Technologies, Ed Tilly, chairman and CEO of Cboe Global Markets, Neal Brady, CEO of Eris Exchange, Julie Winkler, chief commercial officer for CME Group, and Ben Morof, chief compliance officer forTeza Capital Management, share their thoughts on MiFID II implementation.
CFTC Commissioner Behnam Named Sponsor of the Market Risk Advisory Committee; Agency Also Announce Temporary Sponsors for Remaining Committees
The Commodity Futures Trading Commission (CFTC) today announced that Commissioner Rostin Behnam will sponsor the Market Risk Advisory Committee (MRAC). The agency also announced temporary sponsors for the Agriculture Advisory Committee and the Global Markets Advisory Committee, until additional Commissioners are confirmed by the U.S. Senate.
***** This news was actually first reported during the press conference at Expo following the chat with the new CFTC Commissioners.~JJL
CME Group Expands Base Metals Offering with New Copper Premium Shanghai (Metal Bulletin) Futures Contract
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will expand its base metals offering with the introduction of a new Copper Premium Grade A CIF Shanghai (Metal Bulletin) futures contract to begin trading on November 20, 2017. Pending regulatory approvals, the new contract will be available for trading on CME Globex and for submission for clearing through CME ClearPort. It will be listed with and subject to the rules and regulations of COMEX.
*****CME Group makes metals market news during LME Week. Nice!~JJL
Focus – Monthly insights from the WFE and our Member Exchanges
World Federation of Exchanges
Featuring: Loh Boon Chye – CEO, Singapore Exchange (SGX); Kesara Manchusree – President, The Stock Exchange of Thailand; Looking back at the WFE & Imperial College Technology Conference – a video; JPX kick starts IOSCO’s inaugural World Investor Week 2017; and NSE launches state-of-the art data centre
Monday’s Top Three
Yesterday’s top story revolved around a particularly odd development in the world of fund management – Nasdaq Claims It Is the Victim of an ETF Heist. Our second story was about the Nodal Exchange, DAT and Transrisk’s new trucking freight futures market – A long overdue futures market could decrease rate volatility in trucking. Third was a Nobel Laureate’s thoughts on monopolies – America Has a Monopoly Problemóand It’s Huge.
MarketsWiki Page of the Day: Susquehanna International Group
Susquehanna plans to introduce wagering on football, basketball from Dublin and other sports.
|MarketsWiki Statistics Sponsored by Level Trading Field|
HKEx’s chief defends LME deal, says will ‘eventually recoup’ the £1.4bn paid
Henry Sanderson, Neil Hume – FT
Charles Li, head of Hong Kong Exchanges and Clearing, defended his £1.4bn purchase of the London Metal Exchange, saying it was a rare asset that would eventually recoup the money paid for it.
Brexit help wanted: Europe’s biggest exchanges seek new CEOs
John Detrixhe, Quartz
Europe’s biggest exchange operators are seeking new chief executives that will be at the helm of their companies as Brexit unfolds. London Stock Exchange Group CEO Xavier Rolet is departing after leading the company for eight years, while Deutsche Boerse boss Carsten Kengeter is leaving after being dogged by insider trading allegations.
A Well-Known Quant Firm Is Looking for Traders Who Want to Bet on Sports
Kit Chellel and Annie Massa – Bloomberg
Susquehanna will wager on football, basketball from Dublin; Firm’s founder Yass is a poker whizz who deploys statistics
Susquehanna International Group has always embraced game theory, taking employees to baseball games and using poker as a tool for teaching its traders. Now the U.S. firm is betting that gambling on sports could be its next winning investment strategy.
Morgan Stanley quits brokerage industry pact on recruiting
Elizabeth Dilts, Olivia Oran – Reuters
Morgan Stanley is quitting a pact it signed with rival securities brokerages over a decade ago agreeing not to sue one another when brokers quit to join rivals and take clients with them.
The Dow just logged its longest period without a 1% intraday move since 1930
Mark DeCambre – MarketWatch
The Dow Jones Industrial Average carved out fresh history Monday, in an otherwise downbeat day, with a historic period of relative tranquility on Wall Street.
