Hits & Takes
By JLN Staff
The arrow is pointing up for some firms in the derivatives brokerage space. TD Ameritrade has grown its derivatives trading business in equity options and futures from 36 percent of total trading in 2012 to 44 percent in 2017. ~JK
In 2016, the Dhaka Stock Exchange was granted a full membership into the World Federation of Exchanges in June and formally welcomed into the organization yesterday during its annual meeting being held in Bangkok. The DSE listed more than 330 securities, and posted a notional average turnover of BDT 4.94 billion ($60.6 million) in 2016, up from BDT 4.22 billion ($51.7 million in 2015). ~JK
Financial Data for FCMs from the CFTC is out. ~[JJL]]
Millennials already have more than $1 trillion of annual purchasing power (in case you were wondering how we have the clout to “kill” so many industries as the clickbait-y headlines like to say.) ~SD
OIC Celebrates 25th Anniversary as Leading Provider of Unbiased Options Education
The Options Industry Council (OIC) today announced the kick-off of a yearlong celebration commemorating 25 years as the leading educational resource for investors who use or want to learn how to trade U.S. listed options. OIC’s mission is to increase the awareness, knowledge and responsible use of exchange-listed equity options among a global audience of individual investors, financial advisors and institutional managers.
MarketsWiki Page of the Day: London Metal Exchange
Trading fees at the London Metal Exchange (LME) are likely to be cut to boost liquidity at the exchange, according to Charles Li, the head of LME’s parent company, Hong Kong Exchanges & Clearing. The exchange had seen volumes drop after it hiked its fees 31 percent in 2015.
Euronext appoints US head of FICC; Kevin Wolf has previously worked at Eris Exchange as chief business and product development officer.
Hayley McDowell – The Trade
Euronext has hired a US head of fixed income, currencies and commodities (FICC) in New York, The TRADE understands.
How the aristocracy preserved their power
Chris Bryant – The Guardian
On 11 January this year, Charlie, the genial 3rd Baron Lyell, died aged 77 in Dundee after a short illness. He had inherited his title and the 10,000-acre Kinnordy estate, in Angus, when he was just four years old. After Eton, Christ Church and the Scots Guards, he spent nearly 47 years in the Lords, serving as a Conservative minister from 1979 to 1989.
Why Alternative Investments Are Bad for Your Portfolio
Peter Lazaroff – WSJ
It’s never been easier for investors to add exposure to alternative investments into their portfolios. Liquid alternatives offering exposure to hedge-fund strategies and nontraditional asset classes through a mutual fund or ETF wrapper are becoming increasingly popular among investors looking to increase diversification at a time when equity valuations are high and fixed-income yields are low.
***** You mean like Bitcoin?
I criticized Google. It got me fired. That’s how corporate power works.
Barry Lynn – The Washington Post
I’ve studied monopolies for about 20 years. I got into this line of work back in 1999, when an earthquake in Taiwan resulted in the shutdown of computer factories all over the United States.
What happened was that an earthquake disrupted the flow of electricity to foundries in Taipei, where most of the world’s capacity for a key type of semiconductor was located. The loss of this capacity led to a cascading crash of industrial activity, similar to a financial crash.
****** Interesting look at the current world of antitrust.
How to Build a Successful Brand – David Kelbaugh
“Your product or service is how you make your money, your brand is how you’ll be remembered.”
In this video from MarketsWiki Education’s World of Opportunity event in Chicago, David Kelbaugh, CEO of Tacklebox, breaks down the benefits of successful branding. Kelbaugh says his job is to make sure you get remembered for the right reasons, by the right people. The goal isn’t to impact people and tell them to buy what you’re selling, but to influence them to advocate for you. People don’t buy what you do, they buy why you do it.
Thursday’s Top Three
Running away with the number one spot for most read story (by far) yesterday was the WSJ article, CFTC Charges Monex With $290 Million Precious-Metals Fraud. Nearly tied for a distant second and third were the stories from The WFE, The World Federation of Exchanges Elects Eight Board Directors and Reuters, Madoff trustee recoups $687 million in biggest settlement since 2011
107,263,463 pages viewed; 22,754 pages; 208,990 edits
ICE to ‘Go West’ with Chicago-to-Tokyo network
Nicole Bullock – FT
Intercontinental Exchange and a consortium of high-speed traders have teamed up to sell access to an ultrafast network between the financial centres of Chicago and Tokyo.
