JLN Options: Investors Seek More Transparency on Corporate Hedging, Derivatives Exposures

Jan 17, 2013

LEAD STORIES
Investors Seek More Transparency on Corporate Hedging, Derivatives Exposures
Emily Chasan, The Wall Street Journal
Corporate disclosures on hedge accounting and derivatives trading are so opaque that investors are often unable to see the true risks companies face from engaging in those activities, according to a new report from the CFA Institute, which is recommending companies improve disclosures in those areas.
http://jlne.ws/W91pQf S&P 500 Advances to Five-Year High on Economic Reports
By Rita Nazareth & Sarah Pringle, Bloomberg
U.S. stocks rose, sending the Standard & Poor’s 500 Index to a five-year high, amid better- than-forecast initial jobless claims and housing data.
http://jlne.ws/XGRl34 GFI announces rebranding of FENICS FX options platform, citing Dodd-Frank changes
Daniel Purt, Bank Credit News
GFI, a leading interdealer broker, announced the rebranding of FENICS TraderSM, its multi-bank foreign exchange options platform, on Monday in the face of new changes mandated by the controversial Dodd-Frank Act.
http://jlne.ws/V9Wa84 Futures on DTCC GCF Repo Index Achieve Major Milestones with New Volume and Open Interest Record
Press Release (NYSE Euronext)
NYSE Liffe U.S., the innovative U.S. futures exchange of NYSE Euronext (NYX), today announced it has achieved major milestones for its award-winning suite of Futures on DTCC GCF Repo Index (“GCF Repo futures”). Since the launch of GCF Repo futures on July 16, 2012, NYSE Liffe U.S. has traded nearly 500K contracts as a result of rapid growth in volume, Open Interest and activity from global interest rate market participants.
http://jlne.ws/S40ovx Citadel selects Bloomberg for derivatives trading and access to clearing
Automated Trader
Citadel has begun using Bloomberg’s Fixed Income Trading platform for electronic trading and clearing of interest rate swaps.
Citadel will use Bloomberg for electronic execution and access to clearing in preparation for upcoming Dodd-Frank regulatory deadlines. The first trades were placed by Citadel on Monday via Bloomberg’s multi-dealer trading platform (BBTI) and cleared through LCH.Clearnet.
http://jlne.ws/W90PlK Direct Edge Discloses Order-Handling Discrepancies
Gregg Wirth, Traders Magazine
For the second time since Christmas, a major U.S. stock exchange operator has announced discrepancies in how its computer systems price and prioritize complex trade orders routed through the exchange.
Direct Edge, which operates the EDGA Exchange and the EDGX Exchange, disclosed in a Dec. 28 trading notice and a Jan. 11 update that it had discovered two separate discrepancies that may have led to poor pricing for some customers.
http://jlne.ws/W915kK 
** Seeing a lot of this sort of thing lately (see next story). –JB NYSE Reveals Brief Order Routing Hiccup
Matt Egan, FOXBusiness
New York Stock Exchange parent NYSE Euronext (NYX) said it experienced a brief routing problem Wednesday morning that may have caused some trades to be executed at prices other than the best available.
http://jlne.ws/W0DPs9 U.S. dispute over derivatives trading data heats up
Douwe Miedema, Reuters
A conflict over potentially valuable derivative trading data heated up on Wednesday, underlining how an overhaul of Wall Street after the financial crisis is sparking acerbic competition battles.
http://jlne.ws/SPq5Sg

EXCHANGES


NYSE Euronext Global Index Group Announces 2012 Performance of Indices and Yearly Recap  
Press Release (NYSE Euronext)
All NYSE Euronext’s blue-chip indices were up in 2012. The NYSE US 100 Index gained 11.22%. Among the European blue-chip indices the Belgian BEL 20 Index gained the most with 18.83%, followed by the French CAC 40 with 15.23% and the Dutch AEX-Index with 9.68%. The Portuguese PSI 20 finished the year off strong with a monthly performance of 7.59% to reach a positive Year to Date (YTD) performance of 2.93%.
http://jlne.ws/W8DBvS NASDAQ OMX, Deutsche Bank and Imarex announce FX service
AutomatedTrader
NASDAQ OMX Nordic has partnered with Deutsche Bank and Imarex FS to offer market participants access to an integrated trading and clearing service for FX products. This allows clients of NASDAQ OMX’s Norwegian clearing house, NOS, to trade FX products through Deutsche Bank’s FX trading platform. Imarex FS will handle the customer onboarding process.
http://jlne.ws/W91GTs CME Clearing Named ‘Clearing House of the Year’ by Risk Magazine
Press Release
CME Group today announced that CME Clearing has been named the Clearing House of the Year in Risk Magazine’s annual Risk Awards.
The annual awards recognize excellence in risk management and derivatives markets across 29 categories.
http://jlne.ws/XGQmji
** Seems there is an award for everything these days. –JB

REGULATION


AML again a top priority for broker-dealer exams, FINRA says
Stuart Gittleman, Compliance Complete (via Reuters)
Anti-money laundering compliance will again be a focus of Financial Industry Regulatory Authority examinations this year, particularly at broker-dealers with higher-risk business models due to their clients, products and service mix, or locations.
http://jlne.ws/V9WgwA
** Options mini-manipulation strategies are a part of this. –JB SEC Requires Structured Notes Value Disclosure, Law Firm Says
Kevin Dugan, Bloomberg
The U.S. Securities and Exchange Commission is requiring structured note issuers to disclose the estimated initial value of the securities, according to a bulletin from law firm Morrison & Foerster LLP.
http://jlne.ws/XGRN1d U.S. SEC to Offer Money-Market Overhaul Soon, Commissioner Says
Dave Michaels, Bloomberg
A second effort to overhaul rules governing the $2.6 trillion money-fund industry will be offered by the U.S. Securities and Exchange Commission before the end of March, said SEC Commissioner Daniel M. Gallagher.
http://jlne.ws/W90UG5

TECHNOLOGY


This Is What Happens When A Buggy Algorithm Goes Crazy On A Stock
Linette Lopez, Business Insider
Algorithmic trading, the use of pre-programmed computer codes to place orders and execute trades, is supposed to be the fastest, smartest way to trade in today’s stock market.
http://jlne.ws/V9WuDY

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