Day trader made $700,000 in a scheme targeting hacked online brokerage accounts, prosecutors say
Liz Moyer – CNBC
Add online brokerage accounts to the list of things that can be hacked for gain. A Pennsylvania resident describing himself as a day trader piggybacked off trades made in hacked brokerage accounts to generate $700,000 of illicit profit, federal prosecutors in Brooklyn and the Securities and Exchange Commission said Monday.
He turned his life around with own trading system; Founder of SF5 devised the unique TradersGPS as a remisier to make winning bets and pay off his debts
Rupali Karekar – Straits Times
Former remisier Collin Seow was only six months into his new job and expecting his second child in 2007 when he encountered a major obstacle.
This $13bn hedge fund has been hiring a lot of quants
Paul Clarke – eFinancialCareers.com
Call it a sign of the times, but even as Capula Investment Management has been losing senior investment staff in more traditional strategies, it’s been building its quant desk.
Jail bankers who caused 2008 crash, says Gordon Brown
Hamish Macdonell, Scottish Political Editor – The Times
Guilty bankers should be jailed and their pensions and bonuses revoked as payback for the 2008 financial crisis, according to Gordon Brown.
Agency Bond-Rigging Probe Is Said to Be Dropped by Britain’s FCA
Suzi Ring – Bloomberg
FCA told four traders at center of probe the case was closed; Probe was into possible manipulation of $9 trillion SSA market
The U.K. Financial Conduct Authority has closed a two-year investigation into possible manipulation of the $9 trillion agency bond market, according to people with knowledge of the situation.
Wall Street Bonuses Likely to Rise This Year, DiNapoli Says
Hannah Levitt and Katherine Chiglinsky – Bloomberg
Wall Street bonuses could increase for the second year in a row as profits at securities firms surged in the first half, New York State Comptroller Thomas DiNapoli said.
Bank of England believes Brexit could cost 75,000 finance jobs
Kamal Ahmed – BBC
The Bank of England believes that up to 75,000 jobs could be lost in financial services following Britain’s departure from the European Union.
Exchanges, OTC and Clearing
CME to launch China copper premium contract
CME Group, the world’s largest futures market operator, said on Tuesday it would launch a copper premium Shanghai contract to build on a surge in copper trading on its Comex exchange.
London Metal Exchange in talks with online platforms
Eric Onstad – Reuters
The London Metal Exchange (LME), which has lost volumes to over-the-counter trading, is looking at forging alliances with online platforms for industrial metals to recoup profits from the growing OTC business, its CEO said.
ISDA SwapsInfo Third Quarter 2017 Review
The ISDA SwapsInfo Quarterly Review provides analysis of interest rate derivatives (IRD) and index credit default swap (CDS) trading activity. The report provides a breakdown of publicly available data to analyze the impact of regulatory change on swap execution facility (SEF) and bilateral trading volumes, as well as cleared and non-cleared activity.
ISDA Launches Swiss Module for ISDA Resolution Stay Jurisdictional Modular Protocol
The International Swaps and Derivatives Association, Inc. (ISDA) today announced the launch of a Swiss module to the ISDA Resolution Stay Jurisdictional Modular Protocol (JMP). The new module will allow market participants to comply with Swiss regulations that require contractual stays to be included into certain financial contracts not governed by Swiss law.
LCH appoints new chief operating officer; John Horkan, the current head of North America at LCH, will take on the role of chief operating officer.
Hayley McDowell – The Trade
LCH has appointed a new chief operating officer (COO), shortly after naming Daniel Maguire as its new chief executive officer.
Theranexus takes its first steps on Euronext Growth
Theranexus, a French biotech company that develops drugs for the treatment of central nervous system disorders, celebrated today its listing on Euronext Growth (ticker code: ALTHX). Theranexus was part of the first TechShare class of 2015, and is the third company in the programme to go public, joining a community of over 330 tech companies listed on Euronext.