Tulip Fever: There’s a Digital Token for That, And So Much More
Lily Katz – Bloomberg
Almost 200 initial coin offerings seen in next four months; Tokens back causes ranging from adult movies to religion
Everyone from Paris Hilton to Floyd Mayweather seems to be making a foray into the world of digital currencies, and it’s getting pretty weird.
Asean Linkage folds after falling short
Bangkok Post: business
The Asean Trading Link was initially implemented between the Singapore Stock Exchange (SGX) and Bursa Malaysia (BMB) in 2012.
The Stock Exchange of Thailand (SET) later joined as the third exchange in the programme. Each exchange has upgraded its matching engine and infrastructure, including the trading link system.
Equifax Reports Data Breach Possibly Affecting 143 Million U.S. Consumers; Social Security numbers, birth dates, addresses and driver’s license numbers exposed
AnnaMaria Andriotis and Ezequiel Minaya – WSJ
Credit-reporting company Equifax Inc. said Thursday that hackers gained access to some of its systems, potentially compromising the personal information of roughly 143 million U.S. consumers in one of the biggest and most threatening data breaches of recent years.
State Street to pay more than $35 mln to settle U.S. charges: SEC
State Street Corp (STT.N) will pay more than $35 million to settle U.S. charges that it fraudulently charged secret mark-ups for transition management services and hid details from clients about the trading of U.S. Treasury securities, the U.S. Securities and Exchange Commission said on Thursday.
FINRA reverses policy on Brokercheck information, allows access to bulk data
Elizabeth Dilts – Reuters
The head of the Financial Industry Regulatory Authority told a congressional committee on Thursday that FINRA overhauled its policy on allowing public access to information it has on brokers’ professional and financial records and will allow the public to download the information in bulk.
Three Equifax Managers Sold Stock Before Cyber Hack Revealed
Anders Melin – Bloomberg
Trio didn’t know about the intrusion when selling, firm says; Shares tumbled in late trading after company disclosed breach
Three Equifax Inc. senior executives sold shares worth almost $1.8 million in the days after the company discovered a security breach that may have compromised information on about 143 million U.S. consumers.
Investors defend hedge funds amid rush to passive and private strategies
Lawrence Delevingne – Reuters
Some big money investors are warning that the rush to cheap stock bets and private asset strategies at the expense of hedge funds may prove costly.
More Investors Put More Money Into ETFs, Survey Says; The annual survey by Charles Schwab says four out of 10 ETF investors expect the funds to become their primary investment vehicle.
Johanna Bennett – Barron’s
U.S. investors have nearly doubled portfolio allocations to ETFs in the past five years, and even more expect to embrace the investment vehicle in the next few years, according to a study by Charles Schwab (SCHW).
The future of ferrous scrap futures; Long-time scrap trader Nathan Fruchter answers a series of questions about whether hedging will play a larger role in ferrous scrap trading.
Recycling Today Staff
The major financial exchanges and futures markets periodically introduce trading tools they hope will convince buyers, sellers and traders of ferrous scrap to engage in hedging and other forms of exchange-related trading.
Wells Fargo’s Year of Scandal Stretches On; The San Francisco bank still faces a long list of legal woes a year after its sales-practices scandal came to light
Emily Glazer – WSJ
A year after Wells Fargo WFC -0.40% & Co.’s sales-practices scandal erupted, the bank has changed its leadership and lost valuable ground to rivals. Yet executives still face an array of legal challenges that may take months if not years to sort out.
ECB to Study QE Options That Don’t Need Tweak to Rules
Jana Randow and Alessandro Speciale – Bloomberg
Scenarios presented to Governing Council stick to ECB’s limits; Euro-area officials spoke on the condition of anonymity
The European Central Bank’s scenarios for its asset purchases after 2017 could be implemented without adjusting the parameters of the program, according to euro-area officials familiar with the matter.