Activated link to Eurex Website for the retrieval of KIDs and further information regarding the PRIIPs regulation
With this circular, Eurex Deutschland (Eurex) would like to inform about:
Report on Initial Public Offering Applications, Delisting and Suspensions
Itiviti Integrates ETF Data From IHS Markit in Delta One Solution
Itiviti, a global technology provider for the capital markets industry, today announced a strategic alliance with IHS Markit, a world-leader in critical information and analytics solutions, to create a turnkey ETF solution integrating the multi-award winning Tbricks by Itiviti trading platform with SOLA, the comprehensive ETF data service from IHS Markit.
France says taxes on US tech groups would ‘restore balance’; Digital economy minister Mounir Mahjoubi stresses need for fair competition
Harriet Agnew and Anne-Sylvaine Chassany – FT
France’s efforts to impose a new tax on US groups such as Amazon and Google should not be seen as a sign that centrist president Emmanuel Macron has turned anti-technology, the country’s digital economy minister has said.
Bitcoin mania has students flocking to crypto classes at Stanford and other top computer science schools
Ari Levy – CNBC
CryDan Boneh, co-director of the Stanford Computer Security Lab, said cryptography classes are red hot; Over 1 million people have signed up for his online class; Carnegie Mellon hired a cryptography expert from Microsoft Research to help build out its program.
ptocurrencies are surging in value, and university students want in on the action.
Don’t let the bitcoin bubble blind you to the wonders of smart ledger technology
Michael Mainelli – City AM
The smart ledger community needs to help clarify the use of tokens and coins in its own best interest (Source: Getty)
Last Monday, 500 people attended the Long Finance Digital Currency Educational Trade Fair.
U.S. regulator asks Trump not to dismantle class-action rule
Lisa Lambert, Pete Schroeder – Reuters
A top U.S. regulator for Wall Street took the unusual step on Monday of directly asking President Donald Trump to veto a resolution that allows financial companies to block customers from banding together to sue, a request likely to be ignored.
McCain warns: We must ‘fight against propaganda and crackpot conspiracy theories’
Chris Perez – NY Post
Sen. John McCain has a message for America: Wake up! The Vietnam war hero and former Navy pilot issued the plea on Monday night during a speech at the US Naval Academy ó in which he urged people to “fight against propaganda and crackpot conspiracy theories.”
Mueller’s Moves Signal Broad Scope; Guilty plea shows special prosecutor has the ability to flip people
Joe Palazzolo and Jacob Gershman – WSJ
With Monday’s unsealing of a 12-count indictment and a guilty plea, Special Counsel Robert Mueller signaled that his probe into alleged Russian interference in the 2016 presidential election has taken him far beyond the campaign, former prosecutors and legal experts said.
Facebook and Twitter to seek help in online manipulation fight; Groups to testify to Congress that Russian meddling in US election was wider than thought
Hannah Kuchler – FT
Facebook, Google and Twitter will call for help in the battle against online manipulation when they testify to Congress on Tuesday, while revealing that Russian meddling ahead of the US election was wider than previously reported.
The Trump Deregulatory Juggernaut Is Rolling
Gerald F. Seib – WSJ
Why, you might ask, are the financial markets and the business community so happy with the Trump administration? After all, a Trump presidency carries the risk of a trade war, which alarms investors and big-business leaders; in fact, the business community is actively working against the administration’s threat to deep-six the North American Free Trade Agreement.
Betting industry faces heavy losses as crackdown begins
Andrew Ellson, Consumer Affairs Correspondent – The Times
Bookmakers will see their profits slashed and advertising rules tightened after the government published a long-awaited review on the industry today.
Treasury plan to weaken capital rules has real economic costs
William R. Cline – American Banker
In the wake of the financial crisis, new regulations on bank capital and stress tests strengthened the ability of the major U.S. financial institutions to withstand shocks. The Trump administration’s plans to weaken capital requirements threaten to undo these gains. If they go forward, the financial system could again be dangerously vulnerable.
Day Trader Charged in Brokerage Account Takeover Scheme
The Securities and Exchange Commission today charged a day trader based in the Philadelphia area with participating in a scheme to access the brokerage accounts of more than 100 unwitting victims and make unauthorized trades to artificially affect the stock prices of various companies.
Live: FCA boss Andrew Bailey confirms details of second RBS-GRG investigation during intense Treasury committee grilling
Catherine Neilan -City AM
The head of the Financial Conduct Authority has revealed details of the City watchdog’s second investigation into RBS’ small business unit during an intense grilling from MPs.
Bets on the Next Fed Chair: A History of Speculation Gone Wrong; It is tough to make money from betting on a new chairman’s hawkishness or dovishness, even if you knew who it was going to be
James Mackintosh – WSJ
President Donald Trump’s The Apprentice-style hiring process for the Federal Reserve chair is due to end this week, and it looks like the message to Janet Yellen is: “You’re fired!”
Powell leading in Trump’s Fed chair reality-TV spectacle; Serving governor would be continuity candidate but president keeps his audience on tenterhooks
Sam Fleming in Washington – FT
Donald Trump is preparing an announcement on the next Federal Reserve chair this week with governor Jay Powell said by administration officials to be the leading candidate in what remains an unpredictable process.
Dubai Financial Services Authority Continues To Develop Its Funds Regime
The Dubai Financial Services Authority (DFSA) has today conulted on a comprehensive package of proposals to support the continued development of the growing funds industry in the Dubai International Financial Centre (DIFC).The proposals are wide-ranging and are designed to provide greater flexibility for investors and fund managers in the Centre.
ASIC publishes business plans
ASIC today published its 2017 – 18 business plans.
Each year ASIC publishes business plans for each of the sectors it regulates. These are published by 31 October. This is part of ASIC’s commitment to transparency and accountability.
ESMA publishes the 21st Extract from the EECS’s Database of Enforcement
The European Securities and Markets Authority (ESMA) has published an extract from its confidential database of enforcement decisions on financial statements. The extract includes a selection of 12 decisions taken by national enforcers in the period from June 2015 to February 2017.
Investing and Trading
IMF warns volatility products loom as next big market shock
Miles Johnson – Financial Times
The International Monetary Fund has warned that the increasing use of exotic financial products tied to equity volatility by investors such as pension funds is creating unknown risks that could result in a severe shock to financial markets.
Private Equity Presentations: Are Some Tall Tales?
Preston McSwain – CFA Institute Enterprising Investor
Tall tales. They are part of the folklore of all cultures. Think of Paul Bunyan; the “big one that got away;” and even a few stories from Garrison Keillor’s Lake Wobegon, “where all the women are strong, all the men are good-looking, and all the children are above average.”
Franklin Templeton Undercuts BlackRock on Single-Country Stock ETFs
Chris Dieterich – WSJ
Another front in the long-running ETF fee war? How about completely new theaters of operation.
Franklin Templeton Investments, a unit of Franklin Resources, announced the launch of 16 ultra-low-cost foreign stock ETFs that will undercut the management fees of nearly every rival product currently on the market.
A Stock Market Where the Rally is Actually Deserved
Richard Barley – WSJ
Patience is paying off for European stocks. The long-awaited promise of an earnings recovery is becoming reality this year, and in the process is setting eurozone stocks apart in a very good way from their U.S. peers.
TD Ameritrade ETF Move Spotlights Shelf-Space Practices
Asjylyn Loder and Daisy Maxey – WSJ
TD Ameritrade’s controversial decision to overhaul its commission-free ETF platform spotlights a little-known corner of the investment industry: paying for access to investors.
TD Ameritrade announced last week that it was revamping its lineup of exchange-traded funds that are exempt from trading fees, and will now make ETF issuers pay for the privilege of trading commission-free. The decision rankled some financial advisers, who say the move may hurt smaller savers and alienate some clients.
Why the Dow Jones Industrial Average Is Crushing the S&P 500 in October; Some investors remain anxious about what could go wrong for a stock rally that has sent the DJIA to 54 record closes this year
Akane Otani – WSJ
The Dow Jones Industrial Average raced past its rival indexes in October, as a pickup in economic growth around the world boosted shares of blue-chip firms that sell everything from bulldozers to airplanes.