Exchanges, OTC and Clearing
LME plans fee cut to lure back business; Moves are result of wide-ranging consultation by chief Matt Chamberlain
Henry Sanderson and Neil Hume – FT
The London Metal Exchange has announced plans to slash fees as part of a strategic plan aimed at protecting its position as the centre of global metals trading.
In The Search For Yield, S&P 500 Dividend Futures Emerge
Kira Brecht – CME OpenMarkets
Demographic shift, low yield environment create a quest for dividends; Open dividend futures contracts up more than 100 percent in 2017
In the wake of the global financial crisis in 2008, policymakers and central banks around the globe turned to historic and unprecedented monetary policies amid efforts to stimulate economic growth and stave off disinflationary pressures.
CEO Of Qatar Stock Exchange Re-Elected As A Board Member Of The World Federation Of Exchanges (WFE)
During the 2017 Annual Meetings held in Bangkok, Mr. Rashid bin Ali Al-Mansoori, CEO of Qatar Stock Exchange, was today reelected as a Board Member of the World Federation of Exchanges (WFE).
Moscow stock exchange starts bidding weekly options for a pair of “dollar-ruble”
Since September 14, 2017, traders on the futures market of the Moscow stock exchange will be able to trade weekly options for futures contracts for the US dollar-Russian ruble currency pair. New tools will complement the line of monthly and quarterly options for this underlying asset.
CBOE Holdings to Present at Barclays Global Financial Services Conference September 12
CBOE Holdings, Inc. (BATS: CBOE | NASDAQ: CBOE) today announced that CBOE Holdings Chairman and Chief Executive Officer Edward Tilly will speak at the Barclays Global Financial Services Conference in New York on Tuesday, September 12, at 2:45 p.m. ET.
Canada’s CCP proposes buy-side clearing; CCPS have introduced new clearing memberships for the buy-side in response to increased capital pressures on banks.
Joe Parsons – The Trade
The Canadian Derivatives Clearing Corporation (CDCC) will allow corporates and pension funds to directly clearing their cash or repo fixed income trades.
CDCC Introduces Direct Clearing for Canadian Buy Side Firms
Canadian Derivatives Clearing Corporation (CDCC), Canada’s national central clearing counterparty (CCP) for exchange-traded derivative products, certain over-the-counter (OTC) products and repurchase agreements (repos), announced today a proposal to expand its fixed income service to enable certain Canadian buy-side firms to clear cash or repos trades directly through CDCC. CDCC’s new direct-clearing model seeks to extend the range of significant benefits associated with CCP clearing, including capital, margin and collateral efficiencies to a new membership category called Limited Clearing Members (LCMs).
September 2017 Eligible ETFs and Stocks
CME Clearing accepts a select number of shares of ETFs and stocks for customer and house segregated performance bond collateral for Base Guaranty Fund products. ETFs and stocks are each capped at $500 million per clearing member firm. Please refer to the Standard Acceptable Collateral and Resources website for further details regarding acceptable collateral, haircuts, and limits.
Fintech bonanza? A third of financial technology startups expect to IPO within five years
The UK’s ambitious fintech startups are eyeing success on the public markets with a third of them planning an IPO in the next five years, new figures reveal. –
Transferwise, Revolut and World Remit are among the country’s innovative financial technology companies with long-term ambitions of going public, signalling the burgeoning industry’s confidence.
Sterling Trading Tech Successfully Deploys New Real-Time Risk Solution For Portfolio Margin And Volatility Shocks
Sterling Trading Tech (STT) announced today the first deployment of its new real-time risk solution, the Sterling Risk Engine, to Prophecy Asset Management.
Hong Kong regulators to push for greater clarity in fintech market guidance to help companies develop
South China Morning Post
Hong Kong’s securities, banking and insurance regulators are looking to offer greater guidance on financial technology innovation in the city, following recent developments in the adoption of blockchain, artificial intelligence and so-called initial coin offerings (ICO).
Cambridge Blockchain Expands into Europe with Paris Venture; Blockchain startup creates Paris-based subsidiary to accelerate European development.
John Brazier – WatersTechnnology
Cambridge Blockchain SAS will be based in the Partech Shakers startup campus in Paris. The company aims to continue its expansion into Europe with its blockchain-based offering, designed to alleviate the growing compliance challenges faced by financial institutions relating to identity data management and know-your-customer (KYC) costs.