ETF price wars deepen as Deutsche cuts fees at flagship fund; Providers scrambling to grab as much share in passive investment landscape as possible
Robin Wigglesworth – FT
The passive investment price wars deepened further this week with Deutsche Bank cutting the cost of its flagship junk bond fund and Franklin Templeton unveiling a series of cheap country-focused exchange traded funds.
The currency hedging conundrum
James de Bunsen – City AM
British savers have benefited from diversifying their investments away from UK shores in the quest for lower risk and better returns.
Archer Daniels Midland profit hit by weak exports
Gregory Meyer – FT
Archer Daniels Midland, one of the world’s biggest crop traders and processors, reported worse-than-expected results for the third quarter as bountiful supplies of corn and soyabeans held back exports from the US.
The Chicago-based company is among the handful that dominate the international grain trade, shuttling food commodities from farms to countries dependent on imports. Its biggest footprint is in the US, which has struggled to export grain in the face of competition from South America.
The Rising Stars: Lee, McLeod, Wouters, Moller; The TRADE’s profiles its Rising Stars of 2017, beginning with Jonathan Lee, Craig McLeod, Joeri Wouters and Anne-Kirstine Moller.
Editors – The Trade
Jonathan Lee, head of credit trading, Hermes Investment Management
Wall Street bankers are getting bigger bonuses again
Kevin Dugan – NY Post
Time for that second home in the Hamptons. The average banker bonus in 2017 is poised to get fatter for the second straight year, as hopes for deregulation have led to a flurry of trading and underwriting on Wall Street, according to New York State Comptroller Thomas P. DiNapoli.
RBS should accept criticisms in report “more readily”: Britain’s FCA chief
The head of Britain’s financial watchdog said it was unfortunate that the Royal Bank of Scotland (RBS.L) did not more readily accept strong criticisms made in a report on its treatment of struggling businesses during and after the financial crisis.
BNP Paribas quarterly revenues sink on trading woes; French lender’s fixed income, currencies and commodity revenues fall 26% in the quarter
David Keohane in Paris – FT
BNP Paribas followed its European and US rivals as its third-quarter results took a hit from a decline in trading revenues in a period the bank described as unfavourable for market activities.
Swiss Central Bank Hits Jackpot With Quarterly Profit of $33 Billion; The Swiss National Bank benefits from the weaker franc and higher equity prices, but is restrained from locking in gains
Brian Blackstone – WSJ
Switzerland’s central bank bet it all, lost big and is now making record profits on a wager that buying hundreds of billions of dollars in foreign stocks and bonds would weaken the Swiss franc.
Banks benefit from China’s economic rebalancing; ICBC is trading above book value in Hong Kong for the first time in two years
Henny Sender – FT
As part of China’s anti-corruption drive, the free liquor and even bottled water disappeared from the hotels housing guests for the 19th Party Congress, which concluded last week. But despite the austere note on which the core leadership insisted, there was a congratulatory air about the proceedings.
London has been named the top European economic city, making the UK the most attractive country for employers
Courtney Goldsmith – City AM
The UK has been dubbed the most attractive country for employers and staff, with London retaining its crown as the top European economic city, according to a new report.
Hibor’s Frightening Halloween Turn; The cost for banks to borrow Hong Kong dollars from each other just shot up to a nine-year high
Here’s a Halloween mystery: The cost for banks to borrow Hong Kong dollars from each other just shot up to a nine-year high.
Brexit deal will only be legal after a vote of MPs
Oliver Wright, Policy Editor – The Times
A Brexit agreement with the EU would need to be enshrined in law and be subject to scrutiny and a vote by MPs and peers, ministers have conceded. Until now Theresa May and David Davis, the Brexit secretary, have insisted that parliament will only be given a “take it or leave it” vote on the overall deal, without the need for primary legislation.
Thanks to Wall St., There May Be Too Many Restaurants
Rachel Abrams and Robert Gebeloff- NY Times
The way Marcus Mooney saw it, he wasn’t just selling hot dogs ó he was selling experiences. In addition to the classics ó a cheese dog and a chili dog ó his restaurant, Frank’s Night Out, served hot dogs topped with more exotic ingredients, like a “Surf & Turf Dog” featuring crumbles of garlic-basted Maine lobster.