Trump anger at Cohn raises doubts about his White House tenure: sources
Svea Herbst-Bayliss, Jeff Mason – Reuters
A newly fraying relationship between U.S. President Donald Trump and top White House economic adviser Gary Cohn has raised questions about how long Cohn will stay in his job, say two people with close ties to the White House.
White House Considering at Least Six for Fed Chair
Craig Torres and Jennifer Jacobs – Bloomberg
Bankers, economists, business people are under consideration; Markets patient for now with Yellen in charge until February
The White House is considering more than a half-dozen candidates to be the next head of the Federal Reserve, including economists and business people, with a goal of filling out a depleted board with expertise ranging from financial regulation to community banking, according to three people familiar with the matter.
Publish leaked RBS report, MPs tell FCA
Jill Treanor – The Guardian
The Financial Conduct Authority is facing pressure from the Treasury select committee of MPs to publish the report into Royal Bank of Scotland’s troubled business restructuring unit.
Ex-Amazon worker pleads guilty to giving secret financial info to frat brother
Jackie Wattles – CNN Tech
A former Amazon financial analyst pleaded guilty on Thursday to insider trading for leaking confidential information about the company to his college fraternity brother.
Former Amazon analyst pleads guilty to insider trading
Jessica Dye – FT
A former financial analyst for Amazon has pleaded guilty to charges that he sold non-public details about the e-commerce giant’s quarterly results to a former fraternity brother in advance of the earnings release.
Britain’s FCA quizzed by lawmakers on listing rule plans ahead of Aramco IPO
Britain’s financial regulator has been told by two parliamentary committees to address concerns that plans to relax rules on listing state companies could undermine corporate governance.
UK MPs to scrutinise stock market listing reforms; Regulator accused of loosening rules to attract world’s biggest IPO, by Saudi Aramco
Caroline Binham and Anjli Raval in London – FT
UK plans to change its stock market listing rules as it attempts to win the world’s largest share sale, by Saudi Aramco, will be scrutinised by two separate parliamentary committees for political interference.
Financial Data for FCMs
Futures commission merchants (FCMs) and retail foreign exchange dealers (RFEDs) must file monthly financial reports with the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) within 17 business days after the end of the month. Selected financial information from these reports is published below. The most recent month-end information generally is added within 12 business days after FCMs and RFEDs file their reports, but occasionally may be added later. For example: The 17th business day filing “due date” for February 28, 2015 financial reports was March 25, 2015. The 12 business day target for posting these data was April 10, 2015.
FINRA CEO Robert Cook Testifies Before House Financial Services Subcommittee on Capital Markets, Securities, and Investment
Robert W. Cook, President and CEO of the Financial Industry Regulatory Authority (FINRA) today testified before the U.S. House of Representatives Subcommittee on Capital Markets, Securities, and Investment about FINRA’s operations and regulatory programs, and how FINRA is fulfilling its mission to protect investors and ensure market integrity while facilitating vibrant capital markets.
ISDA Launches Latest Version Of ISDA SIMM Non-cleared Derivatives Margin Model
The International Swaps and Derivatives Association, Inc. (ISDA) has announced the launch of the latest version of the Standard Initial Margin Model (ISDA SIMM), which incorporates a number of enhancements to further develop the methodology.
State Street agrees $35m fraud settlement with SEC; Complaints related to hidden mark-ups and lack of disclosure over an electronic platform
David J Lynch in Washington – FT
State Street has agreed to pay more than $35m to settle a pair of complaints by the Securities and Exchange Commission that it defrauded six institutional investors by charging them hidden mark-ups and failed to disclose material information about the operation of its electronic platform for trading US Treasuries.
Sebi mulls physical settlement of stock derivatives; Move to help improve alignment between cash and derivative markets
The Securities and Exchange Board of India (Sebi) on Thursday sought market feedback on moving to a physical-settlement system in stock derivatives. Currently, all derivatives contracts are cash-settled.
Sebi imposes Rs 2,423 cr fine on PACL, 4 directors; They are accused of illegal mobilisation of funds to tune of Rs 49,000 cr from public
Regulator Sebi today imposed Rs 2,423 crore fine on PACL Ltd and its four directors for illegal fund mobilisation through various schemes that were used by the group to garner over Rs 49,000 crore from the public.
New York regulator kicks Pakistan’s Habib Bank out of US; NY watchdog says company ‘opened the door’ to terror financing and fines it $225m
Ben McLannahan in New York – FT
New York’s state banking regulator has slapped a $225m fine on Habib Bank, the biggest bank in Pakistan, and ordered it out of the US after finding a catalogue of flaws in compliance that “opened the door” to the financing of terror.
Investing and Trading
5 Questions with Darren Reed of Cygnet Proprietary Trading
Brian Mehta, CMO – Trading Technologies Blog
Darren Reed is currently a Director and Co-Founder of Cygnet Proprietary Trading in Perth, Australia. Prior to that, he was a trader who helped run Trader Development at Genesis Proprietary Trading in Sydney and Melbourne. Previously, he was Head of Trading at a Sydney-based hedge fund with a focus on the Asia/Pac region. Darren has a really interesting background and philosophy on trading.
Bond Manager With $6.6 Billion Just Saw the Scariest Chart Ever
Jonas Cho Walsgard – Bloomberg
Morten Steinsland, head of fixed income at Alfred Berg in Oslo, has been in the fixed income markets for three decades but the other day he saw the scariest chart he’s ever seen.
Diameter Raises $1 Billion for New Credit Hedge Fund
Sridhar Natarajan – Bloomberg
The firm set to be among largest new hedge funds this year; Diameter will invest across performing and distressed debt
Diameter Capital has raised about $1 billion to make wagers on company debt, making it one of the largest hedge-fund startups this year, according to people with knowledge of the matter.
U.S. firm backing ether-based ETF says to refile listing application
The U.S. firm behind an effort to start an exchange-traded fund based on the cryptocurrency ether said on Thursday it planned to refile an application to list the security on Intercontinental Exchange Inc’s NYSE Arca exchange after an initial filing was withdrawn.
The definitive guide to the state of Wall Street, business by business
Alex Morrell – Business Insider
Business is up on Wall Street, but not nearly enough to start popping bottles.
In World of Supposed Bubbles Here’s What Investors Fear Most
Natasha Doff – Bloomberg
Cross-asset investors concerned about credit, Bitcoin, China; BAML says price gains are getting ‘more bubbly’ than in past
From Alan Greenspan and the current Federal Reserve staff to fund managers hoarding cash, people feel queasy about asset prices.
Reverse Yankee Bonds Set Record Pace as Europe Outbids U.S.
Sid Verma and Charles Daly – Bloomberg
Falling euro yields, deep ECB pockets offer escape hatch; U.S. junk bond spreads jumped 20 basis points in August
You’re the treasurer of a U.S. company and you have $1 billion of junk bonds to sell. But buyers are getting a bit sniffy. What do you do?
JPMorgan creates joint venture for retail, internet banking: memo
Liana B. Baker and Olivia Oran – Reuters
Merger and acquisition dealmakers make their livings advising companies on mergers, sales and spinoffs. But this time, investment bankers at JPMorgan Chase & Co are working on an internal deal of their own.
Private Equity Prowls for Young Bankers Early in Frenetic Ritual
Yueqi Yang – Bloomberg
Cocktails, interviews start within months for junior analysts; Job offers can ‘explode’ at midnight as buyout firms compete
Wall Street’s newbies — investment banking analysts straight out of college who just hit the desk — have barely started one job when another starts beckoning.
Nordea May Be Snubbing Sweden, but Investors Should Not
Christopher Thompson – NY Times
The likes of Swedish banks S.E.B., Handelsbanken and Nordea are stable, well capitalized and dull. Investors have spurned them in favor of eurozone banks. Yet the banks’ generous dividends are attractive – and if Nordea’s move to Finland leads to lighter regulation, they may get more so.
Financial abuse curbs weigh on emerging markets; Rules to curb money-laundering and terrorist-funding are hitting EM business
Philippe Le Houérou – FT
Efforts over the past few years to strengthen the global financial system against unnecessary risk taking, money-laundering, and terrorist funding will ultimately contribute to greater financial stability and a safer world. However, the new regulatory approach also has unintended consequences for emerging market countries.
Hong Kong’s hot governance issues are minefield for investors; As Chinese stocks become mainstream, battle to balance principles and pragmatism goes on
Jennifer Hughes in Hong Kong – FT
Which would you rather own: a company whose board takes its direction from the Chinese Communist party, or one that hasn’t held a shareholder vote in eight years?
China’s Bad Banks Show It Still Has a Big Bad Loan Problem
Anjani Trivedi – WSJ
There are Chinese banks and then there are China’s bad banks. To understand just how worrying the country’s bad-loan problem has become, it’s worth taking a look at the latter.
UK And Singapore Hold Third Financial Dialogue
The United Kingdom (UK) and Singapore held the third UK-Singapore Financial Dialogue in Singapore today. Both sides exchanged views on domestic and international financial market developments and covered a broad range of areas encompassing the global economy, regulatory developments, FinTech and cyber-security.
Top HNA Executive Touts Opaque Conglomerate’s Transparency; Acquisitive Chinese company’s ownership structure has drawn questions from bankers and clients
Julie Steinberg – WSJ
A top executive of HNA Group Co. said the acquisitive Chinese conglomerate has “nothing to hide” regarding its ownership structure, which has drawn questions from bankers and clients in recent weeks.
China Strengthens Yuan Guidance on Longest Streak in More Than Six Years; Among Asian currencies, the yuan’s recent rally against the dollar–wiping out declines from 2016–has stood out
Saumya Vaishampayan – WSJ
China guided the yuan stronger against the U.S. dollar Friday for the 10th session in a row, the longest such streak since early 2011.
London could lose Saudi Aramco’s $2 trillion IPO to New York over a UK rule it’s trying to change
Lianna Brinded – Quartz
Saudi Arabia’s titanic state-run oil giant Saudi Aramco is looking to list 5% of its shares, which could value the company between $1 trillion (paywall) to $2 trillion. Slated to take place by the second half of 2018, it would be the world’s largest IPO—and everyone wants to try and get a slice of it.
Take It to the Bank: China Needs Deposits
Andy Mukherjee – Bloomberg
As the world frets about China’s excesses in lending, the downgrade of Bank of Communications Co. by Moody’s Investors Service is a reminder that investors ought to pay attention to the funding side as well.
Catalonia Cries “Freedom!” Market Says “Not So Fast…”; A referendum’s coming, but Spanish bond yields are a picture of calm.
Mark Gilbert – Bloomberg
Catalan President Carles Puigdemont says he’s willing to go to jail in the fight to achieve independence from the rest of Spain. His region’s creditors are unconvinced he’ll succeed.
For Venezuela’s True Believers, the Ultimate Risky Bet Beckons
Ben Bartenstein – Bloomberg
Electricidad de Caracas entices Landesbank Berlin Investment; $650 million of bonds maturing in April priced at 65 cents
For years, investors in Venezuela and its state oil company, Petroleos de Venezuela SA, took comfort knowing that in the event of a default, there’d be assets they could potentially seize to recoup some of their losses.
Brexit: Ex-Barclays boss sees London jobs moving to New York; Bob Diamond predicts London will lose legal jobs alongside financial services to New York
Renee Bonorchis – Independent
Bob Diamond, the architect of Barclays investment bank over more than a decade in London, said the capital will be hurt more than people expect from Brexit, with lawyers likely to join bankers in moving away.
U.K. Finance Sector Seeks Clarity on Contracts During Brexit
Simon Kennedy – Bloomberg
The British finance industry urged the government to provide “early clarity” on whether contracts involving financial transactions will remain valid after Brexit.
Chicago will bid for Amazon’s second headquarters — and its 50,000 jobs
Ryan Ori and Lauren Zumbach – Chicago Tribune
Chicago is chasing one of the country’s largest corporate headquarters deals in years, joining what is sure to be a fierce competition to land Amazon’s second headquarters.
If You Build It, the Dutch Will Pedal
Christopher F. Schuetze – NY Times
When city officials unveiled the first section of the world’s largest bike parking garage in Utrecht, a small city in the center of the Netherlands, late last month, the feeling of accomplishment was short-lived.